Why Are Brokerages Often Labeled When Disposing of Real Estate?

Frequently seen in announcements or public disclosures, securities firms’ real estate disposals often attract industry attention and generate various speculations.

Different institutions have different motives for disposal. Some sell assets to settle debts; when the timing is right, brokerages often choose to dispose of these assets, which is a common phenomenon. Others are scattered properties acquired during the early stages of establishment; as the company develops and consolidates its property portfolio, these scattered properties no longer serve as operational sites. Managing them consumes resources and yields low rental returns, making them prime candidates for sale. Of course, some brokerages dispose of real estate to optimize assets; from an operational perspective, this is a normal strategic move.

Red Tower Securities previously listed six properties in Kunming, Shanghai, and Shenzhen on the Beijing Property Exchange, with a total listing price of 263 million yuan, expected to contribute a total profit of 187 million yuan. Southwest Securities concentrated on disposing of over 70 distressed assets to accelerate bad asset clearance. Founder Securities transferred the Zhengzhou Yuda International Trade Building at a discount, also drawing industry attention.

Recently, the most closely watched development is the progress of China Merchants Securities’ asset disposal. According to information from the Shanghai United Property Exchange, the listing of five core properties in Shenzhen has been postponed. The first extension is until March 24, possibly to gather more interested parties and facilitate a deal.

China Merchants Securities’ 5 Properties Postponed

The Shanghai United Property Exchange website shows that the five properties China Merchants Securities plans to sell are all located in Shenzhen’s core area, with a combined minimum price of about 148 million yuan. Four of these are in the Jiaye Huaguang Building A in Futian District, from the 8th to the 11th floor, each floor listed separately, with a transfer minimum price of 29.84 million yuan per floor, totaling approximately 119 million yuan. The other property is in Luohu District’s Sunggong East Road, B2-B, B2-C, and B2-D buildings of Bao’an Plaza, with an overall transfer minimum price of 28.14 million yuan. The original deadline was March 17, 2026, but it has now been extended to March 24.

According to the announcement, these properties will be sold via online bidding, and the successful bidder must pay in one lump sum. Interested buyers should have good financial standing and payment ability, with no adverse operational records.

Sources indicate that most of these properties were purchased in the 1990s. Some have old construction, outdated facilities, and limited functions. Surrounded by residential areas, they are difficult to meet the needs of modern financial institutions for intelligent, high-end office spaces. Holding these long-term involves high maintenance costs, low rental yields, and poor liquidity. This disposal is part of the company’s normal operational adjustment—converting fixed assets accumulated over decades into flexible cash resources to improve asset turnover.

Financially, although the total listing price of 1.48 billion yuan seems substantial, its impact on China Merchants Securities’ performance is limited. The company’s 2025 performance forecast, released in January 2026, projects total revenue of 249 billion yuan, up 19.19% year-over-year; net profit attributable to shareholders of the parent company is expected to reach 12.3 billion yuan, an increase of 18.43%. Based on this, the sale amount of these properties accounts for only about 1.2% of net profit attributable to the parent, unlikely to significantly affect the company’s overall profit structure.

Additionally, the performance report shows that the company’s weighted average return on equity (ROE) has increased to 9.90%, up 1.08 percentage points from the previous year, indicating improved capital efficiency. China Merchants Securities attributes this improvement mainly to strategic focus on serving the “five major articles” of financial services, strengthening coordination, and enhancing both development quality and operational efficiency.

Looking at the company’s development, it has been steadily optimizing its strategy in recent years. In 2025, its performance grew steadily, with total assets reaching 753.35 billion yuan and equity attributable to shareholders of the parent at 137.959 billion yuan. Activating existing assets further releases financial resources, helping to supplement working capital, strengthen the balance sheet, and support future expansion and core business investments.

Clear Trend Toward Asset-Light Industry

Analysis shows that securities firms’ property sales are not new. Since 2025, firms like Huaxi Securities, Founder Securities, Red Tower Securities, and Guotai Haitong Securities have all sold assets.

On March 11, Guotai Haitong Securities’ Beijing branch and Beijing Financial Street Securities Business Department listed some assets for sale, totaling 34.902 million yuan in Beijing and Zhuhai.

On February 12, Red Tower Securities announced that some properties in Beijing had been listed on the Beijing Property Exchange, with a total listing price of 263 million yuan, an appreciation rate of 802.17%.

On February 17, Founder Securities announced that its wholly owned subsidiary, Founder Underwriting & Sponsoring, successfully sold 101 properties and a conference center in Zhengzhou Yuda International Trade Building for 730 million yuan. The company stated this was to “focus on core businesses and activate distressed assets.”

In the same year, on January 27, Guolian Minsheng also listed for transfer 10 office units and two underground parking rights in Guilin’s Ke Gao Li Jiang No.1 Business Office Building, with a minimum transfer price of 4.7535 million yuan.

Huaxi Securities adopted a “sale and lease” strategy. On July 3, 2025, the company successfully leased out its headquarters office building B area for 12 years, with total rent of 359 million yuan (including tax). The tenant is Chengdu Furun Tianfu Investment Co., Ltd. Huaxi Securities stated this would improve asset operation efficiency and bring long-term stable rental income. Just over a month later, on August 28, the board approved further asset disposal plans involving properties in Zhuozhou, Hebei.

Additionally, Southwest Securities listed over 70 assets—including properties, parking spaces, and vehicles—for transfer on the Chongqing United Property Exchange in late 2025, with a total minimum price of 4.8782 million yuan, many of which are distressed assets.

Sources indicate that securities firms seek to raise funds for other business development through property disposal. The core logic is to “activate existing assets” and “focus on main businesses.” In the current environment dominated by capital-intensive activities like proprietary trading, margin financing, and derivatives, the efficiency of cash use is far more important than holding unproductive old properties.

What Will Be the Future Trend of Securities Firms’ Property Disposals?

Industry insiders believe that as market conditions improve, securities firms may slow asset disposals and shift focus to core business expansion. However, given current market trends and industry development, asset disposals are expected to remain routine over the next two years, serving as an important measure to optimize asset structures and enhance overall competitiveness.

In terms of disposal methods, “sale and lease” is likely to become mainstream. Huaxi Securities’ long-term leasing of its headquarters office building B area provides a mature model for activating high-quality core properties. For distressed assets, how to minimize disposal losses and protect investors’ interests under market pressure remains a practical challenge.

From an industry perspective, this round of concentrated property disposals reflects both a strategic return to the core financial functions and a passive process of risk cleanup from past business activities. As market cycles turn, real estate accumulated on balance sheets will eventually be phased out in an orderly manner. This process also exemplifies China’s securities industry moving toward standardization, professionalism, and high-quality development.