Five major banks team up to "take orders", Poly Properties mortgages the Shenzhen "land king" to withdraw 4 billion yuan.

On November 11, Poly Properties Group Co., Ltd. issued an announcement on major asset mortgage, stating that its subsidiary Shenzhen Baoying Real Estate Development Co., Ltd. mortgaged the land and construction in progress of Plot T204-0153, Yuehai Sub-district, Nanshan, Shenzhen to five banks to provide credit enhancement for the RMB 4 billion fixed asset syndicated loan.

According to the announcement, the creditors and mortgagees of this syndicated loan include five institutions: China Construction Bank Corporation Shenzhen Branch, Agricultural Bank of China Co., Ltd. Shenzhen Futian Sub-branch, China CITIC Bank Co., Ltd. Shenzhen Branch, China Guangfa Bank Co., Ltd. Shenzhen Branch, and China Minsheng Bank Co., Ltd. Shenzhen Branch. The debtor and mortgagor are both the project company Shenzhen Baoying Real Estate Development Co., Ltd.

The amount of the secured claim is RMB 4 billion, covering all debts under the "RMB [Four Billion] Fixed Asset Syndicated Loan Contract for Poly Nanshan Yuehai Plot T204-0153 Project".

In addition to the principal and interest, the scope of security also includes compound interest, penalty interest, liquidated damages, compensation for damages, as well as litigation fees, legal fees and other expenses incurred by the syndicate in realizing the creditor's rights and security rights.

The mortgaged property is the land and construction in progress of this plot, with the ownership certificate number of Yue (2026) Shenzhen Real Estate Right No. 0444595. As of November 9, 2026, the book value of the mortgaged property is RMB 57.72 billion, which is unaudited, equivalent to 19.28% of the company's net assets of RMB 29.949 billion at the end of 2025.

The announcement stated that there are no other restricted rights on the mortgaged property except for this mortgage, and relevant matters have been approved by the company's authorized decision-making body. The "Mortgage Contract" will be signed in the near future and the land use right mortgage registration will be processed.

From King of Land to Mortgaged Asset

On June 5, 2026, Plot T204-0153 in Yuehai Sub-district, Nanshan, Shenzhen was sold with a starting price of RMB 2.302 billion. 6 central state-owned enterprises and local state-owned enterprises participated in the bidding. After 297 rounds of competition, Poly Properties won the plot with a total price of RMB 5.772 billion, with a premium rate of 150.74%, and the transaction floor price was about RMB 108,700 per square meter, refreshing the unit price record of residential-related land in Shenzhen.

Public transfer information shows that the plot has a land area of 14,116.04 square meters, a floor area of 53,110 square meters, and a plot ratio of 2.9, of which the residential floor area is 49,000 square meters, with an additional 1,500 square meters of commercial supporting facilities, 110 square meters of property service rooms, as well as cultural activity rooms, childcare institutions and other supporting facilities.

From land acquisition in June to mortgage in November, the interval is about five months.

For the project company, this is equivalent to converting the largest land expenditure into development funds with a longer term and lower cost through mortgage.

It is worth noting the creditor structure: China Construction Bank and Agricultural Bank of China are large state-owned commercial banks, while China CITIC Bank, China Guangfa Bank and China Minsheng Bank are joint-stock banks. The five institutions entered the same core area project in Shenzhen in the form of a syndicate, which reflects not only the location and value of the project itself, but also the endorsement of the parent company's credit.

Costs and Variables

On the other side of smooth financing are the constraints of mortgage rate and subsequent investment.

According to the announcement caliber, the RMB 4 billion secured claim corresponds to the mortgaged property of RMB 57.72 billion, with a mortgage rate of about 69%. The remaining approximately 30% of the land cost and subsequent construction and installation investment still need to rely on self-owned funds and sales proceeds.

After the construction in progress is included in the mortgage together, the pre-sale and mortgage release rhythm of the project needs to match the arrangement of the syndicate, which will directly affect the schedule of cash flow return. The announcement did not disclose the loan interest rate, term structure and withdrawal rhythm, and relevant terms will be clarified after the signing of the Mortgage Contract.

The financial performance at the parent company level also provides another reference.

In the first three quarters of 2026, Poly Properties recorded a total operating revenue of RMB 19.323 billion, a decrease of RMB 3.436 billion from RMB 22.759 billion in the same period of the previous year; total operating costs were RMB 19.813 billion, compared with RMB 21.523 billion in the same period of the previous year; it recorded an operating loss of RMB 560 million, a total profit loss of RMB 510 million, and a net loss of RMB 849 million, of which the net loss attributable to owners of the parent company was RMB 816 million, compared with a profit of RMB 127 million in the same period of the previous year.

In the first three quarters, the net cash flow generated from operating activities of Poly Properties was -RMB 1.682 billion, the net cash flow from financing activities was -RMB 3.245 billion, and the net decrease in cash and cash equivalents was RMB 4.929 billion.

As of the end of September, monetary funds stood at RMB 21.869 billion, a decrease of RMB 4.996 billion or 18.60% from RMB 26.864 billion at the beginning of the year; the difference from the net decrease in cash and cash equivalents was RMB 67 million, which usually comes from the impact of exchange rate changes on cash; the proportion of monetary funds in total assets dropped from 16.19% to 13.38%.

In terms of sales, as of October 2026, Poly Properties Group has achieved a cumulative contracted sales amount of about RMB 36.6 billion, a cumulative contracted sales area of about 1.317 million square meters, and an average contracted sales price of about RMB 27,777 per square meter.

In the window of declining financing costs, using plots in core cities to obtain low-cost project loans is a relatively realistic choice for real estate enterprises at present. But what really determines the quality of this financing is still the entry price and de-stocking speed of this plot.

The starting point of a floor price of about RMB 108,700 per square meter means that the project must be positioned as high-total-price improved products. The area gathers enterprises such as Tencent and DJI, and the demand from high-net-worth groups is relatively abundant, but the capacity of the high-end market and changes in policy calibers are still uncertain factors.

For Poly Properties, this RMB 4 billion syndicated loan solves the "initial stage" capital for development, and it also seems to be a smooth credit enhancement financing.

This article is from the WeChat Official Account "Viewpoint", written by Viewpoint New Media, and published with authorization by 36Kr.