Sunac's abolition of all regional divisions is now a foregone conclusion

Recently, market rumors have circulated that Sunac issued a document to abolish all regional platforms covering North China, East China, South China, Southwest China and other regions, flattening the original three-level management structure of "Group Headquarters — Region — City Company" into a two-level vertical management system of "Group — City Company".

The author has learned through inquiries that Sunac's abolition of all its regional platforms is imminent, though no official document has been released yet. Details are still being refined, and the adjustment is expected to be finalized within this month.

Sunac has made frequent moves recently. At the end of May, Zhang Qiang, former Executive President and President of the Chengdu-Chongqing Region, was transferred to the Group Headquarters to take charge of the entire real estate development sector, while Ma Zhixia, the former head of the Group's real estate marketing business, stepped down from her frontline position. Meanwhile, Wang Mengde stepped down as Chairman of the Board of Sunac Services, and was succeeded by Huang Shuping, a long-serving "veteran" of Sunac.

After the adjustment, the specific businesses of the real estate development sector no longer need to report to Wang Mengde and Ma Zhixia; business teams will report directly to Zhang Qiang, and both Zhang Qiang and Huang Shuping will report to Wang Mengde.

More than a month after Zhang Qiang took office, Sunac began to implement reforms targeting its regional platforms.

Source: Internet

Although no official document has been issued, the adjustment work at the regional level has already been launched in advance, mainly including two key tasks: first, the division of city companies and the confirmation of which city company will take over the management of each project; second, the arrangement of personnel originally serving on the regional platforms.

In fact, the plan to abolish regional platforms has been under internal deliberation at Sunac for a long time. Since the second half of last year, personnel on regional platforms have been gradually deployed to city companies and frontline projects, and currently most employees of regional platforms have been assigned to work on projects. The remaining steps will be formal procedures to abolish the regional management level, followed by detailed distribution and implementation of specific tasks.

The scope division of each city company has also been basically determined. For example, Hainan has been designated as an independent unit; the Central China Region may be split into three city companies corresponding to Wuhan, Changsha and Nanchang; Sunac Cultural Tourism Real Estate will no longer operate projects independently. The core management personnel from the former regional platforms will be in charge of the key city companies in the future.

The elimination of the regional management level is a result of the continuous contraction of Sunac's business scale. Although according to its financial statements, Sunac still has 681 projects with a total land reserve of 107.772 million square meters, in reality, the number of projects that can operate normally in core cities is mostly in single digits. Even in some regional platforms, after completing the main tasks of ensuring housing delivery and disposing of a large number of unsold inventory projects as a whole, there are only two or three operable projects left across the entire regional platform. Therefore, from a business perspective, the regional platforms are no longer necessary to exist, though the arrangement of personnel and the restructuring of the management system still require a transitional process.

It is reported that some long-serving "veteran" employees at Sunac have deep affection for the company and hope to continue working there. Therefore, in the absence of new real estate development projects, some of Sunac's city companies are actively expanding the agency construction business, using such projects to retain their teams and cover labor costs.

In addition, the service and cultural tourism businesses have become increasingly important to Sunac; these two business segments will retain their full teams and operate relatively independently.

According to Sunac Group's 2025 annual report, in the whole of last year, Sunac's property management revenue reached 6.69 billion yuan, and its cultural tourism business revenue hit 4.73 billion yuan. Although the total revenue decreased slightly compared with 2024, the proportion of these two businesses in the total revenue kept rising, providing a "bottom line" for Sunac's operating income and relatively stable cash flow — which is crucial for Sunac at its current stage. Huang Shuping is directly in charge of these two major businesses.

Source: Internet

However, this round of abolishing regional platforms will inevitably be accompanied by staff cuts, especially for some support positions that previously existed on the regional platforms.

Besides, Sunac is also trying to enable some of its city companies to achieve self-sustainability and revitalize their operations, completing the transformation from debt resolution and housing delivery assurance to normal business operations starting from the frontline level. Abolishing the regional management level and deploying management personnel to lower levels is also a way to provide human resources support for these city companies. However, the actual effect of this move will depend not only on the business capabilities of the city companies, but also on whether the real estate market can stabilize.

This article is from the WeChat Official Account "Future Habitat", written by Xiao Wu Jian Da Wu, and published with authorization from 36Kr.