Insight Spotlight | Guangzhou IFC Lease Renewal Rate Exceeds 86%, Yuexiu Property Fund's Asset Stabilization Effect Highlights

Guandian.com On March 11, Yuexiu Property Fund was the first to release its 2025 performance report.

From the financial data, the fund’s overall operations demonstrate resilience, with asset management capabilities and cyclical resistance effectively validated.

In terms of specific operational data, during the period, the fund achieved a total revenue of 1.856 billion yuan, with net property income of 1.284 billion yuan, and core operational indicators remained stable.

Notably, Yuexiu Property Fund’s optimization results at the financing end are significant, with the average financing cost at the end of the period dropping to 3.61%, down 55 basis points from 4.16% in 2024, further strengthening financial safety margins.

Regarding distribution policies, the manager continued a prudent strategy, with total distributions for the year reaching 270.7 million yuan, and each fund unit distributed 0.0522 yuan RMB (equivalent to 0.0580 HKD). Based on the closing price as of December 31, 2025, the annualized distribution yield is 6.74%.

Through continuous optimization of asset renovation and leasing strategies, Yuexiu Property Fund further strengthened the core asset’s role as a ballast, while the fund’s financing structure improvement also demonstrated resilience through cycles.

The fund stated in its financial report that the management team stabilized operations through multiple measures, effectively supporting relatively stable annual operating income.

Stable Operating Fundamentals

Reflecting on Yuexiu Property Fund’s development over the past year, the most notable change is the strategic adjustment of its asset portfolio.

On September 8, 2025, the fund sold a 50% stake in Yuexiu Financial Tower for a total of 3.433 billion yuan, while the remaining 50% was transferred to an internal restructuring partner for internal reorganization.

After the sale and internal restructuring, the fund’s actual beneficial interest in the property decreased to 49.495%.

Post-asset sale, Yuexiu Property Fund still holds nine property portfolios, covering office buildings, hotel apartments, retail malls, and specialized markets, with a leasable area of 633,800 square meters at the end of the period, an overall occupancy rate of 82.1%, higher than the market average, and asset valuation stable at 33.645 billion yuan.

Looking at income structure, office buildings remain the main contributor. In 2025, this sector generated 986 million yuan, maintaining a contribution rate of over 50%.

Reviewing the past year, the national office market remained in a phase of supply expansion and structural adjustment. Although demand from technology, finance, and other sectors rebounded since Q4, rental levels and occupancy rates still faced certain pressures overall.

In this complex environment, several office projects under the fund performed steadily. Notably, Fortune Plaza’s occupancy rate at the end of the period was 93.4%, Wuhan Yuexiu Fortune Center’s occupancy was 62.1%, both up 1 percentage point year-over-year, while Hong Kong Yuexiu Tower maintained 100% occupancy, with stable operations.

In terms of lease signings, the fund signed a total of 96,000 square meters of new office leases during the year, including core property Guangzhou IFC with 15,700 square meters, including a large-scale trade sector lease on the first floor; Wuhan Yuexiu Fortune Center with 26,800 square meters; and Shanghai Yuexiu Tower with 6,430 square meters, effectively filling vacated units.

For renewals, renewal rates for Guangzhou IFC and Fortune Plaza were 86% and 84%, respectively, while Wuhan Yuexiu Fortune Center’s renewal rate reached a three-year high of 76%.

Regarding strategies for the office market, the management team stated at the earnings conference held on the same day that most of the fund’s office properties are located in core areas such as Zhujiang New Town and Sports Center in Guangzhou, with significant location advantages. Additionally, over the past two years, the fund has actively promoted product optimization aligned with market trends, achieving phased results.

It is understood that during the reporting period, Guangzhou IFC launched a 7,403-square-meter decorated unit, with a clearance cycle of about 36 days and a clearance rate of nearly 72%; Wuhan Yuexiu Fortune Center renovated about 21,000 square meters of units with a clearance rate of nearly 98%; Fortune Plaza’s decorated units achieved a clearance rate of 93%.

“Our product optimization capabilities enable projects to gain higher recognition from clients,” said the fund manager.

Furthermore, on the service side, Yuexiu Property Fund has provided new experiences for clients through community-building initiatives; in terms of tenant recruitment, it has promoted tenant expansion through industry operation models, continuously optimizing tenant structure.

Data shows that in 2025, the fund introduced 10 Fortune 500 and China 500 tenants into its office properties. By the end of 2025, tenants from Fortune 500 and China 500 accounted for about 38% of the leased area in the office sector.

The hotel apartment segment is another highlight of Yuexiu Property Fund’s annual performance, generating revenue of 514 million yuan, accounting for 28%.

Notably, despite some room upgrades at the Guangzhou Four Seasons Hotel during the period, the hotel apartment segment’s revenue grew steadily by 1.1% over the year.

The Guangzhou Goldin Arch Condotel also performed outstandingly, reaching a record high since opening, with an average occupancy rate of 91.5%, up 1 percentage point year-over-year; average room rate was 1,137 yuan per room per night, up 1.6%; and RevPAR (revenue per available room) reached 1,040 yuan, up 2.7%.

In retail malls, the segment contributed 147 million yuan in revenue, accounting for 8% of total income. Notably, Guangzhou Goldin World Plaza’s occupancy rate at the end of the period was 95.5%, and Wuhan Starry River V港 Shopping Center’s occupancy was 87.4%, a significant rebound of 5.0 percentage points from mid-year.

Bai Ma Building, as a key component of the specialized market segment, had an occupancy rate of 96.0% at the end of the period, up 1 percentage point mid-year, contributing 209 million yuan in revenue, representing 11% of total income.

Strengthening Financial Margins

In the face of market volatility, Yuexiu Property Fund has built a solid operational “safe harbor” through a stable asset portfolio and prudent financial strategies, achieving steady growth in asset value.

Regarding the office market trend, the management team predicts that in 2026, new supply will continue to increase vacancy rates, with rental prices under downward pressure but with a narrowing decline. Notably, tenants show high stickiness in core business districts, and market opportunities mainly focus on tenant upgrades, relocations, and expansion needs of tech and consumer clients.

Based on this outlook, Yuexiu Property Fund plans to leverage its unified brand advantage to strengthen marketing, enhance customer acquisition, and solidify the industrial characteristics of each building, further clarifying project positioning, creating distinctive operational systems, and adopting flexible pricing strategies to achieve a dynamic balance between price and occupancy.

For the retail sector, the management emphasized at the earnings conference that it will continue to promote mall renovations and upgrades, while continuously optimizing tenant structures to maintain market competitiveness.

Besides lean operations, sound financial management remains a core pillar supporting the company’s cycle resilience. Over the past year, Yuexiu Property Fund has actively and prudently managed capital structure and financing costs, effectively safeguarding growth.

During the reporting period, the fund completed the sale of a 50% stake in Yuexiu Financial Tower, with net proceeds expected to be about 2.3 billion yuan; combined with the anticipated refinancing of 3 billion yuan from new bank loans, total proceeds are approximately 5.3 billion yuan, intended to be used entirely for debt repayment.

Latest financials show that at the end of the period, the company’s debt ratio was 48.5%. After repaying part of the debt with proceeds from asset sales in early 2026, the debt ratio has fallen to 41.2%.

In terms of financing costs, during the period, Yuexiu Property Fund’s financing expenses amounted to 773 million yuan, down 16.5% year-over-year; the average financing cost dropped to a near three-year low of 3.61%.

The average interest expense rate for the year was 3.77%, down 76 basis points from the previous year, saving approximately 150 million yuan in financing costs. The interest rate exposure was reduced to 10%, down 16 percentage points from the beginning of the year, effectively controlling interest rate risk. Meanwhile, foreign exchange exposure decreased to 24%, the lowest in five years.

Notably, over the past year, Yuexiu Property Fund achieved multiple breakthroughs in financing innovation. In July 2025, the fund issued 600 million yuan of three-year Panda bonds with a low coupon rate of 2.70%, marking the world’s first listed REIT Panda bond issuance.

In February 2026, the company successfully priced its first offshore green dual-currency bond, including a $300 million three-year green bond and a 690 million yuan three-year green dim sum bond, marking an important move to re-enter the US dollar capital market since 2021.

“The future, if domestic and international financing markets’ interest rates or policies change, we can choose more favorable financing channels for deployment. We will continue to advance in this direction,” said the fund manager.

Additionally, during the earnings conference, the management responded to the trend of the domestic public REITs market becoming more mature and normalized.

The fund stated that under the C-REITs model, domestic commercial assets are expected to gradually return to a reasonable market value range, which will bring a more favorable valuation environment for the projects held by the fund, and overall, it is a positive signal for all REITs products.

Disclaimer: The content and data in this article are compiled by Guandian based on publicly available information and do not constitute investment advice. Please verify before use.