(Yicai) Jan. 22 -- A number of Chinese state-owned subway construction firms have become the biggest developers in terms of sales in their hometowns, amid a sustained downturn in the property market, thanks to their deep pockets and their close ties to transit-oriented development, which integrates urban spaces closely with public transportation, according to real estate research firm CRIC.

Xiamen Rail Transit Construction & Development Group, for example, was the biggest developer in terms of sales in Xiamen, southeastern Fujian province, last year. The firm, which is controlled by the Xiamen State-owned Assets Management Commission, logged sales of CNY15.8 billion (USD2.2 billion) and a sales area of more than 500,000 square meters. While the well-established local developer C&D Group followed with CNY12 billion in sales.

This was largely the result of Xiamen Rail, which was set up in 2011 and has assets of more than CNY180 billion (USD24.7 billion), snapping up CNY21.8 billion (USD3 billion) worth of land in 2021 and 2022 to develop housing projects along the city’s three subway lines and several others that are under construction.

Similarly, Chengdu Rail Transit City Investment Group’s housing sales in Chengdu, the capital of southwestern Sichuan province, hit CNY13 billion (USD1.7 billion) in 2024. Although it lagged behind four central state-owned property developers in terms of sales, it was the biggest local real estate company in the city.

Chengdu Rail’s property business is growing rapidly thanks to links to transit-oriented developments. Chengdu is developing nearly 10 million square meters of rail-linked projects along the city’s 15 metro lines. Nearly one million square meters of such projects are actioned each year on average.

Developers have been buying less land since the real estate market entered a slump in 2021. Instead state-owned subway companies, which have significant financial resources, have been acquiring land and developing transit-oriented developments which are large-scale and long-term.

Subway construction requires substantial cash flow, CRIC analyst Shen Xiaoling said. The development of transit-oriented projects can ease financing pressure through income from property sales. They are also more competitive in the market due to their good transportation links.

Editors: Dou Shicong, Kim Taylor