Country Garden () is a property development company based in

Guangdong ) means "wide" or "vast", and has been associated with the region since the creation of Guang Prefecture in AD 226. The name "''Guang''" ultimately came from Guangxin ( zh, labels=no, first=t, t= , s=广信), an outpost established in Han dynasty ...

, China, owned by

Yang Guoqiang Yang Guoqiang (; born October 9, 1954, in Shunde, Guangdong), is a Chinese entrepreneur, the founder and special advisor of Country Garden Group, one of the largest private real estate developers in Guangdong Province, Mainland China. Yang re ...

's family. It ranked 206th in

Fortune Global 500 The ''Fortune'' Global 500, also known as Global 500, is an annual ranking of the top 500 corporations worldwide as measured by revenue. The list is compiled and published annually by '' Fortune'' magazine. Methodology Until 1989, it listed o ...

list of 2023. Country Garden features a

market capitalization Market capitalization, sometimes referred to as market cap, is the total value of a publicly traded company's outstanding common shares owned by stockholders. Market capitalization is equal to the market price per common share multiplied by ...

of over US$29.84 billion as of 2018; with 187 high-end township developments throughout China,

Malaysia Malaysia is a country in Southeast Asia. Featuring the Tanjung Piai, southernmost point of continental Eurasia, it is a federation, federal constitutional monarchy consisting of States and federal territories of Malaysia, 13 states and thre ...

and Australia among its vast international project portfolio. The company is incorporated in the

Cayman Islands The Cayman Islands () is a self-governing British Overseas Territories, British Overseas Territory, and the largest by population. The territory comprises the three islands of Grand Cayman, Cayman Brac and Little Cayman, which are located so ...

. Its headquarters are in the

town A town is a type of a human settlement, generally larger than a village but smaller than a city. The criteria for distinguishing a town vary globally, often depending on factors such as population size, economic character, administrative stat ...

of Beijiao (), in

Shunde District Shunde (Shun Tak in Cantonese) is a district of the city of Foshan, Guangdong province, located in the Pearl River Delta. It had a population of 2,464,784 as of the 2010 census. Once a traditional agricultural county, it has become one of the mo ...

Foshan Foshan (, ; Chinese: 佛山) is a prefecture-level city in central Guangdong Province, China. The entire prefecture covers and had a population of 9,498,863 as of the 2020 census. The city is part of the western side of the Pearl River Delta m ...

. In October 2023, the company announced that it was unable to fulfill its offshore debt obligations and was subsequently deemed in default on approximately US$11 billion of bonds, making it another victim of the

2020–2023 Chinese property sector crisis The dash is a punctuation mark consisting of a long horizontal line. It is similar in appearance to the hyphen but is longer and sometimes higher from the baseline. The most common versions are the endash , generally longer than the hyphen ...

. In July 2024, the

Hong Kong High Court The High Court of the Hong Kong Special Administrative Region is a part of the legal system of Hong Kong. It consists of the Court of Appeal and the Court of First Instance; it deals with criminal and civil cases which have risen beyond the l ...

decided to postpone the hearing of Country Garden’s liquidation petition to January 20, 2025, giving the company some breathing room to finalize its offshore debt restructuring plan. On January 16, 2025, the company presented a proposal to its offshore creditors aimed at reducing $11.6 billion in debt.

History

founded Country Garden in 1992 in

Shunde Shunde (Shun Tak in Cantonese) is a district of the city of Foshan, Guangdong province, located in the Pearl River Delta. It had a population of 2,464,784 as of the 2010 census. Once a traditional agricultural county, it has become one of the mo ...

. He built the company from scratch, having previously worked as a farmer and on construction sites. The company now has interests in

property development Real estate development, or property development, is a business process, encompassing activities that range from the renovation and re- lease of existing buildings to the purchase of raw land and the sale of developed land or parcels to oth ...

, construction, fitting and decoration,

property management Property management is the operation, control, maintenance, and oversight of real estate and physical property. This can include residential, commercial, and land real estate. Management indicates the need for real estate to be cared for and mon ...

, and hotel operations in a wide variety of global markets. In 2005, Yang transferred his shares in Country Garden Holdings Company Limited to his daughter,

Yang Huiyan Yang Huiyan (; born 1981) is a Chinese-born billionaire businesswoman and property developer. She is the chairwoman and the majority shareholder of Country Garden Holdings, a stake largely transferred to her by her father Yang Guoqiang in 2007 ...

. On April 20, 2007, Country Garden was listed on the

Hong Kong Stock Exchange The Stock Exchange of Hong Kong (, SEHK, also known as Hong Kong Stock Exchange) is a stock exchange based in Hong Kong. It is one of the largest stock exchanges in Asia and the List of major stock exchanges, 9th largest globally by market ...

, and in October 2007, Yang Huiyan was declared the wealthiest woman in Asia by ''

Forbes ''Forbes'' () is an American business magazine founded by B. C. Forbes in 1917. It has been owned by the Hong Kong–based investment group Integrated Whale Media Investments since 2014. Its chairman and editor-in-chief is Steve Forbes. The co ...

'', with a net worth of US$16 billion. In 2014, Country Garden was ranked the sixth largest property developer in China by sales revenue. On April 2, 2015, Chinese insurance giant Ping An became the second largest shareholder in Country Garden by acquiring 9.9 percent of the company for US$800 million. In February 2020, in response to the

COVID-19 pandemic The COVID-19 pandemic (also known as the coronavirus pandemic and COVID pandemic), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), began with an disease outbreak, outbreak of COVID-19 in Wuhan, China, in December ...

, the

Sydney Sydney is the capital city of the States and territories of Australia, state of New South Wales and the List of cities in Australia by population, most populous city in Australia. Located on Australia's east coast, the metropolis surrounds Syd ...

office of a Country Garden subsidiary, Risland Australia, sourced eighty-two tonnes of supplies, which were subsequently airlifted to

Wuhan Wuhan; is the capital of Hubei, China. With a population of over eleven million, it is the most populous city in Hubei and the List of cities in China by population, eighth-most-populous city in China. It is also one of the nine National cent ...

. This

daigou Daigou () is an emerging form of cross-border trade in which an individual or a syndicated group of exporters outside China purchases commodities (mainly luxury goods but sometimes also groceries such as infant formulas) for customers in China. ...

operation has caused concern that those activities of Chinese companies may have contributed to shortages of

personal protective equipment Personal protective equipment (PPE) is protective clothing, helmets, goggles, or other garments or equipment designed to protect the wearer's body from injury or infection. The hazards addressed by protective equipment include physical, elect ...

products in

Australia Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...

. In 2023, Country Garden joined the ranks of property companies such as

Evergrande Group The China Evergrande Group was a Chinese property developer, and it was the second largest in China by sales. It was founded in 1996 by Hui Ka Yan (Xu Jiayin). It sold apartments mostly to upper- and middle-income dwellers. Evergrande was i ...

succumbing to the

. Following a series of

credit rating A credit rating is an evaluation of the credit risk of a prospective debtor (an individual, a business, company or a government). It is the practice of predicting or forecasting the ability of a supposed debtor to pay back the debt or default. The ...

downgrades and delayed bond coupons due to a

liquidity crisis In financial economics, a liquidity crisis is an acute shortage of ''liquidity''. Liquidity may refer to market liquidity (the ease with which an asset can be converted into a liquid medium, e.g. cash), funding liquidity (the ease with which borrow ...

, the company missed US$15 million in payments in October 2023, triggering cross defaults in up to $11 billion of offshore bonds. It subsequently removed PwC as its financial auditor.

Management

Yang Guoqiang ( Yeung Kwok Keung, 楊國強) has been the actual controller of Country Garden since he founded the company. In February 2023, due to age reasons, Yang Guoqiang resigned as

chairman of the board The chair, also chairman, chairwoman, or chairperson, is the presiding officer of an organized group such as a Board of directors, board, committee, or deliberative assembly. The person holding the office, who is typically elected or appointed by ...

. Yang Guoqiang's daughter

, the firm's largest shareholder, succeeded as chairman. After the resignation,

kept the role of special adviser to the

Cayman Island The Cayman Islands () is a self-governing British Overseas Territory, and the largest by population. The territory comprises the three islands of Grand Cayman, Cayman Brac and Little Cayman, which are located south of Cuba and north-east of ...

–registered company.

Business strategy

Country Garden focuses on erecting residential properties in third- and fourth-tier cities in

mainland China "Mainland China", also referred to as "the Chinese mainland", is a Geopolitics, geopolitical term defined as the territory under direct administration of the People's Republic of China (PRC) in the aftermath of the Chinese Civil War. In addit ...

Rapid project development model

Country Garden follows a rapid build-and-sell model called the "456" project development model, by which they aim to complete a project within four months from land acquisition to launch; five months to collect payments from buyers; and six months to recover all costs associated with the

investment Investment is traditionally defined as the "commitment of resources into something expected to gain value over time". If an investment involves money, then it can be defined as a "commitment of money to receive more money later". From a broade ...

. Their average time from land acquisition to launch is 5.2 months, making them one of the fastest builders in China.

Employee risk and profit sharing scheme

Country Garden implemented a

profit-sharing Profit sharing refers to various incentive plans introduced by businesses which provide direct or indirect payments to employees, often depending on the company's profitability, employees' regular salaries, and bonuses. In publicly traded compan ...

model, whereby 20 percent of a project's

net profit In business and Accountancy, accounting, net income (also total comprehensive income, net earnings, net profit, bottom line, sales profit, or credit sales) is an entity's income minus cost of goods sold, expenses, depreciation and Amortization (a ...

is awarded to general

project manager A project manager is a professional in the field of project management. Project managers have the responsibility of the Project planning, planning, procurement and execution of a project, in any undertaking that has a defined scope, defined star ...

s and regional presidents if they meet targets. However, if there is a net loss, 20 percent of the loss is assumed by the managers until

cash flow Cash flow, in general, refers to payments made into or out of a business, project, or financial product. It can also refer more specifically to a real or virtual movement of money. *Cash flow, in its narrow sense, is a payment (in a currency), es ...

is corrected. This scheme has been successful in motivating employees and increasing sales.

Concentric Sharing

In 2014, Country Garden introduced the "Concentric Sharing" plan, which requires top leadership to invest their own money in projects. The plan involves creating a project company comprising all project members and

senior management Senior management, executive management, or upper management is an occupation at the highest level of management of an organization, performed by individuals who have the day-to-day tasks of managing the organization, sometimes a company or a cor ...

, which includes company directors, vice presidents, regional presidents, and

project managers A project manager is a professional in the field of project management. Project managers have the responsibility of the planning, procurement and execution of a project, in any undertaking that has a defined scope, defined start and a defined fi ...

Notable international developments

Country Garden Danga Bay

Country Garden's first venture outside of China is the Country Garden Danga Bay (CGDB) coastal development in

Johor Bahru Johor Bahru, abbreviated as JB, is the capital city of the Malaysian state of Johor. It is the core city of Johor Bahru District, Malaysia's second-largest district by population and the second-largest district economy. Covering an area of ...

Iskandar Malaysia Iskandar Malaysia (formerly known as Iskandar Development Region and South Johor Economic Region), is the main southern development corridor in Johor, Malaysia. It was established on 8 November 2006. Iskandar Malaysia is currently the largest ...

, with a sales figure of US$1.57 billion (MYR5.0 billion) on the day of its official launch. Similarly, its second Malaysian project in

Semenyih Semenyih is a town and a mukim in Hulu Langat District in southeastern Selangor, Malaysia along the Kajang–Seremban road. It is southeast of downtown Kuala Lumpur and southeast of Kajang. Etymology The meaning of the name of the town is un ...

Selangor Selangor ( ; ), also known by the Arabic language, Arabic honorific Darul Ehsan, or "Abode of Sincerity", is one of the 13 states of Malaysia. It is on the west coast of Peninsular Malaysia and is bordered by Perak to the north, Pahang to the e ...

, termed Country Garden Diamond City, had 70 percent of its total units for Phase 1 sold in early June 2014.

Forest City

Forest City was planned as an integrated residential development, built on reclaimed land within the locale of

Iskandar Puteri Iskandar Puteri (formerly known as Nusajaya) is a Cities of Malaysia, city and the administrative capital of the state of Johor, Malaysia. It is situated along the Straits of Johor at the southern end of the Malay Peninsula and the southernmos ...

Johor Johor, also spelled Johore,'' is a States and federal territories of Malaysia, state of Malaysia in the south of the Malay Peninsula. It borders with Pahang, Malacca and Negeri Sembilan to the north. Johor has maritime borders with Singapore ...

, Malaysia, in close proximity to the border with

Singapore Singapore, officially the Republic of Singapore, is an island country and city-state in Southeast Asia. The country's territory comprises one main island, 63 satellite islands and islets, and one outlying islet. It is about one degree ...

. Forest City is a joint venture between ''Esplanade Danga 88'', an affiliate of state government subsidiary ''Kumpulan Prasarana Rakyat Johor'' (KPRJ), through a joint venture, Country Garden Holding Ltd (CGPV), with CGPV holding 60 percent of shares and KPRJ the other 40 percent. The project encountered but managed to overcome initial

environmental Environment most often refers to: __NOTOC__ * Natural environment, referring respectively to all living and non-living things occurring naturally and the physical and biological factors along with their chemical interactions that affect an organism ...

and

political Politics () is the set of activities that are associated with decision-making, making decisions in social group, groups, or other forms of power (social and political), power relations among individuals, such as the distribution of Social sta ...

controversies. However, following the 2018 change in Malaysian government,

and

, sales, construction progress and occupancy rates entered a steep decline. In September 2023, ''

The Wall Street Journal ''The Wall Street Journal'' (''WSJ''), also referred to simply as the ''Journal,'' is an American newspaper based in New York City. The newspaper provides extensive coverage of news, especially business and finance. It operates on a subscriptio ...

'' published a report indicating that the occupancy rate of apartments within Forest City is notably low, with only approximately 9,000 residents inhabiting a development designed to accommodate up to 700,000 individuals. Furthermore, the commercial segments of the project have yet to show any indications of commencing operations, underscoring the overbuilding problem facing the project and Chinese property development companies.

Risland Australia

Risland Australia, Country Garden's overseas venture in Sydney, garnered strong sales, with 296 apartments at its Ryde Garden development sold within six hours in late June 2014, generating US$169 million (AUD180 million) in the process. In 2023 following Country Garden's bond default, the uncompleted project was sold to

Frasers Property Frasers Property is a Thai-Singaporean multinational real estate and property management group which develops, owns, and manages properties globally. It is owned by Thai Chinese billionaire business magnate Charoen Sirivadhanabhakdi. The group ow ...

. At the point of sale, the 4,500-5,000 lot project remained largely unsold and lacked sewer and other infrastructure.

Financial summary

Liquidity crisis (2020-2024)

There have been rumors about the financial health of Country Garden since the start of

. The valuation of its equities had witnessed a steep decline. In January 2023 the stock price had been HK$3.24 (equivalent to 41 U.S. cents). As the end of July 2023 approached, the company's share value had ebbed significantly, bottoming out at HK$1.58. On August 7, 2023, Country Garden had two bond coupons denominated in

U.S. dollar The United States dollar (symbol: $; currency code: USD) is the official currency of the United States and several other countries. The Coinage Act of 1792 introduced the U.S. dollar at par with the Spanish silver dollar, divided it int ...

s (approximately $22.5 million) that had expired and had not yet been paid. As of August 8, 2023, according to statements from investors based in

Hong Kong Hong Kong)., Legally Hong Kong, China in international treaties and organizations. is a special administrative region of China. With 7.5 million residents in a territory, Hong Kong is the fourth most densely populated region in the wor ...

, the company defaulted on the cumulative amount of US$45 million with regarding interest disbursements linked to two offshore U.S. dollar bonds. The company enjoyed a leeway of 30 days to effect the payments. Should it not meet these financial obligations within the aforementioned time limit, it would default on the stipulations contained in the bond agreements. On 10 August 2023, Country Garden warned of a large net loss for the first six months of 2023 due to impairment on property projects and declining profit margins; the loss was expected to be in the range of CN¥ 45 billion(US$6.25 billion) to CN¥ 55 billion, after a net profit of around CN¥ 1.91 billion in the same period in 2022. The company's shares fell up to 14.4 percent to a record low on the day following the profit warning, closing below HK$ 1 for the first time. The same day, Country Garden appointed

China International Capital Corporation China International Capital Corporation Limited (CICC; 中国国际金融股份有限公司) is a Chinese partially state-owned multinational investment management and financial services company. Founded in 1995, CICC provides investment banking, ...

(CICC), as its financial advisor to handle the restructuring of its public market debt, with preliminary decisions expected to be made in the near term. On August 12, 2023, Country Garden Real Estate Group announced the suspension of trading for eleven onshore bonds on the

Shenzhen Stock Exchange The Shenzhen Stock Exchange (SZSE; ) is a stock exchange based in the city of Shenzhen, in the People's Republic of China. It is one of three stock exchanges operating independently in Mainland China, the others being the Beijing Stock Excha ...

and

Shanghai Stock Exchange The Shanghai Stock Exchange (, SSE) is a stock exchange based in the city of Shanghai, China. It is one of the three stock exchanges operating independently in mainland China, the others being the Beijing Stock Exchange and the Shenzhen Stock ...

starting August 14, following its controlling shareholders' disclosure of a significant first-half loss. This decision affects multiple yuan-denominated corporate bonds issued in 2021 and 2022, with discussions about restructuring due to liquidity challenges. The company's bonds have faced a sharp decline in value since August 2023, prompting discussions with bondholders about repayment arrangements and potential solutions to address financial difficulties. On September 5, 2023, the company paid offshore U.S. dollar bond interest within the

grace period A grace period is a period immediately after the deadline for an obligation during which a late fee, or other action that would have been taken as a result of failing to meet the deadline, is waived provided that the obligation is satisfied duri ...

. In October 2023, the company's Australian branch, Risland Australia, sold the 366 hectare (904 acre) Windermere project in Victoria state to

and also announced plans to sell its $2 billion Wilton Greens estate in Wollondilly Shire south-west of Sydney, after it began defaulting on offshore debts for the first time. In October 2023, the company failed to pay US$15 million in

-denominated bond, triggering cross defaults in up to $11 billion of offshore bonds. Despite initially missing an interest payment worth approximately 66 million yuan on onshore bonds in May 2024, Country Garden was able to pay within the grace period.

Controversies

In June 2018, Country Garden halted all projects in China for security inspections following an accident at its construction site in the eastern province of Anhui that killed six people. In Aug 2018, Malaysia's Prime Minister

Mahathir Mohamad Mahathir bin Mohamad (; ; born 10 July 1925) is a Malaysian politician, author and doctor who was respectively the fourth and seventh Prime Minister of Malaysia, prime minister of Malaysia from 1981 to 2003 and from 2018 to 2020. He was the ...

reportedly said he intends to ban foreigners from buying homes being built by Country Garden in the southern tip of the country. In October 2019, Country Garden, via

Walker Corporation Walker Corporation is an Australian privately-owned property development company. Most notably, Walker Corporation is responsible for the development and restoration of several significant Australian sites, including King Street Wharf, Finger ...

, was given the approval to develop stage one of South East Wilton in Sydney Australia. This is controversial because the eastern side of the site will cut Koala corridors along Allens Creek. The Greater Macarthur area, of which South East Wilton is the most southern section, is home to the largest recovering Koala colony in

New South Wales New South Wales (commonly abbreviated as NSW) is a States and territories of Australia, state on the Eastern states of Australia, east coast of :Australia. It borders Queensland to the north, Victoria (state), Victoria to the south, and South ...

References

External links

*
Official Website Of Country Garden
GB)
Official Website Of Country Garden Danga Bay
(GB) {{Hang Seng China Enterprises Index Chinese companies established in 1992 Real estate companies established in 1992 Companies listed on the Hong Kong Stock Exchange Real estate companies of China Privately held companies of China Companies based in Foshan Shunde District 1992 in Foshan