Property management firms are “abandoning” communities as China’s property slump forces a strategic retreat

A-Living’s numbers show a painful pivot

A-Living (雅生活服务) told investors that its 2025 property-management revenue fell 3.1% year‑on‑year and urban services revenue dropped 15.1%, while owner and non‑owner value‑added services plunged 17.9% and 75.5% respectively — yet the company swung to profit, with net profit attributable to shareholders rising 103.2%. The firm blamed the weakness on a broader real‑estate downturn, deliberate exits from loss‑making contracts, mounting pricing pressure from competition, and higher costs as service quality was upgraded. A‑Living said it intentionally withdrew from 548 projects in 2025, shrinking managed area by about 4.82 million square metres and pulling out of 12 cities.

Industrywide pullback from low‑return projects

The A‑Living retreat is not unique. Colour Life (彩生活), China Overseas Property (中海物业), Shimao Services (世茂服务) and Yongsheng Service (永升服务) all reported large contract cessations; it has been reported that Country Garden Services (碧桂园服务) has exited an estimated 80 million+ square metres after “comprehensive assessment” of unfixable project fundamentals. Sunac Services (融创服务), Longfor Smart Living (龙湖智创生活), Wanyuyun (万物云), China Resources Mixc Lifestyle (华润万象生活), Yuexiu Service (越秀服务) and Jianye New Life (建业新生活) are among many cutting low‑return assets. The retreat follows a decade of aggressive scale expansion — A‑Living’s managed area grew roughly 18‑fold from 2015 to 2024 and several peers expanded multiple times — and now a correction driven by developer distress, tighter financing and degraded fee collection.

Residents, regulators and business models caught in the squeeze

The human cost is visible. Residents in multiple cities describe sudden exits by incumbent managers, months‑long management gaps, and demands that owners retroactively pay missed fees. One widely reported case: a suburban Hebei community lost its contractor in late 2024 and only secured a replacement via local government tender a year later; the interim company tried to charge arrears as an “emergency management fee,” touching off protests. Industry sources say chronic low collection rates, rising labour costs and social‑insurance enforcement, plus bad debts from developer defaults, make many projects structurally unprofitable. Who foots the bill when operators walk — owners, local governments, or the market — is the pressing question.

From “scale is king” to surgical shrinkage

What was once a race to grow is now a trimming exercise. Firms are isolating core profitable portfolios, divesting non‑core assets, and severing entrenched ties with developer parents to clean balance sheets. This shift is partly a product of Beijing’s post‑crisis regulatory tightening and deleveraging push in the property sector, which has reduced developers’ ability to subsidize or mask underperforming management units. The industry’s transformation will test whether property management can move from sheer scale to disciplined, service‑oriented execution — and whether regulators will step in to prevent further community abandonments. Who wins and who loses will shape neighbourhood life across China.