(Yicai) Nov. 19 -- More than 20 Chinese developers have changed their chairpersons over the past six months, as the real estate sector’s wrenching restructuring forces builders to adapt to the new landscape and rebuild their leadership capabilities, according to industry insiders.

State-owned Bright Real Estate Group was the latest to announce a change in chairperson on Nov. 14, with the Shanghai-based firm appointing Wang Wei to replace Lu Jimin, who is retiring.

The shakeout is centred on mid-sized and large state-owned developers, including China Merchants Shekou Industrial Zone Holdings, CCCC Real Estate, and Overseas Chinese Town Asia Holdings, as well as firms that have restructured debt, such as Jinke Property Group, and high-profile names like China Vanke that are under financial pressure.

Beyond routine retirements, the recent changes reflect the need for new leadership with different skills and capabilities as the property sector moves into a new phase, Liu Shui, director of corporate research at China Index Academy, told Yicai.

Developers must abandon the old business model driven by land acquisition, rapid expansion, high debt, and fast turnover, Liu said, adding that the new leadership needs to have the foresight to navigate economic cycles, emphasize financial stability, and build robust financial management systems.

The need for fresh leadership is growing as the industry pivots from large-scale property development to more refined operations and asset-light business models such as project contracting and property management, Liu pointed out.

Another major driver of the top management shake-up is earnings pressure, according to Liu, who noted that performance has weakened at many developers since 2022, with more than 60 percent of listed builders reporting first-half losses this year.

The property sector has changed profoundly for several years, with sales and profits taking a hit, making it essential for developers to rethink their business models, said Yan Yuejin, vice president of Shanghai E-House Real Estate Research Institute.

“Companies need to adjust their organizational structure and senior management personnel to adapt to the new market situation and gain greater competitiveness,” Yan said. “In addition to changing regional and key business line heads, it may also be necessary to bring in talent with broad managerial experience from outside."

The market’s current challenges place high demands on leadership, so their professional and strategic abilities need to be higher than ever, according to Yan. New top executives must be strategically sharp, product-minded, marketing-savvy, digitally literate, and capable of driving business transformation, Yan pointed out.

The downturn in the property market is already affecting leadership pay. Chairperson compensation at the 78 developers listed in Shenzhen and Shanghai fell 16 percent to a combined CNY69.4 million (USD9.8 million) last year, according to data from Wind Information.

Editors: Tang Shihua, Martin Kadiev