Many Chinese developers have become involved in the development of cemetery, which promise profits much higher than other projects.
In just a few years, the costs of acquiring a final resting place at the Wanfu Overseas Chinese Cemetery, 657 acres of hilly ground on the outskirts of Beijing, have multiplied, according to Shanghai’s China Business News.
“I bought a grave there for 20,000 yuan (US$3,300) in 2006 but the price had soared to 120,000 yuan (US$19,700) by 2013 when I intended to buy another plot following the death of another family member,” Mu Qing (pseudonym) told the paper. As if this wasn’t enough, this price only covers a 20-year lease of the land space. Moreover, it pales in comparison to plots in higher-end cemeteries neighboring Beijing, which can top hundreds of thousands of yuan or even over 1 million yuan (US$164,000) per plot, much higher than average housing prices in the same areas.
China Business News noted that amid China’s aging society, the funeral business has attracted attention from many different industries, including major developers.
In 2011, Greentown China, a developer based in Hangzhou, invested in a high-end cemetery in the city, where the price for a plot has jumped to over 50,000 yuan (US$8,200), or even 980,000-2 million yuan (US$160,800-$164,000) for people who want prime sites and elaborate tombs.
With the approval of the municipal government, Taikang Life Insurance plans to invest 60 million yuan (US$9.85 million) in a garden-like graveyard on Lofu Mountain in Huizhou, Guangdong province.
Such projects are usually carried out in cooperation with municipal governments, who provide the land and exempt the facilities from business tax. According to China Business News, cemetery projects can rack up a whopping 600% profit rate.
Statistics show that the annual revenue of China’s burial industry now tops 200 billion yuan (US$32.82 billion).
Since the development period for cemetery projects is longer than realty projects, most enterprises are only probing the new sector tentatively. Due to the involvement of municipal governments, the business is now a turf still in the grip of a limited number of enterprises.
The financial status of Sino-Life Group, a major funerary enterprise with shares listed on the Hong Kong market, offers a glimpse into the state of the industry. The company racked up revenues of 67.6 million yuan (US$11.09 million) in 2010, 72.5 million yuan (US$11.90 million) in 2011, and 61.8 million yuan (US$10.14 million) in 2012, 81%-91% of which derived from the Chinese market.
In general, the outlook of China’s funeral industry is promising, due to growing demand along with the aging population and the limited supply of land for burial. The existing cemeteries in the nation will be used up in six years, and in most municipalities’ existing supply of grave plots will be exhausted in 10 years.