Others News
- Shanghai News
Date: 28-Mar-2007 Sources: (Xinhua Online)
GUANGZHOU R&F Properties plans to buy US$1.3 billion worth of property in Shanghai over two years, entering a market that is dominated by foreign and local powerhouses such as Shimao and a target of government austerity measures aimed at cooling a real estate bubble.
Guangzhou R&F, which has been largely focused on the country's affluent south and a few northern cities, is counting on resilient demand from wealthy buyers in the country's financial heart and argues that prices have stabilized after a series of property-buying curbs in the first half of 2006.
The firm has earmarked 14 billion yuan (US$1.8 billion) for capital expenditure in 2007, of which about 10 billion yuan would be used for the purchase of land and the rest for construction, chairman Li Silian said Friday.
Li reckoned the Shanghai investment could begin yielding a profit in 2009.
'We're attacking Shanghai this year,'Li said. 'And in the future, we'll invest heavily in and around the city to boost our landbank.'
The company would spend about 7 billion yuan this year alone buying land in Shanghai, he added.
Guangzhou R&F, which like much larger rival China Overseas Land is listed in Hong Kong but does most of its business on the mainland, will use its burgeoning Shanghai base as a platform to other cities in eastern China, which like southern China is both a financial and industrial base.
It's not alone in venturing to new territory. Shanghai-based Shimao is going one step further, potentially investing US$2 billion in hotel chains in the Philippines.
On Thursday, the firm reported net profit had climbed 69 percent to 2.135 billion yuan, but the figure was below analysts' expectations for net profit of 2.52 billion yuan.
The firm has said it expected net profit to rise 30 percent in 2007 and a further 45 percent in 2008 as it develops its usual residential projects while adding to its portfolio of rental properties.
Development in the first half of this year slowed as the government took steps to head off a speculative real estate bubble, but has accelerated in the latter part of the year.
Among other measures, the government's austerity steps require that 80 percent of a developer's units are 90 square meters or less, which prompted a three-month restructuring delay in Guangzhou R&F projects set to launch in 2007.
Sponsor Results:
