GuocoLand (China) Limited, the China arm of the Singaporean real
estate company, will pour over US$5 billion into China's property
market this year.
The investment is nearly double GuocoLand's capital injection
into the country over the past two decades.
"The move underlines our strong commitment to be a major player
in China as well as our confidence in the growth of China's
economy," said Violet Lee, managing director of GuocoLand
China.
The expansion, Lee said, is partly because of the government's
restraining policy on the sizzling property sector, which will
cause difficulties for smaller developers but provide more
opportunities to cash-rich companies.
Although the Ministry of Commerce has said it will adopt a more
restrictive attitude toward foreign investment in property
projects, Lee said it has a limited impact on long-term foreign
investors. And, the company's accelerated expansion is an
expression of this confidence.
GuocoLand China acquired a 100-percent stake in Tianjin Zhong
Xin Ming Shi Real Estate Development Co from Lead Mix Limited and
Reliapoint Limited, it said in a statement to the Singapore stock
exchange yesterday.
The purchase cost GuocoLand China some 406 million yuan, which
will be funded by its parent company's internal resources and
loans.
Tianjin Zhong Xin Project Co holds the land-use and development
rights to a land parcel known as Plot 12 located in the
Laochengxiang area in the Nankai District of Tianjin.
Laochengxiang, the oldest residential district in Tianjin, is a
cultural, commercial and historic hub.
The site, with an area of 26,000 square meters and a saleable
area of about 153,000 square meters, is designated for residential
and office development.
The acquisition marks GuocoLand's foray into Tianjin, a major
city with a flourishing economy in northern China, and strengthens
the company's presence in China, where it is active in Beijing,
Shanghai and Nanjing.
"We plan to develop over 1 million square meters in the future,
a tenfold increase on our current projects," said Lee.
GuocoLand China is also preparing to go to Chongqing and Chengdu
this year. "We have been in discussions for several projects in
those cities," Lee added.
But exploiting second-tier cities doesn't mean GuocoLand China
will shift focus from key municipalities. "As the base for
GuocoLand, we want Beijing to take 50 percent in our overall market
share," said Lee.
The company has signed a conditional cooperation framework with
Beijing Beida Jade Bird Company to take over a land parcel of
106,000 square meters. The site is located along the main
thoroughfare of Dongzhimen Road on the east second ring road in the
Dongcheng District of Beijing.
(China Daily March 28, 2007)