The Chinese yuan, also known as the renminbi, is already convertible under the current account - the broadest measure of trade in goods and services. However, the capital account, which covers portfolio investment and borrowing, is still closely managed by Beijing because of worries about abrupt capital flows.
Hang Lung plans 3.5b yuan investment in Wuxi project
Hang Lung Properties plans to invest 3.5 billion yuan to develop a shopping centre, office and luxury hotel project in Wuxi, Jiangsu province, as part of its aggressive expansion in the mainland.
It bought a 37,386 square metre site at Renmin Road for 685 million yuan. The project, to be named Wuxi Hang Lung Plaza, will have a floor area of 243,000 sqmetres.
'The acquisition of this prime lot is part of our long-term investment plan,' the firm said yesterday.
The firm, which raised HK$6.68 billion from a share placement last month, aims to develop 10 projects in the mainland involving an investment of up to 30 billion yuan over the next several years.
It will develop five commercial projects in other mainland cities.
Meanwhile, Yanlord Land Group, which is listed in Singapore, has teamed up with the Singapore government-controlled GIC Real Estate to acquire a mega site in Nanjing for 2.4 billion yuan.
The companies bought the 306,126 sqmetre prime site through a government land auction. The site, in the Hexi New Urban Area, is designated for residential and commercial uses.
'The area will be a new central business district of Nanjing,' said Michelle Sze, an assistant to the chief executive of Yanlord Land. 'The site will be turned into a large-scale housing project similar to Taikoo Shing [in Hong Kong] with more than 5,000 units.'
The purchase price represents an estimated accommodation value of 3,490 yuan per square metre, based on the site's potential gross floor area of 688,000 sqmetres. Ms Sze said the acquisition cost was reasonable because another plot nearby was recently sold for 4,000 yuan per square metre.
The investment cost to develop the site will be almost 9,000 yuan per square metre, according to Ms Sze's estimate, bringing the total investment in the project to 6.19 billion yuan.
Analysts expect the developers to sell the project at 12,000 to 13,000 yuan per square metre to make a profit. The development is expected to be completed in five years.