Evergrande Real Estate Group, a developer that recently postponed its Hong Kong initial public offering, has cut prices on a number of upmarket residential projects in Guangzhou by as much as 40 per cent to speed up sales.
The move has triggered concerns that the Guangzhou-based developer was trying to raise cash by selling its properties at a discount.
The firm said it had offered 100 units in the first phase of its residential project Royal Scenic Peninsula at between 7,980 yuan (HK$8,869) and 9,380 yuan per square metre. This compares with 14,000 yuan per square metre for the latest batch of units at National Day last year.
It also offered some units in two residential projects - Jinbi Century Garden and Jinbi Lingxiu International - also in Huangpu district at a discount of 30 per cent, according to property agents.
The average price had declined to less than 9,000 yuan per square metre, down from the highest transaction price at the development of more than 12,000 yuan per square metre, according to Ellis Wong Hin-ming, the managing director at Centaline China's Guangzhou branch.
'We can tell the company's strategy has been changing after its failed attempt to raise funds through listing,' Mr Wong said. 'It is not common for a developer to offer such a substantial discount in order to speed up sales.'