Sino-Ocean sales up sixfold so far this year

PUBLISHED : Saturday, 28 March, 2009, 12:00am
UPDATED : Saturday, 28 March, 2009, 12:00am

Sino-Ocean Land Holdings, the largest property developer in Beijing, said property sales had increased sixfold year on year to a record 2.3 billion yuan (HK$2.61 billion) so far this year.

The company's goal is 8 billion yuan in contract sales this year.

'The strong sales growth in the first quarter is mainly because of improving market sentiment,' chief executive Li Ming told a press conference yesterday. He said the growth was driven by the unleashing of pent-up demand from end-users.

Mr Li disagreed that sales had been boosted by price cuts. He said he now believed home prices in Beijing would stabilise this year in light of tight supply, while other cities, such as Tianjin, Dalian and Shenyang, might see a moderate correction of about 5 per cent.

The company achieved record contract sales last year of 7.24 billion yuan, of which 5.43 billion yuan can be recognised this year and next on completion. It expects the average selling price in contract sales to stay under pressure as more projects outside Beijing, which usually fetch lower prices than in the capital, are launched for sale.

Last year, the average selling price dropped 8 per cent to 10,486 yuan per square metre from 11,375 yuan.

Beijing accounted for 80 per cent of total sales, followed by Dalian, with 10 per cent. Tianjin and Zhongshan contributed 5 per cent each.

Mr Li (below) said the company planned to increase the contribution to revenue from its portfolio of investment properties, currently 2 per cent, to between 20 and 30 per cent in the coming three to five years, when it would grow to more than half of the company's asset value.

'Now is a good time for acquisitions, because we can buy at low cost,' he said. 'We may sell our shares in some investment properties or acquire shares from partners to make them single-owner so asset value can be enhanced more easily.'