Shimao Property buys luxury apartment project for 805m yuan

PUBLISHED : Saturday, 05 June, 2010, 12:00am
UPDATED : Saturday, 05 June, 2010, 12:00am

Shimao Property Holdings has acquired a luxury serviced apartment project in Beijing for 805 million yuan (HK$918.5 million).

The property, Oakwood Residence Beijing, in Chaoyang district, has 202 rooms with a gross floor area of 49,000 square metres. The price represents an accommodation value of 16,428 yuan per square metre.

Based on the floor area, the company said it needed to invest an additional 245 million yuan to upgrade the project, after which it would be offered for sale.

Earlier this week, Shimao announced that contract sales for the first five months recorded a year-on-year fall of 10.7 per cent to 9.54 billion yuan. It also said the area sold dropped 23.4 per cent year on year to 865,957 sq metres.

It said sales for last month slowed marginally from previous months as buyers waited on government moves to cool the property sector.

'The company also postponed new product launches in a move that inflicted some impact on the month's sales results,' Shimao said.

Buying demand has collapsed on the mainland as a result of government measures since April to rein in excessive growth in home prices.

Measures included lifting minimum downpayments for second homes to 50 per cent from 40 per cent, and charging buyers in that market 1.1 times the People's Bank of China's benchmark interest rate of 5.31 per cent. The authorities have also banned mortgages on purchases of a third property and imposed residency requirements on buyers.

For the first five months of this year, Shimao had 23 projects available for sale.

The five best-selling projects for the company were Kunshan Shimao Butterfly Bay, Beijing Shimao Gongsan Plaza, Kunshan Shimao East No 1 New City, Hangzhou Shimao Rivera Garden and Shaoxing Shimao Dear Town.