Times Property sees plenty of growth potential in its home base of Guangdong
Mainland developer Times Property plans to stay focused on the Guangdong area and targets 50 billion yuan in sales before 2020
Hong Kong listed mainland developer Times Property said it would continue to focus on the Guangdong area and plans to expand its scale of sales to 50 billion yuan (HK$59.4 billion) before 2020.
Rather than rushing into new markets like most developers – especially Beijing and Shanghai where home prices are surging – the Guangdong-based developer sees potential in its existing footprint.
Established in 1999, the company recorded contract sales of 19.5 billion yuan last year, up 28 per cent from 2014.
Most of Times’ projects are developed in Guangzhou and its satellite city, Foshan, as well as in Zhuhai, the city next to Macau.
Despite being categorised as one of the four top mainland China cities, home price growth in Guangzhou has been slower than other top tier cities, rising only 10 per cent in the past year, compared to a 53 per cent spike in Shenzhen, a city in the same province.
“I’m not worried,” said Times Property Chairman Michael Shum Chiu-hung.
“Guangzhou has a strong economy, good education and medical resources, it’s just a bit behind at this point. But with the population inflows I’m positive about the price growth in this area in the future,”he said.
Shum said the company would keep focusing on developing residential projects in Guangzhou, Foshan and Zhuhai, citing the inventory level in the three cities as comparatively healthy.
In its latest move, Times consecutively bought two land parcels in Foshan, pushing the area’s average land price to a record high.
Shum said home prices in Foshan were on the rise as more Guangzhou citizens shift to Foshan, the neighbouring city, to buy flats as its much cheaper than Guangzhou.
“Where we bought land is so close to the border of Guangzhou and Foshan that 60-70 per cent of new homes are sold to Guangzhou residents, ” he said.
Shum expects the latest land purchases in Foshan, with prices hitting a new high of more than 15,000 yuan per square metre, will launch via presale by the end of 2016 with a selling price ranging from 23,000 to 24,000 yuan per square metre.
“The market is big enough in Guangdong,” Shum said, adding that prices are still in a reasonable range in most Guangdong cities, providing room for future growth.
Guangdong, located in China’s southeastern corner, has been the province with the most developed economy and largest population in the country.
Times Property is targeting to achieve 50 billion to 60 billion yuan of annual sales in less than five years, Shum said.
The company has set a 2016 sales target of 21.5 billion yuan, representing 10 per cent growth from last year.
Shum believes recent central government easing policies for the sector, particularly the reduction in down payment requirement, would directly stimulate sales transactions. He is optimistic that more policies will soon be announced to prop up the sector.
“There is still room for further interest rate and tax cuts,” Shum said.