Gintian Industry shifts its attention to Shanghai in bid to diversify

SHENZHEN'S real estate conglomerate Gintian Industry (Group), which built up a property development and investment portfolio in southern China, is shifting its attention north as the doldrums in the market hit Guangdong province.

Like many other developers looking to cash in on the spillover from Shanghai, the group said such a strategy would spread the group's risks.

The group said it was focusing on Shanghai and surrounding areas because there is little land available in Shenzhen for development.

Director of the company's development committee Yan Shaohua said: 'We must ensure the continual development of properties as they account for a major portion of our profits.

Property development contributes about 60 per cent to the group's annual profits.

Although a glut of offices and high-rise flats exists in Shenzhen, Mr Yan stressed that the special economic zone would remain an important market.

Even as the shift to Shanghai and east China gathered strength, Mr Yan said the company would complete its projects in Xiamen and Shantou.

In the wake of Beijing's clampdown on construction of luxury hotels, apartments and villas catering to the foreign market, Gintian Industry is building flats for local residents.

Mr Yan said: 'Our projects will now cater to middle to low income groups.' He said the group would be working on redevelopment projects in older districts on the mainland. These included projects in Wuhan and Shanghai.

Mr Yan said the main advantage of such projects, for which the local government would provide the land and the group would pump in the funds, was their prime location.

The group was negotiating for a project in Shanghai's Hongqiao district and Wuhan's Hankou district.

Mr Yan said Gintian Industry would invest an initial amount of between 30 million yuan (about HK$27.93 million) and 40 million yuan in each redevelopment project.

In Shenzhen, the group will start construction on its first anju (comfortable housing) project, which meets the requirements set by the central government for low-cost housing.

The group plans to build several blocks of low rises, with a gross floor area of 269,100 square feet, in Lowu district.

The project will be completed early next year.

Sales prices will range from 362 yuan to 390 yuan per sq ft.