China Resources lands key sites as credit crunch sidelines rivals
China Resources Land has secured the rights to develop three sites in mainland cities after facing almost no competition in public auctions because government measures to cool the economy have cut off smaller rivals' access to loans.
The government-backed developer has spent 600 million yuan for land in three cities - Beijing, Wuhan and Hefei - on which to develop top-end residential projects.
Managing director Wang Yin said reduced competition from rivals was helping drive down land prices, smoothing the way for expansion by larger players.
'Rival developers are facing tight credit and have become less aggressive in bidding for land, and we took advantage of the situation,' Mr Wang said.
State measures were introduced in May to curtail investment in property development, steel, cement and aluminium production, but the effort to cool an overheated economy has inadvertently hurt private businesses.
China Resources Land bought a 115,159 square metre site in Daxing, Beijing, for about 200 million yuan in July after land prices in the area had fallen 36 per cent from the end of last year. The firm faced few rival bidders for the site.
It also secured the rights to develop prime sites in Jiyuqiao, Wuhan, and Shushan in Hefei for roughly 200 million yuan each.
The three projects will have a combined gross floor area of 450,000 sqmetres and call for a total investment of more than one billion yuan, including the 600 million yuan land cost.
Mr Wang said the three projects would be completed between September 2006 and November 2007 and would generate revenue of more than two billion yuan.
