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CR Land sees surge in sales

China Resources Land, a Hong Kong-listed developer on the mainland, has said its residential sales to date had reached 64 per cent of its target for this year, and that new government measures to cool the property sector would have little impact on the firm.

The red-chip company, which derived more than 60 per cent of its property sales from Beijing last year, said the average price of new residential projects it sold in the capital rose 5 per cent to 10 per cent year on year in the first five months of this year but did not give figures.

'We don't think the new round of austerity measures will have much impact on our operations this year,' managing director Wang Yin said yesterday.

'Apart from residential developments, we also have a number of investment properties in our existing portfolio. Rental revenue of these properties has grown about 10 per cent so far this year.'

Soaring property prices prompted the State Council last week to announce six measures, including credit-tightening and tax regulations, to cool the market.

Analysts expected Beijing to be one of the primary cities where the central government aimed to slow growth after official statistics showed property prices in the city surged 17.3 per cent in the first quarter, well above the national average of 5.5 per cent.

'It is mostly cities whose property markets have been more severely impacted by overheating which are expected to be most affected by the measures,' said Andrew Ness, an executive director of research at CB Richard Ellis.

'Beijing and Guangzhou have experienced fairly sizable residential price appreciation in the opening months of 2006 as more affluent local residents have been fairly active in acquiring housing units recently in these markets.'

To expand its revenue base, China Resources Land paid 3.3 billion yuan for three properties from its parent in November last year, including a shopping centre in Shenzhen, a 26-storey office and retail complex in Beijing and China Resources Times Square in Shanghai.

Mr Wang said the firm had about 2.5 billion yuan in cash and would keep expanding in China.

Its stock closed up 5.06 per cent at $4.15 yesterday but was still down 16.4 per cent since Beijing's measures came out on May 17.