Shui On Construction and Materials (Socam), controlled by Vincent Lo Hong-sui, will invest 700 million yuan to develop an uncompleted office building in Beijing as the Hong Kong-listed developer moves to enlarge its portfolio of distressed property developments on the mainland.
Chief executive Frankie Wong Yuet-leung said the company was in the final stages of the acquisition which would be the company's fourth investment in distressed mainland projects.
Socam, whose operations include construction and cement-making, is taking on the projects as some developers struggle under government austerity measures aimed at cooling demand in the property market.
Other acquisitions this year include an unfinished 38-storey Grade A office plaza in Dalian with 91,500 square metres of gross floor area, two blocks of Zhongcheng Plaza in Qingdao, providing a gross floor area of 62,000 sq m and one uncompleted commercial project in Beijing with a gross floor area of 124,560 sq m.
The most recent project, which has its foundation work completed, will provide a gross floor area of 60,000 sq m. 'Distressed property development is a new core business for the group,' Mr Wong said. 'We expect to see more good buying opportunities after the central government announced a series of austerity measures.'
Measures announced this year, including restrictions on lending for property projects, would cause some mainland developers to fail to complete their projects and force them to sell, he said.