Beijing Capital Land, a developer controlled by the city's government, plans to increase its sales target 60 per cent to 6 billion yuan (HK$6.8 billion) this year. The developer generated 3.74 billion yuan from contracted sales totalling 337,942 square metres in gross floor area last year, down about 53per cent from the previous year. It blamed the decline on poor market sentiment and the Sichuan earthquake, which affected property sales in Chengdu. Tong Jun, the president of Capital Land, said the company aimed to increase its sales by launching nine projects with an aggregate gross floor area of 637,003 sq m. 'We have generated more than 5 billion yuan from property sales in the first two months of this year, 92per cent more than a year earlier,' Mr Tong said, adding that the property market had become active. Capital Land aims to complete nine projects with a total gross floor area of 824,696 sq m this year. About 30 per cent or 250,000 sq m of the floor area has been sold. The 1.9 billion yuan generated from the sales will be booked this year. The developer secured government approval to issue up to 1.8 billion yuan in corporate bonds in November last year. Mr Tong said the company could issue the bonds in the first half of this year. Despite the new bonds, the company plans to reduce its net gearing ratio to 80 per cent from 110 per cent last year by improving its loan structure and increasing property sales. Chairman Liu Xiaoguang said property prices in Beijing's city centre had stabilised owing to the limited supply of residential units and strong demand, but prices in the suburban areas were still under pressure. Wu Xuan, an analyst at China Merchants Securities, said the developer might not achieve the sales target of 6 billion yuan, as it might be forced to slow development work owing to its high gearing ratio. 'And the property market will not have a major improvement until the second half of this year, when the government's stimulative measures begin to take effect,' said Mr Wu. He said he expected net profit to drop 17 to 18 per cent from 383 million yuan last year. Shares in Capital Land jumped 9.21 per cent to close at 83 HK cents yesterday.