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SCMP Reporter

Powerlong Real Estate Holdings has boosted its land bank by six million square metres in 10 mainland cities as the company leads a trend towards building shopping malls at a time when Beijing is trying to cool the red-hot residential property market.
The aggressive buying spree reflects the belief of mainland developers that the commercial property sector will be less affected by government curbs and can piggyback on the country's ambitious urbanisation drive.
Hong Kong-listed Powerlong sealed 13 land deals in the 10 second- and third-tier cities including Tianjin, reinforcing its bid to become China's top commercial property developer, according to chairman Xu Jiankang.  
'Powerlong's expansion complies with the nation's urbanisation drive and the company is looking forward to building more shopping malls in various cities to profit from the rapid economic growth,' he said during a signing ceremony at the weekend.
He  said the Fujian-based developer aims to set up 100 mega shopping centres across the nation, up from the current 30.
The developer also signed agreements with retailers including Tesco, Parkson and Suning Appliance, under which the chain-store operators would become tenants of  Powerlong's malls, expanding their presence in China.
Alastair Hughes, chief executive of Jones Lang LaSalle's Asia-Pacific operations, said recently that the mainland's commercial property sector had attracted a clutch of interested investors amid a strong economic recovery and a short supply of space.
Powerlong, which also focuses on mass residential development projects in the mainland's second-tier cities, also secured a credit line of 15 billion yuan (HK$17.1 billion)  from major Chinese banks including the Industrial and Commercial Bank of China  to replenish its land bank.
Beijing has been reining in the residential property industry this year by raising mortgage rates and minimum down payment requirements amid mounting worries of an asset bubble and growing anger at sky-high home prices.
It is expected that further austerity measures - such as a property tax - will be launched this year as Beijing attempts to drag down property prices as part of efforts to avoid social unrest.  
'The residential projects are badly affected by the government's curbs,'  Shenyin & Wanguo Securities analyst Yin Zi  said. 
'For those who are interested  in expanding in the commercial property sector, it might be a good time in the coming six months to do so,' Yin said.
Several major developers have unveiled plans to shift their focus from the residential to the commercial sector this year, looking to maintain growth in tandem with  the fast-growing  economy.
In January, Hang Lung Properties  said it would use revenue from property sales in Hong Kong to fund its development of mainland shopping malls estimated to warrant an investment of HK$10 billion over the next three years.
Shimao Property Holdings  said in February that it would focus on developing commercial property this year, which it expected would become a new growth engine for the company.
Currently, Wanda Group  and Powerlong are the leaders in building shopping centres on the mainland.
Powerlong was established in 1990 and raised HK$2.75 billion in a Hong Kong initial public offering last October. The company  also  aims to list on the Shanghai Stock Exchange, but has yet to map out a detailed  offering plan or a timetable.
The company reported a net profit of 3.04 billion yuan in 2009, a jump of 225 per cent from a year earlier.
Buying spree
Powerlong has deals with Tesco, Parkson  and Suning Appliance
The developer currently has 30 mega shopping centres on the mainland and plans to have: 100



Powerlong builds land bank amid shopping mall push