China property

Country Garden pivots towards India, saying urban development ‘more than 10 years behind China’

PUBLISHED : Thursday, 19 January, 2017, 8:53pm
UPDATED : Thursday, 19 January, 2017, 10:27pm

Chinese property giant Country Garden said it is actively looking for investment opportunities in India, where it plans to acquire at least one residential land parcel by the end of 2017.

Developers from China have been making headlines in recent years for their ambitious overseas plans to build projects in popular destinations such as the US, UK and Australia.

But Country Garden, a Guangdong-based homebuilder, has adopted a different strategy. They have focused their expansion on the neighbouring countries, from Malaysia to Indonesia, and now they are looking towards India, the world’s sixth-largest economy.

Mo Bin, Country Garden’s president and executive director said in Hong Kong that the company sees big potential in India.

“The population in India has almost surpassed that of China, and its economic growth is the fastest in the world,” Mo said.

“We got very excited after visiting India, as their urban development is more than 10 years behind China.”

The company, which is known for building mega developments in China’s smaller cities, plans to seek out local partners to jointly develop its first housing project in India.

The location will be selected from among six cities including Delhi, Mumbai and Bangalore, Mo said.

The project amounts to an adventure, even as political and cultural differences are potential risk factors, he said.

To curb capital outflows, the Chinese government banned its citizens from converting their money into other currencies for overseas property purchases.

Mo said he believes the restriction is a short-term measure and will be relaxed after two or three years.

For the company’s huge Forest City project sitting on four artificial islands in Johor, Malaysia, Mo said Country Garden has to date invested about 7.6 billion yuan and the collected sales proceeds have covered the total costs, although he declined to reveal the sales figures.

Wu Bijun, the general manager of the company’s finance centre who will be the new chief financial officer effective from April, 2017, said Country Garden’s projects in Malaysia have been affected by the government’s stricter capital outflow control.

But that should not be an issue for its prospective India project, she said, as those homes would target local Indian buyers.

Domestically, Country Garden in 2016 reported contracted sales of 308.84 billion yuan, more than doubled the level a year earlier.

The company ranks as the third largest Chinese developer by sales, trailing China Evergrande Group and China Vanke.