Hong Kong-listed developer Beijing Capital Land fast tracks projects to stay competitive

Hong Kong-listed Chinese state-owned developer Beijing Capital Land has reduced its average project cycle by 58 days to boost sales as authorities on the mainland show no signs of easing off on the cooling measures.

Beijing Capital now tries to obtain project presale permits within nine months, as part of its new strategy, which it has adopted since the beginning of last year.

“This is the only choice we had, to stay in the competition,” said Zhong Beichen, its chief executive and executive director.

Beijing Capital, which has a land bank of 12.6 million square metres, also reported has reported a 70.6 per cent surge in cumulative contracted sales to 18.8 billion yuan (US$2.7 billion) for the first four months of 2019, on the back of a switch to a strategy of fast turnovers.

It also announced a jump of 39.2 per cent year on year in its cumulative contracted sales area to 785,000 square metres in the first four months this year.

The company plans to raise no more than 3 billion yuan through a rights issue, according to a filing with the Hong Kong stock exchange on Friday. The funds will be used for debt reduction, according to its statement.

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The mainland China property market is set for a tough year ahead.

“We expect national contracted sales value to slow further over the next 12 months, because of softer demand in lower tier cities,” Celia Yang, analyst at Moody’s Investors Service, said in a report. “We expect price growth will slow during the remainder of 2019 because local governments will fine-tune regulatory measures, aiming to stabilise prices.”

In this climate, Beijing Capital has also moved to diversify its business, by expanding into industrial estates for hi-tech companies. Last November, it opened Zhongguancun Integrated Circuit Park, a 60,000 square metre industrial property, in Beijing.

“The property will focus on innovation and assembly of integrated circuits. [Its tenants] are mostly engaged in producing circuits for mobile phones, recorders, electric toothbrushes and even submarines,” Zhong said.

At least five other cities, including Qingdao, Chengdu, Wuhan, Xiamen and Chongqing, have approached the company for the development of such industrial estates, he said. But Beijing Capital will choose its next projects carefully, based on existing industries, talent pool and subsidies, Zhong added.

He said the company is always looking for projects in Hong Kong, and that it would welcome collaboration with companies in the city.

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“In mainland China, we have a lot of cooperation with CIFI Group and Longfor Properties,” Zhong said, adding that Beijing Capital will consider all avenues for acquiring land in Hong Kong, including tenders and the auctions of buildings for redevelopment.