Chinese developers turn wary on site deals

Mainland developers say they will become more selective in land replenishment in the second half of the year after they reported mixed results yesterday.

Chen Zhoulin, the chairman of Guangdong-based Agile Property, said the company would focus on acquiring smaller sites near existing projects for between 500 million yuan (HK$628 million) and one billion yuan. The projects would cater for owner-occupiers and home upgraders.

"It will shorten the development cycle and accelerate capital turnover rate," he said after the firm reported that interim net profit rose a lower-than-expected 3 per cent to 2.13 billion yuan for the six months to June. The interim dividend of 14.5 HK cents was the same as last year.

Sino-Ocean Land yesterday reported interim net profit of 1.41 billion yuan, up 17 per cent from a year ago.

"Property developers, in particular the small to medium-sized players, will face pressure in seeking financing channels," Sino-Ocean Land chairman Li Ming said. "We expect property developers will be more rational when they acquire land, and both the land prices and high land premium phenomenon may soften in the second half of the year."

Turnover rose 35 per cent to 9.09 billion yuan in the first half. It proposed an interim dividend of seven HK cents, up from six HK cents a year ago.