CIFI bets on countercyclical investment strategy in China’s property market

After an aggressive year of land acquisition, Lin Zhong, the founder and chairman of CIFI Holdings (Group), will slow the pace of expansion but quicken sales this year. With more than 20 years’ experience in the industry, Lin shows full confidence in his countercyclical strategy.

Why would your company slow down acquisition of land when the market is recovering?

This year is not a good year for buying land. We have purchased six land parcels so far this year, far fewer than what we bought in the same period last year. The real estate market is volatile, and we don’t want to buy high, like stocks. Investments should be counter-cyclical, so we invest heavily when the market is bad. When the market is good, we hurry to sell flats.

We don’t set a budget for buying land, it all depends on opportunities. We only require that the annual land cost should not be over 30-40 per cent of the sales that year.

Will CIFI enter new cities this year?

We might only enter one new city. There are not many good opportunities in the cities we haven’t entered. For example, we have a team in Shenzhen, but the land market there is too hot now, we just want to pay the price we think is reasonable. So I don’t think we would have any real investment there this year.