Who cares about backlash when there’s profit in redeveloping old Shenzhen buildings
China’s biggest developers are banking on redevelopment and leasing projects to make up for the slower regular home sales as Beijing tightens controls on prices and lending to cool the market
China’s biggest property developers are accelerating investments in redeveloping residential blocks for lease in Shenzhen’s urban villages to generate income growth, brushing off mounting opposition from affected tenants hurt by soaring rents in the city.
Country Garden Holdings, the biggest developer by sales, and Longfor Properties are joining a growing list of companies banking on redevelopment projects and an expanded leasing portfolio to make up for the slower regular home sales across the country as Beijing continues to keep a lid on prices and mortgage lending to curb overheating in the property market.
The increasing interest underline an apparent dismissal of the open letter of opposition from workers at Foxconn, an Apple supplier, to developer China Vanke and local authorities. The workers claimed they were forced out of their flats in Qinghu Village, an urban village and dormitory district for Foxconn workers where Vanke is involved in redeveloping a number of the buildings. An urban village refers to a rural neighbourhood in the city, surrounded by structures from rapid development and modernisation.
The workers fearing a higher and unaffordable rent after the redevelopment, also claimed that Vanke’s “Wancun redevelopment plan” has broken their original lease contracts.
“The Wancun Plan has overcome a lot of difficulties, but we will try our best to move forward the plan,” said Zhang Xu, vice-president of Vanke at the company’s annual general meeting in late June, in acknowledgement of the letter and backlash.
