January 8, 2005
Beijing-based developer Soho China expects revenues from property sales to rise by 24 per cent this year to 4.5 billion yuan (HK$4.23 billion), predicting prices will probably climb by more than 10 per cent despite the government's measures to curb growth.
Chairman and co-chief executive Pan Shiyi said the company reaped 3.64 billion yuan from property sales last year, below its sales target of four billion yuan set at the start of the year.
``We should have been able to meet the full-year target, but sales schedules for some projects were postponed due to the delay in official approvals for land use and property sales,'' he said.
Despite the government's macroeconomic control measures, Pan is confident that Beijing's property market will keep growing by 10 to 20 per cent this year. Transaction volumes in the city's secondary market may grow even faster, he added.
``Although I'm concerned over a possible shortage of land in a few years, I still believe the property market in Beijing is experiencing a healthy boom,'' Pan said.
The company is developing Soho Shang Du, a 170,000 square meter retail-commercial-residential development on a 2.2-hectare site at Beijing's central business district. The project is expected to be completed by mid-2007.
While banks in China have tightened loans to developers, Pan said the company would not be affected since it carried no debt so far and that it had no plans to borrow ``in the foreseeable future.''
Meanwhile, the lukewarm response in Hong Kong to Soho China's mainland property development has prompted the developer to roll out new promotion strategies. ``We have launched some Beijing units for sale here, but it seems Hong Kong investors are not really interested,'' Pan said.
To lure more Hong Kong investors, the developer could rent the apartments, then sell the properties together with the tenancy contracts to ensure yield, he added.
Soho China was the largest taxpayer in the mainland's real-estate sector last year, paying 300 million yuan in tax.
