Shui On Land Chairman Vincent Lo applauded the central government's new policies on the property market, saying they can motivate more prospective buyers to purchase flats.

The central government announced a string of loosening policies on Oct 22 to invigorate the country's stagnant housing market. That included reducing property deed taxes and down-payment requirements.

"The policies are not one-size-fits-all," Lo said. "The central government provides a certain extent of flexibility to local governments, allowing them to implement the policies according to their needs."

Although the property growth is running out of steam, Lo remained positive that the policies will spur market demand and will put it back on the right track.

In view of the worsening market conditions, Lo admitted that the company has halted developments of four projects in Yunnan that involve a total investment of 40 billion yuan.

He said the company has notified the Yunnan provincial government that it will recommence the projects in the second half of next year when the market becomes more stable.

He noted that the company made the decision because it has to be accountable for the shareholders and provincial government.

Although the global economy is suffering, Lo said he believes investing in the mainland property market can still generate a handsome return, despite the company having no intention to slash prices to boost sales.

He said that the average price of the company's newly release projects in Wuhan increased to 15,000 yuan per square meter this year from 13,500 yuan per square meter in 2007.

In addition, Shui On Land has kicked off construction of a commercial project in Chongqing with a total gross floor area of 680,000 sq m. The 8-billion-yuan project is scheduled to be completed in 2015.

"We're confident about the office demand in Chongqing, with the city's 15 percent GDP growth in the first half. The project can accommodate its pent-up office demand," he said.

He said that the company's capital expenditure for the next two years is about HK$10.4 billion. Among the war chests, HK$2 billion to HK$3 billion will be earmarked for construction and relocation costs. Lo added that the company currently has HK$3.3 billion cash in hand.

(HK Edition 10/30/2008 page2)