Sales reach 35.6b yuan by end-September

Hong Kong-listed Evergrande Real Estate, one of the top-10 developers on the mainland, said Monday it expects to significantly overshoot its full-year target for property sales as it has achieved 89 percent of its goal at end-September.

Contracted sales for 2010 at the end of September totaled 35.6 billion yuan, up 54.2 percent from a year earlier and close to the company's full-year target of 40 billion yuan.

Evergrande also hit a new monthly record for contracted sales in September at 5.1 billion yuan, 15 percent more than that of August.

"Despite the depressed property market in the wake of the government's tightening measures (earlier this year), our business is progressing way ahead of our target," said Xia Haijun, chief executive officer, at a media briefing held to update Evergrande's operations.

A greater number of transactions and an increase in property prices contributed to the growth in sales, the developer's data showed. During the first nine months of the year, the average selling price rose 21.8 percent to 6,248 yuan per square meter compared with a year ago while the contracted sold gross floor area rose 26.5 percent to 5.70 million square meters.

"This year is almost certain to beat our previous sales estimate, thanks to our unique position in the real estate market," said Xia.

The company's withdrawal of its business in first-tier cities while expanding into second-tier cities presents a great opportunity, Xia said. Income and demand for affordable residential properties are rising in smaller cities, but big real estate developers remain thin on the ground.

"We see a perfect match between our unique market position and the growing demand for better and affordable housing in the smaller cities," said Xia.

These cities, with much lower property prices compared with big cities such as Beijing and Shanghai, will be less affected by government tightening measures, Xia added.

Despite the measures unveiled in April to rein in the overheating property market, Evergrande saw stable sales growth between May and September.

Since making inroads into second-tier cities in 2006, Evergrande has gained presence in all the second-tier cities that it wants to , Xia said.

Looking ahead, the company is ready to move forward with its expansion into the third-tier cities like those in the Yangtze River Delta area.

"We will take advantage of our unique position in the marketplace to develop ourselves into the leading real estate developer in the second- and third-tier cities," Xia said.

Nevertheless, Xia believes that the real estate property tax expected to soon be unveiled by the government will dampen soaring prices seen in hot markets such as Beijing and Shanghai to some degree. However, prices in second- and third-tier cities will be little affected, he added.

China Daily

(HK Edition 10/12/2010 page3)