2011-02-23 11:00

SINGAPORE - Singapore property developer CapitaLand said on Tuesday it is in China for the long run, especially the affordable housing market, despite the recent cooling measures by the authorities to curb speculation.

The company also said it intended to build affordable housing in China like those built by the Housing and Development Authority in Singapore and planned to start with the city of Wuhan in central China.

"We think that we could duplicate the model in Singapore, the HDB model, where designs are based on more fundamental requirements," said Chief Executive Officer Liew Mun Leong.

"We can standardize our design ... industrialize our construction, improve our project management to give us a reasonable profit margin but over a larger volume," Liew said.

Singapore television Channel NewsAsia said CapitaLand intended to build a pipeline of over 15,000 low-cost housing units in China this year.

In 2010, China was already the biggest contributor to Capitaland's pre-tax profit, as its unit CapitaLand China Holdings reported a 24 percent surge in earnings before tax to $532.6 million.

The company sold $858.6 million worth of property in China in 2010.

The company said that the Chinese market will account for 35 percent to 45 percent of its business in the next 3-5 years and that the fundamentals of the market in China were still very strong.

"Demand, for example, because of urbanization, is still very strong in China. Just for new family formation, China needs something like 4.5 million homes every year," said Liew.

CapitaLand reported a fourth quarter net profit of S$522.1 million ($40.9 million), far exceeding the estimates of market analysts.