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Yanlord has landbank in 8 Chinese cities

For 9 months last year, value of pre-sold units doubled to $1.1 billion

ONE of the companies whose shares are joining the STI this year is Yanlord Land Group, a top-tier property developer in China. Founded in 1993 by chairman Zhong Sheng Jian, who is now a Singaporean citizen, Yanlord has expanded its landbank into eight Chinese cities with exposure to the country’s rapid industrialisation.

The group is one of China’s leading property developers in terms of revenues, with some $952 million in net sales in 2006, and $171 million in net profits.

Yanlord, which at yesterday’s closing price of $2.70 had a market value of $4.89 billion, saw nine-month sales and net profits fall significantly year-on-year at the end of the 2007 third quarter.

But the group said at the time it has a positive full year outlook. It pre-sold nearly $1.1 billion worth of apartments in 9M07, almost double that for the same period of the previous year, and expects to record the bulk of the sales in the fourth quarter.

As of the end of last September, Yanlord had a total land bank of just over 4 million square metres (sq m) in gross floor area (GFA). Of this, about 1.5 million sq m are under development, with another 2.5 million sq m held of future development.

Projects are underway in Shanghai, Nanjing, Suzhou of the Yangtze River Delta, in Zhuhai and Shenzhen of the Pearl River Delta, in Tianjin to the north-east, and in Chengdu and Guiyang in Western China.

Shanghai accounts for the largest proportion, or over two-fifths, of the group’s projects currently underway, with Chengdu, Nanjing and Suzhou also with major portions.

Yanlord’s future landbank, though, is less weighted toward Shanghai, which accounts for just 8 per cent; instead, second-tier cities like Nanjing, Zhuhai, Shenzhen and Tianjin comprise the bulk of the land.

Mr Zhong, the company’s founder, was one of the first to capitalise on Chinese rule changes in 1988, which allowed people to own their homes for the first time in the Communist country.

Already a businessman with interests in the manufacture of bottlecaps, fertiliser and paper – a group he had built out of trading raw materials and paper in the 1980s – Mr Zhong next directed his capital to property development.

Anticipating the rise of an affluent class in China, he avoided building bare basics homes for the masses and instead constructed high-end apartments in Shanghai that won a name among yuppie buyers. Yanlord’s selling costs are said to be lower than those of other developers, because of the brand name it built over the last two decades.

Mr Zhong himself visited Singapore in 1988, en route to Australia, and decided to settle here. His wife, five children, and seven siblings (five brothers and two sisters) also reside here.


Source: Business Times 10 Jan 08


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