It says China’s anti-speculative measures won’t hit property prices
CHINESE property developer CentraLand Ltd is poised to tap into the commercial property market in the city of Zhengzhou with its ongoing development of J-Expo, a wholesale commodities building located in the heart of Zhengzhou city.
Yan Tao, executive director and chief executive officer of CentraLand, said in Mandarin that he has been observing the property market for the past 10 years and recognised a demand in the commercial property market which other industry players had failed to meet adequately.
Located at the junction of the main road and rail network in Central China, Zhengzhou city enjoys good traffic and is an important wholesale centre, especially for women’s apparels.
Branding itself as a premium brand property developer, CentraLand specialises in high-end residential and commercial developments.
Mr Yan said that the recent anti-speculative measures of the Chinese government have had minimal impact on his company.
This is because its target consumers are either well-heeled residents in Henan province who pay cash for their residences in developments like Guoling Shanshui in the suburban area of Zhengzhou city or businessmen who buy retail and office units in J-Expo.
These consumer habits are unlikely to change due to the cooling measures.
Mr Yan said: ‘The measures are not meant to bring down the property prices in China.
‘Rather, they are implemented to ensure that property prices continue to rise, albeit in a healthy and progressive way.’
Mr Yan said that the measures are aimed at the ‘bubble’ created due to the phenomenal growth in major cities like Beijing and Shanghai.
Hence, the impact of the measures is not that great on second and third-tier cities like Zhengzhou.
Mr Yan believed that the China property market presents more opportunities than challenges due to the rising affluence of its people.
Referring to a Chinese saying that one shop can support three generations of a family, Mr Yan believed that the typical Chinese businessman would be more than willing to invest in a shopfront as his disposable income increases.
Mr Yan also considered the recent listing on the Singapore Exchange (SGX) as a strategic move in terms of talent management.
His company’s listing in Singapore is expected to increase the appeal of the company to promising talents.
Already, the listing has helped Mr Yan persuade a friend from Carrefour China to join his company.
Mr Yan is confident that with the listing, his company would be able to offer higher salaries to its employees. This should help to retain talent in the company too.
While it had considered Hong Kong, CentraLand decided that SGX was more suitable for its medium-sized operations since there are already many larger players in the Hong Kong market.
Instead of being a medium-sized fish competing with bigger fish in the unexplored seas, the company would rather be in familiar waters.
CentraLand also chose Singapore over other South-east Asian countries based on the recommendation and experience of CentraLand’s other major shareholder, Li Wei, who owns Synear Food Holdings, a Singapore-listed frozen dumpling maker in Zhengzhou city.
Mr Yan believed that with a clear strategy, efficient management team and strong financial background, the company should be able to face the everyday challenges in the property market.
Following the listing on SGX, CentraLand’s operations will continue to concentrate geographically in the city of Zhengzhou in Henan province but the company is consistently on the lookout for opportunities to expand.
CentraLand shares closed 0.5 cents higher on Wednesday at 60.5 cents with 1.1 million shares traded.
Source: Business Times 9 Feb 08