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Wednesday 3 February 2010
Developer penalised in Beijing for land deal delay
A developer said on Tuesday it was penalised by mainland authorities for failing to complete a major Beijing land deal on time, as authorities clamp down on land purchase and development practices while moving to fend off property price bubbles.
Developer penalised in Beijing for land deal delay
Reuters in Beijing 02 February 2010
A developer said on Tuesday it was penalised by mainland authorities for failing to complete a major Beijing land deal on time, as authorities clamp down on land purchase and development practices while moving to fend off property price bubbles.
Beijing Dalong Weiye Real Estate Development said a plot of land for luxury residences it agreed to buy in suburban Beijing for 5 billion yuan (HK$5.68 billion) was reclaimed by the local government and it would lose a 200 million yuan deposit after missing the deadline to sign a contract.
Dalong’s shares were the biggest losers on the Shanghai stock exchange on Tuesday, slumping their 10 per cent daily trading limit to 15.40 yuan.
“The company will actively communicate with the relevant government bodies and reduce potential losses,” Dalong said in a statement to the Shanghai Stock Exchange. “We will also closely monitor the development of the situation.”
Mainland has raised bank reserve ratios, tightened mortgage rules, sped up supply of affordable housing and vowed to punish developers that hoard land in its campaign to avert property price bubbles after last year’s bank lending binge.
Mainland developers have bid feverishly for land, helping to drive up prices for both land and property.
Dalong won the bid last November by agreeing to pay 30,000 yuan per square metre of floor space, making it the most expensive land deal in mainland at the time. The area was intended for the development of luxury villas.
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Developer penalised in Beijing for land deal delay
Reuters in Beijing
02 February 2010
A developer said on Tuesday it was penalised by mainland authorities for failing to complete a major Beijing land deal on time, as authorities clamp down on land purchase and development practices while moving to fend off property price bubbles.
Beijing Dalong Weiye Real Estate Development said a plot of land for luxury residences it agreed to buy in suburban Beijing for 5 billion yuan (HK$5.68 billion) was reclaimed by the local government and it would lose a 200 million yuan deposit after missing the deadline to sign a contract.
Dalong’s shares were the biggest losers on the Shanghai stock exchange on Tuesday, slumping their 10 per cent daily trading limit to 15.40 yuan.
“The company will actively communicate with the relevant government bodies and reduce potential losses,” Dalong said in a statement to the Shanghai Stock Exchange. “We will also closely monitor the development of the situation.”
Mainland has raised bank reserve ratios, tightened mortgage rules, sped up supply of affordable housing and vowed to punish developers that hoard land in its campaign to avert property price bubbles after last year’s bank lending binge.
Mainland developers have bid feverishly for land, helping to drive up prices for both land and property.
Dalong won the bid last November by agreeing to pay 30,000 yuan per square metre of floor space, making it the most expensive land deal in mainland at the time. The area was intended for the development of luxury villas.
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