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Hong Leong Group not affected by China's real estate control policies

SHANGHAI: China's introduction of the recent real estate control regulations and policies, will not affect Malaysian conglomerate, Hong Leong Group's property investment projects in China.

Violet Lee, Group Managing Director of Guocoland China, told a special interview with the local and Malaysian media here, that the group's existing projects in China, the Guoson Centre Shanghai and Guoson Centre Dongzhimen, Beijing, are not targets of the said policies.

Both projects are mixed-use development, comprising the Guoman hotel, shopping malls and SOHO offices as well as residential units. Guocoland China is the group's property arm in China.

Lee was in Shanghai to witness the official launch of the Guoman Hotel, Shanghai, last Saturday, May 29.

The London flavour, five-star hotel's opening was officiated by Executive Chairman of the Hong Leong Group, Tan Sri Quek Leng Chan and officials from the Shanghai government.

"The Guoman hotel and shopping malls are properties of Guocoland while the SOHO units are owned by business enterprises. The main aim of the policy is to curb the soaring prices of residential units," she explained.

The prices of housing units in major cities in China have risen by over 15% in first four months of this year, owing to speculation.

"Housing projects only account for 30% of our business in China. We are lucky, as our latest 1,112 residential units in Nanjing city, were sold out before the policies were announced in April," she said.

Under the new policy, individuals have to pay not less than a 40% downpayment for a second home, and no financing is given for a third home or to non-tax payers.

Lee said, while the policy may affect housing developers, its overall intention is to clean up the property market for a healthier growth.

"Some property developers may be affected, but not Guocoland China. I see it as an opportunity for us.

"Under the new policy, 78 central government enterprises, with their core business not related to property development, had to exit the property business.

"Therefore, I forsee, more opportunities for Gucoland to secure land and less competition in the bidding for it," she added.

She also highlighted that with full economic recovery likely to be in place by 2012, the time was right for Guocoland to concentrate on the existing Guoson Centre and new, mixed-used development projects in other major cities in China.

According to Lee, Guocoland expects to develop Guoson centres in the cities of Tianjin, Nanjing and Chengdu.

"We hope to see between five to 10 Guoson centres in China in the next three to five years," she said.

The Guoson Centre won the five-star "Best Mixed-Use development in China" award, at the recent 2010 Asia-Pacific Property Award presentation. -- Bernama

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