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Thursday, July 24, 2008

GuocoLand to triple investment in China

BEIJING: GuocoLand is aiming to triple its investment in China in the next three years, from US$3 billion now, a senior official with the Singapore luxury home builder said yesterday.

Against a backdrop of slowing domestic sales, GuocoLand is increasingly shifting its attention to other Asian countries, especially China.

“The broad investment climate in China is sound, and our board of directors is confident about the outlook here,” said Violet Lee, managing director of GuocoLand (China) Ltd, a wholly owned subsidiary of Singapore-listed GuocoLand.

Since it entered the Chinese real estate market in 1984, GuocoLand has developed 8 sites in Beijing, Shanghai, Tianjin and Nanjing.

GuocoLand’s most recent project is the Guoson Centre in Beijing, which includes a five-star hotel, offices, a shopping mall, apartments and a transport interchange that is the downtown terminus for the capital’s newly built airport rail link.

The hub was completed and handed over to the local government this month in time for the Olympics starting on August. 8.

The overall US$1.5 billion project is expected to be completed by late 2009.

China now accounts for 20 to 30 per cent of GuocoLand’s total revenues, a figure that is likely to rise as the company expands, Lee said.

GuocoLand’s landbank in China is expected to increase to 5 million square metres within three years from 2 million sq m now, she added.

“The focus of our development will be high-end multi-functional business properties in major cities, as we did in the past,” said Lee.

The developer, controlled by Malaysian tycoon Quek Leng Chan, is also looking to diversify its investments in China by expanding into sectors such as health and education, Lee said.

She did not elaborate.

Lee said GuocoLand’s profits in China would be hurt by Beijing’s drive to cool the real estate market as well as by soaring raw material and labour costs.

But she said the firm would broadly stick to its China growth strategy.

“We wish to hold our assets for a long time, at least 10 to 20 years,” said Lee, who won the Miss Singapore crown in 1984.

By Reuters

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