China HGS to Receive Land Use Right or Cash Compensation Awarded By Local Government

  China HGS to Receive Land Use Right or Cash Compensation Awarded By Local
                                  Government

PR Newswire

HANZHONG, China, Feb. 21, 2013

HANZHONG, China, Feb. 21, 2013 /PRNewswire-FirstCall/ -- China HGS Real Estate
Inc. (NASDAQ: HGSH) ("China HGS" or the "Company"), a leading regional real
estate developer headquartered in Hanzhong City, Shaanxi Province, China,
today announced that the Company was approved to receive additional 35.25 mu
(equivalent to 23,500 square meters) land use right or equivalent amount of
cash compensation from the municipal government of Yang County.

In 2011, the Company entered into a preliminary contract (the "Contract") with
the municipal government of Yang County for building and providing affordable
housing with total Gross Floor Area ("GFA") of 40,000m^2 apartment buildings.
Later, the Company was entrusted to build additional 132 units of affordable
apartments in Yang County.

To date, the sales of all the contracted affordable apartments have been
completed. The construction of some of these apartment buildings has been
completed and some owners have started to move into their apartments. The
Company completed total contracted sales of 487 units of these affordable
apartments with total GFA of 58,286.89 square meters. The related contracted
sales revenues are estimated to be RMB124 million. These affordable apartment
buildings used a land of 35.25 mu (approximately 23,500 square meters) in
total.

On February 16, 2013, the Company received an approval from the Bureau of
Housing and Urban-Rural Development of Yang County to award the Company 35.25
mu land use right (approximately 23,500 square meters) or equivalent amount of
cash as compensation. The details regarding the award to be in land use right
or in cash will be determined by the municipal government of Yang County.

"I am very pleased that the Company fulfilled this government contract on time
and contributed to the local economy by providing affordable housing to the
local people," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of
the China HGS. "I am very proud of receiving the award from the municipal
government. Whether the compensation will be in additional land use right or
in cash, I believe they will increase the value for our shareholders."

SafeHarborStatement

This press release contains forward-looking statements, which are subject to
change. The forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. All
"forward-looking statements" relating to the business of China HGS Real Estate
Inc., which can be identified by the use of forward-looking terminology such
as "believes," "expects" or similar expressions, involve known and unknown
risks and uncertainties which could cause actual results to differ. These
factors include but are not limited to: the uncertain market for the Company's
business, macroeconomic, technological, regulatory, or other factors affecting
the profitability of real estate business; and other risks related to the
Company's business and risks related to operating in China. Please refer to
the Company's Annual Report on Form 10-K for the fiscal year ended September
30, 2012, as well as the Company's Quarterly Reports on Form 10-Q that have
been filed since the date of such annual report, for specific details on risk
factors. Given these risks and uncertainties, you are cautioned not to place
undue reliance on forward-looking statements. The Company's actual results
could differ materially from those contained in the forward-looking
statements. The Company undertakes no obligation to revise or update its
forward-looking statements in order to reflect events or circumstances that
may arise after the date of this release.

About China HGS Real Estate, Inc.

China HGS Real Estate, Inc. (NASDAQ: HGSH), founded in 1995 and headquartered
in Hanzhong City, Shaanxi Province, is a leading real estate developer in the
region and holds the national grade I real estate qualification. The Company
focuses on the development of high-rise, sub-high-rise residential buildings
and multi-building apartment complexes in China's Tier 3 and Tier 4 cities and
counties with rapidly growing populations driven by increased urbanization.
The Company provides affordable housing with popular and modern designs to
meet the needs of multiple buyer groups. The Company's development activity
spans a range of services, including land acquisition, project planning,
design management, construction management, sales and marketing, and property
management. For further information about China HGS, please go to
www.chinahgs.com.

SOURCE China HGS Real Estate Inc.

Website: http://www.chinahgs.com
Contact: Randy Xiong, President of Capital Market, +86-091-6262-2612,
randy.xiong@chinahgs.com
 
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