China Vanke Sales Surpass Target for 2014 as Growth Defies Property Curbs

China Vanke Co. became the first Chinese developer to post annual sales of 100 billion yuan ($15 billion), reaching a target it had set for 2014 and defying government measures to cool the real-estate market.

Revenue reached 100.1 billion yuan as of Dec. 1, China’s biggest publicly traded developer said yesterday, exceeding its target of 80 billion yuan for 2010. The Shenzhen-based company said it sold properties worth 12.87 billion yuan in November, more than double its sales for the same period in 2009.

Vanke’s “milestone” revenue showed it was able to avoid China’s efforts to restrain foreign capital and ease gains in the housing market, according to Credit Suisse Group AG. The government this year suspended mortgages for third-home purchases, pledged to speed up trials of property taxes and raised interest rates in October for the first time since 2007.

“Vanke moved fast to smaller cities that were less impacted by the government’s tightening and they were not afraid to cut prices,” Du Jinsong, a Hong Kong-based property analyst for Credit Suisse, said by phone today. “Their success is due to the right strategy that they executed this year.”

Vanke’s shares climbed 2.7 percent to 8.49 yuan at the close in Shanghai, the highest since Nov. 15. The measure tracking property stocks on the Shanghai Composite Index advanced 1.3 percent.

About 90 percent of Vanke’s apartments are less than 144 square meters (1,550 square feet), with those smaller than 90 square meters accounting for 60 percent of the homes it built, it said in an e-mailed statement.

‘Quick Sales’

“Quick development and quick sales are features for Vanke’s sales strategy,” Yu Liang, president of Vanke, said in the statement.

China’s property prices rose 8.6 percent in October from the same period a year earlier, the statistics bureau said on Nov. 10. While the increase is the slowest in 10 months, it’s the 17th month of gains for housing values in the nation, data from the bureau showed.

SouFun Holdings Ltd., the country’s biggest real-estate website owner, said home prices in 100 cities it monitors advanced 0.8 percent in November from October, gaining for a second month even as the central bank raised rates.

Vanke’s sales were “in line with the good performance” of China’s real-estate companies, which means the government’s tightening policies weren’t “strong enough,” said Gao Jian, a Shanghai-based property analyst for Northeastern Securities Co.

Moving Inland

Shanghai Forte Land Co. said yesterday its sales volume reached 12.6 billion yuan by November, exceeding its annual revenue target of 11.5 billion. Shimao Property Holdings Ltd. has achieved 91 percent of this year’s 30 billion yuan sales target by the end of November, it said in a statement yesterday.

Vanke this year entered inland Chinese cities such as the southern city of Kunming, Guiyang in the western region, and Urumqi in the far west of the country, it said in the statement.

The company may have marketed more homes in the middle of the year because they expected the property market to ease, Credit Suisse’s Du said. It would be “good enough” if the company is able to match its sales this year in 2011, he said, as the government may impose more property curbs as early as this month.

The developer may be shielded from some of the measures as it’s attracting cash-rich investors, Northeastern’s Gao said.

About 35 percent of its customers in November paid for their homes in full instead of taking out mortgages, compared with 30 percent in October, Vanke’s Tan said. Last year, they made up less than 20 percent of the homebuyers, he said.

“Speculative capital or investors with deep pocket certainly will not be influenced by the government’s property curbs,” Gao said.

--Bonnie Cao. Editors: Linus Chua, Andreea Papuc

To contact Bloomberg News staff for this story: Bonnie Cao in Shanghai at +86-21-6104-3035 or bcao4@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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