Greenland to Spend $4.5 Billion on World's Third-Tallest Building in Wuhan
Shanghai Greenland Group said it will invest 30 billion yuan ($4.5 billion) to develop the world’s third-tallest building in Wuhan and reported revenue that will help rival the nation’s biggest publicly traded developer.
The company, set up in 1992 after former Chinese leader Deng Xiaoping’s historic tour of southern provinces, will build the 606-meter (1,988-foot) Wuhan Greenland Center in the central Chinese city, it said today. The 3 million-square-meter (32 million-square-foot) property will include luxury hotels and apartments, and a conference center when it’s completed in five years, it said.
“Wuhan is a very important city in central China,” Chairman and President Zhang Yuliang said in an interview in Wuhan, using a Chinese metaphor to compare the city with the head of a dragon. “It’s transiting from a regional center to an international city -- it has a huge market potential and it’s necessary to construct a landmark building here.”
China is set to become the world’s second-largest economy this year, Vice President Xi Jinping said last month, and its expansion of 9.6 percent in the third quarter is more than three times the pace of growth in the U.S., helping to drive more investments in the fastest-growing major economy.
Wuhan was ranked by ECA International this month as Asia’s 25th most expensive city for expatriates, beating locations including Mumbai and Kuala Lumpur.
“Chinese developers are moving inland and into second-tier cities because there are fewer sites left in major cities,” said Fu Qi, an analyst at China Real Estate Information Corp., which provides property data and consulting services. “In inland cities, the best thing is to build landmark buildings because they help build closer ties with local governments.”
The new building in Wuhan, located about 900 kilometers (559 miles) west of Shanghai, will be higher than the 492-meter World Financial Center in Shanghai, now the tallest tower in China. It will only be dwarfed by the 632-meter Shanghai Tower, scheduled to be completed in 2014, and the Burj Khalifa in Dubai, the world’s tallest at 828 meters.
Greenland has no immediate plans for an initial public offering and is not considering a listing in Hong Kong, Zhang said.
“We’re in no rush to go public; we’ll be listed eventually but we don’t have a timetable for that,” he said. “We need to decide what’s best as the model for our expansion.”
The Shanghai-based, government-controlled developer, which has properties in 43 Chinese cities across 22 provinces, said it expects revenue to exceed 120 billion yuan this year, helping it rival China Vanke Co.
Vanke, China’s biggest listed developer, said last week its revenue reached 100.1 billion yuan as of Dec. 1, meeting a target it had set for 2014. 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.
Greenland’s sales exceeded 110 billion yuan in the first 11 months of the year, Zhang said. Full-year revenue from the real estate business will reach 70 billion yuan, he said.
Greenland and Vanke’s sales projections show developers are still selling more homes even after 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.
Rising Home Prices
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 was the slowest in 10 months, it was the 17th month of gains for housing values in the nation, data from the bureau showed. The November housing data is expected as early as Dec. 10.
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.
Greenland’s investments in offices and other non- residential properties may have helped offset the effects from the government’s curbs, said China Real Estate Information’s Fu.
“Greenland’s good sales might also be due to its strategy of moving more toward commercial property,” Fu said.
To contact the editor responsible for this story: Linus Chua at email@example.com