Dec. 13 (Bloomberg) -- China Merchants Property Development Ltd., the country’s third-biggest developer by market value, plans to buy more land next year because of the “positive” outlook for the property market.
The developer, on track to meet its 40 billion yuan ($6.6 billion) sales target this year, will be “more active” in buying land in 2014, said Liu Ning, the company’s board secretary, without elaborating. Home prices in major cities will rise further next year on a supply shortage and will be “relatively stable” in second-tier cities, she said.
China’s home sales in November rose to the highest monthly value in almost two years even as more local governments announced measures to curb rising prices. While Premier Li Keqiang hasn’t imposed any nationwide additional measures to rein in property prices since his predecessor Wen Jiabao stepped up a three-year campaign in March, about 13 Chinese cities have tightened real estate policies in the past month.
“These are all short-term policies as the governments try to control the rapid rising prices at the year end,” Liu said in an interview in Hong Kong yesterday.
The developer’s Hong Kong-listed unit China Merchants Land Ltd. will expand to less affluent cities, Chief Financial Officer Yu Zhiliang said in the same interview.
China Merchants Property rose 1.3 percent to 21.83 yuan, the highest in a week, at local close in Shenzhen, while China Merchants Land closed 3.3 percent higher at HK$1.89 in Hong Kong after climbing as much as 6 percent. The Shanghai Stock Exchange Property Index, which tracks 24 developers traded in the city, fell 0.2 percent.
China Merchants Land is currently in the western city of Chongqing, the eastern city of Nanjing and the southern cities of Guangzhou and Foshan, with a land bank of about 5.2 million square meters (56 million square feet), according to the company.
Oversupply in some inland cities is “severe,” including in Ordos in Inner Mongolia in the north, which face “serious bubbles” and have become “veritable ghost towns,” Citigroup Inc. analysts led by Oscar Choi wrote in a report dated yesterday.
“We don’t want to go to ghost towns,” Yu said, adding that the company holds about $700 million in cash to acquire land.
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