According to China Securities Journal Hangzhou Binjiang Real Estate , the real estate developer, is about to go for an IPO plan with the aim to raise as much as RMB 1.5 billion.

This will involve something like 60 million shares, which is 11.54% of its total capital stock.

The company develops luxury apartments as well as commercial properties.

The illustration is of part of the Golden Coast project in Hangzhou which was designed by Peddle Thorp Architects.

The company also owns the Friendship Hotel Hangzhou which is a 4 star-rated hotel newly renovated in 2006. It is also working with Greentown China Holdings to develop real estate on the Hangzhou Hushu project.

At the same time Accor has signed an agreement with Hangzhou Binjiang Real Estate to launch a 5-star Sofitel hotel in Zhejiang Province’s Qiaodaohu Lake Scenic Spot.

Since 1982, when it was first recognized as a scenic spot, Qiandaohu Lake has received about 11 million visitors a year, of which 600,000 are foreign tourists. During this past May Day Holiday, the scenic spot received 724,000 tourists, an increase of 26.57% over the same period of last year.

After the expressway between Hangzhou and Qiaodaohu Lake is opened at the end of this year, it will only take ninety minutes to get to Qiandaohu from Hangzhou.
Source: Research Oracle and research.

A large delegation from Tangshan, a city of seven million people on the Chinese coast some 200 km east of Beijing, is currently visiting Sweden to conduct discussions with the Government and Swedish companies on enhanced cooperation in the area of the environment.

Minister for Trade Mrs Ewa Björling, seen in our illustration, said, ‘This is the exciting start of the broadest and longest term initiative for environmental technology that Sweden has taken in China.’

A new development area with an environmental profile is being planned in Tangshan. The project includes a deep-water harbor, industrial zones and housing for more than half a million people. The City of Tangshan would apparently like to involve Sweden and Swedish environmental companies as partners in this huge development project.

During the high-level visit to China several agreements were signed on cooperation on environmental technology, including the area of sustainable urban development.

In the coming decade another 200 million people in China are expected to move to the cities. This will greatly increase the pressure on urban infrastructure — sewage treatment, waste, transport and energy — areas where Swedish companies possess world-leading expertise.
Source: Swedish Ministry for Foreign Affairs

Directly below this article is a story of Vanke blasting along making profits galore. This is not an universal story. Some local developers in China are feeling the pinch from tighter lending standards and the swing from a seller’s to a buyer’s market.

There may only be a tenuous connection with the American sub-prime problems — loans you would never give unless you were barking mad — but the problem is similar in that money is tight and loans are difficult to get on something which has any element of risk. The banks want not just belt and braces as security but also a touch of super-glue.

Few analysts expect an all-out housing crash (remember it was analysts who murmured not a word about the sub-prime crisis when the savvy operators started bailing out well over a year ago).

However, analysts (a bit devalued at the moment) say, the day of reckoning could be at hand for hundreds, even thousands, of smaller developers that leveraged up on land purchases and expanded into new geographic areas amid easy credit.

Flush with cash from sales and pre-sales of yet-to-be-built projects many developers exercised their ambitions at just the wrong time. That is a pretty frightening scenario outlined by Market Watch.

Bei Fu, an analyst of corporate and infrastructure rating with Standard & Poor’s in Hong Kong said, ‘This is going to be a volatile year for players in the sector. The funding channel has tightened significantly since last year.’

Times changed in the fourth quarter last year as the government stepped up austerity measures to cool speculation. What emerged, analysts say, was a double-squeeze.

Banks cut back on lending to developers and home buyers alike as the People’s Bank of China lifted the ratio of deposits that must be set must aside as reserves. Additional measures saw tightened mortgage lending to second-home buyers and new rules that block developers from using bank loans to finance land purchases. The government also tightened controls over the banking system to make it more difficult for developers to use funds from presales of projects to aid expansion.

Funding from the stock market dried up as regulators delayed listing approvals in a bid to make it harder to raise capital. Companies have effectively been shutout from fund raising on bond and equity markets since markets in Hong Kong and China peaked last October.

Life, indeed, for the developer without access to funds is far from grand. China’s real estate markets may have missed the massive declines seen elsewhere around the globe, but conditions in its 70 major cities have cooled sharply since the fourth quarter.

Vanke, in the story above, is one of the major companies which can easily weather this slight storm. But even Vanke will be giving an extra-careful evaluation of each new project.
Source: MarketWatch

China Vanke, the country’s top property developer by market value, said it sold 482,000 square meters of property in April worth RMB4.32 billion ($618.16 million), up 39.3% and 73.5% year-on-year respectively.

In the first quarter, the company said in a filing with the Shenzhen Stock Exchange that it sold 1.15 million square meters of property worth RMB10.1 billion, up 82.9% and 119.1% respectively. In March, it sold 719,000 square meters worth RMB6.68 billion, up 147.1% and 227.5%.

So where is the massive property slump of which we are continuously warned?

Two theories, both viable. First it has not yet started to bite. Second, when it does, it will be the smaller companies that will feel the impact the most.

Wang Shi, shown in our illustration is the founder and chairman of Vanke. And, an interesting sidenote, he is a mountaineer of some skill. He climbed Everest in 2003.

In addition, Mr. Wang has climbed to the peaks of the 7 highest mountains on 7 continents, being only one of four native Chinese citizens to have accomplished that feat. He has climbed in Antarctica and lead two expeditions to the Arctic in 2004 and 2005.
Source: China Daily

The Chinese property market has seen house prices in 70 large and mid-sized Chinese cities rise 11% year-on-year in the first quarter according to the National Development and Reform Commission (NDRC).

Prices of new apartments jumped 11.8%, down 0.4 percentage points from the same quarter last year, while prices of second-hand flats rose 11.5%, up 1.7 percentage points.

Urumqi, capital of the north-western Xinjiang Uygur Autonomous Region, continued to top the growth list with a 25.3% increase in March. It was followed by Haikou and Ningbo, which saw property prices rose 18.3% and 18.2%, respectively.

Chinese real estate is not all good news. For example prices of new homes in Shenzhen, the southern city bordering Hong Kong, and Nanjing, capital of east China’s Jiangsu Province, fell 4.9% and 0.8%, respectively, from the previous month.

Stricter controls on property speculation have made it much harder to ramp up prices, while the government’s credit squeeze is already hitting developers. In Beijing, strict loan quotas have succeeded in cutting off credit to all but a handful of the biggest and best-connected developers, which can now only secure loans priced at 10% above the nominal interest rate.

China Construction Bank, the country’s biggest mortgage lender, reckons that a 10% drop in the market should cause no major problems, but a 20-30% drop would be very tough for the country’s still fragile banking sector to handle.
Source: HomesGoFast