Developers Halted from Land Buying

The Beijing Land and Resources Bureau cites developers with outstanding payments.

Eight developers were suspended from land purchasing due to delays in payments or contract signings, the government's first enforcement of new policies aimed at bringing down the pace of land purchases and increases in idle land.

According to the Beijing Land and Resources Bureau, Beijing-based property developer Dalong Weiye Real Estate and seven other developers have been excluded from new land trading activities until required payments for previous deals are submitted.

In November, Dalong Weiye beat major developers, including Longfor Properties Co., Sino-Ocean Land Holdings and Poly Real Estate, in an auction of a land plot in Shunyi District, northeast Beijing. The company agreed to pay 5.05 billion yuan for the plot, making it the largest land deal of the year.

However, the market has expressed doubts of Dalong Weiye's capacities of payment as the company's 2008 revenue was only 137 million yuan. Rumors circulated that the company was allied with the district government in the deal in order to push up the land price in Shunyi.

According to Wang Bing, vice director of the Beijing Land Reserve Center, Dalong Weiye failed to present the required payment after the auction.

The bureau also stated that 19 land plots for commercial residences auctioned between late 2007 and Dec. 31, 2008 have yet to begin construction, including two plots bought by China Resources Land Ltd and six plots of COFCO Property. One of the plots has remained idle for 27 months behind its contracted construction date.

China's property market has seen a quick rebound last year with developers showing keen interest in land buying. On December 18, the government stiffened rules on developer land purchasing activities as part of its efforts to rein in the overheating market. According to the new rules, developers will be asked to put down a minimum of 50 percent of land value in land purchases, and are required fully settle land deals from the government within one year of the sale agreement.

(Translated by HW)

Full Article in Chinese: http://business.caing.com/2010-01-25/100110833.html