Singapore's GuocoLand May Double Investment in China on Demand

Singapore's GuocoLand May Double Investment in China on Demand

By Wing-Gar Cheng

April 14 (Bloomberg) -- GuocoLand Ltd., a Singapore-based developer controlled by Malaysian billionaire Quek Leng Chan, may double its investment in China this year to $5.4 billion to tap growing demand for new homes.

Unit GuocoLand China Ltd. is in talks, which may be completed in as soon as six months, about several projects in Tianjin, Beijing and Shanghai, Violet Lee, managing director of GuocoLand China, said in Beijing yesterday.

Singapore developers including CapitaLand Ltd. have expanded in China, the world's fastest-growing major economy, as construction increases amid rapid growth in the nation's urban population. The world's most populous country posted economic growth of 10.7 percent last year.

``I'm not building enough to meet China's demand,'' Lee said. ``With this rate of urbanization, there'll always be this continuous demand for housing.''

Guocoland China also plans to expand into the management of properties and real estate investment trusts, or REITS, by 2010, Lee said. The company has 2 million square meters of property reserves in China, she said.

``The market is just enormous,'' Lee said. ``The appetite is there, the need is there.''

Parent GuocoLand agreed to purchase a 90 percent stake in Beijing Cheng Jian Dong Hua Real Estate Development Co. for 5.8 billion yuan ($750 million), the company said in a statement to the Singapore stock exchange yesterday.

Development Rights

Beijing Cheng Jian owns the development and land use rights to the Dongzhimen site, a 106,000 square meter (26 acre) land parcel in central Beijing, the statement said. The property will be developed into a retail, hotel, office and residential complex with up to 600,000 square meters (6.5 million square feet) of space, the company said. Including the development cost for Dongzhimen, the agreement is valued at 10 billion yuan, according to the company.

The development includes a transportation hub and a rail link that will be able to take passengers to Beijing International Airport within 15 minutes, the statement said.

Shares of GuocoLand closed unchanged at S$4.20 in Singapore yesterday. The stock has risen 65 percent this year, compared with a 11 percent gain in the benchmark Straits Times Index.