The amount of viable property for sale is always shrinking. Thus to survive companies must adjust, realign, restate their aims. Example: China property firm Shanghai Lujiazui Group aims to generate half its revenue from land sales and half from rent within five years as it moves toward becoming a full-fledged property developer.Shanghai Lujiazui Finance and Trade Development Zone, which sells and manages land parcels in the city’s financial district, said the switch will help it capitalize on China’s booming property market, as land parcels available for sale in the area dwindle.
Jiang Ping, a senior executive said, "Our short-term goal is to reduce the amount of revenue from land sales and to increase our revenue gotten from rent — we hope to balance it in 5 years."
In the first half of 2009, Shanghai Lujiazui Finance and Trade Development Zone reported RMB2.6 billion ($381 million) in land sales revenue — or more than 90% — versus RMB190 million in rental revenue.
Lujiazui Finance hopes to increase the amount of land available for rent to 2 million square meters from 460,000 squares in five years.
The firm also plans to buy office buildings as investments.
Reuters quoted Jiang Ping as saying, "Money is not an issue for us — if we see a good project, we will be keen to take it up."
You must log in to post a comment.