China HGS Experiences Brisk Sales at New Pearl Garden Phase-III Real-Estate Project

The Pearl Garden III project is comprised of ten multi-layer apartment buildings with 392 apartment units and a total Ground Floor Area (GFA) of approximately 55,675 square meters, which includes approximately 44,819 sq. m of residential area, approximately 3,064 sq. m of commercial property, and approximately 7,791 sq. m of additional space. The Company started construction in March 2010 and expects to complete construction and deliver the project to customers by June 2011.

China HGS commenced pre-sales for the Pearl Garden III project on February 12, 2011; and during the following five-week period through March 17, 2011, China HGS sold 143 apartment units, 98 basement units, and 5 commercial units. The average selling price of the apartment units, commercial units, and basement were RMB 2,695 per square meter (about $411 per sq. m), RMB 5,350 per sq. m (about $816 per sq. m), and RMB800 per sq. m (about $122 per sq. m), respectively. China HGS also received RMB 33.0 million (about $5.0 million) in customer deposits through March 17, 2011. Based on price levels in February, 2011, China HGS could generate total revenues of about RMB 150 million (about $22.9 million) from sales of the Pearl Garden III project.

Yang County is the largest administrative district of Hanzhong, with a total population of about 440,000. China HGS has developed the Yangzhou Pearl Garden project in two phases since 2008. The Company plans to continue developing other residential and commercial property projects in Yang County after the completion of the Pearl Garden III project.

"We are very pleased to achieve such encouraging presale results from the Pearl Garden III project. Due to increasing demand for real-estate properties in the Yang County local market, the presale results significantly exceeded our initial expectations," stated Mr. Xiaojun Zhu, Chief Executive Officer of China HGS Real Estate, Inc. "The Chinese government recently launched a series of regulations intended to cool down the overheated domestic real estate market. Although these measures will affect the entire real-estate industry in China, including China HGS, we believe since China HGS' market focus is on Tier-III and Tier-IV cities, where most demands is generated from first time apartment buyers and the overall real estate market is less overheated, we believe we will experience only a limited impact from the central government's property control initiatives. Therefore, China HGS continues to remain optimistic and confident about its business growth prospects in 2011 and the following several years."

About China HGS Real Estate Inc.

China HGS Real Estate Inc., through its wholly owned subsidiary, Shaanxi Guangsha Investment and Development Group Co., Ltd., specializes in real estate development in China's second-tier and third-tier cities. The Company's real estate properties include multi-layer, sub-high-rise, and high-rise apartment buildings. The Company possesses the national grade II real estate qualification and was ranked as the No. 1 property developer in Hanzhong, Shaanxi Province in terms of market share in 2007, 2008, and 2009 successively.

Forward-looking Statements:

This press release contains certain statements that may include 'forward-looking statements'. All statements other than statements of historical fact included herein are 'forward-looking statements'. These forward looking statements are often identified by the use of forward-looking terminology such as 'believes,' 'expects' or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website http://www.sec.gov. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.