Successful Completion of First Round of Presales Yields in Excess of $3.4 million in Initial Proceeds and Over $14.0 million in Anticipated Revenue for 2008
XI'AN, China, Oct. 18 /Xinhua-PRNewswire-FirstCall/ -- China Housing & Land Development, Inc. "China Housing" (OTC Bulletin Board: CHLN), a leading developer of residential and commercial properties in the city of Xi'an announced today the successful completion of the first round of presales for the Company's Junjing Garden II project.
Beginning in mid September, the Company began to offer select "club members" the opportunity to secure a purchase right for a unit in the highly sought after Junjing Garden II development for an initial cash payment of 100,000 RMB or approximately $13,300 USD. During a 2-week period, over 250 units were pre-sold, generating approximately $3.4 million in cash. China Housing will use these proceeds for working capital while recording these initial transactions as revenue and subsequent profit once the units are complete and the title is officially transferred to the new owner, which is anticipated to occur late next year. The buyers will be responsible for the approximate balance of $40,000 for each unit at the time of closing to officially consummate the sale with the Company recording approximately $14.0 million in 2008 revenue assuming all units close. There are risks that certain presale units may not come into final closings and if the transaction cannot close in 2008 a portion of the deposits maybe returned to customers. Presales are customary in China and enable developers to have visibility into sell-through rates, while providing access to capital to complete projects which augments overall internal rate of return.
Construction began on the first phase of Junjing Garden II, which consists of 1,000 units in July 2007 and it is expected to be completed in late 2008. Junjing Garden II in total consists of over 2,000 residential units and over 130,000 square feet of related commercial space. The project is located adjacent to the Company's successful Junjing Garden I project just outside the central portion of Xi'an and will deliver amenities that are attractive to its targeted middle-class customers while being the first Canadian style residential community with a "green and energy-saving" theme. A typical unit in Junjing Garden II is approximately 1,100 square feet and can comfortably accommodate a traditional Chinese family, including grandparents. The next round of presales is expected to begin in early 2008.
"The scale of the first presales was greater than our original expectations as the real estate market in Xi'an remains extremely strong with demand for housing far outstripping available supply. As a matter of reference, residential property prices in Xi'an increased approximately 8 percent on a year over year basis as reported by the Xi'an Statistics Bureau," commented Mr. Pingji Lu, Chairman & CEO of China Housing. "We continue to believe that the dynamics of increasing disposable income and population, combined with the aforementioned shortage in housing and the relative price discount in Xi'an compared to other major metropolitan areas will allow us to continue to successfully develop projects while also holding positive implications for our first anticipated Baqiao land sale in the fourth quarter of 2007."
About China Housing & Land Development
Based in Xi'an, the capital city of Shaanxi province in China, China Housing & Land Development, Inc. is the largest private developer of residential and commercial properties. China Housing has been an independent business since 1992 and became a U.S. public company in 2006.
Cautionary Statement Regarding Forward Looking Information
This Press Release may contain forward-looking information about China Housing & Land Development, which are covered under the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. These statements can be identified by the use of forward- looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology, and include discussions of strategy, and statements about industry trends and China Housing & Land Development's future performance, operations and products. Actual performance results may vary significantly from expectations and projections. This and other "Risk Factors" contained in China Housing & Land Development, Inc.'s public filings with the SEC.
