BEIJING, Oct. 19 /PRNewswire-Asia/ -- The "Sales Rankings of Chinese Real Estate Companies for Q3 2009" report released on October 9 by CRIC (China) Information Technology Co., Ltd. in cooperation with the China Real Estate Appraisal and Shanghai E-house R&D Institute shows that both the "No.1" Chinese real estate company in terms of Q3 sales and the "No.1" Chinese real estate company in terms of other results for the quarter have changed. Privately owned Chinese developers, best represented by Evergrande Real Estate Group, are posing challenges for their traditionally advantageous public rivals by rapidly expanding their market share while the "traditional No.1" Chinese real estate company is faced with great challenges. Sina Leju was the first media source to announce the release of this report.
What the new rankings reveal is not merely the quantitative growth, said Dr. Shengping Long, director of China Real Estate Appraisal. As follow-up supply determines potential for a company's growth, huge reserves of land that meets market requirements are expected to give a strong push to real estate developers' growth or even reshape the Chinese property market.
The CRIC (China) report indicates that with low-priced land reserves of more than 51 million sqm, Evergrande deservedly became China's largest "landlord". Evergrande was followed by Country Garden Holdings Company Limited, the previous largest Chinese "landlord". Country Garden's land reserves were maintained at 43.6 million sqm. Agile Property ranked third with land reserves of 29.5 million sqm.
The CRIC (China) Research Center believes the capacity of selling fast and high levels of land reserves at Evergrande, Country Garden and Agile Property will be conducive to their development, allowing these major real estate companies to enjoy huge potential for long-term growth.
Analysts note that land reserves are a major measurement for real estate developers. As one focusing on provincial capitals with the highest potential for growth, Evergrande entered major Chinese provincial capitals each with a population of at five million plus and their suburbs early, acquiring a huge amount of cost-effective, quality land reserves. Currently, Evergrande is conducting property development in 17 Chinese provincial capitals and municipalities across China, including Tianjin, Chongqing, Guangzhou, Shenyang, Chengdu and Wuhan. In these cities, Evergrande operates 44 projects, or more than 80 percent of its total number of development projects.
Last year, when its IPO plan was suspended, Evergrande was criticized for its excessive land reserves. However, value of the huge reserves has now been recognized by the market and these low-priced reserves are making Evergrande the envy of its rivals that once again have to scramble for high-priced land at any cost.
In addition, as the Chinese property market has widely recovered since Q2 2009, real estate developers across China are aggressively accelerating development of new projects. Among them, Evergrande's floor space under construction totals 17 million sqm, the highest of its kind in China, while Vanke has raised its development target for the full-year 2009 from 4.03 million sqm to 5.85 million sqm, representing a rise of up to 45 percent. In the short term, newly started projects and floor space under construction perfectly reflect those real estate companies' short-term growth potential.
Continued increases in newly started projects and floor area under construction are bound to drive up real estate companies' results in the short run, and rankings of Chinese real estate companies for the full year of 2009 will be even more worth looking forward to, Long added.
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