ZHENGZHOU, China, Jan. 17 /Xinhua-PRNewswire/ -- Xinyuan Real Estate Co., Ltd. ("Xinyuan") (NYSE: XIN), a fast-growing residential real estate developer with a focus on a strategically selected group of China's Tier II cities, which are larger, more developed cities with above average GDP and urban population growth rates, today announced recent governmental real estate policy updates regarding the acquisition and development of land in China.
On January 8, 2008, the State Council issued a notice on the development of land. The notice stipulates that land that has remained idle for two or more years will be reclaimed by the government and land that is idle for more than one year and less than two years will be levied a twenty percent land acquisition fee. In addition, the notice requires developers to fully utilize construction land and regulates land supply and land usage.
"The land use regulation updates are complementary to Xinyuan's business model, which focuses on efficient land acquisition and rapid asset turnover," said Mr. Yong Zhang, Xinyuan's chairman and chief executive officer. "By acquiring land through the auction process and beginning development immediately after acquisition, we believe we can quickly and efficiently develop properties without having to worry about governmental penalties regarding idle land."
The State Council's notice updated previous regulations including:
In April 2002, the Ministry of Land and Resources announced Regulation 11 (as amended in September 2007) which called for all commercial land use rights to be obtained through competitive bidding, public auction or listing-for-sale
On March 30, 2004, the Ministry of Land and Resources along with the Ministry of Supervision jointly issued a notice on the inspection of public auction of commercial land use rights, reinforcing the use of competitive bidding, public auction or listing-for-sale as the legal means to land use rights transfer
On May 29, 2006, the General Office of the State Council and nine related governmental departments jointly issued residential property supply structure adjustment and property price stabilization suggestions stating that land and city planning related government departments should strengthen the oversight of land use by developers
According to the May 2006 announcement, (i) if development of land has not commenced for more than one year after the commencement date stipulated in the land use right grant contract, the government shall impose a higher (than usual) rate of idle land tax on such land; (ii) if no development has commenced for more than two years after the commencement date stipulated in the land use right grant contract, the government has the right to reclaim the land; and (iii) if development has commenced but stopped for more than one year without government approval, and if less than one-third of the total site area is developed or less than one-fourth of the total investment of the project is invested, such land shall also be treated as idle land.
About Xinyuan Real Estate Co., Ltd.
Xinyuan Real Estate Co., Ltd. ("Xinyuan") (NYSE: XIN) is a fast-growing developer of large scale, quality residential real estate projects aimed at providing middle-income consumers in China's Tier II cities with a comfortable and convenient community life. Ranked #1 among all property developers in Zhengzhou in terms of contracted sales of residential units for the years 2004, 2005 and 2006, Xinyuan has expanded its network to cover a total population of 34 million people in 5 strategically selected Tier II cities, including Chengdu, Hefei, Jinan, Suzhou and Zhengzhou. Xinyuan has completed 13 projects with a total gross floor area ("GFA") of 0.9 million square meters within the past 10 years and as of September 30, 2007, Xinyuan had 7 projects under construction with a total GFA of 0.8 million square meters and 7 additional projects under planning with total GFA of 1.3 million square meters. With a focus on high asset turnover, efficient working capital management and strict cost control, Xinyuan is dedicated to bringing high quality, affordable homes to China's middle-income buyers. For more information, please visit http://www.xyre.com .
Safe Harbor Statement
This announcement may contain forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Statements that are not historical facts, including statements concerning Xinyuan's beliefs, forecasts, estimates and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. Information regarding these risks and uncertainties is included in our public filings with the Securities and Exchange Commission, including our registration statement on Form F-1, as amended. All information provided in this press release is as of January 17, 2008, and Xinyuan undertakes no duty to update such information, except as required under the applicable law.
