22 March 2019
Shui On Land chairman Vincent Lo (center) says property sales will continue to be tepid this year. Photo: Jolie Ho
Shui On Land chairman Vincent Lo (center) says property sales will continue to be tepid this year. Photo: Jolie Ho

Shui On boss paints grim outlook for mainland property market

The outlook for the mainland property market will remain cloudy for rest of this year before rebounding in about a year’s time, Vincent Lo, chairman of Shui On Land Ltd. (00272.HK), said on Wednesday.

“It is undeniable that sales have slowed this year. We believe that there won’t be much improvement this year. But we don’t think that there will be a big collapse…. especially as the central government is very concerned about the property market,” Lo said after a shareholders’ meeting.

The property market has come under pressure amid restrictions such as limits on home purchases and mortgage loans and credit tightening, so much so that the head of the mainland’s biggest developer, China Vanke Co. Ltd. (000002.CN), said Tuesday that the property market’s best days are behind it.

Shui On Land reported a drop of 7.8 percent in sales in the four months until April compared with the previous year. But Lo said the drop is not so great given the big increase in property sales in the past two years.

“Also, the cycle in the mainland’s property market is only as short as about three years….I believe that after one or one-and-a-half years, the property market will definitely turn around,” Lo added.

The company made 2 billion yuan (US$324 million) from the sale of residential units in the first four months. Details for commercial units were not available.

Lo said he is confident the company can meet the sales target of 13 billion yuan this year, of which 8 billion yuan will be from residential units and the rest from commercial sales.

He also said Shui On is on the lookout again to expand its land bank, four years after it acquired the Hongqiao Commercial Zone in Shanghai.

“We expect to make new acquisitions around our current development projects this year. It is a good opportunity to buy land resources when the market is at an ebb,” he said.

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EJ Insight reporter

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