November 4 -- China’s largest real estate developer China Vanke (000002.SZ,RCode:20002:), posted a 33.33 percent year-on-year drop in transaction value in October to 10.34 billion yuan on transaction area of 1.4 million square meters, down 23.18 percent, reports dfdaily.com, citing a company filing.
Compared with the previous month, transaction value fell 7.35 percent, while transaction area dropped 7.04 percent.
The performance achieved by Vanke in October marked the third consecutive month in which the property developer achieved a year-on-year decline in transaction value.
For the first 10 months, the property developer recorded a 28.7 percent year-on-year increase in transaction value to 9.42 million square meters, higher than the 8.98 million square meters transacted for full year 2010.
During the same period, transaction value was up 23.6 percent to 107.43 billion yuan, close to the transaction value of 108.16 billion yuan recorded in 2010.
In the months of September and October, the traditional peak season for the real estate market, China Vanke recorded transaction value of 22.85 billion yuan on transaction area of 2.08 million square meters.
According to board secretary Tan Huajie, fewer developments were launched in October this year compared with the same month in 2010.
Vanke had rolled out most of its new developments in September and October last year, with transaction value hitting a peak in October. New project launches this year were more evenly spread out, and the number launched in October this year was lower than in June.
According to an industry analyst, the month-on-month declines in both the transaction value and transaction area in October was the industry norm.
The analyst predicts that Vanke will be able to record transaction value of 10 billion yuan each in the remaining two months of the year, bringing total transaction value for 2011 to over 120 billion yuan, with growth of approximately 20 percent.
During the months of September and October, despite identical levels of approved pre-sales area compared with the same period last year, transaction area in 14 cities, including Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, and Shenyang, fell 45 percent year-on-year, said Tan.
During the same period, approved pre-sales area rose approximately 31 percent from the months of August and July, indicating almost no growth in transaction area despite an increase in the supply of new homes.
According to Tan, transaction area in the 14 cities had fallen 44 percent year-on-year in September, and was down 52 percent in October, of which the declines in Shanghai, Shenzhen, Guangzhou, Hangzhou, Nanjing and Chengdu were greater than 60 percent.
Tan forecasts there will still be demand for owner-occupied housing in future, and said Vanke's focus on small and decorated units will be able to meet such demand.
Vanke acquired a 65 percent interest in a plot of land in Zhongshan, Guangdong province, in September for 450 million yuan. It bought another plot of land in Urumqi, Xinjiang province, for 40 million yuan.
Shares of China Vanke rose 1.8 percent to trade at 7.90 yuan per share at 10:13 today.
Source:CapitalVue