Xinyuan Real Estate Announces Recent Governmental Real Estate Policy Updates
January 17 2008 - 8:20AM
PR Newswire (US)
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. For
investor and media inquiries, please contact: In China: Mr. Alex
Gong Director of Investor Relations Tel: +86 (371) 6565-1611 Email:
Mr. Derek Mitchell Ogilvy Public Relations Worldwide (Beijing) Tel:
+86 (10) 8520-6284 Email: In the United States: Mr. Jeremy Bridgman
Ogilvy Public Relations Worldwide (New York) Tel: +1 (212) 880-5363
Email: DATASOURCE: Xinyuan Real Estate Co., Ltd. CONTACT: In China:
Mr. Alex Gong, Director of Investor Relations, +86- 371-6565-1611,
or , or Mr. Derek Mitchell, Ogilvy Public Relations Worldwide
(Beijing), +86-10-8520-6284, or ; Or In the United States: Mr.
Jeremy Bridgman, Ogilvy Public Relations Worldwide (New York),
+1-212-880-5363, or Web site: http://www.xyre.com/
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