Country Garden sales slump abates after China property stimulus

CHINESE builder Country Garden Holdings’ sales slump moderated in October, a sign of improving industry prospects following China’s stimulus blitz that include measures for property developers.

Contracted sales for October declined 31 per cent from a year earlier to 4.3 billion yuan (S$798 million), according to corporate filings. That narrowed from a 41 per cent on-year drop in September. Its October sales also gained 20 per cent from the September total.

In September, China began introducing a series of measures to jumpstart the economy and property sector, including cutting borrowing costs and relaxing buying curbs in big cities and downpayment requirements. Improving sales at the distressed company – once China’s largest builder by contracted sales – may temporarily soothe investor concerns over its liquidity given that it’s counting on more transactions to fight off liquidation.

A creditor filed a petition against Country Garden in February after the builder defaulted on US dollar debt a year ago. The company is in talks with creditors for a debt overhaul. But it has already missed a self-imposed target date for getting key creditor support for terms of its restructuring plan, Bloomberg reported last month.

Its wind-up hearing in Hong Kong has been adjourned until late January.

The Foshan-based developer still lags peers in sales. The value of new-home sales from the 100 biggest real estate companies in October rose 7.1 per cent from a year earlier to 435.5 billion yuan, reversing from a 37.7 per cent slump in September, according to preliminary data from China Real Estate Information. BLOOMBERG