Property group Dragon Land to launch US$ listing here

The Straits Times | Dec 17, 1997
By: Colin Tan

Property sales in China not hit by regional turmoil

MAINBOARD aspirant Dragon Land, a Singapore real estate developer with properties in China, is planning to launch its US dollar listing on the local bourse by the year-end.

Dragon Land, founded by two Members of Parliament - Mr Peh Chin Hua and Mr Kenneth Chen - in 1992, will issue new shares of up to 25 per cent of its enlarged capital. But it declined to reveal the actual number of IPO shares
and the offer price.

The group has received in-principle approval from the Stock Exchange of Singapore for the float which is being managed and lead underwritten by merchant bank CEF (Singapore) Ltd, a joint venture between Li Ka-shing's
Cheung Kong and CIBC of Canada.

The company has already invested more than $70 million in various projects in China and hopes to raise more cash to catch the next wave of growth expected to sweep China in 1998 and 1999.

Mr Peh, who is the company's chairman and chief executive, said: "In line with the positive outlook for the People's Republic of China, we plan to expand our scope of existing projects and explore investment opportunities in
other carefully selected areas."

He said the group had targeted investment in cities strategically connected to prosperous areas.

"As the real estate market in these cities is not saturated, we believe we will be able to tap their strong growth potential," he added.

Dragon Land, which has a total landbank of more than 1.7 million square metres in Anxi, Changzhou and Qingdao, had acquired the land at very low cost in 1992, soon after the Tiananmen Square massacre which saw most other
investors staying clear of China.

The group is developing a 1.2 million sq m township in Changzhou, and a 85,000 sq m residential and commercial development in Anxi. In Qingdao, the group has a residential and industrial project besides completing the
province's first 18-hole golf course.

Sales from completed projects grew from $6 million in 1995 to $30.4 million for the year ended June 30,1997.
Pre-tax profits kept pace, climbing from $1.3 million for 1995 to $7.8 million for the year just ended.

Vice-chairman Kenneth Chen said the currency and economic turmoil afflicting the region currently has had little impact on project sales aimed at Singaporean and Chinese buyers.

All the units from its Singapore Garden project in Anxi were snapped up when it was launched last month while 80 per cent of its Singapore Townsville in Changzhou launched last weekend was taken up.

Mr Peh said buyers, who were predominantly Singaporeans but also included some Indonesian and Malaysian investors, found the properties affordable as a result of the low land cost.

The company's forthcoming IPO launch comes at a time when stock market sentiment is poor, but Mr Peh said investors would be discerning enough to recognise that the group did not derive its profits from the local property

"The expected strong rate of economic growth in China will propel the group into its next phase of growth and we hope to raise the cash now so that we can move in when the time is right.