Chinese developer pressures managers over 'slow' turnover

Country Garden chairman Yeung Kwok Keung said staff should submit project plans to local governments the day after successfully bidding for land.
Country Garden chairman Yeung Kwok Keung said staff should submit project plans to local governments the day after successfully bidding for land.PHOTO: REUTERS

SHANGHAI • China's biggest developer is girding for a cooling market, urging staff to quicken home sales while threatening fines or dismissal for managers who are too slow in getting their projects to market.

Country Garden Holdings chairman Yeung Kwok Keung told more than 4,000 employees earlier this week that sales turnover is "too slow", according to a document seen by Bloomberg News.

The builder will fire heads of residential projects if sales start more than seven months after a land purchase, said the document, which cited "fierce" competition in the property market.

Pressure may be mounting on the nation's biggest developers, under scrutiny over their debt loads as government officials maintain a tight grip on the housing market. China is cracking down on property speculation in a campaign that began two years ago, with analysts predicting a slide in sales this year.

Country Garden project heads will incur a fine if sales start more than five months after a land purchase, while they will be entitled to a bonus of 200,000 yuan (S$41,800) if sales start within three months. In another sign of the push for speed, Mr Yeung said staff should submit project plans to local governments the day after successfully bidding for land.

Company president Mo Bin said Country Garden was losing some its edge, according to the same document. The chairman said all employees needed to reflect on why turnover was too slow; there had to be some problems.

Faster sales for the firm that sold the most homes in China last year would mean less chance of being trapped by any abrupt shifts in home-buying rules, a feature of government efforts to control a runaway housing market.

While Chinese developers are facing headwinds, Country Garden has been regarded as undervalued by analysts at firms including JPMorgan Chase.

Fuelled by a foray into smaller cities that largely escaped a government crackdown on property speculation, the builder beat all estimates for 2017 earnings. Its shares surged 243 per cent last year.

Country Garden is controlled by Ms Yang Huiyan, China's richest woman.

BLOOMBERG

A version of this article appeared in the print edition of The Straits Times on April 14, 2018, with the headline 'Chinese developer pressures managers over 'slow' turnover'. Print Edition | Subscribe