Pricey condo development put on ice

By Zhang Kun (China Daily)
Updated: 2007-06-07 07:03

SHANGHAI: Thomson Riviera, a condominium development known for its record-setting prices, will not be allowed to sell property starting today.

The Shanghai municipal housing, land & resource administration bureau had been investigating the developers of Thomson Riviera for forging sales. The developer has also drawn a lot of negative press because of its high prices - which have climbed to more than 100,000 yuan per square meter.

Xinhua News Agency reported that Thomson Riviera started selling units in October 2005. Web records show that sales contracts were signed for three suites, and pre-sale contracts were signed for a further three. The three pre-sale contracts were later cancelled.

"The project encountered strong public criticism because of its high prices from the very beginning. It is suspected of intentionally delaying sales. Its sales departments are also suspected of forging sales, speculating and keeping the units for themselves by over-pricing," said a press release from the Shanghai housing and land administrator.

The bureau is also investigating two other real estate projects: Jiahe International Tower, opposite the Hongkou Stadium, which was found to have hoarded 204 suites, and Kingwai City Oasis, in the Baoshan District, which is suspected of forging trade information.

The central government tightened supervision of the estate market in April. Shanghai's land authorities then followed up this program with their own campaign against foul play.

An editorial by Xinhua said Thomson Riviera's prices set a new high water mark for China's real estate market and gave many developers and local authorities high expectations for prices.

Xinhua wrote that Thomson had acquired the land for Riviera in 1994, but did not open for sales until 11 years later.

"Developers are entitled to price their own products, but in Shanghai, where land resource are so scarce, should they have the right to waste land as well?" the Xinhua editorial asked.

Trading of Thomson's shares was suspended on the Hong Kong Stock Exchange yesterday afternoon. Its price had dropped by 10.53 percent before it was suspended at 2:33 pm.

Shanghai's Oriental Morning Post quoted a sales manager for Kingwai City Oasis, another developer, as saying: "It is common practice in real estate sales for the developer to intentionally keep some good suites. This gives the impression that the sales are good."

(China Daily 06/07/2007 page4)

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