Shimao Says It Sold $146 Million China Property in One Week

By Chia-Peck Wong

Oct. 5 (Bloomberg) -- Shimao Property Holdings Ltd., a Chinese developer whose credit rating was cut Oct. 3 on funding concerns, said it signed contracts to sell 1 billion yuan ($146 million) of property during the country's week-long holiday.

The Shanghai-based company, which didn't provide a year ago comparison, said it was now confident of hitting its full year 14 billion yuan sales target.

Property demand in Chinese cities has dropped by as much as half since the government last year raised minimum down payment requirements and increased rates on some mortgages to cool home prices, CSC Securities HK Ltd. analyst Liu Bin said last month. Moody's Investors Service cut Shimao's rating for the second time in less than three months, citing ``weak cash sales.''

Most of the 160,000 square meters of property sold in China's one-week National Day holiday ending today are in second and third tier cities where ``markets are relatively stable,'' Shimao said, mentioning projects in the eastern cities of Suzhou and Xuzhou.

Nanjing, Xi'an and other Chinese cities are giving property buyers subsidies to bolster the real estate market, Hong Kong- based paper Ming Pao Daily reported last week, without saying where it got the information.

A 60 percent drop in the stock market this year and concerns that economic growth in the world's fourth-largest economy is slowing have contributed to the slump in demand.

To contact the reporter on this story: Chia-Peck Wong in Hong Kong at cpwong@bloomberg.net