SINGAPORE: Singapore property developer CapitaLand said it is in China for the long run, despite a slew of cooling measures by the authorities to curb speculation in the Chinese property market.
The measures have caused price increases to slow in recent months.
Just last week, Beijing introduced a regulation which requires buyers not registered with the city to pay taxes for at least five years before buying their first property.
On Monday, Shanghai banned families registered with the city from owning more than two homes.
CapitaLand said it intends to build HDB-style affordable housing in China, starting with Wuhan City in central China.
It is going full-steam ahead with affordable housing, targeting Chinese families that currently spend 40 per cent of their household income on housing.
CapitaLand Group CEO Liew Mun Leong said: "We think that we could duplicate the model in Singapore, the HDB model, where designs are based on more fundamental requirements
"We can standardise our design... industrialise our construction (and) improve our project management to give us a reasonable profit margin but over a larger volume".
CapitaLand intends to build a pipeline of over 15,000 low-cost housing in China this year.
China was the biggest contributor to CapitaLand's pre-tax profit in 2010.
Its Chinese business unit CapitaLand China Holdings saw earnings before tax jump 24 per cent year-on-year to US$532.6 million.
The company sold US$858.6 million worth of property in China in 2010, up 23 per cent on-year.
CapitaLand said it will be financially prudent when bidding for land sites in China.
CapitaLand Group CFO Olivier Lim said: "There have been in the past, bidders that have overbid for pieces of land, which has hammered their share price, so I think we got to be cautious about that".
CapitaLand said China will account for 35 to 45 per cent of its business in the next three to five years.
Mr Liew said: "We think that the fundamentals of the market in China are still very strong.
"Demand for example, because of urbanisation, is still very strong in China. Just for new family formation, China needs something like four and a half million homes every year.
CapitaLand reported on Tuesday a fourth-quarter net profit of S$522.1 million (US$405 million).
This far exceeded analysts' expectations of S$231.3 million (US$180 million).
-CNA/wk
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