Minmetals Land buys land in Huizhou for HK$870mln

977,000 sq.m. accessible land located in hot spring reserve and resort area suitable for high-end development.

Minmetals Land Limited (“Minmetals Land”) is pleased to announce that, the Company has entered into a Master Cooperation Agreement with a local partner (“Local Partner”) to jointly develop a parcel of residential land with a gross site area of approximately 977,000 sq.m. in Huizhou, Guangdong Province (the “Land”), with a maximum GFA of approximately 1,954,000 sq.m. Upon completion of the transaction, Minmetals Land will own 80% and the Local Partner will own 20% of the project company (“Project Company”) respectively. The total consideration paid by Minmetals Land is approximately RMB750 million (approximately HK$870 million). The land cost is RMB600,000 per MU, which translates to about RMB500 per sq.m. in terms of GFA.

The Project Company acquired 9 pieces of land of approximately 578,000 sq.m. with an aggregate maximum GFA of approximately 1,156,000 sq.m. in a numbers of auctions conducted by the Bureau of Huizhou Boluo Land Resources during the period from April to July 2010. It is expected that the remaining 399,000 sq.m. of the Land will be acquired by the Project Company through government auction on or before 31 July 2011, according to a Minmetals Land report.

The Land is strategically located in the nationwide hot spring reserve and resort area, which is an extension of the Huizhou City CBD in Boluo County, Guangdong Province. Transportation around the Land is very convenient and it only takes ten minutes by car to reach the Land from Huizhou City center, which has an established one-hour highway network system within the region of Guangzhou, Shenzhen and Dongguan. There is a natural lake with an area of approximately 170,000 sq.m. inside the Land. The project has the advantages of natural landscape and water view, abundant resources for golfing, hot spring, holiday and sports. Hence, the project is most suitable for developing as a large high-end residential complex. Huizhou, with its thriving GDP growth in 2009, is one of the key development area of Pearl River Delta. Many top-tier national real estate developers have already moved into Jiangbei West district, where the Project is located. Such district has become a well facilitated area, which together with its advanced attributes, has made the Project ideal for the Company’s investment. The Land, together with the projects under the latest asset injection to be completed, will raise the Company’s land bank to approximately 5 million sq.m.

Mr. He Jianbo, the Managing Director of Minmetals Land, said, “The formation of partnership with the Local Partner marks a successful embankment of the Huizhou project. Following the real estate development projects in Zhuhai, Nanjing, Changsha, Yingkou and Xianghe, this is another milestone of the Company in the city area of a second and third-tier city. Such move is not only important to the Company’s plan to achieve strategic position in Southern China, but also can assist the Company to achieve its development goal in the next 3-5 years by consistently providing mid to long term property development revenue. Being one of the 16 Stated-owned enterprises approved for carrying out real estate development business as the core business, China Minmetals Corporation has, by consolidating its real estate assets and resources, affirmed the position of Minmetals Land as its sole listed real estate flagship. We will strive to enhance the value of our brand, and hence increase our market share and influence in the PRC property market, in order to deliver promising returns to our shareholders.”