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China’s biggest developer threatens firings, fines unless sales are made
If resi projects aren't sold within seven months, Country Garden Holdings' project heads will be fired, according to internal document.
Country Garden Holdings is trying to fight looming housing market regulations with threats and incentives.
As Chinese authorities crackdown on property speculation, which analysts predict will lead to less sales in 2018, the developer told its 4,000 staff to make sales happen or risk losing their jobs, according to an internal document obtained by Bloomberg.
If homes are not sold within seven months of the land purchase, projects heads will be fired; if no sales are made within five months, they will be fined. On the other hand, if the sales are made within three months, the staff will receive a bonus equivalent to almost $32,000.
The reason behind the incentive package is “fierce” competition, according to Country Garden’s chairman, Yeung Kwok Keung. The document also advised staff to submit project plans immediately following the land purchase to expedite development.
It’s also likely that, if sales are made quickly, the developer may be able to side-step changing rules related to buying homes, which authorities are increasingly using to cool China’s housing market. Country Garden, which sold the highest number of homes in China last year, has so far avoided having projects ensnared in major rule changes due to many of their projects being located outside major cities.
JPMorgan Chase analysts say the company is undervalued and last year the developer surpassed all earnings estimates while shares rose 243 percent. Yeung’s daughter and vice chairman, Yang Huiyan, is the richest woman in real estate and China, and is in charge of the department that released the document. [Bloomberg] — Erin Hudson