A little-known Chinese developer has splurged $3.3 billion on land in the past nine months, outbidding some of the country's largest real estate companies even as property sales slow and home builders scrabble for cash.
Excellence Real Estate Group, a private developer based in the southern boom town of Shenzhen, has spent 15.7 billion ($2.5 billion), around three-quarters of the total, on three commercial plots in or near the Qianhai economic zone, a proposed $45 billion financial district about an hour by car from Hong Kong.
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Its investments in Shenzhen, where prices surged about 20 percent in February from a year earlier, have thrown a spotlight on the company at a time when credit in the world's second-largest economy is tightening as the economy slows.
"It's a huge gamble," said Song Yanqing, president at Beijing-based property services company Rand Consultation, warning that Excellence could face funding risks if prices fall.
"It is betting on the assumption that there won't be any fluctuations in the Chinese property market."
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Excellence was founded in 1996 by Li Hua and his older brother Li Xiaoping, a member of Guangdong province's political advisory body.
The brothers are well-connected. President Xi Jinping's brother-in-law, Deng Jiagui, shared director posts with the pair on a company called Excellence Effort Property Development Ltd, according to Hong Kong corporate records.
The three were listed as directors until 2012, when the company was dissolved, documents show. There is no evidence those business ties would have benefited Excellence Real Estate Group in land auctions.
The outlook for Chinese property market has been hit in the past months due to tighter credit on the mainland and a slowing economy. A slowdown in home prices and reports that developers have cut prices to boost sales have also rattled investors.
Excellence insists its investment strategy makes perfect sense.
"It's not a huge gamble ... It's a decision we made after judgment. We just focus on core areas. As Li Ka-shing used to say, 'location, location, location'," said Li Dapeng, brand manager at Excellence, referring to Asia's richest man.
Last July, Excellence made headlines when it outbid some of the mainland's largest developers, such as China Vanke and China Resources Land, to win the first two land auctions in Qianhai for a record-breaking total of 12.4 billion yuan.
In March, the company, which ranked 46th among all Chinese developers by sales revenue in 2013, scooped up another piece of land - this time a commercial site less than 500 metres from the economic zone - bidding 3.3 billion yuan ($531 million) for the plot.
"We have been keeping an eye on this piece of land for a long time," Excellence's Li Xiaoping said, after the firm beat 304 bids from rivals such as Greenland Holding Group Company and Shenzhen Overseas Chinese Town at the 2-1/2 hour auction.
"This parcel of land will shine brilliantly along with the other two we already acquired in Qianhai," Li said, according to a press release from the company.
The company's spending since July is equal to 134 percent of its 2013 annual sales revenue, according to Reuters' calculations based on figures provided by the company.
Chinese developers spend on average about 35 percent of their annual sales revenues on land each year, according to a study from Rand Consultation.
China Vanke, the country's largest developer, spent about 94 billion yuan on land in 2013, topping all listed real estate companies, while Guangzhou R&F Properties ranked 10th with a 22.3 billion yuan land bill, according to real estate information provider CRIC.
Excellence's buying frenzy has attracted the attention of local media and industry watchers.
"How does the company get the funding? That's the question," said Song at Rand Consultation.
Excellence brand manager Li told Reuters the company gets funding mainly through domestic banks, with some from trust companies, the biggest non-bank players in China's vast "shadow banking" sector.
Qianhai plans to auction up to 15 parcels of land this year and Excellence's interest shows no signs of abating.
"We will keep on participating in the upcoming land auctions as long as there is any ideal plot for us," said Li Dapeng, who is not related the firm's founders, adding that the company would consider any ideal plots in or near the Qianhai zone.
But not everyone is convinced by the case for Shenzhen's nascent financial hub.
The initial euphoria over Qianhai has faded since it was announced in 2012 due to a lack of specifics on incentives for companies, with many investors also cautious about competition from Shanghai's new economic zone.
"Can Shenzhen build another financial centre this close to Hong Kong? I'm doubtful," said a property fund manager at a state-backed asset management company. She declined to be named as she was not authorized to speak to the media.
"Excellence is apparently putting all their eggs in one basket when the property market is going down and liquidity is getting tight."