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Sales of a Shenzhen project of China Overseas Land blocked by authorities

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Authorities in the southern Chinese city of Shenzhen have blocked the sale of around 2,900 units of state-owned developer China Overseas Land & Investment (COLI), an official website shows, piling further pressure on the troubled sector.

The blockage comes after a similar move against embattled property company Kaisa Group that has rattled investors and triggered big losses in real estate shares. As in the case of Kaisa, no reason was given for the COLI move.

Chinese property developers are struggling against a credit crunch and excess supply, which have tempered hopes that real estate could provide a boost to the economy. Late last year, the government put in place a series of stimulus measures to spur property buying but inventory remains high.

Four buildings out of seven at a residential project owned by COLI called Yuejing Garden have been blocked for pre-sale, according to the website of Shenzhen's Urban Planning Land and Resources Commission.

The project is located in Longgang district in the northern part of the city, where two of Kaisa's projects have also been blocked.

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A COLI spokeswoman said she was not aware of the blockage.

Shares of COLI fell more than 5 percent, underperforming the broader market which was down 1 percent.

Kaisa has also come under scrutiny after a string of senior executives left unexpectedly. Its shares have been suspended and investors are concerned that if the company was wound up, they would struggle to stake a claim on the company's assets in mainland China.