OSAKA -- Daiwa House Industry will undertake its first major Chinese housing development in six years, with plans to begin constructing 1,700 condominiums as early as October.
Under the project, estimated to cost about 66 billion yen ($620 million), a joint venture of Daiwa House and China's Baoye Group will put up 17 or 18 condo buildings in Nantong in the eastern province of Jiangsu.
Daiwa House and Baoye formed a partnership in 2006. The Japanese company will take a 67% stake in the joint venture. Land for the project has been secured in an area where Japanese retail giant Aeon opened a large commercial complex last December. The regional government in Nantong is keen on urban development even as the central government has been trying to tame a housing bubble.
Daiwa House seeks to finish the project in early 2021. It seeks to sell the condos to middle-class and wealthy buyers, with a 100-sq.-meter unit expected to be priced at the equivalent of around 35 million yen.
The Japanese company has built 5,600 condos in China, in such locations as the Jiangsu Province city of Changzhou and Liaoning Province's Dalian. It had sold about 5,400 of them as of the end of 2017.
The housing bubble remains a concern in China. But real estate inventories shrank just over 15% on the year to 589.23 million sq. meters at the end of 2017, according to the National Bureau of Statistics. Government regulations have curbed growth in housing sales and slowed urban development.
Meanwhile, prices of newly built homes have shown year-on-year growth since last May, according to Daiwa House.