Country Garden backs out of land deal

Cautious stance: A visitor takes pictures of a model of Beijing’s downtown at the Beijing Planning Exhibition Hall. Chinese developers are becoming more cautious in buying land in first-tier cities such as Beijing, which have led a nationwide recovery in sales this year, as escalating land costs are threatening to erode their profit margins. — Reuters

SHANGHAI: Chinese developer Country Garden Holdings Co has decided not to buy two plots of land it won at a Beijing auction after the final prices exceeded its budget, in a sign that homebuilders are under pressure from surging land costs.

Country Garden would not buy the two sites in Beijing’s suburban Fengtai district it won in the auction with co-bidding developer China Jinmao Holdings Group Ltd on Oct 21, it said in an e-mailed reply to Bloomberg queries.