HANZHONG, China, Feb. 21, 2013 /PRNewswire-FirstCall/ -- China HGS Real Estate Inc. (NASDAQ: HGSH) ("China HGS" or the "Company"), a leading regional real estate developer headquartered in Hanzhong City, Shaanxi Province, China, today announced that the Company was approved to receive additional 35.25 mu (equivalent to 23,500 square meters) land use right or equivalent amount of cash compensation from the municipal government of Yang County.
In 2011, the Company entered into a preliminary contract (the "Contract") with the municipal government of Yang County for building and providing affordable housing with total Gross Floor Area ("GFA") of 40,000m2 apartment buildings. Later, the Company was entrusted to build additional 132 units of affordable apartments in Yang County.
To date, the sales of all the contracted affordable apartments have been completed. The construction of some of these apartment buildings has been completed and some owners have started to move into their apartments. The Company completed total contracted sales of 487 units of these affordable apartments with total GFA of 58,286.89 square meters. The related contracted sales revenues are estimated to be RMB124 million. These affordable apartment buildings used a land of 35.25 mu (approximately 23,500 square meters) in total.
On February 16, 2013, the Company received an approval from the Bureau of Housing and Urban-Rural Development of Yang County to award the Company 35.25 mu land use right (approximately 23,500 square meters) or equivalent amount of cash as compensation. The details regarding the award to be in land use right or in cash will be determined by the municipal government of Yang County.
"I am very pleased that the Company fulfilled this government contract on time and contributed to the local economy by providing affordable housing to the local people," said Mr. Xiaojun Zhu, Chairman and Chief Executive Officer of the China HGS. "I am very proud of receiving the award from the municipal government. Whether the compensation will be in additional land use right or in cash, I believe they will increase the value for our shareholders."
Safe Harbor Statement
This press release contains forward-looking statements, which are subject to change. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All "forward-looking statements" relating to the business of China HGS Real Estate Inc., which can be identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties which could cause actual results to differ. These factors include but are not limited to: the uncertain market for the Company's business, macroeconomic, technological, regulatory, or other factors affecting the profitability of real estate business; and other risks related to the Company's business and risks related to operating in China. Please refer to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 2012, as well as the Company's Quarterly Reports on Form 10-Q that have been filed since the date of such annual report, for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. The Company's actual results could differ materially from those contained in the forward-looking statements. The Company undertakes no obligation to revise or update its forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.
About China HGS Real Estate, Inc.
China HGS Real Estate, Inc. (NASDAQ: HGSH), founded in 1995 and headquartered in Hanzhong City, Shaanxi Province, is a leading real estate developer in the region and holds the national grade I real estate qualification. The Company focuses on the development of high-rise, sub-high-rise residential buildings and multi-building apartment complexes in China's Tier 3 and Tier 4 cities and counties with rapidly growing populations driven by increased urbanization. The Company provides affordable housing with popular and modern designs to meet the needs of multiple buyer groups. The Company's development activity spans a range of services, including land acquisition, project planning, design management, construction management, sales and marketing, and property management. For further information about China HGS, please go to www.chinahgs.com.
SOURCE China HGS Real Estate Inc.