The two companies are Hainan Zhong Zhi Sheng He Real Estate Investment Consulting Co, and Bei Guo Tou (Shanghai) Equity Investment
and Fund Management Co.
The new JV - ERA Hainan Real Estate Marketing Co - will conduct brokerage businesses, and establish training and licensing for property
agents in Hainan.
"The full range of real estate agency service is similar to those offered in Singapore, such as brokerage services covering new sales,
resales and leasing in the residential and commercial sectors," APAC
Realty said.APAC Realty and Zhong Zhi Sheng He Real Estate Investment
will each own a 40 per cent stake in the new venture, with Bei Guo Tou
(Shanghai) taking on the remaining 20 per cent.
The registered share capital of the joint venture is 20 million yuan, or about S$4 million, APAC Realty said.
As part of the deal, all existing project-sale businesses from Zhong Zhi Sheng He Real Estate Investment will be transferred to the new
company.
APAC Realty's new venture comes even as the Chinese government has imposed controls across the country to rein in escalating property
prices.
According to the latest property cooling measures, those who wish to buy units in Hainan must provide proof of at least one family member
paying taxes, or social security for five years there.
In the central mountainous region, non-local buyers are unable to purchase any property. And non-Hainan residents aiming to buy homes in
any other part of the province must provide proof of at least one family
member paying taxes or social security, for at least two years.
Said chief executive of APAC Realty, Jack Chua: "The transactions might be affected in the near term. However, we believe the recent
measures will help ensure a sustainable transaction volume, and price
appreciation in light of the government’s plan to establish a free trade
zone in Hainan by 2020, which will see more international and regional
investments in the province’s economy."
Separately, APAC Realty also said that ERA's agents may apply to open a franchise office in any Chinese city, and run a firm with support
from ERA management.
Most recently on Aug 7, APAC Realty posted a second-quarter net profit of S$7.69 million, down 9.3 per cent from S$8.49 million a year
ago.
