The World Financial Center in Shanghai, currently China's tallest building at 492 meters, will be dwarfed by Greenland Group's 606-meter building in Wuhan. Ground was broken at the construction site in the capital of Hubei province on Wednesday. [Photo/China Daily]

Shanghai-based company breaks ground at site of 606-meter tower

SHANGHAI - Ground was broken for a 606-meter-high building in Wuhan, Hubei province on Wednesday, for what is expected to be the third-tallest construction in the world. Its developer, Shanghai-based Greenland Group hopes to develop the building into a multifunctional property with high-end hotels, a conference center and serviced apartments.

The building, being built with a 30 billion yuan ($4.5 billion) investment, will have more than 3 million square meters of gross floor area after completion in five years, according to Greenland.

"Wuhan is a very important city in Central China," said Chairman and President of Greenland Zhang Yuliang. "It's transiting from a regional center to an international city. It has a huge market potential, and it's necessary to construct a landmark building here," he said.

"The project in Wuhan is a step for Greenland to consolidate its development plan across the country," said Lu Qilin, director of the Shanghai-based Uwin Real Estate Research Institute.

"Over the past two years, Greenland has successfully developed a set of iconic buildings as well as residential properties in the northern, central and western China," Lu said. This year alone, Greenland has launched projects totaling more than 4 million sq m gross floor space worth in Zhengzhou, Henan province, Jinan in Shandong province, Nanchang in Jiangxi province, and Dalian in Liaoning province.

The developer has properties in 41 cities across the nation. Greenland's sales exceeded 110 billion yuan in the first 11 months of the year, and its revenue is expected to exceed 120 billion yuan this year, helping it outshine China Vanke Co Ltd.

Vanke, China's biggest listed developer, said last week its revenue reached 100.06 billion yuan as of Dec 1, meeting a target it had set for 2014. The Shenzhen-based company said it sold properties worth 12.87 billion yuan in November, more than double its sales for the same period in 2009.

Related readings:  Greenland fuels IPO dreams with Beijing debut  Shanghai ranks 8th in world's financial center

Shanghai-based property developers are far behind their southern-based counterparts Vanke and Poly Real Estate Group Co, which have firmly established their reputations nationwide through years of development. "Apparently, Greenland is looking for a similar status as a Shanghai representative in the property sector," said Lu.

According to Lu, Greenland realized more than 16 billion yuan in sales by the end of November in Shanghai, nearly triple the amount of Poly and Vanke.

Zuo Hongying, an industrial analyst from Aijian Securities, suggested that the company's current strategy indicates that it may go public.

"Talk about Greenland floating stock has been long and lasting. The only question is when," said Zuo.

However, the company denied having any immediate plans for an initial public offering, and it is not considering a listing in Hong Kong.

"We're in no rush to go public. We'll be listed eventually, but we don't have a timetable for that. We need to decide what's best as the model for our expansion," he said.

The new building in Wuhan, about 900 km west of Shanghai, will be higher than the 492-meter World Financial Center in Shanghai, now the tallest tower in China. It will be dwarfed only by the 632-meter Shanghai Tower, scheduled to be completed in 2014, and the Burj Khalifa in Dubai, the world's tallest at 828 meters.