China Vanke Co, the country's largest listed property developer, has announced B&Q, Europe's number one home improvement retailer, as the exclusive material provider for its decorated apartments in the Yangtze Delta region.
Shanghai Vanke Co, the local arm of the property developer, signed a cooperation agreement with B&Q China yesterday, allowing the retailer to supply all the materials for its pre-furnished homes in five eastern cities including Shanghai and Nanjing, the capital of Jiangsu Province.
"The deal is a win-win result for both sides in the long-term," said Ding Changfeng, general manager of Shanghai Vanke.
"This new deal between these two companies will be a real bonus to people who want to buy quality pre-decorated residential homes," added Ding.
More than 50 percent of all Shanghai Vanke's residential projects will be pre-decorated this year.
A plan released by Shanghai Housing and Land Administrative Bureau, the local market regulator, specifies that by the end of 2005, all new apartments on local housing market must be pre-decorated.
"It will probably take two years for all our new apartments to meet this industry requirement," Ding said.
China Vanke Co reported its first-half net profit for 2004 jumped 51.5 percent to 315.9 million yuan (US$38.1 million).
The Shenzhen-listed developer's residential sales hit 2.34 billion yuan in the first half, up 12 percent from a year ago.
"We are confident this deal will help build an effective material supply chain for China Vanke, which occupies the largest market share in the country's property sector," said Wei Zhe, president of B&Q China.
"Sales of decoration materials to large developers like Vanke are expected to double this year, accounting for between 10 to 15 percent of our total revenue."
Last year, sales of B&Q in China reached 2 billion yuan, up 82 percent year-on-year.