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August 1, 2009

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Vanke takes control of collapse site

SHANGHAI real estate giant Vanke has taken over further construction, sales and refunds involved in the wake of a deadly city apartment collapse.

An unfinished 13-story building, part of the Lotus Riverside complex of apartments in Minhang District, collapsed on June 27, killing a worker.

The complex's original developer, Shanghai Meidu Real Estate Co, has been suspended as the official investigation into the collapse continues.

It is good news for anxious apartment buyers who have been haggling over a compensation package.

A joint news release by Vanke, the Meidu group and the Minhang District government issued yesterday evening said official letters detailing three compensation options were being mailed to buyers of the Lotus Riverside block of apartments.

Under the first option, buyers will get a 5 percent reduction on the initial price of the apartment if they agree to continue their contract.

Under the second option, buyers can terminate the contract and be refunded the money paid to date and interest.

Under the third option, buyers can sell apartments to Shanghai Vanke Real Estate Co Ltd. The price will be decided through government-authorized appraisals and based on market prices at the time of the collapse.

There are 11 Lotus Riverside 13-story buildings, with apartments ranging from 66 to 128 square meters.

Buyers were urged last night to read the letters and decide on one of the three options.

The average price of sold apartments in the collapsed No.7 building was 14,297 yuan (US$2,092) per square meter.

Up to 489 of the estate's 629 apartments had been sold by the time of the collapse.

The accident is blamed on improper earth removal and excavation of an underground garage next to the toppled building, according to a government report.

The investigation has now moved on to finding guilty individuals and departments, authorities said.

So far six people have been detained by police with seven others allowed out on bail to assist in inquiries, according to the local government.

Vanke has vowed to guarantee quality of the apartments and to quickly make settlement on any of the options.


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