China HGS Signs RMB 120 Million Residential-Apartment Bulk-Purchase Agreement

China HGS Real Estate

today announced that the Company signed a residential-apartment bulk-purchase agreement (the "Agreement") for a total price of RMB 120 million (approximately $18.5 million) with the Hanzhong Public Security Bureau on May 28, 2011. The Agreement covers Tower C1 and Tower C3 of the Company's "Mingzhu Beiyuan" project, which is comprised of a total of 224 residential-apartment units and is located in downtown Hanzhong. The total price of the Agreement is RMB 120 million (approximately $18.5 million), with an average sales price of RMB 309 per square foot (approximately $47.50 per sq. ft.). According to the Agreement, the Hanzhong Public Security Bureau has agreed to make an initial payment of RMB 100,000 for each apartment unit within 10 days of the date of the Agreement and make an additional payment to China HGS within two months of the date of the Agreement, raising its total payment to 50% of the total price (RMB 60 million, or approximately $9.2 million). Moreover, China HGS will deliver all residential apartments to the Hanzhong Public Security Bureau within two and a half years after breaking ground. In addition, China HGS also is required to complete the project design, obtain the necessary approvals, and perform the related preparation work within three months of the date of the Agreement.