The Beijing Zhongkun Investment Group, a real estate firm, met with controversy last year when it sought to buy a piece of land covering 30,639 hectares on the north shore of Iceland but was rejected by Iceland's Ministry of the Interior, which cited legal restrictions on foreign entities buying land in Iceland.
"We have been notified that the Icelandic government has approved a new proposal to develop the resort on a land lease," Yao Chen, a company spokeswoman was quoted by the state-run Xinhua news agency as saying.
"But as the negotiation for a contract is still on, no more details are available at this moment," she added.
Yao said the company welcomed Reykjavik's decision and is working to secure a long-term lease, hopefully one good for 99 years, for the same patch of land it originally intended to buy.
"We need about 10 or maybe 20 years to develop the resort well, so a short-term land lease may not fit," Yao said.
She said the company's chairman Huang Nubo chose to develop a resort in Iceland because he considers Northern Europe an ideal region for tourism as it is free of conflicts and over-investment.
Huang also has a personal connection with Iceland, Yao added. The real estate tycoon once shared a room with an Icelandic student when they were both studying at Peking University in their 20s.
Huang was very much impressed by Iceland's breathtaking landscape during his first visit there and set up a USD 1 million fund for Iceland-China poetry exchanges.
Huang had originally planned to invest USD 200 million in the Iceland resort, including USD 8 million for the land purchase. Yao said leasing the land will help the company cut costs.
