Record 6b-yuan land bid in Shanghai

(chinadaily.com.cn)
Updated: 2009-09-10 17:05

Hangzhou-based property developer Greentown offered about 6 billion yuan ($878.63 million) for a piece of land in Shanghai one day before auction -- the highest offer in the real estate market in China and 2 billion yuan higher than the record for a land parcel along Beijing's Guangqu Road traded, the China Business News (CBN) reported.

The plot, named "Changfeng", has a total area of 142,108.1 sq m, with an upset price of 3.06 billion yuan ($447.98 million). As of 6:00 pm Wednesday, 15 developers had applied for the auction, the CBN learned from the Shanghai Land Transaction Market.

As the offer has already reached 6 billion yuan, the land value in terms of per unit floor space will be no less than 19,188 yuan per sq m, according to the CBN report.

Senior analyst Fu Qi told the CBN there are mainly four reasons attracting property developers to bid for "Changfeng".

First, developers that did not purchase much land during last year's market fever have a strong demand for land. Second, with the increase of housing sales in the first half of this year, developers have received enough money for land purchase. Third, as the economy recovers, developers have multiple ways of getting investment. Last but not least, developers are optimistic about the future housing market, so they want to reserve land for future development.

The average price of the project developed on the plot will exceed 27,000 yuan ($3,953) per sq m taking all possible costs into consideration, and with nice home fittings, the project can be sold for more than 30,000 yuan ($4,392) per sq m, Fu said.