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SHANGHAI: Despite the central government's attempts to cool the property market, a Shanghai district government last Thursday, Oct 14 released seven sites for sale.
In an apparent attempt to raise revenue while land prices remain high, Shanghai Pudong New Area People's Government last Thursday pocketed more than 3.15 billion yuan (RM1.47 billion) from the auction of five sites. The other two sites have been made available through a tender.
The largest site, located at the Hang Tou Centre area in Pudong, attracted submissions from 39 developers with 18 last Thursday joining the aggressive bidding in the auction.
The 177,900-square-metre commercial and residential site finally went to a consortium formed by Shanghai-listed Gemdale Group and Tianjin Wenfu Investment Fund for 2.286 billion yuan, or 8,031 yuan per square metre. The price was 328% higher than the opening bid of 534 million yuan. With demand for office space in China's richest city strong, developers also have shown a keen interest in commercial sites.
State-owned Overseas China Town also bought a commercial site at Linhu Road for 461 million yuan or 7,152 yuan per square metre.
A commercial site in the second phase of Chuansha Airport was bought by local developer Greenland Group for 159 million yuan. The 52,500 sqmetre site could provide a total gross floor area of 72,423 sqmetres. The developer also bought a commercial and residential site at Zhaohui Road for 94.3 million yuan.
The fifth commercial site at Zhuqiaoxin Village was snapped up by local developer Shihe Real Estates for 151 million yuan.
A property analyst said: "The local government is trying to generate more money from land sales while prices are still at a high level."
Local governments heavily rely on land sales for revenue. "They have invested heavily in infrastructure such as new high-speed railways and the redevelopment of old towns. They need money to make their dream happen," the analyst added.
For developers, the central government's cooling measures are weakening sentiment.
"Demand for housing remains strong and the economy is improving. They are optimistic about the market outlook. That's why they are aggressive in land bidding," he explained.
Soho China, one of the most active developers in land acquisitions this year, acquired a 48.48% interest in a retail and office project in Shanghai from a local company for 1.212 billion yuan last Thursday. It is the fourth site the developer has bought in Shanghai this year.
The 20,084 sq metre site at Ma Dang Road in Lu Wan district, next to the Xintiandi tourist area, could provide a total gross floor area of 137,442 sqmetres.
Soho China chairman Pan Shiyi said the company would discuss with the seller about the possibility of acquiring the remaining equity interest in the project.
The total investment cost of the project is about one billion yuan. The developer expects the selling price of the office floor area could reach 85,000 yuan per square metre. The company planned to launch the project in 18 months and revenue could be booked when the project is completed at the end of 2012. — South China Morning Post
In an apparent attempt to raise revenue while land prices remain high, Shanghai Pudong New Area People's Government last Thursday pocketed more than 3.15 billion yuan (RM1.47 billion) from the auction of five sites. The other two sites have been made available through a tender.
The largest site, located at the Hang Tou Centre area in Pudong, attracted submissions from 39 developers with 18 last Thursday joining the aggressive bidding in the auction.
The 177,900-square-metre commercial and residential site finally went to a consortium formed by Shanghai-listed Gemdale Group and Tianjin Wenfu Investment Fund for 2.286 billion yuan, or 8,031 yuan per square metre. The price was 328% higher than the opening bid of 534 million yuan. With demand for office space in China's richest city strong, developers also have shown a keen interest in commercial sites.
State-owned Overseas China Town also bought a commercial site at Linhu Road for 461 million yuan or 7,152 yuan per square metre.
A commercial site in the second phase of Chuansha Airport was bought by local developer Greenland Group for 159 million yuan. The 52,500 sqmetre site could provide a total gross floor area of 72,423 sqmetres. The developer also bought a commercial and residential site at Zhaohui Road for 94.3 million yuan.
The fifth commercial site at Zhuqiaoxin Village was snapped up by local developer Shihe Real Estates for 151 million yuan.
A property analyst said: "The local government is trying to generate more money from land sales while prices are still at a high level."
Local governments heavily rely on land sales for revenue. "They have invested heavily in infrastructure such as new high-speed railways and the redevelopment of old towns. They need money to make their dream happen," the analyst added.
For developers, the central government's cooling measures are weakening sentiment.
"Demand for housing remains strong and the economy is improving. They are optimistic about the market outlook. That's why they are aggressive in land bidding," he explained.
Soho China, one of the most active developers in land acquisitions this year, acquired a 48.48% interest in a retail and office project in Shanghai from a local company for 1.212 billion yuan last Thursday. It is the fourth site the developer has bought in Shanghai this year.
The 20,084 sq metre site at Ma Dang Road in Lu Wan district, next to the Xintiandi tourist area, could provide a total gross floor area of 137,442 sqmetres.
Soho China chairman Pan Shiyi said the company would discuss with the seller about the possibility of acquiring the remaining equity interest in the project.
The total investment cost of the project is about one billion yuan. The developer expects the selling price of the office floor area could reach 85,000 yuan per square metre. The company planned to launch the project in 18 months and revenue could be booked when the project is completed at the end of 2012. — South China Morning Post
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