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Three land parcels sold with little premium in Shanghai

TWO land parcels sold at reserve prices in Shanghai today while a third one was acquired for an 18.6 percent premium, further evidence for a "cold" start in the local land market as government rein-in policies remained unchanged to curb speculation.

The three residential plots, all located in remote Jinshan District, formed the second batch of land pieces released in Shanghai after the Spring Festival holiday.

Beijing Construction Engineering Group paid 1.44 billion yuan (US$209 million), or an average gross floor area price of 11,627 yuan per square meter, for the 61,922-square-meter housing site in Binhai New City, after beating several rivals. That compared with its starting price of 9,800 yuan per square meter.

Shanghai Construction Group acquired the 71,671-square-meter plot in Fengjing Town for an average GFA price of 9,800 yuan per square meter while a joint entity of Huafang Co and NHU Real Estate bought the 48,549-square-meter piece in the industrial zone, the smallest of the three, for an average GFA price of 9,500 yuan per square meter.

"The one in Binhai New City was the most popular among the three plots as seven developers competed in the auction, probably attracted by its walking distance to Metro Line 22 station as well as its moderate size," said Lu Wenxi, senior manager of research at Shanghai Centaline Property Consultants Co.

As required by the land watchdog, 60 percent of the homes built on the site should be medium and small-sized apartments while 45 percent of the total space will be purchased by the government upon completion for relocation purposes.

Currently, new homes in the neighborhood sell for between 22,000 yuan and 25,000 yuan per square meter while existing properties cost around 18,000 yuan per square meter, according to Centaline data.

Last Friday, three land pieces designated for housing development in the city's outlying Lingang port area were also sold close to reserve prices.


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