Another dear land parcel in Shanghai

By Cherry Cao | December 10, 2015, Thursday |

Online Edition

THE city's land market maintained its robust momentum with real estate developers' appetite for land remaining unaffected despite the high price.

An auction for a residential land plot in southern Minhang District beat market expectations again today after a developer agreed to pay a price well above that of homes in the same neighbourhood.

Radiance Property Holdings Ltd, after beating some 20 rivals, acquired the parcel near the Xinzhuang Metro Station for 2.815 billion yuan (US$437 million), or 43,790 yuan per square meter on average. That was a premium of 143 percent over its starting price.

After excluding 7 percent of its developable area which is designated for affordable housing as required by the local land authority, the real cost of this land piece, however, has exceeded 47,000 yuan per square meter.

"Land piece in Xinzhuang area designated solely for residential development is a rare offer particularly in recent years and that helped explain the fierce competition in the land auction," said Lu Qilin, director of research at Shanghai Homelink Real Estate Agency Co. "Previously-owned homes in this area currently sell for an average 42,000 yuan per square meter while new projects in proximity to the parcel ask for no more than 45,000 yuan per square meter."

As land cost stays above 47,000 yuan per square meter, the developer will have to sell homes for 69,000 yuan per square meter and above so as to make fair profit, industry analysts said.

Elsewhere in Shanghai, Longfor Property paid 4.65 billion yuan today for a residential plot in Jiangqiao, Jiading District, or an average price of 27,084 yuan per square meter, which is pretty much close to home prices in the neighborhood.

Real Estate

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Another dear land parcel in Shanghai

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