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Developer pays highest price for housing land parcel in Beijing
By Cherry Cao |
July 11, 2012, Wednesday
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Print Edition
Print Edition
BEIJING set its highest price on record for housing land yesterday after an investment holding company paid 2.63 billion yuan (US$416 million), or a price cap set earlier by the city's land authority, for a plot in northwestern Haidian District.
Beijing-based Sinobo Group Co, which invests mainly in mining and property assets, acquired the 38,869 square-meter plot ahead of rivals including Sunac China and Franshion Properties.
The parcel, a rare prime location in Beijing, was offered at a starting price of about 1.866 billion yuan, or 24,000 yuan per square meter, and was finally sold for 33,831 yuan per square meter, a premium of 40 percent, but the price seemed within market expectations. The previous record in Beijing for housing land was set in 2009 at 29,859 yuan per square meter.
Beijing's land authority had earlier set a price cap for the popular parcel to prevent developers from making irrational bidding. Companies agreeing to pay the ceiling price would then have to build affordable homes on the site.
Sinobo agreed to build 16,400 square meters of affordable homes for the government. The government will then pay 10,000 yuan per square meter to the developer.
The last-minute withdrawal of Poly Real Estate Group from the bidding surprised the market. A statement yesterday by the Guangzhou-based developer, one of the largest in the country, said it withdrew from the bidding because "the country's latest property measures are currently at a critical stage."
Poly's abrupt withdrawal came after an article published yesterday in the People's Daily newspaper said it would be inappropriate for state-owned enterprises to bid at land auctions that may see record prices. They have been blamed for soaring land prices.
But Sky Xue, an analyst at China Real Estate Information Corp, said Poly withdrew because it believed "that intense competition for the plot may lead to a high price that will make it difficult for it to make a decent profit. That seems to me the real reason behind Poly's last-minute exit."
Beijing-based Sinobo Group Co, which invests mainly in mining and property assets, acquired the 38,869 square-meter plot ahead of rivals including Sunac China and Franshion Properties.
The parcel, a rare prime location in Beijing, was offered at a starting price of about 1.866 billion yuan, or 24,000 yuan per square meter, and was finally sold for 33,831 yuan per square meter, a premium of 40 percent, but the price seemed within market expectations. The previous record in Beijing for housing land was set in 2009 at 29,859 yuan per square meter.
Beijing's land authority had earlier set a price cap for the popular parcel to prevent developers from making irrational bidding. Companies agreeing to pay the ceiling price would then have to build affordable homes on the site.
Sinobo agreed to build 16,400 square meters of affordable homes for the government. The government will then pay 10,000 yuan per square meter to the developer.
The last-minute withdrawal of Poly Real Estate Group from the bidding surprised the market. A statement yesterday by the Guangzhou-based developer, one of the largest in the country, said it withdrew from the bidding because "the country's latest property measures are currently at a critical stage."
Poly's abrupt withdrawal came after an article published yesterday in the People's Daily newspaper said it would be inappropriate for state-owned enterprises to bid at land auctions that may see record prices. They have been blamed for soaring land prices.
But Sky Xue, an analyst at China Real Estate Information Corp, said Poly withdrew because it believed "that intense competition for the plot may lead to a high price that will make it difficult for it to make a decent profit. That seems to me the real reason behind Poly's last-minute exit."
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