Greattown pays US$806m for two plots in Pudong

By Cherry Cao | April 16, 2015, Thursday |

Online Edition

GREATTOWN Holdings Ltd acquired two adjacent land plots in Tangzhen, Pudong New Area, today for over 5 billion yuan (US$806 million) after beating more than a dozen rivals as the publicly-listed developer sought to replenish its land bank amid improving sentiment among home buyers.

The company paid 2.9 billion yuan for a 61,248-square-meter parcel designated for residential development, or an average gross floor area price of 27,909 yuan per square meter. The price was 69 percent above its asking price, according to Fang.com, the country's largest real estate website which is previously known as Soufun.

A neighboring parcel covering 52,194 square meters, also designated for housing purposes, cost the developer 2.17 billion yuan, or an average GFA price of 29,697 yuan per square meter. That was about 68 percent above its asking price.

The two parcels were popular among developers as major industry players like Gemdale, Longfor, Poly, Wharf Holdings as well as many others all participated in today's auction as supply of purely residential plots in the area remained limited.

"The average GFA price Greattown paid yesterday is the highest land price ever registered in Tangzhen and also the most expensive price for land plots located beyond the city's Outer Ring Road," said Lu Qilin, a researcher at Shanghai Deovolente Realty Co. "For medium-sized developers like Greattown, land bank remains critical if they want to set solid footprint in first-tier cities for sustainable development and that's why they are more prone to pay higher prices compared to their larger-sized counterparts."

Last year, the average sales price for new residential properties, excluding government-subsidized affordable housing, stood at 37,802 yuan per square meter in Tangzhen area, a year-on-year increase of 16 percent, according to Deovolente data.

New homes at a Greentown project which is in proximity to the two adjacent plots, meanwhile, were sold for an average price of 47,300 yuan per square meter so far this year.

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Greattown pays US$806m for two plots in Pudong

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