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Huangpu land parcel is China’s most expensive yet this year
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A PURELY residential land parcel in downtown Shanghai that was sold for an average gross floor area price of nearly 60,000 yuan (US$9,677) per square meter yesterday is the most expensive plot sold in the country so far this year.
The 6,885-square-meter plot in Wuliqiao, Huangpu District, was acquired by a subsidiary of Lai Fung Holdings Ltd, the property development and investment arm of the Lai Sun Group, and fetched a final price of 59,859 yuan per square meter, a premium of 62.5 percent above its asking price of 36,828 yuan per square meter.
Excluding affordable housing required by the government to be built within the project which accounts for 30 percent of the total GFA space, the real cost of land designated for commodity housing development exceeds 85,000 yuan per square meter on average, a record on the Chinese mainland, according to Soufun.com, operator of the country’s largest real estate website.
The previous national record for land price was set by Sunac China in 2013 when the Hong Kong-listed developer bought a parcel in Beijing for an average GFA price of some 73,000 yuan per square meter.
“The price is still within our expectation despite the fact it is the highest ever registered in the country,” said Joe Zhou, head of research for East China operations at Jones Lang LaSalle, an international real estate services provider. “The parcel’s prime location coupled with its mini size means the overall price is acceptable. To some extent, it is also a reflection of continuously optimistic outlook for the city’s luxury home market despite the current correction in the overall housing market.”
According to earlier documents released by the local housing authority, all apartments built on the site must be decorated units and the developer is not allowed to launch sales until construction is completed.
Shanghai’s land market cooled off in the first half of this year as developers stayed cautious amid sluggish property sales.
By value, land sales in the first six months plunged 58 percent from the second half of 2013 and were down 13 percent from the same period a year ago, an earlier report by Shanghai Deovolente Realty Co said.
In terms of premium, land pieces auctioned in the first quarter of this year sold for an average of 51 percent higher than the asking price. The figure fell to 31 percent on average in the second quarter, Deovolente data showed.
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