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Plot's final price may hit earlier record

THE largest land plot offered for residential development in Shanghai so far this year has attracted great attention from developers and the final price might be close to an earlier record that was set for similar plots in neighboring areas, industry observers said.

Within just four days of its launch by the Shanghai Urban Planning, Land and Resources Administration Bureau, 36 developers have collected land documents from the industry watchdog, indicating huge interest in the 210,288 square-meter plot in Zhaoxiang, Qingpu District.

Interested developers need to pay 95 million yuan (US$14 million) as deposit in order to enter the final bidding.

"The large number of interested developers signals that the land plot is very popular due to its size, location and a relatively low starting price," said Lu Qilin, a researcher at Shanghai Uwin Real Estate Information Services Co. "It is very likely that market sentiment would go 'crazy' again this time, just like what we saw during the second half of 2007."

The starting price for the Zhaoxiang plot is 946 million yuan, which is equivalent to a per gross floor area price of 4,500 yuan per square meter.

Townhouses in the Zhaoxiang area are sold well above 10,000 yuan per square meter, market observers said.

In November 2007, Longfor Group, a major real estate developer in the country, beat more than 10 rivals and paid about 10,672 yuan per square meter for a plot in the same area in its first foray into the Shanghai market. The final price was a surprise as it more than tripled the plot's starting price.

Last week, a land plot in the city's southwestern Changning District was sold for around 22,000 yuan per square meter.


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