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August 18, 2016

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Rongxin locks up another record-breaking land deal

RONGXIN Fujian Investment Group has done it again by sealing a record-breaking deal for the most expensive plot ever sold in China yesterday.

The privately-held real estate developer beat 17 rivals when it agreed to pay a record 11.01 billion yuan (US$1.66 billion), or a premium of 139 percent to the reserve price, for the 31,034 square meter site in Shanghai’s Jing’an District.

The Fuzhou-based developer’s winning bid was equivalent to 100,315 yuan per square meter of gross floor area, and also the most costly for a single plot of land ever sold in China by average price. However, the actual price for the parcel’s saleable area should exceed 140,000 yuan per square meter since homes built on the site that could be sold on the open market account for below 70 percent of the parcel’s total space due to government requirements, researchers at Shanghai Homelink Real Estate Agency Co said.

Conveniently accessible by three metro lines, the land parcel is located in a neighborhood where most new homes now sell at between 80,000 yuan per square meter and 100,000 yuan per square meter.

“The price is probably within our expectations because of its premium location within the city’s Inner Ring Road,” said Zhu Ping, a Homelink analyst. “The extremely scarce land supply in central parts of Shanghai and the merger of the former administrative region of Zhabei into neigboring Jing’an both helped boost the developer’s confidence in the area.”

Surrounded by Baochang Road to its east, Gongxing Road to its south, Linshan Road to its west and Zhongxing Road to its north, the site in the former Zhabei District is 90 percent designated for homes and 10 percent for commercial purposes, according to government documents released earlier.

Rongxin was last in the media spotlight a few weeks ago when it acquired a residential parcel in northeastern Yangpu District.

Also held yesterday a housing plot in Gucun of Baoshan District fetched 53,727 yuan per square meter of GFA while another housing parcel in Xujing of Qingpu District was sold for 45,070 yuan per square meter — both for the highest land price sold in their own area.


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