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Collapsed building: Bargain land price revealed

BY THE land where a building collapsed in Minhang District last Saturday was sold to the developer at an unusually low price - less than 5 percent of the price it cost home buyers, an official Website revealed.

The official Website of Shanghai Real Estate Appraisers Association,, records information about purchased lands in Shanghai from 2003.

The Website showed that the land was purchased on October 10, 2003 by the privately-owned Shanghai Meidu Real Estate Co, the developer of the residential building that toppled and killed one person early on Saturday morning.

Meidu paid only 46 million yuan (US$6.7 million) for that 42,342 square meters of land with a floor area ratio of 1:1.8, which means, the average price of each square meter was no more than 604 yuan.

However, when the Lotus Riverside community went on sale after construction last November, the average price of apartments in the collapsed building was 14,297 yuan per square meter and 77 percent of the houses had been sold.

The Website showed that the purchase price Meidu paid was almost one third of that paid by other developers for land nearby.

Land in the same area was sold at 1,929 yuan per square meter in 2003.

The list also showed Meidu's license for real estate projects was only "temporary" when it gained the land in an auction organized by the government in 2003.

Bidding was not open to all developers - only selected companies could participate.

As well as Lotus Riverside, the developer, Shanghai Meidu Real Estate, owns two other estates, Luojin Garden which has 36 apartments all of which are sold, and Luojin New Garden, which has 207 sold out of 289.

Media reports said that the company's business license, which was issued on October 1, 2000, expired at the end of 2004.

The company has a registered capital of only eight million yuan.

Representatives of the company have not been seen since the accident.

But other real estate agencies in the area said their business was little affected.

A woman surnamed Chen from a real estate agency in the area told Oriental Morning Post that her business was normal after the accident because there had been no quality problems reported in the other two residential complexes built by Meidu.


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