Property analysts said the land price was higher than previous transactions in the city, although the accommodation value was less than some high-end Changsha residential properties.

'The city's average price for high-end residential property is about 4,500 yuan only,' a property agent said. 'But prices are expected to rise as Changsha is the capital of the province and is attracting people from nearby districts.'

The accommodation value of river sites ranges between 2,000 and 3,000 yuan per square metre.

Beijing North Star was joined in the land auction by Beijing Urban Development Group yesterday morning. The pair outbid developer Beijing Financial Street Holding.

The winning bid was 98 per cent higher than the opening offer of 4.63 billion yuan.

Company secretary Guo Chuan said Beijing North Star would own the majority interest in the development project, although details had yet to be confirmed.

It will be Beijing North Star's first project outside the capital.

'We bought the site as we plan to expand in second-tier cities and boost our land bank,' Mr Guo said. 'The site can be developed into large-scale residential projects, which is attractive to us.'

Excluding the Changsha acquisition, Beijing North Star owns two million square metres of land, sufficient for development over the next five years.

The site in the urban area of the city could be developed into residential property, a hotel, offices and shopping centres, with a total gross floor area of 2.62 million square metres.

Shares of Beijing North Star were suspended from trading at 2.33pm yesterday pending the release of an announcement relating to a price-sensitive transaction by the firm.

The company's shares rose 4.59 per cent to HK$6.15 before trading was halted.

Meanwhile, Shenzhen Investment yesterday said it had signed a framework agreement with the city government of Taizhou, in Jiangsu province.

The company and the government will set up a joint venture to develop a city centre project with a total site area of 12 million square metres for profit sharing.

The developer expects to gain a portion of the site.

Shares of Shenzhen Investment rose 4.62 per cent to HK$6.80 before trading was halted yesterday.

Thinking big

The plot is more than three times the size of Cyberport in Hong Kong

The percentage increase of Beijing North Star's winning offer over the opening bid: 98%

The accommodation value of the auctioned site, per square metre: Y3,500