Guangzhou land sale sets city's new high

PUBLISHED : Wednesday, 12 September, 2007, 12:00am
UPDATED : Wednesday, 12 September, 2007, 12:00am

R&F Properties pays record at public auction

Guangzhou R&F Properties yesterday bought a low-density residential site in Guangzhou for 18,728 yuan per square metre, a historical high for the city.

The record was set at a Guangzhou municipal government auction of 14 commercial and residential sites that generated 9.51 billion yuan for the city.

Poly Real Estate Group, Agile Property Holdings and Gemdale Group also bought sites in the sale.

Lai Kwok-keung, a director and assistant general manager at Centaline (China), said the record underscored the developers' belief that property prices in the city had growth potential after seeing how prices in Shenzhen jumped 50 per cent so far this year.

'In the past, developers could buy sites in the private market or negotiate with the authorities. But now, all sites have to be sold in public auctions. That's why the sites sold in the past few months continue to hit new highs,' he said.

R&F Properties won the 33,287 square metre residential site in the Baiyunshan resort area for 180 million yuan.

The site can be developed into a small-scale residential compound with a total gross floor area of 9,611 sqmetres.

Property prices of low-density residential projects in the district ranged between 15,000 yuan and 20,000 yuan per square metre.

R&F Properties would have to sell units in the project for almost 30,000 yuan per square metre to make a reasonable profit, Mr Lai said.

'The land price implied the developer expects property prices in the area to increase by 50 per cent in the next few years,' he said.

Shanghai-listed Poly Real Estate Group paid 4.2 billion yuan or 8,439 yuan per square metre on two residential sites in Jinshazhou, a new residential district in the north of Guangzhou.

The two plots, with a total site area of 177,926 sqmetres, provide a total gross floor area of 498,194 sqmetres.

Mr Lai said that property prices in Jinshazhou ranged between 5,000 and 6,000 yuan per square metre, with most of the projects being budget housing.

'The accommodation prices of the two sites are higher than property prices in the area,' he said. 'As the supply of residential sites in the city centre of Guangzhou is limited, developers are willing to pay aggressive prices to acquire sites in new areas such as Jinshazhou.'

Shenzhen-listed Gemdale paid 1.59 billion for the 61,758 sqmetre site in the Panyu city centre, providing a total gross floor area of 68,200 sqmetres. The accommodation value of the site is 6,230 yuan per square metre.

Agile acquired two residential sites in Panyu -which is south of Guangzhou -- for 852 million yuan or 5,409 yuan per square metre. The two sites could provide a total gross floor area of 157,507 sqmetres.

Property prices for new residential projects in Panyu ranged between 8,000 and 9,000 yuan per square metre. The prices of villas already have reached 20,000 yuan per square metre.

A day's work

Amount Guangzhou government earned from the land sales, in yuan 9.5b