Beijing Urban wins site for 1.2b yuan

PUBLISHED : Friday, 08 August, 2008, 12:00am
UPDATED : Friday, 08 August, 2008, 12:00am

Beijing Urban Construction Investment and Development acquired a residential site in the capital city for more than 1.2 billion yuan (HK$1.36 billion).

The company outbid Beijing Capital Development and Beijing Spring Town Development for the site in the Lishui Bridge area in the city's northern Chaoyang district. The winning bid was 1.7 per cent higher than the opening bid of 1.18 billion yuan.

The sale reflects muted sentiment in the mainland's property sector where prices have been falling since the government implemented a raft of measures to curb overheating.

In August last year, a residential site in the same district attracted eight developers including China Vanke, the country's largest developer by market value, and Guangzhou R&F Properties, the biggest in Guangdong province. Hong Kong-listed Beijing North Star won with a bid that was 45 per cent higher than the minimum offer of 791 million yuan.

Nicholas Cho Nam-kwok, an investment director of DTZ (Beijing), said developers were no longer aggressive in bidding because of the uncertain outlook in the market.

'The transaction of the site in Lishui Bridge shows the tighter credit conditions have forced developers to play safe in their bids,' Mr Cho said.

'Many developers are finding it difficult in financing their projects. Selling as many units as possible to get cash for their development projects is their first priority.'

The site Beijing Urban bought has an area of 101,384 square metres. It is located at the north of 5th Ring Road and could provide a total gross floor area of 209,340 sq metres. It could be developed into a mass residential project with flats between 90 and 150 sq metres, Mr Cho said.

Property prices in the Lishui Bridge area range between 7,000 and 9,000 yuan per square metre.

According to research by Beijing North Star, residential deals in Beijing fell 49.5 per cent in the first half from a year earlier.