Site sale a new high for Shanghai
A development site along the Suzhou River in Shanghai has sold for a record 52,855 yuan (HK$60,096) per square metre, largely due to the high cost of relocating affected residents.
State-owned hotel and theme park operator OCT Enterprises won the 133,144 square metre site in Zhabei district for 7.02 billion yuan, 49 per cent above the 4.7 billion yuan reserve price. The district government spent 3.8 billion yuan relocating residents from the area.
Interested developers were asked to pay a deposit of 1.88 billion yuan, which meant only two developers took part in the bidding. On top of that, the winner must now pay 50 per cent of the price within 15 days.
The other bidder was a group formed by Hong Kong-listed SPG Land (Holdings), which owns the Peninsula Hotel on the Bund.
According to the land sale document, participants had to have a track record in managing luxury hotel chains.
'It is a new high in mainland land prices,' said Jim Yip Kin-shing, the head of the investment department at DTZ (North China).
The accommodation value of the site was more than another in Nanjing Road, Shanghai's busiest shopping area, that sold on Monday. That 13,709 square metre East Nanjing Road site went to a joint venture formed by two Shanghai-listed companies - Shanghai New Huang Pu Real Estate and Shanghai New World - for 3.41 billion yuan or 51,868 yuan per square metre.
Albert Lau, the managing director of property consultant Savills Shanghai, said the price paid for the Zhabei site showed the developer was bullish about the city's outlook.
Separately, SPG Land announced it had acquired two residential sites in Wuxi for a combined 4.95 billion yuan. And Shanghai Forte Land announced earlier this week that it had paid US$328 million for a residential project in Changning district, in Shanghai.
