Kerry buys prime resort sites in West Lake region
The plots are near the Qiantang River and lend themselves to a commercial-residential project
Kerry Properties yesterday snapped up five commercial and residential sites in Hangzhou for 2.5 billion yuan (HK$3.1 billion), continuing its aggressive acquisition of mainland sites in recent months.
The developer bought the three residential and two commercial sites in West Lake district's Zhijiang Resort Area at an auction.
It paid between 7,917 and 8,554 yuan per square metre for the commercial sites and between 10,623 and 11,326 yuan per sq m for the residential sites.
All the five plots are close to the famous Qiangtang River and are contiguous, lending themselves to a large commercial-residential project.
"The location is good as it is in one of the most popular tourist destinations on the mainland. It is a high-end residential district, with property prices in the area hovering around 20,000 yuan per sq m," said Julia Zho, managing director at Centaline (China) in Hangzhou.
"The prices (Kerry Properties paid) are less than what China Resources Land paid to buy a nearby site, at 13,563 yuan per sq m, in October 2009.
"China Resources now plans to sell the flats at the site for 22,000 yuan per sq m," she said, adding that she believes Kerry Properties could generate a reasonable profit if it manages to sell the project for at least 18,000 yuan per sq m.
The sites cover a total 142,579 sq m and could yield 216,053 sq m of residential floor space and 23,249 sq m of commercial area.
Kerry Properties is part of the Kerry Group, the controlling shareholder of SCMP Group, which publishes the South China Morning Post.
Meanwhile, Shanghai-listed Poly Real Estate Group acquired five residential sites, totalling 442,000 sq m, for 1.24 billion yuan in Guangdong's Jiangmen city.
Kerry Properties share price fell 0.38 per cent to close at HK$39.65 yesterday, while Poly Real Estate declined 0.53 per cent to 11.22 yuan.
The mainland property market has been buzzing lately, with local governments increasing land supply.
According to China Index Academy, the 20 major cities have released 129 sites for sales between September 17 and 23, compared with 108 sites the week before. Second- and third-tier cities Kunming, Hefei and Chongqing have been the most active in selling sites. Land supply in first-tier cities has decreased.