Demand for land in first-tier mainland cities remains strong

Mainland developers' appetite for land in first-tier cities remains positive despite mounting liquidity risks amid a wider property market downturn.

Hong Kong-listed mainland developers Modern Land (China) and Beijing North Star have joined forces to secure a residential site in Beijing for 1.26 billion yuan (HK$1.59 billion).

The two companies won the site in a joint bid at a government land sale on Monday, Modern Land said in a filing with the Hong Kong stock exchange on Tuesday.

The 77,202 sq metre plot in the capital's Shunyi district has a gross floor area of 109,346 sq metres. The land cost in terms of gross floor area is 11,523 yuan per square metre.

Modern Land said it considered the acquisition a strategic move to boost its land reserve in Beijing, "where the development potential is exceptionally high".

The developer said at least 25,300 sq metres of gross floor area at the site would be set aside for cheaper homes under the mainland's affordable housing policies. Those units would be offered at prices capped at 13,000 yuan per square metre.

The remaining 59,012 square metres would be capped at 18,000 yuan per square metre.