It is Soho China's 12th project in Shanghai since it moved into the city in August 2009, and takes its spend on development sites in the city 28.7 billion. yuan. It estimates the projects will be worth nearly 50 billion yuan when completed.

Chairman Pan Shiyi said: "The price is reasonable. The project could provide a total gross floor area of 150,000 sq m, which is a suitable for office development. We are optimistic on the market outlook of Shanghai."

The 16,560 sq m site in the core business district of Hongqiao could become a retail and office project. It is close to the Japan Takashimaya department store and Gubei International Fortune Centre and could yield a total gross floor area of 150,000 sqm, including the basement.

Jim Yip Kin-shing, the managing director of investment at DTZ China, said: "The land price for the site is very aggressive, as it is a second-tier business district. It may be because there is a lack of land supply in business areas in the city. The site is also close to the airport and the neighbourhood is well-developed." Shares in Soho China fell 0.3 per cent to close at HK$6.68 yesterday.

Growth in outstanding property loans picked up pace on the mainland in the first quarter, driven by frenetic home sales ahead of the start of tougher local government measures to rein in the property market.

Banks' outstanding loans to the property sector amounted to 13 trillion yuan (HK$16.2 trillion) in the January-March period, up 16.4 per cent from a year ago, according to central bank data. Loans had grown at a slower clip of 12.8 per cent in the preceding quarter.

Mortgage loans rose 17.4 per cent in the first quarter from a year earlier, accelerating from the 13.5 per cent growth in the previous three-month period.