Sun Hung Kai Properties, Hong Kong biggest developer by market value, won a prime commercial site in Xujiahui, a shopping and entertainment area in Shanghai, for 21.7 billion yuan (HK$27.3 billion), making it the most expensive site in the city in terms of value.
After exchanging 200 bids with Wharf Holdings, SHKP finally secured the commercial site at 24 per cent above the minimum bid of 17.52 billion yuan. The winning bid represents 37,264 yuan per sq metre.
The site, which could yield a total of 584,200 square metres of floor space, will be the last big lot available for sale in the city centre.
“It will definitely become a landmark in Puxi as SHKP has a track record in building top-notch commercial buildings in Hong Kong and in Shanghai,” said Vincent Cheung, director of Greater China valuation and advisory at international consultant Cushman & Wakefield.
He estimated the total investment of the project would cost about 40 billion yuan. According to the land sale document, the winning developer is required to hold the project for at least 10 years.
“Only big players with strong financial strength can have such holding power. SHKP has expertise in building and managing top quality commercial buildings and it will give a big boost the nearby area in terms of commercial value,” he said.
SHKP owns 9.4 million square feet of investment properties in the mainland with landmark projects in Shanghai that include the office-hotel-retail complex Shanghai IFC in Luijazui, Pudong, and the newly launched shopping mall International APM in Huai Hai Road, Puxi.
“Its IFC is a well- known brand in China,” said Cheung.