Changsha to offer three large commercial sites at half price to woo Hong Kong investors
Changsha, facing oversupply of office space, is looking to encourage Hong Kong developers to help build a commercial district near its high-speed train station by offering land at 50 per cent less than the going rate for city centre plots.
Hunan's provincial capital is releasing three parcels of commercial land at 2,500 yuan per square metre, compared with prices of more than 5,000 yuan per square metre in the city centre.
The SCMP-DTZ office rental index, which tracks prices in 16 cities, showed Changsha posted the sharpest quarter-on-quarter fall in rents - 6.4 per cent - in the first three months of the year. In year-on-year terms, rents dropped 2.6 per cent.
However, the city government remains upbeat about the market outlook.
"With the attractive offer, the new district should have greater upside potential," said Tang Jianxin, a director of the Changsha high-speed railway new district development and construction leading group office.
The three sites could yield a total gross floor area of 1.2 million square metres, which is equivalent to more than four Pacific Places in Admiralty.
Based on the asking price of 2,500 yuan per square metre, the city government hopes to fetch about 3 billion yuan from the sale of the sites, designated for grade A offices, luxury hotels, a convention and exhibition centre and shopping malls.
Hang Lung Properties project planning manager James Wong said the developer was in contact with Changsha government to monitor the city's development.
"We do not have a concrete investment plan in the city so far," he said.
Tang said mainland Chinese developers had bought land in the new district, which was 15 to 20 minutes from the city centre, airport and Changsha's high-speed train south terminal.
"It will become a new core business district," he said.
The first site on offer is designated for a hotel/convention and exhibition centre with a total gross floor area of 445,000 sq metres.
Another site, earmarked for grade A offices, will generate a gross floor area of 502,000 sq metres and the third commercial site, also designated for premium offices, could yield a gross floor area of 272,000 sq metres.