REVENUE earned from land leased to foreign investors to develop residential housing in Shanghai more than doubled in the first 11 months of the year compared with 1994. The jump came after the Shanghai Government lowered land lease rates in a bid to attract more foreign funds for residential projects. The Shanghai Housing and Land Administration Bureau leased 15 plots covering 75 hectares from January to November, compared with five plots covering nine hectares leased in the whole of last year. Bureau official Fan Yutang said the 75 hectares could provide a potential floor space of about two million square feet. He said government revenue from the leases more than doubled to 140 million yuan (about HK$130.2 million) from 60 million yuan last year. 'There is definitely an obvious rise this year in the amount of land leased,' Mr Fan said. 'This is because foreign investors now have a better understanding of our policy.' The government's new regulations providing land lease discounts to foreign investors were formally introduced in August this year, but the temporary regulations came into being in February last year. Mr Fan said under the regulations, foreign investors would be given discounts of 10, 20 and 30 per cent for land designated grade three, four and five in less-sought-after districts in Shanghai. Prime land lots in the city would not be given discounts. He said a good proportion of the 15 plots approved this year were graded as level four and five land. These included lots in the southern Bund and south of the city. The regulations were complemented by the government's move to re-designate the land grades. As a result, foreign developers who had obtained leases for land that used to be in the grade three level but were now considered grade four would have to be paid back the discount. 'In order not to let investors and developers feel cheated, we have to reimburse those who had invested before the regulations came into place,' Mr Fan said. He said although this ate into government finances, it was inevitable because the city urgently needed funds to build new homes for the many residents who still lived in shabby and dangerous buildings. The revenue earned from all land leased for property development in Shanghai fell by half this year. In the first 11 months of the year, 207 plots covering 553 hectares were leased, earning US$460 million for the government. In the whole of last year, 452 plots covering 1,594 hectares were leased and income from land sales was double that earned so far this year.