Drawn by the province's buoyant economy and robust consumption power, Henderson Land Development plans to invest more than four billion yuan to develop two projects in eastern Jiangsu. The money would be spent developing two sites that Hong Kong's third-largest developer by market value bought last week, company executive director John Yip Ying-chee said. The four billion yuan will be spent developing a commercial project on an 111,500 square metre site in the Xiangcheng district of Suzhou next to Shanghai. The land was bought for about 670 million yuan. The finished complex will contain a shopping street, shopping centres, serviced apartments and hotel rooms. The company also intends to invest about 300 million yuan building luxury residences and low and high-rise flats at a central Yixing site of about 37,000 sqm. It bought the lot for 158 million yuan. 'Jiangsu is very wealthy compared to other mainland provinces,' Mr Yip said. 'We are optimistic about the outlook.' Jiangsu's gross domestic product rose 15 per cent in the first half with urban residents' per capita income climbing 17.3 per cent to 8,575 yuan from a year ago. Mr Yip expected to see high profit margins in these two projects due to the relatively low land costs. He said that the company initially had submitted development proposals to the local government for the vacant sites. On obtaining government approval, the sites were still put up for public auction, in accordance with mainland land sale procedures. 'But we did not need to compete with other developers, which would have pushed up the land cost,' Mr Yip noted. He calculated the Suzhou site's accommodation value or the land price in terms of total planned gross floor area at only 82 yuan per square foot, which is cheaper than the 110 yuan per square foot for a nearby residential site the company bought last year. The site in Yixing, a city famous for clay teapots, was sold at an accommodation value of 228 yuan per square foot. Mainland land costs are surging as domestic and foreign developers increase their landbanks in anticipation of robust demand. For example, a residential site in Shanghai's Yangpu district was sold to Greentown China Holdings last month for 1.26 billion yuan or an accommodation value of 12,500 yuan, a 90 per cent premium to the price of a nearby site sold seven months earlier. The mainland's property market continued to heat up last month, with the National Development and Reform Commission yesterday saying the prices of homes in 70 mainland cities rose 7.1 per cent from a year ago. Cities with the steepest climb in home prices year on year include Beihai (15.5 per cent), Shenzhen (13.9 per cent), Nanjing (11.3 per cent) and Beijing (10 per cent).