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Singapore-listed Yanlord Land Group has secured a Shanghai residential site with the sole tender bid, underlining how the uncertain market outlook on the mainland has prompted developers to become  cautious on land acquisitions.
The 97,074 square metre site in Waigaoqiao, Pudong, a new residential area in the city, was put up for tender last month  and initial expressions of interest saw about  40 developers requesting copies of the tender documents.
They included Gemdale, Sun Hung Kai Properties, CapitaLand, Yanlord Land and China Resources Land, according to  newspaper reports.
Property analysts expected the site could attract many bidders since it was the only residential site that has been made available for sale  this year.
However, Yanlord  emerged as the sole bidder  when the tender closed last Friday.  It won the site with its opening bid of 1.19 billion yuan (HK$1.36 billion) or 7,500 yuan per square metre.
Michelle Sze, the head of investor relations at Yanlord, said the site would be developed into a medium-to-high-end residential project.
The development could yield a total gross floor area of 158,604 sqmetres,  Ms Sze  added.
Total investment  for the project including land price and construction costs would amount to about 2.06 billion yuan.
She  said the company acquired the site as  it was optimistic about the outlook for Shanghai's property market, and because the demand for residential units in Pudong remained strong.
'The site is  in the middle of two of our existing projects, one of which - Yanlord Town - was sold out by the end of October last year,' she said.
Meanwhile, prices at the latest  phase of nearby Yanlord Riverside City in Pudong have reached 43,000 yuan per square metre, 10 per cent higher than that in the middle of last year.
'Property sales have slowed this year, but our projects are fetching higher prices,'  Ms Sze said.
Yanlord has now  invested  2.79 billion yuan to acquire development sites on the mainland this year.
Earlier this year it bought another residential site in Tianjin city centre for 1.6 billion yuan or 4,800 yuan per square metre.
Ms Sze said  the company would continue to look for development sites on the mainland, particularly in Shanghai, Tianjin and Chengdu.
However,  not all developers were as active at present, and tightened  loans had slowed the  acquisition plans of many mainland developers, said Albert Lau, the managing director of Savills Shanghai.
'Major developers were aggressive when it came to  land acquisitions last year. But this is no longer the case this year, as many of the sites they bought were expensive,' Mr Lau  said.
Vincent Luk Fung-siu, a director at DTZ Shanghai, said the outcome for the Pudong site tender was an improvement on previous tenders which had been withdrawn due to lack of interest from developers.
'Mainland developers depend greatly on maintaining property sales,' he said. 'The slowdown in sales this year and the uncertain market outlook have forced them to become more cautious on land acquisitions.'
This had opened the door to foreign developers, Mr Luk said.
'They don't need to bid  as aggressively for sites as they had to last year,' he said. 'And they have plenty of investment opportunities in the land market.'



Yanlord submits sole bid to acquire Shanghai site