Hang Lung Properties paid 415 million yuan (HK$471 million) for a site in Wuxi, its second acquisition in a week, signalling growing developer optimism in the market.
The accommodation value works out at 3,842 yuan per square metre, about 43 per cent higher than the price the firm paid for an adjacent site in December 2006.
Hang Lung said it would develop a shopping centre and offices on the site at an investment cost of 3.5 billion yuan.
The developer bought the first site in Wuxi for 685 million yuan, or an accommodation value of 2,686 yuan per square metre.
Lee Wee-liat, senior property analyst at Nomura International (Hong Kong), said the purchase sent a strong signal that the market had turned around.
'It is a good move as land values will go up as more developers jump on the bandwagon,' he said, adding that it was also helped by local governments having released more land for sale.
Last Thursday, Hang Lung bought a 63,400 sqmetre site in Dalian for 1.2 billion yuan, its first purchase in two years. It plans to invest an additional 3.3 billion yuan to develop it into a 222,000 sqmetre 'world class' shopping centre.