In a sign of confidence returning to the property market, Guangzhou R&F Properties clinched its first land purchase in more than a year yesterday by outbidding rivals for a residential site in Beijing. The largest developer in Guangzhou acquired a 32,300 square metre site at Guang Qu Men Wai Street in the Fourth Ring Road area for 1.02 billion yuan (HK$1.16 billion) or 14,097 yuan per square metre. The site could be developed into residential buildings with a total gross floor area of 72,500 sqmetres. Adrian Chan Chi-hoo, assistant to the chairman at R&F Properties, said the project's construction would cost about 290 million yuan. The company might sell homes on the site at 26,000 to 27,000 yuan per square metre when the project was launched in 2011, he said. 'The site is next to our Beijing R&F City, a successful project that has developed our brand in the city. We have built infrastructure in the area when we developed Beijing R&F City. We believe the new site could benefit from the brand and the infrastructure.' Thanks to limited residential sites in urban areas, the site attracted 32 bids. R&F Properties' winning bid was 242 per cent higher than the 299 million yuan opening bid. The developer had suspended land acquisitions since last year because of the poor market sentiment and its high gearing ratio. Eric Wong Chun-yu, a co-head of Asia property research at UBS, said the latest purchases by R&F Properties and Shimao Property Holdings showed the developers had regained confidence in the real estate market amid rising sales. The government's move to ease lending restrictions in the property market also encouraged developers to become more aggressive, he added. 'The aggressive price shows the developer expects property prices to rise,' Mr Wong said. 'The down cycle in the property market has already come to an end.' Dickson Wong Hung, deputy general manager at Centaline (China), said R&F Properties' offer was aggressive as the average price at Beijing R&F City was 20,000 yuan per square metre in the secondary market. However, he said it was too early to say the market had recovered. 'The property market will recover when the economy improves, but that hasn't happened. The outlook will be clearer in the second half.' Meanwhile, China Aoyuan Property Group said it had acquired 70 per cent of a commercial project in Tianhe district in Guangzhou for HK$366 million. The project could provide a total gross floor area of 113,031 sqmetres. Shares in R&F Properties fell 2.76 per cent to HK$14.08, while China Aoyuan rose 2.84 per cent to HK$2.17.