Chinese developers shell out US$7.5 billion for 19 lots on offer in Shanghai’s first land auction in 2023, pointing to property market’s recovery

Poly Developments, a subsidiary of state-owned China Poly Group, emerged as the auction’s biggest winner, obtaining three parcels for US$1.9 billion

It was followed by Vanke, which secured two lots for US$1.6 billion, and China Railway Construction Corp, with two parcels worth US$1.4 billion

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Shanghai’s first auction this year showed that state-owned and state-backed developers are currently the main force in land acquisition. Photo: Shutterstock

Published: 4:09pm, 22 Apr 2023Updated: 6:53pm, 22 Apr 2023

China’s largest city, Shanghai, concluded its first land auction this year with the sale of all 19 plots on offer for 51.9 billion yuan (US$7.5 billion), up seven per cent from their estimated value, signalling keen interest from major developers and suggesting a strong step towards recovery for the country’s property market.

The four-day land sale, which ended late on Friday, saw more than 50 property developers engaged in intense bidding that resulted in 15 plots selling higher than their floor price. One parcel on offer went through 55 rounds of bidding, while another lot was contested by as many as 28 bidders.

Both state-owned and state-backed developers secured 14 out of the 19 lots up for bids. Poly Developments, a subsidiary of state-owned China Poly Group, emerged as the auction’s biggest winner, obtaining three parcels for 13.2 billion yuan, according to data from Chinese real estate consultancy CRIC.

It was followed by Vanke, which secured two lots for 11.3 billion yuan, and China Railway Construction Corp, with two parcels that cost 9.9 billion yuan.

Shanghai’s vast commercial and suburban landscape viewed from the 128-storey, 632-metre-tall Shanghai Tower in Pudong New District. Photo: Shutterstock

One parcel in Shanghai’s suburban Minhang district attracted as many as 28 bidders on Friday. China Enterprise won the bid by paying 2 billion yuan, which was 8.5 per cent more than the floor price or 48,029 yuan per square metre.

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