Top China developers battle for Beijing land site in sign of increasing competition amid red hot property market

Land put up for auction in Beijing’s northwestern Haidian district failed to find a buyer on Wednesday after bidding hit a price ceiling set by the municipal government as it expands efforts to cool the sizzling property market.

The government did not select winning bids for two land parcels because all four bidding developers met the tighter new land sale rules that require buyers to keep residential developments built on the sites as long-term investments for rental and not for sale.

In a move to cool down the red-hot housing market in the capital city, the municipal government set tougher requirements on the sale of two sites auctioned on Wednesday.

Under the new requirements, bidders enter the second round of selection when the price ceiling set for the lot is reached. The winning bid is determined by the total development area the bidder designates for rental purposes.

Bidding for the 83,550 square metre parcel in northern Haidian district entered the second phase of selection when the 5 billion yuan price ceiling was hit.

However, the four developers – Poly Real Estate, Longfor-Beijing Capital Development Holding consortium, Greenland Holding Group, and China Vanke – each promised to devote 100 per cent of the residential property for rental purposes.