China’s top 20 developers have tripled their spending on land acquisitions in the first nine months of this year compared to five years ago, with most of it focused on “new first tier” cities such as Wuhan, according to a report from a leading research firm. The top players including Country Garden Holdings, China Evergrande , China Vanke, Greenland Holdings and China Overseas Land & Investment invested 1.5 trillion yuan (US$228.3 billion) between January and September on growing their land bank, up from 500 billion yuan in 2015, according to Real Estate Foresight, which tracked land acquisitions by the top 20 companies in its report, “Where do top Chinese developers invest?” State-backed China Poly Property Group was the top spender, investing more than 148.4 billion yuan in the first nine months, followed by China Vanke at 113.4 billion yuan, the report showed. Most of the land this year was acquired in Wuhan, Changsha, Suzhou, Xian and Chongqing. The five cities are also known as “new-first-tier” cities and share similarities with the four main super first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen. “It is noteworthy that the ‘new first-tier’ cities, represented by regional centres such as Chengdu, Xian, Wuhan as well as provincial capitals of developed eastern regions such as Hangzhou and Suzhou, are in rapid development period, ranking high in foreign direct investment and economic growth,” Fang Jin, a research fellow at the Development Research Center of the State Council, a top government’s think tank, wrote in a joint report with consultants PwC. Chinese developers’ investment on land in tier two and tier three cities jumped by 352 per cent from 287 billion yuan in 2015 to 1.3 trillion yuan in the first nine months, Real Estate Foresight said. However, their investment in tier one cities rose by only 15 per cent in the comparable period. Moody’s Investors Service said that this was due to strict housing regulations and fewer available land sites in the traditional core cities, pushing developers to shift their sights to new regions. “To support business growth, many developers have invested more outside [traditional] tier one cities given the strong property demand and land availability in certain economic regions,” said Cedric Lai, senior analyst for corporate finance group at Moody’s. Wuhan , the ground zero of the Covid 19 pandemic, emerged as the top destination for land acquisitions, with developers acquiring 11.1 million square metres in terms of gross floor area or 4.3 per cent of the overall total between January and September, the Real Estate Foresight report said. This has resulted in the average land price in the city increasing by 83 per cent from around 4,100 yuan per square metre in 2018 to around 7,500 yuan per square metre this year, the report added. The city, however, was ranked third by value as developers spent 77 billion yuan, or 5.1 per cent of the total capital spent on land acquisitions in the first nine months of the year. Wuhan’s economy grew 7.8 per cent in 2019, faster than the national average of 6.1 per cent. The city of 11 million people has prospered as a transport and manufacturing hub for some of the world’s biggest companies, including French carmaker Groupe PSA, PepsiCo and Siemens. “Wuhan is a must-have and the first destination to gain a presence in central China as it is the connectivity hub in the region,” said Li Guozheng, director of central China with China Index Academy. “After the outbreak, the Wuhan government, in a way to reboot its virus-impacted economy, has put more land onto the market and more incentives to boost land sales,” Li said.