Gemdale is new ‘land king’ with 8.8 billion yuan purchase of Shanghai plot
Gemdale Group on Wednesday morning beat out more than 20 bidders to snap up a plot of land near Shanghai’s Pudong International airport for 8.8 billion yuan (HK$ 10.2 billion), the most expensive site sold in Shanghai this year.
The “land king” site, a nickname for Chinese developers paying sky-high prices for land parcels, is located southwest of Pudong International airport and 48 kilometres from downtown Shanghai.
The transaction price is the highest for all plots sold in the city this year.
The plot, also the largest available so far this year – equivalent to 20 football fields – attracted more than 20 bidders amid contested competition. Within five minutes the bidding price reached 5 billion yuan, according to reports from yicai.com, before it was eventually won by Gemdale with its 8.8 billion yuan offer.
The price tag translates into 33,000 yuan per buildable square metre, but considering other constraints, it is equivalent to an actual price of 41,500 yuan per sq m, which analysts said would require a sale price of at least 60,000 yuan per sq m to make a standard profit margin. This compares with the current 25,000 yuan per sq m price for homes adjacent to the plot.
The popularity of the plot is boosted by factors such as the free-trade zone in Pudong and Disneyland
“The auction again underlines how hot Shanghai suburban land is,” said Yan Yuejin, an analyst with Shanghai-based E-house China R&D Institute. “The popularity of the plot is particularly boosted by factors such as the free-trade zone in Pudong and Disneyland.”