THREE adjacent land parcels in Shanghai's outlying Lingang port area were sold today to major domestic real estate developers at roughly their reserve prices as the city's land market kicked off a somewhat "cold" start for the Year of Rooster.
Shanghai Greenland Group, China Vanke Co and Country Garden Holdings Co acquired the three plots -- covering a site area of 61,380 square meters, 40,361 square meters and 64,418 square meters each -- for an average gross floor area price of 21,180 yuan per square meter (US$3,075), 21,370 yuan per square meter and 21,086 yuan per square meter, respectively, or a premium of 0.85 percent, 1.76 percent and 0.41 percent, respectively, from their starting prices.
The three land plots, all earmarked for residential development, are located about 800 meters away from the Lingang Avenue station of Metro Line 16.
"Though accessed by one metro line, Lingang remains a remote neighborhood in Shanghai where infrastructure and ancillary commercial facilities are still not good enough to attract home seekers," said Lu Wenxi, senior manager of research at Shanghai Centaline Property Consultants Co. "As government rein-in policies remain strictly implemented, real estate developers seemed all more rational and cautious in their latest land acquisition endeavors."
However, that doesn't mean the price is cheap which would be easy for developers to make decent profit.
At the moment, new homes in the neighborhood, decorated units for instance, are sold for just around 29,000 yuan per square meter, Centaline data showed.
As required by the city's land watchdog, at least 80 percent of housing units built on these sites must be small and medium-sized apartments while 15 percent of the total space should be held by the developers which means they won't be available for sale on the open market.
Shanghai implemented last year three major batches of tightening measures to cool down its red-hot property market which included an October 8 announcement that calls for stricter regulation on funding sources for land purchases.