綠城中國(3900)

Greentown pays 90pc premium for land in Shanghai new town

2007/6/22
Hong Kong-listed mainland developer Greentown China Holdings acquired a site in Shanghai’s Yangpu district at a 90 per cent premium to the price of a nearby site sold seven months ago, highlighting the boom in the city’s property market.

Greentown, one of the largest developers in Hangzhou, the capital of Zhejiang province, bought the 59,253 square metre site in New Jiangwan Town area for 1.26 billion yuan in an auction yesterday.

The accommodation value of the site, with a total floor area of 100,730 square metres, is about 12,500 yuan per square metre.

"This is a lot higher than the accommodation value of 6,600 yuan per square metre paid by China Resources Land late last year,” said Tang Zhendong, deputy general manager of property agent Centaline China’s Shanghai office.

In November 2006, China Resources Land paid 1.54 billion yuan, or an accommodation value of 6,600 yuan a square metre, for a 144,247 square metre site also in New Jiangwan Town.

The accommodation value at the time was already about 1,000 yuan higher than the price paid by a mainland developer in 2005 for another plot in the new town.

So far, three sites have been sold through auction in the New Jiangwan Town, an area covering 9.45 square kilometers that the Yangpu district government plans to develop into a modern residential area accommodating about 80,000 residents.

The new town’s future development will be based on the premise of ecological protection, the district government said earlier.

Mr. Tang said the market was surprised by the land price. “I believe the price of the site, in terms of accommodation value, is the highest in Shanghai so far this year,” he said.

Mr. Tang said Greentown needed to set the selling price at 25,000 yuan per square metre to make a reasonable profit.

High-end flats in the area are being sold at 11,000 yuan to 13,000 yuan per square metre.

Greentown is one of the country’s most aggressive property developers. It plans to spend 10 billion yuan on land purchases, its chief executive, Shou Bainian, said in January.

Last year, Greentown and its partners spent more than 8 billion yuan buying land, including a 132,325 square metre residential-commercial site in Lucheng district in Wenzhou, Zhejiang, that it bought for 3.33 billion yuan.

At the beginning of this year, it had more than 3 billion yuan cash.《South China Morning Post》