Guangzhou-based Poly Developments and Holdings, formerly known as Poly Property Group, has won a Shanghai residential site for RMB 4.179 billion ($621 million) at a government auction, according to an announcement by the Shanghai Land Exchange.
The winning bid by the state-owned developer, which is equivalent to RMB 53,766 per square metre, came less than a year after the city government had tried unsuccessfully to auction off the plot in Yangpu district for RMB 4.6 billion, as developers recover their appetites for new sites in 2019.
While Shanghai and other mainland cities saw numerous land sales cancelled last year amid a slowing housing market, a recent report by local research firm CRIC showed that plots auctioned in the first three months of 2019 attracted winning bids which average 19.1 percent above auction reserve prices — a sign of growing competition among builders.
77,000 Square Metres of Homes on the Way
Poly’s new 31,000 square metre site is located at 159 Jiangpu street and sits within Shanghai’s inner ring road. Labelled as plot 201903401, the project is less than two kilometres from Shui On Land’s Ruihong Xincheng residential development in Hongkou district, and is around five kilometres north of Shanghai’s historic Bund.
Approved for a plot ratio of 2.5, the project can yield up to 77,700 square metres of housing, with the developer required to build five percent of that total as social housing and another 15 percent as rental housing.
The remaining portion of the project can be developed into 800 residential units, however, Poly must also provide planning and construction for public facilities on nearby Dahushan Road, including a recreation center, an elderly service center, a home care center and public greenery.
The Yangpu site won a warmer reception this year after the city government knocked more than 10 percent off of the asking price following the attempt at a RMB 4.6 billion sale in June last year. In March, the property was put back into the development pipeline at an auction minimum of RMB 4.12 billion, with Poly, China’s fifth largest developer by sales, finally winning the tender at a 1.45 percent premium with its RMB 4.179 billion offer.
Poly Returns to Shanghai with Fresh Branding
In September last year, Poly Property rebranded itself as Poly Developments and Holdings in a bid to create a “real estate eco-system.” According to an official statement at the time, the group will continue to extend vertically on the real estate value chain, integrating investment, design, construction, sales and asset management.
At the same time, Poly said it would expand horizontally into diversified services for its expanded asset types including residential, offices, hotels, shopping centers, stadiums, industrial parks and theme parks to connect talents, capital, technology and information.
The developer earlier this year posted a 20.33 percent annual growth in its net profits in 2018. In its preliminary earnings estimate filed to the Shanghai Stock Exchange in January, Poly said its net income attributed to shareholders reached RMB 18.8 billion in 2018.