Despite a government clampdown that has scared developers away from bids for sites at the fringes of Shanghai and other major cities, a site in the Chinese commercial hub’s Xuhui district still proved appealing enough to persuade China Vanke to spend RMB 9.8 billion ($1.45 billion) on Wednesday to capture the combined residential-commercial project.
Three parties submitted tenders for the 118,300 square metre site along Hongmei Road, between Caobao Road and Tianlin Road, with Vanke emerging as the winner after two rounds of bidding. A subsidiary of China’s third-largest developer by sales won the rights to the site near Caohejing High-Tech Park by agreeing to pay RMB 12 million over the auction reserve price of RMB 9.851 billion, according to local media.
With the planned building area set at 356,933 square metres, not including construction of rental housing, senior care facilities and amenities as required under the terms of the tender, the site between the city’s metro lines 12 and 9 has cost Vanke RMB 27,632 per square metre.
Building Offices and Homes Near Caohejing
The site consist of five adjoining plots with two of the parcels approved for commercial use, and the other three slated for a mixture of commercial and residential development. Based on the construction requirements for mixed commercial-residential projects in the area, housing built on top of commercial space should consist of no less than 30 percent long-term rental units. The ratio of rental housing for this site is higher than the usual requirement of only 15 percent, according to local media.
Under planning stipulations shown on a pre-application notice about the tender sale issued by the local authorities, 210,000 square metres of office can be built on the site, with 50 percent of the offices built allowed to be sold on a strata basis. Meanwhile, 81,000 square metres of the built area is approved for retail development.
The residential component is approved for construction of 105,500 square metres of space, including 30,000 square metres of rental housing and 5,000 square metres of affordable housing. The tender also required the developer to build 45,000 square metres for sports and cultural facilities, as well as care homes for the elderly.
Vanke Buys Two Shanghai Sites Within 9 Days
China Vanke’s Xuhui site acquisition came shortly after its purchased a 49,500-square-metre plot in Qingpu district, which lies adjacent to Xuhui, for RMB 2.95 billion on July 23rd. The developer is allowed to build 89,000 square metres of finished homes on that residential site with at least 15 percent long-term rental housing and a portion of affordable housing.
Also within the last two weeks, commercial developer Chongbang Group spent RMB 7.1 billion for a 46,100-square-metre retail-office site in the Shanghai’s Hongkou district along Metro line 2, according to Shanghai’s Land Transaction Market website on July 26th.
Earlier in July, a consortium led by Hong Kong-based developer Shui On Land acquired a prime commercial lot on Shanghai’s Huaihai Zhong Road with the space of 390,700 square metres in a government tender for RMB 13.6 billion, China Pacific Insurance, who has a 70 percent stake in the consortium announced in a statement on July 5th.