Guangzhou-based Poly Developments and Holdings has agreed to pay RMB 2.5 billion ($355 million) for a combined residential and commercial site in Shanghai at a government auction, according to an announcement by the Shanghai Land Exchange.
The state-owned developer won the project at a rate of RMB 24,800 per square metre of gross floor area around one year after the city government had tried unsuccessfully to auction off the Minhang district plot for RMB 2.7 billion.
Poly, which ranked as China’s fourth largest developer by contracted sales during the first half of 2019, picked up the suburban Shanghai site less than four months after buying a land parcel in the city’s Yangpu district, bringing the company’s land investments in China’s commercial capital to more than RMB 6.67 billion this year.
Developer Commits to Pujiang Project
The developer, which is a division of arms supplier China Poly Group is paying a premium of 6.01 percent over the auction reserve price of RMB 2.36 billion for the 65,033 square metre site labeled as plot Pujin Street Zhouputang South-9.
The parcel, which is located in the heart of Minhang’s Pujiang New Town along the east bank of the Huangpu river is comprised of two plots which can yield up to a combined gross floor area of 100,734 square metres.
The site, which is around 600 metres from the Jiangyue station on metro line eight, includes Plot 34-1 whch is designated for commercial and residential usage, and Plot 34-6 which is slated for commercial and public service use.
As a condition of the government land tender, the developer must dedicate at least 80 percent of the residential building area for small or medium-sized units to ensure housing affordability. The commercial and public services elements of the project must be held by the developer itself and part of the space must be used to provide community services such as activity rooms for the elderly, a day care centre or school, a public library and a security room.
The project site is located near Pujiang’s Renji Hospital and the Pujiang City Life Plaza shopping mall.
Pujiang, which borders Pudong district on the east bank of the Huangpu, is envisioned by the district government as an extension of the Xinzhuang, Qibao, and Hongqiao areas of Minhang, which lie on the opposite side of the river.
Poly Stocks Up on Shanghai Land
The acquisition in southeastern Shanghai comes after Poly in May had won a residential site in the city’s Yangpu district for RMB 4.179 billion.
That purchase in the northern edge of Shanghai’s core districts, like the Pujiang investment, came after the local government had tried unsuccessfully to auction the same site last year at a higher price of RMB 4.6 billion.
Property investment in China grew by 10.6 percent during the period from January through July of this year, down slowing from a 10.6 percent growth rate during the first six months of 2019, according to official statistics.
With sales by floor area having tapered off by 1.3 percent nationwide during the first seven months of this year, and lending conditions continuing to tighten, large state-backed players have increasingly dominated the country’s major land sales.