With liquidity continuing to flow into China’s financial system, the country’s property developers have more cash on hand for their battle for new sites, and there are signs from Wuhan, Xiamen and even Nantong that some of the nation’s top developers are ready to compete for the flour necessary to bake their bread.
In a sign of future changes, however, the rule-makers at China’s Ministry of Housing and Urban-Renewal Development are already preparing a case for new rules to clamp down on what they are already portraying as overly enthusiastic bidding.
Just last month Sunac China Holdings chairman Sun Hongbin told investors and the media that his company would be “very careful in future land purchases”, but that caution has now translated into a one-day set of site expenditures totalling RMB 15.2 billion.
The purchases translate into more than $2.25 billion to acquire four plots at a government auction in Wuhan on April 23rd, as the top five mainland developer bets big on the capital of Hubei province. Two of the developer’s four plots lie in the city’s Hanyang district where Sunac picked up a mixed-use plot for the auction minimum of RMB 3.85 billion and a residential site for RMB 4.1 billion.
In Qiaokou district, the company picked up a second mixed-use site for RMB 7 billion, while it spent another RMB 287 million to acquire a commercial project in Jiangxia district. In total, Sunac’s four land purchases allowed it to add 1.62 million square metres of future space to its Wuhan land reserves. Read more>>
Land sales in some of China’s cities have begun to show signs of overheating, according to the country’s top regulator of the real estate market and a think tank affiliated with the State Council.
A special survey of land sales during the first quarter of this year by the Ministry and Urban-Rural Development and researchers from the Development Research Centre of the State Council, warned that while most markets remain stable, cities including Wuhan, Guangzhou, Suzhou, Hangzhou and Wuxi have seen excessive levels of activity, according to a report in the official Securities Daily.
The report’s authors recommended that, as the government has eased monetary conditions this year, tighter controls on the land market may be necessary for the overall stability of the property market. Read more>>
China Overseas Property has added a combined residential and commercial project to its Xiamen land bank after pushing aside fourteen competitors to win a government auction on 19 April. The subsidiary of Hong Kong-listed China Overseas Land and Investment agreed to pay RMB 3.86 billion for a site in the seaside city in Fujian province after beating out competitors including Vanke, Sunac and China Poly Group, according to The Paper.
The Xiamen site purchase brings the COLI unit’s April land buys to at least five sites which it purchased for a total of more than RMB 10 billion. In addition to the Xiamen acquisition, the state-backed builder won bids for projects in Shaoxing, Zhejiang; Changzhou, Jiangsu and Guangzhou in Guangdong province. Read more>>
Developer Zhongliang Holdings Group, which last November applied for a Hong Kong IPO has joined with top three builder Country Garden Holdings to win a tender for a residential plot in Anhui province, according to an account in mainland real estate news site Guandian.
Shanghai- based Zhongliang and Country Garden have agreed to pay RMB 1 billion for the site in the city of Fuyang, which brings with it a requirement that the developers also build a primary or high school to accompany the housing project. At the same government auction, Country Garden bought a second Fuyang residential plot for RMB 854 million with that project also requiring the developer to include public facilities. Read more>>
Developer RiseSun has found its way to eastern China with the purchase of sites in Jiangsu and Zhejiang provinces this month. On April 19th the Hebei-based builder agreed to pay RMB 1.26 billion to purchase a mixed residential and commercial site in the Jiangsu province city of Nantong which qualifies the company to build up to 112,542 square metres of space.
On the same day that it made its Nantong buy, RiseSun was also active in Hangzhou, the capital of Zhejiang province. In Jack Ma’s hometown the company’s RMB 1.3 billion bid won on a mixed-use site in Lin’an district which is approved for construction of up to 112,542 square metres. Read more>>
Jinke Property Group arose victorious from a 114 round battle for a residential site in Nanchang, the capital of Jiangxi province on 17 April by agreeing to pay a land premium of RMB 1.14 billion — nearly 58 percent above the auction starting price for the residential site.
At the land sale, the Shenzhen-listed developer agreed to pay the equivalent of RMB 6,763 per square metre for the site in the Ganjiang New District economic development zone, which gives it the right to build nearly 168,000 square metres of housing. Read more>>