Singapore-listed Yanlord Land Group has shouldered aside bids from a trio of mainland rivals to win a residential parcel in Shanghai’s Jing’an district for RMB 3.4 billion ($490 million) according to a notice from the Shanghai Land Bureau.
The developer chaired by mainland native Zhong Sheng Jian won out over bids from China Vanke, China Merchants Land Limited and China Resources Land by paying a premium of 3.82 percent over the auction reserve price to secure the site in in the Daning area north of Shanghai’s urban core.
With the purchase on 11 June, Yanlord wins the rights to develop up to 67,500 square metres (726,564 square feet) of housing in China’s commercial hub.
Yanlord Moving in Next to Sunac
The acquisition works out to RMB 49,000 per square metre of finished homes on the site within Daning’s Shibei Hi-tech Park, in what had been Zhabei district before it merged with downtown Jing’an in 2015. The plot is located close to Shanghai’s middle ring road, as well as to the north-south elevated expressway about 10 kilometers from Jing’an Temple.
To qualify for the tender, Shanghai-based Yanlord agreed to abide by government development requirements including setting aside 15 percent of the project, along with the parking space, for self-held rental units.
The plot labeled as N070501 18-03 is located next to a similar parcel acquired by Sunac China in December 2018 for RMB 3.05 billion, with both projects lying near the Wenshui Lu metro station. For Sunac’s project, the developer is required to build at least 630 homes, covering up to 67,358 square metres, with five percent of the finished area dedicated to social housing.
Zhabei Sites to Grow Scarce
According to local media reports, the government does not plan to make available any new plots in the Daning area within the next three years, which may help to boost the value of Yanlord’s acquisition.
Currently, the latest phase of nearby Jing’an Prime Land, a project being jointly developed by China Resources Land and Zhuhai-based Huafa Group near Yanlord’s site, is selling homes at RMB 86,000 per square meter, with buyers expected to start taking possession of their homes in December this year.
Yanlord already has a portfolio spread across ten cities in China, including Shanghai, Shenzhen and a number of second-tier markets.
Last April, the developer bought up stakes in a pair of residential sites in the northern Chinese city of Tianjin for a total of RMB 7.55 billion (1.2 billion), and has also recently purchased plots in Nanjing and other cities in the Yangtze River Delta.