Hong Kong Resorts International has made a successful bid of RMB 830.4 million ($130.3 million) for a residential plot in Shanghai’s southwestern suburbs, as the developer continues to seek expansion opportunities in the mainland’s Yangtze River Delta region.
HKRI’s latest find in Songjiang district measures 33,539.2 square metres (361,013 square feet) in site area and can yield 32,528 square metres of gross floor area, meaning that the builder controlled by the billionaire Cha family is paying roughly RMB 25,528 ($4,006) per square metre of GFA for the property in the district’s Dongjing town.
The land parcel went under the hammer in late November at a starting price of RMB 764.43 million, with six qualified bidders applying for the tender, and HKRI scooped it up at a price “a little bit on the low side”, according to James Macdonald, senior director and head of China research at Savills.
“The last land plots that we know of that sold in Dongjing town in Songjiang were back in September 2018, two plots which sold for roughly RMB 33,000 per square metre, 1.2 plot ratio and total GFA of 151,000 square metres,” Macdonald told Mingtiandi.
Building a Tech Magnet
HKRI will develop the plot into a low-density, high-quality residential project aimed at skilled workers, helping to diversify the housing supply in the area about 45 minutes’ drive from central Shanghai, the company said Tuesday in a release. Plans call for setting aside 5 percent of the project’s GFA for affordable housing.
“With its prime location, Songjiang will attract enterprises and talents of the technology industry and the residential market is expected to thrive with high demand,” said Violet Lam, general manager for business development and marketing at HKRI.
Bounded by Peigou stream and Caijiabang Road, the “picturesque” development site enjoys connectivity with key arteries including Xinzhuan Highway, Sizhuan Highway, G15 Shen Hai Expressway and G60 Shanghai-Kunming Expressway, HKRI said. A further transport option will become available upon completion of Shanghai Metro Line 12’s western extension, which will pass through the site.
Macdonald expects developers to keep a watchful eye on markets like Shanghai that have a firm base of buyer demand and a more limited supply of residential land plots.
“Tighter developing financing certainly means that land plots are not as fiercely competed for as they have been in the past, and there may be opportunities that present themselves that would otherwise not be available,” he said.
HKRI’s latest win adds another mainland property to the portfolio of a developer that got its start in the 1970s with the Discovery Bay project on Hong Kong’s Lantau Island.
The company chaired by Victor Cha bought its first mainland Chinese property, Chelsea Residence on Shanghai’s leafy Huashan Road, in 2000. It refurbished the serviced apartment building and launched strata-title sales in 2009.
More recently, the group partnered with fellow Hong Kong giant Swire Properties to develop HKRI Taikoo Hui on Shanghai’s West Nanjing Road. The 322,000 square metre office, hotel, residential and retail megaproject held its grand opening in November 2017.
Later that same year, HKRI acquired land to develop Mansion One, a 33,000 square metre mid-rise apartment building in Zhejiang province’s Jiaxing, southwest of Shanghai on the road to Hangzhou. The project near the Shijiuyang wetland launched sales in October of this year.
The HKEX-listed developer’s portfolio also includes several premium residential and commercial properties in Thailand and Japan, including the Sukhothai hotel in Bangkok and the Chelsea Garden residences in Tokyo.