Hongkong Land, known for being the biggest landlord in Hong Kong’s Central district, on August 10th bought a new residential site in Nanjing’s Jiangbei District for RMB 4.49 billion ($652 million), as the Hong Kong developer continues to take on projects in the city of over eight million people.
The developer of such prime Hong Kong properties as Jardine House and Exchange Square won the tender for Jiangbei District plot 2018G07, a 115,400-square-metre site, after 71 rounds of bidding, with the winning bid landing 18.5 percent above the auction’s reserve price.
The newly acquired condo project is Hongkong Land’s third mainland site acquisition within the last two years, as the developer controlled by Hong Kong’s Jardine Matheson Group adds a property in the Nanjing high tech zone to a growing portfolio in the capital of eastern China’s Jiangsu province.
Buying into Nanjing’s High Tech Hub
This latest site, which is approved for residential development, is located in Nanjing’s Jiangbei New Area, a high tech hub which has grown in popularity since Taiwanese semi-conductor maker TSMC announced plans in 2016 to build a $3 billion chip fab in the national level economic development zone.
Hongkong Land’s plot is situated to the north of the Changjiang River, between Pubin Road and Wanshou Road, in the district north and west of the Yangtze River.
“We are pleased with the successful acquisition of the project in Nanjing,” a Hongkong Land spokesperson said via email. The company representative said that Hongkong Land is confident in the long term prospects of the China market and that the company will continue to look for appropriate investment opportunities.
With the land use permit setting a plot ratio of under 2.2, the site can yield up to 253,880 square metres of housing, which works out to a unit price of RMB 17,682 per square metre.
According to China real estate website Fang.com, the average price for new homes sold in Jiangbei District was RMB 23,347 per square metre in April of this year, slightly lower than the city’s average price at RMB 28,515 per square metre over the same period.
In addition to TSMC’s Jiangbei investment, the development zone has attracted around 100 semiconductor firms, according to the local government, which has set a target of achieving annual semiconductor production of over RMB 100 billion per year in the district by 2020 according to local media reports.
Leading domestic real estate developers including Vanke, Wanda and China Poly Group have already developed projects in the same zone.
Hongkong Land’s Fits Latest Piece into Nanjing Strategy
The Jiangbei acquisition comes seven months after Hongkong Land bought a 32,300-square-metre commercial site in Nanjing’s Xinjiekou area for RMB 4.8 billion.
Before that January acquisition, Hongkong Land had announced at a real estate event last September that the company would invest RMB 13 billion to take over the Dong Tie Guan Alley plot in Xinjiekou and build a 260,000-square-metre international financial center in the district.
In addition to those downtown Nanjing projects, Hongkong Land in March entered a joint venture with China largest real estate developer Country Garden and Hong Kong-based China Merchants Land to develop a RMB 9.81 billion site near Nanjing’s Zhonghuamen in Qinhuai district which China Merchants Land purchased in February.
COLI Wins Second Jiangbei Site
On the same day that Hongkong Land made its Nanjing purchase, mainland major developer China Overseas Land & Investment Limited bought the second of two sites offered by the Jiangbei district government.
China’s seventh-largest developer beat out bids from China Vanke and Ronshine Real Estate to win the 2018G06 plot between Pubin Road and Kangsheng Road, and just a few blocks away from Hongkong Land’s purchase, for RMB 5.64 billion.
COLI’s new 149,500-square-metre residential site, has a plot ratio of 1.01-2.2, which works out to a price of RMB 17,152 per square metre of finished floor area.
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