Logan Property pays US$1.63 billion to refresh Shenzhen's real estate price record with furious bidding in Qianhai district

By Pearl Liu pearl.liu@scmp.com / https://www.scmp.com/business/china-business/article/3084624/logan-property-pays-us163-billion-refresh-shenzhens-real?utm_medium=partner&utm_campaign=contentexchange&utm_source=EdgeProp&utm_content=3084624 | May 19, 2020 1:06 PM SGT
A residential land parcel sold for a record price in Shenzhen a day after the Chinese central bank and regulators unveiled a sweeping plan to spur financial services and investments in the Greater Bay Area (GBA).
Logan Property Holdings, the record holder for the most expensive land bought in Shenzhen, surpassed itself by forking out 11.6 billion yuan (US$1.63 billion) for a plot that can yield 183,000 square metres (1.97 million square feet) in gross floor area, topping the reserve price by 45 per cent.
It took the bidders a mere six minutes in three furious rounds to reach the record price, and another 30 minutes for Shenzhen's hometown developer Logan to outbid 15 other potential buyers with the biggest offer of land set aside for subsidised housing.
ADVERTISEMENT
The price tag, at 63,126 yuan (US$8,888) per square metre , refreshes the record for the Qianhai financial district in Shenzhen, 10 per cent more than the 57,886 yuan mark set in December 2019. Developers are rushing into this area, ahead of stimulus measures and incentives expected next week during China's legislative meetings to spur the development of the GBA, of which Shenzhen is a part.
"Shrugging aside the downward pressure of prices [in the housing market], developers are still quite keen to pay large amounts and high premium rates to get land with good potential," said Yan Yuejin, director of the E-house China Research and Development Institute. "We will continue to see heat in the home market and in land sales in the cities with the most promising future and most favourable policies, such as in Shenzhen, and in districts like Qianhai."
The GBA, comprising 11 cities in southern China, including Hong Kong and Macau, has a total population of 70 million residents and a combined economy estimated at US$1.5 trillion. It would be the world's 13th-largest economy " larger than Spain, and smaller than South Korea " if it were a stand-alone economic entity.
SCMP Graphics alt=SCMP Graphics
Several of China's biggest developers were in the fray with Logan for the Qianhai plot, including Shimao Property Holdings, China Overseas Land & Investment, China Resources Land, Ping An Real Estate, Kaisa Group and Yuexiu Property. Logan paid 66,988 yuan per square metre last June for another plot in Shenzhen.
ADVERTISEMENT
The rush to develop Qianhai and the GBA has caused land prices and the price of apartments to soar in Shenzhen, forcing local authorities to cap the price of completed homes at 107,100 yuan per square metre.
Up to 22 per cent, or 40,760 square metres, of Logan's prize will have to be set aside for building government-funded housing for low-income households and first-home buyers, according to the regulations.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved.
ADVERTISEMENT
Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.