Keen interest expected in next round of land parcels

A new round of 35 land parcels designated for residential development in Shanghai will be on sale in September.

One month after this year's second round of land auction, the third round of concentrated land sales was just announced on the official website of the city's land exchange market.

The land parcels cover 13 districts, with a total area of 1.8487 million square meters and an overall starting price of 103.045 billion yuan (about US$15 billion).

The on-the-spot transactions for this round are scheduled to begin on September 23.

Among the land parcels are four renewed from old urban village sites, located in the Pudong New Area, Minhang District and Chongming District, and one comprehensive site for commercial, residential and office use in Jiading New City.

The remaining 30 residential-related plots of land cover a combined area of 1.4766 million square meters, 35.1 percent larger than the total area sold in the second batch this year.

Bidding for the parcel located in Jing'an District will start at 12.06 billion yuan, the highest starting price in this batch, and the closing price is limited at no higher than 12.77 billion yuan.

The site is located in the downtown area, with Metro Lines 3 and 8 around as well as a bunch of educational resources nearby, including several primary and middle schools.

The plot with the largest site area, meanwhile, is in Songjiang District, covering 155,200 square meters, followed by a parcel in Minhang District with an area of 105,600 square meters.

Yan Yuejin, research director of Shanghai-based E-house China R&D Institute, said the pace of land supply in Shanghai has accelerated significantly since this year, indicating the importance that Shanghai places on the land market.

This also means that real estate enterprises need to speed up the return of funds to seize this opportunity for land acquisition, Yan added.

"The land projects are spread out in this round, involving 13 key areas in the city," Yan said. "The land parcels are mainly for residential development, reflecting the high market recognition of residential land in the current market, which could create better conditions for the supply of new homes next year."

As a core real estate market in the country, Shanghai's land investment market, especially that of land parcels designated for residential development, has been recognized by real estate enterprises.

The second round of land bidding in July this year saw active participation of real estate companies, with nearly 40 percent of the land plots hitting the price cap and the total transaction amount reaching 78 billion yuan.