Shanghai sold a downtown commercial plot of land at the highest price this year as a recovery in sales boosted developers’ expectations for a market rebound even as the government maintained property curbs.
The 107,500-square-meter (1.2 million-square-foot) site near Shanghai South Railway station was sold yesterday for 5.4 billion yuan ($864 million), according to the local land reserve center. A group of four companies, led by China Vanke Co. (000002), the country’s biggest developer, and Shanghai Greenland Group Co., which is building China’s second-tallest tower, bought the site, said property broker Century 21 China Real Estate.
China’s land values started to recover in the second half as developers considered acquiring more land even as the government kept property curbs, including home purchase restrictions and a property tax in Shanghai and Chongqing. Average land prices rose 23 percent in November from a year earlier, according to SouFun Holdings Ltd. (SFUN), the country’s biggest real estate owner, which tracks 300 Chinese cities.
“It shows how developers’ cash flows have been improving, otherwise they wouldn’t be capable to bid for the ‘land kings,’” Fu Qi, a Shanghai-based analyst at property data and consulting firm China Real Estate Information Corp., said, referring to a term coined by the local Chinese media to describe record-setting land sales. “They are becoming optimistic for the outlook of the market.”
It was the city’s highest sale by value this year, according to Century 21, the country’s second-biggest broker.
Moody’s Investors Service last month revised China’s property sector to “stable” from “negative” on expectation sales and access to funding will continue to improve in 2013.
China’s housing sales climbed 18.3 percent to 595.8 billion yuan in November from a month earlier, National Bureau of Statistics data showed. China Vanke sold properties for a total 127.2 billion yuan in the first 11 months, higher than the full- year sales last year.
Vanke shares rose 0.9 percent to 9.32 yuan at the close of Shenzhen trading. A gauge tracking property companies on the Shanghai Composite Index added 0.3 percent, the only gainer among the five industry groups on the benchmark.
Poly Real Estate Group Co. (600048) bought in the same district a site for 4.5 billion yuan in October, according to Central 21.
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