China Sells Residential Land at Record Price Amid Curbs

China sold a residential land parcel in Beijing at a record price amid rising competition among developers for sites in major cities, which have led price gains even as the government maintains property curbs.

The 28,100 -square-meter (302,356-square-foot) National Agriculture Exhibition Center plot, northeast of the city center, was sold for 2.1 billion yuan ($343 million) to Sunac China Holdings Ltd. (1918) yesterday, according to a statement on the local land reserve center’s website. Sunac’s bid included a commitment to build a 278,000-square-meter hospital at another site, according to the statement.

The total purchase price of 4.3 billion yuan implies a cost per square meter of buildable space of 73,000 yuan, the most expensive in China, according to Centaline Property Agency Ltd., the nation’s biggest real-estate brokerage. The number of apartments sold for more than 10 million yuan in the Chinese capital jumped 81 percent to 1,388 in the first half from a year earlier, as wealthy buyers favored bigger properties under the government’s purchase restrictions, according to realtor Bacic & 5i5j Group.

“The high price happened even as property curbs were in place,” said Qu Anxin, a Shanghai-based researcher at Centaline, who estimated that homes built on the site will sell for as much as 200,000 yuan per square meter. “I don’t think the government will do much further” to limit prices.

China’s home prices rose in August by the most since December, data from SouFun Holdings Ltd. (SFUN) showed this week, underscoring Premier Li Keqiang’s struggle to make housing affordable even as the economy cools.

Shares Decline

New home prices increased 14 percent in both Beijing and Shanghai in July from a year earlier, and jumped 17 percent in Guangzhou and Shenzhen, leading gains among 69 of 70 cities tracked by the government where prices advanced, according to the latest data from the National Bureau of Statistics.

Liu Xiaojing, a press officer for Sunac, the Chinese developer part-owned by buyout firm Bain Capital LLC, confirmed the bid, without providing further details.

Sunac’s shares fell 4.2 percent to HK$5.25 at the midday break in Hong Kong, set for the lowest since July 29.

Sun Hung Kai

Chinese developers started a land buying spree in major cities in the second half as demand for homes remains strong. Beijing sold a high-end residential land parcel for a record 46,000 yuan a square meter of buildable area on July 23, beating a record set July 3 for a site in southwest Beijing, according to Bacic & 5i5j.

Sun Hung Kai Properties Ltd. (16), Hong Kong’s biggest developer by value, bought a site in Shanghai for 21.8 billion yuan in an auction today, Renee Wang, a Hong Kong-based spokeswoman for the developer, said by phone.

That price is a record in the city, Centaline’s Qu said by phone today.

Sunac, which focuses on luxury projects in cities including Tianjin, Beijing and Chongqing, expects to exceed its sales target this year as demand remains strong even amid the nation’s property curbs, Chairman Sun Hongbin said in an interview in May.

To contact Bloomberg News staff for this story: Bonnie Cao in Shanghai at bcao4@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net

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