COFCO Property Investment Co yesterday paid a premium of 235 percent for a residential plot of land in Shanghai's Pudong New Area — the second-highest in Shanghai so far this year.
The real estate arm of China National Cereals, Oils and Foodstuffs Corp beat more than 20 rivals when it paid 2.44 billion yuan ($368 million) for the 56,886-square-meter site in Xinchang as land purchasing fever continued unabated in Shanghai.
COFCO's bid was equivalent to about 35,744 yuan per square meter of gross floor area. However, the actual GFA price should exceed 38,000 yuan per square meter as some public service facilities are required to be built on the site while 5 percent of the homes built on the plot will be handed to the government as affordable housing.
The land price has already exceeded the current home cost in the area, which is a maximum of around 30,000 yuan per square meter.
"Tight supply of parcels should be the major reason behind the city's overheated land market," said Zhang Hongwei, director of research at Tospur, a Shanghai-based real estate consultancy service firm. "As housing demand is expected to remain robust in the next three to five years, developers' appetite for residential plots will continue to be strong."
Since May, developers from across the country have been making headlines by paying huge premiums for land plots in outlying districts of Shanghai, including Songjiang, Fengxian and Baoshan.
On June 1, Cinda Real Estate Co paid the city's highest premium this year — 303 percent — for a housing plot in Gucun in Baoshan, beating analysts' views.
As of Tuesday, about 200 land plots costing 1 billion yuan and above had been sold nationwide, up from 110 parcels in the first half of 2015, Centaline Property data showed.