Shenzhen is seeing a resurgence of competition for prime land parcels, with developers driving up prices in key districts even as the national property market remains subdued, Caixin Global reports. The high prices have been helped by September’s removal of a 15 percent cap on land auction premiums in the city.
On Wednesday, China Railway Construction Real Estate subsidiary bought a small residential plot in Futian for 792 million yuan (US$12 million), after more than 140 rounds of bidding. The final price came in 65 percent above the opening bid and marked the city’s third-highest premium this year.
That deal was quick on the heels of China Overseas Land & Investment securing a plot in the Shenzhen Bay Super Headquarters Base for 3.19 billion yuan (US$452 million), or a 42.5 percent premium.
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One developer told Caxin that recent bidding for core plots had been “quite fierce.” The surge in interest is particularly notable given developers normally tighten budgets at this time of year.
There’s been a more muted response to plots for sale in Shenzhen’s outlying districts, however. On the same day as the Shenzhen Bay auction, for example, Longfor Group acquired a Guangming district site for its base price of 766 million yuan (US$108 million).
Industry figures say developers are concentrating resources on core urban areas while avoiding less-established districts. The niche activity has yet to make an impact on Shenzhen’s total land auction revenue, which is sitting at a five-year low and down more than 70 percent from its 2021 peak.
