After the procedural work for more than 4 months, the first Shanghai “land application list” case —the financial agglomeration area in the Bund of Huangpu District 8-1 commercial land opened the tender yesterday, and finally Shanghai Zendai Property Co., Ltd won the bid with the total price of RMB 9.22 billion Yuan refreshing the total land price record in Shanghai.
After the opening of tender, relevant person of Shanghai Real Estate Trading Center announced that, the base price of the Bund 8-1 plot was 9 billion, and four bidders submitted their biding documents. The bid price of the complex comprising Shanghai New Huangpu Group, China Enterprise, China Pacific Life Insurance and Taikang Life Insurance was 9 billion; Shanghai Zendai Property Co., Ltd offered the bid price of 9.1 billion, the complex comprising Frote Group and Fosun High-Tech Group offered the bid price of 9.301 billion. However because the rule of “bid evaluation first and price competition second” was adopted, the Frote complex with the highest price could not participate in the price competition due to its lowest score in the commercial bid and technical bid, and it was Zendai Property that was not expected to win finally won the bid.
The insiders were not surprised at the emergence of the new “Shanghai Land King”. “For Shanghai, the land value of the Bund cannot be belittled, what’s more, when the land was firstly launched, the government revealed to the public the land was estimated at 9-10 billion, therefore the market was ready for that. Although the final transaction price broke the national record, the premium rate was rather low, and the price was not raised unreasonably.
In addition, Zhao Yuchuan also pointed out that, Shanghai began to implement the land transfer pre-application system similar to Hong Kong Land Application List System, on one side, the government can provide guarantee for the land sales in order to prevent the land from attracting little interest and impacting the confidence in the market; on the other hand, with the intention to stabilize the real estate market with regulation, the orientation of “bid evaluation comes before price” also leveled the land price to a certain extent. For example, the Bund 8-1 plot was not won by the bidder with the highest bid price as the previous listing price competition, and the insiders predicted that this plot would become the “Double Land King” of total price and unit price, while after the calculation as per the transaction price, the floor price of the Bund 8-1 plot with an area of 45,000 m2 and volume rate of 5.94 was about 34,148 Yuan/ m2, and it didn’t exceed the Shanghai Pudong Binjiang office building land won by the enterprise subordinate to Hainan Airline Group in September last year with the floor price of 36,500 Yuan/ m2.
While some market participants advocated that the Land Application List System that firstly invites bids and then has auctions could not basically fluctuate the land price rising with the better real estate market. For instance, except the Bund 8-1 plot, there are another two plots in Shanghai with high price entering into transaction phase this month. The former Shanghai “Unit Price Land King” in 2007-- Huangpu District 163 Neighborhood plot was listed with the “Land Application List System” after returned by Suning International, the estimated price was still high; and the East Part 1 Neighborhood of Suzhou River Northern Bank of Zhabei District with the starting price of 4.7 billion Yuan, converted into the floor price of 35,300 Yuan/ m2, has exceeded yesterday’s Bund plot and will possibly become the new national “Unit Price Land King”.