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Lowest bid housing land auctioned off

Lowest bid housing land auctioned off

Write: Mert [2011-05-20]

A LAND parcel for the development of affordable housing was sold yesterday in Bao an District, the nation s first commercial housing development project sold to a developer for the lowest bid.

Shenzhen-based Excellence Group bought the land after promising to sell properties developed on the land for 7,380 yuan (US$1,100) per square meter.

This ensured it stood out from two other major real estate developers, Vanke Group and Gemdale, which were also bidding. The average price of commercial housing in the area is now more than 10,000 yuan.

Chinese-language newspapers said that the housing project will target professionals and the white-collar workers who aren t eligible for the government-subsidized housing but can t afford a home when the commercial housing market skyrockets.

The city government set the price for the land parcel at 2,266 yuan per square meter and required property developed on it to be sold for less than 8,000 yuan per square meter.

Excellence Group estimated that the project would bring in about 5 percent of the total investment in profit. The group will invest about 400 million yuan in the project, which will go onto the market in two and a half years, according to Xie Limin, vice president of Excellence Group.

The total cost of the project is estimated at 7,000 yuan per square meter, Xie said. High profits aren t what we were aiming for when bidding ... we want to improve our portfolio in the city s housing market, especially in the affordable housing market, which will be growing. (SD News)