Shanghai's land auction raised RMB 9.7 billion. Why did the plot in East Bund trigger a 72-round bidding war among 5 central state-owned enterprises?

The land auction activity held in Shanghai today continued the previous enthusiasm.

On May 9, Shanghai held the fourth batch of land supply this year. Shanghai offered four plots of land in this auction, with a total starting price of 8.41 billion yuan and an average starting floor price of 35,482 yuan/m². A total of nine enterprises participated in the auction, including six central state-owned enterprises, two state-owned enterprises, and one Hong Kong-funded enterprise. Ultimately, all four plots were successfully sold, with two plots sold at a premium of over 20% and two at the base price, generating a total revenue of 9.709 billion yuan.

Among them, the Dongwaitan plot in Yangpu District became a hot topic today. The starting bid price for this plot was 3.358 billion yuan, with a starting floor price of 63,499 yuan/m². It attracted five bidders, including China Merchants Shekou, Jinmao, China Resources Land, CNOOC, and Poly Real Estate Group. After 72 rounds of bidding, the plot was won by Poly Real Estate Group at a price of 4.241 billion yuan, with a premium rate of 26.3% and a transaction floor price of 80,199 yuan/m².

Analysts stated that the fierce competition among several powerful real estate enterprises for the Dongwaitan plot in Yangpu District was largely due to its significant location advantages and the good sales performance of surrounding projects.

It is reported that the Dongwaitan plot is approximately 400 meters away from Fuxing Island and about 600 meters away from the Huangpu River in a straight line, allowing residents to enjoy the scenic views of the river and the island up close.

Regarding the performance of the new housing market around the Dongwaitan plot, Zhang Wenjing, General Manager of Shanghai Data at China Index Academy, introduced that projects near the plot include Hopson Development Holdings • MANYUN Shanghai and China Construction First Group • Waitanyuanzhu, etc. Hopson Development Holdings • MANYUN Shanghai achieved an average monthly sales rate of 16 units in the past six months, with an average selling price of 121,700 yuan/m². Phase II of China Construction First Group • Waitanyuanzhu, which was launched in March this year, offered 114 units with an average price of 109,000 yuan/m², achieving a sales rate of 90% on the day of launch. CNOOC Yundi Jiuzhang, which was launched for the first time on April 28 this year, offered 187 units and was sold out on the same day.

It is worth mentioning that Yangpu District held a conference on the high-quality development of talents on May 8, where multiple measures to attract talents, such as the "Implementation Rules of the Preferential Enjoyment Plan," were introduced. In terms of housing, the plan clearly states that high-quality content creators who purchase their first home in the district will be given a one-time housing subsidy ranging from 500,000 yuan to 2 million yuan. Priority will be given to supplying housing units in high-quality talent communities, and a monthly rental subsidy of up to 8,000 yuan will be provided.

Industry insiders believe that the measures taken by Yangpu District to build a talent hub will not only attract outstanding talents but also drive a corresponding increase in their housing demand.

In addition to the Dongwaitan plot in Yangpu, the plot in the eastern area of Songjiang New City also attracted significant attention.The plot attracted five bidders, including Poly Development, China Merchants Shekou, Xiangyu Group, etc., to participate in the auction. The plot was ultimately acquired by China Railway Construction at a price of 2.471 billion yuan, with a floor price of 25,288 yuan/m² and a premium rate of 20.442%.

In addition, the multipurpose combined land plot on North Sichuan Road in Hongkou District boasts a strong location advantage, being just 300 meters away from the North Sichuan Road Station on Line 10, with comprehensive living facilities, though it is not purely residential land.

"The commercial and cultural plots within the multipurpose combined land plot on North Sichuan Road in Hongkou District, due to the protective development of historical buildings involved, impose high requirements on developers, resulting in a transaction at the base price," said Zhang Wenjing.

The plot on North Sichuan Road is divided into one residential plot and one commercial and cultural plot, with a starting price of 2.157 billion yuan. Ultimately, the plot was won by the North Bund Group at the base price of 2.157 billion yuan, with a comprehensive floor price of 67,131 yuan/m² (including a residential floor price of 87,997 yuan/m²) and a premium rate of 0%.

"This land auction in Shanghai once again confirms the characteristics of land supply that combines central urban areas with suburbs, prioritizing the supply of high-quality land within the region, which helps to boost the enthusiasm of the land auction market. In the future, as the enthusiasm of the land auction market spreads to the property market, coupled with the continuous entry of high-quality projects and the ongoing optimization of policies, the stable trend of Shanghai's property market will be further consolidated," said Zhang Wenjing.

From the perspective of Shanghai's new home market, according to monitoring data from Centaline Property, there was a certain correction in the transaction volume of Shanghai's property market in April, with the transaction area of newly-built commercial residential properties in Shanghai that month reaching 550,000 m², comparable to the same period last year. During the Labour Day holiday this year (5.1-5.5), the transaction area of newly-built commercial residential properties in Shanghai was approximately 29,700 m², an increase of 18.32% compared to last year's holiday.

Lu Wenxi, a senior research manager at Centaline Property, stated that recently, mid-to-high-end improvement-oriented products in Shanghai have achieved good sales figures, and with a stable supply, some scarce new projects in certain areas have attracted market attention.

"Especially for popular properties, their good sales performance has further enhanced market purchasing willingness. In addition, the secondary market maintaining a good transaction rhythm and the smooth operation of the replacement chain have also played a role in accelerating the entry of high-end improvement-oriented buyers into the market," Lu Wenxi added.