13.69ha residential plot costs 3.8b yuan, expected to yield at least 2,000 units

YANLORD Land Group and Ho Bee Investment have jointly acquired a 13.69 hectare prime residential site in Qingpu District, Shanghai, for 3.82 billion yuan (S$785 million) at a public land auction.

With a total planned gross floor area of 246,487 sq m, the purchase price equates to 15,498 yuan per sq m.

Yanlord, through its subsidiary Shanghai Yanlord Yangpu Property Co, will have 60 per cent equity in the project, while Ho Bee will have 40 per cent.

The project is expected to generate at least 2,000 units to be launched in phases over six to eight years, with initial sales to begin in two years, Ho Bee executive director Ong Chong Hua told BT.

The development cost, according to market sources, could run to about 23,000 yuan per sq m – which will be shared between the two developers on an equitable basis. The units could be sold at an average price of at least 35,000 yuan per sq m, market sources indicated.

‘We are confident this project will be well received by home buyers seeking to live in a conducive international community and will contribute positively to Ho Bee’s future developments and initiatives within the Greater China market,’ said Chua Thian Poh, Ho Bee’s chairman and chief executive officer.

The latest acquisition extends an earlier collaboration between China-focused Yanlord and Singapore developer Ho Bee in Tangshan. Last October, their Singapore joint venture company Yanlord Ho Bee Investments signed a memorandum of understanding with the Tangshan Nanhu Eco-city administrative committee to explore developing a high- end residential project in Nanhu Eco-City.

Zhong Sheng Jian, Yanlord chairman and chief executive officer, said the group is confident the latest joint acquisition in Shanghai will contribute significantly to Yanlord’s growth.

Given the growing scarcity of sizeable prime residential development sites in Shanghai’s city centre, the acquisition ‘presents a unique opportunity for investment in large-scale high-end residential developments’, he added.

Situated 5.5 km from the heart of the Hongqiao Commercial District, the Qingpu site is expected to tap the district’s emergence as an integrated financial, commercial and logistics hub servicing the Yangtze River Delta region.

It will also benefit from strong connectivity, through the city’s metro network, key thoroughfares and railways such as the Beijing-Shanghai and Shanghai-Hangzhou express lines.

‘It’s a good collaboration,’ Ho Bee’s Mr Ong said. ‘Yanlord have done quite a number of high-end residential projects, in fact townships, and we hope to leverage on their experience and the premium branding they have. Most of Yanlord’s projects are sold at a premium.’

Source: Business Times, 18 Feb 2010