Record land sale in Qianhai cements growing importance of this economic zone
Jan 28, 2014, Hong Kong - The acquisition in Qianhai by a consortium formed by Silverstein, a US company, and Qianhai International Energy Financial Center (QIEFC) for RMB 13.4billion (or RMB28,113 / sq. m.), was 74% higher than the site that Shimao Property acquired in November 2013 (RMB16,153 / sq. m.) setting a record for the land market in Shenzhen.
Mr. Craig Shute, Senior Managing Director, CBRE Hong Kong, Macau and Taiwan, comments on this historic land acquisition.
The site acquired by Silverstein Properties marks the first land auction in Qianhai by an overseas developer, after four sites came on the market in July 2013. This signals the confidence towards Qianhai not only from local developers. The area has also captured world-wide attention and interest. We would not be surprised to see more non-mainland based developers entering the market to compete for upcoming available sites. While it may have been the local government’s intention to bring in renowned developers with global experience to develop the area, the business model in Qianhai also proves to be very attractive to overseas developers with an eye on expanding their exposure in the free trade zone in China. This creates a win-win opportunity for both parties.
It is not a surprise to see the record high price from the recent land sale given the prime location of the site and its proximity to key transportation networks. This is by far the best site up for public auction by local government. Located on the harbor front in the Guiwan district, the CBD area of Qianhai, the site will be developed into a business complex dedicated to the banking and financial sector. Of the GFA 5.1 million sq. ft. development, around 60% (3.3 million sq. ft.) will be for office usage - almost equivalent to two blocks of Two IFC in Hong Kong.
The Qianhai government signed a memorandum of understanding (MOU) with British Virgin Islands (BVI) earlier this month. It indicated another tremendous opportunity for Hong Kong to work with Qianhai to bridge the RMB offshore business from Mainland to the global markets. This could potentially bring greater requests for financial support and hence office demand for both Qianhai and Hong Kong property markets.
We believe that with the major infrastructures like HK-Zhuhai-Macau bridge and Express Rail Link expected to be completed in the next two to three years, activities between the two cities could increase to accomplish the integrated plan put forward under the bigger PRD regime.
Neither CBRE nor its affiliated companies make any warranties or claims on the implied accuracy of the information contained herein.
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