Industrial land prices in Shanghai are likely to grow by about 55 percent in the next four years as demand for such plots remains firm, one of the leading real estate service providers has forecast.
Danny Ma, an associate director at CB Richard Ellis' local research department, said that as the central government has imposed macroeconomic controls on local governments to stop them selling industrial land at undervalued prices to lure investments, "industrial land prices have gained substantially by nearly 30 percent per annum over the past two years."
He added that although the "pace will likely slow down in the near future, we still anticipate a 55-percent growth in the 2008-to-2011 period."
Meanwhile, robust demand from investors and occupiers is likely to see a 43-percent jump in average rents of industrial facilities in the coming four years, CBRE research has concluded.
By the end of the third quarter, Shanghai's industrial land prices have soared 49 percent from a year earlier to 1,063 yuan (US$141) per square meter while average rents for industrial facilities rose 13.9 percent year on year, according to CBRE statistics.
On Wednesday, a land plot in the city's Hongkou District designated for commercial and office use was acquired by Hong Kong's CITIC Group for 1.2 billion yuan. The 16,427-square-meter parcel was actually sold at a per-gross-floor-area price of 18,263 yuan per square meter, almost doubling the price for a similar plot in that area in January.
On the other hand, land prices for residential properties have been increasing at an even faster pace.
Last month, Singapore-listed Yanlord Land Group acquired a 54,208-square-meter land parcel in the city's northeastern New Jiangwan Town in Yangpu District for 1.301 billion yuan, or a GFA price of 20,000 yuan per square meter, the highest ever in the city for residential use. That price has beaten the previous record of 12,500 yuan per square meter set in June by Greentown China Holdings Ltd for a land parcel in the same area.
(Shanghai Daily December 7, 2007)