China Vanke wins prime site and assets in auction for 55b yuan
China’s second-largest developer beat seven rivals to win a package of assets held by a bankrupt firm of the Guangdong government
China Vanke, the country’s second-largest homebuilder, has won on Thursday a huge asset package from a bankrupt state-owned company that includes a mega prime site in Guangzhou for 55.1 billion yuan in a public auction.
This is the first sizable acquisition by the developer after a near two-year shareholder tussle.
Vanke beat seven other developers in the ferocious bidding war for the assets of Guangdong Trust and Real Estate Development Corporation, the liquidated real estate arm under Guangdong government. The auction attracted the participation of eight developers, including Evergrande, China Overseas Land & Investment and Country Garden.
The most eye-catching asset in the package is a one million square metre site in Huadiwan of Liwan district, west Guangzhou.
“It’s a very rare land parcel, it’s almost impossible to find such a large site in China’s first-tier city now,” said Long Bin, a real estate expert from the Guangzhou Real Estate Association.
Guangdong Trust and Real Estate bought the site back in 1988 for 280 million yuan, or 218 yuan per sq m. The original construction plan included commercial, residential and recreational spaces, along with parks, schools and a hospital.
But the company went bankrupt in 1999 as a result of the Asian financial crisis and Huadiwan’s development has been suspended since.