Shenzhen-based builder outbid state-run giant China Poly Real Estate to win the rights to a 45,000 square metre (484,376 square foot) mixed-use project behind the city’s International Cruise Terminal for RMB 2.3 billion ($339 million). Acquisition adds to a growing concentration of development projects along Shanghai’s waterfront and brings Evergrande into a redeveloping area of Shanghai that has also become a target for international investors in recent years. Evergrande’s purchase of the 12,500 square metre site at the intersection of Machang Road and Liyang Road gives it the right to add up to 20,000 square metres of homes to its nation-leading sales machine, with units in the area now called the North Bund currently selling for around RMB 100,000 to RMB 110,000 per square meter.
Planning permits for the plot just over 100 metres from the cruise terminal allow for up to 35.6 percent of the gross floor area to be used for retail, while capping the office portion at 20,000 square metres. At the announced land premium Evergrande is paying the equivalent of RMB 51,000 per square metre of floor space, according to Mingtiandi calculations. The project also requires the developer to preserve heritage buildings on the site, which pre-1949 formed part of Shanghai’s International Concession when the area served as a haven for immigrants from around the world due to the city’s free port status. Evergrande’s new Shanghai acquisition puts it just down the road from Raffles City on the Bund, a 1.5 million square metre mixed-use project being developed by CapitaLand, together with Singapore’s GIC, and will make it a neighbour to several projects acquired by international investors in recent years.