A?domestic real estate developer which acquired Shanghai's most expensive land parcel last year will be able to get a full refund of its purchase after both parties reached an agreement.
Nanjing Suning Real Estate Development Co Ltd, a subsidiary of Suning Universal Group, has agreed with Huangpu District Housing and Land Resources Administrative Bureau on the reimbursement, Suning Universal Co Ltd said yesterday in a statement to the Shenzhen Stock Exchange.
Suning Universal Group is the controlling shareholder of Shenzhen-listed Suning Universal Co Ltd, and Nanjing Suning and Suning Universal Co Ltd are two independent firms, the statement said.
The statement was made to clarify earlier media reports saying that "Suning Universal'' might suffer a loss of as much as 440 million yuan (US$64 million) due to its exiting from the deal, as it may cause confusion among shareholders and investors because of similarities in the name of the two companies.
Last August, through its subsidiary Nanjing Suning Real Estate, Suning Universal Group beat nine competitors from home and abroad and won the bid for the 13,709-square-meter plot for 4.4 billion yuan. The gross floor area, or GFA, price of nearly 67,000 yuan per square meter made it the most expensive land nationwide.
The land, with a plot ratio of 4.8 which translates to a total GFA of 65,803 square meters, is designated for commercial and office uses.
The final price of the land, which was sold at a starting price of just 1.8 billion yuan, was a surprise as the market was booming then.
"An exit from the deal must be a good news for the Nanjing developer especially as no loss would result,'' said an industry veteran who preferred not to be identified. "Obviously, it should be very difficult for the company to make profit at such a high cost.''
A subway station, which is under construction, sits under the plot and that may be the major reason behind the delay of the hand-over of the plot, earlier media reports said. The plot should have been delivered to the Nanjing developer in mid-April.
(Shanghai Daily August 14, 2008)
