(Yicai Global) May 12 -- Beijing closed its first land auction of the year yesterday, selling 30 plots to the highest bidder and raising CNY110.2 billion (USD17.1 billion), despite only getting a low premium.

The premium rate was just 6.41 percent due to a number of restrictions on the land market to prevent overheating, according to data from the Beijing Municipal Commission of Planning and Natural Resources. By comparison, land in Chongqing in southwestern Sichuan province auctioned at 40 percent more than the asking price this year, while that in Wuxi, southeastern Jiangsu province got 30 percent more.

The restrictions include the government retaining partial ownership of some of the properties to be built and the mandate to build public rental housing, said Pan Hao, senior analyst at Beike Research Institute.

Over 50 property developers and 200 enterprises took part in the bidding, including China Resources Holdings, Country Garden and Sunac China Holdings. The plots auctioned had a total land area of 1.69 million square meters and a construction area of 3.45 million square meters.

Fifteen of the parcels of land so far have confirmed buyers. Shenzhen-based Excellence Group has snapped up four plots, Tianjin-based Sunac won two, while Foshan, southeastern Guangdong province-based Country Garden seized one.

Six plots that will retain partial government ownership were selling in downtown locations. Two plots in Jinzhan township in central Chaoyang district had price caps of CNY66,000 (USD10,250) and CNY64,600 per square meter.

Ten of the land parcels must be used for residential rental properties. Beijing is looking to increase the supply of housing to solve accommodation needs for young people, Pan said. The capital’s rental housing area accounts for 13 percent of its planned construction area, much more than Wuxi’s 11.2 percent and Guangzhou’s 1.3 percent, he added.

Editor: Kim Taylor