(Yicai) May 6 -- Small parcels of land, about the size of a soccer field, are increasingly in demand among real estate developers in major Chinese cities. These “mini plots” often sell for well above their starting auction prices, reflecting a general shift in urban property markets from large-scale developments to more refined projects.

In Nanjing, for example, 14 residential plots were put up for auction on April 29. Thirteen were sold at the minimum asking price, but one plot sparked intense bidding and was ultimately sold at a 28 percent premium. This plot also happened to be the only “mini” one, with a total area of just 8,626 square meters, enough to build only a few dozen homes.

And this is not an isolated case in the capital of eastern Jiangsu province. In April last year, a 4,499-square-meter plot was sold at a 43 percent premium, while another 4,216-square-meter parcel sold in July that year at a 33 percent premium.

One of these projects will comprise only 66 residential units, while the other will have just 59 units, according to developers’ plans. Industry insiders estimate that once completed, these centrally located projects could sell for between CNY70,000 (USD10,270) and CNY80,000 per square meter, placing them firmly within the luxury segment.

In core areas of cities such as Shenzhen, Shanghai and Beijing, plots of under 10,000 square meters have repeatedly commanded high premiums in land auctions in recent years. Developers seem to favor these projects because they require less investment and have a fast turnover

The shift toward smaller plots in China’s major cities is similar to development patterns observed in other metropolises such as Tokyo and Hong Kong, a person who has many years of experience in real estate investment told Yicai.

“These mini plots are typically located in central urban areas where land is scarce and can rarely be found in the suburbs. This suggests that large land parcels in city centers are becoming harder to come by,” the person said.

At the same time, amid heightened market uncertainties, developers are more inclined to buy smaller plots with lower total costs and shorter development timelines, allowing for more refined, detail-oriented development.

Looking ahead, this trend could lead to a “two-track” property market in many of the larger first- and second-tier cities. In downtown areas, new residential developments are likely to be smaller, more expensive and more upscale, often relying on existing neighborhood amenities instead of building their own.

By contrast, in cities’ outskirts or newly developed areas, larger residential communities are expected to continue to be built, complete with their own facilities and shared spaces for residents.

Editors: Tang Shihua, Kim Taylor