Developer Binjiang Is No. 1 Buyer in China's Busiest City for Land Auctions This Year
Ma Yifan
DATE:  Jul 01 2022
/ SOURCE:  Yicai
Developer Binjiang Is No. 1 Buyer in China's Busiest City for Land Auctions This Year Developer Binjiang Is No. 1 Buyer in China's Busiest City for Land Auctions This Year

(Yicai Global) July 1 -- Binjiang Real Estate Group, a Chinese homebuilder that ranks 13th by sales, is still top dog among land buyers in Hangzhou, the capital of eastern Zhejiang province and China's leading city for land auctions again this year.

Binjiang yesterday acquired 12 more land parcels for CNY22.5 billion (USD3.4 billion) in Hangzhou's second auction this year, Yicai Global learned from the organizer. The city auctioned off 45 plots for a total of CNY55.7 billion to buyers that also included small privately owned firms and state-backed companies.

So far in 2022, Hangzhou has sold land worth CNY138.4 billion (USD20.7 billion), once again ranking first among Chinese major cities. But the hometown of Alibaba Group Holding and Geely Automobile Holdings is special also in another regard: non-state-owned firms such as Binjiang are active buyers, unlike in Suzhou and Nanjing, two other major cities in the Yangtze River Delta.

As big developers wrestle with tight borrowing conditions, regulation, and sluggish sales, Hangzhou-based Binjiang is going against the trend, increasing its appetite for land. For four consecutive years, it has beat industry giants China Vanke, Sunac China Holdings, and Greentown China Holdings for land purchases in Hangzhou.

Binjiang has made some good deals. In the latest auction, it won a number of core plots in popular areas at low premiums or reserve prices. In the previous round, it bagged 11 plots for CNY18.4 billion, including several popular locations.

“Binjiang's constant efforts in Hangzhou are rewarded with brand recognition by local buyers,” an executive at the firm told Yicai Global. “In the same market environment, Binjiang’s products have a faster sales speed and higher premiums.”

The company is gaining market share. In the first half of this year, sales tallied CNY68.4 billion, according to the firm's earnings results released today. That means Binjiang is China's 13th-biggest real estate developer, soaring nine places from last year, based on a ranking complied by consultancy CRIC. Its online sales in Hangzhou reached CNY25.2 billion, making it No. 1 among builders in the city.

Binjiang had first-half net sales of CNY32.2 billion, a gain of 6 percent over the same period last year. The average interest rate on new financing fell to 4.7 percent from 4.9 percent.

Hangzhou’s latest auction shows that the city’s “land supply is neither too cold nor overheated,” an investment specialist at a local real estate company said. The lack of high-premium plots indicates that the market is stable and favorable to people looking to buy their first home, the person added.

Moreover, there are a number of small real estate enterprises that have acquired land and gained development opportunities, the person added. 

Editors: Tang Shihua, Emmi Laine, Xiao Yi 

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Keywords:   Land Auction,Hangzhou,Binjiang Real Estate