(Yicai Global) Nov. 6 -- Units under Xiaomi and China Resources Land have purchased a Beijing residential plot for CNY2.7 billion (USD391 million) to build offices for the tech giant.
Xiaomi Communication Technology and Runzhi Business Operations and Management bought the 46,848 square meter parcel in Changping district at the auction starting price, CNY19,356 (USD2,845) per square meter, the capital's city planning commission said online yesterday.
China Land Resources is playing the main role in the transaction and will use the land to build offices for Xiaomi, an insider close to the deal told Yicai Global.
It's a win for both buyers, Guo Yi, chief analyst at property marketer Heshuo told Yicai Global. As an internet company, Xiaomi is not qualified to purchase the land and needs a real estate developer to help manage costs, while China Resources cannot buy the plot alone as there is a requirement for 70 percent of the buildings constructed to be used as public buildings, he said.
The cooperation gives the land an explicit purpose and will reduce the risk taken by both companies, Guo added.
Xiaomi already owns two industrial parks in the capital and another in Guangdong, according to its initial public offering prospectus published earlier this year. Those are the 348,000 square-meter Beijing Haidian Industrial Park, 191,000 square-meter Beijing Industrial Park and the 103,000 square-meter Guangzhou Pazhou Central Business District Industrial Park.
Editor: James Boynton