At West Third Ring Road, Beijing, a new land plot priced at over 7 billion yuan has emerged once again.

Beijing's land auction market is heating up sharply.

After actively scaling down in the first half of the year with transaction volume dropping 66% year on year, multiple "land king" plots with total price close to 10 billion yuan have taken the stage one after another since July, breaking records over and over again.

Recently, this grand land auction event has welcomed a new protagonist — The DC-L02 plot at Yuegezhuang, Fengtai has been officially listed, with a starting price of 7 billion yuan, and the auction is scheduled for September 29. It is also the fourth super-luxury residential plot with a starting price above 7 billion yuan, following the plots at Jiuxianqiao, Guangqu Road and Xiran.

Plot location

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When it comes to luxury residences, the location conditions must be top-tier. The Yuegezhuang plot is located in the Liuliqiao area of Fengtai, between West Third Ring Road and Fourth Ring Road, adjacent to two subway lines, Line 9 and Line 10. Top-tier hospitals including 301 Hospital and 302 Hospital are within easy reach, and supporting facilities such as Yinhe Harmony Plaza and Wanfeng Park are also fully available.

Despite its prime location and mature supporting facilities, its starting price of 7 billion yuan still shocked the market. If this plot were located in the core area of Haidian or Chaoyang, such a high price would not be surprising. However, it is in Fengtai, where the luxury residence foundation is not prominent and the housing inventory is relatively high. Some people may wonder, can this luxury plot be sold successfully?

Judging from the inherent advantages of the plot alone, it is indeed highly competitive. Compared with other luxury plots such as the Guangqu Road and Xiran plots which are burdened with multiple supporting construction requirements, the Yuegezhuang plot is extremely "clean": there are no other supporting constructions except for an 11-meter-wide east-west community road. What's more, it has a considerable scale. The land area reaches 66,100 square meters, the above-ground building control scale is about 141,500 square meters, and the floor area ratio is as low as 2.14.

Surroundings of the plot

Such a nearly square, large-scale pure residential plot with low floor area ratio, coupled with the excellent urban interface around it, brings no extra burden and low cost for real estate enterprises focusing on luxury residence development, allowing them to give full play to their advantages.

Furthermore, it is also a rare elevated-platform community in Beijing.

According to the land transfer documents, an elevated platform can be built in the community in the future. What is an elevated platform? Simply put, it means raising the entire residential floor of the community by several meters, and the space below is used for garages, equipment rooms and other purposes, and this part of the area is not included in the floor area ratio calculation. As a result, the landscape and living space above the platform will be greatly expanded and optimized. For home buyers, with the same property purchase cost, they can get units with wider facades and larger public space in such a community.

Transfer documents

In addition, luxury residences outside the West Third Ring Road in Fengtai are not difficult to sell. Jiatang Jingyue, which is located just across the road to the west of the plot, has achieved nearly 60% de-sales ratio since its opening in March this year. It also won the top sales in Fengtai District in the first 7 months. In the current Beijing property market, such performance has outperformed most real estate projects.

The steady sales of Jiatang Jingyue have paved the way for the future de-sales of the newly listed Yuegezhuang plot in advance. Moreover, whether it is the floor area ratio of 2.14 (Jiatang Jingyue's floor area ratio is 2.66), the community form (elevated-platform community), or the land area 3 times larger than that of the former, this plot has greater room for product innovation and stronger market appeal.

It is predictable that the Yuegezhuang plot, which will enter the auction field next month, will most likely see fierce competition.

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The listing of the Yuegezhuang plot may bring more worries than benefits to Jiatang Jingyue just across the road. Although the regional popularity will be further increased, its own de-sales pressure will also surge sharply.

Therefore, when the Yuegezhuang plot is auctioned in the future, the developer of Jiatang Jingyue — the Construction Engineering Consortium may make a bid. After all, once the plot is taken by a new competitor, the remaining about 180 units of Jiatang Jingyue will face direct head-to-head competition, and its products do not have absolute advantages. After acquiring the plot, the Construction Engineering Consortium can not only control the de-sales rhythm of Jiatang Jingyue, but also realize the contiguous development of the whole area.

However, this also depends on the capital strength of the enterprise itself. After all, the starting price of 7 billion yuan is not a small sum. The three municipal state-owned enterprises in the consortium may still have a certain gap in financial strength compared with many central SOEs. To acquire this plot, they need to calculate the cost carefully first.

Another likely bidder is China Overseas Land & Investment (COLI), which has shown extremely strong momentum in the land auction market recently. It spent about 130.8 billion yuan in just one week to acquire two residential plots at Jiuxianqiao and Guangqu Road in Chaoyang, and it also competed for the Xiran plot in Haidian until the final stage.

COLI, which favors high-priced plots in core areas, will most likely not miss this 7 billion yuan pure residential plot in the Third Ring Road of Fengtai. In addition, it has sufficient capital, its sales revenue in Beijing in the first half of the year reached 257.6 billion yuan, making it the only real estate enterprise with sales exceeding 200 billion yuan. With sufficient capital, it can act more freely.

China Resources Land (CR Land) is also worth paying attention to. It has acquired several plots one after another near Lize, close to Yuegezhuang. If it wants to further develop the Lize surrounding area in depth, acquiring this new plot is a logical choice for it. However, in this year's Beijing land auction market, CR Land focuses more on acquiring plots at low premium rates. If the competition for the Yuegezhuang plot is too fierce, it may stop in time.

In addition, there are two other frequent bidders in the land auction market — China Merchants Shekou (CMSK) and C&D. CMSK has significantly accelerated its land replenishment pace in Beijing this year. In just two months, it successively acquired three residential plots at Jiukeshu in Tongzhou, Daxing New Town and Pingguoyuan in Shijingshan with a total cost of about 32.46 billion yuan.

As for C&D, which only has a small number of remaining unsold properties such as Guanchen in Beijing, it has appeared in almost all land auctions but returned empty-handed for a long time. Until the end of July, it acquired the Dongxiaokou plot in Changping with 49.77 billion yuan, ending its 13-month land acquisition gap in Beijing.

C&D has made impressive achievements in Fengtai, where the Yuegezhuang plot is located. Its Guanchen project jointly developed with Jinmao in Xingong has excellent de-sales performance and public praise, and it also topped the annual sales ranking in Fengtai last year. This new residential plot is a timely land replenishment opportunity for C&D. With sufficient capital reserves, it can obtain the admission ticket for the next round of the market.

Then for Poly Real Estate, the possibility of it participating in the bidding is also high. Its Taipingqiao project is less than 3 kilometers away from the Yuegezhuang plot in straight line, and the expected sales price after it enters the market is about 100,000 yuan per square meter. The starting floor price of the Yuegezhuang plot is about 50,000 yuan per square meter, which means that its future products will inevitably form direct competition with the Taipingqiao project in terms of total price range and target customer group. If Poly Real Estate makes a bid, it is not only for adding new land reserves, but also a defensive attack to "protect its existing market share".

Or other real estate enterprises will also join the competition.

In more than a month, which real estate enterprise will make a bid and who will finally get the plot? The ownership of the Yuegezhuang plot in Fengtai will be revealed then. But one thing is certain: the land in Beijing's core area will never lack buyers.

This article is from the WeChat official account "Future Habitat", author: Future Habitat, authorized by 36Kr for release.