A representative from China Poly Group Corporation joins the bidding on Wednesday. [China Daily]

Poly Beijing Real Estate Limited, a subsidiary of the State-owned conglomerate China Poly Group, was among the latest successful bidders to snap up high-priced residential land in Chaoyang district, grabbing a slice of scarce real estate on Wednesday for 5.04 billion yuan (US$738.3 million).

The parcel was the most expensive among seven plots of land that sold on the same day in the Beijing Land Coordination and Reserve Center.

The 280,000-sq-m plot in Dawangjingcun village is next to a parcel bought on Monday by Hong Kong listed Sino-Ocean Land for 4.08 billion yuan. Land in the area now sells for as much as 27,529 yuan per sq m.

Poly closed the deal yesterday after 82 intense rounds of bidding, beating four powerful bidding rivals - Sino-Ocean Land, China Resources Land, Beijing Capital development and KWG Property - in the final stretch.

Wearing a pair of smart glasses, a man in a black business suit who had represented Poly at the bidding muttered "sorry" as he brushed past a swarm of reporters after the successful bid was accepted. He slipped inside a waiting black Audi.

A representative from KWG Property, a Hong Kong-listed real estate company, said before the final round of bidding: "How can I have more confidence than those State-owned major developers?"

KWG Property made it down to the final two bidders.

The residential land grant fee in Beijing has already soared to nearly 42.6 billion yuan in 2010, more than 60 percent of the sum reached during the whole of last year.

State-owned companies have been facing criticism recently for bidding on land in the capital.

On March 15, four out of six plots were bought by State-owned corporations with deep pockets. A subsidiary developer belonging to the Citic Group purchased a plot of residential land in Daxing district for 5.25 billion yuan, setting a new sales record for Beijing's housing market.

Among the bidders were companies that did not regard property as their major business, such as China Ordnance Equipment Group Corporation and China National Tobacco Corporation.

"Beijing's housing market offers high profits, so it is no surprise that State-owned companies are joining in. Besides, those enterprises by no means lack money," said Zhang Dawei from the market research department at Centaline, a leading property agent.

In 2009, the total residential land grant fee in Beijing was around 70 billion yuan, accounting for 45.9 percent of local financial revenue. State-owned companies paid more than 49 billion yuan, with private enterprise contributing the remaining 21 billion yuan.

Within the Fourth Ring Road, the average house price reached 31,220 yuan per sq m, while outside the Sixth Ring Road, the average price exceeded 10,000 yuan per sq m for the first time.

(China Daily March 18, 2010)