In the news frenzy of October 10th, the land in Panyu District that used to belong to the Evergrande soccer stadium was pocketed by Guangzhou Urban Investment at a surprisingly low price, and a "price war" in the real estate sector came to an end.
Tracing back to August this year, Evergrande Group announced in a high profile on the Hong Kong Stock Exchange that it had reached an agreement with the receiver to waive the original contract and return the land use right, which made the land use right of Guangzhou Evergrande Soccer Stadium to be returned, while the receiver was required to pay up to 5.52 billion yuan of the transfer fee.
Entering September, the Guangzhou Public Resources Trading Center revealed that the site had re-entered the market with a reserve price of 3.155 billion yuan, a staggering price cut. Looking back to 2020, Evergrande took the land for $6.813 billion, and this price cut of $3.66 billion makes one wonder about the volatility of the market.
In August this year, Evergrande also announced that it had entered into a waiver agreement with the Guangzhou Municipal Bureau of Planning and Natural Resources to return the land use rights of the Xiecun Sports Facilities Plot and the Industrial Plot and to pay a premium of approximately RMB 5.520 billion.
When the Xiecun site re-entered the land auction market, there were many changes in the conditions of the offer. The nature of the land was changed from the original single-use to commercial and residential, the starting price of the listing was reduced from 6.813 billion to 3.155 billion, and the area of the site was expanded from 499,100 square meters to 577,700 square meters.
In the end, Guangzhou Chengyi Real Estate Development Company Limited, a wholly owned subsidiary of Guangzhou Chengtou, successfully bid for the site at the reserve price. According to public information, Guangzhou City Investment will need to invest an additional RMB 4.4 billion for the soccer stadium project.
