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City to Put Land Up for Public Tender

Beijing will put two pieces of land in its southwestern district up for public tender from tomorrow, the city's biggest auction of land use rights in terms of area.

The two pieces of land, covering a total area of nearly 120,000 square meters, are located at the Fengtai Science Park - a component of the Zhongguancun Science Park that has been dubbed "the Silicon Valley of China."

The starting prices for the 50-year-long land use rights to the two adjacent areas - which are separated by a road - are 550 million yuan (US$66.5 million) and 255 million yuan (US$30.8 million), according to the Beijing Municipal Bureau of Land and Resources.

The two pieces of land can be used to build hotels, exhibition halls, shopping malls and entertainment venues, with total floor area expected to top 350,000 square meters, said Fu Xuejiang, deputy head of the Fengtai Science Park Administrative Committee.
He said the unit price is on average about 2,300 yuan (US$278) per square metre, which is very attractive for property developers as neighboring real estate projects are usually sold at more than 7,000 yuan (US$846) per square meter.

The public bidding, which is open to both domestic and overseas investors, will last 10 working days.

The municipal Land and Resources Bureau said the public tender will be the biggest transfer of land use rights in the city since 2002 when China outlawed the so-called agreement land transfer in order to enhance the transparency of the land market and prevent repetitive land trading - one of the root elements that may lead to property market bubbles.

So far, more than 20 developers have expressed an interest in the pieces of land, according to the Fengtai Science Park Construction and Development Co Ltd.

Duan Haibo, company general manager, said more than 150,000 business people and another 300,000 residents are expected to work and live in the park as well as in its neighboring areas in the near future.

"The development of the two pieces of land can meet the current shortfall in public services such as shopping and entertainment at the park. Furthermore, these public service facilities can also meet the demands of people in the southwestern and even the southern parts of Beijing," said Duan.

She said her company had signed a co-operation contract with the China Construction Bank in which the latter promised to extend loans to the bid winner for land construction and development.

Duan said the Fengtai Science Park was inviting big businesses to set up headquarters there.

So far, more than 2,700 enterprises, mainly engaged in science and technology businesses, have established their bases in the park.

"Their total revenue was 45 billion yuan (US$5.4 billion) last year, rising 50 percent year-on-year," said Duan.

(China Daily March 29, 2005)

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