Citic Pacific China Holdings, the property unit of the country’s largest state-owned conglomerate Citic Ltd, has agreed to pay 9.92 billion yuan (HK$11.18 billion) to buy a piece of land in the Hubei provincial capital of Wuhan, returning to building apartments a year after disposing of its residential property portfolio to a rival.
Citic Pacific’s Wuhan land parcel, located northeast of the city’s central business district on the western bank of the Yangtze River, has an area of 229,040 sq metres, according to the Wuhan Land Market Net, the official online platform for land sale data. The site can be developed into 1.17 million sq metres of saleable space, of which a third is earmarked for apartments while 63 per cent is for commercial and office use.
This marks the Citic group’s fourth reported property purchase in Wuhan since mid-2016.
The city of 10 million people and logistics hub for central China was one of two key property development priorities of the company besides Shanghai, Citic Pacific Investment Development Centre’s general manager Fu Qi was quoted as saying on Wednesday by property website guandian.cn.
“Wuhan’s role as a logistics hub and its business-friendly government have attracted many large companies to set up offices and operations there,” CLSA’s regional head of property research Nicole Wong said. “In some other cities, less commercially friendly government land sale policies have seen developers face a severe oversupply when they are ready to launch their projects.”
In May 2016, Citic Pacific paid 4.5 billion yuan to buy two commercial projects from Hong Kong-listed Shui On Land. One was a “super high-rise office and hotel tower” with a gross floor area of 177,116 sq metres under construction in Wuhan’s Jiangan district and the other was a completed office tower with a floor area of 55,053 sq metres.
