(Yicai) July 31 -- A purely commercial land parcel in Pudong New Area of Shanghai was auctioned at an 80 percent premium, which not only far exceeds the rates of most such plots in the city, but also those of some land for housing development in core urban areas.

The rights to develop the commercial plot in the Xinyangsi area were sold for CNY2.7 billion (USD399.7 million) yesterday. A consortium led by Kerry Properties won after 155 rounds of bidding.

The auctioned land is adjacent to a subway station and is designated as a transit-oriented development commercial complex. The project is planned to have about 133,000 square meters of commercial space and about 16,700 sqm of cultural space above ground, with around 23,000 sqm of commercial space underground.

Such fierce competition for purely commercial land parcels is quite rare, a relevant market insider told Yicai. "It's highly unusual to see a high premium of 80 percent in such auctions."

The strong demand was likely related to the long-standing relative shortage of commercial resources in Pudong, the insider said, adding that compared to the mature commercial network in Shanghai's western Puxi area, some emerging residential communities to the east of the Huangpu River lack sufficient large commercial facilities despite their rapidly growing populations.

Taking Xinyangsi as an example, with several mid-to-high-end housing projects in the area being sold, the local population and consumer demand have continuously increased, the insider said. However, there are still no large commercial complexes within a three-kilometer radius of the land parcel, the person pointed out.

As the number of high-end residents in Pudong continues to grow, the commercial value of land in emerging development zones is undergoing a new round of reassessment, the insider said, adding that the worth of quality commercial projects will increasingly depend on the region's population structure, consumer capacity, and potential for future urban functional upgrades.

For the consortium, securing the development rights for the Xinyangsi plot marks a new step forward in its commercial real estate expansion in Pudong. Its Prisma Xinjia Center in the area's Jinqiao town achieved nearly 95 percent occupancy and 90 percent merchant opening rates after opening last month.

The new project will integrate commercial streets, shopping centers, and park spaces to create an open and mixed-use new commercial model, according to its development plan.

Editors: Tang Shihua, Martin Kadiev