(Yicai) March 9 -- The first land auction held in Hangzhou, China’s eastern Zhejiang province, in the New Year of the Horse secured a total sales revenue of over CNY3.2 billion (USD449 million).

After going through 109 rounds of bidding from 12 real estate developers, the land plot was sold at a premium of about 51 percent to state-owned property giant Poly Development and Holdings Group on March 6. The floor price was CNY45,000 (USD6,260) per square meter.

The plot is close to Xinfeng Station on Metro Line 4 and Hangzhou East Railway Station, about four kilometers from Wulin Square, one of the city’s central business districts. It was initially designated for commercial and office use but was converted to pure residential use in April last year. Moreover, its plot ratio was lowered to 2.2 from 3, and the green space ratio was raised to 35 percent, making it one of Hangzhou’s pilot projects in the newly launched nationwide campaign to improve residential quality.

The plot overlooks the Beijing-Hangzhou Grand Canal, offering good landscape and ecological resources, Gao Yuansheng, executive deputy general manager at China Index Holdings’ East China branch, told Yicai. It also enjoys convenient access to public transportation, ensuring smooth daily commutes, he noted, adding that a neighboring project launched last September has achieved strong sales, proving the area’s appeal to homebuyers.

The solid performance of Hangzhou’s land market after the Chinese New Year holiday, with the first auction going for a premium of over 50 percent, sends a positive signal that core land plots in major cities remain highly sought-after by top-tier developers, Gao said.

Hangzhou has been a key focus for Poly Development in recent years, as the company has six projects for sale in the city, three of which were launched after last October, Gao pointed out.

On March 6, Hangzhou also announced plans to put up for auction three new residential land plots, with a combined starting price of CNY4.5 billion, on April 8. Investors will monitor the outcome of these three auctions to gauge whether the market momentum can be sustained.

Editors: Tang Shihua, Futura Costaglione