(Yicai Global) Sept. 26 -- Auctions of land parcels in Beijing have been heating up in a sign of returning confidence among property developers, according to analysts.

The third round of land auctions in China’s capital this year ended on Sept. 23 with an overall premium of 6.06 percent paid, higher than the first two rounds and the recent third rounds in other major cities.

All 18 residential plots -- with a total area of about 748,000 square meters and planned floor space of 1,475,000 sqm -- sold for a combined CNY50.29 billion (USD6.99 billion). Among the successful bidders, China Overseas Property Group acquired three popular sites in Haidian and Fengtai districts for CNY14.76 billion.

China Overseas Property has performed notably well in Beijing's new housing market, and the planned floor area ratio of the two Haidian plots is low, allowing the company to build higher-end homes for upgraders, Chen Xiao, senior analyst at Zhuge Zhaofang Data Research Center, told Yicai Global.

Eight of the 18 land parcels saw particularly fierce bidding. The premium for a site in Fengtai even reached 15 percent, but 10 other sites in distant suburbs all sold at their reserve prices as only one homebuilder had registered to bid for them.

Chen said the auctions reflect a gradual recovery of market confidence and longer-term optimism for the Beijing market among real estate developers. Zhang Kai, head of the land division at the China Index Academy, echoed that sentiment, saying the auctions were a clear indication of market recovery.

One reason is that state-owned developers have relatively low financing costs and are more adaptable to land auction rules, so they are more inclined to acquire land, Zhang noted.

Editors: Tang Shihua, Tom Litting