Major cities across China are witnessing a revival of land auctions featuring significant private developers and smaller local firms, with some new industrial entrants also participating in land purchases in top-tier cities.
In the first seven months of this year, private developers secured 21 spots in the top 100 rankings for total land value acquired, a notable increase from just 18 throughout the entire previous year. This upward trend continues into the current month, according to recent data from Purui Real Estate Research. Key cities seeing increased activity include Hangzhou, Chongqing, Wuhan, Changsha, Dalian, as well as leading cities like Beijing and Shanghai.
For example, a Hebei-based developer purchased a residential land parcel in Beijing’s Fengtai District for more than CNY 1 billion (approximately USD 144.7 million), paying a premium of 16.4%. Similarly, a Shanghai-based company acquired land in Minhang District for CNY 3.7 billion, with a premium of 41%. Another company from Jiangxi Province secured a residential plot in the provincial capital, Nanchang, at a premium exceeding 40%.
Although private developers are showing increased interest in land acquisitions, industry experts warn that this doesn’t necessarily indicate the market has fully bottomed out. Resolving debt issues and completing pre-sold home deliveries remain the top priorities for most private firms, according to Song Hongwei, co-dean at Tongce Research Institute.
Liu Shui, enterprise research director at China Index Academy, emphasized that a rise in land bids by private developers doesn’t automatically signal a market recovery. Many of the active players in recent land events are well-established regional firms that have survived broader market downturns. These companies typically operate prudently—focusing on their local markets—examples include Binjiang Group from Hangzhou, Xingyao Real Estate, and Shanghai-based Dahua Group.
Only a small portion of private developers are actively competing for high-value land in key urban centers. Song highlighted that only a handful of locally rooted, financially solid companies possess both the capacity and willingness to contend for prime plots.
Additionally, some cash-rich private industrial companies have entered the bidding process. For instance, Yinsheng Fanmei Real Estate Development, backed by Liaoning Yinsheng Cement Group, secured a residential land right in Beijing’s Shunyi District after being established specifically for the auction. Another example is Shanghai Dingxin Huazhan Enterprise Management, a new private developer with major shareholders including the nickel producer Tsingshan Holding Group and affiliates of Huafeng Group, which recently won a land parcel in Shanghai’s North Bund.
These new industry-backed developers are likely to partner with third-party firms to handle project development management, given their limited expertise in real estate development. They are expected to contract professional management teams, who will oversee projects in exchange for management fees and potentially share a portion of any surplus profits.