Ke Ruixi: Seven cities in Guangdong disclose their land acquisition and storage plans, with a 87.5% discount on the purchase of 36 net land parcels.

According to statistics compiled by Kerui, from February 7th to 9th, a total of 7 cities in Guangdong Province disclosed their land acquisition plans, involving 48 land parcels with a total land area of approximately 2.246 million square meters and a total acquisition price of 17.103 billion yuan. In terms of acquisition discounts, excluding agreed land and land that has already been partially developed, the overall acquisition discount for the remaining 36 parcels of net land acquired is 87.5% compared to the land acquisition price. In terms of the nature of the project companies of the acquired land parcels, out of the 48 parcels acquired, 45 parcels are owned by local state-owned enterprises. Overall, idle land acquisition has become an important policy tool for local governments to resolve housing inventory and stabilize the market. It can alleviate the financial pressure on real estate enterprises and optimize the supply structure by revitalizing existing land. Looking ahead, land acquisition policies are expected to promote market supply-demand balance and price stability in some real estate markets and cities with relatively good local finances, while also providing resources support for affordable housing and urban renewal. 01 Guangdong 7 cities disclosed land acquisition plans totaling 17.1 billion yuan Mainly owned by local state-owned enterprises According to statistics compiled by Kerui, from February 7th to 9th, a total of 7 cities in Guangdong Province disclosed their land acquisition plans, involving 48 land parcels with a total land area of approximately 2.246 million square meters and a total acquisition price of 17.103 billion yuan. Among them, a city in Zhuhai acquired 14 land parcels with a total value of 6.652 billion yuan, which was the highest amount of land acquired. Following that, Huizhou acquired 8 land parcels with a total value of 4.975 billion yuan. In terms of individual land parcels, the highest acquisition price was for the Ma'an Xin Group Shangliao JD10-01, JD10-03 land parcels in Huicheng, Huizhou, with an acquisition price of 1.329 billion yuan. However, it was also one of the parcels with the highest discount, with a discount of 74.1% compared to the land acquisition price. In terms of acquisition discounts, after excluding agreed land and land that has already been partially developed, the overall acquisition discount for the remaining 36 parcels of net land acquired is 87.5% compared to the land acquisition price. Among them, there were 6 projects in Chaozhou, Heyuan, and Huizhou that were acquired at a premium, while the 6 projects in Maoming and Yunfu were acquired at the original price. Out of the 24 land parcels acquired at a discount, there were 10 parcels with a discount of less than 80%, with the highest discount being on the XJB-06-27A land parcel in Yunfu, reaching 73.2%. It is worth noting that out of the 48 land parcels acquired, 45 parcels are owned by local state-owned enterprises. Out of the 14 land parcels acquired in Zhuhai, 6 were owned by the local Huafa Group. In Zhongshan, two out of the three parcels acquired belonged to local private enterprises, while the other parcel was jointly owned by CHINA RES LAND, Renheng Zhidi, and a local state-owned enterprise. Overall, the first round of idle land acquisitions supported local state-owned enterprises, and there was no specific preference for the use of the acquired land for residential, commercial, mixed-use, or commercial and office purposes. 02 Local governments actively respond to idle land acquisitions But still face 3 challenges In addition to Guangdong, since the issuance of the Ministry of Natural Resources' notice on the use of local government special bond funds to recover and acquire idle land stock in November 2024, many regions including Kaifeng in Henan, Jinhua in Zhejiang, Ji'an in Jiangxi, Guigang in Guangxi, and Siping in Jilin have successively issued announcements to openly solicit idle land for acquisition, showing a quite positive response. However, overall, idle land acquisitions still face the following 3 challenges: 1. Land reserve centers only accept net land delivery, requiring that the idle land in the hands of real estate companies has no pledges, mortgages, etc., and if there are any, the real estate companies need to release them themselves. Normally, real estate companies will mortgage the land to banks to obtain development loans as soon as they obtain a state-owned land use certificate, even if the project has not started. Therefore, real estate companies rarely have idle net land. It is difficult for troubled private real estate companies to raise enough funds to release mortgaged land; state-owned and local state-owned enterprises with strong financial strength can release the land by reallocating funds to achieve land monetization, which may be one of the reasons why the idle land acquired in the first batch in Guangdong Province is mainly owned by state-owned enterprises. 2. The acquisition of idle land stock requires the determination of the basic land acquisition price based on market assessment prices and land costs, which generally may not be sufficient to cover the financing already undertaken by real estate companies, making it difficult for companies to accept. Local governments face significant financial pressure, and even with special bond funds to supplement acquisition funds, they are unlikely to increase acquisition prices easily, which becomes a fundamental contradiction hindering land acquisitions. Additionally, some local governments already have substantial debt pressures, and the issuance of special bonds may also encounter difficulties, thereby slowing down the land acquisition process. 3. According to the requirements of the notice, the use of special bonds to acquire idle land stock does not predominantly support commercial housing construction upon reassignment. In other words, the idle land stock acquired with special bonds is either used for infrastructure or public facility construction, or for affordable housing (including talent apartments) construction. Due to limited land absorption capacity in some real estate markets, even after completing land acquisitions, it may only increase government pressure, thereby reducing the enthusiasm for government land acquisitions to a certain extent.