Finance Association, November 21 (Reporter Li Jie) Following Yuexiu Real Estate, a plot owned by another large state-owned housing company has been stored.

On the afternoon of November 21, OCT announced that its wholly-owned subsidiary, Wuhan Tianchuang Real Estate Co., Ltd. (hereinafter referred to as “Tianchuang Company”), is located on a plot of land in the Yangchun Lake High Speed Rail Business District, Hongshan District, Wuhan. The original plan was to build a TOD subway project with a concentration of high-end industries.

To comprehensively consider industrial investment and real estate market conditions, the government department plans to store the TOD project land through a “collection, transfer, and supply” method, and adjust the original commercial construction indicators to mainly residential and commercial subsidized, and the land after regulation will be tendered on the open market. According to reports, the land area collected and stored this time is 70,214.09 square meters, and the contract is 105.32 acres (subject to the measured area confirmed by the land management department).

The OCT side said that in the future, Tianchuang plans to participate in land auctions after regulation through tenders.

According to Tianyan Research, Tianchuang obtained a plot of land in the Yangchun Lake high-speed rail business core area in Hongshan District in 2020. The land price was as high as 5.2 billion yuan, and the area was about 0.14 million square meters.

Analysts pointed out that due to the high total land price of the plot, it is expected that after being collected and stored, OCT will receive a significant amount of storage.

However, OCT did not announce the exact amount of savings collected. According to it, the collection and storage compensation amount involved in this collection and storage plot is to be carried out based on the land value evaluation issued by the Wuhan Land Arrangement and Reserve Unit commissioned by a third party land asset evaluation company. The final amount is based on the government evaluation results and audit opinions. If the measured area of the collected and stored land changes, the total collection and storage compensation amount will be calculated based on the measured area.

“The land collection, storage and re-supply of land for this TOD project will help enhance the company's liquidity, improve the supply structure, improve the company's operation and management efficiency, and meet the needs of the company's overall development strategy if subsequent companies compete for land through bidding. At the same time, if it fails to compete for land in the later stages, the company can still obtain collection and savings compensation to revitalize commercial land assets.” According to the OCT side.

“OCT has been located in the Yangchunhu High Speed Rail Business District for many years. It is expected that after the TOD project mentioned above is re-supplied, competition will not be intense; it is probably still up to OCT to compete.” The analyst mentioned above pointed out.

With the exception of OCT, plots owned by many housing companies have been stored since July.

Among them, 3 parcels of land have already been stored in the Yuexiu plot, with a total return capital of 13.53 billion yuan; Huasheng Co., Ltd. disclosed on July 19 that the company's holding subsidiary Dongma Company's assets such as 4 state-owned construction land use rights and ground buildings located on Wangyue Road in Yueyang Lou District will be taken back by the Yueyang Land Reserve Center. The compensation range is 0.34 billion yuan to -0.38 billion yuan.

According to the October 31 announcement of Tianjin Investment and Chengkai, according to the “Tianjin Land Refinement and Reserve Project Compensation Contract”, the company received compensation of 0.118 billion yuan from the Dongli District Land Preparation Center on October 31, 2024 to fulfill the relevant obligations. In addition, companies such as Shanghai Mercantile Trade, Huafeng Co., Ltd., and Aokang International have disclosed that their land has also been stored.

As the Ministry of Natural Resources issued the “Notice Concerning the Use of Local Government Special Bond Funds to Recover and Purchase Existing Vacant Land”, many analysts believe that the pace of such collection and storage will accelerate in the future.

Analysts of the China National Index Institute believe that the above “Notice” means that the use of special bonds for land reserves will be officially restarted. This time, local governments are encouraged to use special bonds to recover and purchase unused land, and the recovered land is not limited to affordable housing construction, expanding the scope of use of special bonds, clarifying various aspects such as the purpose of the acquisition, the scope of the subject matter of the acquisition, and purchase price requirements. At the same time, they indicate that the bottom number should be ascertained and the timing arrangements determined, providing policy guidance for all regions.

“With the implementation of the “Notice”, more low-cost incremental capital will enter the market. For housing enterprises, they should seize the opportunity to sell existing land, ease financial pressure, or further improve the land storage structure. For local governments, special bonds are used to purchase existing land, which can enhance the liquidity of local governments, relieve local government financial pressure, support local economic development, and protect people's livelihood.” Chen Wenjing, director of policy research at the China Index Research Institute, thinks.

It further stated that at the market level, the acquisition of idle land in stock helps improve the relationship between supply and demand in the market, and is a key measure to stop the decline and stabilize the real estate market. It can be seen from this that using special bonds to collect and recycle idle land can achieve the effect of “getting more in one stroke”.