|
Having recently spent well over 25 million yuan (US$3.012 million) to buy a plot of land and 50 luxury villas -- most of them still under construction -- near Sheshan Hill, ZK Group has decided to take a drastic step.
It is sending in the bulldozers to destroy the homes in order to make space for even more-expensive villas.
The move follows a Shanghai government decision in February to freeze the leasing of new land for the development of villas.
The freeze immediately pushed up the value of any land already leased for the development of villas, leading ZK Group to decide the land was too valuable for homes that only cost 5 million yuan (US$604,851). So it purchased the land and homes from ATB Property Co Ltd and called in the bulldozers.
ATB had spent 25 million yuan (US$3.02 million) on construction alone. It wouldn't say how much it cost to lease the land from the government.
"The plot at the foot of Shenshan Hill deserves better usage," said Ning Chenghui of ZK Group.
While he wouldn't say much about the company's new plans for the so-called Tianlin Villa project, he did say the new homes will be priced around 10 million yuan (US$1.21 million) each.
"Detailed plans are still under discussion," Ning said.
This isn't the first time a developer has decided to bulldoze newly built villas near Sheshan.
Laiyi Real Estate Co pulled down 16 completed villas known as Royal Garden to make room for a more- expensive project.
Despite the added costs, "ZK Group still believes it can make money," said Wang Hongsong, sales manager for ATB Property Co Ltd, which began working on the Tianlin project in 1999.
"For us, the price ZK Group paid is satisfactory," Wang added. "Besides, it needs to compensate the homebuyers."
Neither company would say how many people had already bought one of the soon-to-be destroyed homes, or how much compensation they would receive.
Industry insiders say ZK has reason to believe it can attract high-end buyers to the area.
The plot next to the Tianlin project was recently developed into Shanghai's most-expensive villa project, Sunville, with each home going for up to 130 million yuan (US$15.73).
"It's nice to see better products neighboring our project," said Xiang Zheng, vice president of BestLand Property Co Ltd, the developer of Sunville. "It will help create a community reserved for the elite."
(eastday.com October 22, 2003)
|
