Nanjing kills land king sale

The land resources authority in Nanjing, East China's Jiangsu Province, said it would "cease the selling process" of a key piece of land to a local developer, which analysts said Monday indicates the local government's quandary in balancing property developers' interests with the rights of so-called "nail households," or small property owners who refuse to sell to make way for larger developments.

Nanjing's Bureau of Land Resources announced on its website Friday that the purchase was halted for "particular reasons," without specifying further.

The 364,000-square-meter plot, located by Jiangbian Road in the city's Xiaguan district, was purchased by Nanjing Linjiang Old Town Renovation, Construction and Investment Co for 5.62 billion yuan ($920 million) last November. The buyer's controlling shareholder is State-owned China Metallurgical Group Corporation's MCC Real Estate Group Co.

MCC Real Estate purchased two plots of land adjacent to the property in question for 20.03 billion yuan in 2010. The three plots together, which cover 2.36 million square meters and are worth 25.6 billion yuan, have been dubbed the city's "land king," a term referring to the most expensive parcel of land in a given area.

Neither the bureau nor MCC Real Estate could be reached for comment by the ­Global Times as of late Monday.

Nanjing's "land king" is not the only high-profile real estate project to be dropped this year. Youngor Group, a private textile and clothing enterprise based in Ningbo, East China's Zhejiang Province, announced on June 20 that it would stop developing Hangzhou's "land king," which it bought three years ago.

Li Zhanjun, a research director at the E-house China R&D Institute, told the Global Times Monday that local governments should take responsibility for killing the deals, especially in Nanjing's case.

"Local governments always fail to hand over the land in time and force the deal to be dropped, because they are unable to clear out the nail households efficiently," Li said. "The officials face double pressure from the central government and the media to protect the rights of such households, as well as from property developers who are eager to develop the land."

Li said the press and the central government should pay more attention to the deals, which will yield significant long-term economic benefits. "Nail households have become an economic burden to some local governments," he said.

Liu Yuan, a senior research manager at Centaline China Real Estate, said Monday that the developers are also to blame.

"The companies failed to accurately estimate the potential market value of properties built on the land, and this has forced them to drop the deals to avoid huge losses," he said, adding that it is still "too early" to decide if the failed deals are a signal that China's real estate market will start performing weakly.