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China Vanke buys land assets of bankrupt Guangdong trust for 55.1 billion yuan
[HONG KONG] China Vanke Co Ltd on Friday said it has won an auction to buy the equity interests and creditors' rights of companies holding assets including land for 55.1 billion yuan (S$11.2 billion).
In a statement, Vanke confirmed the acquisition first reported by state media on Thursday.
The companies involved were subsidiaries of Guangdong International Trust & Investment which in 1999 became China's first non-bank financial institution to enter bankruptcy.
The auction was the first to use an exchange platform to dispose of property as part of a legal procedure, Xinhua news agency reported, citing Guangdong Assets and Equity Exchange Group.
Vanke said on Friday the principal assets involve 16 land parcels in prime districts of Guangzhou, a top-tier city in southern China, with an expected total gross floor area of 2.1 million square metres.
The company said it plans to develop the land into residential property, commercial property, hotels and offices.
"In view of the location of the properties and the potential value of the projects, the Board believes it is a valuable opportunity for the Company to enhance its land bank in Guangzhou." China's second-largest property developer by sales bid 23 per cent over the assets' listed price, beating bids from eight peers, Xinhua reported.
Developers in China are increasing resorting to mergers-and-acquisitions to build land banks as city governments impose restrictions on land auctions.