A site in Xinzhongjie, located opposite the Dongzhimen transportation hub in Beijing will be jointly developed by GuocoLand China and Beijing Oriental Real Estate Investment Co Ltd.
Both groups will be responsible for the administration and planning of the land to meet the prerequisites for a land grant. The two groups will also assume the payment of compensation for the takeover of the land, land levelling and construction of public infrastructure, as well as the resettlement of existing residents.
According to Violet Lee, Managing Director of GuocoLand China, the company should apply the good relationship it has successfully built over the years with the local government.
GuocoLand China’s original proposal was to connect both the Dongsishitiao and Dongzhimen subway stations at both ends, with an underground shopping mall offering luxury fashion services and products.
Miao Qian, a partner from Dongfang Hengxin law firm, noted that the Xinzhongjie area is not considered valuable at all. He added that the cost of resettling the thousands of home owners in the area would be very high.
“If it is a much sought-after piece of land, then it would have been developed early. It is very hard to develop, not to mention the property prices in the surrounding area are very high,” Miao said.
The Xinzhongjie area is part of the overall East Second Ring Road High-End Industry Development Plan initiated by the district government under its 12th Five-Year Plan (2011-2015).
Zhang Yue, Chairman of Beijing Oriental Real Estate said that the actual number of homeowners to be resettled and the compensation cost for the affected residents are still unknown.
“We cannot say for sure whether GuocoLand China will continue to be involved in the secondary land development. But, I believe GuocoLand China will have an edge over others when bidding for the granted land because they would already have a better understanding of the desired development from their involvement in the primary land development,” he said.
So far, GuocoLand China has invested US$3.5 billion in China, with a sizeable portfolio of ongoing and completed property developments covering 2.5 million sq m.
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