TWO Chinese developers yesterday paid the asking price of 1.7 billion yuan (US$270 million) for a land parcel in Shanghai's Putuo District amid a lackluster market sentiment while the local land authority's high criteria may have deterred other firms from bidding.

An entity comprising the two developers, both controlled by Star Capital, paid about 8,400 yuan per square meter for the 69,332-square-meter plot which is designated for office/retail/residential uses.

Neighboring plots in the same area cost Cheung Kung Holdings Ltd, which is controlled by Hong Kong billionaire Li Ka-shing, an average price of 3,055 yuan per square meter in 2006 while Shanghai-based Greenland Group paid about 8,900 yuan per square meter in a land bidding in late 2009, according to statistics released earlier.

"This is a rather reasonable price if compared with earlier tags for similar plots in the neighborhood," said Huang Hetao, research manager with Century 21 China Real Estate. "The high criteria listed for future development of the plot also deterred some developers from bidding."

According to a government document, a developer who acquires a land plot should commence construction within six months after signing the land purchase agreement and the whole project must be completed in three years after construction started.

This compared with an earlier condition set for Greenland, which was allowed to begin construction within 10 months after the signing of a land purchase deal.

Set up in 2010, Star Capital is a real estate private equity fund formed by major Chinese private companies.

The city's land market saw only 12 land pieces sold so far this year, down from 47 plots auctioned in the first two months of 2011, Century 21 said.