Tomson Group, developer of Shanghai's most expensive apartment project, Tomson Riviera sold the third unit on February 6th, 2007. The selling price of the 597.57-square meter unit was nearly 85 million yuan (US$10.95 million),  the highest price paid for a single unit in domestic market. One square meter was sold for 142,119 yuan. [newsphoto]

While the fate of Tomson Riviera, the most expensive apartment building on the mainland, looks increasingly uncertain under stringent government policies on the property market, Lyceum Apartments recently surprised local residents with the announcement that it intends to sell the property for 64,000 to 80,000 yuan per square meter.

The upscale apartment, next to the historical Lyceum Theater and across the street from the landmark Jinjiang Hotel, where the Sino-US Communiqu was signed in 1972, is still under construction.

Developed by the Shanghai Shengda Real Estate Co Ltd, Lyceum Apartments will have 60 luxury flats.

It was reported that some overseas investment funds are eyeing the apartments in the downtown area, but pre-sale of the property has not yet started, local newspapers quoted Shanghai Shengda sources as saying.

The news of Lyceum Apartments' steep prices comes as a surprise as the central government continues to introduce new regulations to bring down property prices after previous measures failed to meet the target.

The Ministry of Construction and seven other central ministries and commissions are expected to send an inspection team later this month to Shanghai and other cities to probe into the illegal activities in the property market, such as corruption and artificial jacking up of prices.

Meanwhile, Tomson Riviera, which sells for an average of 110,000 yuan per square meter, has sold only three of its 181 flats along the Huangpu River bank in the last 17 months.

The luxury property was hit hard by new government policies to restrict overseas buyers. Xinmin Evening News has reported that Tomson Riviera's efforts to sell to overseas investment funds have not worked.

The property has also been affected by news that it might be levied as much as 5 billion yuan in value-added tax (VAT).

The figure was based on Tomson Riviera's estimated cost of 30,000 yuan per square meter, but it said its actual cost is much higher.

Tomson Riviera could still wait for another year or so before the VAT is due.

(China Daily 04/11/2007 page15)

(For more biz stories, please visit Industry Updates)