Bidding for Real Estate Projects in China

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clpstaff &clp articles

Land prices in China's tier one cities have risen at a terrific rate over recent years as available construction space has been squeezed. In response to this, local Chinese authorities have sought to extract their share of profits – at the time of granting the land use rights to the preferred developer – usually through some form of bidding process. By Thomas Fairley, Norton Rose

Four principal types of bidding process have evolved in the Chinese real estate market. These bidding processes are in theory regulated by the Ministry of Land and Resources. However, enforcement of bidding processes may vary from city to city. It is therefore prudent for a foreign developer to identify and understand prevailing local bidding practices early on in its pre-bid preparation.

The four common types of bidding process are:

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