Rebounding property prices are driving developers to pay more for prime land, with two new price records being created within 24 hours in the nation's financial hub and the capital.

A large piece of land in Shanghai's downtown Xujiahui area was sold for 21.77 billion yuan ($3.56 billion) on Thursday, becoming the nation's most valuable plot since 2010.

Hong Kong developer Sun Hung Kai Properties Ltd outbid its regional rivals Wharf (Holdings) Ltd and Henderson Land Development Co Ltd by offering 4.2 billion yuan above the opening price of 17.5 billion yuan.

The 99,000-square-meter parcel of land will be developed into a complex with 580,000 sq m of above ground buildable area and an extra 120,000 sq m of underground space, including offices, restaurants and hotels. The accommodation value based on the above-ground area is 37,264 yuan per sq m.

Analysts said the development of this land plot will enhance the surrounding properties' quality and attract high-end companies to move to the district.

Lu Qilin, research director at Shanghai Deovolente Realty, said the deal was not affected by recent market rumors saying that Hong Kong business tycoon Li Ka-shing intended to sell his office properties in Shanghai.

The Xujiahui center development site fetched a 24 percent premium albeit with only three bidders, showing major Hong Kong developers are still confident in Shanghai's commercial property market, Lu added.

The price paid and the size of the investment show Sun Hung Kai's commitment to the mainland market and its confidence in the long-term sustainability of the market, said James Macdonald, head of Savills Research and Consultancy.

Just one day ago, a piece of residential land parcel located off Beijing's East Third Ring Road was bought by Sunac China Holdings Ltd for 73,100 yuan per sq m of buildable space, becoming the nation's most expensive per square meter plot.

The 28,100 sq m plot, near the National Agriculture Exhibition Center in the capital city, was sold for 2.1 billion yuan. Sunac also disclosed it is to build a 278,000 sq m hospital at another site.

"Sunac's new residential project should be priced between 120,000 yuan and 150,000 yuan per sq m, a new record for the city," said Zhang Dawei, research director at real estate brokerage company Centaline Group.

According to Zhang, the capital's most expensive residential apartments are sold at about 120,000 yuan per sq m.

Analysts expected a significant price hike in surrounding residential properties soon, as happened with the new projects in Beijing's Yizhuang area, which were sold at higher prices after a land parcel was auctioned off at more than 20,000 yuan per sq m in mid-August.

The domestic property market has seen a boom with land prices hitting new highs during red-hot biddings.

On the same day, Hangzhou in Zhejiang province recorded a new local land record when three mixed-use plots were sold for a record 13.67 billion yuan and Suzhou, Jiangsu province, saw a piece of commercial land sold to Shimao Property Holdings Ltd for a record 15,151 yuan per sq m of buildable area.

The land sales fees in the nation's 10 largest cities stood at 81.16 billion yuan in August, soaring 149.3 percent year-on-year, a report from E-House China Research and Development Institute showed.

With no new tightening measures imposed on the property market and with some local governments even toning down restrictions, developers and investors are being encouraged to make a comeback, said a report from the China Land Surveying and Planning Institute, which is affiliated to the Ministry of Land and Resources.

New home prices of the nation's 100 major cities averaged 10,442 yuan per sq m in August, rising for 15 consecutive months in month-on-month terms, a report from the China Index Academy, a research arm of Soufun, China's largest property website, showed.

Among the 10 biggest cities, Beijing saw the highest property inflation at 3.22 percent in August from July, trailed by Wuhan in Hubei province, which posted a 2.16 percent month-on-month rise.

On a yearly basis, new home prices of the 10 largest cities grew 12.18 percent in August, extending the winning streak to 10 months and pointing to robust housing demand in these top-tier cities.

wang_ying@chinadaily.com.cn