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(Read more on the multifamily market.)

(Michelle Deakin is the new international reporter for GlobeSt.com.)

XI’AN, CHINA-Locally based China Housing & Land Development Inc. has sold a portion of its Baqiao Project to a local developer for $25.2 million. The 25-acre parcel, in Shaanxi Province, some 600 miles from Beijing, includes 18.4 acres of raw land, which could support up to 2.6 million sf of buildable area. The parcel also includes roads, utilities and public areas.

Terms of the deal include an initial payment of $15.1 million, which has already been received. The balance will be paid by June 24. The buyer is a partially government-owned company in the utility sector, according to Kun Tao, an analyst with Roth Capital who focuses on China. The company plans to develop part of the land for commercial use, to develop another part with apartments for its employees, and to sell the remainder, Tao tells GlobeSt.com.

China Housing had failed to meet its third-quarter shareholder expectations, Tao notes. To make up the numbers it had promised its first-round shareholders, the company sold a portion of its holdings in Baqiao to meet their make-good provisions. China Housing has retained 468.6 acres of net sellable land in the region.

The average price paid per net acre was approximately $1.4 million. Company officials are optimistic that this sale will enable it to surpass its 2007 make-good target of $16.3 million.

“We are currently engaged in substantial discussions with potential joint venture partners for the purpose of developing the next 80 acres of Baqiao and expect to complete an agreement during the first half of 2008, with construction to commence during the calendar year and presales to begin during 2009,” says Lu Pingji, chairman and CEO of China Housing.

Prices in Xi’an lag behind many areas of China. Seen as a gateway in the “Go West” movement in China, the region is undergoing extensive infrastructure development. “We firmly believe the large disparity in valuations as compared to other major metropolitan markets bodes very well for further development and price appreciation throughout Xi’an in the coming years,” says Pingji. “The local government expects to invest more than $7 billion during the next 10 years for overall infrastructure development to accommodate approximately 900,000 new citizens in the Baqiao area.” The projects include a city subway engineering project, which will connect Baqiao to Downtown, the airport, and the historically significant Terra Cotta Warriors site.

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