Sun Hung Kai Properties (SHKP), one of the largest real estate companies in Hong Kong, purchased an area of land in a commercial district of Shanghai for a record price Thursday, the latest deal showing developers' enthusiasm for commercial property.

SHKP won the auction for the land by offering 21.77 billion yuan ($3.56 billion), the highest price ever paid for an area of land in Shanghai. The land has a total area of 99,188.8 square meters and is in the city's Xujiahui district, which is well-known for shopping and entertainment.

The final bid was 24 percent higher than the starting price of 17.53 billion yuan, equivalent to a price per square meter of 37,264 yuan for buildings on the land.

"The land is one of the few remaining core sites and has fantastic prospects," James Macdonald, head of real estate consultancy Savills China, told the Global Times Thursday.

Macdonald also noted that the high premium and the large scale of the investment showed "SHKP's confidence in the long term sustainability of the mainland market."

However, "the limited total area will be one of the bottlenecks that restricts development of this project in the future," Chen Xi, senior associate director of the office department at RET, a Chinese real estate consultancy, wrote in an e-mail sent to the Global Times Thursday.

Recent media reports have said that China's commercial property market, especially in first-tier cities like Beijing and Shanghai, is still attractive to foreign investors and multinational companies, despite the slowdown in the domestic economy and the sluggish performance of Western markets.

In the first half of this year, the total spending on purchases of Shanghai office buildings exceeded 15.2 billion yuan, up 18.7 percent year-on-year, and the amount invested by foreign firms accounted for 66 percent of the total, according to a report released in July by DTZ, a unit of real estate consultancy UGL Group.

Some major developers from the mainland - including Sunac China Holdings, Fosun International and China Vanke Co - also took part in the auction for the land in Shanghai, but by the end the only remaining bidders were two Hong Kong developers, The Wharf Holdings and SHKP.

Only developers with a strong capital position and stable profit margins would be interested in the Xujiahui project, said Chen of RET, which is why the Hong Kong developers pursued it more than those from the Chinese mainland.

Also, developers from the  mainland have generally preferred residential developments, partly because they lack experience in renting out commercial property. It is also easier to get returns more quickly from residential properties as demand is so strong.

China's most successful commercial developments such as the Village shopping mall in Beijing's Sanlitun, Raffles City in Shanghai and Beijing, and New World Stores in Beijing are all run by groups based in Hong Kong or Singapore..