Shanghai: The most expensive apartment complex in the country has attracted plenty of attention but not many deals since its first block was put on sale last October.

A general view shows the Huangpu River and its high raised buildings along the bank, out of the living room of an apartment at the Tomson's Riviera project in Shanghai July 19, 2006. [Reuters]

Tomson Riviera has sold only two of 220 units. Due to gloomy prospects for future sales, the developer finally decided on Wednesday to withdraw the offer to sell the second block as a whole.

A statement from Tomson Group said it would suspend the public tender for its block B because of the strict government policies on foreign investment. The policies stipulate that foreign investors cannot buy property unless they set up a branch in the country.

On July 3, Tomson Group put block B of Tomson Riviera up for public tender at nearly 4 billion yuan (US$500 million). Since then, the group has been promoting the block in New York, London, Dubai and Singapore. Tomson Group said that it had received many enquiries about the block, but the company deemed them unsuitable.

Michael Hart, head of research at Jones Lang LaSalle Shanghai, said Tomson had set the price of the project at an extremely high level and that it wouldn't grow in the next 5 to 10 years. "It is almost twice as expensive as projects nearby," Hart said.

A general view shows the Huangpu River and its high raised buildings along the bank, out of the dinning room of an apartment at the Tomson's Riviera project in Shanghai July 19, 2006.  [Reuters]

Tomson Riviera, comprising four blocks of 40 to 44 storeys each, is located on the east bank of the Huangpu River, a stone's throw from the famous Oriental Pearl Tower and Jinmao Tower. It boasts the best view at the premier spot and the most luxurious decor.

Tomson put the first block up for sale last October with the most expensive unit at 170 million yuan (US$21.25 million) and the second for sale as a whole this July.

It did not sell a single unit until August. A Southeast Asian buyer purchased a 979-square-metre duplex for 130 million yuan (US$16.25 million). It sealed the second deal recently at 69 million yuan (US$8.62 million). On Wednesday, it withdrew the public tender.

According to the Oriental Morning Post, Tomson Group will continue selling the first block and block C, and will start renting block B next year. But finding tenants may not be easy either. Hart estimated that rental for a unit could be at least US$12,000 a month. "There may be many rich people interested in the apartments, but not enough to fill the whole building," he said.