(Yicai) May 22 -- Xiaomi has handed back to the Shanghai government a plot of land that the Chinese technology giant bought three years ago for CNY1.55 billion (USD215.2 million).

The city government took back the land after changing its designated use as the authorities had a need for the site, The Paper reported, citing Xiaomi’s public relations head Wang Hua. Wang did not comment on the issue of the deposit Xiaomi paid when the land was auctioned off in 2021.

Located in the Binjiang area of Xuhui district, the plot’s designated use was changed to ‘residential’ from ‘mixed commercial,’ the city’s planning bureau announced recently. The change meant Xiaomi would not have been able to build a planned commercial office building on the site.

Xiaomi bought the land for CNY31,001 (USD4,304) per square meter, with an agreed period of 50 years for office use and 40 years for commercial use. The Beijing-based company intended to construct there the Shanghai headquarters for its smartphone, finance, and internet businesses, it said at the time.

Xiaomi is probably willing to adjust its strategy in this regard, an analyst said, adding that firms reallocate and optimize resources according to market changes. The land that Xiaomi returned is in Binjiang, where there are already plenty of office buildings, so it is likely a better choice to rent office space than to build a new one, he said.

Financial technology giant Ant Group similarly returned two plots of land in Hangzhou, the capital of Zhejiang province, to that city’s government in March.

Editor: Tom Litting