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.