Ryoden project draws strong market response

PUBLISHED : Thursday, 19 August, 1999, 12:00am
UPDATED : Thursday, 19 August, 1999, 12:00am

Ryoden Development may speed up construction of the third phase of its Gateway Plaza project in Shanghai after receiving a better than expected response to phase-one unit sales.

The company earlier announced plans to pull out of property developments in Guangzhou and Wuxi and said it was cutting its stake in a Shenzhen project due to unfavourable market conditions.

Executive director Tony Leung Ka-tung said the company remained cautious about mainland expansion but would adjust the development progress of existing projects in Shanghai in accordance with market response.

Mr Leung said the company had sold 105 phase-one units internally in Gateway Plaza since last Tuesday.

The first 50 were sold at an average of 5,500 yuan (about HK$5,130) per square metre but prices for the remaining units were raised to about 6,100 yuan per square metre, he said.

Mr Leung said the company would sell another 30 units internally, leaving the remaining 143 in phase one for public sale tomorrow.

The public sale units are expected to be priced at between 6,500 and 6,600 yuan per square metre.

The company plans to discuss with its partners speeding up construction of the third and final phase of Gateway Plaza, which is also for residential use.

Ryoden owns a 27.18 per cent stake in the residential-commercial project.

The first phase, comprising 63,630 sq metres, is mainly residential. Construction of the remaining phases has not yet started.

Mr Leung said the second phase was planned to be commercial, but the company had no immediate plans to start development amid slow market sentiment.

The third phase will comprise three housing blocks, providing a floor area of 89,000 sq metres.

Ryoden's other key development in Shanghai is its 60 per cent-owned commercial project Shanghai Square.

Mr Leung said occupancy of the office portion had reached 80 per cent and the company was finalising an anchor tenant to fill the retail area.

The take-up rate of the retail portion dropped to 50 per cent after department store Sincere moved out.

He said a mainland department store was negotiating to lease 10,000 sq metres, which could raise occupancy of the retail portion to more than 80 per cent.