In a joint venture with MacauLand Holdings, the company will put up its majority-owned development, The Manhattan, in Cotai, for presale early next year.

'There is plenty of room for competition,' said Dan Tagliere, principal of MacauLand Holdings, which has been created by GPP Formosa Investment Management, a Hong Kong-based real estate investment firm serving institutional investors.

Within walking distance of The Manhattan is City of Dreams, a luxury residential project that debuts next year. The project is a joint venture between Melco International Development and Kerry Packer, Australia's richest citizen.

City of Dreams will have the world's first underwater casino, two four-star hotels and one five-star hotel.

There will be a total of 2,000 rooms, two luxury serviced apartment blocks covering 1.5 million square feet and an upmarket shopping mall.

Mr Tagliere said there were about 28,000 overseas workers in Macau as of last year. More than 1,600 of them were considered 'expatriates'.

The firm estimated that construction has begun on only 10 per cent of all foreign direct investment projects committed to Macau so far.

'We have seen only the tip of iceberg of expatriate arrivals,' he said.

The Manhattan, due to be completed in early 2007, targeted overseas investors and expats working in Macau, Mr Tagliere said.

Although selling prices have not been finalised, the expected average price was about $3,000 per sqft. If all 169 units were sold, the company would generate a total sales revenue of $1.2 billion, he said.

Units in the project measure between 1,626 sqft and 2,492 sqft, and could give an annual rental yield of 4 per cent to 4.5 per cent.

Meanwhile, China Overseas Land & Investment said that it was considering launching the second phase of its luxury residential project La Cite, about two minutes' drive from the Hong Kong Macau Ferry Pier.

Tony Yau, director and general manager of China Overseas Property (a wholly owned subsidiary of China Overseas Land & Investment), said 500 units had been sold at $1,500 to $3,100 per sqft since the project appeared on the market in August.

'The project has been attracting buyers from 17 countries, including Japan, Portugal, South Korea and Israel,' he said. International and Hong Kong buyers accounted for 30 per cent each of total sales. Overseas buyers purchased units for self-use or for investment, Mr Yau said.

MacauLand and China Overseas both believe Macau's luxury residential market in Macau will stay promising.

The Macau government has approved 7,052 apartments, which will be ready for delivery from next year onwards.

Mr Tagliere estimated that annual new supply would be about 2,350 units over the next three years.

'About 10 per cent of those flats will meet international luxury standards,' he added.

In the first nine months of the year, the volume of transactions went up 21.9 per cent to 16,638, while the total value went up 34 per cent to $13.73 billion, according to Macau's Statistics and Census Service.

Mr Tagliere disagreed with analysts who suggested that Macau was experiencing a 'correction'. He said the long-term outlook was positive.

'A handful of transactions this summer may have been lower than expected. But people, especially Hong Kong people, tend to base their analyses on a daily basis. Global funds see property investment as a long-term investment,' he said.

Mr Yau noted that home prices had recorded a single-digit downward adjustment after apartment values had soared to as much as 300 per cent over the past two years.

He believed luxury residential prices would outperform the mass market in the coming years because of a growing demand for quality homes.