Alan Chiang, director of City Integrated Residential Services at DTZ Debenham Tie Leung, said that more investment funds and foreign developers had expressed interest in the area's property market, attracted by rapid economic development.

Sources said Wachovia bought more than 50 per cent of a distressed residential project at Qing Lu Road in Jida, a luxury residential district on the waterfront.

The remaining share is owned by a local developer.

Investment cost of the luxury project is estimated at about 600 million yuan, taking into account the development site's 420 million yuan cost or 3,500 yuan per square metre in terms of accommodation value, according to property agents.

For years, the local developer had planned to develop a residential project on the site but financial difficulties had left the development unrealised which eventually led to the sale to Wachovia, property agents said.

The 9,000 square metre site, next to the International Conference Centre Hotel, can provide a total gross floor area of 120,000 sq metres.

It will be developed into a low-density luxury residential project.

The Zhuhai government hoped to turn the city into a key tourism destination in the mainland, taking advantage of its closeness to Macau, Mr Chiang said.

'In riding the boom in the Macau economy and real estate sector, developers and investment funds feel confident about the Zhuhai property market,' he added.

Meanwhile, property prices in Zhuhai remained low compared with other mainland cities such as Shanghai and Beijing.

'The average price of waterfront residential property rose 50 per cent to 10,000 yuan per square metre last year, a situation that would have been difficult to imagine before. The property market is still immature, which provides more development opportunities for foreign developers and funds,' Mr Chiang said.

In November last year, RREEF teamed up with a Macau investor and two Zhuhai developers to build a 20-block residential development on a 106,146 sq metre site in the city. The project will provide 2,000 flats and a small number of retail units when completed over the next three years.

Most of the residential developments in Jida are luxury projects as the area is the central business district and on the Zhuhai waterfront, according to Hermit Poon, the deputy general manager of Centaline (China).

Property prices of new waterfront residential projects in Jida range between 10,000 and 11,000 yuan per square metre.

For example, prices at the luxury Shan Hai Yi Pin residential project have touched 11,000 yuan per square metre.

Mr Poon said average property prices in Zhuhai have risen 40 per cent in the past two years. Similar properties in the area cost only 7,000 yuan per square metre in 2004.

Sources said Wachovia was looking for a variety of development projects in the mainland, but preferred residential projects because of the liquidity they represented.

According to the Zhuhai government, transactions of newly built housing units last month accounted for 31,509 sq metres, up 38.81 per cent from November.

The value amounted to 1.43 billion yuan, representing 31.44 per cent growth from the preceding month.

Wachovia incorporated under the laws of North Carolina in 1967 and is one of the largest diversified financial services companies in the US, providing a broad range of retail banking and brokerage, asset and wealth management, and corporate and investment banking products and services.