Firm plans Anhui hotel

PUBLISHED : Monday, 28 May, 2007, 12:00am
UPDATED : Monday, 28 May, 2007, 12:00am

Shenzhen Investment, the Hong Kong-listed unit of Shenzhen's municipal government, plans to develop a 100-room hotel in its 890 million yuan resort project in Anhui province.

The company unveiled its first foray in the hospitality business last week as it said it would buy an 80 per cent stake in Anhui Chengyi, a company that owns a 580,000 square metre site, for as low as 108 million yuan.

The site is located in the Bantang Resort area, which is famous for its hot and cold springs, according to Shenzhen Investment's chief operating officer Joe Zhang Huaqiao.

'The Bantang Resort area has been an exclusive resort in the past few centuries. Our hotel will target domestic travellers,' Mr Zhang said.

Bantang is about one hour's drive from Hefei, the capital of Anhui, and two hours from Nanjing.

Shenzhen Investment also planned to develop 550 villas measuring 200 square metres each, and 45,900 square metres of commercial space in the project, which would take three to four years to complete, he said. The villas were expected to be released for pre-sales next year.

Mr Zhang said Anhui's 'stunningly low' land price lured the company to expand there.

The price Shenzhen Investment would pay for the site represents a cost of about 230 yuan per square metre. Anhui Chengyi will retain a 20 per cent stake in the project.

Prevailing prices for villas in Anhui were between 4,000 yuan per square metre and 10,000 yuan per square metre, Mr Zhang said.

Shenzhen Investment said in March it planned to sell more than HK$700 million of rental property assets this year to generate cash to buy land for development.

Shenzhen Investment shares fell 1.26 per cent to close at HK$4.83 on Friday.