Shimao has mixed-use plan for site in Beijing night-life area
Mainland developer Shimao Property Holdings plans to invest three billion yuan to build a mixed-development project in Beijing.
The developer - controlled by Hui Wing-mau, the mainland's second-richest man - yesterday announced that it had bought a commercial development site at Sanlitun, a popular night-life area in eastern Beijing's Chaoyang district, for 1.4 billion yuan.
Shimao's development plans for the area will include a five-star hotel, shopping centre and cultural and entertainment facilities.
The 322,920 square foot site at Gongti North Avenue can provide a total gross floor area of 2.26 million sqft.
Richard Wong, associate director in the research department at DTZ, said the project was in a prime Beijing location. He believed the demand for luxury hotels in the area was strong because of scant supply.
However, Shimao's shopping centre will face strong competition from new shopping developments nearby.
Swire Properties has teamed up with Hong Kong property fund Gateway Capital to develop a retail and hotel project in Sanlitun.
It will be the largest high-end shopping centre in the area when it is completed this year. The consortium paid 4.8 billion yuan for the site.
The Sanlitun commercial site is Shimao's second acquisition this year. In February, the developer bought Beijing Huaping International Plaza for 1.05 billion yuan.
The Shanghai-based developer has expanded aggressively in mainland cities in the past few years.
Shimao has bought five development sites in Beijing, Suzhu, Xuzhou, Hangzhou and Fuzhou since the beginning of this year at a cost of 6.27 billion yuan.
The five projects can be developed into residential, hotel, offices and shopping centres with a total gross floor area of 44.45 million sqft.
According to its annual report, Shimao had bought development sites with a total gross floor area of 67.8 million sqft as of the end of last year.
The company also has developments in Shaoxing, Wuhu, Yantai, Jiaxing, Changzhou and Shenyang.
The company expects its land bank to stand at 217 million sqft, which is sufficient for development use over the next six to seven years.
Shimao and Gemfair Investment, a company wholly owned by Mr Hui, earlier this month raised HK$5.5 billion from a share placement.
Shares of Shimao yesterday rose 3.05 per cent to close at HK$17.58.