Developer steps up delta expansion
Sun Hung Kai Properties, Hong Kong's largest developer by market capitalisation, will invest about two billion yuan in a commercial-residential project in Suzhou, significantly expanding its footprint in the populous Yangtze River delta region.
'We are now working on the master plan for the project,' said Alfred So Chung-keung, executive director of SHK Real Estate Agency, after the group bought three adjacent sites in Suzhou earlier this month for about 1.54 billion yuan, or an accommodation value of 353 yuan per square metre.
Mr So said the three plots of land with a total gross floor area of 4.36 million square metres will be used to build low density luxury housing, offices and a hotel.
The group also acquired a 467,200 sq-metre commercial site in Hexi district in Nanjing, for a total consideration of 833 million yuan earlier this month.
Both the projects in Suzhou and Nanjing were still in the planning phases and there was no timetable for launch dates yet, said Mr So.
In addition to the two newly acquired sites, Sun Hung Kai Properties also has projects underway in Hangzhou and Wuxi in Zhejiang province; and in Shanghai. Hangzhou MIXC, SHK's joint venture project with China Resources (Holdings), has secured tenants for more than half of the shops in the shopping mall.
The six billion yuan Hangzhou MIXC development is a residential-commercial project located in Qianjiang New City, a new central business district planned by the municipal government. It has a total gross floor area of 800,000 square metres of flats and serviced apartments, shops, offices and hotel space.
The first phase consists of a shopping mall and three blocks of residential towers offering around 600 units. All will be completed by mid 2009.
Sun Hung Kai said earlier this year in a quarterly newsletter that the development would offer around 700 residential units with floor spaces ranging between 1,000 and 4,000 square feet.
'About 51 per cent of the 130,000 square metres gross leasable area has been leased,' said Kong Xiaokai, general manager of China Resources Sun Hung Kai Properties (Hangzhou). Anchor tenants include Thailand's Central Department Store, film conglomerate Golden Harvest, Singapore's Food Republic, Toys 'R' Us, and Nike. He declined to disclose rental rates but said tenants will be charged a basic rent and a profit sharing component.
Presale of 240,000 square metres of units in the residential towers will start next May, said Mr Kong. However, it was too early to set selling prices, which would depend on market sentiment at the time of the launch.
Average prices for private housing in Hangzhou have risen about 60 per cent from some 9,000 yuan per sq metre in January to nearly 15,000 yuan per sq metre in November, according to property consultant DTZ. Flats located on the waterfront of the Qiantong River are now selling at around 30,000 yuan per square metre.
Mr Kong said China Resources is now planning its third and fourth MIXC projects in Shengyang and Chengdu, which would probably not involve a joint venture project or at least would leave SHK the dominant shareholder in the project.
The land will be used to build luxury housing, offices and a hotel
The Yangtze delta project will have a gross floor area of, in square metres: 4.36m