Firm eyes property project in Shanghai
CHINA Overseas Land & Investment is negotiating a US$50 million property development in Shanghai for further expansion in the mainland property market.
Undeterred by the slowdown in the China property industry, the mainland-backed company is also pursuing a project in Shenzhen.
Chairman Sun Wenjie said after the company's annual meeting yesterday it was negotiating a deal to develop a 7,800 sq metre site in Luwan district, Shanghai.
He said the site could provide a gross floor area of 250,000 sq metres, part of which was intended to be used as the group's headquarters in Shanghai.
The remainder of the development is intended to be kept for rental purposes.
Mr Sun said his company was also negotiating the development of a 30,000 sq metre site in Shenzhen.
He said the project, intended for investment purposes, could provide a potential floor area of 250,000 sq metres, but it was not finalised yet.
He said the company was attempting to increase its portfolio of investment properties in China, as part of its strategy to enlarge the recurrent income base.
Mr Sun said its major investment property was still the China Overseas Building in Hong Kong, which was expected to generate an annual rental income of about HK$100 million.
He said several of the company's mainland property developments had been designated for rental purposes to expand its investment property portfolio.
He expected the group's rental income from investment properties would increase to about HK$300 million in the 1996-97 financial year, accounting for 30 per cent of total profit.
He also said it was expanding its construction business.
The group plans to release a batch of residential units at a Shanghai project for sale in Hong Kong next month. The average selling price is set at US$1,350 a square metre.