NEW World Development is stepping up its operations in Tianjin with the signing of a preliminary agreement to develop 7.5 million square feet of a housing project in the southeast of the city. The company was also developing two commercial towers in the Tianjin Port Free Trade Zone with a total investment of US$120 million, mainland government officials said yesterday. New World was taking advantage of Tianjin's policy of focusing on expanding housing development projects to offer better accommodation to low income families, said Tianjin municipality vice-secretary Liu Yulin. Mr Liu said the government welcomed foreign investment on property development and had no plans to slow the progress of property projects. New World has signed a letter of intent to develop the first phase of the proposed mass housing project in Hua Yuan District, Mr Liu said. Phase one, which will be jointly development by New World and the Tianjin city-country construction committee, will provide space of more than 7.5 million sq ft, mainly for residential use. Mr Liu said the total cost had not been finalised because the terms of the development, such as the investment return, had not yet been fixed. The project will provide 19 million sq ft of residential space with an estimated investment cost of four billion yuan (about HK$3.67 billion). Initiating housing construction projects to accommodate more low income families has been central to the city's property development programme of late. The scheme is now in full swing in Tianjin with a completion of a large number of housing projects covering a total gross floor area of 24.5 million sq ft last year. The government would release 10 square kilometres to rehouse thousands of residents and for commercial development this year. Apart from the development in the city centre, the government is aggressively developing new economic development area and free trade zone in the fringe area. New World has obtained the rights to develop a plot in the Tianjin free trade zone.