A NEW business and commercial centre is emerging in the western area of Beijing in the form of a seven billion yuan (about HK$6.51 billion) redevelopment project in Xidan North Avenue. The massive redevelopment is being undertaken by Beijing Jingyuan Property Development Company, 60 per cent owned by Hong Kong-listed Asia Securities International. The whole project involves the development of 10 sites on 20.85 hectares of land, providing a total gross floor area of more than 6.4 million square feet. Ronald Poon, managing director of Ronald Poon Consultants - the project's architect and master planner - said the Xidan project was proceeding smoothly despite China's two-year old austerity drive. He said the developer was working on three sites which were scheduled for completion within three years. The three sites, spanning an area of about 340,000 sq ft, would provide up to 4.3 million sq ft in floor area, with office premises on the top retail podium and car-parking levels, he said. About 55 per cent of the developable area in the three lots would be office space and 22 per cent would be shopping premises, plus about 1,200 car parking spaces. The developer also plans to build a hotel, serviced apartments, commercial and retail complexes and to provide infrastructure facilities in the other sites. Beijing Jingyuan also sold a 31,420 sq ft site to a mainland company at the end of 1993. A 141,000 sq ft plot was sold to Bank of China which will build a 1.8 million sq ft headquarters there. Mr Poon said the bank's headquarters building would boost the development of Xidan's role as a financial hub in Beijing while many state banks also planned to set up office in nearby Chang An Avenue. The redevelopment project would transform the Xidan west area into a modern integrated commercial centre, he said. Beijing Jingyuan would be responsible for developing municipal infrastructure in the redevelopment area including widening Xidan North Avenue to 70 metres to facilitate traffic flows, he said. Beijing Jingyuan intends to finance its development costs out of the proceeds from pre-sales of parts of the properties in the project. Construction of the project started in 1994 and is expected to be completed in 2002. The project will be linked to the proposed underground shopping arcade at the new underground railway network's Xidan station in future. Xidan is a popular commercial area in Beijing, described by some property agents as similar to Hong Kong's Tsim Sha Tsui. Analysts said Xidan, in west Beijing, and Wangfujing, in east Beijing, were both under large-scale redevelopment and they would become major business and commercial centres in the capital city. Prices and rents of office and retail properties in Beijing have stayed at high levels due to limited stock, but a large new supply is expected over the next few years. Some analysts cautioned that the growth rate of office and retail property values was likely to slow down with the increases in supply but another influx of foreign companies could fuel demand. Monthly rents in Beijing are estimated presently at US$7.9 per sq ft for offices, $7 per sq ft for quality apartments and $22 per sq ft for street-level retail premises.