New World Development is to enlarge the second-phase residential portion of its Beijing New World Centre in a shift away from its original office-orientated plan. Peter Leung Cheung-keung, general manager of Kiu Lok Property Services (China), a subsidiary of the property conglomerate, said market trends indicated more demand for residential developments. He said the second phase of Beijing New World Centre would mainly feature serviced apartments but it would also have a small proportion of office space. The company was still awaiting development approval from the Beijing municipal government for the second phase of the pro-ject. It is understood it will be about half the size or more of the first phase, which has a total gross floor area of 1.68 million square feet. Analysts said increasing the residential portion was a logical move. Mr Leung said 1996 to 1997 would be the most difficult period for the real estate market in view of the substantial amount of new office space coming on stream. According to New World's research figures, a total of 9.9 million sq ft of new office space is expected by the end of the year and another 8.4 million sq ft in 1997. New World said the Beijing government estimated new office take-up by foreign-funded joint ventures in 1997 at 8.6 million sq ft. The first phase of Beijing New World Centre, in Chongwen district, cost 2.3 billion yuan (about HK$2.13 billion). It is the company's largest development in Beijing. It comprises twin office towers, a block of serviced apartments and a 750,000 sq ft podium. The project is a joint venture between the China Ministry of Electronic Industry, the Beijing Chongwen district government and New World Development (China). It forms part of the redevelopment of the city's Chongwen district into a modern area catering to domestic and foreign investors and consumers. Mr Leung said the company would be involved in redeveloping the 5.4-hectare site. He said it would also be investing 700 million yuan to widen Chongwen Menwai Street. 'In order for commercial activity to flourish, you need to improve transport.' Mr Leung said to date only 182,988 sq ft of gross floor area of the five-storey retail podium were available for rent. New World Department Store would occupy another 182,988 sq ft and the company would co-operate with the Chongwen district government to open another department store, he said. The fourth storey of the mall, which is scheduled for completion in April 1997, would be a 'computer world' and the fifth a food court. Of the twin office towers, 70 per cent of the southern block has been sold. The company was considering holding the northern block for long-term investment although selling floors has not been discounted.