HANG Lung Development is spearheading a US$500 million property project in Shanghai in partnership with Henderson Land Development and Hysan Development. Hang Lung, with its property investment arm, Amoy Properties, is taking a 42 per cent stake in the development above the planned Xujiahui station in the Shanghai underground railway network. Henderson Land owns 23 per cent, while Hysan holds 15 per cent. The remaining 20 per cent is owned by Shanghai Xuhui District Real Estate Corp. Hang Lung chairman Ronnie Chan Chi-chung signed the joint-venture contract in Shanghai on Thursday. Speaking after returning from Shanghai yesterday, Mr Chan said that of the US$500 million investment, US$160 million would be for land premium and resettlement of residents. He said the project would comprise four residential blocks, two office towers and a 130,000 square metre shopping centre on a 50,788 sq m site. The development, to be named Xujiahui Centre, will have a total gross floor area of 340,000 sq m, making it one of the biggest property projects in the city. Mr Chan said the participation of Amoy mainly stemmed from its intention to retain the shopping centre as a long-term investment property. Hang Lung and Amoy would share the 42 per cent interest almost equally. He said Hang Lung was sticking to its established conservative policy for expansion, and its investments in China would focus on property projects in major cities. ''It's impossible to spread investments throughout China, which is such a big country,'' said Mr Chan. ''We'd like to pick the best sites in the best cities for our investments. Shanghai is our first choice.'' The Xujiahui Centre is Hang Lung's second property project in Shanghai and in China. The first project is the smaller development of a 42,300 sq m site in Hongkou district. Mr Chan said Hang Lung was also negotiating for potential projects in Guangzhou and Beijing, adding that its investments in China would account for less than 10 per cent of the group's total assets. Hang Lung, Henderson Land and Hysan have formed an investment vehicle, Country Link Enterprises, for the project. Mr Nelson Yuen Wai-leung, managing director of Hang Lung, said half the US$160 million for land premium and resettlement costs had been paid, with the other half payable upon completion of resettlement by the Shanghai authorities. He said the project would have great potential for development because it would be linked to the underground, the first phase of which is due to open in May or June. The residential and office blocks will be offered for sale, and Hang Lung will be project manager for the whole development, due for completion in 1996. Pre-sale of the first batch of properties is expected in mid-1994. Meanwhile, Mr Chan said Amoy Properties had about HK$1.6 billion of bank borrowings, considered low relative to the property investment group's equity. He expected the company to generate a total rental income of about HK$1.6 billion from its investment properties in Hongkong this year. Hang Lung executive director Alfred Li said Amoy would continue on its acquisition trail for quality properties following a series of purchases including the Standard Chartered Bank Building. He said the recent issue of bonus warrants, if fully exercised in 1995, could raise about HK$1.7 billion to HK$1.8 billion for Amoy's long-term expansion. The company's 12,500 sq m Peak Galleria shopping centre on the Peak, due to be ready for occupation in August or September, is expected to generate annual rental income of between $80 million and $100 million for Amoy.