CRE eyes Cheung Sha Wan storage site

PUBLISHED : Friday, 05 December, 1997, 12:00am
UPDATED : Friday, 05 December, 1997, 12:00am

Red chip China Resources Enterprises (CRE) is bidding for phase two of the Cheung Sha Wan wholesale market to develop cold storage warehouses.


The company will submit its bid to the Government under a tender which closes today.


The site, measuring 98,982 square metres, is earmarked for building a fresh food wholesale market, a container handling complex and an industrial building or offices.


A source said the company considered the site ideal for a fresh food cold storage business because it is next to a pier.


CRE expects total investment, including the land premium, to be about $1 billion.


'If CRE secures the site, the company will relocate some of its existing cold storages and warehouses to Cheung Sha Wan and redevelop the company's old cold storages,' he said.


Cold storage and warehousing are among CRE's key businesses.


The source said if CRE failed to win the tender, it would not have an impact on business development.


'The company has sufficient space to meet warehousing demand now,' he said.


Meanwhile, CRE managing director Frank Ning Gaoning said negotiations to buy a brewery with an annual production capacity of 200,000 tonnes, in Jilin province, was expected to be concluded this month.


'The project will involve several hundred million yuan and we can finance it internally,' he said.


After buying the brewery, CRE's annual production will increase to 800,000 tonnes.


CRE has signed an agreement with Esprit Asia Holdings to set up a $125 million joint venture to develop the mainland fashion retail and wholesale business. Of the venture, CRE owns 60 per cent and Esprit owns the rest.


The two parties plan to double the mainland sales network from the present 100.


A CRE spokesman noted that the joint venture had obtained a licence to operate a wholesale venture for China - a business which is barred to foreign investors.


Initially, the venture will sell Esprit branded fashions but this will later extend to other brands.


The spokesman said CRE also would apply for pre-sale consent for phase two of Villa Esplanada on Tsing Yi Island.


'Hopefully, the sale may start in the middle of next year and the price will be at this year's pricing of an average of $7,000 per square foot. However, the final price depends on market conditions,' he said.


It is expected the phase two portion of the project will realise about $4.5 billion in cash for the developing consortium, which is 55 per cent held by CRE with the remainder equally shared by Sun Hung Kai Properties and Cheung Kong.