A consortium led by Cheung Kong (Holdings) is expected to know the Government's land-premium offer on a sizeable shipyard redevelopment in Cheung Sha Wan by the end of this year. A source close to the consortium said land-premium negotiations had started but it would be several months before the Government made a formal offer. The project would involve the exchange of some small plots of government land that would affect the land premium calculation, the source said. Cheung Kong - manager of the project - last year secured the Government's approval to build a 3.71 million square foot residential-hotel project on Cheung Sha Wan waterfront. About 3,500 flats or about 2.36 million sq ft of residential space were approved for construction on the site. The project is jointly developed by Cheung Kong and five shipbuilding and repair companies, including Shun Tak Holdings and China Merchants Holdings' Yau Lian Dockyards. The source said the consortium was likely to take advantage of the weakened state of the property sector to bargain for a lower land premium when the Government made an offer. Analysts said it was difficult to estimate the projected land premium for the redevelopment. They said the average value could be below $1,000 per sq ft, with reference to the land premium of $1,250 per sq ft for the Lai Chi Kok Amusement Park's residential redevelopment jointly owned by Cheung Kong and Far East Hotels & Entertainment.