Shui On Group, privately controlled by Vincent Lo Hong-sui, is expanding its property interests in Shanghai with ambitious plans to establish an 18,000-unit housing estate over the next 11 years. Rui Hong Xin Cheng, in the Hongkou district, is the company's second large property investment in the city following the completion of the $1.2 billion Shui On Centre commercial development early last year. Development costs of the first-phase residential project will be $1 billion, bringing total investment in the city so far to slightly below HK$3 billion. The company is planning another large housing project in the city. This year the city's total supply of quality residential space is estimated at 4.7 million square metres. Henry Cheng, managing director of the group's subsidiary Shui On Properties, said overall residential supply was tremendous. However, he believed the Rui Hong Xin Cheng development would be welcomed by mainlanders as it had a special market niche. Mr Cheng said the company was building the Hong Kong-style, high-rise apartments for younger, middle-income mainlanders seeking higher-quality living standards. The apartments, which are part-furnished, sell for 500,000 yuan (about HK$465,000) each or 6,500-7,500 yuan per square metre, which Mr Cheng said barely covered development costs. The first phase, comprising 10 blocks of 29-33 stories and 1,800 units, is under way, and the first three blocks are almost completed. Another four blocks would be ready by the end of 1999 or early 2,000, and the building schedule for the last three blocks in the first phase would depend on sales response, he said.