Shui On Group is displaying its confidence in the Shanghai property market with plans to redevelop a 52-hectare obsolete area in the city centre into a HK$25 billion commercial-residential-tourism development zone. The proposed investment by the company, which is privately controlled by Vincent Lo Hong-sui, comes at a time when some Hong Kong developers are considering slowing their mainland expansion plans due to unfavourable market conditions. 'Investment return in the short run may not be excellent, but I am very confident in the long-term prospects,' Mr Lo said. The project, located in the Taipingqiao area in the Luwan district, will comprise four development phases. Phase one will provide retail, restaurants, entertainment and tourism facilities in restored houses built in the late 19th and early 20th centuries. Other phases include a group of office buildings targeted at major corporations as well as residential and shopping space. Mr Lo said the first phase, providing 60,000 square metres, was under construction while development progress on other phases would depend on market conditions. Total investment in the first phase, known as Shanghai Xintiandi, is estimated at HK$1.1 billion. Mr Lo said the company had so far invested more than HK$700 million, mainly on site acquisitions and resettlement of residents. A US$45 million syndicated loan provided by HSBC, Bank of East Asia, China Construction Bank's Shanghai branch and Hang Seng Bank indicated bankers' confidence in the project, he said. Mr Lo said he hoped to develop phase one of the project into a tourism centre similar to Singapore's Clarke Quay. The first development phase is scheduled to be completed by 2001 - the year Shanghai will play host to the Asia-Pacific Economic Co-operation forum meeting. The project is adjacent to the memorial house of the First Congress Hall of the Communist Party of China on Xingye Road, which will be transformed into a pedestrian area. Mr Lo said the project was expected to be a focal point for Shanghai, where the group was also developing a sizeable housing project on a 40-hectare site in the Hongkou district. Shui On's other investments in the city include a 26-storey office and commercial development, Shui On Plaza, as well as the City Apartments and City Hotel.