The redevelopment of the Cheung Sha Wan godown site into a residential property is likely to be China Resources Enterprise's (CRE) next big property project. The company's parent, China Resources (Holdings) (CRH), received government approval for the project about two weeks ago. An Lu, a project division general manager, said CRE had contacted CRH about the possible acquisition of the godown site from its parent. Analysts said CRH owned more than half of the redevelopment project, which they estimated was valued at more than $4 billion. They said CRE might get sizeable returns from the project, given CRE's lucrative experience with its major income-earning residential project, Villa Esplanada, in Tsing Yi. Along with the other two property developers, Kerry Properties and Sun Hung Kai Properties, CRH has been engaged in long negotiations with the Town Planning Board over the redevelopment of two Cheung Sha Wan godown premises into a 1.56 million square foot residential property. The green light from the Government may clear the way for the transfer of the godown site to CRE which could help sustain the company's profit growth. The profit contribution from property development for the first half of this year fell to 59 per cent from 63 per cent in the same period last year. Mr Lu said there would be a further slight fall in the proportion as 80 per cent of the income from the sale of the second phase of Villa Esplanada had been booked in the first half. Analysts estimated that it would take at least three years before the residential project in Cheung Sha Wan could be completed. CRE plans to expand its earning power through acquisitions and other investment opportunities, and the Cheung Sha Wan godown site redevelopment project and another CRH-owned asset, China Resources Petroleum and Chemicals (CRPC), are expected to be the targets for CRE's next acquisition. CRPC comprises gas stations and oil storages and is estimated to be worth between $10 billion and $12 billion. MEETINGS
