Kerry Properties will release a Shenzhen luxury residential project worth 900 million yuan (about HK$843.48 million) for sale next year, according to joint managing director Wong Siu-kong. Mr Wong said Kerry would invest 500 million yuan in the 400-unit project and aimed at selling the property at 10,000 yuan per square metre. The project, with 90,000 sq metres of residential area, is in the Futian district near the Shenzhen Bay reclamation sites to be auctioned next month. Construction is under way. Kerry secured the Futian site last year for HK$180 million, representing an accommodation value of about HK$178 per square foot. Mr Wong said the project, which was due for sale in the fourth quarter of next year, had better community facilities and transport links than the sites to be auctioned. He said Kerry also was interested in bidding for the three Shenzhen Bay residential sites but the facilities and transport links for the area had to be improved. He also was concerned that the land-disposal volume in Shenzhen could be a little too large. Mr Wong said Shenzhen's high-end residential property prices could rise 5 per cent to 10 per cent next year but mid-range product supply was too high. He said Shenzhen's purchasing power for luxury properties was strong, with the city's average income for Shenzhen residents higher than that of Shanghai and Beijing. Luxury properties were also mainly taken by locals. With convenient marine and land transport links with Hong Kong, the city most probably would be the target of Hong Kong people wishing to buy properties in mainland cities. Mr Wong felt Hong Kong and Shenzhen would be better off if co-operation and integration of the two places went deeper. He said the two cities had few overlapping characteristics - Hong Kong was strong in financial services, much stronger than Shenzhen. Hong Kong's manufacturing was declining while Shenzhen was growing in this sector. Apart from the Shenzhen project, Kerry is developing two Shanghai projects. Work on the 60,000-sq metre Central Residences phase two is under way, while construction on the 80,000-sq metre Kerry Everbright City is due to start next year. Mr Wong said the two projects would require investment of 600 million yuan. Construction on another Shanghai project, at Yan An Zhong Road, would start in the second half of next year. Kerry secured this project earlier this year for a land cost of US$27 million. Buildable floor area is 68,470 sq metres. Mr Wong said pre-sales for the Shanghai projects would start in the second half of 2003. He said Kerry would expand its exposure in Shanghai, but cautiously, because of the highly competitive environment on the mainland. The firm would favour high-end residential properties rather than office and retail developments.