Kerry Properties will invest an initial 300 million yuan (about HK$281 million) in a logistics-related project in Beijing's Chaoyang District, according to chief financial officer Chew Fook Aun. Mr Chew said the project, in Shi Ba Li Dian, required an initial investment of 1.5 billion yuan, of which Kerry Properties would contribute 20 per cent. He said work on relocation of the present occupants of the site was under way. The project occupies three million square metres of land. It is being undertaken by a joint-venture company, Beijing BHL Logistics, whose shareholders also include Beijing Holdings, Beijing Holdings Investment Management, Beijing Hua Yuan Group and Beijing Redstone Industries. The joint venture is responsible for the provision of basic utilities to the site boundary. The land will subsequently be parcelled out to individual project companies to be formed for development. Kerry Properties has been expanding its logistics business in the region in recent years. Mr Chew said the group had no concrete plan to spin off its logistics unit at this stage but would concentrate on establishing a good logistics network. Meanwhile, Mr Chew said the company's Constellation Cove luxury residential project in Tai Po would be launched for sale in the first half of this year, but a timetable had yet to be finalised. Kerry also had 100-plus units at Ocean Pointe in Sham Tseng left to sell, he said. Mr Chew said the residential market was doing well, especially sales of smaller-sized flats. Kerry's Jupiter Terrace in North Point had secured a satisfactory response. The developer would consider releasing additional Jupiter Terrace units for sale at higher prices but that would depend on market response. The project, with 188 units of 628 square feet to 738 sq ft, was 70 per cent sold. Mr Chew said home-purchases were being driven by lower interest rates, despite the weak economic situation. Although deflation and unemployment were worsening, the economy was expected to improve in the second half. He said the likelihood of further price falls was low. Mr Chew said Kerry Properties had no plan to dispose of its rental properties, as most were fully let. The performance of its luxury portfolio was stable and fairly unaffected by the September 11 terrorist attacks in the United States. The group was increasing its land banks in Hong Kong and China, he said. Land acquisition in Hong Kong was somewhat slower and some land premium negotiations were continuing. Kerry Properties yesterday signed a five-year unsecured HK$4.5 billion syndicated loan facility with 17 banks. Mr Chew said the group's gearing ratio stood at 30 per cent and this would not be affected much by the syndicated loan because the proceeds would be mainly used for refinancing. The facility, with an interest rate of 0.4 per cent per annum above the Hong Kong inter-bank offer rate, has a three-year revolving period, with the outstanding amount to be converted to a term loan at the end of the three years.