Developer Tai Cheung Holdings plans to acquire several luxury residential sites within the next six months, according to chairman David Chan Pun. Mr Chan said after the company's annual general meeting yesterday that it was especially targeting quality sites on The Peak and Island South. 'We don't possess much land bank [but] we have hundreds of millions of cash on hand,' he said. With cash and bank credit available, Tai Cheung had access to more than HK$1 billion to acquire land, he said. The mid-sized developer has not been active in land acquisition in recent years but it bought a small plot for HK$100 million in Chung Hom Kok near Stanley in April's land auction. Mr Chan expected the property market was unlikely to recover in the next two to three years, given poor economic sentiment, serious unemployment and abundant supply of mass residential flats. 'Flat prices in the mass residential market have continued to slide in previous years despite the suspension of home ownership scheme flat sales and land auctions,' he said. Only luxury residential developments would be profitable as the demand was stable, he said. Mr Chan expected to generate a profit margin of up to a 100 per cent from a luxury residential development on the Stanley site. The company would invest HK$160 million to HK$170 million, including the cost of the land, to develop 14 houses of about 2,000 square feet by 2004. He estimated the development cost at about HK$4,000 per square foot and the market value at HK$8,000 to HK$10,000 per square foot. Mr Chan said the company was negotiating to acquire other luxury residential sites with a developable area of about 30,000 sq ft each. He said property development in Hong Kong would remain the core business for Tai Cheung. The company's leasing properties, including hotels, offices and parking spaces, generated annual rental income of more than HK$100 million and would be kept as long-term investments, he said.