Li Ka-shing's ambitious plans for expanding his property empire into North Point have been boosted with the government asking for a land premium of less than $1 billion for a site where his development company Cheung Kong (Holdings) wants to build a hotel. The government proposal - understood to be $950 million - is likely to be accepted by Cheung Kong as it represents only 68 per cent of what Sino Land paid in last month's land auction for a commercial site in Kowloon Bay. Cheung Kong has plans to redevelop the Fook Lee Godown site in North Point, which has been sitting idle since the company bought it in the mid-1990s, into a 40-storey hotel project. It is adjacent to a 1.47-hectare residential-commercial Oil Street lot which was included in the latest land application list and in which Cheung Kong had previously expressed its interest. The land premium offer for the site, which has a gross floor area of about 465,000 sq ft, translates into $2,043 per square foot or about $1.4 million per hotel room, compared with the hefty $2,988 per square foot Sino Land paid for its $1.82 billion Kowloon Bay site, which can also be developed into a hotel. A government spokeswoman said that as the agreement was not finalised there would be no official comment. Cheung Kong was not available for comment yesterday. 'The company has large exposure in the hotel projects in Hong Kong. It would be part of their existing strategy to expand in the segment,' said Winnie Chiu, a DBS Vickers Securities property analyst. Ms Chiu added that the valuation of $1.4 million per hotel room was reasonable in light of the revival of the tourism industry. Vigers Appraisal and Consulting executive director Tony Chan Tung-ngok said he expected Cheung Kong to apply for the adjacent Oil Street site and buy the neighbouring Asia Cold Storage site to strengthen its development there. In 1999, Cheung Kong proposed a cruise-terminal project for North Point, but the idea was scrapped following strong opposition from environmentalists and politicians.