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SCMP Reporter

HUA Du City, 22 kilometres north of Guangzhou, has become a new promised land for property investors, after being chosen the site for the booming city's new international airport.

  North of Guangzhou's Beiyun District, the site of the existing airport, the centre of Hua Du City is only 10 minutes from the new airport's site.

  The rush to acquire land has pushed the prices up to 600,000 yuan per acre from 300,000 yuan for an adjacent lot last year.

  Despite the dramatic rise, it is only about one fifth that of urban area in Guangzhou.

  Hua Du City, meaning Flower Capital, has an area of 960 square kilometres and a population of 560,000. Its relatively cheap land prices have already drawn investors and speculators.

   Other than second-line players, Hong Kong blue chips such as New World Development, Cheung Kong, Hopewell, Sun Hung Kai Properties, Guangzhou Investment and Guangdong Enterprise have also expressed keen interest in Hua Du City.

  New World is the most aggressive so far. It joined forces with Guangdong Enterprise and Guangzhou Investment to build a 32 km airport expressway which cost US$260 million (HK$2 billion).

  Another consortium led by New World and Cheung Kong has also signed a contract to develop a huge residential project south of Hua Du City. It is expected to house almost 70,000 families on completion.

  In Sin Hua Town, Hopewell's Wu family is taking part in an urban redevelopment project, where demolition work has started.

  There are currently 35 domestic and foreign-funded real estate development corporations in Hua Du City. Average residential units for local people are priced at 200 yuan per square foot while those for overseas sales are at $350 per square foot.

  Market demand has softened, but developers regard it as consolidation ahead of a new round of price rises.

    Hua Du City is an important base of light industry and rural economy. During the first half of 1993, it had a total industrial output of 2.3 billion yuan.



Guangzhou airport gives new life to Hua Du City