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Peggy Sito

Hongkong Land Holdings has made its first foray into Macau's property market in a joint venture with Shun Tak Holdings to build a $6 billion residential-retail-hotel project on the waterfront.

Robert Wong Yau-chung, a residential property executive director of Hongkong Land, said the development - with a gross floor area of 2.6 million square feet - 'is definitely not our last project in Macau'.

The project, which will not include gaming, is expected to be completed in 2009.

Mr Wong said the company had no timetable to announce its next Macau move.

Central's biggest landlord, lured by Macau's bubbling economy which grew 8.2 per cent in the second quarter, said it had agreed to pay Pansy Ho Chiu-king, a daughter of Shun Tak chairman Stanley Ho Hung-sun, $638.5 million in cash for a 49 per cent stake in a 197,660 sq ft site.

Ms Ho is also the managing director of Shun Tak.

The site is adjacent to the casino-hotel complex MGM Grand Paradise, a 50-50 venture between the United States-based MGM Mirage and Ms Ho.

As part of the arrangement, Shun Tak would acquire the remaining 51 per cent stake from Ms Ho for $664.6 million, said Daisy Ho Chiu-fung, a deputy managing director of Shun Tak and sister of Ms Pansy Ho.

The consideration, subject to the final size of the development, will be settled by an issue of new shares.

Shun Tak said it would issue between 89.7 million and 100.6 million shares at $6.81 each to Ms Pansy Ho for the purchase.

Neither party would disclose the investment cost for the joint venture but Shun Tak said in yesterday's announcement that its 51 per cent stake was estimated to be no more than $2.9 billion, including land cost.

The development will incorporate an estimated 1.9 million sq ft of residential and serviced apartments, all with a view of Nam Van Lake and Macau Tower.

It also includes about  380,000 sq ft of retail  space on the lake front that will be managed by Hongkong Land and a 320,000 sq ft, 210-room, five-star hotel, which will be managed by Mandarin Oriental Hotel.

Mandarin Oriental  manages Mandarin Oriental Hotel in Macau, which is equally owned by Shun Tak and the hotel group.

'There will be no gaming element in this development complex,' Mr Wong said.

The gaming business was not the company's investment strategy, he added.

He said the project's location would be at the heart of the Macau casino district.

Not far away is the Lisboa hotel casino, which is owned by Mr Ho, and MGM Grand Macau, which is slated to open in late 2007.

The project is expected to be approved by the Macau government in a few months.

Mr Wong believes Macau will see a robust demand for quality homes despite concerns over the fast rising prices.

'The outlook is good and that is why we see other Hong Kong developers  going into the market,' he said.

Henderson Land Development has a $4 billion residential-retail-hotel complex in the Taipa reclamation area in the pipeline while Kerry Properties is planning to build a high-end residential project in Cotai with a gross floor area of at least 2.8 million sq ft.

Hongkong Land bets $6b on Macau deal



Hongkong Land stakes $6b on Macau with Shun Tak