Developer seeks majority stake in Beijing project for 4.8b yuan Swire Properties, which failed to secure sites in Hangzhou and Chengdu recently, says it will continue attempts to extend its reach to second-tier mainland cities. The property unit of Hong Kong-listed Swire Pacific this week confirmed it would buy the majority stake in a retail-hotel project in Sanlitun district, Beijing, for 4.8 billion yuan, bringing its mainland investment to more than 12.8 billion yuan. The company also has a 97 per cent stake in Taikoo Hui, a four billion yuan office-retail-hotel project in Guangzhou and a 50-50 joint venture with HKR International to build a 10 billion yuan retail-office-serviced apartment project in Shanghai. 'We are going to look for opportunities that will arise in major and second-tier cities,' said Jolyon Culbertson, director and general manager of Swire Properties. Shrugging off government austerity measures to restrict foreign investment, Mr Culbertson said the company's long-term strategy in the mainland market would not be affected by the policy. He said the firm's recent aggressive expansion was due to 'more opportunities in the mainland'. Swire Properties said it had lost out to rivals in bidding for sites in Hangzhou and Chengdu, without giving details. In Hong Kong, increases in Grade A office rents were set to slow after a 20 per cent jump last year, Mr Culbertson said. Rises of 10 per cent this year would not be a surprise, he said. Separately, Hysan Development, the largest retail landlord in Causeway Bay, said tenants had enjoyed bumper sales during the Lunar New Year. Hysan Development executive director Pauline Wong Yu Wah-ling said the company's shopping malls achieved double-digit turnover growth during the Christmas, New Year and Lunar New Year holidays. Growth was higher than last year, she said without elaborating. Mrs Wong declined to indicate if the company would raise retail rents but said rental charges would be in line with market levels. Demolition work at Hysan's Hennessy Centre in Causeway Bay would be completed in the third or fourth quarter of this year, she said. The whole redevelopment will be completed by 2009 or 2010. The redevelopment is part of the company's plan to enhance the values of its property portfolio. Total gross floor area will be 710,000 square feet with half designated for retail space and half for office use.
