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Mainland developer Shimao Property Holdings  plans  to invest three billion yuan to  build a  mixed-development project in Beijing.

The developer - controlled by Hui Wing-mau, the mainland's second-richest man - yesterday announced that it  had bought a commercial development site at Sanlitun, a  popular night-life area in eastern Beijing's Chaoyang district, for 1.4 billion yuan.

Shimao's development plans for the area will include a five-star hotel, shopping centre  and cultural and entertainment facilities.

The 322,920 square foot site  at Gongti North Avenue  can  provide a total gross floor area of 2.26 million  sqft.

Richard Wong, associate director in the research department at DTZ, said  the project was in a prime Beijing location.  He believed the demand for  luxury hotels in the area was strong because of  scant supply.

However, Shimao's  shopping centre  will face strong competition from  new shopping  developments nearby.

Swire Properties has teamed up with Hong Kong property fund Gateway Capital to develop a retail and hotel project in Sanlitun.

It will be the largest high-end shopping centre  in the area when it is completed this year.  The consortium  paid 4.8 billion yuan for the site.

The Sanlitun commercial site  is Shimao's second acquisition  this year. In February, the developer bought  Beijing Huaping International Plaza for 1.05 billion yuan.

The Shanghai-based developer has expanded aggressively in mainland cities in the past  few years.

Shimao  has bought  five development sites in Beijing, Suzhu, Xuzhou, Hangzhou and Fuzhou  since the beginning of this year at a cost of 6.27 billion yuan.

The five projects can be  developed into residential, hotel, offices and shopping centres  with a total gross floor area of 44.45 million sqft.

According to its annual report, Shimao  had bought development sites with a total gross floor area of 67.8 million sqft as  of the end of last year.

The company also has  developments  in Shaoxing, Wuhu, Yantai, Jiaxing, Changzhou and Shenyang.

The company expects its land bank to stand  at 217 million sqft,  which is sufficient for  development use over  the next six to seven years.

Shimao  and Gemfair Investment, a company wholly owned by Mr Hui,  earlier this month  raised  HK$5.5 billion from a share placement.

Shares of Shimao  yesterday rose 3.05 per cent to close at HK$17.58.



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Shimao Property Holdings

Shimao has mixed-use plan for site in Beijing night-life area