CHINA Overseas Land & Investment will generate a healthy cash flow of about HK$2 billion from property sales this year. Despite a consolidation of Hong Kong's property and stock markets, and China's economic austerity policy, company chairman Sun Wenjie said the group continued to flourish and was proceeding prudently with its diversification in property and construction. He said China Overseas had to go with the mainstream on property sales. He said he believed the residential market was about to bottom out and predicted that prices would rebound. China Overseas was looking for opportunities to acquire land for development, he said. The company had bid at a government land auction last month but it was beaten by other developers. On China's planned land appreciation tax, Mr Sun said the levy would not have any material impact on the company as it had few new mainland property projects. He said the tax aimed to discourage speculators rather than hamper developers so the long-term prospects for China's real estate market remained positive, particularly in the wake of the recent consolidation. China Overseas had reported strong sales for its property projects in Shenzhen and Shanghai. Mr Sun said three residential blocks in Hai Hua Garden in Shanghai were almost sold out and the fourth block would be released soon. This year China Overseas had secured seven development sites worth HK$2 billion in Hong Kong, Guangzhou and Shenzhen. 'Since our inception, we have invested in 70 development projects in Hong Kong, Shanghai, Guangzhou and Shenzhen, with total investment amounting to $32 billion, of which $13 billion is attributed to our company,' he said. 'Currently, we have 31 property projects under development with an estimated investment totalling $3 billion.' The group yesterday signed a US$45 million syndicated loan with seven banks led by Mitsubishi Bank. The 21/2-year term loan, with an extension option for a further two years, carries an interest rate of 1.375 percentage points over the three-month London interbank offered rate. Mr Sun said the loan would be used as additional working capital for its business expansion. Apart from property, he said the company had secured 22 construction and management contracts worth HK$4.3 billion this year. He said that in the past 15 years, the company had undertaken 248 construction contracts worth $23.9 billion. The group had 18 management contracts including four relating to the Hong Kong airport programme. He said: 'In addition, we are working on 28 construction contracts which includes the police headquarters complex, China Merchants Building in Shanghai, Hing Tung Estate Phase One, and others.' He said these contracts were worth $12 billion. China Overseas has also diversified into power stations, cement production and warehousing.