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Sun Hung Kai launches Shanghai project
By Alex Frew McMillan
HONG KONG, China (CNN) -- Developer Sun Hung Kai Properties says it will invest around HK$8 billion ($1.0 billion) in a project in Shanghai. The development will include a hotel, as well as office, retail and residential space. The move comes the same week another Hong Kong developer, HKR International, said it will spend 4 billion yuan ($483 million) in its own redevelopment project in Shanghai. (Full story) Universal is also reportedly set to announce it will build an $870 million amusement park in Shanghai that could open as early as 2006. Development in the coastal city is booming at a time Hong Kong's property market is in the doldrums. Hong Kong property prices have fallen around 65 percent since its bubble burst after the city's handover to China in 1997. Shanghai was chosen earlier this week as the site for the 2010 World Expo. (Full story) Sun Hung Kai, which has until now resisted heavy investment in mainland China, will develop around 4.5 million square feet next to the Jinmao Building, in the Luijiazui neighborhood of the gleaming-new Pudong business district. Due to finish by 2011Sun Hung Kai expects to complete the first portion of the project in 2007, with the whole three-phase development wrapping by 2011. China's booming economy, expected to grow around 8 percent this year, has led to heavy property development, often speculative. That has prompted outgoing Premier Zhu Rongji to warn that the mainland may be developing a bubble of its own. But Sun Hung Kai management said it is guarding against that possibility by choosing to develop in a strong location. Chairman Raymond Kwok said Thursday he expects the company to sell 6,200 apartments next year, bringing in more than HK$12 billion ($1.5 billion) in sales. The company has generated HK$15 billion in apartment sales in the first 11 months of 2002. After rising 0.49 percent on Thursday, shares in Sun Hung Kai are down 0.98 percent at HK$50.50 at the lunch break on Friday, mirroring the Hang Seng index's 0.99 percent decline.
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