Chinese Estates To Build US$230 Million Project

Written on January 26, 2007 by admin

Chinese Estates Holdings (0127), controlled by Joseph Lau Luen-hung, has set aside HK$1.8 billion to build the first phase of its planned Macau housing project.Chinese Estates executive director Lau Ming-wai - the son of Joseph Lau - said Thursday 680 luxury apartments will be completed in the first stage between 2009 and 2010.

The project will be completed in four stages before 2013.

The company has secured a HK$1.6 billion syndicated loan to fund the construction of the phase one. The 3.5-year loan is pitched at 65 basis points over the benchmark Hong Kong interbank offered rate.

The first phase will cost between HK$1,000 and HK$1,500 per square foot to build, Lau said after a signing ceremony for the syndicated loan.

Chinese Estates paid HK$1.4 billion for the Taipa development site, which will yield a total gross floor area of five million sq ft for the entire project.

A spokeswoman confirmed the company also intends to enlarge the project size by increasing the gross floor area, but did not provide details.

“We are applying for an additional floor area, which can be included in the second, third and fourth phases if plans to increase the floor area are approved,” she said.

The company expects the land premium amount for the proposed additional floor area will not be substantial due to lower land costs in the enclave.

It aims to launch uncompleted flats in the first phase for pre-sale this year.

The price will depend on market conditions in Macau, where luxury apartment prices range from HK$3,500 to HK$5,000 psf, Lau said.

The project includes 24 residential buildings and one serviced-apartment block, to be built on an 847,000 sq ft site. It will provide 3,500 units with sizes ranging from 450 to 2,900 sq ft.

Lau said Macau is becoming a world-class gaming and tourist destination.

“Increases in labor and personal incomes have created significant demand in the property sector,” he said. “In particular, the high-end luxury segment is experiencing both pent-up demand and a supply shortage.”

Shares of Chinese Estates fell 0.8 percent Thursday to close at HK$10.78.

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