New World China Land Ltd plans to start 3 billion yuan (US$362 million) in commercial and residential developments in Shanghai next year to tap rising demand for offices and homes in the city.
The mainland property unit of New World Development Co plans to spend 1.5 billion yuan building a retail and hotel complex in the city's Luwan district and another 1.5 billion yuan on a housing project in the Changning district, said Lisa Leung, the company's regional director of marketing in Shanghai.
New World and rival Hong Kong developers are stepping up investments in Shanghai, betting a property boom in the financial center will continue, fuelled by China's entry to the WTO and the city's hosting of the 2010 World Expo. Real-estate prices in the city have risen about a fifth in two years.
"The office market in Shanghai is still on an upward trend, and will be boosted by the hosting of the 2010 Expo," said Jeff Yau, an analyst at South China Research Ltd, who has a "buy" recommendation on the stock.
"The property market should be generally positive in the coming decade."
Henderson China Holdings Ltd, the mainland property unit of Hong Kong's second-biggest developer, said earlier this month it will speed up its seven projects in Shanghai.
Sun Hung Kai Properties Ltd., Hong Kong's biggest developer, said it is investing HK$8 billion (US$1 billion) in a development in the city's Lujiazui financial district.
To be completed by 2011, the complex will include residential, office and retail space, along with two hotels.
New World China, which started business on the mainland two decades ago, has invested 8.69 billion yuan in seven Shanghai developments since 1997. Its latest two planned projects in the city will be finished within three years, Leung said.
"We have a lot of confidence in Shanghai as there are many foreign companies setting up offices in Shanghai, particularly with the WTO entry," Leung said. "We are actively looking for other locations for suitable projects in Shanghai."
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