New China Homes set $116M project.

With the American lifestyle becoming increasingly popular in China, New China Homes Ltd has announced plans for a $116 million mixed-use project near Beijing the second development the company has under taken in the country since 1997.

The project called Millenium Towers, will be located in an area called China's "Silicon Valley," Zhong Guan Cun, which is six miles from Beijing's central business district. It will contain four residential towers, several smaller apartment buildings and two 24-story commercial towers on about 10 acres. With Millenium Towers and California Gardens -- New China Homes first development in Shanghai -- the company is hoping to capitalize on China's emerging home-ownership market.

"I think there's a future in building homes in China," said Charles Stein, New China Homes' chairman of the board. "We expect that our development efforts in Beijing will be met with great enthusiasm."

Formed in 1997, New China Homes is a real estate holding company that conducts business through its 98-percent-owned operating subsidiary, Shanghai Chingchu Property Development Company. A substantial equity holder in New China Homes is parent company Far East Consortium. New China Homes specializes in serving niche markets and has offices in New York, London, Hong Kong, Shanghai, Beijing, and Guangzhou.

China's political and economic climate is rapidly changing, and New China Homes is hoping to build homes that will accommodate the country's growing appetite for western products and services. The Chinese government has abandoned past policies of supporting the construction of public housing and, instead, is encouraging private-sector construction and private home ownership with tax incentives. Residents can obtain bank mortgages at rates of 4.5 to 6 percent to finance 80 percent of new home purchases, according to New China Homes officials.

Located eight miles from Shanghai's central business district, California Gardens is China's first American-style suburb. The development is located on 350 acres and contains 4,500 townhouses averaging 1,600 square feet, and 1,300 apartments averaging 1,000 square feet. Among amenities offered are schools, sports and conference facilities, a 24-hour medical clinic, retail shopping, restaurants, and a country club. Homes typically sell for $120,000 to $130,000 and are sold to members of China's growing middle-class, officials said.

The current average per-person living area in Shanghai is about 43 square feet, a fraction of Singapore's 400-square-foot average and the United States's 540-square-foot average. China's goal is to increase the average nationwide to 100 square feet per person, according to New China Homes.

"We've been able to sell our homes quickly," Stein said.

While supporting both projects, the Chinese government has not been a development "partner" on either project. Unlike other companies conducting business in China, New China Homes has not "bought their way into the game," noted one New China Homes executive.

The government, however, has had input into the project. With Millenium Towers, the commercial component of the project was added at the suggestion of Chinese officials, developers said.

The plans call for two commercial "smart" buildings featuring voice, video, and data communications technology to accommodate the high-tech companies expected to move into the space. The buildings will also feature state-of-the-art energy, lighting, and power control systems, developers said.

New China Homes expects that the commercial space will be absorbed quickly, particularly since it will be located in an area where 17 of the most prominent Chinese universities are located. Major multinational companies, like Microsoft and Siemens, are located in close proximity to Millenium Towers.

"There is a need for this type of space," Stein said.

New China Homes is still seeking $5 million in financing from Taiwanese investors and construction will not begin until the financing has been secured, Stein said.

The 840 apartments planned for the project will be housed in "smart" buildings that include services such as direct Internet access, low-cost phone service, satellite and cable television, security services, and telemedicine.

"As China's economy grows stronger, and as the country becomes a full participant in the World Trade Organization, the niche markets for home buyers will undoubtedly expand," Stein said.