HONG KONG: Guangzhou Golf in Hong Kong R&F plans to buy $1.3 billion worth of property in Shanghai over two years, entering a market that is dominated by foreign and local powerhouses such as Shimao and a target of government austerity measures aimed at cooling a real estate bubble.

Guangzhou R&F, which has been largely focused on the country’s affluent south and a few northern cities, is counting on resilient demand from wealthy buyers in the country’s financial heart and argues that prices have stabilised after a series of property-buying curbs in the first half of 2006.

The firm has earmarked 14 billion yuan ($1.8 billion) for capital expenditure in 2007, of which about 10 billion yuan would be used for the purchase of land and the rest for construction, Chairman Li Szelim told reporters.

Li reckoned the Shanghai investment could begin yielding a profit in 2009. “We’re attacking Shanghai this year,” Li told reporters. “And in the future, we’ll invest heavily in and around the city to boost our landbank.”

The company would spend about 7 billion yuan this year alone buying land in Shanghai, he added.

Guangzhou R&F, which like much larger rival China Overseas Land is listed in Hong Kong but does most of its business in mainland China, will use its burgeoning Shanghai base as a platform to other cities in eastern China, which like southern China is both a financial and industrial base.

It’s not alone in venturing to new territory. Shanghai-based Shimao is going one step further, potentially investing $2 billion in hotel chains in the Philippines.