Jan. 25 (Bloomberg) -- Chinese Estates Holdings Ltd., a Hong Kong builder controlled by billionaire brothers Thomas and Joseph Lau, said it will start to sell its first Macau project as soon as this year.

The investment in the 3,500-unit residential project on Taipa Island includes HK$1.4 billion ($179 million) for the land and construction costs of between HK$5 billion and HK$7.5 billion, Executive Director Lau Ming-wai told reporters today.

``We are very optimistic on Macau's property market,'' said Lau. ``Macau's economy is growing at a faster pace than Hong Kong's economy.'' The company plans to sell the units at between HK$3,500 and HK$5,000 per square foot.

Property prices in Macau, the only place in China where casinos are legal, have climbed because of economic expansion brought about by soaring gaming revenue. Foreign investors are staking $20 billion on growth after the city ended billionaire Stanley Ho's gaming monopoly in 2001.

The city's gambling revenue started to surge in 2004, when Sheldon Adelson's Las Vegas Sands Corp. and Galaxy Casino SA four-decade gaming monopoly of billionaire Stanley Ho. Gross domestic product increased 11.4 percent in the third quarter, according to the government's Web site.

Shares of Chinese Estates fell 0.7 percent to HK$10.78 as of 3:33 p.m. in Hong Kong. The stock has risen 14 percent this year, outperforming a 3.5 percent gain by the benchmark Hang Seng Index.

Four Phases

The Taipa project will be completed in four phases, with the first phase scheduled to be sold this year and with a target completion date of 2009. The other phases will be completed by 2013, Lau said. The project has a gross floor area of 5 million square feet and will cost from $1,000 to $1,500 per square foot to build, he said.

Chinese Estates will pay HK$1 million for a 70 percent stake in Moon Ocean Ltd., which owns the building site on Taipa Island, the company said in a statement in January last year. The Hong Kong developer will also pay 684 million Macau patacas ($85 million) still owed for the land and will take over a HK$750 million loan used to help pay for the site, the statement said.

Moon Ocean has signed HK$1.6 billion in syndicated loans with seven banks, including Overseas-Chinese Banking Corp., to fund the project, Chinese Estates said.

Macau is a former Portuguese colony that returned to China's control in 1999 and is now a semi-autonomous special administrative region -- the same legal arrangement as Hong Kong, across the mouth of the Pearl River.

The city has a population of about 500,000 compared with Hong Kong's 6.9 million. Macau is also one 40th the size of Hong Kong in area. Macau, a gambling hub with 24 casinos, attracted 22 million visitors last year, an increase of 17 percent from 2005.

To contact the reporter on this story: Clare Cheung in Hong Kong at scheung4@bloomberg.net.

Last Updated: January 25, 2007 03:10 EST