The 18 projects are also likely to generate investment returns of 18 to 20 percent per year upon completion, the same rate of return it is seeing from its finished projects in Shanghai, he said.
Its portfolio of mainland properties should grow to account for 50 percent of Hang Lung's rental revenues in five years, up from just 30 percent now, Chan said.
The increased rental income, combined with the sales proceeds from its residential projects in Hong Kong, are likely to be enough to finance the project over the coming years.
"I can do all 18 projects with no borrowing, potentially I can do that. Of course, I don't know when I'm going to sell all my Hong Kong residential development projects," he said.
"If the market conditions are such that it makes sense for me to drag it out a little, then the cash inflow will be a bit slower. In which case I may borrow some, but it is unlikely."
Shares in Hang Lung have risen almost 37 percent this year, beating a 7percent rise in Cheung Kong (Holdings) (0001), and a 5 percent gain by Sun Hung Kai Properties (0016), its larger rivals. The blue-chip Hang Seng Index has risen about 9 percent. Hang Lung shares gained 0.2 percent Tuesday to HK$27.10.
Hang Lung, Hong Kong's No3 real estate firm by market value, currently has about half of the 18 projects it hopes to complete in the mainland under way, with budgets for these projected at about HK$24 billion, Chan said.
These include commercial complexes in cities including Shenyang, Tianjin, Jinan, Changsha and Wuxi.
While mainland authorities have attempted to cool price gains in major markets with administrative measures, Chan noted these were targeting the residential sector, while Hang Lung's focus was on commercial properties, such as malls and offices.
The company recently raised the number of targeted projects in the mainland to 18 from 12. Chan said that for the time being he was not ready to commit his China team beyond this.
"I'd be happy to do more. The only thing is I don't want to write a check that is too big and [that I] cannot deliver," he said.
The real estate executive expects to fund a large portion of the expansion into the mainland with sales of completed luxury residential developments in Hong Kong. Chan said the sales were likely to happen over the next three years and raise at least HK$20 billion.
With an effectively debt-free balance sheet, Hang Lung is in no rush to sell the properties, he said. But he noted the firm had sold more than 90 percent of the units in its AquaMarine development and about a quarter of the properties in its Harbourside project. But the firm has not sold a single one of the 1,800 units in its Long Beach project.
"I'm not capital-constrained ... the likelihood of the high end property market going up is higher than the likelihood of the market going down. So why bother to sell them so fast?" he said.
Chan said it made sense to then put that capital into the mainland, noting its Shanghai projects were earning 18 to 20 percent annual returns now that they were up and running.
Cheung Kong, meanwhile, expects China to account for a third of its property earnings by 2010, with one executive saying asset price bubbles are encouraging middle class homebuyers.
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