Our visit with Shui on Land and presentation by Robin taught us a lot about real estate and the level of control the government plays when it comes to owning land in China. Shui On Land was founded in 1971 by Vincent H.S. Lo, the ‘King of Relationships’ and the 16th richest man in Shanghai. It became listed on The Stock Exchange of Hong Kong in October 2006 and employees 1,300 individuals.
Shui On Land has a land bank of 13 million square metres (over 14 million yards) which is sufficient for 8 years of development. Their core competencies include master planning, property development, property investment, and property management.
Shui On Land created the clean and classy Xintiandi area, which is the cities more famous landmark and metaphor and model for growth with Shui On Land. The Xintiandi landmark was created to drive property value. Shui On Land wants to become the premiere innovative property developer in the PRC.
One interesting thing we learned is that most buildings in Shanghai (other than skyscrapers) are no higher than 34 floors. Once a building is taller than that, there are significantly more requirements that need to be met. This is to build sound structures capable of withstanding events such as an earthquake.
Robin told us that the company cares about three things: Knowledge, Innovation, and Community. What does the government care about? Well, she told us that too.
Basically, they don’t want people to buy property as investments, which explains why property down payments are about 40% for your first place, and about 60% for your second. (If you are wondering whether some people get ‘divorced’ in order to buy two houses for cheaper, they do.) The government also wants to provide affordable housing (to prevent a bubble burst). Chinese people don’t get interest from banks, and put all of their money into housing- even though they don’t ever get to actually own it. I guess they are used to it, but it must be frustrating for foreigners.