Professional Business Marketing ? Vanke accelerating overseas foray

By Yang Yangteng, Shen Zejin

After working with Hong Kong?s New World Development Company Limited in acquiring the Tsuen Wan property, Vanke has made another move in its international business: joining force with Tishman Speyer, Vanke obtained the property at 201 Folsom Street in San Francisco, marketing the company?s first step in USA?s real estate market.

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According to the announcement jointly made by Tishman Speyer and Vanke, the 201 Folsom Street properties will be high-rise luxury apartment projects of two adjoining residential condominium buildings of 37 floors and 42 floors respectively, consisting of 655 condos in total.

Entering USA is no accidence

On February 28, Vanke convened its 2012 Business Presentation Meeting. When talking about the partnership with Tishman Speyer, Yu Liang, president of Vanke, said that Vanke will hold 70 percent of the joint-venture, and the reason why they had chosen 201 Folsom Street is that it is a ?really good piece of land?.

Yu Liang suggests that Vanke?s entering the US market is no accidence. In its development history, Vanke has now completed its third 10-year plan, namely to become an outstanding company in China. In Vanke?s forth ten-year plan, its goal is to become an outstanding company internationally, and entering the US market is an important step Vanke takes towards this goal.

When talking about why Vanke has chosen to set foot in the US, Yu Liang said that Vanke had sent seven teams to seven different regions around the world to carry out on-the-spot investigation and research two years ago, and had chosen USA as the second stop of its international adventure. The reason is that America?s housing market is similar to that of China, both having a vast territory, clear geographic division, and a huge market volume. Besides, working with Tishman Speyer will help Vanke to avoid problems like unfamiliarity with the market, and that is the reason why Vanke always chooses outstanding companies as its partners when it is exploring new markets.

Meanwhile, Yu Liang pointed out that Vanke?s decision to explore the international market didn?t mean that it would shift its investment focus from the domestic market to the overseas market. He said that Vanke would continue to base itself on the Chinese market. Although Vanke has entered more than 60 cities in China, the number still accounts for only 10 percent of all cities in China, and there is still vast room for development. In Yu Liang?s opinion, European and American countries have now passed the bottleneck period of urbanization transformation, but China is still going through the process; Vanke hopes to improve its existing advantages thorough excellent foreign resources and outstanding partners, adjust its idea of China?s urbanization, and improve the development of its business in China. Moreover, Vanke hopes to provide better supporting service for China?s urbanization in the future.

Build cooperatively, but not sell

In the presentation meeting, Yu Liang also pointed out that although Vanke would have 70 percent in the joint venture, Vanke would not be in charge of selling houses, neither would it build a new China Town in America. According to Yu Liang, the project will target the local market and establish a local community, instead of targeting Chinese customers specifically. Vanke will participate in the whole process throughout cooperation will Tishman Speyer, learning the American company?s excellent management model while improving Vanke?s own expertise.

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It has been told that, in USA, when the cooperation framework agreement is signed, the land for construction has yet to be acquired, whereas in China, the land is obtained before discussion about cooperation framework. The American model is more efficient, and Chinese companies can learn from it. Besides, the Americans? project development proposal is more detailed and professional than Vanke?s proposals in the past, which provides an excellent learning opportunity for Vanke to improve its professionalism.

Founded in 1978, Tishman Speyer owns US$ 54.2 billion worth of properties and manages 325 projects across the world, including 1200 million m2 of commercial properties and 920 million m2 of residential area, including the Rockefeller Center, the Chrysler Center, and the Sony Center in Berlin. It is the largest commercial real estate company in America.???

In its international development in the future, Vanke will not stop at just working with Tishman Speyer alone. According to Yu Liang, Vanke will always maintain an open-minded attitude when it comes to cooperation: as long as there are outstanding partners in the locality, Vanke would consider working with them. Currently, although Vanke?s cooperation in USA is limited at residential project, the possibility of it working with foreign companies to develop commercial real estate projects in China has not been ruled out.

Source: http://lowbrowse.org/vanke-accelerating-overseas-foray.html

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