We focus on developing large scale quality residential projects, which typically
consist of multiple residential buildings that include multi-layer apartment
buildings, sub-high-rise apartment buildings or high-rise apartment buildings.
Several of our projects include auxiliary services and amenities such as retail
outlets, leisure and health facilities, kindergartens and schools. We also develop
small scale residential properties. Our developments aim at providing middle-income
consumers with a comfortable and convenient community life. In addition, we
provide property management services for our developments and other real estate-related
services to our customers. We acquire development sites in China primarily through
public auctions of government land and direct negotiations. These acquisition
methods allow us to obtain unencumbered land use rights to unoccupied land without
the need for additional demolition, re-settlement or protracted legal processes
to obtain title. As a result, we are able to commence construction relatively
quickly after we acquire a site for development.
We currently operate in thirteen markets in China - Beijing, Shanghai, Tianjin,
Chengdu in Sichuan Province, Jinan in Shandong Province, Suzhou, Kunshan and
Xuzhou in Jiangsu Province, Zhengzhou and Xingyang in Henan Province, Sanya
in Hainan Province, Changsha in Hunan Province, and Xi’an in Shaanxi Province.
We also operate in three locations in the U.S. - Irvine, California; Reno, Nevada
and Brooklyn, New York.
Our Property Projects
Overview
We offer the following four main types of real estate property products:
· multi-layer apartment buildings, which, in China, are typically 6 stories
or less and normally require nine to 12 months to construct after we obtain
the related construction permit;
· sub-high-rise apartment buildings, which, in China, are typically 7
to 11 stories and normally require 12 to 18 months to construct after we obtain
the related construction permit;
· high-rise apartment buildings, which, in China, are typically 12 to
33 stories and normally require 18 to 24 months to construct after we obtain
the related construction permit; and
· office, mixed-use and commercial properties which have offered since
2012.
Our projects are in one of the following five stages or categories:
· properties under construction, comprising properties for which the
construction permits have been obtained;
· properties under planning, comprising properties for which we have
entered into land grant contracts and are in the process of obtaining the required
permits to begin construction;
· completed projects, comprising projects for which construction has
been completed;
· properties held for lease, comprising projects for which construction
has been completed and which we plan to hold and manage and;
· properties held for sale, comprising land and properties which we purchase
and hold for sale.
We outsource all of our construction work to independent construction companies
which are selected mainly through our invitation to tender bids for the project.
We generally hire one or more contractors for each of our projects, with each
contractor responsible for a designated portion of the project on a “turnkey”
basis. We have established a selection procedure in order to ensure compliance
with our quality and workmanship standards. We take into account the construction
companies’ professional qualifications, reputation, track record, past
cooperation with our project companies and financial condition and resources
when inviting candidates to bid. We also review the qualifications and performance
of our construction contractors on a semi-annual basis. We closely supervise
and manage the entire project construction process, utilizing our enterprise
resource planning systems to monitor and analyze information regarding the process
on a real-time basis. We collect information throughout the development cycle
on the entire project, including information from our third-party contractors,
to avoid unanticipated delays and cost overruns.
Our construction contracts typically provide for limited flexible payments,
which provide for adjustments for some types of excess, such as design changes
during construction or changes in government-suggested steel and cement prices,
as well as labor costs. The contractors are typically responsible for procuring
the necessary raw materials, as well as providing engineering and construction
services. We procure certain ancillary fixtures for installation, such as elevators,
windows and entrance doors. For our purchases of such fixtures, we use a centralized
procurement process to help increase our negotiating power and lower our unit
costs. We maintain good relationships with our suppliers and have not encountered
any significant supply shortages or disruptions in the past.
We expanded into the U.S. market in 2012. Investment decisions with respect
to the U.S. market are carried out through the investment committee of our board
of directors. We currently seek investment opportunities mainly through off-market
transactions, including newly constructed condominium projects and conversion
projects. We currently consider the following factors when selecting a project:
· Geographic location. We intend to focus in areas that are economically
active and diversified, and attractive to immigrants on the east and the west
coasts.
· Risk adjusted financial returns.
· Funding opportunities.
We set up a specialized U.S. project team in 2012, comprised of U.S. local consultants
and employees with substantial experience and understanding in various areas
of the U.S. real estate market.
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