By Clement Woo
My first trip to Dongguan City was about 14 years ago, slightly after Chinese New Year. The weather then was very pleasant since it was still in spring season. The ever-famous trade exhibition, Canton Fair was held at Guangzhou and normally some trade visitors would choose to stay at the nearby cities to avoid the Bangkok type of traffic jam and it was a lot cheaper.
Dongguan City is the third largest city in the province of Guangdong, behind capital city, Guangzhou and special economic zone city, Shenzhen. Dongguan comprises 28 towns and four sub-districts that make the mother city. We stayed at Changping, a town of close to one million population.
Dongguan is the industrial powerhouse of China with annual GDP of close to $100 billion and almost all its towns has its own unique industry. During those days, aside from the local industries, Changping was also infamous for its booming nightlife, so much so that it forms a big chunk of its local economy. Five-star hotels were everywhere, new luxury KTVs sprucing up almost weekly, restaurant businesses prospered to cater to patrons from Taiwan, Malaysia, Singapore, Hong Kong and Japan. With the booming local economy, it also attracted a lot of migrant workers from other provinces and created a huge demand for housing.
I was accompanying my good friend, EW on that trip. Back then he was a senior partner in a medium-sized law firm and wasn’t a Datuk Sri yet, so it was supposedly to be among ‘buddies’ kind of trip. Work, business and leisure. In fact, it was 90 percent leisure. EW brought me to one newly-completed apartment project right in the middle of the busiest section of the town. Located at the T-junction facing those busy five-star hotels, KTVs and shopping malls, these apartment blocks are known as Jing Hui. “Bro, I own 33 units inside here…”, he told me.
During the early days, there wasn’t much restriction on foreign property ownership in China. Property sector just started to boom and developers were very cautious in their approaches. Developers are only allowed to market and sell their properties upon achieving 70%-80% construction status. As such, the fear of unsold units always remains. EW spotted and took that opportunity to negotiate with the developer for bulk purchase discount and easy payment scheme. He got what he wanted. 33 units with great discounted price averaging RMB2,000 per square meter with payment spread across 24 months interest-free.
He had no problem getting tenants for all his units. In fact, he almost broke even just from rental collection alone, before selling off all his units years back at the market rate of RMB14,000 to RMB20,000 per square meter.
Think big, start big and move fast. He who dares win.
Phnom Penh, Cambodia
Everything was going great for Kampuchea before Khmer Rouge. During one of the visits by the late Singapore Prime Minister, Lee Kuan Yew, vowed to turn Singapore into a garden city like Phnom Penh. But then, Pol Pot and the Khmer Rouge came. They destroyed whatever was going great. Everyone was sent to the countryside, some killed or simply disappeared. Phnom Penh became a ghost city, empty and deserted.
After the war, the caretaker government encouraged her people to go back to their home cities. People were still skeptical and afraid. Rebels were still active and some areas were still off-limits. Many did return to Phnom Penh. The daring ones picked and chose whichever properties in the city that were left behind, despite the potential dangers. Many settled down slightly in the outskirts of Phnom Penh for safety reasons. These were the fortunate ones as the properties which they occupied ultimately became multimillion-dollar assets years later.
So what happened to those who were not so fortunate and daring enough? Well, they subsequently bought small plots of land and build their own houses on these. For those who have relatives residing overseas, they will build bigger and taller houses with the remittances. For some, they will just build the bare minimum and improve the condition whenever the money comes. Despite all the modern boreys (housing estates) and condominiums coming up, it is still a common practice to see landowners subdivide their land parcels into smaller plots for sale. Usually the plots will be fully taken up in a matter of days.
Nana (not her real name) is the distant cousin of my farm supervisor. A few years ago, she came to see me with a proposal. A joint-venture proposal. “What type of joint-venture?” I asked her.
“Sir, I would like to acquire one hectare of your land, subdivide it into 40 plots and sell it to the villagers. You and me will divide the profit half each”. Basically, she wanted to sell other people’s land and earn profit from it, but without paying anything prior to the landowners. Nothing wrong, in fact it was a win-win situation. I have the land and you have the buyers. I make money and you make money.
I rejected her “joint-venture offer”. Not because I didn’t like her idea. It was because I had other business plans for that particular parcel. Later I learnt from my farm supervisor that Nana didn’t only approach me with such offer, in fact she approached many other land owners and companies with that offer. Some will, some won’t but some agreed with her “joint-venture” offer. Subsequently she did very well, her reputation grew and there is no turning back. The last time I met Nana few years ago, she was a proud owner of a realtor firm and her turn to cherry pick who to JV with.
Think big, start small and move fast.
“Who Dares Wins” – Sir David Stirling (Founder of Special Air Service)