人民网人民网首页
Weather【Joburg Sunny 9℃-21℃】 【Cape Town Sunny 15℃-28℃】 【Durban Sunny 16℃-21℃】
Exchange Rate【1 CNY = 2.09832 ZAR】 【1 USD = 6.60193 CNY】 【1 USD = 13.8527 ZAR】

Chinese pioneer in SA's property market

(People's Daily Online)  Sissy Zhang  2016-01-22 04:56



 Fred Wen, the Director (Deputy CEO) of CRI-Eagle Investment (People's Daily Online / Sissy Zhang)

 
Unlike other metropolises on the globe, Johannesburg’s Sandton financial district has few skyscrapers. Sandton Skye is one of them. Starting construction in July 2013, space in its Phase 1 has sold out. Within walking distance, work has begun for the foundation of another business complex - The Central.. Occupying three hectares, the site has already attracted leading law firm Werksmans to relocate their Johannesburg head office there. Call it coincidence or luck, both of these two properties belong to one Chinese enterprise - China Railway International Group (CRI).

Sandton Skye has created hundreds of jobs for the city. It pays tens of millions of rand in tax, and helps secure the company’s cash flow.

Being the first luxurious residential property of its kind at the time, opening for sale when construction was still underway, the project sounded quite risky. But Fred Wen, director (deputy CEO) of CRI-Eagle Investment, was quite determined and confident then. “It’s a result of our market research,” he said.

According to their survey in 2010, the population in Sandton will increase by 300,000 by 2016, mainly white-collars and senior executives, who would be in great need of high-end residences. “So we took the risk, and it turned out to be a wise choice,” said Wen.


According to Wen, a range of purchase options designed to maximize investment are offered by CRI, whose customers not only buy to live, but also buy to let or sell. As an investment product assured of delivering long-term growth, Sandton Skye also collaborates with local estate agencies to ensure competitive rents for its investors. The project gains fame for CRI among its local competitors,  and similar properties are built to share the cheese.

Besides Sandton Skye and The Central who assume their place at the pulsing epicenter of Sandton, Eagle Canyon in Roodeport, CRI’s debut in South Africa’s high-end market has consistently been ranked as a top 10 South African golf estate.

Originally in 2006, CRI entered South Africa for a high-speed train project connecting Johannesburg and Durban, but compromised to shift to the real estate industry when it went south. CRI entered into partnership with local companies like Investec and Eagle Canyon to establish joint venture companies in co-developing projects featuring high quality life styles, and the JV companies have grown by leaps and bounds.

Though construction is its expertise, the Fortune Global 500 company is bounded by various regulations as a foreign developer. It has to rely on local teams throughout the process from design, construction, sale to safety management. CRI mingles with their local partners in the whole developing process, and would rather sacrifice part of the profits to adapt to the industry. It also spends high percentage of its project management fee on legal consultation and plays by rules.

“You can’t cut relevant expanses, because you can’t afford to take risks,” Wen said, “We basically regard ourselves as a native developer and do as the Romans do.”

Wen spoke highly of the South African market, saying it’s operating in a relatively dynamic, healthy and sustainable way. He values the middle-class group in Africa as well. “They are pretty active, even as active as those in Asia. And they are contributing to the high-end consumer culture, purchasing houses, automobiles and luxury goods.”

According to a Deloitte report, Africa’s middle class has tripled over the last 30 years, and is expected to grow to 1.1 billion by 2060, accounting for 42 percent of the continent’s population.

Wen noted that CRI is planning to invest in Zimbabwe in real estate industry. With a young team, CRI is planning to take root on the African continent, striving towards becoming a pioneer enterprise of property investment in the local market.

(The story was originally published on Business Day on December, 2nd, 2015)