Logistics Now, China Later

              Tis the season of Columbia Chazen pre-trip meetings. While most groups are likely discussing the logistics of visiting vineyards in South America and the hippest restaurants in London, the China Healthcare Trip students had a very different conversation. Over delicious sesame noodles and dumplings at Han Dynasty restaurant, we chatted about the logistics of VPNs, the high security frisking students received while picking up visas, the annoyance of Facebook being blocked, and the necessity of avoiding sensitive government-related conversations. When we placed our Chazen bid points on the China Healthcare tour, we knew China would bring different logistical aspects. Nonetheless, the opportunity to meet with Lilly Asia, Shanghai Pharma, and Sequoia (to name a few healthcare companies) and have firsthand experience in the country referenced in all our classes seemed worth all the “hassle” of visiting a communist country.

              Admittingly, I am a healthcare nerd: since sophomore year of College, I’ve catered my academic and career choices towards the healthcare sector. Bias aside, the company visits on our upcoming trip are nothing short of impressive. Pharmaceutical, digital health, hospitals, and rehabilitation companies provide a diverse emergence into the Chinese healthcare industry. Now would be an appropriate time to publicly thank our hosts Chloe Li, Mingming Wu, and Tiffany Zhao. Without them, we would not be able to visit such a line up of companies. Maor Cohen and Daniyal Hussain deserve public acknowledgement for their leadership and dedication to bringing this trip to fruition.

              Some of us are lucky enough to make a pit stop in Seoul, Korea before the group reunites at the Renaissance Beijing Wangfujing Hotel on March 17th. We will spend the afternoon adjusting to the culture and walking around Beijing. We will start our company visits on Monday morning with a visit to United Family Healthcare. Stay tuned!

Singapore, China & Hong Kong: the journey is upon us!

When I think of Singapore, skyscrapers and images of technological modernity immediately come to mind. I would be remiss by neglecting to mention the image of The Jetsons – a once popular American cartoon – that also comes to mind for me when this hyper-developed nation is mentioned. The trip will formally begin in two days, when 40 Columbia Business School students and two faculty members from the Paul Milstein Center for Real Estate depart for a study tour of Singapore and the Pearl River Delta region of China. The fortunate portion of our group that hasn’t endured an endless stream of final exams has already departed, visiting the beaches of the Far East before heading to Singapore.

Our first day will be filled with cultural visits: a visit to the Gardens by the Bay (pictured here), Chinatown and Little India. A riverboat tour and dinner at one of the most notable seafood restaurants will follow.

120607010620-gardens-bay-panoramic-horizontal-large-galleryWe’ll spend the next two days meeting with leaders in the real estate industry: multinational companies such as Blackstone Real Estate Partners, the largest real estate private equity company in the world, and Capitaland in addition to strong players in the regional market such as GIC. We’ll end our Singapore experience with an alumni reception at Spago.

Guangzhou, nicknamed the City of Flowers in southern China, is our first stop in the Pearl River Delta region. This area is considered the birthplace of the ancient maritime Silk Road, now used as a major trading and transportation hub.  This major city is an important commercial center in China and a focus for real estate development and investment.

The group will also explore Shenzhen – another major commercial center in the Pearl River Delta. Meetings with Vanke, Jones Lang LaSalle, Swire Properties, Fosun and site visits of the Ping An Finance Center and the Qianhai project await.

The trip will end with a day to explore Hong Kong before returning to New York City. I can’t wait for the adventure that lies ahead. I am, however, hoping to sleep for the duration of the 21-hour flight there!

Nicole Atoyan ’17

 

Final Reflections on China

It’s been over a week since we arrived in the U.S., exhausted and rumpled from a 15-hour flight from Hong Kong. Anyone else craving dumplings yet?

The trip was well worth the jet lag. Here are some of the highlights now that we’ve all had time to reflect:

1)      The company visits: Our organizers really went above and beyond here. Not only did we get a glimpse of what it’s like to work in what b-school students consider some of the most coveted jobs in the world, we heard the perspective of local developers, too. I actually found our visits with Swire, Hongkong Land and SOHO China the most interesting. It helped that we met with some pretty high level people there.

2)      The food! Just when I thought I had my fill, there was something even more delicious to consume.  Ok, maybe we weren’t all fans of the stinky tofu (it really does stink) or the scorpions on a stick that you could buy in a street market. But I don’t mind the idea of eating dumplings for breakfast.

3)      The sights!! Bonus points to our organizers here. We hit all the major ones on my list, plus stuff that was off my radar. The Great Wall was pretty incredible—and thankfully, we did not visit at the same time as Michelle Obama, which would have surely added to the traffic on the way there. And I for one was impressed with that Giant Buddha, even though it was erected all the way back in 1993.

Finally 4) The group. It was a pleasure getting know everyone’s backgrounds and their future plans. I was impressed by the questions that were asked during our company meetings. The students on this trip truly eat, sleep and breathe real estate.   Image

Overall, I feel lucky to have been a part of this while at Columbia. Big shout out to Karl, Maria, Scott and Bria for making it happen!

-Anjali Athavaley ‘14

 

Built-Up Beijing

It may be just a few hours away by plane, but Beijing feels vastly different from Hong Kong. I can’t read the street signs and just ate pigeon off a stick in a market. Now THIS is China!

Anyone hungry for starfish?
Anyone hungry for starfish?

We’ve been incredibly lucky to enjoy some sunny, clear days here. The unexpected weather has made our site visits even better.

On Thursday, the folks at Swire Properties gave us a tour of their outdoor mall Taikoo Li, located in the Chaoyang district of Beijing. The complex consists of more than a million square feet of retail. The South side has stores that drive foot traffic, like Uniqlo, while the North side is all high-end retailers—think Miu Miu and Emporio Armani.

On the North side, it seemed like retailers had taken huge amounts of space for the amount of foot traffic they were getting. That afternoon, there were few shoppers in sight. Swire said that while shoppers might not be visible on the streets, celebrities who discreetly took elevators stopped by on occasion. In our meeting, Swire added that retailers mainly wanted a presence in Beijing and may start to think more about productivity per square foot in the future.

Our meeting with Soho China was equally fascinating. The developer says its niche is in prime office properties in Beijing and Shanghai. The company’s trendy offices—complete with open spaces and ping pong tables–seemed typical of a startup in Soho, New York.

The design and construction of the office complex we saw, however, was quite different from buildings in the U.S. Check out photos of the Galaxy below.

The building, designed by Zaha Haidid Architects
The building, designed by Zaha Haidid Architects

A close-up shot of the construction at Galaxy.
A close-up shot of the construction at Galaxy.

The trip to the Galaxy was our final company visit. That meant it was time for an acrobat show, the Great Wall and more dumplings.

The Great Wall!!
The Great Wall!!

This will be my final post before heading back to the U.S. I’m so thrilled I was able to experience this country through the lens of real estate. Seems like there is no better time to do it – I’ve lost count of the number of cranes and construction sites I’ve seen here.

See you all back in Uris and have a safe flight, everyone!

Anjali Athavaley ‘14

China: Finishing touches

1 country, 2 special administrative regions, 9 passport stamps, 12 company visits, not to mention planes, trains, automobiles, and boats!  There’s no denying the Chazen China trip was moving and shaking for a full week.  Now that I’ve had some time to digest it all and recite the details of the trip to friends and family (not to mention fully adjust back to Eastern Standard Time), I find myself repeating certain details and questions that I found to be major takeaways of the trip.

–          Beijing Matters: The central government’s role in Chinese economics is obvious and profound.  The policymakers in Beijing take on a lot more responsibility then most others.  For example, the Chinese government owns all of the land in China (yes, all of it); you can only develop or own property in leased fee status, which means that you are essentially leasing the ground from the government for a certain period of time.  When that lease expires, the government can technically just take the building back, no questions asked.  This hasn’t happened yet because no ground leases have come to their expiration date yet, but it’s the 800-pound gorilla in the room anytime anyone is interested in developing property in mainland China.  This is just one example of the government’s reach and influence, but shows how dealing with policymakers can be somewhat sticky.

–          Population Situation: China’s 1.3 billion people is obviously a big figure, and is still growing (albeit at a slower pace due to the one-child policy).  Most people predict the high pace of urbanization to continue in China at a rate of approximately 80 million people per year (equivalent to the population of Germany).  There are already over 150 cities in China with over 1 million people. Where will most of these people work in order to support that type of population movement?  According to the visits we had, about half of them will have college degrees.  What will be the makeup of both the cities’ demographics and the real estate property mix? Longer term, what will the impact of the one-child policy be?  What will it mean for China’s workforce in the future?  This will have a big impact if China truly wants to transition from a net exporting economy to an economy that relies more on domestic consumption.

–          Pollution Solution: One thing we could not get away from in either Shanghai or Hong Kong was the air pollution.  It’s unfortunate, since both cities have tremendous skylines to showcase.  We recently debated in my Global Economic Environment class whether China could continue to grow without major pollution effects. The answer was contested, but after having been there its obvious there’s a long way to go in the major metropolitan areas, despite the fact that the manufacturing operations are on their way out to the tier 2 and 3 cities.

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Hong Kong skyline through the fog

–          Debt’s Not the Issue:  Unlike the US and other major Western economies, China doesn’t have an overleveraging problem in their residential real estate sector (at least for now).  Consumers rarely take mortgages that are higher than 50% of the value of the property (compared to upwards of 80% in the US).  So if China were to undergo a “bubble popping” that so many are predicting, it won’t be because of over-leverage.  It’s more likely that if anything extremely negative did happen in China, it would be a black swan situation that no one saw coming rather than a debt issue.

–          Unique Urban Landscapes: Shanghai and Hong Kong are genuinely beautiful cities, albeit in different ways.  Shanghai has a dazzling office district, and has a number of beautiful urban areas throughout its massive area, despite some zoning inconsistencies.  Hong Kong is obviously a lot smaller, but still has an amazing array of commercial real estate to show off along the reclaimed shoreline.  They are definitely places worth visiting for the real estate, as well as for the unique cultural aspects of daily life.

Overall the trip was a huge success in terms of the quality and variety of the companies we visited, the number of sites we toured, and the breadth of the education we received.  It was certainly worth the 30 hours of flying, the bureaucratic red tape, and massive jet lag.

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Shanghai’s Pudong district skyline

Thanks for following along.  I hope you enjoyed all of the Chazen blog posts throughout our spring break!

Matt Giammanco ‘13