As usual, the Shanghainese do it better. As soon as you enter the lobby of Jason Wu's Brawman Group, the Shanghainese understanding of style and marketing makes itself felt. Instead of hideous buildings in grimy suburbs, where notions of interior decoration stretch to old calendars stuck on walls and little else, here you have the Shanghai touch. Gleaming wood floors, comfortable, good looking sofas in the lobby and plentiful natural lighting throughout, give the company headquarters on Kangding Road in central Shanghai a pleasant and professional appearance.
Jason Wu, the president and founder of the group, wears a crisp checked shirt and dark trousers, and is as smartly turned out as his office.
Appearance is importance to Wu for professional reasons, so it's not surprising he has gone to some pains getting it right. The bulk of his firm's business is providing services to real estate companies - adding the creative touch to the crude business of construction.
It was a visionary move when he set up his company in 1998, a time when everybody else was pouring into traditional real estate.
"I knew I wanted to go into real estate, that was clear from the take off real estate was seeing in Guangzhou and Shenzhen," notes Wu, who worked in the state electricity department as a civil servant before diving into business.
"But I didn't want to go along the obvious route. It struck me that it was a rather murky business, where your main asset was who you knew, "he says.
According to Wu, the way the system worked in those days was that a state-owned enterprise would provide some land to a private sector construction company through a joint venture. The construction company would build the projects and pre-sell it, while the SOE would get additional easy funding from one of the state banks with which it had a close relationship.
For Wu, the implication was that barriers to entry were rather low and that it was necessary to find an angle to make a success of things.
During his work as a civil servant he had worked on accommodation issues for the staff of the state electric industry, and therefore had a good knowledge of land and housing issues in China. His real education took off when he was hired as general manager to head up a joint venture real estate company in 1996.
"It was working there that I really learned about what a real estate market actually was. I learnt a huge amount about foreign real estate markets, and began to wonder what it might be like to give it a go myself," he says, knocking ash from one of the many cigarettes he smokes during the interview.
He started off his operations just after the Asian Financial Crisis, but he says that this wasn't a problem.
"The market had reached the bottom and was already slowly picking itself up. And since we were new, we didn't have any historical problems," he says.
Currently, his company covers the gamut of real estate services. As we tour his office, we pass class rooms where he offers training courses for US qualifications in real estate. Another office is covered in drawings, sketches and overflowing ashtrays. This is the 'engine room'of the business, where his designers thrash out ideas for making real estate projects as attractive as possible.
"We provide clients with landscaping as well as interior design for the individual units," points out Wu.
Paradoxically, Wu is preparing himself for a plunge into traditional real estate development, despite his company's history so far in providing purely auxiliary services.
He shrugs his shoulders, on being asked about this 'volte face'.
"Yes, it's good to be in a sophisticated service industry. It means we know what the latest trends on. But the (services) business is pretty stable. It's hard to show dramatic growth," he says, perhaps regretting having missed out on the crazy days of double digit housing growth in Shanghai over the past few years.
Looking sideways at his personal assistant, a clever and polished Canada-educated professional he complains deadpan:"And staff costs are so expensive in this industry…the local market is starved of consulting talent so we have to recruit graduates from overseas universities. For them the salary we provide is nothing special, but it's a lot by local standards."
Wu reckons that his years as consultant in the market have given him the edge, and indeed he unveils some projects that seem to go beyond the usual portfolio of malls, bars and residential housing of which Shanghai already has a plethora.
Although Wu is going back into the traditional real estate business, as he shows me in a downstairs basement, it becomes clear he want to add something a little bit new.
Salesmen wandering around in Hawaiian shirts provide the first clue. Hainan Island is invariably referred to as China's Hawaii, and Wu's latest project is to offer Shanghai's prosperous white collar class a hopefully irresistible combination of fun and profit. At a guaranteed rate of a 6% annual return, punters can buy a flat to, just 100 yards from the beach, which they can inhabit, for say, 30 days per year. The rest of the time, the flat (and the hundreds of others in the development) is managed by a hotel management company and rented out as a normal guesthouse. As well as a return, that means the owner doesn't have to worry about the flat while he's not using it.
Another project involves a holiday resort on Lake Tai, close to the beautiful city of Suzhou in wealthy Jiangsu province. Wu plans to develop three uninhabited islands into a holiday resort, comprising a mix of shopping, sports and recreations, and of course hotels and villas.
The third area Wu is interested in is old people's homes. It's in major urban centres like Shanghai that the government's one-child polices is most vigorously enforced. Modernization has put a lot of stress on the nuclear family model, and the pampered 'little emperors', as the spoilt single child generation is known, often repay their parents by moving into separate accommodation as soon as they are able.
But Wu needs cash for these ideas, and here he complains about the obstinate refusal of the major local banks to provide him with funding.
"They will provide funds for major blue chips, foreign and local. But for local private firms, and small, foreign private firms, the procedure for getting a loan is very irksome," he says.
As a result, Wu started exploring an overseas listing last year. While Hong Kong would be the obvious choice, he believes that the second board, the Growth Enterprise Market is a shambles, and that the main board has attracted too many dishonest mainland private companies who have fleeced local investors.
He takes out the name card of Mike Rowse, head of InvestHK, the public relations body for Hong Kong, and looks at it dubiously.
"I'm afraid of the reception a mainland private company would get from Hong Kong investors after recent scandals," he confesses, "so I've been looking at the second board in London."
Wu hopes that the proceeds would enable him to grow much faster.
"At the moment, as soon as I finish a project I have to sell it to cover my costs. That's unlike foreign companies who are able to sell their retail portfolio while renting out their commercial portfolio. Often, you can get a higher yield from owning and managing a project than by selling it," he says. Lack of funds also holds back another of his business lines, that of marketing new projecting, because the projects all need upfront costs. As a result he finds his pace of growth, funded from retained earnings, quite limited.
At the moment, the scale of his business it not huge, at around $10 million in turnover, but with a profit rate he estimates at 50%. He's confident the market will pick up again after the tightening measures the government introduced in May.
"Basically, house prices put on a head of steam between the last quarter of 2003 and the second half of 2004. That's the excess that needs to be squeezed out of the system," he reckons, predicting that house prices should drop on average by 25-30% by early next year.
Wu is impatient at any talk about the boom reflecting badly on Shanghai.
"The reason the Shanghainese are crazy about property is because until the 1990s, living conditions here were worse than anywhere else," he insists.
"People were living in one square metre of space each. Three generations in six square metres," he says, adding that in the 'old days' Shanghai was one of the very few Chinese cities where the parks were open till the early hours of the morning - it was the only way the Shanghainese could get some privacy.
According to Wu, the government was so concerned about the mass of workers in central Shanghai (which did not see any real construction until the early 1990s) that a major scheme was launched to increase the living space of its inhabitants, especially those living in the picturesque but cramped and old fashioned down-town areas.
In any case, Wu's plans are not confined to Shanghai. "We invest and operate all over China. We are fairly unusual in having a nation-wide viewpoint," he says.
As the meeting draws to an end, Wu takes a final drag on his cigarette and sticks out his hand to bid me good bye.
"And make sure you write that we are always on the lookout for partners, especially ones who can contribute capital" he says with a grin.
