Standardization: the Future Competitive Goal for Chinese Real Estate Developers

BEIJING -

Driven by the favorable policies put in place by the Chinese government, real estate developers’ accelerated de-inventories and continued strong demand, China’s real estate market has seen continuous improvement in terms of transaction volume so far this year. According to the “Sales Rankings of Chinese Real Estate Companies for the First Three Quarters of 2009″ report released recently by CRIC (China) Information Technology Co., Ltd., in cooperation with China Real Estate Appraisal, Evergrande Real Estate Group was a strong performer for the quarter among all the residential projects across 70 Chinese major cities. The privately held company not only took the lead in terms of sales results for the third quarter, but also becomes the largest landholder in the Chinese property market with land reserves of 51 million square meters. Sina Leju was the first media source to announce the release of this report, part of which is as follows.

“Standardization” is becoming a future competitive goal for real estate developers. Vanke, another major Chinese real estate player, is also aggressively implementing standardization strategies to control costs. Vanke recently signed a RMB 1 billion plus contract for centralized purchasing of residential fixtures and furnishings. According to company vice president Zhou Weijun the centralized purchasing is expected to help Vanke cut costs by over RMB 100 million, when compared with having each regional office or department be independently responsible for the procurement of the same items.

Management at Vanke said at the recently held 2009 Interim Results Presentation that, “one of our major tasks in 2009 is to further optimize cost structure and give full play to our advantages as a large-scale company.”

Reporters have learned that unlisted real estate developer Evergrande Real Estate Group also has a standardized cost control system for project development. The company strives to reduce costs and strengthen competitive advantages in all areas of its operations, including land purchase, product design, bidding, purchase and management. Standardizing procedures is an important part of these efforts. Starting with intensive collectivized management at the head office, the company has standardized operations across all branches nationwide, including style of management, project selection, planning and design, use of materials, bidding, project management and marketing, to minimize operational risks brought about by nationwide expansion and ensure cost control.

As an emerging leader in the real estate sector, Evergrande has implemented unified standards ranging from location, size, orientation and status when choosing new projects, ensuring that the new project fits in with corporate strategy and will be carried out successfully while minimizing decision-making risks. Additionally, under standardized processes and rules to deal with each and every kind of situation and operating environment, Evergrande examines, approves and implements marketing programs and selling prices for all projects across the country under the group’s unified standards while marketing all projects under a single message: “genuine garden landscaping + buildings near completion + refined taste in fixtures and furnishings”, demonstrating Evergrande’s corporate strength and quality of products to ensure higher selling prices and sales ratio.

For more information, please contact: Kevin Fax: +86-10-5895-1005 Email: Kevinmts@sina.com

Source: Sina Leju

Kevin, Fax: +86-10-5895-1005, Kevinmts at sina.com