This article is sponsored by Jiangong Real Estate Group
Li Li, the chief executive of Jiangong Real Estate Group who has been with the company for 15 years, has been inspired by the company’s micro-city experience in Hangzhou. She believes such projects can promote better co-operation and connectivity through the integration of real estate and technology.
What makes ‘micro-cities’ an attractive idea?
The business model is fairly simple – micro-cities can make people’s productivity align with their lives. Megacities like Shanghai or Beijing are enormous, usually congregating around a business center.
People are drawn to those cities for opportunities. But now, with so much development, one city center cannot hold everything that people need to live. Every human has to live their life, we all have a living cycle that we need to follow, and businesses need to build their schedules around that.
Cities no longer fulfill their main purpose, which is fulfilling people. The city landscape does not make it easy for people to do their work, run their chores, help their family, etc. If they have to travel for two or three hours every day to go to work, then that is a significant waste of time.
Furthermore, that wasted time makes them more stressed, which therefore makes them less productive as workers. So, we came up with another idea. We believe in pursuing the 8-8-8 balance (eight hours of work, eight hours of play, eight hours of sleep), and our vision is to enable workers to achieve that balance. The most important function of a city – of the space where people live – is fulfilling all the needs of the people who live there. We want people to be happy and satisfied.
How can that be achieved?
Our micro-city development strategy is straightforward. We have the Euro-America Center (EAC) in the Huanglong Commercial District; our Euro-America Financial City (EFC) as the signature complex in Sci-Tech City, the “China Silicon Valley;” and EIC, our Seattle model micro-city. Many top corporations – in China and elsewhere – have expressed interest in our micro-city vision.
If those companies’ workers can be better rested and feel more fulfilled, that could become a driving force for economic development. For example, Alibaba, Gaw Capital, ByteDance (TikTok), Kuaishou, Huawei, Marriot Apartments and more have already taken up residence in our EFC development in Hangzhou.
We designed EFC and EIC specifically to bring everything that residents could ever need to their doorstep. We are confident enough in the results that we are planning a series of these super micro-cities as a platform to connect international industry across borders. The micro-city concept works.
Given the ambition of projects like this, have you encountered any difficulties in attracting capital for the development?
The fact that we already have a lot of Chinese partners, including Alibaba, China Life Insurance, Huawei, and even fund managers like Gaw Capital Partners, which ranked number one in the most recent PERE APAC Fund Manager Guide, and Yunfeng Capital, is a boon for us. Forging these relationships allows us to better calculate and promote the value of our buildings to new investors.
Whether they are new or long-term partners, investors take a very pragmatic approach toward the vitality of developments. They ask whether it can succeed, whether the development timeline will be steady and how long it will be until they see results.
Investment fund managers were one of our biggest successes, actually. The early results of our projects, including micro-cities, matched what they wanted very closely. Whether they had three-year, five-year, 10-year or even 20-year horizons, fund managers could find a micro-city product that satisfied their reporting requirements.
Unsurprisingly, finding the right location is crucial to the success of new micro-cities. You have to find the right districts, looking at the heart of those districts. They have to have good living districts, as well as good transportation infrastructure. At the same time, the design and productivity are also important. The government and policies also have to be favorable. If the area has all these qualities, then it is a great fit.
Your company uses two phrases to emphasize the role of technology in real estate: “a new species of ‘real estate + high technology + big data’” and “architectural black technology.” How do you see those things coming together?
It’s about improving and modernizing the environment in which people live and work. We realized years ago that people’s needs weren’t being met by the space or technology in modern cities.
People are the most important resource for a business. So, we put their needs first: their safety, their health, etc. For example, we have used ultra-high electromechanical standards to ensure the indoor environment is in a better environment.
In EIC, we integrate natural light and a harmonious atmosphere, with large-span, large-bay, super-high and spacious design, both for environmental friendliness and to boost people’s confidence and comfort. Our micro-cities have LEED Community + WELL community double gold certification, reducing carbon emissions while protecting the biodiversity of micro-cities, creating a green community in which people and nature coexist harmoniously.
When the core of ESG is the tenant
While community is key to successful real estate, ESG is key to community and so must be prioritized.
In Jiangong’s micro-cities, ESG is not another benchmark to meet, but instead a stepping-stone toward the final vision for their developments, according to Li.
“One would expect that newer, modern, more ‘efficient’ ways of doing business would muscle out the traditional ways. And yet, in small and close-knit communities, the traditional way thrives. In megacities, there are many options, but they are not often easily accessible,” says Li.
“So, we work to bring work and life closer together. We allow people to live more naturally, in a space where they can work, live, coexist, be a community.
“In the best real estate, people can enjoy the space and their time, while knowing that any problems that come up can be resolved. The community is the key to realizing a successful real estate venture – and ESG is key to community.”
By integrating technology with space and real estate, I see three major benefits: accurate customer positioning, transforming construction policies and benchmarking products against top quality global standards.
Much of this will be focused on high-end individuals and investors, the global leaders and entrepreneurs in finance and industry. We also hope to bring international standards into China as a way of furthering systemic integration and collaboration globally.
Again, EIC is an example – everything is connected. From five-star hotels, luxurious lobbies, drop-off areas, staircases, exhibition areas and commercial spaces, the residents have extraordinary opportunities to see and get everything they need.
What inspires these micro-city developments?
We took inspiration from cities all over the world, like the new World Trade Center, Rockefeller Center and Hudson Yards in New York, Apple stores globally, etc. We have teams in America, Australia and Europe doing research about what works best.
Seattle is an inspiration. In Seattle, there are “life service providers” such as Boeing, Microsoft, Amazon, and Starbucks and Costco, which balance technology and services, industry and life just right. Jiangong hopes to create an upgraded version of Seattle – EIC, designed by architects F+P – to achieve a mixed construction of residential, commercial and office, one-stop solution to all needs. It took a lot of effort to bring such different ideas together, but we think it is worth it.
When people feel hopeful for the future in the micro-city, when there are no gaps in their lives, that makes the buildings the safest and the most enjoyable they can be. The true measure of success for a micro-city is how much people want to come to them, not for how pretty they look, but because they know they can be happy there with their friends, their hobbies, and even more happy in their work.
Apart from individuals, many businesses choose to relocate to micro-city districts because they find they get so much more business from happier people and a more conducive atmosphere. By maintaining that tenant satisfaction, micro-cities stand out from competitors in development, and we know that these cities can be sustainable and profitable for 20 years and more.