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SCMP Reporter

Speed, flexibility and personal service give Yu Tai Hing the upper hand over bigger rivals

Six-foot Dennis Law Sau-yiu   strides into his conference room and talks about  how a small developer can fight in a ring packed with heavyweights.

Mr Law is managing director of private developer Yu Tai Hing.

The family business started operating as a pawn shop  more than 100  years ago. It went  into real estate development, now its core business, in the 1940s, and also covers a finance firm and a contractor.

The youngest son in the family, Mr Law  kept a low profile until  two years ago when he was forced to get  socialite Teresa Cheung Siu-wai to repay a $250 million  loan  she had taken out for a property deal.

His father, Lo Siu-tong, is known for acquiring old buildings for redevelopment.

Such small-scale redevelopment is one of the niche markets a featherweight developer can pursue in a market  dominated by  conglomerates that get land at more competitive prices.

'Speed and flexibility  are our advantages over major developers, although space left for small developers has become smaller in recent years,' said Mr Law.

Apart from small-scale redevelopment, companies such as Yu Tai Hing also have the advantage of acquiring shops - properties which  publicly listed developers usually overlook.

Another advantage is being able to rely on gut instinct.

'I can conclude a deal myself, while it's impossible for Li Ka-shing to negotiate with a seller himself ... [large developers]  have to do a lot of formal calculation  in making deals, which makes them comparatively slow in small deals,' said Mr Law.

But being streetwise is probably more important than  offering that personal touch in a volatile property market.

'I've seen some shop owners leasing their own shops with an exceptionally high rent to project a false rental yield. Therefore, you have to know the streets really well in order not to be misled by plain numbers.'

Mr Law said Yu Tai Hing went for    projects that cost $200 million to $300 million - a risk the firm could afford to take.

'We are looking for residential and commercial properties in this price range. It could be strata-title offices or shops on streets  having high passenger flow.'

The firm is  selling two residential projects: the Morning Glory, a luxury residential project in Sha Tin, and Flourish Mansion, a mass residential project  in Mongkok.

With Yu Tai Hing's contractor arm, Mr Law said the company could lower construction costs to offer  competitive pricing in acquiring a small urban site of between  5,000 square feet and  10,000 sqft.

According to Mr Law, Yu Tai Hing has a land bank of about 80,000 sqft.

' But it has  been  difficult to acquire land in the private sector in recent months as most owners were  looking forward to the government's land sale as a price indicator,' he said.

On a personal level, Mr Law, who graduated in film directing at Loyola Marymount University  in Los Angeles in the United States 15 years ago, acquired listed movie production house Milkyway Image Holdings last year from director Johnny To Kei-fung for about $700 million.

Rather than   diving straight into his dream, he is taking it slowly.

He does not have  a controlling stake of the company, managing only the financial aspects  of the production house and leaving the decisions about  film production to Mr To.

'Movies are a business after all. I couldn't go straight into it only because it's my major interest but without careful calculation,' he said.

Mr Law has also written a few movie scripts and is  now working on one for a satirical film.

Although he has the capital to fund his own film, he'd prefer to let the value of his scripts be determined by the market.

'Whether my scripts can be turned into films depends on whether there are investors who are interested.'



Featherweight developer has a supple style