Shui On Land, a mainland property developer that raised HK$6.2 billion from an initial public offering in September, is linking up with Cisco Systems to design and build highly automated, internet-linked residential and commercial projects across China. Shui On and Cisco, the world's largest supplier of networking equipment, signed a memorandum of understanding last week to start their initiative by establishing a so-called digital community in Yangpu, one of Shanghai's least-developed areas. 'I believe the development of digital communities represents the future in China,' Shui On chairman Vincent Lo Hong-sui said. He declined to provide financial details. Mr Lo, with more than 20 years of experience developing property in China, said collaboration between Shanghai-based Shui On, whose shares were listed in Hong Kong last month, and information technology companies will enable it to draw up 'a blueprint for building China's cities of the future' that could be emulated by other developers. 'Development of networked, intelligent buildings will provide a huge value-added factor for Shui On Land, which could reduce its development costs and help it generate higher rentals,' said Paul Pong, an industry analyst and managing director of Pegasus Fund Managers. Shui On formed its first IT-related strategic relationship last year with Oracle, the world's largest enterprise software supplier, which will initially focus on establishing an Advance Technology Solution Centre in Yangpu. Shui On's strategy with Cisco will involve extensive use of the Cisco Connected Real Estate (CCRE) framework, which uses internet protocol networking communications technologies in the foundation of building design and development. 'These solutions create value and opportunity for building developers, owners and occupants by using the power of our converged network for voice, video and data to help create intelligent, connected buildings,' said Cisco Asia-Pacific president Owen Chan Ze-wai. The relationship with Shui On was the company's first strategic tie-up in the mainland property sector, he said. Existing buildings usually have numerous proprietary networks for operating the telecommunications infrastructure, building systems and associated devices - including heating, ventilation and air conditioning, security and access, and fire and safety. As a result, those buildings are complex to operate, have limited automation functionality and have high installation, integration and maintenance costs. Mr Chan said decisions taken in the design and construction phases can have far-reaching financial and operational effects because an estimated 75 per cent of the expense of a development occurred during the maintain-and-operate period - typically 25 years to 30 years after the building is completed. The CCRE would help streamline the network environment for Shui On's building projects in Shanghai, Chongqing, Wuhan and Hangzhou, Mr Lo said. The company has a land bank of 6.7 million square metres in China. The Cisco framework will be introduced in Shui On's Knowledge and Innovation Community (KIC) project in Yangpu, a 61-square kilometre area with a population of more than one million and home to more than 100 research institutes, 14 universities and colleges. Academic institutions near Shui On's proposed digital community include Fudan University, Tongji University, Shanghai University of Finance and Economics, Shanghai Institute of Electric Power, and Second Military Medical University. The 840,000-square metre KIC project, a six-year development backed by the Shanghai government, aims to link the surrounding academic institutions with a complex of low-density residential blocks of up to six storeys each, modern office space, research and development facilities, cultural and entertainment attractions, shopping areas, and the newly restored Jiangwan Stadium, built by the Kuomintang government in 1935. 'Investing in hi-tech infrastructure will enable Shui On Land to implement more innovative services that people will pay a premium for,' Mr Pong said. The relationship with Shui On could deepen the mainland market presence of Cisco, which dominates sales of networking equipment to large enterprises and service providers in China. Value-added network services that its CCRE solutions support include integrated access control and video surveillance, internet telephony, wireless broadband connection and Cisco's new high-definition video-conferencing system called TelePresence. Cisco chief John Chambers in June declared TelePresence the company's latest 'emerging technology', with the potential of generating US$1 billion in annual sales within the next seven years. The KIC project is the first in the mainland to receive a demonstration unit. The new Cisco product line was designed to make video-conferencing more lifelike than other systems in the market, including those from Huawei Technologies, Hewlett-Packard, Tandberg, Fujitsu and Polycom.