Small as it is, mainland developer Yuzhou Properties prioritizes maximizing profits rather than aggressive expansion, company chief financial officer Chiu Yu-kang said. “The key is to buy cheap land and cut financing cost,” he told South China Morning Post in an interview. The company last month issued US$250 million five-year senior notes, before the cost rose possibly rises further on expectations of an interest rate rise in the United States. “The interest rate of 9 per cent is higher than our average overseas funding cost of 8.5 per cent, but the timing is crucial,” he said, adding that financing cost in 2015 will be kept at par with last year, as expensive maturing debt issued in 2012 will be refinanced later this year at an interest rate expected to be higher than what it is now. Yuzhou Properties has three ways to cut land costs. They are: bid when others retreat, help local governments clean up raw land and acquire sites from overseas Chinese who bought them more than 30 years ago. It won the bid for a 55,017 square metre site in suburban Jiading district of Shanghai at the floor space cost of 10,405 yuan per square metre in July 2013, when China ran into a credit crunch. A few months later, neighbouring parcels were sold at 18,000 yuan per square metre. In Quanzhou of Fujian province, the developer invested 200 million yuan to help local government clean up a 1.3 million square metre site and then get the parcel at the floor space cost of 377 yuan per square metre, versus the market price of over 1,000 yuan per square metre. However, it shuns projects owned by bankrupt small local firms, particularly half-built ones, as quality is often so bad that any reputable buyer will have to tear it down and build it from scratch, Chiu said. His company was ranked the 66th-largest mainland developer, based on sales revenues in 2014, in a list compiled by China Index Academy, the country’s largest private real estate consultancy. But Yuzhou Properties is not interested in rapid expansion. Such a strategy is no longer highly valued by global investors as before and mounting debts have crushed quite a few developers in the past. “The competition in the future is mainly about products,” Chiu said. “We need to optimize our corporate structure and management team.” The company is not planning any investment into other industries hotly pursued by developers including Evergrande Real Estate. They are seeking new growth engines to make up for a weaker increase in China’s housing demand in the next decade. “What we want to do is not to give up but to sharpen our competitive edge,” Chiu said. In the C-Suite on P3, Chiu will share more on their strategy.