Chinese reit chief caps busy year with award recognition from retail sector

Hui Xian Reit's first commercial property outside Beijing is beginning to pay off. Chief executive Tom Cheung says the company will continue to look for investment opportunities

PUBLISHED : Tuesday, 11 August, 2015, 11:24pm
UPDATED : Tuesday, 11 August, 2015, 11:24pm

This year has been a busy but rewarding one for Tom Cheung Ling-fung, the chief executive of Hui Xian Asset Management, the manager of Hui Xian Real Estate Investment Trust.

Last month, Cheung was named one of the top 10 persons of the year in China's retail industry.

Presented by the China Chamber of Commerce, the award recognises the achievements of industry participants.

Cheung says he looks forward to stable business growth for Hui Xian as the company kicks off a series of activities in the coming months to celebrate the 15th anniversary of its major asset, Beijing Oriental Plaza.

Could you tell us more about the award?

The award is organised by the China Chamber of Commerce, which is under the aegis of the Ministry of Commerce, to honour those who have contributed to and made achievements in the retail industry. Judges will choose 10 winners among the more than 100 candidates.

I am honoured because it is a nationwide competition. I am the first Hong Kong person to have won this award.

Hui Xian acquired the Metropolitan Oriental Plaza in Chongqing for 3.91 billion yuan. How is it contributing to the company's performance?

It is the first time the company invested in commercial property outside Beijing. The acquisition was completed on March 2. It contributed 38 million yuan in the first half.

We will continue to improve the shopping centre's tenant mix, making it Chongqing's leading one-stop shopping and entertainment destination.

Looking forward, the Chongqing project will be seen as a growth area while Beijing Oriental Plaza will maintain stable organic growth of about 6 per cent.

Investors welcome the Chongqing acquisition and asked when we would make another. We hope to clinch more acquisitions. We will continue to seek yield-accretive investment opportunities which can expand our portfolio in first and second-tier cities.

The Link Real Estate Investment Trust recently entered China's commercial property market. Do you see them as a competitor ?

We do not comment on other companies' strategy.

The way to operate commercial properties in mainland China is not the same as outside the country. You cannot handle it if you do not stay in mainland China for a long time.

Our asset management team is very experienced. Our strength is to enhance the value of our assets. From credit control - which means how to make sure you receive rent - to hiring people and to how to deal with labour unions, it all needs skills and knowledge. It takes time and effort.

What changes did you make to the company since you took over the chief executive position?

Two things. I came from a very strong operations background as I started as the general manager of Beijing Oriental Plaza and saw its growth. When I took the chief executive position two years ago, I extended my experience and knowledge into the capital markets.

As a chief executive, I have brought the two divisions working together and help them work more efficiently.

I have also been involved in the acquisition of the Chongqing project and turned it into the right product for the company.

Did you feel pressured when you first expanded your activities into the capital markets?

Not at all. The company has a strong team of experts with professional knowledge of the capital markets. I have knowledge about the markets too but I just spent less time in the area previously. Now, I spend more time.

Do you believe in the O2O (offline to online) business model?

The business model has been successfully applied to gain customers in some industries such as air ticket booking and taxi calling services.

For the retail industry, we have been studying the model for a long time. We hope to find a model that can help asset value growth. It seems the model is not matured for the retail industry.

If I have money to invest, I would prefer to use it to build up relationships with tenants or offer small gifts to customers to attract them to visit and spend more in the retail centre.

How do you plan to celebrate the 15th anniversary of Beijing Oriental Plaza?

We will soon begin a series of marketing activities and celebrations that will last until the end of this year.

We have performances and exhibitions. Tenants and customers at Beijing Oriental Plaza will be offered special discounts of up to 50 per cent to buy certain goods in the shopping centre.

It will be very busy and I believe I will not have time to sleep.