Stylish rental homes gain favour with urbanites

Gehong returned to China from the US in 2008 after taking part in the launch of JW Stone, a real-estate investment trusts (REIT). He became president and CEO of Grand China Fund, a Chinese real-estate private equity fund, before founding the China Young Professionals Apartment (CYPA) Management in 2012. He is also a partner with SAIF Properties Fund.

Here Wang explains why the dividend of the “secondary leasor” model is gone, and how to survive now, businesses have to compete on quality.

Can you give us a brief introduction to CYPA?

It’s a long-term contract apartment brand founded in 2012. In Beijing we have projects in Guomao, the Forbidden City, Shunyi and a future one in the 798 art zone. We are very detail-oriented. For example, we offer electrical cars and bicycles to our tenants for free. There is no smell in the building because we provide proper garbage disposal facilities. Many young women decide to settle at our developments once they enter the lobby and smell the fragrance – prices matter less.

How do you view China’s professional rental market?

I see a huge market. China’s millennials are much more willing to spend on a good quality of life. They have low tolerance of the long commute and prefer to rent near their workplaces or subway stations, despite higher costs. For them, where they live is not just an issue of accommodation but also lifestyle, health, identity and attachment.

I did intensive research before establishing the startup. I found two key decisive factors for young people. The first is size and total price of an accommodation (a steep total price is unacceptable). Also, there should be surprises. When my designers consult me during renovation, I tell them not to worry about how to satisfy “me”, but how to satisfy our potential customers. Our quality products and services differentiate us from our rivals and that is why we can charge a 30 per cent premium.