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2020-01

Interview with Chairman Ronnie C. Chan

2020 marks the 60th Anniversary of the founding of Hang Lung Group, the parent company of Hang Lung Properties. Over the years, Hang Lung Group has matured with Hong Kong, and has also seized opportunities resulting from growth of Mainland China, where it now operates across nine cities. At this important time for both reflection and ambition, Connections interviewed Chairman Ronnie C. Chan about the Group’s development — and its future.
 
Two Stages in 60 Years
 
Ronnie sees the history of Hang Lung Group as two distinct phases of development: “In the first 30 years, we went from a high to a low; and in the second 30 years, we rebounded from a low to a high.” The first period actually began with a decade of growth – a brief golden era. “But the Group became more conservative after this, and our growth slowed down,” Ronnie says. “We failed to make use of many of the biggest opportunities available at that time.”
 
Hang Lung entered the Mainland market in the 1990s, and has successfully established a presence in Shanghai, Shenyang, Jinan, Wuxi, Tianjin, Dalian, Kunming, Wuhan and Hangzhou. Ronnie says: “In our second 30 years, we mainly expanded into Mainland China, but that does not mean we’re neglecting Hong Kong.” Hang Lung acquired a number of properties in Hong Kong for leasing purpose in the early 1990s, and also bought land for development. Between 2000 and 2010, Hang Lung had been “implementing a two-pronged approach, with business operations in both Hong Kong and Mainland China”.
 
Teachings from Chan Tseng-Hsi – the Founder of Hang Lung Group
 
Ronnie says he learnt a lot from his father Chan Tseng–Hsi who was the Founder of Hang Lung Group. He says his father was an honest and upright person who held to his convictions, and would never make use of improper methods or legal loopholes for the sake of business growth. Since taking over as Chairman of the Group and its subsidiaries, Ronnie says he has always upheld his father’s tradition of corporate governance. “We do our business in a clean way, and there has never been anything shady or suspicious in our operations.”
 
Hang Lung’s Five Real Estate Genetics
 
In the Chairman’s Letter to Shareholders written personally by Ronnie and published in our financial reports, he repeatedly refers to the “five real estate genetics” as the keys to success in the development of high-end shopping malls and offices. In conversation with Connections, he says that while no piece of land will ever fully satisfy all five criteria, “there can be no compromise regarding the location, and the size of the land is important too, while the other aspects can be compensated for using technical methods”.
 
Ronnie is increasingly confident about purchasing land in Mainland China. “With the changes in society and the economic transformation, many cities will start to have different needs, and these needs will emerge at different times,” he says. Success there will depend not just on economic factors, but also supportive local government policies.
  1. Buy in the Best Location
  2. Ensure Adequate Land Size
  3. Set a Reasonable Development Brief
  4. Apply Wise Design
  5. Ensure Quality Construction
 
Hang Lung’s Growth Prospects and Expectations of the Next Decade
 
Ronnie is untroubled by increasingly fierce competition in the Mainland market. “The level of competition varies at different times, but China has a lot of good cities and the opportunities are always there.”
 
Looking ahead, Ronnie says that if the Group can acquire a good plot every two years, it can be confident of continued strong growth. “I believe that China’s overall economy will continue to grow in the next 10, 15 or 20 years,” he says. “Even without taking new projects into account, rent from our existing properties will go up when the economy prospers. Therefore, we can be sure about two things in the next decade: we should make use of the opportunity to buy land, and rental prices will continue to rise. As long as we do not overextend ourselves, the outlook will be very promising.”
 
Ronnie believes that the structure and the team at Hang Lung today is the best it’s ever been, though there is always room for improvement. He hopes that every employee will contribute to the Group’s continued excellence!
 
Click HERE to watch the video of Ronnie's interview.
 

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