Wu Yajun, president of Chongqing-based Longfor Properties and the richest woman in China. (Photo/CFP)
Longfor Properties has become a dark horse in the Chinese realty market in recent years and its success has enabled its chairwoman Wu Yajun to assume the title of China's richest woman, boasting a fortune of 39.06 billion yuan (US$6.2 billion), for three years in a row.
One secret behind the success of Longfor is speed, as evidenced by the location of its headquarters in Beijing, which boasts convenient transportation for its employees coming to the office or going to the airport for business trips.
Since the inception of the company, Wu Yajun has steered the company through the principle of high turnover. At Longfor, it may take only five months for a project to break ground after securing the land, while the average time for the process is eight months. The speed of Longfor's development process is based on a formula which calls for 90% duplication and 10% innovation.
The 90% duplication has been made possible, thanks to module-based products. After securing a plot of land, managers of Longfor would first determine the type of development project to be built on the land and its architects would select modules from the database for assembly, thereby saving 90% of the time it would normally take to design the project. Then the design department tweaks the design according to the features of the land.
Longfor is one of the most profitable realty developers in China, boasting a 23% net profit rate in the first half of 2012, the second highest among major developers, trailing only China Overseas Holdings at 27%.
One major factor behind the high profit rate is stringent cost control, carried out via its cross-function concerted IT platform. The platform can detect unreasonable outlays in every business unit.
Talent is the major weapon of Longfor, which offers high pay to retain its best employees. The annual pay for a financial superintendent, for instance, reaches 4 million yuan (US$640,000) and that of a project superintendent hits 1.5-2 million yuan (US$240,000-$320,000).
In addition to residential projects, Longfor has also made major inroads into the commercial-property market. In the first half this year, commercial-property sales in Beijing, Chongqing and Chengdu contributed to one quarter of the group's total revenue.
Its commercial complex in Beicheng of Chongqing, for instance, consists of two supermarkets, two multiplexes, one department store, 30 restaurants and entertainment outlets, and over 200 boutiques.
In 2010, Longfor set up a commercial property department to accelerate its development in the highly lucrative market. The company aims to set up one regional shopping center every three to four years and boost the share of rental income from commercial properties to 30% of its total revenue in 10-15 years, according to Wu Yajun.
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