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Chuang Cui is a China’s national level registered structural engineer since 2010. He started his career in the field of architectural design, and then transitioned to project management and overall company operation management. He is currently the Vice President of Operations of a listed real estate group, in charge of strategy, operation, risk control, legal affairs and human resources.
He will defend his Executive Doctorate of Business Administration (EDBA) in September 2023, on the theme “”Examining the Transformation of Real Estate Assets towards the Asset-light Model in China: An Analytical Case Study”” under the supervision of Professor Marco Heimann, professor at iaelyon School of Management, University of Lyon 3.
Thesis Direction
Pr Marco Heimann
Thesis Title
Examining the Transformation of Real Estate Assets towards the Asset-light Model in China: An Analytical Case Study
Abstract
In the past, China’s real estate companies have always adopted a typical asset-heavy operation mode, in other words, completely relying on their own strength for land purchase, design, construction and sales, and before sales, real estate companies mainly rely on financing loans to maintain the process of business activities. When the market is good, people want to buy houses and prices rise, and sales can quickly generate cash flow to pay off the loans.
However, with the continuous increase of land costs in China and the increasing difficulty of financing loans, the profit margins of real estate companies in this asset-heavy mode continue to shrink, and at the same time, there will be a greater risk of cash flow. In such an environment, many companies began to think about the transformation of asset-light, hoping with the help of their existing brand influence and management ability, and cooperate with the entrusting party with land resources, carry out brand output and management output, and then collect the corresponding service fees.
Many companies do not succeed in this transformation process. What are the success factors needed to be present for the transition to asset-light is the question this paper wants to address.
Considering that the asset-light model is still a relatively new model for Chinese real estate, and there are not many research results accumulated in the past; at the same time, the performance of companies varies widely, this paper prefers to find the answers to the above questions through case studies and conclusion analysis, i.e., qualitative research.
Three representative and successful companies were selected and questionnaires were sent to the executives and managers. Based on the 37 valid questionnaires returned, the responses were analyzed and organized, and four management lessons (or success factors) of general interest were derived. At the same time, a failed company was selected for analysis in order to provide a strong argument for the previous success factors from the opposite perspective.