Keeping ahead of the curve with R&D

PETALING JAYA: You don’t often see property development companies investing substantial sums in research & development (R&D) but China-based China Vanke Co Ltd (Vanke) has been spending RMB300 million (RM178 million) annually on R&D since 2006, especially on aspects of property development. In fact, China’s largest residential developer owns and operates the country’s only private R&D Centre focusing on property development techniques, building materials, landscaping and smart living technology.

“Vanke’s R&D does not produce any products. We work together with third party partners to research and improve building skills and materials quality. Through such research, Vanke will gain the latest industry knowledge. It is something that keeps us ahead in the industry.

“Meanwhile, our research partners, including building material manufacturers can produce better products and sell them in the open market,” Vanke’s Xiongan Green Research and Development Centre senior research manager Professor Zhu Yangyang told the Malaysian media during a familiarisation trip to the centre located on a 200-acre site in Dongguan, China recently.

He highlighted that Vanke’s vision is to create value for all parties. “The purpose of setting up the R&D centre is to improve our product quality. Manufacturing is not something we are aiming to move into. We would rather create value for all parties.”

The R&D Centre comprises a building workmanship lab, landscape and plant research zone, home living technology showroom, as well as a home furnishing facilities and testing lab as Vanke is the first developer in the country to offer fully-furnished units.

The centre conducts tests such as building component durability, earthquake resistance and building water leakage and noise resistance tests. It also provides testing labs for building materials and home furnishing products in the market.

“As we are the biggest private funded property development research centre in the country, we can initiate a test whenever we want. Some of our research outcomes have even become the benchmarks for the country, such as manmade wood, cable and wiring quality and standards,” he revealed.

The standard procedure for any research matter, he explained, starts with the paperwork before multiple lab tests, followed by applications in selective pilot projects to further observe the practicality and efficiency of a process or material. If viable, the research results will be applied at Vanke’s new projects locally and internationally.

Win-win situation

He adds that Vanke does not restrict its partners from producing and selling products that have been enhanced based on the research done at the centre.

“The idea is to raise the quality of property development as a whole. We do not own the exclusivity to the research. We need to be fair, we provide the facility but it will not create any value without the knowledge contribution from our research partners who are the experts. We all benefit from the research,” he said.

To further create value for all parties, Vanke has jointly set up a B2B building materials sales platform called VVUPUP.com, with

China’s Cura Investment and Zhong Tian Build. The platform has more than 3,000 building material suppliers with more than 100,000 product listings.

“The B2B website is the only building material purchase channel for Vanke’s projects. In 2018, Vanke contributed some RMB38 billion in sales via the website while other developers contributed some RMB20 billion,” he noted.

According to Vanke, the platform recorded a total sales of RMB120 billion last year, with Vanke contributing some RMB36 billion.

Ready to contribute to the Malaysian market

“Vanke is not just an ordinary property developer who builds, sells and leaves. We build, sell and stay on to provide customer service, such as property management. This after sales service gives us direct access to our property users’ feedback. Their feedback is often a source of inspiration for new research so that we can do better in our next project,” Zhu noted.

Vanke is also China’s largest property management company by total asset value so, it has a strong database of customers.

As it gears up to launch its first project in Kuala Lumpur, Malaysia, Zhu said the R&D team is ready to work with local parties.

“The R&D department hopes to contribute our knowledge and experience to Malaysia. We are open to any cooperation opportunity, be it in doing research or knowledge exchange,” he added.

Vanke purchased an 8.5-acre tract in Jalan Raja Chulan for RM500 million back in 2017. While the residential project details are pending government approval, it was reported that the proposed development will be launched soon, in 2020, with a gross development value of RM5 billion.

This story first appeared in the EdgeProp.my pullout on Jan 24, 2019. You can access back issues here.