Archive for the ‘Living’ Category

Airport billboards

Friday, November 30th, 2007

As a kid, I’d grab my father’s fresh copy of the Far Eastern Economic Review just to check the regular Travellers’ Tales page. Occasionally, there’d be photos of English language bloobs, typically from a restaurant in Phuket, Tokyo or Taipei. They’re just too common place to deserve notice, but being in the property industry, I do enjoy the billboards at Beijing’s international terminal. Below are a few shots taken during the year. By the way, Norman Foster’s Terminal 3 looks VERY good. It will mean a much needed doubling of capacity when it opens next year. The Gugong-Red roofing feature allows it to stand out from the region’s post modern terminals.




Learning Mandarin, is it worth it?

Sunday, November 11th, 2007

According to The Economist more than 400 secondary schools in Britain are now teaching Mandarin. There are now 30 m foreign students of the language and there will be 100m by 2010. Even my brother’s old high-school in Denmark now teaches the language as a minor subject. Besides some wishy-washy soft parts of the curriculum, at the end of the course students are expected to:

  • understand daily speech and be able to communicate orally
  • be able to write about 300 major chinese characters
  • be able to recognise about 700 major characters

Back to the article, the issue raised was, is it worth the effort to gain fluency? Below are two excerpts from the article that sum it up:

“But is learning moderately good Chinese worth the opportunity cost? After all, in three or four years a British graduate could get most of the way to qualifying as a lawyer, for example. According to the Association of Graduate Recruiters, those who hire British graduates attach little importance to language skills in general. So to justify the extra effort needed, the demand for fluency in Mandarin would have to be way above demand for, say, French.

Yet anecdotal evidence suggests that there is little call for Britons with Mandarin. One reason is that many Chinese already speak reasonable English. In China’s bigger cities children often start learning English in reception year. It is compulsory for all from the start of secondary school to the second year of university. To study for a doctorate, even in fine art or the poetry of the Tang dynasty, students need to show fluent literacy in English. An academic career is closed to those who cannot do so.”

“For this reason, Britons at home never need to use Mandarin in their dealings with Chinese firms. Haier, a white-goods maker, for example, reports that every Chinese employee posted to its 15 overseas industrial parks, 22 trading companies, 30 plants and eight R&D centres outside China speaks good English.

Within China companies can hire an expatriate who speaks Chinese. Or, more often, they take their pick from an abundant supply of local graduates in English who are happy to work for 2,000 yuan (£130) a month. “I took an 80% pay cut to come here because I wanted to learn the language,” says Ken Schulz, a software engineer from Silicon Valley who studied Chinese full-time for four years at Beijing’s University of Language and now works in the capital at WorkSoft, an outsourcing firm. “I’m the only foreigner in an office of 1,200 people, and I hardly get any opportunity to use my Chinese.”

But don’t be disheartened, with little effort, most expatriates in Beijing (fewer in Shanghai) acquire basic conversational skills within a year of moving here. For spoken Chinese, the learning curve starts off flat, but steepens once you get past discussing your country’s weather and prominent people (for Danes, appropriately humanistic H.C. Andersen) with the city’s garrulous taxi drivers. Without literacy, and it is a slog, you won’t get much further. But irrespective of how far you get, being able to interact in another language is an enriching experience, besides the kick you’ll get out of impressing visiting friends and siblings.

Source: The Economist

Beijing vs. Shanghai

Sunday, November 11th, 2007

We often get asked by expatriates, “What’s the difference between living in Beijing and Shanghai?”. Here’s an excerpt from an email sent to a Dutch client who may be relocating from Tokyo. His company gave him the option of moving to either city.
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Shanghai is quite different from Beijing. In Beijing all the development is on the east side, with the villas in Shunyi to the northeast. Shanghai’s divided by the Huangpu river. Puxi on one side, newer Pudong on the other. There are 4 main villa clusters (and several smaller ones). Three are on the Puxi side, and one on the Pudong side. Your office is in the Xin Tian Di area on the Puxi side of the city.

The villa area in Pudong is new and quite well planned. The ones in Puxi are similar to those in Beijing. None of the clusters in Shanghai have the same concentration of amenities that Shunyi (in Beijing) has. The area around your office is quite pleasant. There are a number of good apartment options, but being in the city centre, tends to be favoured by singles or couples with toddlers.

During peak hours, the commute between your office and the American School would take an hour while the commute between the American School and the newer Pudong cluster would take at least 90 minutes. Of course, there are international school in all the villa clusters. But in a nut shell, in Shanghai, your choice of housing location is VERY dependent on (a) your school and then (b) your office. In Shanghai it’s more like living in different townships rather than a single city.

As for lifestyle Shanghai is definitely more developed and a better run city. Beijing is catching up, with the Olympic infrastructure being the driving force. For Chinese culture, Beijing is richer. For nightlife and foreign acts, Shanghai is more like Hong Kong. Many Beijing expatriates learn to speak at least rudimentary Chinese within a year. In Shanghai few do as English gets you further - Philippino waiters and maids are common there. Shanghai shopping is definitely superior, expecially in the higher end. But for mountains and outdoor excursions, Beijing has more to offer. It really depends on what your interests are.

One last thing, please budget for Beijing short-term housing to be very expensive in the summer next year due to the Olympics. Expect rents for small serviced homes to be similar or more expensive than for a long term villa. Also, you should book now. When relocating to most cities, it’s normally a good idea to spend 1-2 months in a serviced apartment during which you find a more permanent home. However, in Beijing (and Shanghai) expatriates cluster in a handful of high-occupancy villa communities. The turnaround is over the summer, and by July each year, many of the better homes are leased out. By August you’re left with either poor decor and/or crazy rents (from wealthy landlords who are not price-sensitive). If you’d like to be here for the Olympics, you need to prepare early - either by staying in a serviced apartment, or selecting your permanent home in say, May. If the Olympics is not important, I recommend selecting your home in June and moving in as soon as the games are over.

Hope this helps in your decision making. Do let me know if you have any questions.

Best regards,

Carol

Expatriate Relocations [Olympics Part II]

Wednesday, August 29th, 2007

We recently passed the 365-days-to-go mark. Companies are considering how it will affect their relocations. Here’s an excerpt from an email sent this morning to one of our clients.

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Yes, the 2008 Olympics is starting to affect rents, or to be more precise, Landlords’ expectations. This is a concern for us - but primarily for two types of housing:

- Type X: privately owned properties in the city renting for under USD2,500/month
- Type Y: serviced apartments.

For Type X, quite a few landlords are asking for 10 month leases or a premium rent of upto 3x the market rate. Landlords in the higher ranges don’t seem to be as optimistic. This could be because they (i) tend to be more experienced investors and (ii) prefer a steady rental income over a short term windfall. Consider this: renting out to Olympic tenants would de-facto entail leaving an apartment empty for the month before and the month after the Olympics, equivalent to 3 months rent. Add in the cost and time of providing bedding & kitchen utensils and it’s not looking so profitable.

Let me get back to answering your questions. We have seen rental increases of 5-10% over the last 4 months at popular Type X mid-tier CBD properties such as Gemdale, China Central Place, Fortune Plaza and Central Park. There has been increased demand (and occupancy). Completion of adjacent malls in these areas has made once messy construction sites attractive neighbourhoods. Despite this, there are still vacancies. With old leases expiring throughout the year, I expect a continuing regular supply albeit at higher rents.

For Type Y, the major serviced apartments have been in the process of setting their rates for a while. There’s been lot of uncertainty on their part, and until recently, they were reluctant to quote on paper. Quotes over the phone even changed from one day to the next. We experienced this with ******* who wanted to move to Oriental Plaza. Currently quotes for the two months around the Olympics are at over 3x standard rates. An interesting point is that medium-term leases at Oriental Plaza terminating just before the event are at the favourable 1 year rate.

What advice should one give potential transferees?

- For Type X: Transferees should budget having to pay a premium of 10-15% for one-year leases. Landlords’ expectations may drop as we get closer to the Olympics, and they rationalize their expectations. However, it’s best to be prepared for the worst. For summer moves, if possible, delay till after the Olympics.
- For Type Y: Avoid at all cost leases that extend into the month before and during the event. I expect the serviced apartments will do well due to the large number of corporate and provincial visitors.

- For families living in Shunyi with rent budgets above USD4,000/month: Some Landlords may expect a premium but I expect it will be a proportionately lower premium than for Type X properties. If need be, move-in early (June or early July 2008). But, again, if possible, delay moving till after the event.

A possible strategy for HR might be to treat moves starting, in say, May as short-term assignments with transferees staying in a hotel or serviced apartments. During this time, the transferee selects a home. He leaves Beijing in July and returns to take up his permanent assignment right after the Olympics. Of course, there are other factors to consider, but this may be workable for some. Here’s an excerpt from a report that looked at the Sydney Olympics’ occupancy rates:

Occupancy rates fell in the few months before the Games: from 83% in March to 74% in May, and finally to 68% in July and August. There was a further drop to 67% in the two weeks leading up to the Olympics. The games themselves provided hoteliers with a short-term increase in revenue as average room rates increased by 40% and occupancy rates stood at around 80%.

(Source: ETOA Olympic Report http://www.etoa.org/Pdf/ETOA%20Report%20Olympic.pdf)

If Beijing replicates Sydney (not implausible as we are also a distant location for higher-spending Olympic visitors), those private Landlords who find deep-pocketed Olympic tenants will indeed make a short-term windfall. However, there will be availabilities throughout. It will be interesting to see when optimistic Landlords become rational and start normalising rents. Our guess? Late July.

Hope this answers your questions. Do let me know if you have any more.
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Birth in Beijing

Saturday, July 21st, 2007

A friend called the other day. We’d met at a farewell dinner. She’s 3 months pregnant and wanted to know a bit more about the maternity hospitals and clinics in Beijing. From the US, she’d recently taken up a job in the city with a well know media firm. A bit too recent. Her insurance did not pay for births during the first year of coverage. I believe most insurers have this clause. Alas, bundles of joys aren’t always scheduled. Z’s arrival cost in the region of USD30,000 including pre & post natal care for a non-caesarian birth at Beijing United Family Hospital. An astronomical amount for those used to free health care, but a reasonable sum for others. At the other end of the spectrum, O’s birth at a maternity hospital cost RMB6,000 (a RMB10,000 deposit was required). Pre & post natal cost was negligible. His parents were very satisfied with the treatment given.

So, what did we get for our money? More attention from nurses and mid-wives. 5 days in a private room during which we received a hands-on course in basic infant care. A comfortable environment. As a working mother-to-be, I also appreciated that I could schedule appointments with my doctor. In contrast, for my amniocentesis I was referred to Xie He (Peking Union). This entailed 2x 4 hours of queues that ended in a public announcement that Z was OK, and a girl. We’d considered surprising ourselves. As for how good the doctors are? I’m not qualified to judge. Z’s arrival was thankfully complication-free. I had appointments with 4 doctors before settling on one. They encourage this to increase the probability of the mother being acquainted with the doctor on duty during the birth. There are other private options in the city. A landlady I know just gave birth at the new private maternity hospital round the corner from Beijing United. She was pleased and it was half the price. Would I go there for a second birth? Yes, as I’m acquainted and comfortable with it (and thankfully insured). The unknown is a major issue in any birth - and also part of the wonder.

10 beds in 2008 [Olympics Part I]

Tuesday, June 12th, 2007

Last month we received an inquiry from a Danish broadsheet. They were sending 10 journalists out to cover next year’s Olympics and would need accommodation for a month. Their soon-to-be Beijing correspondent was coming out on a fact finding trip for his colleagues (and also to find his own long-term housing). Peter was consulting.

Beijing’s serviced apartments are only just starting to publish their rates for short term (1 month) guests. Rates are currently at 3-4 times the norm. Most require half of the total rent to be paid on booking and the rest on arrival. One bedrooms at the city’s mid-tier serviced apartments now rent for around RMB10,000/month. It’s not going to be cheap next year.

At Athens the Danes rented a house together that was an hour’s drive from the city. They were looking for something similar here. We put our thinking hats on. There is a house in the first phase of a Shunyi villa compound that rents for a very reasonable RMB700/day. It’s a bit run down, but perfectly inhabitable. The landlord’s representative verbally agreed to lease it to the journalists for the standard rent. Mission accomplished, the Dane returned home. A few days later, Peter calls to confirm the booking and but is told that it’s not going to happen. It will be for lease, but the landlord hasn’t decided how much he wants to charge. It won’t be RMB700′day. The Client isn’t happy.

Less price sensitive corporate guests who book early will be catered for next year. At the other end of the spectrum, less discerning back packers will (as always) be able to find shelter. Expect a myriad of home-stay and low-end homes for short-term lease. However, there will be a shortage of mid-tier options.

In Athens, a teacher could pack his personal items into his garage, lease out his suburban home at a premium and fly off to Florida for four weeks with his family on the proceeds (and have change to spare). Daily expenses would be steal for Euro earners. It won’t happen here. Middle income accommodation would be deemed unacceptable by their middle income counterparts abroad. There is a plethora of mid-tier homes for rent in the city. However, the landlords would have to forgo or shorten leases commencing August 2007 and even if the property happened to be vacant next summer, there are other factors weighing against leasing to Olympic guest. A one month Olympic lease would entail a property being de-facto unleasable for 4 months - not to mention the bedding and kitchen utensils that would have to be provided. Would you set aside r your investment property for rent during the Olympics, or rent it out next week at the standard rate to an expatriate?