A life of leisure

Real estate and leisure developer Mr Teh has his eye on China's future. Whether splashing around in his water park or settling into one of his design concept apartments, you'll notice his vision in every detail

----By Jody Braverman

Malaysian-born British national "Mr Teh" is a self-proclaimed workaholic. Before investing in China he toiled away in the world of corporate finance, which he says took too much of a toll on his mind and body. In 1995, he came to China to take advantage of the possibilities arising in the leisure and property industries. Today, Teh's Dino Beach water park is a successful enterprise abutting another multimillion-dollar development, Royal Garden, the brainchild of Teh and four world-renowned Italian designers. Teh's getting only marginally more leisure time than he did back in his corporate finance days, but he's certainly enjoying watching his labors bear fruit.

EuroBiz: Why did you choose China as a place to invest?

Mr Teh: I've been investing all over the world. The reason I chose China is the rate of literacy. That's something I look at wherever I invest. The way the economy is able to expand or grow very fast is totally dependent on human resources, and having an efficient and trainable workforce is totally dependent on the level of literacy of the country.

EB: Why did you decide to build a water park, of all things?

Teh: If you look at the scenario in China, as income goes up, the amount of leisure time goes up. That's first. Secondly, the "one child" policy in China implies that six adults are feeding one kid - husband and wife, plus their parents on both sides. Consumption and leisure spending culturally dictates that that kid will be spoiled. So that's where the money will go to. And it's very apparent today in China if you look around; the expansion of education, for example, private schools, dance classes, anything that's related to the upbringing of a kid has priority over total household income.

EB: When you first opened the park, was it successful?

Teh: It was a cultural shock for us. The park was designed by US standards, but the income level in China was not at that level. [From 1995 to 1998], an outing to the water park took up something like 15 percent of a household's monthly income for a middle-income family. A water park outing is a basic outing in Western society, but when you put it in China it became luxury goods. We totally messed up the pricing policy in the beginning and it took us three years to adjust that, and it took us another six years to slowly push it back up. Even today we are still only at 40 percent of US prices with the same equipment.

EB: What was the initial plan for your real estate investment?

Teh: We leased the land for real estate, and then later on we negotiated with the government to get the park. Any leisure activity helps to drive the people traffic to a certain area and it will speed up the development of the area around it. So our objective was to use the water park as a magnet to draw interest to the community around it. It was always the plan to drive the water park and then start building the real estate development next to it.

EB: What was the concept for the property development?

Teh: As income rises in China, the requirements for private housing get more and more intense. By the definition of communism, all land and assets belong to the state, which implies a homogeneity in the design of houses. When the rules changed to housing being a commodity and people having the right to choose to buy what they wanted, the questions were: what does the consumer want, what are they living in now and where and how do they want to live in 10 years? After evaluating the market conditions we came to a conclusion - to build houses that are as close to what Western society has today in terms of design and in terms of space allocation, so that our properties can withstand the test of time.

EB: How did you come to that conclusion?

Teh: The conclusion was really not that difficult if you take into account the number of local Chinese students that are being sent out to the rest of the world to be educated. As they go out, they will see how people live and they will say, 'That's the way I want to live.'

EB: What was the design concept behind Royal Garden?

Teh: Minimal. Less is more. Take out the walls, have as few walls as possible in the house, have as much transparent space in terms of windows and getting more sunlight in. That way you can borrow the notion of space from outside of your house. But to achieve that you need to invest a lot of time and, for sure, you have to increase your construction costs to structurally change the way the house is built as opposed to most of the projects that are in place in the same market. The most cost-efficient house design is by way of using a lot of sheer wall; the walls are structural walls, as opposed to the notion of using a frame structure. Frame structure gives you a lot more flexibility in terms of space; a sheer wall structure gives you a lot of obstruction and makes it difficult to redesign your house.

EB: Is China ready for this minimalist concept?

Teh: We are reducing the walls within the house to give people the flexibility to remodel their house in the way they want it. By having a minimal design, we are trying to free up the space for the potential buyer. They may remodel the house in a very gothic style, but whether it's gothic or neoclassical is basically a function of your tastes; there is no conflict about whether you want more space or less space.

EB: How is this project different from the typical high-rise apartment buildings you see in Shanghai?

Teh: In Shanghai today, most of the buildings have to comply with a lot of strict earthquake codes and a lot of strict sunlight requirements by the state, which controls what you can design. It is the bylaws that control what you can build. The difference between Royal Garden compared to some of the more common projects you see in the market is a question of cost. If my goal is total cost efficiency in terms of construction costs, the houses that I would build would be the same as the other houses in Shanghai today. By taking sheer wall away and starting to free up the space in the house, we might need to thicken the floor slab, have more steel in the structure. Once you increase the steel content, of course the cost of construction goes up. The cost is higher but what the consumer gets is much more flexible in terms of internal space.

EB: Why did you decide to bring these four well-known designers - Patricia Urquiola, Mauro Lipparini, Piero Lissoni and Carlo Colombo - onto the project?

Teh: Our reason for selecting them as architectural designers was that they are all very, very good industrial designers. Basically, they are the driving force of the interior products which are commonly used in industrial design. They are architects, they are interior designers, but they are much more focused on interior product design - coming up with innovative ideas for how to build a new chair, a new bed, how to make the bed more comfortable, uses of new material. Whatever they have in their mind today will be out on the market in five years. So if you get a designer like that to be your main architectural design consultant, when they design your building today they are already conceiving what will be out in the market in five years. If I get an architect who is not an industrial designer, they will put into the house what they see in the market now, which would mean that they are five years late. So, if you want your house to withstand the test of time, these guys will be able to put you there. They know what is coming because they are the people who are designing it.