This story is part of Forbes’ coverage of Asia’s Power Business Women 2024. See the full list here.
Stephanie Lo in May assumed the role of vice chairman of mainland China-focused Shui On Land, the flag-ship unit of Shui On group, founded in 1971 by her billionaire father, Vincent Lo. She will have plenty on her plate as she is tasked with steering the developer through a property market crisis that began in 2020 when the Chinese government kicked off a crackdown on excessive borrowing by builders.
Lo knows to play a long game, and plans to remain steadfast while waiting for the turmoil to subside. In September, Beijing unveiled its biggest stimulus package since the Covid-19 pandemic, including lower borrowing costs and smaller down payments on second homes. “There will be some more years to come before we can actually settle and see a bounce back,” she tells Forbes Asia in an exclusive interview at the company’s Hong Kong headquarters three days after the stimulus measures were introduced.
Shui On Land posted an 88% plunge in net profit to 72 million yuan ($10 million) in the first half of 2024 on a 68% drop in revenue to 2.1 billion yuan, attributed to fewer residential completions, which in turn reduced property sales. But the company has “a very good foundation to weather the storm,” Lo says, partly because its portfolio is mainly in Shanghai, one of the few mainland Chinese cities still attracting buyers for high-end homes. According to a report from real estate consultancy Savills, first-hand high-end residential transaction volume surged more than fourfold in Shanghai in the second quarter of 2024 from a year earlier. In late September Shui On Land also sold all 108 units in the first phase of its Lakeville VI luxury residential project in downtown Shanghai, which is scheduled for completion in 2026.
Lo, a trained architect, also points to Shui On Land’s focus on creating big developments that preserve historic neighborhoods and transform them into retail and entertainment destinations. Chief among them is Shanghai Xintiandi, a 1.8-million-square-meter (total gross floor area) site launched in 2001 that turned a rundown area into an upscale shopping, entertainment and business district. Last year, the company opened two more developments in Shanghai: Panlong Tiandi, which revived one of mainland China’s ancient water towns—known for their bridges and canals—and includes commercial, residential and hotel assets on more than 500,000 square meters, and Hong Shou Fang, an 88,000-square-meter office and retail project. The new sites helped lift first-half rental income by 16% to 1.8 billion yuan, three-quarters of which came from Shanghai.
The next wave of expansion after the property crisis will come from similar urban regeneration schemes, Lo predicts, adding that Shui On Land is in “a good position to capture future growth.” The company has already built Tiandi (which means heaven-earth) complexes with similar concepts to Shanghai Xintiandi in Chongqing, Foshan and Wuhan. Lo also notes that Shui On Land has been paring debt since 2016, when most Chinese developers were tapping historically low interest rates to fuel red-hot expansion. At the time, the move was viewed by some shareholders as “counterintuitive,” she says, but it has paid off. Shui On Land’s net gearing ratio was 53% as of June 30, down from 81% at end-2015 and well below the three-digit gearing levels common among developers that have defaulted, such as China Evergrande Group and Shimao Group. “I think [deleveraging] is the reason why we can be in a stable standing now,” she says.
Lo joined Shui On Land in 2012 after working at architecture and design firms in New York. She became vice chairman of subsidiary Shui On Xintiandi in 2017 and executive director of Shui On Land a year later. Her 76-year-old father is chairman of both Shui On group and Shui On Land and majority shareholder of the latter.
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