by Lawrence A. Samuelson AIA, NCARB, NBAR

After a 30-year career of land planning, architectural design, and real estate development in the United States, I'm now living in Beijing. Watching the rapid urbanization of one of the world's great cities gives me a sense of déjà vu. Local planners and developers may be making some of the same mistakes we have made in North America.

The newly entrepreneurial real estate development community in Beijing does not always fully analyze their intended markets or consult adequately to confirm their financial assumptions. This seems to mirror what happened in Houston, Texas in the late 1980s and early 90s when overproduction of office buildings created high vacancy rates.

Developers who perform "due diligence" conduct market and financial feasibility studies before launching a new project. They engage in land planning and architectural design that does not commit the developer but presents options on which to base marketing and financial projections. This preliminary work tends to minimize project risk and maximize return on investment.

Defining the Market

My observation is that present development in Beijing does not respond to market conditions. It might be assumed that location or sheer population size would guarantee success, but I foresee difficulties ahead.

Current development, guided by shortsighted profit motives, appears to address only the luxury segment of the commercial office and residential markets. The clearest evidence of the lack of market sensitivity is in Beijing's residential developers' emphasis on luxury apartments and expensive villas to the exclusion of diverse, affordable housing.   >>>

Discuss this article in the Architecture Forum...

The Fourth Ring Road circling Bejing demonstrates dense, regimented urbanization. This is an unusually pollution-free day; the distant mountains are not usually visible. Photo: Lawrence A. Samuelson The ring roads of Beijing's central business district. In red is the "Beijing Fortune Plaza," a mixed-use urban project by Hong Kong developer HKI. Image: HKI   Click on thumbnail images to view full-size pictures.