An interview with Mr. Tony Cheung, Founder and President of
P&A Engineering Ltd. and PA Wellness Consultancy Ltd.
In recent years, China’s government has continued to launch policies in support of the big health endeavor. As a result, the real estate industry is witnessing a rise of wellness property projects. However, to develop wellness real estate is not an easy thing. It is different from traditional real estate developments in many aspects. SpaChina interviewed Tony Cheung, the Founder and President of P&A Engineering Ltd., to give us an insightful picture of the wellness real estate world in China.
A graduate of Harvard University, School of Design and with a diploma in aircraft engineering, Mr. Cheung has 40 years’ experience in engineering design in the architecture world and has been a pioneer in developing high-quality health club facilities in China for more than 30 years. Under his leadership, PA Group and its subsidiary PA Wellness now form the most recognized technical spa consulting company for facilities in luxury hotels, resorts and other leading properties. e.g., Shangri-la hotels, Ritz-Carlton hotels, Four Seasons hotels, Mandarin Oriental hotels, and Peninsula hotels.
Wellness real-estate development has strongly emerged as a new trend in the industry. What are the reasons for this? Is state policy a significant support?
This trend is inevitable. As people’s living conditions continue to improve and be satisfied, they pay more attention to health and longevity, or healthy aging. In addition to health activities and lifestyles, they also need a place. Wellness property is that place. There are different forms of wellness properties, including wellness residence, villas, resorts, retreats and more.
The government’s laws and regulations on wellness real estate are still limited in the scope of real estate, meaning the developers are the one who decide the type and usage of the landed property-to build a medical resort, a wellness resort, a senior care property, a hot spring resort or others. Afterwards, they have to obtain relevant license according to the laws in order to begin the construction, such as medical license, hotel management license, hot spring water quality proof, and etc.
People’s health is a significant symbol of a nation’s prosperity and power. In 2019, the government issued The Healthy China Action (2019-2030) as well as some other documents centering on disease prevention and health promotion. They call for a shift from disease cure to health improvement, striving to reduce the onset of diseases. A range of health, sport and TCM programs have obtained great support from local governments in terms of venues and subsidies. In my opinion, the government’s attitude to the health industry’s development is very clear — fully supportive. So there is surely a huge potential for China’s big health industry.
How many corporate groups have you met with that are developing wellness real-estate programs? Why will they need to develop the wellness real-estate?
Almost all the big real estate developers in China have had some actions, such as Ping An Property, Evergrande Real Estate, Agile Property, Country Garden, KINGOLD, Silversun, as well as a few tourist project investment groups and management groups.
Of course, they actively follow the hot policies of the government and the government also generously offers privileges to them. Many big life insurance companies are beginning to set foot in wellness real estate as well, as a way to complement the company’s other businesses like insurance or medical business. Wellness real estate will soon become a strong trend in society. Those who have sensed it have already taken action in order to achieve long-term development and success in the big health industry.
Are the wellness real estate programs in China found everywhere or are they concentrated in certain areas? Why? Are they combining their regional character and culture concept of wellness?
To wellness real estate, surrounding environment is the first thing to be considered. There are many places in China which enjoy pleasant climate, rich resources and beautiful scenery. They are quite ideal sites to construct wellness properties. The famous tourism provinces, such as Yunnan and Hainan, and those with all-year-round warm temperatures are perfect choices as well. In addition, China boasts rich hot spring resources, which is a key element for wellness. In many regions in Japan and Taiwan, the wellness resort and senior care retreats by natural hot springs are always the most popular.
Concerning the location, another factor is the developer’s own advantages. It depends on which areas they are familiar with so that they can give full display of the regional characters and culture concept. Some developers have projects across the whole country and some others prefer particular regions. As far as I know, the former, usually big national brands, are better at getting and integrating resources nationwide. And the latter can also be very impressive if they do well. Bolian Resorts & Spa, the wellness resort company second-to-none in Yunnan, is a good model. Laying the foundation on integrating regional characters with wellness and culture elements, Bolian creates not only a wellness destination but also a culture destination, drawing a lot of guests from near and far.
Apart from the two factors above, I don’t think there are many limits or preferences on the locations. From the angle of attracting customers and running business, convenient transportation is also a key point. Without doubt, the properties nearer to large populated cities more easily draw guests.
What is the situation for wellness real estate in China now? What are the most popular types or themes of wellness real estate?
I have designed and developed the “wellness part” of SPA and Wellness projects for nearly 40 years. I find that wellness real estate in China is still in the starting phase. Why do I say so? Because many of the projects don’t have a clear theme. Sometimes, they want to get everything together, and the result is they fall into chaos without true content. Many others blindly invest in hardware, without professional knowledge and comprehensive planning. They even employ people who don’t have any health knowledge to help them do so.
This is what the investors and designers need to beware of. The industry needs experienced professionals, who understand the state’s conditions and China’s culture and traditions, and are good at giving the right guidance, to join in the project construction. They can tell how to choose, how to use, how to recognize the effect and how to design proper experience procedure that satisfy guests’ phycology. China’s traditional Feng Shui concept should be taken into account in the wellness real estate development. It is not superstitious. Rather, it benefits people by adjusting to the natural energy magnetic field, which is quite scientific.
Wellness vacation resorts that target affluent people is the mainstream form of wellness real estate in China during recent years, including the resorts focusing on hot spring, food therapy, spa, TCM, western holistic healing, kinesiotherapy, Taichi, yoga or others. They have been the most acceptable and popular ones so far. At such properties, we not only see the involvement of international management brands, but also discover the rise of many excellent national brands.
The emergence of senior care properties is another trend. Some of the good ones are combined with TCM, hot spring and food therapy. However, Chinese seniors between 60-70 years old who can move freely still hold to the old consumption habits that largely fall behind those in Europe and America. As a result, the senior care properties in China at present still fail to reach international standards in terms of scale and services. In addition, personnel cultivation is surely a key factor for the long-term development of wellness real estate.
Could you share with us one or two impressive cases? What are the unique characteristics of the best wellness properties?
Recently I was introduced to a project called “Alliance Cooperation of China’s Insurance Industry and Senior Care Industry”. It advocates that traditional real estate needs breakthroughs, transformations and new industry growth points. Statistics show that over 100 real estate enterprises in China have set foot in wellness real estate.
To me, the most attractive type is the senior care project combining real estate with insurance capital. Insurance capital is a long-term and steady source of funding and is always large in amount which is suitable for long-period value investing. Such senior care projects are greatly welcomed by the market. By the end of 2017, the total scale of life insurance capital in China was 1.3 billion yuan. The real estate projects invested by insurance companies occupy 30% of total. The China Insurance Regulatory Commission has issued articles many times to encourage and support insurance companies investing senior care real estate, and it even permits insurance enterprises to establish particular departments to manage senior care projects investment. At least, some insurance companies that I am familiar with have actively taken actions. I stay very positive to this trend. The insurance companies’ biggest advantage is that they already have a group of target customers, with their accurate data at hand. They may also offer packages that integrate medical services, senior care finance, and more.
A friend of mine is building a medical wellness community in Hangzhou. It is called Taikang Community·Daqing Valley which is in inside the West Lake Scenic Spot area, surrounded by Xixi Wetland and Zhijiang National Holiday Resort. It’s only 11 kilometers away from Hangzhou downtown. The project involves quality education resources like the China Academy of Art and the Zhejiang Conservatory of Music which give the region a profound art and culture atmosphere. In the future, he will build more characteristic towns, the first of their kind in Zhejiang province, including Yunxi Town, Longwu Tea Town, and Culture Town. He said Taikang would continue to innovate and deepen the concept of “cultural senior care” community. I believe they will soon become star projects in the Yangtze River delta region.
What are the difficulties and challenges during the development of wellness real estate projects?
From the perspective of a project consultant, I think the investors need to be far-sighted and develop long-term customers instead of following others blindly. The designers need to update themselves with international standards and learn from others’ experience. The marketing personnel should lead the public to establish stronger awareness in wellness lifestyle and wellness consumption habit.
What trends do you see in the big health field of China?
Big health will be the mainstream in the future’s real estate industry, travel industry and people’s daily living. This is not only a trend in China but in the whole world. With time, wellness real estate will dominate the real estate industry, transform the residence structure and even change the whole city appearance. Wellness will enter into every aspect and detail of people’s life.