Chapter 159 You Get What You Pay For
After listening to Lin Ruoyan's explanation, Qin Shuang and Chen Jun were enlightened and looked at the problem from a new height and depth.
Qin Shuang originally thought that she had made great progress in learning professional knowledge recently, but in fact, compared with General Manager Lin, she was still a long way behind.
Although we made the right judgment on this project, winning it requires more than just technical expertise. We also need to understand the real demands of local authorities. These demands encompass all aspects of the project, not only addressing the living needs of ordinary people but also bringing greater benefits to the local community.
Chen Jun nodded repeatedly after listening to this. Without being bound by professional rules, his way of thinking would not be limited to a fixed professional field.
Coming from a rural background, he deeply understood that success required more than just personal effort. The various departments under his control each pursued their own goals, and his work happened to bring them greater benefits. Success depended on capitalizing on the situation and following the flow. If one focused solely on making money, it would be difficult to gain recognition and support.
He understood that what Mr. Lin wanted to do was something that everyone could benefit from. While building a complex might yield slower returns and not be as easy to sell as residential properties, the potential for what could be built into it and the resulting benefits to the local community was immense, something that simply residential communities couldn't match.
Qin Shuang said, "I understand! Simply building residential space is a dead end. Shouldn't we also increase the commercial portion, revitalize commercial and office spaces, and develop the entire site as a new economic driving force? Residential space is just a small part of the equation. Our plan should emphasize the construction of new projects, attracting investment, joining emerging industries like the internet, creating new jobs, and continuously generating revenue for the region, right?"
"Yes, you used that word well. Other developers are still debating how to turn this area into a residential area, whether to build luxury homes, the appropriate ratio of various apartment types, whether to use paint or tile for the facades, and which foreign style to copy for the overall style. They consider commercial areas merely as supporting facilities for residential buildings, and even try to turn office buildings into residential buildings in disguise. Their layout is naturally inferior to ours.
Once our idea comes out, it will definitely impress the relevant departments. Qin Shuang, you will be responsible for all matters related to the land auction for this project in the future. Lin Ruoyan quickly handed her responsibilities to Qin Shuang, and did not forget to comfort him.
"Don't be too burdened. You're just practicing with this. It's okay if you can't get the land. It just means the people in charge here still have limitations and aren't suitable for us. To make a project a success, you need the right time, place, and people. If they don't accept our approach, we'll move to another city and slowly look for a suitable one."
Lin Ruoyan boasted without a burden. Since she couldn't make it here, she could squeeze the system and look at other cities mentioned in the book. Even if all else failed, building an international school or creating a new city should still be enough to cover her expenses.
How could this be easily exchanged? A project worth hundreds of millions, and they just threw it to her? Qin Shuang's heartbeat quickened again. Fortunately, she had been forced to draft an 80 million yuan land purchase contract right after joining the company, and her heart and ability had been tempered. It was just a bid for land, wasn't it? No matter how expensive it was, it was still much cheaper than the land in Beijing.
There is still a need for initial investment, and she needs to know how much it should be. She doesn't want to end up spending a lot of money on a detailed plan only to have it fail to materialize, causing losses to the company.
Furthermore, the commercial ratio wasn't a random assumption. After previous projects, Qin Shuang had a firm grasp of the costs of various types of real estate. Commercial and office buildings were inherently more expensive to build than regular residential properties. If they couldn't sell, or if they sold for less than the initial investment, wouldn't that be a loss? Therefore, other companies tended to focus on residential development, minimizing the actual commercial footprint, creating at most a few ground-floor retail spaces and, at best, a large-scale shopping mall.
However, what Qin Shuang and Chen Jun didn't know was that Lin Ruoyan was developing urban complexes, which obviously required more investment than residential projects, just to have a stable source of spending money.
Her more promising projects, like the school and the XX New Town, aren't too expensive. XX New Town currently only has a hundred acres of land, so the cost is probably only 100 or 200 million yuan, which will only last for two months. If they can secure a project and build an urban complex, they could spend at least 300 or 400 million yuan. By commencing work on multiple projects simultaneously, there will be more channels for steady monthly spending.
So she had a clear plan for this urban complex, regardless of cost, and she wanted to do it the best she could, starting with finding a design company.
Lin Ruoyan said, "Xiao Qin, contact the design department and explain this idea to them. Have them find a top-notch design company to conduct a site survey as soon as possible. Follow the overall framework of urban renewal and set no quota. Don't constrain the designers' minds with the idea of selling houses quickly."
"But isn't it too early to let a design company get involved on a large scale before the land has even been auctioned? Even if it's just to provide an in-depth plan, a top-notch design firm's fee would be at least two or three million, right? What if...? Or why not let the design department do some research on their own first? I've heard that other developers handle projects before they even acquire the land themselves, then hire outside designers to draw the renderings. If our design department is short on staff, we can still hire some interns; their overall level is definitely on par with that of the design institute."
Lin Ruoyan shook her head. "We can't let the design department become a design institute. They have more issues to consider and more projects to manage. They can't spend all their energy on this one plot of land that hasn't been auctioned yet. I pay them such high salaries, not for them to draw blueprints. Since they bring plans to the land auction, everyone has to pay this cost. If they don't hire a formal design institute, the work they produce will look weak."
Having said that, Lin Ruoyan is very clear that in the real world, many developers trick design companies into bidding for land together. If the land is not acquired, the design fee will not be paid. At most, they will promise to pay for the land acquisition research fee, and a few tens of thousands of yuan is not enough to cover the human cost of the design institute.
There's also a more benevolent type of developer who pays a monthly fee of tens of thousands of yuan to support a design team at a specific design institute, solely responsible for acquiring land. This isn't free money; every month, they hand over a dozen or so plots of land to the design institute for forced relocation, regardless of size. The equivalent of a forced relocation plan is around 10,000 yuan.
While this approach may seem to save developers upfront design costs, it also significantly reduces designers' creative potential. You get what you pay for. Land acquisition proposals worth tens of thousands of yuan often become routine, leaving no one willing to put their heart and soul into them. Renderings are often repetitive mockups, with random buildings and background figures. A few revisions lead to a new "new" design, with one or two experienced designers constantly working on the same scheme to reduce the design firm's own costs.
Lin Ruoyan has been working in real estate for so long in the real world, and she has a deep understanding of the unspoken rules in the industry.
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