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IBM enters real estate market
By Zhang Yu'an (China Daily)
Updated: 2004-04-05 09:00

Information technology (IT) giant IBM is enlarging its business scope by officially entering the Chinese real estate market for the first time.

The company from the United States inked a deal over the weekend in Beijing with the China Electronics Plaza (CEPlaza), a landmark modern office building located in Zhongguancun, dubbed the "Silicon Valley of China."

Described by the company as an innovation in marketing, sources with IBM (China) said the IT giant had reached an agreement to form a strategic partnership with CEPlaza, which has a total construction space of more than 120,000 square metres.

They added that such a partnership helps IBM break its traditional business boundary and develop a new business sector.

Dai Jianping, general manager of IBM North China Region Operations, said the deal with the CEPlaza marks the first time IBM has entered the real estate industry anywhere in the world.

"Such co-operation is a completely new experiment for us," Dai said after the signing of the agreement.

CEPlaza Operation President Zhu Qingwei said his company highly values co-operation with IBM because the majority of its clients are expected to come from the IT industry.

According to the agreement, IBM will make use of its advantages and resources in the IT industry to work out a total solution and build an advanced IT platform in the office building.

"All clients will be able to enter the IT service system and obtain the latest information services rapidly, which is designed to help the enterprises expand their businesses in a fast way," said Zhu, adding that "traditional real estate projects are not able to offer such services."

CEPlaza expects the deal with IBM will help sharpen its competitive edge in the fiercely competitive office building market in Beijing.

Without revealing the ratio of benefit sharing between the two partners, Dai admitted the deal will help IBM obtain a large platform for development.

China Electronics Group, one of the 44 key State-owned enterprises, is an investor in the CEPlaza and is part of the Beijing municipal government's efforts to improve its investment environment and attract more investors from home and abroad.

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