Pan does not think much of the international norm which measures energy conservation by the SCE (standard coal equivalent) consumed by one square meter of building, including electric power and heating. He said this method is inaccurate as it only evaluates the building itself, not taking into account factors like how many people use it, how it improves local employment, how much it contributes to GDP growth and how much tax the people inside the building have paid. "If we do not take factors like people, social and economic problems into consideration, we would very likely arrive at an absurd result. Buildings which are unsuitable for people to live in or with no people to live in are the most environment-friendly buildings."

In the 1990s, Pan introduced the concept of SOHO (Small Office Home Office) and established SOHO New Town, consisting of offices, residences and other supporting facilities like shops, restaurants and sports.

SOHO is a concept based on Pan's vision of market development trends in Beijing, which is that in the information age the boundaries between home, office and factory are becoming vague. SOHO New Town is characterized with simple shapes and broad doors and windows, replacing balconies with French windows, which was unique in Beijing at that time. Most importantly, he mixed western construction styles with traditional Chinese styles in design, like the current cultural atmosphere in Beijing. These buildings not only supply flexible options for residences and offices, but are also in line with the rapid growth of small-sized private enterprises, which have now become the most active sector in China's economic development.

In the following years, Pan developed several SOHO buildings like Jianwai SOHO, which focuses more on the entire system of the community.

The SOHO format, which can meet various demands, received a warm welcome from consumers. SOHO New Town, completed in 2001, was the best selling real estate in Beijing for two successive years, 1999 and 2000.

"The basic point of real estate development is to focus on human activities and create human-oriented rooms with complete supporting facilities for them. Only by doing this can we construct environment-friendly buildings," said Pan.

Location, location, location

Undoubtedly, to real estate developers, location is the most important factor they have to consider during their development. In this regard, Pan has a nose for location.

More than 10 years ago, west Beijing was generally regarded as the best place for real estate development as the financial street and China's silicon valley are located there. However, Pan and his wife Zhang Xin, who is also his business partner, chose to build their first SOHO project in east Beijing. The reason is very simple, east Beijing is brighter at night than the west. To them, the brightness at night is closely associated with economic development impetus.

In 1987, 24-year-old Pan resigned from the civil service and headed for Shenzhen and Haikou, two special economic zones at that time. According to him, the two cities were undergoing urgent construction and therefore bricks would be needed, lots of them. He found work in a brick factory, rose to become manager and then started his real estate development business with some friends.

At that time, Pan discovered that the average housing area in Beijing was only seven square meters per person, while the figure in Haikou was several times bigger. Using the logic that large amount of capital was flowing into Haikou, he persuaded his partners to go to Beijing.

After he obtained a business license in Beijing, he was made aware of a piece of land near a subway station where he built the Wantong New World Plaza. The project went on to be listed by Beijing Real Estate magazine as the most outstanding real estate project in Beijing in1994.

After Pan finished Jianwai SOHO and Guanghua SOHO, he had no land reserves, no apartments for sales and no bank loans. His company recently announced it would develop a 470,000-square-meter piece of land in Sanlitun. The project, entitled Sanlitun SOHO consisting of offices and high-level apartments, will be completed in 2008-09 in different stages. The commercial section, with an area reaching 120,000 square meters, will be completed by the end of next year.

Sanlitun lies adjacent to the diplomatic quarter in Beijing. In the 1990s, the place was gradually developed into a bar street. In June 2004, the Beijing Government began to rebuild the area and it gained the reputation as the best place for real estate in Beijing, with developers clamoring to get in.

"Sanlitun, Beijing's traditional business district as well as a modern place for fun, is very close to Beijing's CBD (central business district). In the coming two to three years, the place will be under large scale construction. When the surrounding projects are completed, Sanlitun will be an excellent location," said Pan. It is reported that the trading value for this project exceeded that of his previous three SOHO projects.

However, while many think Pan is operating at great risk as he will only be selling after the 2008 Beijing Olympics, he is confident in the future of China's economic development. "I am optimistic with the Beijing real estate market after 2008," he said.