"But we do not go everywhere we are asked. Before any decision is made, we go there and research the city's history and culture, its current condition and economic outlook. To be honest, if a city does not have enough economic potential, we won't consider building such a costly project because our return will not be secured," said Lo.

But clearly not everybody agrees with Lo's view. Some with small shareholdings are complaining the company's slow capital flow has undermined the group's profitability.

In 2012, Hong Kong-listed Shui On Land recorded 4.8 billion yuan in revenue, down 43 percent year-on-year, partly because fewer properties were delivered and recognized as sales. Profits attributable to shareholders dropped 41 percent year-on-year to 2 billion yuan.

Lo decided to spin off the premium commercial property unit China Xintiandi Co, which started to operate separately from March 1. After the restructuring, the wholly owned subsidiary China Xintiandi Co will focus its role as a commercial property investor, operator and manager. The change is expected to bring higher efficiency.

Although the separate listing is still subject to regulatory approval, the business maneuver is generating a positive effect. During the first three quarters of this year, Shui On Land Ltd posted a surge of 239.7 percent year-on-year in revenue, ranking first among all listed developers in China.

"Personally, I hope the listing will happen at a time when China Xintiandi's business acumen is recognized. But the capital market environment is also an important consideration," said Lo, suggesting the listing may be take place in 2014 or even 2015 if the market does not make a turn for the better quickly.

Currently, developers are showing great enthusiasm for commercial property. From January to August, a total of 716.8 billion yuan was poured into the sector, up 26.5 percent year-on-year and higher than the overall real estate investment's 19.2 percent increase during the same period, according to data from the National Bureau of Statistics.

An increase in commercial property supply will be seen in the next two years because the central government's monetary tightening policies are driving developers to quit residential projects and flock to commercial ones, said Dai Fang, an industrial analyst from Zheshang Securities Co Ltd.

He expects an oversupply to develop in some third- and fourth-tier cities, but well-located commercial properties in the first- and second-tier cities won't be affected.

There are also external challenges to influence the return on commercial property investment, such as rising competition from e-commerce, which is driving an in increasing number of people from physical shopping to placing orders via the Web.

In addition, rising operating costs, especially labor, and lack of differences among products and services may pose a threat to the outlook for commercial properties, according to a report from global commercial real estate services firm CBRE Group Inc.

Chen Zhongwei, head of research at CBRE China, said mid-range department stores will take the biggest hit because the retail model is under double pressure from the shopping mall boom and the increasing popularity of e-commerce purchases.

"Experiential consumption or one-stop shopping is the most essential strategic adjustment to accommodate the online shopping boom," suggested Chen. In addition, to improve their competitiveness, landlords are likely to introduce professional retail asset management, differentiate themselves through the launch of new brands and/or undergo tenant-mixture adjustments.

But as a man bullish about China's prospects, Lo is confident about the country's outlook and its business center Shanghai.

"Shanghai is going to become a global financial hub in 2020 so it will need a lot of houses, offices and entertainment facilities. Meanwhile, the city's pilot free-trade zone project will also bring passenger flow and cash flow into the vibrant city," Lo said. "This is not a market of 23 million Shanghai people, but a market with demand from all over the world. That demand will bring us huge opportunities."