The decision to move forward on building Brickell CitiCentre, a $1.05 billion mixed-use project, is based on what Swire sees as the long-term potential for growth in this market.

“The best opportunity we’ve seen is here strangely, not in China,” said Martin Cubbon, chief executive of the Hong Kong-based Swire Properties. “This looked more attractive than the same analysis looked in big cities in China. But clearly there are plenty of others that don’t agree with me because they’ve been buying land in China, not in Miami.”

During 2008 and 2009, when others were pulling back on Miami as the financial and real estate meltdown hit, Swire Properties starting buying up land. Initially, the plan was to build condos. But as the size of the parcel grew so did the company’s ambitions.

“The chance to build something of real scale right downtown in the middle of a cosmopolitan American city is really rare,” Cubbon said. “Regardless of what’s happened in the market place, we couldn’t march into New York, LA or San Francisco and suddenly find nine acres of contiguous space right next to the main highway and the business district, within easy access of one of the best known tourist destinations. That’s very attractive.

“It may take us three or four years to piece all the elements together, but we will certainly do it. We’re not under any pressure from banks or investors.”

The Miami Herald sat down with Cubbon when he was in town in June for the Brickell CitiCentre groundbreaking. Here’s what he had to say:Q. What caught your interest in the Brickell area?

The Downtown Brickell area clearly began to change in 2009, 2010 and 2011. It became much more vibrant as more people began to stay and live in all the condos built in the last 10 years. It gave it a real buzz which I don’t think it had 10 or 15 years ago. It also created a need and the need was for high-quality shopping, entertainment and food and beverage. That had not really been built in a coherent, scalable way in the Downtown Brickell area in the past. That’s what we saw as the opportunity. We have the wherewithal to do it. Maybe we’re going to be proven wrong over the next five years. But we’re going to give it our best shot.Q. Did you look anywhere else in the U.S.?

No. We have a history here in Miami. We have been here a long time on Brickell Key. Our people understand the market. This couldn’t have happened anywhere else because we wouldn’t have had those eyes and ears on the ground looking at the opportunities. Sometimes I think it’s a little bit of serendipity how we got to where we are now. We wouldn’t have seen this opportunity had Steve Owens and his team not had a well-established office here. We wouldn’t have had the opportunity if land prices hadn’t corrected so sharply in 2008-2009. We wouldn’t have had this opportunity if we couldn’t have acquired enough space to do something that’s scalable. Scale is important when you’re talking about retail and entertainment.Q. Your company has built many similar mixed-use projects in Asia like Brickell CitiCentre. Why have you decided to shift from condo development to focus on this niche?

You can have some really good years building condos and you can have some lean years. We realized that was a highly volatile business all around the world. We wanted something that provided a more secure ongoing cash flow and rental stream. That’s when we started building industrial buildings, then office buildings and retail buildings. Then we began to combine them together. We have gone from being predominantly a residential developer to now owning or managing about 24 million square feet of commercial space.Q. In the U.S. many developers tend to have a short-term view, building projects and then flipping them. Why do you take the opposite approach?

Partially because we can. We’re a large company with a very strong balance sheet and we believe we add value because of this ongoing management and ownership. Having a long-term focus means we can approach management slightly differently. It’s what keeps tenants coming back to us and what keeps values of our properties up. In America we’re confident that we’ll be able to garner the right tenants who will want to be with us because they know that if Swire Properties designs and manages the project, we’re going to look after it long-term. That’s obviously good for their interests too. The simple example is Pacific Place, which has had a 25-year IRR of over 23 percent. It has been a fantastic investment. Q. What’s your vision for what impact these projects have on the redevelopment of the surrounding community?

It’s sort of like turning lead into gold. You’re basically pushing forward the boundary of something that is very valuable into something that is less valuable and that’s what generates the value. We would humbly submit that’s what we’re going to try to do with Brickell CitiCentre. We’re going to push the boundaries of what is currently the central business district a little bit further south and bring with it what we hope will be a transformation of values. This is not an overnight phenomenon. It will happen if we design well and we construct well, if we get the right tenants and if we manage them successfully. Q. How do you decide what goes in a mixed-use project like Brickell CitiCentre?

There is a real skill set in mixing the different uses: hotel, office, retail and condos. These things coming together, it’s not by a matter of accident. It’s really thinking about what the community and the area needs most, and ultimately what it will pay for. It’s not an overnight phenomenon. We’ve been thinking about the mix for Brickell CitiCentre over the course of the last 18 months. What’s going to maximize the value of that site? What is that community known for and what does it need? You can do a number of things when you’ve got nine acres, but not everything is going to work. You have to be responsive to the area. What do you think people need? Do they necessarily need another supermarket? Another department store?  . . . Brickell CitiCentre is going to have a strong entertainment and food and beverage bias. We think it’s going to be a bit trendy and chic, to attract the young people that broadly live in this community.

The project will have its own peculiar look and style that befits Miami. This is not Beijing or Hong Kong. One can’t glibly import something that works in Hong Kong and think it will work in Miami. That’s why if you look at all six of our centers, not one repeats the name. We don’t think this is about replicating a series of boxes and plopping them all over world. It’s about responding to the community and the locale. Q. Is this a sign of future U.S. expansion to come or is Asia still the company’s focus?

China and Hong Kong is still our home and the biggest portion of our asset base. My single biggest challenge right now is finding projects that I think make sense in the long-term. In Asia where we’ve dominated, there’s been a rapid escalation in value. Yes, there are still projects, but given the land costs and construction costs you have to look at whether these projects really make sense.Q. Would you consider doing more projects in Miami or South Florida?

We would consider doing more in Miami or South Florida. This project will give us critical mass that we’ve not had in Miami in forever. Once you put in place something of this size, people suddenly know Swire Properties. I think if we have success in Brickell CitiCentre, people will believe that we can do it again.Q. Why does an Asian company have a small outpost in Miami? How did it happen?

It’s another great serendipity story. The company grew very quickly in the ‘70s and ‘80s and we generated a lot of capital. The company was looking to diversify. Swire Group is a big Coca-Cola bottler and that gave us a relationship with Coca-Cola in Atlanta. It was a reference from Coca-Cola that made us come to Miami and also Hawaii. We looked at both markets and we invested in both markets. Hawaii operated for a number of years and we sold out. Here we kept on reinvesting.Q. Swire Properties recently went public in a nontraditional arrangement. Why did you decide to go this route?

We made the decision to go public in 2009 and tried to list in 2010. But we got to the point of the road show and it coincided with the first Greek crisis. We still could have done the deal but we would have had to sell the shares at more than a 25 percent discount to net asset value. The exising shareholders weren’t prepared to do that.

We moved on and chose to sell one of our assets, Festival Walk. We sold it in in August of last year. That raised $2.4 billion in U.S. dollars. That gave us the capital so we didn’t really need to go to the stock market at that time. Instead, we did something quite innovative, called a listing by way of introduction. We get a listing by way of distributing shares in the company to the existing shareholders in Swire Group. That means you weren’t looking to raise any money, but we get a listing. We don’t suffer the pain of selling our assets on the cheap. But we have a vehicle for the longer term. Should we need capital, we can now go to the markets and raise it.