Tuesday, February 8, 2011

Top Global's top gun has ambitious plans

(SINGAPORE) Top Global, controlled by Sukmawati Widjaja - sister of tycoon Oei Hong Leong - is looking at building up a property investment and development business in Singapore, China, Indonesia and Malaysia. It also plans to acquire or lease hotels in Chinese cities, says CEO Hano Maeloa, who is the son of Madam Sukmawati.

And the Catalist-listed company recently established a property consultancy company in Singapore with two partners which it hopes to franchise in Indonesia. Top Global set up Global Property Strategic Alliance Pte Ltd, or GPS Alliance Pte Ltd for short, late last year with Dennis Yong and Jeffrey Hong.

The two men were previously chief operating officer and executive director (agency) respectively at HSR and each holds a 15 per cent stake in the new property consultancy group.

Top Global controls the remaining 70 per cent. GPS Alliance's existing suite of services includes real estate brokerage (covering resales of condominiums and landed properties in Singapore), corporate leasing, commercial properties, and investment sales.

Next month, it plans to begin brokerage of HDB resale flats and marketing of overseas properties.

GPS Alliance Pte Ltd currently has about 30 full-time staff and over 100 associates (who are paid by commission only). The target is to grow the associates number to 500 to 1,000 by year end.

Setting up a property consultancy business will not only help parent Top Global source for deals like development sites in Singapore but give it first-hand knowledge of the latest property market trends, says Mr Maeloa.

Mr Hong is GPS Alliance's CEO and Mr Yong, its agency mentor. 'Top Global is not involved with the day-to-day management at GPS. Our partners run GPS separately and our offices are also in separate locations. So we keep it at arm's length,' says Mr Maeloa when asked if rival developers may not be comfortable with giving marketing and other jobs to GPS, because of its links to Top Global.

GPS Alliance's office is at Jalan Pemimpin near Bishan (Top Global's premises are at Shaw Centre in Scotts Road) and 'we plan to franchise the GPS name to Indonesia, and when we have a presence there, we can do a lot of cross border selling. For example, we can market Singapore properties in Indonesia, or sell Indonesian properties here, or Australian properties in Indonesia'.

Top Global has a 30 per cent stake in the consortium developing a retail/theatre, hotel and residential project on the landmark Capitol site in Singapore.

Chesham Properties, controlled by members of the Kwee family of Pontiac Land Group, and Perennial Real Estate hold 30 and 40 per cent stakes respectively in the consortium.

'(Chesham director) Kwee Liong Seen is my mum's very good friend and approached us on this site,' explains Mr Maeloa.

Mr Maeloa bought a stake of about 20 per cent in Top Global in 2007 but sold it within a year because he could not get control of the company. He remained an executive director.

In early 2010, Madam Sukmawati emerged as a substantial shareholder in the company, taking up a placement offer, which led her to do a general offer for Top Global.

The company also did a rights issue last year. Madam Sukmawati's stake in Top Global today stands at slightly over 50 per cent.

Under the leadership of Madam Sukmawati, who is the company's executive chairman, and Mr Maeloa, Top Global has divested the construction and waterproofing business and decided to focus on three core businesses - property development/investment; hotels; and real estate support services including property consultancy.

For the property business in Singapore, Top Global initially focused on the residential sector, but following the introduction of the Jan 13 property cooling measures, it decided to broaden its focus to include commercial and industrial properties since these segments are not targeted by these measures.

As well, capital values in these segments have not gone up as much as for the residential sector, notes Mr Maeloa.

'It has become more viable to have mixed developments comprising residential and commercial components rather than doing pure-residential projects in Singapore,' he observes.

'Residential property prices have gone up so much...and I think going forward there will be some sort of oversupply in the residential sector, so you have to position yourself as a niche player.'

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