Friday, July 27, 2012

Credo name history after JLL acquisition

Business Times: Fri, Jul 27

[SINGAPORE] Home-grown property agency Credo Real Estate, widely known as the go-to dealmaker for en bloc sales, is bidding farewell to its name following its acquisition by global real estate services group Jones Lang LaSalle (JLL) - a deal that both firms announced yesterday.

Industry experts estimate that JLL would have paid between $10-20 million for Credo - which specialised in collective and residential sales, valuations, auctions, research and consultancy.

The sale will see founder and managing director Karamjit Singh join JLL as head of the combined Singapore Capital Markets and Collective Sales teams.

Mr Singh will also have oversight and responsibility for JLL's growing Singapore residential sales business.

All 50 of Credo's employees are expected to join JLL, which will have a headcount of 400 post-acquisition. Credo officially merges with JLL from Sept 1.

The deal will allow JLL to become the No. 1 player in the commercial capital markets and collective sales in Singapore, said Chris Fossick, JLL's managing director of Singapore and South-east Asia.

"We have now become the market leader in the Singapore capital markets investment business. That's what our goal was.

"We also have a goal to build up our residential business, and that has been ongoing now for five years, and bringing our two organisations together means that we now have about 300 associates to support our project sales activity," said Mr Fossick.

For Credo founder Mr Singh, the sale marks a bittersweet end to a name that he has built over the past decade, after he left JLL with then-colleague Melvin Poh to strike it out on their own. Mr Poh later left Credo to set up his own property development outfit, Fission Group.

Said Mr Singh: "To see the Credo identity fade away . . . there's mixed emotions. But again like in everything in life, you've got to move on." To grow to the next level, he decided to take up JLL's offer, whcih was first made in February.

For one thing, JLL is a leading player in the local commercial sales market - which both he and Mr Fossick felt is complementary to Credo's dominance in collective sales.

In an interview with BT in June, Mr Singh had said that he hoped to build up Credo's existing business of investment sales of commercial and industrial buildings, and land.

Then there is the respective research teams of both firms, which is headed by Chua Yang Liang at JLL, and Ong Teck Hui at Credo.

"The research field is very wide. Dr Chua takes care of South-east Asia, so that is even bigger than just Singapore. Teck Hui has been very instrumental in helping to shape views, for us and for our clients," said Mr Singh.

It was this prospect of dominating in many fields by combining forces that led Mr Singh and Mr Fossick to come together and sign on the dotted line.

Credo has seven shareholders including Mr Singh, deputy managing director Tan Hong Boon, and executive director Yong Choon Fah. In 2007, Credo handled about 18.7 per cent of the record $11.6 billion of collective sales - including the record $1.34 billion Farrer Court deal.

After a couple of quiet years for the market, it jumped back into the fray transacting close to $930 million of the $1.13 billion in collective sales recorded last year.

In all, since the group was set up in April 2002, it has closed more than 70 collective sales totalling nearly $5 billion.

Mr Singh said that the en bloc sales market will continue to be a key focus of the group even after the merger is completed. The way to deal with a cyclical market like this, said Mr Singh, is to "be very selective in picking the right en bloc project and moving with times and anticipating where the demand lies".

He also believes that the collective sales market is "probably the only credible source of supply of freehold land, of land in bite sizes."

Mr Fossick said that the Singapore collective sales market will continue to stay alive as long as the city continues to upgrade its physical infrastructure.

"New buildings today will become old in the future and there will be opportunities for collective sales. We don't see that cycle changing," he said.

He added that all countries and cities want to make sure that their infrastructure is "rejuvenated, rebuilt, redeveloped" so that the city remains modern.

"Singapore doesn't have lots of land so it has to recycle itself, and we are going to see that recycling all the time," he said.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C
Senior Sales Director
DTZ Debenham Tie Leung (SEA) Pte Ltd (L3006301G)

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