Page 1

Display to 30 November 2017 S$5.90

Daily news at www.sbr.com.sg

THE

PROPERTY ISSUE

START UP SECRETS FROM GRAB, ZALORA, FUNDING SOCIETIES,SMARTKARMA, AND SPACEMOB BIKE-SHARING FIRMS GEAR UP FOR A CAR-LITE SOCIETY WILL AMAZON KILL THE RETAIL STARS? SINGAPORE BONDS: WHO’S BORROWING WHERE? 79 73

MICA(P) 244/07/2011 KDM No: PPS1645/3/2008

• 5 hottest areas to buy property right now • Commercial vs residential, which is better? • Mega mergers are underway for real estate firms

S G N KI EST S N RA LARGTE FIRM 50L ESTA

T S ES IRM G F R LA URE 5 2 ITECT CH AR

A RE


FROM THE EDITOR About Us

AUDITED CIRCULATION: 24,794 ONLINE READERSHIP: 215,000 monthly uniques through Google Analytics The Singapore Business Review is the highest circulating and best read business magazine in Singapore. Our online readership has an average of 215,000 unique viewers, according to Google Analytics. We won the Business/Professional Media of the Year category at the 2016 MPAS Awards. Do reach out to us if you would like us to tell your story to our readers via print & online advertising or events. Publisher & EDITOR-IN-CHIEF Tim Charlton production editor Genelie Sta.Ana-De Leon GRAPHIC ARTIST Elizabeth Indoy ADVERTISING CONTACT Rochelle Romero rochelle@charltonmediamail.com Angelica Biso angelica@charltonmediamail.com Ricky Jayson Jacinto ricky@charltonmediamail.com ADMINISTRATION ACCOUNTS DEPARTMENT accounts@charltonmediamail.com Advertising advertising@charltonmediamail.com Editorial sbr@charltonmedia.com

SINGAPORE Charlton Media Group 101 Cecil St. #17-09 Tong Eng Building Singapore 069533 +65 3158 1386 HONG KONG Charlton Media Group Hong Kong Ltd 19/F, Yat Chau Building, 262 Des Voeux Road Central Hong Kong. +852 3972 7166 www.charltonmedia.com Printing Times Printers Private Limited 16 Tuas Ave 5 Singapore 639340 www.timesprinters.com a member of Times Publishing Limited

Can we help?

Editorial Enquiries: If you have a story idea or just a press release, please email: sbr@charltonmedia.com and our news editor will read it. For a personal message to the editor, put the word “Tim” in the subject line. For Media Partnerships, please email: sbr@charltonmedia.com and put “partnership” in the subject line and it will forward to the right person. Subscriptions email: subscriptions@charltonmedia.com Singapore Business Review is published by Charlton Media Group. All editorial is copyright and may not be reproduced without consent. Contributions are invited but copies of all work should be kept as Singapore Business Review can accept no responsibility for loss. We will however take the gains. Sold on newstands in Singapore, Malaysia, Hong Kong, London, and New York. Also out in sbr.com.sg with online readership of 215,000 monthly unique visitors*. *Source: Google Analytics **If you’re reading the small print you may be missing the big picture   



Welcome to Singapore Business Review’s annual property issue. Prospects are looking positive for both the residential and commercial spaces for the rest of the year with a sharp jump in transaction volumes in 2017 compared to 2016 despite the declining trend in property prices. In the first half of 2017, sales of private residential units reached a total of 6,039 as compared to only 3,675 units sold in the same period last year, representing a 64% year-on-year increase. Meanwhile, titanic mergers are underway with Proptech shaking up the real estate industry. Our annual rankings on real estate firms reveal that more than half of the top 20 largest agencies slashed their salesforce as technology innovations opened up new platforms for consumers to handle their own property transactions directly instead of hiring a property agent. Case in point: Propnex and DWG’s merger, followed by Orange Tee and Edmund Tie. In the architecture arena, firms foray overseas amidst bleak outlook in the local construction scene. Rising staff and material costs locally have led them to more developments in Thailand, Vietnam, and Malaysia. This issue also bears the coverage of Singapore Business Review’s 20 Hottest Startups Panel Briefing 2017. Along with other industry experts, Grab’s managing director Ankur Mehrotra and Zalora’s managing director Giulio Xiloyannis shared what made their startups shine. Enjoy the issue!

Tim Charlton

Singapore Business Review is available at the airport lounges or onboard the following airlines:

Singapore Business Review is available at the following clubs and hotels: American Club Hollandse Club Laguna National Orchid Country Club Raffles Country Club Raffles Town Club RSYC Seletar Club Sentosa Golf Club Singapore Cricket Club Singapore Island Country Club Swiss Club The Tanglin Club The China Club The Legends Fort Canning Park The Pines Club Tower Club Singapore

Fullerton Hotel Grand Plaza Park Royal Hotel InterContinental Le Meridien Orchard New Park Hotel Pan Pacific Raffles Hotel The Hilton The Regent Singapore The Ritz Carlton The Swiss Hotel Stamford Traders Hotel Singapore Darby Park And at 16 serviced residences


CONTENTS

30

COVERSTORY Things are looking up once again for Singapore’s property market

08 Bike-sharing firms gear up

16 Ten revolutionary architects aged

for a car-lite SG

09 Grab’s record-breaking funding

44 CMO Briefing

RANKING

12 Why Singapore is dubbed the best

34 Why firms are cutting agents

34 Architecture firms foray

city in the world to work for a startup

14 Can Singaporeans really go cashless?

Published Bi-monthly on the Second week of the Month by Charlton Media Group 101 Cecil St. #17-09 Tong Eng Building 2 SINGAPORE SingaporeBUSINESS 069533 REVIEW | NOVEMBER 2017

20 Economy Watch 42 Legal Briefing

40 and under

10 Will Amazon kill the retail stars?

22

FINANCIAL INSIGHT Bond issuance falls, bond markets pick up

REGULAR

FIRST

FIRST

20

ECONOMY WATCH Grim labour market looms as economy accelerates

EVENT COVERAGE

overseas amidst bleak outlook

48 Startups Panel Briefing

For the latest business news from Singapore visit the website

www.sbr.com.sg


News from sbr.com.sg Daily news from Singapore most read

SHIPPING & MARINE

Why analysts are preferring Sembcorp over Keppel Analysts at UOB Kay Hian are laying their bets on Sembcorp Industries, preferring it over its rival Keppel Corporation. According to analyst Andrew Chow, Sembcorp met analysts’ expectations as better earnings from Singapore utilities and gas helped offset continued losses in India. All eyes are on group’s review to take place in late 2017, with details available in early 2018.

TRANSPORT $ LOGISTICS

AGRIBUSINESS

Two things that will support ComfortDelGro’s mid-term outlook ComfortDelGro should not lose all its hopes as its overall outlook for next year could be buoyed by two things. Whilst it bears the brunt of the flailing taxi business, the group will be supported by the significant revenue growth from rail with the opening of Downtown Line 3 on 21 October. “This serves more populated areas than the first two phases,” analyst Eugene Chua said.

Olam acquires 6 newly incorporated subsidiaries Olam International Limited’s (Olam) wholly-owned subsidiary Queensland Cotton Corporation sold its 20% stake in Agrex Australia Pty Ltd (formerly known as Olam Grains Australia Pty Ltd) for US$8.8m. Six companies recently joined the company’s list of associates.Olam Outspan (Cambodia) Co., Ltd. has an issued share capital of $1,354. It specialises in procurement.

Revolutionising Singapore’s retail experience: physical stores are not doomed yet BY ERICH GERBER “Physical retail is dead!”—open any news publication and you’re likely to find a similar headline. The reasons for such fears are aplenty. In Singapore, store occupation in the city’s prime shopping Orchard district has reached the lowest point in five years, the least since 2009. The simplest explanation is that e-commerce has taken over with 230 million Southeast Asians going digital in purchasing products and services.

Are businesses still trapped by past perception of cloud computing? BY ONG KAI KIAT According to the Infocomm Media Development Authority of Singapore (IMDA), only 30% of Singaporean businesses are on the cloud and they reported higher productivity growth. Over the next 3 to 10 years, IMDA expects to see growing adoption of cloud computing given its elasticity over traditional IT solutions.This is lower than the 37% adoption rate for US businesses which is expected to soar to 80% in 2020.

MOST READ COMMENTARY How good interior design helps elevate the hotel experience BY JORIS ANGEVAARE In Singapore (and the world), the business strategy of hotels is changing—because the way people use hotels is changing. With the rising popularity of the sharing economy, growth of millennials, and digital disruption, travellers are increasingly savvy today. According to the Asian Digital Transformation Index, Singapore emerges top of the list with a high ability to transform ourselves in the face of digital disruption.

4

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017


E-Store JAREE SMITHE E-Store is a 1-stop solution for your needs in hardware and peripherals. From desktops, laptops and tablets to routers, monitors and cables, you will be able to find it all under one roof. Check out the products and ongoing deals at https://estore.jareesmithe.com

Cloud Services JAREE SMITHE provides intuitive and scalable cloud-based solutions to various industries. Subscribe to a dedicated system to eliminate IT complexity and enjoy the benefits of cost-saving and mobility with cloud infrastructure. Find out more at https://jareesmithe.com

Maintenance JAREE SMITHE understands the importance of protecting your business and data. JAREE SMITHE offers assessment and maintenance packages to our clients, to implement preventive measures and deal with unanticipated cyberattacks. Contact us for more information at info@jareesmithe.com

Customization

Js

55

JAREE SMITHE utilizes the vast experience working with various industries and ongoing research to advise and provide customized solutions to clients with extraordinary needs or specific requirements. If you are struggling to find the right solution, send your request to sales@jareesmithe.com

JAREESMITHE www.jareesmithe.com X HOME

ABOUT US

RP CO

JONAS

JAREE SMITHE Pte Ltd +65 6814 0268 info@jareesmithe.com

E AT OR

LU SO

NS TIO


Agenda PEOPLE | PLACES | SERVICES | OPPORTUNITIES

SERVICES

OPPORTUNITIES

INVEST NORTHERN IreLAND

Seamless Seamless is the key meeting place for this brave new world of commerce. It is a new event built on 20 years of experience – a seamless continuity from Asia’s largest and longest running conference focussed on cards and payments, to a dynamic summit and large-scale exhibition bringing together the converging worlds of ecommerce, retail, and payments.​

OPPORTUNITIES

OPPORTUNITIES

SCCE Over 3,600 compliance professionals around the world have already come to an SCCE Basic Compliance and Ethics Academy to master the fundamentals of managing a compliance and ethics program. The Academy provides three and a half days of classroom-style training, and class size is limited to facilitate interaction amongst the attendees and with the faculty. Learn from experienced practitioners and prepare for the Certified Compliance and Ethics Professional-International (CCEP-I)® exam, which is optional and is offered at the conclusion of the Academy. Join us on 10-13 July for this once-a-year event in Singapore.

Products and services from Northern Ireland are sold to over 100 countries. The region has built strong, trusted relationships around the world – that’s why we are the perfect partner for global business. Invest Northern Ireland is the main economic development agency for this part of the UK, promoting trade and investment through its network of global offices. To find out more about what Northern Ireland can do for your business, visit investni.com

OPPORTUNITIES

EASB

kaplan singapore

East Asia Institute of Management (EASB) is a four-year EduTrust certified private education institution. We offer Diploma, Bachelor’s Degree, Master’s Degree, and MBA programmes. Major disciplines include Hospitality and Tourism Management, Business Management, Accounting, Banking & Finance, Medical Bioscience, and many more. For more information, visit www.easb.edu.sg

Ranked by JobsCentral as the number one Preferred Private Education Institution consecutively in 2012 and 2013, and by AsiaOne People’s Choice Awards in 2009, 2010, 2013, 2014, and 2015, Kaplan Higher Education provides full-time and part-time diplomas, bachelor’s and master’s degrees to individuals looking to pursue careers in various fields. For more information, visit www.kaplan.com.sg

6

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

visit

charltonmedia.com

FOR MORE INFORMATION on EVENTS AND ADVERTISING


specializes in software products that promotes next generation workplace solutions which will enable digital transformation of businesses.

All-in-one comprehensive solution to HR workflow. Experience an organized and smart system, where you can retrieve necessary information with ease

Kloud-Soft HRM Key Features: 1. Role Base Dashboard 2. Custom Report Generation 3. HR management 4. Payroll Management

“Kloud-Soft HRM as low as $2 per employee per month*�

5. Time Attendance Management 6. Leave Management

Terms & Conditions Apply

7. Employee Self-Service Portal and Mobile App 8. Multi Company Management 9. Integration Done Easily with other System

+65 6812 3700 sales@kloud-soft.com


FIRST Ofo and Mobike each have over 100 million users globally, with the latter recording 25 million rides daily in 150 cities. Meanwhile, oBike has attracted Grishin Robotics and has secured US$45m in its Series B funding round in August. Since March, it achieved 500,000 signups.

3 in 5 workers ARE unhappy

Singapore’s employees feel they are vastly overworked and underpaid. Despite the city’s reputation as a global and regional financial hub, its employees maintain that they are not the happiest lot. JobsCentral’s Work Happiness Survey Report 2017 confirmed that whilst Singapore is beaming with business, its employee retention rate might decrease as a majority of workers itch to leave their jobs for greener pastures. The report indicated that 65% of the respondents are not satisfied where they are whilst 34.6% desire to get a pay raise from their bosses. As the cost of living in the city shoots up and the effects of the economic slowdown are felt, workers hope that the numbers on their paychecks increase in conjunction. Across all work attributes, respondents placed the most weight on salary followed by work-life balance, good relations with colleagues, interesting work, and acceptable work demands. Happiest employees Employees from editorial and translation services are the happiest with an average Work Happiness Indicator score of 75.8, placing huge importance on the following attributes: positive impact to society, safe working conditions, and autonomy at work. A far second are the employees in the field of public relations with an average score of 60.1, followed by employees in the marketing industry with an average score of 60.0. The least happy employees in Singapore are those in the function of customer support with an average score of 47.0, owing to the difficult nature of responding to various customer inquiries and feedback. The report also noted that non-Singapore citizens and non-permanent residents are happier with a score of 54.9 compared to citizens and Singapore permanent residents with average scores of 50.6 and 51.0, respectively. 8

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

Ofo plans to establish over 100 preferred parking zones and release more than 10,000 bicycles by end-2017

Bike-sharing firms gear up for a car-lite society

W

hilst the bike-sharing trend has already been booming in other markets such as China, it was only this year when three major bike-sharing platforms decided to commence their operations in Singapore, in support of the government’s push for a car-lite society. Beijing-based Ofo and Mobike, as well as the homegrown oBike, are the biggest firms to offer stationless bike-sharing models. In July, Ofo managed to raise the largest investment in an app-based bike-sharing firm, recording more than US$700m in its latest Series E funding round led by Alibaba, Hony Capital, and CITIC Private Equity, resulting in an estimated valuation of about US$2b. “We are very fortunate to be part of the global sharing economy and investors have exhibited a lot of confidence in our business model,” Ofo said. This funding feat trumped Mobike’s US$600m Series E funding, with investors including Singapore-owned Temasek, Warburg Pincus, Tencent, and Sequoia.

Ofo and Mobike each have over 100 million users globally, with the latter recording 25 million rides daily in 150 cities.

Challenges and bike-sharing’s future Since these firms utilise dockless systems, one recurring problem that operators face are errant riders. In July, LTA’s Active Mobility Enforcement Officers impounded 70 dockless bicycles that were parked indiscriminately. To counter and discipline errant drivers, credit systems were put in place where users will gain and lose points depending on their behaviour. Once the credit score falls below 80, the user will be charged $100 per 30 mins. Ofo also said it has segmented their operations into districts based on population density and it has deployed on-the-ground operations crew in each district to locate indiscriminately-parked bikes. For oBike, the use of the latest Bluetooth technology helps track the location of their bikes accurately, reducing the time the maintenance team spends in finding and redeploying bikes. These bike sharing firms are a part of the bigger sharing economy model that is taking off globally. PwC said this model has all it takes to grow from US$15b to US$335b by 2025. For Mobike, it stated that it is actively developing its artificial intelligence platform that can integrate and analyse hundreds of variables including weather, time of day, location, crowd patterns, and supply and demand trends.

Mobike records 25 million rides daily


FIRST Commenting on the record-breaking deal, Mike Davie of DataStreamX said Grab is a “safe bet” for investors looking to pick a winner in Southeast Asia due to its strong management and country-specific services.

Grab has the largest land transportation fleet in Southeast Asia with 1.2 million drivers in 87 cities

Grab’s record-breaking funding

W

hen Singaporeheadquartered ridehailing company Grab raised US$2b from lead investors Softbank and Didi Chuxing it not only became the largest-ever single financing in Southeast Asia, but also served to fuel its transformation into a payments titan. Keen to build on its lead—it claims to capture 95% of the taxi-hailing market and 71% in private vehicle-hailing—Grab will focus on developing its mobile payment platform GrabPay. A Grab

spokesperson said that there is a “huge opportunity” for Grab to lead the e-payments sector in Southeast Asia given the Grab app’s 55 million mobile downloads and nearly 3 million ride transactions daily. A Didi spokesperson said the strategic partnership with Grab went “as smoothly as expected” and that it chose to invest in Grab because of its leadership position and commitment to technological innovations, including developing a payment platform that will “pioneer the trend of mobile payment in Southeast Asia.”

There is a “huge opportunity” for Grab to lead the e-payments sector in Southeast Asia given the Grab app’s 55 million mobile downloads and nearly 3 million ride transactions daily.

Will the rivalry turn into a merger? Cameron Priest of TradeGecko said Grab’s new investment will force Uber into some tough decisions. If it plays its cards well, Grab could even secure a monopoly in Southeast Asia. “Uber will have to decide if it can afford to keep losing money going up against the local well-funded competitor, or is it better to bow out of Southeast Asia like they did in Russia and China with Uber merging with Didi in China and Yandex in Russia. If Uber wants to raise money from Softbank, they may now have no option but to merge with Grab.”

Payment options around Grab’s network

Source: Grab Press Centre

The Chartist: SGD to further appreciate The Singaporean dollar has consistently appreciated since the beginning of the year, strengthening at approximately 7%. Analysts at BMI Research said the SGD is set to continue strengthening with an average of around SGD1.38/USD in 2017 and SGD1.34/USD in 2018. Strength in the Chinese yen resulted to the SGD’s past appreciation, but going forward, positive growth inflation dynamics in the US will be the primary factor together with an undervalued exchange rate and strong external position. However, analysts expect the currency to drag slightly as the Monetary Authority of Singapore (MAS) endeavours to keep the city’s exports competitive. In the short term, the drag in appreciation is likely to be caused by an overbought currency and the SGD trading at the lower currency band of MAS.

Looking to test resistance Singapore - exchange rate, SGD/USD

Source: BMI, Bloomberg

Continuing to build reserves Singapore - foreign reserves, USDbn

Sources: BMI, Bloomberg

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

9


FIRST Ambassador briefing POland

Will Amazon kill the retail stars?

W

Zenon Kosiniak-Kamysz was appointed as ambassador of the Republic of Poland to Singapore since July 2014. He shared his thoughts on Singapore and Poland’s business relations: Singapore is Poland’s biggest export market in Southeast Asia. Our mutual trade is balanced with majority of the Polish exports related to the shipping industry. The recent slowdown in the Singaporean O&M industry had some implications for our bilateral trade but Poland-made luxury yachts still sell well here. The Polish Trade and Investment Agency (PTIA) just opened here its first Trade Office in Asia and signed memorandums with IE Singapore and SBF on facilitation of business cooperation to support individual businesses in the partner markets. Poland has strong competencies in many industries, including automotive and aviation, land transportation vehicles, construction industry, or biotech. Manufacturing is a strong domain in Poland. We are also one of the top global locations for business services. Our talents in IT or fintech industries are highly valued. Singaporean investors keen to go abroad should know that sustained economic growth and financial stability make Poland one of the most attractive foreign investment destinations. As an agricultural powerhouse in Europe, Poland has a great potential to tap into Singapore’s policy to diversify food sources and expand foods exports to the local market. Singaporean O&M companies may seek to employ their competencies in the development of offshore wind or fish farming in Poland. Before moving to Singapore, Kosiniak-Kamysz served as the ambassador of Poland to Canada, Slovakia, and he was posted twice to Germany and Hungary. He was also undersecretary of state for armaments and modernisation at the Ministry of National Defence.

10

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

hen Amazon officially launched its Prime Now service in Singapore, one of the biggest talking points is whether it will snap most of the market share out of incumbent e-commerce players and e-tailers like Lazada and online clothes store Zalora whilst cannibalising traditional brick and mortar stores like Tesco in Singapore. To some experts, Amazon Prime Now’s entry may not exactly be a bad thing for e-commerce and brick and mortar incumbents. Local e-tailer Pelando.sg’s co-founder Mehul Jobanputra believes that the talk of competition is too premature for now. “Lazada has been around since 2011 and it has expanded to neighbouring Southeast Asian countries gradually,” he said, adding that Lazada’s online marketplace is too well-positioned to be affected by the arrival of Amazon in Singapore since they are currently the “master of the region with local expertise and Alibaba backing.” Meanwhile, Gartner’s research director Adrian Lee said, “The incumbents should worry as the focus shifts to differentiation of customer experience and ability to fulfill a growing and more discerning consumer base.” Foodpanda managing director Luc Andreani said that the whole cannibalisation of the

Zalora’s mobile pop up store

market and its players really depends on what kind of operational and growth model are being compared. For example, marketplace models, like food delivery service foodpanda, may not necessarily mean cannibalising bricks and mortar because there is still a value chain connection there with these physical stores providing the goods and the online service acting as the platform for consumption or delivery. Shoppers will always want to touch and experience a product in the flesh, especially fresh food, so we believe there will always be a place for brick and mortar stores.

Demolition of brick and mortar? Shirley Zhu, programme director at IGD Singapore, emphasised the importance of the human experience in food shopping. “Shoppers will always want to touch and experience a product in the flesh, especially fresh food, so we believe there will always be a place for brick and mortar stores.” Zalora, for instance, needed to adopt and launch mobile pop-up stores in certain cities in Southeast Asia tagged as growth areas, allowing people to physically see and experience their products as a guide before purchasing online.

Mobile App Watch

Artzibit visualises how art would look like on your wall Imagine the use of augmented reality to picture how art would look like on your wall--- that is the aim of Artzibit. In a few clicks, potential buyers can choose an artwork from a large array of options, customise the artwork, and see the artwork hanging on their walls in real time, giving buyers perfect visualisation of the art. “No longer will Artzibit allows buyers to have a sneak you need to go to a shop to look at a potential peek of an art in their mobile phone piece which might fit your home,” said Jonathan Chew, group CEO of Artzibit.“By using AR, and by streamlining the rest of the processes in one platform, we make it easy for anyone to buy the perfect piece of art for their wall.” Upon purchase, Artzibit prints and frames the chosen artwork and delivers it within seven working days, with an option to have it professionally installed. “With advancements in AR you will be able to do this in the comfort of your own home,” Chew added.


SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

11


FIRST

Why Singapore is dubbed the best city in the world to work for a startup

W

hen Eugene Huang quit his job in a large offshore bank in Singapore, he did not sign on to the next biggest competitor. Instead he took a chance with a startup called Redbrick Mortgage Advisory, riding a hot employment trend in a city now considered the best in the world for startup workers, according to a new global ranking. “I remember my daily life was about meetings after meetings — making decisions was a long drawn, cumbersome process as it involves getting various departments to agree on something, and a longer time to take action,” said the 36-year-old director earning US$100,000 per annum. Huang and other employees in Singapore have seen their pick of startups flourish in recent years. Many now offer an attractive combination of perks that make it compelling to join a promising young company, such as fast-growth excitement, work-life balance, and increasingly competitive compensation. Ömer Kücükdere, managing director of Nestpick, reckoned Singapore ranked first amongst 85 cities because it offered the best quality of life for those employed in the startup industry based on five criteria: Startup Ecosystem, Salaries, Social Security

& Benefits, Cost of Living, and Quality of Life. Singapore particularly shined in healthcare and safety, and its vibrant startup scene with robust career opportunities In Singapore, a startup technology employee typically earns higher right off the bat at $38,000 (entry-level) and climb to $59,000 (experienced). A marketing neophyte, meanwhile, stands to earn $43,000 but experienced managers can only expect around $58,000. Meanwhile, a Singaporean startup employee in project management can expect to earn $34,000 (entry-level) and rise to $66,000 (experienced) per year. “Certain cities may offer bigger paychecks, but after considering taxes and living expenses, the return may not be so high,” said Kücükdere. Advantages and disadvantages “I am earning less than 20% of what I would have made if I remained in my previous position within a MNC. But the knowledge, experience and satisfaction gained so far outweighs the monetary opportunity cost.” said Dorothy Yiu, co-founder and COO of employee engagement platform EngageRocket. Eugene Cheng You Jin, a partner and creative lead of virtual storytelling agency HighSpark, shared some

Start-up Cities Index

Source: Nestpick

cautionary tales. “We’ve seen numerous startups just ‘disappear’ from the market. There’s always the very real fear that all your work, money and time invested into the business might not pan out in the end. A PR crisis or technological glitch could cripple your startup overnight with the right intensity.” Chow Liying, founder of OurBraletteClub, a startup that manufactures bralettes, noted that the startup life in Singapore is more exciting and lucrative than ever before because of the strong infrastructure that has been put in place to foster growth in the industry. However, she warns that start-up employees must enter the field with the chance of failure still fully in mind.“Despite all ideas being wonderful, not all turn to fruition and it might cause some disruption in the career path when that happens. But for anyone else, it’s a great big adventure,” concluded the 24 year old entrepreneur.

OFFICE WATCH

Shopee’s new office fits the millennial lifestyle When online shopping platform Shopee began designing its new 3,500 sqm office in the Ascent building at 2 Science Park Drive, it took three concepts to heart: connectivity, collaboration, and community. These ideas resonated not only with the Singapore-based online marketplace’s business mission, but also its more than 200, predominantly millennial, staff. The new corporate home featured spacious meeting rooms, cozy sleeping pods with luxe pillows and air purifiers, an entertainment corner with a foosball table, a cafe with a pool table, and even an in-house masseuse area for twice-amonth massages. Shopee’s workspace dreamland clearly oozes fun but there was tough work behind the scenes.“One of our biggest obstacles would be the race against the clock to find the perfect office space that can accommodate Shopee’s rapid growth and also accurately reflects our values and personality,” said Zhou Junjie, chief commercial officer at Shopee. 12

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

The Lounge

Shopee’s new meeting room

Sleeping pods

Shopee Cafe


The next show that changes the conversation. The next product that changes the world. When you have the right data and the right science, you won’t have to wonder what’s next—you’ll know. And when you know what’s next, you can get there first. Learn more about The Science Behind What’s Next™ at nielsen.com.

Copyright © 2017 The Nielsen Company (US), LLC. All Rights Reserved.


FIRST NUMBERS

Digital Payments: Thinking beyond Transactions

OCBC Bank launched a mobile keyboard in late August to enable their clients to make cashless payments to any bank account

Can Singaporeans really go cashless?

F

Source: PayPal APAC

14

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

or all of Singapore’s tech savvy and strong push towards a cashless society, a recent Paypal report revealed that nine out of 10 Singaporeans still prefer to pay using cash. Despite the country’s high smartphone penetration rate and world-class connectivity capabilities, the report said the value of notes and coins in circulation by the MAS has been increasing in the past 10 years with latest available statistics showing that it rose to $42.5b in 2016. But this statistic may very well be short-lived as the government continues to make a significant push for digital payments adoption in Singapore. In August, the MAS established a Payments Council to be part of a series of efforts towards realising the vision of an e-payment society in Singapore. The Payments Council is also setting up a taskforce to develop a common QR code for Singapore as the use of QR code-based payments is considered as a practical and convenient way to introduce e-payments to cash-based merchants in the city-state. The room for growth of digital payment, despite Singaporeans’ current preference for cash, has no ceiling — at least for the time being. “Singaporeans are interested in the mobile payment experience,” said Yeo Hiang Meng, Payments Council member and president

of the Federation of Merchants’ Association in Singapore. “We hope to see intensified marketing efforts to encourage businesses and consumers to adopt mobile payments at heartland shops and hawker centres.”

The value of notes and coins in circulation by the MAS rose to $42.5b in 2016.

Cashless is king For the private sector, the recent rollout of PayNow has reported 500,000 registrations and more than $10m in transactions since its launch in early July. Meanwhile, OCBC Bank launched a mobile keyboard in late August to enable their clients to make cashless payments to any bank account in the territory without having to exit whatever mobile application they’re using. This is on top of established e-payment schemes like GrabPay, Apple Pay and Android Pay making headways in digital payment transformation in Singapore. Where the city-state is headed, looks like there wouldn’t be much paper notes and coins needed.

Awareness of new payment methods

Source: PayPal APAC


Co-published corporate profile

Porsche is the official automotive partner of the BNP Paribas WTA Finals Singapore

Porsche seals multi-year global partnership with WTA The Porsche Race to Singapore is the fruit of Porsche and WTA’s long standing commitment to women’s tennis.

T

he heat is on as the world’s top tennis players battle it out in the Porsche Race to Singapore, the official qualification for the BNP Paribas WTA Finals Singapore presented by SC Global is to be held from 22-29 October at the Singapore Sports Hub. The Porsche Race to Singapore, formerly known as the Road to Singapore, is the fruit of a new multiyear partnership between Porsche and the Women’s Tennis Association (WTA), as announced in a grand launch last April. This year, Porsche will be the official automotive partner of the WTA Finals Singapore. Since the first Porsche Tennis Grand Prix in Filderstadt, Germany in 1978, the world’s best tennis players have been coming to the annual Porsche Tennis Grand Prix, now moved to the Porsche Arena in Stuttgart and regularly voted as the players’ favourite tournament on the WTA Tour. Strong partnership through the years Porsche has for the longest time remained the most loyal sponsor of international women’s tennis and an avid supporter of Europe’s oldest women’s indoor tournament. Fifteen years ago, Porsche took on the role as organiser, intensifying its involvement and establishing its direction in the world of sporting events. From 2015, Porsche has extended its sponsorship to the WTA Finals in Singapore. Dr. Henrik Dreier, general manager of

Porsche Singapore, said that through its involvement in the WTA Finals, Porsche built greater visibility and value for its brand alongside the growth of WTA as a major international sporting event. The Porsche Race to Singapore is already firing on all cylinders. One lap of the Porsche Race to Singapore is represented by each game. Each tournament of the Porsche Race to Singapore is noted in campaign graphics with a lap number (reflecting the tournament number within the season) on a pit lane signpost. Excitement brews The most coveted prizes puts the competition up a notch. “The player who finishes the season as the Number One player on the Porsche Race to Singapore leaderboard, by collecting the most points after lap 57, will not only seal a spot at the season-ending showpiece but also be awarded with a new Porsche 911 GTS Cabriolet. We have heard from players and WTA that this great incentive was already leading to a higher competition since every player wants to finish first in the Porsche Race to Singapore ranking. The trophy car will then be handed over to the winning player.” As the official automotive partner this

The heat is on at the WTA Finals

year, Porsche is providing a fleet of 40 Macans in conjunction with the fourth edition of the WTA Finals in Singapore. The top eight women’s singles players and doubles teams coming to Singapore for the WTA Finals, along with game officials, will be chauffeured in the Porsche Macan. Eventually, the winners of the WTA Finals will receive US$7m and a Billie Jean King Trophy for the singles category and the Martina Navratilova Trophy for the doubles category. “The partnership with WTA greatly contributes to the internationalisation of the Porsche brand and increases engagement with women’s tennis. In addition to the successful partnership with WTA, the Porsche Tennis Grand Prix provides an additional element of excitement that are highly valued by Porsche, and contribute to raising the visibility of women’s tennis across the globe. For spectators and admirers of both Porsche and tennis, fans are able to witness how two very different brands share the same passion of excellence, both on and off the court,” said Mr. Francis Lee, managing director, Stuttgart Auto. As a partner of the German Tennis Association , Porsche has also been supporting Porsche Team Germany for four years in the Fed Cup.

“Porsche is providing a fleet of 40 Macans in conjunction with the fourth edition of the WTA Finals in Singapore.” SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

15


startups

SumoStory offers affordable PR

When cash-strapped startups want to run a public relations (PR) strategy to boost their business credibility, they are confronted with an unviable option of having to spend $5,000 monthly on a PR agency. “We offer a middle-ground solution,” said Chris Chong, founder of SumoStory, a technology-driven PR service that offers the fraction of the cost of a traditional agency retainer fee and delivers a tailored approach to media pitching. SumoStory uses data science and automation to streamline the pitching process. Through bots, it can scrape data from websites to understand a journalist’s writing history and

interests. This data is then fed into the startup’s system to create a list of primary and secondary matches fit for a startup. “This tailored approach ensures that the content we pitch to journalists is targeted and relevant, which creates more opportunities for media coverage,” said Chong. Traditional PR uses the spray-andpray tactic, which involves sending out press releases at a high volume and gaining short-lived media coverage, Chong noted. This usually costs $5,000 per month with a compulsory retainer that locks clients in. SumoStory, meanwhile, leverages on technology to scan the media landscape for targeted press opportunities for clients, including commenting on recent topical issues and trends. “With our unique matching algorithm, we’re able to offer highly targeted content pitches to journalists in relevant industries,” he said. SumoStory packages are priced at $800 and $2,400 for 6 months’ worth of PR support. “SumoStory is a performancedriven PR, with our unique matching algorithm, we’re able to offer highly targeted content pitches to journalists in relevant industries,” he said.

This platform sends tourists on secret trips

Zelia Leong

Spontaneous travellers are in for a surprise as travel website Anywhr (anywhr.co) adds a little more thrill to the usual getaways. Launched in January 2017, Anywhr offers a fresh approach to travel - it is the first and only surprise travel company in Asia that lets travellers book trips to destinations that only get revealed when they arrive on the airport. This Singapore-based start-up is becoming a go-to choice for adventurous and spontaneous travellers that have visited all the usual tourist destinations like Phuket, Bali or Langkawi, and want to explore fresh places around the world that they themselves would not have been able to discover on their own.

16

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

“Right now we’re focusing heavily on technology and product, and looking to raise a round of funding soon to supplement the functions in our roadmap,” said Zelia Leong, co-founder of Anywhr who started the company with fellow co-founder Felix Tan. Both are former Rocket Internet executives that headed marketing, product and operations roles. Part of Anywhr’s next growth steps is to hire more so-called trip curators who will plan and decide the trips of travellers that book on the website. “We also promise not to send travellers to over-travelled destinations such as major big cities,” Zelia said. “Travel is about discovering the people, the place, yourself, and seeing things with fresh eyes and gaining new experiences,” said Leong. “We help frequent travellers discover new places they never knew existed, and new travellers to embark on their globetrotting journey when they do not know how to start.”

AutoWealth gives financial planners a run for their money

When 29-year-old Ching Kai Chen first tried the beta test version of AutoWealth, a robo-advisory platform that doles out financial investment services, he was impressed by its combination of convenience and intelligence. “Investing can take a substantial amount of time – stock picking, monitoring individual company results and getting the analysis correct. I wanted a simpler and less risky way of investing, and AutoWealth provided the right product for me,” he said. Unlike human financial planning, AutoWealth’s robo-advisory platform automates the entire investment process to make it simpler, and more convenient. Customers start by taking a two-to-three-minute online questionnaire, which feeds into the robo-advisory system. This helps create a full picture of customer’s financial situation, risk profile and financial goals. AutoWealth’s proprietary algorithm analyses the customer’s answers and recommends a tailored investment portfolio. Meanwhile, its platform technology automates 80% of the financial advisory and investment management process that enables them to offer low fees that are 25% that of traditional financial services, or at 0.50% per annum on the assets under advice and US$18 per annum platform fee. In comparison, Autowealth COO Noel Lee noted that traditional investment through mutual funds typically comes with excessive sales charges, annual management fees and other hidden charges that stacks up to about 2% per annum on average. “Combining higher returns with a lower fee structure, our clients are able to take home way higher net returns compared to mutual funds or financial planners,” said Lee. Human touch Whilst robot automation brings major improvements to the AutoWealth investment process, there is still human touch. Customers can meet face-to-face with one of the startup’s financial advisory representatives, all of whom are licenced by MAS, to ask more questions and to open their AutoWealth account through which portfolio performance can be monitored on demand. “We believe a hybrid model will particularly address the needs of the older population, whom we also desire to serve,” said Lee. After its official launch, AutoWealth is setting its sights on getting the word out to more Singaporeans through more roadshows and seminars, including investors that are not as familiar with digital technology. The startup is also engaging regulators and industry bodies to further nurture the robo-advisory industry.


Y

BUILD RENEW RECYCLE

We are one of the largest one-stop Underground Utilities Infrastructure companies based in Singapore. We provide Underground Utilities Infrastructure construction and maintenance, sewer pipeline rehabilitation, road and airfield construction and maintenance as well as asphalt pre-mix production and construction waste recycling. SINGAPORE • • • • •

LEY CHOON CONSTRUCTIONS AND ENGINEERING PTE LTD MULTIFORM DEVELOPMENTS AND CONSTRUCTION PTE LTD CHIN KUAN ENGINEERING AND CONTRACTORS PTE LTD TEACLY (S) PTE LTD PAN ALLIANCE TECHNOLOGY INTERNATIONAL PTE LTD

LEY CHOON (M) SDN BHD

LEY CHOON (YANTAI) ECO-GREEN CONSTRUCTION MATERIALS LTD

MALAYSIA CHINA

SRI LANKA •

TEACLY (S) PTE LTD 1BRANCH 19/7/2017 OFFICE 2:56 PM

LFL_Award_OP_130x200mm.pdf


FIRST The Analysts’ call

How will ThaiBev fare in the shortterm?

ThaiBev will acquire 240 branches of KFC in Thailand

ThaiBev buys big buckets of KFC stores

B

eer and chicken go well together gastronomically, but apparently also financially with leading beer maker Thai Beverage (ThaiBev) announcing it could acquire 240 branches of the popular fried chicken fastfood chain KFC in Thailand. Analysts reckon the $463m deal is a diversification strategy for ThaiBev, the largest beverage company in Thailand and brewer of the popular Chang beer, given lower beer consumption amidst the one-year mourning for the late King Bhumibol. ThaiBev’s results for the third quarter of 2017 showed its beer segment’s sales volume dipped by 8.7%, although the company did manage to maintain its 40% market share despite stronger competition.

KFC’s extensive network in Thailand will give the Group direct access to multiple customer touch points across the country, enabling us to understand trends and stay at the forefront of the industry. This is essential for sustainable growth over the long term. “Whilst the proposed transaction took us by surprise, we believe this is part of the group’s strategy to diversify outside of alcoholic beverages,” said Andy Sim, analyst at DBS. “We also noted that its current head of food segment, Nongnuch Buranasetkul, was previously from Yum Restaurants 18

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

International (Thailand) prior to joining the ThaiBev group,” he added. Yum Restaurants owns the KFC brand, which is currently the top quick service restaurant brand in Thailand by brand share and number of outlets, along with Pizza Hut and Taco Bell. “The acquisition of the KFC stores represents more than just an opportunity to enlarge ThaiBev’s food business,” said Buranasetkul, senior vice president – food business (Thailand) at ThaiBev announcing the deal.“KFC’s extensive network in Thailand will give the Group direct access to multiple customer touch points across the country, enabling us to understand trends and stay at the forefront of the industry. This is essential for sustainable growth over the long term.” The KFC branches, which are reportedly profitable and will be managed by an industry veteran that has direct experience in handling the brand, will not only expand ThaiBev’s food business but also help drive up beer and other beverage sales. “With the group’s potential acquisition of over 240 existing KFC stores in Thailand for approximately S$463m, the group can leverage on KFC’s network to distribute its portfolio of beverage, which could also bode well for [ThaiBev’s Beer segment] given the room for growth in the food service space,” said Jodie Foo, analyst at OCBC. ThaiBev registered 3Q17 core net profit of $205m (+15% y-o-y) on the back of $1.4bn revenue. Management expects earnings per share to increase from the acquisition, even if fully debt funded, and the deal to be completed by the end of December 2017.

Juliana Cai, analyst at RHB We expect 4QFY17F to see positive growth in spirits and beer volumes as we think trade agents are likely to stock up on inventories prior the excise tax hike in September 2017. The spirits division is ThaiBev’s largest segment, contributing 57% to topline and 82% to EBITDA, and it has a 80% market share in Thailand’s spirits industry. Therefore, an uplift in spirit volumes would continue to bode well for the group. Andy Sim, analyst at DBS 4Q17F should show a stronger yearon-year (yoy) growth. whilst 9M17 results registered a meagre 3% yoy, we believe 4Q17 could turn in a better yoy performance. ThaiBev’s 9M17 operating and core net profit stood at 76% and 80% of our forecasts, respectively. We expect 4Q17F to show a stronger yoy growth vs. last year on the back of trade loading in anticipation of an excise tax increase in September. On a longer-term horizon, we believe its ongoing transformation into a regional beverage player will help to further re-rate the counter. Its associate, Fraser & Neave Ltd (FNN) now owns 18.74% in Vinamilk, and has stated an intention to increase this further Jodie Foo, analyst at OCBC On competition and new entrants, we believe the spirits segment holds defensive moats underpinned by significant market share, extensive scale and distribution network. We understand beer’s market share has also been generally stable. Thai Beverage PLC’s (ThaiBev) 3QFY17 results came in within our expectations amid a muted consumption backdrop. Revenue was largely unchanged YoY at $1.4bn, as Spirits was up 4.5% from a low base last year, but sales declined for Beer (-7.1%), Non-alcoholic Beverages (NAB) (-4.1%) and Food (-2.3%). Including a $256m fair value gain from F&N, overall PATMI was up 162% to $459m.


Country report: GERMANY others. Philippi highlights that as of late, German companies have been investing in centres of excellence in additive manufacturing in Singapore and initiating support services for the implementation of Industrie 4.0 processes for Singaporean companies.

German companies have been initiating support services for the implementation of Industrie 4.0 processes for Singaporean companies.

How Singapore is leveraging its partnership with Germany Germany has around S$15b invested in Singapore.

W

hen German trading company Behn Meyer’s doors first opened in Singapore in November 1840, little did everyone know that it would pioneer the integral role of German businesses in Singapore’s economic success several decades later. In fact, over the last ten years, the number of German companies in Singapore has tripled to a 1,600-strong list, strengthening Germany as Singapore’s principal goods trading partner in the European Union and likewise, Singapore as Germany’s second most important economic partner in the ASEAN region. This long-standing partnership between the two countries has led to tight-knit collaboration in several industries, mainly chemicals, biomedical sciences, electronics, engineering, and logistics. Germany has around S$15b foreign direct investment stock in Singapore, and according to Tim Philippi, executive director, Singaporean-German Chamber of Industry and Commerce (SGC), the total trade between the two countries has amounted to approximately S$20.8b.

Over the last ten years, the number of German companies in Singapore has tripled to a 1,600-strong list.

But what really were the critical factors that led to Singapore and Germany’s strong collaboration? Philippi, as the lead of the platform for Singaporean and German companies, says that both countries have been receptive to development and the fostering of business relationships and collaborations, with focus on competitiveness and highend solutions for future readiness. Innovation-driven nations Philippi adds that SGC has also observed stark similarities between the two countries in terms of digital healthcare, high-end manufacturing, energy efficiency (buildings, industry), smart city (big data, smart logistics, smart transport), Industrie 4.0 (industrial internet of things), and water technology, among others. Further, the interconnectivity and complementarity between the two countries is especially seen in their economic histories, wherein both Germany and Singapore have gone through different phases of economic development at almost the same time, from labour-intensive to now R&D and innovation-driven. Now, Singapore and Germany are closer to Industrie 4.0 than many

ASEAN’s sweet spot According to Philippi, Singapore found a way to encourage companies to grow capabilities and conduct new or expanded activities in Singapore. “Certain sectors are robust and attractive for German businesses. The Singaporean government is investing in advanced manufacturing technologies to enhance the competitiveness of companies and better position them for the future. German companies with their technological expertise will be able to play an important part in this development,” Philippi adds. To aid German companies looking to set up shop in Singapore, the Singaporean-German Chamber of Industry and Commerce organises events like trade shows and mission trips to expand opportunities for businesses. In November, there will be a mssion trip in the field of energy efficiency. “This German programme has been running very successfully for 14 years and has enabled German companies to gain access to international markets. Operating in the field of energy efficiency, these companies actively protect the environment through the implementation of sustainable technologies and support knowhow exchange.” added Philippi Additionally, the SGC also organises Singapore pavilion in international trade show to assist Singaporean SMEs to expand their global reach. “One of the latest ones was our fourth Singapore pavilion at IFA, the leading trade show for Consumer Electronics & Home Appliances, in Berlin, Germany. Six companies participated under the wing of the Singapore pavilion to show case their latest innovations,” said Philippi.

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

19


Country report: GERMANY

German firms speed up Smart Nation initiative From faster logistics to autonomous technology, check out the most exciting innovations from Continental Automotive Singapore and Hoffman Quality Tools Asia Pacific.

I

n its nine years in Singapore, Continental has been leveraging its R&D capabilities to develop top-of-the-line transport solutions and stay ahead of the competition. Despite its relatively short stay in the city, Continental has 140 years of experience in the transport industry and an excellent global reputation in terms of innovation. As Continental expands its business, Singapore gets to experience transport expertise first-hand through the company’s enhanced Smart Nation collaboration with the government. Building the car of tomorrow Continental is particularly known for its prowess in the development of in-car management systems, with a wide range of offerings including instrumentation clusters and displays, multimedia and telematic devices, radio navigation devices, central input devices, interior modules, body control modules, and seat comfort systems. In 2016, Continental Automotive introduced to the Singapore market its Powertrain Division’s Transmission Business Unit

Lo Kien Foh, Managing Director of Continental Automotive Singapore

20

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

Lo (center) in the midst of a discussion with fellow colleagues

the aggressive addition of new product focused on advanced controller solutions for lines, with the aim of becoming Singapore’s a variety of transmissions. “With Singapore’s primary R&D hub for the design and aim to become a Smart Nation, Continental development of automobile electronics and contributes by being involved such as technologies. “Transportation issues such our support to the Singapore Institute of as chronic traffic congestion are constant Technology’s Telematics degree in Intelligent challenges for the industry. With the primary Transportation Systems (ITS) and the launch goal of efficiently transporting goods and of the Park&Go @SG mobile application services to the together with the full satisfaction ITS Lab, to enhance of our customers the search of parking “20 million better cars, stakeholders, spaces in Singapore. better mobile lives for 25 and Continental In addition, million consumers, and develops intelligent Continental is also 20 better cities by 2025. ” technologies and playing an active role solutions in the most in the development efficient, effective of autonomous and innovative way,” Lo adds. driving with our road map to develop fully Continental’s clients are sure to expect autonomous technology in 2025,” says Lo more smart offerings along the way, as it Kien Foh, managing director, Continental moves forward in its goal towards 20 million Automotive Singapore. With the agenda of delivering new answers better cars, better mobile lives for 25 million consumers, and 20 better cities by for future mobility, Continental boasts of 2025. Through the 2025AD.com platform, a highly-skilled team driven to push the Continental fosters discussions on social, boundaries in automotive competence. To business and technology topics relating excellently and enjoyably fulfill their roles, to the future of mobility. Continental has Continental has inspired a corporate culture also recently acquired Quantum Inventions among its more than 1,200 curious and to deliver next generation navigation committed employees in Singapore who are systems that are highly responsive to the primary driving force behind innovative real-time information such as traffic data, components, systems, and services. road incident information and dynamic To accommodate its growing talent pool road pricing. “Our agenda is to deliver new and expand its business, Continental is set answers for future mobility. Continental to put up a third building in the Singapore currently employs more than 230,000 R&D location. Lo says that Continental has employees in 56 countries,” adds Lo. been managing its growth in Singapore by


Country report: GERMANY

Pinaki Banerjee, Managing Director of Hoffmann Group in Asia Pacific

With the rise of digital disruption and innovation, and consequently competition, companies who place the focus on its clientele can never go wrong. Hoffmann Quality Tools Asia Pacific, part of the Hoffmann Group, has mastered this principle as it increased access to its services and developed greater responsiveness while rolling out more exciting solutions for its customers. Hoffmann brings to the table 98 years of machining and tooling expertise, homegrown in Germany and now readily available at the fingertips of its Singapore clients. Delivering customer-centric innovation “As a company we are moving towards digitalisation, staying localised and responsive in the internet of things. We are continuously improving, providing efficient solutions and timely delivery to our customers. This can be achieved when we put resources to increase responsiveness in digital channels. It is very crucial for us to understand the needs of our customers. The easier it is for our customers to use our digital channels the better it is for us. We are not just a company that sells tools to our customers, we are a company that provides consultative services to our customers, be it online or offline,” says Pinaki Banerjee, managing director, Hoffmann Quality Tools

than the year before. Asia Pacific. This can be done because we listen to the In recent months, Hoffmann Group has customers’ feedback and come back better been transporting offline services to online the next year. We speak in our customer’s platforms with new digital services that language and focus on customers that value help users to identify the right tools for them. This includes the new GaugeScout for our business propositions. This is evident in the measuring tools and 18 different languages the ThreadScout for that our catalogue thread cutting and comes in. While thread milling. “Hoffmann staying true to its As Banerjee has delivers more three competencies emphasised, it is than 75,000 of trading, important for firms to products, its manufacturing, meet their customers GARANT and Holex and being serviceshalfway and provide the exact solutions brands included, oriented,Hoffmann Group delivers that they need. As of more than 500 more than 75,000 such, Hoffmann manufacturers.” products, its GARANT Group is working on and Holex brands digitalisation that included, of more than offers a transparent 500 manufacturers. and efficient solution Through its three competencies and to its customers. Hoffmann Group has also its robust team of service consultants, set its eyes on the much-awaited Industry Banerjee says that Hoffmann Group is 4.0 or smart factory, where the internet of able to accomplish what plenty of other things, cyber-physical systems, and cloud companies cannot do, and that is to provide computing, among others, are fully and comprehensive high-quality solutions from a seamlessly integrated. single source. As a system partner for quality tools, GARANT Tool24 Smartline Hoffmann Group secures the tool supply for With its vision, Hoffmann Group has thus customers and supports them with unique produced GARANT Tool24 Smartline , a manufacturing and service competence. smart tools dispensing cabinet that allows Banerjee says “We have a Lighthouse professional and transparent monitoring of tools and at the same time manages a direct project, called LogisticCity. This will enable us to deliver anywhere in Europe within tool procurement via the system. 24 hours. Furthermore, combined with With over 25.000 items on the catalogue, Hoffmann Group´s premium GARANT brand our warehouse and storage facilities in Malaysia and Singapore it will enable us to allows companies to get their problems deliver within 48 hours to anywhere in Asia. solved within a single source. LogisticCity is designed to support our “With GARANT, we provide innovative growth ambition until 2030.” solutions every year and each year is better

GARANT Tool24 Smartline

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

21


economy watch

Total employment fell 0.4% and Singapore’s unemployment rate stood at 2.2%

Grim labour market looms as economy accelerates Economic production grew 2.9% in 2Q17 beating market expectations, and yet, the labour market remains a laggard due to job-skills mismatch.

F

or the thousands of Singaporean workers who lost their jobs or were turned down on their applications, the joyous news of an accelerating Singapore economy brings little comfort. The labour market remains challenging with total employment contracting in the second quarter of 2017 even as the country’s economic production grew 2.9%, beating market expectations. And whilst 3,500 Singaporeans were laid off between April and June, fewer than the previous quarter and a year ago, more retrenchments could be in the offing as it will take time to fix the job-skills mismatch plaguing the labour market. Firms are shedding staff after completing digitalisation upgrades that reduce the need for labour, whilst those that do want to hire additional headcount are facing a lack of skilled workers able or willing to take on openings. Manufacturing workers have been particularly affected by this plan, as seen in continued layoffs. Deutsche Bank chief economist Juliana Lee noted that manufacturing payrolls fell 3.3% yoy in the same period even as the sector expanded 22

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

3,500 Singaporeans were laid off between April and June.

8.1%. Manufacturing continued to lead growth in Singapore, galvanised by electronics production that rose two percentage points faster in 2Q17 than the previous quarter. This is also in spite of a worsening biomedical sector that contracted more than three-and-a-half percentage points than in the previous quarter. In contrast, services payrolls rose only 1.4% even as the sector expanded 2.4%. Factoring in the heavy retrenchment in construction where payrolls fell 5.7% in 2Q17, total employment fell 0.4% and Singapore’s unemployment rate stood at 2.2%. UOB head of research Suan Teck

Kin said that the labour market remains weak pointing out the job vacancies to unemployed persons ratio has been declining for 10 quarters. The latest job vacancy to unemployed ratio in the first quarter of 2017 stood at 0.81, which Suan reckoned was “amongst the worst since the global financial crisis 30 quarters ago and has been below parity for four consecutive quarters.” The weak labour market has been seen as one of the drivers that has lowered consumer sentiment and contracted household consumption. Private consumption expenditure posted two quarters of negative growth on a yoy basis, which Suan mentioned has never happened since 1976 during a non-recessionary period and could point to a “deeper, structural issue within the labour market.” Partly in response to sluggish domestic consumption, Singapore’s central bank may act more carefully with regards to policy normalisation, even as the country’s growth prospects this year brighten on the back of improving manufacturing and global trade. “The MAS [Monetary Authority of Singapore] may also choose to approach policy normalisation more cautiously, due to possible concerns over Singapore’s medium-term growth – particularly to population aging, changes in immigration policy, and as the economy approaches the technology and productivity frontier,” said Joseph Incalcaterra, chief economist at HSBC. “Moreover, domestic consumption remains relatively subdued, despite higher export figures, as highlighted by weak private consumption and gross capital fixed formation.”

Figure 1: Manufacturing providing additional lift to GDP growth

Source: CEIC, HSBC


economy watch Data hint at modest rebound in construction ahead

Source: CEIC and Deutsche Bank

Whether Singapore can broaden its economic recovery and manage its jobless growth has attracted more attention as the country benefits from a global trade upick. The manufacturing and services sector continued to shine, according to Incalcaterra. Manufacturing and services shine “Singapore’s manufacturing sector has handsomely benefited from the recent pick-up in global trade, particularly from strong Chinese demand for electronics and other manufactured goods,” he said, adding that the sector’s expansion has provided “a significant lift to the country’s economic momentum.”The services sector, which represents roughly two-thirds of economic production, grew by 7.2% yoy in 2Q17 compared to 6.2% in the previous quarter - and it is on a roll. “As a matter of fact, services have expanded by one percentage point each quarter since the third quarter of 2016. More significantly, the primary reason for the sector’s pickup in 2Q17 were growth in previously laggard areas, including: wholesale & retail trade, finance & insurance, and business services,” Incalcaterra noted. Maybank Kim Eng analyst Chua Hak Bin noted that wholesale & retail trade saw faster growth as non-oil re-exports accelerated, and retail sales volume rose faster. Transportation & storage continued growing at a robust due to rises in container throughput, air passenger traffic and air cargo handled. As for finance & insurance, the sector was supported by stronger bank loans, Singapore Exchange activities and

Jobless growth in manufacturing

Source: CEIC and Deutsche Bank

insurance segments, according to Chua. Finance & insurance pushed the growth pedal, expanding at its fastest pace in more than two years at 3.8%. “MTI [Ministry of Trade and Industry] attributed the strengthening of business services to ‘head offices & business representative offices and other administrative & support services’, reflecting the surge in property market transactions seen in the first half of the year,” Chua said. Construction: The “weakest link” But even as the manufacturing and services sector outperform, the construction sector is proving to be a headache for the Singapore economy. The embattled sector contracted 5.7% yoy in the 2Q17, its fourth consecutive quarter of negative growth, albeit in line with government estimates, according to Incalcaterra. “Construction remains the weakest link,” said Chua, attributing the contraction to lower public and private sector contracts. Sharing her sanguine outlook on construction, Deutsche Bank’s Lee reckoned the sector may soon find its footing and flourish once the Minister for National Development’s newly unveiled draft master plan for Jurong Lake District kicks into high gear. The plan includes the development of Singapore’s second central business district. “This 15-20 year plan, with a significant number of white sites, allows developers to create a mix of uses, likely serving as a critical catalyst for developments ahead of the HighSpeed Rail terminal operation in 2026

The slowdown in GDP growth will likely to be limited to 2.3% in 2H17.

and a strong boost in sentiment for the construction sector,” she said. Amidst a challenging labor market that has already slashed manufacturing and construction jobs, the second half of the year (2H17) might bring in more worries for the unemployed and workers in danger of retrenchment as analysts expect growth momentum to slow from the first half. Lee said that the slowdown in GDP growth will likely to be limited to 2.3% in 2H17, expecting net trade and countering the negative impact of destocking. For Suan, 2H17 should see the continuing growth for the electronics and precision engineering clusters, but warns that the doubledigit growth for semiconductor production may slow into the single digits, due to base effects and a slower 2H capex growth expected in China.” Heaadwinds towards end 2017 Singapore can also become vulnerable to headwinds and uncertainties to growth in the face of the upcoming elections in several European countries. “It may fuel further populist, anti-trade sentiments which will be a strong negative for Singapore’s trade-dependent economy,” said Suan. Chua, meanwhile, held a more sanguine view, maintaining a full-year GDP forecast at +3% in 2017. He anticipates that an improving domestic economy will offset the expected moderation in manufacturing growth in 2H17 pointing the uplift in education, health, social services and the arts, entertainment & recreation segments, as well as retail trade and property. SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

23


FINANCIAL INSIGHT: SINGAPORE BONDS

Deal #1: Frasers Centrepoint Ltd has announced a new 10year senior unsecured SGD-denominated bond issue.

Deal #2: City Developments Limited offers the first Singapore dollar two-year Green bond indicated at a 1.98 percent coupon

Bond issuance falls, bond markets pick up Primary bond offerings from Singapore-domiciled issuers reached US$12.8b in the first half of 2017.

S

ingaporean companies have cut back on local issued bonds to finance operations and have moved towards more overseas borrowing and perpetual bonds, new data shows. Meanwhile, Singapore local banks remain the largest bond issuers, accounting for 61.8 % of the market in the first half of 2017. Property developers remained active issuers in order to refinance maturing debt and raise debt capital for overseas expansion, whilst smaller companies offering higher yields also came back to tap the local capital markets. Primary bond offerings from Singapore-domiciled issuers reached US$12.8b in the first half of the year, translating to a 23.2% decline in proceeds after a strong momentum sustained over the same period last year which recorded $16.7b in primary bond offerings. This is due to the decision — and, arguably, preference — of local companies to tap both domestic and offshore bond markets to raise funds. “The Singapore DCM (debt capital market) is dropping in the past few years,” said Louis Ng, head of APAC fixed income at Dealogic. “Volume and activity drop 20% and 30% year-on-year, respectively.” During the second quarter of 2017, proceeds reached US$4.5b, or a 45.8% decline from the first quarter of 2017 and down 41.7% from the second quarter of last year. Singapore issuers tapped the US-dollar bond market and raised US$3.3b, an increase of 5.8% in proceeds compared to the same period in 2016. Moreover, perpetual bonds issued by Singaporean companies totalled US$1.4b to date, 24

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

During the second quarter of 2017, proceeds reached US$4.5b, or a 45.8% decline from the first quarter of 2017 and down 41.7% from the second quarter of last year.

up by 49.3% from the same period last year. Thomson Reuters senior business communications executive for APAC Janet Jin noted that United Overseas Bank is currently the most active issuer/borrower in terms of bond proceeds this year, capturing 13.9% market share worth US$1.8b, including the company’s issuance from its subsidiaries. DBS Group Holdings currently leads the Singaporeissued bonds underwriting this year with related proceeds of US$3b, accounting for 23.2% of the market share. Oversea-Chinese Banking Corporation Limited (OCBC) and HSBC Holdings, meanwhile, rounded out the top three spots with 11.9% and 9.3% market shares, respectively. Data from Thomson Reuters revealed that DBS Group books an estimated US$12.9m in fee revenues, and accounted for 23.7% of Singapore’s bond fee pool. Imputed underwriting fees from bond issuance by Singaporean companies, moreover, totalled US$54.5m, down 33.8% from the first half of 2016. Thomson Reuters further revealed that Singaporean firms from the financial sector tapped the bond markets and raised US$7.9b, translating to a 19% decline in proceeds compared to the same period last year. Financials, therefore, captured 61.8% of the total bond proceeds issued by Singaporean borrowers. HSBC Holdings issued its debut Singapore offering of Additional Tier 1 capital in June this year for S$1b (US$724.4m), the largest issuance this year in the


FINANCIAL INSIGHT: SINGAPORE BONDS Singapore-dollar bond market, following a string of European banks tapping the SGD bond market this year, including Commerzbank AG, Landesbank BadenWuerttemberg (LBBW), and BNP Paribas. Deals: Who borrowed where? For Singapore-dollar bonds, OCBC Bank was the sole lead manager and bookrunner of the Frasers Centrepoint Limited deal priced at S$348m, 10-year bonds at a coupon rate of 4.15% on 16 February 2017, and upsized the issue size by another S$50m to S$398m on the following day. OCBC Bank embarked on a S$52m re-tap in April 2017 and a S$50m re-tap in May 2017, bringing the total to $500m. These followed OCBC Bank’s other sole mandates from Frasers Centrepoint Limited in the past year: a S$250m, 10-year 4.25% issue in April 2016 and a US$200m, 5-year 2.5% issue in July 2016 (Frasers Centrepoint’s debut USD bond issue). In the Financials sector, OCBC Bank was joint lead manager and bookrunner of the deal with BNP Paribas priced at S$250 million for a 7.5-year bond issue at a coupon rate of 3.65% in March 2017, as well as Commerzbank’s S$500 million, 4.875% 10-year non-call 5-year issue in February 2017. Andrew Wong, vice president for fixed income research at OCBC Bank, noted that in his firm’s mid-year 2017 outlook for Singapore that there is a partial revival of SGD bond market activity in 1H2017. “In addition to volumes picking up, we saw an improved breadth of issuers including well-known names, foreign financials as well as the return of smaller higher yielding issuers.” he said. He further noted that the solid issuance activity in the first half of 2017 is mainly due to issuers looking to lock in the low cost of debt in early 2017 with the global reflation outlook still promising. Similarly opportunistic behaviour seen in late second quarter of 2017 when Singapore Dollar Swap Rates (SDSR) plunged to year-to-date lows (10 year swap rates fell to 2.10%), whilst throughout the year, we saw a significant recovery in demand for SGD papers with investors moving on from the high profile defaults in the embattled O&M sector in second half of 2016, and ample market liquidity looking for yields. Some of the players in the Singapore-dollar bonds category include the Housing and Development Board’s Singapore debt capital market league table

Sources: Thomson Reuters

Singapore DCM volume by macro industry breakdown - 2017 YTD

Sources: Thomson Reuters

Janet Jin

Andrew Wong

Louis Ng

issuance of S$900m, UOB’s S$750m issuance, as well as Singapore Airlines Limited and Mapletree Treasury Services’ issuances at S$700m. This also includes foreign financials like Huarong Finance,, and the return of smaller higher yielding issuers like Centurion Corp Ltd, Tuan Sing Holdings Limited, and Chip Eng Seng Corp Ltd. City Developments Limited (CDL), through its wholly-owned subsidiary CDL Properties Ltd (CDLP), has successfully launched the first green bond by a Singapore company. The two-year senior secured green bond has raised S$100 million at 1.98% fixed rate due 2019. The investors comprised mainly financial institutions and fund managers. The green bond is issued under the CDLP S$700 million secured Medium Term Note (MTN) Programme first established in 2001. DBS Bank Ltd. (DBS) is the sole bookrunner on this transaction. Financial, real estate The country’s real estate sector, meanwhile, accounted for 9.9% market share, raising US$1.264b in proceeds and representing a 25.4% increase year-on-year from the first half of 2016. Government and Agencies, Energy and Power, and Industrials captured 7.8%, 5.8%, and 4.6%, respectively, raising US$2.3b in combined proceeds. Consumer Staples; Consumer Products and Services; Healthcare; Telecommunications; Media and Entertainment; and Retail make up the rest of Singapore’s debt capital market volume in the first half of 2017 for a combined total of over US$1.3b in proceeds. Activity in the Singapore-dollar bond market, however, is picking up pace in the second quarter of 2017. SGD bond market reached S$6.7b (US$4.8b) in 2Q2017, increasing by 35.4% in proceeds from the previous quarter as number of primary issuance grew by 45%. This brings total Singapore-dollar bond issuance to S$11.6b (US$8.3b) so far this year, or 7.1% lower compared to the proceeds raised in the first half of 2016. In terms of macro industry, the financial sector remained the top, accounting for 53% of the SGD bond market, raising S$6.2b (US$4.4b) so far this year. Real estate and Government & Agencies followed behind with 16.1% and 14.6% market shares, respectively. Foreign issuers tapping the Singapore-dollar bond SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

25


FINANCIAL INSIGHT: SINGAPORE BONDS Singapore dollar bonds volume - top macro industry - 2017 YTD

Sources: Thomson Reuters

market raised S$3.7b (US$2.7b) thus far, translating to a 13% decline in proceeds from the same period last year at S$3.4b, as number of primary issuance slowed down by 54.8%. APAC outlook, China role In terms of outlook and trend, Singapore bond markets may likely to continually be dominated by the real estate and financial sectors for the rest of 2017, if the first half of the year is any indication. OCBC research showed that in the first six months of the year, property developers remained active issuers in order to refinance maturing debt and raise debt capital for overseas expansion. Regionally, Dealogic’s Ng noted that that in 2017 so far, China is accounting for 57% of Asia ex Japan International issuances, marking the first time this kind of issuance is surpassing the 50% benchmark. “Chinese issuers have changed the game in Asia somewhat, with more new players joining the market and reducing fees,” said Ng, noting that this is making the market more challenging. He mentioned that the average number of bookrunners on Chinese International transactions has increased from 4 in 2010 to 6 in 2017. For instance, China Cinda Asset Management issued a $3.2b preferred share with 23 bookrunners on the deal, the highest number of bookrunners on the same deal in Asia ex Japan International market, which again is squeezing fees in the region. Moving forward, Ng is expecting that Asia ex Japan International DCM will surpass the previous full year record set in 2014 at $280.9b. For reference, Asia ex Japan International DCM has reached $199.8b in the first half of 2017, increasing by 66% compared to the same period in 2016 which is the highest year to date volume on record. This outlook and impending trend may be more apparent in the next few quarters and years with the launch of the Bank of China’s new Debt Capital Market Centre in Singapore in June this year. This will help boost financial and capital market activities in Singapore. The new centre will help promote Chinese bond market to investors in the region by helping Bank of China boost its underwriting business for panda bonds. 26

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

In 2017 so far, China is accounting for 57% of Asia ex Japan International issuances, marking the first time this kind of issuance is surpassing the 50% benchmark.

hong kong view

Dim Sum bonds: out of flavour Hong Kong’s decent showing on the bond market and debt capital market front is fuelled by certain notable deals—that could affect the bond market landscape in the Asia Pacific region as numbers and figures shoot up. Some of the more notable deals this year include the State Grid Corporations’ US$5 billion transaction completed in April in the Special Administrative Region. The most notable transaction, meanwhile, is China Evergrande’s US$6.6b transaction which comprised of US$3.8b in new money raised and US$2.8bexchange offer, the largest US dollar bond ever completed in Asia. This transaction marked the largest bond raised by a Chinese real estate company on record, as well as the largest high yield bond priced in Asia ex Japan ever, according to Michael Tse, APAC fixed income head at Dealogic. Industry experts and observers are saying that this deal may raise borrowing costs in Asia’s booming bond markets. From the issuance’s perspective, financial institutions still hold a majority in 2017. More than 60% of the total issues (including government bonds) in 2017 so far was contributed by financial institutions or the financial services sector, according to Natixis’ senior economist Jianwei Xu. Real estate sector and airlines companies, meanwhile, issued the second and third most corporate bonds at 15 and 5 issues, respectively. Dim Sum bonds continue to lose its flavour With the current interest rate differential, the market share of USD bond remains substantial at about 58% for the Hong Kong bond market, followed by the share of Hong Kong dollar at 32%. Chinese yuan (renminbi) takes the third largest share but remains a minor domination currency compared to the other two at 4%. The offshore RMB bond (dim sum bond), however, issuance further slowed down in 2017 on the back of not only the appreciation of yuan as well as the hike of interest rate, but also the rapid opening up of China’s onshore bond market. Data from BMI Research suggested that whilst increasing linkages between China’s onshore financial markets with Hong Kong will likely continue to place the latter as a top offshore yuan clearing centre, the offshore dim sum bonds market in Hong Kong will gradually lose appeal over the coming quarters as the onshore bond market gains prominence. Dim sum bonds were previously attractive to foreign investors who wished to gain exposure to yuandenominated assets, but were restricted to the onshore market due to capital controls.

Declining significantly Hong Kong – Dim Sum bonds issued, CNYbn

Source: BMI, Wind


als

m

in

Se

r

in

So

lu tio

Leg Plat f

Te n

ms

oating LNG

n io

or

Fl

s

ns

FP

Te

m

or

i

Marine

es

s a n d SO F E C M o

i-

C

bl

/

O FS

FSRWP

Submers

FE

g

SO

The right solutions, the right results

SO

Experience…

P r o fi t fr om O u r E x p er ien ce Tokyo

Houston

Singapore

Brazil

www.modec.com

We live in times where connectivity is the mainstay of everything we do, see, touch and hear. As the leading real estate agency in Singapore with more than 6,260* salespersons and high market share, ERA continuously innovates and strives to deliver customer satisfaction. Our latest technological initiative is ERA Connect, a new feature in iERA mobile app which will: • increase the knowledge of ERA salespersons about existing projects and new launches in the various regions • facilitate communication between ERA salespersons through open sharing of marketing ideas and clients’ enquiries • enable ERA salespersons to serve clients’ needs more efficiently with

real-time project information Another feature in the app developed exclusively for ERA salespersons; ERA Zap, facilitates internal co-broking between teams. ERA salespersons can upload listings with photos and pricings, and teammates within the division who are keen to collaborate on any listing can ‘zap’ it. All parties can communicate within this group chat to arrange for viewings and provide updates.

plans islandwide. ERA salespersons can use these powerful tools to provide a hassle-free transaction to their clients. ERA will continue to identify gaps in the real estate business and develop new offerings to meet the needs of our salespersons and clients.

Other features include property calculators for new Seller’s Stamp Duty (SSD) regulations, resale/new home progressive payment and the rental stamp fee. In addition, they can access transactions, condo reports and floor

*CEA Public Register, September 2017


cover story

The sale of Jurong Point suburban malll at G$ 2.2b is considered the largest investment deal in 2017

Things are looking up once again for Singapore’s property market Singapore’s property market is bucking the declining trend of the past few years with figures and prospects for both residential and commercial spaces all looking positive for the rest of the year.

O

ne of the biggest reasons why things are on the rise once again for Singapore’s property market is the improving market sentiments and the country’s still relatively low interest rates, buoyed further by the government’s implementation of zealous cooling measures to ease the downward trend that started following the peak reached in the third quarter of 2013. This decline, according to Value Penguin’s senior vice president Duckju Kang, represents the longest decline in real estate prices in Singapore, with landed and nonKey indicators

Source: URA, MTI, OrangeTee Research

28

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

In the first half of 2017, sales of private residential units reached a total of 6,039 as compared to only 3,675 units sold in the same period last year, representing a 64% year-onyear increase

landed property values down 10% and 8%, respectively, over the last 13 consecutive quarters. This relatively slight upturn has been a welcome reprieve for various stakeholders in the sector. Xian Yang Wong, Orange Tee’s head of research & consultancy, said that buyers who were previously window shopping are now coming into the market to buy. This is echoed by Ismail Gafoor, PropNex Realty’s CEO, saying that Singapore’s real estate market is currently abuzz with activities and we are witnessing a rebound in consumer confidence. “Buyers who were once waiting on the sidelines to see signs of recovery seemed to be making the move,” he said. Hottest locations High end properties in Core Central Region (CCR) are now underpriced at around $2,500-$3,000 psf while Sentosa properties have dropped 30-35% over the last four years, driven down by various cooling measures in the last five years, which makes purchasing in these areas especially attractive for investors, said Gafoor. For Alice Tan, head of research and consultancy at Knight Frank, investors should consider snapping up properties in locations with “strong development growth stories” such as the Jurong Lake District and Paya Lebar


cover story residential market could bottom by the end of 2017,” according to Wong.

Hottest locations for Singapore property

Propnex: Core Central Region Sentosa Knight Frank: Jurong Lake District Paya Lebar Central

Property Guru: District 9 (Orchard / River Valley) District 15 (East Coast/Marine Parade) District 19 (Hougang/Punggol/Sengkang) District 10 (Tanglin/Holland) District 11 (Newton/Novena)

Source: Singapore Business Review

Central, where prices and rents could spike within the next 5 to 10 years as they transform. Local property buyers continue to value proximity to schools, work places and amenities, said Winston Lee, head of regional projects at PropertyGuru Group. This was reflected in the top five preferred districts to buy property in Singapore based on PropertyGuru’s Consumer Sentiment Survey in the first half of 2017: District 9 (Orchard / River Valley), District 15 (East Coast/Marine Parade), District 19 (Hougang/Punggol/Sengkang), District 10 (Tanglin/Holland), District 11 (Newton/Novena). When deciding between buying a landed property or an apartment, the former can appear more attractive and a more urgent purchase due to their being relatively underpriced, limited supply, and higher appreciation potential, said Ong Teck Hui, national director, research & consultancy at JLL Singapore. “Landed home prices have corrected much more than non-landed homes,” he said. “The consequence of the scarcity is that landed price appreciation tend to be higher. Over the longer term, it is likely that landed homes will enjoy superior capital appreciation.” For those who are looking into investing in commercial or residential spaces, Eugene Lim, KEO of ERA Realty notes that either of the two can be a good deal, depending on the investment objectives and the buyer’s risk appetite. Since buyers of commercial properties are not subject to the Additional Buyer’s Stamp Duty, and are instead required to pay GST, this can lead to lower prices for investors who own a company and purchases a commercial property through it by applying to claim back the GST amount, subject to tax guidelines. On the other hand, “purchasing a residential property may be more straightforward and familiar to investors, with only the relevant stamp duties payable,” said Lim. “However, investors should take note that commercial properties are generally more attuned to economic cycles than residential properties, as the tenants are companies which are subject to business cycles, and hence riskier.” Data from Orange Tee reveals a sharp jump in transaction volumes in 2017 compared to 2016 despite the declining trend in property prices. In the first half of 2017, sales of private residential units reached a total of 6,039 as compared to only 3,675 units sold in the same period last year, representing a 64% year-on-year increase. “Rising volumes should ultimately support prices and the private

Grade A CBD rents, for instance, bottomed in the first quarter of 2017 and edged up 0.6% quarteron-quarter in the first half of 2017.

Market sentiment The improved market sentiment and movement have also contributed to the increase in the number of transactions at 6,095 units as depicted in the recently released Urban Redevelopment Authority statistics, with private residential prices falling by just 0.1% in the first half of 2017 — one of the lowest drops in the past 15 quarters. This is the highest number since the peak period in the second quarter of 2013 when the number of transactions reached 6,945. Tay Huey Ying, JLL Singapore’s head of research, shared the same sentiment, noting that sales volume in the country’s residential property market have rebounded although leasing demand remained lacklustre in light of continued tight immigration policy. “JLL’s research showed that rents of prime apartments remained soft as of 2Q17, easing 1.4%in 1H2017, bringing the total rental correction to 21.6% since the downtrend started in 3Q13,” she elaborated. Tay Kah Poh, head of residential services at Knight Frank Singapore, said in a report that industry experts and observers like him share the current feeling that the market has already bottomed, paving the path to recovery and rise. Apart from residential and private individual properties, office and commercial spaces are also experiencing a brighter year. JLL Singapore’s research showed that rents and capital values of central business district (CBD) office and island-wide business park spaces bottomed and posted increases in the first half of the year. Grade A CBD rents, for instance, bottomed in the first quarter of 2017 and edged up 0.6% quarter-onquarter in the first half of 2017 — putting an end to two years of decline in rents amounting to 20.1% in total. Leasing activity — both residential and commercial — has also been part of the positive tide of the whole sector. Ying shared that capital values of Grade A CBD office space bottomed in the first quarter of 2017 and 2.2% quarter-on-quarter in the first half of this year, underpinned by buoyant demand by investors looking to ride on the office rental upturn. “On the office front, leasing demand is gravitating towards the newer and better schemes in the CBD, and this is stressing the older and poorer grade stock, Private Residential Property Sales(based on caveats), breakdown by residential status

Source: URA, OrangeTee Research

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

29


cover story Orang Tee’s Wong reckoned that this rekindled interest in the collective sales market is evidence of developers’ hunger for land, on the back of dwindling unsold inventories and good performances of new launches. For Gafoor, more demand is also expected to awash in the market as former en bloc owners with cash proceeds will now look into purchasing resale or new launch properties as their new homes or even invest in properties to expand their property portfolios. “This trend has indeed added further excitement for consumers in the market in 2017,” he added.

Expected completions

Source: URA, OrangeTee Research

and putting pressure on their landlords to lower rental expectations to maintain occupancy,” Ying noted, further adding that this is the case because demand is still largely made up of relocation instead of new setups and expansions. Despite Wong’s suggestions that the rental market is expected to remain weak as incoming supply continues to outweigh current demand this year, he expects that this segment of the sector will recover by 2018 as the number of incoming completions tapers off sharply. This is echoed by JLL Singapore’s Ying, adding that given some occupiers’ commitment to space ahead of lease expiry, the staggered return of space to the market has also softened the anticipated impact of the large influx of supply on rents. Data from Orange Tee revealed that there will be lesser supply of property units in 2018, which could narrow the gap between the sector’s supply and demand. There are 8,417 private residential units expected to be completed in 2018, which is a 49% fall from 2017 completions of 16,544 units. Completions next year is also 37% below the average annual completions of 13,319 units in the last decade from 2007 to 2016. “Island-wide occupancy rates have remained above 90%, despite the record high volumes of completions in prior years,” Wong said, suggesting that rental demand for Singapore residential real estate remains relatively resilient. Notable deals Some of the biggest and most notable deals for 2017 so far in the Singapore property market include the SG$2.2b sale of Jurong Point suburban mall, considered the largest investment deal in 2017 year-to-date in terms of absolute quantum and the largest retail transaction in the history of the city-state. “It underscores investors’ confidence in good quality retail assets even in the face of challenges currently facing the sector,” Ying said. PropNex Realty’s Gafoor also noted the evidently increasing collective deals — or en bloc deals — in the market with seven deals completed so far in 2017, valued at $2.5b and surpassing the three deals worth $1b for the whole of 2016. An example of this would be the tender for Tampines Court which was recently closed, receiving a top bid of $970m — $10m more than its original asking price. If this deal is awarded, we can expect total value of en bloc deals so far for the year at slightly more than $3b. 30

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

In the next 6 to 9 months, the market will continue to be bullish.

Outlook On specific segments of the sector, Gafoor noted that confidence is high for the private residential side to experience a 25% increment, with total volume of transactions for new launches and resale crossing the 21,000 mark by 2017. This optimism is shared by JLL Singapore’s Ying, saying that sale of new private residential units could reach a four-year high of about 11,000-12,500 units by the end of the year — barring any adverse external events derailing buying momentum — if the 1,021 units per month on average of the last seven months of 2017 is by any indication. Robust sales volume will also lend a hand to prices, which are already showing signs of bottoming. The URA’s all-private residential price index receded by 0.1% q-o-q in the second quarter of 2017 — a notable improvement over the previous estimate reading of about -0.3%, and hinting at some price strengthening over the later period. “With demand for private homes having made a sustained return, prices are on track to bottom in the next quarter or two and post moderate increases thereafter,” she said. A brighter economic outlook also cloaks the commercial property market in Singapore which is expected to lift business confidence and support leasing activity. Coupled with the tapering of pipeline supply in 2018 and 2019, CBD Grade A office rents are poised to continue to firm over the next 12 months. Ying shared that investors are expected to continue to favour Singapore’s CBD Grade A office assets given the opportunity to ride the rental upturn. “This will bode well for capital values, which we expect to outperform rents in growth in the near term,” she added. For Orange Tee’s Wong, these recent developments put Singapore’s property market on a bright perspective.

Expected completions, by market segments

Source: URA, OrangeTee Research


IN A WORLD WHERE ALL BUSINESS IS GLOBAL, SUCCESS IS IN THE DETAILS. Lionbridge combines the language expertise and operational capabilities you need to engage with your global customers.

Professional translation and localization services: Email: asiapacific@lionbridge.com Phone: +65 6508 0616

NOW OPEN FOR ENTRIES For inquiries, please contact: Eleonor Angeles eleonor@charltonmediamail.com or +65 3158 1386 ext 209


RANKINGS: Real estate

Le Quest is one of PropNex’ recent offerings in the homes segment

Why firms are cutting agents With Proptech shaking up the real estate industry, PropNex Realty and DWG’s merger may just be the opening salvo of more titanic mergers to come.

M

ore than half of the top 20 largest agencies slashed their salesforce as technology innovations opened up new platforms for consumers to handle their own property transactions directly instead of hiring a property agent. On the other hand, four of the top ten real estate agencies this year increased their staff: PropNex, Huttons Asia, Orangetee. com, and KF Property Network added salespersons to take advantage of a buyer confidence upswing. Overall, 2017 has been kinder to property firms. The rollout of government cooling measures eased and private home sales surged. But for the biggest player in Singapore, even these positive drivers might not be enough to shield smaller, marginsqueezed firms. “There is only space for two or three big real estate agencies in the country,” said Ismail Gafoor, CEO of PropNex Realty, arguing that consolidation in the Singapore real estate industry has become a question of when, not if. “Ultimately, we can expect more numbers of small and mid-sized agencies to unite with the bigger players in the upcoming years,” he noted. He reckoned the Singapore real 32

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

“There is only space for two or three big real estate agencies in the country,”

estate market is relatively fragmented and mergers are becoming more attractive given the tougher operating environment. For PropNex, which rose to number 1 in Singapore Business Review’s Largest Real Estate Agencies 2017 rankings, the merger meant a talent boost critical to staying ahead of the pack. Nearly nine out of 10 active DWG salespersons who earned at least $50,000 or above in the past year signed on to PropNex in July. “With the added strength and network, PropNex is confident that our close to 7,000 strong salesforce will add greater value to all property developers in their outreach to home investors whilst at the same time, match consumers to their dream homes with the wider range of listings available,” said Gafoor. PropNex has been flexing its muscles in the new homes segment, with three new project launches — ARTRA, Martin Modern and Le Quest — doing well. All 531 units of Hundred Palms Residences EC in Hougang sold out within 7 hours in July. It also completed seven collective deals so far in 2017 valued at $2.5b, up from the three deals worth $1b for the whole of 2016. Another mega merger was

announced in August between the associate agency division of OrangeTee and Edmund Tie & Company Property Network, the fourth- and fifth-largest agencies in this year’s ranking, respectively. This would create OrangeTee & Tie Pte Ltd., the third-largest agency with more than 4,000 agents, as well as a combined portfolio of more than 50 existing residential projects and four upcoming launches. “To do well in real estate, we need to be able to create economies of scale to enhance productivity and cost effectiveness, harness adequate manpower with broad skill sets for market coverage and penetration, and leverage on technology to maximise efficiency and effectiveness,” says Steven Tan, managing director of OrangeTee. “The similarity of organizational cultures is a good start towards a successful merger that is sustainable over the long term. Additionally, both firms complement each other well in terms of capabilities,” adds Ong Choon Fah, CEO of Edmund Tie & Company. AI, automation, and talent glut Whilst bigger firms are taking advantage of a buyer confidence rebound, smaller firms might be tempted to join forces amidst the pressures of technology disruption and sales agent oversupply. Artificial intelligence and automation technologies are starting to force firms to invest heavily on digital-friendly platforms or risk losing customers. They must also start spending on additional training for sales agents to provide better servicing skills that automated systems cannot provide. “Real estate agencies must prepare to integrate their businesses with information technology and transform into a global interconnection which embraces differences in cultures and practices,” said Merson Chow Yi Tong, KEO at Mindlink Groups, which landed 15th in SBR’s ranking this year. Chow noted that the consolidation trend is driven by the fact that a majority of real estate agencies have seen a


RANKINGS: Real estate resale transactions now have either a buyer or seller who did not engage an agent’s services — and Tan said this trend seems likely to continue. For the thousands of property agents in the island competing for a shrinking pool of transactions, this represents a sink-or-swim ultimatum: Distinguish yourself as an impeccably polished professional or become obsolete. “I believe that property agents would do well enhancing their professionalism and maintaining the trust of consumers. With increasing disruption, it is all the more vital that property agents maintain a high level of professionalism,” said Tan.

One Tree Hill Gardens

profit nosedive in recent years and made it more tempting to sell to or merge with a bigger company. This has created a ripple of fear amongst salespersons, driving them to become more prudent on choosing what they perceive to be more reliable agencies. For Knight Frank’s executive director and head of residential Tan Tee Khoon, the issues of technology disruption and salesperson oversupply are intertwined. Consumers are becoming less dependent on human agents to handle their property transactions, preferring to do it themselves through digital platforms that cut down the complexity. “Today’s more educated and tech-savvy consumers are increasingly comfortable with handling complicated processes themselves, or with the help of userfriendly digital platforms. Already, several players have entered the market in recent years to cater to such consumers, and this will change how property marketing and negotiations are carried out,” said Tan. He pointed out that around 40% of Singaporeans intend to DIY (do it yourself), or are undecided about whether they intend to hire an agent for their next property transaction. With these shifting consumer preferences, nearly one in four Housing and Development Board

40% of Singaporeans intend to DIY, or are undecided about whether they intend to hire an agent for their next property transaction.

A welcome recovery Navigating technology and staffing concerns will be critical for property firms that want to pull ahead of the industry as it experiences a confidence recovery. Collective sales and private home sales, in particular, have surged. Knight Frank, which shed three salespersons this year to 61 and slid one place to 26th in this year’s rankings, had two notable collective sales deals this year: Hougang Avenue 7 sold to Oxley-Lian Beng Venture Pte Ltd for $575m and One Tree Hill Gardens for $65m to a subsidiary of Lum Chang Group. Meanwhile, JLL Singapore had also been active in the collective sales market. It sold Goh & Goh Building for S$101.5m to a unit of BBR Holdings and The Albracca, a 10-storey residential development

along Meyer Road, to Sustained Land Pte Ltd for $69.12m. “The buoyant home sales has led to a decline in developers’ housing inventory, and this has brought about an active development land sales market, particularly on the collective sales front, given the limited state land supply in the Government Land Sales programme,” said Tay Huey Ying, head of research and consultancy at JLL Singapore, who rose three places to 16th in the Largest Real Estate Agencies 2017 rankings. Sanguine outlook ERA Realty Network, second-largest real estate agency in Singapore with 6,178 salespersons behind PropNex, chose to focus less on recruitment and more on launching projects driven by renewed home buying interest. ERA was the agency for 8 out of the 9 new major project launches in 2017 that totalled more than 5,000 units, including The Clement Canopy and the record-breaking Hundred Palms Residences EC which sold out within 7 hours of launch. “Prices have largely stabilised and buyers feel that there are less downside risks and more upside potential,” ERA Realty’s key executive officer Eugene Lim said, pointing out that new project sales in the first half of 2017 rose by 64% and private resale climbed 63% from the same period last year. ERA holds a sanguine outlook considering resilient household balance sheets, low unemployment and stable economic growth.

Hundred Palms residences sold out within 7 hours after it was launched.

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

33


RANKINGs: Real Estate 2017

Real Estate Agency

2016

2017

2016

Name of Key Executive Officer

1

PROPNEX REALTY PTE LTD*

2

6732

5718

LIM YONG HOCK

2

ERA REALTY NETWORK PTE LTD*

1

6178

6243

LIM TONG WENG (EUGENE)

3

ORANGETEE AND TIE PTE LTD**

4

4069

-

TAN WEE SIN MICHAEL

4

HUTTONS ASIA PTE LTD

3

3118

2911

TIANG AI SEEK (PEGGY NGIAM) ANG YING HUI PHYLICIA (PHYLICIA ANG)

5

SAVILLS RESIDENTIAL PTE LTD

7

681

736

6

KF PROPERTY NETWORK PTE LTD

9

652

617

TAN TEE KHOON (HARRY)

7

GLOBAL ALLIANCE PROPERTY PTE. LTD.

8

623

699

PHUA SIN SAI (JACK PHUA)

8

HSR INTERNATIONAL REALTORS PTE LTD

10

491

588

HONG ENG LEONG JEFFREY HONG)

9

SCOTIA REAL ESTATE GROUP PTE LTD

11

403

471

LIM GEOK CHWEE (DEREK LIM)

10

C&H PROPERTIES PTE LTD

12

386

411

LIM KIM CHAI NELSON

11

CBRE REALTY ASSOCIATES PTE LTD

14

377

365

SIN KOK TONG (CALVIN SIN)

12

SRI PTE. LTD.

42

234

37

TAN WEILIANG (CHEN WEILIANG) (NICK TAN)

13

SLP REALTY PTE. LTD.

13

186

389

DARREN CHEW YONG SIANG (DARREN)

13

ONEHOME PROPERTY PTE LTD

15

186

230

ZHANG QINGLIN (ARTHUR ZHANG)

15

MINDLINK GROUPS PTE LTD

16

151

150

CHOW YI TONG (MERSON)

16

LHG PROPERTIES PTE LTD.

23

98

76

HO CHAI HWA (LEWIS)

16

JONES LANG LASALLE PROPERTY CONSULTANTS PTE LTD

19

98

99

FOSSICK CHRISTOPHER JOHN (CHRIS FOSSICK) TEO HOCK HOE (GABRIEL TEO)

18

TEHO PROPERTY NETWORK PTE. LTD.

-

95

-

19

REAL CENTRE INTERNATIONAL PTE. LTD.

18

94

129

LIM TECK NAM (KEN LIM)

20

REA REALTY NETWORK PTE LTD

19

89

99

WOON CHUEN THIAM (WINSTON C.T. WOON) TAN YEOW SIONG, SHAWN (SHAWN TAN)

21

SMP REALTY PTE. LTD.

-

82

-

22

COLLIERS INTERNATIONAL (SINGAPORE) PTE LTD

27

73

62

TANG WEI LENG

23

VESTOR REALTY PTE LTD

21

72

92

YEE PENG HOCK

24

CBRE PTE. LTD.

24

71

72

PAULINE GOH

25

SINGAPORE ESTATE AGENCY PTE LTD

27

66

62

SEE LYE KEONG (SHI LAIQIANG) (CALVIN) YEO ENG CHING DANNY

26

KNIGHT FRANK PTE LTD

26

61

64

27

ASIAPAC REAL ESTATE SERVICES PTE LTD

30

56

57

KOK KITT SOON JANSEN

28

PTO PROPERTY SERVICES PTE. LTD.

-

54

-

ZHANG JUN CHEN JOE (JOE)

28

REALSTAR PREMIER GROUP PRIVATE LIMITED

-

54

-

WONG TECK KEONG (WILLIAM)

30

SAVILLS (SINGAPORE) PTE. LTD.

34

53

47

MING KOK WAH (STEVEN MING)

31

HOUSE & HOME PROPERTY PTE. LTD.

25

48

65

ER CHENG HIANG (ALVIN)

32

MIRACLES REALTY GROUP PTE. LTD.

31

46

54

PHER KWONG SIANG (JEREMY) CHANG CHU HOON (LINA)

33

VENTURE INTERNATIONAL PROPERTIES PTE. LTD.

34

44

47

34

SLP INTERNATIONAL PROPERTY CONSULTANTS PTE LTD

32

42

52

SIM KAIN KAIN

35

YOUR ESTATE SPECIALIST LLP

38

41

42

LEOW HUN SIN (BENSON) TONG YICK HOONG EDWIN

35

MCG REAL ESTATE PTE. LTD.

-

41

-

37

RIPTON REALTY PTE LTD

39

40

39

CHUA YONG KANG

38

EDMUND TIE & COMPANY (SEA) PTE LTD

-

39

39

KOH CHOON FAH (ONG CHOON FAH)

39

MCDOWELL REALTY NETWORK

43

38

35

WANG SOON YEE LARRY

40

CUSHMAN & WAKEFIELD (S) PTE LTD

5

35

1,406

CHUA HOON LAN (JUNE)

40

DEANS REALTORS PTE. LTD.

47

35

31

CHIA OI LIN (JANE)

42

FRASERS CENTREPOINT PROPERTY MANAGEMENT SERVICES PTE LTD

-

31

-

SEE SAN SAN

43

CENTALINE (SINGAPORE) PROPERTY AGENCY PTE. LIMITED

-

30

-

KHOO BOON TIEN (RONNIE)

44

SE REALTY PTE LTD

41

29

37

TAN YU MEI ANGELYN

45

TEAKHWA REAL ESTATE PTE LTD

50

28

29

SIEOW TEAK HWA

45

ALISTER & LEE PROPERTIES

46

28

32

LEE TWE JEAT (GARY)

47

CCN REALTY PTE. LTD.

47

27

31

SETO SIU MANG (IDA)

47

ASSET PROPERTY PRIVATE LIMITED

-

27

-

ALEX CHEN CHEOW PAH

49

WRITE REALTY PTE LTD

40

26

38

CHEW BEE KUAN (ANGIE)

49

WILD WILD WEST PROPERTIES PTE LTD

49

26

30

YAP ENG CHENG (ROBERT)

total

26,284

24,830

Data obtained from Council for Estate Agencies (CEA). accessed on june 23, 2017. * obtained from CEA as of august 18, 2017 ** obtained from CEA as of september 11, 2017

34

Number of Salesperson

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017


REAL ESTATE AGENTS

2

1

3

4

5

Five bankable real estate agents aged 40 and under

F

rom unequalled shophouse advisory to a decade of regional expertise, Singapore’s pool of young real estate agents is promising in every regard. Singapore Business Review presents five of the city’s most competitive real estate agents aged 40 and under who have mastered the ropes of the job at such a young age. Handpicked by their companies and colleagues, these real estate agents demonstrate what can happen when one is fuelled by youthful energy, inspired by love for people, and equipped with a vast knowledge of Singapore’s economy and the real estate market. They are ranked by age. 1 Kavin Kuah, 29, ERA Realty Kavin had already secured a spot in a local university when he decided to forego further education and make his first career move. Armed with a diploma in Business (Banking and Finance), he ventured into real estate at the age of 25. With no contacts on hand after completing his national service, Kavin had quite a rough start by going door-to-door in HDB estates. Kavin’s difficult beginnings inspired him to learn the ropes of real estate sales from the bottom, fuelled by his quest for success. Today, he is consistently ranked amongst ERA Realty’s top agents, closing transactions from $5m to $10m. “I chose to be a real estate professional, as the industry has no income ceiling–the only limit to your income is the ones that you create,” he said.

2 Clemence Lee Wei Qiang, 30, JLL In 2015, Clemence, then 28 years old, was given the opportunity to build from scratch and lead a shophouse advisory team in JLL. Within two years the team has amassed transactions amounting to over $100m worth of shophouses, enabling JLL to gain recognition for providing topnotch advisory in the shophouse market. Young as he is, Clemence has also worked with the commercial leasing team whereby he was instrumental in advising multiple multinational corporations and local-based entities in their leasing requirements. At present, Clemence is primarily focused on the acquisition, divestment and advisory services to clients on commercial properties including office buildings, retail malls, shophouses and strata office and retail units. Clemence is able to close high-value transactions worth up to $45m.

Loyalle Chin, 31, PropNex Loyalle Chin is known for closing deals in Central Business District shophouses and hotels, particularly in the areas of Amoy Street, Ann Siang Road, and Chinatown, with one-year shophouse transactions amounting to more than $50m and commissions over $300,000. He also has brought in European clientele to accquire a hotel, and he has also served established F&B industry players including a Michelin-star restaurant chain and Starbucks Coffee in hotels 3

and shopping malls. Loyalle’s deals have earned him numerous awards such as a two-time Platinum Achiever award in 2017 (agents with earnings of more than $100,000 a month) and a PropNex 5-year Ambassador award (individuals with consumer satisfaction and ethical conduct as critical hallmarks). As a testament to his impact and influence, Loyalle spoke to a crowd of 2,000 people at the recently held “PropNex Millionaires-Conversation with CEO.” 4 Eugene Lee YC, 34, ERA Realty Inspired by an inner passion for service, Eugene left his lucrative career path as a high-flying engineer to become a full-time salesperson for ERA Realty. Eugene, an honors Mechanical Engineering graduate from the National University of Singapore, has worked his way up the real estate ladder since 2005. Eugene’s hard work has been paying off, as he continues to receive awards for exemplary work, such as ERA Asia Pacific ELITE Award and Institute of Estate Agents (IEA) Platinum Award. His vast knowledge of market trends enables him to come up with detailed calculations based on his client’s financial situation and even allows him to provide more proposals that the client can choose from. With a personal motto of “Success is attained through helping a lot more people,” Eugene has earned the trust of his colleagues, co-agents, friends, and clients. Eugene transacts deals worth $4m to $7m 5 Jasmine Lau, 39, OrangeTee When Jasmine entered the real estate market, she immediately understood why it is not for the faint of heart. Despite the volatility and unpredictability of the Singaporean market, Jasmine has remained on top of her game to offer reliable advice and excellent services to her clients.With a M.Sc. (Real Estate) and a B.Sc (Building), Jasmine offers unparalleled expertise when it comes not only to the real estate market, but also to the physical structure of her client’s properties. To date, she has brokered 218 sales transactions and 261 leasing transactions, spanning across all segments from HDBs, private residential, commercial & industrial. Jasmine is also experienced in regional real estate, with almost a decade of working on greenfield projects supplying steel for use across various industries in the region. SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

35


RANKINGS: ARCHITECTURE

Corals Boulevard Maldives is one of AGA’s overseas projects

Architecture firms foray overseas amidst bleak outlook Rising staff and material costs in SG are sending local architecture firms to Thailand, Indonesia, Vietnam, and Malaysia.

T

he construction industry in Singapore has not been promising as of late, with some of the city’s largest architectural firms experiencing revenue cuts for the second year running. Slower business resulted in a painful 30-40% slash in Singapore revenue for Swan & Maclaren Architects, while DP Architects drew30% of its revenue from Singapore over the past year, and the remaining 70% from overseas clients. With increasing staff costs and expectations, people and talent movements within the architectural landscape either remained stagnant or decreased, but executives maintain that these changes are a result of factors other than the economic situation. For instance, Ong & Ong Group, the firm with the largest decrease in registered architects amongst those interviewed, attribute their 40% decrease in architects to a recent firm restructuring from early 2016 to mid-2017. The second firm with the biggest decrease at 14 architects or 24% from 2016 is RSP Architects, Planners, and Engineers. In total, the 20 largest architectural 36

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

Computational design techniques are increasingly changing the way how we work. These techniques include BIM automation and VR/AR technologies.

firms in Singapore experienced an overall 2.22% decrease in the number of architects from the previous year. Digitalisation is also an important aspect of the industry’s growth, according to Angelene Chan, chief executive officer, DP Architects. “Digitalisation is transforming construction projects today. Computational design techniques are increasingly changing the way how we work. These techniques include Building Information Modelling (BIM) automation and VR/AR technologies; as well as real-time building performance feedback, data-driven design and artificial intelligence which are at nascent stages,” she said. Changes in dynamics Ashvinkumar Kantilal, chief executive officer, Ong & Ong Group, said employment trends remain unchanged in that there are still more foreign applicants than Singaporean or Permanent Resident applicants. According to him, there is also a shortage of staff trained in BIM as well as staff who have an experience of 6-10 years. Other executives

attribute changes in their number of architects to factors such as new registrations for increases and retirement and pursuit of other interests for decreases. Due to firms exploring opportunities overseas, the number of staff based abroad also increased. Tan Shao Yen, chief executive officer of CPG Consultants Pte Ltd, said that the fall in registered architects in his firm is a common scenario for many other companies of the same size. Tan added that some of the registered architects left to pursue greater passions such as teaching and highlighted that movements do not have a drastic impact on their overall staff numbers. “The small decrease is a natural employee turnover. We are indeed looking for more design talents as we expect China’s Belt and Road initiative will bring ample opportunities to Asia. We are well positioned for countries along the Maritime Silk Road, with offices from Shanghai, Hong Kong and Singapore going east to the Middle East and London,” said Tony Ang, global board director, Aedas. In the past year, AGA Architects felt the need to explore markets beyond Singapore due to the slow growth of the local architecture industry. Ng Hoe Theong, key executive officer, AGA Architects, said that his firm is currently working on projects in Australia, Indonesia, Vietnam, China, and Maldives. In fact the biggest and most notable project that the firm has clinched this year is the Corals Boulevard, a super high-rise luxury condominium and mixed development site in Male, Maldives. Meanwhile, Lim Chai Boon, group director, Swan & Maclaren Architects, said they also prefer to grow their overseas office due to extremely high staff costs in Singapore. As foreign applications pour in, Lim said this is a perfect opportunity for them to assess their current talent pool against the barrage of new applicants. With their overseas growth, Lim said they managed to beat six other firms in Thailand to clinch


RANKINGS: ARCHITECTURE in London, Respublika Plaza in Astana, Lusail Commercial Boulevard in Qatar, and Deira Enrichment Project in Dubai.

The infrastructure sector remains healthy due to the large investment here by the public sector notably new MRT stations, Hi-speed Rail Terminus linking to Malaysia and also the new Changi Airport Terminal 5.

The local scene Despite several challenges in Singapore, architectural firms in the city continue to secure local projects and remain hopeful that growth will come around. Ang said that the major challenge in the local industry is the management of limited skilled manpower resources against the need to support the productivity drive. He said that skills in BIM and PPVC are still developing whilst most public sector works have this as a dominant requirement. “The Built Environment industry in Singapore has been working Mariner’s Quarter, DP Architects’ towards enhancing productivity, project in London resulting in fundamental changes in architectural design and construction a 750,000sqm mixed development project in Bangkok, a size that is very processes. Statutory initiatives are also changing the way consultants work rare in Thailand. with each other and contractors. The Infrastructure consulting firm importance of Integrated Design and Surbana Jurong also prizes its Implementation Delivery cannot architects by ensuring that they be emphasised well enough,” CPG get experience not only locally, but Consultants’ Tan added. internationally. CEO Wong Heang Ang noted that the local market Fine said that his firm is a technology leader through the regular use of BIM will be dominated by new residential development as residential sales and artificial intelligence in its goal seemed to have picked up on to increase building functionality the premise that the market has and efficiency. They are known for bottomed out. There has been huge 2017 World Architecture Festivalsuccess in en-bloc sales, with new shortlisted projects such as Floating Ponds, which use the vertical farming sites to be added to the market besides furious bidding by local concept to maximise land use, and National University of Singapore’s School of Design and Environment, a net zero-energy building that produces as much if not more energy than it consumes. “The global market has more focused on cultural works, as well as new and more flexible development products. Large-scale, high-density developments are still on the trend, including multi-storey street retail in lieu of Western street retail, high-rise LOFT accommodation and SOHO towers to cater for new work-live dynamic and mixed-commercial hubs,” Ang of Aedas added. DP Architects has also joined the bandwagon and is currently working on a number of notable overseas A project by AEDAS: Unilever’s office in Indonesia, Photo by Owen Raggett projects such as the Mariner’s Quarter

developers for new Government Sale Sites to refresh their landbank. “There is also the proliferation of co-working office spaces and co-living lifestyles. The infrastructure sector remains healthy due to the large investment here by the public sector notably new MRT stations, hi-speed Rail Terminus linking to Malaysia and also Changi Airport Terminal 5. The expansion of the Mandai Zoo and redevelopment of the Tanjong Pagar Port Terminal will be the new significant works in the pipeline,” Ang continued. Ong & Ong’s Kantilal said there are several changes that need to be made in the local architectural landscape so that Singapore-based firms can be productive, as costs rise and consultant fees go down. At present, they are involved in notable local projects such as Cuscaden Road Hotel project, Seaside Residences, the recently completed Royal Square, and interiors for the Singapore Post Office. Meanwhile, Tan said CPG Consultants continues to lend thought expertise towards Singapore’s Industry Transformation Map’s knowledge building processes. These processes increase productivity through off-site prefabrication, coordination through digital design, and evolving designs towards more complex and highdensity developments via integrated design.“We have seen the industry consolidate and grow their BIM expertise in the past year. In this region, there is an increasing demand for prefabricated pre-finished construction.”

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

37


RANKINGs: Architecture 2017

Architecture Firm

2016

2017 Number of Registered Architects

2016 Number of Registered Architects

Name of Key Executive Officer

1

DP ARCHITECTS

1

84

79

ANGELENE CHAN

2

AEDAS

2

69

71

TONY ANG

3

CPG CONSULTANTS

3

64

69

KHEW SIN KHOON

4

SURBANA JURONG

4

60

59

WONG HEANG FINE

5

RSP ARCHITECTS PLANNERS AND ENGINEERS

5

44

58

LEE KUT CHEUNG

6

SAA ARCHITECTS

8

30

23

YEO SIEW HAIP

7

ONG&ONG GROUP PTE. LTD.

6

29

46

ASHVINKUMAR KANTILAL

8

ADDP ARCHITECTS

7

28

29

-

9

P&T CONSULTANTS

8

20

23

CHOY MENG YEW

10

ARCHITECTS 61

10

14

15

MICHAEL NGU KING TENG

11

AGA ARCHITECTS PTE. LTD.

11

13

12

NG HOE THEONG

11

CIAP ARCHITECTS

14

13

11

THAM TUCK CHEONG

13

DCA ARCHITECTS

18

12

9

KOO TIN CHEW, VINCENT

14

DESIGN LINK ARCHITECTS PTE. LTD.

15

10

10

CAROL TEO

15

AWP

15

9

10

EDWARD WONG

15

WOHA ARCHITECTS PTE. LTD.

11

9

12

WONG MUN SUMM & RICHARD HASELL

17

LAUD ARCHITECTS

19

8

7

JOSEPH LAU

18

ID ARCHITECTS

19

7

7

LOKE LEONG SENG

18

AC CONSORTIUM

19

7

7

GRACE YOUNG AND TAN MEOW HWA

18

DESIGN-ENVIRONMENT GROUP ARCHITECTS LLP DESIGN

-

7

-

-

18

FORMWERKZ ARCHITECTS

25

7

6

-

18

FORUM ARCHITECTS

-

7

-

-

18

JGP ARCHITECTURE

19

7

7

JAMES GOH

18

MKPL ARCHITECTS PTE LTD

11

7

12

SIEW MAN KOK

18

RDC ARCHITECTS

19

7

7

MOHAN SHANMUGAM

18

SWAN & MACLAREN ARCHITECTS

19

7

7

LIM CHAI BOON

total

579

596

DATA PROVIDED BY COMPANIES AND SOURCED FROM BOARD OF ARCHITECTS. SURVEY PERIOD: JULY-AUGUST 2017.

38

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017


Architects shophouses, sophisticated single family homes like the BT House, and large-scale landed residences.

The Santorini Photo credit: AGA Architects

The BT House Photo credit: Ong & Ong Group

Ng Teng Fong General Hospital Photo credit: CPG Consultants

Singapore University of Technology and Design Photo credit: Marc Tey and DP Architects

Singapore’s revolutionary architects aged 40 and under

T

he design and development scene in Singapore is bursting with innovation, thanks to its highlycompetitive architectural workforce. Singapore Business Review is proud to showcase fresh and exciting projects from the city’s best architects under the age of 40. They are ranked according to age.

1 Doreen Koh, 34, CPG Consultants Doreen is a prominent healthcare architect who has been involved in the Ng Teng Fong General Hospital & Jurong Community Hospital, which has garnered several international awards: the Design & Health International Academy Award and European Healthcare Design Award. Doreen has also led the design of the National University Hospital Master Plan. She continues to apply acquired healthcare knowledge by participating in ongoing competitions and projects. 2 Ong Qi Rong, 35, ONG&ONG Ong Qi Rong has accumulated extensive experience since his first foray into the Indochina region in 2012. With experience in residential, retail, hospitality and masterplanning, he is currently closely

involved in the growth of ONG&ONG’s presence in the region. His portfolio includes The Bay in Phnom Penh as well as Siem Reap Botanic Residences & Lifestyle Mall, both finalists in the World Architecture Festival in 2015 and 2016. 3 Lim Jiahui, 36, CPG Consultants Jiahui’s architecture and urban design expertise paved the way for a win in a design competition for Binh Duong province as well as involvement in many major CPG-led developments in and around Hanoi. Jiahui was also a key team member in the development of the multi-awarded National Gallery Singapore. He is now working on the Deepwater Ocean Basin facilities at NUS with one of the largest water containment for wave simulation.

4 Lee Cheow Yeh, 36, ONG&ONG Lee Cheow Yeh sees architecture as a collaborative process that fuses the spatial needs of the client with materiality through the architect’s perception. Lee has worked on the Pinnacle at Duxton, the tallest public housing development to date. Trained at WOHA and DP, he now leads initiatives on various conservation

5 Tan Sian Chong, 37, AGA Architects Since joining AGA, Sian Chong has led the success of projects such as The Santorini Condominium and the revamped West Coast Community Centre. He serves as lead for The Alps Residences Condominium and is involved in the extension to a mixed development in Western Australia. Prior to AGA, Sian Chong worked on The Regency at Tiong Bahru Condominium and the New Extension to Asian Development Bank in Manila, Philippines. 6 Ruhiyyih Ling, 38, Surbana Jurong With 13 years of experience Ruhiyyih was instrumental in developing the design of stack-up factory typologies in line with URA industrial land use intensification effort. In recent years, she has expanded her repertoire in the public sector scene helming an upcoming Punggol Secondary School, Changi Airport Runway 3 Equipment Tower and Ancillary Building, and in the redevelopment of Civil Defence Academy’s Field Training Area. 7 Woon Chung Yen, 39, DP Architects Chung Yen has led overseas projects such as Acropolis and Southpark mixed developments in Dhaka, Bangladesh, and Muong Hoa Cultural Park in Sapa, Vietnam. Locally, Chung Yen has been involved in several mixed development and institutional projects including Frasers Mixed Development and Singapore University of Technology and Design (in collaboration with UNstudio), and has been invited as architectural guest critic for National University of Singapore and SUTD. Prior to joining DP Architects, Chung Yen has also worked on Singapore’s first autism-focused school. SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

39


analysis: expats in singapore and wellbeing (72% say it is better than at home) and sixth for their children’s overall quality of life. In fact, 74% of expat parents say their children have a better quality of life here than they would have at home.

Singapore is ranked as the top expat destination for third year in a row

Why expats choose Singapore 7 in 10 expats say the country offers 42% increase in their annual income.

A

strong economy, impressive track record for families and confidence in their financial affairs are among the many reasons expat life in Singapore is outstanding. The city-state ranks first overall once again this year, but an expat life here comes at a price. Three-quarters of expats (73%) say the country offers better earnings potential than their home country. Indeed, they report a 42% increase in their annual income since the move to an average of almost USD118,000. This figure is USD18,000 higher than the average expat income globally and USD3,000 higher regionally. Not only that, but expats in Singapore are also very confident in the strength of the local economy (73%) and Singapore’s political climate (83%). It is understandable then, that the greatest concern over their financial affairs is the future of the global economy. Half (48%) of all Singapore-based expats, compared with only a third (31%) of expats generally, and two-fifths (37%) of expats regionally, cite economic uncertainty globally as a key concern. More than two-thirds (65%) of expats here say they have more disposable income than at home. The money is spent on taking more holidays since the move (50%), living

40

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

This figure is USD18,000 higher than the average expat income globally and USD3,000 higher regionally.

in a better property (40%). And those setting money aside are saving for retirement (57%), property (44%) or other long-term investments (40%). But an expat life in Singapore is not cheap, especially for the 40% of expats we surveyed who have families. Almost nine in ten expat parents (85%) say childcare is more expensive than at home. But with Singapore ranked second in our global rankings for the quality of children’s education, the investment seems worth it. Considered one of the safest, most secure destinations in the world (82% of expats say they feel safer here than at home to rank the country second globally) Singapore also comes in third in our rankings for family. This includes ranking third for the quality of childcare (68% of expat parents say it is better than at home), fifth for children’s health

Singaporean nationals abroad Such a highly regarded home country means a comparative lifestyle abroad is a tall order for Singaporeans. However, the key positives they report are important ones. Seven in ten (70%) Singaporeans abroad say their work/life balance is better than it was at home, compared with 53% of expats globally. Two-fifths (42 per cent) of Singaporean expats say their social life is better than it was at home and two-fifths (43 per cent) believe the move has brought them closer to their partner. Anurag Mathur, Head of Retail Banking and Wealth Management, HSBC Bank (Singapore) said “Each year that we conduct the Expat Explorer survey, I am amazed by the diversity of the expat community. From young entrepreneurs and career climbers to families looking for a fresh adventure, there is a destination out there to suit everyone.” However, becoming an expat is not without its challenges. “Living across international borders can make securing their financial wellbeing harder. Whatever their priorities, be it expats living in Singapore or Singaporeans living overseas, active financial planning is key to getting them there,” he said. From HSBC’s Expat Explorer Survey 2017, Singapore Remains Top Expat Destination for Third Year in a Row.

Singapore Remains Top Expat Destination

Source: Survey conducted by YouGov between March and April 2017 on behalf of HSBC Expat


R E C O G N I S I N G

SINGAPORE’S EXCEPTIONALBUSINESS

LEADERS Nominate outstanding industry leaders and receive your well-deserved accolade.

Management Excellence Awards 2017 To nominate, please contact Julie Anne Nuñez at +65 3158 1386 ext. 221 or email julie@charltonmediamail.com


Event coverage: STARTUPS PANEL BRIEFING

ANKUR MEHROTRA, GRAB: “If you think you can live on ramen, then the money you need to raise is different than if you need to feed two kids. it’s easier to convince [investors] when you have a product.”

GIULIO XILOYANNIS, Zalora: “Rocket companies have a history of going very aggressively into the marketing space within the first six months of their lifetime. And they do so with a big injection of funding.”

Industry experts share their insights in SBR’s Hottest Startups Panel Briefing From funding to optimising big data, panelists shared what worked for their now-lauded enterprises.

H

undreds gathered to gain insights at the Startups Panel Briefing 2017 held last July 11 at the Suntec Singapore Convention and Exhibition Centre. Singapore Business Review brought together the companies listed in the 20 Hottest Start ups 2017, along with venture capitalists, investors, entrepreneurs, and startup founders from various industries such as fintech, property, e-commerce, retail, healthcare, education, and many others. The panelists delivered valuable insights in spades as they shared what made their start ups succesful. The region is a prime startup territory, not only for entrepreneurs, but also for investors looking for the next big thing. Vikas Jain, director of marketing, partnerships, and customer experience at Funding Societies, said, “Purely from an investment standpoint, I think it’s quite rich. There are a lot of venture capital firms who have moved to Singapore in the last few years and are looking at Singapore and Southeast Asian startups because one, there are a lot of ventures in Southeast Asia; and two, the economies are growing.” Moreover, investors now are looking beyond scalability and giving a premium to impactful and disruptive businesses. Raghav Kapoor, CEO and co-founder of Smartkarma, also noted the privileged position of those setting their roots in Singapore. Indeed, startups five years ago had to

42

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

While Singapore is a premiere startup territory, 99% of budding enterprises close shop within the first year of their existence.

compete for the small pool of serious institutional money. “That changed quite dramatically with the government sort of really stepping up and creating the ecosystem. I think at the early stage, VCs came into being maybe three and a half or four years ago and started investing quite rapidly,” said Kapoor. Singapore’s startup landscape However, it is interesting to note that whilst Singapore is a premier startup territory, 99% of budding enterprises close shop within the first year of their existence. Jain explained that this is especially the case with those operating outside the fintech and tech space. “When most startups outside the fintech and tech space start off, they’re probably still relying on money from friends, family, or angel investors. What’s happening to the other 99% is a big question. They probably can’t scale up. They’re probably just running on their revenues that they earn on a regular basis.” Jain also posited that this particular avenue still has a long way to go to fully equitise Singapore’s business landscape. However, this doesn’t mean that the whole tech strata of startups get an easy pass. Praveen Velu, co-founder of Mimetic.ai, said that those involved in deep tech actually experience the funding gap faced by other segments,


Event coverage: STARTUPS PANEL BRIEFING particularly because VCs aren’t yet accustomed to investing in such ventures. Velu added, “With deep technologies, there’s also long gestational periods. It takes time to build platforms, get out there, and acquire users. It takes many years before you hit revenue.” But for the lucky 1% that do get over the first year hump, the name of the startup game remains the same—getting enough financial resources to grow and improve. The funding conundrum The formula could be as many as there are startups present, because as Aki Ranin, COO and co-founder of B2B robo-advisor firm Bambu, stated, “It’s going to be different for fintech, consumer services, retail, e-commerce, etcetera.” However, what will be useful is to network with the startup community to get a sense of what’s realistic and applicable to a segment or industry. “Definitely don’t listen to anybody,” advised Kapoor. “I think it’s more about understanding where you’re going, who can get you there, and how much you need to get there.” Ankur Mehrotra, managing director of Grab, also agreed that it depends on how and what you need. “If you think you can live on ramen, then the money you need to raise is different than if you need to feed two kids. You have tax, valuation. But in general, obviously, it’s easier to convince [investors] when you have a product.” Accelerators are also invaluable to the fledgling startup. “No shortage of those in Singapore also. I think finding an accelerator that focuses on your segment or industry could be a really good place to start rather than immediately trying to raise a million dollars,” added Ranin. Asking for more money than what is actually needed could negatively impact a startup and hinder its growth in the future. Velu explained this, saying “I think the rule of thumb is you want to raise as little as possible to get through that first 12 to 15 months. You want to raise as little as possible at that stage because valuation is a story you tell. At that stage, that story is a little hard to tell.” Velu added “You want to get your product or your business to a point where you’re able to negotiate your first institutional round from a position of strength.” Whilst startups need to look at all their available options, they should also be thinking about and communicating with possible partners and investors, even those that are

Panelists share their inisghts

All users, what they want is the benefit they can get from your brand.

at first glance out of the box. Ayesha Khanna, CEO and co-founder of ADDO AI, recommended partnering up with academia especially when it comes to talent and skill-building. “It takes skill to work with academics, but if you can work with them really well, they are the people with a lot of the skills you need,” she explained. Khanna ended the session saying that startups shouldn’t waste their time waiting for the iron to get hot. “I think that whatever way you decide to go, don’t wait. It takes a long time. My experience took quite a long time, because you want to give yourself the flexibility to choose a good investor, a strategic partner.” Creating a brand story Besides money, startups need to build their brand if they hope to sustainably expand. Having an ever-increasing user base, steady balance book, and business acumen, coupled with a fleshed out brand story and marketing strategy, is a surefire way to get ahead of the competition. A brand story isn’t just a few paragraphs of how and why a startup was founded, though. According to Rhonda Wong, CEO of Ohmyhome, “It’s very important to be able to illustrate and talk about your benefit very clearly. Because all users, what they want is the benefit they can get from your brand.” This user-oriented approach was how Anna Haotanto, CEO of The New Savvy, managed to build a loyal following for her platform. “I think one of the things that we do very well is we focus a lot on our end users. We try to engage them and understand their needs.” More than being a single-sided relationship, a user base fostered this way helps a lot in building communities. When you’re bootstrapping and don’t have a lot of marketing money to spend, an engaged community will work wonders towards promoting your brand. On the other hand, say you’re fortunate enough to have some serious money to use in promoting your business. What then? Just like figuring out how much money you should be raising, the answer highly depends on what industry you’re in and how receptive people are to your efforts. What worked for one business may not work for another, and what worked in the past is not guaranteed to deliver the same results in the future. For e-commerce players like Zalora, the marketing effort kept evolving as it grew. Zalora managing director Giulio Xiloyannis, noted three areas they focused on for marketing: search engine, mobile and social media, and then television. “Now this is subject to funding. It’s subject to being a rocket company. Rocket companies have a history of going very aggressively into the marketing space within the first six months of their lifetime. And they do so with a big injection of funding,” Xiloyannis commented. Marketing efforts shouldn’t only evolve through time, but they should also adapt to the local culture and business environment of wherever a startup is expanding in. For companies such as Zalora which work with physical goods, the supply chain is an additional factor to consider on top of local fashion trends, traditions, and customs. Depending on the business model, elements SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

43


Event coverage: STARTUPS PANEL BRIEFING exponential growth. If a restaurant comes and pitches to us, that’s an easy kind of ‘No’ because it doesn’t fit the model,” explained Vinnie Lauria, managing partner at Golden Gate Ventures. “It’s just important to understand what your business is. Does it fit the venture model? That’s number one,” he added. He also said that if a startup is the first of its kind in an uncharted territory, VCs may hold off on their investment until other fledgling enterprises begin to sprout and prove that the particular segment has a bright future.

Session 1: Overview of the start-up landscape in Asia

such as language, level of internet penetration, and culture of transaction will also have to be localized for expansion efforts to even have a chance of thriving. Knowing your market Meanwhile, Karl Loo, CEO and co-founder of ServisHero, put an emphasis on having market readiness and good local talent that can both steer the ship in the right direction, as well as provide deep insight into how their particular part of the world behaves. “For us, it’s really access to a good talent pool that is local as well as ensuring that there is market readiness of consumers and suppliers on our platform.” Alternatively, influencer and partner campaigns worked incredibly well for lifestyle and wellness company GuavaPass. Emma Harris, GuavaPass vice president for global brand strategy, said influencer campaigns netted them a lot of acquisitions that were low cost for them because they were really doing just a barter exchange. “Partner campaigns also helped us a lot by being able to tap into other people’s database and really getting the word out on what we were as a company and what our product was,” she added. “Partnerships are incredibly important. I think for anyone looking into a strategic partnership with a telco or a bank, look for corporate investment opportunities as well,” said Loo. Collaborating with other businesses not only raises brand awareness, it also bridges any trust gaps and legitimises a startup for potential customers. Better still, a well-executed partnership opens up the door for referrals and long-lasting business ties. Wong also advised startups to start partnerships within their niche, saying “I think it’s also important to find partnerships that are more relevant for your business first because you have a limit in resources so you can’t be writing to everybody in the world. Start with things that are relevant to you.” Afterwards, startups should pitch to businesses who are less aligned yet are willing to tap their customers. Another factor would be the industry and whether an entrepreneur is pitching to the right funder. “I think it’s important to realise that every investor has their own perspective of what they want to invest in. For venture capital, that is hype, generally high tech, high growth, and 44

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

It’s really access to a good talent pool that is local as well as ensuring that there is market readiness of consumers and suppliers on our platform.

Show me the money One of the industries that’s having its cake and eating it too is fintech, wherein startups are being built by financial professionals who made the entrepreneurial jump. Gerben Visser, co-founder of FinTech Consortium, said that around 110 of the 354 startups they have tracked have now received funding. “If you look globally, Singapore now is definitely one of the top three hubs for setting up in fintech. On the flip side, the challenge for investors in the fintech space is a lot of it is very technical; a lot is still very much B2B based,” Visser noted. How about those not in fintech? Turochas “T” Fuad, CEO of Spacemob, also discussed something that most startups would tend to forget; something that will mark the difference between a congratulatory and a rejection handshake: the fundamentals. He noted that every business can be boiled down to the basics, and there’s no fundamental difference between making the best potato chip and innovating something in neuroscience. Sadly, businesses tend to forget about the simple matters that actually support their entire model. “I’m always focused on the fundamentals. The how you run your business. And how A+B=C. That drives valuation. That allows investors to see and realise that if they put a dollar into your company, they’ll be able to make a hundred dollars back in a few years. As simple as that,” said Fuad. Gillian Tee, CEO and co-founder of Homage, agreed and said that knowing their business inside and out is one of the key things startups need to undertake before even approaching an investor. “As a good entrepreneur, no one can tell you more about your business than you already know. You should know your business better than anybody else.”

Session 2: Creating a brand story


Event coverage : STARTUPS PANEL BRIEFING “Who are you? What’s your story? Why are you working on this particular problem and service? How is it working right now in the market that you’re offering? And what are some of the proxies that show that there is a real need for what you’re building?” were just some of the questions Tee faced when she was raising funds. Meanwhile, Callum Laing, partner at Unity Group, encouraged startups to build a board of advisers—people knowledgeable about the industry—while they’re still trudging out of the early game. On the onset, startups can bounce ideas off of these advisers, getting valuable feedback for little more than a lunch or dinner out every so often. “Start giving those guys updates. Every week, just drop them an email,” said Laing. Once they’re ready to raise funds, startups can approach their advisers and ask to be introduced to investors. “They’re much more likely to know investors that are interested in your sector who are likely to invest. You instantly build so much more credibility than if you’re a new entrepreneur knocking on peoples’ doors for the first time,” Laing related.Fuad also reminded startups to take care of their standing within the community. “Money is easy to make. Money is easy to raise—in some ways better than others. But your reputation is only one time. I think that’s something that you need to focus on rather than all the other stuff.” Rise of the data scientists Data—love them or hate them, they make a business run. From convincing possible investors, to optimising work processes, and to planning future endeavours, proper utilisation of available data ensures that businesses aren’t shooting themselves in the foot. That’s why data scientists are slowly rising to prominence. Doing the nitty-gritty number crunching behind the scenes, they enable decision makers to steer their ships in the most profitable direction. That’s what data scientists, like Roger Sundararaj from DataStreamX, do day in and day out. He mentioned “I need to understand the patterns inside the data. I need to find the necessary insights that drive businesses.” Sundararaj gave social sentiment, financial, foot fall, and stock data as some of the things his company derives value from. Vincent Wong, country head of ShopBack Singapore, attested to the valuable insights his data team

Session 3: Discussion on funding

Session 4: The rise of big data

The data that is reported to us is about the things we need to know to run our business. [We try] to understand our customers and their transactions more intimately.

produces. He said “The data that is reported to us is about the things we need to know to run our business. [We try] to understand our customers and their transactions more intimately.” However, in the race to gather the best insights, startups may fall into the trap of investing too much into data collection and analysis systems. Some may even hoard massive amounts of data that don’t meaningfully contribute to their business. Wong dissuaded this practice, saying “We don’t collect data that we don’t use. Every startup has a different objective in the beginning. You need to understand that objective first and then you’ll be able to collect the correct data points that serve your purpose.” In fact, businesses can collect as much as 65m data points a day and they’ll make all of it useful, as what Kuldeep Singh, CEO and founder of Biofourmis, revealed. “We are learning lots of things from these data. When we talk about big data, it’s not just about how you have specific models, but how you evolve to learn.” What does Biofourmis do with that mind-boggling amount of data, you ask? They use it to help the patients of their partner clinics and hospitals. “The way remote patient monitoring was done was more reactive. So with this approach of continuous model training, personalised baselines, and predictive analytics, we can be much more predictive, rather than being more reactive,” explained Singh. Rio Inaba, COO of Sansan Global Pte. Ltd., also encouraged startups to get into big data, and not just think of it as something solely for scientists. With the calling cards and contact information they get, his company is able to pin point business opportunities that would otherwise have been glossed over. “Most of the time, people just don’t realise that the people you meet in networking events like this, there’s a lot of opportunities you guys are bringing back to the company but you never utilise. That’s what we do. Big data is definitely for the business people,” Inaba said. Again, valuable data that can be harvested and leveraged for returns vary from company to company. What’s important is that startups know how to read between the lines of data, to harness the most relevant specific to the company to come up with results. “The key takeaway is the more variety of data you have, the more creative you can be in processing your data points,” ended Sundararaj. SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

45


Legal briefing

New structure ideal for fund management The S-VACC will complement existing collective investment schemes (CIS) available in the country.

I

ndustry experts are buzzing over the proposed Singapore Variable Capital Company (S-VACC) legislation that was proposed by the Monetary Authority of Singapore (MAS) early last year and opened for public consultation in March this year. But is it really the game changer that would propel Singapore to become the leading hub for investment funds and asset management? S-VACC, in a nutshell, is a new type of legal entity to structure investment funds in Singapore that will complement existing collective investment schemes (CIS) available in the country, including trusts, companies incorporated under the Companies Act, and limited partnerships under the Limited Partnerships Act. Who benefits from the new legislation? According to MAS’ consultation paper, the new framework proposed will help provide investment managers greater operational flexibility, and allow CIS to consolidate the fund domicile with the respective fund management activities. The structure will also act as a platform for fund managers to anchor their substantive operations in Singapore, where control and management will be executed from the Southeast Asian nation. In other words: S-VACC will provide greater flexibility for the return of capital to shareholders in order to facilitate redemption rights of investors as well as cater to the creation of sub-funds with segregated assets and liabilities within a single S-VACC. The proposed legislation, and subsequent public consultation, marks the first time that Singapore has made available a flexible corporate vehicle designed with investment funds in mind — something that puts further shine to the already attractive and lucrative investment funds and asset management industry in Singapore. “The S-VACC has been designed to further develop Singapore as a centre for both fund management activities and investment fund domiciliation, providing CIS with an additional option to the unit trust structure,” according to Nicola Yeomans, partner at Herbert Smith Freehills. “The MAS also intends to allow the segregation of assets and liabilities of sub-funds established under a single legal entity.”

“S-VACCs can enjoy increased privacy and anonymity as they will not be required to disclose their register of shareholders and financial statement to the public.” Amy Ang partner at EY noted that the S-VACC has the potential to be an exciting addition to Singapore’s fund ecosystem, as long as the tax treatment, internationally and in Singapore, supports the MAS’s intentions for 46

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

S-VACC has the potential to be an exciting addition to Singapore’s fund ecosystem.

Nicola Yeomans

Amy Ang

introducing the vehicle. Continuing from the key features is the possible effect to stakeholders, particularly funds. Dentons Rodyk Senior Partner I-an Lim listed down some of the advantages that they’re seeing from MAS’ latest investment fund innovation. For instance, S-VACCs can enjoy increased privacy and anonymity as they will not be required to disclose their register of shareholders and financial statement to the public (unless required by supervisory and/or law enforcement agencies). They are also not obligated to hold annual general meetings, lowering operating costs. How will it affect stakeholders? With the legislation, foreign investment funds may also be re-domiciled in Singapore, creating more business for service providers, on top of opportunities presented by the ASEAN CIS (targeting retail investors in Malaysia and Thailand) and the tax-treaties Singapore is party to. Fund directors will not be required to make solvency statements prior to the repayment of capital, whilst investors will be allowed to subscribe and redeem shares or units at will due to S-VACC’s variable capital structure. Despite the positives, Lim shared that the exclusivity in terms of who can manage S-VACCs, apart from larger investor protection and political issues, may prove to be a significant hurdle along the way. “In order for S-VACC to be the vehicle of choice for global fund managers and to truly increase the competitiveness of Singapore as a fund management hub, we believe that the … legislation must be expanded to allow for fund managers who are not based in Singapore to take advantage of the S-VACC structure,” Lim said. The assessment further noted that although the proposed framework offers increased opportunities for cross-border collaboration, growth for stakeholders in the fund industry, competitiveness and ease of doing business for Singapore, as well as a wider investor base for fund managers to tap on, it also reveals the potential pitfalls for inexperienced investors.


M

A

D E

I N

SINGAPORE W

1

7

A

A

R D S

2

0

AWARDS FOR MANUFACTURING EXCELLENCE Deadline for nominations is on 27 October 2017

ENTER NOW

For inquiries, please contact: Julie Anne Nuñez +65 3158 1386 ext 221 julie@charltonmediamail.com


marketing Briefing

How can marketers leverage on SPO?

Supply Path Optimisation is the new buzzword on digital marketing, and here’s what the buzz is all about.

T

he concept of supply path optimisation or SPO has been making rounds in the marketing industry as of late, and experts say that it will remain a buzzword in the ad tech panels for the next few months. But what exactly is SPO and how does it work? Simply put, SPO is the optimisation of media buying. It uses an algorithm that allows media buyers to interact with media suppliers in generating the right impressions in a transparent, efficient, and cost-beneficial way. A money-making machine? Yongjie Wong, co-founder and chief marketing officer of Qourier, said that SPO allows media publishers or suppliers to maximise their revenue in the long run and at the same time affords media buyers the ability to bid on and win media inventory at the most reasonable price. For Benny Chow, project and marketing manager at Firefly Photography, SPO does not only maximise revenue, but more importantly, it reduces the advertising cost by helping ad buyers optimise bids for better performance by fighting ad-frauds. He explained that SPO makes the process more transparent as some supply-side platforms (SSPs) may use methods to maximise their own profits through means that do not benefit the advertiser’s interest even without the publisher’s knowledge. Steve Feiner, co-founder and chief executive officer at A Better Florist, added that a current bidding strategy should be return of investment (ROI) positive before the application of SPO, if done correctly, can generate profit. “If you are not generating an ROI with your current strategy, then optimising that strategy might never deliver a ROI. SPO is a new and complex area of marketing and tech that only works if it is done right. Like most new cutting edge concepts in the beginning, most will play around with the concept, but unfortunately not reap the rewards until it becomes much more widely understood,” Feiner emphasised. Chow added that SPO must be utilised with the demand-side platform (DSP), such as OpenX or Google, already built in with the process. Wong further noted that SPO should be used in tandem with

An SPO agency may develop an algorithm to provide services to ad buyers.

48

SINGAPORE BUSINESS REVIEW | NOVEMBER 2017

the modern company or brand’s marketing direction, considering that transparency and quantifiability are paramount in today’s digital age. What is the right way to do SPO? Chief marketing officers and marketing executives are expected to be in the loop on SPO, and since it is a relatively new concept which is still developing, marketers are expected to learn as much as they can with regards to how the concept will play out in the coming years. “In general, marketers should know that SPO exists and that it will become a much bigger deal in the next few years. In the short term, I don’t think it should not be an area of focus for the majority of marketing executives. There is no shortage of new wonderful concepts to be aware of, and until more basic concepts like attribution are more widely understood, nothing more than a cursory understanding should be required,” Feiner added.

Yongjie Wong

Benny Chow

Steve Feiner

SPO should be used in tandem with the modern company or brand’s marketing direction, considering that transparency and quantifiability are paramount in today’s digital age.

Plenty of media buying agencies are already using SPO, and with more education in the next 3-5 years, Wong said that in-house marketing teams would begin to utilise SPO as well. Feiner added that buying advertising programmatically is still a bit of a black box, and in order for more advertising to flow in the right direction, transparency and ease of understanding will need to become paramount. “Demand providers and supply providers interact in a multitude of methods creating a tremendous amount of complexity for all parties. SPO will certainly help with the transparency portion and I do expect it to be a bigger and bigger driver going forward,” Feiner elaborated. Chow highlighted that SPO benefits the more authentic publishers with good media inventory as it helps save costs in the long run, SPO may become an industry in itself where an SPO agency may develop an algorithm to provide services to ad buyers/DSP to check against SSP. “There is one potential acceleration driver out there that could drastically change the course of SPO — agencies and large advertisers that are spending hundreds and even billions of dollars. If a WPP or a Unilever objects to current processes,that would create a very strong desire to fix the current situation bringing the issue that SPO is trying to fix to the forefront,” Feiner said.


ASIAN

EXPORT AWARDS SINGAPORE 2017

RECOGNISING THE LEADING EXPORTERS IN SINGAPORE Deadline for nominations is on 27 October 2017 For inquiries, please contact: Julie Anne Nuñez +65 3158 1386 ext 221 julie@charltonmediamail.com

NOMINATE NOW


Transforming ANDMARKS Beyond acumen and foresight, it takes vision to boldly transform a familiar landmark into a hub of vibrant possibilities. At OUE, the corporate philosophy is driven by Transformational Thinking— an approach that views every development as an opportunity to unlock its value and transform its potential. 2017 sees OUE celebrating key milestones, one of which is the opening of OUE Downtown, a newly transformed mixed-use development that will be the unrivalled destination to live, work, shop, dine, and play in Singapore’s Central Business District.

One Raffles Place

OUE Downtown

OUE Limited is a diversified real estate owner, developer, and operator with a real estate portfolio in prime locations in Asia and the United States. OUE consistently grows its business by leveraging its brands and proven expertise in developing and managing assets across the commercial, hospitality, retail, and residential sectors. With its core strategy of investing in and enhancing a stable of distinctive properties, OUE is committed to developing a portfolio that has a strong recurrent income base, balanced with development profits, to enhance longterm shareholder value.

OUE is the sponsor of OUE Hospitality Trust and OUE Commercial Real Estate Investment Trust. In March 2017, OUE acquired International Healthway Corporation, a listed integrated healthcare services and facilities provider. For more information, visit www.oue.com.sg.

Singapore Business Review (October - November 2017)  
Advertisement