Ho Bee Land’s twin-engine growth strategy propels high ROEs

HO Bee Land stands out among Singapore-listed property groups for its relatively high return on equity (ROE) numbers. In nine out of the past 10 years, the group’s ROE - which measures the rate of return on the capital provided by shareholders - has been at least 7.5 per cent.

Chief executive officer Nicholas Chua credits this track record to greater diversification, both geographically as well as in property investment: “We have prepared ourselves by developing our twin engines of growth. Our recurring income stream is sustainable as our tenants have good covenants. We will also focus on driving good cash flows and maintaining a strong balance sheet.”

Ho Bee had previously been “predominantly in the development space”, said Chua, adding that more than 80 per cent of the business was in residential development at one point. But it decided, over a decade ago, to strengthen its recurring income business from investment properties.