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SingHaiyi aims to build branding as a Singapore company
SINGAPORE-LISTED SingHaiyi Group is well-aware of industry perception of the group as a foreign-owned developer and hopes to change that with its upcoming residential projects on the collective sale sites that it recently secured.
While looking to build its branding in property development with an emphasis on product quality, it will also continue its diversification from residential projects to commercial development here and abroad.
The group is studying the Australian and European markets, where it has gained an exposure through a 9 per cent stake in Australia-listed Cromwell Property Group that is collectively held by SingHaiyi and its parent Haiyi Holdings.
It has gone to Australia recently to look at Cromwell Property's portfolio to gain an understanding of the business environment there.
"We will continue to focus on Singapore but also keep tabs on overseas markets. When there's opportunity to enter, we will enter," group managing director Celine Tang told The Business Times.
Mrs Tang and her husband Gordon Tang are sole shareholders of Haiyi Holdings, which owns a controlling 56.17 per cent stake in SingHaiyi.
Through the firms they control, the Tangs have exposure to Singapore residential landbank of above 1,800 units from the purchase of three collective sale sites Sun Rosier, How Sun Park, and Park West since September. Given its 50 per cent stake in each of these projects, SingHaiyi's share of residential landbank stands at more than 900 units.
"We want to build up SingHaiyi's branding in development as a Singapore company," said Mrs Tang, who moved here from Guangdong since the early 1990s and together with her husband and three children, has become a permanent resident.
The group's focus on branding entails ensuring quality in the choice of the main contractors, architects, construction materials and so on, she elaborated. "The waste of space should also be avoided, as poor space planning can cause inconvenience to buyers and is hard to correct later on."
But the land price for Sun Rosier last September at S$271 million, or S$1,325 per square foot per plot ratio (psf ppr), was deemed aggressive, with consultants projecting a selling price above S$2,000 psf. However, Mrs Tang said: "If we do not bid high enough, we would not be able to secure the site."
SingHaiyi's chief financial officer Gregory Sim told The Business Times that the group has not followed the herd instinct in land acquisition but has been intentional in the locations it picked.
The market risks are also perceived to be low as the property market recovery remains underway. "If the product has good layout and space planning, as well as strong product attributes, rational buyers will still look at it," Mr Sim said.
"We do not think there will be a problem for the market to digest the new units at S$2,000 psf," he said of the former Sun Rosier site. The group plans to roll out residential projects at the former Sun Rosier and How Sun Park sites in the third or fourth quarter.
Mr Gordon Tang and his wife started Tang Dynasty Pte Ltd in 1995 as a trading and investment company and later on, set up Haiyi Holdings in 2003 as an investment holding company focusing on international trade and financial investments.
The husband-and-wife team were thrust into the spotlight only in 2012 when Haiyi Holdings agreed to subscribe for cumulative convertible perpetual preference shares in the former SingXpress Land, which when converted into ordinary shares, translated to a controlling stake of 62 per cent in SingHaiyi.
SingXpress Land was renamed SingHaiyi Group in March 2013, and Mr Tang roped in his US business partner Neil Bush, a brother of former US president George Bush, as non-executive chairman the following month.
Since 2013, SingHaiyi has acquired three US assets from American Pacific International Capital Inc, a company chaired by Mr Tang since 2003.
One of them was Tri-County Mall, a shopping mall in Cincinnati, Ohio, and the other was Vietnam Town, a condominium project in San Jose, California. The third was 5 Thomas Mellon Circle in San Francisco, which the group plans to redevelop into a condominium project.
The group has since sold out 141 units in phase two of Vietnam Town, which is expected to positively impact SingHaiyi's financial performance this year, Mr Sim said.
As for the still-struggling Tri-Country Mall where occupancy hovers around 60-70 per cent, the group has gone back to the drawing board to tweak its tenant mix.
Mrs Tang considered the stake acquisition of Cromwell Property as a "very strategic" move - one that not only provides recurring income for the group but also enables the group to gain access to new markets such as Australia and Europe.
"Through Cromwell, we have some feel of the markets," Mrs Tang said. "The Australian residential has been very hot but its industrial and logistics markets are not over-heated yet and we will consider them. We can also look at commercial development but that will depend on the location. Meanwhile, the European economy is recovering."
SingHaiyi also owns a 25 per cent stake in ARA Harmony Fund III, which holds a portfolio of five retail malls in Malaysia, as well as a 35 per cent stake in the fund's general partner. This has allowed the group to gauge the health of Malaysia's retail market.
In their personal capacity, Mr and Mrs Tang also hold stakes in Singapore-listed Cromwell European Reit, Suntec Reit and Ascendas Hospitality Trust.
SingHaiyi's approach to accessing new markets is reminiscent of how it first made a foray into commercial property in Singapore, through being part of a consortium led by Perennial Real Estate Holdings in 2014 to acquire TripleOne Somerset. Its 20 per cent stake in TripleOne Somerset was divested last year.
The group is now working with Suntec Reit to re-make Park Mall at 9 Penang Road in Singapore into a 15-storey office cum retail building. "As long as there's win-win, we will partner with others," Mrs Tang said.