SUTL Enterprise bulks up marina portfolio

IT'S been four years since mainboard-listed SUTL Enterprise - previously called Achieva - steered out of the flailing IT peripherals business and dropped anchor in the glitzy marina space to court the growing ranks of Asia's super-rich boat enthusiasts.

But the tipping point for SUTL may be yet to come. The company currently boasts of being the only marina infrastructure with a spot on the Singapore Exchange and will soon have a great deal more horsepower in its portfolio apart from its flagship ONE°15 Marina Sentosa Cove in the city state.

Across the Causeway, in the harbourfront of Malaysia's southern tip Johor and about 20km from the second link, a bigger marina Puteri Harbour bearing the company's chop ONE°15 Marina - named after Singapore's geographical location in the equator - has started taking shape since last month.

When completed in two years, SUTL's 60:40 project with Malaysian-listed builder UEM Sunrise, will be the biggest marina in a country endowed with scenic coastlines and islands that are tourist magnets, where a string of marinas have berthed in hot spots such as Penang and Langkawi as well as in the East Malaysian states of Sabah and Sarawak.

"This is big," says Arthur Tay Teng Guan, clearly amped up at the prospects. He is executive director and chief executive of SUTL Enterprise, a company controlled by privately-held SUTL Corp - a diversified group founded by his father in 1968 as a ship chandler and owned by the Tay family.

"When we finish, Puteri Harbour will be almost double that of Sentosa (Cove Marina)," says the genial businessman and owner of a superyacht himself.

The marina in Johor's Iskandar Puteri will have public, private and superyacht marinas spanning about 0.5 hectares of land and will be able to accommodate up to 440 berths - 148 at the public marina serving boats, 278 at the private marina, and a mega-yacht marina for 14 vessels with a fuel pontoon.

SUTL's sales team has been fully briefed on the pitch and will be deployed once the sales gallery opens by June this year to push 6,000 club memberships.

"I'm sure we will sell all. Just like Sentosa, we sold all the memberships before we completed it," said Mr Tay.

He adds: "We are mindful on how to sell. We are going to concentrate on how to become a second home ... a club is like a second home where one can entertain family, friends and business partners, and wine and dine them on a unique, prestigious venue."

According to Mr Tay, SUTL may bring "strategic money partners" into its share of the joint venture - specifically those who are "only interested in returns but love this marina company" to share the project's financial load.

The company's flagship Sentosa Cove marina - which he describes as "cili padi" (bird's eye chilli, as in small but hot) - has 270 berths and 4,000 memberships, and in keeping with the boat culture's mantra of "big is beautiful", will also have a refreshed layout plus reconfigured pontoon to woo bigger boats.

"We are configuring new pontoons so big boats come in front to park, like (in) Monaco. They pay more (versus small boats) ... it's very nice money."

One to nine

Since 2015, after a single marina asset in Singapore was injected into SUTL, the company has measuredly "adorned a string of pearls" along the Asian coastlines for the boating community to sail along.

"We are trying to ... connect them to each other, like connecting flights but without the time pressure," he says.

Apart from the projects in Singapore and the upcoming one in Malaysia, it has seven other projects in dock, all but one of which doesn't involve ownership but solely management contracts. It is in the process of finalising a deal to pick up a majority stake in a Thai company that will develop and operate a yacht club in Makham Bay, Phuket which is expected to be up and running in 2021.

In Indonesia, SUTL will operate and manage two marinas - a navy club in Jakarta that faces the Java Sea and another in Nirup Island, close to Singapore and Indonesia's Batam and Bintan islands - which are expected to be completed sometime in the next two years.

The company has one outlier in its Asian-centric portfolio - the ONE°15 Marina Brooklyn in New York which will officially open in June this year. "Most of the projects will be finished in two years. You have to be patient with me. It is coming ... in 2020 and 2021", says Mr Tay.

That may not be asking too much as by then, the headline digits could look dramatically different. In 2018, SUTL's net profit came in 14 per cent lower at S$5.8 million - dragged down by higher expenses for advertising and event spending - on the back of a 2 per cent rise in total income to S$35 million.

China calling

In China - the land of the uber-rich with a leisure boating market that promises a compounded annual growth rate of nearly 6 per cent between 2018 and 2025, thanks to the rising popularity of marine tourism and sales of recreational boats and galvanised further by government initiatives - SUTL has three projects so far, all of which are management contracts. One involves a five-year contract which commenced in January to manage the day-to-day operations and amenities of an integrated marina in Zhongshan, in Guangdong province. The other two are Marina Guishan in Zhuhai and Marina Taihu Lake in Suzhou which are under construction and due to be completed this year.

Knotting the pearls

Clearly, none of that is enough to stop debt-free SUTL - which has a market capitalisation of just over S$50 million and some S$45 million in its kitty - from stringing a longer "pearl necklace". "We are looking at a combination of owner-marinas and managed-marinas as we also are conscious of wanting to be asset-light," he says.

The company's shopping ground is essentially Europe, Maldives, Tokyo, China, Langkawi and Bali to name a few . "I'm going to buy strategic marina assets to grow the ONE°15 Marina brand - a Singapore-proud brand. If I organically grow the brand, it will take too long." It would be nice, he adds, to have around 20 marina assets under the group's belt.

Does the relatively less vibrant pleasure-boating culture in Asia pour cold water on such aspirations?

He replies: "It's a chicken and egg situation. Twenty years ago, there was no marina developer like me. So, I provided a very unique marina infrastructure to power up, wash, repair and refuel the boats. I am creating that convenience and making them available. They will come."