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Values, vision form Soilbuild's foundation
ONE doesn't have to be in the construction and real estate industry to know the importance of a good foundation to a building. But it certainly helps to know how to apply the same principle to one's business: by establishing it on the right values from the start.
For Soilbuild Group, a foundation of honesty and hard work was all that executive chairman Lim Chap Huat had when he and two co-founders started out in 1976. He had a technician diploma in civil engineering and two years' experience from his National Service stint in the land estate department, but little in the way of connections or capital.
"We started with only S$25,000. We basically didn't know anybody. We had to slowly build trust with the suppliers, with the subcontractors," Mr Lim said. As the consultants and architects they worked with realised that they were honest and reliable, they began to get more referrals to other clients and Soilbuild Group finally took off.
Today, the group has grown to house three business verticals - a listed construction arm, a funds platform with a listed real estate investment trust and a privately held property development and investment arm - but Mr Lim's business philosophy remains unchanged.
"Be sincere. Don't go around cutting corners. With hard work, with sincerity, I think eventually people should recognise it. Everything should fall in place when you are honest and you do honest work," he said.
Of course, this is not the only tactic Soilbuild Group has employed in building up to where it is today. An openness to innovation and technology, as well as a constant drive to diversify its businesses, have helped it to weather several recessions and other storms in its 43-year history. Soilbuild director Lim Han Qin, who is the second of Mr Lim's three sons, shares that the group has actively embraced a multi-sectoral, multi-disciplinary strategy in the last 10 years to spread its eggs out into more baskets.
"We shifted our focus from residential to industrial development, and went quite heavily (into that). That sort of cushioned us, so we only have one residential property exposed to the current cooling measures, and we have a lot more in industrial," said the younger Mr Lim.
"Now we are venturing overseas where the risks are greater, but hopefully we are compensated with higher returns." Soilbuild first went overseas to Myanmar in 2012, and in 2017 undertook its first residential development project in Vietnam with a partner. The project was launched this year and has achieved about 25 per cent sales so far.
The group also signed a forward-funded development project for purpose-built student accommodation in Liverpool this year, diversifying further in terms of asset classes as well as markets.
"We have a balance of emerging markets where we can take a bit more risk, and we have developed markets like the UK, with our purpose built student accommodation apartments that are for lease. So hopefully that gives us more stable returns."
In addition to dealing with a likely global economic slowdown, the construction arm has its own set of challenges, with rising manpower costs and a government push for productivity. Soilbuild Group has turned to technology to tackle these issues, such as building an integrated construction and precast hub to focus on prefabricated construction components. For example, precast slabs are produced there and shipped to construction sites to be assembled, improving productivity and reducing manpower costs.
The elder Mr Lim has been at the front of the industry pack when it comes to promoting innovation and sustainability through his business. His decision to adopt more technological solutions came after a trip to Germany organised by the Building and Construction Authority (BCA) in 2012, where he saw how the latest innovations could greatly increase productivity.
In the case of the group's emphasis on sustainability, he looks past the costs involved to the future benefits that the approach will bring.
"In 2010, we already went for green buildings, where the green plot ratio is more than one," the elder Mr Lim said. "We got a green plot ratio of four by doing a lot of gardens. Back then, we recognised what it means to be green and how important it is.
"We pay additional costs to build the green area, and the maintenance is also higher. But there are benefits: your electrical costs and aircon costs will come down because (the building) is shaded."
GREEN LOAN, GREEN DESIGN
The group secured its first green loan in September for its Solaris @ Tai Seng project, its third Green Mark Platinum build-to-lease business space. The younger Mr Lim is confident that the group's expertise in sustainability will position it well to ride a growing trend of space being viewed as not just physical but experiential as well, emphasising community and amenities to promote greener living.
For instance, the Tai Seng building and other upcoming projects will feature end-of-trip facilities like showers and secured bicycle lots, as well as smart building access and management systems. The group incorporates green design wherever possible, which not only helps with meeting BCA's Green Mark Platinum certification standards but also confers other benefits.
"Planters in a building serve multiple functions," the younger Mr Lim explained. "Your landscape spaces become a space for communal usage, and you set your building in. Looking out, you see greenery and you are set further away from the sun, so you reduce your heat gain and that helps with aircon consumption."
When asked what is the group's biggest challenge for the next five years, the elder Mr Lim responds: "Succession planning, of course."
His wife and two older sons are already working in Soilbuild Group, while his youngest son is currently a private equity analyst.
"(My father) doesn't push us so when (my brother) is ready, he will join," said the younger Mr Lim. "The business has evolved from a small three-man outfit, over the years, into a much larger organisation with now three distinct business drivers. So I think we can do with all hands on deck."
In the same vein, the organisation prioritises talent attraction and retention to ensure growth, he added. Since workplace environment is a key part of employee satisfaction, Soilbuild Group puts its expertise in designing welcoming spaces to good use in its own office with greenery, a common pantry to encourage staff to have meals together and a gym with weekly exercise classes.
"Typically construction, real estate are not so sexy as a business, so we face a bit of challenge in finding good graduates or good people," Mr Lim said. "These little touches hopefully will help create a better environment for our staff."
He credits the group's latest Enterprise 50 recognition to these valued employees, saying: "I think it's an affirmation of the effort put in by all the staff, not only us.
"We have seen a lot of the companies who have been recognised in the past go on to greater heights. Being recognised gives us the confidence and push to go in the direction that we have set for ourselves, and hopefully we can also scale greater heights in our own ways."