Savills says hiring of senior CBRE team well-timed

Singapore

PROPERTY consulting group Savills says its acquisition of the "top investment sales team in Singapore" is timely, given that more capital inflows are expected in the city state from regional markets in Hong Kong, China, Korea and Australia.

Jeremy Lake, Galven Tan, Yap Hui Yee and Sophia Lim left CBRE in September and began work in Savills Singapore last Friday.

Mr Lake and Mr Tan have been instrumental in brokering slightly more than S$19 billion in transactions across the commercial, residential, hotel and industrial sectors in the past 51/2 years. These include Asia Square (excluding the Westin hotel), PWC Building, 71 Robinson Road, PoMo, Ibis Novena and the collective sale of Park House. Ms Yap and Ms Lim sealed more than S$800 million in strata office and shophouse deals over the same period.

Savills Singapore chief executive officer Marcus Loo said: "Jeremy and his team bring with them tremendous depth of experience in this marketplace, having handled a significant portion of Singapore's largest investment transactions across ... asset classes. This is significant for us as their stellar track record and extensive client contact base will enable us to serve our clients better - not just in Singapore, but in the region."

At Savills Singapore, Mr Lake heads the investment sales and capital markets department as managing director. Mr Tan is the deputy managing director, Ms Yap is director and Ms Lim, senior manager. (In CBRE's capital markets team, they were respectively the managing director, executive director, associate director and manager.)

The Business Times understands that Savills poached the quartet with a multimillion-dollar incentive package tied to performance, and which is to be paid in tranches over five years.

Chris Marriott, CEO of Savills South-east Asia, said: "These hires have been part of a broader strategic initiative to build a leading investment and capital markets team in the Asia-Pacific region, extending our formidable strength in Asia, Australasia and the Middle East. Jeremy and Galven have, over the years, built up a reputation for their professionalism in underwriting, marketing and closing transactions for all nature of sovereign, institutional and private clients, both locally and globally."

Mr Lake, when asked by BT recently how his team was planning to clinch deals with its move to a smaller property consulting group, said: "It is not always size that counts. We aim to offer our services and our points of difference. We have been in the market for a long time, so we are well versed on the market and we have a lot of deep contacts and relationships with market participants."

Industry observers say that besides their contacts and relationships with market players, a key reason for the foursome's success at CBRE is teamwork - they hunt in a pack instead of solo.

Mr Lake added: "For each property marketing assignment, we work in a team of two or three members, whom we hope the client can relate to. It's some sort of a buddy system; this way, every client can always reach at least one of us. So that is something we've applied before, and we shall continue with the team model."

Mr Tan spent 15 years at CBRE, and Mr Lake, a total of 32 years - the first four in London before he moved to Singapore in 1991.

The pair had decided that after a long time in CBRE, it was time for a fresh start and a new challenge.

Said Mr Tan: "The main motivation is the challenge to make the investment sales team at Savills No. 1 in the Singapore market. We also believe that Savills has a very strong investment sales team in North Asia, which will be mutually beneficial in creating deals. We are looking forward to the challenge of a new environment."

He is cautiously optimistic about prospects for the Singapore residential property market. While the Urban Redevelopment Authority's benchmark private home price index has posted two consecutive quarter-on-quarter increases, the bulk of residential units sold by developers are still small units, as buyers remain sensitive to absolute prices. "Developers are remaining focused on moving their existing inventory before considering replenishing land."

That said, Mr Lake said that, given pretty healthy sales take-up at select luxury residential projects, some developers have an emerging interest in development sites in upscale locations. "The problem is that most of these sites would be offered via collective sales, and owners probably still have price expectations which are beyond where developers are. So we continue to have a price gap."

Mr Tan said: "While there are more sales of luxury residences, the volume still does not comfort developers to an extent that they can be sure of developing and selling all units in a new project within the five-year sales deadline, stipulated as a condition for upfront remission of the additional buyer's stamp duty on the purchase of residential land."

Mr Lake said that the Singapore office market will be hit by an undersupply in terms of new completions in the next few years, coming in at below historical average annual demand. Tenant demand has been a little soft in the past six months or so, as a result of the US-China trade war and resultant weaker economic growth projections for Singapore.

"So it is possible that the office rental growth story has got a little bit softer; but the undersupply is still there. We anticipate that the China trade war may be resolved in the next 12 months or so; then we would expect economic growth to return and we'd still be left with the undersupply, which would then result in rental growth resuming.

"So perhaps the office market is on pause, rather than peaked; which again presents an opportunity for investors to step in."

Mr Tan said: "Singapore remains a popular investment destination because it offers stability. The biggest challenge remains the lack of investment-grade office assets sought by institutional investors. So there is a slight price gap."

On a brighter note, interest rates are almost certain to go down, so that can help bolster capital values, said Mr Lake.