There's still room for 'calculated risks', says Kwek
CDL executive chairman is optimistic despite global uncertainties and trade tensions
Fri, Feb 22, 2019
EVEN with global uncertainties like trade tensions, questions around Brexit and global economic growth, executive chairman of property giant City Developments Limited (CDL) Kwek Leng Beng does not think things will be all that bad.
But it is still important to be cautious and take "calculated risks," he said at the group's results briefing on Thursday.
"I am confident that the economic scenario will not prolong too long and I won't be surprised if many of the issues are settled this year," he said. "Once all of these geopolitical problems are settled, Singapore will be one of the first countries that will come out well."
He added that the UK as a financial centre is very well established, and there is much pent-up demand as people are waiting to see outcome of Brexit before they purchase property.
Plus, as he put it, "The British ... used to have many colonies and many of the colonies never forget that - and I am sure they are very keenly interested to transact business." He added that US President Donald Trump "can change his mind overnight so I won't be surprised if things move forward faster than anticipated".
Still, he pointed out that it is important to err on the side of caution and not think there is "no end to the boom" the world has experienced in the past eight years. He said: "If you cannot have organic growth, you look at acquisitions. It is management who can find good acquisition growth here and there."
Locally, the group - which picked up a string of residential and mixed-use development sites in Singapore last year - sees stability in private home prices this year.
Group chief executive officer Sherman Kwek said that buyers had put off their purchases in the last few years "but when the right project is launched with the right attributes and competitive pricing, it's able to sell very well".
He added: "We were quite surprised when we saw several suburban projects hitting new highs so, yes, there is still pent up demand."
Moreover, developers who bought land over the last one-and-a-half years do not have much buffer to drop prices significantly as land prices were high.
He thinks there will be 40 to 50 launches this year - "quite a lot of supply" - but fewer than what some media reports have said because "some of the projects can't hit the market in time anyway".
The elder Mr Kwek added that there were many en bloc beneficiaries still looking to put their money somewhere. He said: "I don't think at one go, prices will collapse like a pack of cards."
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