Published October 10, 2009

Ho Bee again looks abroad for growth

Developer sniffing for opportunities in China and London. By Kalpana Rashiwala

HARD pressed to find land in Singapore, developer Ho Bee Investment again plans to beat a path overseas to places such as China and London to grow.

'We are still sniffing for opportunities, but our next phase of growth will definitely not just be in Singapore but outside of Singapore,' Ho Bee chairman and CEO Chua Thian Poh told BT in a recent interview.

Under a joint-venture agreement Ho Bee signed with high-end China residential developer Yanlord last month, the two Singapore-listed developers will join forces for a feasibility study on a project in China.

Ho Bee and Yanlord are also eyeing large sites in China's second and third-tier cities to build mid and upmarket condos for locals.

Additionally, Ho Bee is scouting for residential development opportunities in Central London. 'London was badly hurt during the financial turmoil, and the pound has also come down substantially,' said Mr Chua. 'Maybe it's time for us to re-look at London again.'

Ho Bee is no stranger to London, having developed and sold Parliament View, comprising 190 apartments, along the River Thames facing Big Ben and the Houses of Parliament. The project, undertaken jointly with SsangYong Cement - now known as EnGro Corp - was completed in 2002. Ho Bee has retained four apartments in the development.

In China, too, Ho Bee has been involved in projects in Shanghai through joint ventures with Hong Kong partners, and with its new partner Yanlord hopes to secure several large land parcels to do phased development on each site.

'Hopefully we'll be be able to do something nice for the first phase and showcase our capabilities. This will help build up value for the remaining phases,' said Ho Bee executive director Ong Chong Hua.

Through their alliance, Ho Bee and Yanlord will leverage on each other's expertise and track record. 'Yanlord is a high-end and reputable developer in China. Ho Bee has also made a name for itself, especially on Sentosa Cove. And I think projects by Singapore developers still command a price premium in China,' Mr Ong said.

'In China, you can get a big chunk of land and develop it over, say, a 10-year period. So things are much easier to plan. In Singapore, getting land is quite ad hoc.'

Mr Chua said securing land here through collective sales has become more difficult because of the more rigorous rules governing such sales to protect minority owners.

'Looking for our raw material is the big challenge in Singapore,' he said. 'Every site that comes up (at state tenders) now attracts 12-15 tenderers. The pricing is also very competitive.'

'Hopefully, when the government restarts the confirmed list next year, it will stabilise the market.'

A more positive note for Ho Bee in Singapore is that it has not exhausted its local land bank. Even after this week's preview of the 205-unit Trilight condo on Newton Road, Ho Bee has three other Singapore condos that can generate a total of over 600 units. These include the 248-unit Parvis at Holland Hill, which is a joint venture with MCL Land, and two condos at Sentosa Cove - the 151-unit Seascape and a project of about 300 units on the Pinnacle Collection site.

Parvis may be previewed later this month or next, while the two Sentosa projects - to be developed jointly with Malaysia's IOI Group - are slated for release next year to leverage on the opening of Sentosa's integrated resort.

Ho Bee has been the predominant residential developer at Sentosa Cove, an upscale waterfront housing district emerging on 117ha of mostly reclaimed land on the east coast of Sentosa island. It clinched eight plots there, five of which it has completed developing. The other three are the two joint-venture sites with IOI and another plot on which Ho Bee is building Turquoise condo, which is about half-sold.

'Most of our projects are close to nature - whether it's a hill, nature reserve, river or the sea,' said Mr Chua, who started Ho Bee in 1987 as a small developer focusing on industrial property. 'In the 1990s, we became a decent-sized developer when we developed the Southaven I and II condos in Upper Bukit Timah at the foot of Bukit Timah hill,' the 61-year-old said.

Even before the Singapore property market peaked in 1996, Ho Bee had turned its attention to London. Initially it bought several floors of apartments off-plan from London builders and later bought apartment blocks which it subsequently sold as the market went up.

'When we understood the market better, we developed this trophy building opposite the Houses of Parliament,' said Mr Chua, referring to the Parliament View project.

Things panned out well for Ho Bee as it managed to ride the jump in London property prices as well as the appreciation of the pound - in stark contrast to the lean times for Singapore's property market during the Asian crisis.

'Then around 2001-2002, we thought it was time to come back to Singapore,' Mr Chua said. The company developed several projects such as Rio Vista condo at Hougang beside the Serangoon River, jointly with MCL, and Amaninda in Thomson Road, before it turned its attention to clinching sites at Sentosa Cove when these went up for sale from late 2003.

The rest, as they say, is history.

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