Published March 14, 2007

Far East to pay attention to high-end homes

Influx of overseas players has raised the bar in prices and quality: CEO

FAR East Organization will pay more attention to the high-end property market, which has grown too big to ignore, says CEO Philip Ng.

Mr Philip Ng: 'Today, this very wealthy segment of the market has grown too significant to ignore. We must augment our organisational machinery to address this'

'In the past, we concentrated our efforts on the mass market serving entry-level private home buyers as well as buyers of mid-market condominiums and landed homes.

'Today, this very wealthy segment of the market has grown too significant to ignore. We must therefore augment our organisational machinery, in terms of our product development and sales and marketing capabilities, to address this,' Mr Ng says in the group's in-house publication Landmark.

Mr Ng also stressed that as Singapore shapes up as a vibrant international city, it is seeing new players from overseas with 'high standards and deep expertise' and 'flush with cash and hungry for projects'.

'They have raised the bar in prices and quality and changed the nature of the game.' Mr Ng observed.

'We need the right frame of mind and resolve to compete in this new league,' he said, stressing that it was imperative for the group to lift its level of performance as the 'stakes have become much higher now, with the heat in the market and soaring replacement costs'.

'For if we do not sell at the right prices, when we go back into the market, we are actually topping up more equity. We would be doing what is uneconomic, that is, selling low and buying high,' he said.

At the other pole, income-driven demand also looks more promising. Mr Ng said that sustained robust economic growth and a strong job market will translate to rising incomes.

'There will be more purchasing power to support the domestic segment of the property market - the mass-market, entry-level, and mid-market condominiums and landed properties which have remained subdued thus far.

'In the next few years, we expect the middle market to play catch-up with the international market in terms of transaction activity with some price upswing,' he said.

Far East sold 869 residential, commercial and industrial units worth $725 million last year. But while the group's business showed improvements across all fronts, 'we were not able to meet our targets in property sales and in the leasing of our portfolio of residential, retail and industrial assets'.

Far East, set up by Mr Ng's father, property magnate Ng Teng Fong, last year bought nine sites costing about $1.6 billion in Singapore. They will yield in total 3.1 million square feet of buildable area. This is the largest land bank investment Far East has made in a single year, exceeding the total of $1.54 billion invested in land and property acquisitions in the preceding six years from 2000 to 2005. Besides the nine sites, Far East's Hong Kong-based sister company Sino Land bought the Collyer Quay site last year for $165.8 million.