The Singapore property market is showing signs of being on a strong up-cycle and, as during the boom of the 1990s, this is luring companies, whose core businesses are not in property, to try their luck at residential development to boost their profits.Companies in publishing, jewellers and even booksellers have all recently got into the act.
But property consultants say there is room for such niche players to profit from property development in a buoyant market.
One such project is a 15,000 square feet land site at One Robin Road which is being turned into a 17-storey tower of luxury high-end apartments.
The developer is not the usual property player.
Educational publisher and retailer Popular Holdings bought the site last year for S$12.5 million in a move aimed at boosting its bottomline.
Popular also bought a 29,000-square-foot site at Shelford Road which it plans to develop into 5-storey luxury apartment blocks.
Popular bought the site for S$27 million.
The educational publisher and retailer is just one of several listed non-property players which are hoping to tap into the current property boom.
Chou Cheng Ngok, Chairman and Managing Director, Popular Holdings, said: “Simply put – it’s what you call opportunity. And in business, opportunity is very important. We have to realise when opportunity knocks. You know that retail business is cash business. So I think we do have sufficient funds – this is one of the reasons why we go into property. The other is of course as I’ve mentioned opportunity.”
Property consultants say that typically bigger developers go for sites larger than 40,000 square feet to build full-scale condominiums.
This leaves room for boutique developers and niche players to go for the smaller ones. Donald Han, Managing Director, Cushman and Wakefield, said: “You have got a variety of land products that’s available which is suitable for different niche players. And I think a lot of the corporates that are looking into diversification factor – are particularly looking into the smaller plot of portfolios of properties.”Property consultants say the presence of niche players adds variety to the property scene.
But for these players, timing is an important issue.
Mr Han said: “For new players the important thing is really that you have to get the cycle of the market right. We know that the market cycle is of course right at this point of time. The important thing about being a developer is that you must have a very deep pocket to sustain when the market starts to flatten out. Or when the music stops.”
Apart from Popular, other listed companies which have recently made forays into property development include publishers SPH and Eastern Holdings and jeweller Aspial.
Source: Channel NewsAsia, 19 April 2007