CEO Christopher Tang’s outlook on the real estate industry for Frasers Centrepoint Singapore emphasises that remaining flexible is key to business sustainability in a volatile property market. We look at how this aligns with the company’s overarching strategy to continue growing and staying competitive within the industry, in his recent interview with Lianhe Zaobao. Here are some highlights from the interview.
Click the image to read the full interview with Mr Tang on Lianhe Zaobao. Photo credit: Lianhe Zaobao
Staying ahead in a competitive industry
Frasers Centrepoint Singapore’s business model is a combination of residential, retail and office assets that complement each other. Steady recurring income from retail and commercial office projects sustains the company’s growth and progress when there are few viable investment opportunities. Said Mr Tang, “In the cyclical real estate industry, remaining flexible and ensuring stability in the volatile property market is more important than constantly winning bids, so that steady progress can be made.”
Over the past five years, Frasers Centrepoint Singapore’s portfolio has been strategically reshaped to ensure it stays competitive, resilient and relevant.
Frasers Centrepoint’s international footprint has also grown to span across 80 cities around the globe today, since its humble beginnings in Singapore. Among the assets of Frasers Centrepoint Singapore, residential business accounts for about 40%, while the remaining 60% lies in the retail and office assets.
After 15 quarters of decline, the property market is beginning to show signs of bottoming out but CEO Christopher Tang remains cautiously optimistic for the years ahead. He shares that being an integrated real estate company with a balanced portfolio will ensure that the firm remains resilient, and able to weather various cycles.
Investing with foresight for the long term
Frasers Centrepoint Singapore invests strategically and in a disciplined manner by focusing on sites that have a potential angle for a valuable development. The Jiak Kim Street lot is the most recent example of this.
Mr Tang maintains that the residential business continues to be an important focus for the business. One of many fulfilling milestones in 2017 was when Frasers Centrepoint Singapore emerged as top bidder in the closely-fought tender for the prime Jiak Kim Street site with a bid of $$995.41 million, narrowly winning the next contender by a mere 0.57%.
The intense competition among developers demonstrated the plot’s superior development potential. Though the development is in its early stages of planning, it is not hard to recognise the site’s prime location and its potential to be developed into a high-quality property that will enhance the trendy pier-side precinct.
Some other examples include Waterway Point that is located in the new and growing town of Punggol, the new Northpoint City where it is the largest retail sanctuary in the northern Singapore, and Frasers Tower that is strategically situated in a prime gateway of the continually-expanding Central Business District (CBD).
Promising prospects for Frasers Tower
The office spaces market is on the upturn and reflects the health of Singapore’s economy and property market. Many commercial tenants are snapping up spaces in newer developments that are coming up, given the lumpy supply recently.
For the iconic Frasers Tower, Mr Tang draws attention to the over 50% of leases that have been committed by strong international brands. Their interest indicates that companies value the design, and the convenience of the property’s central location in the CBD.
The 38-storey Grade A office tower is expected to obtain a Temporary Entry Permit (TOP) in the first half of 2018, and will have a total lease floor area of 663,000 square feet. Frasers Tower was designed to provide a flexible work environment for a vibrant work community. Its community zones, The Sky, The Terrace, The Oasis, and The Park, were created to inspire a stimulating and functional work environment with its unique blend of workspace and nature.
Dominating the northern retail front
The expanded Northpoint City offers the community over 400 retail outlets under one roof, making it the largest retail mall in the north of Singapore.
The mall’s new South Wing mall opened progressively from December and tenants have already been serving customers through the holiday season. By Northpoint City’s official opening in the second quarter of 2018, everyone can enjoy over 100 international food and restaurant concepts across the North and South Wings.
Also, the Yishun public library will be opening in February 2018, bringing more crowds to the development. The integrated development is expected to be a community gathering point, resembling what is envisioned for the future of large-scale integrated developments.
Progressive changes that uphold the business’s legacy
Over the decades, Frasers Centrepoint Singapore has undergone changes and Mr Tang has witnessed the continuous growth of the company with pride. He reminisces the time he joined the company, nearly two decades ago, and notes that the business has taken greater strides in the past five years. Business in Singapore grew $6.9 billion to $12.2 billion over the past five years, and the overall scale of the Group grew more rapidly, from $10.4 billion to $27 billion.
“Real estate is an engaging business. I take pride in what we do because I know that our work impacts lives and contributes to society and its needs,” he said as he reflected on his journey with Frasers Centrepoint Singapore. Remaining confident in the long-term prospects of the local property market, Mr Tang believes that the business will continue to develop steadily.
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