Since its founding in 1987, property developer and investor Ho Bee Land H13 has come a long way.
It all began when founder and executive chairman Chua Thian Poh established the company with the dream of becoming a prominent real estate developer.
“We started in 1987 with buying an industrial building. From then on, we started to develop small- and medium-sized developments. That was our first step,” recalls Chua.
Thirty-six years later, the group listed on the Singapore Exchange S68 ’s mainboard has fulfilled what Chua set out to do. Among other accolades throughout the years, it was known for being the first developer to tap on the potential of the luxurious Sentosa Cove in 2003 and acquiring the iconic building, The Scalpel in London in 2022. The latest feather in Ho Bee Land’s cap? Receiving the EY Family Enterprise Award of Excellence this year.
Within the business, Chua is joined by his son Nicholas, who is Ho Bee Land’s CEO and executive director. Nicholas joined the group in 2002 as a manager of the company and held several senior management positions before becoming its CEO.
Ho Bee Land has kept its base here in Singapore but has, over the years, built a global portfolio comprising properties in several geographies, such as Australia, China, the UK and Europe.
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In Singapore, the group is best known for its numerous projects in Sentosa Cove and its buildings at One North. In the UK, the group has eight office buildings totalling around GBP2 billion ($3.37 billion). This also includes its acquisition of The Scalpel for GBP718 million, which made headlines. In Australia, the group has a sizeable land bank, which includes its master-planned residential developments and development at the iconic Surfer’s Paradise at Gold Coast. It also has residential developments in China, real estate funds, and office assets in Europe.
As at FY2022 ended Dec 31, 2022, the group was sitting on a total property portfolio worth $7.19 billion.
Its big break
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While the group has enjoyed numerous wins, the older Chua attributes its success to two key milestones — its diversification to the UK in 1996 and its foray into Sentosa Cove in 2003.
In London, the group developed its own property and bought other properties for investment. The move to the UK helped the group go through the 1997 Asian financial crisis relatively unscathed, even as many other countries folded.
Looking back, Chua recognises that the move was “timely”. “In property, you will never know [whether it’s the right time or not]. We were lucky that we escaped,” he says. “Yet, when you’re in this business long enough, you will definitely get caught in between, but it’s a matter of how you handle it.”
In 2003, the group had the foresight of being the first developer to make a big bet on the development of Sentosa Cove, which was an empty piece of land at the time.
“We developed our first project in Sentosa Cove that was berthed by the cove itself. Then we continued to bid for others. In total, we now have eight projects in Sentosa alone, which allowed us to become the biggest developer on the island,” shares Chua.
“During our travels, particularly in Australia and France, we noticed that most of the properties facing the waterfront in those countries always commanded a premium. This was why we were quite confident in Sentosa at the time,” he explains.
He adds that it was the site’s unique waterfront location and its views of mainland Singapore that attracted him to begin with.
Yet, there were others who doubted Chua’s judgement, especially when the land was priced higher than some sites on the mainland.
Today, Chua’s decision has proven sound. In FY2022, Ho Bee Land reported total sales of $400 million from its projects on the Cove itself, double the sales in FY2021.
Apart from these milestones, the younger Chua noted that the group’s geographical diversifications in China in the early 2000s and Australia in the early 2010s were also part of the group’s big breaks.
“It’s all about protocol and risk management. We tried to diversify and not put all our eggs in one basket. That’s how we did it progressively. Apart from Sentosa, we also had a big break in Metropolis [in One North],” he says.
Making a strategic shift
The pivotal year of 2010 saw Ho Bee Land acquire the site that would later become Metropolis, which is the largest Grade A office development outside Singapore’s central business district (CBD) today.
“A site in Buona Vista was put up for tender by the government [in 2010]. [That area] was an untested market then, but we thought, we’d just put our best foot forward, and we were lucky enough to be awarded with the bid,” says Nicholas.
It was a calculated risk that the group had to take, as the location was then known as a hub for R&D. But the group liked what it saw, as the building was “well covered” with its amenities and its location next to the Buona Vista MRT Station on the East-West Line then.
Yet it was this acquisition that enabled the group to act on its twin-engine approach, which is balancing development and investment for its sustainable, recurring income in the long term.
The move to make the shift from relying solely on development income became crucial, especially from 2007 to 2008 when the Global Financial Crisis (GFC) happened. At the time, the group was still acquiring more sites on Sentosa Cove and pumping capital into their existing sites.
“During that time, we thought about it, and together with the board, we felt that we shouldn’t rely on development income which was 90% of our business then,” says Nicholas. “It was then that we tried to bring in recurring income and create a twin-engine approach where we work on our developments as well as focus on bringing in recurring income.”
“Along the recurring income strategy, we also began purchasing buildings in London to complement our overall strategy of having a balanced portfolio,” he adds.
According to Nicholas, 75% of the group’s takings, which includes the biomedical sciences development Elementum next to Metropolis and London’s The Scalpel, is now made up of recurring income while the remaining 25% comes from development income.
In the UK, the group’s properties are doing well operationally. The older Chua also remains confident that the portfolio will do well in the mid- to long-term as it is still a financial centre despite the current headwinds in the region.
“The key thing about real estate is always holding power. You need to have that because you’ve got to ride through the cycles. So right now, the cycle is not there, but you just need to be able to ride through it,” says Nicholas.
Family ties
On working with family, both men acknowledged with a laugh that there were some differences in their working styles.
“It’s good that Nicholas doesn’t just follow me in terms of the way he works,” says the older Chua. “He has his own style, definitely and I think that is important. [After all], you don’t want him to just follow [the way I work].”
“When it comes to certain decisions, we always make it very clear that the company comes first. It’s not just the both of us, we’ve also got management staff, who we discuss with whenever we go into a new project or development,” he adds.
Yet, there are similarities as well when it comes to running the business. Treating people right is a philosophy both father and son can agree upon. Thinking of a win-win solution for all partners — whether it is in a joint venture or when dealing with a counterparty — is another.
Having a strong team is also important to the duo. “Once you are able to have a strong management team with you, you try to engage with them, and then retain them for the long term. So that’s important for us,” shares Nicholas.
Giving back is also another thing both father and son have in common, recognising that they have the opportunity to do so. The older Chua himself is an active community leader and is recognised for the philanthropy work that he does, whether through the Chua Foundation or other platforms.
Yet, there are always ups and downs when working together.
One of the best things about working with family is being able to tap on his father’s wealth of experience at any time of the day, says Nicholas.
Working with family also allows the group to be nimble and make quick decisions without the bureaucracy of working for a larger conglomerate, he adds.
Yet, according to the younger Chua, the key thing is being able to put the group ahead of self and make the right decision for the group.
“We also try to be impartial and objective in facing matters. So sometimes, it doesn’t matter who you are, we are all encouraged to speak up. While we have a diversity of views, once we agree on a certain direction, we all toe the line and follow that direction,” he says.
Yet, working with family also means that there is no downtime.
“My father lives and breathes the business 24/7. When I say 24/7, that’s really 24/7. Likewise, I learned to do the same 24/7 as well. The questions can come in the middle of the night and you just need to be on top of your game,” shares Nicholas. “I probably got quite a lot of earfuls during the earlier years, because it takes a few years to adjust, but we got there.”
The older Chua explains: “If you’re the leader of your company, you have to know most of the things ahead of the rest. You have to be very alert.”
On his thoughts and wishes for the future, Chua shares that he hopes for Nicholas to take Ho Bee Land to the next level. “He has to build up his base from here. Profit is one of the criteria, but he also has to answer to his shareholders. Hopefully, we can build more substantial development or investment properties [moving forward].”
Referring to the ongoing macroeconomic headwinds, the older Chua notes that there will be challenging moments when running a business but adds that Nicholas and his team will “get through these difficult times”.
