Focusing on its core competence

Source : Business Times – 17 Jul 2009

PROPERTY development and investment group Sing Holdings believes in focusing on – but expanding within – its core competence.

Ranked fifth on DP Info’s list of 50 fastest-growing companies, with a CAGR of 312.30 per cent, the company has so far achieved success through its ‘in-depth knowledge of the business, effective management team, discipline and focus on its core competence’ says chief executive Lee Sze Hao.

Although the company is a ‘pure, focused property developer’ it looks into a ‘mix’ of sectors to diversify risk, and into high-yielding properties and projects for growth.

The company’s history underscores this. Sing Holdings was founded in 1964 by Mr Lee’s father, Lee Fee Huang, who is currently chairman. Although it focused initially on residential property, it began to undertake industrial and commercial projects in the 1980s.

Examples of recent projects include the Meyer Residence condominium and the EastGate industrial complex.

In 2006, Sing Holdings was listed on the Singapore Exchange – a testament to its continued success.

After the first quarter of 2009, the value of the company’s assets was $519 million – an increase of $14 million and $370 million from 2007 and 2006 respectively.

Revenue also grew, from $16.8 million in 2006 to $20.7 million in 2008.

Besides being active in different sectors, the company has income streams from various sources.

For instance, it developed the Ocean Towers office complex in Shanghai, which it sold in 2006 for a $48.8 million profit.

Due to the cyclical nature of property development, the company needs ’stable recurring income’ to maintain healthy profits, Mr Lee says.

The company’s BizTech Centre – an office complex with a lettable area of 75,000 sq ft – therefore needs to maintain a ‘high occupancy rate’ to provide constant cash flow.

Such recurring income is especially crucial in today’s recessionary climate. Mr Lee admits that Sing Holdings has had to ‘adapt to the different business environment’ by cutting costs and ‘generating healthy cash flows’.

The company has had to ‘adjust its asking prices’ to keep sales up. Thanks to price cuts, its BelleRive condominium, launched in May 2009, is 85 per cent sold.

Sing Holdings’ ‘flat organisational structure’ has helped the company make such decisions quickly and stay ‘ahead of the curve’. Besides weekly meetings, employees give feedback direct to Mr Lee, fostering effective communications.

Also, several executives have been ‘working as a team for more than 10 years’ at the company. This has ensured ‘a good understanding of management objectives’ and ‘effective execution’ of decisions.

Sing Holdings is preparing for growth as economic sentiment improves. The Laurels, a residential project in Cairnhill Road, is in the planning stage and expected to be launched late this year or early next.

‘The company is ready to expand its business and is cautiously exploring new land acquisition opportunities,’ Mr Lee says.