HSR to list on SGX via reverse takeover

Source : Business Times – 17 Nov 2009

The property firm’s owners will sell their entire stakeholding to Catalist-listed Wepco for $40m

PROPERTY agency HSR International Realtors said yesterday it plans to list on Singapore Exchange (SGX) through a reverse takeover (RTO).

Husband-and-wife team Patrick Liew and Kellie Lim, who own 100 per cent of HSR, will sell their entire stakeholding to Catalist-listed Wepco Ltd for $40 million.

Wepco now provides electroplating services to the electronics, automotive, aerospace and medical industries. But once the RTO is completed, it will focus on real estate.

The company is likely to be renamed and re-branded. It will also apply for a transfer from the Catalist board to the mainboard.

Established in 1981, HSR is one of the largest homegrown real estate agencies in Singapore, with more than 7,000 agents listed.

Last year, it had a 32 per cent share of the HDB resale market and 40 per cent of the private residential market, said chief executive Mr Liew, who will head the enlarged Wepco.

HSR reported a drop in 2008 net profit to $1.4 million, from $4.9 million in 2007.

The weaker property market caused revenue to fall to $55.2 million from $80.6 million.

Mr Liew intends to use HSR’s listed status to grow the company.

‘We see tremendous opportunities for growth in Singapore as well as regionally and globally,’ he said.

In particular, HSR is looking to partner other real estate firms in South-east Asia to break into more markets.

It has marketed property in Australia, New Zealand, Malaysia, Canada and the United States, but currently operates mainly in Singapore.

Being a listed company will boost HSR’s brand equity and give it more ways to tap the capital markets for growth, Mr Liew said.

Wepco will pay the $40 million to Mr Liew and Ms Lim by issuing 80 million new shares at 50 cents each.

The issue price represents a premium of about 117 per cent over Wepco’s closing price of 23 cents last Friday.

Upon completion of the acquisition, Mr Liew and Ms Lim will own 83 per cent of Wepco’s enlarged share capital.

Wepco said that in the past few years many of key customers have shifted their operations overseas, resulting in a substantial loss of revenue.

This, plus increased raw material prices and other operating costs, has had a substantial negative impact on profitability, Wepco said. ‘While the company continues to strive for high growth in its current business, the directors are of the opinion that in view of the challenging business climate in which the group operates, there is a need to look for other business opportunities to increase shareholders’ value,’ it said.

Wepco’s stock gained 10 cents to close at 33 cents yesterday.

HSR property firm set to list on SGX

November 17, 2009

PROPERTY firm HSR announced yesterday that it will list on the Singapore Exchange via a reverse takeover of electroplating company Wepco.

As part of the move, Wepco will apply to be transferred from the Catalist board, where it is now listed, to the SGX mainboard.

The move involves Wepco acquiring the real estate giant and issuing 80 million shares at 50 cents a piece, a total of $40 million, to HSR owners Patrick Liew and his wife Kellie Lim.

Mr Liew, who is HSR’s chief executive, and Ms Lim will hold 83 per cent of Wepco’s enlarged share capital. There will then be a placement exercise of Wepco shares to comply with listing requirements.

Mr Liew said the reverse takeover will allow the firm to list faster than if it were to go the initial public offering route.

He added that the listing will give HSR access to the capital markets as well as liquidity and branding for expansion.

HSR will focus on growing in niche areas such as cross-border property transactions and licensing its structured training programmes for new agents.

The company has marketed properties in Australia, New Zealand, Canada and the United States as well as in its home market.

HSR has about 7,000 property agents in its fold and claims to have captured 40 per cent of the private residential resale market and 32 per cent of the HDB resale market last year.

It will be only the second listed property agency, after mainboard-listed Hersing Corporation, which owns ERA.

The reverse takeover needs backing from the authorities as well as from Wepco shareholders.

Property agent’s priority is to get the best price

Source : Straits Times – 14 Oct 2009

IT IS good to examine why the ‘one agent representing buyer and seller’ situation happens only in the HDB resale market and not the private property market.

The difference between an HDB resale and private property is that in the latter, once the parties agree on the selling price, the sale is concluded after the legal searches and transfer of titles are carried out. In an HDB resale, the agreed price is not conclusive. The HDB needs to give consent. Obviously, there is more administrative work to do after the agreement on price is inked.

However, administrative work is independent of price. Therefore, when the agent wants to charge an administrative fee that is pegged to a percentage of the agreed price, it gives a wrong impression that he is being rewarded for getting the best price.

I often hear property agents say that HDB resale flats are lower in price compared with private properties, and therefore deserve a 3 per cent commission for the fee to be sizeable to co-broke. If a private property sells for $1 million, the commission of 2 per cent is $20,000, and in a co-broking situation, each agent gets $10,000. For an HDB resale flat selling for $300,000, a 2 per cent commission comes up to $6,000 and is unattractive for co-broking.

However, I must reiterate that a property agent’s fundamental duty is to get the best price for the party he represents. Earning a fee for other aspects of work like running advertisements, walking potential clients and fixing appointments are duties expected of a property agent, but they come after his fundamental duty to get the best price.

Before the authorities implement any control over the issue, I suggest that if a buyer is interested to make an offer to the seller, he can do so with or without the agent present. This is so as not to lose out because the seller’s agent insists on the buyer engaging his administrative services. The agreement between the seller and his agent should have provided that the the latter be entitled to his commission even if it was the seller who closed the deal.

Patrick Sio

Sellers can try mystery caller test to check on their property agents

Source : Straits Times – 14 Oct 2009

WE THANK Ms Kwok Yoke Pui for her Forum Online letter yesterday, ‘Commissions and property agents’.

The Singapore Accredited Estate Agencies’ (SAEA) position expressed in an earlier letter last Friday (’1 agent for buyer, seller: OK, but get written consent’) was that if sellers and buyers wish to appoint estate agents to assist them in their HDB resale transactions, they should be separately represented by estate agents of their choice to avoid a situation of conflict of interest.

An estate agent should act and collect commission only from one party to the transaction, who could either be the seller or the buyer. We had then suggested an exception to permit dual agency if the sellers and buyers are both aware and consent to the appointment of the same agent, preferably in writing. Such a practice, including separate agents of the same agency acting in the same transaction, for example, can be found in some states of the real estate industry in the United States.

The Ministry of National Development has since announced its proposed regulatory framework for public consultation on Oct 12, and the issue of dual agency, especially for HDB resale transactions, will be adequately addressed.

We shall channel Ms Kwok’s feedback to the ministry. Meanwhile, we would offer her suggestion of a ‘mystery caller test’ to sellers who have appointed estate agents to represent them in their HDB resale transactions. Sellers can administer this test to ferret out instances when their appointed agents refuse to entertain offers presented by prospective buyers who do not intend to use the latter’s services.

Dr Tan Tee Khoon
Chief Executive Officer
Singapore Accredited Estate Agencies

At last, real protection in property deals

Source : Straits Times – 14 Oct 2009

THE real estate trade can expect to come under close statutory scrutiny in under a year. Not before time, in our view. According to a projected timeline for public comment and legislative drafting, the latter half of next year is when laws to professionalise the industry and to reinforce consumer protections in residential property deals would have gained parliamentary passage. The regulatory step should have been taken years ago. There has been growing disquiet about the ethical instincts of property agents, and estate agencies have been slow to upgrade service standards even as they prospered in boom cycles. The industry has shown amply it could not be left to regulate itself, which was the Government’s light-touch preference.

For a small market, the over-populated agency sector is, for starters, an embarrassment of riches. There are 1,700 licensed real estate agencies, 25,000-30,000 individual agents. Pruning the numbers alone is no guarantee against malpractice and incompetent handling of client needs, but the common test and trade accreditation for agents proposed by the Ministry of National Development can eliminate unsuitable ones. The industry can build on that by fostering a more professional image so as to attract better educated entrants. But mind this: The act of developing an industry accreditation outfit acceptable to all firms could itself be a challenge, as there are competing trade associations with separate memberships. This will be a test of the industry’s intent to improve itself as the accreditation body shall decide on the content of qualifying tests and continuing education, license agents and maintain an online public register open to consumer inspection. Mind this too: The entrance exam must be rigorous, or the edifice of accountability will come tumbling down.

The ministry also proposes that a tribunal adjudicate disputes, to cut through the present mish-mash of processes that often lead aggrieved parties on an exhausting chase to obtain satisfaction, if that. Go for it. The Consumers Association is currently the first port of call for complainants. Despite its strenuous efforts, it is undermined by lack of enforcement clout.

That function of enforcement and punishment for violations will be exercised by a statutory regulatory agency. This is the most drastic of the proposals. In the circumstances, and considering the failure of self-regulation, it is an acceptable way to ensure compliance. Estate agencies and the more successful of agents may protest that this is a case of overkill. Maybe. But absent the regulatory empowerment, the recommendations will sound like good intentions that will just die on the table.

Commissions and property agents

Source : Straits Times – 13 Oct 2009

I AM writing in response to last Friday’s letter, ‘1 agent for buyer, seller: OK, but get written consent’, by Singapore Accredited Estate Agencies (SAEA), in reply to my letter on Thursday, ‘Agents shouldn’t take on dual roles’.

I would like to thank SAEA for the prompt response. I also noted an online debate on my letter in The Straits Times discussion board and I am glad the public is taking note of this issue.

First, I would like to clarify that I am not referring to an isolated incident, but a rampant practice or ‘open secret’. My focus is not solely on the agent who acted for me, but rather all the agents I have contacted so far.

I met at least 15 of them (from different property firms) during viewings and spoke to many more on the phone. They would first establish if I am an agent or a buyer, and the tone usually becomes much friendlier when I say I am a buyer. They all have the same message: that I must pay them 1 per cent commission because they need to represent me.

Some participants in the ST discussion board thought I was not willing to pay the 1 per cent commission. I would like to clarify that I am most willing to pay. The point is, I want to pay the agent who is representing me, not the seller’s agent. This is because in cases of dispute (not necessarily legal) such as agreeing on the HDB’s first and second appointment dates, both sides’ interests should be represented by different parties.

SAEA’s advice on the agent getting written approval from both the seller and buyer is not practical because even before you are allowed to view the flat, the seller’s agent will have stated such terms very clearly. And once you view the unit and you wish to make an offer, the agent will once again tell you that you need to engage him as your agent before he relates your offer to the seller.

‘Agents should not insist on representing buyers to obtain a commission, failing which they would not accept any offers to buy on behalf of the sellers,’ wrote SAEA. ‘Such a position is an ethical breach that we do not condone.’

These are statements I fully understand but the question remains: What if they still insist and I desperately like the unit?

I understand that buyers can choose not to purchase the unit or look for their own representing agents, but past experience tells me I will never be able to even view a good unit or close the deal, even though I may offer the highest bid, because the seller’s agent can still choose not to disclose to the seller the highest offer, but rather the offer from other buyers who are willing to engage him for the purchase of the same unit.

Also, relating to the bid for a condominium unit at $690,000, we knew the sale was closed only when my agent called the seller’s agent to check on the status two days after our offer. It was only much later we discovered that the unit was sold at a lower price.

That said, I do not see the need to disclose the details of the agents who acted for me because this involves more than one agent and probably most agents. I suggest SAEA do a mystery caller test, that is, call any agent who has listed a property for sale and pretend to be a buyer. Tell the agent you do not want him to represent you and you will understand what most buyers are going through.

I just wish that clearer rules and better-defined ethical codes of conduct could be put in place soon to stop these practices and close any loopholes.

Kwok Yoke Pui (Ms)

Move to ban ‘one agent for buyer and seller’ under study

Source : Straits Times – 13 Oct 2009

THE Government is contemplating a move to ban property agents from engaging in the widespread practice of representing both the seller and buyer of an HDB flat in the same transaction.

The idea is set to get the thumbs up from home buyers and sellers, but could leave some agents unhappy at a potential loss of commission income.

The proposal was released yesterday by the Ministry of National Development (MND) to raise industry standards. The move would ensure that agents are ‘not in a conflict-of-interest position’, it said.

Currently, many disputes arise because an agent represents both buyer and seller in the same HDB resale transaction.

The practice means the seller’s agent often gets a commission from the buyer as well and may refuse to sell to a certain buyer if no commission can be made.

In other words, the agent may not be trying his best to achieve the best price.

For example, suppose a seller’s agent gets an offer of $300,000 for an HDB flat from a direct buyer willing to pay a commission. He gets to collect 2 per cent in fees from the seller and 1 per cent from the buyer. All up: $9,000 in commission.

But suppose another buyer comes along with his own agent and offers $320,000. Although the price offered is higher, the seller’s agent might refuse to cooperate with the buyer’s agent as the potential commission is lower at $6,400 than if it was a direct buyer.

This practice presents a clear conflict of interest – sellers naturally want the highest price for their property, and buyers want to pay the lowest, MND said in a statement.

‘The same agent cannot possibly discharge his professional duties to both equally and represent both their interests fully.’

However, MND noted that flat buyers may need an agent’s administrative help, and proposes the seller’s agent be paid a fixed administrative fee to help buyers process the paperwork. Alternatively, buyers could engage their own agents or even handle the transactions themselves.

Agency bosses yesterday acknowledged that this move might be unpopular with property agents as it will hit their commission cheques.

‘This could be a big issue for agents since this practice has been adopted for many years now,’ said ERA associate director Eugene Lim. Still, ERA supports the move if it protects the consumer by preventing conflicts of interest, he said.

PropNex chief executive Mohamed Ismail said it is common for some agents to refuse to co-broke in order to earn larger commissions. Co-broking is where a seller has one agent and a buyer another.

‘In the longer term, agents will not lose out as it levels the playing field. All agents will have to co-broke, and everyone will get his rightful commission,’ he said.

Mrs Loh Jo Lyn, 28, is one home buyer who had a bad experience buying an HDB flat when her bid through her agent was rejected by another agent who wanted a direct buyer.

‘This is definitely moving in the right direction. The industry needs more regulation to protect sellers and buyers,’ she said.

Tribunal for real estate sales rows?

Source : Straits Times – 13 Oct 2009

A SPECIAL tribunal might be set up to resolve disputes over residential real estate transactions – replacing the current bewildering hotch potch of options.

This is one of a wide-ranging set of proposals aimed at protecting consumers and lifting standards in the largely fragmented and self-regulating property industry.

Others include: Accrediting all agents, setting up a central registry and instituting a common entrance examination for agents.

The Ministry of National Development (MND) will launch a public consultation exercise for one month from today.

It has just conducted extensive industry consultations on the proposed shake-up. A key impetus for the review, the Government said, has been the high number of complaints in recent years.

To resolve disputes, consumers usually go to the agencies, the industry associations or the Consumers Association of Singapore (Case). Case, for instance, had 727 real estate cases in the first nine months of the year, compared with 1,100 cases last year and 1,055 cases in 2007. It had just 379 cases in 2002.

Case executive director Seah Seng Choon said a tribunal specialising in real estate disputes would help both consumers and agents cut dispute-related costs and, hopefully, speed up resolution.

The Government could help initially by providing start-up funding, but its operation would eventually rest with the industry, it said.

Also, MND said it may be necessary for all agencies to put in place complaints handling processes.

‘The first line of defence should be the agencies, followed by an independent body before the case goes to the tribunal. If not, everybody will be heading straight to the tribunal,’ said Institute of Estate Agents president Jeff Foo.

He added the framework is a ‘good step forward after more than 20 years of self-regulation’.

Another key proposal is mandatory accreditation for agents. The accreditation body – possibly a group of professionals – could keep a public central registry to let agencies assess the background of agents they aim to hire.

This registry could help solve the problem of errant agents who switch from one agency to another undetected or those attached to multiple agencies, experts said.

About 1,700 agencies and 25,000 to 30,000 agents deal in HDB and private homes here.

To add clout to its plan, the Government wants to introduce a regulatory authority, which will be a government agency working with the accreditation body, to set up a disciplinary framework for taking action against errant agents.

For instance, to prevent rogue agents from jumping from one agency to another, MND is thinking of having a demerit points system. These points would stay with the agents and be widely known, MND deputy secretary (development) Tay Lim Heng said yesterday.

Agencies may also face the same disciplinary actions.

Still, some industry sources say more needs to be done. ‘The industry has been pushing for the licensing of individual agents for more than a decade. The basic minimum requirements weeds out only agents who don’t know what they are doing, not the unethical agents,’ said ERA Asia Pacific’s associate director Eugene Lim. ‘The agents have to fear the accreditation body. Otherwise, there is only so much the agencies can do.’

Real Estate Developers Association of Singapore chief executive Steven Choo said: ‘You can’t legislate ethics, but you can transmit knowledge and raise standards of professionalism. No industry matures overnight. Given time, we should be looking at an improved industry.’

Consumers may benefit, but they also have to help make the framework effective. There would be public education outreach programmes to help them understand their responsibilities and rights.

Key elements of the new framework are expected to be out by the end of the year, with the legislative work to be done by the first half of next year. It would be up and running in the second half of the year.

The public can offer feedback on www.mnd.gov.sg

A sterner deal for property agents now

Source : Business Times – 13 Oct 2009

Freelancing may end; agents will have to pass exam

The government has proposed ways to regulate property agents here.

To start with, their activities will be monitored more closely and rules enforced more keenly. A new government agency will be created to take on the enhanced regulatory powers.

A recognised accreditation body for agents will be formed. It will create and maintain a public central registry listing all accredited agents so that consumers are able to ascertain that the agent they engage is qualified.

The Ministry of National Development (MND) is also looking at whether industry players can work with government to set up an independent tribunal specialising in real estate disputes. ‘Such a set-up would send a strong signal on the industry’s commitment to enhance fair dealing and raise professional standards,’ said the ministry.

MND is also proposing that real estate agents should no longer be allowed to be freelancers (agents who are not contracted with any accredited agencies). It also wants to prevent them from representing more than one agency.

Agents must also pass an industry examination and be accredited by the accreditation body (which will be set up next year) before they can practise.

Key elements of the new framework are expected to be announced in December 2009 to January 2010. Legislative enactment is expected by the second half of 2010.

‘The new regulatory framework seeks to achieve two objectives: one, to enable consumers to better safeguard their interests through public education and robust regulations, and two, to increase the professionalism of the real estate industry,’ said MND in a statement yesterday.

The proposed framework comes as the number of complaints against property agents have been rising in recent years. The Consumers Association of Singapore (Case) received 1,100 real estate-related complaints last year, 1,055 in 2007 and 991 in 2006. This year, it received 727 complaints from January to September.

Minister for National Development Mah Bow Tan commented in March this year that the status quo was ‘not tenable’ and that the whole system was ‘not satisfactory’.

With this in mind, MND and other relevant agencies have been studying ways to strengthen the regulatory framework over the past few months. Various stakeholders were consulted, such as industry associations, real estate agency directors, individual agents, Case, and the Real Estate Developers’ Association of Singapore (Redas). MND is now is seeking public feedback.

The framework is likely to focus on residential property transactions as a start as the bulk of complaints are related to purchase of residential properties by individuals – particularly in the HDB resale market.

The proposed framework will also require property firms to take greater responsibility for their agents’ actions. Agencies, for example, will be required to put in place complaints-handling processes, including a mediation platform at the agency level in the event of a dispute.

The regulatory authority will also work with the accreditation body to establish a disciplinary framework to take action against non-compliance or infringement of accreditation requirements. If agencies and/or agents are found to be guilty, they will face disciplinary action in the form of demerit points and possible warnings, fines, suspension and expulsion.

Agencies that are unable to exercise enough control over their agents may also be subject to punitive measures such as restriction on recruiting more agents.

Industry players said that the framework could help usher in better standards of practice to an industry that is right now almost entirely self-regulated. ‘I think the impact will be towards greater professionalism and more protection for the consumer,’ said PropNex CEO Mohamed Ismail.

Market watchers also said that if the proposed regulatory changes are implemented, the number of agents could fall by as much as 20 per cent as those who are not prepared to sit for the industry examination could make an exit. Right now, there are an estimated 25,000 to 30,000 real estate agents in the market with varying degrees of training and professional standards.

Going the extra mile pays off handsomely for SLP Int’l

Source : Business Times – 29 Sep 2009

This exemplary property agency does a lot more than merely bring buyer and seller together

SLP International Property Consultants Pte Ltd does something many of its ilk just don’t. And it is this extra touch that has propelled the property agency into the ranks of Singapore’s top SMEs.

SLP doesn’t just bring buyer and seller together; it takes the trouble to find out what potential buyers want and how potential sellers can deliver.

Helmed by the husband-and-wife team of Stanley Yeo and Kain Sim, the outfit took off in 2001 with the objective of serving clients in the commercial and industrial property sectors. Notably, both of them had earlier helped developers and investors to acquire more than S$48 million worth of investment properties in Singapore; some A$383 million (S$471 million) worth of properties in Australia; and over £128 million (S$289 million) worth of properties in London.

So it carved a niche for itself by assisting developers in designing properties that meet the demands of the target market, recommending them potential land and buildings for development that have strong projected returns.

On the buyer or lessee side, SLP takes the initiative of going to them. Its marketing team visits SMEs at their premises so as to better understand their needs. This way, it can propose better facilities even before the client looks for it.

Over time, it will also be able to tell developers what sort of space will be in demand. Hence, SLP likes to work closely with developers right from the start.

The agency built its reputation right from the first project it secured, after facing its fair share of problems as a small outfit getting its first break. The job: assisting in the sale and development of a 265-unit light and clean industrial building in Bukit Batok.

The economic downturn back then, in 2001, naturally impeded the selling process. But SLP dug in and generated sufficient sales proceeds to assist the developer in funding the development. The project was completed on time without the developer suffering any major cash flow problems along the way.

Topping that, SLP managed to sell every unit over a period of 18 months for the project.

‘To us, it was a very good record because back in 2001, no local industrial development of this size was able to achieve 100 per cent sale before temporary occupation permit was granted,’ Ms Sim recalls.

This was also an important precursor to the many subsequent projects that SLP was to be involved in. But rising business drove the outfit into another wall: hiring people. Recruitment was a challenge because it was difficult to attract people to work for a relatively unknown company. SLP tackled the problem by offering on-the-job training to encourage people who did not have prior experience in the field to join the company. And it worked.

Having established a favourable business presence in the commercial and industrial property sectors, SLP diversified into residential property. By 2004, it was expanding beyond Singapore. Today, it has operations in Indonesia and China.

SLP has achieved many milestones. It sold out industrial office building Alexcia – where its head office is located – in just two months. Just recently, it broke the industry track record with the 100 per cent sale of Northstar, a 654-unit industrial building, within 15 months.

SLP is proud to have maintained its commitment to each project from the start till the end, regarding each project as completed only when every unit is sold. Because of that, SLP has become a well-recognised brand name for business space solutions within the industry. The confidence in SLP’s expertise and dedication has brought in a continuous stream of clients, allowing the company to reinvest its earnings to fund its regional expansion.

In the residential property sector, in which SLP is a relatively new player, the company has also fared well. A living testimony of its achievement here is the recent three stunning blocks of DBSS (Design, Build and Sell Scheme) public housing apartments, Natura Loft, each standing at 40 stories high along Bishan Street 24.

Qingjian Realty Pte Ltd, one of China’s leading developers, engaged SLP as its consultant in its first foray into property development in Singapore. Not only was SLP put in charge of the sale and marketing of the property but, more importantly, SLP contributed to the successful bid for the project by Qingjian, as well as the design and development of the housing project with its knowledge of the needs of the local population.

SLP’s partnership with Qingjian seeks to change the local perception of public housing and property projects undertaken by mainland Chinese property developers. This partnership has also set a new benchmark in residential property value and quality.

On a walkthrough of the project’s showroom with Ms Sim, we were impressed by the high quality of the materials used, the thoughtfulness of the spatial arrangements, and the environment-friendly design of the interior space and exterior landscaping.

Last November, SLP won the prestigious Enterprise 50 Award, a clear recognition of the company’s successful approach to business and its strong growth potential in the coming years.

Looking ahead, SLP’s owners are convinced that the only way for the company to grow is to venture into foreign lands. In 2004, it started searching actively for strategic partners locally and internationally to begin its expansion into the region, starting with the Indonesia market. Last October, SLP made its foray into the Chinese market amid the financial turmoil, beginning with the city of Shanghai.

‘Despite the global financial crisis, our Shanghai office was able to break even in just two months. Now, we are in the process of opening the second branch in Shanghai,’ Ms Sim says.

The founders also believe that the company is capable of fulfilling its targeted milestone of establishing 35 branches nationwide in China within the next 3-5 years.

Besides wanting to expand overseas, Mr Yeo and Ms Sim also want to grow the company from within. ‘We have the vision to gradually move towards the next stage – to nurture the next generation of leaders in the company and to let key management staff become business owners,’ Ms Sim says.

As a parting shot, she advises: ‘You must dare to dream big dreams when starting a business. There will be plenty of setbacks and disappointments, but if you are passionate about what you are doing, you will be able to overcome the problems that come along your way.’

JLL jointly starts online property auction service

Source : Business Times – 17 Sep 2009

Jones Lang LaSalle Inc, the second biggest publicly traded commercial property broker, is joining Real Estate Disposition Corp to start an online auction service to sell commercial property and loans.

‘In a stagnant sales market where interested investors are limited, using an auction opens up a property to a viable buyer marketplace,’ Jay Koster, president of Chicago-based Jones Lang LaSalle’s capital markets practice, said yesterday in a statement.

Real Estate Disposition runs www.auction.com, a website focusing on residential property sales. The site has sold more than US$5 billion in assets since 2007, Jeffrey Frieden, chief executive of the Irvine, California-based company, said in the statement.

It will now also sell commercial property and related debt as well as bank- owned real estate, Guy Ponticiello, managing director at Jones Lang LaSalle, said in an interview.

Commercial property sales in the US will fall to the lowest level in 18 years as the industry endures its worst slump since the savings and loan crisis of the early 1990s, according to data from Real Capital Analytics Inc.

US commercial property values have plunged 36 per cent since peaking in 2007, as mortgage losses forced banks to restrict lending. Would-be buyers await defaults by investors who relied on debt to make purchase between 2005 and 2007, when prices were soaring.

The auction process is a way ‘to find truly where the pricing is’, Mr Ponticiello said.

The venture’s first online commercial auction will be for 100,000 square feet of office space in suburban Dayton, Ohio, owned by Procter & Gamble Co. The sale, set for Oct 15, includes two four-storey office towers that housed the company’s food division, he said.

JLL jointly starts online property auction service

Source : Business Times – 17 Sep 2009

Jones Lang LaSalle Inc, the second biggest publicly traded commercial property broker, is joining Real Estate Disposition Corp to start an online auction service to sell commercial property and loans.

‘In a stagnant sales market where interested investors are limited, using an auction opens up a property to a viable buyer marketplace,’ Jay Koster, president of Chicago-based Jones Lang LaSalle’s capital markets practice, said yesterday in a statement.

Real Estate Disposition runs www.auction.com, a website focusing on residential property sales. The site has sold more than US$5 billion in assets since 2007, Jeffrey Frieden, chief executive of the Irvine, California-based company, said in the statement.

It will now also sell commercial property and related debt as well as bank- owned real estate, Guy Ponticiello, managing director at Jones Lang LaSalle, said in an interview.

Commercial property sales in the US will fall to the lowest level in 18 years as the industry endures its worst slump since the savings and loan crisis of the early 1990s, according to data from Real Capital Analytics Inc.

US commercial property values have plunged 36 per cent since peaking in 2007, as mortgage losses forced banks to restrict lending. Would-be buyers await defaults by investors who relied on debt to make purchase between 2005 and 2007, when prices were soaring.

The auction process is a way ‘to find truly where the pricing is’, Mr Ponticiello said.

The venture’s first online commercial auction will be for 100,000 square feet of office space in suburban Dayton, Ohio, owned by Procter & Gamble Co. The sale, set for Oct 15, includes two four-storey office towers that housed the company’s food division, he said.

HSR – Striving to provide the best for the staff

Source : Business Times – 28 Jul 2009

ON the outside of the building that houses HSR International Realtors, a sign reads ‘HSR Property, the #1 real estate group and largest real estate company in Singapore’. Inside the 80,000-square-foot compound in Toa Payoh is a karaoke lounge, games corner, spa, gymnasium, billiard tables, coffee tables and shades dotted around an open area for alfresco dining.

The provision of such elaborate amenities is to remind staff to take a break and achieve work-life balance. ‘HSR is not only a workplace to them. It’s like a second home or mini country club. They can bring their family members along and enjoy our facilities,’ says the company’s CEO, Patrick Liew.

A winner of the Enterprise 50 Award last year, HSR was founded as Hap Seng Realty by Lau Gek Poh and Helen Lau, with Kellie Lim the first executive director. It was renamed HSR in 1992.

Apart from the recreational facilities, the HSR building houses various subsidiaries which together provide a one-stop solution for real estate advisers and clients. For example, HSR advisers can print their flyers at the printing company while HSR clients can use interior design company Paxel to beautify their properties – all on the premises.

The focus on staff is pertinent in an industry where it is common for agents to switch to competing companies. This was exactly what caused HSR to hit a low in 2002-2003.

‘Our management team left suddenly, and it dawned on us that for a company to flourish it is important to have people who have a sense of belonging and loyalty,’ says Mr Liew. ‘We are not just property agents. We see ourselves as advisers, providing the best advice for our clients. That is why we strive to provide the best for our staff. If we sincerely mean well, they will stay with us. It’s not just about profits – it’s about creating a better life for our people, and that will make them want to contribute.’

This strategy contributed to a six-fold increase in sales between 2004 and 2007 to $300 million. In 2007, the group netted a profit of some $5 million. According to the company, it has 41 per cent of the private resale markets – residential, commercial and industrial – and 36 per cent of the HDB resale market.

Other than a conducive environment, HSR is big on getting the best out of its people through education. Advisers can choose from a range of more than 30 courses. ‘We see every one of our people as an F1 racing car,’ says Mr Liew. ‘Our job is to create a championship track for these racing cars to move further and faster.’

Staff with top sales records undergo in-house training courses to be recognised as trainers. And through training, they share their rich sales experience with fellow advisers.

All HSR advisers have to go through a continuous 20-hour boot camp. Beyond this, each can choose to sign up for other HSR courses that interest them. Courses are revised regularly, depending on the market conditions. ‘When the market was booming, we set up leadership courses to help our advisers lead their teams better,’ says Mr Liew. ‘When the market is down, we set up negotiation courses to help our advisers work with clients to close their deals more readily. One of our goals is to make sure our advisers attend at least six hours’ training per week.’

HSR’s training is backed up by a guaranteed income plan. ‘If our advisers are not performing well, it means that we have not done a good job coaching them and we will compensate them,’ Mr Liew says. ‘We put our money where our mouth is.’

Besides courses, HSR has created an award-winning SMART Plus technology system to assist its advisers. This is a Web-based sales management system that allows advisers to match suitable buyers with sellers, and facilitates course enrolment and in-house communications. HSR says it is the only player in the industry that has implemented such a system. Human error in transactions has been minimised, while transaction processing has accelerated. The SMART Plus system also makes it quick and easy to monitor and assess the sales performance of the company’s 8,000-plus advisers.

Advisers are also kept in the company loop through a monthly letter. As a part of its philosophy, HSR takes pride in its corporate social responsibility initiatives.

In 2007, it raised $50,000 by organising Glass-a-thon, when a record was set for the most number of people walking on broken glass. Some 521 HSR advisers created another national record by breaking arrows on their throats to help raise money for the President’s Charity Challenge.

All HSR advisers are also given three days’ additional leave to do charity work. Besides enhancing HSR’s efforts to give back to society, this helps bond HSR advisers with one and the company.

In the midst of recent public frustration over dodgy real estate practices, HSR was very much unfazed.

‘Every HSR adviser carries a Code of Honour with them everywhere they go. They recite it every time before a meeting or training course starts. Our advisers want to promote and protect our client’s best interest in whatever they do,’ says Mr Liew. The golden rule in the code is: ‘I will do to others what I want others to do to me. I will not do to others what I do not want others to do to me.’

Mr Liew speaks plainly: ‘If an unethical adviser breaches this code, we will not hesitate to turn them in to the authorities.’

The writers are students of the NUS Business School

Here’s a house – and a $50k mattress

Source : Business Times – 24 Jul 2009

Hersing Corporation’s Harry Chua does not want to sell you just a house – he wants to sell you a mattress along with it, as well.

Two months after Hersing’s quiet opening of the Dozz Mattress showroom at its headquarters in Toa Payoh, the holding company of real estate agency ERA is going for gold.

At a private launch today with guests from the Ferrari and Lamborghini jet-set, it will be launching a mattress with a 22-carat gold cover from Italian brand Magniflex that will cost as much as $50,000.

This new venture will sit alongside Hersing’s eclectic assortment of dealings in the real estate, storage and money transfer industries.

In 2003, Hersing – which holds the local franchises for property broker ERA and remittance agency Western Union – set up a wholly-owned self storage firm, Storhub, which has since grown to five locations in Singapore.

To Jack Chua, Hersing’s president, the group’s move into mattresses makes perfect sense. ‘After buying a house, the customer needs a mattress. We’re just providing them with a customer service,’ he said.

With 18 mattress brands, the showroom has seen a 30 per cent increase in monthly revenue since its soft launch in May.

The group expects the showroom to break even this month, according to Hersing’s founder and chairman Harry Chua.

The latest feather in its cap where the mattress business is concerned is Hersing’s clinching of the exclusive distributor rights for the Magniflex brand for South-east Asia.

The group is currently looking into the mega-retail mattress store concept for its foray into the rest of Asia.

While $50,000 will get buyers a super king-sized Magniflex Gold – a personalised mattress with gold thread in its cover – normal Magniflex mattresses also retail at the showroom from a less eye-widening $1,298.

To date, more than 100 units of the Magniflex Gold have been moved globally, with the gold thread being touted for its anti-bacterial and anti-static qualities.

Despite the current downturn, Mr Harry Chua is unperturbed by the prospect of offering the Rolls Royce of mattresses to the Ferrari-owning crowd.

‘If you can pay a million dollars for a car, what is $50,000 for a mattress in which you spend eight hours a day? I think we will do very well. As well as Storhub,’ he said.

With the financial market currently displaying volatility, perhaps the monied classes can be persuaded to put their money in mattresses instead of under them.

Agency sorry property details were revealed

I refer to Ms Eve Tan’s letter last Sunday, ‘Agency revealed unit number, price’.

We have since replied and apologised to Ms Tan for any inconvenience caused.

It was not our intention to have such details for use by our associates as a form of publicity. The information on the transaction was recorded in our database solely for our associates’ reference and was not meant for public circulation.

We have since undertaken steps to ensure that transactional details are kept private and confidential in order to safeguard the interests of both buyer and seller.

At the same time, we have also reminded our associates not to publish such information in future.

Angelina Lim (Ms)
Assistant Manager
Corporate Communications
DTZ

Prevent private info from falling into wrong hands

We are one of the many ‘victims’ of cold calls made by property agents, and the calls have become more frequent in recent weeks, possibly because of the economic downturn.

When we demanded to know how they obtained our personal particulars, the agents told us that we are in their ‘yellow pages’, where the personal particulars of new residential owners or existing ones are ‘bought and collated’ by a private company, which in turn sells them to property agencies.

It seems that our particulars were purchased for a mere $1.60. Our residential telephone number is listed as private, yet the agents were able to obtain it.

We understand that lawyers need to file new owners’ particulars when they lodge a caveat. The particulars then become public information accessible on the Internet.

But is there any way the relevant authorities can help to prevent such information from falling into the hands of companies which are making big bucks at the expense of invading the privacy of home owners?

Doesn’t the Institute of Estate Agents have a code of conduct requiring its members not to ‘harass’ new or existing home owners by making cold calls?

Shung Lai Lin (Mrs)

Source : Sunday Times – 24 May 2009

Agency revealed unit number, price

I recently sold my property through DTZ.

Early this month, I was very upset when I received a flyer which stated the condominium developments, unit numbers and exact transaction prices of properties transacted by the company in the East Coast area. My unit at One Amber, #xx-0x, and the transaction price were at the top of the list.

I wrote immediately to DTZ and complained about the agents who had publicly distributed the details of my unit number and exact sale price.

I have yet to receive a reply.

Such information should be confidential and not made public, much less advertised and distributed freely.

By contrast, the Urban Redevelopment Authority’s two online services, Prices Of Units Sold In Private Residential Properties and Private Residential Property Transactions With Caveats Lodged, respect the privacy of both seller and buyer by not revealing the address or the transaction price.

Eve Tan (Ms)

Source : Sunday Times – 24 May 2009

Agency revealed unit number, price

I recently sold my property through DTZ.

Early this month, I was very upset when I received a flyer which stated the condominium developments, unit numbers and exact transaction prices of properties transacted by the company in the East Coast area. My unit at One Amber, #xx-0x, and the transaction price were at the top of the list.

I wrote immediately to DTZ and complained about the agents who had publicly distributed the details of my unit number and exact sale price.

I have yet to receive a reply.

Such information should be confidential and not made public, much less advertised and distributed freely.

By contrast, the Urban Redevelopment Authority’s two online services, Prices Of Units Sold In Private Residential Properties and Private Residential Property Transactions With Caveats Lodged, respect the privacy of both seller and buyer by not revealing the address or the transaction price.

Eve Tan (Ms)

Source : Sunday Times – 24 May 2009