Published 12 April 2011
The Business Times
Having forged a strong branding for SC Global in Singapore, he aims to scale the business geographically, reports KALPANA RASHIWALA
HAVING attained his vision over the past 10 years for SC Global to become a brand name synonymous with innovative luxury residential developments in Singapore that command a price premium, Simon Cheong is eyeing a bigger playing field.
‘Over the next 10 years, my vision would be to scale our business geographically using the strong branding which SC Global has achieved. We’ve managed to achieve higher premium pricing than the international hotel brands that have put their names on residential projects here and these brands have been around for over 50 years. This speaks volumes for our brand and it’s logical for us to build on this opportunity,’ he said in a recent interview with The Business Times.
However, Mr Cheong, the group’s chairman and CEO, declined to identify the new overseas markets where the SC Global brand could be used. ‘Our goal is for SC Global to be a leader in setting innovation for design and high-end lifestyle living on an international level among the top developers in the world.’
The group has thus far developed high-end projects under the SC Global brand only in Singapore, although it has a presence in Australia and China. Australian unit AVJennings builds middle-market housing. And in China, SC Global has established the Kairong Developments brand to develop middle-income projects in second-tier cities, starting with Shenyang. In the mid to longer term, when the timing is right, however, the group hopes to enter the high-end luxury residential market in first-tier cities such as Shanghai and Beijing.
Back in 2000, when SC Global Developments was floated through a backdoor listing, Mr Cheong had spelt out his vision for the company in an interview with BT: ‘We’re a lifestyle builder, not a commodity builder . . . Our strategy is to develop a brand name for producing innovative quality developments and if the timing is right and if we do the branding right, we should be able to command a premium.’
He seems to have made good on his vision.
Today, his SC Global Developments has emerged as a formidable brand name in Singapore’s high-end residential sector, even copyrighting its taglines such as ‘The Ultimate Living’ and ‘Own the Original’ throughout Asia.
In the past 10 years, the group has innovated marketing concepts and been in the forefront of design thinking, says Mr Cheong. Lincoln Modern, when launched in 2002, was the first all-lofts development in Singapore. The project was the first Asian residential development to bag the Royal Institute of British Architects Award in 2005.
SC Global was the first developer to conduct viewings by appointment only when it began marketing The Ladyhill in 2000, a policy widely adopted by high-end developers today.
The group also has set up its own condo management arm – Seven Palms Resorts Management – to provide its customers quality service. ‘Why do you live in a condo as opposed to a landed home? It’s because of the service,’ says Mr Cheong. ‘We are a homegrown brand. We started from scratch. We have become a known developer in the land of giants basically and with no track record before.’
There are also financial markers of SC Global’s success. Its revenue increased from $4.8 million for FY2000 to $878.3 million for FY2010. For FY2000, it posted a $2.6 million net loss; last year, it achieved a record net profit of $144.2 million. The group’s market capitalisation has risen from $105.4 million in 2000 to $688.6 million in 2010.
Mr Cheong recalls the challenges that SC Global faced in the early days. ‘Nobody knew us as a developer, as a serious developer . . . We started with just one project, The Ladyhill, and then of course the question then was we had nothing, we had no track record, except deal-doing capabilities. In fact, at one time, people were saying you are just deals people; some people were calling me a broker. It was quite challenging,’ he says in the interview at the spanking new clubhouse of the recently completed condo The Marq on Paterson Hill.
‘Real estate development is a really tough business, especially in Singapore where the industry is very mature and yet highly regulated. It requires heavy upfront capital. Along the whole value chain, everyone – from en bloc land sellers, consultants, bankers, contractors and end-buyers – exits first before the developer. Profit-wise, even the end-buyers often make more margin than developers. People forget that in the 1997 Asian Financial Crisis, many developers went under.
‘I didn’t realise how tough it is being a developer. If I had known, I may not have become a developer. I would stick to being a banker.
‘Fortunately, what has made the journey easier is the support from my family, mentors, shareholders, colleagues and friends. I owe a lot to them. No general can win a war alone.’