For Singapore’s Wealthiest, Land is Riches

IF you’re a member of Singa-pore’s most wealthy club, there’s a good chance you’re also a property tycoon.

Several of Singapore’s richest folks have their wealth rooted in real estate – thanks to a land bank built up mostly in the pre-independence days of Singapore.

Some of this land was bought for agricultural uses for their rubber businesses; in other cases, because the tycoons had the foresight.

Good judgement and luck definitely played a part, as did a measure of risk-taking, as much of this land was bought at an uncertain time in Singapore’s history – way before the economy took off or the population had started to boom. But one thing for sure: land in Singapore was always scarce.

Two names especially stand out as pioneers of Singapore’s private property market: Ng Teng Fong, founder of two corporate empires, Far East Organization in Singapore and the Sino Group in Hong Kong; and Kwek Hong Png, founder of the Hong Leong Group. Both believed in the value of land.

In a 1996 interview with Apple Daily, Ng had said: “If you want to be in the property business, it is not possible to invest in every region. You open the map. If you can’t see the place (because it’s too small) but only the name, that’s the place to invest in … Singapore and Hong Kong are the best examples.”

As for Kwek, he had written in his autobiography: “Where there is land, there is wealth, and wealth opens many avenues.”

Their legacies have continued into the next generation.

In Forbes’s 2015 list of Singapore’s 50 richest, Ng’s two sons, Robert and Philip Ng, top the list with a net wealth of US$8.7 billion (albeit US$4 billion less than a year ago amid the cooldown in both the Singapore and Hong Kong property markets).

They are followed by Kwek Leng Beng, Kwek Hong Png’s elder son and executive chairman of Hong Leong Group and its subsidiary, City Developments (CDL), developer for executive condo The Brownstone EC.

(The four Kwee brothers of the privately-held Pontiac Land as well as father-and-son pair, Raj Kumar & Kishin RK, of property firms Royal Holdings and RB Capital, also made it to the list – in seventh and 10th places respectively.)

In fact, the younger Mr Kwek was once dubbed “Kwek Land Bank” for the group’s considerable real estate holdings in Singapore – in places such as Upper Changi, the Upper Bukit Timah area, and Tomlinson Road – that had been amassed by his late father.

Asked what has happened to the land, a Hong Leong Group spokesman said its landstock of over three million square feet in the Upper Changi Road North area has been developed over the years into projects such as Azalea Park, Ballota Park, Carissa Park, Dahlia Park, Edelweiss Park, Ferraria Park, The Gale and Hedges Park, following the letters of the alphabet. Its latest project there is The Inflora, currently being built. More condo projects are on the cards.

The group’s Upper Bukit Timah land has been developed into various residential parcels, among them Hume Park 1 and 2, Hillview Green, Hillview Heights and Hillview Park.

And on its Upper Tomlinson Road site now stands the St Regis Hotel and Residences.

Another multi-millionaire businessman whose story followed a similar path (although he also delved in other businesses) was Lee Kong Chian.

At the height of the Great Depression in 1930, a cash-rich Lee bought hectares of rubber land at rock-bottom prices while competitors of his Lee Rubber Company were forced to wind up.

These astute businessmen would have accumulated more land if the government had not in 1967 introduced the Land Acquisition Act to buy over private land at less than the full market price.

The government was on the cusp of building a young nation at the time, and needed ready and cheap land for its housing, commercial and industrial projects. It couldn’t afford to have rich old landowners benefiting at the public’s expense, since it needed to ensure that the houses and factories it built were affordable for the people.

Knight Frank Singapore executive chairman Tan Tiong Cheng said: “Even after the acquisition, a few still had leftover land good enough to last generations. Bukit Sembawang, for example, has had more than 70 per cent of its land bank compulsorily acquired since the 1960s, but still had land to develop in the last 50 years. But of course, in recent times, they have also started tendering for state land and private land to do development.

“Other examples of companies or individuals who enjoyed historical land banks as developers are Frasers & Neave, United Engineers, Great Eastern Life, Ngee Ann Kongsi and Shaw Brothers.”

Still, as much as the right confluence of environmental factors helped, much of the individuals’ success was also due to their own entrepreneurial flair.

Associate Professor Sing Tien Foo of the National University of Singapore’s Department of Real Estate said: “They took some risks in joining the market early and enjoyed the first-mover advantage. But they entered at a time when the economy was uncertain. Had Singapore not done well, it would have been a different ending for them.”

Might it still be possible for individuals or developers today to get rich the same way – amassing land and waiting for a surge in its value over time?

Consultants think it unlikely, given the mature state of the property market which would limit how strongly property or land prices can still rise, as well as the rounds of measures implemented in recent years to slow down a runaway market.

These include the qualifying certificate rules, which stipulate that foreign and listed developers have to complete a project and sell all the units within seven years from the date they bought the land.