How CDL built its property empire

we know CDL so well. There's a reason this story has captured the interest of the whole nation and international press as well. Obviously, it's one of the richest and not the richest families in Singapore and everybody loves seeing how the 1% lives. Um, but also CDL is a household name, literally. Yeah, yeah, it is, yeah. It's built some of the biggest properties and developments on our island. Many of you are living

in CDL properties. So on today's edition, we're looking at how CDL built up its legacy and its brand. And we'll continue to monitor where its pricing um goes in the days and weeks ahead, Nicholas Mark is here, Chief Research officer at Property Portal mogul.sg. Nicholas, welcome aboard. Thank you for having me. Do you think CDL is one of the, if not the most prominent developer in Singapore, or would it be Far East? Well, I think uh for a listed developer, it will

be city development. Uh, Far East Organization is another very big real estate developer in Singapore, but they are not listed on the stock exchange. So, um, when we want to look at share prices and so on, um, It will be city development, Capital land, and others who are listed on the SGX. You know, I was looking at how many locations they have and how many countries, and here's what I found. 163 locations in 29 countries and regions. So it's all over the world, Nicholas. It is such a big brand.

Uh, yes, they are. Uh, and of course, they are quite, they are very well diversified, uh, for, for a company, some develop, there are basically two main methods that developers use to generate revenue. First is real estate development, primary residential property. You buy land, build. And sell. And the second one is to own a portfolio of investment properties to rent it out and to earn rental income, such as commercial properties, hospitality and such.

Now city development has a very well diversified portfolio. They do both of these main activities as well, and I think, of course, um. The Ari, which was just launched recently, city development has a stake in it, and that often residential development often captured the headlines and it's also a good branding exercise for the developer as well. Let's talk about some of the most prominent developments um that we know of. I think they've got a long,

long 60 year history in Singapore. Let's talk about some of the more familiar ones. Um, over in the Marina Bay area, the sale, it was, it was Singapore's then tallest residence in the early 2000s, and if I'm not wrong, in the entire plot that was reclaimed, it was like the first building there. When it first came out, there was nothing down there. Yes, yes, correct. $700 per square foot or something like that.

And, and, and not only was it, uh, the amazing thing is that this piece of land was sold through a government land sale program, and it was zoned as a white site. Now, typically, a piece of land that's so near to the Raffles Place, zoned as as a white site, the developer will typically build an office building. Perhaps you have some. Shops and restaurants on the first few stories, but it

will predominantly be office building. But because um the development plans came about in 2003 when there was the SARS epidemic. So we were wondering like, oh, what is city development going to do, because the demand for office space wasn't really that strong, and it was quite brilliant. The company actually Develop it into a high rise apartment, 1,111 units in total.

And so, and this, and when it was launched, it was in 2004, pandemic over, the government announced that we're going to build two IRs, one of them at Marina Bay, and there was a lot of excitement. People want to cash in, how do I profit. How do I capitalize on this new this new concept about an integrated resort? And Tower One of the Sail and Marina was launched in September 2004 at just an average of $950 per square foot, and people snap it up.

People snap it up. That's bay facing, you know, because it's facing the bay, there's no obstruction, nothing. Yes, it was a very new concept, right, uh, to, to have uh residential development in the city area. And of course, subsequently in 2005, 2006, other developers follow suit, um, they redeveloped um. Some of their office buildings, old office building at Shenton Way, redeveloped it as residential development and they sold as like hot cakes because from 2004 to 2008, it was a massive.

So the sale really paved the way for residential in the CBD you would say? I, I'll say it's a pioneer of the area. Let's talk about some of the other big ones for CDL. Yeah, we've got Saint Regis Residences. You've got the equatorial. You've got City Towers. You've also got Lot One Shoppers Mall in Chua Chu Kang. I remember because it was where the hotel was. It was a it was the Hotel Equatorial, wasn't it. So to think about it, they started off building City Plaza in the area.

Yeah, Geylang Paya Lebar area and to see how they've come. I got one better. Which one? 1985 they built Clementi Park Condominium. That's at Sunset Way. This is almost a million square feet. It's, it's gigantic, and I think it's one of the earliest mass condo town areas. I know we didn't prepare you on this one and we didn't tell you we're going to mention it, but, but does this strike a bell, Clementi Park to you? It's freehold. Uh, yes, it does. Now, the, I think you need

to have the developer need to be very big. You need to be trusted by consumers in order to pull off something like that to build condos in Singapore? Is this potentially one of the first condos in Singapore? I'm not sure actually. Um, may not, I'm not sure if it is because we already have non-landed properties and I think it was only subsequently that the that the government start to classify, make a difference between apartments and uh.

Condominiums where condominiums, you know, the land needs to be above 4000 square meters, and you need to have facilities and so on. But it could, yes, I think it could be one of the much earlier ones. I'm, I'm googling it. Apparently the oldest condominium in Singapore is called Beverly Mai, was completed in 1974, built at the cost of $4 million. It was 28 stories and it was at Tomlinson Road. OK. I don't know. That is Novena.

I, I know, I know where it's, uh, near Grange Road. Yeah, yeah. OK, OK. Uh, Nicholas, will this recent family drama between father and son in the boardroom, do you think it's going to slow down any of their current properties being developed? Well, I don't think so. That it might have a bit of a road bomb, but the, the road was, I mean, the vehicle will still go ahead. Um, then it's an ongoing saga, but I think the company will still continue as a going concern. We will still see

it being developed. It's just that perhaps Um, certain major business decisions, uh, might be delayed, uh, but like, for example, land acquisitions, um, but I think that eventually this, this, um, issue will have to be, this family issue will have to be settled one way or another, um, in order for, well, I think for, for all the stakeholders um to be able to uh carry on.

It's interesting when, when I was shopping around, I remember I, I, I interacted a lot of people who also shopping around and they talked about like, oh no, no, if you want quality, you buy the CDL one, right? You know, there was, there was this brand association, there was also this brand association with um green buildings. They have a lot of green mark building um categorization as well. Do you think the brand name in the shop, in the buyer's mind is going to be affected by this?

I don't think so because I I think it still has a lot of city development, the branding still carries a lot of goodwill among Singaporeans and um although if dirty laundry starts being aired, then it changes everything. Uh, no, not really. I don't think so unless it, I don't think this will happen, but in the most unlikely event, if this were to be eventually led to lower quality products being pushed out into the market, then yes, it will have a negative impact, but I highly doubt.

that that will happen. I guess one of the blemishes would be when it lost money in the UK and China. I think it lost something like $1.9 billion with a, with a B, yes. So there must have been quite a severe hit for them because this was just as COVID hit too. Ah yes, I, I, I think that was a big, big, um, bump, uh, big, big road bump there and uh it does, it does also, uh, it did also create um, yes, Friction the family as well as, uh, is also reflected in the decline in

the share price and marketization. We saw that today. They've got some new launches happening. Uh, on their website, they've listed, um, Anson Road, Newport Residences, which is a mixed-use development and by the way, it's freehold, very rare to get a freehold piece right there at Anson Road, and one on Zion Road, which is going to be an integrated development, and that's a 99 year leasehold as well. The new launches, I mean, they've been

in the works for a long time la. It's, it's potentially not going to be affected. No, I don't think so, because you see, the development plans would already have been finalized. Uh, it's just a matter of timing, of course, many things have to come in, getting all the government approvals, uh, making sure that you have all your marketing efforts, everything lined up in order

for it. And the other thing is timing. You see, some developers will also have to wait, uh, also want to time, uh, choose the right. timing to launch their properties at a time when they believe that they are not in direct competition with another project in the same targeting the same market segment or in the same neighborhood, and also they are able to garner enough marketing agents from the big agencies to push

out their projects. What is their strength because they got a couple of shopping centers. Not a lot, not like Far East, which has more I guess in the retail segment. I think they're big on mixed developments as well. Now, now definitely. I, I think previously it was mainly about middle to high-end condominiums. Yes, yes. Uh, but they have also in the past, uh,

developed some mass market condominiums as well. So, so they're quite well diversified, so they can do everything from mass market, all the way up to high-end developments, and they have a wide portfolio of Commercial properties from, like, for example, Republic Plaza to hospitality. Now some developers do not have hospitality, um, like hotels and so on as part of their portfolio they've got

the Millennium. So which is something we want to talk about as well, you know, we've got these different property developers in Singapore, Capital Land, Gaoland. Land lease, ras property as well. Do you think they'll be looking now and saying, oh, this is a good time to take advantage and see whether they can maybe sort of push city debt aside when it comes to projects? I'm not because things are still developing and things are changing every day, right? I mean this, this, um, saga

and so on. I, but I don't think it would make city development vulnerable for uh takeover or, or they will lose their market share. If anything maybe shifts on the board, that's about it. Yes, yes, I, I don't, but when it comes to property development and and land acquisitions, as long as the companies still have the support of the uh of the bankers and also of the other stakeholders, I think they can, you will be. Business as usual in the short term, in the near future.

The Kwek family, pretty much Singapore's richest family and CDR has become Singapore's largest listed property developer back in the late 80s with the market value crossing $2 billion. Then, thank you to Nicholas Mark for joining us. He's chief research officer of PropertyPortalmogul.sg.