0
Thursday,  Aug 17,2017,18:48 (GMT+7)

In good times, prepare for bad times

Ngoc Tran
Wednesday,  Jul 27,2016,00:43 (GMT+7)
Zoom in

Zoom out

Add to Favorites

Print

Send to a friend

In good times, prepare for bad times

Ngoc Tran

Chen Lian Pang, CEO of CapitaLand Vietnam - PHOTO: NGOC TRAN

Chen Lian Pang, CEO of CapitaLand Vietnam, discusses CapitaLand strategy and tactics in the Vietnamese real estate market.

We know you want to expand business here in shopping malls, office buildings, maybe something like Raffles City projects that CapitaLand has done in Singapore and China. Do you have any good locations yet for them?

- Chen Lian Pang: Actually we’re looking to invest more into office and commercial buildings. Of course, we’re also looking at opportunities that we can do a Raffles City in HCMC or Hanoi. We have eight Raffles Cities in China, one in Singapore. Hopefully the 10th will be in Vietnam. So far we don’t have anything concrete. But on the office buildings side there are some opportunities that we are not firm yet, so we can’t do the announcement now. 

Do you have any budget allocation for these?

 - Budget is not an issue. There are no numbers yet. But with good projects and commercially viable ones, whether it’s one billion, two billion Singapore dollars, it’s not a problem. 

 Do you have any strategy right now for this new segment in Vietnam?

 - We’re now 100% residential. We’ll be moving forwards and looking at 50-50. 50% residential, and 50% of our asset should be in  portfolio like office buildings, retail malls.  

Why?

- With these, we’re going to stabilize our income and profit.

You mean that for the residential properties there are cycles.

 - Yes.

What are you predicting?

 - In Vietnam, a real estate cycle is about 7-8 years, peak to peak. The peak should be either last year, or this year.  So there are three or four years more before a market crunch. This is based on the statistics, on history.

Do you have any tactics in order to counter a market crunch?

- We’re moving towards more commercial asset investment, as said. And I always tell my staff, In good times always prepare for bad times. In my mind, I’m constantly preparing. In good times I’m thinking of what I would do in bad times.

But precisely, do you have any plans for that day? Let’s say, in residential properties, will you lower your prices? Will you do a lot of marketing or fire people?

- Of course we do have plans. There are three things we do. One, we increase the acquisition of  commercial assets. The office sector is picking up. It has gone through the worst period. Second, we outsource all the non-critical functions. Maybe we need 500 staff, but now we have only 300 here. Then on the acquisition of residential assets, we have to slow it down. This year, whatever we have to buy, we have to buy it now and launch it in 1.7-1.8 years. Actually, during the last crisis, we have never retrenched any staff. It’s our company policy. We make pay cuts for the senior management, but for juniors – no cuts. My big boss, I think, was cut 30%, I was cut 15%, some were cut 10%. In good times we get good bonuses, in bad times we have to shoulder the responsibility by reducing the cost.

What is the performance of CapitaLand Vietnam in terms of sales for the last six months in the residential sector?

- Last year we achieved 1,200 units. I don’t think the six-month number of units sold is reflective, because we are looking at two new launches in the second half of the year. For six months the sales number is a bit low, but we are going to launch two new projects. With those two projects I think we should be able to achieve at least 1,300-1,400 units.

So how about turnover?

- The sales revenue is going to about 280 million Singapore dollars.

Who are your major buyers?

- Mostly the locals.

Since the Government of Vietnam opened up the market with new regulations for foreigners, have you had some overseas buyers?

- We launched the Verde Vista project twice in Singapore. We sold 120 units in Singapore since July last year.

Why did they buy? It’s an investment?

- Most for investment. Of course, if you compare with this region, the property price in HCMC is still low. Even compared to Malaysia, it is low. Even Thailand, that is still low. Foreign buyers see opportunities that in the long run the property price here definitely has to go up. I think they are looking at three-year, five-year term.

How about paperwork they have to do if they buy here? 

- We’ve just formed a team called Customer Relation Unit. We help foreign buyers with all this paperwork. And it’s free.   

You’ve just received an award “Real Estate Personality of the Year”. What does this mean to you?

When they gave me this award, I was very surprised. I didn’t know why they chose me. It must be many things I’ve done in the past are correct.  But it’s also the effort of my staff, my bosses, my partners. 

What do you like most while living and working here?

- The pace here is not as hectic as in Singapore. All my staff here are very young, very friendly. I enjoy working with them. I enjoy working with my partners as well. We have very good relationship.

What are negative things or obstacles you’ve encountered?

- Laws and rules are not that transparent as compared with Hong Kong and Singapore. It’s harder to do business here. But  I’m sure as we are moving forward they will become more and more transparent.  

Reported by Ngoc Tran

Share with your friends:             
 

Giấy phép Báo điện tử số: 321/GP-BTTT, cấp ngày 26/10/2007
Deputy Editor-in-Chief: Pham Huu Chuong
Managing Editors: Nguyen Van Thang, Huynh Cam Tung
Head Office: 35 Nam Ky Khoi Nghia St., Dist.1, Ho Chi Minh City, Vietnam. Tel: (84.8) 829 5936; Fax: (84.8) 829 4294.
All rights reserved. Developed by Mat Bao Company.