Kan Kum Wah, Head of Residential Marketing, BFC Development.As plans are being finalised for the launch of the second tower of Marina Bay Residences, Kan Kum Wah explains how the sell-out success of the first tower kick-started Singapore’s current luxury sector boom.
As Head of Residential Marketing for BFC Development, Kan Kum Wah oversaw the record sales of Marina Bay Residences last December. It was the latest major project for Kan, who has nearly 20 years of experience in marketing and launching many of Singapore’s most coveted residential addresses, including Ardmore Park and The Claymore, to key regional markets.Kan joined Knight Frank’s marketing department in 1989, providing consultancy services to major property developers such as City Developments Limited (CDL) and Far East Organisation. In 2004, he was seconded to Knight Frank Indonesia as head of the company’s residential department, managing promotional and marketing campaigns for premium serviced apartments in Mega Kuningan to the Indonesian, Singapore, Hong Kong and China markets. Kan then joined PT Cozmo Internasional, a leading Indonesian property developer, as Director of Marketing, Business and Project Development.
BFC Development BFC Development Pte Ltd is a joint venture between Cheung Kong Holdings, Hongkong Land and Keppel Land, focused on the development of the Marina Bay Residences and the Marina Bay Financial Centre on a 3.55-hectare site in Singapore’s new ‘downtown’. Phase One is set to be completed in 2010 and will include a 55-storey residential apartment building, 244,000sqm of office space, and retail and recreational facilities. Plans for Phase Two, which will include more commercial and residential elements to be completed in 2011, will be announced later this year.
How did Keppel Land, Cheung Kong Holdings and Hongkong Land decide to come together to buy the site in Marina Bay?In 2002-03, the property market was still very slow. This prime site was released for tender and the three developers were all interested, but were not certain of the market. Any of them could handle the project alone, but they teamed up to mitigate some risk because the market was not healthy at the time. The economy was quite stagnant and everyone was waiting to see what would happen, and that’s why they went in together and bid almost S$1 billion for the land. Once we were awarded the land, the master planning started with KPF (Kohn Pedersen Fox). We were all just hoping the project would take off, and it did.
What assets and attractions in Marina Bay were the developers aware of at the time?At that point, the URA (Urban Redevelopment Authority) had given a vision for Marina Bay, but nobody knew then the gaming licences were coming (they were announced in April 2005). The new downtown had been clearly identified and the URA had its blueprints, but how far and how well it was going to be developed was an unknown.
How did you feel in May 2006 when you found out Marina Bay Sands would be a neighbour of Marina Bay Residences?It was a pleasant surprise. After all, we had gone into virgin territory. I mean, The Sail launched its second tower at the end of 2005, selling for just over S$1,000psf, and in December 2006, we launched the first tower of Marina Bay Residences, which sold on average at S$1,900psf. That’s almost a 100% jump, which nobody could have predicted. You could have said Christmas came early for the developers, but it was never meant to be like that. We were never meant to be greedy. We were happy with a certain amount of profit and are prepared to share the rest with consumers.
Aside from the profits, Marina Bay Sands and all the other new attractions in the area, like the Singapore Flyer, are all positives for prospective residents. How do you spread such news to overseas markets?We have a very good PR campaign run by Baldwin Boyle Shand, along with our internal marcom team. The experience of the three developers showed in the success of this launch, because we all understood how important it was to communicate with our market. A lot of times, insufficient information is given to buyers and we don’t want consumers to second guess what’s coming up. We embarked on a very thorough communication process, by having journalists brought from Hong Kong, the Jakarta Post, and so on. I also went to Jakarta to talk to the media. So, we were able to spread awareness much faster and that’s where we gave ourselves a competitive advantage.
Were you expecting a large number of foreign buyers?Traditionally, Singapore developers always go after two markets, Indonesia and Hong Kong. We were just following that tradition. But we knew there would be a high amount of foreign interest, so the intention was to get the best buyers, globally, to participate in this project. This is for buyers with deep pockets. Most of them know what they really want, so there’s not much need for an introduction except to reassure them of the quality. That’s the part we were doing, because the location was already there.
Generally, what are the different requests between a buyer from Hong Kong and a buyer from Jakarta?People in Hong Kong will always ask, ‘What’s my upside?’ For Jakarta buyers, as they’re so close to Singapore, they’ll ask about the tenure of the land. This is leasehold land (99 years). At the same time, they always ask, ‘Are we close to Orchard Road?’ You have to explain in more detail. In Hong Kong, you explain that we’re equivalent to being in Central (in Hong Kong) or Canary Wharf, in London.
The location of the casino beside Marina Bay Sands must have been a major attraction.
Asians like gambling, so by announcing Sands, it gave us a lot of mileage. It does help us push the marketing to the next level.
Of the 428 units sold, 40% were bought by foreigners. Aside from Hong Kong and Indonesia, where did buyers come from?We have buyers from Malaysia, the Middle East, India, UK and the US. We also sold eight apartments to mainland Chinese and two to Taiwan, so I think we really had a good spread. Most of them already have a home in Singapore or investments in Singapore, so for them it’s an additional home or an additional piece of investment.
What was the nationality about the buyer of the three-storey, 11,000sqft Über Penthouse?He’s an Asian buyer who’s very familiar with Singapore properties. That’s all I can say.
What’s your opinion on the amount of speculators who bought into Marina Bay Residences?Most of the buyers are still holding on to their units. I’d say 10-15% of units have changed hands, so the speculation factor is not as high as some people thought it was. The speculative issue has been addressed by the current government, but it doesn’t want to discourage the current property market, as most speculation is focused on the high-end market. Most of these buyers can afford it and know what they’re doing. I think we’re in a very controlled environment. The banks are very careful with their lending, and they assess the risks for potential buyers. Speculation has not filtered down to the mass market.
You’ve said December is not usually a good time to launch because many people go on holiday. So, how did you sell 428 units in three days?I think the market was ‘ready’ for us and as a marketing team, we decided it was time to launch, so we did. If you’re really keen on the property, you’ll book your holidays around the launch! The quality and workmanship was evident in the showflat, the three developers have established reputations, so the most common question was about the timing of the next phase: ‘When can we get another flat?’
The prices certainly made headlines.
We averaged S$1,900psf, but we peaked at between S$3,450-S$3,500 for a penthouse unit. The Über Penthouse sold for over S$28 million.
Yet, considering how the market has since risen, do you sometimes think, ‘If only we’d waited …’
Ha ha. I think Marina Bay unleashed the potential in the Singapore market and brought back the confidence of the real estate market. Everyone was holding back, thinking whether real estate was worth considering, and finally they said, ‘Yes’, and that’s when all the rest of the buying came along. There are no regrets from the shareholders, as we had a base price, we achieved our objectives, everybody was happy. Sure, six months down the line, the market booms, but we don’t look back. Also, we must share our gains with our buyers, because if the market downturns, they will suffer. It’s a two-edged sword. We have no regrets launching at the price we did, as all our consumers have made money.
You’ve set a provisional target of launching the second residential tower by the end of the year. Physically, how will it differ from the first?We’re looking at a bigger building, with about 250 larger units, a mix of three and four bedrooms. We expect to build close to the allowable maximum height of 250m, whereas the first tower was 239m high and 55 storeys. However, I can say now that we’re not here to set record prices. We want to sell it as quickly as possible, but we don’t want to set a timeline target. We’ll let the market decide, as we don’t know what it will be like in a few months’ time.
Why have you chosen to speak at September’s China International Luxury Property Show in Shanghai?China is now a very global market that one has to visit. For the first phase, we didn’t have the chance to go to China and talk to our customers there, so we’re making full use of this opening. This is not limited to Chinese buyers because Shanghai is a global city. When we sold tower one, we sold all the units at our launch Singapore, so that’s why we want to market more overseas and do more sales overseas. We’re looking at all possibilities.
The luxury sector has evolved a lot in the last six months, with the advent of ‘super-luxury’, such as pools on every balcony. Will it be harder to pitch Marina Bay Residences as ‘luxury’ in light of more boutique developments?We have upgraded our plans a lot in terms of quality, security, kitchenware and so on. For this level of buyer, you have to provide such quality. The buyers are more educated now, definitely, but we also don’t want to go through a stage where we’re creating things that are extravagant, where people may not feel the need for it. We are addressing what we call the expected quality but not over-killing it.
The Marina Bay Residences will stand beside the Marina Bay Financial Centre, which is already filling up with future tenants. What kind of environment can buyers of Marina Bay Residences expect to be living in? We expect about 50,000 office workers in the office towers when the second phase is complete in 2011 and 2012. By then, the new MRT line should be operational, with the Landmark station below the office towers and Bayfront station by Marina Bay Sands. In fact, the resort should be open by 2009, while our first residential tower should open by the first quarter of 2010. The Sail is set to be up by 2008. New attractions in the Marina Bay area include the Marina Bay Golf Course, which is open, the Singapore Flyer, Clifford Pier, Gardens by the Bay and the Marina Barrage. It’s amazing how much is going on.
Singapore joining next year’s F1 calendar is also good news for Marina Bay residents, who should be able to view parts of the race, and certainly hear it.
F1 is a yearly event, so it’s more geared towards the tourists, but I’m sure owners will expect more friends to stay over! It’s expected to bring a lot of revenue into the area and a lot of vibrancy.
What else will residents be able to see from their windows and balconies?They can see the Singapore Flyer, the nightly fireworks from Sands, the Esplanade, as well as the ‘postcard of Singapore’: the Fullerton and the Merlion. Marina Bay Residences units are generally facing this Marina Bay area or the Straits, across the water to Sentosa and Batam. These are views only money can buy. This is truly the ‘million dollar view’, so it’s really for the exclusive few.
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