While many consider cleaning services to be unattractive business ventures, Savills Singapore sees it as an added benefit to its facilities-related services. This is why it acquired an overwhelming share in Absolute Maintenance Services (AMS) which is a 20-year-old cleaning and sanitising service provider in September.
Lentor Hills Residences enbloc has a total site area of about 17,100 square metres (sq m) with a maximum Gross Floor Area (GFA) of 60,480 sq m. It is expected to house 595 residential units.
The deal will take Savills from the top 10 spot among facilities services providers , to in the top 5. “We want to be the sole international service provider within the top three companies within Singapore,” says Chris Marriott, Savills Southeast Asia CEO.
Over the past 10 years, Savills has been building its property management integrated facilities management and facilities management businesses in Singapore. “Combined we’re hoping that the turnover of the entire property administration business could exceed $100 million by the end of next calendar year.” adds Marriott.
He is hoping to replicate the strategy and strategy in Singapore across the region. After being living in Asia since 1990 and working for Savills from 1995 onwards, Marriott is a native of Hong Kong and Singapore. With his headquarters in Singapore currently, he is in charge of Savills’ entire operations throughout Southeast Asia.
“I’ve always believed that in Asia we’ve faced the challenges of food and famine in a way that is more than the Western world. Whether that’s because of an Asian Financial Crisis, the dotcom boom and bust, Covid or property cooling measures,” says Marriott. “We’ve been required to be flexible in how we conduct our business. This requires a strong plan that is able to withstand the volatility and highs that occur in real estate market.”
Counterbalance
In contrast to the transient nature of the agency business, which is known to be volatile, Savills is building up its regular income via contracts-based companies, also known as “perennials” according to Marriott. For Savills this began with the purchase of CKH the Strata Management company which was founded in 2011 by Chan Kok Hong, with the beginning stake of just 51% in 2011.
Since since then, CKH Strata Management has been integrated into Savills’ property management business with Chan managing director Chan managing director. It’s currently the largest strata property manager in Singapore having a portfolio of more than 160 strata titles of the management corporation (MCST) properties that comprise around 50k housing units. Winnie Wong who is the deputy director for Savills property management has set out to increase this portfolio up to 200 properties that will have more than 60,000 units.
In addition to its residential strata management, Savills is also growing in the industrial and commercial area, in both single-ownership as well as strata-titled properties like Orchard Gateway and 20 Collyer Quay. This business line is led by Tang Chee Charn, executive director of Savills property management. Tang has joined Savills following his departure from Colliers just two years back, and was the last director for property management.
A key component of Savills general property managing business Facilities management, as well as its facilities management services, which is led by the executive director Robin Leow. Some of Savills facilities management customers are Bank of East Asia and Visa corporate offices.
Leow was integral in the acquisition of AMS that provides cleaning and facilities services for industrial and commercial warehouses, industrial kitchens, and institutions. The clients of AMS comprise those from the Building and Construction Authority, Singapore Press Holdings and Fullerton Bay Hotel. The company that AMS’s sister, Solute, a professional house cleaning company was acquired by AMS.
Other acquisitions
Since January 1, Savills bought a large stake of Singapore-based company that provides project management services Merx Group. It was founded in 2001 and is headed by Chief Executive Officer William Forwood, Merx has 50 employees across Asia and covers a range of industries including data centres, workplaces hotel, industrial, and retail.
Recent projects carried out for Merx in Singapore includes the renovation of Dyson’s 148,000 square feet headquarters in the St James Power Station heritage building, as well as Axis Communications’ regional office with an area of 11,484 square feet Grade-A office space in Suntec City Tower 1. Another major undertaking was Metrojet’s automated aerospace plant in Clark situated in the Philippines.
“Merx is the keystone to expanding our region’s services for managing projects,” says Marriott. Merx’s operations have been seamlessly integrated to Savills”, Forwood, regional lead for project management, is “actively trying to expand our reach across Southeast Asia and the rest of the Asia Pacific region”, Marriott says.
According to Marriott Merx, the company’s services complement Savills Project Management Services which is led by Vincent Lau, which handled the office fitting-out process for Lazada in its brand new office space of 109,000 square feet on four floors in Lazada One located in Bras Basah and KPMG’s brand new office in Asia Square Tower 2.
The company was formed in July of 2021. Savills bought a strategic stake in the Malaysian supply chain consultancy agency, LCA. It is now rebranded as LCA-Savills. The consultancy for logistics and supply chain company has a footprint across the region. “This firm has allowed us an opportunity to sit at the boardroom at the table with the C-suite comprising manufacturers, distributors, e-retailers and logistics companies, to provide them with advice on their logistics and real estate strategies for regions,” Marriott says. Marriott.
To expand its property management company, Savills spent $650,000 on an “re-engineering program” which takes two years finish. “We’ve hired consultants to assist us with the digitization and digitalisation of our services,” says Marriott. “It’s not just about introducing new technologies and applications, but rather about streamlining our service to make it more efficient and adaptable. It addresses the issues which every business in Singapore has to face and that is staff -both in the corporate headquarters as well as in the field.”
Replicating recurring income businesses in the region
Outside of Singapore, Savills is expanding its recurring income business model to the other regions of the. It’s starting with Vietnam where the firm has more than 2,500 employees within Hanoi, Ho Chi Minh City and Danang and manages 140 buildings throughout Vietnam and is mainly residential. The company is now attempting to expand into commercial with several buildings under the management of assets.
“The Vietnam market is ahead of others emerging economies,” says Marriott. “It’s active, innovative and has adopted technology in many areas in business.”
The firm also increased its property management business to Thailand in addition to Malaysia. For Indonesia, Savills bought a controlling stake in CBI which is an Indonesian property management company which was previously an affiliate of the Coldwell Banker franchise.
Savills made a splash on the island of Indonesia by being chosen as the sole representative to Rajawali Place, a mixed-use development that includes two towers that include the 65-story St Regis Jakarta Hotel and the 30-storey Rajawali Place office tower. The office tower is an area that is lettable of 455,900 square feet. It also has 26,049 square feet in retail spaces. This mixed-use project was finished in the 3rd quarter of 2022 and is located on a 62.937 square feet site that faces West Setia Budi Reservoir in Setiabudi, Jakarta, Indonesia.
Along with Savills Proptech Investment company Grosvenor Hill Ventures, Marriott is looking to invest in new technologies that will enhance its real property business. In the year 2019, Savills teamed up with HomeClick to launch iCondo which is an online management system for residential residents. It allows residents to connect with building managers as well as facilities in the development.
Based on Marriott, iCondo now dominates in its market within Singapore and is looking to expand its reach with Savills to the remainder of the region which includes Indonesia, Vietnam and Thailand.
Savills is also investing in, and worked closely with Banco an invoice financing service that aids SMEs within the property management industry. “A majority of SMEs are plagued by problems with cashflow, and have to perform their work before they get paid,” notes Marriott. “And it’s extremely costly to access traditional banks to fund the cashflow gap that is usually over an adolescent two-to-three-month time. They therefore use factors.” Banco is therefore designed to enable small- and medium-sized businesses to obtain financing that is less expensive, according to Marriott.
Agency business
In addition to the agency’s operations, there is Sally Tan, who came to the company in April, in the role of Savills Singapore’s director for commercial and industrial leasing. Tan is responsible for the expansion of the company’s leasing and sales business capability in the industrial and office sectors.
Based on Marcus Loo, CEO of Savills Singapore, the firm provides advice to the e-commerce giant Lazada along with its owner firm Alibaba about their residential property needs in Singapore and other cities in the region.
Other noteworthy office leasing clients that the firm has been able to represent in recent times include multinational financial services firms like UBS, Allianz and EFG Bank and the world’s largest engineering company Howden as well as the electronic consumer giant Samsung and the international law firm of British-American origin Norton Rose Fulbright; and the most recent, multi-national professional services firm KPMG. “We assist a number of our clients throughout the region, and not just in Singapore since a large portion of the decision-makers in the region are located in Singapore,” says Loo.
Savills the capital markets and investment division, which is headed by Jeremy Lake and Galven Tan is also completing a variety of significant market transactions like selling Tanglin Shopping Centre for $868 million in February of this year, and the auction of the privately owned freehold sites in Thiam Siew Avenue for $815 million in November. The team also has advised institutional investors on the most important commercial properties, shophouses, and strata-titled commercial properties and Good Class Bungalows as noted by Loo.
Hybrid working is being a trend and many companies are experiencing “right-sizing” currently, Loo observes. This is why the need for a workplace strategy team is crucial: “Our team will assess what is most effective for a company from a real estate standpoint,” says Loo. “It is not about the cost of living, but rather about what the company requires to determine the best workplace model.”
In addition to offering workplace strategy consulting services to companies, Savills has also created the workthere.com online platform that serves as an aggregater of all co-working spaces located in Singapore. Additionally, there are Savills leasing agents in place to assist users in finding the best co-working space that will best suit their needs, says Loo. “The market offers a vast variety of companies and can become complicated for the user,” says Loo. “So we assist them in reducing the different options, taking off all frills, so that they are aware of what they’re getting on the amount they pay in terms of membership charges.”
Portal for landlord-tenant livethere.com
A potential alternative against workthere.com is livethere.com which is a private platform that connects landlords of residential properties and tenants via an online portal. “We have seen more multi-property owners purchasing properties to invest or for their children’s future,” Loo says. Loo. This means there’s an imperative to help to get “the highest yield” on their investment properties Loo says.
Livethere.com which was founded in April in the year that is now live, links landlords with potential tenants . They will be able to view the available residential properties that are available for lease and the rental rates they are asking for. To landlords, this platform aids them in managing their portfolios, and warning them six months in advance of when leases for their properties expire. It also lets them evaluate their rent rates and yields with respect to most recent rate of rent and market yields. This helps them negotiate a new lease with the tenant who is currently in place when the lease is renewed, according to Loo. This provides the landlord with “a comprehensive perspective” regarding the residential investments in his portfolio, he says.
Since livethere.com began operations in April, it’s received between 300 and 400 inquiries every month, as per Loo. It’s also beneficial for tenants since they’ll be able to narrow down and evaluate the various properties that meet their needs and their preferred location. “Because the supply is extremely tight within the housing market lots of expatriates are looking to find a place prior to arriving to Singapore,” he says. “So livethere.com aids newcomers and those who are planning to relocate to Singapore, both Singaporeans as well as expatriates.”
A further service offered under livethere.com can be that Savills Residential leasing agents can also assist tenants negotiate with landlords, says Loo.
Livethere.com is a livethere.com website was born from Savills reputation as the most prestigious estate-owned strata-titled property management company in Singapore as per Loo. In addition, to overseeing the property, MCST Council members as well as residents often request Savills’ property managers if they are able to assist with different aspects related to the estate he says.
Savills Singapore has close to 600 people within the property staff management. In addition to the AMS business, which employs more than 1,600 employees, Savills’ total headcount for the property management business in generalwhich comprises facilities management as well as facilities servicesaround 2200, according to the estimate.
“From my point of view, Savills is no longer simply a transactional and consulting firm,” says Loo. “We have evolved into a company with an effective regular income model which has been enhanced by the digitalization of our business.”
