Patrick Liew, CEO of HSR Property Group,The leader of the pack
Posted by Singapore Property Match on November 16, 2009
The leader of the pack
One of Singapore’s most driven entrepreneurs, Patrick Liew has a long list of achievements and awards to his name. At the beginning of his career his was the youngest management committee member of Siemans Nixdorf, before being headhunted by Dow Jones Telerate to head up their sales and marketing in Singapore. He then joined the Gartner Group as regional director, before joining HSR and making it the largest real estate agency in Singapore, employing over 8,000 agents. Along the way he has picked up a slew of awards including Global Leader Award, Asia Brand Leadership Award, Top Entrepreneur Award and the Entrepreneur of the Year for Social Contribution Award. So what makes him tick?
“About 17 years ago I was standing in my office in Shenton Way, admiring the sea view and I had an epiphany,” he says. “I realised I was not getting anywhere. I was earning good money, but not enough to have freedom of lifestyle and freedom of choice, so I decided to sack my boss. I didn’t want to go back to a job – I wanted to be an entrepreneur. I could have gone back to the technology business, but you need financial backers; I could have gone into banking and finance, but you need a lot of connections. Then I happened across a report by the University of Singapore, which found that people in real estate make some of the top incomes in Singapore; certainly more money than doctors, lawyers, accountants or engineers. The Straits Times also did a report on how people become millionaires in Singapore and they discovered that 90 per cent of millionaires became so directly or indirectly because of real estate. I saw an opportunity so I jumped into the market”
The opportunity perhaps wasn’t as straightforward as he imagined, however, as by his own admission Liew lost a six figure sum during his first 12 months in the business. He takes a sanguine view now of his one time status as ’the greatest failure in the history of real estate’ and attributes the loss to a combination of over-confidence, spending too much on advertising, chasing deals that were too big and doing business with the wrong people.
“It was in my second year that my feet finally touched the ground,” he says. “My counsel to anyone entering the industry now is that it doesn’t matter where you come from, what your background is or what your achievements are, when you join the industry you need to start with a clear mind and accept that you’ve got to learn new knowledge, new skills, new attributes and new habits and be prepared to start all over again.”
Now he has been in the business for over 17 years, Liew cites technology as the main driver of change in the industry and one of the most important factors in the development of HSR. He believes that being technology driven is a crucial factor in ensuring survival in the property business and has six full time programmers and developers on staff to help HSR maintain its edge. This investment paid off when the company was awarded two major tech awards for its SMART Plus web-based sales management system from the Infocom Development Authority and the Singapore Infocomm Technology Federation.
“Globalisation has had a tremendous impact on this business,” he says. “Whatever you do, you have to see from a global perspective. HSR is moving to sell property from all over the world. It’s the seven C’s: you need to have Career, Cash, Credit card, Condominium, Car, Country club and finally you need to have a Cross border investment. We’re coming to a point where Singaporeans are saying, I want that lifestyle, I want a second home overseas, I need to diversify my portfolio of investments. I am positioning HSR so we can be a bridge to this new world. We’re beginning to see more sophisticated competitors coming into the industry, which is good as it’s driving us to be better than we have always been.”
Although he doesn’t see Malaysia, Australia and New Zealand being supplanted anytime soon as the major destinations for overseas property investments from Singaporeans, Liew thinks that savvy buyers should keep a close eye on the US market.
“My gut feeling is that in the next 12 to 18 months, the American property market will be very attractive to Asians. America is on sale – there’s a lot of distressed property there now. We are helping a private equity group now to try to sell distressed property in Asia and you can get a freehold, free standing bungalow for US$30,000 in rentable condition and you should be able to get between 16 to 18 per cent return. This is an opportunity that won’t last forever.”
Many events have shaped Liew’s business philosophy, including his tough, cash-strapped childhood, conversion to Christianity at 15, keen interest in business literature and seminars and being a practitioner of Thai kickboxing, but the most dramatic is probably his kidnapping in the early 90’s in an Asian country. He won’t say which country it happened in, as he stills does business there, but he will reveal that it was less than three hours’ flight from Singapore.
“They put me in a beautiful bungalow, which according to them was the most prestigious suburb in the country,” he says. “They showed me they had guns – the guy who was watching me was a senior police officer. They all told me that their other cohorts were soldiers – so it was a brilliant idea to get the police, army and a businessman together to run this kidnapping business. I was there on business and taken off the street, purportedly to meet clients. I was held in the bungalow for a week and my life was hanging by a thread. People say you see your life flashing before you and that’s exactly what happened. Every night at 11pm they would push me in a room and ensured all the lights were off, so I had to sit there and think through my life. That’s when I starting rethinking my philosophy and I began to realise that we need a higher purpose, that we all cannot be pursuing personal power, fame, glory and profit. At the end of the day we all have to live for other people and the more we reach out to bless another life, the fuller life we live.”
This philosophy is probably best exemplified at HSR by the company’s strong commitment to charity. The company lays on numerous extras at its campus style offices in Tao Payoh – including childcare, valet parking, spa treatments, a games centre and gourmet food – to keep employees happy and in a giving frame of mind. Staff are then invited to make a monthly donation to one of the three charities HSR has established – Operation Blessing, for humanitarian work, Junior Achievement for teaching children financial literacy and Elderly Outreach, for seniors.
Having over 8,000 agents on the books has allowed the company to become a big player in both the charity world and the property world, though Liew is keen to stress that he doesn’t want to be big just for the sake of it.
“The reason why we want to be the largest is not because quantity is the focus,” he says. “One of our battle cries is that we want to be quantitatively strong but qualitatively superior. To me, you can’t have one without the other. If you’re going to make our world a better home, we have to be large enough and strong enough to do that. In some ways we have leveraged on the fact that we have the largest network of real estate agents in Singapore. We have more buyers and sellers, we have more properties in our database and we have more people to help our clients.”
Though he is wary of making too many market predictions, due to the size of the company and his potential influence on the markets, he does admit to being surprised by the current upturn in the Singapore residential market.
“The current boom surprised many people. It surprises me because I expected a boom, but I did not expect such as steep rise as in the last four months,” he says. “There’s a cultural gap between the Western mindset and the Eastern mindset. In the Western world, you build up a career, save up and when there’s enough money and stability of income, you go and buy a house. Most Singaporeans are born with a key on the tongue, meaning if you ask any child, every one of them will want to own a property and some Singaporeans even get married to own a property. The sentiment for property is very strong. For all these years sentiment has driven the market stronger and faster than the normal economic indicators and the normal supply and demand forces. In the last four months, this sentiment has driven the market. I’m not saying the market should not have recovered, but it should not have recovered as strongly as it has.”
Liew also thinks that now the upturn is underway, prime property in districts nine, ten and eleven and Sentosa will continue to grow in value due to global, rather than local, demand as foreign buyers snap up units as Asia takes centre stage for the next growth cycle. However, his main tip for investing is one sector of the market that is rarely available to foreigners – landed property.
“If your reason for buying is medium- to long-term investment, I’ve always said that landed property is the way to go,” he says. “If you look at the landed property market, the prices have not gone up as dramatically as new developments in most of the other sectors, but there’s probably only about four per cent of freehold landed properties in Singapore, so you are investing in a market that has very limited supply. As Singapore grows to reach our projected 6.5 million people, the Government has to increase the plot ratio, so there’s an opportunity to divide landed properties into freehold condominium plots. I’m particularly fond of old, run-down, dilapidated properties. Singaporeans buy based on what they see. I always tell my friends, don’t buy based on reality, buy based on possibility. As an investor, the worse state a property is in, the happier you should be. You’re going to buy it at a discount and if you work with good interior designers and architects, you can sell it for a good margin of profit.”
He also recommends taking a look at unfashionable areas such as Geylang, which, due to its proximity to the city, its facilities and its low property prices and decent rental returns, can offer good investment opportunities.
“I have taken many contrarian views,” he says. “When everyone is turning left, turn right, when everyone is chasing Marina Bay Residences, I say, maybe we should look at One Shenton. Sometimes when you take a contrarian approach, you find a bigger pot of gold instead of chasing the crowd. When you join the crowd you can have bigger market size, but you have smaller market share.”
