How Dato’ Colin Tan of Hatten Group Built A RM2 Billion Property Empire
There is a twinkle in Dato’ Colin Tan’s eye when he talks about the future. I hear clear excitement in his voice as he discusses industry disruptors and how technology will impact the future of property development. This enthusiasm is perhaps, unsurprising, given that the 34-year-old Singaporean is best known for his visionary work as a catalyst for economic growth and land development in overlooked and underdeveloped sites across Malaysia.
Together with his brother, Dato’ Edwin Tan, Colin’s first foray into the property development scene was in 2004, when they bought an abandoned building site in Malacca, and turned it into Dataran Pahlawan Melaka Megamall (DPMM)—currently the largest and most profitable shopping mall in the state. The youthful duo have since continued their unprecedented success, and their property development arm, Hatten Land (recently listed on the Singapore Stock Exchange’s Catalist board), oversees a list of projects totalling over RM2 billion in market value.
Projected profits after tax for Hatten Group will be RM300 million in FY19, but Colin has his sights set much further and higher. “I hope that I can grow to a point where our revenue exceeds that of Singapore’s GDP”, he shares, while acknowledging that this eventuality might be far off. In spite of his bold aspirations, Colin isn’t just a numbers man–he also has a deeply altruistic side that aims to create social value by impacting the local community. “When we first started Hatten, all I wanted to create was a billion-dollar portfolio, so I could sit back and relax afterwards. But as we grew, I realised I didn’t want to stop. I’ve found a purpose larger than just money—the priority is helping certain communities grow, ensuring that their unique histories and cultures are remembered, even as we add commercial value to the area.”
TEO REN FENG: Hatten Land recently listed on the SGX Catalist board and is looking to grow further with mergers and acquisitions in the near future. Why the move towards rapid expansion?
DATO’ COLIN TAN: The reason we decided to list the company was because we had found ourselves stagnating. Yes, there was year-on-year growth, but looking at factors like cash flow and acreage size, we were still lagging behind. Mergers and acquisitions together with an increase in capital injection will provide us exponential growth, to get to the next stage of development.
REN FENG: You specialise in niche property markets like Malacca, Pahang and Seremban in Malaysia. Wouldn’t that reasonably account for the smaller scale?
DATO’ COLIN: Not necessarily—what we’ve realised is that history, culture and tourism are what will give the place its value, regardless of time and size. This is why we saw value in Malacca when the consensus was that it wasn’t a good area to invest in. Malacca is actually a very historically significant area and used to be the capital of Malaysia, though much of it had been forgotten. So China’s “One Belt, One Road” plan for Asia makes me smile, because the concept is not a new one too. It stems from the old Chinese maritime silk roads first established by Admiral Zheng He. He stopped over in Malacca on 5 out of the 7 voyages he made, and the recent Chinese investments in the state shows just how much they value the land. They’re building a deep-sea port in Malacca, and with better infrastructure, the land value will also rise.
REN FENG: What is your ultimate goal for Hatten Group?
DATO’ COLIN: We’ve been voted among the top 10 developers in Malaysia, which was the goal we had set ourselves in 2013. But as I was telling my staff: recognition is only one of the many factors. I hope that I can grow to a point where Hatten’s revenue is larger than Singapore’s GDP. It’s obviously a far-off eventuality, but as long as I feel that I am adding value in what I do, I’m going to keep at it.
REN FENG: What do you mean by “adding value”?
DATO’ COLIN: Besides innovation and integrity, value-creation is what I want to be known for in the minds of our stakeholders and the public. The first question we ask when deciding whether to venture into a new area is if we can create value by contributing in one way or another to the various communities and lives there. If not, we won’t go in. Our project has to be welcomed by the local community, be complementary to the local environment and achieve sustainability in the long run. It’s a twist from profit-driven decision-making, but we feel that if you start with this approach, then the profits will follow.
REN FENG: What is your motivation?
DATO’ COLIN: When we first started Hatten, all I wanted to create was a billion-dollar portfolio, so I could sit back and relax. But after we grew, I realised that I didn’t want to stop. I’ve found a purpose larger than just money, even though others might find it hard to believe. [laughs] Just relying on numbers alone really kills the dream because it’s easy to get depressed once you hit your targets.
REN FENG: Has your risk appetite changed too?
DATO’ COLIN: We used to be very big risk-takers, but as we get bigger, the weight is heavier. With DPMM, our very first project, I went in there with almost nothing and gave everything I had for it, even though our choice of site was out of the norm. But now—knock on wood—if I were to go down, we’re talking about the livelihoods of 800 people, so the risks that we take these days have reduced, which is both good and bad, because our moves are much more calculated, albeit slower.
Never get complacent—a good practice which I try to set in our company is to always hold the belief that we are number 2.
REN FENG: How do you keep a competitive edge as you grow and become more established?
DATO’ COLIN: Never get complacent—a good practice which I try to set in our company is to always hold the belief that we are number 2. It is my habit to do constant competitor analysis, no matter how small they may seem, because they might be doing something better which we can learn from.
REN FENG: How do you build brand association and differentiate yourself from the competition?
DATO’ COLIN: Repetition. Part of the reason why we did Hatten Hotel was also because we wanted to have some brand presence that showcased the quality we stand for. Our hotel is priced in the 4-star range, but what we try to provide is the quality and service of a 5-star establishment. When people have a good experience there with us, it reflects back on the properties that we sell, which might convert them into buyers in the future.
REN FENG: Do industry disruptors like Airbnb affect the way you run and develop your properties and hotel?
DATO’ COLIN: Disruptors are only disruptors if you think they are. [laughs] They become favourable when you look at them as opportunities instead, which is what we see. I believe the majority of people who have always stayed in hotels, will keep staying in hotels and are unlikely to use Airbnb. For those who do, what we’ve done is to link up with Airbnb, and give the owners of our serviced apartments the option of renting out their places to them. So instead of only being able to do long-term leases of at least a year, they can now lease their apartment for certain periods and choose to block out dates they want for themselves. The great thing about this is that rental prices are not fixed and can fluctuate in response to demand.
REN FENG: What technologies and trends are you keeping your eye on?
DATO’ COLIN: Personalised technology that study and anticipate your habits and patterns. It’s paired to your phone, so if my wife or I enter the house, the order in which things are turned on will be completely unique to each of us. I think that’s going to be pertinent in the future. I’m also looking into how to globalise property development where you can buy real estate from the comfort of your home. Currently, when we talk about purchasing property, we’re discussing very large sums of money. But can we break it down, so that we can invest say, just $50,000 into purchasing a property? I believe that the rental market is going to be very big—partly because everyone wants novelty nowadays and no one stays put in an area or even in a country for long.
REN FENG: Speaking of novelty, how is Hatten dealing with potential changes and trends in the market?
DATO’ COLIN: My focus now is on development and I’m still figuring out the process since only a portion of the property business can be SOP-ed. You have to be very flexible and creative with the rest, especially since the way we work and operate today is so different from the past. I’m fascinated by how three people working from home can start a billion-dollar company. We’re building a co-working space in Malacca, and what’s unique is that as long as you have a business model, you can approach us for help. We’ll look over these start-ups’ business models and decide if we want to invest in them. It is our way of spurring others to become entrepreneurs and boosting the community.
REN FENG: What’s one of the most meaningful projects that Hatten has initiated in a community?
DATO’ COLIN: We set up a property agency about three years ago, which is targeted at helping those without standard educational qualifications enter the property development market. A good number of Malaccans and Malaysians lack basic secondary school qualifications, and eventually fall by the wayside, socially and economically. This property-selling arm of ours hires those in this category, regardless of educational background, just so long as they can market themselves and sell. At a recent dinner party for the staff, one of them shared about how it was hard growing up, because his parents could only afford to rent a room in a relative’s house to live in. Friends and family used to look down on their situation. Recently, he’s been able to buy a house for his family after working with us for 2 years, and hearing about such experiences motivates me. As we grow bigger, there are greater opportunities to educate others and contribute to various communities.
From past experience, I’ve learnt that if I’m too soft, it spoils the whole team.
REN FENG: What is the single most important leadership lesson that you’ve learnt?
DATO’ COLIN: The importance of having EQ. People management is definitely the key to success as a leader. Like flying a kite, you need to know when to let go and when to rein it in—depending on the situation and individual. From past experience, I’ve learnt that if I’m too soft, it spoils the whole team.
REN FENG: What about your hardest lesson?
DATO’ COLIN: Learning to manage my emotions when it comes to our staff. I’ve had to make hard decisions affecting one or two individuals and it’s always very difficult for me because it’s not simply about business—I’m okay with losing RM10 million on a project, it’s just numbers—but about the people. Employees leaving us also used to upset me a lot; I considered them part of the family and had a lot of regard for our personal relationships.
REN FENG: How have you learnt to cope with this?
DATO’ COLIN: It’s really a rollercoaster of emotions. Sometimes when certain things happen, you think to yourself: I’m going to be stronger next time and learn to put my feelings aside. But is that what life’s really about? I choose to believe in being good and kind—hopefully, the laws of attraction will bring like-minded people into my life.
REN FENG: What do you think is the biggest contributing factor to your success?
DATO’ COLIN: Perseverance. Look at Facebook and think of the many naysayers who claimed that they would never make any money. If they had chosen to believe otherwise, they wouldn’t be where they are today. As long as a leader perseveres, there really isn’t anything stopping them from achieving success.
This interview is part of Influential Brands® Top CEO of the Year series, which recognises and profiles a select group of CEOs who are exemplary in 5 areas; Brand Leadership, Brand Expansion, Financial Performance, Innovation and Personal Integrity.
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