YONG HUI YOW: How’s your day going?
LENY SUPARMAN: It’s been a very hot day. I just had my lunch in a Sichuan restaurant. It’s right next to my office at Beach Road. I brought a client there after a meeting.
YONG HUI: How did Chih Ching and yourself start KOP?
LENY: I’ve been friends with Chih Ching [Ong] for a long time. We actually had another watch business, Bezel, before we started KOP. Bezel was just a part-time hobbyist business when we were still having our full-time jobs. It’s quite typical for a lot of people who hold jobs, yet want to dabble in some sort of business venture. From that experience, we found that we had great chemistry and could work well together.
YONG HUI: Was it easy working with a close friend on a business venture?
LENY: It’s not easy to do business with friends, as they like to say, but from that experience, Chih Ching and I felt we actually could do it. We were a good combination. When I was working in Shanghai, she was a practising lawyer. She was very interested in real estate and had many clients who invested in them, so there were many opportunities where we worked together. It was a matter of time and opportunity, and I felt it was time to venture out on our own. We decided to join forces to start investing in real estate. That’s how KOP started.
In a business partnership, you either survive or die together – there is no way out. It’s like being husband and wife. With your partner, you should not be selfish. As soon as one of you feels there is a way out first, it can become quite unhealthy in the long run.
YONG HUI: How can people overcome the challenges of working on business ventures with friends?
LENY: You really need to voice out concerns you have, and not bottle it up. There also needs to be a lot of trust, which means you cannot second guess your friends in business. Sometimes, there are instances where people will try and come in-between you and your business partner, or perhaps insinuate things about the partnership. You just have to clear things up. Open communication and trust are top priorities. In a business partnership, you either survive or die together – there is no way out. It’s like being husband and wife. With your partner, you should not be selfish. As soon as one of you feels there is a way out first, it can become quite unhealthy in the long run.
YONG HUI: How did KOP get its first project?
LENY: The first development was actually this one [The Ritz Carlton Residences]. At that time, the property was enbloc. It was a condominium called Horizon View. A client of Chih Ching’s asked her for advice, and it was then that we felt the property was a good investment. In the end, the client decided not to go ahead with it. We asked for permission instead, and he did not mind. It was not very difficult for us to raise money at that time. We became the managers of the development and brought in Ritz Carlton. We also came up with the concept, roped in the designers, architects, as well as the banking and financing of the project, and of course, the construction. A lot of the money raised was from friends and family.
YONG HUI: How did you rope The Ritz Carlton in?
LENY: We were very lucky. As a new company, without any solid track record, we managed to get The Ritz Carlton to endorse the project. Also, this is the first Ritz Carlton Residence outside of North America – and the first in Asia. A lot of people were caught by surprise we could do that – we had our sceptics. Then the Lehman crisis struck, and it got tough, but we still managed to sell quite a few units. This is a very good property to hold, and is very well-maintained, thanks to Ritz Carlton and their great team. The cash-flow from the leases is also very good. Once the market is more stable, the buyers will come back.
YONG HUI: How much does a unit here cost?
LENY: They start from S$11 million.
YONG HUI: How’s occupancy?
LENY: Quite good– about 70 per cent. We’ve sold about half the units, while others are being leased out.
Chih Ching and I are dreamers. As a newcomer, we need to be different from the big boys. We really need to stand out from the crowd, but not for the sake of it.
YONG HUI: Another development of yours – Hamilton Scotts, caused quite a stir for its Sky Garages. How was that conceived?
LENY: Chih Ching and I are dreamers. As a newcomer, we need to be different from the big boys. We really need to stand out from the crowd, but not for the sake of it. Whatever we build needs to be relevant for the market and contemporary. We like to identify gaps in the market. At that time, everyone was into luxury. It was the era of luxury. We already had the Ritz Carlton Residence, which is a branded serviced residence, so what’s next? Both projects are also in close proximity from each other, so we had to ensure that they would not cannibalise each other. As such, the concept had to be different.
YONG HUI: How are they different?
LENY: Ritz Carlton was meant to be more classy, more elegant, and quieter. It’s understated luxury. What’s the other end of the spectrum? Flamboyance, loudness – to be cool and hip. Both have their own target markets and are very distinct from one another. We brainstormed with the architect and he said to us that car parks do not have to be in the basement. People who own nice apartments usually have beautiful cars, so they should be showcased and not hidden in the basement. In many luxury apartments, an owner may have three or four cars. They may drive one or two cars and cover the others up like a museum piece. We thought about the idea and realised it could be a very cool concept. It was the first in the world. The Scotts Road frontage is also very wide, which provides ample opportunities to showcase the lifts going up and down. It was a very flamboyant project, which took a lot of hard work and research to bring to fruition.
YONG HUI: Many people are very interested to know if high-end property prices have hit bottom. What’s your take?
LENY: The opportunity right now is in high-end properties. In fact, investments are already picking up in the luxury segment. Investment funds are turning their attention to high-end residential real estate because they feel this is the bottom and the only way to go is up. The price gaps between the high-end and mass markets are actually very narrow right now. The land price for a mass market development is only slightly cheaper than a finished product in the high-end segment. Blackstone for example, has already started their acquisitions of high-end properties. With the big firms looking to invest, the end user will naturally follow. This is a very good opportunity, and many high-end buyers are looking around for good deals. Singapore has a herd-like mentality – once people jump in, everybody starts jumping in and the prices will go up. Right now, prices are low, and developers are willing to transact.
YONG HUI: Are foreign buyers deterred during this period?
LENY: Many foreign buyers still need to come to Singapore because their children are studying here and they have businesses here. It’s not so much that they’ve turned their attention away from Singapore to invest in London or Australia, although the ABSD (Additional Buyer’s Stamp Duty) has had quite an effect. That’s why prices have stagnated for high-end properties for a few years. In fact, Singaporeans are the ones turning away from Singapore and buying elsewhere. Personally, I feel prices cannot go any lower.
YONG HUI: Do you think at least some of the measures will be relaxed this year or the next?
LENY: I certainly hope so. There’s a lot of talk and speculation, but you never know.
YONG HUI: You have a resort in Indonesia. How’s that doing?
LENY: Montigo Resorts is in Batam, and we’re opening in Bali too. Batam was never a well-known market for tourism, and we created it. Montigo Resorts has been done very well. It’s quite a miracle I must say. We’ve completed Phase One and all the facilities are up. Phase Two would be the studio residences and the larger residences. We are developing Montigo Resorts as a brand. In Bali, we’re opening up Phase One at the end of this year. We’re very excited. Tourism in Bali has always been strong, even though there’s a lot of competition there. We feel our product is differentiated enough to stand on its own.
YONG HUI: What makes Montigo Resorts stand out?
LENY: Montigo Resorts is a family resort, but a pretty high-end one. This is rare in the market, and we’ve identified this gap.
YONG HUI: It’s a family-oriented Banyan Tree?
LENY: Yeah. Banyan Tree and the other resort brands are focused on couple getaways, whereas Montigo Resorts is more family-oriented, with a multi-generational concept. You’re meant to bring your kids and parents too. My parents are still healthy, so they travel with us a lot. We Asians believe in San Dai Tong Tang, so it’s very suitable for the Asian dynamic. Even in Europe and the US, it is becoming more about having quality family time. It’s a brand we feel is very different in the resorts space. At Montigo, you can choose to have lots of activities, but also have the option to relax when the kids are at play. We cater to different states of minds and generations.
YONG HUI: Why did KOP take up the WinterLand development in Shanghai? Why do an entertainment project?
LENY: As a company, we want to progress. We have done residential, commercial and resort projects. The next thing we need to do is to move into something with higher barriers to entry, such as large multi-use complexes. We don’t want to do retail centres as they are now very competitive. People are also shopping less in stores. There are simply too many shopping centres around. How many H&Ms, Zaras and Uniqlos can you open?
YONG HUI: What do you think people will be interested in then?
LENY: The next thing people will spend money on is ways to get their kids away from mobile devices. People will be interested in places that allow the family to bond. For instance, movies, concerts, sports games… these types of entertainment-driven activities will become more popular. There is longevity in this space. However, we won’t totally be in entertainment. Ultimately, we are still focused on real estate. Winterland is an indoor ski resort, and will house all sorts of winter sports. We’ll have ski slopes, as well as very big, flat areas for learners and other activities. In China, skiing is still something quite new, so it’ll be quite novel. There will also be an IMAX complex, theme-based shopping, F&B outlets, an indoor beach club, hotels and serviced apartments. It will be a great place to spend two or three days. This will be a real game changer for the company.
YONG HUI: When will it be completed?
LENY: We are targeting 2018 to be in time for the Shanghai Winter Olympics. We’ve actually signed an agreement with the Winter Olympics Federation so they can come and have their first ski-off at the resort.
YONG HUI: Which is your favourite development so far?
LENY: That’s like choosing a favourite child. I live here [The Ritz Carton Residences] so this is like my oldest child. Whenever I have time, I go over to Montigo Resorts, which is super fun. It’s usually fully-booked, and sometimes, I cannot even get a room for myself. It’s hard to say but it’s between these two. I like Hamilton very much too, but because I don’t live there, I don’t see it as much. They’re all my children. They have all developed, grown up, have their own stories, personalities and intricacies.
YONG HUI: I understand you were originally from Indonesia. What brought you to Singapore?
LENY: Yes, I was from Medan. I came to Singapore to study when I was eleven years old. Like many Indonesian Chinese, our parents sent us to Singapore for a better education. They wanted me to learn Mandarin. All my siblings eventually came over too. I’m now a Singaporean citizen.
YONG HUI: Are your parents in Singapore too?
LENY: Sometimes. They are here at the moment, but they travel a lot for business. They’re semi-retired now.
YONG HUI: What do your parents do?
LENY: My family is in many businesses, like a typical Indonesian Chinese, but their main interest is in oil transportation. We are also in real estate, agriculture, prawning and so forth.
YONG HUI: How were you raised?
LENY: I was a very independent child because my parents were away in Indonesia while I came over here [Singapore]. They would visit us about once a month. I lived with my sisters and my grandmother took care of us. I had to arrange my own school bus. Even when I transferred school, I had to see the principal on my own. I was very lucky to come to Singapore at a young age, before my sisters, which gave me a better foundation in terms of my English and Mandarin.
YONG HUI: As a kid, what were your aspirations?
LENY: I wanted to be a lawyer because I liked to argue. My parents said I should be a lawyer. After that, I felt it was too difficult. Maybe I was too lazy. Then I wanted to study communications and be a journalist, but my parents questioned me: are you sure you want to be a reporter? They suggested I study business so I could help my dad in the future. So I did. I majored in marketing because it was the easiest. [laughs] It’s true! What was your question again? As a kid, your mind will keep changing. Even after I graduated, I didn’t know what I wanted to do. Business is quite a general subject, but I was always keen on real estate. I think it’s in my blood. When I was young, my dad would sometimes ask for my opinion on properties.
YONG HUI: How did you end up at CBRE?
LENY: Someone recommended the position to me. At first, I didn’t know what it was all about, or what property consultancies even do. I didn’t understand it, but I knew it was real estate-related, and I liked it. That was why I was inclined to go for the job. I stayed on for nine years, which gave me a very good foundation in real estate. I was in retail, and amongst all real estate segments, retail is the most complex. If you can do retail, you can do all other property segments. However, I think hotels are even more difficult than retail real estate.
YONG HUI: Why is the hotel business more difficult than retail?
LENY: Because there are so many aspects. If you’re successful in property investing, you’d usually combine hotels with residential or commercial. Investing in hotels has the slowest returns as compared to other real estate segments, but once the hotel is successful, it provides a lot of prestige to the owners, and if it’s run well, it has very good recurring income as well. The challenge for hotels is in the operations. If it’s operated well, even if the hotel is very old, it can still be the best in the world. Performances in operations are evaluated daily or weekly. If you underperform this week, you need to play catch up the week after; otherwise, you will never catch up.
YONG HUI: How do you ensure your operations are seamless?
LENY: We have a separate team for hospitality operations. Chih Ching and I support them wholeheartedly. We understand the intricacies of it, but we leave the day-to-day running to the production team. We feel that even though Singapore has very good hardware, we also need the software to go a long with it. Intricate service is very important. This is why when we did the Ritz Carlton, we wanted a hospitality company to run the property and provide an exceptional level of service – so we approached The Ritz Carlton. They are one of our favourite brands. Once the property is managed by a hotelier, the standard becomes very different.
YONG HUI: Has your family ever pressured you to help out in the family business?
LENY: Not really. They’ve never pressured any of us, except perhaps my brother, because he’s the son. Anyway, the business has been passed on to my uncles who are now handling it. I think they know it’ll be difficult for us to adjust to the way business is done back in Indonesia. It’s very different over there. I think we’ve been spoilt. [laughs]
YONG HUI: Any plans to expand to other cities beyond the ones you’re already in?
LENY: Right now, we are in Singapore, the UK, Indonesia and China. We won’t go to countries where we need to start from scratch or depend on someone else to operate the property. We need to be able to operate it ourselves. But any opportunities which exist in these countries, we’d be keen to take a look.
YONG HUI: There’s talk of a property bubble in China and a trail of ghost towns. What’s your take?
LENY: I’ve seen these ghost towns myself. They are over-developed and under-utilised cities. That’s why we don’t go into the second and third-tier cities in China. We only stick to Shanghai. I myself have worked there for two years. I like the city very much. Projects that we have taken up are usually very international in nature, and Shanghai is a perfect playground for us. Those ghost towns are not in Shanghai. Even in a crash, the prime areas will always be able to stand on their own. That’s why it’s so important to look for prime locations.
Dare to dream, but at the same time know that the devil lies in the execution.
YONG HUI: What’s your business philosophy?
LENY: As a real estate developer, your properties have to be used, lived in, and well-occupied. I always remember that I’m building for people. You must always think of the consumers in everything you do. If you keep the consumers in your heart when you’re building, you will succeed. It’s a very simple philosophy. You should always be true to yourself, and do things you believe in. Once you have belief and the conviction, you’ll be able to do something which appeals to consumers you are targeting. I like to keep things simple, and constantly strive to overcome different challenges, to create something exciting. Dare to dream, but at the same time know that the devil lies in the execution. I’m also practical so I wouldn’t venture into anything too big and too ‘impossible’ for us. It has to be something we can attain, and I always ask my team: are we able to do it?
YONG HUI: You’re obviously successful. What else are you looking for?
LENY: Success is relative. When you’re in the property business, even in a tough market, you have to build a business that is sustainable and profitable. You always have to reinvent yourself, create something new, and scale new heights. To do so, the fundamentals have to be in place. That’s a constant challenge for me. I hope that as the company becomes more established, I will have more time for myself.
YONG HUI: How do you deal with the stresses of your work?
LENY: I’m quite simple. I go for a swim, do facials, and watches movies. Or, I have a nice dinner, and catch up with good friends and family. I spend a lot of time with my family. I’m very close to my nieces and nephews. Weekends are very precious to me. I try to have my own personal time. That’s enough for me. If I have too much time, I get bored.
YONG HUI: What’s the last movie you caught?
LENY: I watch a lot of movies on planes as I travel a lot. Right now, I’m really into this sitcom called Orange is the New Black. I was just watching it on the plane. For the big screen, there hasn’t really been a movie I want to catch.
ANTON: You should catch Jurassic World, to get ideas from the entertainment park.
LENY: Ah, yes. I like Chris Pratt. Maybe I’ll catch it sometime.
YONG HUI: What’s the long-term strategy for KOP?
LENY: We want to continue doing interesting projects. We think that WinterLand and Northern lights will raise the bar for the company. We want to replicate it in other cities. We also want to further expand Montigo Resorts. We are always looking out for opportunities for our real estate business in these countries we’re already operating in.
YONG HUI: What makes KOP stand out from the other luxury high-end developers?
LENY: Most luxury developers only do residential, and most developers who do hospitality only do that. We are more multi-faceted. We have real estate, commercial, hospitality and entertainment. Hospitality is a very difficult business to get into. The firms that are in real estate with some hospitality usually don’t do either very well. KOP has managed to secure very good projects in both sectors. That’s something which is very challenging. For a small company like ours, to operate well in several segments is something which sets us apart.