Urbanizing with Singaporean know-how

Ascendas-Singbridge group's CEO sees opportunies in 13 million people moving to cities every year

The June merger that created the Ascendas-Singbridge group is dedicated to integrating the strengths and cultures of two Singapore-based urban realty companies, so as to double the combined entity's size in the next five years.

It is a challenge that excites the group's CEO, Miguel Ko. "Given our asset management in China, we can hopefully exceed that (goal)."

The group specializes in urbanization projects spanning townships, mixed-use developments and business and industrial parks in 29 cities in Asia, including several in China.

Earlier this year, Singapore's State-owned Temasek Holdings and private sector JTC Corp agreed to merge four of their subsidiaries - Ascendas, Jurong International Holdings, Singbridge Group and Surbana International Consultants - into two joint ventures that could bid for and bag bigger projects.

"When I received a call from Temasek 15 months ago, telling me they will merge Ascendas and Singbridge into one, I felt enthusiastic," Ko said, recalling the key moment that would pitchfork his career into a new orbit.

Even before the merger, both Ascendas and Singbridge had a strong presence in China. Ascendas has operated for 20 years in eight cities in China, with some projects becoming major contributors to local economies.

Singbridge started its China business five years ago, but has been able to launch high-profile projects in Guangzhou of Guangdong province, Jilin province, Chongqing, Tianjin and Chengdu of Sichuan province. It is a major player in large-scale integrated sustainable developments.

According to Ko, the Ascendas-Singbridge group serves a global clientele of more than 2,400 international companies.

He said he is aware China is undergoing an economic restructuring, but is not unduly fazed by perceived slowdown. "China in the last decade has gone through unusual growth, and when the base grows larger, the percentage (of growth) will be smaller, but the number is (still) high," he said.

In recent years, China has seen tremendous investment in the commercial property sector. As a result, some 60 second- and third-tier cities are facing short-term oversupply, according to a report by international property consulting firm Jones Lang LaSalle.

To be sure, this is hurting the Ascendas-Singbridge group. A way out for it is to find right locations for development in big cities such as Shanghai, Beijing, Guangzhou and Shenzhen. Ko believes the first-tier cities will continue to grow quite nicely as oversupply is not acute here.

"The group will soon decide on second- and third-tier cities in China because we have recently found that location becomes very critical. For example, a certain street in a second-tier city can still perform very well whilst the next street is not so good," Ko said.

According to him, the next two years will be challenging, but he projected China's property market to return to positive growth in five years. The bright side for the property sector comes from China's quick urbanization.

A United Nations Development Program forecast quoted by Xinhuanet.com showed that 70 percent of the Chinese population will live in urban areas by 2030.

Chinese Premier Li Keqiang said in September this year that the nation's current urban population was only 55 percent.

"This means a one percentage point growth every year, or 13 million people a year are moving to cities, providing a lot of opportunities for companies like us," said Ko.

In order to fulfil the company's ambition in China, Ko said they are working on developing a "local smart" team. The new group's goal is to become a very substantial and local player in China in five to six years.

"We look to combine several successful elements, which include Singaporean managers who know Singapore's urbanization program well and are very willing to cooperate with Chinese managers, strong local property developers, outstanding local talents, and strategic heritage for success in China," Ko said.

"Ascendas-Singbridge wants to make sure that in the next 20 years, it will develop into a company that people respect and do not regard as a foreign company. We want it to be a key player in China and part of China."