Friends since they met in Office Cadet School (OCS) in 2004 and served in the same Armour unit during their National Service, Darren Chua and Remy Ng went on to become housemates in Sheares Hall, one of the six halls of residence at the National University of Singapore. Both enrolled in NUS Business School, but Chua did double majors in Business and Law and therefore graduated two years after Ng did.
“We have been buddies since our army days, and we have always chatted about what businesses we would like to do together,” recounts Chua. “It always felt right for us as bros to explore working together since we went through so much in the army together.”
What really cemented their friendship was a “four-day, three-night” mission training without any sleep. “We were paired up for the training exercise in OCS,” says Chua. They have been best friends since. According to Chua, he will be turning 34 in December, while Ng will be celebrating his 34th birthday in May.
Business ideas concocted while in university included setting up a carwash, but that did not take off as they felt they could notcompete with the industrious foreign workers. The pair then set up a bubble tea stall while Chua was still doing his bar exams. But they found themselves manning the stall and scooping tea for customers on weekends. After six months, they sold the business to a friend. They barely broke even on that first business venture.
Ng graduated from NUS Business School in 2009 and went to work in property consultancy Knight Frank Singapore. Chua did his pupillage and worked at Rajah & Tann – one of Singapore's largest law firms – from 2011 to 2013.
Even as they were pursuing their respective careers, they still held on to the dream of being entrepreneurs and going into business together. “We contemplated going into property development, but you know how expensive land is in Singapore,” says Ng. “The cheapest piece of land we could find was in an opportunity to develop a pair of semi-detached houses on Casuarina Road in Yio Chu Kang or somewhere in Pasir Ris. We didn’t want to develop anything more than four units because that would mean we would have to apply for a developer’s licence.”
However, the land alone would have cost about $5 million, and that was before construction costs, says Ng. Then, they met up with an Indonesian friend from university. The Indonesian introduced them to his friend, who has since become the third and silent partner in Genesis Indojaya. He told them that they could buy land for a lot cheaper in Indonesia.
That led to Ng and Chua setting up Genesis Indojaya in 2012, with their Indonesian friend as a silent partner. The latter, who wants to remain anonymous, has been instrumental in helping them navigate the nuances of the Indonesian property market as well as opening doors to the relevant government authorities for them to get development permits and approvals for their projects.
Ng took on the role of managing director of the firm, and relocated to Jakarta to helm the business. Chua plays the role of equity adviser of Genesis Indojaya, and his forte is in drafting contracts and advising on the corporate structure as well as strategy. “I was doing mergers & acquisitions while at Rajah & Tann and I loved it,” he says.
The first piece of land that Genesis Indojaya purchased was the size of a soccer field and cost only $500,000, recounts Ng. It was located in the outskirts of Jakarta, and developed into 10 townhouses. “We borrowed money from friends and family members,” he says. “We told them that we couldn’t guarantee that they would get their money back but we offered them a 30% return – at 10% per annum – over 2 ½ years.”
They raised the equity to purchase the land in 2013 and were able to double the money for their friends and family members who had financed their first project, says Chua.
When the first project was completed in 2015, they rolled over the money into their second residential development, Jayana Villas – a terraced housing project with 57 units sitting on a 7,000 sq m (75,348 sq ft) site, and also located in the outskirts of Jakarta. “Our target audience was the local middle- and upper-middle-income homebuyers,” says Ng. The houses were therefore priced at the equivalent of $110,000 to $130,000 each.
“What differentiated us from the big mainstream Indonesian developers was that we were able to develop our projects at a slightly lower cost and yet produce better quality products,” Ng adds.
Chua, who helped structure the deals, says the approach they took was from a corporate finance slant. “We structure our company such that each development has its own joint venture partners,” he says. “Initially, a lot of investors who met us were concerned because they saw us as just two young guys and relatively inexperienced then."
However, the deals were structured such that their investors’ losses are minimised even in the worst-case scenario. It helped to develop projects in phases, with returns given back to investors at the completion of each phase. “With landed property – where buyers are predominantly local homeowners – the investors are shielded to some extent,” says Ng.
Today, investors in Genesis Indojaya’s projects include high net-worth individuals, investors and property funds from China, Hong Kong, Japan and Singapore.
The last two residential developments by Genesis Indojaya in Jakarta were cluster housing projects. One of them, Cinere Loft, drew inspiration from the shoebox apartment phenomenon in Singapore for a landed home concept – a double-storey house with a built-up area of about 60 sq m (646 sq ft). The per sq m price is higher but the absolute prices are from $60,000 each. “The target audience are young couples, young families who can’t afford Jakarta metro prices,” says Ng. “These houses are about a 45-minute drive from the city.”
Ng is also focusing on Transit Oriented Development (TOD) projects – land near MRT stations because Indonesia’s first MRT system is going to start running this year. “We’re looking at plots within 1km of an MRT station,” he says. “Land prices right next to an MRT station are priced at a premium. That’s why we are looking further away. In the outskirts, people don’t mind living a little further away from the MRT stations, say 600-800m away, which is a 6- to 10-minute walk.”
So far, their biggest development in terms of gross development value is the Citadines Berawa Beach Bali, at about US$40 million ($54 million).
The entire portfolio of seven projects – one in Bali and six in Jakarta – is worth US$50 million to US$60 million, estimates Chua.
“On our way to a meeting, we passed the Kampong Java site that Chip Eng Seng bought for $418.8 million in January,” says Chua. “Our entire portfolio is worth just a fraction of that.”
However, the duo is hoping to list their company on the Singapore Exchange someday. “We would love to list in Singapore because of the familiarity and because it’s the nexus for the region,” says Chua.