[UPDATE] Old rich, next gen

/ EdgeProp Singapore |
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SINGAPORE (EDGEPROP) - Born in January 1985, “at the tail end of the Year of the Rat”, Andy Lim, group CEO of JL Family Office (JLFO), will be celebrating his 36th birthday soon. However, he won’t be able to celebrate it at his new headquarters at 65 Club Street just yet.
Having purchased the property last August for $15.7 million, he came into possession of the 3½-storey, 999-year leasehold, conservation shophouse in November. He has big plans for it: Renovation works have just begun, with a “Singapore theme” for the interiors — from vintage enamelware to art pieces and a mural on the façade. Lim is still looking for local artists and his intention is to “give back to society by supporting local artists and SMEs”.
Lim: So buying the shophouse at $2,900 psf presents good long-term value. That in itself is an opportunity trade (Photo: Albert Chua/EdgeProp Singapore)
The number “65” of the shophouse is symbolic to Lim for several reasons: “It’s Singapore’s country code, and 1965 is the year Singapore became an independent nation,” says Lim. “We’re a Singapore-based family office, and our wealth was created here.”
JLFO is the investment holding group founded by his father, John Lim, in 2008. Co-founder and group CEO of ARA Asset Management, the elder Lim led a $1.78 billion privatisation of ARA Asset Management together with Warburg Pincus and China’s AVIC Trust in 2016. ARA Group and its associates hold more than $100 billion in gross assets under management as at June 30, 2020, with the assets spread across 28 countries.

Wealth creation

The elder Lim is ranked by Forbes among Singapore’s richest, with a net worth of US$645 million ($853.3 million) as at August 2020. The family’s wealth in JLFO comes mainly from a 20.41% stake in ARA Asset Management.
JLFO holds a 10.5% stake in Straits Real Estate (SRE) too, with the balance 89.5% stake owned by Straits Trading Co. Started in 2013 with a capital commitment of $950 million, SRE has a diversified portfolio of investments across various asset classes spanning Australia, China, Japan, Malaysia, Singapore and South Korea. As at Oct 31 last year, SRE had over $1.4 billion in assets under management.
In fact, the younger Lim was instrumental in setting up SRE in 2013, and served as director of business development for the next five years. The year 2018 was significant as it was then that Lim assumed the role of JLFO group CEO on a full-time basis. Prior to that, he divided his time between JLFO and SRE, he says.
The conserved shophouse at 65 Club Street is the first acquisition under The Land Managers (Photo: Samuel Isaac Chua/EdgeProp Singapore)
He now serves on the board of SRE as a director. Trained as a lawyer, Lim was with law firm Allen and Gledhill from 2010 to 2014, where he was involved in real estate deals. “That has put me in good stead,” he says. “When I do deals, documentation is never an issue.”
On Dec 3 last year, Lim launched The Land Managers, a boutique real estate investment firm under JLFO. With an initial capital commitment of $250 million, The Land Managers will look at investments in Singapore, Europe and Greater China.
Lim is among the emerging wave of next-generation businessmen striking out to do deals on their own. While they are probably tapping their families’ connections, they are also keen to be seen as their own person.
Besides Lim, there is Matthew Ong, CEO of Singapore-listed property development firm SLB Development, and son of Ong Pang Aik, executive chairman of listed construction firm Lian Beng Group. The younger Ong ventured into the fund management business in June last year, and co-founded 32RE, with Jeremy Choy and Wee Teng Chuen.
Wee, managing director of 32RE, is also senior vice president at United Overseas Bank (UOB). His father, Wee Ee Cheong, is UOB deputy chairman and CEO, while his grandfather, Wee Cho Yaw, is chairman emeritus of UOB.
Meanwhile, Singapore-listed property group, Ho Bee Land, founded by chairman and CEO, Chua Thian Poh, has seen his children taking more prominent roles in the business. His son Nicholas was made deputy CEO in September 2018. His daughter Weiling oversees the family office.

‘Opportunity trade’

The Land Managers’ maiden acquisition in Singapore is the shophouse at 65 Club Street. Lim had chanced upon the shophouse while looking for a suitable space for his headquarters last year. “I was literally the first guy to put in an offer for the shophouse two weeks after the circuit breaker,” he relates.
Jerry Tan, founder of JTResi, a boutique firm that specialised in marketing luxury property, was the vendor of 65 Club Street. The deal was brokered by Savills Singapore director of investment sales and capital markets Yap Hui Yee. “The shophouse is ideal for a family office — it’s a corner shop unit, located at a quiet cul-de-sac,” says Yap. “The timing was just perfect as I had just started marketing the shophouse on behalf of Jerry Tan, and Andy of JL Family Office happened to ask me if there were any suitable space for his headquarters.”
JTResi’s Tan had purchased the property in 2006 for $2.8 million, and had spent another $1.2 million to refurbish it. Having sold the property for $15.7 million, Tan would have made close to four times his original investment.
Unlike many of the shophouses that Lim has viewed, the property at 65 Club Street impressed him the most. “I must give the seller credit for maintaining the property so well,” he says.
Based on the built-up area of 5,400 sq ft, the price for the shophouse translates to $2,907 psf. “Prior to that, the last transaction on that street was for the shophouse opposite that was sold for $3,880 psf in 2018,” he recalls. “So buying the shophouse at $2,900 psf presents good long-term value. That in itself is an opportunity trade.”
According to Lim, he has no plans to amass a portfolio of shophouses for now. He made the purchase as “I was really just trying to buy my own office space”, he says. As a boutique real estate investment player, he intends to look at real estate deals “opportunistically” in Singapore.
Toh Shaowei, UBS head of real estate research & strategy — Asia Pacific, commented in a December report: “We expect that institutional investors and family offices will continue to cast their eyes over opportunities in the Singapore commercial property space.”
The shophouse purchased by The Land Managers is located on a quiet stretch of Club Street at the end of a cul-de-sac (Photo: Samuel Isaac Chua/EdgeProp Singapore)

‘Smallish developments’

Lim is also interested in developing “smallish, landed housing projects” in Singapore. He doesn’t have any specific location in mind, preferring to be deal-driven. “The whole world is just flush with liquidity in the system, and that is keeping asset prices high,” he adds.
In Europe, Lim is interested in investing in cities such as Berlin and Munich in Germany, as well as London, UK. Germany has one of the lowest home ownership rates in Europe, at just 51.9%, according to online magazine Edge Policy Development & Research. “The preference among Germans to rent their homes is the primary reason for their country’s low ownership rate,” says the report.
Hence, The Land Managers’ next deal is likely to take place in Europe. “I’m working with someone I’ve known for a long time, and we’re looking to see if we can acquire apartment blocks to be leased for rental income,” he adds. “There’s a big rental culture in Europe, so we must capitalise on it.”
Another attraction of investing in Europe is the low borrowing cost, and high loan-to-value ratio, which makes even a low-yielding asset attractive, says Lim.
In China, the focus will be on Tier 1 and Tier 1.5 cities, and sectors such as logistics, residential and suburban shopping malls, he adds. “I’ve been focusing on these sectors when I did deals in China,” he says. “Suburban retail assets may not be the flavour of the month right now because of concerns about valuation and the boom in e-commerce. But I’m very comfortable doing deals in China given my past experience. Of course, we will have to buy at the right price and purchase assets that demonstrate good value.”
Singapore Chinese Weekly Entertainment Club, founded in 1891, remains a members' only, millionaires' club (Photo: Samuel Isaac Chua/EdgeProp Singapore)

Travel restrictions

He has been planning to go to Europe, but his plans have been hindered by the Covid-19 travel restrictions. Also, he can travel only when a deal reaches maturity as he has to take quarantine into consideration, even if there are green lanes established between the cities and Singapore.
“In the past, I can travel to two different countries in a week,” Lim says. “I can be in China from Monday to Wednesday, rest one day, and fly to Australia on Friday. Now, I have to choose as I can only fly to one place instead of two.”
Like most gateway cities, asset prices in Singapore are high, adds Lim. He feels opportunities for The Land Managers will be quite limited on the homefront. The firm will be pursuing deals of $20 million to $50 million in size, based on equity alone. “That is the sweet spot,” he says. “And with 50% gearing, it could double to $40 million to $100 million which is quite sizeable.”
He is open to forming partnerships and joint ventures with other players, and to purchasing listed companies with real estate holdings that are undervalued. “We can do indirect deals like that too,” he says.
For the consummate traveller and dealmaker, the biggest challenge has been the travel restrictions, which look likely to stay. “I don’t see things going back to the pre-Covid days,” says Lim.

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