Global-thinking CDL is still Singaporean at heart

SINGAPORE — City Developments Limited (CDL) may have placed great effort in recent years to grow its global footprint — from the appointment of an Australian as its very first CEO to rapid overseas expansion — but the listed homegrown property unit of diversified Hong Leong Group still very much wishes to remain Singaporean.

The Republic, said CEO Grant Kelley, could be the company’s “hidden upside” when the real estate market eventually recovers from the doldrums it has been in after repeated rounds of Government cooling measures and loan curbs.

Domestic home prices have fallen 9.1 per cent from their peak in the third quarter of 2013, after rising more than 60 per cent from 2009 after the global financial crisis.

“Singapore is still our No 1 market. We weren’t really seeking to replace the Singapore core, we’re just seeking to add to it ... This is our historical legacy. We value this market and in some sense, it is the hidden upside to CDL — the recovery in the Singapore market — and that’s something we believe time will ultimately solve,” he told TODAY in an interview last week.

“I think we can’t emphasise enough that we see ourselves very much as a key player in this market,” he added.

Illustrating CDL’s continued active presence here despite its overseas focus the last two years, Mr Kelley said the company participated in every single Government Land Sales tender, even though it was successful only once last year — with the 150,700sqft Lorong Lew Lian parcel that it, along with its joint venture partners, snapped up for S$321 million.

“We’re very disciplined on pricing around here ... We do bid for all the assets that come through Government land auctions, and we bid them at prices that we’re comfortable with,” he said.

While it was never the intention to leave home turf, the challenging environment here — which saw the decline in rental potential and prospective buyers holding back on purchases — still expedited the need for the then-Singapore-centric company to diversify, said the 51-year-old in his first extensive media interview since coming on board in February 2014.

This is because CDL has “naturally outgrown” the Singapore market, not unlike other international property firms such as United States-based Boston Properties and Australia’s Lend Lease, which Mr Kelley said sought opportunities globally in order to expand their businesses.

The result was a more diversified CDL with about 45 per cent of its total assets parked in China, Japan, Australia, the United Kingdom and the US at end-2015, up from about 36 per cent two years earlier. This figure could grow closer to 50 per cent as the company looks to deepen its presence in these five overseas markets.

Under Mr Kelley’s watch, the firm also launched two investment platforms called the Profit Participation Securities (PPS) in 2014 and 2015 totalling S$2.6 billion, streamlined its structure and groomed the next generation of CDL leaders.

Reflecting on his two years working in the company founded by the Kwek family, the Adelaide native said his time has been both challenging and fulfilling at the same time. He described CDL executive chairman Kwek Leng Beng as a “great innovator and great leader” who embraced his contributions to the team. A key personal takeaway, he added, is that leaders in modern business must lead by example.

“I think as a leader now, you’ve got to stay at the forefront of your team intellectually. You’ve got to actually lead them through a process and have them observe you adding value, and then they’ll give you their respect,” he said.

“The second thing is just hard work. I think when you’re in one of these positions, you have to set an example by being the guy whose car is first in the car park, because if you expect people to go the extra mile, I don’t think you can ask them to do anything that you would not personally do.”

Now in his third year at CDL, Mr Kelley has his eyes firmly set on achieving the “5-5-5” strategy, which stands for S$5 billion investments in overseas markets and to raise S$5 billion of funds under management in five years, or by end-2018. As of 2015, CDL has invested S$2.3 billion in overseas acquisitions and raised S$2.6 billion of funds.

Beyond hitting those targets numerically, the CEO hopes that the process of working towards that goal would lay the foundation for the CDL team and build up their capabilities to continue executing such deals “long after I’m gone”. “I’m not planning to go, but I just think that’s important,” he quipped.

His affinity for Singapore and the intention to stay put were evident when he unknowingly referred to the Republic as “home” after completing a recent business trip to Hong Kong.

“I was leaving Hong Kong (last) Monday night, the team and I were at the airport, we’re walking towards the gate and I said ‘Guys, time to go home now’ and I caught myself. I realised I called Singapore home,” shared Mr Kelley.

“I actually really love the company, I genuinely do ... So for me, (this job) is a nice alignment of a great team with real business opportunity that I can add some value to. How would I change it? It’s probably just adding to what CDL has built over the last 52 years with these strategies that, in a certain sense, we’ve been doing on a day-to-day basis. If we can keep doing that, I’ll be very happy.”