SINGAPORE (EDGEPROP) - The merger between Savills Residential, the residential project sales business of Savills Singapore, and real estate agency Huttons Asia has fortified the position of Singapore’s fourth biggest real estate agency in terms of number of brokers. The deal, according to Chris Marriott, Savills CEO for South East Asia, had been on the cards for some time. “And now, we’ve been able to construct a deal where everybody’s happy and it drives positive outcomes,” says Marriott. “It enables us to really focus on the future; to assist in building up Huttons’ business alongside Savills’.”
Marcus Loo, CEO of Savills Singapore and Chris Marriott, CEO of Savills South East Asia (Photo: Samuel Isaac Chua/EdgeProp Singapore)
The combined entity, “Huttons — in association with Savills” will benefit from economies of scale. “It is inefficient to have two brands,” adds Marriott. “In order to be a successful residential broker today, you need to increase investment in broker numbers, talent, technology and training.”
As Huttons’ largest shareholder, Savills Singapore will have board representation through Marriott. “We’ve had a long-standing relationship,” he says. It is a relationship that has spanned more than 15 years. When Savills acquired Hampden Real Estate from Michael Ng in 2005, the former took over the 48% stake in Huttons that he owned as well. Founded in 2002, Huttons was a fledgling company then, Marriott relates.
With the residential project business now wholly under Huttons, this means that Savills Singapore will focus on “full-service real estate business”, says Marriott.
Marcus Loo, CEO of Savills Singapore, will continue to build the Singapore business, while Marriott focuses on the Southeast Asian business.
Loo was appointed CEO of Savills Singapore in January 2019. He had joined Savills Singapore in February 2015 as executive director and head of the tenant advisory division. He brought along his tenant representation team, comprising Greg Marler and Ashley Swan, in the move from Colliers International to Savills.
Jeremy Lake, veteran in investment sales, joined Savills as managing director of investment sales and capital markets (Photo: Savills)
‘Talent acquisitions’
Another team that made its way from Colliers to Savills later that same year (in September 2015) was Cynthia Ng, the head of valuation and deputy managing director, and seven other valuation specialists. Ng is now managing director and head of valuation & advisory at Savills Singapore.
More recent hires include Eric Teo, previously the head of transaction advisory services group at Ernst & Young (EY) in both Singapore and Australia. Teo joined Savills in January 2019 as head of business valuation and advisory for South East Asia. Joining him at Savills are EY colleagues, Jason Doan and Jason Tan, both of whom are executive directors in the valuation and advisory business.
In January 2019, Robin Leow, former head of integrated facilities management at Bintai Kindenko, a mechanical and electrical engineering specialist firm, made his way to Savills Singapore too. He is now installed as its senior director and head of facilities management.
Last November, Savills announced two key appointments: Jeremy Lake and Galven Tan as managing director and deputy managing director of investment sales and capital markets respectively. Prior to Savills, Lake and Tan were in similar positions at CBRE. “That was really to cement our position as a leader in investment sales,” says Marriott.
Earlier this month, Savills announced the appointment of Tang Chee Charn as executive director and head of property management business. Tang is the former head of real estate management services at Colliers International.
Key growth markets in the logistics and supply chain business in Southeast Asia are Indonesia, Malaysia and Vietnam; while in North Asia, it is Japan, South Korea (pictured) and Taiwan (Photo: Bloomberg)
Focus on recurring income business
“If we stood back and looked at Savills’ broad strategy, it is to continue building the platform in Singapore, with a strong focus on our recurring income business: property management, facilities management, professional valuation and consulting services in addition to our strong agency business,” says Marriott.
Savills continues to be in the market for talent, although “very cautiously” given the current environment, notes Marriott. “Notwithstanding that, we are always on the lookout for talent, and we will always consider opportunities that add value to our platform of generating accretive returns.”
Areas where Savills continues to see growth include logistics, student accommodation and data centres. Three months ago, Savills signed a cooperation agreement with Malaysian-based logistics and supply chain specialists, LCA Asia. It is a regional alliance between the two firms, says Marriott. Key growth markets in the logistics and supply chain business in Southeast Asia are Indonesia, Malaysia and Vietnam; while in North Asia, it is Japan, South Korea and Taiwan.
It’s not just the exponential growth in e-commerce that is powering the logistics business. Major manufacturers and suppliers are “multi-sourcing” instead of being reliant on just one vendor or one location in order to minimise risk of disruption, says Marriott.
Yann Deschamps, head of Workthere Asia Pacific moved from Savills Shanghai to Singapore to launch Workthere in March 2018 (Photo: Samuel Isaac Chua/EdgeProp Singapore)
Workthere — co-working agency
Three years ago, Savills launched a new agency service, Workthere, in the UK. It is a search engine and aggregator of co-working and serviced office spaces. Workthere was launched in Singapore in March 2018. Yann Deschamps, who was head of Workthere Asia Pacific since Nov 2017, left recently, and is now commercial director of co-working operator Arcc Spaces since September.
Workthere focuses on the local flexible workspace market, featuring well-known brands such as JustCo, Servcorp, The Great Room, The Work Project and WeWork. “It’s opportune for SMEs [small and medium-sized enterprises] to leverage the co-working and serviced office community, especially if they are unsure as to the scale and size of their business,” says Marriott. “We’ve also seen a growing interest in enterprise solutions, which are for the larger corporates that are exploring the core-flex model for a portion of their space needs.”
Workthere has been integrated with Savills’ traditional corporate leasing advisory business so that tenant advisers can work with enterprises on their core-flex solutions. The corporate leasing business is headed by Ashley Swan.
“We see co-working becoming more relevant, having cemented its position in the leasing market over the past five years,” says Savills Singapore’s Loo. Companies are also taking a more proactive approach in analysing how staff can work from home (WFH) and how to manage relationships — not just with clients, but also with other internal staff and the IT department, he adds. “A lot of firms are going through that right now. This is an exercise that will take some time before we know for sure whether the net effect is a reduction in space or an increase in space given the safe management measures that have to be put in place.”
Savills has been investing in technology: residents’ applications for the projects that the firm manages, procurement applications for those in the property and project management arena, and implementing technology in process departments such as accounting. Savills has also embarked on a project to create a “Savills data lake” for storage of big data.
“We are working to enhance our existing agency platforms,” says Marriott. “We already have databases and search platforms, but we’re looking at enhancing them by incorporating our digital marketing suite.”
Workthere, designed as a search engine for co-working and serviced office space, is now part of Savills' corporate leasing advisory service
‘Top three — by profit’
For Marriott, it is not just important to be ranked among the five biggest global firms by market capitalisation or number of brokers. The key factor will be the ability to maintain a strong balance sheet and service one’s debt, notes Marriott. “We have added ‘cash flow’ to our vocabulary — not that it wasn’t always there. But with a strong balance sheet, we can come out of the pandemic downturn with a bigger market share and accelerate faster when the market returns to normal.”
The London Stock Exchange-listed firm has announced its half-year results ended June 30. Group revenue was down 7% y-o-y to GBP791.4 million ($1.407 billion) in 1H2020. Underlying profit was down 66% y-o-y to GBP13.2 million. However, Savills recorded net cash of GBP9.4 million in 1H2020, compared to net debt of GBP139 million in 1H2019.
With Covid-19, transactional businesses have dropped, but property and facilities management business saw revenue growth in the first six months of 2020, according to Savills in its results announcement on Aug 6. There has already been a considerable amount of consolidation in recent years, says Marriott. “The key will be the ability of the top five global firms to maintain a strong balance sheet,” he adds. “This period could well throw up some opportunities because of the extended period in which businesses need support for their cash flow.”
Reflecting on Savills’ growth in Singapore and Southeast Asia over the past 15 years where he continues to play an instrumental role, Marriott says: “We’ve stuck to a steady, stable growth plan. And we will continue to push that plan, not just in Singapore but in Southeast Asia.”
In Singapore, Marriott wants Savills to be among the top three players — “by profit and not by number of brokers”, he adds.
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