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SLB Development looks to new horizons

CEO Matthew Ong to explore real estate fund management, develop smart industrial spaces and venture abroad

On the second day of Chinese New Year, Matthew Ong, CEO of Catalist- listed property developer SLB Development, came down with “stomach flu”. That kept him away from “all the food” that people typically indulged in during the festive period, he recounts.

While he has since recovered, his recent experience got him thinking about the importance of food preparation. In November and December, four major cases of food poisoning broke out, and 600 people were affected. One person even died.


Matthew Ong, standing next to the scale model of InSpace, whcih shows the rooftop facilities of the industrial building (Credit: Samuel Isaac Chua/EdgeProp Singapore)

“Perhaps more food operators will now consider having their own self-contained unit for food preparation instead of using shared facilities so they have a better control of the standards of hygiene,” reckons Ong.

SLB is currently constructing MacTaggart Foodlink at 20 MacTaggart Road, located just 300m from the Tai Seng MRT Station. The five-storey building is scheduled for completion in 4Q2020 and is zoned for Business 1 use. It is ideal for central kitchens, food processing and cold room or storage facilities, adds Ong.

The units range in size from 2,467 to 2,673 sq ft, with ceiling heights of 6.3m to 8m. To date, only eight of the 28 units in the building are still available, which means the property is 70% sold.


MacTaggart Foodlink is a redevelopment of the former Khong Guan Industrial Building and is scheduled for completion sometime in 2020 (Credit: SLB Development)

Redevelopment of former Khong Guan Industrial Building

MacTaggart Foodlink is a redevelopment of the former Khong Guan Industrial Building. It was said to be built in 1952 by Chew Choo Han and Chew Choo Keng, co-founders of homegrown biscuit company Khong Guan. In the past, the main entrance of the former building served as a shopfront for Khong Guan biscuits too.

Ong purchased the building in October 2016 for $31 million, under Smooth Venture, a wholly- owned subsidiary of Lian Beng Group, the mainboard-listed construction company headed by his father, group chairman and managing director, Ong Pang Aik.

The younger Ong acquired the building from the parent company for $32 million in 2017, when he decided to spin-off SLB as a separate listed entity. SLB’s initial public offering took place in April last year. Parent company, Lian Beng Group, still owns a 74.11% stake in the firm, while Ong’s aunt, Lay Koon, is a non-executive, non-independent chairman of SLB.


Hexacube @ Changi is one of the portfolio of 10 industrial buildings with 4 million sq ft of space developed by SLB's Ong in joint ventures with others (Credti: SLB Development)

According to Ong, the idea of spinning off the property development business into a separate listed entity had taken root as far back as 2007, when Lian Beng entered into a string of joint-venture projects.These included Lincoln Suites, which was a tie-up with partners Koh Brothers, Heeton Holdings and KSH Holdings; and Kovan Residences, a joint venture with Centurion Properties. Lian Beng has also developed mixed-use developments such as The Midtown and Midtown Residences with Oxley; as well as KAP and KAP Residences as part of a consortium alongside Oxley, Heeton, KSH, TEE International and ZAP Piling.

Most of its developments are through joint ventures, says Ong. “This helps in terms of portfolio diversification and in reducing our risks significantly.”

During Ong’s 11-year stint at Lian Beng, he oversaw the development of about 10 industrial projects with a total of four million sq ft. Past industrial developments in his portfolio, which are also joint-venture projects, included M-Space, the 88-unit Mandai Foodlink, the 425-unit Eco-Tech@Sunview, the 73-unit Hexacube @ Changi and T-Space @ Tampines, its latest development with 251 units that is newly completed and fully sold.


T-Space@Tampines was recently completed and all 251 units are sold (Credit: Samuel Isaac Chua/EdgeProp Singapore)

Preview of In Space

The upcoming project, In Space, marks Ong’s 10th joint-venture project with Oxley. It’s a 51:49 split between SLB and Oxley. A freehold property, In Space is a redevelopment of the former Pei Fu Industrial Building at 24 New Industrial Road.

The property was acquired on April 24 last year, less than a week after the listing of SLB. The duo paid $76.25 million for the 62,346 sq ft, freehold site.

In Space is scheduled for preview sometime in the middle of March. The new freehold industrial building spans eight levels, and contains 84 units. Average sizes of units are about 216 sq m (2,325 sq ft), and are priced from just below $1.7 million, or at $750 psf.


A redevelopment of the former Pei Fu Industrial Building, InSpace will be a new eight-storey building with a total of 84 units (Credit: Samuel Isaac Chua/EdgeProp Singapore)

Ong has given a lot of attention to the details of the space. For a touch of glamour, he has coined the term “grand suites” for the ground floor units that feature a soaring ceiling height of 7.8m, dual frontage and a centrally situated mezzanine level, which will be ideal for office space. The dual frontage allows for the display of merchandise or branding purposes, says Ong.

The “garden suites” are the mid-floor levels, which have breakout areas and balconies on the sides, where people can hang out or take an evening stroll. The “courtyard suites” are those on the upper levels which connect directly to the facilities deck on the rooftop. Facilities include swimming pool, dining pavilions, a gym and landscaped garden. Based on the take-up of the units at T-Space, such courtyard suites tend to be the most popular, notes Ong. The building is also going to be the tallest in its neighbourhood, adds Ong, which means unblocked views from the rooftop.

Given the location of In Space within the Hougang industrial area, Ong expects interest to come from design firms, businesses involved in e-commerce, as well as traditional small and medium-sized enterprises. “We realise that there’s still demand for industrial spaces in good locations, with units that are well laid out and where there’s ease of access,” he elaborates. “That’s why we have decided to develop most of our developments as rampup factories, so vehicles can be driven straight to the units for ease of loading and unloading of goods.”


Dining pavilions, swimming pool and other facilities on the rooftop deck of the courtyard suites (Credit: SLB Development)

“Smart user space”

Based on the profile of buyers in the previous projects, including T-Space, Ong reckons about 80% of them are business users, with investors making up the remaining 20%. “Many of these investors are also local business owners, and if they can’t lease out the units, they will move in themselves,” he adds.

He wants to position In Space as the first industrial building to feature “smart user space”. SLB is collaborating with a tech firm to develop a smart application for users of In Space. They will be able to use the app to turn on the lights and air-conditioning, shading devices for their glass windows and even smart plugs that have the capacity to be connected to up to 200 machines and devices. This will be able to allow the users to remotely control all the appliances and devices within their individual units. There will be a security camera at the entrance of each unit where companies can monitor access to their individual units from their mobile phones.

These are some of the smart home features in new condominiums that Ong is intending to deploy for his industrial buildings. “It’s time to adopt them in industrial spaces too,” he adds. “If we develop just another typical industrial development, I don’t think it will attract end-users.”

With more people using personal mobility devices (PMDs), Ong is also including charging points on every level. The nearest MRT station is Bartley on the Circle Line which is about 782m away. That translates to an 8-10 minute walk, but on the PMD, it’s just 3-5 minutes away. “Those who don’t drive will be relying on PMDs to get to the MRT station, and the charging points on every level of the building will be a great convenience for them,” he says.


Using personal mobility devices like the e-scooter, it's just a 3-5 min ride to the Bartley MRT station (Credit: Bloomberg)

Upcoming launches

Ong’s plan is to launch at least two new projects every year. In addition to In Space, another project that is slated for launch sometime in 1H2019 is Rezi 24, a 110-unit, freehold residential project at Lorong 24 Geylang. Rezi 24 is a joint-venture project with KSH Holdings and Heeton Holdings.

SLB Development also has another industrial development at 50, Lorong 21 Geylang. It is a boutique development with just 10 units in a block sitting on a 9,011 sq ft, freehold site. The project is likely to be launched sometime this year.

Another project that is scheduled for launch before the end of 2019 is the Gaobeidian project – Sino-Singapore Health City, a township development that is in a joint venture with KSH, Heeton and Oxley. “We have to see how the trade war pans out,” says Ong.

In addition to embarking on development projects in joint ventures with other partners, Ong feels that there are opportunities for SLB in the “real estate fund management business”.


50 Franklin Street was purchased for $51.5 million in Nov 2016 and sold for $90.15 million in Dec 2017 (Credit: Lian Beng)

Overseas opportunities

While at Lian Beng, Ong was key in overseeing the acquisition of the group’s investment portfolio. All three properties he acquired in Melbourne, Australia, were divested by end-2017. The latest was its office tower at 50 Franklin Street, which was acquired for A$51.5 million in November 2016 and sold just over a year later in December 2017 for A$90.15 million.

In July 2017, a Lian Beng and KSH Holdings 80:20 joint venture sold a low-rise apartment block at St Kilda for A$34 million, having acquired it just a year earlier for A$24 million. Hence, the joint-venture partners walked away with a A$10 million profit.

The month before, in June 2017, Lian Beng divested the historical Newspaper House on Collins Street in Melbourne for A$35 million. It had purchased the building in June 2015 for A$24.9 million.

“We had a good run in Australia,” says Ong. He is unperturbed by the expected slowdown in the Australian residential market this year as he intends to focus on commercial properties, like he did before. He is not just intending to look at potential acquisitions in Melbourne, but in Sydney too.

Besides commercial buildings in Australia, Ong is looking for buying opportunities in Japan, Shanghai and the UK as well. He intends to build a landbank of both local and overseas projects. However, this time, he wants to buy “sites and buildings with income”. “It’s more prudent than buying an empty piece of land, and waiting to get the right approvals,” he reckons.


The 1,427-unit Riverfront Residences developed by SLB as part of a consortium with Oxley Holdings (Credit: Oxley Holdings)

“First-mover” advantage in en bloc market

Ong is also monitoring sales in the Singapore residential market as SLB is part of the Oxley-led consortium that is developing the 1,052-unit Affinity at Serangoon North Avenue 1 and the 1,427-unit Riverfront Residences at Hougang Avenue 7. Both projects were launched last year.

Affinity At Serangoon benefitted from its proximity to one of the 12 new stations that will be coming up on the Cross Island Line. Since the announcement on Jan 25, over 100 units have been sold, bringing total sales to close to 40%. Riverfront Residences benefitted from the preview of The Florence Residences last weekend (Feb 16-17), with over 20 units sold over the two days. To date, a total of 887 units (about 60%) in the development has been taken up.

Being “first-movers” in the en bloc market by acquiring sites early in the cycle at more attractive land prices, Ong says that he, along with the joint-venture partners of these projects, hopes to “reap the rewards over the next few years”.

In the meantime, he will be jetting off to Melbourne and Sydney in search of new acquisitions and striking new joint ventures.

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