This story appears in the August 17, 2014 issue of Forbes Asia. Subscribe to Forbes Asia
By Jessica Tan
Even while on a holiday to Tasmania last September Singaporean property developer Koh Wee Meng could not help himself.
"It so happened that I came across this plot of land while driving along, seeing a 'For Sale' signboard. After talking to the agent, I came to realize it's cheap," says the man who notably built up parts of Singapore's Geylang district and has timed the city-state's property cycles well enough to secure a $1.55 billion net worth. "For A$4 million [the price of two three-bedroom condo apartments on the fringe of his home city] you can own 2,000 square meters."
Click here for more from this issue’s Singapore Rich List
As it turned out, that short stay led Koh's Fragrance Group to its maiden foray abroad. Soon after picking up that acreage along a main drag of Hobart, the capital of Tasmania, Fragrance acquired two other mixed-use parcels in Melbourne and one in Perth.
Apartments, offices and retail are planned for the four sites, which are all in central business districts. Koh says he's on the lookout for additional acquisitions in Australia.
Koh has done more than 100 projects in Singapore since 1992 but has tailed off. He also controls its second-largest budget hotel chain, Fragrance, operated under Global Premium Hotels (GPH), a Fragrance Group unit that was recently spun off.
He and his wife own 85% of Fragrance Group and 65% of GPH; both trade on the Singapore stock exchange.
A well-timed entry into Australia is Koh's best shot at making his next billion. Developers in land-scarce Singapore have faced rounds of government measures in recent years to cool price run-ups. "You can't run fast like in the past," he observes. "In the past perhaps you can sell 100 units within one or two months. Now, to sell 100 units, you take nine months." Koh believes conditions "will continue to be tough."
Several Singapore builders have rushed into Iskandar, the rising Malaysian metropolis just a 30-minute drive north of Singapore, while others have ventured into Vietnam and Myanmar. But Koh thinks that, along with peers like Ho Bee Land and Hiap Hoe, he is trying a more conservative stretch. "Australia is a safe country," he says. "I prefer a country where the infrastructure is in place and where there's political stability. I want to go to a place where the security is good. I can work safely; I can walk safely."
Mark Wizel, director of the Melbourne sales team at CBRE and the agent for one of Fragrance's purchases, says there's a historic undersupply of apartments there in the face of a "strong underlying international student population and the strong net migration coming to Melbourne out of Asia."
Koh says all four buys in Australia totaled $156 million and were financed entirely by Fragrance Group, without bank loans. He says that one of the properties, along Collins Street in Melbourne, will be developed into a skyscraper, subject to approval.
"Over the next 18 months you should be able to see some sales and construction activity," says Koh, adding that all developments "will move at one go." Result: "Maybe it will take 3 to 4 years to complete." GPH, his hotel business, may enter the Australian market, too.
Koh moved from a family jewelry business into property development during Singapore's early 1990s boom. In 1996, he began developing budget hotels in the seedy Geylang district, a venture that buffered him from the 1997 financial crisis as most property prices went south.
In 2009, Fragrance had another run at Singapore property. “During the global financial crisis, when some developers could not afford to buy land, we were the ones buying every month, ” he says. It was during this period that his residential projects got bigger and bolder and GPH began to enter the midtier hotel business with its Parc Sovereign brand.
Business was brisk right until early 2013. That's when he braked again, tendering for only one plot of land in Singapore, after going on a billion-dollar buying spree the year before. "You must never, never eat until the tail end," says Koh, who is most comfortable speaking a mix of English, Mandarin and Hokkien, a Chinese dialect. “You have to tell yourself: ‘Don’t be greedy.’’
While Fragrance Group has grown dramatically, Koh still keeps his office operations lean with no more than 25 on staff. Fragrance doesn’t conduct earnings briefings for analysts and management rarely gives media interviews. Koh doesn’t even have an email address or own a smartphone. (He carries an old
“To grow the company is my primary concern. I tell my people, if there’s anything urgent, just call my handphone, there’s no need to email,” he says. “My thinking is that I spend my time working on the company and making it grow.”
