OCTOBER 2018 FORBES ASIA | 17nology and doing a stint in India with
engineering irm DLF, he has spent his
life in Singapore, building his reputa-
tion as the CEO of three companies at
CapitaLand, where he pioneered real
estate investment trusts and specialized
in mall development around Asia.
He started Perennial with $7 million
of his own money, giving himself ive
years to succeed. In 2011 he listed Peren-
nial China Retail Tr ust in Singapore, and
one investor was Kuok Khoon Hong, the
scion of Singapore’s Wilmar International
and nephew of Malaysia’s richest tycoon,
Robert Kuok. heir relationship helped
drive Perennial’s growth, with Kuok be-
coming a major shareholder in 201 2.
Perennial Real Estate Holdings went
public in 201 4, and the company has ex-
panded beyond property into healthcare.
It boasts a $9 50 million market cap, and
Kuok and his Wilmar International is the
biggest shareholder, with a 5 6.2% stake.
Pua holds 1 0.3%, and Sim holds 15 .4%.
Sim, whose V3 Group houses massage-
chair maker OSIM International and
TWG Te a , irst invested in 2010 ater Pe-
rennial’s consortium won the Capitol ten-
der; he had also bid on it.
Pua is quick to put the Capitol proj-
ect in perspective. He says it represents
only 1 0% of the company’s holdings; 67%
of the portfolio is made up of enormous
mixed-use developments in China as Pe-
rennial seeks to become the dominant
high-speed-rail player. hree projects—
in Chengdu, Xi’an and Tianjin—are along
the national high-speed-rail network, of-
fering stores, hotels and medical hubs
that include eldercare facilities. Five more
may be in the works. “We think margins
in China are much better,” he says, com-
paring it with Singapore.
Perennial has also invested in Indo-
nesia, Malaysia and Ghana. In May the
company announced the $ 15 .6 million
acquisition of a site in Sentul City, a mas-
ter-planned township in Jakarta. In Pen-
ang, Perennial has a joint venture with
Malaysia’s IJM Corp. to develop the Light
City, billed as a waterfront precinct that
will include a mall, convention center,
two hotels, an oice tower and two con-
dominium buildings, plus attractions
such as a theme park, an art gallery and a
large number of restaurants.
he purchase of half of the Capitol
project, as well as lower gains in China,
is hitting Perennial’s proits this year. Net
proit is expected to reach only $ 5 mil-
lion, down dramatically from last year,
and rising to $7 million next year, ac-
cording to an average of analyst estimates
compiled by Bloomberg. But revenue
is expected to come in at $69 million, a
29% rise from last year, before jumping to
$ 146 million next year.
he two banks that cover Perenni-
al have “buy” recommendations on its
shares. DBS calls Perennial’s China proj-
ects “hidden gems,” though with lengthy
gestation periods, while a CIMB report
cites “a faster-than-expected ramp-up of
Capitol Singapore” as one potential cat-
alyst for growth. CIMB estimates that
when the Capitol project is fully opera-
tional it could yield up to $40 million of
annual income.
Perennial does have industry skep-
tics, though the most prominent ones
decline to speak on the record. One
competitor has concerns about Peren-
nial’s China investments, pointing to
the cooling property market, rising
government oversight and consumers’
preference for online shopping.
Another competitor doubts that the
Capitol project will live up to expecta-
tions because high-class retail tenants
will be wary about replacing mid-lev-
el ones, and Kempinski will face stif
competition from the area’s numerousluxury hotels. he 13 1-year-old Raf-
les Hotel, for instance, is set to reopen
early next year ater a full-scale renova-
tion. It announced recently that three
celebrity chefs will open new Raes’
restaurants.
Pua dismisses the doubts. “here are
many successful developments which
house various tiers of retail tenants,” he
says. “A s long as it’s well-planned and ex-ecuted, it would provide a much more
holistic shopping experience to cater to
a wider range of customers.” As for the
hotel competition: “he hospitality out-
look for Singapore remains positive,
and there are limited ultra-luxury hotels
which are housed in conservation build-
ings in the Civic District. he ability to
leverage the Capitol heatre for major
events puts the hotel in a good position
to compete in the market.”
Meanwhile, skeptics warn that Eden
Residences Capitol, with several lats al-
ready on the resale market, needs an
overhaul. Veteran property agent Samu-
el Eyo, managing director of Lighthouse
Property Consultants, says it can be “re-
positioned” for newly rich Millennials
but only ater the Capitol’s retail compo-
nent has been upgraded. “Older rich cli-
entele won’t go for North Bridge Road
as a luxury address,” he says, adding
that it’s now competing with the near-
by South Beach development, where 190
luxury residences just went on the mar-
ket. “It’s brand new, and Eden has already
launched; it will need a lot of marketing.”
Ta k i n g the long view, Pua marvels
at Perennial’s growth to date. “In nine
years, from nothing we created a compa-
ny of this size,” he muses before skipping
ahead to the opportunities in China. Pe-
rennial’s eight high-speed-rail projects,
once they’re online, will contain more
than 4 million square meters. “In ive to
ten years we will be a very diferent com-
pany.” Where does that leave Singapore?“We’re happy to grow in Singapore,” he
says, “if we can create value—but Singa-
pore is getting tough.”
As for lessons learned from the Capitol
project, Pua irst lists patience in resolving
disputes. When asked for other lessons,
he replies: “I think, for partners you have
not dealt with before, it’s important to sew
up everything on paper. Some long-term
partners are the only ones to trust.” F“FROM NOTHING WE CREATED A COMPANY
OF THIS SIZE. IN FIVE TO TEN YEARS WE
WILL BE A VERY DIFFERENT COMPANY.”