Choo: The best time to enter a market is when there is blood in the streets.

Choo Yeow Ming, chairman and CEO of Asia-Pacific Strategic Investment Ltd (Apsil), says the decision to exit the bereavement services business in Malaysia and enter the property agency business in Singapore had been on the cards for some time. “The best time to enter the market is when there is blood in the streets,” says Choo. “Real estate is a cyclical business. It will bounce back.”

Apsil’s transition to the real-estate services business began with its acquisition of Century 21 Hong Kong from Luke Ng in May 2015. It then acquired Global Alliance Property (GAP) for $1 million. The original acquisition price for GAP was $2.75 million, but was slashed to $1 million, owing to the weakening property market in Singapore. GAP in turn was the result of a merger between Global Property Strategic Alliance and More Property last September. The combined entity has a sales force of 700 agents. On Feb 4, Apsil acquired Century 21 (AsPac), which holds the franchise for Singapore. Century 21 (AsPac) is owned by Ng and Chong Chai Shyong.

Apsil’s real-estate services business currently has 1,100 agents, and it intends to double the number to 2,000. The plan is to create a merged entity called Century 21 GA, says Ng, who is now a director and shareholder of Apsil. “The best time to consolidate the business is in a slow market,” he notes. “When business improves, we can grow the company to an optimum size. Hopefully, in one or two years, we will start to see the benefits.”

Choo decided to enter the property agency sector rather than become a property developer because the upfront investment is less. “And in a downturn like the one we are facing now, developers are stuck with unsold units yet they have to pay hefty penalties,” he adds. Some developers are hit by extension charges imposed under the Qualifying Certificate rules or by the Additional Buyer’s Stamp Duty (ABSD) for unsold units.

The property agency business is scalable, says Ng. “Apsil has a war chest of $20 million to $30 million to hit the acquisition trail over the next six months once the integration of Century 21 GA is completed.” he says.

This article appeared in the City & Country of Issue 719 (March 14, 2016) of The Edge Singapore.