SINGAPORE: In 1941, a 641,148 sq ft freehold land parcel at Coronation Road was valued at four cents psf, or a total of $25,646, according to a table of valuation records prior to World War II published by Knight Frank in its latest book, The Evolution of Real Estate — Journey to the Past and Future: from 1940 to 2015”, commemorating the firm’s 75th anniversary.
The price of four cents psf is a far cry from today’s land and property prices.
For instance, in 2013, CapitaLand paid $366 million for a 403,015 sq ft plot on Coronation Road in a government land sales tender.
The price for the 99-year leasehold residential development land parcel translates into $908 psf per plot ratio (ppr).
In terms of price psf, it is 22,700 times more expensive than the freehold site of 72 years ago.
Tan Tiong Cheng, executive chairman of Knight Frank Singapore, attributes the transformation of Singapore “from third world to first in one generation” largely to the Land Acquisitions Act introduced in 1966.
It gave the government the authority to acquire private land quickly for the development of infrastructure — such as schools, airports, public transport, hospitals and industrial estates — and turn the slums into public housing flats.
In 1960, only 44% of the land was owned by the state.
Twenty-five years later, the figure was raised to 76%, achieved through land acquisition, land reclamation and transfer of British military land.
In 2007, the percentage of state-owned land rose to 85%.
Today, about 90% of land is held by the state, according to Knight Frank.
Tan (left, with Yeo): Having grown the company and seen so many changes, our biggest objective is to make sure things are in safe hands
Intertwining histories
“[Knight Frank was] the biggest beneficiaries [of the Land Acquisitions Act] in that we acted on behalf of people whose properties were being acquired by the government and ensured that they received adequate compensation,” recounts Tan, who took over the running of the firm in 1986.
When the government sold land by public auction, Knight Frank was involved.
According to records kept by the firm, in a public auction in 1952, a 99-year leasehold 10,000 sq ft vacant land parcel on Shenton Way was sold for just $22 psf, or a grand total of $220,000.
Knight Frank was also involved in the first government land sales programme introduced in 1967.
When URA wanted to conduct its first auction of state land for residential development on Kew Drive in East Coast in 1992, Knight Frank was the appointed agent.
It was also the first property consultant to have successfully conducted a collective sale in Singapore, when it sold Cosy Mansion for $24.7 million in 1994.
Knight Frank Singapore started in 1940 as Cheong Hock Chye Pte Ltd by its eponymous founder.
It was subsequently renamed Cheong Hock Chye & Co (CHC).
Cheong Thiam Siew, chairman of Knight Frank, who passed away in 2007, took over the helm of CHC in 1949 after his father’s passing.
The property consultancy firm evolved over the years as more international property consultancies entered the scene.
In 1983, CHC merged with Knight Frank to form Knight Frank Cheong Hock Chye & Baillieu to carve a bigger niche in the Singapore property market.
The new entity was 55%-owned by CHC and 45% by Knight Frank.
The company was renamed Knight Frank in 1996.
Changing hands
In 2011, LC Development, a Singapore Exchange-listed property developer with a focus on the hospitality sector, acquired an 80% stake in CHC for $34.1 million, which gave it a 44% stake in Knight Frank Singapore.
The 80% stake in CHC was acquired from the firm’s seven investors, including Tan and Knight Frank’s group managing director, Danny Yeo.
LC Development was renamed LCD Global Investments in October 2013.
In February this year, LCD Global exercised its option to purchase the remaining 20% stake in CHC, giving it a 55% stake in Knight Frank Singapore.
LCD Global itself became a takeover target recently.
Last September, J Trust Co Ltd acquired a 29.5% stake in the company through its subsidiary, J Trust Asia, for $93.14 million.
In February, AF Global, a joint venture between listed jewellery retailer-turned-property developer Aspial Corp and listed property group, Fragrance Group, controlled by brothers Koh Wee Seng and James Koh Wee Meng respectively, made a general offer for LCD Global with a bid of $233 million.
As at March, AF Global and its various parties owned 83.9% of LCD Global.
As AF Global, Aspial and Koh Wee Seng are controlling shareholders of LCD Global, they are now indirectly major shareholders of Knight Frank Singapore as well.
“We have sold [CHC], but Knight Frank UK is still a key owner, and we still practise under a licence agreement,” explains Tan.
“The licence agreement will ensure that we’re 100% independent.
Of course, there’s bound to be a perception of conflicts of interest because they [AF Global] are developers.
But, certainly, internally we will make sure the priority is our clients.” Succession planning is already in place.
“Having grown the company and seen so many changes, our biggest objective is to make sure things are in safe hands,” explains Tan.
“And we have identified some key people to run our core businesses.” For Tan, it is “business as usual” after the firm’s 75th anniversary celebration dinner on April 22.
This article appeared in the City & Country of Issue 674 (Apr 27) of The Edge Singapore.