Edmund Tie & Co charts a new course

/ The Edge Property |

July 15, 2016 11:09 AM SGT

The metal plate bearing the name Edmund Tie & Company once graced the main entrance of the company’s office on the 35th floor of Shaw Towers. It is now outside the boardroom, where it has been placed for the past two decades. It was recently polished, and could once again take price of place at the main entrance.

After all, on July 1, the management of DTZ Debenham Tie Leung bought over the majority stake in the company held by Cushman & Wakefield. It has since reverted to its original name, Edmund Tie & Co.

Having cut its ties with international property consultancy Cushman & Wakefield, Edmund Tie & Co intends to chart a new course for itself as an independent local firm.

For some industry veterans, there is a sense of déjà vu. They remember the last time Tie and a group of more than 10 of his colleagues at the former Jones Lang Wootton (now JLL) walked out en masse 21 years ago to start Edmund Tie & Co.

“The origins of our company go back to 1995 when we created one of the first local property consulting companies owned and led by Asian leadership talent, insight and experience to compete on a par with the international property firms,” Tie said in a statement on July 1 regarding the relaunch of Edmund Tie & Co.

According to industry sources, the rebirth of Edmund Tie & Co was inevitable, following the merger of DTZ and Cushman & Wakefield last year. Both are competing firms in the real estate consultancy business, they point out.

Prior to that, the firm had been operating as DTZ Debenham Tie Leung for 16 years. DTZ Debenham Tie Leung was the result of an alliance between Edmund Tie & Co in Singapore, property surveyor CY Leung & Co in North Asia and DTZ Debenham Thorpe in Europe in 2000. CY Leung & Co was headed by Leung Chun-ying, who was chairman of DTZ Debenham Tie Leung Asia-Pacific until he left to take on the role of Hong Kong’s third chief executive in 2012.

Revolving-door ownership

The last few years had been challenging for DTZ Debenham Tie Leung, given the revolving- door ownership changes at parent company DTZ. The once-venerable UK firm was founded in Birmingham in 1784. DTZ became the first property brokerage firm to be listed on the London Stock Exchange in 1987 and among the first to venture into China.

DTZ became a victim of the global financial crisis. It was put into administration and delisted in December 2011. To rescue the company, the board of DTZ agreed to sell the firm to UGL, an Australian engineering and services conglomerate. UGL agreed to repay £77.5 million of DTZ’s £106 million debt to the Royal Bank of Scotland.

In early 2013, UGL put DTZ on the market in a bid to cut debt and focus on its core mining and engineering business, according to Australian media reports. Texas-based private-equity firm TPG and its partners — Hong Kongbased PAG Asia Capital and Ontario Teachers’ Pension Plan — bought DTZ from UGL in June 2014 for A$1.2 billion.

Backed by the TPG-led consortium, DTZ then acquired US property brokerage firm Cassidy Turley in early 2015. “Nobody expected that the private-equity fund group would have the appetite to buy another property consulting firm so soon, but lo and behold, they did,” says a property industry observer.

In February 2015, Cushman & Wakefield was put up for sale by Italy’s Exor, the investment company of the Agnelli family, who also owns Fiat Chrysler Automobiles and Ferrari. The TPG-led consortium saw this as an opportunity to build a global real estate firm that could rival the likes of New York Stock Exchange-listed CBRE and JLL. Using its DTZ unit, TPG and its partners purchased the New York-based Cushman & Wakefield for US$2 billion in May last year, with the deal concluded in September.

Subsequent to the acquisition, Cushman & Wakefield was merged with DTZ. The Cushman & Wakefield name has been retained, as it is the more recognised brand in the US with a 99-year history. DTZ’s strength lay in Asia, particularly in China, and therefore the name DTZ/Cushman & Wakefield will continue to be used until next year when the DTZ name will be dropped. “On paper, DTZ was supposed to be buying Cushman & Wakefield, but in reality, it was the other way around,” says an industry veteran with more than 30 years in the business.

Holding on

Most of the shareholders of the various DTZ entities had reached an agreement with Cushman & Wakefield. The exception was Edmund Tie & Co in Singapore. This led to a protracted debate that lasted more than a year, according to an industry source who requested anonymity.

The shareholders of Edmund Tie & Co finally decided to buy over the remaining 69% stake of the holding company from Cushman & Wakefield. “There were only two options available: to buy out or to sell,” says the industry source. “And they decided on a management buyout.”

In Singapore, Tie will continue as chairman of Edmund Tie & Co. The firm is helmed by stalwart CEO Ong Choon Fah, who was also an original co-founder of the company. Ong will continue to head the research and consulting business.

A total of 300 years’ experience

Ong has 25 years of experience in the real estate business and Tie has 40 years. The nine shareholders of Edmund Tie & Co have between 20 and 40 years of experience each, bringing the grand total to 300 years.

One of the shareholders is Yam Kah Heng, who has 38 years’ experience in valuation, investment sales and general management. He remains as senior adviser and continues to lend his expertise. Executive director Heng Hua Thong helms the firm’s hospitality management division, which includes Treetops Executive Residences on Orange Grove Road. A veteran with more than 30 years in the real estate business, Heng will oversee business operations in Thailand and Indochina as well as head the China desk.

Margaret Thean, executive director of residential services, will now also oversee the agency business. She has been in the business for more than 30 years and is one of the original shareholders of Edmund Tie & Co.

“Many of us, including Edmund, are still very passionate about what we do,” says Ong. “And we believe we still have many more years to contribute to the real estate industry. The idea is to pass the company to the next generation of leaders.”

Relationships with Edmund Tie & Co’s affiliates in Southeast Asia remain intact even without the DTZ brand to link them. In Malaysia, there is Nawawi Tie Leung Property Consultants Sdn Bhd and Nawawi Tie Leung Real Estate Consultants Sdn Bhd, helmed by chairman Muhammad Nawawi Mohd Arshad, managing director Eddy Wong and executive directors Ungku Suseelawati Omar and Brian Koh. Its Thailand subsidiary, Edmund Tie & Company (Thailand) Co Ltd, is headed by Heng as managing director designate.

A new beginning

Many industry veterans applaud Edmund Tie & Co’s courage to cut its ties with an international real estate network, and to become an independent local firm once again. “I wish them well,” says the head honcho of another property consulting firm. “It’s a tough market that may persist for another couple of years.”

When Edmund Tie & Co was formed in 1995, the group had also parted ways with an international firm. “We didn’t have a strategic alliance too at the time,” recounts Ong. “Even then, we knew our business was increasingly global and we would need to form partnerships. I think it’s no different now.”

Twenty-one years ago, the firm started from scratch. “We had no staff, no clients and no business,” relates Ong. In May 1996, a year after the company was founded, the government introduced property curbs. And in 1997/98, the Asian financial crisis occurred.

“We have gone through so many crises — from the recession in the mid-1980s to the Asian financial crisis in 1997/98, the dotcom bust in 2000, SARS in 2003, the global financial crisis in 2008 and now the global market slowdown,” says Ong. “Edmund Tie has even been through the oil crisis in the 1970s.”

This time around, however, the firm has more than 260 staff in Singapore, including 162 in property management. “Despite the uncertainty over the past year, many of them stayed with us,” says Ong. “That is really inspiring because it is hard to find staff who will stay with you. Many of them had options, but they chose to remain.”

Targeting 2,000 associates

The firm has 1,400 associates under the DTZ Property Network who will now operate under the name of Edmund Tie & Co Property Network. “We are targeting to grow the number of associates to 2,000 by year-end,” says Ong. “We are investing heavily in training and IT to allow our associates to add value and transit from being brokers to advisers because the pure property brokerage business has been commoditised.”

Some industry sources point out that, at one time, the associates at DTZ Property Network numbered more than 2,000. Owing to the tightening of requirements with the introduction of the Council of Estate Agencies (CEA) six years ago, however, some dropped out of the industry. Others left to pursue other interests because of the slowdown in transactions owing to the increasingly punitive property cooling measures. The uncertainty over DTZ’s future over the past year had also led some to leave the firm.

Will Edmund Tie & Co be able to win new associates now that it is no longer linked to an international property network? Ong believes it will. “Our associates business is not dependent on the international network,” she says. “A lot of the properties that they will be representing will be in Singapore and the region. While we will be marketing overseas properties, we are also very careful to make sure we are dealing with reputable developers and that we abide by the requirements of CEA.”

Looking for new partnerships

Still, the firm will look for a partnership with regional and international players. “Since the announcement on July 1, we have been approached by people,” says Ong. “We are looking for strategic partners with a similar mindset.”

There are opportunities in investment deals — from the sale of office buildings to industrial buildings and bulk purchase of condominium units, says Ong

Ong sees opportunities in investment deals right across the board — from offices to industrial buildings and even bulk residential deals. “With the uncertainty following Brexit, investors will stay clear of the UK and Europe for a while,” she says. “Banks are also concerned about funding. And in the US, with the presidential elections coming up in November, there is uncertainty about the outcome.”

History has shown that in times of volatility, gateway cities such as Singapore will be well positioned as safe havens, adds Ong. “In fact, we have seen an increase in the number of enquiries and people who are open to opportunities in Singapore now that the risks have increased in the UK, Europe and US.”

Ong recognises that the road ahead will be tough. “But we are not afraid,” she says. “Tough situations allow you to innovate and bring you out of your comfort zone.”

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