Across borders reproduces the new year message from the CEO of Keppel Land, Mr Ang Wee Gee, to staff on 3 January 2017.
Happy New Year!
Thanks to all of you, while 2016 was a difficult year, we continued to execute our strategy well, and performed better than expected, better than in 2015.
BUSINESS AND STRATEGY
In 2016, we stayed focused on our core markets of Singapore and China and growth markets of Vietnam and Indonesia. Our many years of determination and hard work in diversifying our income geographically has produced our desired outcome. Despite the sluggish market in Singapore, we continue to grow strongly as a Company, with our overseas businesses contributing in excess of 60% of our profit last year. In total, we sold about 5,700 residential units in 2016, of which about 3,800 units were sold in China and about 1,500 units were sold in Vietnam. This is 25% higher than the total 4,567 units we sold in 2015. Keppel Land China has become a major contributor to our Company’s profit and will remain so in the coming years.
Capitalising on the favourable market conditions in Vietnam, we launched four projects for sale in Ho Chi Minh City (HCMC) in the second half of 2016, all of which were met with strong demand. As these projects will only be completed over the next few years, we can expect profit contribution from Vietnam to grow steadily in the coming years. Last year, we also invested prudently and scaled up in the high growth cities within our focused markets. For instance, we strengthened our presence in HCMC through two major acquisitions, both located in the prime Thu Thiem New Urban Area, which is slated to be HCMC’s new CBD. We also celebrated the successful opening of Saigon Centre retail mall in August.
In line with our strategy to expand our commercial portfolio, and leveraging on our strengthened retail capabilities with our earlier acquisition of Array Real Estate which was renamed to Keppel Land Retail Management, we purchased a stake in 112 Katong retail centre in Singapore, as well as a newly-completed retail development in Shanghai. Our suite of Grade A office buildings in key cities was augmented with the completion of International Financial Centre Jakarta Tower Two and the topping off of Junction City Tower in Yangon.
As part of our plan to build strategic partnerships, we increased our investment in Nam Long Group, a leading affordable housing developer in HCMC. We also expanded our collaboration with Shwe Taung Group, a reputable conglomerate in Myanmar, through our investment in Junction City Phase 2 in Yangon. Just recently, we formed a joint venture with Indonesia’s Metland Group to develop a landed housing estate in Jakarta.
Throughout 2016, we proactively recycled assets to achieve higher returns for our shareholder. Our business heads constantly review each and every asset in their portfolio thoroughly to ensure that we divest them at the most appropriate time and at the best price. We successfully monetised assets worth over S$500 million during the year. These assets included Life Hub @ Jinqiao, a mixed-use development in Shanghai; International Centre and Sedona Suites in Hanoi; The Belvedere in Colombo; Keppel Thai Properties; Sedona Hotel Mandalay; Jiangyin International Golf and Country Club; and our township developments at The Botanica, Chengdu and Central Park City, Wuxi, both mostly completed.
To be a leading property developer, we need to constantly improve our products and services so as to offer the most value to our customers. In this regard, several initiatives were implemented last year arising from the recommendations of multi-disciplinary internal teams that were formed to explore new ideas. We introduced smart home features, Habitap mobile application, and Laureate concierge services for Corals at Keppel Bay. To market our homes more effectively, we tapped on social media by setting up mobile websites in Singapore and China, and built a pilot virtual reality show suite at Highline Residences.
Keppel Land Office Management was formed in April to transfer our wealth of knowledge and experience in office development in Singapore to our overseas units. With the successful pilot of Workspace at Keppel Towers, we are expanding the co-working space concept to Keppel Bay Tower in Singapore, Saigon Centre in HCMC, Junction City Tower in Yangon, and Park Avenue Central in Shanghai.
CSR AND RECOGNITIONS
While we do well, we also want to do good. Keppel Land achieved a total of about 4,800 hours of community service in Singapore and overseas in 2016. In Singapore, we championed the arts through a weekly volunteer programme at National Gallery and hosted underprivileged school children and their families at the Gallery during the Keppel Community Month in August.
We also collaborated with charitable organisations to reach out to needy families. Overseas, a total of five volunteer trips were conducted for the Words on Wheels mobile library programme in HCMC, Vietnam, and Water for Life in Yangon, Myanmar, while staff in China and Vietnam volunteered at adopted schools and orphanages.
We continued to receive international recognition for our accomplishments in corporate excellence, quality and sustainability during the year. We were named the Best Overall Developer in Singapore, Vietnam and Myanmar, amongst other honours, at the Euromoney Real Estate Awards 2016.
Keppel Land China was conferred the Top 10 ASEAN Companies in China for the fourth consecutive year by the China-ASEAN Business Council. At the Myanmar Property Awards 2016, we received accolades for Sedona Hotel Yangon (Inya Wing) and Junction City. Marina at Keppel Bay was the first marina in Asia to be conferred the Marina Excellence Design Jack Nichol Award by The World Association for Waterborne Transport Infrastructure (PIANC), beating other international marinas to clinch the title. At the Global Real Estate Sustainability Benchmark 2016, we were ranked first in the Residential (Global), China and East Asia sectors, and third among developers globally.
CULTURE AND PEOPLE
Indeed, crucial to the success of any business strategy, is having the right culture and the right people. Following the 2015 Employee Engagement Survey (EES) results, we put in place new initiatives to step up staff communication and engagement. Short and long term plans for the Company were shared regularly at various platforms like the Annual Staff Communication Session at the beginning of the year and the Annual Staff Conference in Singapore, China and Vietnam in the middle of the year, as well as unit-level townhall meetings on a quarterly basis.
We also took every opportunity to promote innovation. The “Project Thinking Unboxed” initiative was introduced to encourage staff working in small teams to look into ideas that could bring value to the Company. These initiatives, together with our engagement efforts over the years, have helped to keep our staff engagement levels high, as shown by our improved overall engagement score in the 2016 EES Pulse Survey results.
Moving forward, we will continue to develop our people through well-planned job rotation and job enlargement programmes. For example, at least 50 HQ and senior staff within Keppel Land have experienced job rotation, overseas posting or a role change in 2016. We have also seen the results of our succession planning efforts, most notably in our China management team with various staff stepping up to take on greater responsibilities. We will encourage our promising staff to take on overseas postings and accelerate our localisation efforts to develop our staff and strengthen our operating platforms overseas. We will make every effort to keep ourselves lean and productive to stay competitive in the tough times ahead. We will also collaborate closely within the Keppel Group to unlock synergies and drive stronger performance.
We expect 2017 and in fact, the years beyond, to be no less challenging than 2016. However, as we have painstakingly built up a strong foundation for our Company over the years, through the constant review and refinement of our strategy, strengthening of our operating platforms in our key markets, development of our talent to their fullest potential, and reinforcement of our open, collaborative, entrepreneurial and innovative culture, I am confident that we will continue to overcome future challenges and forge ahead successfully.
Once again, a big thank you to all of you. Our achievements so far would not have been possible without your dedication, hard work and resourcefulness.
I wish all of you a happy, healthy and successful year ahead!