Lim Yew Soon, MD of EL Development, at his offi ce in the Eldix industrial building in Mandai Estate. (Photo: Cheryl Marie Tay)
Just a decade ago, Lim Yew Soon did not see himself as a player in the property business. Today, he is a prominent developer of several residential and industrial projects in Singapore. We chart his success story, and gain useful industry insight from the man himself.
by Cheryl Marie Tay
It’s difficult to separate Lim Yew Soon from his work. When asked to talk about himself and his life experiences, the managing director of EL Development inevitably finds a way to tie it all back to his business. Personable and humble, he is clearly passionate about his career.
But a little over a decade ago, he was reluctant to even enter the real estate industry. Until 2005, the civil engineering graduate had been working in the IT sector, and his father had been trying unsuccessfully to persuade him to join the family business. The senior Lim headed the eponymous Evan Lim & Co., one of Singapore’s top construction companies, and was keen for his youngest son work for him, following in the footsteps of his older siblings.
Teething problems
Eventually, the younger Lim relented. The construction industry greenhorn found being a main contractor challenging, having to deal mostly with public developers such as JTC, as well as a few private developers.
The plan was to take the company overseas, and he would shadow his older siblings when it came to signing overseas building contracts. Lim soon encountered his main obstacles: forex risks, and developers defaulting on payment. He decided something had to change, so he proposed to his father the idea of branching out into property development. The latter was supportive.
“Rather than take the risk of building for others and hoping we got paid,” Lim says, “I started scouring Singapore for en bloc sales and we developed our first project, the 32-unit Rhapsody on Mount Elizabeth.
“We had limited capital at the time, and not much resources to rent a space for a showflat, so we used the gym of the previous property (on the site) as our showflat, showcasing only the appliances and sanitary fittings due to limited space.
He also recalls his relatively young age at the time as something of a hindrance. “It was 2006 and I was just 31 years old. One of the buyers asked for my IC to verify that I was in charge; they had never heard of Evan Lim as a developer.”
Constructing a reputation
Despite the initial hiccups, Rhapsody on Mount Elizabeth turned out to be a success, and Lim was motivated to further explore property development. The first step was to ensure the company would be recognised not just as a builder but also a real estate developer.
“We realised buyers were getting more conscious of developers’ reputation, so we set up EL Development as a subsidiary of Evan Lim. Then in 2007, to give our buyers clearer branding of our development, we branched out on our own and became an independent firm.”
In 2011, amid favourable market conditions, EL Development turned its attention to mass-market condos and Design, Build and Sell Scheme (DBSS) projects, and began to participate in government land sales (GLS).
To date, the company has developed several residential projects in Singapore’s prime districts, including Parc Centennial, Rhapsody on Mount Elizabeth and Stevens Suites; its industrial buildings include Nordix in Woodlands Industrial Park and Eldix in Mandai Estate, the latter of which acts as his office. Its latest project is Symphony Suites, a 660-unit condo in Yishun expected to be completed by 2019.
Small but steady
There’s no denying that EL Development’s portfolio is modest, at least when compared to local property giants like CapitaLand. Lim admits that before 2011, the company was “too small to participate in GLS, so we targeted en bloc sales”.
Even now, he shares: “We only have 10 full-time staff under EL Development, and we leverage heavily on Evan Lim as a construction company.” In fact, one might be forgiven for thinking the company is a one-man show, since Lim is involved all aspects of the business, from recruitment and land-sourcing to finance, administration and project management.
Still, he has managed to carve a name for the company and himself in Singapore’s competitive real estate world. “Our success model comes from our ability to catch opportunities in the market. Once we notice the market will head in a certain direction, we take the opportunity.
“Being a small company, we don’t have a multi-layered hierarchy and can adapt our property designs to our buyers’ preferences very quickly. Our affiliation with a construction company also helps. And we are able to strike a balance between marketability and buildability. After all, what is marketable may not always be buildable.”
It’s not everyday a small fish in a big pond can thrive, but Lim’s willingness to adapt and get his hands dirty seem to have done the trick. “As this is a family business, I am involved in every step of the process, so decisions are made more quickly. I’m probably closer to the ground than many bigger developers.
And though he has never been formally educated in real estate, he considers his qualifications an asset to the business: “My educational background in civil engineering actually helps me better understand many aspects of the building process.”
Predictions, precautions and perks
Unlike many developers, Lim’s take on the property cooling measures more concerned with the bigger picture instead of prices alone. “For the government, the economy is a priority. Relaxing or removing the ABSD (Additional Buyer’s Stamp Duty) would encourage both locals and foreigners to buy and therefore, boost the economy. There is only so much the government can do to keep home prices affordable, and even though we have not seen any large price drops, the stagnation of property prices over the past few years shows the measures are working.”
He also warns of the measures’ negative impact on hardworking Singaporeans: “The seven percent ABSD on a second property is a heavy burden on would-be upgraders. The ABSD has artificially subdued demand, because it penalises those who have been financially prudent and saved up for a property that is perhaps better suited to a family, something the government encourages Singaporeans to do.”
Such practicality makes it easy to see that a large component of Lim’s success is his prudent, cautious nature. Asked about his future plans for the EL Development, he says, “Currently, we are quite conservative in terms of our business plan. We don’t acquire a lot of land banks or projects, and we develop a new project every two to three years, focusing on GLS and mass-market developments.”
He firmly believes the “single biggest lesson” he has learnt in his years in property is financial prudence. He recalls the Lehman Brothers crash in 2008, when EL Development faced the danger of its own financial crisis in the face of spiking interest rates, but was spared when the market recovered soon after. He attributes his financial prudence to this point in the company’s early history.
However, he does enjoy the advantages of running a privately held company. He says with a smile: “We are not under pressure to report yearly growth. As such, we have the freedom to pick and choose our projects. We are in a sweet spot because we can participate in GLS and develop mass-market condos, but not being listed, we are not required to consistently buy land and develop property.”
Developmental difficulties
So what are the challenges Lim faces in this industry? The main one, he says, is meeting buyers’ expectations. “Singaporeans’ expectations have become very high, but buyers may not understand the limitations contractors and developers have. And with social media, it is very easy to spread information. People post complaints about developers and properties, which can affect our reputation.”
This means he must work doubly hard to maintain and improve the company’s reputation. “We try our best to do quality-control in every single aspect, but lapses now and then are unavoidable. But ultimately, any defect will be fixed.”
He explains the process briefly, beginning with the company’s engineers submitting its property specifications to the Building & Construction Authority (BCA), which may have certain objections.
“It’s unpredictable, but this means our engineers must change some features to meet the BCA’s requirements, and we usually don’t have the time to change the same features in our showflats to accurately represent the BCA’s standards. We do meet those requirements (in the properties themselves) and that actually costs more, so we hope our buyers understand we are not trying to cut corners or mislead them.”
A push in the right direction
Lim credits much of his success to his late father Evan Lim, who passed away in 2012. He says of his parent and mentor: “He trusted me to make decisions despite my lack of experience when I first joined the company. During the Lehman Brothers crisis, he told me: ‘When you do business, you will make and lose money. Don’t be too troubled, but think of what you can do to improve the situation.’ He did not reprimand me but instead, encouraged me. I considered him a form of spiritual and moral support.”
It was this support and indeed, the elder Lim’s persuasion for his son to join the family business, that has led to Lim Yew Soon’s love for what he does. Even when he talks about the challenges he faces, there is unmistakable enthusiasm in his demeanour.
Ultimately, he is grateful for the opportunity he was given 10 years ago.
“As a private company, the ability to compete with the big boys on the larger condo sites is something we never dreamt we could achieve. But having done so a few times already, it’s truly one of my greatest career achievements.”
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