http://www.businesstimes.com.sg/hub/...-the-home-turf

Defending the home turf

25 Nov


DESPITE the attention on its overseas ventures, FCL group CEO Lim Ee Seng maintains that Singapore remains a core market of the developer's portfolio. He gives a breakdown of the developer's strategy to weather the headwinds in the Singapore property market:

Focus on the mid to mass market segment: This is the deepest part of the market where there will be transactions even in the toughest years. FCL has a portfolio of properties at various stages of development that will translate into a fairly stable income flow.

High level of presales: The majority of FCL's current projects are over 95 per cent sold. This allows the company to focus on managing execution, and also fund most of its construction cost from progress payments. A high level of presales also provides it with clear earnings visibility, a key factor in its ability to manage capital.

Disciplined land banking strategy: The developer only holds enough land for around 1-1.5 years of supply. This reduces the pressure to build and sell, and helps it to bid for, and price its units in accordance with prevailing market conditions since the company is generally able to launch a residential project within six to eight months of acquiring a plot of land.