PropNex names Kelvin Fong deputy CEO as it concentrates on expansion and leadership rejuvenation

Ismail Gafoor, co-founder, CEO and executive chairman of the Singapore-listed real estate firm PropNex Just turned 60 years old. “Based on my level of energy I’m able to continue as CEO for five years. Is that the best thing to do for the business, if you want it to stay relevant?” The CEO asks. “The most difficult problem facing the real estate business and a lot of businesses is the issue of leadership renewal.”

In contrast, Gafoor believes in building PropNex to last long after his time at the company. PropNex announced an “masterplan” to ensure continuity of leadership and important appointments on August 23rd.

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The most significant change is Kelvin Fong’s appointment as the position of deputy CEO. Fong is 48 years old and has served as executive director and board member at PropNex since the company’s listing in the year 2018. Formerly working for the Republic of Singapore Air Force for six years Fong was recruited to PropNex in 2002. He had been the leader of the largest group of agents working at PropNex which was more than 3,000 prior to joining the PropNex management team.

As vice-chairman of the Chief Executive Officer, Fong will lead PropNex’s Singapore agency, as well as oversee the development of training programs and collaborate with Gafoor on operations and strategy. Fong will also collaborate together with Michael Koh, the group’s newly appointed chief technology officer, in order to accelerate the implementation of PropNex’s digital and IT-related strategies.

“Corporate architecture” in the first
Gafoor continues to “provide strategic direction and assume overall charge for the business of the group” in accordance with the statement of the company.

Eddie Lim, currently senior vice president, was elevated to the newly-created post as chief agent officer (CAO).

Five other employees were promoted to the position of agency vice president (agency vice president). Bobby Sng has assumed the responsibility of the agency’s VP of leadership development. Cijay Tew was appointed agency director for training and development and Marcus Luah has taken on the agency’s VP for business development. In addition, Benjamin Tan will be the agency’s vice president for business strategy, and Ken Ng, the agency director of business development.

“We have created a corporate structure, coupled with a set of processes that allow employees to grow along with the business,” says Gafoor. Gafoor believes that the upper management must be supervised by a person from within PropNex. “It must be someone who has grew up with us, is ensconced in our beliefs and values, who shares our enthusiasm for our company and believes in making a an impact on the lives of people around them. Then, he must be embraced by the people are in his charge. This is the long-term master strategy.”

The present PropNex principal management team, which includes the agency VPs and C-suite They have “over 200 years’ experience in the field collectively” Gafoor says. Gafoor. “I am convinced that they are the best team to build PropNex’s leadership position on the market in achieving Our Vision 2025 of reaching 15,000 salespeople.”

Aiming for 15,000 sales people by 2025.
PropNex had 6,684 salespeople when it was first listed in July 2018. Today it is 12,073 at the time of the July 31st deadline. “We nearly doubled our sales force within 5 years,”” Fong says. Fong. “And we’re looking to double our salesforce by 3000 in the next three years. If we can achieve this leap, revenue also will increase.”

Gafoor Agrees. “If our goal of 15,000 salespeople comes to fruition in 2025, it would be an increase of 20% increase in our sales team, and that is that we will see a 20% increase in our market reach and share.”

PropNex’s 1H2023 revenues were lower by 22.9% y-o-y to $364.28 million, down from $472.33 million for 1H2022. The profit decreased 18.8% lower at $22.95 million.

The project marketing business, which is PropNex’s largest and most significant source of revenue made up $113.5 millions (31%) of its overall business. It was lower by 38.1% from 1H2022, which generated $183.4 million of revenue. According to Gafoor’s estimates, 1H2023’s revenues from project marketing were less due to less launches in the initial quarter of this year.

The launch of new projects started to be recognized in April, according to Gafoor. “Bear the fact that profits from new projects will be recognized only up to 12 weeks after the launch,” he adds.

Although developers’ revenues have been disappointing in certain projects, they have to complete the sale of all apartments within the next five years to become qualified to receive an additional stamp duty (ABSD) reduction which is 35%. “So developers will either have reduce prices or increase the commissions of agents,” says Gafoor.

As Singapore’s biggest real estate company with more than 10,000 agents PropNex has the advantage of being able to make more sales from projects. This is why PropNex has been appointed to the majority of new residential development launches.

New businesses
It also has been able to get various other kinds of sales. The Hong Kong developer with 60 units at Bencoolen has Bencoolen has recently made the decision to sell the apartments. The developer owned the units in the 94-unit block of apartments on Bencoolen Street within the city’s neighborhood for more than a decade. Despite the fact that three joint marketing agencies were hired, PropNex sold 52 of 60 units, claims Gafoor.

Another example was the sale of 48 semi-detached, strata-titled houses in Eleven at Holland. These were mortgagee sales with prices ranging between $3.714 million up to $4.406 million, which is roughly $1,000 per square foot. The units were all taken up in just 36 hours, says Gafoor.

After Eleven @ Holland’s success, Eleven @ Holland, Clydesbuilt Capital Clydesbuilt Capital, who is the developer of Lornie 18 has appointed PropNex to market six units in the project. Clydesbuilt has been holding six of the 18 properties at Lornie 18 to earn rental income following the completion of the project in 2008. PropNex provided the freehold, strata-titled homes for sale for around $6 million which is roughly $1,300 per square foot. So far only four of the six houses have been purchased.

“The benefit that is PropNex is that it allows us to make a pitch, get an agreement, form teams and develop an effective sales pitch based that outlines the value proposition, research, reach out and finally close the deal,” says Gafoor. “This was not our mode of operational procedure before.”

Hong Leong Holdings has also recently appointed PropNex to manage leasing for the Hong Leong Building located at 16 Raffles Quay. The building covers 485,000 square feet in net lettable area spread across the 45-storey office tower as well as the basement space for retail. With the acquisition of Hong Leong Building, PropNex now has an “business area” segment that it can sell to other developers that have commercial properties available to lease.

These are just a few of the new initiatives PropNex has recently taken on Gafoor adds Gafoor.

‘Push factor’
Since establishing its Office at Melbourne, Australia, this April, PropNex has also brought to Singapore projects, such as Melbourne Square apartments in Southbank developed by Malaysian developer OSK Property and an initiative by Australian developer Yarrabank Developments.

“We believe there is some pressure from Singapore investors being unable to acquire an additional or later property in Singapore due to restrictions on cooling,” says Gafoor. “With the exchange rate that is favorable for the Singapore or Australian dollar as well as Australia being an established market, Singaporeans can purchase the property located in Melbourne CBD for $500,000.”

The 10 cycles of property cooling measures in Singapore from 2011 also made buying a house more difficult, says Fong. The most recent set of cooling measures took place in the latter part of April and resulted in a rise by ABSD in the case of Singaporeans or permanent residences purchasing the second or subsequent properties. Foreigners who bought residential property were able to see ABSD rise up to 60%%.

Technological advances have also changed the conventional process of buying a home as per Fong. “Today speed and real-time information are crucial to closing an agreement.” Therefore, he believes that there is an urgent requirement for “continuous training among sales representatives” to reach the level of professionalism required to protect and advise the interests of customers. “This is a key area our new team will concentrate upon,” he adds.