Behind The Place Holdings’ share-price bull run

The share trading activity of Singapore-listed investment holding company, The Place Holdings, may not have reached the scale of US video-game retailer GameStop, whose share price was driven up 400% by a stampede of Reddit retail investors over three days in the last week of January.

However, a 1.5-cent or 14.7% surge in The Place Holdings’ share price to 11.7 cents at 10.19am on Jan 25 was enough to trigger a query from market regulator Singapore Exchange Regulation about its “unusual price movements”. It closed the day at 12.8 cents, 25.5% higher than the previous day’s close of 10.2 cents on Jan 22.

From January to November 2020, The Place Holdings’ share price had flatlined at around one cent a share. The upward trajectory in its share price started from early December.

Series of joint ventures with MCC Land

It began on Dec 3, when The Place Holdings announced a “strategic collaboration framework agreement” with MCC Land, the Singapore-based property development arm of one of China’s state-owned enterprises and a Fortune 500 company, Metallurgical Corp of China (MCC). It is listed on both the Hong Kong and Shanghai Stock Exchanges. MCC Land is also the developer for the upcoming Executive Condominium Provence Residence.

The collaboration agreement was for the redevelopment of the freehold Realty Centre at 15 Enggor Street in Tanjong Pagar in the CBD, which The Place Holdings’ 51%-owned subsidiary, New Vision Holding, had purchased en bloc for $148 million back in April 2019. Subsequent to the announcement, The Place Holdings’ share price soared 161.5% over the course of one month: from 1.3 cents at the close of Dec 3, to 3.4 cents at the end of Jan 4.

On Dec 21, The Place Holdings announced that the company was subscribing to 20% of the shares in a joint-venture company together with MCC Land, for the development of a 99-year-lease site at Tanah Merah Kechil Link. MCC Land had beaten 14 other bidders to win the coveted site - located next to the Tanah Merah MRT Interchange Station - in a government land sale (GLS) tender in November, with a top bid of $248.99 million ($930 psf per plot ratio, or psf ppr).

This was followed by an announcement on Jan 3 on the signing of a shareholders’ agreement with MCC Land and Ekovest Development, a subsidiary of Malaysia-listed construction and engineering firm Ekovest Bhd. The shareholders will jointly develop a new 264-unit condominium, with a 21,528 sq ft retail component, at Tanah Merah Kechil Link. MCC Land will take a 51% stake in the joint venture, while Ekovest and The Place Holdings will hold 29% and 20% respectively.

The Place Holdings’ share price shot up 61.8% following the announcement — from 3.4 cents on Jan 4, to 5.5 cents on Jan 18. It vaulted another 180% to close at 15.4 cents on Jan 29. It closed slightly lower at 15 cents on Feb 2.

“MCC Land is one of the partners whom we have come to build a strong relationship with,” says Fan Xianyong, CEO of The Place Holdings, in an interview with The Edge Singapore. “MCC’s strengths are in design, construction and real estate development. We are better at creating innovative property concepts, staying abreast of technology by merging property management with the Internet of Things, and bringing interaction and vibrancy to the community. So, we complement each other to maximise the potential of our property projects.”

Leveraging mixed-use developments in Singapore

In Singapore, MCC Land and Hao Yuan Investment are expected to launch One Bernam, a 351-unit condominium with commercial podium on the first level, sometime in 2Q2021. Hao Yuan won the 99-year leasehold site on Bernam Street in a GLS tender in September 2019, with a bid of $440.9 million ($1,463 psf ppr).

One Bernam is adjacent to Realty Centre, which sits on a freehold site of 11,000 sq ft, with a plot ratio of 5.6+ and maximum height of 175m. As it is considered part of Anson Road, it will be able to capitalise on the 25% to 30% increase in gross plot ratio under the government’s CBD Incentive Scheme introduced in 2019 to encourage rejuvenation in the city centre. Realty Centre will be redeveloped into a new mixed-use development with commercial and residential components.

The Place Holdings has appointed DP Architects to design the new project on the site of Realty Centre. Incidentally, DP Architects is also the design architect for One Bernam.

The Place Holdings would like to link the two projects given their proximity to each other and the frontage along Enggor Street on one side, and Bernam Street on the other. “But we still need to discuss with the stakeholders and seek government approval as one project has a 99-year lease, and our site is freehold,” explains Fan. “While Realty Centre may be a small-scale redevelopment site, its location is very good, and the product offering is unique.”

MCC’s management and The Place Holdings’ Beijing-based The Place Investment Group are acquainted with each other in China, says Zhang Wei, The Place Holdings’ chief strategy officer. “After connecting with MCC Singapore, we found them to be a great partner for us as they have a strong presence as a builder and real estate developer in Singapore,” he adds. “And we would like to collaborate with them at Realty Centre.”

‘Part of a grand strategy’

For The Place Holdings, “the Realty Centre and Tanah Merah sites are a small part of a grand strategy towards even bigger developments”, says Fan. “Singapore is our first stop. Later, we intend to expand to regional markets such as Malaysia and Australia.”

The Place Holdings was previously listed as Eucon Holdings. The shareholders of The Place Holdings injected $93.7 million through the subscription of new shares and diversified into media-related business in October 2016. The name of the listed company was changed to The Place Holdings in May 2017. The Place Holdings is led by group executive chairman Ji Zenghe and Fan, both veterans in the property development and media-related industries, who are based in Singapore.

The parent company, The Place Investment Group, is a multi-billion-dollar conglomerate in China with a sprawling business portfolio — from tourism, media, property management to biomedical technology investments and international trade. However, the three main pillars are: property development and management; cultural tourism and related retail business; as well as media-related businesses.

In China, The Place Investment Group’s affiliate, Beijng Aozhong Xingye Real Estate Development Co, developed the landmark Beijing Shi Mao Tian Jie or “The Place” in Beijing. Built in 2006, The Place is a mixed-use development located in the capital’s CBD. It has two prime office towers, high-end retail and a 250m by 30m “skyscreen” or digital canopy — which is “Asia’s largest”, according to The Place Holdings.

China’s Times Square

“The Place in Beijing has become a landmark and tourist destination very much like the Forbidden City or the Great Wall of China,” says Zhang. “It’s the equivalent of the Times Square in New York City.”

Prior to the Covid-19 pandemic, The Place in Beijing was the venue for large national events such as New Year countdown parties, Christmas and MICE events (meetings, incentives, conventions and exhibitions), Zhang relates. Global brands such as Nike’s Jordan brand, Victoria’s Secret and Zara have their flagship stores in the retail mall at The Place. Events held under the digital canopy at The Place include the National Football League, and the launch of Jordan products, he adds.

Smartphone maker Xiaomi’s flagship store is also situated at The Place. Xiaomi uses the digital canopy as its event venue to showcase its latest products using the Internet of Things and smart media, notes Fan.

These events at the digital canopy are part of the group’s media-related business under Beijing Vast Universe Cultural Communications Co. The group had acquired the company in 2016, which marked its entry into the media business.

Moving beyond physical real estate

Meanwhile, The Place in Beijing is undergoing a rejuvenation. “It is moving beyond physical real estate,” says Fan. “Innovation is one of our key pillars. Every real estate development that The Place Holdings has undertaken has innovation behind it from the start.”

Back in 1990, The Place Investment Group had developed its first condominium project in Beijing. In the past, there was a height restriction of 14 storeys for property projects in the northern part of China due to construction limitations. However, the group worked together with a reputable architectural firm and the relevant authorities to develop a high-rise condominium of 30 storeys. “It was a breakthrough for the building industry then,” recounts Fan.

Completed in 2000, the group’s maiden condominium development, Global Trade Mansion, incorporated gardens, pavilions and communal facilities that were ahead of its time. “It surpassed the standards of lifestyle developments built in that era,” relates Fan. “After we set the trend, the rest of the market followed.”

Likewise, The Place Holdings wants to do something different in Singapore, says Zhang. “Our eventual aim is to create 10 such integrated properties with digital canopies around the world that can provide communities with new immersive, interactive media solutions,” he continues. “We have already operated the digital canopy in Beijing for more than 10 years, so we have experience in interactive media and we have seen how it influences consumer behaviour. We are confident that we can replicate the success in Singapore.”

Domestic tourism at ‘China’s Grand Canyon’

In 2018, the group acquired a 270,500 sq m (2.9 million sq ft) land site at the Mount Yuntai Integrated Tourist Township, located at the entrance of Mount Yuntai Scenic Area. Mount Yuntai was among the first natural attractions in China to be conferred a Unesco Global Geopark and was listed as a National Park of China in 1994. In 2017, it received a record 5.57 million domestic and international visitors.

Last October, the group completed the acquisition of Tianjie Yuntai Wanrun (Xiuwu), to diversify into cultural tourism business. Mount Yuntai Integrated Tourist Township features theme parks, hotels, entertainment facilities and clubhouses, some of which are currently under construction. The group plans to develop its site into property projects that cater to tourism and “new retail trends”, notes Fan.

In 2019, the firm applied for a change of the zoning from commercial to residential use. Commercial projects have land-use rights of only 40 years, and can only be sold to corporate entities, explains Fan. Upon conversion to residential use, the projects built there can be sold to individuals, and the land-use rights will be extended to 70 years, with gross floor area increased as well, he adds. This will allow the group to build villas on the site. They can also serve as holiday homes for purchasers which, according to Fan, “command a higher value”.

“Because of Covid-19, domestic tourism has increased in China,” he adds. “Yuntai Scenic Area — located about 70km from Zhengzhou City, the provincial capital of Henan — is similar to the Grand Canyon in the US. However, it lacks quality tourism amenities and hospitality infrastructure.”

Fan believes that the group’s site in Mount Yuntai Scenic Area “will be able to support new economic opportunities and promote more business”.

Improving quality of life

The group is seeking partners to participate in large-scale projects within Singapore and across the region. “While real estate development and property management is a key pillar of The Place Holdings’ overall business in Singapore, it is not the main focal point,” Fan says. “We want to build a platform of strategic partnerships where we collectively contribute our respective capabilities in creating large-scale landmarks in Asia.”

The group wants to further strengthen its relationship with MCC — not just in Singapore, but elsewhere in Southeast Asia too, notes Fan. “In the future, if we plan to expand to the Philippines, Sri Lanka and Malaysia, we can do that with MCC,” he says.

Developments that incorporate big data and artificial intelligence are few and far between in Singapore, observes Fan. “The population is ageing; this will bring about changes and improvements in quality of life,” he adds. “Singapore is one of the countries with the longest lifespans. It has a good climate and environment. There is room for enhancements in buildings and property developments that improve the quality of life.”

Fan sees The Place Holdings’ mission as “bringing the best technology and innovation into our developments in Singapore”. He wants the group’s future developments to be “experiential centres” as well.

“We are more than just a real estate developer or property manager,” says Fan. “We want to create communities that are vibrant and connected in Singapore.”

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