This year, we began looking into what we could do to turn around the current situation, and the time is coming for us groom the next group of people to run the business.” — See Photo by Haris Hassan/The Edge
Metro Homes has taken an unusual step to ensure its longevity and move it out of its current sphere of a family business.
“We are the first agency to be granted Bhd [public limited company] status by [The Board of Valuers, Appraisers, Estate Agents and Property Managers],” says See Kok Loong, executive director of Metro Homes Realty Bhd, formerly Metro Homes Sdn Bhd. “This will allow greater growth of the company. A private limited company, or Sdn Bhd, is allowed a maximum of 50 shareholders. But a public limited company [Bhd] can have more than 50 shareholders.”
There are two types of public limited companies — listed and non-listed — and Metro Homes Realty Bhd, which commenced operations this month, is the latter. With this new status, See says Metro Homes will be able to compete in the more competitive market since the liberalisation of 2014. One result of this was allowing foreign retail real estate companies to enter the local market.
“There are two public-listed retail real estate agencies from Singapore now operating here through licensing or franchise,” says See. “Retail real estate is for normal day-to-day transactions and usually refers to individual sales. Corporate real estate refers to institutional sales such as real estate investment trusts, corporate rental for expatriate staff and so on.”
As Metro Homes focuses on retail real estate, increased competition is inevitable. To compete, See believes the company needs to get bigger.
Another reason for the change is to retain talent.
“Over the years, we have trained a lot of licensed negotiators. After they get their licence, where do they go? They open a new agency and compete with us,” See says. “Because there is no room to stay with us. Now, with the bigger entity, there is room. This is one reason I told the board I want to get a Bhd because I want the registered negotiators to stay with me.”
In addition, See wants to ensure that the company continues long after he and his brother — Datuk See Kok Seng, also an executive director in the new entity — retire from the business. “[Metro Homes] is a family business. But we want to do away with that because we have noticed that, after the owners retire, the company becomes smaller and smaller and irrelevant to the market.”
“We do not want to see that for Metro Homes. That is one of the reasons we want to move forward. This year, we began looking into what we could do to turn around the current situation, and the time is coming for us groom the next group of people to run the business.”
See says there was no certainty the request to operate as a public limited company would be approved by the board but the company decided to go ahead and make the request after doing some checking. The process took time as the Valuers, Appraisers, Estate Agents and Property Managers Act 1981, which governs the board, is not clear on whether this could be done. The Act says an agency can operate as a “sole proprietor, partnership or body corporate”.
“Body corporate” is not defined in the Act but a definition was found in the Companies Act. With this, See presented his proposal to the board and after some checking and ensuring all was in order, his application was approved to operate as a public limited company.
Always planning for the future
See and his brother have never been ones to stick to the tried and tested path of growth for their company. Since Metro Homes started in 1985, in a small office in Petalng Jaya Old Town, where See and his family live, it has grown until at one time it had 16 offices nationwide.
His calling to selling real estate came early. Even when he was studying accountancy at Universiti Malaya, he sat for the negotiator’s licence exam. After spending six months in an accounting firm, it was plain to him that that was not the life for him.
Over the years, his brother and he have survived several slowdowns, which made them realise the importance of always trying to stay ahead of the market. See saw each slowdown as an opportunity to reinvent Metro Homes to take advantage of the upswing in the property cycle.
Today, with the soft market conditions, See took stock, led him to seek public limited company status. He also noticed a rise in the use of technology to do business and is ensuring that Metro Homes embraces property technology.
“We want to move into digital transformation — proptech. What we see right now is that most websites are purely providing information. But I see the next stage as transaction based,” he says. “We have been given the licence to do transactions. If we don’t move into [digital transformation] I think it is a waste. Also, we want to draw people with the same mindset to join us, to help us fulfil this dream of moving into proptech.”
See will use proptech to train new negotiators and prepare them to grab more market share, and he hopes that with proptech, all stakeholders, including customers, will be well taken care of.
“We need to put in technology to ensure that all stakeholders in the real estate ecosystem benefit from its use and there is greater efficiency,” he says.
With this change in the company and its business status, See acknowledges that more companies will probably follow his lead in time, since he has set a precedent. While the company’s overall operations continue without much change, See says the only addition would be financial report submissions.
As the interview winds down, See remarks that the company is looking to focus less on the subsale market, which made up 80% of its business, to do more project marketing. He says that by focusing on projects, cash flow is manageable as the money from the developer goes to the agency.
As for the future of the company, See believes it will do it good to go for a listing on the LEAP Market. This platform was opened last year for small and medium enterprises to raise funds and visibility in the capital markets.
“Maybe in three to five years’ time with board approval,” he smiles.