This article first appeared in City & Country, The Edge Malaysia Weekly on December 21, 2020 - December 27, 2020

Taking the helm amid the Covid-19 pandemic could not have been an easy task for IOI Properties Group Bhd CEO Datuk Voon Tin Yow. The group, he says, will continue with the digital transformation journey that it started before the virus outbreak.

Voon took over as the new CEO early this year, replacing Lee Yeow Seng, who has been redesignated executive vice-chairman.

IOI Properties is known for its large-scale developments, such as Bandar Puteri Puchong, Warisan Puteri, IOI Resort City and 16 Sierra. Property development remains its main revenue contributor.

The group’s property investment as well as hospitality and leisure sectors — which include IOI City Mall, Puchong Financial Corporate Centre, IOI Palm Villa Golf & Country Resort, and Le Meridien, Putrajaya — have been severely affected. It is providing support to its business partners and tenants through various strategies.

The following is an excerpt of City & Country’s interview with Voon, who talks about the group’s strategies during this period as well as its plans.

Datuk Voon Tin Yow: For our financial year ended June 30, 2020 (FY2020), IOI Properties recorded revenue of RM2.12 billion and profit before taxation (PBT) of RM897.09 million. The property development segment remained the key driver of the group’s operations and accounted for 78% of total revenue, while revenue from property investment accounted for 15%, and hospitality and leisure plus other segments accounted for 7%.

Revenue from operations in Malaysia accounted for 62% of total group revenue, with the remaining 37% and 1% respectively contributed by the China and Singapore operations. Despite the challenging business environment resulting from the pandemic, the revenue contribution from property development remained strong at RM1.64 billion.

The group’s PBT of RM1.06 billion in FY2020 (after excluding assets written down in value and net foreign currency translation loss on borrowings) was 4% higher than FY2019’s RM1.02 billion (excluding fair value gain on investment properties and net foreign currency translation loss on borrowings). Higher PBT was mainly attributable to higher profit contribution from the property development segment and higher share of profit from the sale of land by an associate.

The unprecedented Covid-19 pandemic was a challenge for the property industry, as most social and economic activity in Malaysia came to a halt between March and May. IOI Properties responded quickly to this by introducing attractive promotional packages, accelerating and increasing the use of digital technology and responding to the changes in customer behaviour.

The group offered attractive sales packages publicised and delivered through digital means. Customers were also able to view properties through 3D virtual tours of show units — a feature that has already been incorporated into IOI Properties’ sales approach for a number of years.

In embracing the new normal, the group continues to leverage its digital marketing capabilities and IOI eMarketplace platform to expedite property transaction processes. The IOI eMarketplace is a one-stop platform that brings together IOI Properties and bankers, lawyers and purchasers to facilitate seamless communication to enhance customers’ convenience and enable them to track every stage of their property purchase process.

IOI Properties constantly improves on its digital marketing capabilities and is fortunate to have set up the IOI eMarketplace platform to conduct sale transactions before the implementation of the Movement Control Order (MCO) imposed in Malaysia between March and May. The group has plans to accelerate sales through analytics aided by artificial intelligence features.

The group also welcomes the reintroduction of the Home Ownership Campaign under the National Economic Recovery Plan (Penjana). IOI Properties will emphasise mid-price range products to meet market demand, as the trend in the group’s existing developments indicates that mid-priced units are most sought-after.

IOI Properties has three malls under its property investment segment — IOI City Mall, IOI Mall Puchong and IOI Mall Kulai. Owing to the pandemic, the group is adopting active and pragmatic tenant retention strategies to maintain occupancy rates and support its business partners and tenants in the interest of long-term sustainable collaborations, and these have shown positive results.

IOI Properties continues to support its tenants with rental rebates and interest-free packages, with changes in tenancy terms to percentage of rentals. For tenancy agreements that have expired, this paves the way for new brands and new businesses to be introduced to the malls, which will refresh their tenant listing while maintaining good variety and shopping experiences for shoppers. Many new retailers are keen to explore and experience brick-and-mortar retailing, as physical shopping will continue to thrive.

The management of the malls has stepped up support to the tenants via advertisements on social media, physical advertisements with ongoing online activation, and mall-wide promotions for tenants to participate on a complimentary basis. This includes the tenants’ weekly or seasonal promotions, such as online shopping. The mall management provides the option of self-pickup by shoppers in addition to home delivery. If shoppers are not familiar or comfortable with online shopping, they may call the tenants, especially pharmacies and essential goods stores, directly, or the malls’ customer service careline for assistance in ordering their goods. This is quite helpful for elderly people or individuals who prefer to speak with someone over the phone. Other forms of support for tenants include monthly mall-wide promotions such as gift with purchases, online competitions and other methods to boost sales and keep shoppers interested and excited about the malls’ offerings.

The tenants and shoppers are the malls’ top priority and the management remains accessible to them and maintains close communication with all tenants, who are treated as business partners, working hand in hand to overcome these challenging times. During this time, tenants are encouraged to retrain all their service staff to maintain high standards of service. Shoppers’ feedback and views are also taken into consideration, putting great ideas and recommendations from them into action.

In July 2020, IOI Properties refreshed its corporate vision, mission and core values, which is centred on the word ‘Trusted’. It is a concise, powerful and deliberate statement that defines IOI Properties. The group’s commitment to becoming a trusted brand is encapsulated in its new tagline: ‘Building Trust, Inspiring Lives’.

The new vision, mission and core values set the foundation for a solid, sustainable business that will continue to grow extensively as well as establish the direction for IOI Properties in running its business and managing stakeholders’ expectations. In achieving the vision and propelling it to further growth, the group sees the adoption of technology as a way forward towards managing customer experience.

The group is also looking to expand the use of technology in marketing its products to boost sales as well as automating work processes aimed at increasing efficiency and improving product quality.

IOI Properties offers a balanced mix of residences, commercial hubs and public amenities in its integrated developments, creating spaces where people can stay, work and play. Thus, the group creates sustainable, integrated developments with vibrant residential communities and thriving commercial enclaves in strategic locations, complemented by excellent connectivity and accessibility, and complete with a wide range of amenities such as shopping malls, hotels, parks, hospitals and educational institutions. Some of our signature integrated developments are IOI Resort City, Bandar Puteri Puchong, Bandar Puchong Jaya, 16 Sierra, Bandar Puteri Bangi and Warisan Puteri Sepang.

Besides Malaysia, IOI Properties is currently focused on Xiamen, China, and Singapore, which will continue to hold the group in good stead. Currently, IOI Properties has no plans to expand its business in other countries but would certainly consider its options when such opportunities arise.

A reputable brand name for almost four decades in the property industry and with a proven track record, IOI Properties is committed to adapting its strategies to be in line with market needs and continuing to build trust in its brand name through quality and innovation in its products and services to create long-term value for all its stakeholders.

Over the years, the trust that has been built with stakeholders, and which IOI Properties seeks to earn from prospective customers, is crucial to continuing to produce the results that matter. As such, the group will continue its digital transformation journey with the deployment of technology to enhance customer experiences by automating and integrating the different business processes within it.

As part of its commitment towards product quality and service excellence, the group recognises the importance of talent development and is committed to the upskilling and training of our employees to achieve top-notch product quality standards and deliver excellent service to our customers.

The group is also committed to maintaining its competitive edge by consistently curating award-winning developments with high Quality Assessment System in Construction (Qlassic) scores. Our numerous Qlassic Awards won thus far are a testament to our commitment to delivering products of excellent workmanship to our customers.

As the economy is expected to gradually recover from the pandemic, IOI Properties is committed to continue to create vibrant developments in line with market demand, with proximity to good transport facilities and an excellent infrastructure network, as well as developments that embrace smart technology in a post-pandemic era in which customers expect modern-day conveniences with adequate space and privacy to accommodate a work-from-home lifestyle.

A lower price threshold for foreigners to buy properties in Malaysia, particularly in the urban areas, would help to boost the market and reduce the property overhang in the country.

Compliance costs and capital contributions increase a developer’s cost of doing business. Therefore, a review to reduce or remove unnecessary compliance costs will increase the affordability of properties in a housing development.

The government plays an important role in monitoring the supply and demand of properties in the market. By enabling transparency in data sharing, developers can access data on property market transactions and supply in a timely manner. This could assist developers in the effective planning of their developments.

Giving tax incentives for alternative financing schemes from the private sector, such as Rent-To-Own, would help developers and incentivise interested investors to invest in properties. A government financing scheme to partially finance purchases by first-time home buyers can be a cheaper alternative to providing public housing, and a catalyst for achieving the nation’s aspiration of home ownership for all.

Focusing on domestic growth via government initiatives and infrastructure projects, which will encourage other related support services, will lead to a spillover effect by creating jobs, opening up new areas, increasing external trade activities and strengthening domestic demand. That will encourage consumer spending and boost investor confidence.

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