Date: August 6, 2019
Spanning almost five decades, Mohamed Ismail Gafoor’s obsession with real estate began with a childhood mired in poverty, one strewn with tales of how homelessness drove his grandmother and uncles to the brink of destruction.
“Growing up, my father told us how he and his siblings survived without a roof over their heads – they tried to seek shelter with relatives but were chased out, and at one point, my grandmother even brought him and his siblings to the river to commit suicide,” recalled Ismail, Co-Founder, Executive Chairman and Chief Executive Officer of SGX-listed real estate services group PropNex Ltd.
Ismail himself grew up in a one-room public housing rental flat with four other siblings, sleeping on a mattress on the floor and waking up at the crack of dawn to help deliver newspapers before heading to school. His afternoons were mostly spent helping his father in the family’s provision shop.
“My parents never owned their own home till late in their lives. That’s why I believe everyone who can afford it should take an interest in understanding and owning real estate,” he said.
A passion for the brick-and-mortar eventually spurred Ismail to leave a 13-year career with the Singapore Armed Forces in 1995, with the aim of building “something entrepreneurial”.
A year later, together with his wife, he established real estate agency Nooris Consultants, a name coined from a combination of the first syllables of their names – Nooraini and Ismail.
The couple built up their expertise in the local property market through research and legwork – attending industry seminars, visiting showflats and frequenting open house events.
“I wanted to help as many people as possible to understand the advantages, as well as achieve their goals, of owning their own homes,” said Ismail, who holds a Bachelor’s degree with Honours in Land Economics from Sydney’s University of Technology.
Within two years of inception, Nooris Consultants grew to become the biggest Malay-Muslim real estate agency in Singapore, but Ismail figured he ought to dream bigger. “We realised the market we were serving was too niche, and we should expand our horizons.”
Size also mattered. “When you’re small, you won’t be able to reap economies of scale,” he added.
So in July 2000, Nooris Consultants merged with four other partner companies, and the Property Network of Excellence – or PropNex – was born.
Listed on SGX Mainboard in July 2018, PropNex has a current market capitalisation of about S$200 million. As Singapore’s largest listed real estate agency with more than 7,900 sales professionals, its key business segments include real estate brokerage, training, property management, as well as real estate consultancy.
In the year-to-date, PropNex shares have generated a total return of 19.4%, outperforming total returns of 12.1% and 12.6% for the benchmark Straits Times Index and broader FTSE ST All-Share Index respectively.
As a testament to its service levels, PropNex has won numerous accolades from government bodies and industry authorities, including the Top Real Estate Agency and Influential Brand Winner 2015 award, as well as Best Real Estate Marketing Idea 2017 Award by the ASEAN Real Estate Network Alliance.
The Group holds leading positions in the real estate industry. In FY2018, PropNex handled 42.4% of total units transacted in the primary private residential market, 34.2% of total units transacted in the private residential resale market, and 50.3% of total units transacted in the HDB resale market, data from Frost & Sullivan showed.
Beyond the city-state, it has a growing foothold in Malaysia, Indonesia and Vietnam, with a combined overseas presence of more than 1,400 sales professionals across 18 offices.
That’s not all – the Group intends to expand its geographical reach every year, focusing on key ASEAN markets. “We aim to open a new regional office each year if possible, by finding the right partner,” Ismail said.
But each regional presence is not just a showcase. “We don’t subscribe to the idea of opening overseas offices as a way of demonstrating expansion,” he noted.
“For every overseas market we penetrate, we have clear key performance indicators to fulfill. We want PropNex to be a market leader in that country within five years of operations.”
More Than Middlemen
To differentiate itself from competitors, PropNex focuses on educating and empowering both its sales staff and customers, Ismail said. Its proprietary training programmes, which equip its salesforce with relevant know-how to navigate the real estate market, have seen participation from more than 30,000 attendees to-date.
The Group was also the industry pioneer of consumer education seminars in 2013. These regular forums, which provide insights and perspectives, as well as highlight trends in the private residential market, help consumers make informed buying decisions.
Known as the “champion” in the industry for training its sales professionals, PropNex continually repackages and refreshes its development curricula. It offers customised training for staff, such as targeting different market segments and zones, including a “Lux” team that specialises in high-end residential projects.
“We aim to train our salespeople to be more than just middlemen – grooming them into consultants, so they can play instrumental roles in helping the customer develop a good understanding of the market, as he journeys from asset accumulation and enhancement towards a better retirement,” Ismail noted.
The Group is also forging ahead by riding the waves of digital disruption. It employs online platforms, data analytics and proprietary technology systems to help its salespeople boost value-added services to their customers. These include a co-broker app that external agents can log into to track various stages of a property deal so as to reduce paperwork, as well as one that allows buyers to browse current real estate listings.
“Rather than fear technology, we harness it to our advantage,” he added.
This principle dovetails with the Group’s relentless pursuit of continuous improvement. “There’s no such thing as ‘we have arrived’, or we have learned everything there is to learn,” Ismail said.
“We can never rest on our laurels because there will be new challenges ahead.”
A case in point is the domestic property market, which is still grappling with oversupply after the government implemented its latest round of cooling measures – including higher buyer stamp duties and tighter loan limits – last July.
Singapore’s private home prices rebounded to a five-year high in the second quarter, after falling for two straight quarters. The private residential property index rose 1.3% in the April-June period, according to flash estimates from the Urban Redevelopment Authority (URA), reversing declines of 0.7% and 0.1% in the March and December quarters respectively.
In May, private home sales surged almost 30% from the previous month, as a rising stockpile of unsold units from earlier property launches spurred developers to cut prices, creating what analysts described as a classic buyers’ market. According to URA data, 952 private housing units were sold in May, with 1,394 new units launched in the month. In comparison, only 444 new units were launched in April, with a total of 735 units sold that month.
“Although we saw weaker home sales in the first quarter of the year due to a sustained impact from last year’s cooling measures, the Singapore residential market remains resilient,” Ismail noted.
“Foreign investors, who continue to view Singapore as a haven for property investments, remain very keen to take up new units because of the attractive prices.”
The domestic en bloc or collective sale market – created between 2017 and 2018 – remains huge, with a large number of owners looking for replacement homes. Robust demand from HDB upgraders – as their flats reach the five-year minimum occupation period – is also expected, he added.
“That’s why we’ve seen such a strong rebound in sales volumes in March, which indicates that buyers and investors are feeling more confident about entering the market again.”
Essentially, PropNex’s business model is “enviable”- one that is evergreen and asset-light, with strong free cash flows.
“Being in the service industry, we don’t require huge capital investments – all we need is a well-trained salesforce that can provide value-added services to owners and developers,” he pointed out.
“While the cooling measures are a setback, they’re part and parcel of the real estate sector, and we’re not impacted in the same way as construction firms, developers or REITs,” he noted, referring to real estate investment trusts.
Real estate services are required when wedding bells ring, as most married couples will want a home of their own, or in cases of divorce, as the couple dispose of shared assets to go their separate ways.
“When families expand and children arrive, couples will want to upgrade their properties. For families facing economic difficulties, they may want to downgrade to smaller and cheaper homes to boost cash reserves. In every instance, our services are required,” he added.
No Middle Ground
Likewise, the strength of PropNex’s brand and its market leadership position – thanks to the Group’s unwavering focus on people – bodes well for the future.
In 2000, PropNex was the first in the industry to implement a dual-career path for its sales professionals – a commission scheme that gives team leaders a share of the company’s profits. This model was subsequently adopted by industry peers.
Six years later, it introduced a pension plan for team leaders to enhance and protect their welfare, and in 2013, rolled out a spouse protection scheme, where in the event of a team leader’s death, his family would be taken care of until the year when the deceased would have turned 60 years old.
“At PropNex, it’s all about building our people – taking care of them so they can go out and achieve all that they’ve set out to achieve,” Ismail noted.
“This has always been PropNex’s mantra: The day when the company fails to add value to its people, is the day that its people should leave elsewhere, for the sake of their loved ones.”
Another touchstone is adherence to a professional code of ethics. In 2008, PropNex required all its agents to buy professional indemnity insurance for themselves, which protects the rights of their customers in the event of professional negligence, omissions or breaches of duty. The move was ahead of its time and costly – PropNex had to terminate 2,800 out of over 7,000 agents because they refused to take up the insurance.
“That was the right thing to do at the time, so we did it,” Ismail recalled.
It was only in 2010 that the industry regulator – the Council for Estate Agencies (CEA), a statutory board formed under the Ministry of National Development – made it mandatory for all estate agents and salespersons to be covered by professional indemnity insurance.
“I’m not someone who prays to money, and money can blind you,” he noted. “If you pray to money, you will cut corners, and if you cut corners, you will not be guided by your core values.”
“There’s no middle ground in PropNex – either you love to work for us or you won’t survive here,” he added.
The 56-year-old is equally uncompromising when it comes to parenting his three children – a daughter, 21, and 15-year-old twins, a girl and boy.
The values of discipline and accountability are inculcated through specific home routines that include the assigning of household chores, restricting screen time to about two-and-a-half hours per day and fixed monthly allowances.
“If you’re brought up to have the right attitude and good values like hard work and self-discipline, these will supersede all other aspects of your life, including your background,” he added.
“This is a sure formula for success in life.”
- Traditionally, the first quarter of the year is a subdued period. The segment that sees reeling in from the cooling measures is the private residential resale market, with homebuyers potentially holding off buying decisions.
- The Company expects the private property market to pick up its momentum towards the second half of the year, as en-bloc owners are receiving their sale proceeds and are looking for replacement homes that allow for immediate occupation.
- There is an anticipated line-up of up to another 66 projects to be launched this year, and the Group has been appointed for 46 projects to-date.
- To fully capitalise on the numerous project launches this year, the Group will continuously conduct consumer seminars to articulate the opportunities to potential buyers. These consumer seminars are often conducted by the Company’s executive directors Mr Mohamed Ismail and Mr Kelvin Fong.
- On the public housing front, the HDB resale market is reflecting continuous demand and price stabilisation. This can be attributed to the estimated 30,000 HDB flats reaching minimum occupation period (MOP) this year, and the lower number of build-to-order (BTO) flats offered this year at an estimated 15,000 units.
PropNex is Singapore’s largest listed real estate services group with over 7,900 sales professionals. Its key business segments include real estate brokerage, training, property management and real estate consultancy services. The Group has an established lead in Singapore’s residential market, and is growing its operations regionally, with a presence in Indonesia, Malaysia and Vietnam. With a strong commitment to service excellence and quality, PropNex is the proud recipient of numerous accolades, and is a recognised leader in real estate agency services.
The company website is: www.propnex.com.
Click here for the company’s StockFacts page.
For the three months ended 31 March 2019 financial results, click here.
First published on SGX website on 5 July 2019
About kopi-C: the Company brew
Text: Jennifer LH Tan
Photo: Company file
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