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Sarawak dynasties - Keeping the legacy alive
05 February 2012

Imagine yourself in a relay. Now, put yourself in the shoes of the front-runner. The idea of beginning a race, but ending it with a pass of a baton is an anal-ogy that aptly describes the tran-sition of faith and trust when it comes to handing down the torch of the family business.

Indeed, small or big, a lot of the businesses in Malaysia are oper-ated on legacies. The dilemma with family businesses was the idea of how it could be kept sustainable under the hands of the younger generation.

HAND IN HAND: Both father and son discussing the layout of their MetroCity project.

With that in mind, BizHive Weekly has decided to narrow down on two primary dynasties in Sarawak, both of which are movers and shakers in their respective fields, property and retail.

The dawn of a dynasty

Hitting the right tone (father and son)

The 1997/1998 Asian financial crisis as Chong Kia Hoi recalled, had been a momentous period for him. Prior to the predicament which left the Asian economies roiled in a nest of mess, Chong Kia Hoi Realty Sdn Bhd (CKH Realty) was all set to launch its mega project Suria Jaya.

"Before my company`s establishment in 1981, I was just a part-time investor. I used to invest in small plots of land and two to three acres at the time was considered big. The turning point was in 1996 when I developed Suria Jaya.

"I launched it somewhere in October or November 1996 and that was right before the Asian financial crisis. I was really lucky because I was able to sell off most of my units before the crisis struck the economy," he said.

Indeed, many of us could identify with that near incident, where luck and blessings were the only explanations for our good fortunes. Chong`s story was just one of many.

Two years after establishing his company, the developer decided to purchase some land with the intention of constructing a shopping complex in 1983. The real estate situation in the early 80s as he described it was pervaded with excitement and it appeared as though there was no end to the euphoria filling the industry.

Soon after however, the local market suffered a hurdle and the property market was caught in a whirlwind of events. Luckily for Chong, he managed to glide past it by chance and was not able to purchase the land. This near incident as Chong put it was a `blessing in disguise`.

"I nearly buried myself in 1983. I wanted to buy over this land in town to build a shopping complex. At the time, everybody went crazy, the sky was the limit. Property prices kept shooting up and suddenly it crashed.

"You can say I was young and foolish then. I applied for a loan and got turned down. Just imagine how lucky I was. Looking back, I think I faced more challenges before as compared with now because we have laid quite a firm foundation 30 years into the business," he said.

Three decades on, and the company`s operation was going strong. The group which was leading the development in Samarahan and has been pioneering the talk of the town with its MetroCity project in Matang came to show that whatever principle that was being put in place was surely working.

Chong elaborated that being cautious was essential and learning the course of the market trend was the only way to lead the pack. This, he believed was an everlasting tactic that would never grow out of trend, despite the changing times.

"There is always a strategy. You have to build to suit the market demand. We had a few niche projects going on in Samarahan and were one of the earlier property developers there.

"A lot of the developers you see nowadays are jumping on the bandwagon to capture a large share of the area because it is so profitable. But we`ve sold most of our units and pulled out of the heated rivalry there now," he explained.

While he knew that Samarahan properties would fetch much higher values in the near future, Chong had always stood by his rule of thumb: never be greedy.

"Never be too greedy. You have to be cautious. I always teach my son that. Although there is no bubble in Kuching, we still keep a very close eye on the market. Prices will not dip, but there is currently too much volatility in the market.

"I already anticipate that this year will not be an easy period for most property developers. You can already sense the signals. Which is why this year, we will concentrate solely on our MetroCity project."

Chong was every bit calm and collective, a developer whose instincts had awarded him the prestigious Sarawak Housing and Real Estate Developers Association Property Man of the Year Award for 2010.

Talking in a composed manner, it was not hard to tell the kind of person he was. Chong always reminded David, his son, to take steps prudently and think twice before embarking on any mission.

As such, like his dad, David had developed a keen sense of awareness and a sense of assessing the environment clearly before embarking on any mission.

Although Kuching has witnessed a string of shopping complexes springing up, both father and son knew not to enter into this particular market as they believed that this was one area that Kuching was not yet ready for. "The rate of population increase here in Sarawak is still too slow and the purchasing power is too low. You can only find very few complexes that are successful. It`s just not that feasible at the moment," David stressed.

"In Kuching, we are already seeing a string of complexes springing up. They are millions of square feet but there is not much supporting power to really sustain this kind of properties.

"The speculative elements are also a reason why we prefer to avoid this type of developments. The asking price is just not justifiable. You have certain new projects selling for RM2,000 per square feet (psf) but if you work it out, what kind of businesses could really operate on those premises when your cost is already so high?

"Say I`ve got 500 sq ft and I buy it for RM1 million. How much must I charge to pay my monthly payments to the bank? We are currently not at that level yet. This is not Kuala Lumpur or Klang Valley, it`s dangerous to ask for those kinds of prices and that`s why we choose to stay risk-adverse in this business," David explained.

The continuation of a legacy

Now that Chong Kia Hoi Realty has reached its 30 year-mark, the question of retiring for Chong was still far away. Such a thought had not crossed his mind at all. There was no rest for the lively father and his son, David surely agreed on that.

"Honestly, I have never thought of myself as taking over the business because in my mind, my father is still the captain of the ship. He is still very active and I love it that way. My father was born in China, so if you want to say that he is a typical Chinese businessman, in certain aspects, yes. But in some other aspects, my father is very open.

"He is mature enough to be able to accept other opinions but of course he will weigh it. I think this is good because I`m still not as experienced as my father. I`m still learning. I feel very comfortable with him there because I can throw in any ideas and it will come back, more refined, through a much more mature lense," he added.

According to David, his father though was not overly strict, had always taught him and his siblings the value of money. Being a devoted Christian, the family had never looked upon wealth as a main priority.

"He always presses upon us the importance of spiritual matters above earthly materials and truth be told, growing up, we never had the impression that we were wealthy. My father practices what he preaches and he is very prudent financially.

"I think it boils down to his humble beginnings when my grandparents came from China and my granddad was a coffeeshop owner and my grandmother had to sell `kuih` just to send only one son to university, and that was my father. Since joining the business 10 years ago, my father`s strengths lie primarily in his financial prudence and cash flow management," he said.

PIONEER PROJECT: Image captures an artistic impression of CKH Realty`s MetroCity project in Matang.
The project which consists of a gross development value of RM970 million has been the talk of the town in Kuching.

Being in Australia for more than a decade, David reflected on what the best of both worlds had taught him and that combining the Eastern and Western values was a management element that he could bring forward into the business.

David added,"I definitely want to bring in the meritocracy values over here. They reward you based on your capabilities over there and the young ones are more open and expressive, something which I think the Asian culture in general is very restricted. At the same time, I do think that our Asian values are valid in the current times. The culture there is leaning more towards leisure, they earn to spend."

Though his major was solely concentrated in legal matters, his next interest or love was in information technology, and he hoped to digitise his father`s real estate group going forward.

On whether or not his father was empowering him all along, David answered that it was never the case of who was the bigger boss in CKH Realty and to allow a younger generation to operate as they pleased was simply foolish.

"For me business is business. It`s not a matter of love for your children. If you know something is wrong, you should not go ahead with it.

"What I learnt from my father, I applied it in my marketing strategy. Our purchasers are generally very shrewd people. You don`t need all the glitz in marketing. We`re very straight forward in our marketing, we concentrate on the products, pricing and location and we spend wisely on necessary expenditure and cut down on unnecessary expenses," he disclosed.

Knowing from experience how a wrong move could put a business in jeopardy, it seemed as though both father and son were not taking any chances of making a risky gamble in Sarawak`s property scene. Chong Kia Hoi himself admitted that though his time in the industry spanned far more than 30 years, he still at times made mistakes. Hence, taking a cautious stance and being financially prudent would always be his defensive weapons in this game.

(Taken from The Borneo Post)

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