HSR founder aims to turn around agency in three months
HSR founder aims to turn around agency in three months
Patrick Liew says he will bring operating costs down by 80 per cent
Mr Liew: "HSR is like baby to me. I'm a real estate man. While I have left the industry, the industry has not left me."
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| HSR founder aims to turn around agency in three months |
FOUNDER of HSR International Realtors Patrick Liew is slated to hold the reins of the real estate agency once again from next month, with an ambitious goal of turning the loss-making agency around within three months.
Expected to resume the role of executive chairman at HSR, Mr Liew hopes to "re-engineer" the company and in the process, transform an industry that he believes is sorely in need of change.
For a start, Mr Liew said he will bring costs down by 80 per cent, mainly due to rental savings from consolidating its office premises. Contrary to an industry notion that size matters, Mr Liew wants to do away with the practice of mass recruitment.
"We expect to put the company in a much better position in three months' time," he told The Business Times in a recent interview. "Within three months, we should be in the black. By next year, we might be a force to reckon with."
Stressing it is not about market size but market share, Mr Liew is looking to recapture the latter despite the market doldrums. There are plans to relist HSR if the market improves over the next three years, he said.
HSR had inked cumulative net losses of S$10.6 million over the past two financial years and seen its number of registered agents slide from 1,375 at the beginning of last year to 1,055 currently since Mr Liew and his wife sold their 66 per cent stake in Catalist-listed HSR Global to Phileo Capital, the investment vehicle of Malaysian tycoon Tong Kooi Ong, for S$13.65 million in 2013.
Last month, Mr Liew and his wife agreed to acquire HSR from 3Cnergy, the renamed HSR Global, for a nominal S$1 under a conditional sale and purchase agreement subject to 3Cnergy shareholders' approval on the disposal this month.
Mr Liew told BT that he wants to bring in a new management team and roll out a slew of infocommunication technologies to improve efficiency, redesign work processes, and re-establish a corporate university for his agents.
He is projecting major manpower cost savings for HSR since he is not taking over the office personnel that provides listing-related services for 3Cnergy, where he and his wife still hold a collective 12.5 per cent stake. HSR's operations will be consolidated into some 10,000 sq ft of space at Toa Payoh Hub.
Re-entering the industry after a two-year break during which he pursued a doctorate at the University of Southern California, Mr Liew believes that the agency business is primed for a sea change.
"Real estate agencies are built on the premise of agent strength. It's passé. The numbers game is not going to stay," he reckoned, estimating that a large agency with 5,000 agents may have only 20 per cent of the agents who are performing.
"At HSR, we tell those parking their names with us to not do so and we are willing to let them go," Mr Liew said.
The role of a real estate agent also has to evolve, he added. They can no longer focus on just transactions but on relationship-building.
"Customers are becoming more sophisticated and demanding and information has become more easily available," he observed. "The real estate agent of the future must value-add to the customer, do feasibility study, analyse their needs and ask themselves: 'how can I provide information to the customer so that they can make better informed decisions'.
Moving forward, real estate agents have to be very different. They need to act virtually like a relationship manager or trusted consultant."
On that note, Mr Liew wants to re-establish a corporate university to train agents not only in knowledge but in relationship-building, investment and asset management skills. He hopes to retain a group of salaried professionals at HSR to focus on training agents, adding that agents should go through up to three months of training before they can start practising and commit to life-long learning.
"We want to attract professionals who want to reposition themselves as consultants, advisors, personal relationship managers to their clients," he said. "We want HSR to be a home for top achievers, not a place for sales agents who just want to go and smoke their way through."
HSR is looking to have "only 500 very good producers" and is willing to pay out 93-95 per cent of commissions to agents, higher than the industry norm of up to 90 per cent.
But HSR will still honour its 100 per cent commission scheme for now. Under this scheme that took effect this year, experienced agents who currently get a 90 per cent cut on commissions will only be entitled to 100 per cent of what they earn above S$38,000 in a 12-month cycle. New agents need to rake in more than S$88,000 of gross commissions before taking home 100 per cent of commissions earned above this threshold.
Among his other entrepreneurial ventures, Mr Liew founded Australia-listed Success Resources Group, a large education seminar company that invites renowned speakers like Bill Clinton, Tony Blair, Anthony Robbins and Donald Trump as well as academics like Michael Porter and Philip Kotler.
Active in community work, Mr Liew also kick-started Reach Community Services Society that runs a family service centre; Junior Achievement, a non-profit organisation that trains students aged 9-19 years in life skills; and the Love Little India Movement that provides counselling and legal advice to migrant workers in Singapore.
But real estate remains a "main calling", Mr Liew quipped. "HSR is like baby to me. I'm a real estate man. While I have left the industry, the industry has not left me. So I came back last year," he said.
"While I left HSR, HSR has not left my heart. Every molecule in my body shouts the real estate message."
The Business Times Published on Monday, 8 June 2015
By Lynette Khoo
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