Far East Organization



Far East Organization (FEO) is a property development group founded by Ng Teng Fong in 1960.1 It is the largest privately held property developer in Singapore, with developments spanning the residential, commercial, retail, hospitality, industrial and healthcare sectors. In Singapore, the company has developed over 700 properties, including condominiums, hotels, offices, shopping complexes and offices.2 There are over 180 development and investment companies – both privately held and publicly listed – under the group. Together with its Hong Kong-based sister organisation, Sino Group, FEO has assets of over US$40 billion and employs more than 13,000 staff worldwide.3

Beginnings
Ng, whose parents were immigrants from China, set up FEO in Singapore in 1960. It was said that he had assistance from billionaire, Eliya Thamby,4 early in the venture. Ng named the company “Far East Organization” after being inspired by the success of film studios Cathay Organisation and Shaw Organisation.5

In 1962, FEO completed its first development project of 72 terrace houses at Jalan Pacheli in Serangoon Gardens that were sold for $20,000 each.6 Ng made his maiden foray into the hotel industry the following year with the development of Singapura Forum Hotel on Orchard Road. The hotel, which cost S$5.5 million to build, was sold in 1982 for S$178 million.7

FEO subsequently continued with residential developments such as Katong Seaview Palace in the East Coast area in 1967 and Watten Estate in Bukit Timah in 1969. In 1969, FEO also made its first venture into a publicly listed entity with the construction of Singapore Hilton hotel.8

As FEO took on projects of increasing magnitude and cost, it ran into financing problems when a local institution withdrew its credit facilities. However, Ng found alternative financing arrangements with the Moscow Narodny Bank, and FEO was able to continue with its expansion plan.9

Besides residential and hotel developments, FEO had diversified into other areas by the late 1960s, including finance and retail. FEO’s associate and subsidiary companies included Lucky Realty, Far East Land & Housing Development, Far East Curio Centre and Far East Finance.10

Dominance on Orchard Road

Having developed Singapura Forum Hotel and Singapore Hilton Hotel on Orchard Road, FEO ventured into retail property development with the construction of Far East Shopping Centre in 1974.11 This was followed by the development of other shopping and office complexes in the area, including Lucky Plaza (1978), Orchard Plaza (1981), Far East Plaza (1983) and Claymore Plaza (1984), which cemented FEO’s dominance at Singapore’s prime retail strip, Orchard Road.12

As chairman of Far East Organization (FEO), Ng was nicknamed “King of Orchard Road”. His shopping centres featured a number of firsts: Far East Shopping Centre was the first mall in Singapore with an atrium and external escalators, Lucky Plaza had see-through bubble lifts, and Far East Plaza had serviced apartments above the mall.13

Singapore’s largest private property developer
1980s
By the 1980s, FEO was regarded as the largest private landholder in Singapore. The group’s aggressive land acquisition – even through downturns in the property market – was a carefully calculated long-term strategy that was Ng’s trademark.14 Profits from completed developments were used to acquire new land – at times at record prices – and FEO was known to have one of the largest land banks in Singapore.15

O adopted the strategy of acquiring land, and then completing and selling developments quickly. When supply overtook demand in the property market in the mid-1980s, the group cut prices to attract buyers to its developments. With the market crash at the time, there were again rumours that the group was in financial trouble, but it managed to ride out the downturn.16

1990s
FEO reaped the rewards of a strong property market in the early to mid-1990s. Its land purchases peaked for the decade in 1994 and 1995 at S$2 billion per annum. In 1997, the group had a 41 percent share of the private residential market in Singapore, with 2,410 units sold during the year.17 The Bayshore condominium, completed that year, reportedly brought in at least half a billion dollars in profits for the group.18

FEO’s portfolio of hotels, shopping malls, serviced apartments, offices and commercial spaces also generated a recurring income stream. In 1995, FEO owned about 35 percent of all serviced apartments in Singapore, including the flagship, Orchard Parksuites, which cemented its position as the largest owner-operator of serviced apartments.19

After a high profile takeover contest with Malaysian businessman Quek Leng Chan, FEO acquired a majority stake in Yeo Hiap Seng in 1995.20 Following the acquisition, Yeo Hiap Seng and Orchard Parade Holdings (the former Ming Court Hotel Ltd that Ng had acquired in 1987) became two of the more prominent listed companies under FEO.21

In early 1998, in the midst of the Asian Financial Crisis, FEO and Sino Land (the listed arm of Sino Group) were hit by rumours that they had defaulted on bank loans. The group quickly denied the rumours but stock prices of its listed companies plunged to multi-year lows. FEO’s measures to combat the rumours included disclosing its financial position and reporting S$2.5 billion in property sales in 1997.22 It also disclosed its gearing (ratio of total debt to total assets) as 0.47 at the time.23

The sluggish property market during the Asian Financial Crisis also led FEO to stagger home launches and put some projects on hold. In August 1998, FEO signed the first mortgage-backed bond issue in Singapore. It was a S$162-million financing deal with Citibank, backed by mortgage and cash flow from Leonie Condotel, a luxury serviced apartment project on Leonie Hill.24

Notwithstanding the downturn, FEO reported total sales of S$8.2 billion in 1998, including those of its sister organisation, the Hong Kong-based Sino Group. A 60 percent jump in Sino Group’s sales to S$6.2 billion helped offset FEO’s 20 percent decline in sales to S$2 billion.25

Later developments
By early 2000, FEO was sufficiently confident of purchasing a site at Clarke Quay for S$340.8 million, which it then developed as a mixed-use development project. Named The Central, the project comprised retail outlets, offices and residences.26 Sino Group also developed the high profile Fullerton Hotel in Singapore, which was completed by 2001.27 However, FEO’s residential property sales in that year declined to its lowest in eight years, as it sold just over 800 homes. This saw its share of the home market, which stood between 25 and 40 percent for most of the previous years, shrink to 11.6 percent.28

From January to June 2002, FEO sold more than 300 homes out of its target of 1,000 for the year, and was hopeful that its share of the home market would pick up to around 25 percent. At the time, property sales made up 70 percent of the group’s revenue, while another 30 percent came from recurring income such as serviced apartment rents as well as commercial and industrial leases.29 FEO entered the healthcare sector in 2002 by developing Novena Medical Centre, located opposite Tan Tock Seng Hospital.30


In early 2003, FEO underwent a major corporate reshuffle that saw the creation of four new business groups: Listed Companies, Ventures and Industrial Business, Development and Corporate Leasing, and Retail and Lifestyle Concepts.31

Over the next few years, FEO shifted its focus to retail and commercial developments. The market leader of the residential property sector for most of the 1990s when the market was buoyant, FEO slipped behind several developers during the first few years of the 2000s.32 The group, however, thrived with high profile retail and hotel developments. It also consolidated its position in the industrial and office sectors. In addition, FEO began to re-establish itself on the prime Orchard Road belt by purchasing Pacific Plaza and other properties as well as completing the tallest retail development in Singapore, the S$650-million Orchard Central, in 2008.33 With stakes in Far East Plaza, Far East Shopping Centre, Lucky Plaza, Orchard Shopping Centre, Orchard Plaza and Orchard Parade Hotel as well as full ownership of Orchard Parksuites, Regency House, Elizabeth Hotel and other properties, FEO was the largest private property owner in the Orchard Road area in the 1970s and ’80s.34

The latter half of the 2000s saw FEO resuming its major land banking moves. In 2006, it spent around S$1.6 billion on land purchases, including acquiring more than S$800 million worth of collective sales plots for residential developments.35 As the residential market picked up, the group recorded about S$2.34 billion worth of sales in 2009.36

In recent years, FEO has launched luxury development brands, entered the restaurant market and unveiled plans to expand its mid-range hotel brand, Village Hotels & Residences, overseas.37

Image, marketing and awards

In the 1990s, FEO began its efforts to overcome the perceived lack of quality in its residential projects. The strategy, which included an advertising campaign, was aimed at changing FEO’s image from a developer of mass housing to a developer of quality and creativity. In 1994, the group became the first developer in Singapore to attain ISO certification for project management. Other initiatives to boost its image, quality and service included establishing a quality assurance and control unit. The group also began to embark on more upscale developments with themed designs that reflected lifestyle trends gathered through market research.38

FEO’s efforts led to a number of awards. In 1999, the group received its first FIABCI (International Real Estate Federation) Prix d’Excellence Award for The Bayshore development.39 In 2010, it received the sixth Prix d’Excellence Awards for The Central at Clarke Quay.40 The group also bagged the Urban Redevelopment Authority Architectural Heritage Awards in 1999 and 2001 respectively for the restoration of Far East Square and Fullerton Hotel, while its residential developments have consistently won the Building and Construction Authority Construction Excellence Awards.41



Author
Alvin Chua



References
1. Ng, D. (2010, February 3). ‘He didn’t dress like a rich man’. The New Paper, pp. 2–3. Retrieved from NewspaperSG.
2. Far East Organization. (2017). Inspire better lives. Retrieved 2017, May 30 from Far East Organization website: http://www.fareast.com.sg/
3. Tan, S. Y. (2010). Landmarks: 50 years of real estate development. Singapore: Far East Organization, p. 10. (Call no.: RSING 333.33095957 TAN)
4. Suryadinata, L. (2012). Southeast Asian personalities of Chinese descent: A biographical dictionary (Vol. 1). Singapore: Institute of Southeast Asian Studies, p. 769. (Call no.: RSING 959.004951 SOU)
5. Tan, S. Y. (2010). Landmarks: 50 years of real estate development. Singapore: Far East Organization, p. 5. (Call no.: RSING 333.33095957 TAN); 吴慧敏 & 陈锦柏. (2010, February 3). 本地首富黄廷方逝世 享年82岁. Retrieved 2017, December 13 from Lianhe Zaobao website: http://www.zaobao.com.sg/finance/people/story20100203-33901
6. Far East Organization. (n.d.). Far East Organization: Building an enduring enterprise, p. 2. Retrieved 2017, May 30 from Far East Organization website: http://www.fareast.com.sg/-/media/Files/Landmark-PDF/LANDMARKS---Building-an-Enduring-Enterprise--.ashx?la=en; Wong, K. H. (2010, February 3). The king of Orchard Road. The Straits Times, p.1. Retrieved from NewspaperSG.
7. Built for $5.5 mil, sold for $178 mil.(1983, July 8). The Straits Times, p.15. Retrieved from NewspaperSG.
8. Far East Organization. (2017). History and milestones. Retrieved 2017, May 30 from Far East Organization website: http://www.fareast.com.sg/en/about-us/history-and-milestones; Hotels listed in a separate section.(1968, August 6). The Straits Times, p. 19. Retrieved from NewspaperSG.
9. Suryadinata, L. (Ed.). (2012). Southeast Asian personalities of Chinese descent: A biographical dictionary (Vol. 1). Singapore: Institute of Southeast Asian Studies, p. 770. (Call no.: RSING 959.004951 SOU)
10. Finance company moves into new office. (1967, December 29). The Straits Times, p. 12. Retrieved from NewspaperSG.
11. Far East Organization. (2017). History and milestones. Retrieved 2017, May 30 from Far East Organization website: http://www.fareast.com.sg/en/about-us/history-and-milestones
12. Suryadinata, L. (Ed.). (2012). Southeast Asian personalities of Chinese descent: A biographical dictionary (Vol. 1). Singapore: Institute of Southeast Asian Studies, p. 769. (Call no.: RSING 959.004951 SOU)
13. Ng, D. (2010, February 6). He looked fierce but he was a generous boss. Retrieved 2017, November 29 from Asiaone.com website: http://www.asiaone.com/News/The%2BNew%2BPaper/Story/A1Story20100205-196946.html; Far East Organization. (n.d.). Far East Organization: Building an enduring enterprise (pp. 6, 9). Retrieved 2017, May 30 from Far East Organization website: http://www.fareast.com.sg/-/media/Files/Landmark-PDF/LANDMARKS---Building-an-Enduring-Enterprise--.ashx?la=en
14. Suryadinata, L. (Ed.). (2012). Southeast Asian personalities of Chinese descent: A biographical dictionary (Vol. 1). Singapore: Institute of Southeast Asian Studies, p. 769. (Call no.: RSING 959.004951 SOU)
15. Siow, D. (1993, May 16). Rushing to build up land banks. The Straits Times, p. 4. Retrieved from NewspaperSG.
16. Rashiwala, K. (1998, January 17). No liquidity crunch, Far East figures show. The Straits Times, p. 88. Retrieved from NewspaperSG.
17. Rashiwala, K. (1998, February 16). 5 Far East projects among last year’s best sellers. The Straits Times, p. 42; Tee, H. C. (2002, June 8). Interesting developments. The Straits Times, p. 6. Retrieved from NewspaperSG.
18. Tan, S. Y., & Lee, H. S. (1995, March 29). Is the bull running out of steam?  The Business Times, p. 44. Retrieved from NewspaperSG.
19. Tay, K. P. (1995, March 29). Visitors ensure rosy outlook for serviced apartments. The Business Times, p. 48. Retrieved from NewspaperSG.
20. Lee, H. S. (1995, March 28). YHS battle hots up as FCC moves to boost stake further. The Business Times, p. 1; Goh, S. M. (1995, July 31). Charles Yeo joins forces with Quek Leng Chan-led consortium. The Straits Times, p. 32; Cua, G. (1995, September 13). Teng Fong wins YHS fight, Quek Leng Chan accepts offer. The Business Times, p. 1. Retrieved from NewspaperSG.
21. Ming Court proposes change of name to Orchard Parade Holdings. (1990, May 29). The Business Times, p. 3; Orchard Parade may be spearheading Teng Fong's march into manufacturing.(1994, June 10). The Straits Times, p. 17. Retrieved from NewspaperSG.
22. Sino Group reaps HK$12B from sales. (1998, July 27). The Straits Times, p. 42; Tan, C., & Ang, L. (1998, January 17). Far East property sales hit S$2.5b last year: CEO. The Business Times, p. 1. Retrieved from NewspaperSG.
23. Rashiwala, K. (1998, January 17). No liquidity crunch, Far East figures show. The Straits Times, p. 88. Retrieved from NewspaperSG.
24. Oon, D., & Tan, C. (1998, August 26). Far East’s S$162m loan includes 1st mortgage-backed bond here. The Business Times, p. 2. Retrieved from NewspaperSG.
25. Raj, C. (1999, April 14). Ng Teng Fong’s total sales hit S$8.2b last year. The Business Times, p. 1. Retrieved from NewspaperSG.
26. Lim, F., & Khor, A. (2000, April 27). $2.5b of investment sales and still counting. The Business Times, p. 80. Retrieved from NewspaperSG.
27. Mathi, B. (2001, January 1). PM: Fullerton's come a long way. The Straits Times, p. 1; Tee, H. C. (2001, September 16). One up. The Straits Times, p. 6. Retrieved from NewspaperSG.
28. Tee, H. C. (2002, June 8). Interesting developments. The Straits Times, p. 6. Retrieved from NewspaperSG.
29. Rashiwala, K. (2002, June 1). Far East poised to regain market share. The Business Times, p. 1. Retrieved from NewspaperSG.
30. Chong, V. (2002, November 29). Far East ventures into healthcare. The Business Times, p. 7. Retrieved from NewspaperSG.
31. Guevarra, V. (2003, February 11). Far East in major shake-up. The Straits Times, p. 19. Retrieved from NewspaperSG.
32. Landmark: An in-house publication of Far East Organization. (1994). Singapore: Far East Organization. p. 11. (Call no.: RSING 333.33095957 L)
33. Teo, J. (2006, August 23). Far East set to build tallest mall in S’pore. The Straits Times, p. 24. Retrieved from NewspaperSG; Gan, A. (2008, November 10). Offshore: Orchard Central expects 85% opening take-up. The Edge Malaysia (Weekly). Retrieved from Factiva via NLB’s eResources website: http://eresources.nlb.gov.sg/
34. Landmark: An in-house publication of Far East Organization. (1994). Singapore: Far East Organization. p. 4. (Call no.: RSING 333.33095957 L)
35. Rashiwala, K. (2006, December 1). Far East top buyer of en bloc sites. The Business Times, p. 13. Retrieved from NewspaperSG.
36. TheEdgeProperty.com. (2015, May 11). City&Country: Singapore – competition heats up. Retrieved 2017, June 3 from TheEdgeProperty.com website: http://www.theedgeproperty.com.my/content/citycountry-singapore-competition-heats
37. Teo, J. (2009, October 29). Far East gears up to go regional. The Straits Times, p. 53. Retrieved from NewspaperSG.
38. Yeo, S. (1994, May 9). Far East overhauls image with $5m blitz. The Straits Times, p. 4. Retrieved from NewspaperSG.
39. Tan, S. Y. (2010). Landmarks: 50 years of real estate development. Singapore: Far East Organization, p. 21. (Call no.: RSING 333.33095957 TAN)
40. Seow, E. (2010, May 28). Far East wins 6th Fiabci award for Central. Today, p. 47. Retrieved from NewspaperSG; Far East Organization. (2017, October 6). Four Far East Organization’s developments awarded at FIABCI Singapore Property Awards 2017. Retrieved 2017, December 13 from Far East Organization website: http://www.fareast.com.sg/-/media/fareast/aboutus/newsroom/press-release-pdfs/20171006-Four-Far-East-Organization-developments-awarded-at-FIABCI-Singapore-Property-Awards-2017.ashx?la=en&hash=385D7B97F0999FA3A47B7845395B76F6F1480DBA
41. Kerk, C. (1999, July 8). Far East Sq, Capital Sq get heritage awards. The Business Times, p. 4; Chong, V. (2001, July 19). 7 architectural heritage winners. The Business Times, p. 20. Retrieved from NewspaperSG; Teo, P. L. (2001, May 24). Far East goes west. The Straits Times. Retrieved from Factiva via NLB’s eResources website: http://eresources.nlb.gov.sg/



The information in this article is valid as at 2010 and correct as far as we are able to ascertain from our sources. It is not intended to be an exhaustive or complete history of the subject. Please contact the Library for further reading materials on the topic.

 

Subject
Organisations>>Companies
Real estate developers--Singapore
Business enterprises
Business, finance and industry>>Industry>>Construction and real estate>>Real estate