A trained accountant, Roy Teo stumbled into the real estate investment trust (REIT) sector in 2004 purely by chance – an accident he’s hugely grateful for. It piqued his interest so much that he pulled a complete 180-degree career turnaround. “I was fortunate to enter Singapore’s REIT industry in its infancy and be a part of its tremendous growth. I joined Ascendas REIT in 2005, responsible for its logistics portfolio – a newly formed sector very different from the science park developments it was used to. In 2005–12, I helped double the portfolio from S$650 million to S$1.3 billion, before leaving to venture out on my own,” he explains.
During this time, Roy witnessed several rounds of cyclical property growth and downturn, and changes in the government policies for industrial land – not to mention the GFC. “Today, the REIT sector in Singapore has grown to a size of S$80 billion in terms of market capitalisation. We learn the most while exploring new territory and experiencing downturns,” he adds. In 2012, Roy grasped the opportunity to plan, start and lead the industrial Soilbuild Business Space REIT (Soilbuild REIT) through an initial public offering, which he achieved just a year later.
Based in Singapore, Soilbuild Group has amassed more than 40 years of experience in construction. It is the sponsor of Soilbuild REIT, which has an extensive portfolio of two business parks and nine industrial properties strategically located across established industrial clusters in Singapore. The total gross floor area amounts to 0.4 million square metres valued at S$1.1 billion. This includes: Solaris, a landmark development in one-north; Tuas Connection; West Park BizCentral; Eightrium @ Changi Business Park; and Bukit Batok Connection. Soilbuild REIT stands to further benefit from this strategic sponsor–subsidiary partnership with Soilbuild Group as it has the rights of first refusal to Soilbuild Group’s assets, which grants it the right to purchase the asset before it is offered to the market.
Roy Teo’s favourite saying on the importance of development is from Chinese politician Deng Xiaoping: “Like a boat sailing against the current, we must forge ahead or be swept downstream.”
Starting out as COO in Soilbuild REIT, Roy’s aim was to provide an affordable industrial option, enhance the underutilised opportunities of its assets, fulfil its potential in land-scarce Singapore, and convert its traditional brick and mortar assets to prepare for the transition into the new economy. “We have cost advantage over other developers. With our background in construction, we design industrial facilities with cost and functionality in mind. For us, success is about the positive influence and impact we can have on society.”
Yet the CEO says his transition from accountant to unqualified engineer was not an easy one. “I was an accountant, but I was leading teams of engineers and architects to design greenfield projects. It was a steep learning curve but I survived,” he says. “I take great satisfaction, even with little things, especially when it means fulfilling the needs of my tenants. I’m committed and willing to spend a large amount of my time with business partners, clients and potential customers building friendships.”
Talent attraction and retention is Soilbuild REIT’s biggest challenge, explains Roy. “A positive culture attracts and retains right-minded talent, contributing to the organisation and staff development. To run a business is never about a single individual; it needs a team to make things right,” he says. “I want to develop a more customer-oriented culture with a personal touch to differentiate us from competitors.”
Roy has watched Singapore’s industrial real estate sector change in line with the industrialisation of the country. “In the past decade alone, real estate needs have evolved at an incredible pace. Industrial business parks and high-tech spaces are in high demand and data centres are being developed to cope with the increasing need for data storage. We need to be at the forefront to develop a piece of real estate that can outlast the next hardware revolution, while also meeting ‘software’ requirements in terms of service offerings, quality and the tenant’s experience.”
In November 2017, Roy announced that Soilbuild REIT intends to seek investment opportunities in Australia – a decision largely motivated by local conditions. “The Board decided to expand our investment mandate to Australia, a well established market with legislation similar to Singapore’s. This move will diversify our tenant base and increase our access to assets with longer land lease tenure, thereby strengthening Soilbuild REIT’s portfolio for long-term growth. In three years, we aim to have 30% of our portfolio in overseas assets and we want to be among the top three industrial REITs in Singapore within five years.”