#11 The Asian Mavericks – Mr. Jack Chua (APAC Realty Limited)

This is an exclusive interview with Mr. Jack Chua, CEO of APAC Realty Limited.

APAC Realty is the largest property agency in Singapore, with more than 6,000 active agents in Singapore. It operates under the branding of ERA, a property agency brand with more than 30 year history in the region.

Today APAC Realty is embarking on a regional expansion, opening up new agencies across the region. We sat down with Mr. Jack Chua to understand how he rose through the ranks within the company and successfully steer it into the massive agency it is today.

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Stanley:                     Hi! This is Stanley; from Value Invest Asia, welcome to our Asian Mavericks season 2. This month, our guest is Mr. Jack Chua, the CEO of APAC Realty; a listed company here in Singapore. APAC Realty today, is the largest property agency in Singapore, with more than 6,000 agents in the country, and more than that, it operates a franchise model under the name; ARA, and has more than 17,000 property agents across nine countries today. it’s an amazing story of how a small boutique agency is able to grow over the past 30 years, to now becoming one of the largest property agencies in Asia-Pacific. I have a wonderful talk with Mr. Jack Chua, and I hope you enjoy it as well. So, here you go!

Jack Chua:                Yeah! I’m Jack Chua, the CEO of APAC Realty limited.

Stanley:                     So, thank you Mr. Jack Chua for joining us, for our Asian Mavericks season 2, and I just want to understand a little bit, about how you actually rose through the ranks in this company.

Jack Chua:                By myself…?

Stanley:                     Yeah! By yourself, and also let’s go back all the way to the beginning, can you tell us a little bit about your childhood; how was it like when you were growing up, were you a very mischievous kid?

Jack Chua:                I think I’m normal, not something abnormal, I think is just normal, because I came from a humble family, my parents were – my father was a hawker. So, you grow up, I mean in Singapore HDB flat.  So, I think I’m fortunate, because I think in terms of studying, I’m quite okay, I am able to grab that thing, and able to learn fast. So, in terms of result, it’s not too bad. So, I managed to secure scholarship from the government; it’s called the PSC scholarship. So, to continue my studies in the university, so after the University, of course I need to serve my bond with the government. It’s a six-year bond with the government. So, I went into public works department; which is in charge of all the public buildings in Singapore. So, I started as – I mean my profession is a Quantity Surveyor. Quantity Surveyor. Maybe people they are so calculative always deal with money, costing and so on.  So, this was a very good training for me, so I did sensitive analysis in terms of overhead, in terms of revenue, in terms of figures. Okay! So, I think it’s a good foundation. So, I was in public works department for six years, because initially, I took care of construction of building. So, I became part of the professional team, like we have Architects, Engineers, Quantity Surveyors to take care of the project, then later part of my stay in PWD; I took care of maintenance, including Istana House.

Stanley:                     Ah!

Jack Chua:                So, I took care of the maintenance of all the schools, all the public buildings. I was the head of building management. I did that for six years.

Stanley:                     Wow! It’s quite an experience.

Jack Chua:                So, after I served my bond, I thought that I should go into the public sector. So, I looked around, looked for job, and I think it’s a coincidence, that I got to know Harry Chua; who is the founder of ERA.

Stanley:                     I see.

Jack Chua:                So, I decided to join them; not only as a staff, but also as an agent. So, I got dual role.

Stanley:                     So, you were helping them operationally, and also selling some of their property.

Jack Chua:                Yeah! Because initially, the company is quite small, we may only have maybe 20, 30 agents. It was a really very small set up, and may not need a fulltime management staff. So, I need to also pay for my salary. So, I also closed some deals during that initial period.

Stanley:                     Yeah! you talked about you joining the company right at that infancy almost when it first started

Jack Chua:                I must say that the ERA started way back in 1982, and I only joined them in 1990. So, over the past few years (before I joined) I think they also grow – only that maybe a bit slow.

Stanley:                     I see. Okay! can you maybe shed some light with us; how was ERA at the very beginning, I understand that Mr. Harry took the franchise ERA from the US.

Jack Chua:                Yeah!

Stanley:                     But for real estate brokerage, why is there a need to get a franchise in the first place?

Jack Chua:                Okay! I suppose that if you go back to history way back in 1982. So, Harry; who is the founder of ERA, he secured/acquired afranchise from United States. So, that’s ERA.. I suppose at that point in time, he emphasized a lot on training, because he feels that in Singapore, I think there’s no structured training.

Stanley:                     I see.

Jack Chua:                So, in real estate, for real estate salesperson. In fact, the status of real estate agent is not that high at that point in time. Will not  be viewed as a professional agents, so he decided to go to US, looked at some franchise that can provide a good training. So, he secured the franchise, and brought it back to Singapore. We started – in fact, I still remembered when I joined them in 1990, we did a lot of training for the new agents. So, we have a structured fundamental training for the real estate agents, teaching them from the basic knowledge of real estate to some sales technique.

Stanley:                     Wow! Okay! So, the franchise comes with a complete systems training.

Jack Chua:                Yeah! I mean, if you look at it, why he wanted to secure the franchise is because of the training that the franchisor is able to provide.

Stanley:                     I see. Okay! That’s quite interesting.

Jack Chua:                Yeah!

Stanley:                     But when you first joined the company; can you share with us, how big was the company then, and what was the main business at that time?

Jack Chua:                We concentrated on real estate sales; in fact, most of time we do a lot of private property resale which is then is the bigger market, because HDB resale is still – I mean not so active at that point in time. So, I mean, we provide training to the agent, just like we do a lot of recruitment for the new agent, we provide training; train them, then put them under a manager to guide them, then we start to grow from there. When I joined them in 1990, we have about maybe about 20-30 sales person, in a small little office, and of course today we are lucky, we have now grown to about 6600 agents in Singapore.

Stanley:                     Yeah! That is really amazing growth, and that’s really what I think our audience is very interested in, how you actually grow the company to such a significant size. So, when you first came into the company, maybe share with us some of the things that you see as opportunities, and how you actually helped the company grow quite significantly?

Jack Chua:                I suppose that there are three keywords to it; it’s the recruitment, and the training, and the retention. So, we were repeating this three all the time, then we’re able to grow our company, because recruitment is basically, we talk to the people,  encourage them or convince them to join the real estate agency industry. To be an agent, and in this industry, I think is quite good for entrepreneurs, because basically you’re like your own boss, because there’s no basic salary offered, and then we go by commission split. So, the more you close, the more money, the more income will be generated. So, that is one part of it, then of course, the second part is the training, because we believe that training is able to enhance your knowledge, enhance your skill. So, you’re able to provide a better service to your customer. We have a lot of trainings, being how to do a listing presentation, how to overcome objections, okay all this. So, we provide trainings to the agents to empower them, and make them a better salesperson. Of course, the third one is retention, we also don’t want after you stay here for a while, you go and join others. So, we provide better service, I mean the company, to retain the agent. There are two-fold to it; one is providing service to the agent, the other one also provides products and services that the customer wants. So there are two folds to it.

Stanley:                     So, can you elaborate a little bit on that how do you provide service to the agent?

Jack Chua:                I think agents basically we want them to concentrate in the sales. So, the back-office thing that the company will do, and the company will also do a lot of corporate awareness campaign, to make sure that the public know about ERA. So, when you go into the customer’s house, you don’t even explain what ERA is, they know that it is an agency. So, it’s what type of services that you can provide to the customer. That will make that entry point easier, of course to the customer, we educate the agent, basically – first in service, first in result and first in customer satisfaction. So, that’s important, we have to provide good service to the customer, then of course we also show results. I mean good service without results is also of no use, and then after that your customer is happy with it, and then there’s a lot referral and business will come in. Then you can go on, and build a business from there.

Stanley:                     Wow! So, it seems that it’s almost built one step at a time, and do you remember you know, is there any significant event that kind of really opened the door up for APAC and ERA, like to bring you guys to the next level, do you remember such a time?

Jack Chua:                I suppose that, I think, business is for the long term, we don’t look at short-term programs.  But for the long term, that’s why you have to build on very solid foundation. So, I said that recruitment, training and retention. when you get that, you repeat the process, of course you have to sharpen it. Because over the years, we have to improve over it. Can you imagine last time, when we do advertisement, it’s paper advertisement, but now, it’s mostly online. So, you also have to improve your training, make sure the agents know what to do. So, it’s only to sharpen all your skills, and you’re able to grow the business. If you can recall, we were listed way back in 1998, under the Hersing Corporation, I suppose that with the listing we were able to position ourselves in a leading position, and you can elevate yourself into another level, because you are the listed company. So, it’s the company that people can trust. So, because of that, we also grow into that Asia-Pacific arena.

Stanley:                     Okay! Did you get the ERA like Asian tag franchise straight away, or it was something that you acquired after a while?

Jack Chua:                We acquired the Singapore franchise first, then we be built from there, I mean we acquire the franchise way back in 1982, then it’s only 1998 that we listed in the Singapore Stock Exchange, then after that, we acquired the master franchise for the Asia-Pacific. If you ask whether any special event, this can be one of the special events, that brought us to the Asia-Pacific level from the local level. So, I mean now we have franchises from all over the Asia-Pacific, I have about 17800 agents, across about 700 offices in ten countries. So, we have Japan, we have Korea, we have Taiwan, we have Thailand, we have Malaysia, we have Indonesia, then we have Vietnam, we have Cambodia, and also Hainan. Not the whole of China, but Hainan island. And you know that lately we just announced that we acquired ERA Indonesia and ERA Thailand. So, that is no longer my franchisee, but our wholly owned subsidiary.

Stanley:                     Okay! is that something you’re looking at as well in the future, where you can you can try to buy out some of your better performing franchisees?

Jack Chua:                I suppose that is the plan, because to build the business will take time. Because in a country, if you want to create awareness, it will take some time. So, if we acquire them, we are able to jump start.  We have to look at the country, because we hold the Asia-Pacific franchise for 18 countries now, now we will open up to 10, we still have some more countries to go. So, I mean you know China is really a big market, I think any of the cities in China can be bigger than Singapore. So, we grow through this, I suppose that we are lucky, but there’s unlimited potential for us to grow the business.

Stanley:                     I see, of the 18 countries you mentioned China, is that the franchisee for the whole country, or is like just a few provinces?

Jack Chua:                We hold the master (franchise) for the whole of China, so is, our format can be I mean you know, China is so big,

Stanley:                     That you split up…

Jack Chua:                Yeah! each of the cities can be like Singapore, just look at Shanghai, the population I think I heard is 20 over million now – that is five times that of Singapore, so actually there’s a lot of potential. So, that is how we’re going to grow, but of course doing business in China is not easy…

Stanley:                     There’s a potential for you guys there. Okay! You talked about the first listing back in 1998, and then after a few years, of course, the company got delisted, do you want to share with us, the history or what is the rationale for management to delist the company?

Jack Chua:                We listed in way back in 1998, of course, at the point of listing, I think ERA was the main business, and we were also on a few other businesses. And along the way, of course, after the listing, we also started to acquire some businesses like Western Union. We also acquired some interior design business and a storage business. The company become a bit diversified, I mean if all the businesses are in the real estate business it’s still not too bad, but it’s a bit too different. The in 2012, the owner was a bit tired and wanted to sell ERA. But ERA is a major contributor of the whole businesses. You can’t just sell ERA, because it’s amounting to delisting. So, that’s why he decided to delist the company, and 2013, he sold ERA.

Stanley                      I see. Okay! And he sold the company to a fund management business called Northstar, can you tell us; how did that deal happen – did Northstar come to you guys, or you guys were…?

Jack Chua:                I must declare that for the deal, I’m not involved, because at that time, after the delisting, I think I more or less quit from the company, but I was still with the company but doing other business. I was the one that doing Tim Ho Wan. I was doing that business, selling dim sum! [Laughter]. , At ERA, there’s someone that succeeded me and taking care of things. I think it was quite interesting – instead of selling property, I went to sell bao [Laughter].  But it is a very good experience I must say. I suppose that doing business is all back to the fundamentals. Yeah! So, I’m lucky, I mean we also managed to have a good start, if you recall, people used to queue 2-3 hours just to buy bao. It was interesting and involved a lot marketing, you know, it’s just like marketing a property. So, we use Facebook, and others, to market the services of Tim Ho Wan. On the day of opening, I managed to attract a huge crowd, to our outlet in Plaza Singapura. So, the deal, actually I’m not so involved, after Northstar decided to acquire, they spoke to me. So, we had some meetings, and decided to get the management team, to participate in the buyout. So, there are 14 of us, myself, my CFO, my COOs are those involved in this buyout.

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