Unlocking Value in Global Real Estate Investments: Redefining Outlet Malls with Cecilia Tan, CEO of Sasseur REIT

In this episode of Business Beyond Borders, we are honoured to have Cecilia Tan, the CEO of Sasseur REIT. Cecilia discusses Sasseur REIT, the first Asia outlet mall REIT, in detail, outlining its unique retail format catering to a specialised consumer market in China. 

Cecilia also shared the challenges she faced when helming Sasseur REIT in the midst of the Covid-19 pandemic, adapting to remote work, and managing properties from afar. She also shed light on how Sasseur REIT managed to bounce back strong with a record high occupancy rate of 97.2% and impressive sales figures of 2.3B RMB, despite the pandemic closures in China.

In this episode, we discuss:

- Cecilia's career journey leading up to helming Sasseur REIT

- Sasseur REIT as the first Asia outlet mall REIT

- Challenges and opportunities in the outlet mall industry

- The impact of COVID-19 on the retail sector

- Managing real estate investments and unlocking value

Gain valuable insights into managing a REIT, navigating real estate transactions, and derisking investments in this episode. Tune in now!

Links:

Bluente's Website: https://www.bluente.com/

Cecilia’s LinkedIn: https://www.linkedin.com/in/cecilia-hl-tan-ba08bb31/

Our Socials: @bluente.official (Instagram and Tik Tok)

Transcript

Daphne (Host) | 00:00:00 to 00:00:18

Welcome to another episode of Business Beyond Borders. Today we're very excited to have with us Cecilia Tan, who is the CEO of Sasseur REIT. Welcome, Cecilia, to today's episode. Thank you, Daphne, for having me. Let's kick off the episode by understanding a little bit more about what led you to become the CEO of Sasseur REIT today.

Cecilia (Guest) | 00:00:18 to 00:00:56

Okay, it's a long story, but just cut it short. I had the opportunity to get to know my chairman of the platform, who is also the chairman of the sponsor way back in 2016 through mutual introduction by some friends in the industry. And when we met, he was actually in Singapore at that time exploring a listing of Sasseur REIT. And then we clicked very well because he doesn't really speak much English. And one of the few is I speak quite good Mandarin, so I think that helps to build bridges in terms of communication.

Cecilia (Guest) | 00:00:57 to 00:01:34

And I was also very fascinated by what he was trying to do here, bringing sort of outlet mall listing. And then subsequently, we sort of kept in touch. And in 2019, when I left my old corporate job, he actually mooted the idea that maybe I should come and provide some strategic support to him, because at the time, the REIT just got listed, and he was also very interested to understand, see how stock market operate. And this is like the first international, I would say, offshore venture they have in form of listing. So I did that for him as a part time advisor to him for about two years.

Cecilia (Guest) | 00:01:34 to 00:02:04

And then in between, I think I get to know him a lot better, really, at personal range, and also got to know some of his colleagues back in China. And I got so comfortable with who they are, what they do in China. And in 2021, there was some discussions around CEO succession, and I thought, okay, probably it's time to really take the branch. And there I am. For our audience, who might not be so familiar, could you share a little bit more about what Sasseur REIT does?

Cecilia (Guest) | 00:02:04 to 00:02:17

Yeah. So Sasseur REIT was actually listed in March 2018. It's sort of very interesting REIT. It's the first, I would say, Asia outlet mall REIT. So it's in a retail space, but it is a very specialized space.

Cecilia (Guest) | 00:02:17 to 00:02:54

This is outlet mall. I think most of us are not unfamiliar with outlet mall, but I think before the Sasseur REIT listing, actually, a lot of people didn't realize that it's actually a very vibrant and growing industry in China in relation to outlet malls, the industry. And when I sort of got into this job, I researched a little bit more, actually, the outlet mall industry in China started in 2002, actually the same time as the Singapore REIT industry started. Uncanny. So when we got listed here, I think one of those things we also try to educate the market here is that it's a very specialized retail format in China.

Cecilia (Guest) | 00:02:54 to 00:03:15

And in fact, that caters to a very specialized, what I call the middle class consumers. And I always tell the market and my investors that if you want consumption proxy, you should be looking at Sasseur REIT. Yeah, very nice. Earlier, you mentioned that you joined Sasseur REIT in 2021, and that's in the middle of the pandemic. Yes.

Daphne (Host) | 00:03:15 to 00:03:38

What were some of the challenges that you faced, especially given all the travel restrictions, and then you're based here in Singapore? Yeah, indeed. I think when I came onboard, a few components there in terms of restriction, I remember the transition was really work from home entirely. I mean, in my whole life, I've never worked from home. So I think it was that era that everybody sort of got around and understanding what work from home means.

Cecilia (Guest) | 00:03:38 to 00:04:02

So when I transitioned into the role, in fact, every day, I was just on Zoom with my colleagues. And you're right, I think for the REIT, right, the main assets are the properties. And because the properties are all in China, in fact, before I came on, I joined in July 2021. So before I came on, actually, my chairman side in China, they were discussing whether I should go to China. But it was difficult because they had long quarantines.

Cecilia (Guest) | 00:04:02 to 00:04:32

Correct. They have like 14 plus 7, depending. So after a few rounds of discussion, we sort of aborted the idea. So I told them, let me just transit here in the Singapore office, and then we see how it goes. And of course, 2021, that whole transition was, I wouldn't say very difficult, but still, because I'm coming into a role which is full time and in a sort of critical leadership position, I literally was trying to sort of get things done virtually.

Cecilia (Guest) | 00:04:32 to 00:05:07

So you can imagine it's actually quite challenging. But I think with all things, we always find ways to get around it. Yeah. And what are some of the primary responsibilities and challenges of managing a REIT here in Singapore with properties in a different country? Yeah, I think the first thing first is when a REIT has 100% of assets overseas, the biggest challenge you have is a lot of the people, they don't have affiliation, affinity with the assets because they can't go to the asset, and particularly property.

Cecilia (Guest) | 00:05:07 to 00:05:29

Right. I find sometimes can be very emotive, and people, whether they like the look and feel of it, the location. So one of those things we try to bridge the gap is that we try to sort of showcase a lot of the outlets via videos. And one of those things are good things that my sponsor team in China, they are very extremely media savvy. I think.

Cecilia (Guest) | 00:05:29 to 00:06:01

I'm so glad that because we have so much contents, we have no lack of contents. But I think that cannot still totally replace what we call the experiential component in terms of people going to see the outlet. So obviously, China just only recently opened up in July, visa free. So the first thing we did this year, and for those who follow us on LinkedIn, we brought a bunch of analysts to the outlets, and they were like, totally, totally wow. Because in as much as they see the videos, they already got so excited.

Cecilia (Guest) | 00:06:01 to 00:06:35

But it's very different when you go and see the real thing, because you feel the mood there and you can feel that the market there is so different from Singapore. The outlets, in terms of scale, know, on average, every outlet is about the size of Vivo city. That is, like, smaller, for your knowledge. So everything in China has to be proportionate to what we understand of the Singapore market. And outlet itself, at least the one that we run, our outlets, we have a very unique proposition in terms of even the hardware itself, the look and feel, right.

Cecilia (Guest) | 00:06:35 to 00:07:07

It's very different from what you see from a Japanese outlet, from a US australian outlet. And those what I would call the open style village, the outlets that we have in China, at least under Sasseur, is really just mega shopping center. So as it is, people already don't connect that, but the moment they step into the outlet, they feel that they know it's an outlet because everywhere there's so much discounts and so much shopping available. And I remember the analysts, they were like, just keep nonstop buying.

Cecilia (Guest) | 00:07:13 to 00:07:32

It's a big catalyst for people wanting to shop and feel and touch the elements there. Yeah. And it must be very exciting for you to be operating a REIT like that. What keeps you most excited on a. Day to day basis, I think, is to expect the unexpected and to look forward the surprise and upside.

Cecilia (Guest) | 00:07:32 to 00:08:09

Yeah. Because very interesting in terms of our REIT model, the underlying leases, and again, this is so, so peculiar, I think probably works well in a market like China, where they have a huge population base. A lot of leases in the outlets, actually, they don't pay fixed rent. Your expression already tell me, because it's unthinkable for a landlord that you have a tenant that you don't pay you a fixed rent. You get worried because this is very contrary to how a landlord would be wanting to get predictable cash flows.

Cecilia (Guest) | 00:08:09 to 00:08:31

But this has worked very well because of the fact that the nature of the outlook is really we try to drive sales. And one of those things we are also looking at is how do we rejuvenate the outlet through the kind of tenants and the brands we bring in. Now, imagine that. Case in point. If you go to our shopping centers in Singapore, you find that they are quite same old same old.

Cecilia (Guest) | 00:08:33 to 00:09:03

So it's so boring. But in outlets, what we try on is that when we look at the performance of the tenants, how do we have alignment of interest? So the model that's worked very well is we take a percentage of their sales, which means it's a double edged sword. If the tenants performs very well, which means then we pick the right brands, then we get a high percentage in coming back to rental. But if the tenant doesn't perform well, then we will be thinking about how do we get rid of the tenants.

Cecilia (Guest) | 00:09:03 to 00:09:20

So as part of this package, right. Actually, we sign very short leases with the tenants. We sign maybe between one to two years. And in fact, some of the new tenants that come in with test bait, they could even sign, like, six months, and then we do extension. Again, this is very different from how retail operate here.

Cecilia (Guest) | 00:09:20 to 00:09:43

Retail tends to sign longer leases. They want stability, they want certainty, but we want flexibility. Yeah. So it's very interesting, whenever we have new tenants coming in, I'm always looking forward to how the tenant is going to perform. And we actually look at tenancy in a very holistic manner because of the fact that no one tenant is providing that huge concentration of income.

Cecilia (Guest) | 00:09:43 to 00:10:19

So that's something that we always are very sort of mindful, and that will also ensure stability of the cash flows, that the cash flows will not be dependent on any one or two tenants. Yeah. And also, quite interesting, they mentioned that the leases are short. I'm curious, when the tenants are being refreshed also on a kind of like six months or one year basis, does that keep the consumers or the shoppers also excited to come back to see what's new? In fact, I tell you, it keep the retailers on their toes, because if they don't perform well, they may lose a chance to be in our outlets and we have a long waiting list.

Cecilia (Guest) | 00:10:19 to 00:10:29

But having said that, so even with signing short lease, we tend to have a high retention rate. So we just keep renewing their leases. Nice. Yeah. And in fact, we are seeing some of the tenants over the years that perform so well.

Cecilia (Guest) | 00:10:29 to 00:10:38

They've increased their spaces in the outlet. So in some of the outlets, they have double story duplex. Wow. Yeah. So double floors of shopping.

Cecilia (Guest) | 00:10:38 to 00:10:46

Now, in Singapore, who gets that? Only the high end brands like Louis Vuitton. No, in our outlets. Right. The sports brands who are doing very well.

Cecilia (Guest) | 00:10:46 to 00:11:05

Some, they have double. Nice. Yeah. And I think under your very strong leadership, and also based on what you've mentioned, we would like to congratulate you on a really strong first half of the year performance. Maybe could share with us what led to such strong performance, especially this was before China's reopening.

Daphne (Host) | 00:11:05 to 00:11:19

How did that pan out? Yeah, I think if we sort of put in perspective, 2022 was extremely challenging for us. I think 2022 globally, nobody expected China to go through such a roller coaster. Right. In COVID.

Cecilia (Guest) | 00:11:19 to 00:11:41

And when I look at the numbers in 2022, in fact, our four outlets in China, two in Chongqing, one in Hefei, one and Kunming in total year, they close. We have to close because of COVID restrictions for close to two months. Wow. Yeah. So coming into 2023, of course, the relaxation in COVID, remember, happened very late in December 2022.

Cecilia (Guest) | 00:11:41 to 00:12:18

It was, like, fast and fewers and caught everybody by surprise. But that to us was such a great relief because the biggest challenge when managing our outlets during COVID was the unpredictability. We were literally on the toes here in Singapore. And actually, I was most concerned about the health and the mental health of my colleagues in China because they were going through so much stress, and also about preserving the health environment for our shoppers, because we really don't want to have any infectious situation. And thank God that, you know, actually, that was very well controlled.

Cecilia (Guest) | 00:12:18 to 00:12:35

So coming into two two three, of course, the great opening story of China, right? Everybody was so anticipating. I mean, we had a good first quarter, to be honest. Second quarter came in a little bit softer, but all in, I think first half still performed very well. First half, our sales for the four outlets in total was 2.3 billion Renminbi.

Cecilia (Guest) | 00:12:35 to 00:12:45

Wow. Congrats. 2.3 billion Renminbi. Just in context of Singapore, it's about 450,000,000 Sing right. And that was 20.5% year on year.

Cecilia (Guest) | 00:12:45 to 00:13:07

But of course, total two was a low base. But still, that shows that when there's a reopening, people wants to go back to fiscal shopping, right? So I was always asked this question, don't you think the ecommerce will disrupt? But I think the numbers speak for themselves. There is this great desire that people want to go back for experiential shopping, and that's always how we position our outlets.

Cecilia (Guest) | 00:13:08 to 00:13:31

And in fact, during that period, first, our occupancy actually reached record high of 97.2, even before pre COVID of 96%. Yeah. So our numbers actually exceeded pre COVID. So I think it tells you a lot about really, firstly, I feel that we have established ourselves as a very good brand name in the outlet space. Our sponsor group, they are the number one operator in China in terms of the number of outlets in China.

Cecilia (Guest) | 00:13:31 to 00:13:53

So clearly, they are a household name in some of the cities that they are in two, I think there is this great desire that people want to go out and spend. Retail therapy is very real because I do that from time to time, right. So you feel good spending money more. So when you buy discounted brand goods at discounted prices, right. You're very feeling that, well, you get a good deal.

Daphne (Host) | 00:13:54 to 00:14:11

That's amazing. Looking ahead, what are some of the key trends that you have observed in the space? I think earlier, you mentioned quite a number of people asking you about ecommerce disrupting the area. But personally, what are some of the key trends that you think would continue to pan out in the next two to three years? I think definitely.

Cecilia (Guest) | 00:14:11 to 00:14:39

COVID has brought about a disruption across sectors, and retail has also and we've seen that in ourselves. Robinson's 160 year old retail departmental store closed shop, finally. Totally. I was so devastated because that was one of my favorite departmental stores to go to. But by the same token, recently, I think not too long ago, there is this big departmental store called Pacific Taiping Yang.

Cecilia (Guest) | 00:14:39 to 00:14:49

It's a Taiwanese departmental store. They also been in China for 30 years. They finally closed their last shop in Xujiahui in Shanghai. Right. A big departmental store.

Cecilia (Guest) | 00:14:49 to 00:15:13

So I think what is happening now is that if your retail format, you don't have a clear value proposition. Now, departmental store clearly is in direct competition with the ecommerce because if you go to departmental store, it's a general merchandise, and people get that online. Really. Right. So for us, how do we continue to be at the forefront of that retail format?

Cecilia (Guest) | 00:15:13 to 00:15:43

One of those things that we actually spend a lot of time on is 客服, which is customer service. Customer service is very big because these days, apart from people wanting to just buy goods, they want to be educated when they go to a shop, they want to understand the product. And I think that customer service is that touch point that will bring the customer back again to the stores. So that's number one. Number two is that we always make sure that we have variety.

Cecilia (Guest) | 00:15:43 to 00:15:54

Okay. So this is part that I feel that we can compete with the ecommerce, because the Ecommerce one of those things is convenience and variety. But in outlets, right. At least in our outlets, we have something like 300 to 500 brands. Wow.

Cecilia (Guest) | 00:15:54 to 00:16:22

Yeah. So literally, you can spend one whole day in the outlets, and then you must be thinking you're coming back again, because you're probably not going to be able to go to every single shop. Right. So we try to do that in order to sort of also add that human touch element, that choice. But also very important for us in the outlet, we give the clear value proposition of discounted prices now, people more so now in China, where we call 消费降级, there's a downgrade in consumption.

Cecilia (Guest) | 00:16:22 to 00:16:52

We see that value proposition being a lot more of a catalyst now, where people are really clearly looking to buy goods, and they feel that, oh, it's getting good to you in the past, when people are a lot more liberal with their spending. Right. They may not really want to think about such things, but it's becoming a lot more important now for a lot of our consumers. Yeah. Riding on these trends that you have mentioned, then, how do you capitalize on them going forward?

Cecilia (Guest) | 00:16:53 to 00:17:15

Yeah. So I think we must know our weakness and strength. So for our group, we are very cognizant of our strength, and we continue to invest in what we do and continue to do very well in those one of those things we also have been spending and harnessing is what we call the VIP customer base. So, you know, our VIP customer base is quite unlike the loyalty program we have here. Sorry to say.

Cecilia (Guest) | 00:17:15 to 00:17:40

I think the loyalty program we have here are quite primitive. But the VIP, we really treat them like really red carpet treatment. For example, in our 两江 shop, if you go to our website, you will see we have a dedicated space called VIP Lounge. And they can go and they can use the facilities there. They can sit down, have a chat, they can even book some of the private rooms they can order food in.

Cecilia (Guest) | 00:17:41 to 00:18:11

We really want to sort of make them feel at home. All this is about increasing the stickiness of them coming. And I think in China also a lot of people pay attention to a lot of branding association. So we want them to feel that oh, they feel very proud that they are satisfying VIP customer and then they get really all those good deals. And when we have promotional activities, the VIP will get to invited first and they will come first back to Cherry.

Cecilia (Guest) | 00:18:11 to 00:18:24

Yeah. In fact, one of those things we do quite interestingly is that when we run our September anniversary sales 终年季, which is a signature, the VIP will be first to come and it's 24 hours shopping. Wow.

Daphne (Host) | 00:18:26 to 00:18:39

Unimaginable. Yeah, I know. And so they will be looking so forward to it because it's such an experience that you shop in the mall like 2, 3 a.m. Thousands of people are still shopping with you in the mall.

Cecilia (Guest) | 00:18:39 to 00:18:51

The kind of feeling I think is very special. Yeah, it's very special. Right. So it's one of those things that we do. The other things of course, we continue to harness brand relationships.

Cecilia (Guest) | 00:18:52 to 00:19:09

That is really the lifeline for us. Outlet to be successful is we need to continue to have their brands and then have that conversation with the brand to make sure that their inventory stays up to date. And in fact, increasingly like some of the sports brand are doing very well. We have direct factory outlet line now. What does it mean?

Cecilia (Guest) | 00:19:09 to 00:19:25

It means we cut away all the intermediaries. We provide even greater price point competitiveness to our consumers. So those are the things that as a group they continue to harness and put resources. So it's really managing a lot of those relationships. Correct.

Daphne (Host) | 00:19:25 to 00:19:36

It's less transactional in a sense. Correct. Yeah. Sasseur REIT also has portfolio. I mean, the properties are around different parts or different regions in China.

Daphne (Host) | 00:19:36 to 00:19:48

Maybe you could share a bit more of the differences that you have noticed across the retail industry in different regions in China. Okay. China is really big. We are mainly in tier two, tier three cities. So I get this question a lot.

Cecilia (Guest) | 00:19:48 to 00:20:06

When oh, China reopening doesn't mean everybody will rush off China and how that impact. Okay. I think really the ordinary folks in China, in tier two, tier three cities, they actually don't travel that much. Right. So because of this, there is this huge desire to still do domestic consumption spending.

Cecilia (Guest) | 00:20:06 to 00:20:36

You see more of that in tier one cities. So, Sasseur Group, by the fact that we started in tier two, tier three cities, we understand the dynamics of that consumer behavior very well. Okay. But obviously when we go to different cities, we also try to tune the sort of mix a little bit depending on the consumption habits and capacity. For example, in Nanjing, right, Nanjing is not in our portfolio, but Nanjing is managed by our sponsor.

Cecilia (Guest) | 00:20:36 to 00:21:10

Nanjing is a high consumption, the high capacity for consumption spending. So they started with one outlet, now they have another one in Nanjing. So I think we look at where the trends are and we go to where we feel that we are going to cater to an underserved market where people want to buy discounted branded goods at a discount, but they don't have the means and it's actually not easy to open an outlet. So what has happened is over the years, what the group, the sponsor, has done is gone what we call the asset like strategy. Okay.

Cecilia (Guest) | 00:21:10 to 00:21:41

Now, because if you do the traditional model, you go and build a piece of land, you go and do a construction that will easily take you maybe three to four years from planning to build. And also that requires a lot of capital. That model in today's market is, number one, is very capital intensive. Two, given where the property crisis is in China, you really do want to get involved in all this. So the group actually, I would say they have huge foresight, particularly my chairman, he understood how do you penetrate yourself in this retail market.

Cecilia (Guest) | 00:21:41 to 00:22:07

Right. What he has done now, apart from the early outlets that he built and four of which already injected in Sasseur REIT, he has gone to say, third party property owners. And he takes 20 years master lease. Maybe he will be looking at places where he will feel that he's not represented there, but there is latent or potential consumption spending that can be unlocked. Right.

Cecilia (Guest) | 00:22:07 to 00:22:24

So it's like this. If you don't bring a product, you cannot unlock the consumption. So he will do that and then he will maybe put some capex and sometimes the landlord could also agree to put some capex. And then they will do renovation depending on extent. And boom, you become an outlet.

Cecilia (Guest) | 00:22:24 to 00:22:31

Ready? Wow. Yeah. And then we just opened one in Shijiazhuang on the 28 of September. Nice to huge fanfare.

Cecilia (Guest) | 00:22:32 to 00:22:55

So this is how we are looking at in terms of penetrating different parts of China, but part of that is also increasing the brand equity. Yeah. So I now want to turn back time a bit. You started out your career as an investment banker at JP Morgan, listing REITs across your journey, and then now you're managing one. How did that experience kind of build up to what you're doing today?

Cecilia (Guest) | 00:22:55 to 00:23:24

Yeah, I think when you're a banker, you are very transactional in nature because you do one project to the other. So when I listed sort of banker, I listed Ascendas REIT. And that was very, very early days, and that was a very interesting journey because Ascendas at that time, they were looking at all the industrial properties. So you look at the properties. So one of those things that is a discipline, because the REIT got to look at income producing assets.

Cecilia (Guest) | 00:23:24 to 00:24:07

Now, you don't just pick any income producing assets. You need to pick those assets that you don't have the fundamentals to sustain a level of stable income. So we actually have to go through a whole lot of feasibility study in terms of picking the really good ones to try to come into the REIT now, but when I was a banker, I was just doing, I would say, the beginning of the thing, helping my client put together, but I didn't get around to managing. So there's a Chinese saying 创业容易可是守业更难。I think the more difficult part is the managing of the REIT. But I think because of the fact that I started in the journey, I understood what it takes to do to put together a REIT.

Cecilia (Guest) | 00:24:07 to 00:24:42

It helps me now becoming an inset practitioner when I look at the REIT, what are things that need to drive the sustainability and the resilience of the REIT? Because REIT is supposed to be very long term. Real estates are supposed to be very long term vehicles. So when we do strategies, we need to think about, we cannot be so short term, but how do we build? Every dollar that we invest must create long term effect, but maybe it may not be immediately recoverable in terms of results, but clearly that will help to maybe even sustain the valuation of the assets in the long term.

Daphne (Host) | 00:24:42 to 00:24:57

Yeah. And also kind of like, if you reflect back on your journey, what are some of the key learnings that you have had that you continue to apply as you think about managing the REIT today? Okay. Because the REIT is a listed vehicle. Right.

Cecilia (Guest) | 00:24:57 to 00:25:23

So the REIT is I would say when we look at the REIT, although the underlying assets are real estate, but the REIT fundamentally is a financial product. Yeah. Okay. So the good thing is, when I was a banker, I did a lot of capital markets transaction. So when I'm managing the REIT, I got to be very cognizant about the capital markets environment because you cannot say that you just ignore what's happening in the macro.

Cecilia (Guest) | 00:25:23 to 00:25:36

Right. And a lot of this investor sentiment is very key. So you have a situation whereby you may be thinking, oh, your results are so good. Like, for example, our results are very good. Why is our share price keep going down, right.

Cecilia (Guest) | 00:25:36 to 00:26:17

Because that is also a function of the capital markets. And so we have to be very cognizant in terms of how we align and also sort of not go against the trends of the capital market, but also stand ready to capture the trends of the capital markets when we see the tight turning in our favor. Right. And the other thing, of course, in managing the REIT, the capital structure is very important. The cost of capital REITs is very sensitive, which is why you see now in the high interest rate environment, right, all the share prices of the REIT all tumble because of the fact that the REIT actually has borrowing and high interest rate definitely is going to be negative in terms of the cost structure for the REIT.

Cecilia (Guest) | 00:26:17 to 00:26:50

So that's something that, given my banking background, I am a lot more attuned to this sort of correct. Correct. And speaking of capital structures, previously you also had led multiple transactions across different countries, singapore, UK, China. And as you reflect on these transactions that you have done, what are some of the key factors that leads to successful closure of these transactions, especially when it comes to cross border deals that people might be handling? Maybe to narrow that down, I would talk a little bit more about the property transactions.

Cecilia (Guest) | 00:26:50 to 00:27:11

I've done property transactions across many countries. And one of those things, when we look at property transactions, there are some similarities across all countries, but there are also differences. For example, if you go to UK, the transaction that I did was a heritage building. It's what they call listed property. So when we're buying that transaction, the due diligence angle is different.

Cecilia (Guest) | 00:27:11 to 00:27:44

We have to be very sensitive about because the client wanted to do a lot of renovation and then we need to go and really look at the structure and see where the parts that we can start to tune and not tune. And we need to have the conversations with the regulators. So in every transaction, we have to look at where the deal breaking point may be relative to the apart from the price, the transaction itself might have some deal breaking elements and we have to be very cognizant of that. Then, of course, it's culture. We cannot say we do things like this in Singapore.

Cecilia (Guest) | 00:27:44 to 00:28:22

Then when I go and do a transaction in Indonesia or Malaysia or UK, I'm going to adopt. So when we go there, I normally work at least those times I work with the local team and we try to sort of customize the approach that we do, because at the end of the day, very simply, bankers are there to provide solutions. Now, the transaction is the outcome of how you navigate through those hurdles and challenges. And those could be some of it could be very technical, but some of which actually you require some human navigation in terms of how you communicate, how you package. How you reach out to different stakeholders in the whole system.

Cecilia (Guest) | 00:28:22 to 00:28:43

So I enjoy that a lot. What was your most memorable transaction that you have completed? There was one in Singapore. That was in very early days when I was still a junior banker. It was actually a hotel in a premium part in Singapore.

Cecilia (Guest) | 00:28:43 to 00:29:13

It's called Ana Hotel. You're probably too young to remember, but in those days, a lot of the Japanese airlines, they love to buy hotels because they provide end to end solutions. But interestingly, their hotel is actually part of a listed company, and it's a single asset. Yeah. So I remember after the Asian financial crisis, one of the major airlines in Japan approached us to try to get us to sell this listed company in Singapore.

Cecilia (Guest) | 00:29:13 to 00:29:36

But you can imagine, the environment was very tough. So I was put on that job as the main banker, and I was still trying to figure out how to do real estate transactions because I was quite a junior banker. So when I look at that, it was a hotel. But hotel actually was very tough to sell because hotel by nature is very unpredictable. But Singapore is a very interesting thing.

Cecilia (Guest) | 00:29:36 to 00:29:55

They have this thing called change of use. So halfway through the transaction, we realized actually the hotel can be rezoned as residential. So then we decided, okay, we're going to pitch it very differently. We're not going to sell the hotel as it is. We're going to sell the hotel with the redevelopment angle.

Cecilia (Guest) | 00:29:55 to 00:30:20

Then we try to sell at a higher NAV. And that was how we actually re engineered and redesigned, and eventually that transaction was completed at a higher transaction volume. And of course, our fees also better. So that was a very memorable the other thing is very interesting, because halfway through, right, when we first started as a hotel, I couldn't get any traction. And I told my Japanese client, you wait for one more year.

Cecilia (Guest) | 00:30:20 to 00:30:34

And my boss is saying that I'm crazy. Woman japanese client, wait for one more year. Because I truly believe, right. You don't go against the market, because if the market is not ready and so the client was surprisingly listened to my advice. One year later, when we restarted right.

Cecilia (Guest) | 00:30:34 to 00:30:44

The change of zone came in, and that's how we managed to pivot that and became residential. And today, if you go and see, the site is a high end residential. Wow. Nice. Yeah.

Cecilia (Guest) | 00:30:44 to 00:30:56

So that, to me was very, very interesting, because it also shows the actual real estate. Right. You cannot see real estate as just pure brick mortar. At the end of the day, real estate also has a financial angle. Yes.

Cecilia (Guest) | 00:30:56 to 00:31:03

How do you unlock correct. How do you unlock real estate? So it's the same when I manage a REIT. Right. How do I continue to unlock value?

Daphne (Host) | 00:31:03 to 00:31:43

Exactly. I was going to say what you have just shared kind of pans through your entire career. And also earlier, you had also alluded to when you are currently managing the REIT, thinking very actively about not just that very standard playbook model of how to manage REITs, how retail or outlets should actually operate, but really thinking very creatively so that you can unlock value across different angles. And I find that very exciting. My last question for the English segment, this transaction that you have just shared was at an earlier point in your career, what advice would you have for younger professionals who are thinking about exploring a career in real estate investments?

Daphne (Host) | 00:31:43 to 00:32:34

How should they go about thinking about that? Okay, I think real estate investments, when I tell people I do real estate, people say, oh, you're property agent, that is like the first thing to come. But actually, real estate in the very high end, what we call the institutional platform, right, is really about financial returns. So when we look at the real estate, one of those things is you have to be grounded in a lot of fundamentals, the legal side of things, the tax side of things. When you do a real estate transaction in China versus in Singapore, a lot of how you unlock the returns has to do with how you put the capital for the real estate, how you structure the real estate, because there will be tax implications, there'll be legal.

Cecilia (Guest) | 00:32:34 to 00:33:00

And also when you do due diligence on the real estate, when you encounter problems. Okay, when you buy a real estate, when you go into same purchase agreement, how do you mitigate the risk? So a lot of that requires very fundamental grounding in terms of understanding the risk. So a lot of people have this tendency oh, by real estate, I just look at the blue sky from my own training, right? When I look into real estate, the first thing I try to look at are the risk.

Cecilia (Guest) | 00:33:04 to 00:33:21

Can I undertake certain measures to derisk? If it's a physical means, I just put capex, but if it's structural, it could be latent risk. How do I derisk? Like in the SMP, can I pass a risk to the seller? Can I buy insurance?

Cecilia (Guest) | 00:33:21 to 00:33:43

So I think there's actually a whole lot of creativity solutions that you can do. In fact, I did the transaction in China just off sidetrack, just to give the point in Xintiandi. Okay, yeah, that was in 2004. I was managing Income Fund. But Xintiandi at that point in time, when we went to do Xintiandi Tent, it was a development project.

Cecilia (Guest) | 00:33:44 to 00:34:05

How do I reconcile? We did a structure of a convertible bond. Okay, so it can be done, but it requires you to really think of the box and work towards a solution that will meet the finance at the end. It's all about financial return. And I think with that, we wrap up the English segment of today's episode.

Cecilia (Guest) | 00:34:05 to 00:34:33

Now we'll move on to the Chinese rapid fire questions. 其实我们现在就就进入快问快答的环节，那你准备好了吗？可以呀，我就随性吧，那首先能不能够用中文介绍一下自己好啊。我是道道地地的新加坡姑娘啊，我姓陈，我的中文名字叫凤来，可能就是我的父母是望子成龙望女成凤吧，我的名字属于凤来，嗯，对对对，那么我家庭呢，就蛮简单的，就是一个老公一个儿子。那你最喜欢的中国城市是哪一个呢？嗯，这个问题其实我有思考过，嗯，其实我最早期去中国的时候是在九五年，我当时去了北京。嗯，我当时去了北京，其实我就感觉，好落后啊，因为我，因为北京当时就是其实没有很多的高楼，那么我。

Cecilia (Guest) | 00:34:42 to 00:37:14

当时下榻的那个酒店是他们说的国企酒店呢，就我进去我就感觉我有点担心，那个卫生的情况好像不是很好，可是十年过后我再回返到中国，当时我去了上海啊，零四年去做了新天地那一宗那个项目。我非常的震撼，我抵达中国，我一路那个车从机场沿路到就是淮海路那段路啊，我看到的中国是我几乎是没有想象到，就非常的。时尚，而且它的高楼的那个设计，我当时觉得比新加坡还要，就是大胆啊，还要创新，是，所以我感觉到当时中国的潜力非常的庞大，当然我陆陆续续呢，也去了几个城市啊。不过上来管理这个刹车船房租之后呢，我也去了重庆跟昆明，还有合肥。

Cecilia (Guest) | 00:37:25 to 00:37:49

我可以说是每个城市有它的一个吸引力吧，我但我最熟悉的城市还是上海，因为我毕竟当时在做新天地那个案子，我在上海陆陆续续待了几个月，所以其实我那个时候呢，就是会走去外滩。嗯，那个南京的步道，步道行那个地方我都非常熟悉的，而且当时就是莱佛士城，刚刚在那边开始，嗯开业嘛，可是我现在去了重庆跟昆明。哎，其实我觉得重庆昆明也是非常吸引我的，昆明呢，有它的少数民族，所以它我觉得中国它你到每个城市，你第一个要尝试它的，它的食，它的美食，OK，嗯，你最接触的那个城市就是通过吃。吃的饮食文化在文化上是非常重要，通过吃你去了解这个当地的一个城市，它的钱，它的。

Cecilia (Guest) | 00:37:51 to 00:38:02

历史从他的吃他的食物其实反映出他的历史，我去当时我去了昆明，他的少数民族是吃的手抓饭啦，还有那个昆菌，对吗？那个经过我就觉得，这个东西非常的有趣。那我到了重庆，当时吃出来的重庆火锅啊，对吗？那么在上海又吃不一样的，就是一些不一样的食食材，所以我我觉得每个中国城市我都我都挺喜欢的。那那说到美食，那你最喜欢的中国美食会是哪一个，我我我对辣还是不太行，所以其实这个重庆火锅对我来说还是蛮有挑战，那重庆火锅它的那个它的那个鲜度是非常好。特别是它的那个，又是它的食材是非常新鲜，你这个火锅我觉得是非常健康，可是那个麻有点受不了，所以我还是偏向比较，就是小笼包。

Cecilia (Guest) | 00:38:04 to 00:38:31

这类的一些我们比较比较熟悉的，比如说粤菜啦，对对吧，还是啊，潮州菜我就很喜欢，OKOKOK，那就是很多我们观众应该不知道你之前是以中文教了房地产这个课程。那你是为什么决定这么做呢？嗯，其实我教我教那个才才几天的时间呢，所以其实我那个是受邀去教课，那么我觉得还蛮新鲜的，因为我从来没有尝试过，就是以中文来来。解解说嘛，所以当时还是蛮有压力的啊，还是要经过一段的学习，因为这个这个语言要是你没有每天去用啊，其实它没有产生一个自然反应，要发自内心的对，所以可能。我这个接触之后呢，感觉是比较比较有有自信吧，是是是那。

Cecilia (Guest) | 00:38:41 to 00:38:47

那你就是在英文的播课的时候也提到了，就是因为你的中文能力非常强，所以遇到了就是上次传的主题的时候，就能够培养一些一定的默契，那你是啊，怎么样把你的中文培养到这么好的成。我觉得跟我的家庭背景没有关系，因为我的父母其实他们教育程度很低的啊，其实我从小在家是讲不接话的，讲不接话的就我们那个年年年代的父母一般都没有受过很大的教育。所以啊，英文其实不行，所以可能，而且我的父亲他即便说他教育程度不是很高，可是很喜欢买中文书，所以我家里一大堆的中文书，你知道吗？所以有时候呢，你就会不经意的你就会拿出来读啊，所以我觉得就是。从小对这个语言呢，就是产生非常熟悉，你没有抗拒，不像我觉得现在的小孩子都有这个问题。

Cecilia (Guest) | 00:38:50 to 00:39:50

他对这个中文他非常的抗拒，所以我们是在这种环境下呢，而且我从小就是听广播长大，而且呢，我我也只看中文播到，因为我的父母他都不会英文嘛，所以他只能。只能看中文播报，所以我是在那个环境下长大的，其实我老师说我去学校的时候，我我的英文很差的，每次那英文考试我就好好害怕，所以我就觉得好像我会不及格，对对对。OKOK，那就最后一道问题，就是您对于中国零售业的这个领域的机遇会有什么样的看法呢？嗯，我觉得中国的消费群呢，它是非常的犀利的，嗯。嗯，因为特别是这种中国零售，它是一个竞争很强大的，可是我们刹车团队本身，为什么我们这么多年来还是有这个领领导的一个地位，我觉得这个当中呢，也是要很清楚的，能够。

Cecilia (Guest) | 00:39:55 to 00:40:06

我很清楚的抓到消费者，他他的投其所好啊，因为在这种不断演变的一个过程，比如说这个电商，他的对这个零售的冲击是非常庞大的啊，我特别是看到疫情的时候啊。这所所有的实体店你都不能够啊，营业的时候只有电商他是冠军，因为他只有在他这边是赚钱的啊，可是这个疫情后时代，为什么实体店呢，他还是有这个存在的能力，我觉得这当中呢，也是表示说。这个人啊，他还是一个要到一个实体店，他是他要能够触摸他的那个体验的，可是这当中呢，我刚才有提到，就是这个太平百货，他在30年在。上海那个店老店呢，根据我的理解，30年不变，30年不变这个道理，你认为看你是最好的，可是消费者他是会转变的，所以你你在这种情况下，你还是保持不变，而消费者已经转变，你自然会会没落，所以他自然就被淘汰了，嗯，所以我们在这个零售业呢，我们一直要求新求变，所以其实我们集团有一个号召啊，就是。一直要在创新，我们的创新可以很细腻的啊，可以很细腻，比如说在客服方面呢，我一直不断的去寻找创新啊，怎么去接触客人，这个是一个很热闹的功课。那么。你在这个板块你做的很好的时候，你的客人的心已经交到你身上来的时候，真的你的你的那些竞争者，你要抓住你这个客人的心，我觉得是有难度的，所以我们在这方面呢，是求清楚突破。而且呢，在比如说在整个品牌的一个布局呢，我们是网上看的，嗯。说过一句话，你要把奥莱说在客服方面呢，我一直不断的去寻找创新啊，怎么去接触客人，这个是一个很深奥的功课，那么你在这个板块你做的很好的时候，你的客人的心已经交到你身上来的时候。真的你的你的那些竞争者，你要抓住你这个客人的心，我觉得是有难度的，所以我们在这方面呢，是求新求突破，而且呢，在比如说在整个品牌的一个布局呢，我们是往上攀的。我我我记得我们家的主席他说过一句话，你要把奥莱就是奥特莱斯，就是奥莱的简称做的非常时尚，他用了这个观念，你怎么去解释啊，理解这个观念就是说你不要把奥莱变成说他是个非常低档的一个。行业，那你我们这个当中在创新的过程中呢，我们要把奥莱的整个一个级别拉高，所以客人来到你的奥莱，他觉得他是very high level。

Cecilia (Guest) | 00:40:10 to 00:41:14

他不是 low level 那种，就就捡那种最便宜的烂货那种，不是的，我们要把它这个这个傲慢的定位拉到时尚，我们才能够跟着时代走，因为现在客人的要求越来越高，对对对对对。那这样我们就结束今天的播客呢，非常感谢啊，Cecilia 就是百忙之中抽空和我们分享你对房地产信托的经验啊，那 thank you so much, Cecilia, for spending time with us today. To share with us your experience in listing and managing REITs. I personally learned a lot and also see the spark in your eyes when you're describing how excited you are in growing Sasseur and wishing Sasseur REIT all the best. Thank you.

Daphne (Host) | 00:43:15 to 00:43:19

All the success. Thank you very much. Thank you for having me. Thank you. Thank you.

Cecilia (Guest) | 00:43:20 to 00:43:22

It was it okay? Yes.

Daphne (Host) | 00:43:25 to 00:43:25

Thank you.