John Lim Sees Real Returns With Li Ka-shing

John Lim Sees Real Returns With Li Ka-shing:

BY JANE A. PETERSON

This story appears in the August 18, 2014 issue of Forbes Asia



Property tycoon John Lim quit worrying about having enough money in 2007. That was when ARA Asset Management went public and he cashed out part of his holdings as the company’s cofounder. “It was the biggest payday of my life,” says the group chief executive, who describes himself as an “ordinary guy” with a knack for spotting a good deal.



To celebrate Lim bought a secondhand Porsche 911 Carrera S, picking silver as the color because it wasn’t too flashy. He moved his growing staff into new quarters on the 16th floor of one of the Suntec City towers just above the crown jewel of his real estate empire, Suntec City mall. The mid-1990s office building is functional but, again, not too flashy. Lim says he didn’t consider slacking off and instead found himself working more. “It’s the passion that drives me now,” he explains. “After so many years I still love my business.”



Maybe that’s because business is booming. ARA–short for Asian Realty Advisors–encompasses eight real estate investment trusts, seven private real estate funds, a burgeoning property-management operation and more than 1,000 employees. The business spans 14 cities, from Dalian to Sydney. It boasts $20.2 billion in assets under management as of Mar. 31, and its shares are up more than 120% since 2007. He makes the Singapore list for the fifth straight year, with a net worth of $565 million–40% higher than a year ago.



Click here for Singapore’s Richest 2014



The 58-year-old Lim’s road to riches began only in 2002. Over dinner one night in Singapore a lieutenant of Hong Kong billionaire Li Ka-shing suggested that they form a Hong Kong real estate fund. Li knew Lim from deals that Lim had pursued in Hong Kong, though none had come together. Joining with Li meant leaving a career at GRA Singapore, a subsidiary of U.S.-based Prudential Real Estate Investors, but who turns down Superman? Lim stumped up $700,000 of his own money to add to Li’s $300,000, and they were in business. To this day Lim says he isn’t sure why Li tapped him as a partner. Still, the chemistry worked.



The venture encountered a rocky start–the SARS virus soon hit, hammering the Hong Kong economy–but Lim had an idea. He persuaded Li to bundle the malls and list the package not in Hong Kong but in Singapore–Asia’s first cross-border REIT. “I smell opportunity,” he says from his boardroom chair, recalling the 2003 listing. “That is my gift.”



Now Lim is embarking on another bold alliance that could boost ARA’s assets under management by 40%. Under a deal signed last October he and Singapore blue-chip Straits Trading Co. agreed to commit up to $770 million in seed capital to start property funds that ARA will manage. ARA and Straits Trading say they expect the funds to reach $8 billion in assets under management eventually.



But Straits Trading, owned by the family of the late banker and philanthropist Tan Chin Tuan (granddaughter Chew Gek Khim makes the list this year), drove a hard bargain. It put up 90% of the seed capital, and it demanded the largest share of ARA–20.1%. As a result Lim reduced his stake from 33% to 19.5% and the share held by Li’s Cheung Kong (Holdings) Ltd. fell to 7.8%. “I am happy to take a smaller stake in a much bigger pie–a much, much bigger pie,” he says. The new venture hasn’t announced any real estate purchases yet.



Lim grew up in Singapore as the youngest of six kids. His first mentor was his father, a strict teacher turned vice principal who was a classic, old-school taskmaster. “My father was fierce,” recalls Lim. “He would whack us when we failed a test.”



That upbringing produced his inner strength, Lim believes. While never making head boy, he says he was always in the top 10% and ultimately achieved first-class honors in engineering at the National University of Singapore. “I was not a good student in school compared with some of my friends who were rocket scientists,” he recalls. “But I worked hard and was blessed with the fruits of meritocracy.”



Before graduation in 1981 DBS Land offered Lim a job, and he soon began advancing in the company. Lim befriended his bosses’ bosses, who became his mentors. When he left to join GRA Singapore, and later when he started ARA with Li, they applauded. “They play golf with me now so I must still be a good student,” he says.



Lim calls China’s midmarket malls the “sweet spot” of Asian investment, regarding them as recession-proof. “In tough times you go to the mall, you buy your noodle bowl and the groceries, and you watch a movie,” he says, adding this warning about high-end malls: “When the market is no good, nobody will buy your Louis Vuitton.” He continues: “I’m not so worried about e-commerce. Mainland Chinese are just like Singaporeans. Weekend shopping is their hobby. They want to be seen shopping.”





credit: Nelson Ching/Bloomberg



Lim is now spending $340 million to upgrade Suntec City mall, a prime example of a midmarket shopping center. It finished phase one last year; among the new features is the world’s largest high-definition video wall, according to Guinness World Records. It flashes: “Suntec Singapore, the preferred place to meet.” Suntec also boasts one of the world’s largest fountains, the now refurbished Fountain of Wealth, where shoppers line up to walk out and touch the pulsing water, absorbing its qi of prosperity. Lim himself doesn’t go down to touch the water, but like most Chinese businesspeople in Asia, he believes in feng shui and signs contracts on “good days,” if at all possible. He’s also not a shopper. “I walk around malls,” he says, “but I don’t shop.”



Lim starts each morning at 7, walking his Shetland dog, Chili, in his East Coast neighborhood while he plans his strategy for the day. After juice and a soup made of white fungus, which is “good for the lungs,” he heads to the office. “When I have a vision, I brainstorm with my senior people. Then I put up an execution plan and entrust my people to execute.” While some projects fail, he says he never blames the idea, only the implementation, which is always fraught with tax and regulatory hurdles, sticky relationships and funding hassles. “I’m a hard master,” he admits, “but my staff must find the solutions.”



Cheryl Seow, group chief financial officer, has been with Lim from the outset and sits in on interviews with journalists. “He is a good mentor,” she says. “But people who work for him must share his passion.” Says Lim, pointing to a Korean business that ARA pried away from Macquarie Group in December: “Most of the time we’re on the offensive. You don’t wait for people to come to you. You find ways to persuade them to sell.”



On Sundays Lim has a regular dinner date with his family, sometimes gathering at home but often going out. “Sometimes we go to fancy restaurants, and it costs me a lot of money!” he says. “But it’s important. I want to give my philosophy of life–my values of hard work and philanthropy–to my sons.” He thinks back to when he was building ARA, traveling even more than he does today. “I hardly paid attention to my boys when they were teens,” he muses. “That is my biggest regret.”



His Lim Hoon Foundation–started in 2008 and named after his late father, the schoolteacher–funds scholarships. The philanthropy, says Lim, has the added benefit of bringing his family closer together: “It’s improved our communications. We now have more to talk about.”



Lim’s elder son, Andy, who trained as a lawyer, lives across the street from his father and runs the family office next door to ARA’s offices. He and his professional managers help Lim invest his wealth, putting money into fixed income and equities and also Chinese and Singaporean startups in e-commerce, energy and health care. Lim’s younger son is still in school.



What is Lim’s weakness? “Public speaking,” he says, “and being interviewed.” Though seemingly at ease as he answers questions, Lim shudders when recalling his one live appearance on CNBC. After spending four days preparing to answer a set of questions, the interviewer asked him entirely different ones. He vowed to never repeat the mistake. “Life is too short,” he says, “I don’t need that kind of stress.”



These days Lim prefers to reserve his energy for building ARA: “The world is changing all the time. Once you stand still, you lose your leadership position–something I do not intend to do.”

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