The Edge Malaysia (Options), 6 March 2006
He may have climbed to new heights as CEO of one of the premier property development companies in the country, but Sunrise Bhd’s Datuk Michael Yam has not forgotten his small-town roots. SHEILA SINGAM tracks his professional journey over the past three decades.
When you're faced daily with breathtaking views of a township you have helped create, one that has changed the skyline of one of Kuala Lumpur's most enviable residential enclaves and redefined the concept of high-rise living, you surely can't help but be motivated each day you come in to the office. Surveying my surroundings from the top floor of Sunrise Bhd's penthouse headquarters in Plaza Mont'Kiara, I can understand why Datuk Michael Yam is such a smiley person. He has a lot to be happy about.
Having joined Sunrise just before the financial crisis in the previous decade, he has, through a combination of financial prudence and astute human resource management, steered the property development company through the eye of the storm and back into calm waters. After a brief dulling of interest in the wake of the crisis, demand for properties in the township appears to have returned with a vengeance. Today, units in both Mont'Kiara Bayu (what Yam unabashedly refers to as the "recession product") and the larger, more luxe units in the newer Mont'Kiara Damai are raking in a healthy yield of 13%.
"That's why people keep coming back, not because Michael Yam looks good!" the CEO of Sunrise says tongue in cheek. "We have a lot of repeat customers."
It is a measure of his personality and customer managements skills that many of these customers have evolved into friends today and are people Yam takes the time and trouble to listen to. Nobody understands better how crucial feedback is in the continuous quest to improve at every level.
Yam's approach towards the whole process of property development is a holistic, hands-on one, has been since the first project he supervised fresh out of school. Perhaps one of the reasons for his continuing enthusiasm for real estate is that it's in his DNA.
"My father was a contractor who started at Class F level and worked his way up to Class A through sheer hard work. Being the eldest, I was shown the ropes since primary school. I went to project sites with him, and during the school holidays would follow him to various towns where he worked. I got to know the workers, hang around with the kepalas... I began to appreciate being on a work site," he reminisces.
The ability to interact with people from all classes and "speak the lingo" was planted there. The decision to pursue building and management studies in the UK was also influenced by those early days, he admits. "I knew exactly what I wanted to do."
His first "formal introduction" to the industry came when his father assigned him to manage a construction site for the Agricultural Institute, a World Bank-funded project in Ayer Itam, Johor.
"I had just finished my Form 6 in RMC [Royal Military College]…," he begins, then stops short at the expression on my face. "Can't you see from the look?" he asks with amusement. Come to think of it, yes. If you didn't know that familiar face, you might be inclined to think he's with the police, or the army. It's there in the short, well-groomed hair, the clipped moustache, the crisp lines of his shirt and well-pressed trousers. Only the perpetual smile would look out of place in the armed forces.
Assigning such an important task as a World Bank-funded project to a boy fresh out of school was a measure of his father's faith in him and he attacked the task with gusto.
"I learnt a lot from the kepalas. They taught me the tricks of the trade and how to deal with technical assistants and problems on site." That's not the only way they took him under their wings, apparently. "Prior to my departure for the UK, they took me to the best nightclub in Batu Jahat," he says. Excuse me? Batu Jahat? "Oh, that's the name they gave Batu Pahat. It used to be the Paris of the South," he grins wickedly. Right.
While RMC and the early years working with his father may have instilled in Yam the qualities of responsibility, military-style discipline, leadership and strength, it was probably the years spent in the UK that laid the foundations for his management style and stringent standards. After graduating with a degree in Building & Management Studies (specialising in construction) from the University of Westminster in London, he decided to stay on in the UK, working with various real estate concerns where he acquired a wealth of experience related to various aspects of the industry.
After graduating in 1978, he did a post-graduate diploma in Management Studies. Just before completing it, he was approached by an Iranian friend to build a Georgian-style mansion in Hampstead on a street that was two roads away from Bishop's Avenue, "arguably one of the most expensive streets in the UK".
"While the project was not a big one, I did everything from labouring to project management to buying the materials. At anyone time, there were 20 highly skilled workers on the site." Offering an analogy to explain the experience he acquired, he says, "It doesn't matter if it is a bird or an elephant, the process of eating, and digesting food is the same from beginning to end. Here I had to deal with a bird, but I went through the entire process of building management from A to Z."
Digressing a little from his reminiscences, he relates an interesting anecdote about the-house-that-Michael built in the UK. "Four years ago, an Indian gentleman involved in steel and cement met me on a visit to Malaysia and invited me for a meal at his house. 'Where is your house?' I asked and he described the road and the house. It sounded a lot like the house I had built. True enough, when I went, it was. He'd renovated it a bit, but here was the same house and 20 years later, I had the opportunity to have the most incredible vegetarian Indian dinner there cooked by the present owner!"
After the Georgian mansion, he was offered other building jobs. It was a mark of recognition for the non-white in an industry dominated by Irishmen, but Yam admits frankly that he was not "brave enough to take on these projects". "I still felt vulnerable, a foreigner in a foreign city. It was 1980, there was a softening in the property market there and I decided I needed the permanency of a proper job or security".
He got one, as a building officer with the Works Department of the then North Thames Area Health Authority. The job involved looking after the 600-bed Shenley Hospital, one of the largest psychiatric health facilities in the UK at the time. His role was to maintain the facility, which was made up of more than 50 blocks and 100 staff houses.
"It was a new learning curve for me. There was a new revelation every day as I learnt to do things like tenders according to the British system," Yam shares. It was about this time that the British government instituted a system to measure productivity, a system that Yam says allowed him to manage his staff.
"Basically, it involved measuring productivity by measuring all the movements required for a particular job and timing it. As the manager, I had to work it out and hand out the docket to the staff for a job done. Those with more dockets were given a higher salary. It proved to be a great incentive and allowed us to shed staff that were not productive," he explains.
He advocates introducing such a system to improve productivity in Malaysia. "If you give people an incentive to do a job in a fixed time, they will," he points out.
Although he was quite happy living and working in the UK, Yam and his Malaysian-born wife Cindy made the decision to return to Malaysia in 1983. "We got married in 1979. We were both working, quite comfortable, had a house, two cars and all that. But when Grace [the first of their four children] was born in 1982, my wife quit her job to look after her and we had to re-examine our lives as we had to survive on one income. The Chinese have a saying, 'Eat not full, but you won't die of hunger'. At that point, we said we would come back," he reveals.
Most fortuitously, he came across an advertisement in a newspaper for a project manager's job in Malaysia. He applied and was offered the position of project manager with UK-based PDCS (Property Development and Consultancy Services), where Ron Whitehouse was his mentor.
At the end of 1988, public-listed hotel group Landmarks Bhd offered him the position of group property manager, which entailed "looking after their investment properties". Yam says one of the "most enjoyable" aspects of the job was concurrently being appointed the CEO of Sungai Wang Plaza in 1989.
"I suspect those who know me will give me credit for the revamp of the centre. We managed to change the image of the place in just six months. One of the most significant things about Sungai Wang Plaza is its repositioning. We managed to gentrify the first floor, bringing in the first Marks & Spencer outlet here and introducing Delifrance, World of Sports, Padini and Chomel to reinforce the changes," he says.
It was an extremely busy period in Yam's career. Besides overseeing the revamp of Sungai Wang Plaza, he also had to get the Park Royal Hotel and Carcosa ready for the Commonwealth Heads of Government Meeting hosted by the Malaysian government in KL in 1989.
"Everything was on fast track. We had to bring in staff from Switzerland and Korea to rush the job in Carcosa. When the Queen [Elizabeth] arrived on Oct 14, 1989, we were just clearing out!" he says.
The period also took him on another learning curve where he learnt the ropes of the hospitality and retail business. "I sat on the hotel board, met a lot of people and made a lot of friends. My social skills are not bad," he says in an understatement.
In 1993, he left Landmarks to join investment holding conglomerate Peremba as managing director of both its property and logistics divisions. Here, he oversaw the development of the Office Park and Resort Development in Saujana, PJ, and the Wangsa Maju township in KL. For a short while, he was also in charge of the Port Klang Logistics Park.
"In 1996, my oId boss Ron Whitehouse told me a listed company was looking for somebody. I had a lot of faith in him, I saw him as my mentor, and I said okay. The rest is history - I joined Country Heights [Holdings Bhd] as the CEO. It was very aggressive and active, the Mines Resort and Pecanwood [Gold & Country Residential Estate] in South Africa, now one of the top five golf resorts in the country, were being built. It was a bit like finishing school for me. Tan Sri Lee Kim Yew is a savvy marketeer and he rounded up the entrepreneurial part of my career," he narrates.
A year later, he moved to Sunrise Bhd.
"It had just been taken over by Tan Sri Lee San Choon. I thought being captain of an Airbus was better than being co-pilot of a 747. When I joined Sunrise, I started to look at the organisation before I went into its structure. If blood is a critical part of the body, then communication is a lifeline of an organisation. My RMC training in leadership had taught me communication. It enabled us to batten down the hatches and buckle up for the tough times," he says.
The tough times came in mid-1997. "We were dealing with jittery bankers and I had to watch cash flow like a hawk. Profit is not cash flow, another tenet I learnt during project management. I started looking at what we were paying out and the money that was coming in. In 1997/98, we didn't see the light at the end of the tunnel...," he confesses. His demeanour is serious now as he recollects the dark days.
Fortunately, there was only one ongoing project at the time - Mont'Kiara Astana, launched in July 1997. The company had sold 70% upon launching, but there were no sales throughout 1998. The sales from Astana, and from Plaza Mont'Kiara, the commercial project being constructed, were what saw the company through that period.
"But without other income coming in, there was no cash flow," Yam says. His solution? He talked to the staff and included them in discussions on how to handle the crisis.
"I spoke frankly to them. I gave them a choice - retrenchment or take a pay cut. The staff consensus was to go for a pay cut," he says. Yam set the example by shaving 15% off his own salary, while the rest of the staff, except those earning less than RM2,000, took a 10% cut.
"We began to face a tough decision: whether to sell the site of what is now Mont'Kiara Aman or enter into a joint venture to do Mont'Kiara Bayu, " Yam reveals. Fortunately, they were spared this by a turn of events in 2000. "Somebody wanted to buy Mont'Kiara International School," he says. The company had not considered that option before; it got a healthy RM40 million from the sale, so it did not have to resort to selling its land. The move also enabled staff salaries to be reinstated in 2000 and the company to payout a special half-month bonus that year in appreciation of its employees' loyalty.
After gauging market needs and the prevailing sentiment, Yam decided it was an opportune moment to launch "recession product" Mont'Kiara Bayu in March 2000.
What exactly does a recession product mean for a developer hitherto perceived to be the purveyor of luxurious high-rise living, I ask.
"In the past, we were building 2,000 sq ft condos. Here, we decided to offer small, chewable products with three-star finishes at very affordable prices," he replies. It is a measure of Sunrise's reputation, he says, that the condos were sold within three months. They were completed six months ahead of schedule and today, generate an average yield of 13%.
As confidence in the market returned, Yam thought it would be a good time to launch another project, Mont'Kiara Damai, in 2002. Again, the project, which offered "bungalows in the sky", was completed ahead of time in July 2004. Yam is happy to note that the price of these units, ranging in size from 3,000 to 9,000 sq ft (for the penthouse), has appreciated considerably to more than RM600 per sq it from the average RM380 per sq ft at which the units were launched. The owners are, of course, laughing all the way to the bank.
The company subsequently launched another condo project, Mont'Kiara Aman, which was completed in December last year. Today, units that were originally sold at RM1 million less than three years ago by the developer are going for about RM1.4 million. Nothing is more convincing than cold, hard figures, it appears, and Mont'Kiara buyers keep coming back for more, judging from the high rate of repeat customers the developer seems to enjoy. Perhaps, the fact that Sunrise's CEO has put his money where his mouth is by taking up residence at one of the company's own penthouses speaks louder than any advertisement can. "I've lived here since 2000," he shares.
The company has also garnered much respect among the international real estate fraternity, judging by the willingness of foreign parties to collaborate on its projects. One of its most notable projects overseas, built in collaboration with Pegasus 111 Properties (Pty) Ltd, Macon Group and NBS Devco, is the half-a-million square feet Fourways Crossing Retail Centre in South Africa (which was completed in 1998 and has since been sold). Ongoing projects include a proposed 128-unit residential development in Carlingford, Sydney, with Multiplex, one of Australia's top property developers, and a newly-embarked upon mixed-use harbour front project in Ipswich in the UK with English partners.
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