Passion and Perseverance: The Andaman Way – An Interview with Dato’ Sri Dr. Vincent Tiew – PART 1


Homefinder magazine recently interviewed Dato’ Sri Dr. Vincent Tiew, managing director of Andaman Property Management, regarding his life’s journey and his quest towards building Andaman Property the award-winning property developer it is today. He also shared with Homefinder his various dreams and ambitions in the local property development industry as well as his personal autobiography, “Passion and Perseverance” – a book that encompasses his ideas and knowledge which he spoke at length. The following is an introduction to the above interview. Please take note that Part 2 of this cover-story will be featured in our June issue.

Dato’ Sri Dr. Vincent Tiew’s sharp leadership, intuitive management style and sound direction are instrumental in charting the company’s phenomenal growth. Under his helm, the Company has achieved RM2 billion gross value and has won coveted awards, APM was awarded `Most Valued Developer 2013’ by Malaysian Reserves (In conjunction with International Herald Tribune) and `SME Young Entrepreneur’s Award’ by SME Association Malaysia. Dato’ Sri Dr. Vincent Tiew who holds a Doctorate in Business Administration and Doctorate in Philosophy, Project Management, a Masters in Business Administration and a Fellow with The Hong Kong Institute of Chief Executives, is a sought-after speaker at property and investment forums and seminars. He was named `Upcoming Entrepreneur of The Year 2013’ by Malaysian Reserves In association with International Herald Tribune, for his success in business and entrepreneurship.

Property development in the Andaman Group
Andaman Property Group is celebrating its 10th anniversary this year and to date has achieved an overall GDV (gross development value) surpassing RM3 billion. 2015 has been foreseen to be an exciting year for property development whereby Andaman Property will be launching two development projects with a sales GDV exceeding one billion ringgit. In the second half of 2014, Andaman launched Upper East Tiger Lane in Ipoh which is a 529-unit luxury apartment with a gross development value of about RM330 million. Meanwhile, in the second half of 2015, Andaman will be embarking on its first project in Johor Bahru called Arc at Austin Hills JB – a 6-acre freehold project and a joint development with MPJB (Majlis Perbandaran Johor Bahru) with a GDV of around RM600 million. Whilst in the second half of 2015, a new sales office and a new sales gallery located at Ampang, Selangor have been planned. Also, in the works is the impending launch of a major project called Arc at Ampang Heights. This project faces the MRR2 (i.e. middle ring road II) highway, whereby Phase 1 of the project comprises 1,600 apartment units with a GDV of approximately RM600 million.
The implementation of GST on property
Homefinder also obtained Dato’ Sri Dr. Vincent Tiew’s views regarding the current implementation of GST on property in Malaysia – what are the effects or repercussions for developers, investors and owners alike within the property market post-GST and how will Andaman weather the so-called “GST storm”. According to Dato’ Sri Vincent, there are basically two prongs or approaches to this issue. Firstly, he personally feels that the implementation of GST is timely and generally good for Malaysians. He highly promotes and advocates its implementation, and congratulates the government on the move, as he feels it is a good policy for the rakyat or the people. Secondly, for projects that have been launched and are in the midst of construction under Andaman Property – most of these projects which are liable for GST – Andaman Property has decided to absorb the cost of the GST itself. For new projects that have been undertaken and yet to be launched by Andaman Group, these upcoming projects are not liable for the GST. Nevertheless, he said, in terms of overall costing, there will inevitably be minor contributions, somewhere in the range of 3-4 percent, to the overall production and construction costs. With this added percentage, it means that developers will have to work much harder in order to better manage their cost, to maintain their profit margins as well as profits from their return of investment – hopefully to be recouped from their initial investment. In the local property industry, he believes every developer in Malaysia is in it for themselves and depending on their company’s direction and philosophy – either to absorb the full six percent or to pass on a certain percentage say 3-4 percent to potential buyers. For property that has already been implemented and launched, Andaman will absorb the total cost. For new and recently launched property, Andaman’s take is to fully absorb the GST cost.

Developing a dream property in Malaysia
In the context of Malaysia and the local property market scene, what are the best options or optimal solutions in developing an award-winning property, or building a dream home for that matter? What are the “professional” ways or methods? It depends of whom the question is posed to – whether it is a luxury developer, a property developer that focuses on the luxury segment or niche market, or a developer which focuses on boutique or branded development and niche property. For Andaman, it has decided to go back to the basics or fundamentals – as long as the development allows the buyers (i.e. two category of buyers basically) to enjoy the home of their choice at the right price and at the right location – the objective of ensuring buyers get investment advice on their property of their choice or desire would have been fulfilled. The second category of buyers would be in terms of ROI (i.e. returns of investment).
Such returns of investment would likely include those who invest in property as a means to hedge against inflation (i.e. currency devaluation of the Malaysian ringgit) in the midst of uncertain economic or market conditions. For this particular group of property investors, they may crave a certain lifestyle or eye a certain location. Going back to the basic or fundamental principles, at what price would one consider buying even at the best possible location? For example, at Mont Kiara, there are very luxurious super-grade buildings with specific and creative designs incorporating top-notch facilities. But the real question is, at what price is one willing to pay? Price is still the single most important consideration, key element or determining factor in making purchases in property.

Generating Value, Creating Wealth
Dato’ Sri Vincent Tiew shared with Homefinder the various hurdles and hardships, as well as the many challenges he had encountered during his rise to “superstardom” in his quest to develop a “dream” company such as Andaman. Andaman Group was in fact started off by a group of shareholders – Dato’ Sri Vincent Tiew was only invited to join the group after some three long years – so today he has been with the group for the past seven years or so. In the first three to four years at Andaman Property, the company only undertook a single project. The company took off with extremely little capital cash-flow. For the first project, they had to wait until they had completed the entire project – followed by the collection of all profits upon completion – only then could the company use the money to embark on the second, third and fourth projects subsequently. The greatest obstacle was obviously during the first six years of the company during which time staff turnaround was very high. Back then the staff was barely rewarded with any kind of attractive packages, renumeration, bonuses and incentives.
Everyone was actually on “over-gear” or overdrive. They worked doubly hard and walked the extra mile. The current challenges for Andaman will be to ensure they are able to continue rewarding and managing the expectations of the major shareholders – there are three principal stakeholders to be exact in this case. The first stakeholder is actually the shareholders of the company themselves. The second stakeholder is the staff or employees of the company itself. And the third stakeholder is the buyers or property purchasers. The first group ensures that they continue to deliver optimum profit returns to the shareholders of Andaman. The second group will be trying to ensure the company is able to deliver its promises, directions and expectations. Because in the past four years or 48 months, Andaman Property has been rewarding its staff or employees in kind as well as other forms of goodwill gestures and monetary considerations – to a tune of 36-60 months in incentives, bonuses and allowances – each and every year consistently, during the last four years or so.
So can you imagine trying to keep up with that kind of commitment and expectations? Not only have they organised departmental as well as the company trips – they have undertaken more than fifteen overseas trips and most of the trips even include the office boy, tea lady and receptionist. So which property developer in Malaysia has done and achieved the same feat as what Andaman has accomplished? The third group would actually be the buyers themselves. After some nine years, on 1 July 2014 to be precise, Andaman Property finally adopted its famed tagline, “Generating Value, Creating Wealth.” This motto or tagline basically means that buyers who invest in Andaman Group and its stable of property are guaranteed to make money, most importantly, at the point of purchase. Because Andaman wants to create value for buyers; they want buyers to make money. Property buyers would buy for own stay or for property investment. The biggest challenge for Andaman is not a financial one; or is it about land cost; nor is it about economic conditions. The only other major concerns and challenges during the past many years have been about retaining staff and ensuring shareholders continue to get optimal returns for their investment. Most importantly, buyers are assured each and every time they invest with Andaman; they are assured of a value-for-money piece of property.

‘The Andaman Man’ – words of wisdom
Undeniably, Dato’ Sri Vincent Tiew comes across as a man of character – i.e. humble, diligent, passionate and wise. There are countless of other essential qualities or virtues that make up a wise man. Homefinder picks the brain of our esteemed and celebrated icon in property.
I dare not say I am wise, but I guess I am learning from the shareholders and my fellow directors from time to time. Whatever positionings, achievements and directions you see at Andaman, which obviously I am the spokesperson, does not mean all come from me. It is actually via through our management – very close, niched, strong management team – very close working relationship amongst the board of directors and the shareholders is what brought us to today. There is no special key – I guess on a personal note, it would probably be my upbringing – from an extremely poor family, so I cannot really afford to fail and I wish not fail. The same goes to our fellow team members and colleagues who have actually joined Andaman and stayed on with us more than five years, which is why we handsomely reward the staff – every year, year after year. I guess the key thing is really back to the team, really, I have to credit everything to the team. The wisdom actually originates from the management; the management had and is always in close touch or contact with the staff. So that is where we work together very closely. So I guess we do come from the new breed of management; we think out of the box!
As it was pointed out before, eighty percent of their team colleagues are well below 45 years old. It is actually “walking the talk” that exemplifies such wisdom – whilst the passion is already there all along. Passion to make money, and passion of wanting to succeed – it is in the heart of all the Andaman people (i.e. staff, personnel and employees). You would probably see, if you see through the pictures of their trips, functions, parties, etc. – it is always a group, a team work. Bear in mind, the way Andaman is structured is very close-knit or personal. Whatever the company makes in turnover, whatever the company makes in profitability, there is a certain percentage that is taken out to be distributed and shared among all of its staff – the takeback per staff or employee sometimes equals to roughly 36-60 months per year, per person. Now which public-listed firm or property development company in Malaysia can afford to do that? Because the management and the shareholders were willing to share, they were willing to say: “We make the extra RM10 million then we take out a certain percentage, and everyone can get a cut of it.” In other words, it is about sharing – Andaman Property is a personal property company indeed!

From a fishmonger’s son to a diversified entrepreneur
His phenomenal rise from a fishmonger’s son to a real estate “superstar” is quite an understatement indeed. Having lived a destitute childhood and experienced poverty his whole life, he sincerely believes he has changed his life, as well as the fate of the community around him, for the better in pursuing a career in property development. So can one honestly make a living by investing in property? Is property investment a rewarding career or is it ‘life-changing’?
During the first ten years of his career, he was not involved in any property development, but was engaged in private education and shopping mall management. One of his last positions was as general manager (GM) of Berjaya Times Square Shopping Complex in Kuala Lumpur; he was also director of several shopping malls. In the past six or seven years, in property development itself, has brought or given him the financial returns of probably equivalent to roughly fifty times of his first ten working years throughout his career. Financial satisfaction per se; property development is undoubtedly a highly rewarding career. It has certainly changed his life and his family for the better. With his unique style and passion, Andaman has also benefitted in many ways. Every year, the company needs to perform a minimum of twelve CSR (corporate social responsibility) initiatives or activities; including charity, welfare, philanthropy, etc. With that, wealth and achievement and the little success that it has done or performed, it has managed and prompted the idea of being able to willingly share and continuously undertake or champion plenty of fair and noble social causes. Andaman has been able to do just that and he has been quite lucky to be part of the team, leading and championing its causes.
In property development itself, in the past six or seven years when he was with Andaman and working in a property development firm, he finally started doing real property investment, unlike when he was working in the shopping mall industry and the education industry. At that time, he only possess a few or a couple of properties. But over the past six or seven years itself, upon setting foot into property development, he has taken property investment on a personal note or quest – as a hobby or a pastime of sorts. In the last seven years, he has invested comfortably, some buy and sell, some buy for long-term rental income, etc. – to a tune of probably forty to fifty properties, in the past six or seven years. During the early years of his working life, he only possess one or two properties. And these property that have been invested in – some which could have been sold – having rewarded himself handsomely with financial returns and rewards. With similar principles applied on how he should lead Andaman Property Group, in an identical way. One is able to multiply or accumulate one’s assets and wealth if one does it with a very niche, clear and understandable way. Which is why, Andaman has always advocated the salient or key points that Robert Kiyosaki had shared with Andaman – smart property investment, wise property investment and positive cash-flow management. These are merely technical terms, but the keywords themselves represent true words of wisdom. It is really the strategy as well as a weapon that create continuous recurring wealth.

The future of property development in Malaysia
Dato’ Sri Vincent Tiew also shared with Homefinder his hopes and expectations for property development as well as property investment in Malaysia. There are fundamentally two perspectives or angles to the issue of property development – the authorities, which is the government, as well as the private sector. On the public sector, he really wishes that the federal and state governments would be matured enough to see the bigger picture to, actually where possible, waive or abolish certain quota currently imposed upon property development. An open market is generally seen as a healthy trend for property development. Quotas are typically perceived as restricting the dynamic flow or free-flow process of property transactions.
Within a set or fixed quota, you are unable to sell above and higher than the allowed or permitted allocation of property. With the imposition of quotas, a certain percentage of the allotted property costs is reserved for freebies, discounts, bonuses and other considerations. On the liberal side or aspect of things, it should be pointed out that with foreign investors or overseas buyers, there also should not be any property quota. Assuming there is a current or existing condominium development which sparks the interest of a particular group of foreign property investor who intends to buy up some seventy percent of the entire building (i.e. lots of the condo), if so what is wrong with that? At least, these foreign investors are bringing in FDI (i.e foreign direct investment) into this country, which is seen as a good thing and a sign of a healthy economy. Why are we setting or fixing a limit on how much property that can be purchased by foreigners by imposing unnecessary quota on property development (including real estate) in Malaysia? Also, why are we restricting property purchases by foreigners who happen to have the “funds” to close a deal or to complete a sale, relying solely on local buyers instead who have limited financial budget and lower spending power?
On the private front, Dato’ Sri Vincent really hopes that the processes involving various government departments with regard or respect to approvals of property development would in the future be more streamlined and efficient, and not be bogged down by unnecessary government bureaucracy and administrative red-tape. For property developers, issues such as coordination and approval for projects, whether pre-development or post-development, are seen or perceived as a major source of headache – with conflicting interests and priority standards among the different governmental agencies. The unproductive nature of delayed project approvals often lead to increases in the cost of development, subsequently passing the heftier prices onto home buyers and property investors.

“Every government department wants to be the “kingmaker”, wants to be the “authority” and everyone is trying to impose whatever policies and guidelines which they may not be written within their respective departmental constitution or their own rules and regulations. So every department is trying to impose their own sets of policies and guidelines from time to time. So it makes property development lengthy, costly and non-productive. Henceforth, it hurts the bottomline of property developers, it affects the selling price and buyers eventually would have to fork out more money.”, he quipped further.

Sometimes you get all the necessary approval (i.e. paperwork approvals) from the various departments for your project and you are still stuck with one department awaiting or pending their approval. There many unresolved bureaucratic issues with a long list of red-tape which often hampers the dynamic process of a property development project. Sometimes you acquire the land, it takes so long before you can launch it. Even if you launch it, it takes even longer before you can wrap it up with a CF (i.e. certificate of fitness), or a certificate of completion. Too many departments having their own say and involvement; imposing their will, their guidelines, as well as their own whims and fancies.

Andaman Property in the foreseeable future
Andaman Property is basically hoping that it would be able to achieve its total RM5 billion sales GDV (i.e. gross development value) in the next five years or so. A turnover totaling some RM5 billion in sales GDV would mark a significant progress, adding a major milestone to what Andaman Group has achieved and accomplished thus far, since its very first year of incorporation with very little capital investment. Andaman Property has certainly done itself a pretty good deal indeed. By the time the company celebrates its 15th anniversary, some five years down the road, its total sales GDV could finally attain a clear-cut gross, and hopefully surpassing its targeted figure of RM5 billion. That is Andaman’s ultimate dream and aspiration.
Dato’ Sri, it has been such a fascinating journey thus far, and Homefinder would like to thank you for your time and contribution to this brief interview. We love your inspirational speech, your frank opinions, your great comments and your beautiful ideas. Fact of the matter is your speech has been truly informative as well as enlightening. We believe it is good to share your knowledge with others. We feel privileged indeed to have had an audience with you. So thank you again Dato’ Sri for being such a “sport” during the interview and good luck to you in all your future undertakings and personal endeavours. Dato’ Sri, you are the man! ;)