Simon Treacy, the Group CEO of MGPA, has twenty one years’ industry experience across Asia-pacific. Recently, he has been selected as the incoming chairman of ULI for South Asia, a region which includes the Indian sub-continent, Australia and New Zealand, and all of South East Asia. By Arnold Liu
RFP has established a student writers’ program where upcoming professionals who are currently studying in a field relating to the built environment to interview senior industry professionals. This article is one of those commissioned as part of the programme. For students it offers not only the opportunity to be published prior to graduation but it also offers the chance to meet and get insight into the profession they will join. Apart from publicity for their work and their firm, for interviewees, it provides the opportunity to influence and give back to the development of the profession. To participate in the program please contact cs@facilitymedia.com.
“My role as the chairman is to make sure I can steer ULI’s effort in the right direction in this region”, states Treacy, emphasising plans to “revitalize” the connectivity that has built over the last five years since the SE Asia chapter was set up. ULI, the Urban Land Institute, is a nonprofit research and education organisation supported by its members. Founded in 1936, the Institute now has 30,000 members in 95 countries worldwide, representing the entire spectrum of land use and real estate development disciplines working in private enterprise and public service.
Treacy explains that ULI Asia firstly started off in Japan, then Hong Kong covering north Asia including China, and will make a further contribution when it further establishes itself in Singapore. He reckons that ULI will make a great contribution to this region, where so much development and urbanisation is ongoing. “I do think there is a niche in the market for the ULI to really get close to various public and private organizations…” he adds. Specifically, he has been involved in a series of high-level conferences with Singapore’s ”Centre for Liveable Cities”. These communications and cooperation are both productive and effective, enhancing the relationship between the two reputable organizations and benefiting the whole real estate industry.
One of ULI’s areas of expertise is helping cities’ capacity for dealing with natural disasters, such as earthquakes and tsunami, Treacy explains. ULI’s network of urban planners and managers can help cities to share their experiences in fighting natural disasters proving extremely helpful for countries suffering from them, like New Zealand and Japan.
Of the 2000 ULI members in the region around 65 percent are from the public sectors and 35 percent private. Treacy believes this is a healthy proportion and will enable ULI to access diversified organizations and resources.
Leading Real Estate
investment institution- MGPA Treacy arrived at his current position as CEO through a series of moves within MGPA. Most recently as Chief Executive Officer – Asia Investments and prior to that, he he had responsibility over day to day operations of MGPA Asia Fund II and MGPA Asia Fund III, after having being Country Manager for Japan where he established MGPA operations over a six year period.
Since starting up MGPA has twice experienced financial crisis in Asia. Treacy comments on the lessons learnt from these two periods: “Stay calm and remain objective.” He elaborates saying that during the global financial crisis, too many people could be inclined towards panic, and so it is important to remain calm and make the right decisions and be up front or transparent without causing unnecessary surprises. Clear and timely communication during times of crisis even when the news is not good creates trust, a trust for which he expresses gratitude. This trust is an invaluable asset for MGPA, representing the company’s respectable reputation accumulated through top quartile outperformance.
Asked about the three-year plan for MGPA, Simon confidently elaborates his strategies: “…to continue to lift our investment performance…, hire and retain the best professionals in this industry to manage our investments…, to achieve greater strength for MGPA and enhance its brand and reputation…”. Furthermore, he emphasizes the importance of MGPA remaining profitable to also co-invest alongside investors in its funds as well as retain world class talent.
Treacy’s approach to human resources is to “…get good people around me...” He views people as at the core of MGPA’s values. He shortlists several necessary qualities MGPA use when recruiting with integrity and hands-on expertise at the top of the list. “We are not an investment bank… we are a real estate company” He repeats this point, and stresses people in MGPA should always make investment decisions sticking to the corresponding investment strategy and policies. As an example, Simon refers to Asia Square, the a large mixed use development located at Marina Bay in Singapore, where “…over 50 experts are continuously inputting their intelligence to develop the project …” This management expertise is a core competency of MGPA and enables them to generate superior returns for investors.
Real estate investment Guru
Thinking back to the beginning of his career in real estate field, Treacy smiles and speaks affectionately of his time in Asia. Having been in the region since 1997, Simon first followed Australian behemoth Lead Lease to Bangkok helping investors and developers who were hurt badly by Asian financial crisis in handling non-performing assets. Subsequently he has worked in nearly every primary economy in Asia including Japan, Singapore, Malaysia, Hong Kong, PRC, Taiwan, Indonesia, amongst others. He has witnessed the opening of each of these real estate investment markets to foreign investors, specifically to Private Equity funds.
Treacy’s comment on the features of real estate investment situation the various Asian countries is that they are “very different”. As to the characteristics of each market, he comments: “China is not an easy place to do business due to its ever-changing rules and low-transparency investment environment…Japan, especially Tokyo, is an interesting market at this moment with high potential return and risks… Thailand’s market is still fluctuating… Taiwan is a small market... Vietnam could be the next tiger in Asia... India opened up five to six years ago and its performance will be solid in coming several years, but it is quite tricky with lots of traps… Australia is a very mature market….”
In terms of his pick, Treacy asserts that China has very positive economic prospects and investment potential especially when viewed over a longer time horizon, although it calls for lots of due diligence in investment and asset management. He goes on to share some proven experience in managing risks in emerging countries: “our policy is to hire and trust local employees and to find projects that we can add value to… so that we can survive even during a market downturn.”
In terms of investment return expectations, Simon makes the distinction between opportunistic versus core-plus funds, which offer different return expectations and risk tolerances. The higher risk opportunistic funds target a 17-20 percent annual return, while core-plus would be expected to return 8-12 with a lower risk. With respect to investment time horizon, MGPA prefers to develop and reposition real estate projects actively to realize their true value ordinarily within five to six years.
The other side of life
When not working on the activities of the ULI or overseeing MGPA’s strategic growth Treacy brings an equivalent commitment to his home life. “You need to balance your work and home life”, he advises those who are willing to achieve real success in career and life. Simon’s passion and dedication to his work stems also from the support of his family. He further attributes his ability to balance life and work to well-trained time management skills. Certain time with his family is non negotiable. If he knows that he has additional work that he must complete: “… I get up at 4 in the morning and get work done” before sending his kids off onto the school bus. “… At night I leave office 5:30 PM to pick up my children… put them in their chairs for dinner and then back to my work… home is my priority…”
