By Joyce Teo

WHEN the boss of the Popular bookstore chain answered the seductive call of property development some four years ago, his shareholders were horrified.

'They probably thought I was drunk... I was already 70, why would I do something like a flash in the pan?' says Mr Chou Cheng Ngok.

Related link: » From Sentosa Cove to China » From wet markets to prime homes » Quick on the draw » Year of living dangerously

But Mr Chou, now 73, the firm's chairman and managing director, decided to pursue his enduring interest in property.

When he first landed in Hong Kong from Singapore at the age of 27, he caught the real estate bug.

He has since handled several property developments there, a place he has called home for the past 45 years.

He told The Straits Times last week: 'I came to realise that the book business is a high capital investment with a fixed profit margin. From the 100th to the 110th shop, can the profits still be phenomenal?'

'Property is cyclical. The book business is not cyclical... You've got to be very sensitive about when you jump in and in which part of the cycle you are ready to sell.

'Cycles are shorter and shorter but it is still about four to five years apart, so you can't overstretch in case you have to hold.'

Popular's first project here began in 2006 when it bought 15,070 sq ft of land in Robin Road in Bukit Timah for $12.5 million.

The firm sold all 14 units at the One Robin project from April last year for more than $1,310 per sq ft.

While it was a sell-out, the ride was not exactly smooth.

Popular held back the launch when the market weakened in 2008 but opted to sell last April when things got brighter. But as it turned out, 'we actually sold it a bit early', admitted Mr Chou, as prices started to pick up around May.

He hopes his timing will be better for his second project, the 19-unit 18 Shelford.

Mr Chou started building work in mid-2008 and will launch soon.

The firm has taken a hit from its property dealings. It reported a net loss of $17.6 million for the year ended April 30, instead of the previous year's $13.6 million profit, due to the fall in fair value of 18 Shelford and another project, 8 Raja.

'For a smaller player, the timing is even more crucial as you don't have a name to rely on. You have to ride the wave,' says Mr Chou.

Big projects are also out of the question. 'We don't have much capital. We don't want or dare to try big developments.'

Fortunately, small projects give smaller firms like Popular the chance to showcase their design ideas and quality, as buyers warm up to them as developers.

That is why Popular insisted on building a full-sized show unit for its first two projects. 'If you see the quality, you wouldn't mind the name so much,' says Mr Chou.

The margins could have been higher if they had cut corners, he says, but they are in it for the long haul.

Mr Chou sees his projects as places that he too would enjoy living in. 'It's more the thrill of building something that you think is nice and comfortable, nothing ostentatious.'

Property looks set to become one of Popular's core businesses although for now it is playing it slow and steady.

Buying land is tricky for small players now. If Popular thinks a site is overpriced, it will walk away.

'You need experience and discipline. You can get carried away because the profit is so phenomenal,' says Mr Chou.

'You cannot foresee everything. You must hope for the best and prepare for the worst.'

This article was first published in The Straits Times.