IT was a night that belonged to the best of Malaysia’s private property developers.
The StarProperty.my Awards 2017 concluded with glitz and glamour on Tuesday night, coinciding with a report issued by research house Kenanga the same day that the property market has finally found a floor.
Kenanga Investment Bank Bhd equity research head Sarah Lim Fern Chieh said in her report entitled “Property Developers: When sentiment trumps fundamentals” that the sector has found a bottom after languishing for about two years.
Lim said selective developers are expected to show healthier headline sales, while most are looking at a flattish trend. What is important, she said, is that the odds of developers missing their sales targets are less likely this year.
Developers at the event greeted the news with satisfaction. The majority of the winning entries comprised mainly residential developments. The residential segment is the biggest driver of the Malaysian property market.
The other segments in the property market include industrial and commercial, which comprise mainly of office and retail space, hotels and other commercial projects, and agricultural transactions.
Paramount Corp Bhd special adviser Datuk Ricque Liew Yin Chew, one of the winning companies at the event, said: “About a year ago, I told young people that house prices would never tumble, that there would be no fire sale.”
Liew said developers are generally versatile and flexible and the last two years have showed their agility. “Developers will come up with products that will see them through good and bad times. During the good times, developers will push the boundaries with innovative, high-end products. In a slow market, we go back to bread-and-butter products. We scale down and cater to owner-occupiers.
“Speculators and investors have been weeded out – they have gone on a holiday. Today, the property market is very healthy. Some may not think so, but it is very healthy today,” said Liew, who has been in the property development business for decades.
Liew said all the multi-million-dollar investment-type of properties targeted at foreigners, mostly high-rise residentials, have been shelved, or the development tweaked to more realistic levels. Those that have been completed are being picked up by Chinese investors. For those whose development orders have been approved by the authorities, they have gone back to replanning their projects, he said.
Quality buyers
The changing scenario is being carefully observed. SP Setia Bhd president and chief executive officer Datuk C.J. Khor said he is seeing “more quality buyers” coming into its sales gallery today.
“I agree with Sarah Lim (from Kenanga Research) that the worst is over. In our sales gallery, those who come in are genuine buyers and they do get their loans approved.
“We are seeing ‘real’ buyers,” he said at the same event.
Khor said he noticed this changing scenario last month in February. Khor said during the Chinese New Year period beginning Jan 28 and 29 and right up to the middle of February, S P Setia’s landed projects saw a lot of interest.
“Landed sales priced between RM500,000 and RM700,000 were strong. Whether we are seeing the swing as we progress into the year, the landed residential segment will lead the way for SP Setia.”
To cater to the challenging market, SP Setia is offering smaller units, what Khor calls 20-footers. The company’s Osiris units are sized at 18ft x 65ft and priced at RM598,000, while Eliptica is 20ft x 65ft at RM638,000. Eliptica is 100% sold. Both are located in Setia Alam, Shah Alam.
The company is scheduling to launch more 20-footers by the middle of this year. The focus on landed units is also evident at Eco World Development Group Bhd (EcoWorld). Its chief operating officer Datuk S. Rajoo said so far, 2017 has treated the EcoWorld team fairly.
“Sales have been good for all the three regions we are in, namely, the central region of the Klang Valley, the northern region in Penang and in Johor despite some difficulties on the part of the buyers in getting loan approvals.”
Rajoo said landed mass housing is doing well and this point, he said, is particularly important in the Johor market where most developers have focused on offering high-rise units.
“Our buyers in Johor come from all over Malaysia, as many of them live in Johor but work in Singapore. So, that is mainly an owner-occupier market for us. We do have some industrial estates or industrial parks there which can be used for warehousing or for production purposes. That too is doing well.”
Rajoo said the EcoWorld group has three industrial parks in Johor and one in Selangor, which it expects to launch in the fourth quarter of this year or the first quarter of 2018.
Rajoo said EcoWorld is fortunate in the sense that despite being a young brand, its branding is very strong. Coupled with that, they have got its concept, design and location right.
As for its Bukit Bintang City Centre, which EcoWorld is developing jointly with UDA Holdings Bhd and the Employees Provident Fund, BBCC Development Sdn Bhd chief executive officer Datuk Richard Ong said its residential block of 393 units, launched at the end of last year, is 75% sold and formalised with sale and purchase agreements. Of this 75%, 28% are foreign buyers from Japan, China, Taiwan, Hong Kong and the Middle East.
“Our buyers recognise that, at an average of RM1,600 per sq ft, they are not only buying into a residential unit, but a development that offers entertainment, retail and a business element.”
That location is second to none and it will be offering another 275 units from another BBCC residential block in the June/July period this year. Ong has also launched strata offices of about 1,000 sq ft in BBCC.
Mah Sing group managing director Tan Sri Leong Hoy Kum said the downcycle is only temporary. The mid- and long-term prospect is healthy and positive because of strong fundamentals such as a young population, stable employment, healthy gross domestic product growth and the continued development of public transport infrastructure. Long-term demand will continue to be strong for property buyers who are buying to own or buying to invest for long-term rental income.
Leong said he is hopeful about a pick-up in market momentum in the second half of 2017.
Small but winning big
While the above are big players, there were smaller but no less innovative developers who picked up a couple of excellent awards.
Bon Estates Sdn Bhd, which began its history in Penang, made its mark at the event with The Estate in South Bangsar, Kuala Lumpur.
Its marketing director Angeline Liau said the high-rise residential development was launched on March 19 this year. It did some pre-launch selling and at the launch date itself, achieved a 65% take-up rate. Up to 90% of the buyers were locals.“I really feel the market is picking up. But I have to, at the same time, say that we have priced our project very competitively at an average of RM800 per sq ft. Maybe because of that, we have been getting good traction,” Liau said. The Estate is scheduled to be completed in the fourth quarter of 2020.
The company’s previous projects include Minden Heights, White Lily, both of which are completed landed housing on Penang Island.
Another Penang-based winner at the Star Property Awards was Ideal Property Group. Its chief operating officer Goh Teng Whoo said its winning entry I-Santorini, a condominium project in Tanjung Pinang, is also 80% sold although it has scheduled to launch it in April this year.
Goh said this was the first time it entered the competition and it is extremely pleased with the outcome.
Well done: (from left) IOI Properties Group COO Teh Chin Guan, IJM Land MD Edward Chong, Gamuda Land COO Ngan Chee Meng and Eco World Development Group CEO Datuk Chang Khim Wah congratulating each other.
Judgment calls
PPC International Sdn Bhd managing director Datuk Siders Sittampalam, one of the panel judges, said winning an award in any one of the categories creates a branding for the developer.
“It signifies that a developer has a development which is one above the rest,” said Siders.
To be a winner, a project has to be holistically and uniquely planned and designed.
The merits of each award is not confined to an overall design and concept. Instead, it has detailed qualitative attributes such as the incorporation of technology, building features, architectural, environmental elements and a neighbourhood concept that is above the rest.
In today’s security-conscious market, it also offers security and safety features besides issues of affordability.
Another panel judge CBRE|WTW managing director Foo Gee Jen said winning the awards gives the market players good publicity, but there is still room for improvement.
“A good thing about the awards is that it provides a platform for niche and small players to compete against the big boys. There were two of the awards that went to new players. This, I feel, is refreshing and gives these players the opportunity to compete on a wider level,” said Foo.
Note: The StarProperty.my Awards 2017 showcase will be at the Centre Court/Fashion Court, The Curve, Petaling Jaya between March 30 and April 2, 2017 between 10am and 10pm. Eastern Decorator, a home texile maker, is a sponsor of the event.
Those who registered early online will also get to enjoy free subscription of The Star ePaper for three months.
Register online at http://fair.starproperty.my/page/pre-reg-form/
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