BY THEAN LEE CHENG
TYCOON Tan Sri Chua Ma Yu was a few minutes late. His miniature schnauzer signalled his arrival. Pepper obviously knew where the master was going because it headed straight for the office.
“You like dogs? You have a dog?” Chua asks, smiling, Pepper tucked in his arm.
Chua and his daughter Carmen (pic) are no strangers to the KL investment scene. But the father and daughter team wants to carve a name as niche property developers.
“I build trophy assets... one at a time,” he says.
Chua, chairman of CMY Capital Group, is known more as an investor than a property developer, and the high profile projects he and Carmen have undertaken the last several years have generated a certain amount of attention.
“I want to build the best. It is about quality, not quantity,” says Chua. Their current project is St Regis Kuala Lumpur in KL Sentral. It will be located opposite the National Museum. Carmen is overseeing the project with close to daily site visits.
The 48-storey St Regis comprises a 208-room all-suite hotel and 160 units of branded serviced apartments located above the hotel for privacy. Both will be managed and operated by St Regis, a brand under Starwood chain.
The hotel is expected to open in April 2016 and the serviced residences will be handed over on a staggered basis thereafter.
Chua draws a triangle and divides it horizontally. “Here, at the bottom,” his pencil at the broad base, “is the affordable housing or mass housing. As you go up, prices on a per sq ft (psf) basis goes up.
“Just below the top,” his pencil taps just below the apex, “are properties between RM1,800 psf and RM2,000 psf. Some of the high-end condominiums around KLCC falls into this category.
“Branded residences are here.” He circles the sharp end of the pyramid. “Niche market. Nobody build here, and so I do it.”
“I want to build a name, a standard for myself as a niche property developer. I build for the super rich. I build trophy assets.”
Pure breed vs variants
As Kuala Lumpur evolves, one of its hallmarks will be the type of residences it offers. It started with two branded residences - St Regis which started with management/operations with Starwood in 2008. The Four Seasons Place was unveiled in 2013 after a few delays.
Says Carmen at an earlier interview at St Regis sales gallery at ONE KL, the 35-storey luxury condominium she completed in 2009: “St Regis and Four Seasons are the true branded residences.”
St Regis is her second luxury project.
Between St Regis and the Four Seasons brand, variants of branded residences are being marketed, some are homegrown brands like RuMa by the Ireka group, Banyan Tree from Singapore and Pavilion Suites, a local brand by Tan Sri Desmond Lim Siew Choon. Opinions differ whether a international hotel brand must be behind it.
A property source says whether it is a local or foreign brand, as long as there is a hotel providing some form of service, it can be termed as a branded residence.
Says Carmen, CEO of ONE IFC Sdn Bhd, the developer and owner of The St Regis KL: “Branded residences have to be serviced by a hotel, be it a three- or a five-star hotel brand because the hotel will be providing the same standard of services for both hotel and apartments.”
Ideally, the hotel and the residences must be together in one block. The Ritz-Carlton hotel and the The Ritz-Carlton Residences are an exception. The hotel is in the Bukit Bintang-Imbi area under the YTL group and the residences by Berjaya group in Jalan Ampang. In St Regis and The Four Seasons, the residences are located above the hotel. Carmen says there must be a ratio of 1 hotel suite to a residential unit. The rationale: if there are too few hotel suites and too many serviced residences, how will the hotel staff be able to cope with the demands of the residences?
Carmen’s mentor and father says the existence of this niche segment of the property market for the top 1% of the population is important.
“It puts Kuala Lumpur on the global investors’ map. High net worth investors buy into branded residences around the world. A city which offers branded residences gives its that global status.” Yet, in both, Malaysians form the majority of buyers and some buy to stay.
Chua says buyers buy into this niche market because they are assured of quality and feel secure behind an international hotel brand standard.
Global branded residences tend to command a premium of 30%-40% over stand-alone properties. It offers a higher yield, says Chua. St Regis residences, 72% sold, has an average price of RM2,500.
Developers pay between 5% and 7% of gross sales revenues to the brand owner, usually a hotel operator, before they can call it a branded residence. The hotel operator will advise design standards and provide the residences with hotel support and services. Kuala Lumpur is at a very early stage of this global trend, Chua says.
His trophy assets started with ONE KL, a 35-storey freehold condominium project in the KLCC Twin Towers vicinity which came with the tagline “94 apartments, 95 swimming pools”.
One KL set the benchmark price of RM1,000 psf at its launch. St Regis will do the same.
The Four Seasons
The other pure-breed branded residence is 65-storey The Four Seasons Place near the Petronas Twin Towers. Priced at an average of about RM3,000 psf, it is 75% sold, nearly half of them cash buyers. What remains today are two- and three-bedroom units ranging from 2,200sq ft and 3,000 sq ft. The last of eight duplex units, with a built-up of about 6,500sq ft, was sold for RM22mil in October.
One can differentiate between the serious and the curious, says a Four Seasons source. The real buyers are prepared to pay a premium for the view, which explains why the duplexes, which face the park, were popular, despite their hefty price tags.
One-bed room units have a built-up of 1,098 sq ft. There were 12 of these and they were among to first to be sold. There are two penthouses, priced at about RM44mil.
The Four Seasons mall and retail portion will be ready by 2017, the apartments later. It will have about 160 residences and about 200 hotel rooms, close to the one hotel room to one residential unit ratio.It is developed by Venus Assets Sdn Bhd, which is controlled by Ipoh-born Singapore tycoon Ong Beng Seng, businessman Tan Sri Syed Yusof Syed Nasir and the Sultan of Selangor, Sultan Sharafuddin Idris Shah.
Despite the soft property market today – and very likely next year – variants of branded residences have entered the market.
The latest is 8 Conlay by KSK Land Sdn Bhd, a mixed-use development with an estimated gross development value (GDV) of RM5.4 bil, targeted for completion by end of 2020. It will have two residence towers with more than 1,000 residential units and a 300-room hotel by Kempinski, one of Europe’s oldest hotel brand.
Among the first to be ready will be Desmond Lim’s Pavilion Banyan Tree Signatures behind KL Pavilion mall. Banyan Tree is a resorts brands from Singapore. It will have about 100 hotel rooms and 440 private residences. All of them will be in a single block of about 60-storey block. Lim’s Lumayan Indah Sdn Bhd has a 51% stake in the project with Qatar Holding to hold the remaining 49%.
Whether it is a three- or a five-star, trophy assets are castles in the air for the 99%. Oh yes, very likely, dogs are welcome.
