IMPACTED by high-land cost in Penang, Ivory Properties Group Bhd will focus on building high-rise properties on the island.

Group chairman and chief executive officer Datuk Low Eng Hock says the price of landed properties may be beyond the affordability of most due to exorbitant land prices.

”We hardly come by a big parcel of land to plan for landed projects on the island. Most are pockets of land suitable for high rise development.

”We don’t think planning for landed properties will work; the property prices will be very expensive,” Low adds.

The cost of a plot of net land in a prime area like Pulau Tikus is between RM500 and RM600 per sq ft. In Tanjung Bungah and Batu Ferringhi, land is priced between RM300 to RM400 per sq ft, while in the South-West district it is between RM100 and RM200 per sq ft.

The land price today is about 20% more than a year ago.

Ivory plans to launch only high-rise schemes in the second half of this year. These include:

the first phase of the RM10bil Penang World City (PWC) project in Bayan Mutiara

the RM300mil third and fourth phases of the residential towers for Penang Times Square

The Bay, a RM130mil sea-fronting condominium block in Batu Ferringhi

and the RM400mil City Mall and City Residence project in Tanjung Tokong

These are some of the key projects that will spur the growth of the group over the next five years.

Last year, Ivory acquired the 102.56 acres for the PWC project for RM1.072bil and 2.4 acres for The City Mall and City Residence in Tanjung Tokong for RM40mil.

The 1.1 acres for the The Bay project in Batu Ferringhi was acquired for RM25mil in 2010.

Despite the high land cost, Ivory plans to keep a percentage of the properties affordable.

The first phase of the PWC project on a 10-acre site, with an RM800mil gross development value, comprises approximately 1,500 condominium units, of which about 15% will be affordably priced between RM300,000 and RM500,000 for units with built-up areas of 600 sq ft and 800 sq ft.

“Subsequent phases for PWC will also see 15% of the properties priced in the affordable range of between RM300,000 and RM500,000. These units were in the entire master plan as a value-added component from the very early stage, even during the tender exercise for the project,” Low adds.

Low says the group also wants to position The Bay project as a medium to high-end scheme, as investors’ preference for luxurious super-condominiums has dried up.

As for the City Mall and City Residence project, the plan is to develop 80% residential units and 20% of three-storey commercial lots.

“We are looking at selling the City Mall and City Residence units each for between RM700,000 and RM750,000. The City Mall will have a gross built-up area of 600,000 sq ft. For the residential towers for Penang Times Square, there will be 700 condominium units of various sizes, ranging from 400 sq ft to 1,200 sq ft,” he says.

To differentiate Ivory from its competitors, Low says the group will use architectural and cultural themes of a particular country in the Penang World City project. .

“As we are planning for a world class city within PWC. Economies of scale is of the essence. We need a huge number of Penangites to call Penang World City their home. That is why PWC has affordable components,,” he says.

There would be Chinese, Korean, Middle Eastern and European villages in PWC, so that the properties can be marketed in that particular country through an appointed real estate agent, he says.

“We want to create a world culture in order to attract tourism and foreign investors and to differentiate PWC from the other mega-development projects on the island. These parcels will be solely for en-bloc sales to expatriates,” he says.

Last July, Ivory won the right from Penang Development Corporation to purchase and develop the PWC project in Bayan Mutiara after edging out four other parties, including SP Setia Bhd,.

Ivory offered RM240 per sq ft or RM1.072bil for the entire site, the highest, , securing with it the right to develop on the existing 67.56-acre site and another 35 acres that will be reclaimed over the next three years.

Tropicana Ivory Sdn Bhd, a joint-venture company in which Dijaya Corporation Bhd holds a 55% stake, and Ivory Properties Group Bhd the remaining 45%, is the developer of the PWC project.

On the City Mall and City Residence, he says the residential components will sit above the retail outlets. It will have an open tropical style interior design featuring giant palm trees, water features with lots of natural lighting, to blend with the architectural design of the residential component,” he adds.

Source: The Star

THE RM2.1bil seafront Southbay City project in Batu Maung, Penang, is scheduled for completion in 2018.

It comprises a shopping mall of 1mil sq ft and a five-star hotel that will further boost the property value of the south-west district of the island.

The project has a 60% residential component and 40% of commercial properties, comprising six phases.

Mah Sing Group Bhd executive director Lim Kiu Hock said the second, third, and fourth phases of Southbay City would have residential and commercial towers.

“For the fifth phase, we are planning The Wharf project that will include a marina for yachts to berth, while the final phase will be either another hotel or a commercial tower.

“The group is now constructing the Southbay Plaza, the first phase of Southbay City, which comprises two residential towers erected on top of a 250,000sq ft retail podium,” Lim said.

Lim said there were also plans to develop a shopping mall for Southbay City once the second Penang bridge was completed.

“The second bridge is expected to be completed next year and upon its completion, we will start the development of the mall so that it will be in a position to attract shoppers from the northern region.

“We can then anticipate a strong flow of visitors from Seberang Prai to the island,” he said.

He spoke at the Mah Sing ‘Realising Dreams Property Showcase’ held on Saturday and Sunday at Hotel Equatorial in conjunction with the group’s 18th anniversary celebration.

The event attracted more than 3,000 people.

Lim said that Southbay City, sitting on a 33-acre high plateau land, was the only integrated seafront resort project on the island.

“Such integrated projects in the Asean region are difficult to find, especially with the pricing in Penang.

“This is the reason we have already locked in 75% or RM80mil of the sales for the launched portion of the RM329mil Southbay Plaza project.

“About 15% of the buyers for Southbay Plaza comes from Singapore.

”The project has easy access to the expressway, airport, the second bridge and the industrial park,” he said.

The value of the three-story linked property in the Residence@Southbay by Mah Sing in Batu Maung has appreciated about 15% per annum since 2009, influenced by the master plan of Southbay City as an integrated seafront resort project.

Priced at about RM800,000 per unit in 2009, a linked unit in the Residence@Southbay is now priced about RM1.2mil in the sub-sales market.

“When the second bridge is completed, the Southbay City project will definitely impact positively the property value of the south-west districts,” Lim said.

The Southbay Plaza is one of the projects at the two-day showcase.

The other project in Penang that received overwhelming enquiries, registrations and bookings at the event was the Legenda@Southbay.

“We have received about 3,000 registrations for Ferringhi Residence, which we expect to preview in July once approval is given.

The other projects displayed at the property showcase that received strong response from Penangites were the RM.14bil M City project in Jalan Ampang, about 4km from Kuala Lumpur City Centre, and the RM3.25bil Icon City project in Petaling Jaya which is an integrated development.

“For M City, we have sold all 401 units of the small home office units and 24 units of retail lots.

“It sold well because of the four acres of garden located on various floors all over the building to give the residents the feel of living in a landed property scheme,” Lim said.

Source: The Star

GEORGE TOWN: SP Setia Bhd is projecting its Penang properties would generate about 15% or about RM500mil of the company’s 2012 revenue, expected to be about RM4bil.

SP Setia Property (North) general manager Datuk S. Rajoo said that the developer’s key contributing projects in Penang included Setia V Residences, Setia Triangle, Pearl Villas and 11 Brook Residences.

The biggest contributor to revenue for the financial year ending Oct 31, 2012 (FY12) would be the Setia V Residences project, comprising 166 units in 43- and 48-storey towers in Kelawei Road.

“This project will generate RM150mil for the company’s 2012 fiscal year. We have sold about 20% of the project to Penangites working overseas, locals and foreigners from Medan and China,” he said.

According to Rajoo, the 48-storey block would be the tallest residential tower in Penang and is built to withstand earthquake vibrations of up to 6.8 on the richter scale.

The Setia V Residences units have built-up areas of at least 2,700 sq ft and are priced from RM2.7mil onwards.

“The buyers comprised largely those who have the disposable income to upgrade their lifestyle,” he said.

The RM265mil Setia Triangle is expected to add about RM120mil to the company’s FY12 revenue.

“The project, already 50% sold since the soft launch two months ago, comprises 34 units of two, three and four-storey shop-offices with built-up areas of 3,000, 4,500 and 6,000 sq ft, respectively,” he said.

The units are priced between RM1.95mil and RM3.6mil.

“There will also be a residential component comprising a 225-unit condominium, priced between RM575,000 and RM1.2mil,” he said.

The Pearl Villas bungalows and 11 Brook Residences are expected to contribute about RM150mil to the group’s 2012 revenue.

“The balance will be generated by the release of bumiputra units from other projects,” he said.

Source: The Star

UDA Land (North) Sdn Bhd plans to launch a RM650mil condominium project on a leasehold site in Tanjung Tokong in the first quarter of next year in view of the strong demand for high-rise residence in prime locations and the changed perception towards leasehold properties among Penangites.

UDA Land chief operating officer Kamarudzaman Mohd Zain says in an interview that the project, Darra, located by the sea will comprise condominiums with built-up areas ranging between 1,400 sq ft and 1,800 sq ft and are priced above RM800,000.

“The layout plan is in the final stages of approval. The project is expected to be launched in the first quarter of 2013,” he says.

Kamarudzaman says that with the right pricing residential properties located in prime locations are still selling very well.

“For example, Brezza, comprising 312 condominium units of between 1,250 sq ft and 1,450 sq ft in the same location as Darra, was sold out in a year to mainly local buyers.

“The selling price in the sub-sales market for Brezza units has appreciated to about RM700,000 from the initial pricing of between RM350,000 and RM500,000 per unit in late 2010,” he says.

The demand for commercial properties in the right location is still strong, despite a slowing economy with an anticipated GDP of 4.6%, compared to over 5% in 2011.

The Vantage Desiran Tanjung, comprising a four-story business centre with 120 units of shop office, although 80% completed, is already 100% sold. The price for a standard ground floor unit is around RM1.2mil. The units on the higher floors are priced lower.

“The RM87mil Vantage Desiran Tanjung sold well because of its broadband facilities, ample car park bays. The project’s proximity to a hospital, international hotels, botanical gardens, and renowned project Straits Quay mall in Tanjung Tokong were plus points,” he says.

Registered and chartered valuer C.A. Lim & Co proprietor Lim Chien Aun says the value of properties on leasehold land in the island has appreciated substantially. This shows that Penangites, who have always been reluctant to invest in leasehold properties, have changed.

“Leasehold properties in prime locations are now appreciating faster than freehold properties in a non-prime location. Actually, the leaseholds in neighbouring countries have appreciated very well. For example, the land in Hong Kong island is leasehold and yet the value of properties on the island is among the highest in Asia.

“A lot of the land in central London, for example, is leasehold too, but the value of property is very high,” he says.

Raine & Horne Malaysia director Micahel Geh says Penangites now give more importance to the location of the property rather than to the status of the land on which it sits.

“They are now looking for conveniences and amenities like easy access to shopping malls, food and beverage outlets, banks, cinemas, and hospitals.

“Some of the leasehold projects on prime locations in the island have been appreciating at over 10% per annum over the past two years,” he adds.

In Seberang Prai, UDA Land plans to launch a RM33mil four-storey commercial mall come end of 2012, known as TPJ Business Park, in Jalan Baru, a prime location.

“The mall will have about 8,500 sq m of gross built-up area that can accommodate 76 commercial lots of 1,160 sq ft and 2,100 sq ft. We are planning more commercial projects on our remaining land bank of about 20 acres. These commercial schemes are to support the needs of the residential community in Seberang Prai,” he says.

Kamarudzaman says UDA Land also plans to submit the building plan for the RM98mil Serambi project soon to the local authorities.

The project, which is on a 16-acre site, comprises three-storey semi-detached, terrace, and bungalow units. “The plan for the project has received the green-light,” he adds.

He says UDA Land will launch the RM22mil Arcaria project early next year. It comprises 26 units of three-story semi-detached, three-story super-linked, and bungalows.

The terrace units will be priced from RM725,000 onwards, a semi-detached for about RM900,000, and bungalow units from RM1.4mil.

Meanwhile, Fook Tone Huat of Henry Butcher Seberang Prai says property prices in central Seberang Prai have appreciated by about 20% since 2010.

“In prime locations of Seberang Prai, a semi-detached house is priced at about RM750,000. A terrace house in similar locations is now priced at about RM280,000, compared with about RM350,000 two years ago. Similarly, a bungalow has a price tag of RM1mil now, about 20% more than two years ago,” he says.

The value of commercial properties in Seberang Prai has also appreciated by about 20% from 2010, Fook adds.

“A three-storey shop lot in a business park in Bukit Mertajam is now priced at RM700,000, approximately 20% more than in 2010. People are buying properties on the mainland for investment, as the second bridge is scheduled to be completed soon. More funds are coming into the industrial park south of Seberang Prai,” he says.

Source: The Star

PETALING JAYA: While house buyers are seeking more affordable homes, developers do not want to be bound into building low- and medium-cost homes.

In its memorandum to the Finance Ministry, Real Estate and Housing Developers Association (Rehda) said it wanted to develop affordable homes in line with the increased household income instead of being compelled to build low- and low-medium cost units, which it said consumers did not want.

“Unoccupied and excess low-cost units are a waste of resources. They are cross-subsidised by both developers, through lower profit, and lower tax collected by the Government and buyers of non-low cost units, in additional tax,” said Rehda president Datuk Seri Michael Yam.

“They are either vacant or abused by being rented to foreigners. The hardcore poor group, which is falling in numbers, can be housed in the government-built social housing (PPR).”

He said Rehda had also proposed a lower stamp duty, with buyers of cheaper units paying less.

“The ceiling for higher priced units should be lifted as inflation and higher costs have increased the prices of even affordable homes,” he said, adding that more incentives were needed to encourage faster adoption of the Green agenda.

Yam said Rehda had also suggested an auto release mechanism for Bumiputra units, which were not sold after a certain period.

“Penalties should not be imposed for such releases as it is caused by low demand,” he said.

National Housebuyers Associa-tion (HBA) secretary-general Chang Kim Loong said the organisation had not submitted a memorandum for the upcoming Budget as its previous request for the enforcement of the “build-and-sell” system had yet to become a reality.

“Although Sharia-compliant housing using the BTS system was announced in Budget 2012, it is yet to be implemented,” he said.

It was reported that the ministry had approached HBA early this month for recommendations on how to reduce the price of homes.

Among its 10 recommendations, HBA urged the Government to unlock its land banks in various locations and give priority to affordable housing projects instead of high-end properties.

Source: The Star