By EUGENE MAHALINGAM
RENOWNED property developer Tan & Tan Developments Bhd, which is known for developing high-end projects, is not limiting itself to this segment if it considers other prospects viable.
“We develop projects for all segments and across the board, and not just high end,” IGB Corp Bhd property development head Teh Boon Ghee tells StarBizWeek.
Tan & Tan is a wholly-owned subsidiary of IGB Corp.
“If it is viable and feasible, we will do it. We have found a niche in the market and prefer to do more value-added projects,” Teh says.
Established in 1971, Tan & Tan is known for developing the first condominium lifestyle concept in Malaysia with Desa Kudalri in 1979 and Sierramas in 1993 - the first gated community development in the country.
One of the company's latest developments, the G Residence service apartments project at Jalan Desa Pandan, he says, is “not too expensive” compared with other projects within the area.
“We don't think it's expensive, seeing as response is quite good. It is around the range of terrace house prices within the Klang Valley,” Teh says, noting that other apartments within the area ranged between RM850 and RM1,100 per sq ft.
According to Teh, the G Residence units are priced at an average of RM650 per sq ft with an expected maintenance fee of 30 sen per sq ft, including the sinking fund. Units range from 1,080 to 1,545 sq ft, and are located on two 23-storey-high blocks. Selling price are between RM610,000 and RM1mil.
He says that the units are targeted at young couples and families.
Despite the recently tightened lending rules, Teh says he expects the G Residence service apartments to be fully sold within the next few months.
“Since sales opened in December, about 80% of the 474 units have already been sold. Over the next one to two months, we should see more units sold,” he says.
Teh says he is confident of full take-up given the response the development has received so far and despite the recently tightened lending rules.
“One or two of our buyers had problems with the new banking requirements, but most of them had no issues.”
However, Teh does believe that the new rules will have some impact on property buying trends in Malaysia.
Effective this year, banks have started using net income instead of gross income to calculate the debt service ratio for loans. This pre-emptive move by Bank Negara is meant to contain the rise in household debt.
“It will affect the buyers' ability to buy property. However, it's still early days since it (the new rules) was implemented and we will monitor closely to see if there will be any impact going forward.”
Separately, a recent online property survey conducted by the iProperty Group covering Singapore, Indonesia, Hong Kong and Malaysia, revealed that demand for houses priced at around RM1mil had dropped and was expected to be flattish throughout the rest of this year.
iProperty Group chief executive officer Shaun Di Gregoria was quoted in a local news report as saying that Malaysians were expected to continue to be upbeat about the property market, with interest seen mostly in properties priced between RM400,000 and RM500,000.
Teh meanwhile noted that location played an important factor in the development of property, adding that the company's G Residence was strategically located.
“G Residence is just a few minutes' drive away from the Kuala Lumpur city centre and within embassy row.
Construction of G Residence, which has a gross development value of RM430mil, has commenced and is expected to be completed by February 2015. The project is located on 1.46ha of leasehold land. Two car parking bays are allocated for each apartment.
G Residence is being developed by Opt Ventures Sdn Bhd, a joint-venture (JV) company between Tan & Tan and Sin Heap Lee Sdn Bhd.
G Residence also comprises 26 units of retail outlets on the ground and first floors. On whether the developer had secured any anchor tenants for the retail outlets, Tan says: “They (the potential tenants) like to see some progress in the project first before they take it up.”
“We expect mainly food & beverage (F&B) stores, as the surrounding area has a shortage of high-end (F&B) outlets.”
The current rental price is RM4,000 per unit, with an approximate size of 1,500 per sq ft. Teh says the retail space will not be for sale.
“This is so that we can have better control (of managing the tenant mix),” he says.
On its other projects, Teh said IGB is developing an apartment project in Jalan Tun Razak, which the company hopes to launch by mid-2013. It also has a JV bungalow project with KL Kepong Bhd.
IGB has some 688ha of landbank in Malaysia.
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