By Racheal Lee of The Edge Malaysia
Sunday, 15 August 2010 00:00
Gamuda Land Sdn Bhd has carved a name for itself as a landed residential estate developer in the suburbs with townships such as Bandar Botanic in Klang, Valencia in Sungai Buloh and Jade Hills in Kajang. But things are changing, and the property development arm of Gamuda Bhd is embarking on its first high-rise mixed commercial development in the heart of Kuala Lumpur.
Last month, Gamuda Land entered into a sale and purchase agreement to acquire a 2.94-acre parcel of commercial freehold land, located at the intersection of Jalan Pudu and Jalan Robertson, for RM820 psf from Wearne Brothers Properties Pte Ltd.
The parcel, which is now home to a foreign car brand’s 3S (sales, service and spare parts) centre, is located next to Wisma Magnum in Jalan Pudu. Within its vicinity is the century-old St Anthony’s Church on Jalan Robertson and pre-war colonial buildings in Changkat Tung Shin.
The developer is planning a RM600 million mixed development on the site, its managing director Chow Chee Wah tells City & Country.
Chow says the parcel will be divided into two distinct plots — one with Jalan Pudu frontage and the other fronting on Jalan Robertson — to allow for the development of a commercial and a serviced residential component.
“We will build the retail and commercial component fronting busy Jalan Pudu because it is nearer to pedestrian traffic,” he adds.
With a plot ratio of seven, Gamuda Land is looking at commercial space of 80,000 to 100,000 sq ft, housed in five or six levels on the half-acre plot.
For the parcel fronting Jalan Robertson, plans are for serviced apartments with a SoHo concept that caters for young professionals who want to live in the central business district (CBD) to avoid traffic congestion when travelling to work.
Chow says the serviced apartments/SoHo will probably range in size from 650 sq ft to 750 sq ft at an affordable price range aimed at young people and expatriates.
“The biggest advantage of the development is that it is near the LRT (Plaza Rakyat station). The project is also within walking distance to the Bukit Bintang shopping area. We have done a lot of market studies and understand that investors like small units below 800 sq ft as the rental yield is very good. It is also affordable, on a per unit basis, to the young local professionals who have just started their career,” he says.
The plan is to build two blocks of serviced apartments/SoHo offering 900 units, with an indicative pricing of RM1,100 psf. One of the blocks will have 40 levels, connected to a lower block by a sky bridge. The sky bridge will be where all the common amenities will be located.
There will be a retail podium beneath these units, Chow says, but it will be different from the commercial component fronting Jalan Pudu. This retail podium will have a net lettable area of 32,000 sq ft designed for “speciality shops” such as hair salons and convenience shops. Gamuda Land also hopes to bring in F&B outlets to create a vibrant atmosphere.
“on Jalan Robertson, we will create a contemporary lifestyle centre for the mass market which is not in direct competition to what is available in the adjacent Bukit Bintang area.
“The F&B outlets in the retail podium can offer al-fresco dining on Jalan Robertson. We hope to make it a new location for young people to hang out. Of course, we will have separate lifts and car parks for residents and visitors as the security aspect is one of our main priorities. We are still finalising the design and the product mix,” he says.
Construction is scheduled to start in about two years. The commercial space will be kept for leasing to control the tenant mix, but Gamuda Land does not discount a sale and leaseback option.
Going forward, Chow says Gamuda Land could undertake similar niche developments in the CBD area.
“We will not disregard any opportunities to further strengthen and enhance our market share, and we are still looking to acquire more such land in KL city. We will continue to look out for growth opportunities to sustain our market presence. This is also to capitalise on Gamuda Land’s strong positioning and track record,” he says. The developer has a total landbank of 2,222 acres in Kota Kemuning, Valencia, Bandar Botanic and Jade Hills in Selangor, Madge Mansion in Kuala Lumpur, Horizon Hills in Johor and Vietnam, valued at RM22 billion.
Gamuda Land’s Jalan Pudu project is in the mature Jalan Pudu-Bukit Bintang area which has hardly seen any new projects in recent years. Land is scarce here, with the area dominated by shops aimed at the pedestrian traffic from Puduraya bus terminal and Plaza Rakyat LRT, and contemporary shopping malls further up in the Bukit Bintang shopping strip.
Adjacent to Puduraya is Plaza Rakyat, which occupies a triangular tract. The construction of a RM1.3 billion mixed development on it was stalled due to the 1997 Asian financial crisis. Initially, it was to comprise a 79-storey office tower, a 46-storey condominium, a 24-storey hotel and a 7-storey shopping centre.
Efforts have been made to revive the project since 1997, but the government announced in January this year that it had decided to terminate the deal with the developer following failed negotiations. A deadline to revive the project was not met.
The Puduraya bus terminal, meanwhile, has been closed for a facelift. Bus operations were moved to the Bukit Jalil Stadium. The long-distance bus terminal will move to the Bandar Tasik Selatan integrated transport terminal once it is open and Puduraya will only cater for city buses and taxis.
According to Raine & Horne International Zaki + Partners Sdn Bhd associate director James Tan, a 1,500 sq ft ground floor shoplot can easily fetch rentals of RM15,000 to RM20,000 a month now. But he expects rentals to go down due to the reduced crowd after the relocation of the outstation buses.
The project coming up at Jalan Pudu-Jalan Robertson is Gamuda Land’s second development in the CBD. Madge Mansion in the U-Thant area is its first niche development and also its first in the CBD area.
Madge Mansion, which offers a completely different concept from the Jalan Pudu-Jalan Robertson project, is scheduled for a soft launch next month.
“We held back the launch of Madge Mansion for almost a year due to the economic crisis … As you know, the property market has picked up over the last nine months and several townships we did [Bandar Botanic, Valencia and Jade Hills] have seen prices appreciating by easily 15% to 20%. KLCC condo prices have also stabilised with some appreciation and are now fetching as much as RM1,500 to RM2,000 psf,” Chow says.
He adds that the 2.16-acre Madge Mansion is for those who want to reside in the quieter part of the city in a low-density area. The parcel was purchased for RM350 psf at end-2007.
“It is low-density and only has residential traffic. This area is an exclusive area where you create unique and quality living, yet are still within walking distance of the CBD. We are offering units with family-sized built-ups of 4,000 to 4,500 sq ft. Madge Mansion caters for family living, while the Jalan Pudu-Jalan Robertson project is for young people to live where they work,” he notes.
Chow calls Madge Mansion a “sky-linked bungalow” that caters to the upmarket group and emphasises security. The project will have 52 units, including six duplexes and penthouses, in three 10-storey blocks.
These will be tagged from RM4 million or RM1,200 psf. It is targeted at expatriates, top corporate management and upgraders who are looking at security. According to the feedback, says the developer, foreigners, especially from China, are interested in buying the units.
“Foreign investors think that any growth of a country will start from the capital; in our case it is the KLCC area. Due to the tightening rules in China, many Chinese are looking at properties abroad,” Chow says.
He adds that a lot of effort has gone into windflow and landscaping at Madge Mansion, with vertical and spot planting to reduce the temperature and for shade. He notes that the development will incorporate the practical function of plants, such as bamboo hedges or screens, as well as Eugenia and bamboo as layering.
Madge Mansion will offer an Olympic-size swimming pool and a fully glassed-in gym. The four ground floor units by the poolside are on the same level as the walkways and lanai.
“These four units are almost like landed homes. They face the swimming pool directly, but for privacy they will be shielded by island plantings. These four units also have their own backyards. Market intelligence shows that some elderly people like landed homes where there is space to walk out,” Chow says.
He says the four units will be in Blocks B and C. These units will fetch a premium, and will be priced at not less than RM1,500 psf.
The project will also have two basement car parks with 188 bays, with a minimum of three parking bays per unit, while penthouse owners will get at least six bays. Lockers will be placed at the parking bays for residents to store bulky items such as golf sets.
Besides the niche projects in the CBD area, Gamuda Land plans to launch Ambang Botanic 2 in Klang next month, after the overwhelming response to its Ambang Botanic 1. First launched more than 10 years ago, all 1,150 units in Ambang Botanic 1 have been sold. First to be launched in Ambang Botanic 2 next month will be semi-detached and superlink homes.
The developer is now completing a RM40 million toll-free ramp from Lebuhraya Shah Alam (Kesas) into Bandar Botanic, scheduled to open next month.
The homes in the first phase of its freehold RM1.5 billion Jade Hills development will be handed over next month. As the clubhouse is already operational and the landscaping has matured, the properties in Jade Hills have seen an appreciation of 20% since the launch two years ago. It has launched 186 out of the 1,650 units in the project.
The RM1.02 billion Valencia, meanwhile, is almost fully developed, Chow says. The last part of the project, comprising link homes, is currently under construction. These will be sold when construction reaches an “advanced stage”.
Besides Malaysia, Gamuda Land also has projects in Vietnam’s two main cities — Ho Chi Minh City (HCMC) and Hanoi — that will be launched in October. In HCMC, it will start the earthworks for the 203-acre Celadon City — a project jointly undertaken with Vietnam’s Sai Gon Thuong Tin Real Estate Joint Stock Co (Sacomreal) on a 60:40 basis — next month.
The project will comprise residential and commercial components, and will have a gross development value of US$1.6 billion (RM6 billion) and be carried out over seven years.
In Hanoi, Gamuda Land is developing Yen So Park, which has a GDV of RM10 billion, on its own. The developer was given 434.9 acres for commercial and residential development in return for constructing a cultural park and sewerage treatment plant in the area.
The cultural park, which started in 2007, is scheduled for completion this October.
“We are looking at other countries, whether as a joint venture or outright purchase. For our next financial year (FY2011 ending July 31), we will see local and overseas revenue contributions at 50:50. Currently, all our sales contribution comes from local projects,” Chow says.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 815, July 19-25, 2010