On solid ground after a rough start

Below 10 years multi-own strata residential Silver: The Mews @ KLCC

Getting things right from the beginning is crucial in ensuring sustainability of a building and unfortunately some like The Mews serviced apartment project in Kuala Lumpur city centre had to learn that the hard way.

Offering five-star service and facilities, the project tucked away in a quiet corner along Jalan Yap Kwan Seng just 1km from KLCC, has successfully bid farewell to its difficult past.

In the first two years following the completion of the boutique luxury residence in September 2017, the property’s management recorded maintenance payment defaults that amounted to more than half a million ringgit, the accounting records were not kept well and ended up in a mess and there was no proper system to regulate short-term accommodation rental which many owners in the project are using their units for.

But thanks to the joint effort of developer Eastern & Oriental Bhd (E&O), the joint management body (JMB) and the current professional property manager Henry Butcher Malaysia (Mont Kiara) Sdn Bhd, things finally fell back into place at The Mews. Their hard work has certainly paid off with The Mews emerging as a Silver winner in EdgeProp Malaysia’s Best Managed and Sustainable Property Awards 2020 in the below 10 years multi-own strata residential category.

According to Henry Butcher Malaysia executive director Low Hon Keong, E&O, the JMB and Henry Butcher had placed their trust in each other and worked together to turn things around within a rather short period.

“We were appointed by the JMB in April 2019 to take over the management work here at The Mews. We were grateful for the opportunity to look after such a unique project in the KLCC area,” he tells EdgeProp.my.

However, he recalls, upon taking over, the team quickly found a number of areas that required immediate improvement, including the poor administration and the messy accounting records.

“The previous management had issues such as frequent absence of site staff and improper account reconciliation,” he adds.

This led to a high amount of outstanding dues of more than RM500,000 despite the decent collection rate of above 90% simply because the previous team was unable to identify who had paid the maintenance charges and who had not.

So when the Henry Butcher team came in, it started by implementing a proper work flow system and assigned five site staff to the property including an account manager to get the figures in order.

Short term rental challenge

The new team was also faced with the challenge of establishing a system to regulate the short-term rental activity at The Mews.

According to Henry Butcher Malaysia, of the 256 serviced apartment units spread across the 38-storey twin tower in The Mews, more than 50 units or 20% of them are offering short-term rental accommodation. Only about 10 units are owner-occupied while the remaining are leased out to long-term tenants.

Low says the short-term accommodation units here are very popular as records show that there were 500 check-ins in the month of February alone.

The popularity of short-term rentals here also means that the management must ensure that security is not compromised.

Following the resolution to allow short-term rental activity was passed by the majority of owners at an annual general meeting, a guideline on standard operating procedure based on Kuala Lumpur City Hall’s (DBKL) guidelines was created.

“The owners here are mostly investors and very few are owner-occupiers. And due to the challenges in getting rentals and the economic downturn, a lot of owners started to do short-term rentals, without informing the management.

“But instead of curbing the activity, we decided that it would be better to have it done under proper rules and regulations, security and that the management is informed. This is to minimise any issues arising from the activity,” says E&O Customer Services Sdn Bhd senior general manager and head of property management Eira Skelchy, who is also E&O’s representative in the JMB.

Hence, the management body, the property manager and the developer appointed a lawyer to assist them in drafting the rules and regulations on short-term rental activity at The Mews. A check-in counter has also been set up at the concierge to ensure a smooth check-in process for security personnel and guests, she adds.

Upholding five-star quality

Looking ahead, The Mews JMB chairperson Audrey Ho who also works for E&O, says the management body will continue to work with the developer and property manager to ensure the building’s upkeep and finances are well-managed.

Some of enhancement works that are being planned include setting up a coffee kiosk on the ground floor; creating a mobile application to offer more convenience for owners and residents; and using solar technology to reduce the long-term electricity usage and cost.

“The biggest challenge for us here is the ever-increasing cost to maintain and manage the building, which is designed to provide a five-star quality living for the residents, hence the preventive maintenance works and efforts to ensure the collection of maintenance charges remain at above 90%,” says Ho.

Low also reveals that the JMB and the property manager are working with the Fire and Rescue Department (Bomba) on a framework to improve the fire safety in the building considering the fact that a significant portion of residents are short-term guests.

“We are in the midst of preparing a fire evacuation plan to be installed at every level in the building and establishing an emergency response team that will provide fire safety training to onsite staff and security personnel. We will also be working with Bomba to conduct yearly fire drills here,” he adds.

The improvements that have been done and are being carried out by the management of The Mews have been reflected in the rising value of the units here. The serviced apartments here have recorded a higher transacted price of RM1,687 psf in 2019 compared to RM1,611 psf in 2018. Rental rates also went up from RM5,971 per month in 2018 to RM6,286 per month in 2019.

Get the full results of EdgeProp Malaysia’s Best Managed & Sustainable Property Awards 2020 here: https://www.edgeprop.my/awards2020

View the virtual awards ceremony here: https://buff.ly/2YFNcVg​

This story first appeared in the EdgeProp.my e-Pub on July 2, 2020. You can access back issues here.