A focus on family

KB Group entered the fiercely competitive property development market in 2000 and soon established itself as a reputable developer in Perak. Founder and managing director Datuk Roslan Khalid, who has 35 years of experience in the industry, set up the company in Kuala Lumpur but all his projects are in the silver state.

“I chose to start my first development — a small commercial project — in Sitiawan because it is the hometown of my grandmother and father. It was meaningful to me because it was like going back to my roots,” explains Roslan, who had spent his formative years in Penang.

The 1.46-acre Sitiawan Sentral is located in the heart of the town and is an hour’s drive from Ipoh city. Comprising 51 shopoffices and with a gross development value (GDV) of RM28 million, the project was completed in 2014.

According to Roslan, he had entered the industry as an architect in 1983. “I don’t deny architecture is something I love. However, I found that the job restricted my imagination; the clients had their own thoughts and most of the time, with no other choice, we had to follow.”

After 10 years of working as an architect, Roslan co-founded Amona Consolidated Holdings Sdn Bhd and started his first property project in Tampoi, Johor, in 1998. It was a RM200 million mixed-use development that comprised shopoffices, a condominium tower, a medium-cost, high-rise apartment block and a clubhouse.

Then in 2000, Roslan quit Amona Consolidated Holdings and founded KB Group and he hopes to pass on the brand to his sons.

“For me, family is precious and a top priority. I wished to have my own family business and I hope it will tie my family and the next generation together,” he smiles.

Nesting resort

Family is the main inspiration for Roslan’s latest project, Ramada Lumut Resort, in Manjung, Perak. The 4.7-acre resort — a joint venture between KB Group and the Perak government, which owns the land — is a four-star luxury investment property.

Upon its completion around end-2018, Ramada Lumut Resort will be backed by Ramada Worldwide, which is a mid-scale, full-service brand of the world’s largest hotel company, Wyndham Worldwide.

Headquartered in Parsippany, New Jersey, Wyndham Worldwide has about 7,700 properties and over 668,500 rooms in 71 countries.

“We received positive response from a lot of hoteliers the world over after the master plan [of Ramada Lumut Resort] was unveiled. A number of five-star hoteliers expressed interest in the project, which was a pleasant surprise,” says Roslan.

Under the partnership, Wyndham Worldwide and Ramada Group will adopt the best industry practice in managing the resort, whose services will be managed as per the quality guidelines set by the latter. The hotelier will also provide training support and a service excellence framework.

Ramada Lumut Resort will be located in front of Lumut’s forest reserve and only five minutes by foot from the town’s jetty terminal. “This means that the resort will offer both mountain and sea views and guests will get to enjoy the sea breeze and fresh air from the forest,” Roslan explains.

With a GDV of RM455 million, Ramada Lumut Resort’s single 34-storey block will house 269 serviced apartments (built-ups: 786 to 1,824 sq ft) and 170 serviced suites (380 sq ft to 532 sq ft). There will also be seven exclusive forest villas (1,949 sq ft) behind the main block.

The selling price starts at RM400,000 or RM770 psf and buyers will enjoy a guaranteed rental return per annum of 7% for the first three years after the completion of the project.

“The resort is the only one in the region that offers a 72.9% net rental return over a 10-year period. It is comparable to, if not better than, many other investment options in Perak and even the Klang Valley,” claims Roslan. “This is not a project for long stay but at the end of the day, it is your property. You have absolute right to choose what to do with it after the completion of the three-year leaseback scheme.”

“Buyers who decide not to participate in the scheme any more will not be allowed to use the resort’s facilities, although there is a lounge and a swimming pool on Level 29 for their exclusive use,” Roslan says.

To emphasise the family theme, Roslan has included a unique “nest” in the resort. “After I decided on the main concept of the resort, everything flowed from there. Family is important ... to so many people. And a nest is symbolic of family. This is the reason I decided to build a giant bird’s nest in the resort.”

Inspired by the nest of the burung tempua (Ploceidae or weaver birds) in Malaysia, Roslan has sketched The Sarang (Malay for bird’s nest) on a manmade island in the development, called Isle of Dreams. This will be situated behind the main resort block and be surrounded by an infinite pool and the seven forest villas.

The 3-storey Sarang will be connected by a bridge from the forest villas as well as a spiral staircase from the ground level.

Moreover, a few small pods on the manmade island will allow children to camp there and enjoy activities like story-telling or a camp fire.

“I was born in Penang and had endless opportunities to hike up Penang Hill or to camp by the beach in Teluk Bahang. Today, that pristine environment has been replaced. I want the children these days to have the opportunity to experience what my generation’s children did. Hence, the manmade island and a lot of outdoor activities in the resort,” Roslan remarks.

The activities include wall climbing, flying fox, mountain or riverside trekking, rafting and island hopping. “We want to create more than just a luxury resort bedroom. We want an integrated resort where adults and children can have a full day of fun. With more than 30 in-house facilities, you don’t have to worry about what to do,” laughs Roslan.

The in-house facilities include a swimming pool, sunset lounge, spring pool, gym, children’s clubhouse, all-day dining restaurant and café.

There is also a seminar room and a ballroom that can seat up to 350 for corporate guests, private events and outdoor events.

‘Never a bad time to launch’

The overall property market condition is not something Roslan worries about when it comes to planning a new project. “I have been in this industry for 35 years and I have seen worse. I believe that if you have a good product and provide your buyers with a visible upside potential, there is no such thing as a bad time to launch a project,” he comments.

To ensure the success of his projects, Roslan and his team spend a few years studying and planning them. Ramada Lumut Resort is one such project.

“I started watching the Manjung property market after international companies, such as the world’s largest iron ore producer Vale International, oil and gas player Sapura Kencana and naval shipbuilder Boustead Naval Shipyard moved into the area a few years ago. I noticed the growing demand for property there,” says Roslan.

Also, a study carried out by his team showed Lumut’s hotel occupancy rate being higher than Pulau Pangkor’s over the past two years.

“We saw the opportunity to offer a reasonably priced, four-star luxury resort in Lumut, so we bid for some land from the state government to build the first such project in the vicinity. The state government supported the project because it is in line with the Lumut tourism industry’s development plan,” Roslan explains.

However, Raine & Horne International (Ipoh) partner Chou Yee Sang believes there is limited potential for Lumut’s hotel industry. “Lumut has enough budget to mid-range hotels but it lacks high-end hotels compared with Pulau Pangkor,” he says, adding that there is an opportunity for such hotels, provided they have a concept that can draw people to Lumut instead of Pulau Pangkor. Chou believes the overall property market in Lumut as well as other parts of Perak is quieter compared with last year due to a slow market and an economic downturn.

Nevertheless, he believes Manjung and Sitiawan, which didn’t receive much attention compared with Ipoh and Kampar, will slowly draw the investors and homebuyers in. “Manjung and Sitiawan are centrally located. Property prices are cheaper here than in Ipoh and Kampar. We see more factories and companies moving into the areas, boosting the local property market.”

He notices, however, that the properties have been moving more slowly in the past few years due to the economic uncertainty.

“We don’t see the property market as active as like it used to be in the short term. We need more time, probably two to three years, to take Perak’s property market into the next growth level,” Chou stresses.

Roslan has faith in his resort concept as his studies showed that investors are interested in hassle-free investments that bring good returns over the medium term. “A successful resort does not need a large land size but the right concept. We don’t need to follow the trend. We have positioned ourselves as a niche developer. As long as the resort is attractive enough for its unique concept ... buyers will come to us, like how [the Ramada Lumut Resort concept] has impressed international hoteliers and interested buyers,” he says confidently.

So far, Roslan has seen expressions of interest from local buyers as well as from Singapore, Indonesia, Taiwan, the Philippines, China and the Middle East. “We have planned more road shows in and outside Malaysia after the official launch at the end of this month,” Roslan says.

Moving forward

Other than Ramada Lumut Resort, KB Group is in the midst of obtaining approval for another project in Ipoh. It is also in the mid of negotiations with a landowner in Pahang to build a five-star luxury spa hotel.

An integrated project with an estimated GDV of RM600 million, it will consist of two towers of serviced suites and a three-star hotel with a 2,500 pax convention centre and entertainment hub.

More details will be revealed at a later date as they are still being finalised for submission to the authorities. However, Roslan is hoping to introduce the project by the second half of this year.

“The hospitality segment is my property development business focus. I see tremendous potential for the segment over the mid term. Malaysian property, especially hotel investment property, is relatively cheap in the region. In recent years, we have seen more buyers from overseas, especially China and Hong Kong,” Roslan remarks.

He says the east coast of Malaysia is an “interesting” area.

“The east coast is closer to Singapore than other popular seaside property hot spots, such as Penang, and it has more upside potential than other coastlines in the peninsula,” Roslan says.

For the moment, though, Roslan, who sees himself as a careful man, is putting all his energy into Ramada Lumut Resort and the yet-to-be-named Ipoh project.

“It is important for us to focus on these two projects. We don’t want to risk our reputation by handling too many things at one time. I want to ensure everything is in order and has good quality, and we deliver what we promised the buyers. All this needs concentration,” he says.

“Moreover, the company’s brand name is something I want to pass on to my future generations. We never take short cuts because as a trained architect, I understand how important the foundations are. Building a brand is just like developing a project. Only by building it step by step will it stay strong and last.”

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This article first appeared in City & Country, a pullout of The Edge Malaysia Weekly, on Jan 25, 2016. Subscribe here for your personal copy.