‘Petaling Jaya of Johor’

Areas within the vicinity of Bandar Utama and Mutiara Damansara in Petaling Jaya are often sought after by homebuyers and investors for many reasons, among them, location and accessibility. Another factor these two townships share is the retail and shopping element. In Bandar Utama, there is the 1 Utama shopping centre while Mutiara Damansara has its popular shopping strip where The Curve, Ikano Power Centre, Ikea and Tesco are located.

Down south in Johor Baru, property developer Plenitude Bhd aims to emulate the success of these two neighbouring suburban townships at its 965.73-acre Taman Desa Tebrau development.

The developer has coined the development the “Petaling Jaya of Johor” and hopes to bank on a similar strategy of bringing in strong retail players to catalyse growth.

Plenitude has already brought retail players Jusco and Tesco hypermart into Tebrau City, which is the commercial and retail component of Taman Desa Tebrau, located 14km from Johor Baru.

The developer had also disposed of a 36.94-acre tract in July 2007 to the Ikano Group at RM40 psf, or a total sum of RM64.4 million. The Foreign Investment Committee and the Johor government approved the transaction last February, bringing the establishment of a second Ikea outlet in the country closer to reality.

“Desa Tebrau is a massive township and the frontage has been taken up by these big commercial players, with the rest being residential. Jusco and Tesco are up and we are now just waiting for Ikea,” Plenitude’s executive chairman Chua Elsie tells City & Country. Bringing in these retailers are among the strategies to speed up the maturity of the township, she adds. However, the Ikano Group management, when contacted, says there are no plans as yet for the land.

Taman Desa Tebrau
The freehold Taman Desa Tebrau to date has 300 commercial units and 3,792 residential units, with a population of 16,800, with some 524.74 acres left for development.

The first project in the township was launched in March 1997.

Tebrau City, which spans more than 100 acres, is an integrated commercial, residential and leisure hub within Taman desa Tebrau. It is located along the Tebrau Highway and surrounded by mature residential areas with a population catchment of more than 450,000 within an 8km radius.

In Taman Desa Tebrau, Plenitude has some RM180 million to RM200 million worth of residential launches in the pipeline for FY2010 and FY2011 ending June 30. Among these is the township’s first bungalow development. The final building plans for 55 units of 2½-storey bungalows in Phase 12B, with a gross development value (GDV) of RM55 million, are scheduled to be submitted to the local authority sometime this month.

“I think the launch will be sometime early next year, depending on market conditions and the pace of our current sales,” says Chua. “We will have new stock coming in when our existing stock depletes.” The bungalows are targeted at local buyers looking to upgrade to a gated and guarded community.

Apart from the bungalows, the township will also see the launch of 201 units of 2-storey terraced houses (GDV of RM46.23 million), 100 units of cluster semi-detached houses (GDV of RM40.8 million) as well as 103 units of 2 and 3-storey terraced houses (GDV of RM32.74 million).

Plenitude is also focusing on selling its remaining stock of homes worth some RM328 million.

Early this year, the developer opened for sale its Tebrau City Residences in One Tebrau City @ Taman Desa Tebrau. The project comprises four 9-storey blocks offering 472 units of serviced apartments with a commercial component that will offer 152 retail and office units on the ground and first floors. There is also a carpark podium with more than 2,000 car park bays.

Plenitude plans to keep the commercial component, which has a net lettable area of 167,330 sq ft, for recurring income. The first block of apartments will be completed soon.

“We have a pool of investors buying from us because the Johor Baru market is small [compared to Kuala Lumpur] and people who are interested will come the minute we open our products for sale. We are targeting mostly locals and Malaysians working in Singapore. We do have Singaporeans buying under the MM2H (Malaysia My Second Home) Programme,” says Chua.

As part of the developer’s efforts to create a green environment, a 2km “green lung” is being planned in the centre of Taman Desa Tebrau. However, it does not plan to go into using energy-saving technology for the moment. “You can do it, but where are the services coming from? We are not at that standard yet, and it is not so practical for us to go into it. There is no proper maintenance and sustainability,” Chua says.

With Malaysia’s second Ikea outlet slated for its flagship development in the southern state, Plenitude aims to further push property values there and burnish its reputation as a township developer

Other projects
Plenitude’s developments — ranging from affordable to high-end projects — are spread from the north to the south of the peninsula.

It also owns a hotel — Tanjung Bungah Beach Hotel — in Penang, but Chua says the company is not looking to expand its hotel business aggressively. It wants to continue focusing on property development and is looking for landbank in Johor and Penang.

Several projects are ready for launch in Perdana Heights and Bandar Perdana in Sungai Petani, Kedah, as well as the 451-acre Taman Putra Prima in Puchong, Selangor.

Next year will see the launch of 248 units of 2-storey, 22 x 65ft terraced houses in Phase 8B of Taman Putra Prima, says Chua. The development has a GDV of RM80.95 million.

In early June this year, the company acquired the entire equity interest in Intisari Sanjung (M) Sdn Bhd, which owns 32 acres of leasehold land adjacent to Taman Putra Prima for RM24.5 million.

The newly acquired land parcel is slated for 400 low-cost, low-medium and medium-cost houses as well as commercial components when Taman Putra Prima approaches its tail-end. The township still has some 187.6 acres of undeveloped land.

In Perdana Heights in Kedah, Plenitude will be launching 49 units of 2-storey terraced houses and 157 units of 2 and 2½-storey semidees next year, with a GDV of RM12.15 million and RM54.99 million respectively.

Meanwhile, the neighbouring Bandar Perdana will see future launches worth some RM155.29 million, including 1-storey bungalows, 2-storey semidees, 2-storey shops, 1½-storey terraced houses as well as 2-storey terraced houses.

“We are riding the crisis. Of course we are affected but we are not stressed because we are prudently managed. We look at market conditions before we launch,” says Chua.

“I think investors are confident of our prudent financial management and effective cost management. We have the financial strength to complete our projects. Our take-up rate is good and whatever we have sold is enough to cover our outflow. We launch whenever we see our stock depleting and after we have done all our market surveys.”

The government’s move to offer RM10,000 tax relief on interest paid on housing loans for the next three years, as well as the RM100 million fund relocation under the Housing Credit Guarantee Scheme (SJKP) to assist those without fixed income own affordable houses, may benefit the company, she reckons, as its properties range from RM250,000 to RM500,000.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 772, Sep 14-20, 2009.

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