MACLY Equity Sdn Bhd, a joint venture between two established Singapore developers Macly Group and Roxy-Pacific Holdings Ltd, launched the first of two towers of The Infinitum @ KL City Centre late last year. Its maiden project has a total gross development value of RM800 million.
The first tower, The Colony by Infinitum, has seen a 70% take-up. The developer plans to launch the second tower, The Luxe by Infinitum, in the first quarter of next year. The two towers have been given different names to help with their branding and product differentiation.
Located on a 1.4-acre freehold parcel in Jalan Dewan Sultan Sulaiman, the development is next to Quill City Mall. It is an eight-minute walk to the Medan Tuanku monorail station, which is linked to major areas in the city centre including the retail strip of Jalan Bukit Bintang. It also links to Kuala Lumpur Sentral, where one can then travel to KLIA and klia2.
Macly Group managing director Herman Chang and Roxy-Pacific Holdings executive chairman Teo Hong Lim tell City & Country that the official launch of The Luxe will most likely take place after Chinese New Year next year but registration will commence at end-October this year.
Macly Group was founded by Chang and has been involved in property development since 1987, with projects such as high-rises and cluster housing. The group also owns and operates hotels under the Lloyd’s Inn brand.
Roxy-Pacific Holdings was established in 1967 and listed on the Singapore Exchange on March 12, 2008. It has developed residential and commercial properties, and is the owner of Grand Mercure Roxy Hotel and other investment properties.
Chang and Teo formed Macly Equity in 2013 to develop their first project in Malaysia. The parcel for The Infinitum was purchased in 2012 for RM90 million.
“We completed the basement in the middle of last month and have awarded the contract for the two towers together,” says Chang. The entire development will be completed in 2020.
In addition to the small office/home office (SoHo) units, the project will also have 31 retail lots that are not for sale.
“We are not going into the retail space in detail,” explains Chang. “After we have sold the SoHo units, we will then think about the strategy for the leasing of the retail space.”
A retail consultant will be appointed later to work out a tenant mix that will meet the residents’ needs, he adds.
The two towers will offer a total of 723 SoHo units. The Colony will have 33 storeys and 423 dual-key units. The average launch price was RM1,380 psf, with built-ups of 705 to 1,155 sq ft.
Due to the good response to the first tower, the developer has decided to launch its second tower. The Luxe will have 43 storeys and offer 300 dual-key units. The built-ups will range from 675 to 1,190 sq ft, with an average selling price of RM1,450 psf.
“Because the sales of the first tower were not too bad within 10 months and some people were asking about the second tower, we decided we will launch it. But we also want to give people something better in terms of finishes, such as having 800mm by 800mm porcelain tiles in the living room, better appliances and fittings to make the ‘case’ more compelling for The Luxe,” says Chang.
Teo adds, “After selling 70% of the first block, the agents and selected buyers asked about the second block and we found that there was demand for better finishes and requests for hassle-free rental where buyers want concierge services … Not that the first block is a low-end project, but it was good for the buyers back then. So, now we realise that we need something different to address the demands of the new group of buyers.”
Both towers will have separate entrances and facilities for residents, including a swimming pool with a view of the Petronas Twin Towers, outdoor dining area with barbecue facilities, residents’ lounge and gym. The green features will include energy saving lights, windows with reflective features, inverter air conditioners and low-voltage water heaters. Only The Luxe will have concierge services.
The building is aiming for GreenRE Gold certification. The maintenance fee will include the sinking fund, which is 40 sen psf, and the expected rental yields are 4%.
Demand for new products
With the high-rise market in Kuala Lumpur city centre soft and the high rejection rate of housing loans at the moment, is it wise to launch The Luxe?
“We feel that we have the right value proposition and a unique product,” says Teo. “Besides the price point, the product has dual-key units. Coming from Singapore, we know how to build compactly and develop more efficient dual-key products. By offering this development, we are breaking away from the general and you will have a pocket of demand to absorb it … New products have to be created in order to create the demand.”
Incidentally, Chang is no stranger to small-sized units as he is the pioneer of the “shoebox” apartments in Singapore. The concept was offered in Macly Group’s Mackenzie 138, which has 35 apartments in Mackenzie Road, Singapore. The smallest measures 409 sq ft while the average built-up is 450 sq ft. The project was fully sold in 2004.
For The Luxe’s dual-key units, Chang says one unit will be slightly smaller than the other, with a 60:40 ratio. When residents enter their unit, there will be a common foyer, which will lead to two doors. The smaller unit, which can be leased out to a tenant or be an office for a small business, will have a small pantry and washing machine niche.
Recognising that the company is the new kid on the block, the developer will complete the project regardless of whether it sells all of the units and has set aside the necessary funds to do so.
“The whole idea is to do this project well and, in the meantime, look for other opportunities,” says Teo. “We don’t want to come along, sell 50 units, and the project can’t receive funding and is abandoned.”
Long-term outlook positive
According to Metro Homes director See Kok Loong, demand for “small residential high-rise units in the Kuala Lumpur city centre remains average as it attracts the single or young couples to rent”.
However, the high-rise market is soft because of the situation in the global economy and the low confidence level, together with the difficulty of obtaining financing from banks. He adds that the situation has become more challenging due to the downsizing of oil and gas companies after oil prices fell. However, he believes small residential high-rises in the city will do well in the long run.
“High-rises in the city is the way forward because of scarcity of land and land prices are too high to justify landed developments,” says See. “Furthermore, Malaysians are looking for conveniences such as integrated developments with shopping, dining and lifestyle options. Also, high-rises offer better security compared with landed schemes.”
While Chang and Teo are positive that their product will do well in the current challenging market conditions, they are not resting on their laurels. They are looking to expand their product range in Malaysia and are on the lookout for viable parcels and possible joint ventures. At the moment, though, they want to make sure that they complete their project to their buyers’ satisfaction to further establish Macly Equity in the Malaysian property market.
This article first appeared in The Edge Malaysia on Oct 10, 2016. Subscribe here for your personal copy.
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