City & Country: BRDB without Jagan

PROPERTY players, consultants and astute real estate investors in the Klang Valley are training their sights on Selangor’s Seri Kembangan. Their interest centres on Senja, a high-end gated-and-guarded landed project, set to be unveiled anytime now.

So, what’s so special about Senja, one may ask. Seri Kembangan remains synonymous with relatively affordable homes, yet this is not the first luxurious residential project coming up at this address — think award-winning Gita Bayu.

Senja, without doubt, is interesting for its lifestyle concept and even pricing, with the cheapest intermediate terraced house costing a cool RM1.9 million and up. Not a modest sum at a time when it is increasingly becoming a buyer’s market. The stratified leasehold landed project, under Bandar Raya Developments Bhd (BRDB), will also offer semi-detached houses, bungalows and villas. (See report here)

More interesting is that Senja will debut in the absence of long-time CEO of BRDB, Datuk Jagan Sabapathy, who officially leaves the company this month. Just two weeks ago, BRDB staff bid Jagan farewell at a gathering held at the developer’s sales gallery in Bangsar. The evening, according to someone close to Jagan, was emotional.

BRDB has been Jagan’s “home” for exactly 14 years and a month, so much so that most in the local property fraternity credit him for BRDB’s current DNA — a lifestyle developer with discerning taste and attention to detail.

BRDB is not the only developer of distinction in KL’s elite Bangsar locale; the other is the Eng Lian Group. BRDB owns the bustling Bangsar Shopping Complex while Bangsar Village I and II at the other end of the area are in Eng Lian’s stable.

Over the years, BRDB has ventured successfully outside Bangsar to KLCC and Iskandar Malaysia, building notable luxurious homes and commercial buildings. In 2004, Fosters & Partners was engaged to design The Troika, an award-winning residential high-rise in the KLCC. The building was completed in 2011.

Interestingly, Jagan’s departure from BRDB, which was taken private last year, has come on the heels of a spate of resignations from various departments of BRDB. While job hopping among development companies is not uncommon, especially for marketing and sales staff, speculation is rife is that these have been sparked by the voluntary delisting of the company and hence, questions over its direction, going forward.

Of BRDB’s previous launches, Serai is particularly noteworthy. The ambitious luxurious condominium project in Bukit Bandaraya was unveiled last December, and the response to it took the market by surprise.

Jagan officially leaves the company this month

This is why — the Serai units are huge, with the 121 units ranging from 4,025 sq ft to 6,913 sq ft in size. These were put on the market at a time when there was an abundance of large condo units and the condo-buying crowd was very much into modest-sized purchases.

Not only this, Serai’s pricing was at a 20% or so premium to the prices then. At RM1,300 psf to RM1,500 psf, the cheapest purchase came up to RM5.8 million, and larger units, up to RM10 million. There are two penthouses, each measuring 14,000 sq ft, priced at about RM20 million.

So far, more than 90% of the units, in two towers, have been sold. Interestingly, it was the larger units that went very quickly!

According to someone familiar with the pricing strategy, Jagan had pushed for the RM1,300 to RM1,500 psf pricing despite a general consensus among the senior management that the market could only take around RM900 psf then. They had argued that at RM1,300 psf, Serai would be priced two years ahead of the market.

Well, as it has panned out, BRDB got it right.

Whatever the case, Jagan has been the face of the BRDB brand. Similar to Tan Sri Liew Kee Sin of SP Setia, Tan Sri Lee Kim Yew of Country Heights or Tan Sri Leong Hoy Kam of Mah Sing, although of late, the latter has been promoting the visibility of his daughter Jane Leong.

With Jagan at the helm, BRDB has built and nurtured a strong following of property investors who have remained loyal to the brand mainly because they would have made money from their previous BRDB buys.

For sure, selling high-end property demands a fine and even close developer-buyer relationship. Developers seek out well-heeled investors not only because they have the capacity to buy but are also a brand’s best ambassadors.

It was good for BRDB to have a face to the brand.

Au Foong Yee is managing director of The Edge Communications Sdn Bhd

This article first appeared in The Edge Malaysia Weekly, on September 30, 2013.