City & Country: Dijaya trains its sights on Johor

Dijaya Corp Bhd, known for its Tropicana Golf and Country Resort development in Petaling Jaya, plans to direct its focus on its newly acquired tracts in Johor Baru next.

Its managing director Datuk Tong Kien Onn tells City & Country the new development may possibly be called Tropicana City @ Danga Bay and is expected to have a gross development value (GDV) of RM3.8 billion.

Tong says the components of the Johor project will emulate that of its Tropicana City development in Petaling Jaya. “The only addition is a hotel, which is included in the initial plans for the Johor sites”.

The two parcels, comprising a total of 37 acres, are located about five minutes from Johor town.

A joint venture company, Goldhill Quest Sdn Bhd, has been set up to acquire the prime freehold waterfront sites for RM308 million. Goldhill Quest is 60% owned by Dijaya’s wholly owned subsidiary Nagasari Cerdas Sdn Bhd, and 40% by Global Corporate Development Sdn Bhd, a wholly owned subsidiary of Iskandar Waterfront Sdn Bhd (IWSB).

The sale and purchase agreement was signed on Aug 2. IWSB and Danga Bay Sdn Bhd (DBSB) are master developers of waterfront properties in Johor. The Johor government, through Kumpulan Prasana Rakyat Johor, owns substantial interests in both companies.

While planning is still in the initial stage, the project will consist of commercial buildings including offices and residences, four to five-star hotels, as well as a retail mall.

“It will be a niche lifestyle mall, with emphasis on food and entertainment to keep it vibrant. We will keep it for recurring income as well as to control the tenant mix,” Tong says.

The developer expects the project to keep it busy for the next 12  years.

Six of the 37 acres come with a development order. “The six-acre site is ready for the development of serviced apartments, with an indicative price of RM600 psf.” There will be three blocks of serviced apartments, with more than 600 units, which are expected to be launched by the end of the year.

“I believe it is the right time to venture into Johor, rather than wait a few more years when land prices would have increased.

Lately, the property market there has been picking up and we expect more interest in the next couple of years, especially with the better relationship between Malaysia and Singapore. Things can only get better. I remember going to Johor some six or seven years ago, and it was quite quiet then,” says Tong.Dijaya Corp executive director Quek Cham Hong concurs that Johor is different now: “You can see lots of activities going on there and the infrastructure should be in place by next year. So we are confident that within the next two to three years, things will be even better. New developments in Johor now are modern and contemporary, compared with older properties there.”

Tong believes more Singaporeans will come to Johor, following the announcement of Khazanah Nasional Bhd and Temasek Holdings Ltd’s proposed iconic wellness township project in Danga Bay. It was reported that both parties will develop the almost 500-acre site in Danga Bay on a 50:50 basis. The wellness township will offer holistic wellness services and facilities, as well as alternative medical treatment aside from modern medical services.

In addition, Tong says the integrated resorts in Singapore may  require some 60,000 employees and he sees affordable accommodation in Johor benefitting from the spillover from the island state.

“In the next few years, when connectivity gets even better in Johor, we expect even more Singaporeans there. Our target market are Singaporeans, foreigners, as well as locals – the middle-upper and upper-middle class,” Tong says. It is important to look forward, he says, and believes that Johor is now the most vibrant development corridor in the country.

Casa Tropicana
Back in the Klang Valley, out of the 600-acre Tropicana site in Petaling Jaya, about 10% remains undeveloped. “It will be for commercial development, which we plan to undertake over the next four to five years,” Tong discloses.

The developer launched the fifth and final block of its leasehold Casa Tropicana condominiums on July 31. “The response was overwhelming as all non-bumiputra units were sold. The units were sold at an average of RM440 psf. Those facing the Tropicana and Sri Selangor golf courses, of course, came with a premium,” he says. Secondary market prices for the first four blocks of Casa Tropicana are around RM340, he adds.

While the first four blocks of Casa Tropicana were built through a JV with LBS Bina Group Bhd as the turnkey developer, Dijaya Corp will develop the final block. “The difference in the final block is that we have substantially improved the layout as well as the finishes. We are also providing kitchen cabinets for the units,” Quek adds. Units are sized from 985 sq ft to 1,478 sq ft.

Tong says 90% of the buyers for the final block are locals: “Our buyers consist of young families as well as parents buying for their children for proximity’s sake. Also, I believe the younger generation want a lifestyle and some know about our upcoming Tropicana Avenue that will be built just opposite the condominium. Evenings in the surrounding area right now are already very vibrant, with a lot of events going on.”

Aside from Casa Tropicana, Dijaya Corp also launched Pool Villas at Tropicana Indah, consisting 54 units of 3-storey semi-dee villas. The project, a JV with Selangor State Development Corp (PKNS), saw a 50% take-up since its launch in mid July. The units, priced from RM3.8 million, comes with a lift and pool each.

Slated for launch at the end of this year is Tropicana Avenue, on a 5.7-acre leasehold tract, which will consist of a two-storey retail mall and three blocks of nine to 11-storey offices above the mall. Tong says the focus for the mall will be food and entertainment. The expected GDV of Tropicana Avenue is about RM250 million to RM280 million. The offices, with built-ups from 885 to 2,334 sq ft, have indicative prices of around RM450 to RM500 psf.

“I believe the Klang Valley property market is doing well. Property sales in certain locations are good and confidence is rising. The best place to invest is still the property market as property prices will appreciate. For example, 18 years ago, we sold our bungalow lots for RM32 psf and now, recent secondary transactions are between RM280 and RM300,” he says.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 818, Aug 9-15, 2010.