City & Country: Fitters targets RM2b project launches in the next year

IN the past 36 years, Fitters Diversified Bhd has been involved in various businesses such as manufacturing and trading, construction and engineering, fire safety and protection, and specialised theme works.

In 2008, the company decided to diversify to create a new income stream. This led to the acquisition of a 502-acre agricultural parcel in Cameron Highlands, which was intended for farming. When the plan faltered, the land was sold to Khazanah Nasional Bhd.

Then in 2009, Fitters stumbled on a new opportunity — an 8.43-acre commercial parcel in Setapak, Kuala Lumpur.

Wong (left) and Hew with a model of Zeta D’Skye

According to managing director Datuk Richard Wong, Fitters received a juicy deal from Parkson Retail Group for the construction of a shopping mall.

“We managed to get Parkson to pay for the construction,” says Wong. “We also got the airspace above the mall, dubbed Festival Mall, and with the cash from its construction, we were able to fund the development of the serviced apartments on top of it.” Upon completion of the project, Parkson owned the mall while Fitters owned the serviced apartments.

Festival City has a gross development value (GDV) of RM650 million with the serviced apartments contributing to RM450 million of that amount. The serviced apartments were sold at an average price of RM550 psf with sizes ranging from 500 to 1,400 sq ft.

With the mall fully operational and the serviced apartments completed and sold, Festival City and Festival Mall paved the way for Fitters to move forward with this new business segment.

“We believed it was an obvious transition for us and to date, our property development segment has been a meaningful contributor to the group’s earnings,” says Wong.

As Fitters’ property development segment came with new commitments, it needed a capable person to helm it.

Five months ago, the group appointed David Hew as the new CEO of Fitters Property Development Sdn Bhd. With his banking background, and having handled mortgages as well as development strategies and financing schemes, Hew is the right person for the job, says Wong.

“Moving forward, in these challenging times, we will approach the market carefully and offer good products at affordable prices,” he adds.

More projects in the pipeline
Currently, Hew has his hands full. Fitters Property Development is looking to roll out a few new developments.

Zeta D’Skye, located on Jalan Ipoh in Kuala Lumpur, is its latest offering. Comprising two 24-storey towers, it stands on 2.84 acres of freehold land and offers 284 units of condominiums. The units will be sold at RM600 psf with sizes ranging from 900 to 1,200 sq ft. It is already fully booked and Hew expects the development to be fully sold by year-end.

He adds that Zeta D’Skye is considered a low-density, high-rise condominium targeted at young couples looking for a nice condo close to the Kuala Lumpur city centre.

Meanwhile, Fitters is looking to offer its landed development project, dubbed Zeta Residence, to the market after Zeta D’Skye.

The Zeta Residence is located on a 50-acre leasehold parcel in Rawang, Selangor, and is expected to be launched by year-end. The development commands a GDV of RM300 million and offers super link and semi-detached homes in a gated and guarded environment.

While the company is still fine-tuning the details, Hew says the super links will be sold for RM700,000 onwards while the semi-detached units will be priced from RM1.2 million. There will be four phases.

“There are plenty of parcels left in Rawang especially near the Sungai Buaya side,” says Hew. “But at this moment, they are still not attractive.”

Located next to Glomac Saujana by Glomac Bhd, Zeta Residence is expected to benefit from Glomac’s plan to construct a direct link from Jalan Batu Arang into its development.

“We foresee that Rawang will become the next Puchong very soon. Most of the big developers are there and the Rawang community is continually growing,” says Hew.

However, he expects the company’s development in Cyberjaya to come onto the market first as its land in Rawang still needs to be planned carefully.

Fitters has a 7-acre freehold parcel in Cyberjaya that it plans to develop into a township, tentatively dubbed Zeta Eco Park. It is currently fine-tuning the concept. As the land is located at the centre of a very mature Sungai Buloh area, delicate planning is needed to create a good environment for the people living there, says Hew.

The parcel in Cyberjaya will be developed on a joint-venture basis. It will command a GDV of RM500 million and will be rolled out in the first quarter of next year.

The projects Fitters has on the drawing board will continue to supply the group with the earnings that it has been enjoying for the past two years and this is what Wong expects from its property development segment.

“We have a lot to chew on for the time being, so going forward, we will avoid buying too much land unless it’s so attractive that we can’t refuse,” he says. “With the projects in hand, we have a sizeable GDV that will keep us busy for the next two to three years.”

This article first appeared in The Edge Malaysia Weekly, on October 28, 2013.

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