City & Country: Going Big

Belleview Group was thrust into the limelight when the Penang government recently appointed the developer to revive a massive abandoned project. Founder and managing director Datuk Sonny Ho says with more launches in the pipeline and a planned listing on the local bourse, the company is set to move into the next league. Racheal Lee has the story.

Belleview seeks Greater Exposure

Penang-based Belleview Group has been able to keep a low profile until recently when it was appointed by the Penang government to revive an 11-year-old abandoned property project in Taman Cemerlang, Bandar Baru Air Itam — one of the largest, if not the largest, abandoned projects in the state.

The new building plan, comprising two developments — All Seasons Park and Place, as well as Melody Homes — was approved on Feb 20. The group has also resolved the outstanding loan of RM40 million.

Another project that has brought the developer into the limelight is the RM300-million 1st Avenue retail mall — a joint venture between the group, Asian Retail Mall II Ltd and Lion Group — in Georgetown with 400,000 sq ft of retail space.

Competition from established listed players, such as S P Setia Bhd, IJM Land Bhd and Mah Sing Group Bhd, which have been expanding in Penang in a big way in recent years, has also prompted Belleview to seek greater exposure for its projects and the company.

To build a stronger brand and gain more recognition in the market, Belleview’s founder and managing director Datuk Sonny Ho hopes to float the group on the local bourse before his retirement in 2014.

He is now training senior managers to prepare them to head the company’s development portfolios upon listing.

Nevertheless, Ho believes that Belleview is one of Penang’s “blue-chip developers” today, and has advantages over KL-based developers such as its local knowledge of the market, its background as a truly Penang developer and its ample landbank there.

“I came to Kuala Lumpur 20 years ago to hire award-winning architects [like what other KL-based developers were doing] to work for me, so my profile looks very much similar to those in KL. We don’t feel inferior and I feel that we have the same experience [as other developers],” Ho tells City & Country in Kuala Lumpur recently.

He cites All Seasons Park and Place, which is designed by an Australian architect, and 1st Avenue shopping mall designed by a Canadian architect.

And, while other developers are trying their best to go into Penang, Belleview is also looking to undertake projects in the Klang Valley through joint ventures with landowners. Nevertheless, Ho says this will only happen in two to three years as he does not want to strain the company’s resources, both financial and manpower.

RM800 million worth of launches
The group has not seen many launches in 1H2009 due to the global economic meltdown, but it started to launch projects in 2H2009 and has achieved RM250 million in sales so far.

It is now less than one month to 2010, and Belleview has planned six launches, from now until end-2010. Among the launches is the long-awaited freehold All Seasons Park condominium. The other component is All Seasons Place, a retail offering.

An artist's impression of the All Seasons Park and Place in Taman Cemerlang, Bandar Baru Air ItamLaunched on Dec 5, All Seasons Park will be the largest condo project in Penang, says Ho. The commercial component — the 2-storey All Seasons Place with 120 retail units, located below the condo component — is scheduled for launching by January next year.

Offering 808 units in four blocks with built-ups from 856 sq ft to 2,333 sq ft, the RM400-million All Seasons Park condo will be launched in two phases. These will be tagged from RM248,900. The 45,000 sq ft All Seasons Place will be leased out to control its tenant mix, and the developer has already secured a supermarket as the anchor.

“The commercial factor is important for a development and it must have a right mix of ingredients. We may sell it en bloc later,” says Ho.

Affordable development Melody Homes, which comprises 500 apartments, will also be officially launched next year. These units, of built-ups from 700 sq ft, were opened for sale July this year from RM159,900. At press time, some 50% has been taken up.

An artist's impression of the RM300-million 1st Avenue retail mall in GeorgetownTo recap, in 1996, the owner of the 20-acre Taman Cemerlang site, Cekal Berjasa Sdn Bhd, had teamed up with Penangan Maju Sdn Bhd to build 1,369 apartments. However, the project was abandoned in 1998 after Penangan Maju defaulted on a loan and was wound up the following year. More than 1,200 purchasers who had paid between 10% and 20% of the purchase price were affected.

The project in Taman Cemerlang is Belleview’s third rehabilitation project. In 2005 and 2006, it revived a total of 824 units of property in Bandar Baru Air Puteh, Balik Pulau in Penang and Kulim Techno City, Kedah.

The next rehabilitation project by the group is the redevelopment of Plaza Tunku Yaakob into a commercial project, offering the largest shopping mall and the first 5-star hotel in Alor Setar, Kedah.

Other launches scheduled for next year are Bukit Dumbar Residences, 6-Western Avenue, high-end condominium development Moulmein Rise and landed project W Residence. All six projects, ranging from high-end to affordable, are estimated to have a total gross development value of up to RM800 million.

Bukit Dumbar Residences will offer 62 units of 3-storey terraced homes and semidees, with built-ups of 2,792 sq ft and 3,288 sq ft, respectively. Meanwhile, 6-Western Avenue will see the development of six 2-storey bungalows, with built-ups ranging from 6,000 sq ft.
Moulmein Rise and W Residence are still under the planning stage.

Ho hopes these developments will be sold out by end-2010 in view of the country’s stable economic recovery. Moreover, there are indications that the electric and electronics and semiconductor manufacturers in Penang have started hiring workers in response to fresh orders coming in for 1Q2010.

Last year’s global economic meltdown is the third economic crisis Ho has experienced in his 30-year career. These “risk-management experiences” have augured well for the group. The 1998 Asian economic crisis, which caught most developers off-guard, had taught the group to be cautious and not to depend on one type of development alone, says Ho.

From the high-end-only developments such as Mutiara Villa in Bagan Jermal, Penang and Bellisa Court in Pulau Tikus, Penang prior to the Asian crisis, Belleview has diversified into various kinds of developments, based on the mantra “rain or shine, the company must survive under any circumstances”.

“We learnt from the economic crisis in 1998 that we can’t depend on high-end projects alone. So we restructured the group’s portfolio and spread our base from high-end to affordable developments. We want the group to be more versatile. When foreigners shy away during downturns, there will still be local buyers,” he adds.

Right timing
Location, location, location — this is the golden rule in property investment. For Ho, however, it is always “timing, timing and timing”. He says right timing is crucial in developing good projects, besides the basic ingredients of experience, market study and knowledge of the location.

“Going into and getting out of the market at the right time” has become one of the group’s core strategies.

What is the definition of right timing? “I’m not a fortune teller... but the economy has its cycles. In the property business, we always know that the property market will follow suit six months after the stock market’s bull run.

“When the stock market is down, it is time to grab land. Most of the companies and banks are weak at this time, and it is a good time to get a good deal. Locations sometimes don’t work, but timing always works,” says Ho.

“That’s the same for recovery. As a developer, you want to sell when market confidence is high so that you can price the property with a good profit margin. You have to make sure that you hit the economic cycle at the correct time… enter to get land when the market is bottom and exit when market confidence is strong, take-up rate is firm and pricing is good,” he adds.

Ho believes that the creative loan packages offered by banks will continue for a while until a real recovery is experienced, hence, there will still be more property investment opportunities coming.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 784, Dec 7-13, 2009. 

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