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This woman has come to inspect the site more than eight times. Once, she even brought along a consultant and she has yet to make a purchase. It’s so frustrating,” shares Peter Chan, CEO of Superboom Projects Sdn Bhd, the developer of The Haven in Ipoh.
Chan finally asked the woman what was stopping her from buying a unit. She gave two reasons; she was worried the end product would not be as beautiful as advertised and she wanted to be completely sure it would be a good investment.
“A lot of investors like to evaluate and wait, and then wait some more. By the time they buy, the price would have gone up and they end up paying a premium and earn a lower yield. It’s this mindset of wanting a sure thing. But there’s no such thing as a sure thing,” says Chan.
Since the project began, The Haven in Ipoh has been faced with many like-minded potential buyers. The developer had admitted to City & Country a year ago that selling The Haven would be a challenge, given its concept and pricing, especially in a sleepy hollow like Ipoh. When the project was announced, it sparked a lot of negative perceptions and continues to do so today.
“People were saying nobody wanted a luxury condominium here and even the banks did not want to give us the financing. I had to bring the bank officer to the site to convince him, then I had to do the same with his boss. This went on until one of the banks took a chance on us,” recalls Chan.
He says Superboom saw an opening in the market in Ipoh for premium condominiums and decided to go ahead with the project.
The 10-acre leasehold project is next to Sunway City Bhd’s Banjaran Hot Springs and just down the road from Sunway City Ipoh. It comprises 489 units of luxury condominiums spread over three blocks, with a gross development value (GDV) of RM250 million.
Built-ups range from 893 sq ft to 5,500 sq ft. Next to it is a four-acre lake surrounded by age-old limestone hills. Sitting in the centre of the lake is a 280 million-year-old limestone outcrop named Rockhaven.
Chan understands where the negativity is coming from. In the last two decades, Ipoh has been flooded with mostly ordinary housing projects. Supply exceeded demand and this led to a lacklustre property market and poor yields. There is also the question of whether residents would want to live in condominiums when there is plenty of land and landed properties around.
However, Chan has taken the challenges head on.
“I have a lot at stake. We have invested so much money and time in the project. When we first came here, this place was a dump,” says Chan, adding that the design was changed 45 times before the company was satisfied with the product.
Before this, Superboom had developed the low-cost, 576-unit Permai Lake View Apartments with a GDV of RM32 million. The gated-and-guarded development sits on the road leading to The Haven. It was launched in 2004.
“In the beginning, valuers in town would not set any value on Permai Lake View because they said it was too far away and nobody wanted low-cost apartments. Similarly when we did Subang Galaxy in the Klang Valley, we were told homes in that area would not fetch good prices. But we went ahead and proved them wrong,” says Chan.
Subang Galaxy, which was completed in August 2009, comprises 175 units of terraced houses and has been fully sold. The development has a GDV of RM60 million.
Within two years of completion, prices for Permai Lake View have risen to around RM80,000 from the launch price of RM55,000, while Subang Galaxy prices have climbed to more than RM500,000 from the launch price of RM270,000.
Chan, who says he can’t afford to fail as at 61 he’s too old to start all over again, now wants to prove the naysayers wrong about The Haven.
A product of international talents
One of the first things Chan did was to hire two international contractors through open tender, China-based Beijing Construction Engineering Group Co Ltd and Malaysia-based Bina Puri Holdings Bhd.
To ensure quality management, Best Western International, the world’s largest hotel chain, was appointed to provide professional management services to purchasers, including helping them to source tenants. Best Western will manage the development as a four-to-five-star hotel, similar to a condotel, targeting medium-term stays.
“Best Western is giving a 6% per year rental guarantee for the first three years,” says Chan.
In addition, Superboom has seen encouraging results from its partnership with Tasweek Real Estate Development and Marketing, a major real estate services company in the United Arab Emirates, to market The Haven in the Middle East, he says.
Sales of phase 1 have hit 80% since the launch about a year ago, while Phase 2, launched in September 2010, is 60% sold. Phase 3, launched in January this year, is 20% sold.
Units in the first block were sold at RM330 psf while current prices are up to RM390 psf. Chan estimates prices will hit RM450 psf by the time the project is completed in 2013.
About half of the buyers are from Ipoh, which has surprised some people.
“We had to break mindsets to sell. These people are buying to stay — some are young families and some are retirees. The other buyers are from Singapore, Kuala Lumpur and Johor looking for a vacation home or an investment,” says Chan.
There is a constant stream of visitors to the sales gallery. In fact, he says, due to the overwhelming interest, visits to the sales gallery will be by appointment only starting from April.
According to a property consultant familiar with Ipoh, however, the sentiment among the locals is still generally negative.
“It may offer the best in terms of design, concept and finishing, but many locals are put off by the Klang Valley prices. However, we do see interest from those outside Ipoh or Ipoh-born folk who want to invest in properties in Ipoh,” says the consultant.
Chan counters that a development of similar quality as The Haven in the Klang Valley would cost about RM600 psf, which is almost double the cost of The Haven.
“People who argue that The Haven is selling at Klang Valley prices are incorrect. It’s the price of a medium-cost development in the Klang Valley but you are getting a luxury development here,” says Chan.
Taking The Haven abroad
Chan feels people tend to underestimate Ipoh as a vacation spot and an investment destination. He believes in the investment potential in Ipoh becuase it has ready infrastructure, low cost but high quality of living, ample land and a laid-back charm.
“Of course, you can’t forget the food,” he notes.
“Penang is becoming overbuilt and prices in the Klang Valley are climbing ever higher. Smart investors looking for high returns will have to start looking for something fresh and new, in places like Ipoh, for example, where on a dollar-for-dollar basis, one is able to enjoy a higher quality of life at a lower cost.”
Many would beg to differ, however, including the property consultant, who says Ipoh is usually below the radar of foreign investors. He sees good potential though in promoting Ipoh as a place to retire.
“People are talking about Taiping and Ipoh as good places to retire to but the price of The Haven may not be what many retirees can afford,” says the consultant.
While the price tag may seem hefty for the locals, Chan believes it will play a big role in determining its success overseas as it is only a fraction of the prices of developments of equal quality in Hong Kong and Singapore.
Ideally, Chan wants 50% of the buyers to be Ipoh folk, 25% from other states and the rest from overseas.
Aside from the Middle East, the developer is also looking to promote the project in China, where its ties with Beijing Construction will help lend credibility. He notes that the Chinese government is curbing property speculation in the country so investors’ money must find somewhere to go.
“We will not raise the price overseas as it will be seen as cheating the buyers. I believe it will come down to buyers’ confidence in us,” says Chan, who expects the last batch of buyers to come from abroad.
He believes the development proves that there is demand for luxury homes in Ipoh. However, he is unsure if there will be sufficient demand for similar products in Ipoh.
“As of now, I have yet to hear of any such developments by other developers,” he says.
Building what people need
Right now, Chan has six new project propositions sitting on his desk — in Johor, the Klang Valley, Cameron Highlands and Ipoh. He declines to reveal any details.
“Now that we have tied up with Best Western and Tasweek, the next project should be easier to move,” he says. The developer will concentrate on high-rise, resort living as well as eco-living developments within Peninsular Malaysia and is looking to create a recognisable brand under The Haven banner.
However, as a niche developer, “We will focus fully on one project, roll the money and resources and then move on to the next project. We are not looking to make obscene profit, but enough money to keep the company going,” says Chan.
He is determined not to let negative perceptions and rumours get in the way of its developments.
“We are committed and confident in the product. When it’s done right and without any misrepresentation, people will come around,” he says.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 852, Apr 4-10, 2011
