City&Country: Cover Story-- Growing organically

Mahabuilders Bhd, which is also known as the “white knight” of Johor for its track record in reviving abandoned housing developments in the state, is developing its own projects on undeveloped land now. In fact, it embarked on its first luxury residential development called Horizon Residence in Johor recently.

“We started looking at greenfield property development five years ago to grow organically,” says Steve Wong, general manager of Mahabuilders. One of the measures taken was to bring in more professionals to enhance the Mahabuilders brand.

The company was incorporated as Mahadun Benaan Sdn Bhd in 1983 by Mahadun Abd Rahim, Md Said Hassan and Sim See Kiong. It was initially involved in the construction of public institutions such as schools, municipal buildings and mosques in Johor.

After changing its name to Mahabuilders Sdn Bhd in 1994, the company made its first foray into property development. It started work on the then abandoned Taman Baiduri, which had a gross development value of RM30 million, in 2001. The housing project was completed in 2004.

The company then went on to revive other projects, such as the Skudai Ville Apartments and Taman Renggam Jaya, thus earning itself the moniker white knight.

Today, Mahabuilders has over 800 acres of land primarily in Johor for proposed projects with a total estimated GDV of RM2.5 billion. Wong says it will take about 8 to 10 years for the landbank to be developed. The developer’s construction order book value for the next two years is RM300 million, he adds.

In line with its goal to list on Bursa Malaysia eventually, the developer changed its name to Mahabuilders Bhd in April this year. However, says Wong, it is still early days for a listing and the company is taking its time to build its portfolio.

While most of its current projects are located in the south, Mahabuilders is on the lookout for projects in other areas as well as joint ventures with other companies. “We are also looking at land that has immediate development potential all around Malaysia, including Kuala Lumpur and Seremban,” says Wong.

For now, the company is focusing on developing the Senai Industrial Park, residential projects Desaru Utama, Cahaya Kota Putri, M’tiara Apartments, and Horizon Residence.

Horizon Residence
Located in Bukit Indah in Zone B of Iskandar Malaysia, the RM160 million Horizon Residence sits on 5.58 acres of freehold land and is slated for launch early next year.

“Horizon Residence is part of a 21.5-acre site planned for projects with a total GDV of RM333 million that will take five to six years to be fully developed,” says Wong.

The remaining 15.92 acres will offer shopoffices (with a GDV of RM50 million and covering 7.45 acres) and another high-end condominium (GDV: RM250 million; land area: 8.47 acres).

Horizon Residence comprises two 23-storey towers with a total of 440 units. Tower A has 238 units (size: 1,200 sq ft; price: from RM390,000) while Tower B offers 202 units (size: 1,095 sq ft; price: from RM355,000).

There will be 10 to 12 units on each floor.

The “special” units in the towers come with a balcony garden each and built-ups of 1,600 sq ft onwards. The ones in Tower A cost RM526,000 while those in Tower B have a price tag of RM467,000.

The duplex penthouses in the towers have built-ups of 1,900 sq ft onwards and are priced from RM784,000.

“Each unit has 11ft high ceilings and comes with kitchen cabinets and wardrobes. The condominium has full facilities for its residents, like a gym, swimming pool, a multi-purpose hall and three-tier security features,” says Wong.

The project is just a stone’s throw from a forest reserve while Bukit Indah itself is a developed township with an estimated population of 60,000, he adds.

Horizon Residence is also close to the second link expressway to Singapore.

The developer is targetting Singapore’s permanent residents who prefer to live in Johor Baru although they work on the island. Wong says there is demand for high-end condominiums in Johor from this group because property prices in the state are more affordable than in Singapore.

Senai Industrial Park
With a GDV of 320 million, the Senai Industrial Park is located on the western side of the state and stretches over 125.8 acres. It is being developed in stages and is 10 minutes away from the Senai International Airport by road and not far from the Port of Tanjung Pelepas.

“This area is already operational as there were some factories in the vicinity when Mahabuilders took over the project,” says Wong. The developer has since refurbished a number of the buildings and sold some and leased some.

Due to the generous amount of land, Mahabuilders was able to build factories to meet the needs of clients.

“We were able to build factories to the specifications of customers on plots that were larger than, say, 10 to 15 acres, depending on their requirements,” Wong observes.

The latest launch in the industrial park was a 15 to 20-acre project with a GDV of RM60 million, comprising 54 semi-detached factories. Type A (22 units) lot sizes start from 22,000 sq ft and have built-ups of 9,920 sq ft onwards. Prices start at RM1,754,800. The Type B (32 units) lots are smaller (size: 8,400 sq ft; built-up: 4,500 sq ft) and prices start at RM848,000. The take-up rate for Type A and Type B is 40% and 50% respectively.

Some plots in the industrial park will be sold if the price is right. However, the developer’s strategy is to lease out the factories. “This will be a form of recurring income,” Wong says.

Desaru Utama
Another project that Mahabuilders is busy with is Desaru Utama on the eastern part of Johor.
This 438-acre joint venture development with Southeast Johor Development Authority (Kejora) is situated in Bandar Penawar, Desaru. With a GDV of RM800 million, it will take about eight to nine years to complete.

“The township is located 1½km from the Pasir Gudang-Desaru Highway. And the area will be surrounded by educational institutions such as Institut Sains and Technology Darul Taksim; Institut Kemahiran Belia Negara and Bandar Penawar Sports School,” says Wong.

About 133 acres are being developed now, with some of the homes launched in 1H2010.

The 175 units of 1-storey terraced homes in the project with a built-up of 987 sq ft are priced from RM96,300 while the 110 units with a built-up of 1,095 sq ft cost RM124,000 onwards. Their take-up rate is 90% and 70% respectively.

Also launched were 24 units of 1-storey and 66 units of 2-storey semi-detached homes. Some 45% of the former (built-up: 1,564 sq ft; price: from RM289,800) have been sold while 30% of the latter (built-up: 2,200 sq ft; price: from RM369,000) have been taken up.

Meanwhile, close to 90% of the 13 bungalows (built-up: 3,000 sq ft; price: from RM459,450) that were launched have been sold.

The developer plans to offer 80 units of 2-storey shopoffices — with a built-up of 3,080 sq ft and priced from RM428,000 -- by the end of the year or early next year.

The freehold 55-acre Cahaya Kota Putri in Plentong, Masai — with a GDV of RM295 million — is another of Mahabuilders’ ongoing housing projects. The first phase of the development features 278 units of 1-storey terraced homes at prices ranging from RM130,800 (built-up: 973 sq ft) to RM153,780 (built-up: 1,096 sq ft). There are also 56 units of 2-storey terraced homes — with a built-up of 1,905 sq ft and priced from RM250,800 — on offer. Already, 80% of these homes have been sold.

In Larkin, the developer is working on M’tiara Apartments, a five-acre leasehold project with a GDV of RM78 million. Some 70% of the 400 units (size: 1,006 sq ft; price: from RM199,700) housed in two towers have been sold since their launch in 2009.

Samuel Tan, executive director of KGV-Lambert Smith Hampton (Johor Baru), says Mahabuilders’ projects should do well because of their generally good locations and affordable pricing. The houses in Desaru Utama, especially, would attract second-generation Felda settlers, he adds.

“There is also the possibility that the Desaru area will be developed into a tourism belt and the nearby Teluk Ramunia promoted as an oil and gas hub. The near-completion of the Senai-Desaru Highway and the possibility of a third link from Singapore to this region, as proposed by the prime minister, will make the area more accessible,” he says.

As for Cahaya Kota Putri, Tan sees house prices here appreciating due to the soon-to-be-completed Southern Link.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 834, Nov 29-Dec 5, 2010