It was against this backdrop that a week later S P Setia Bhd decided to proceed with two new launches — Brio Tower in Setia Walk, Puchong, and Phase 8B of Setia Eco Park, Shah Alam, on Oct 31.
As it turned out, the RPGT move did not dampen the enthusiasm of buyers — there were long queues for both products. Those keen on the Brio Tower units had lined up the night before in front of the Setia Walk Galleria. The RM102.78-million Brio Tower is the second serviced apartment tower in Setia Walk after Solace Tower. The 27-storey block offers 254 units sized from 845 to 2,758 sq ft and priced from RM291,800 to RM1.02 million. At the end of the launch day, 127 units were sold, with sales rising to 169 units as at press time on Nov 18.
Similarly, those interested in Setia Eco Park (Phase 8B) started queuing at about 6am that day. The development features 28 units of 2-storey semi-detached homes and four units of 2-storey bungalow. The built-ups of the 32 units range from 2,835 to 4,647 sq ft. All these, priced from RM1.2 million, were sold in 1½ hours the same day.
Responding to the hot response, another 32 semidees and 13 bungalows coming up next to Phase 8B and which offer built-ups similar to Phase 8B were open for viewing the same day. Though pricing was not immediately available, some of the prospective buyers decided to make out cheques, based on the pricing of Phase 8B, to the developer in a bid to “book” these units. At the end of the same day, all the 32 semidees and 13 bungalows were “booked”.
Buoyed by the strong take-up, the developer then unveiled Phase 9C in Setia Eco Park on Nov 2. The 30 units of 1½-storey bungalow, with built-ups of 2,657 to 3,187 sq ft, have indicative prices of RM1.19 million onwards. Again, eager buyers decided against waiting for confirmation of the prices — they made out cheques, based on the indicative prices, to “book” the units. All the 30 units were taken up the next day.
Then on Nov 14, S P Setia launched Setia Eco Park Spa Villas (Phase 6C). This comprises 27 units of 2 to 3-storey villas, with built-ups from 5,338 to 7,331 sq ft. The cheapest unit costs RM4.6 million. At press time, only four units were not taken up.
S P Setia president and chief executive Tan Sri Liew Kee Sin is indeed a very pleased man. He attributes the overwhelming response to two factors — Malaysia’s stable macro-economic environment and the company’s recently-launched programme called “The Best for The Best”, which incorporates the 5/95 financing scheme.
“The country is growing; the economy is not doing that badly and not many people lost their jobs. The property market has not gone down. I was very happy [to see the good response]… it shows that the RPGT effect is not there yet.
“Many people have been complaining about RPGT, but I think 5% is minimal. The government said it will review the tax. Instead of fearing what the government will do, we just went on with our work,” he tells City & Country.
For the award-winning Setia Eco Park in Shah Alam, buyers want to live in bigger houses, says Liew. “Unlike Setia Walk, Eco Park is a driver’s city; you must drive if you want to stay here. However, it is a township with a density of only 3.5 units per acre,” he adds.
Brio Tower comes with six levels of elevated car park. What is interesting are the sky gardens sprawled on four levels, all of which will give residents a view of the forest and lake. The maintenance charge is 25 sen psf.
Another attraction is the proposed LRT station across the road and the developer’s plan to build a link connecting Setia Walk to Tesco Puchong.
Buyers of the recent launches are owner-occupiers and amenities are important to them. Liew says the Setia Walk apartment units are small and people buy them because of the concept, the proposed LRT station and Tesco facilities.Innovative schemes
S P Setia is Malaysia’s first developer to launch the 5/95 home loan package. Introduced in January this year in the face of the global credit crunch, the financial package ended in July, but not before raking in some RM1.39 billion in sales that boost group revenue to RM1.5 billion for FY2009 ended Oct 31 — a record for the developer.
Under the package, the buyer needs only pay 5% of the purchase price upon signing the sales and purchase (S&P) agreement. A loan is secured for the remaining 95%, but this will only be required to be serviced when the unit is handed over.
Why was the package stopped in July? “We sold so much, we also need to build so much… that’s why we stopped the financial package to consolidate,” says Liew. “We make sure the S&P agreements are signed; the loan agreements come through; we collect the money and, more importantly, arrange for construction to start. At the end of the day, our customers are supreme. If we sell so much and we don’t build properly and there is no quality control, customers will come and ‘haunt’ you.”
However, there seems to be no stopping this award-winning developer. Last month, it brought back the 5/95 package under its The Best for the Best programme, which will be on until April next year. The programme emphasises and promotes the developer’s unique concepts, master planning, quality control and customer service.
Says Liew: “The 5/95 package will continue as long as the banks are ready to finance us; the banks are more than willing to finance us. This time, if the customers want something special in terms of design and environment, they can come to see us and we will see whether we can accommodate them. We are telling people that S P Setia is not about 5/95 package alone; it is also well-known for development concepts, master planning, quality control and service.”
The 5/95 package was so successful that competing developers have also jumped onto the bandwagon, offering similar schemes.
Customers nowadays don’t just buy property based on financing packages available, but also take into consideration other factors such as master planning and quality control. They don’t just buy a house but also the overall planning and infrastructure, says Liew.
S P Setia is the only developer to offer a 36-month warranty after delivery, instead of the usual 24 months. Customer service is very important. Customers will be taken care of before sales and after delivery of the property, says Liew.
Two more phases in Setia Eco Park are scheduled for launch as soon as all the necessary approvals are secured, and Liew expects this to be before end-2009. Based on a preliminary marketing study, these will be a sellout, says Liew.
Asked for details of the developer’s launches in the near future, Liew says it is a “marketing secret”. “As a public-listed company, we will continue to sell. However, we cannot allow our competitors to know what we are launching. Sometimes, the best information source is the newspapers. The competitors read the newspaper and that’s it… Like the 5/95 package, we spent two months working with the banks to come out with the mechanism. After we announced it, other developers approached the banks, told them ‘give me what you gave to S P Setia and the developers followed suit the next month...,” says Liew.
S P Setia has total undeveloped landbank of more than 4,000 acres scattered in Penang, the Klang Valley and Johor. This includes two plots of land it acquired last year in Sungai Ara and Jesselton on Penang Island for RM87 million. These tracts will be used for residential development.
The KL Eco City, a joint venture with Kuala Lumpur City Hall in the heart of KL, with a minimum gross development value (GDV) of RM6 billion, is scheduled to be unveiled by 3Q2010.
“We have received the provisional development order (DO) and we are now discussing land matters. Once we get the approval, we will go for the official DO. Even though it is 24 acres, its GDV is as big as our 800-acre Setia Eco Park.
“It is a complicated project… traffic flow, public transport and master planning are some of the issues we must settle. Otherwise, no one will come to the place,” says Liew. “This is something exciting. We will start doing our preliminary marketing study in January. This eco city will be the first integrated project, with eco themes based on GBI [Green Building Index] Gold standard,” he adds.
KL Eco City in Kampung Abdullah Hukum will feature luxurious high-rise residential and commercial complexes upon completion. It is located opposite Mid Valley Megamall and The Gardens Mall.
In Setia Alam, works on SP Setia’s maiden retail venture, Setia City Mall, will start early next year. To be developed in two phases, this is a joint-venture project with Lend Lease Asian Retail Investment Fund 2 Ltd. The RM450-million Phase One will comprise a department store, 250 local and international speciality stores, major anchor retailers and an entertainment precinct. This will have a net lettable area of about 700,000 sq ft and is scheduled for completion by end-2011.
On the international front, S P Setia has gained a toehold in China and Vietnam, but there are no immediate plans to venture to other countries because the developer wants to focus on building its name and branding in the two countries.
“Vietnam has a population of 85 million and China, 1.2 billion. We need at least another five years to do well in these two countries. Progress is expected to be slow and steady... it won’t be an overnight success,” says Liew.
He says an ideal revenue contribution ratio from local and overseas operations to be 70:30 in five years. Overseas operations currently contribute less than 5% to the group’s revenue.
Going forward, Liew sees S P Setia continuing with its good sales performance in the current FY. “In term of sales, we are always No 1 in Malaysia… For FY2010, we are confident of securing at least RM1.5 billion in sales… The market will be there,” he says.
On talk that banks are going to raise interest rate, Liew says the current rate is low and it not possible to maintain it. “It is so cheap and given the current inflation rate, we know why people are buying property,” he says.
Liew expects a slow economic recovery next year. However, if China and India were to continue to boom, Malaysia will follow suit.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 782, Nov 23 – 29, 2009.
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