City&Country: Cover Story-- An icon rises in Kota Kinabalu

Prime land for development in the central business district (CBD) of Kota Kinabalu, Sabah’s capital city, is not easy to come by. So, when a 2.5-acre parcel came up for auction three years ago, businessman Datuk David Chu seized the opportunity to add to his landbank and acquired the site.

The coastal land, part of which encompasses the sea near Jesselton Point is now the site of The Jesselton Residences, which will be the tallest project in town when completed. Instead of reclaiming part of the sea, the project will be a cofferdam construction.

Chu, who is executive chairman of Jesselton Waterfront Holdings Sdn Bhd, says the mixed development is set to be the CBD’s next icon upon completion in 2015. Jesselton Residences will have three 30-storey towers, comprising residential, retail and basement levels. The developer is Palikota Sdn Bhd, which is wholly owned by Jesselton Waterfront Holdings.

The 52 year-old Sabahan started out as an insurance agent after completing high school at Sekolah Kebangsaan St John’s in Kota Kinabalu. “I always admired successful people and after some time as an insurance agent, I went to work as a car salesman. I bought my first house when I was 21. I then went on to start my own business selling second-hand cars,” he reveals. He believes that to be successful, it is important to be observant,  to listen and learn from other people, as well as to be persistent.

Chu has come a long way since. Besides his property  development business, he is the executive director of public listed Widetech (Malaysia) Bhd, which is involved in the food services, leisure and entertainment industries.

Jesselton Residences, Chu’s most significant property project so far, has a gross development value (GDV) of over RM600 million. He tells City & Country that the tallest building in Kota Kinabalu’s CBD is now only 15 storeys because of flying path regulations. Jesselton Residences, however, is situated beyond the flying path although Kota Kinabalu International Airport is a mere 10 to 15 minutes away.

The 2.5-acre commercial leasehold land, which he acquired  for RM12 million three years ago, is now worth about three to five times more, he says.

He believes the site is the “last piece of commercial and privately owned land in the central business district of Kota Kinabalu”.

The project will have 333 units in total within three blocks, offering views of Tunku Abdul Rahman Park islands just 3km from the mainland, as well views of the city and Sutera Harbour Golf Resort, he says. The higher units offer views of Mount Kinabalu, Yayasan Sabah and Karambunai Resort. The two- and three-bedroom units, with built-ups of 900 to 2,200 sq ft, are tagged at RM700,000 to RM2.4 million. More than 50% of the units were sold before the launch on June 28.

There will also be nine duplex penthouses, the biggest of which is over 6,000 sq ft in size. “Our penthouses are priced at about RM10 million and are not open for sale to the public but by invitation only,” says Chu. The price for the penthouses works out to about RM1,500 psf while the standard units range from RM600 to RM900 psf. Chu says the pricing is comparable to nearby developments such as Asian Pac Holdings Bhd’s KK Times Square, which was recently launched at about RM600 to RM800 psf.

The design maximises sea views from every bedroom, with huge balconies for sun-shade and cooling purposes, says the developer. 

The project also offers 100,000 sq ft of retail space over three levels. “It will be more like a boutique mall offering luxury, designer retail and F&B outlets facing the waterfront and open to the public. We are thinking of selling only 30% of the retail space to close associates and keep the rest, especially those on the ground floor, for recurring income,” says Chu, adding that a very grand entrance statement facing the sea is being planned.

Just beside Jesselton Residences is Suria Sabah Shopping Mall, one of Sabah’s largest malls. “Basically, those living in Jesselton Residences do not need a car. They just have to go down, walk a few minutes and there’s Suria Sabah and many international banks. Less than five minutes' walk away, there’s the Hyatt Regency Kinabalu Hotel and other amenities," says Chu.

He  describes the current city landscape as rather “flat and under-capitalised”. “I hope Jesselton Residences will pioneer the regeneration of Kota Kinabalu's commercial hub and the transformation of its urban landscape, consolidating residential and commercial developments to allow affluent, inner-city residents to live and work in a metropolis.

“With the beautiful views of the South China Sea and Tunku Abdul Rahman Park islands, we should emulate the coastal developments of Hong Kong, California, Singapore, Australia and other successful resort cities of the developed world and envision a city that is vibrant both day and night,” he says.

“We must take full advantage of the magnificent views of our seafront properties and develop the most luxurious, high-end products to increase the value of our urban developments as well as the value of our destination.”

The developer believes that more people, including Sabahans, are beginning to appreciate such developments, as they become more affluent and  exposed to the lifestyle products in other countries. Many families with children studying in Australia, for example, have expressed interest in the development, says Chu, who is a father of four.

"More Sabahans are now appreciating waterfront properties. Most of our buyers are locals. Some of my friends visit the showhouse with their children who are currently studying in Australia — Sydney, Melbourne, Brisbane — and they really appreciate Jesselton Residences and what we are offering,” he explains. He adds that his eldest son recently returned from Australia to join the company.

He believes in the prospects of property investment in KK, especially when the city begins to fulfil its development and tourism potential.

“We have been asked to do road shows in Singapore, Hong Kong and even Korea but if we can sell all the units locally, then of course we do not need to do international road shows,” he says when asked if there are plans to market the project internationally.

Local expertise
“I am proud to say that most of my key consultants are Malaysians based in Sabah. The design of Jesselton Residences is also exclusively designed by Sabah architects. We have hired the world-renowned Oriental Group of the Arcelor Mittal conglomerate to do the cofferdam construction as there will be no reclamation of land,” Chu says. The Oriental Group has extensive experience in cofferdam construction, which is the norm for seafront developments worldwide, he says.

“This will be the first such development (cofferdam) in Sabah where car parks and shopping spaces are built under the sea,” he notes.

Among the facilities are an infinity pool overlooking the sea, gymnasium, saunas, a party pavilion and viewing decks on the seventh floor. The residential units are located from the eighth level.

On the property scene in Kota Kinabalu, Chu says the Sabah market is vibrant. “There are many new developments right now in Kota Kinabalu. We also have the big boys there. Cash-rich Sabahans, especially planters, are always looking to invest in properties, especially retail and condos, as they see the value in such investments.”

He adds that tourist arrivals are rising and the Kota Kinabalu International Airport is the second biggest and busiest airport in the country after Kuala Lumpur International Airport. The airport receives direct flights from countries such as Australia, the Philippines, China, Korea and Japan, as well as private planes.

That is good news for him as he also owns the 90-room Kudat Golf & Marina Resort, built in 2003. The resort charges RM300 a night for seaview rooms and RM100 to RM300 for the other rooms.

“Many Koreans come to Sabah just to play golf. In fact, I have many Korean guests who come to my resort which is just beside a golf course [which is not owned by him], as it is so much cheaper than playing golf in their own country,” says Chu. A travel and golf enthusiast himself, he travels frequently to Kuala Lumpur and Australia for both business and leisure.

Damai Residences
Chu has been actively acquiring land since three years ago, including a 5-acre tract in Damai, an established suburb in Kota Kinabalu, which is set to be the site of Chu’s next project — a mixed development called Damai Residences.

The site, just 10 minutes from the Damai city centre, is easily accessible from both Jalan Damai and Lintas Highway. It is also close to public and private secondary schools, government hospitals, the Sabah Medical Centre, as well as the Sabah Golf and Country Club.

Damai Residences will consist of 580 residences and 10 units of 4-storey boutique offices or neighbourhood retail units with lifts.

The RM650 million development will offer 14 units of 4-storey garden villa townhouses and 14 units of 4-storey pool villa townhouses with private car parking lots for four cars, individual lifts and roof terrace. There will also be 152 units of loft residences within a 38-storey tower with built-ups of 2,200 sq ft, as well as 400 apartments within a 40-storey tower, with built-ups of 900 sq ft for studios to 1,800 sq ft for corner units.

Damai Residences will be launched some time next year with indicative prices of RM600 psf. In the meantime, Chu is actively looking for more landbank within prime areas in Kota Kinabalu.

“It is not easy to get prime land here. For now, I am focusing on Kota Kinabalu but Kuala Lumpur may be an option in the near future. It really is all about the location.

“Prices for properties in Kota Kinabalu at around RM800 psf are still considered cheap. I am convinced that the property market will continue to be vibrant here. I may also consider listing my company in the future,” he says. For now, he adds, he plans to focus more on property development than on his other ventures.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 869, Aug 1-7, 2011