Looking beyond the Klang Valley
It is not often that a real-estate greenhorn scores a coup, but Bellworth Developments Sdn Bhd did just that. Its maiden project, The Greens serviced apartments in Taman Tun Dr Ismail (TTDI), Kuala Lumpur, saw 50 people spending the night outside its sales gallery to express interest in the 60 units that were to be launched the next day, July 31, 2011. There are a total of 165 units in the development.
“I remember on July 30, this lady, a TTDI resident, arrived at noon, before the launch, and asked whether she could make a booking then,” managing director Kevin Kuok tells City & Country. “I replied, ‘No, you’ll have to wait until tomorrow.’ And then she said, ‘Okay, but can I queue here?’ We realised that she and her family had decided to queue up then and they were booking two units.”
By 11pm that day, a group of about 50 people were camped outside the sales gallery. Kuok says he spent that night tossing and turning in bed, worrying whether these prospective buyers could cope with the light drizzle and mosquitoes.
But by 6am, they were already breakfasting on nasi lemak and piping hot curry puffs from TTDI’s street vendors. The sales gallery opened at 8am and four hours later, 80% of the units were booked.
On that day, July 31, the units were priced at an average of RM750 psf. Kuok opines that the units were well received as The Greens was very likely one of the last new developments in the established neighbourhood.
“When we showed [the buyers] the finishes, the high-quality kitchenware and appliances, the layout and the size, they realised what we were giving them at that price, and I think they were impressed by it all.”
At the beginning of July, Bellworth had held a soft launch for 300 people comprising business associates, privileged registrants and other VVIPs. During the event, 85 units were booked, says Kuok.
Fast forward to March 3 and a further 12 units — out of 20 “directors’ units” reserved by the company, says Kuok — were taken up, bringing the total percentage of units sold to 90%. These were sold at about RM800 psf, adds Kuok.
The Greens is a RM310 million development on a freehold, 1.79-acre tract at the intersection of Jalan Wan Kadir and Jalan Damansara. Its units range from 1,445 to 3,832 sq ft in size and are housed in two 27-storey towers with a 45,000 sq ft facilities deck, all of which rest atop a retail podium with a net lettable area (NLA) of 17,000 sq ft.
Bellworth is keeping the space in the retail portion for lease and is speaking to potential tenants. “What we are looking for are F&B outlets offering international cuisine and a somewhat upscale dining experience,” says Kuok.
While the launch of The Greens was underway, the deveoper was already busy planning other projects worth a total of RM2.75 billion, he adds.
Bellworth is a subsidiary of LGB Group, which counts infrastructure, water and waste management company Taliworks Bhd, highway concessionaire Grand Saga Sdn Bhd and industrial steel manufacturer Amalgamated Industrial Steel Bhd among its subsidiaries. The group’s corporate office and Bellworth are located in TTDI.
Kuok is relatively new to Bellworth, having joined the company in 2008 as a director before being promoted to CEO a year later. He had begun his career in real estate more than 16 years ago in the marketing department of Kemayan Bina Sdn Bhd before moving on to Malaysian Resources Corp Bhd, S P Setia Bhd and Tan & Tan Developments Bhd in that order.
Determined to prove that its success with The Greens was not just a flash in the pan, Bellworth extended its property development business outside the Klang Valley and overseas as well by venturing into the UK, where it will be stamping its mark on the Royal Borough of Kensington and Chelsea.
The redevelopment of Lancer Square, an exclusive address in the Royal Borough of Kensington and Chelsea, would arguably be Bellworth’s most prestigious undertaking to date.
“The US subprime mortgage crisis had a major effect on the European financial markets. In the UK, the market suddenly over-corrected, which meant great buying opportunities at low valuations,” remarks Kuok.
“Lancer Square was owned by the Crown Estate [which manages assets belonging to the monarchy and channels the generated revenue to the UK Treasury] when it became available for sale in early 2009. For us, it was a rare opportunity to own a prime asset in one of the most sought-after locations in the West End. We bought the property for £40 million, which represents a net initial yield of 8.2% supported by strong covenants such as Warner Music UK, Jimmy Choo and Starbucks. It has incredible potential to be redeveloped into a high-end retail, commercial and residential property.”
The 1.05-acre retail centre is just north of Kensington High Street and is close to the so-called “Millionaire’s Row” that is Kensington Palace Gardens.
The prestigious property will be redeveloped into a sustainable mixed-use property with a GDV of RM1.75 billion. The redevelopment will boost the total net saleable area to 160,000 sq ft from the current 80,000 sq ft and introduce apartments and offices.
Bellworth has proposed to develop 60 luxury apartments that will range from 800 to 2,400 sq ft in size and be tentatively priced at £2,500 psf.
“Smaller units usually sell well in the area because the market there mostly comprises owner-occupiers. They are of old money as it is the ‘Millionaire’s Row’. It should be noted that property prices in the royal borough dipped only 10% during the global financial crisis in 2009, but have since rebounded by 30%,” Kwok says.
However, given the various hoops Bellworth will have to jump through to get the development off the ground, the redevelopment will understandably take some time.
Kuok says the company is in the midst of finalising the plans with the town council and planners and hopes to receive the relevant approvals by 3Q2013.
For starters, the group has to ensure that the façade of the redeveloped Lancer Square is not a radical departure from the appearance of the older buildings in the neighbourhood due to its special status as a royal borough.
In addition, to satisfy part of a 30% quota of affordable homes within the development, LGB Group acquired the adjacent Old Court Place building for an undisclosed sum. This will be torn down and rebuilt into affordable apartments.
“We are negotiating with the council. What we have proposed are larger affordable housing apartments in the area, which are fairly scarce. The typical size of most affordable homes there is 700 to 800 sq ft with two bedrooms. We’re still working it out. Hopefully, the council will agree that this is enough to fulfil the requirements.
“The town planning council is very conscious of the need to ensure a mix of economic classes in one area,” Kuok explains.
Bellworth plans to obtain LEED and BREEAM Excellence green rating certification for the project. This essentially means that Lancer Square has to be able to generate 20% of the energy it needs as well as feature other energy-saving technologies.
“There are also other limitations that we have to be mindful of. For instance, we cannot deprive our neighbours of their right to daylight. Hence, we have engaged consultants to specifically look at whether our plans will infringe on their rights. There are various submissions and presentations we have to make before approvals are granted. They are very strict in the UK,” Kuok observes.
The historic state of Melaka is where Bellworth’s other development will take place. The company plans to launch the first phase of Bellworth Melaka — a 400-acre leasehold residential development in the Hang Tuah Jaya district — at the end of this year.
This phase will cover 60 acres, comprising three pockets of 20 acres each. Bellworth plans to build 480 semi-detached houses and terraced homes, although it has not decided on the exact number or mix of homes in each phase yet.
While the built-ups of the units have not been firmed up, Kuok says he is looking at RM300,000 for the terraced houses and RM450,000 to RM500,000 for the semidees.
“It will be a combination of terraced and semidees in gated and guarded enclaves. The market has been very favourable for high-end landed homes in a secure environment. I think that is something that is doing well.
“We plan to have distinctive neighbourhoods in the master plan. Altogether, we have about 13 precincts,” he adds.
Bellworth expects to build a total of 1,600 homes in the resort-style development with an estimated GDV of RM1 billion. “We have 60 acres of land dedicated to hotels, commercial projects and another portion to schools,” remarks Kuok.
In addition, the development will include a 30-acre community park. Other nearby recreational facilities include the Tiara Golf & Country Club, the Air Keroh Golf & Country Club and the Orna Golf & Country Club.
“Bellworth Melaka is in the plan submission stage. The state government imposes a 60% bumiputera allocation on residential developments which we have to abide by.
“Therefore, it is crucial that we have a robust product strategy to balance the dynamics between residential and commercial sales to optimise our cash flow position,” Kuok says.
Back in TTDI, coming up next to The Greens is Menara LGB, a 31-storey office tower that is aspiring to qualify for MSC status and Green Building Index and Singapore Green Mark Gold certification.
Currently, Bellworth is in talks with two potential major tenants, but Kuok declines to reveal more as these tenants are still “shopping” around for space.
All Kuok will say is LGB Group’s various companies are expected to take up 100,000 sq ft of the 410,000 sq ft of net lettable area in the building. If the deals go through, the major tenants are expected to take up another 100,000 sq ft or so, leaving about 50% of the building for smaller tenants.
“We have received a lot of enquiries from nearby companies, but we are very selective about our tenants … we would rather have a few taking up more space to ensure less problems with the leases,” says Kuok.
Currently, the office tower is 50% completed and the whole building is expected to be completed in 1Q2013.
Bellworth is also hunting for more pockets of land in the Klang Valley, especially prime land in mature areas. “Expect some deals to be confirmed in the coming months,” Kuok says, refusing to divulge more.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 902, Mar 19-25, 2012
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