In recent years, a number of developers, including big property players like Mah Sing Group Bhd and S P Setia Bhd as well as new property developers like D’Pulze Ventures Sdn Bhd, have begun building in Cyberjaya.
Despite the various launches lined up throughout the year in what is touted as Malaysia’s Silicon Valley, there is a retail and hotel deficit in Cyberjaya.D’Pulze Ventures says it hopes to remedy this with its integrated development.
In 2009, when D’Pulze Ventures ventured into Cyberjaya, it conducted a market survey to determine the type of products that occupants of the cyber city needed. “When the market survey was conducted, we found that there was an inherent lack of retail [development] as well as pent-up demand for hotels in town,” COO Kan Ky-Shen tells City & Country.
In Cyberjaya, there are 40 MNCs and over 500 MSC status companies, but only one hotel, Kan points out. “The only hotel in Cyberjaya — Cyberview Resort & Spa — is usually fully booked while the other nearest hotels are located in Putrajaya.”
This means that companies in Cyberjaya, many of which are shared service centres and regional offices, are hard-pressed to find accommodation for their overseas guests or employees when they are in town. Thus, the need for an integrated development offering the necessary components, says Kan.
D’Pulze Ventures was established in 2009 to undertake its maiden project, D’Pulze Cyberjaya, which comprises two hotels, two blocks of serviced apartments and a mall. The development sits on 4.3 acres of freehold land with a gross development value (GDV) of RM500 million.
With a total built-up of 1.7 million sq ft, the overall development is expected to be completed in the first quarter of 2014. There are 505 serviced apartments with sizes ranging from 558 sq ft (studio and single bedroom) to 676 sq ft (two-bedroom). They were launched in early 2011 at RM400 to RM600 psf and were sold out. The component that stands out in D’Pulze Cyberjaya is the mall, which is slated to be the first mall in Cyberjaya when completed next year. It will have a gross floor area of 400,000 sq ft. D’Pulze Ventures has signed tenants for the mall. However, the company does not plan to reveal any information on its tenants yet.
“Instead of building apartments with retail shops, we’ll create a lifestyle-concept retail mall with good brands,” Kan says.
The two hotels, which are to be completed in June 2014, are wholly owned by the company. One hotel will be managed by Citadines and the other by Tune Hotels under Tune Group. Citadines is part of The Ascott Ltd group under Singapore’s CapitaLand. Citadines D’Pulze Cyberjaya will have 232 rooms while Tune Hotel will offer 162.
The Ascott Ltd came into the picture in 2010 when it was looking for an opportunity within Cyberjaya. According to Kan, it was a mutual agreement between the two parties. Tune Hotels came in the following year for similar reasons — it was looking to penetrate the Cyberjaya market. “The very fact that The Ascott and Tune Hotels wanted to partner us just shows the potential of the area,” says Kan.
With the hotels and the mall, the developer believes it has the right mix to create vibrancy in the area.
“We don’t want to just develop residential and commercial components in Cyberjaya. It needs to be sustainable and I believe that this retail mall will be the perfect addition,” says Kan.
“At full capacity, the development should have 3,000 or more people living in it and naturally patronising the mall. The mall’s success, we believe, will translate into capital appreciation for our apartment buyers and will ensure that our hotels are hot picks.”
With a primary catchment of not less than 450,000, Kan is confident that D’Pulze will be able to stand out in the already saturated retail market outside of Cyberjaya.
Kan’s bullishness over the project is also due to its location. D’Pulze is located along Persiaran Multimedia, right in the heart of Cyberjaya, and is surrounded by the offices of most major MNCs. It is also located directly opposite the main transport terminal.
The company acquired the land from Setia Haruman Sdn Bhd, Cyberjaya’s master developer, in late 2009. Kan says the company is very happy with the location despite having paid a premium to the market price for the land at the time.
Kan believes there is a major component missing in Cyberjaya and Putrajaya. Based on a research conducted, the catchment needs supermarkets, entertainment hubs, dining options, fashion offerings and business-class hotels.
When D’Pulze came into Cyberjaya, it was at the peak of the US subprime mortgage crisis. “Places like Kuala Lumpur and Petaling Jaya were already saturated so we decided to go into a place whose full potential people have yet to be seen and, at the same time, know that eventually, the place would grow,” Kan adds.
He points to Selangor’s demographics. “We have Batu Caves towards the north, and the Titiwangsa mountain ranges towards the east while in the west lies Port Klang. We felt these areas were already saturated. Hence, the population will naturally be heading towards the south.
“Puchong lies to the south, but it is already developed to the brim. So the next growth area will be Cyberjaya, which is just adjacent to it.”
According to Kan, Cyberjaya’s good accessibility plays a role in promoting the area. Four major highways lead to Cyberjaya, namely the Maju Expressway, Damansara-Puchong Highway, the North Klang Valley Expressway and the North South Expressway Central Link.
“Our investment in the branded hospitality industry and innovative retail mall is for the long term. We expect domestic consumption and demand to remain strong, especially in the southern region of Greater KL, given the population’s movement to the south as people continue to look for better planned cities like Cyberjaya,” says Kan.
Given the current uncertain market conditions, many would feel that sticking to what you know is the best business strategy. However, “it’s the eurozone and US debt crisis that made us want to go into properties”, says Kan.
“What can be more secure? Property development can work to hedge against a devaluing currency or rising interest rate. This is the main reason we wanted to move into this asset class.”
Although D’Pulze Cyberjaya is the company’s first development, Kan has experience in joint-venture property development projects in Penang and Perth.
From the meeting room of his office in the central business district of Cyberjaya, Kan looks out the window at the rising structure that would soon be D’Pulze Cyberjaya. Also present is his entire marketing division. “We believe that having an experienced and passionate team is the key to success,” he says.
Kan is confident that the future is full of possibilities. “Penang would be a good place to work on a business hotel and another fully integrated development with a mall,” he says. “As we are a private company, there is no rush for us to develop to meet shareholders’ expectations every quarter. Because of that we have the luxury of time to plan our next move.”
Kan also says D’Pulze Ventures plans to move into property development in Australia. However, before proceeding, there are risks to consider. “First, you have the currency risk as the Australian dollar is still very high and we’ll have to be there physically to oversee the construction. Also, the labour laws are very different.”
For now though, his main focus is D’Pulze Cyberjaya.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 906, April 16-22, 2012
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