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City&Country: Encorp raises the bar

We want to establish ourselves as one of Malaysia’s top 10 developers in three years,” announces Yeoh Soo Ann, group CEO of Encorp Bhd.

That’s a bold statement, considering the young age of the company’s property development arm. Encorp started as a construction management outfit and launched its maiden property development, Cahaya Alam, in 2004.

Located in Section U12 of Shah Alam, the leasehold 209 acre mixed development has a gross development value (GDV) of RM630 million and comprises link and semi-detached homes, apartments, shop offices and a school. To date, 272 of the 2,414 residential and commercial units have been built, with the rest expected to be ready by 2015.

Over in Kota Damansara, Selangor, Encorp is busy with Encorp Strand, an ongoing mixed development with a GDV of RM1 billion. The company views this as its flagship development that will elevate its profile in the development arena.

Sitting on 45.6 acres of leasehold land, Encorp Strand comprises four components — the Strand Business Suites (3½ and 4-storey shop offices), Garden Office, a shopping mall that comes with a covered, climate-controlled boulevard, and serviced apartments. The 40-storey serviced apartment block, with units ranging from 600 to 2,500 sq ft, will sit atop the mall, with facilities located at the podium rooftop level. These will include a swimming pool, covered tennis courts, gym and clubhouse.

The entire development of Encorp Strand is targeted for completion by 2015. The first to be completed —  the Encorp Strand Business Suites comprising 265 shop offices — was launched in 2005. Fully sold, the units were handed over in October 2008.

The developer is launching the Garden Office on Saturday, Nov 21. Comprising 14 blocks of office and retail outlets, units measure from 1,700 sq ft onwards and are priced between RM1.2 million and RM1.8 million.

“We challenged the architect to create something different. We are fortunate to work with an architect who has done a lot of projects overseas and thus, brings with him a wealth of experience and creativity,” says Yeoh. French architect Nicolas Ayoub of Conceptua Paris de Strand was brought in for the design that offers architectural influences from other parts of the world, such as the tree-lined cafés in Paris and features from London’s Strand.

The Garden Office has been designed with green living in mind. Features include rain water conservation for domestic and sprinkler use, natural sun shading through the strategic orientation of building blocks, sky gardens on all blocks which act as heat insulation during the day and lush landscaping combined with cascading waterways along the boulevard.

“The challenge is making green interesting. I believe what we have come up with is not only aesthetically appealing but every feature is well thought out too,” offers Yeoh. The Garden Office is scheduled to commence construction in mid-2010, with completion in 2012.

Under construction is the Encorp Strand Shopping Mall, with a total net lettable area of 308,800 sq ft that will feature themed floors, such as family, luxury, and entertainment. The retail outlets will be leased.

One might question the wisdom of building yet another mall in an area within a 5km radius of established malls like 1 Utama, The Curve and Ikano. The decision was taken after a survey by a consultant, says Yeoh. “There are 400,000 homes within a 5km radius of our site and 43% of them are earning more than RM50,000 per annum. And [as] most malls are overcrowded, weekends can be a nightmare. That is what we hope to offer — a good neighborhood mall that caters to the daily needs of the residents, without the hassle of traffic jams and large crowds.”

Also under construction is the 800ft-long Encorp Strand Boulevard, which will offer themed dining and entertainment outlets. It will boast the only free-standing F&B platform of its kind in Malaysia — 28ft wide and 500ft long, and linked to the balcony of the first floor of units of alfresco dining along the Boulevard.

“Right now, the rents for the shop offices at the Strand Business Suites are around RM4,000 to RM5,000 for a 1,500 sq ft unit and RM10,000 to RM13,000 for a 6,000 sq ft unit. Since launching in 2005, selling prices on the secondary market have gone up, from RM1.08 million to RM2 million in two years,” says Yeoh.

Encorp’s executive chairman Datuk Seri Mohd Effendi Norwawi weighs in on the development: “In keeping with our track record, our development has been planned to deliver outstanding investment value, not only to those who purchase units in the initial phase but for everyone who will eventually visit and patronise this remarkable residential, entertainment and lifestyle community.

“When we first envisaged the idea of Encorp Strand, one principle was paramount — this would not be an ordinary office block or shopping mall, it would be an experience. Upon completion, Encorp Strand will raise the bar for residents living within a 5km radius, whether they plan to run a business or are simply looking for a new and exciting leisure, entertainment and lifestyle experience,” adds Mohd Effendi in an email.

Cahaya Alam
The development of Cahaya Alam, Yeoh says, is based on a concept of affordable properties in a parkland setting, targeting middle-income families. Cahaya Alam offers a “zero-defect” plan, meaning all properties handed over will be defect-free. So far, three phases have been launched and all the 272 two-storey link houses sold. A soft launch for Phase 4 (Camellia), comprising 167 units of 2-storey link houses and priced at RM359,900 onwards, was held on Oct 10. Buyers get to choose from a bare, semi-furnished or fully furnished unit. The take-up rate since the launch is 70%.

Encorp Bhd was incorporated in March 2000 and listed on the main board of Bursa Malaysia on Feb 11, 2003. The company has two core businesss — property development and construction management. Construction management arm Encorp Construct has managed projects that include Cahaya Alam as well as the construction, upgrading and refurbishment of schools and hostels in Sarawak.

Encorp wants to see the two divisions contributing equally to group revenue within two years.

Encorp, Yeoh says, had always intended to be a property developer, which was why the two tracts of land where Cahaya Alam and Strand Encorp are being developed was purchased in 2001. “At the time, Kota Damansara was still a new area and the demand was slow. We knew the market was not ready for a major development like Encorp Strand. So, we decided to wait and focused on construction projects instead,” says Yeoh.

This was a period of learning for the company. A lot of time was spent brainstorming ideas and concepts, analyzing projects by other developers, and understanding the market.

“We believe that if everything comes together the way we want it to, our customers will believe in us and the value of our products. Our emphasis is on understanding the needs of the people and it’s from here that the concept of Strand Encorp emerged,” says Yeoh.

Other projects
Encorp is venturing into Penang with a high-end development in Batu Feringghi targeted for launch next year. The project consists of 88 units of resort-style homes comprising villas, bungalows and luxury condominiums. Each unit faces the sea and comes with a private swimming pool. Work on the 5.83 acre freehold development with a GDV of RM210 million is scheduled to start in 2011, with completion in 2013.

Due to the recent slowdown, the developer had held back new launches until now. But the upturn in the property market has surprised Yeoh. “In the last three months, demand is back, prices are rising and confidence in the market is growing. I believe the liquidity is still there. Malaysia is fortunate because we have not been hit as hard as other countries. My only worry is a situation where people become overconfident, so we are moving forward cautiously.

“We will not compromise on the value of the development. Ultimately, we want long-term stakeholders and to achieve that, we have to have value creation. That’s why you do not see us actively buying here and there. We did not promote ourselves in the past because we were new and did not have a product to show, but now that we have started to build, this will change,” he says.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 782, Nov 23 – 29, 2009.

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