City&Country: Exsim turns crisis into opportunity

For many companies, the global financial crisis was a period best forgotten, but for Exsim Development Sdn Bhd, it was a time full of opportunities.

“Some plots of land were cheaper at that time, so we grabbed the opportunity to acquire some for development,” recalls Exsim director Lim Aik Hoe.

He comes from a family that is a familiar name in the timber business so it is no surprise that Exsim started out as a timber company in 2002, before venturing into property development in 2009.

“We are the fourth generation in our family to run a timber business,” says Aik Hoe, who runs the company with his brother Aik Kiat.

Exsim would probably have remained a timber company if it were not for the financial crisis.

“People were panicking and cashing out of their land. We asked ourselves, how many opportunities would we have to buy prime land at such attractive prices? So [we] began our property development arm,” says Aik Hoe.

Their strategy was to seek out small tracts in good areas suitable for niche developments as Aik Hoe sees the company more as a contemporary boutique developer. The brothers ended up acquiring a total landbank of 29 acres for RM105 million.

One of the tracts acquired was a four-acre parcel in Kota Damansara that is now the site of Exsim’s first project — the fully sold Nouvelle Industrial Park. The development, which has a gross development value (GDV) of RM70 million, offers 21 units of 3-storey semi-detached factories and is almost completed.

The success of the project prompted Exsim to develop three more similar developments under the Nouvelle banner, namely, Nouvelle Kemuning Industrial Park (RM65 million GDV), Nouvelle Industrial Park 2 (RM55 million GDV) and Lot 10 (RM50 million GDV) at Kota Damansara. The three projects are almost fully sold.

Now, Exsim is moving on to residential development by embarking on its biggest and most ambitious project to date — The Treez in Bukit Jalil, Kuala Lumpur with a GDV of RM190 million. The 2.6-acre tract was also acquired during the financial crisis.

The most exclusive address in Bukit Jalil
Making the move into residential developments was not a decision that was made overnight. Aik Kiat admits Exsim started off wtih industrial projects as they are easier to develop and take a shorter time to complete.

“Residential buyers are more particular, as they should be, and it takes more work and a longer time to complete such projects,” says Aik Kiat, adding that for a new developer, it is safer to start with small industrial projects.

To Michael Yam, sales and marketing director of Jalil Max Development Sdn Bhd, a subsidiary of Exsim, it is a “daring” venture and likely the most expensive high-rise residential development in Bukit Jalil.

“If you look at Bukit Jalil, there are no other high-rise residential developments that match ours in terms of luxurious fittings, built-up sizes and green features. We are also a new developer with no track record in developing residential projects,” says Yam.

To their surprise, The Treez achieved a take-up rate of 95% in less than three months with little advertising.

Yam says the response was beyond their expectations. After gathering feedback from the buyers, they were proven right in their initial assessment that there is a demand for high-end developments in Bukit Jalil. Yam notes that most of the buyers are from the medium to high income group and are under 40 years of age.

“It appears that these buyers have been waiting for a high-end lifestyle development like ours,” says Yam.

The Treez comprises 135 condominium units, 12 condo villas, 15 link villas and five penthouses. The development which fronts the 80-acre Bukit Jalil International Park, offers luxury that is normally found in 5-star resorts, says Yam.

Among the facilities are a 25-metre infinity swimming pool, private lounge for gatherings and parties, a yoga pavilion, fully equipped gym and a grand sunken lobby.

The Treez could also mark another first once it is developed, as the first green residential building in southern Kuala Lumpur. The development will meet Malaysia’s Green Building Index (GBI) standards.

“It is a matter of choice whether you want to make that extra effort to help save the environment. Going green also does not mean having to pay more,” says Yam, who believes all developers should go for greener developments.

Exsim has been prudent in its selection of building materials for The Treez, using when possible, environmentally-sourced materials from sustainable sources. The development also incorporates features such as a recycling facility, condensation water reuse system, rain harvesting system and solar panels.

As a way to reduce carbon monoxide car fumes and promote a more active lifestyle, there will also be a bicycle rental service for the tenants. Green is also a way for the company to differentiate itself from the other developers, especially as it is a new player, adds Yam.

Another key point is that the units are larger than what is normally found in Bukit Jalil, which he estimates to be generally below 1,400 sq ft.

“Our sizes start from 1,409 sq ft, so it is perfect for those who want more space,” says Yam.
The Treez boasts large floor plans of 1,409 sq ft to 1,700 sq ft for condominium units, 2,733 sq ft to 3,260 sq ft for condo villas, 2,450 sq ft to 3,952 sq ft for penthouses and 4,344 sq ft for link villas with rooftop gardens. Prices start from RM704,000 onwards.

Aik Hoe and Aik Kiat hope The Treez will be a catalytic project that will transform Bukit Jalil into an enclave like Mont Kiara.

“Bukit Jalil has always been a low to medium market but there is potential for this area to grow into something more. The Treez has proven that there is a market here for high-end products, so we hope other developers will move in the same direction,” says Aik Hoe.

Building a strong foundation
Exsim has always strived to create designs and concepts that can be considered out of the norm. As Aik Hoe puts it, being conventional is very boring.

It is something he personally can relate to, having taken an unconventional route to becoming a property developer.

“I am a licensed auditor and Aik Kiat has a background in quantity surveying before we went into the timber business. Now, we’re property developers,” he says, acknowledging rather apologetically that giving interviews is something he is still trying to get used to.

“We are low profile people, which is also how we approach the business,” Aik Kiat chimes in.
But, the brothers know in this business, you need to be known otherwise people will not have confidence in your products. “That is why we are doing more publicity now. We want the public to know who we are,” says Yam.

Already in the works are several projects that they hope will further raise Exsim’s profile. These include a 3-acre commercial development in Sungai Besi, which comprises serviced apartments, SoHo units and lofts with an estimated GDV of RM240 million; a 2-acre light industrial development in Kota Damansara; and a 5-acre residential development in Bukit Overseas Union Garden (OUG) in Jalan Klang Lama.

Exsim currently has a landbank of about 11 acres in the Klang Valley and is actively sourcing for more land.

According to Yam, the company has already obtained approval in principle for the Sungai Besi development, which is located about 6km from the Sungai Besi airport. The land was acquired in May 2010.

“We are waiting for the height restriction approval as the area falls under the flying zone of the Sungai Besi airport. Once we get it, we will start work on the project,” says Yam.

The Sungai Besi airport, which is now used as the Royal Malaysian Air Force base, will be relocated to make way for the Greater KL development plan under the 10th Malaysia Plan.
Exsim’s focus now is to build a strong foundation — a task the Lim brothers feel is still some way off despite having five projects that are nearly sold out.

“We do not even have a completed project yet. With the exception of Nouvelle Industrial Park at Kota Damansara, our other projects will not be completed for at least another year. We need to deliver first ... we want the buyers to see for themselves that our products are worth buying,” reasons Aik Hoe.

It may take a bit more time for Exsim to achieve its goals, but if it can deliver what is promised, the road ahead looks promising indeed.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 841, Jan 17-23, 2011