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City&Country: I-Bhd expands residential component of i-City

When the concept of the 72-acre freehold i-City in Shah Alam was first mooted in the early 1990s by Tan Sri Lim Kim Hong, executive chairman of I-Bhd, many said it was a good one. But behind the agreeable smiles was a degree of scepticism.

i-City is a RM3 billion commercial development master-planned as an integrated information and communications technology (ICT)-based community with lifestyle recreation. Certified as a MSC Malaysia cybercentre and endorsed as a tourist destination, it was also recognised as an international park in 2010. Its international park status makes i-City the only area in Shah Alam with F&B outlets and cinemas that are open 24 hours.

The strategy, says I-Bhd CEO Datuk Eu Hong Chew, was to use i-City’s MSC status to drive office demand and attractions to boost tourism, both of which have worked well. Office occupancy currently stands at about 85% while about 90,000 people visit the place each week.

i-City comprises corporate towers, office suites, hotels, a data centre hub, serviced apartments, an innovation centre and a shopping mall which will incorporate a riverfront development similar to Clarke Quay in Singapore. The development is designed to cater for six industry clusters ­— biotech, shared services, software development, media hub, data centre and Islamic hub.

Following an increase in plot ratio from 1:3 to 1:5, i-City’s proposed built-up space grew from 7.5 million sq ft to 13 million sq ft. The increase in plot ratio also allowed I-Bhd to add another 30% to its residential component, going from a single residential parcel to having a residential component in every parcel with an estimated total gross floor area of more than eight million sq ft.

“We have distributed the residential components across the six parcels. It could be SoHos (small office, home office), SoVos (small office, versatile office) or serviced apartments,” says Eu.

The first residential component to be launched was 2.4-acre i-Residence. Launched on March 24, the freehold i-Residence has a gross development value (GDV) of RM160 million. It comprises two blocks of 346 suites ranging from 715 to 1,357 sq ft, and 20 low-rise duplex villas that are between 2,529 and 3,734 sq ft in size. In line with i-City’s positioning as an intelligent city, all properties will feature seamless integration with its IT infrastructure.

 

“There was never a focus on residential until now because we didn’t have the built-up, and the idea of high-rise residences in Shah Alam back then was too new. We know that the bulk of the market is young and there is a trend for high-rise living. We are piggybacking on this trend,” says Eu.

Lim adds that the developer is also taking advantage of the Selangor government’s initiative to clean Sungai Rasau and the construction of the RM58 million interchange near the Sungai Rasau tollbooth that will link the Federal Highway to i-City. The riverfront development, which is part of the one million sq ft mall, fronts Sungai Rasau.

To Eu and Lim’s delight, the first block has already been fully sold through word of mouth.“These are buyers who have paid the deposit.

I think i-Residence is reasonably priced and well designed. It’s like having a Kuala Lumpur City Centre apartment but at Shah Alam’s market price,” says Eu.

Lim notes that most buyers are locals while about 10% are foreigners, mainly from Singapore, and many of them are owner-occupiers.

“We expect to increase the price by about 5% for the second block, starting from RM382,000. We haven’t done any advertising for i-Residence yet, so the efforts we have put into marketing i-City have paid off,” he observes. Lim hopes the success of i-Residence and future SoHos and serviced apartments in i-City will transform the traditionally landed home market in Shah Alam.

On the overall GDV of i-City, Eu believes the estimated RM3 billion is a conservative figure. The plan is to launch about one million to two million sq ft of properties per year with completion over 10 years. Next up are SoHos designed for the young with a cosmopolitan lifestyle in mind. The indicative prices are between RM465 and RM500 psf. The SoHos are scheduled for launch in 2H2012.

“The state government has agreed that Shah Alam be turned into an international city and we are the catalyst of that transformation. We are offering international lifestyle to the people here. There is already an international community in Shah Alam but they are mostly manufacturing based. The state is trying to move away from manufacturing to services and commercial businesses. Our development plan caters for that vision,” says Eu.

I-Bhd is set to start work on the shopping mall soon, which is expected to be completed in 2015.
Under the i-City management development agreement with the state government and local council, which allows i-City to be managed as a gated and guarded community, the developer will also manage the surrounding 45 acres of buffer area.

“We plan to turn the 45 acres into a green zone. This is in line with the concept of a pedestrian-friendly environment and Shah Alam’s idea of a green zone,” says Eu.

The agreement also allows I-Bhd to provide common services such as waste collection, road repairs and landscaping. Lim believes this is ideal as it enables them to provide services at a higher level than local authorities because tenants and investors are much more demanding these days.

From a marketing perspective, Lim wants to package i-City’s residential development as part and parcel of its MSC development. “We are also targeting foreign buyers and two countries we are looking at are India and China. Both countries have a large and young knowledge-based workforce looking for jobs as well as companies and we have the facilities and products for them.”

The concept of i-City has always been to create a development driven by technology and tourism, says Eu. “Back then, there was no Multimedia Super Corridor. So, there was no relevant local model for us to study and we weren’t sure whether we could actually create a nightspot in Shah Alam.”

But perseverance and hard work do pay off, says Lim, who admits to putting in long hours in the past few years to get i-City off the ground.

Since 2008, the developer has invested RM10 million a year to bring in new attractions, including the LED lightscape, SnoWalk (50,000 sq ft of Arctic environment), theme park rides and a soon-to-be-completed children’s play area.

“We have not completed the tourism portion yet; there are probably another five to six steps to go. We have marketed i-City as a MSC hub and tourist destination. This is because a lot of MSC companies operate at night. The challenge those days was to create a vibrant environment at night,” says Eu.

Lim believes that i-City’s tourism programme has done just that by creating a public presence. “Before, people knew about i-City but they had never been here. We sold the location and the concept, but at night and on weekends the place is quiet so we worked on bringing the crowds to i-City. The next challenge is to use both components to drive the residential developments here.”

I-Bhd also has an upcoming project in Jalan Changkat Kia Peng near Kuala Lumpur City Centre. The 50-storey, 450-unit Grand i-Residence is a high-end luxury condominium. The developer hopes to launch the slightly over one acre project, which is currently at the development order approval stage, in 2013.
“This will be a one-off project and is less challenging compared to i-City. KLCC is saturated with big units above 1,000 sq ft but not small ones like ours. It is a proven market, so we know we can sell,” says Eu.

 

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 903, Mar 26-Apr 1, 2012

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