When Mah Sing Group Bhd previewed its M Suites in Jalan Ampang in September, the response was encouraging enough to get the company searching for another piece of land in the area.
“During the M Suites preview, buyers would just snap up whichever unit was available without caring about the floor or its orientation and views, especially the studio apartments. We had a long list of buyers interested in studio apartments but we did not have enough units to sell,” says Mah Sing COO Teh Heng Chong.
M Suites, offering luxury apartments ranging from 501 to 1,599 sq ft and a gross development value (GDV) of RM306 million, has been over 80% sold since its preview. The development, located on a 1.44-acre freehold plot, was scheduled for its official launch last Friday.
Mah Sing’s search for additional land ended in early November with the acquisition of a 4.7-acre commercial tract located about 1.5km down the road from M Suites. The tract, which the company acquired for RM114.9 million, has been earmarked for what Teh calls an “iconic” landmark in Jalan Ampang — M City.
Both M City and M Suites are part of Mah Sing’s M Series, which Teh describes as trendy apartments and SoHos in prime areas surrounded by amenities.
M City, with an estimated GDV of RM920 million, will comprise residential suites, designer SoHos, sky villas and boutique 3-storey shops. Teh says the development will be architecturally exciting, featuring nature decks of landscaped terraces every four floors, a sky gym that offers panoramic views of the city, villas on top of the building with private pools and a clubhouse, among others.
“For the residential suites, we are going for smaller units similar to M Suites, which we believe fill a void in the market around Jalan Ampang and the KLCC area,” says Teh.
Having smaller units gives Mah Sing product differentiation in this area as most of the apartments in Jalan Ampang have an average built-up of 3,000 sq ft, which not many people can afford, Teh adds.
A survey on rents of condominiums and apartments in the KLCC area and its vicinity conducted by the developer shows that small to medium-sized units generate better yields than larger units. Teh puts the estimated overall average yield at 7% to 9%.
“That is why we came up with the studios and one-bedroom suites for our M Series. Our business is market-driven; if people want to buy, we will create products for them to buy,” says Teh.
The target market is young professionals and expatriates working in the city. Investors, who made up about 60% of the buyers of M Suites, can expect an estimated average rental yield of 7% to 7.5%, says Teh, adding that a yield of 7% and above is very acceptable.
The projected yields are based on the average leasing rate of RM5 psf recorded by neighbouring development Seri Hening Residence. The 113-unit Seri Hening is located next to M Suites and is owned by Great Eastern Life Assurance (M) Bhd.
The location and future potential are crucial factors in ensuring the success of the two developments. In fact, Teh foresees the next wave of development to be in Jalan Ampang.
“KLCC is already quite a mature market but there are still a lot of pockets of land in Jalan Ampang waiting to be developed, so this area will be the new hot spot,” says Teh.
The indicative pricing for M City residential suites starts from RM398,800, with sizes ranging from 500 to 1,786 sq ft. Its sky villas are priced from RM2.5 million for sizes of 2,150 sq ft onwards. The SoHo units, with sizes of 700 to 1,270 sq ft, start from RM528,800 while the 3-storey shops start from RM1.6 million.
The partially furnished M Suites units are priced from RM537,800 to RM1.08 million. The studios have been fully sold.
Sub-structure works for M Suites started in mid-November, and the development is scheduled to be completed by 2013. M City will be developed over five years, with its launch targeted for 1H 2011.
Mah Sing, known for its fast turnaround strategy, has acquired landbank worth about RM3.1 billion in GDV this year for new projects. It has 34 ongoing projects. As at early November, it had about RM8.64 billion in unbilled sales and remaining GDV from projects in the Klang Valley, Penang Island and Johor Baru.
“We have been fortunate this year as most of our projects are doing well. We hope to keep the momentum going, but we also have to be a little cautious as we know the market will not always be this good,” says Teh.
Among the projects lined up for the new year are The Icon Residence Penang, with an estimated GDV of RM280 million, and the development of 2 and 3-storey semi-detached homes within the Garden Residence township in Cyberjaya.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 834, Nov 29-Dec 5, 2010
TOP PICKS BY EDGEPROP
You buy Property , We Help you pay installments !
(CMCO Offer) 5R6B Villa Style Super Link, Puchong
NEW 1 Sty SEMI D Seksyen U14 Booking RM500 Only
Shah Alam, Selangor
Cheras Semi D Below Market Price Left *7Units*
Cheras, Kuala Lumpur