The year 2012 has been good for Mitraland Group so far. The developer recorded good sales for Cascades in Kota Damansara, Selangor, and is now marketing a new development in Taman Melawati, Kuala Lumpur, called 16 Quartz. The name is courtesy of the foothills of the 16km Melawati quartz ridge where the development is located.
Cascades is a mixed-use development coming up on 4.7 acres of leasehold land with a gross development value of RM390 million. The first phase comprises 40 retail units while the second offers 266 serviced apartments with built-ups of 561 to 1,138 sq ft. The final phase is a 28-storey corporate tower with a gross floor area of 260,000 sq ft. The retail units have been fully taken up while the serviced apartments and corporate tower are 85% and 80% sold respectively.
Clearly, the positive response to Cascades prompted Mitraland to introduce 16 Quartz.
Built on 8.63 acres of leasehold land in Taman Melawati, 16 Quartz has a GDV of RM200 million. It offers 3-storey courtyard and 4-storey zero-lot villas.
Mitraland chairman Datuk Johan Ariffin and managing director Chuah Theong Yee describe 16 Quartz’s concept, which focuses on lifestyle as well as safety and security features, as simple yet strong.
The project is a gated community with a clubhouse, the facilities of which include a 25m infinity pool, wading pool, children’s playground, pool terrace, viewing deck, BBQ deck, gymnasium, games room, pantry and function room. However, what stands out is a 30% provision for green spaces within the development, says Johan. “If you are serious about your business, you have to tune in to the current lifestyle needs.”
Another feature of the project is that the car park for the residents is located below a garden deck. “The cars are all underneath the garden deck,” Johan says. “And it’s safe for the children to play on the deck.”
The garden deck is located at road level or on the first floor of the courtyard and zero-lot villas while the car park is on the lower ground beneath the deck and linear park.
About 2.6 acres have been allocated for the garden deck and linear park in front and behind all the units. The linear park comes with a 40ft pathway outside the courtyard villas while there is a 474ft-long stream on the garden deck with another located near the main entrance. There is also a 40ft-high water wall at the main entrance.
Even before the official launch of 16 Quartz on Sept 29 and 30, Mitraland has sold more than 60% of the courtyard villas. According to Johan, sales so far have been through word of mouth and to existing customers.
The 55 courtyard villas in the development have built-ups of 3,571 to 4,338 sq ft and are priced at RM1.75 million to RM2.31 million. The built-ups of the 26 zero-lot villas range from 6,008 to 6,078 sq ft while the prices are between RM3.35 million and RM3.58 million.
“Mitraland was established in 1998 and we have a following of loyal supporters,” Johan says. “Our philosophy is very simple: give enough room for your purchasers to make money. If people make money when they invest in you, the next time you have a project, they will have the confidence to buy from you again.”
The developer is also looking at getting Green Building Index (GBI) certification for 16 Quartz, like the serviced apartments in Cascades. Accordingly, solar panel heaters and rainwater harvesting are part of 16 Quartz’s design.
“In today’s market, it is important for businesses to be customer-centric. We see today’s buying public as being more environmentally conscious, hence green features attract them,” Johan says.
“Foreign buyers too look for green features. This is a trend that started in the commercial sector where many multinational companies gave preference to green buildings. For many of them, it is already in their corporate charter.”
Essentially, says Johan, 16 Quartz offers a country environment within the city and he sees the project being well received by the expatriate community.
“We are very close to Jalan Ampang’s Embassy Row and we have international schools in this neighbourhood. There will be good demand from the expatriate community, especially in the rental market.”
Outlook for Melawati
The first thing Mitraland did upon entering Taman Melawati was to assess the trends in the area. “We scanned the area and the market and asked what the other players were doing there. Nadayu Properties Bhd is developing a number of bungalows. Sunway Bhd has semidees. We eventually decided that we wanted something different to avoid going head-to-head with the other developers. If you go head-to-head, you might cannibalise the market,” Johan explains.
According to him, the Melawati area has come a long way. Accessibility to the area has improved with the construction of the Duta-Ulu Kelang Expressway (DUKE) and the Middle Ring Road 2. DUKE has cut the travel time from Melawati to Mont’Kiara to 20 minutes while it takes about the same time to go from Melawati to the Kuala Lumpur city centre.
Johan says the Malaysian property market is still doing well in general, thanks to the government’s Economic Transformation Programme (ETP) and supporting economic policies.
“The country has been relatively insulated from what is happening in Europe. When you have a combination of these very supportive policies and the result of the spillover from many of the projects that the government has been launching, you see that Malaysia is doing okay. There is economic activity, the people are enjoying the fruits of these efforts and the confidence is high.”
He adds: “In the property market, although they say location is everything, if you don’t have that feel-good factor that comes with supportive government policies, you may not have buoyancy. But when you have a combination of sensible economic policies and a reasonably well-performing economy, we have a very good chance of being successful in the property market.”
The country should also not be overly concerned about foreign purchasers driving up property prices, Johan says.
“There’s a misconception that foreigners are driving up our property prices. Foreign purchasers do not make up even 3% of total property sales in the country. Of course, there are certain products in certain areas that attract strong foreign participation, but that is in only one or two locations, such as Penang or some places in Johor.”
Besides the rising cost of land, developers are also faced with increasing costs in other areas.
“Today, the challenge is in labour and third-party costs. Third-party costs can be in the form of contributions to third parties, such as utility service and infrastructure providers [sewerage, water, electricity and telecommunication] that are pushing up the cost of their services,” says Johan.
A proposal to raise the developer’s deposit from RM200,000 to 3% of the development cost is also an issue. “If this amendment to the Housing and Development (Control and Licensing) Act 1966 is implemented, we will likely have to pay as much as RM2 million in deposit for our projects,” Johan complains. “Times are getting tougher.”
The amendment will require developers given a housing development licence to pay a requisite deposit of 3% of the gross development cost of the project compared with RM200,000 now. This is to ensure that developers have sufficient financial ability to begin building.
Mitraland will harness recurring income from its commercial development C180 in Cheras, says Johan, adding that looking at recurring income is part of a natural progression for developers. “This is the second stage in a developer’s life. The first is development income while the second is recurring rental income,” he explains.
C180 is 17.7-acre freehold project with a GDV of RM360 million that will be carried out in three phases. The first phase offers 3 and 4-storey shopoffices that were officially launched in April 2009 and have been fully taken up.
The second phase consists of three components — The Gateway, The Pulse and The Centerstage. The Gateway offers twenty-eight 4 and 6-storey shopoffices that were launched in October 2009 and are currently 95% sold while The Pulse offers 45 three-storey retail shopoffices that were also launched in October 2009. They have been fully taken up and were handed over in July this year.
The Centerstage is the 55,000 sq ft entertainment block and will house food and beverage outlets, a gym, fitness centre, family karaoke and Chinese banquet restaurant. This component will only be for lease and is targeted to be opened in November.
The third phase also consists of three components — The Nest, The Livia and The Latitude.
The Nest comprises a three-star business hotel with 156 rooms. It will be owned by the developer but managed by the Accor Hospitality group under the Ibis Styles brand. It is also targeted to open in November. The Livia offers 190 serviced apartments that are fully sold. The Latitude is a 6-storey retail-cum-signature office block that has been sold and handed over in September.
Mitraland is also considering offering leasing services to unit owners of C180. It may extend this service to all its projects at a later time.
Behind Cheras Sentral (the former Phoenix Plaza), Mitraland has a new project that has yet to be named. To be built on 7.5 acres of freehold land, the condominium development will offer over 400 units in three towers. Johan says the developer is looking to launch the development in the second quarter of next year.
In Puchong, Mitraland has finalised a deal for 63 acres of leasehold land in Meranti Jaya for Phase 1B of its industrial development Lake 6 Entrepreneurs Park. Phase 1A comprises 46 semi-detached and detached factories. Phase 1B will offer 24 semi-detached factories and will be launched soon. There are also plans for 32 three-storey superlink houses, 8 three-storey bungalows and 84 three-storey semidees.
The first phase of Lake 6 has an estimated GDV of RM180 million. Its semi-detached factories have a built-up of 5,466 sq ft and are priced from RM2.5 million to RM3.4 million. The detached factories have a built-up of 9,600 sq ft.
Mitraland is also hoping to launch landed homes in Lake 6. Johan says semidees may be developed on the other side of the 20-acre lake on the site, away from the factories.
Phase 1A of Lake 6 was launched in October 2011 and is currently 100% taken up. The completion date for Phase 1A is 2014 while Phase 1B is expected to be completed in 2015.
Next on the developer’s agenda is Penang because, says Johan, it has selling points that are different from those of the Klang Valley or Johor.
“We are on the lookout for land in Penang, but we haven’t found the right location at the right price. We’re not in a hurry, but we are constantly looking for opportunities there”, especially in Batu Ferringhi and Tanjung Bungah.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 930, Oct 1-7, 2012
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