City&Country: Prima Properties on a new path

Prima Properties Management Sdn Bhd may be an unfamiliar name  in the local building fraternity but this developer has set its sights on becoming a major property player in Malaysia’s information and communications technology (ICT) hub Cyberjaya. This, the company intends to do so, by leveraging on the experience of its construction sibling, Pembinaan Pakatan Binasetia Sdn Bhd (PPBS) — the first contractor in Cyberjaya.

PPBS started the construction of its first project in the city, an office block, followed by the  construction of Cyberview Lodge Resort & Spa in August 1997, on the same site. The contractor created an impressive record by completing the 20,000 sq ft Cyberview Lodge Resort & Spa within 100 days — in time to host the world leaders attending the Asia-Pacific Economic Leaders (APEC) Retreat in November 1998.

A few years later, the construction firm also built several buildings in Cyberjaya, including the Ericsson building, Century Square, Cascata Bistro, Cyberview Gardens and the Street Mall.

Prime properties
PPBS was set up by Prima Group of Companies in 1988, eight years after the group was founded. Among the completed projects of PPBS are the 300 residential units in Country Heights Kajang as well as the MS Garden Hotel in Pahang and Kedah.

At the group level, Prima Group has constructed more than RM1 billion worth of commercial and residential properties in the country. The group also has other real estate-related companies, such as interior design, fencing, timber flooring, landscaping and plastic ceiling firms.

Prima Properties was then set up by Prima Group in 2000 to undertake the group’s development projects in Cyberjaya. The property arm has since developed three office projects — Multimedia Development Corp’s (MDeC) headquarters, Prima Avenue 1 and Prima Avenue  2.

It was not an easy task undertaking the constructions in the ICT hub back then considering the lack of amenities in Cyberjaya, recalls C M Chong, Prima Properties’ executive director, and the 1997/98 Asian financial crisis didn’t help the situation either. However, the group stayed confident about the city’s growth prospects.

“We had sentimental feelings about Cyberjaya… and its growth prospects, that’s why we formed our own team to do the development here. We purchased land from the master developer and developed it on our own. Our strategy had been to build and lease to our tenants. It has not been easy for us because Cyberjaya was a newly developed area then,” he says.

Future developments
Nevertheless, Chong tells City & Country, the developer is shifting its focus from office developments to commercial developments and medium-cost residential projects, with the middle-income group such as fresh graduates being the main target group.

The developer plans to launch at least two joint-venture projects — a mixed development and a residential development — in Cyberjaya by the middle of this year. It is currently in talks with partners for these projects and  he hopes  these would conclude this quarter.

“We are planning to put up a mixed development of retail and commercial with a leisure and lifestyle theme to further enhance the vibrancy of the community here. It will be on a tract of six to 10 acres.

“We hope to attract those who pursue higher education in Cyberjaya, who will later pursue a career there to purchase property there as well. We will build commercial and retail centres with a focus on leisure and lifestyle. This is to complement the residential and commercial properties that are already being developed in Cyberjaya,” he adds.

For the residential projects, the developer is planning to build apartments and terraced houses in the RM150,000 to RM300,000 range and targeted at the young working population in Cyberjaya.
Chong declined to give more details on the project which he says is still in its preliminary stage. The developer also owns a bungalow unit at the Promenade Lakeside in Putrajaya, which it leases out.

Cyberjaya will remain Prima Properties’ focus in the near future, says Chong, looking at the traffic congestion, growing cost of living and limited prime office space in Kuala Lumpur and Petaling Jaya as well as signs of a spillover in office demand from Putrajaya to Cyberjaya.

Prima Avenue 1 & 2
The first development of Prima Properties was MDeC’s headquarters. Based on the concept of resort-office, the 4-storey building was completed and handed over to MDeC in 2001.

Prima Properties then acquired some three acres of land to develop a commercial project — Prima Avenue 1— in 2000 for RM6.3 million.

Construction of Prima Avenue 1 started in 2001. The eight blocks were built on the concept of build-on-demand. By building one block each year, the project was completed in 2008 at a cost of RM180 million.

Five of the blocks comprise office space with the rest occupied by retail outlets and car park. It is the first integrated office development and has a total lettable area of more than 300,000 sq ft. Chong says the buildings are fully tenanted.

“When we first set our eyes on Cyberjaya, we realised that there were shortcomings to be dealt with. We needed to address the tenants’ needs for amenities and convenience. That’s why we designated spaces in our commercial developments to incorporate food outlets, retail shops as well as a sports centre, which formed a vibrant community that would attract tenants,” Chong says.

Among the key tenants at Prima Avenue 1 are the World Health Organisation, Hewlett-Packard Multimedia Sdn Bhd and Suruhanjaya Perkhidmatan Air Negara (SPAN).

After the completion of Prima Avenue 1, the developer is now looking to complete Prima Avenue 2, which will consist of four buildings — Prima 9 to 12 — with total net area of 349,000 sq ft on a seven-acre piece of land.

Prima 9 in Prima Avenue 2 was completed in April last year, with 75% of the 111,000 sq ft of net office area being rented out to EDS MSC Sdn Bhd.

“For the remaining 25%, we have two potential tenants that are looking to lease the place. I hope to confirm the tenants in two to three months’ time, then we will enjoy 100% occupancy,” Chong says.

Prima Properties is currently building the second block, Prima 10. The 108,000 sq ft building is scheduled for completion in March this year. The company has been scouting for potential tenants for the block but so far nothing has been confirmed.

“We are in talks with potential tenants even before the building is completed. You must have a building under construction before you are able to talk to them. It is a way to show our commitment,” he adds.

Prima Properties plans to build a community area in Prima 12 early this year. It will house two food courts, a childcare centre, sports area and parking space.

However, it will hold back on the construction of Prima 11 as supply is expected to exceed demand this year, says Chong.

“This year, more than two million sq ft of office space by other developers will be ready in Cyberjaya. We want to keep track of the demand for office and commercial space here before we commence the construction of Prima 11. As of now, we will put this on hold as we anticipate a huge supply of office blocks this year,” he adds.

Currently, there are five to eight million sq ft of office space in Cyberjaya, Chong notes.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 790, Jan 25-31, 2010.