City&Country: Pulai Springs to grow property development business

Pulai Springs Bhd is mainly known for its golf resort, Pulai Springs Resort, in Johor Baru. Situated at the foothills of Mount Pulai, a 10-minute drive to the Johor Baru city centre, the resort has two award-winning 18-hole golf courses.

Although the company’s core activity currently is the hospitality business, which accounts for 70% of its revenue, plans are afoot to grow its property development business. Its executive director Nick Mah Siew Chean tells City & Country that the company is aiming for a 50:50 balance between the two segments in the near future.

“We plan to start new projects on the existing landbank, which should be able to generate higher revenue from the property division in the next two to three years. We would like to eventually be known as a niche developer with equal involvement in both development and hospitality,” he says.

“We believe our lessons and experience in the hospitality business can be applied to property development, especially when more people now prefer to have some lifestyle elements in their homes and lives.”

The Pulai Desaru Beach Resort
Besides Pulai Springs Resort, the company also owns the 10-acre four-star Pulai Desaru Beach Resort in Desaru, Johor. Adjacent to the resort is an eight-acre tract for which the developer is drawing up an exclusive, upmarket development of about 40 resort villas. “We have started planning and it will be one of — if not the most — expensive resorts in the area at an average of RM800 to RM1,000 per night,” says Mah.

There will also be about 50 units of holiday homes with built-ups of 1,000 to 1,500 sq ft for sale, he adds. “We will offer basic management services to the unit owners. We are looking to sell at about RM500 psf. Subject to necessary approvals, we hope to launch next year.” He notes that Desaru is very busy during weekends and school holidays so the project can be feasible.

The Pulai Desaru Beach Resort was known as Desaru Perdana Beach Resort before its acquisition by Pulai Springs in 2004. Mah describes it as “an unpolished jewel”. “It now takes about 1½ hour’s drive from Johor Baru to Desaru, but once the Senai-Desaru Highway is completed, it will take only 45 minutes.

“The Pulai Desaru Beach is only 1.5 km from the highway so we expect new business opportunities for the hotel. We have a high number of Singaporean guests as it is very affordable with a lovely beach environment,” he says.

“We are in the midst of refurbishing the resort, with inspiration derived from the sea. So far, 50% of the rooms have been refurbished and now, we are focusing on the common
areas as well as the restaurants. We will also upgrade the spa to make it more comprehensive,” he adds.

The resort enjoys an average occupancy of 50% and rooms cost about RM280 a night on weekends. When the refurbishment is completed, Mah expects the rooms to cost RM300 per night during non-peak periods. The developer is spending RM10 million on the refurbishment, which is being carried out in two phases, with the first expected to be finished by the first quarter.

Mah, 33, who is from Penang, became the major shareholder of Pulai Springs in 2007. He was then appointed executive director. He discloses that his father, a lawyer by profession, ventured into property development, focusing on hospitality, some 15 years ago. “My sister studied hospitality in Australia and later managed three to four chalets in the Blue Mountains. Besides hotels in Malaysia, my family acquired a 180-room hotel in China five years ago. So, you can say hospitality is a natural progression for me,” says Mah, who has a degree in social science.

Mah also sits on the board of the family business founded by his father, which owns several hotels, including the Hydro Hotel in Penang, the Hydro Hotel in Kunming, China, as well as two three-star hotels in Australia — the Airport Sydney International Inn and Metro Hotel Sydney.
“In hospitality, one has to have the passion and be committed to it. It can be rewarding as it involves dealing with people on a constant basis. Hospitality is not a necessity, it is a want,” he says.

Pulai Springs Resort
Pulai Springs was founded by Datuk Chua Jui Leng in 1996 and was listed on the main board of the KLSE in December 2002.

Besides its two golf courses, Pulai Springs Resort also offers the exclusive Anugraha suites as well as the 300-unit CintaAyu All Suites — a serviced apartment-style hotel. Other amenities include restaurants, a cineplex which can seat up to 72 people and a spa.

CintaAyu was completed in 2007 and the initial launch was in 2004. At that time, the previous management decided to sell only 50% of the units. “We decided to sell another 70 units in March last year,” Mah says. The units range from studios to four-bedroom suites. To date, 78% have been sold at between RM300,000 and RM1.4 million, he reveals. In 2004, the units were sold for RM450 to RM500 psf, but today, the average price is RM700 psf. Purchasers include Singaporeans and locals, and from Kuala Lumpur too.

A guaranteed rental return scheme of 7.5% for four years is offered to CintaAyu purchasers, plus other benefits such as a social membership for Pulai Springs Resort, 7 to 14 days of free stay a a year and discounts for food and beverage outlets in the resort.

Mah says 15 acres of undeveloped land within the 320-acre Pulai Springs Resort have been allocated for residential development. “We are currently in the planning stages and looking to develop either condominiums, semi-detached houses or bungalows. This will happen at end-2012,” he adds.

Apart from the resort, Pulai Springs is also busy with its  29-acre mixed development, Maharani, in Muar, which is 40km from Melaka and 180km from Johor Baru. The first phase was launched in 2004 and the group is looking to launch the second phase, comprising 2-storey terraced homes, later this year.

Mah adds that the group is currently in talks with some parties on developments in the Klang Valley.

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