Hua Yang to develop more luxury properties

KUALA LUMPUR: Hua Yang Bhd is going upmarket, with more luxury property projects in the pipeline in Malaysia  within the next five years.

The move is deemed crucial to achieve the company's annual real estate sales target of at least  RM500 million to position the firm among top developers in the country, Hua Yang chief operating officer Ho Wen Yan said.

"Internally, as a group, we are aiming for an overall RM300 million sales target (in financial year (FY) ending  March 2010), translating to 900 to 1000 units of properties to be sold nationwide.

"This is in line with our aim to be (among) the top five developers in five to seven years. To reach that goal,  we need to progressively achieve  RM500 million to RM600 million in sales annually," Ho said in a press briefing  on Thursday April 29.

The developer, which has made a name for itself in the affordable residential property segment, foresees  upmarket entities including its maiden luxury residential initiative - the RM28 million Polo Park project in  Johor Bahru, to contribute a tenth of its topline in the future.

According to Ho, Hua Yang has chosen Johor Bahru as the location for its first premium real estate jobbecause  the developer has established its brand there. Hua Yang's property sales in Johor Bahru generate about 60% of  its revenue.

The company had purchased another 140-acre tract in Johor Bahru last September for RM38 million to undertake a  township project.

"We are looking at developing a township on the new piece of land. Both projects are still in the planning  stages," Ho said, without disclosing further details.

The developer's foray into upmarket properties could be seen as a strategic move because luxury real estate, in  general, tends to be more resilient to interest rate hikes compared to more affordable entities.

However, Hua Yang has indicated that it remained positive on the outlook for the affordable and mass-housing  market segment where the company has established itself.

This by virtue of the fact that the segment which includes properties priced between RM90,000 and RM400,00, is,  mainly, driven by owner-occupiers, according to notes accompanying the company's quarterly financial filings  with the exchange.    

Ho had said in an interview with the The Edge Financial Daily in December last year that Hua Yang was on the  lookout for smaller plots of land of around 150 to 300 acres here and in Selangor. This is in line with the  company's focus on urban growth areas.

It was also reported that Hua Yang might raise funds in FY2011, an exercise which could take the form of a  rights issue or bond sale to finance the company's expansion.

Hua Yang's RM750 million One South mixed development on a 17.89 tract within the Sungai Besi enclave here is  worth noting.

According to Ho, One South will be the company's flagship project and he foresees the developement to be one of  the group's main revenue drivers.

"One South is expected to contribute RM100 million to Hua Yang's targeted sales revenue of RM300 million in  2010," Ho said.

One South which will include retail, commercial and residential components, will be developed in five phases  over eight years.

Phase one, on a 4.3 acre tract, will see 384 units of shop offices with a street mall concept complete with  landscaped  walkways, tree-ined indoor piazza, and glass-inlaid roofs to create a relaxing landscape for both  work and play.

The office and retail units have built up areas of between 479 sq ft to 2,100 sq ft with prices starting from  RM350 psf and RM750 psf respectively. This translates into a minimum price of RM167,650 for the offices and RM359,250 for the retail entities.

Phase two to five will offer 1,261 serviced apartments with built-up areas from 1,000 sq ft onwards with prices  starting from RM250 psf, translatinhg to at least RM250,000 for each high-rise unit.

One South forms a major chunk of the over RM1 billion worth of real estate projects Hua Yang plans to roll out  this year.

Hua Yang's other projects include the RM45 million Senawang Link, an industrial-cum-commercial development in  Seremban, and Phase 3 of Symphony Heights, a RM200 million residential development in Selayang, Selangor.