IJM Land courts foreign buyers

IJM Land Bhd’s The Light Linear, a residential component of The Light Waterfront project in Penang, received overwhelming response from homebuyers during its launch on Aug 1. All the non-bumiputera units have been sold, bringing sales to 82%. Comprising 328 units, The Light Linear condominium units average about 1,500 sq ft and are priced at an average of RM410 to RM450 psf. Foreign homebuyers make up 5% of the project’s purchasers.

The developer aims to put this project on the international arena next. As a first step to attract foreign investors, it plans to introduce The Light at the upcoming Urban Waterfront Conference 2009 in Bahrain in November, says IJM Land managing director Datuk Soam Heng Choon.Soam: We have to exercise caution in our launches because we don't know if the market will go down again. Photo by Abdul Ghani Ismail

“If we have the right product to sell to the foreigners, we would likely participate because we believe The Light is something the international market wants. For us, The Light meets international standards. We want to unveil our project at the conference and the investors can then come here to see our project,” he tells City & Country.

The Light Waterfront, a RM5 billion project to be developed over the next 12 to 15 years, has been designed to rival landmarks such as Canary Wharf in London, the Docklands in Melbourne, Australia, and Queens Quay in Toronto, Canada. The developer has appointed six Malaysian architectural firms to craft the residential components in the first phase of the project that is set to be the developer’s crown jewel. The project will be developed in three phases.

Johor project
The property arm of IJM Corp Bhd also hopes to develop a project in Johor that is also aimed at foreign investors.

IJM Land bought Sebana Cove — a resort and residential development in Desaru, Kota Tinggi — for RM120 million with some properties and infrastructure completed from AMDB Bhd in August last year. The project comprises an international residential marina and golf resort at the southernmost tip of Peninsular Malaysia.

The developer plans to redevelop the 1,188-acre tract into an upmarket residential area catering to foreigners, primarily Singaporeans, due to its proximity to the island republic. The third bridge linking the eastern side of Johor to Singapore, which was announced by Prime Minister Datuk Seri Najib Razak on May 22, is near the project.

“Sebana Cove is near to Changi (airport) and it is easy for foreign visitors to fly into JB or take a 40-minute boat ride to get there. The third bridge is also nearby and we need to leverage what we have,” Soam says.

The project, he adds, is targeted at high net worth people who can afford to buy a holiday home. There is a marina for them to park their boats as well.

“We hope the Senai-Desaru Expressway can be completed earlier so that it can reduce travelling time from Johor Baru to Sebana Cove. Also, when the integrated resorts (IR) in Singapore are completed, more foreign arrivals are expected to the island republic,” he says.

However, he is unable to give further information on Sebana Cove as new plans for the project are currently being drawn up.
IJM Land intends to do more marketing activities overseas and eventually set up sales offices abroad.
On overseas projects, Soam says the development of a retail complex and a serviced suites-cum-residential complex in Changchun, China, is pending approval.

An artist's impression of The Light PointRemaining cautious
For its FY10 ending March 31, the developer is looking at RM1.5 billion worth of launches (see table). To date, it has launched projects worth RM550 million. With the strong response to The Light Linear, the market would surely be looking out for the next launch of The Light — The Light Point — towards the end of the year. The Light Point condominium is an-88 unit development in a single 28-storey tower on a 2.87-acre site.

However, Soam remains cautious and says launches will depend on market conditions. The built-ups of The Light Point range from 1,830 to 2,300 sq ft. There are also two penthouses of 4,090 sq ft. The condominium has a gross development value (GDV) of RM110 million, with an average price of RM500 psf and above.

“We have to exercise caution in our launches because we don’t know if the market will go down again. We believe we don’t have a problem selling The Light Point, but we are looking at the right timing for launching. It will depend on market conditions. We don’t want to throw out everything at the same time,” Soam says.

He adds that location and pricing are two important factors in selling properties during a downturn and that financing packages can further attract buyers.

“There seems to be some signs of recovery and sales recorded by most developers improved in the beginning of the year, compared to the last quarter of last year. I think all the big guys are facing the same problems. However, if there are pockets of development where buyers have been waiting for a long time and the price is right, I think the people will buy. Buyers are very discerning nowadays. They study the market and if the location is right and the price is right, then they don’t mind queuing overnight to buy.

The location of a project, Soam emphasises, is a crucial consideration for purchasers. “You might sell at the same price at other locations, and you won’t even have a single buyer. It is a combination of the location and pricing. However, if you keep throwing out new units for sale now, there may be more demand than supply,” he says.

Soam reveals that many buyers of The Light Linear are repeat buyers who made money from their previous investment with IJM Land.

“We give the buyers an opportunity to make money. When the property is ready, there is an opportunity for upside for them,” he adds.
My Space Plan Series 2
The sales of The Light Linear were also in tandem with the developer’s sales package, My Space Plan. The first series of the plan was implemented from April 1 to June 30, with a sales target of RM200 million to RM250 million. IJM Land decided to extend the package — My Space Plan Series 2 — to Sept 30 on buyers’ request.

“So far, the response has been very encouraging, and our sales are touching almost RM300 million from a mix of landed and non-landed properties sales. Series 2 will equal Series 1, if not do better. We launched a project called Summer Place comprising 530 units in Penang in April and we have sold all. In fact, we achieved sales of 70% to 75% in less than a month. Series 2 is expected to have a similar impact in bringing in sales.

My Space Plan incentives include a 5:95 payment scheme, zero interest during construction, free stamp duty upon transfer, up to 10% cash rebate and free loan legal fee.

In Series 2 of the My Space Plan, IJM Land has included new projects, such as the recently launched Nusa Duta in Johor.
IJM Land does not intend to further extend My Space Plan. Instead, it will come out with some other financing packages that cater to the needs of different income groups. Details, however, have yet to be finalised.

“The new financing packages will depend on the market, because we don’t know what will happen in October. Maybe H1N1 will get worse,” Soam adds.

After making a name for itself in the local field, IJM Land is now ready to march into the international arena, making use of the facilities available. Amid the uncertain market sentiment, the developer is slowly but surely putting itself into the game.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 771, Sep 7-13, 2009
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