THE Landmark Penang is the first tie-up between the Singapore-based property developer and Malaysia's Boon Siew Group, heralding an aggressive regional push by the third generation of the Loh family and entrepreneur Sherman Lim.
The Penang-Singapore connection has never been closer. What appears to be yet another Penang property launch is turning out to be a vehicle for regional expansion. The Landmark Penang, located in the enclave of Tanjong Tokong, north of Georgetown, was previewed in Singapore over the weekend of Nov 3 and 4. It is a high-end mixed-use project with just 66 residences, 242 SOHOs and 11 F&B loft outlets.
Prior to the launch, BSG Property, one of the largest property players in Penang, rarely showcased its projects in Singapore. It is the property development arm of the privately held Malaysian conglomerate Boon Siew Group, controlled by the family of the late tycoon Loh Boon Siew. "Most of our customers are from Penang, where we have our own pool of followers," says Lim Kean Seng, 36, Loh's grandson and executive director of BSG Property and Oriental Plantations, which controls the group's plantation business.
Lim was in Singapore last weekend for the launch of The Landmark Penang, which has a gross development value of RM600 million (S$240.3 million). Lim's cousin, Loh Kian Chong, 36, executive director of Oriental Holdings, and Alfred Chew, an executive director of BSG Property, were also in Singapore for the launch.
The project is significant, as it marks the maiden joint venture between BSG Property and privately held niche developer, Katana Developments, founded by 37-year-old Singaporean and former national tennis player and ex-banker, Sherman Lim. The project was marketed in Singapore by Knight Frank.
Started about a decade ago, Katana Developments is majority-owned by Loh Cheng Yean, second daughter of the late Loh Boon Siew and aunt of Lim and Kian Chong. Cheng Yean also came up with the name "Katana", which means cutting edge in Japanese. Her stake in Katana is said to be on a personal capacity and is independent of her holdings in Boon Siew Group and Oriental Holdings, where she is executive chairman. "I've always been interested in property and architecture, even in secondary school," recounts Sherman. "I've known Cheng Yean a long time. She embraces the idea of helping people whenever she can, and has helped many entrepreneurs along the way."
Lim likens the tie-up between BSG Property and Katana to that of Mercedes-AMG, with the latter like AMG, which designs more exclusive models, and the former like Mercedes.
Sherman agrees. "This is an interesting business model, and brings value to the market," he says. "With BSG Property, [Katana] can ramp up expansion even more rapidly. Lifestyle and innovative projects in the past tend to be more boutique. But, with the tie-up between BSG Property and Katana, we can introduce lifestyle concepts in larger projects."
Five years ago, Katana Developments purchased the two-acre site that The Landmark Penang occupies. As it is Katana's maiden project in Penang, BSG Property was a natural choice as a partner. The site of The Landmark Penang is considered a prime location, as it is adjacent to the upmarket shopping mall, Island Plaza, and just a mile away from Gurney Drive, according to Kian Chong.
When it comes to views, the 41-storey The Landmark Penang is comparable to Marina Bay Residences in Singapore. Sherman concedes that it is not by the waterfront. "But you still enjoy the seaviews, without the glare of the sunlight in the daytime or the pitch-dark night," he says. "At The Landmark [Penang], you have views of the city skyline, Gurney Drive nightlife and the sea beyond, which is a nicer view."
'New, boutique and lifestyle-driven'
The idea was to create something "new, boutique and lifestyle-driven", according to Sherman. The 308-unit The Landmark Penang has a wide variety of unit types, ranging from one-bedroom suites of 799 sq ft and two-bedroom suites of 1,195 sq ft, to three-bedroom sky pads of 1,302 sq ft, 3+1 bedroom villas of 2,622 sq ft, and 4+1 bedroom villas of 3,004 sq ft. There are also eight penthouses. The units will be fully fitted and furnished. The developer will also help overseas investors to lease out their units and manage it on their behalf. The project is scheduled for completion in 2015.
Sherman says there is a market for smaller two- and three-bedroom apartments, and projects that are fully furnished. At the weekend launch in Singapore, about 120 units of residences and SOHOs were released at an average price of RM1,000 to RM1,500 psf, or S$400 to S$600 psf.
"RM1,000 psf is still cheap compared with similar-quality projects in Singapore," observes Lim. "And, in Penang we have everything — good medical facilities, quality education, great food and good climate."
So far, a total of about 200 units in the first phase of The Landmark Penang has been released, and about 70% of the units have been reserved even before the official launch. "We will continue to release units periodically throughout the period of construction till project completion," says Sherman.
One of the largest property players in Penang, BSG Property is believed to have a landbank exceeding 500 acres (21.78 million sq ft). Most of the land is said to have been accumulated by Loh Boon Siew prior to his death in 1995. "We have been in property development since the 1950s, during my grandfather's lifetime," says Lim. "The style was quite different then. The pace of property development was quite slow. Now, we're doing more township projects."
Loh family's third generation
BSG Property has developed more than 10 residential projects mainly in Penang Island and some in Butterworth. Its recent developments include Permai Gardens, a gated community of three-storey terraced houses and bungalows with condo-facilities as well as a three-tier security system. There are also 2-Permai, a resort-style development of three-storey terraced houses; and Nine-Ten, comprising three-storey semi-detached houses. Both 2-Permai and Nine-Ten are located in the Permai Village township, which includes a commercial cluster and an international school.
"We want to expand to the rest of Malaysia, to Kuala Lumpur and even Johor," says Kian Chong. The group is believed to be exploring a couple of land sites in Iskandar Malaysia with Khazanah Nasional.
Boon Siew Group and its listed holding company Oriental Holdings are renowned as the distributor of Honda motorcycles and cars in Malaysia, Singapore and Brunei under Kah Motors. Other businesses in the group's portfolio include plantations, property development and hotels. The conglomerate is undergoing a transition involving the second and third generations of the Loh family. Patriarch Loh has four daughters, two sons and 17 grandchildren, five of whom have entered the family business.
It is believed that Kian Chong is being groomed to take over the reins of the listed Oriental Holdings. Meanwhile, Lim is overseeing the private conglomerate, particularly the plantation business under Oriental Plantations and the property business under BSG Property. Another cousin, Tan Hui Jing, 31, is a director of Boon Siew Honda Motorsports, the automotive division of the group.
The three cousins are involved in BSG Property's joint venture with Katana and are good friends with Sherman. On the possibility of the joint-venture partners developing projects in Singapore, Sherman says "it really depends on market conditions". Given that a platform has already been established via the joint venture, there is "an aggressive push" by the two parties to expand across the region, he adds.
Both BSG Property and Katana are looking at the potential of developing mixed-use projects in Singapore, which could include residential, hotel and commercial elements, says Sherman. They are planning to look closely at government land sites, particularly "white sites" towards mid-2013.
In Singapore, the Loh family owns Boon Siew Building on Bukit Timah Road, where Katana has its headquarters, as well as the sites occupied by the Honda Driving School in Bukit Batok, and the Honda showrooms in Alexandra and Ubi Roads. The family also owns the Bayview Hotel on Bencoolen Street.
Katana's overseas forays
Katana may be small in size relative to BSG Property, admits Sherman, but it is a game changer. He says, "Even though it's based in Singapore, we were thinking of taking all the successful parts of Singapore property development and transplanting them into the rest of the region. We try to add value to all the projects that we do, and create something unique."
Katana's flagship project was Katana Residences in Kuala Lumpur, located on Jalan Madge, just off Jalan Ampang Hilir, in the neighbourhood of the exclusive Embassy Row. The concept for the project was a posh boutique development designed by renowned architect, Chan Soo Khian of SCDA Architects — the same firm behind the design of SC Global Developments' The Marq on Paterson Hill, Tuan Sing Holdings' Seletar Park Residence and UOL Group's Nassim Park Residences in Singapore.
Completed in 2008, Katana Residences is a five-storey block with 24 duplex apartments of 3,800 sq ft each and six triplex penthouses of 5,000 sq ft each. When it was launched five years ago, prices ranged from RM2.7 million for the duplex apartments to RM4.5 million for the penthouses.
Katana II, the second project in KL, is also located in the Ampang Hilir enclave, and features a contemporary interpretation of courtyard-style homes by another renowned Singapore-based architect, Mok Wei Wei, of W Architects. Launched in 2008, Katana II is a 40-unit boutique luxury development with a mix of townhouses, duplex apartments, lofts and triplex penthouses measuring 3,000 to 5,500 sq ft. The project was completed early this year.
Katana has expanded beyond Malaysia in recent years. For instance, it acquired a 32-acre site in Niseko, Japan, famous for its spectacular ski slope and popular with tourists from Asia and Australia. The project is expected to be a niche mixed-use development comprising hotel suites, residences, restaurants and a wellness spa.
Five years ago, Katana purchased a 10-acre site in Chiang Mai. The plan is to build a 100-unit resort development comprising suites and villas. The project is scheduled to be launched in 4Q2013. The project is designed as a "Resort Residential Wellness Retreat", Sherman says, along the same lines as the Niseko project.
Last year, Katana ventured into Cambodia, and formed a partnership with a Phnom Penh developer to build a 135-suite condotel there. It is now in the midst of finalising the hotel management contract.
The BSG Property-Katana joint venture is already exploring two other projects in Malaysia, but Sherman declined to disclose the locations, saying only that they are "outside Penang".
This story first appeared in The Edge Singapore weekly edition of Nov 12-18, 2012.
TOP PICKS BY EDGEPROP
[ Europe Style Duplex Condo ] ROI 9% Cash Back
[ Confirm Rental Get RM 3000 ] Students Condo
Freehold Double Storey Bandar Tasik Kesuma
[ READY TENANT+ COVER INSTALLMENT ] Hotel Suites
Freehold Semi-D, Taman Lesung Batu Jaya
Alor Gajah, Melaka