Tiew Johor Bahru ARC

ANDAMAN Group’s towering development, ARC @ Austin Hills, in Taman Daya, Johor Bahru, is surrounded by perfectly manicured lawns and landed homes.

“ARC is right next to a golf course (Austin Heights Golf and Hotel Resort). It will be the first and perhaps the only high-rise development in Taman Daya to offer panoramic views of the golf resort,” says Datuk Seri Vincent Tiew, managing director of Casa Andaman Sdn Bhd, or Andaman Group as it is better known.

The developer chose to build in Austin Hills because it is touted as the “Bangsar” of Johor Bahru. “We thought it through before deciding on the location. Not only is ARC located next to a scenic golf course but it is also just 15 minutes away from the Johor Bahru city centre,” Tiew adds.

ARC @ Austin Hills is Andaman Group’s first project in Johor Bahru. The three-block serviced apartment project has 1,843 units and a gross development value (GDV) of RM600 million. Unit sizes are 650 sq ft (two bedrooms), 850 sq ft (three bedrooms) and 900 sq ft (three bedrooms) while prices start at RM420 psf.

Launched on July 31 and slated for completion in 1Q2019, ARC @ Austin Hills is capitalising on its strategic location, nearby amenities and affordable prices to attract buyers.

In terms of location, Tiew explains, ARC @ Austin Hills is within 5km of institutions such as Sunway College, KFCH International College and Fairview International College. “There are so many amenities near the development, such as Hospital Sultan Ismail, AEON Tebrau City and Tesco Tebrau City, and the upcoming Austin Heights Water Theme Park [which is scheduled to open by the end of this year]. This development is also near the largest morning market in Taman Daya and Taman Mount Austin.”

The project’s location has drawn many “Johoreans working in Singapore but nonetheless choose to live in Johor”, according to Tiew. “However, at least half of our buyers are from the west coast of Malaysia.

“Despite the falling ringgit and weak share market, I would say the response has been good as we achieved close to 40% (about 600 units) take-up in less than a month.”

ARC @ Austin Hills is a joint venture between Andaman Group and Majlis Bandaraya Johor Bahru (MBJB). The 5.11 acres of freehold land the project is sitting on is owned by MBJB. “When we first got to talking, MBJB was keen on bringing a reasonably priced high-rise development into the Johor market. We knew we would be able to deliver,” says Tiew.

Upscale finishes at affordable prices

For ARC @ Austin Hills, Andaman Group is keeping the prices lower than those of other developments in the affluent area — between RM270,000 and RM450,000. “The prices of our apartments are 20% below the general market price in Taman Daya and Taman Mount Austin,” declares Tiew.

“We felt very strongly about tackling this grossly untapped market, whose average household income is above RM5,000 but below RM10,000. This development would be perfect for those who cannot afford to purchase a home above RM500,000.” Besides making a profit, the developer is fulfilling its vision of providing more “affordable” housing for its buyers.

“We believe in providing a more realistic price for our buyers. I think RM1,000 psf is a tad overpriced. The market in Johor Bahru is not like that in Kuala Lumpur,” Tiew points out. “This is also one of the reasons we decided not to include studio units. We want our buyers to get value for money with the 2-bedroom and 3-bedroom units.”

About 300 selected 2-bedroom units will come with two parking bays.

“From the outset, we established that our target market would be young individuals and young families, especially those looking for their first homes,” Tiew says, adding that most of the buyers are potential “owner-occupiers”. Meanwhile, at least 30% of ARC’s buyers are investors.

“We ended up attracting more investors since ARC is located 17km (15 minutes away) from the Customs Immigration and Quarantine (CIQ) complex,” Tiew remarks.

Despite its lower price range, he stresses, ARC @ Austin Hills offers quality and luxurious finishes. “There is a wide variety of facilities and luxury finishes that come with this development, although it means that our construction cost would be higher than usual.

“In terms of facilities, we have an Olympic-size swimming pool, a Jacuzzi, barbecue pits, squash courts, an outdoor sky garden and a Japanese-inspired garden with a koi pond. We also have a multi-tiered security system with CCTV at our perimeter fencing and card access to this development. The residents will also be able to access Singapore TV channels and a Satellite Master Antenna Television point will be provided,” he says while highlighting the ritzy and sophisticated façade of full glass windows with glazing.

Knight Frank’s Johor branch executive director, Ricky Lee, agrees that at RM420 psf, ARC @ Austin Hills is one of the more affordable high-rise residential projects in Taman Daya and Taman Mount Austin at the moment. “It is also quite a high-density development with 21 units per floor,” he comments. Current average prices in the area are between RM500 and RM600 psf, while average rental yields are between 4% and 6%.

Furthermore, the development is strategically located, he says. “There are enough food and beverage outlets, public amenities such as shopping malls, tertiary institutions and a medical centre at Austin Hills, Taman Daya. However, the traffic may worsen as more high-rise developments are completed in this area in the next four years,” he cautions. The high-rises include KSL Residences by KSL Holdings Bhd, Havona by Sunray Development Sdn Bhd, Austin Suites by Mah Sing Group Bhd, Austin Regency by Scudai Development Sdn Bhd and Seri Austin Residence by United Malayan Land Bhd.

According to Lee, the area attracts the middle class. “Landed properties appeal to owner-occupiers while high-rise residential projects may draw a mix of investors and owner-occupiers.”

He believes the future is promising for Austin Hills. “The most desired investment here is a combination of low entry cost, good yield and upside capital appreciation. The track record of the developer, its reputation and quality of the developments are key factors to be considered when choosing a property to purchase,” he advises.

ARC lobby

Future targets

“We noticed that a lot of developers are shifting away from Johor Bahru due to poor market sentiment, so we decided to build ARC to fill the void,” says Tiew, explaining Andaman Group’s adoption of the blue ocean strategy.

He adds that the group’s focus is the mid-range market. “We have never launched products that are priced above
RM1 million. While other developers are only starting to branch out into this market segment, we have been focusing on it from the beginning.

“Currently, we don’t have any land or reserved GDV. We prefer to launch within 12 months of acquiring land or to enter into JVs with other developers. Typically, we don’t buy land and wait for it to appreciate; this is one of our development philosophies. Hence, 90% of our projects are developed without bridging loans [and are internally funded].”

Considering the poor market sentiment, the group is adjusting its sales timelines. “We have to fine-tune certain sales timelines — normally, we aim to sell out within six months. The timeline has since been extended to nine months to correspond with the state of the market. For this year, we have a sales target of RM600 million, which would be derived from ARC and another residential development in Ampang that is due to be launched at the end of this year,” Tiew explains.

“Next year, we plan to achieve a sales target of RM1 billion,” he says, adding that the forecast is based on a couple of upcoming projects. “We will be project manager for a development on an 88-acre prime tract in Ampang as well as a few in Kuala Lumpur and Petaling Jaya.” Details of these projects have yet to be finalised.

“We are also keen on the Myanmar and Vietnam markets,” remarks Tiew. “We plan to kick-start our venture into the international market soon.”

Andaman Group expects the medium-cost segment of the Johor Bahru market to grow in the coming years, underpinned by the city’s relatively young workforce and a population that needs more homes. “While high-end developments and developers will feel the pinch, we believe there is still a market for medium-cost developments. We see only good things for ARC,” says Tiew.

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