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MCT Consortium’s lofty plans

While many developers are lying low in the current economic downturn, there are some that have gone ahead with their plans. One such developer is MCT Consortium Bhd, which saw the first phase of its 77-acre One City development in USJ 25, Subang, sell out in less than three months.

To be developed over three phases, the freehold One City integrated development features shops, retail lots, office suites, serviced apartments, corporate offices, a shopping mall and hotels.

In the first phase, sixty-three 4-storey walk-up shoplots, priced between RM1.6 million and RM3.2 million, with a gross development value (GDV) of RM100 million, were sold out in less than three months (launched in January).

MCT Consortium managing director Tong Seech Wi and executive director Danny Goh were surprised with the market response achieved without the aid of marketing activities. The developer is now going ahead with its second phase and is confident it will get good response.

“Despite the bearish market, sales of our first phase show that people are still spending,” says Tong. A relatively unknown player, the developer decided to sweeten the deal by offering a 2+2 year leaseback guarantee package, with annual rental returns of 7%.

 

With double-frontage design, the 22ft by 80ft garden shoplots, with average built-ups of 7,040 sq ft, boast individual roof garden terraces. These units will be completed next year.

A 1.5-acre central park will serve as a green lung as well as a venue for various activities, including outdoor performances. “We will be putting in a stage, jogging tracks and a workout area. We will sponsor various performances and events to draw in the crowd. Politicians, too, can use our facilities to meet their constituents. This area will serve as a meeting point for residents nearby,” says Goh says, adding that the developer will be maintaining the central park. Another attraction is an open space boulevard, measuring 502ft by 80ft, between the shoplots. It can be converted into a street mall that can accommodate about 160 mobile kiosks.

The second phase will have retail lots and office suites housed within a 15-storey complex, with a GDV of RM300 million. Fifty-one units of double-frontage retail lots will occupy the first two floors. With built-ups ranging from 1,000 to 2,000 sq ft, these are priced at between RM500 and RM750 psf.

For the second phase, the developer will be offering a 3+3 year guarantee leaseback option, with 8% annual returns. The upper floors will feature 182 units of modular office suites, with a net lettable area of 450,000 sq ft.

The indicative selling price is RM330 psf, while the rents can fetch between RM2 and RM2.50 psf, according to the developer.  The second phase will also feature a 12-storey business hotel and a 15-storey corporate office block.

“We offer the leaseback packages because we understand investors’ concerns about putting money in a bearish market. Construction will take three years and we will lease back the units for another three years. The economy will definitely improve by then,” says Tong. The leaseback guarantee package is seen as a win-win situation for the company as it plans to control the tenant mix.

The main feature in the second phase will be a 120,000 sq ft sky terrace on the roof of the retail-cum-office centre. With a modern façade and fully equipped with LED and laser lights, Goh says the sky terrace will be ideal for fine dining. “We want to create a vibrant night life and with the sky park, you can conduct business talks while enjoying fantastic views,” he adds.

There will be a floor dedicated to business-cum-leisure. It will have 12 seminar rooms, karaoke outlets and a fitness centre.  “We will be looking for a cinema operator to run a boutique cinema. Since the seminar rooms won’t be in use at night, they can be converted into a boutique cinema and each room can seat 100 people,” says Goh.

With mainly food and beverage operators occupying the retail lots, there will be no duplication in dining options. “We will also have a bank or convenience store to serve the office crowd,” adds Goh.

The third final phase, which is the largest, may feature serviced apartments, a corporate office, an auditorium, a shopping mall and hotels. According to the developer, it is still finalising the plans. “The product mix is there and we are working on the specifications. For instance, we are planning to have an office tower and a hotel, both 45 storeys high. But this will be subject to approval,” says Tong.

The One City commercial tract was acquired from another property developer whom Tong and Goh declined to disclose.  The site is located at the convergence of two highways — ELITE and LDP. “This site has good exposure since it’s only 30 minutes from KLIA. We took one year to study other major commercial developments in the Klang Valley and incorporated their selling points into our One City development,” says Goh.

Goh says the project needs something special to draw in the crowd. “So, instead of building the highest or the tallest, which is beyond our capabilities, we will be emphasising on the concept and design to create a landmark,” he adds.


USJ 1 Avenue
Established in 1999, MCT Consortium started off in the construction sector, specialising in building electrical substations, including one in Abu Dhabi. It has also worked on a highway project in Nilai, Negri Sembilan. Today, the construction arm is kept busy with its own property development projects.

The founding partners of MCT Consortium are Tong, Goh and Goh’s elder brother Barry. Not only did all of them hail from the same hometown in Sitiawan, Perak, but Tong and Barry were also former classmates.

According to Tong, it all started when Barry, who worked in the electronics industry, chanced upon an electrical substation project and invited him and Danny, who is a quantity surveyor, to team up. “We mainly took on construction work on electrical substations back then,” says Tong.

For MCT Consortium, venturing into property development was a natural progression as the margins in construction were quite low, says Tong. “Not only are margins better in property development, but as a developer, we can also build on whatever ideas we have and this itself is fulfilling,” he explains. The developer inked the deal for a leasehold 5-acre plot in USJ 1 for between RM4 million and RM5 million a few years ago and later acquired three neighbouring 1-acre plots as well.

It realised that it needed to have a niche offering at USJ 1. After conducting some market surveys, it found that there would be demand for good quality condos with extensive security features. Says Tong, “Our project, USJ 1 Avenue, needed a strong selling point, so apart from ensuring quality and the usual swimming pool and sauna, we also came up with extra facilities like a dance studio, a sky garden and a private 35-seater theatre room as well as tuition and meeting rooms.”

The first phase of the RM200 million USJ 1 Avenue, comprising 296 condos housed in two 19-storey blocks, was launched four years ago. With built-ups of between 1,346 and 1,802 sq ft, these were priced between RM180 and RM190 psf. More than half were sold in less than six months. “Basically, our buyers were young families. With the affordable pricing and suite of amenities, it is value for money. Secondary values today are about RM230 psf and our buyers are happy,” says Tong.

The second phase of USJ 1 Avenue was launched in 2007 at RM230 psf. Located on an adjoining 2-acre tract, this phase offers 146 units in a 19-storey block that is connected to the first phase via a sky bridge. The developer recently handed over the keys to its buyers. The developer wanted to acquire two more plots near USJ 1 for another condo project, but dropped the plan due to the economic crisis.

MCT Consortium has also been active with several projects. These include shoplots in Rawang, a mixed commercial and residential development in Selayang known as 162 Residency, and another one comprising 2-storey terrace houses, shopoffices and apartments in Taman Tropika, Bangi.

The developer has also set its sights on a 464-acre leasehold agricultural parcel in Sepang, which it acquired last year. Located next to Cyberjaya, it plans to offer an exclusive gated bungalow enclave with over 400 units. Dubbed Lake City, the RM1 billion development will have clubhouse facilities as well as a 100-acre lake. The 10-year project will feature several gated precincts to be built over a few phases.

According to Tong, MCT Consortium managed to acquire the site at a reasonable price and plans to launch the first phase of more than 100 units by year-end. The 2 and 3-storey bungalow villas, with land areas from 6,000 sq ft and built-ups from 3,000 sq ft, will be priced below RM1 million.

“It is important for us to look for locations that are easily recognised and near the city centre. Not only is our locale near Cyberjaya and Putrajaya, it only takes 30 minutes to reach the city centre from the highway. Apart from the development concept, our price of below RM1 million is attractive. Our main target market are the upgraders who want an exclusive lifestyle at a reasonable price,” says Tong.

 

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 755, May 18 – 24, 2009.

 

 

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