LBS Bina Group storms ahead

2009 marks an exciting beginning for LBS Bina Group Berhad. The launch of eight projects this year breaks the developer’s silence for the past two years. Furthermore, their persistence in striving to deliver all of them early has clearly won over buyers with many of them sold out within months. iProperty.com catches up with LBS managing director Dato’ Lim Hock San.

A series of projects launched this year by LBS Bina Group (LBS) was met with overwhelming response. Launches within the group’s flagship Bandar Saujana Putra was snapped up within months spurred by strong demand.

LBS managing director Dato’ Lim Hock San says, “Currently LBS is regarded the market leader of medium cost housing sector as we are filling up that market demand. A lot of developers today are going for high-end products which leave a supply gap and this is where LBS deliver medium cost products.”

In just two and a half months since its launch, all 220 units of its Iris Garden 1 single-storey houses were sold out. This was quickly followed by another 200 units of Ruby Garden, single-storey linked residences under its ‘Affordable Homes Series’, which were all taken up in just two months. Buoyed by this demand, LBS subsequently launched Iris Garden 2 which was split into three phases comprising 48 units per phase. Phase 1 and 2 are sold out, leaving only limited units available in Phase 3.

“Consumers are buying LBS products to live in and not to speculate,” elaborates Lim.

Just recently LBS launched 156 units of Topaz 3 double-storey house in Bandar Saujana Putra. Built on 18ft x 55ft lots, the houses are a follow-up to Topaz 2 which saw 67 units sold out within two months. Before that the group has launched 330 Town House units in Taman Tasik Puchong. 104 units from phase 1 were all sold while phase 2 is still open.  

The group’s success is not limited to residential developments. In Taman Perindustrian Tasik Perdana, Puchong, out of the 58 semi-detached factory units launched late last year, all of the non-Bumiputra units have already been taken up. In Bandar Saujana Putra, 60% of the 37 units (Phase 1) of the double and triple storey shop units have been grasped even before the targeted official launching in November. Lim was confident to see this 78 commercial units to fully meet the entrepreneurs’ demand in this growing township.

“This year alone, LBS launched eight new products with a total gross development value of RM384 million. Today (Ed’s note: third week of October), we have sold more than RM270 million which was my original projection for the year end. We are now setting our sights on achieving RM300 million sales by year end instead,” says Lim.

Lim stresses that this proves that there is a huge demand for medium cost housing as not many can afford premium products in prime areas. He further added that new homebuyers as well as upgraders are a target market for the company.

“Bandar Saujana Putra will be the bread and butter of LBS for the next three years. There will be other areas primed for development that will generate continued income but it is still too early to disclose them,” says Lim.

Lim added that LBS still does high end products depending on the location, the requirement and consumer demand. The group has semi-detached and bungalow residential projects in Batu Pahat . Sometime during the first quarter of 2010, LBS will have a medium-high end project at the group’s landbank in Cameron Highlands.

Next year, LBS will be launching another high end development in Puchong with a gross development value of over RM1 billion. Encompassing 175 acres and set amidst a lake, product offerings there will comprise semi-detached, bungalow, condominium and commercial units.

Culture and strategy

Lim has stressed during the company’s property launches this year that LBS will strive to deliver its projects ahead of schedule. So far, some of the projects launched are already starting to fulfil that vision with early completion in sight.

This culture and persistency stems from the group’s previous experiences when some of their projects were delayed.

“In the last two years, some projects were delayed as some of the appointed contractors could not absorb the rising cost of materials. LBS has to intervene to finish the job but there is already a delay.

“Today onwards, control has been further tighten and we strike to ensure that there will be no such delay. Contractors have direct access to me and regular spot checks are done to ensure that all the projects are on time and of acceptable quality,” stresses Lim.

Lim explained that LBS can tackle the contractor issues as the group has their own contractor company which is 51 percent owned, which results in lesser problems.

“Buyers feel confident when delivery is early. It is important for them to know that their investment will turn to reality and they will feel better when they can see progress on site. Early delivery directly influences the reputation of the developer and that is an important trait that homebuyers look out for,” adds Lim. He reinforced that LBS has never abandoned any projects.

Lim says, “LBS also takes it seriously to ensure our customers are happy. We have a dedicated customer care centre set up for that purpose. It can be said that at least 99 percent of our customers are happy with the products. Whenever customers raise concerns and it is within capacity, it is the job of the developer to rectify them. This rectification can never be postponed.”

According to Lim, LBS customers want continuity and good relationship does not end with the delivery of the products.

“Purchasers share good experiences and this has been in favour of LBS so far. One of the reasons why our homes are being snapped up fast is because our buyers themselves are ‘selling’ the neighbourhood to friends and family members by word of mouth. The best part is, LBS does not even have referral programme. All this happened naturally. In a way, this creates a very close-knit community as customers will see familiar faces within the neighbourhood which is a great thing.

 

Asked about the group’s marketing efforts, Lim says that besides regular press advertisements, road shows, radio, etc., LBS also does sponsorships for the community. One of them was the contribution of RM150,000 as building fund for a surau in Bandar Saujana Putra.

“LBS also offers incentives, one of which we call the Hassle Free Home Ownership Programme, to make it easier for buyers. That said, people do not buy houses just because of the incentives as their first concern will always be the location and then the product,” says Lim.

Outlook for 2010

Lim believes that the property market outlook for next year will be good, a direct outcome of the stimulus packages and efforts announced by Malaysia Prime Minister Datuk Seri Najib Tun Razak. The enthusiastic response to LBS Affordable Homes Series reflects a recent improvement in consumer confidence in spending and also signals the return of interest in property investment.

“It is a very good time to buy properties now due to lower interest rate. Furthermore, property is a good hedge against inflation and is time proven.

“I remember that I could buy noodles for just 10 sen back in the old days, but today, what can 10 sen buy you? This is the effects of inflation,” explains Lim.

According to Lim, property prices are expected to go up next year, especially in prime areas. He added that in the next two to three years it will also be difficult to find landed properties for below RM200,000 in the Klang Valley.