The new-styled TA Group is moving in a big way into property development. With its stellar record in stockbroking more than a decade ago, how will its new property play fare? Managing director and chief executive officer of TA Enterprise Bhd Datin Alicia Tiah chats candidly with iProperty.com on the company’s foray into property development
- Q: Competition is heating up in the property development sector in Klang Valley. Why would buyers choose your projects instead of projects by other more established developers who have been in the market for over 20 years?
A: Case in point – our upcoming Damansara Avenue project. Our Unique Selling Points (USPs) are design, attention to detail and landscaping, plus a lot of greenery. We have a 7-acre urban park which is open to the public as well. We maximize the view by making sure no building blocks another building. This will also improve air flow. We have double volume ceiling, lots of beautiful landscaping and lush greenery which make it a great place to take a walk.
Families and community can enjoy healthy living and have family time. The trend now is to work, live and relax in the same location, therefore reducing carbon emission. We aim for self-contained development so that there’s no necessity to travel to KL.
The entire development will be a gated & guarded community with 24-hour security and CCTV. Usage of card access is a must for all residential and office area.
When you are investing in properties, you have to go for good developers. We are a public-listed company with RM2 billion shareholders’ fund. [Hence, we are financially solid].
2. Q: How has response been for the completed Idaman properties?
A: We still have a few unsold units in Phase 4 of Amania, while we have fully sold out Phase 1-3. The price of Phase 1 more than doubled within 3 years! That’s a 30% return per year!
3. Q: What are your expectations for the new launches especially Damansara Avenue?
A: We expect no problem with our new launch. So far, all our customers are very happy. A lot of purchasers of residential units are also interested in commercial units.
For every project, the first phase has to do well. For us, our first phase for Damansara Avenue consists of Lifestyle Retail & Signature Office Suites. We don’t want to sell retail just yet as we want to maintain the quality and ambience. We want to wait for a good spread, only after that we will launch other types of units in Phase 1.
Phase 1 is part of a 48-acre masterplan development with an urban park setting which consists of service apartments, life-style retail and F&B outlets, business offices, corporate offices, hotel, life-style retail mall and community centre. All of these elements shall be developed around a 7-acre urban park. Phase 1 will have a unique combination of retail outlets, F&B outlets, commercial offices and SOHO within an urban park setting. The entire development is designed with direct frontage onto the main road (Persiaran Perdana) which is conveniently linked to LDP. A single level naturally ventilated basement car park directly serves all F&B and retail outlets, and offices.
We look at our projects on a long-term basis and want to ensure the long-term success of our projects. That’s why we want quality tenants. The indicative price for our Signature Office Suites is from RM440 per sq ft. There is also an early bird discount. We will have a private preview for registered buyers at the end of July, while the official launch will be early next month (August).
Sri Damansara is a township with fairly dated shophouses and limited parking, but now, we have provided ample parking, more than what is required by the authorities. Therefore, we are confident that it would do well. We have to make sure that the shops do well first, and then the residential units will follow suit.
Within 7-10 years, this area will flourish. If you think long-term, you would seriously consider buying it now at this price because the price keeps going up at the launch of every new phase. As well, every year prices tend to go up.
Retail prices and labour will not come down, and interest costs are on the uptrend, so if you had bought early, you would eventually be laughing to the bank.
We are pleased that Desa Park City is launching more of its phases. The price would be higher, hence making the area more desirable.
We have the advantage of having the last piece of commercial freehold land within this area. Further, the government wants to develop Sungai Buloh, hence making this a very desirable address in future.
On top of that, accessibility is very good as it fronts the LDP, MRR2, NKVE and Penchala Link.
4. Q: What are your past and current projects and their Gross Development Value?
A: On-going Projects and Value
1. Damansara Idaman (Amania - Phase 4 - bungalows ) - RM 113 million ( completion: end 2010 )
2. Damansara Avenue (construction to start: end 2010) - RM 3.8 billion ( spread over 7-10 years )
Past projects and value
1. Damansara Idaman (phase 1 – bungalows) - RM 50 mil
2. Damansara Idaman (phase 2 – bungalows) - RM140 mil
3. Damansara Idaman (Phase 3 – bungalows) - RM115 mil
4. Idaman Villas (Semi-detached houses) - RM103 mil
5. Idaman Residence (condominiums) - RM360 mil
Total - RM770 mil
5. Q: How large is your current landbank?
A: Landbank (mostly freehold):
1. Klang Valley & KL City Centre - 68.88 acres
2. Others - 1,145.5 acres
Total - 1,214.38 acres
6. Q: Are there plans to acquire more land for development? Would you consider acquiring leasehold land?
A: Yes, we are looking for land all the time. A lot of land has yet to be developed. If the price is right, we will buy. People do approach us. We won’t rule out the possibility of a joint-venture with landowners. If the valuation is fair and the land is in an area where we can add value, why not?
We wait for the right time to develop. The longer we sit on the land, the higher the value goes. We wait till all the surrounding areas are developed, then we develop the last piece of land there. For example in Kluang, Johor. We have the last piece of land that can be developed there. We don’t have to develop it yet as the land will still be there. It won’t go anywhere.
Another example: We will be launching our development in Dutamas when the time is right.
Yes, we will also consider leasehold land at prime locations.
7. Q: Apart from your involvement in hotels overseas, will you be embarking on any new property development overseas in the near future?
A: We have some experience in property development in South Africa. Apart from Aava Whistler Hotel in Whistler, Vancouver, we also have a joint venture in Richmond, which is a much sought after area in Vancouver for immigrants of Chinese ethnicity. It’s a 22-acre land which we are jointly developing with a renowned local developer. It’s a mixed development called Fantasy Gardens, which includes the latest amusement park set amidst lots of greenery.
We are not marketing these to Malaysians here because there is a lot of demand there already! It’s very easy to sell landed properties there.
We foresee increased interest in townhouses in Malaysia as the population increases because landed properties are much more expensive. Overseas, townhouses are very popular partly because the buyers don’t have a choice due to the higher prices of landed properties. Sometimes as well, they don’t have the time or money to maintain a garden.
8. Q: How much do you expect your property arm to contribute towards your group’s earnings in the next 5 years?
A: Our property arm has already superseded our stockbroking business contributing some 60% of group revenue. We also want to increase our overseas income, and not just focus on Malaysia. Our overseas income is expected to top 60%, and will contribute even more in future. Stockbroking is a very seasonal play and the Malaysian share market is in the doldrums currently. We have a very diversified portfolio, for example, property, stockbroking, overseas hotels. These diversified assets will stabilize our group earnings.
9. Q: How do you foresee the property outlook in the 2nd half of 2010?
A: Still good. Landed properties will continue to do well. The same can be said of commercial properties in choice locations. Shophouses in good location are still good. As the population increases, it’s a natural evolution where people with cash will hedge against inflation by buying properties. And if they are savvy enough, they would choose the right location.
There is a still strong demand from locals for residential and commercial properties at mid-range price (RM450-600psf) which embrace the modern lifestyle concept. Especially sought after are those situated at prime locations which have good accessibility and amenities.
