By Sharon Kam
Becoming trendsetters — that is how Boustead Properties Bhd director Datuk Ghazali Mohd Ali describes its successful Mutiara Damansara development in Petaling Jaya, Selangor. This is the fourth time that Boustead Properties has made it to the Top 10 of The Edge Top Property Developers Awards. This year, it took the 10th position. (On Aug 8 this year, the property arm of Boustead Holdings Bhd was taken private.)

“At Mutiara Damansara, we could have followed the move towards high density developments and build more condominiums but we did not. When people close, we open. We want to set the pace where we are,” says Ghazali.

Since Boustead first launched the township in 2000, Mutiara Damansara has seen strong and steady appreciation. The highly successful development could be due to its freehold status and strategic location but it is also very much because of the developer’s innovativeness and initiatives to add value for purchasers.

“We do not stop after we have delivered. We constantly value-add. We focus on quality rather than quantity. For instance, we maintain the open spaces, the parks and roads, all at our own cost to ensure control over the aesthetics, the cleanliness and other aspects which could add value,” says Ghazali.

“If we had not bucked the trend, we would not have come up with a commercial hub such as what we have now in Mutiara Damansara,” he adds, referring to the commercial precinct which now comprises Boustead’s The Curve shopping and lifestyle centre and other commercial entities such as Ikea, Ikano, Tesco and Cineleisure.

Mutiara Damansara
The 360-acre Mutiara Damansara has only 30 acres left for development and “the longer it waits, the better”, according to the developer. This has been Boustead’s strategy for some time considering the strong appreciation in value of real estate here over the past few years.
It launched its bungalows and semi-detached houses there in 2002, priced at RM1.3 million and RM843,000 respectively. Today, the same units are being transacted ar RM2.4 million and RM1.8 million respectively. Bungalows here are currently being tenanted at about RM15,000 a month.

Early last year, the developer launched 3-storey semidee units at RM1.8 million each but just a little over a year later, these units are already transacting at above RM2 million on the secondary market even before the houses have been delivered!

Demand for properties there has not lagged even amidst the overall sluggish property market in the Klang Valley.

In fact all the residences launched by Boustead last year, comprising about 180-odd units of bungalows, semidees and superlinks, have been fully taken up. The next residential phase in Mutiara Damansara will be Surian Residences, a condominium which is pending approval. It is expected to be launched end of the year. “We are looking at a selling price of above RM500 psf, for now,” says Ghazali.

The 311-unit condominium project, the second after Surian Condominium which Boustead launched in 2004, will be on a 10-acre site, with sizes of between 800 sq ft and 2,200 sq ft per unit.

“For the future, we still have 10 bungalow lots of 10,000 sq ft each which we may develop and sell or just sell as bungalow land. We have not decided on that,” says Ghazali.

As for its corporate lots, prices may breach RM420 psf soon. There were 20 such 1-acre lots and there are only nine lots left for sale which Boustead is considering holding back, again in line with its strategy of tapping into future price appreciation.

The daytime population of Mutiara Damansara is also growing, what with the increasing presence of corporations and multinationals taking up office and showroom space there. The major companies already there or moving there include Nestlé, Daimler-Chrysler (M) Sdn Bhd, Toyota Lexus, UAC Berhad and Batu Kawan Berhad.

“Several of our friendly competitors, like Glomac, have bought land from us which we would like to believe means we are doing quite well,” says Ghazali.

The rising population in the area will provide further boost to the shopping precinct there.
“This allows us to offer more products and change the tenants mix more often. At The Curve for instance, Debenhams will be opening there at the end of this October, taking up 10,000 sq ft, while Living Quarters and Metrojaya will be expanding. The number of tenants has increased over the years and other new tenants will be coming in. F & B outlets are doing well too. Turnover rentals have also increased and this is a good sign,” says Ghazali.

“The Curve attracts two million visitors a month and we are confident it will reach 100% occupancy by end of September,” he adds. The Curve is developed by Mutiara Rini Sdn Bhd, a wholly-owned subsidiary of Boustead Properties.

The Curve management will be embarking on a new joint branding exercise with its neighbours like Ikano and Cineleisure to brand the whole commercial area as “One Destination” or a one-stop commercial centre. This new branding strategy will begin early next year.

According to Ghazali, Cineleisure which is 50%-owned by Boustead in a joint venture (JV) with the Cathay Group, will be undergoing a major revamp soon with revised floor layouts and new signages. New tenants will also be invited to move in.

To cater to the rising daytime population, the current site where a McDonald’s outlet now stands will be turned into a car park accommodating 1,000 cars. According to Ghazali, there are currently five access points into Mutiara Damansara and Boustead is studying yet another access which will head straight to the Damansara-Puchong Highway.

The proposed LRT line from Kota Damansara to Cheras which is expected to pass through the area, will certainly augur well for the whole development and plans are to build connecting links from the proposed LRT station near the new hotel right up to the corporate offices.

The 145-room Royale Bintang Damansara is also experiencing good occupancy rates, especially during weekends, and to cater to the demand for more rooms, a second hotel will be built there.

“The building of our second hotel there will be commencing soon,” says Ghazali, adding that the 302-room 4-star hotel is located behind Cineleisure.

Boustead also manages the Royale Bintang KL and the soon-to-be-open five-star Royale Chulan on Jalan Conlay, KL. It has also taken over the management of Royal Adelphi in Seremban and hopes to open the Royale Bintang Penang next.

Another project by the developer in the Klang Valley is its 183, Jalan Ampang condominium, next to the British High Commission, which has just been completed. However, those units are for rental only.

For future developments, there is a half-acre piece of land in Kenny Hills which Ghazali says can be developed into a super bungalow or a limited number of bungalows, while there are plans for a mixed development in a JV with the Cathay Group on a site in Bukit Bintang which used to house a Cathay cinema.

The group’s development on Balau estate, a former 1,336-acre oil palm estate in Semenyih, Selangor where the University of Nottingham campus is located, is also being geared up for its first launch of residential homes. The university can be the catalyst for housing and property development in the area, says Ghazali, adding that Boustead is managing the project for the group.

The group’s property investments experiencing good occupancy and rental yields include Menara Boustead, Menara Affin and Wisma Affin, all in Kuala Lumpur’s Golden Triangle.
In Johor, the developer’s 1,400-acre Mutiara Rini development in the Iskandar Malaysia region is seeing good sales, with 6,000 homes already sold. It has another 800 acres to be developed.

“We are starting development of the commercial area soon. It won’t be another The Curve but we are negotiating with a potential key anchor tenant,” says Ghazali.

The developer had also strived to offer something different from other developers there. For one, each purchaser is given a bicycle so they can make full use of the 30km bicycle lane in the development. The township development also boasts a 60-acre town park which it is developing with the support of the Forest Research Institute of Malaysia.

Strategy going forward
The overall economic slowdown, and rising inflation coupled with the increasing costs of construction, would affect a developer in one way or another. For Boustead, it is somewhat fortunate that it would be able to buffer the high cost of construction by raising selling prices of properties in its development in Mutiara Damansara, says Ghazali.

Boustead Properties was taken private recently and the company would be doing a bit of rationalising while facing the challenges in the current property market.

In dealing with increasing costs of construction, Boustead is looking at smart partnerships with subsidiaries within the group which are involved in manufacturing building materials such as ceramics and paint. “We are also looking at coming up with more efficient designs for our properties, as functional designs can contribute to the cost of construction,” says Ghazali.
One thing Ghazali really wishes though, is for the government to speed up development planning approval as this would help reduce construction costs.

“Construction periods can be reduced but we never really know when the approval will be given. As long as there is a delay, it will add to the costs,” he says.

Although the government has made some improvements in the approval system, Ghazali feels things can be even better. “The improve-ments to the public delivery service is not moving as fast as it should be. We also need credible and corrupt-free civil servants for the industry and the people to benefit because delays are a factor in the costs of construction,” he adds.

This entry was posted on Wednesday, September 3rd, 2008 at 8:58 pm and is filed under Newsclipping. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.