A jewel in the rough

By THE EDGE

Coming up amidst secondary jungle in the ex-mining town of Gambang in the east coast of Peninsular Malaysia is the RM1 billion Bukit Gambang Resort City (BGRC).

Sprawled over 500 acres of freehold and leasehold land, it will feature a host of tourist attractions, including a water park, an adventure park and a forest park, and resort suites and villas, says its developer Sentoria Harta Sdn Bhd.

The idea is to develop a family-oriented, integrated resort city in a natural environment, says the Kuantan-based Sentoria Harta. It targets not only the locals, but also those out of town and foreign tourists attracted by Malaysia's culture.

For those not familiar with the east coast, the questions would be: Where is Gambang? Who is behind the billion-ringgit development?

For a long time, even the locals considered Gambang, located 30km east of Kuantan town, inaccessible. This perception has changed somewhat with the emergence of the East Coast Expressway, says Gan Kim Leong, Sentoria Harta's executive director.

Gambang is now home to, among other facilities, a matriculation college, the Paya Besar community college and a Felda scheme with five primary and two secondary schools. For BGRC, this means a captive market of lecturers and students for Desa Hijauan, its affordable housing component.

The project comprises several components, of which the five main ones are the water park, adventure park, forest park, East Coast Bazaar and Heritage Square. These are complemented by a residential component, comprising resort accommodation and Desa Hijauan. The final component will be institutions of higher learning.

Preliminary work on BGRC has started and the project should keep the developer busy for at least the next decade, says Gan.

Track record
A developer is judged by its track record. So, what's BGRC's story?
Gan and former colleague Jimmy Chan are executive directors of Sentoria Development Sdn Bhd, the holding company of Sentoria Harta. Set up in June 1998, Sentoria Development is involved in the construction, leisure and hospitality industries apart from property development.

The partnership started when the duo, civil engineers with some 20 years' experience in consulting, contracting, design and property development, decided to be their own boss.

"We decided to do something on our own; to have our own business," Gan tells City & Country.

The company's maiden project, the upgrading of the Bahau road in Negeri Sembilan, was awarded in 2000. The following year, Sentoria Development designed and built Sekolah Rendah Bandar Rinching in Semenyih, Selangor. In 2002, the company ventured into its first property development project — a mixed development named Taman Sentoria in Kuantan. And it has not looked back since.

It was also in 2002 that Sentoria Development chanced upon 117 acres of freehold agricultural land. Used to the high land prices in the Klang Valley, Gan and Chan could not believe their ears when they learnt how much it was going for, although they declined to reveal the price. The decision to invest in the land was made when they realised its potential.

Last year, an adjoining 430-acre tract of leasehold land was alienated to Sentoria Alfa Sdn Bhd by the Pahang government. Gan and Chan had a brainwave — why not combine the two pieces of land and build a water park resort city?

Why a water park resort city? "Why not?" asks Gan. There is no water park in the east coast, he says. All of them are located on the west coast — Sunway Lagoon in Selangor, Bukit Merah Laketown Resort in Perak and A'Famosa Resort in Melaka.

Sentoria Harta is looking beyond return on investment with regard to the water attractions. It sees the buzz created by these popularising the homes that will come up within BGRC. Gan also expects other than the locals — there is a catchment of some four million people in Pahang, Kelantan and Terengganu — to visit the water park and invest in the homes.

"BGRC is strategically located near the Gambang interchange, the first East Coast Expressway exit point into Kuantan town, and only 8km from the toll plaza," says Gan, adding that it takes less than three hours to drive to BGRC from Kuala Lumpur.

"People think it's too far to travel to Kuantan, but with the highway, it is actually very convenient. Most city dwellers work five days a week. Where can they go for the weekend? They won't want to travel far. Our society is also becoming more affluent, with more people seeking entertainment and relaxation. We want to provide that," he says.

Previndran Singhe, CEO of Kuala Lumpur-based Zerin Properties, says that while BGRC is a great tourism project, he sees Kuantan's beaches as its strength.

Gan agrees, but is quick to point out that BGRC will offer more attractions. It is not replacing the beaches, but complementing them, he says. "We are providing an alternative tourist destination for visitors."

What would BGRC's selling point be? Acknowledging that it would be unrealistic to compete with the big boys in the industry, the down-to-earth developer says it will capitalise on what it sees as lacking in existing integrated water parks, such as a natural environment.

"We will bank on our natural surroundings and family-oriented activities. For instance, the secondary jungle will provide a shady environmental setting," Gan explains.

To ensure there will be something for every visitor, the developer will introduce recreational activities, such as jungle trekking and mountain biking in the 100-acre forest park; educational attractions for young children, such as a tropical fruit farm, an aquarium showcasing freshwater fish from various states in the country and a petting zoo with local animals.

Instead of adopting flashy foreign names and themes for the rides, the developer will go local. The 40-acre adventure park, for instance, will feature the Sungai Lembing Tin Tunnel and the Mulu Cave Adventure Ride. The East Coast Bazaar will boast a 3-in-1 concept, combining a local wholesale market, night market and foreign factory outlet showcasing the handicraft of the local people.

The Heritage Square will put on cultural shows and have food and beverage outlets. There will be batik painting workshops and a variety of activities for children, says Gan.

Resort accommodation
Gan is very excited about the integrated resort accommodation, comprising the Scenic Ocean Ville resort suites and Global Heritage resort villas. The former is designed with various ocean themes — Caribbean Bay Resort, Arabian Bay Resort, Andaman Bay Resort, Hawaiian Beach Resort and Mediterranean Beach Resort — while the latter will have country themes.

Sentoria Harta held a sales preview in June for the 560 units in Caribbean Bay Resort. Gan says the sales were "better than expected" at 300 units, of which 80% were sold to buyers from Kuantan.

What is noteworthy is that the units, tagged at RM107,000 onwards for the 470 sq ft studio units (140 units) and RM152,000 onwards for the 810 sq ft family suites (420 units), come with a five-year leaseback agreement, with guaranteed annual rental yields of 7.5%. Owners get 35 days of free stay during the five-year period. The developer will absorb all the legal fees.

Buyers, says Gan, can continue to lease the units to the developer after the initial five years. The units will also be fully furnished and maintained free of charge during the leaseback period.

Sarkunan Subramaniam, executive director of Knight Frank (Ooi & Zaharin Sdn Bhd), says for a project such as BGRC to sell, the developer must offer a good track record. "Some developers make promises, but when they find that they can't carry on with the project, they fold and buyers are left in the lurch. Who is guaranteeing the 7.5% return? Is it backed by any financial institution?" he asks.

"The return is guaranteed by the developer," Gan says, "We will honour the rental guaranteed simply because, based on our calculations, income derived from the hotel operation is sufficient to fund the rental.

"We guaranteed RM1,000 and RM650 per month for our family and studio suites respectively, which is much lower than other developers offering similar products."

'BGRC should do well'
Gan is confident BGRC will do well, given its affordability and the current high hotel occupancy rate in Kuantan, boosted by the fact that Kelantan and Terengganu do not work from Friday to Sunday. A typical room at Swiss Garden Hotel costs about RM300 per night, says Gan.

The launch of the project's next resort suites — about 500 units in Arabian Bay Resort — are slated for early 2008. The developer is targeting to put Desa Hijauan, comprising 900 units of 1-storey homes and 41 units of 2-storey shopoffices, on the market early next year.

According to Gan, the building approval for Desa Hijauan is expected by year-end. Priced from RM35,000 onwards, the homes have built-ups from 660 sq ft onwards. The shopoffices have built-ups of 3,080 sq ft and are priced at RM280,000 onwards. Gan says the water park and the Caribbean Bay Resort units are targeted to be ready by June 2009.

Will the developer make its way into the Klang Valley? Gan discounts this for now, due to the high cost of land there and the fact that the BGRC project will keep Sentoria Harta busy for the next 10 years.