Commercial push by Glomac

Glomac to launch RM1.1 billion worth of integrated projects in 12 months


STRATEGIC DEVELOPMENT: Glomac’s project in Damansara. Right: Fong

GLOMAC Bhd, unfazed by slow consumer spending, is launching new commercial properties worth RM1.1 billion over the next 12 months while most developers are postponing their launches.

As the residential market suffers from high fuel and raw material prices, Glomac's move to invest in commercial properties is seen as strategic due to demand, group executive vice-chairman Datuk Richard Fong Loong Tuck said.

"The residential segment seems to have reached a saturation point. We are reacting to the market, which is why we are moving into integrated commercial developments," Fong told Business Times in Petaling Jaya, Selangor, recently.

"Integrated projects offer higher profit margins. We have expertise in these developments and do not see why we should not move with the flow," Fong said.

Glomac had previously built Kelana Centre Point, Kelana Business Centre, Glomac Business Park, Plaza Kelana Jaya, Dataran Prima, Glomac Square and OUG Square on similar concepts.

Fong said Glomac will not only replicate them but include more lifestyle features for new launches.

"We are launching a few commercial projects. The most expensive is Glomac Damansara," Fong said.

The RM650 million project will be sprawled over 2.76 hectares of freehold land along Jalan Damansara and adjacent to Damansara Kim.

It will feature a 15- and 30-storey office tower, a nine- and 10-storey office suite, two 25-storey serviced apartment blocks, 12 units of multi-storey shop offices and a three-level hybrid retail mall.

The project, Fong said, will be developed in four phases from this year for completion by end-2011.

Phase one, launching this month (August), will see the structures of the shop offices and the RM131 million 15-storey office tower building up first.

The mall with net lettable area of 150,000 sq ft and worth RM161 million, and the two office suites valued at RM168 million is in planning stage. This phase two project will be launched early next year.

The third and fourth phases will comprise the serviced apartments and the 30-storey office tower respectively and will be launched in late 2009.

Fong said the indicative proposed selling price for each serviced apartment unit is from RM600 per sq ft and around RM110 million per block.

The 30-storey office tower is worth RM185 million.

"We are open to selling the towers en bloc for sustainable development. The towers will attract European, Arab and local investors," he said.

Fong, who is also Malaysian chapter of the International Real Estate Federation (Fiabci) president, is optimistic on en bloc deals after selling Glomac Tower in Kuala Lumpur for RM577 million.

"We made a handsome profit from the sale. En bloc is something we will look at from now," he added.

Glomac also recently sold 20 units of four-and-a-half-storey shop offices in Sri Hartamas for RM100 million. But these were via open tenders.

The project, dubbed Galleria, will be constructed from August.

"The units were sold within a week from the tenders. We will consider this option to sell," Fong said.

By New Straits Times - Business Times - (by Sharen Kaur)