Very often, when one considers a property for investment, one tends to consider those in the city. And when one thinks of developers, there is a tendency to consider the big, established players for fear of projects being abandoned.
But what about the smaller players, some family-based business, in a little town far away from city life serving their community? Where are these companies heading? And how has the turmoil of the past year affected them? Or did it?
Before going further, a big company does not become big overnight. One does not become rich out of the blue. It takes years of savings and investing, wise decisions and many other factors.
From Skudai, Johor to holiday destinations like Langkawi in the north, from Peninsular Malaysia’s largest state to former tin state Perak, these small-scale developers share their views about the community they are building in, and for, and the effects of the global downturn. For three out of four of them, property development is their core business. Because they have years of experience in that community, they know the infrastructure and the market. On the whole, they have weathered the crisis well.
Some, like YNH Bhd, have decided to venture out into the Klang Valley. Others, like Hua Yang Bhd which started out in the Valley, is venturing out to the little areas. Yet others are contended to stay put.
Professionals working in the town centre can also consider Bandar Putra with its exclusive living and pretty surroundings.
To the city
In 2003, a little-known developer from Manjung, Perak, YNH came to Kuala Lumpur. Manjung is about 80km from Ipoh, and is located between the city and Lumut, the getaway point to Pangkor, and Sitiawan.
When it came to Kuala Lumpur, its choice of land was telling – Mont’Kiara and the Jalan Sultan Ismail vicinity. The family business was seeking its fortune in the city but it was not leaving behind its roots in Perak; it was, in fact, adding another pillar to its foundation.
Come the fourth quarter, YNH will be handing the keys to buyers in both projects, Fraser Place, next to Wisma Hong Leong, in the city and Cerian Kiara in Mont’Kiara.
(Because Fraser Place is a project with a commercial title, it is not governed by the Housing Developers Association’s mandatory three-year completion deadline.)
Formerly known as Yu Neh Huat Bhd, the company was incorporated in 1985 as a family business. The late Datuk Yu Neh Huat was a farmer and livestock keeper. The company began constructing its first project – 10 units of double-storey shop offices – in the late 1980s.
Its financial controller Chan Yan Meng says the company’s turning point came in 1995, with the Manjung Point township, a project of about 1,000 acres. It still has about 700 acres that are yet to be developed.
“Although we may have ventured out to Kuala Lumpur, Manjung Point will continue to be our reference point. Today, YNH is a trusted and one of the largest developers with a strong base here,” says Chan, who has been with the company since 1990. Its staff strength has grown from 30 in 1990 to 250 today.
Most of its customers are civil servants – mainly those at the naval base located there and teachers – and small holders.
With 45% of its revenue coming from there and the rest from its projects in Kuala Lumpur, the company has diversified its market with a foot in the city.
There are dozens of small-scale developers in and around the peninsula, Sabah and Sarawak. Many of them have humble beginnings and are contended to be where they are. In some ways, the economic downturn has not really affected them as much as the big boys.
Says an analyst who declined to be named: “Housing development is still very much location based. If a developer is from a small town, it has to consider the local economy and demographics in that area.
“In such a situation, there may be a tendency to expect sales to be poor because of the global economic woes but this need not be the case. Away from the city, these smaller developers have a captive market and they will still do relatively well. In terms of sales and earnings, it will be stable.
“YNH, for example, sells to civil servants, and makes an average RM40mil to RM50mil sales annually in what many would consider as remote areas. Likewise, Pasdec Holdings Bhd in Pahang.
“In Sabah, property sales are doing well in plantation areas because of the significant price of palm oil. So it really depends on locality. While some – Hunza Properties Bhd from Penang and YNH who have made their way into the city the last several years – there are many others who are contented doing what they are doing in these smaller towns.
“A big deterrent is the price of land in the Klang Valley, which is not representative of the whole country.”
Klang Valley-based Hua Yang is scouring for projects outside the Valley where land prices are cheaper.
The rural pull
Like YNH, Hua Yang is also a family-based business. Its Seri Kembangan mixed development is by far the largest project in its stable. Its chief operating officer Ho Wen Yan says it would like to focus on other markets in Perak, Johor and Seremban.
Says Ho: “Outside the Klang Valley, our focus is mass housing in integrated townships; in Seri Kembangan, it is high-rise residential units.”
He says the affordable mass market segment is the company’s core focus and contributes the bulk of Hua Yang’s revenue. In terms of customer demographics, most of them are first-time buyers comprising young couples who buy for occupation.
“In the city, the story is different. There is the investor group who buys to sell, or to rent. So the present lull is an opportunity to grow our presence.
“The bigger boys have gone into niche housing, resulting in a lack of affordable mass market housing in the RM90,000 to RM380,000 range. Our opportunity is to tap into this market,” Ho says.
The company plans to launch several developments in the next six to nine months in Seremban, Senawang and Johor Baru amounting to about nearly RM120mil. Its Sg Besi project, comprising residential, commercial and retail, has a GDV of RM550mil.
It is also pretty upbeat about its financials for 2010 with revenue of RM100mil in 2009, RM60mil in 2008 and RM63.5mil in 2007.
In Pahang, the largest state in Peninsular Malaysia, land is in abundance. This is Pasdec Holdings home turf. CEO Mohd Khairuddin Abdul Manan says the company is best known for medium-cost houses comprising mainly single-storey terrace and semi-detached homes, which contribute 60% to the group’s turnover.
Besides housing development and management, the group is also involved in construction, the manufacture of bricks and trading in building materials.
The group recorded improved sales of its residential properties from RM32mil in 2007 to RM64.8mil in 2008. The projected sales for 2009 is RM81.8mil. The group has 2,500 acres of land, 90% of which are in Pahang. Pasdec expects revenue and profit to be affected due to market condition.
Says Khairuddin: “Results for the first half of the year indicated a drop in our targeted turnover by 37%, we anticipate unfavourable results for the second half of the year. But we will look for ‘wow’ factors’, like public infrastructure and other amenities.
“We expect caution and perseverance for the residential market owing to the economic turmoil until the year-end.”
The total GDV of the company’s five flagships projects, which are located in Kuantan, Pahang is RM1.98bil.
Further north, Thong Sin Development Sdn Bhd has made Langkawi and Cameron Highlands its playing field. The company is best known for building apartments and serviced apartments, which contribute 70% to the company’s revenue. It has some double-storey and semi-detached units scattered about but overall, its forte is apartments.
Born and bred in Penang, and having been in the business for the past 30 years, its managing director K. C. Tan is familiar with the infrastructure and the market he is operating in.
To the city
In 2003, a little-known developer from Manjung, Perak, YNH came to Kuala Lumpur. Manjung is about 80km from Ipoh, and is located between the city and Lumut, the getaway point to Pangkor, and Sitiawan.
When it came to Kuala Lumpur, its choice of land was telling – Mont’Kiara and the Jalan Sultan Ismail vicinity. The family business was seeking its fortune in the city but it was not leaving behind its roots in Perak; it was, in fact, adding another pillar to its foundation.
Come the fourth quarter, YNH will be handing the keys to buyers in both projects, Fraser Place, next to Wisma Hong Leong, in the city and Cerian Kiara in Mont’Kiara.
(Because Fraser Place is a project with a commercial title, it is not governed by the Housing Developers Association’s mandatory three-year completion deadline.)
Formerly known as Yu Neh Huat Bhd, the company was incorporated in 1985 as a family business. The late Datuk Yu Neh Huat was a farmer and livestock keeper. The company began constructing its first project – 10 units of double-storey shop offices – in the late 1980s.
Its financial controller Chan Yan Meng says the company’s turning point came in 1995, with the Manjung Point township, a project of about 1,000 acres. It still has about 700 acres that are yet to be developed.
“Although we may have ventured out to Kuala Lumpur, Manjung Point will continue to be our reference point. Today, YNH is a trusted and one of the largest developers with a strong base here,” says Chan, who has been with the company since 1990. Its staff strength has grown from 30 in 1990 to 250 today.
Most of its customers are civil servants – mainly those at the naval base located there and teachers – and small holders.
With 45% of its revenue coming from there and the rest from its projects in Kuala Lumpur, the company has diversified its market with a foot in the city.
There are dozens of small-scale developers in and around the peninsula, Sabah and Sarawak. Many of them have humble beginnings and are contended to be where they are. In some ways, the economic downturn has not really affected them as much as the big boys.
Says an analyst who declined to be named: “Housing development is still very much location based. If a developer is from a small town, it has to consider the local economy and demographics in that area.
“In such a situation, there may be a tendency to expect sales to be poor because of the global economic woes but this need not be the case. Away from the city, these smaller developers have a captive market and they will still do relatively well. In terms of sales and earnings, it will be stable.
“YNH, for example, sells to civil servants, and makes an average RM40mil to RM50mil sales annually in what many would consider as remote areas. Likewise, Pasdec Holdings Bhd in Pahang.
“In Sabah, property sales are doing well in plantation areas because of the significant price of palm oil. So it really depends on locality. While some – Hunza Properties Bhd from Penang and YNH who have made their way into the city the last several years – there are many others who are contented doing what they are doing in these smaller towns.
“A big deterrent is the price of land in the Klang Valley, which is not representative of the whole country.”
Klang Valley-based Hua Yang is scouring for projects outside the Valley where land prices are cheaper.
The rural pull
Like YNH, Hua Yang is also a family-based business. Its Seri Kembangan mixed development is by far the largest project in its stable. Its chief operating officer Ho Wen Yan says it would like to focus on other markets in Perak, Johor and Seremban.
Says Ho: “Outside the Klang Valley, our focus is mass housing in integrated townships; in Seri Kembangan, it is high-rise residential units.”
He says the affordable mass market segment is the company’s core focus and contributes the bulk of Hua Yang’s revenue. In terms of customer demographics, most of them are first-time buyers comprising young couples who buy for occupation.
“In the city, the story is different. There is the investor group who buys to sell, or to rent. So the present lull is an opportunity to grow our presence.
“The bigger boys have gone into niche housing, resulting in a lack of affordable mass market housing in the RM90,000 to RM380,000 range. Our opportunity is to tap into this market,” Ho says.
The company plans to launch several developments in the next six to nine months in Seremban, Senawang and Johor Baru amounting to about nearly RM120mil. Its Sg Besi project, comprising residential, commercial and retail, has a GDV of RM550mil.
It is also pretty upbeat about its financials for 2010 with revenue of RM100mil in 2009, RM60mil in 2008 and RM63.5mil in 2007.
In Pahang, the largest state in Peninsular Malaysia, land is in abundance. This is Pasdec Holdings home turf. CEO Mohd Khairuddin Abdul Manan says the company is best known for medium-cost houses comprising mainly single-storey terrace and semi-detached homes, which contribute 60% to the group’s turnover.
Besides housing development and management, the group is also involved in construction, the manufacture of bricks and trading in building materials.
The group recorded improved sales of its residential properties from RM32mil in 2007 to RM64.8mil in 2008. The projected sales for 2009 is RM81.8mil. The group has 2,500 acres of land, 90% of which are in Pahang. Pasdec expects revenue and profit to be affected due to market condition.
Says Khairuddin: “Results for the first half of the year indicated a drop in our targeted turnover by 37%, we anticipate unfavourable results for the second half of the year. But we will look for ‘wow’ factors’, like public infrastructure and other amenities.
“We expect caution and perseverance for the residential market owing to the economic turmoil until the year-end.”
The total GDV of the company’s five flagships projects, which are located in Kuantan, Pahang is RM1.98bil.
Further north, Thong Sin Development Sdn Bhd has made Langkawi and Cameron Highlands its playing field. The company is best known for building apartments and serviced apartments, which contribute 70% to the company’s revenue. It has some double-storey and semi-detached units scattered about but overall, its forte is apartments.
Born and bred in Penang, and having been in the business for the past 30 years, its managing director K. C. Tan is familiar with the infrastructure and the market he is operating in.
The glass bubble lift overlooking the pool in Century Suria condominium.
“The global downturn did affect us, but not too much. Century Suria condominium in Langkawi saw a drastic drop in response from foreign purchasers as a result of the global woes. Since second quarter 2009, sales have picked up for all the projects and continue to look encouraging from local buyers. We have 17 acres in Kuah, Langkawi and 2.5 acres in Cameron Highlands and we expect things to be stable and encouraging in the coming months,” he says.
By The Star (by Thean Lee Cheng)
“The global downturn did affect us, but not too much. Century Suria condominium in Langkawi saw a drastic drop in response from foreign purchasers as a result of the global woes. Since second quarter 2009, sales have picked up for all the projects and continue to look encouraging from local buyers. We have 17 acres in Kuah, Langkawi and 2.5 acres in Cameron Highlands and we expect things to be stable and encouraging in the coming months,” he says.
By The Star (by Thean Lee Cheng)
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