The company's latest 60:40 joint venture with Asie Sdn Bhd for the redevelopment of 4.08 acres of the former Pekeliling flats area, along the busy thoroughfare of Jalan Tun Razak-Jalan Pahang in Kuala Lumpur, has stirred quite a lot of excitement in the market given the project's prominent location.
Leong says Mah Sing will engage an international architect for the project.
To be named M Sentral, the project comprising service residences and retail units with an estimated gross development value (GDV) of RM900mil, forms the first part of a privatised urban regeneration project of the old Tunku Abdul Rahman flats covering 58 acres.
The project is the largest privatised urban regeneration project in Kuala Lumpur so far.
Private company, Asie, has been granted the concession rights to develop the whole of the 58-acre site into a mixed development with potential GDV of RM9bil.
The project with the theme “River Garden City” will comprise residential and commercial property, community, leisure, recreation and infrastructure facilities.
Asie and its subsidiary Usaha Nusantara Sdn Bhd will undertake the development of the maiden parcel on the 4.08 acres jointly with Mah Sing's wholly-owned subsidiary Grand Pavilion Development Sdn Bhd.
The project site has the Titiwangsa LRT and monorail stations and various city landmarks like the Istana Budaya, Lake Titiwangsa, National Heart Centre and Kuala Lumpur Hospital in close vicinity.
With the right master planning, the urban regeneration project will be able to add significant value to the land.
According to Mah Sing group managing director and chief executive Tan Sri Leong Hoy Kum, the renewal project is a comprehensive redevelopment to encourage the community to live, work and play in the city centre.
“The 4.08 acre site is on a prime location facing Jalan Tun Razak and will be one of the most visible plots of the entire 58 acres. Linking this maiden development to the entire site will be a sky bridge that Mah Sing will put up with the understanding that we may be the potential joint venture partner for other parcels within the land,” he shares with StarBizWeek.
Leong says Mah Sing will engage an international architect for the project, “someone we have worked with and who has the ability to understand our vision and come up with a concept and design that will promote development and enhance the surrounding.”
“We shall go along with the over-arching theme of River Garden City, and make sure that our design is modular so that we can expand the theme to envelope the land as and when it becomes necessary. We are keen to show our execution abilities to turn the land into a new riverside garden city,” he adds.
M Sentral will comprise smaller sized and more affordable service residences with lower entry prices to cater to the strong demand for such units. There will also be some retail units.
“We are looking at small units from 500 sq ft, priced between RM700 and RM800 per sq ft. From our preliminary plans, the service residences will make up approximately 75% of the units and we are looking at 1,000 units overall,” he adds.
The target market for M Sentral are executives, expatriates and those working in the medical fraternity in view of the ease of access to prime commercial areas, tourist attraction areas, medical facilities, amenities and network of public transportation in the surrounding areas.
“The location, concept, product and branding will be its key success factors,” Leong stresses.
He says the land is ready for immediate development as demolition works, soil investigations and partial earthworks have been completed.
Awareness programme and registration of interest for M Sentral are expected to commence in the second half of this year.
Subject to authorities' approval and fulfilment of conditions precedent, the proposed development is expected to commence by the first half of 2012 and to be developed over a span of five years.
Based on Mah Sing's fast project turnaround model and marketing prowess, the project previews are set to start as early as the second quarter of this year.
While most analysts have given the thumbs up for the project, there are also sceptics who think that the land cost could be too high.
UOB Kay Hian Research says the total implied consideration of RM106.6mil or at RM600 per sq ft for the 4.08 acre land, is considered costly compared with other recent land transactions nearby.
CIMB Research however takes a positive view of the acquisition, noting that “the purchase price of RM600 per sq ft is fair for a project with such a high GDV and in such a strategic location being adjacent to a very busy ring road.” Its proximity to an integrated LRT and monorail station also enhances its accessibility.
“This venture could be the start of many joint ventures with the land owner, and Mah Sing may be able to participate in the entire urban regeneration project which is estimated to have a GDV of RM9bil,” adds CIMB Research.
TA Research is also positive of the deal and is confident that Mah Sing will be able to secure other development rights for the remaining 53.9 acres of concession land for the ease of project coordination and management.
“This will serve as an earnings catalyst to support future earnings growth. This is especially true in this period of time where a prime and sizeable landbank in a strategic location is hard to come by,” it notes.
Assuming a 20% PBT margin and the investment cost of RM106.6mil, the research house says the development could offer potential yields of 15% return per annum over the development period of five years.
Leong is confident that M Sentral will turn out to be another success story for the company.
He says Mah Sing has enjoyed great success for its M brand series of projects so far.
M Sentral will be the third project in the series, he says, adding that all the three projects M Suites, M City and M Sentral are all well served by good public transportation links.
Besides the existing LRT and monorail networks, there may also be future MRT stations that may be located close to these projects potential Great Eastern Mall stop for M Suites, potential Ampang Point stop for M City and potential Titiwangsa stop for M Sentral.
M City is served by LRT network at the Dato Keramat and Jelatek stations, and Star line (Ampang station).
M Sentral's central location also makes it the next major transit hub.
M Suites Jalan Ampang, next to Great Eastern Mall, comprising service apartments from 500 sq ft are nearly 100% sold. M City Jalan Ampang comprising service residences, SoHo, sky villas, three-storey shops and lifestyle retail outlets, is also well received.
Only the SoHo in M City has been previewed in May, and units in phase 1A have all been taken up and about 30% of phase 1B has been sold so far.
The five acre project has garnered much interest with its garden city concept with over four acres of greenery with thematic hanging gardens and lagoon parks.
Leong says urban renewal projects allow Mah Sing access to prime land, and the company will continue to acquire strategically located land as part of its growth plan.
“We would like to take part in more urban regeneration projects by both the Government and the private sector. We have been aggressively acquiring land and with our track record and branding, we are frequently presented with various proposals. We have the appetite and balance sheet, but we are also very selective of the lands that we buy.
“These must be good ones which fit our business model and allow us to value add. We believe our track record, know how, branding and financial capacity can help to unlock and enhance the land's value,” he adds.
By The Star
Posts
No comments:
Post a Comment