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The methodologyHow the companies are ranked

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THE WEEK OF AUGUST 23 | 2004THE EDGE

Datuk Jagan Sabapathy,Bandar Raya Developments

Tan Sri Jeffrey Cheah,Sunway City

Dr Radzuan Abdul Rahman,Island & Peninsular

Datuk Ghazali Mohd Ali,Boustead Properties

Datuk Michael Yam,Sunrise

(Left to right from top left)

Robert Tan, IGB CorpDatuk Seri Liew Kee Sin,

SP SetiaDatuk Lee Yeow Chor,

IOI PropertiesTan Sri Mustapha Kamal

Abu Bakar, MK Land HoldingsDatuk Mohamed Said,

Sime UEP Properties

RANK COMPANY SOME SIGNIFICANT PROJECTS*

1 IGB Corp Bhd Mid Valley City, Sierramas,Sri Bukit Persekutuan

2 SP Setia Bhd Taman Bukit Indah (Johor),Duta Nusantara, Setia Alam,Setia Alam Eco-Park,

3 IOI Properties Bhd Bandar Puchong Jaya, IOI PalmGarden Resort, Bandar PutraSenai (Johor)

4 MK Land Holdings Bhd Damansara Perdana, DamansaraDamai, Cyberia, Bukit MerahLaketown Resort (Perak)

5 Sime UEP Properties Bhd UEP Subang Jaya,Putra Heights, Ara Damansara,Bandar Bukit Raja

6 Bandar Raya CapSquare, Bangsar Hills,Developments Bhd Palmyra Bangsar,

Taman Permas Jaya (Johor)7 Sunway City Bhd Bandar Sunway, Kiara Hills,

Sunway City Ipoh (Ipoh)8 Island & Peninsular Bhd Bandar Kinrara,

Taman Setiawangsa,Desa Mutiara & Bayan Heights(Penang)

9 Boustead Properties Bhd Mutiara Damansara ,Taman Mutiara Rini (Johor)

10 Sunrise Bhd Mont’Kiara Sophia, Mont’KiaraDamai, Kiara Designer Suites,Plaza Mont’Kiara, Mont’KiaraSolaris and SerembanForest Heights (Seremban)

*Unless stated the projects are located in the Klang Valley

RANK COMPANY

1 IGB CORP BHD2 SP SETIA BHD3 IOI PROPERTIES BHD4 MK LAND HOLDINGS BHD5 SIME UEP PROPERTIES BHD6 BANDAR RAYA DEVELOPMENTS BHD7 SUNWAY CITY BHD8 ISLAND & PENINSULAR BHD9 BOUSTEAD PROPERTIES BHD10 SUNRISE BHD11 PETALING GARDEN BHD12 UDA HOLDINGS BHD13 E & O PROPERTY DEVELOPMENT BHD14 PELANGI BHD15 TALAM CORP BHD16 SELANGOR PROPERTIES BHD17 COUNTRY HEIGHTS HOLDINGS BHD18 YTL LAND & DEVELOPMENT BHD19 DIJAYA CORP BHD20 GLOMAC BHD21 DAIMAN DEVELOPMENT BHD22 EQUINE CAPITAL BHD23 PARAMOUNT CORP BHD24 METRO KAJANG HOLDINGS BHD25 WORLDWIDE HOLDINGS BHD26 MALTON BHD27 UNITED MALAYAN LAND BHD28 HONG LEONG PROPERTIES BHD29 NEGARA PROPERTIES BHD30 ASIA PACIFIC LAND BHD

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2 • THEEDGE MALAYSIA | CITY & COUNTRY | AUGUST 23, 2004

Top three retain positions

GROUP EDITOR-IN-CHIEFHo Kay Tat

EDITORAu Foong Yee

([email protected])

WRITERSHazatul Syima Haron

Jennifer GomezVikki Choong

A Yogesh

ADVERTISING &MARKETING

GENERAL MANAGER(REGIONAL)

Edward Stanislaus(02) 9699 8339

GENERAL MANAGER(MALAYSIA)

Chandran Ravi(012) 267 1000

MANAGERSAlison Lim

(012) 212 3442

John Joseph(012) 288 3952

SENIOR EXECUTIVESHeidee Dato’ Hj Ahmad

(019) 388 1880

Sharon Lee(017) 873 8139

Koo Ping Ping(012) 213 5876

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Suresh Sekaran(012) 307 7473

EXECUTIVESShirley Chin

(012) 226 2321

Debbie Joseph(012) 206 9344

Esther Woon(012) 288 1690

COORDINATORAznita Anuar

(03) 7660 3838 ext 602

We welcome yourcomments and criticism.

Send your letters toThe Edge, PO Box 8348,Pejabat Pos Kelana Jaya,

46788 Petaling Jaya,fax: (03) 7660 8568;

e-mail:[email protected]

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address and contact number(tel/fax) for us to verify.

Minor juggling and a newcomer to list, but otherwise little surprise in ranking

tivity, value creation for buyers, image and expertise.(See opposite for details and the methodology.)

While data for the quantitative attributes wasbased on published sources extracted by InteractiveData Systems Sdn Bhd, the judging of the qualitativeattributes was carried out by a five-member panelcomprising the International Real Estate Federation(Fiabci) world president-elect Datuk Alan Tong; RealEstate and Housing Developers’ Association ofMalaysia president Datuk Jeffrey Ng, Fiabci MalaysianChapter president Kumar Tharmalingam, FiabciMalaysian Chapter deputy president Datuk TeoChiang Kok and City & Country editor Au Foong Yee,who also moderated the deliberation. This is thesecond year of the ranking.

Top 10It is no mean feat to be ranked as a top 10 developer.The race was neck and neck for many contenders. Inthe process, a new name has emerged on the list along

with some minor position juggling among a few others.Players like IGB Corp Bhd, SP Setia Bhd and IOI

Properties Bhd maintained their sterling per-formance, both quantitatively and qualitatively. Allthree retained their respective first, second and thirdpositions which they secured in The Edge inauguralranking exercise last year.

MK Land Holdings Bhd and Sime UEP PropertiesBhd managed to gain ground, moving up to fourthand fifth position, respectively, from the fifth andseventh spots the year before.

The newcomer to the top 10 list is BousteadProperties Bhd of Mutiara Damansara fame. Knownas SCB Developments Bhd until May this year, it wasreclassified four months earlier under the propertysector of Bursa Malaysia from plantations. BousteadProperties made it to the ninth spot.

A top 10 developer that is worthy of notice isSunrise Bhd. Its size is modest compared withdevelopers such as IGB, SP Setia and IOI, but it scored

| BY THE CITY & COUNTRY TEAM |

T he Edge Malaysia Top Property DevelopersAwards 2004 have unfolded little surprise. Allthe top 10, ranked from the property buyer’sperspective, are Klang Valley-based developersthat are practically household names.

Not only are the winners outstanding for their sizeand profitability but they also showcase exemplaryquality, timely delivery, innovation, value creationfor buyers and creativity.

The exercise, based on five quantitative and fivequalitative attributes, covered all the 94 companieslisted in the property sector of the Main and SecondBoards of Bursa Malaysia.

The quantitative attributes, based on performancein the financial year ended Dec 31, 2003, are: Share-holders’ funds, group pre-tax profit, revenue, gearingand cash plus cash equivalents. The qualitativeattributes are: Quality of products, innovation and crea-

TOP 30 (2003)

Quantitative attributes (2004)RANKING COMPANY

Qualitative attributes (2004)RANKING COMPANY

1 Sunrise Bhd2 IGB Corp Bhd3 SP Setia Bhd4 Sime UEP Properties Bhd5 Bandar Raya Developments Bhd6 Sunway City Bhd7 YTL Land & Development Bhd8 Island & Peninsular Bhd9 Boustead Properties Bhd10 IOI Properties Bhd11 MK Land Holdings Bhd12 Pelangi Bhd13 Glomac Bhd14 Equine Capital Bhd15 Country Heights Holdings Bhd16 Petaling Garden Bhd17 Paramount Corp Bhd18 Dijaya Corp Bhd19 Eastern & Oriental Bhd20 Selangor Properties Bhd21 Negara Properties Bhd22 Hong Leong Properties Bhd23 Mutiara Goodyear Development Bhd24 Damansara Realty Bhd25 Malton Bhd26 Mah Sing Group Bhd27 E & O Property Development Bhd28 Daiman Development Bhd29 Bolton Bhd30 Metro Kajang Holdings Bhd

1 IGB Corp Bhd2 IOI Properties Bhd3 SP Setia Bhd4 MK Land Holdings Bhd5 Sime UEP Properties Bhd6 Sunway City Bhd7 UDA Holdings Bhd8 Bandar Raya Developments Bhd9 Island & Peninsular Bhd10 Talam Corp Bhd11 E & O Property Development Bhd12 Petaling Garden Bhd13 Boustead Properties Bhd14 Selangor Properties Bhd15 Worldwide Holdings Bhd16 Daiman Development Bhd17 Dijaya Corp Bhd18 Country Heights Holdings Bhd19 Naim Cendera Holdings Bhd20 KSL Holdings Bhd21 Metro Kajang Holdings Bhd22 Pelangi Bhd23 SHL Consolidated Bhd24 Asia Pacific Land Bhd25 Plenitude Bhd26 Ayer Hitam Planting Syndicate Bhd27 PJ Development Holdings Bhd28 LBS Bina Group Bhd29 Kumpulan Hartanah Selangor Bhd30 United Malayan Land Bhd

RANKING COMPANY

1 IGB Corp Bhd2 SP Setia Bhd3 IOI Properties Bhd4 Bandar Raya Developments Bhd5 MK Land Holdings Bhd6 Sunway City Bhd7 Sime UEP Properties Bhd8 Island & Peninsular Bhd9 (tie) Sunrise Bhd9 Pelangi Bhd

TOP 10 (2003)

Quantitative attributes (2003)RANKING COMPANY1 IOI Properties Bhd2 SP Setia Bhd3 IGB Corp Bhd4 (tie) Bandar Raya Developments Bhd

MK Land Holdings BhdSunway City Bhd

7 UDA Holdings Bhd8 Sime UEP Properties Bhd9 Talam Corp Bhd10 (tie) Island & Peninsular Bhd

Malton Bhd

Qualitative attributes (2003)RANKING COMPANY1 Sunrise Bhd2 IGB Corp Bhd3 Sime UEP Properties Bhd4 SP Setia Bhd5 Bandar Raya Developments Bhd6 MK Land Holdings Bhd7 Sunway City Bhd8 Pelangi Bhd9 Island & Peninsular Bhd10 (tie) Dijaya Corp Bhd

Negara Properties Bhd

COMPANYAsia Pacific Land BhdBandar Raya Developments BhdBCB BhdCountry Heights Holdings BhdDijaya Corp BhdFACB Resorts BhdGlomac BhdGold Bridge Engineers & Construction BhdHong Leong Properties BhdIGB Corp BhdIOI Properties BhdIsland & Peninsular BhdLand & General BhdMalton BhdMetro Kajang Holdings BhdMK Land Holdings BhdNegara Properties BhdParamount Corp BhdPelangi BhdPetaling Garden BhdPK Resources BhdSelangor Properties BhdSHL Consolidated BhdSime UEP Properties BhdSP Setia BhdSunrise BhdSunway City BhdTalam Corp BhdUDA Holdings BhdWCT Engineering Bhd

(in alphabeticalorder)

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THEEDGE MALAYSIA | CITY & COUNTRY | AUGUST 23, 2004 • 3

s

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The panellists are (clockwise from left) Kumar, Tong, Au, Ng and Teo

How the companies are rankedThe methodology

The research for The Edge Malaysia Top PropertyDevelopers Awards 2004 was carried out betweenJune and July 2004 on all the 94 companies listedin the property sector on the Main and SecondBoards of Bursa Malaysia.

The ranking, based on the companies’quantitative and qualitative attributes, is from theconsumer’s perspective. All financial dataconsidered is for the 2003 financial year. It issourced from published sources through InteractiveData Systems (M) Sdn Bhd.

Quantitative attributesThis aspect of the ranking involves the applicationof five quantitative attributes: Shareholders’funds; group revenue; group pre-tax profit;gearing (total short-term and long-term debtdivided by shareholders’ funds); and cash andcash equivalents.

Qualitative attributesThere are five qualitative attributes. They are:Product quality (service, finish, timeliness);innovation and creativity (product, marketing);value creation for buyers (capital appreciation);image and market perception (credibility,management style, effectiveness); and expertise(management, experience).

Points awardedA maximum of 10 points are awarded for eachquantitative and qualitative attribute, 10 beingthe highest. The awarding of points for thequantitative attributes is straightforward, basedon the available data.

For the qualitative attributes, points areawarded by a five-member panel of judges (seeinformation on the panellists on Page 4) amiddeliberation on the candidates.

Note: This is the second year of the ranking.Following feedback from our maiden effort lastyear, we have slightly amended the process.This year, we did not shortlist the candidates(based on the criterion that they must have aminimum shareholders’ fund of RM250 millionplus a minimum annual revenue of RM100million for three consecutive years). Instead, allthe 94 companies listed in the property sectorof the Main and Second Boards werescrutinised. We have not considered privatelyowned companies or companies not listed inthe property sector but which have property-development activities.

The ranking has been carried out with thebest of intentions. The property developmentsector, an important engine of growth of theeconomy, has played and is expected to continueplaying a significant role in the shaping of thecountry’s economic health. This is in addition tothe need for the sector to fulfil the nation’shousing requirements. Given the onus placed onthe sector, we therefore feel the need to sievethrough the multitude of players to identify andbenchmark the country’s top property developers,as perceived by the general property-buyingpublic. We have also taken the opportunity tohighlight some of their success stories. Feedbackand suggestions are welcome. — Editor, City &Country

big in terms of qualitative attributes, thusraising its profile.

It is interesting to note that several of thecompanies that did well in the ranking wererelatively unheard of a decade ago. Theseinclude companies like SP Setia, MK Land,Glomac Bhd and Equine Capital Bhd.

Those not rankedThose not rankedThose not rankedThose not rankedThose not rankedIt must go down on record that not all thesuccessful developers in Malaysia wereconsidered in the exercise. Only those listedin the property sector of Bursa Malaysia werescrutinised.

This would mean that the propertydevelopment activities of construction-based Gamuda Bhd and WCT EngineeringBhd as well as plantation group KumpulanGuthrie Bhd did not qualify for con-sideration. Gamuda, through its subsidiary,is building the townships of Kota Kemuning(jointly with DRB Hicom Bhd) and BandarBotanic in Selangor while WCT Engineeringis busy with Bandar Bukit Tinggi in Klang.Kumpulan Guthrie is known for its BukitJelutong and Bukit Subang developments.

Privately owned property developers havealso been left out of the exercise. PetalingJaya’s Bandar Utama is no doubt a winningaddress, but developer Bandar UtamaDevelopment Sdn Bhd does not qualify

because it is unlisted. The same goes forBukit Kiara Properties Sdn Bhd, founded andhelmed by panellist Tong, who also foundedSunrise Bhd. Fellow panel member Teo is adirector of Bandar Utama Development.

On the other hand, Bandar Raya Deve-lopments Bhd is not necessarily what the marketwould consider a “true blue” developer simplybecause a chunk of its earnings is derived frommanufacturer-subsidiary Mieco Chipboard Bhd.However, the developer has been consideredbecause of its listing in Bursa Malaysia’sproperty sector.

A matter of perceptionWithout question, perception plays animportant role when it comes to judging thecompanies on their qualitative attributes.

Ultimately, it is up to a developer to con-vince the property-buying market its qua-litative attributes. By the same token, the onusis on a developer to dispel any unjustifiednegative perception the market may have ofthe company.

At the end of the day, what a potentialproperty buyer wants of a developer may notnecessarily be exactly what an investor wants(see story on Page 4).

In short, a property developer ranked topfrom the consumer’s perspective need not bethe fund manager’s darling.

HARIS HASSAN /THE EDGE

alphabeticaler)

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Datuk JeffreyNg Tiong LipPresident,Real Estate and HousingDevelopers’ Associationof Malaysia (Rehda)

T he companies that emerged high up therungs of The Edge Malaysia Top Prop-erty Developers Awards 2004 will comeas little surprise to those familiar withthe local property sector.

Since the ranking is geared to convey thegeneral views of the property-buying public,how do these top developers fare for the in-vestor? Have they performed equally well onBursa Malaysia in the past year?

City & Country came up with some inter-esting finds based on data provided by Inter-active Data Systems Sdn Bhd for an 18-monthtrading period from the start of 2003. Whereapplicable, prices have been adjusted for newissues.

Of the top 10 property developers ranked,seven were also the top 10 share performersfor the review period.

Consider IGB Corp Bhd. Had you boughtits stock at 85 sen on the first trading day in2003, and cashed out on June 30, 2004, atRM1.25, you would have made a profit of47% on your investment. Not bad.

Here’s even better news. Those who in-vested in Sunrise Bhd during the same period— entry: RM1.12; exit: RM2.80 — would havemade a sterling capital gain of 150%!

Sunway City Bhd is another company thatdid remarkably well on the share market inthe 18 months. Based on an entry price of 62sen and exit of RM1.50, an investor wouldhave made a neat 88 sen on the ringgit orclose to 142% in profit.

Yet another investors’ darling must beGlomac Bhd, coming in third in terms of shareperformance. Glomac is among the top 30 inthe property ranking. Those who had invested97 sen in the company in early 2003 wouldhave walked away with a gain of 131% at theend of 18 months when the share pricereached RM2.25.

How the developers’ stocks performedIsland & Peninsular Bhd also performed

strongly on the share market, registering aprice gain of 125% followed by Bandar RayaDevelopments Bhd at 95%.

Investors who had believed in ParamountCorp Bhd and Metro Kajang Holdings Bhdwould have been rewarded handsomely. LikeGlomac, Paramount and Metro Kajang featurein the top 30 of the property developers rank-ing and would have enriched their investorsby 72% and 52%, respectively.

SP Setia Bhd, which secured second po-sition in the top property developers rank-ing, also proved that it is a good companyto invest in. You would have reaped a soundreturn of RM1.51 profit per share (62%) hadyou bought its share at RM2.45 and sold atRM3.96 at end-June 2004.

MK Land Holdings Bhd’s share price alsoturned in a solid performance. An investmentin this company during the review periodwould have made you 49% richer.

The share price of IOI Properties Bhd,ranked third in the overall property ranking,started 2003 at RM5.40. At the close of Junethis year, the price had moved up to RM7.45.Though significant in terms of quantum, theRM2.05 gain works out close to 38%.

Sime UEP Properties Bhd’s shares heralded2003 at RM3.94. By June 30, 2004, the pricehad climbed 26 sen to RM4.20, registering again of close to 7%.

Boustead Properties Bhd may have clinchedthe ninth spot in the top property developersranking, but its share dipped four sen fromRM4.54 to RM4.50 during the 18-month pe-riod under review.

The conclusion is that the top property de-velopers ranking exercise is not totally reflec-tive of the stock market performance of thecompanies. — By Au Foong Yee and VikkiChoong

PICTURES BY HARIS HASSAN/THE EDGE

Datuk Teo Chiang Kok

Datuk AlanTong Kok Mau

Deputy president,Fiabci MalaysianChapter

World president elect,International RealEstate Federation(Fiabci)

The judges

Au Foong YeeEditor,City & Countryand haven, The Edge

E

Top 30 developers ranked by share performance(Jan 1, 2003–June 30, 2004)

NO DESCRIPTION JAN 1, 2003 JUNE 30, 2004 DIFFERENCE DIFFERENCE

KLSE Composite Index (points) 632.43 819.86 187.43 29.64

KLSE Properties (points) 536.06 732.39 196.33 36.62

(RM) (RM) (RM) (%)

1 Sunrise Bhd 1.12 2.80 1.68 150.00

2 Sunway City Bhd 0.62 1.50 0.88 141.94

3 Glomac Bhd 0.97 2.25 1.28 131.01

4 Island & Peninsular Bhd 1.95 4.38 2.43 124.62

5 Bandar Raya Developments Bhd 1.12 2.18 1.06 94.64

6 Paramount Corp Bhd 1.42 2.44 1.02 71.83

7 SP Setia Bhd 2.45 3.96 1.51 61.63

8 Metro Kajang Holdings Bhd 1.24 1.89 0.65 52.42

9 MK Land Holdings Bhd 1.68 2.51 0.83 49.40

10 IGB Corp Bhd 0.85 1.25 0.40 47.06

11 YTL Land & Development Bhd 0.76 1.08 0.32 41.45

12 IOI Properties Bhd 5.40 7.45 2.05 37.96

13 Selangor Properties Bhd 1.66 2.26 0.60 36.14

14 Talam Corp Bhd 0.85 1.12 0.28 32.54

15 E&O Property Development Bhd 0.46 0.60 0.15 31.87

16 Petaling Properties Bhd 0.98 1.29 0.31 31.63

17 Negara Properties Bhd 3.08 4.00 0.92 29.74

18 WorldWide Holdings Bhd 1.49 1.90 0.41 27.52

19 Country Heights Holdings Bhd 1.04 1.31 0.27 25.96

20 UDA Holdings Bhd 1.12 1.40 0.28 25.00

21 Pelangi Bhd 0.49 0.60 0.11 22.45

22 Malton Bhd 0.59 0.67 0.09 14.53

23 Daiman Development Bhd 1.21 1.34 0.13 10.74

24 Dijaya Corp Bhd 0.79 0.87 0.08 10.13

25 Sime UEP Properties Bhd 3.94 4.20 0.26 6.60

26 Asia Pacific Land Bhd 0.25 0.26 0.01 2.00

27 Boustead Properties Bhd 4.54 4.50 -0.04 -0.88

28 Hong Leong Properties Bhd 0.53 0.51 -0.02 -3.81

29 United Malayan Land Bhd 1.20 1.14 -0.06 -5.00

30 Equine Capital Bhd 1.48 0.87 -0.61 -41.22

Kumar TharmalingamPresident,Fiabci Malaysian Chapter

INTERACTIVE DATA SYSTEMS

Ng is also managing director of Asia PacificLand Bhd, a position he has held since 1992.An economics graduate from MonashUniversity, Melbourne, Ng worked with aninternational auditing firm in Australia beforereturning to Malaysia. He then headed theinternal audit department of Federal HotelsGroup (1981 to 1984) before moving on tothe finance, corporate, planning andexecutive management of businessoperations in the property and hotelindustries. Ng is a member of the Institute ofChartered Accountants Australia, MalaysianInstitute of Accountants and the MalaysianInstitute of Certified Public Accountants. He isalso vice-president of Fiabci MalaysianChapter and a member of the Board ofDirectors of the Construction IndustryDevelopment Board (CIDB).

As MD of Asia Pacific Land, Ng abstainedfrom deliberations and the awarding of pointsfor the company during the panel discussion.

An electrical engineer by training, Teo is a director ofBandar Utama Development Sdn Bhd and beeninvolved in property development for about threedecades. He has undertaken a multitude of projectsincluding high-rise commercial and office complexes,shopping centres, industrial and housing schemes.These include the ongoing and popular Bandar Utamatownship in Petaling Jaya. A past president of Rehda,Teo also sits on the advisory board of the Associationfor Shopping and Highrise Complex Management.

Executive chairman of Bukit Kiara Properties Sdn Bhd,Tong has earned the distinction of being the firstMalaysian property developer to be elected as Fiabciworld president for the 2005/06 term. Tong hasdedicated more than three decades to the cause ofreal estate development in Malaysia. After graduatingfrom the University of Sydney in 1959, he worked inAustralia for a year before joining the then architect’sdepartment of the Municipality of Kuala Lumpur (nowCity Hall). In 1964, he started his own architecturalpractice and four years later, founded Sunrise SdnBhd, a property development firm. Tong was electedthe state assemblyman for Bandar Klang in 1974 andserved two terms. Upon retirement from active politicsin 1985, he resumed stewardship of Sunrise whichwas listed on the then Kuala Lumpur Stock Exchangein 1996. Tong cashed out the following year. After abrief hiatus, he returned to the property developmentscene through Bukit Kiara Properties. Tong is a pastpresident of Fiabci Malaysian Chapter (1994 to 2000)and was Fiabci deputy world president for Asia-Pacific(1997 to 1998).

Kumar graduated from the University ofLondon with a degree in estate managementand is a fellow of the Royal Institution ofChartered Surveyors. He has practised as avaluer, was managing partner of Debenham,Tweson, Tharmalingam & Aziz (1978 to 1986)and set up First Malaysia Property Trust, ajoint venture between the Bank of Commerceand Austwide, Australia (1987). He joinedTaiping Consolidated Bhd in 1992 and wasresponsible for the development of JWMarriott Hotel and Starhill Centre before heleft in 1998 to be the director of HallChadwick Asset Recovery Sdn Bhd thatrestructures and rescues property companiesaffected by the economic downturn in theregion. Kumar has attended and presentedmany papers on property crisis management,the time-share industry, restructuring ofproperty companies as well as environmentalissues affecting real estate at internationalseminars.

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IGB stays in top spotSmall-town developers can compete with

the “big boys”. IGB Corp Bhd is a clas-sic example.

Started in Ipoh back in the mid-1960s(then known as Ipoh Garden Sdn

Bhd), IGB has since gone on to carve itself aplace among Malaysia’s top property play-ers — for two consecutive years, the groupemerged top in The Edge Malaysia Top Prop-erty Developers Awards.

Profiling IGB is incomplete without men-tion of its rationalisation exercise with Tan& Tan Development Bhd that was wrappedup in 2002. The exercise paved the way forIGB to continue with its expertise in com-mercial development while Tan & Tan’strack record in delivering quality high-endresidential homes is a definite plus factor inthe coming together of the two names.

The success story of IGB is made sweeter bythe fact that it has no vast estates in its landbank.By the same token, for IGB group managingdirector Robert Tan, a depleting landbank isindeed the group’s greatest challenge.

The 53-year-old Tan cannot help butreminisce about the early days of the com-pany. In 1981, the company was one of theearliest property companies listed on theMain Board of the then Kuala Lumpur StockExchange.

“We were like a pioneer in the industrybecause we were one of the first companiesto be listed. Today, we have to compete in anenvironment where large plantation ownershave joined the development scene,” he tellsCity & Country.

This limitation, however, is not about toimpede the progress of the group which isreputed for its innovation and quality. Eachtime IGB enters the market, it inevitablybuilds on its strength of creating innovation.Simultaneously, the group works on achiev-ing a high recurrent income flow from itsproperty investment.

IGB’s quest to stand apart from other de-velopers, such as pioneering concepts, hasbeen strewn with challenges, to say the least.

Here is its success story.

Challenges and opportunities“When we pioneer something, we have toeducate the market and most consumers don’twant to pay for new concepts. So we have toprice it in such a way. But then, when thereis acceptance, others will copy us…” lamentsTan on the price of being an innovator.

It has been slightly more than a decade thatthe famed Sierramas in Sungei Buloh was un-veiled, then believed to be a pioneer in exclu-sive living within a gated and guarded devel-opment. These days, the concept has becomea norm with high-end homes — even thoseoutside the Klang Valley.

The IGB group is not known for buildingmass homes. “Even if we wanted to enter themass housing market, we couldn’t competeas the existing players would have locked inthe land at a lower value. They would be ableto offer the homes at lower prices than if wewere to go in and purchase land now in thegrowth areas,” Tan explains.

IGB, like Sunrise Bhd, is strong in quality.“We are really concentrated on the high-endluxury market and I think it is difficult for peo-ple to fault us on quality,” he offers.

Besides high quality, Tan points to other at-tributes that have helped build the IGB brand,those that will feature prominently in its jour-ney forward. “We have always gone the extramile to offer better after-sales service. Also, qual-ity and innovation will remain our top prior-ity,” he stresses.

IGB’s landbank, totalling some 2,000 acres,will be depleted in five years or so. That’s whyit is keen to partner companies with primelandbank. A case in point: Recently, IGB enteredinto a joint venture with Landmarks Bhd to de-velop a housing project on a 130-acre tract inWangsa Maju, a development that will stretchover the next 8 to 10 years.

Tan also favours recurrent income. His ra-tionale being since property development issubject to cycles that are beyond a developer’scontrol, income should therefore be balancedwith investments in commercial buildings, bethey shopping complexes, offices or hotels.

Of IGB group’s revenue of RM532.16 mil-

lion posted for the year ended Dec 31, 2003,30% came from recurrent income. The grouprecorded a pre-tax profit of RM184.36 millionfor the year.

“We are on the lookout for commercialbuildings both here and overseas like India,Thailand, Japan and South Korea but the mostimportant criterion to us is, apart from havinggood yield, we must be able to add value tothe project and improve its returns. We wouldalso be open to properties foreclosed by banksand abandoned projects,” he says.

Mid Valley CityUnderstandably, IGB is very proud of MidValley City, the first phase of which com-prises Mid Valley Megamall, six blocks of17-storey office towers, 30 units of signa-ture offices and Cititel, a 4-star businesshotel.

Located strategically half way betweenKuala Lumpur and Petaling Jaya, the mallopened for business in November 1999 andwas immediately successful. It enjoys almostfull occupancy for its 1.7 million sq ft of retailspace available for lease which is going forbetween RM5 and RM40 psf.

The mall will be expanded by 700,000 sqft of retail space under Phase 2 that will alsosee the building of two office towers with atotal of one million sq ft of space, about 300serviced apartment units and a business andleisure hotel with 450 keys. Work on the sec-ond phase is expected to start next month withcompletion expected in the first quarter of2007. According to Tan, Mid Valley Phase 2will cost RM700 million. Also featuring in theMid Valley City master plan is Phase 3, com-prising one million sq ft of office space.

Tan is a firm believer that for a shoppingcentre to thrive, there needs to be a com-plete development mix that will be able tosustain the lull times. He explains: “Weneed to create the population and this iswhere the offices and serviced units cometo play. The hotel will attract tourists, whoare big spenders.”

Expanding the floor space of the mallmeans getting in more tenants. A task thatcannot be easy given the stiff competitionposed by the mushrooming of malls in theKlang Valley in recent years. On top of this,Tan is fussy about who his tenants are.

“We intend to take Mid Valley to anotherlevel; we want to attract a totally different breedof retailers.” By that, Tan means the companywill be going more up-market and lifestyle-driven. “We want to move towards the [Suria]KLCC-retailer-type standard,” he enthuses.

To achieve this, Tan’s team has gone onroad shows both in the country and through-out the region. The response, he says, hasbeen encouraging.

Tan is realistic. Given the niche position-ing of the mall’s up-and-coming phase, hedoes not expect the same traffic volume nowseen at the existing mall. “Every month,there are two million visitors. We expect tohave half of that in Phase 2, which will ap-peal to a more niche market,” Tan explains,adding that the new wing will have 6,000parking bays.

Northpoint TowersNorthpoint TowersNorthpoint TowersNorthpoint TowersNorthpoint TowersNorthpoint Towers is yet another develop-ment coming up within the greater Mid Val-ley City. It comprises serviced residences andoffice space with the SOHO (small office homeoffice) concept. The office space is targeted atthose wishing to own their own working spaceat an affordable cost.

To render it a more attractive investment,the office space will be sold based on a modu-lar basis — buyers can opt for the desired sizebased on their needs and affordability. “Thisis a popular concept practised overseas. Tomake it work here, we have done extensiveresearch on the acceptable concept and ap-proach,” Tan says.

In total, there will be 500,000 sq ft of of-fice space and 250 units of serviced apart-ments featuring built-up from 1,200 sq ft.The indicative price for both is RM350 psf.This will put the total gross developmentvalue of the project in access of RM200 mil-lion. Work on this project started 18 monthsago with completion expected in March nextyear. The launch is expected next month.

Development activities aside, IGB is await-ing the completion of the injection of its unitMid Valley City Sdn Bhd, owner of Mid Val-ley Megamall, into listed vehicle Kris Com-ponents Bhd, which is expected by nextmonth. Last November, the company enteredinto a tripartite agreement with Amtek Engi-neering Ltd and Kris Components, wherebyIGB will acquire Kris Components fromAmtek Engineering and pump Mid ValleyCity Sdn Bhd into Kris Components. In turn,

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When we pioneer something, we have to educate themarket and most consumers don’t want to pay for newconcepts. So we have to price it in such a way. But then,when there is acceptance, others will copy us… — Tan

Kris Components will dispose of its assets, exceptcash, to Amtek Engineering. This move basicallyenables IGB to unlock the value of its investmentin Mid Valley City while still keeping it withinthe group. Ultimately, Kris will emerge as one ofthe first property investment companies listed onBursa Malaysia.

More niche projectsMore niche projectsMore niche projectsMore niche projectsMore niche projectsIGB is working on building more niche and high-end housing projects. These will be on Jalan Sul-tan Ismail, Jalan Stonor (both high-rise condos)and Jalan Mesh, all in Kuala Lumpur. The JalanMesh project, a joint venture with the landowner,will feature low-rise condo development due toheight restrictions in that location. These threeprojects are expected to debut within the next sixto nine months, and are expected to be priced atan indicative range of RM500 to RM600 psf.

Learning curveIf there is anything that is deeply engrained in Tan,it is that a player to be reckoned with must be ableto ride out the bad times.

“We first started work on Mid Valley in 1996and when the crisis set in, ours was one of thefew construction sites where cranes were still op-erating day and night. It was something that wasmooted more than a decade ago, and finally aftermuch vision and hard work, we opened in 1999,”he proudly reveals.

“We spent RM250 million on the infrastruc-ture under the first phase and it was worth it.There will be more infrastructure works to com-plement the second phase. The other factor is thatone must have the stomach [financial ability] tocarry such a mega project through,” he sums up.

Going forward, IGB is definitely a property devel-opment company to watch. — By Jennifer Gomez

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I t was a languid afternoon, grey cloudscasting a sombre mood, but SP SetiaBhd’s group managing director and chiefexecutive officer Datuk Seri Liew Kee Sinwas, as usual, raring to go.

The 46-year-old greeted City & Countrywith a wide smile, obviously pleased at beingtold that his company has, for the second con-secutive year, been ranked among the top 10in The Edge Malaysia Top Property Develop-ers Awards 2004.

A true blue businessman, Liew zeroed inon the opportunity to show off a show bun-galow in SP Setia’s latest development, SetiaAlam in Shah Alam. And it was inside one ofthe show units that the interview continued.

Liew, as those working with him will at-test, is a truly hands-on manager. Take theSetia Alam project. He visits the project siteat least once a week.

“We have projects all over the country,so I can’t allocate more than one day un-less it’s necessary. But it’s imperative that Ivisit the sites constantly; I have to be at-tuned to the happenings to ensure a smoothflow of operation,” enthuses Liew. Nodoubt, he has high expectations of his staff.And of himself.

For sure, Liew views the ranking seri-ously. The fact that SP Setia was ranked sec-ond in 2003 was not something that the com-pany took lightly. “While being second wasfine, we had to look into the drawbacks that

led us to the second spot. Since last year, wehave been looking at building the company’sbrand and image, as branding is essential insecuring the public’s interest and loyalty,”states Liew on updating the group’s activi-ties the past year.

Full steamFull steamFull steamFull steamFull steamSP Setia has been in the limelight a lot thesedays — from the group’s purchase of 13.05acres of land in Sri Hartamas for RM48.2 mil-lion for its high-end Duta Tropika to the sign-ing of a joint-venture agreement with theEmployees Provident Funds (EPF) and GreatEastern Life Assurance (M) Bhd to develop791 acres of the high-end Setia Eco-Park. Thedevelopment value of the park is estimated atRM2.3 billion and 2,900 housing units com-promising mainly semi-detached houses andbungalows are planned for it. Last month, thecompany started selling the 278 bungalowlots, ranging from 8,300 to 13,000 sq ft andpriced at an average of RM60 to RM71 psf.

Simultaneously, work is going full steamahead on the development of Setia Alam, atownship covering 2,500 acres in Shah Alam.The tract is part of the 3,930 acres the grouphad acquired from See Hoy Chan PlantationsSdn Bhd in early 2002 for RM597.3 million.

In April this year, the first official launch com-prising 2,050 units of 2-storey terraced houseswith plots sized from 18ft by 65ft to 20ft by 70ftwas launched amid much pomp, attracting al-

most 5,000 people to the day-long event. Theunits, with built-up ranging from 1,304 to 1,662sq ft, are tagged from RM170,000 to RM315,500.

Slated to be the group’s new flagship de-velopment, Setia Alam is expected to be a self-contained township incorporating the devel-oper’s trademark features such as fully fur-nished show units, town parks and a high-end eco park. Once completed in another 20to 25 years, Setia Alam — with an estimatedgross development value of RM5 billion — isexpected to contain 37,000 units of 2-storeyterraced houses, semi-detached units, apart-ments and commercial units.

To add value to Setia Alam, SP Setia isbuilding the Setia Alam interchange on theNew Klang Valley Expressway-Jalan Merulink. Now almost 30% completed, the RM150million interchange — the sum is borne en-tirely by the group — is expected to be readyin the first quarter of 2006.

“We plan the company’s land acquisition ina way that we have various projects runningconcurrently at four different stages. Nearing thetail-end of our development at Pusat BandarPuchong, we have now plunged headlong intoSetia Alam, a project that will keep us busy forthe next 20 to 25 years. It’s important as a repu-table company to ensure a consistent stream ofincome,” says Liew emphatically.

For the financial year ended Oct 31, 2003,SP Setia recorded a group revenue of RM821.74million with a group pre-tax profit of RM179.09

million, a significant increase of 26.9% from2002. For the current year, Liew estimates thegroup revenue to be close to RM1 billion, giventhe progress of the projects SP Setia is nowworking on.

Liew does not believe in resting on hislaurels. “We are constantly looking at newways to upgrade our image and serve cus-tomers better. With good branding, ourproperty can command premium prices,thus satisfying our shareholders too. Ofcourse, providing quality homes goes with-out saying,” he stresses.

To date, SP Setia has built signature town-ships such as Pusat Bandar Puchong, BukitIndah Ampang, Setia Indah and Bukit Indah,Johor. The group has so far secured variousawards for its concrete corporate image andoutstanding developments. Some of these areAsiamoney’s Top Ten Overall Best-ManagedCompanies in 2003, Kuala Lumpur Stock Ex-change Corporate Excellence Merit Award andthe Best Landscape Award (national category)for its Setia Indah, Johor township in 2002.

Going forwardLiew is excited about its higher-end productscoming up in Duta Tropika and parts of SetiaAlam. He expects Duta Tropika to repeat thesuccess of Duta Nusantara, also in SriHartamas — all the 178 bungalows and semi-detached houses launched in late 2002 havebeen sold, generating sales revenue of nearly

No complacency at SP Setia

Setia Alam is slated tobe SP Setia’s new

flagship development.The developer spares

little effort in showingoff what it can do

through impressive-looking show units.

PICTURES BY ABDUL GHANI ISMAIL/THE EDGE

Mcc_8n9_512.pmd 8/18/04, 9:05 PM8


RM327 million. Duta Nusantara, an exclusive en-clave nestled on 35 acres of prime freehold land,marked the group’s maiden high-end development.With Duta Tropika, targeted to be launched nextmonth, Liew hopes to further enhance SP Setia’sexpertise in high-end development.

“We have initiated various customer-orientedprogrammes to train our sales and marketingteam to be our ambassadors. In terms of quality,we have definitely made positive strides tostrengthen our brand through intensive market-ing efforts and trend-setting development con-cepts and ideas,” he says.

The Setia Alam Eco-Park, spread over 791 acreson the eastern flank of Bandar Setia Alam, has Liewwaxing lyrical. “It’s going to be truly amazing; itoffers top-quality living set in natural verdant envi-ronment. It’s gated and secured living in a refresh-ing surrounding. The bungalow show units are al-ready on display in our show village. It truly en-capsulates a novelty lifestyle experience,” saysLiew, who is a nature enthusiast himself. His holi-day trips are mainly spent scouting for innovativeideas and designs that might come in handy for SPSetia’s development projects.

Setting trendsRecent years have seen SP Setia joining the leagueof developers that spare little effort in showing offwhat they can do through impressive-looking showunits.

“The show village helped us to identify the likesand dislikes of our prospective buyers. We were

able to correct our mistakes thanks to the feedbackprovided. Besides upgrading our quality, we arelooking at better ways to complement our brand-ing efforts,” says Liew, adding that the ranking byThe Edge adds credibility to SP Setia’s efforts.

Besides investing in show villages, numerousactivities are also being held in Setia Alam, SetiaIndah in Johor and the company’s other existingtownships to build ties with the local community.Events such as large-scale carnivals and parties areheld to commemorate festive periods or special oc-casions such as launches, and Mother’s and Fa-ther’s Days.

To further enhance customer service, a new de-partment known as Service Quality Managementwas formed recently to spearhead customer-fo-cused initiatives. Liew says to keep staff, they areconstantly appraised and graded to keep them ontheir toes.

“Complacency should never be encouraged.When another developer comes up with a betterplan, I am forced to ask my staff why we didn’tcome up with it first. I come from a humble back-ground and worked hard to get here, I would en-courage and support anyone who is willing to workhard,” he confesses.

Liew’s constant thirst for knowledge has alsoinfluenced him to set up and contribute to variouseducation funds. “Our company’s ultimate aim isto secure the No 1 spot in your ranking but don’texpect us to slow down even after securing the topspot. As long as I am here, that will never hap-pen,” says Liew confidently. — By A Yogesh

Liew does not believe in resting on his laurels. Despite turning in a good performance last year, the companyis constantly looking at new ways to upgrade its image and serve customers better.

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I OI Properties Bhd has an establishedreputation for size and financial mus-cle. While in the past, the developer’spriorities have been to maximise profitability and practicality, an increasingly

competitive marketplace coupled with risingdemands of buyers have brought winds ofchange for the developer, though not at theexpense to its key fundamentals of deliveringon time and maximising gains.

Clinching third place in this year’s TheEdge Malaysia Top Property DevelopersAwards 2004, it is a given that the company’sbalance sheet helped IOI score highly in termsof quantitative aspects.

The developer has successfully developedsizeable tracts of land like its 1,000-acrePuchong Jaya development. Its financial abil-ity to bear the holding costs, allowing a stag-gering of launches, no doubt helped to addvalue to the project.

Only in recent years has Puchong Jayabeen considered an up-and-coming address.The story was somewhat different up untilaround 1990 when IOI, one of the first majordevelopers in the area, initiated the self-con-tained mixed development township BandarPuchong Jaya. In the process, the Puchongaddress received a boost and this in turn at-tracted a host of established developers keenon a slice of the cake.

Engaging in projects of scale has earnedthe developer equally generous rewards. Forthe financial year (FY) ended June 30, 2003,the group achieved a lower RM509.9 millionin revenue from RM538.8 million in 2002.Group pre-tax profit stood at RM240.3 millionin FY2003, marginally lower than RM245.2million in 2002.

However, for the year ended June 30,2004, the group’s unaudited accounts showan improved group revenue of RM678 mil-lion and a significantly higher group pre-taxprofit of RM326.2 million.

Group executive director Datuk Lee YeowChor says: “For FY2004, we have performedvery well with sales up 50% on a year-on-year basis compared to 2003.”

Lee attributes the improved performanceto sound strategy combined with factors likegood market sentiment, low interest ratesand government incentives, adding, “We areproud that our performance remains consist-ent regardless of good or bad times.”

IOI’s Klang Valley projects Bandar Puteri,Bandar Puchong Jaya and IOI Resort accountfor 70% of group property sales. The strongdemand for these projects is due to their loca-tion, namely Puchong, Putrajaya and Cyber-

People think that if you build high-end homes, yourquality will be better than that of a developer of low/medium-cost housing. Quality, in fact, covers allaspects including type of project as well asefficiency of planning. Good workmanshipand sound construction are also amust... We feel that buyers of ourlow-cost homes are moresatisfied than with whatthe competition offers.— Lee

jaya, areas which offer easy access via thenetwork of highways and road.

In the same vein, Lee has similar aspira-tions for Bandar Putra Kulai in Johor, aproject which began in 1996. “We believe itbears a resemblance to Puchong in respectof the surroundings and social conditionspresent,” he says.

Asked about the quality of IOI’s products,Lee laments that there is a common misun-derstanding of “quality” in the marketplace.“People think that if you build high-endhomes, your quality will be better than thatof a developer of low/medium-cost housing.Quality, in fact, covers all aspects includingtype of project as well as efficiency of plan-ning. Good workmanship and sound construc-tion are also a must.

“As a developer of mixed developments, webelieve in delivering value for money and goodcustomer satisfaction and feel that buyers ofour low-cost homes are more satisfied thanwith what the competition offers.”

He says despite positive buyers’ feedbackso far, the company cannot afford to be com-placent but must continue to improve, add-ing that it is these fundamentals that allowIOI to consistently give satisfactory returns toshareholders.

But of even greater significance is the de-veloper’s change in focus. Known has a devel-oper of “mass housing” in the past, Lee makesit clear that the plan is to move into higher-end housing and commercial development.

“We are selling large-sized semideesin Puchong for around RM1 million andare also modifying our house designsto suit changing preference andtastes, namely the younger morecosmopolitan group of house buy-ers. This group tends to prefer the‘minimalist’ concept so we are us-ing architects who have greater ex-posure to the latest trends. Thehouses will be built with materi-als which give a ‘modern’ feel aswell as providing IT features to suitthe needs of this group of buyers.”

Bandar Putra KulaiOn the 5,800-acre freehold Bandar PutraKulai located about 28km north of JohorBaru, he says the township as well as anumber of focused developments in thevicinity will enjoy sound infrastruc-ture.

For instance, the Senai Airport Ter-minal (SAT), which has been privatisedand is to be developed into a regional air-

IOI Properties knows its mcargo hub. “Together with the second-linkhighway that ends in Senai and the recentlyannounced dual carriageway from Senai toDesaru costing RM1.4 billion, overall accessto the township is greatly enhanced,” he says.

Population growth in this area is alsohigher than the Johor state average. Lee pointsout that these are some of the factors that willspell success for the project. Additionally,there will be a 27-hole golf course, districtcommunity centre and sports hall to comple-ment a selection of high-end residences —semidees and bungalows priced at aroundRM500,000 and RM750,000, respectively.

Lee also comments that the overall plan-ning of the area is excellent because there areno small pockets of land. “The fact that a fewbig developers were involved has resulted inlarge, well-planned townships.”

The integrated community set-up ofBandar Putra Kulai also offers Kulai’s firstmodern shopping complex, the IOI Mall Kulai.The opening of the mall has sparked increasedcommercial activities and boosted the profileof the area. Lee states that the sheer size ofBandar Putra Kulai means its development du-ration is stretched to around another 15 years.

Mcc_10n11_512.pmd 8/18/04, 11:44 PM10



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IOI’s Bandar Puchong Jaya together with its other Klang Valley projects Bandar Puteri and IOI Resort account for 70%of group property sales. The strong demand for these projects is due to their location, which offers easy access.

s market well

So far, 1,800 acres of the 5,800 acres has beendeveloped, generating around RM1.3 billion in salesto date.

Lee takes pride in the fact that IOI succeeded in“beautifying” Puchong and is optimistic of a repeatperformance in Kulai.

Recipe for successAsked about IOI’s recipe for success, Lee saysthe key lies in the execution of plans and strate-gies that encompass areas from the site layout toswift decisions made on the types of propertiesto be launched based on prevailing market con-ditions.

When pressed, this is his summary of the IOIformula: “Our 25 years experience as a developer,a familiarity with the location of the developmentplus our intimate knowledge of the market.”

“Prolonged experience in an area enrichesthe developer with an understanding of the con-cerns of local authorities and community leadersin respect of services and amenities. This way,we are able to work hand in hand with the im-portant stakeholders in the development,” con-tinues Lee.

In IOI’s case, the company has been able to growwith the target market by tracking the growing af-fluence of the market, changing demographics andage profile as well as evolving change in tastes.Such market data determines the developer’s mixof products.

“We have progressed from a township devel-oper per se to a community developer. This meansthat we actively introduce various elements to pro-mote a vibrant, modern, close-knitted communityliving,” he says.

The developer also aims to fulfill “physical” el-ements by catering to residents’ demands — shop-ping, recreation, community centres, town parksand sports centres and education facilities are fea-

tured in the integrated townships.It also actively promotes the setting up of resi-

dents’ associations to promote open channels ofcommunication with residents through its customerservice, regular newsletters and communitywebsites.

Future plansReiterating the developer’s desire to deliver excel-lent after-sales service as well as maintaining thequality of its homes, Lee, without quoting num-bers, says the building and maintenance departmenthas been expanded to about one-quarter of the com-pany’s total staff force.

The developer is also keen to increase its prop-erty investment portfolio which currently includesabout 1.4 million sq ft of net lettable retail and of-fice space located in Malaysia and Singapore. “Inthe past few years, we’ve found that the capitalappreciation of properties is very high so we wouldlike to reap the benefits by keeping some commer-cial properties for future income.” At present, prop-erty investment accounts for less than 10% of thetotal profits of the group.

There are plans to expand the group’s presencein Puchong. “We are planning the largest indoorbadminton complex in Malaysia. This attraction willallow us to further promote development of librar-ies and trendy F&B outlets in the surrounding ar-eas,” says Lee. IOI, he reveals, has another 1,000acres for development located in the Puchong-Putrajaya corridor.

Lee would not comment on the competition,except that he is confident of his team’s commit-ment: “With continued leadership from the topmanagement, clear strategies, good work cultureamong management and staff, years of accumulatedexperience and track record, we are optimistic thatwe will be able to repeat our performance in thefuture.” — By Vikki Choong

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MK Land builds on staff’s strengthT he first-floor meeting room in MK Land

Holdings Bhd headquarters in Daman-sara Perdana was bustling with mem-bers of the senior management teamheaded by none other than the group’s

founder duo Tan Sri Mustapha Kamal AbuBakar and Datuk P Kasi.

Such an assembly is not a rarity at MKLand. It is a reflection of MK Land executivechairman Mustapha Kamal’s strong convictionthat the group is not made up of an individual(or two) but, instead, is a combination of tal-ents, expertise and experience of its people.

“The visions and directions of the groupcome from me and Datuk [Kasi]. My seniormanagement people, such as Mohan, Chan, Tehand Roslan, will then translate these visions anddirections into plans, systems, procedures andstrategies. These will then be implemented bythe individual workers, or implementors,”Mustapha Kamal tells City & Country.

(K Mohanachandran is the chief operat-ing officer of Zaman Teladan Sdn Bhd, TemaTeladan Sdn Bhd and Segi Objektif Sdn Bhd;Peter Chan is the chief operating officer ofSaujana Triangle Sdn Bhd and ParamodenSdn Bhd; Peter Teh is MK Land’s chief op-erating officer of corporate planning andservices; and Roslan Ali is the general man-ager of corporate communications. ZamanTeladan, Tema Teladan, Segi Objektif, Sau-jana Triangle and Paramoden are whollyowned by MK Land.)

MK Land, says Mustapha Kamal, is builtbased on the team effort of professional man-agers. All the managers’ strong points are then“synergised” to form a formidable force. Hepoints to Kasi and Teh as two ideal examples.The former brings to the group his expertiseas an architect and planner while Teh offersvast knowledge of finance and accounts. “Itis a combination of these strengths. That’swhat MK Land is all about.”

MK Land aspires to be a group that fo-cuses on property development as its corebusiness. In line with this vision, the groupdisposed of its entire equity interest in Per-fect Food Manufacturing (M) Sdn Bhd andFairway Review Sdn Bhd and a 69.95%stake in Markins Corp Sdn Bhd in the finan-

cial year ended June 30, 2003, for RM6.7 mil-lion cash.

Its mission: To strive towards excellencein providing quality services and productsthrough teamwork for the betterment of theorganisation, society and nation.

Adapting to changeDuring the deliberations by members of thequalitative judging panel, it has been notedthat several property developers who madeit to the top 10 positions in The Edge Malay-sia Top Property Developers Awards 2004 arecompanies that have been listed on BursaMalaysia for 10 years or less. MK Land is onesuch company.

MK Land was listed in 1999following a reverse takeover ofPerfect Food Industries Bhd,then listed on the SecondBoard. Later that year, thegroup acquired three majorprojects from the Emkaygroup, also headed byMustapha Kamal —Damansara Damai, TamanBunga Raya and Bukit MerahLaketown Resort — forRM603.5 million through ashare swap. The move in-creased the group’s paid-upcapital from RM19.9 million toRM1.174 billion, paving itsway onto Bursa Malaysia’s Main Board.

Kasi, the executive director of MK Land,says while some may look at MK Land as anew name since it has been listed for just fiveyears, the two founders have a combined 51years of experience in property development.

Mustapha Kamal started his career as acivil servant but went on to become the man-aging director of Shah Alam Properties SdnBhd (SAP) in 1977 before venturing into prop-erty development on his own in 1983 by form-ing the Emkay group. Kasi, an architect bytraining, was in the private sector before start-ing his own practice in 1985.

The two first met back in early 1980sthrough their respective involvement in theproperty industry. It was only in 1992 that the

duo joined forces to undertake their firstproject together, the 1,600-acre Bukit MerahLaketown Resort in Perak.

Mustapha Kamal says being “young” doeshave its advantages as the group is more fluidand therefore more able to adapt quickly tothe changes in the property market. “Theproperty development industry is continu-ously evolving. If a company is too old, orhas been listed too long, it faces the danger ofbecoming a dinosaur,” he reasons.

He says 20 years ago, due to a shortage ofhouses, a developer could sell practicallyevery home without putting much effort intothe design. “The property market is more com-

petitive now and developers need to alwayscome up with new designs, new products andnew ways of doing business in order to stayahead of others.”

Strong financial growthMK Land moved up a spot in this year’s rank-ing to fourth place, helped by its strong fi-nancial showing for FY2003. The group re-corded a robust 43% growth in pre-tax profitof RM253 million from the previous year’s ofRM177.million annualised following a changein its financial year from Dec 31 to June 30.Group turnover went up by 20% fromRM718.2 million annualised for 2002 toRM849.2 million.

For FY2003, the Damansara Perdana de-

velopment was the most significant contribu-tor to the turnover with RM298.6 million insales. Other significant contributions camefrom Damansara Damai, Cyberia and BukitMerah Laketown Resort. Damansara Damairaked in RM105.6 million in sales followedby Cyberia (RM102.6 million) and BukitMerah (RM70.2 million).

Kasi expects the 750-acre DamansaraPerdana to continue to be the group’s big-gest breadwinner. Located strategically inthe Damansara development hotbed, theRM8.1 billion township is 30% developedwith sales totalling RM1 billion since its de-but in 1996. The township, to be completed

in seven year, marks MKLand’s move from affordablehomes into the higher-endmarket, in line with its phi-losophy of being a propertysupermarket.

Going forward, Kasi saysthe group is aiming for a con-sistent growth of about 15% aswell as to gradually increasethe dividend payment to share-holders. So far, the group is ontarget. It posted a higher unau-dited turnover of RM752.2 mil-lion for the first three quartersof FY2004, up 15% from lastyear’s RM656 million in thecorresponding period. Pre-tax

profit is up by 12% to RM199.7 million forthe first three quarters of 2004 compared withRM179 million in FY2003.

Market capitalisation of RM6 billionWhen City & Country met Mustapha Kamaland Kasi last year, the duo had outlined thegroup’s goal to achieve a market capitalisa-tion of RM6 billion by June 2007, and toemerge as one of Malaysia’s top 15 public-listed companies.

Kasi says the group has achieved a marketcapitalisation of RM3 billion so far based onits current share price of RM2.50 and issuedshares of 1.17 million. The highest share priceachieved was RM3.40. (At press time lastWednesday, MK Land closed at RM2.26.)

From left: Roslan, Teh, Kasi, Mustapha Kamal, Mohanachandran and Chan form the senior management team of MK Land Holdings Bhd

MK Land’s landbank as at June 30, 2004

MK LAND

PROJECT LANDBANK POTENTIAL GROSS DEVELOPMENT

(ACRES) VALUE (RM MIL)

Damansara Perdana, Selangor 580 7,651Damansara Damai, Selangor 50 1,068Cyberia, Selangor 30 158Taman Bunga Raya, Selangor 250 613Langkawi Lagoon Resort, Kedah 40 470Ipoh projects, Perak 250 242Bandar Lembah Beriah, Perak 2,850 2,346Bukit Merah Laketown Resort, Perak 1,400 2,625Taiping Resort , Perak 45 238TOTAL 5,495 15,411

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“Considering the earnings growth and our pro-jected target of 15% growth every year, we shouldbe able to achieve our target on market capitalisa-tion by 2007. However, this is subject to the vagar-ies of the market,” he says.

On becoming one of Malaysia’s top 15 public-listed companies, Mustapha Kamal says it would bemore realistic now to achieve the target of RM6 bil-lion market capital by June 2007 and become one ofthe country’s top 20 public-listed companies.

He says the group had not anticipated the factthat larger companies such as PLUS ExpresswayBhd and Astro would go for listing. “At the time,we calculated that having RM6 million market capi-tal by June 2007 would ensure we’d be in the top15. Today, having a market capitalisation of RM6million would realistically put us in the top 20 pub-lic-listed companies. We are happy with that.”

Sizeable landbankWhile MK Land is not a plantation-backed group,the group currently has a sizeable landbank of some5,500 acres which will keep it busy for the next 10to 15 years (see table opposite). All these have beenapproved for development with a potential grossdevelopment value of RM15.4 billion. As such, thegroup is in no hurry to acquire new landbank. Infact, no land was acquired in FY2003.

Still, it is not discounting any new land buy. Sincethe group already has several big projects under itswings, like Damansara Perdana, Bukit MerahLaketown Resort and Bandar Lembah Beriah, it is

keen on smaller tracts with strategic location in theKlang Valley. To minimise holding cost, these tractsmust have immediate- to medium-term develop-ment potential of 18 to 24 months.

Kasi also does not discount MK Land having agreater presence out of the Klang Valley, especiallyin Penang and Johor.

Future launchesThe group is not resting on its laurels. MustaphaKamal says several launches have been plannedfor the current year to ensure that the groupachieves a 15% growth. These feature a basketof products, ranging from mixed development tohigh-end products, a move in line with thegroup’s philosophy of being a property supermar-ket.

“For the sake of argument, if we were to ex-perience a recession in the next year or so, thegroup would just stop the launch and develop-ment of products with no demand and move onto those that have a ready market,” says Mus-tapha Kamal.

The “star” among the group’s future launchesare the bungalow and semi-detached villas inDamansara Perdana, said to sit on the highest peakin the township and the Klang Valley at 330m abovesea level. Details are not immediately available.

Other launches on the cards are in DamansaraDamai in Selangor, Kampung Air Villas (on thelake) in Bukit Merah Laketown Resort andtownhouses at the Taiping Resort in Bukit Jana.More details are not immediately available.

Always improvingMustapha Kamal says the group is constantly striv-ing to improve the quality of its products and serv-ices to buyers. These days, selling a quality prod-uct is no longer sufficient; customer service alsoplays in integral part.

“For example, people now are looking for con-venience. They don’t want to go to different projectsites in one day to look at different products of-fered by different developers,” he says. Thus MKLand’s focus on becoming a property supermarket— a one-stop property shopping entity from low-cost products to high-end homes — centred inDamansara Perdana.

To further improve customer service, MK Landhas struck up a strategic alliance with home loansprovider, Malaysia Building Society Bhd (MBSB).MBSB will give a reply within eight days of docu-ments submission on whether the loan is approved.

Kasi’s parting words: Buyers can expect in MKLand’s new launches more innovations, espe-cially those with high-end price tags. — ByHazatul Syima Haron

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The 750-acre Damansara Perdana is expected to continue to be MK Land’s biggest breadwinner

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Sime UEP: 40 years of quality hC hoosing his words carefully, Datuk

Mohamed Said, managing director ofSime UEP Properties Bhd, says thatwhile being ranked highly in The EdgeMalaysia Top Property Developers

Awards 2004 is a prestigious acknowledge-ment, the company regards quality its topmostpriority, with or without awards.

“As inculcated by our late chairman TunIsmail, our motto is to provide good productsand services because that’s what the consum-ers require and that’s what you want to do. Andif you win an award along the way, that’s anextra pat on the back. However, if we don’t, weare not going to adopt a lackadaisical attitude.We will strive to do better,” says Mohamed,who was appointed managing director in July1990.

Having successfully built signature town-ships like Subang Jaya and USJ, the group hasspread its wings beyond the Klang Valley toJohor and Negri Sembilan. However, withactive development projects in Bandar BukitRaja in Klang and Ara Damansara, Mohamedconcedes that the Klang Valley remains its fo-cal development location.

As inculcated by our late chairman Tun Ismail, our motto isto provide good products and services because that’s whatthe consumers require and that’s what you want to do.And if you win an award along the way, that’s an extrapat on the back. — Mohamed

creative breakthroughs for the coming year.This will involve layout, façade design andtechnologically enhanced homes (smarthomes).

Making sizeable profits is every develop-er’s desire but they should not forego socialobligations, stresses Mohamed. Which ex-plains Sime UEP’s commitment to have greenlungs in its developments. One of its latestprojects — Ara Damansara — has benefitedgreatly from this, through the inclusion ofthe “Green Street” among its features.

Mohamed says it has never been the de-veloper’s policy to just make money. Andsince money is not the sole motivating factor,Sime UEP is committed to improving the qual-ity of life of all Malaysians.

“Our developments cater to a wide spec-trum of people; we never neglect the lower-income group. We provide low-cost homes inall the prime areas of our township and 30%of our revenue comes from this. That’s whywe tend to come in lower in the financial rank-ing compared with the bigger guns out there,”says Mohamed with a wry smile.

Rich versus poorFor Mohamed, a developer’s priority shouldbe customer satisfaction followed by its obli-gation to society. He expresses concern overhow some developers could be creating achasm in our society by developing exclusivehigh-end enclaves that do not feature any mid-dle- and low-end homes.

“The rich and moderate are being slottedin different locales while the underprivilegedare tucked away in one godforsaken area. Our

Going upEstablished in 1964 as United Estates ProjectsLtd, Sime UEP Properties has done better inthe ranking this year, moving two notches upto fifth position from last year. Its current starprojects, Putra Heights and Bandar Bukit Raja,have put the group on sound financial foot-ing. Launched in 1999, Putra Heights, whichis coming up on 1,796 acres of freehold land,has been instrumental in filling up the group’scoffers as planned.

Since the financial setback faced by thecompany in 2001, which saw its group pre-tax profit drop to RM112.7 million fromRM150.3 million in 2000, things have beenlooking up. For the year ended June 30,2003, the group posted a pre-tax profit ofRM184.9 million on a turnover of RM469.25million.

The improvement is expected to have con-tinued into the financial year just ended. “Com-pared with the previous year, we are expectingat least a 15% improvement in profit for thelast six months,” says Mohamed. The companyis expected to announce its 2004 results nextmonth.

It is no surprise that the developer isdoing better. Improved accessibility

to Putra Heights, following thecompletion of the RM10.8

million “trumpet” inter-change on Lebuhraya

Damansara-Puchong,has been instrumen-

tal in promoting the township, which haslaunched about 43% of its planned 11,500housing units. The developer plans to com-plete the township, with an estimated grossdevelopment value of RM2.6 billion, by 2008.

Bandar Bukit Raja — Sime UEP’s maidenforay into Klang — has helped awaken thenorthern part of the town. Launched in thefinal quarter of 2002, this township has beenseen as a catalyst for other developers enter-ing Klang. The 5,300 acres of land acquiredby Sime UEP in 1996 is being developed on ajoint-venture basis with Consolidated Planta-tions Bhd.

Some 1,263 of the housing units in PhaseOne have been launched since the townshipmade its debut in 2002. The gross develop-ment value of the first phase has been esti-mated at RM2.1 billion. When completed,Phase One will comprise 10,340 homes and589 commercial and 67 industrial units. Thisdevelopment will keep the developer busy forthe next 20 years.

A brand to be reckoned withThus far, Sime UEP’s properties have beensold on its reputation as a reliable developerand the location factor.

The developer is mindful of its brandingand quality. “Once you have established thebrand, the next move is to improve and sus-tain the quality,” says Mohamed.

Having bagged four Fiabci (InternationalReal Estate Federation) awards for Best Resi-

dential Development for both Subang Jaya(1994 and 1995) and UEP Subang Jaya (2000and 2001), there is little doubt that Sime UEPis a brand to be reckoned with in so far asresidential development is concerned.

The group also prides itself on having beenthe first property developer in Malaysia to beawarded the ISO 14001 Environmental Man-agement Systems in 2000. The achievementfurther strengthens the company’s resolve tocontinue with environmentally friendly devel-opments.

Having introduced and popularised inno-vative ideas such as loft houses, wet and dry

kitchens and 11/2-storey link housesthat are ideal for young cou-

ples in its projects, thedeveloper has ear-

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y homes

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advantaged community has this aversion to thedowntrodden. When we wanted to build a low-costdevelopment in USJ 16, residents of the double-storey and semi-detached homes picketed againstit. However, the Menteri Besar of Selangor gave usthe green light. Look at how arrogant our societyhas become,” laments Mohamed.

He fears that such alienation has resulted insmall pockets of underdeveloped areas dedicatedto the poor. Similar to Harlem in the US, we haveour own neighbourhood ghettos where the crimerates are alarmingly high, he claims.

“I am not against the idea of making money,but it has to be done conscientiously. You mustremember that as a developer, not only are youplanning a development but also perpetuating acommunity. You don’t want to be responsible fora community that is apathetic and oblivious to thesocial conditions around them,” Mohamed opines.

Looking aheadWith the Putra Heights, Ara Damansara and BandarBukit Raja projects, Mohamed feels that the com-ing financial year would see a definite increase inrevenue.

“We will continue to concentrate on what wedo best, which is developing landed residentialproperties. With our proven track record and qual-ity products, I don’t think we can go wrong,” says E

ABDUL GHANI ISMAIL/THE EDGE

Sime UEP is synonymous with USJ(left). The developer is commitedto have green lungs in itsdevelopments, one of which isAra Damansara (above).

Mohamed, who adds that the developer has learntvaluable lessons from some of the mistakes itmade in Subang Jaya and USJ.

“For our Subang Jaya and USJ residents, traf-fic congestion has become a major source of dis-pleasure. But for residents of Bandar Bukit Raja,there will be better accessibility, thanks to theNew Klang Valley Expressway and the New NorthKlang Straits Bypass,” says Mohamed. The latteris planned to be a self-contained township,he adds.

Schools, Mohamed points out, are one of themost important features in any township, espe-cially if you’re looking at a family-oriented com-munity. With the construction of the popular Chi-nese school Pin Hwa in the heart of Bandar BukitRaja, the developer expects to create a compre-hensive educational hub. “There are more plansin the pipeline that will be revealed as we goalong,” says Mohamed.

Armed with nearly four decades of experience,a quality brand and a proven track record, SimeUEP is geared for a good year ahead.

“The crux of the matter is to continue improv-ing the quality and finding better ways to serviceour customers. Rankings and awards are second-ary but they are definitely a boost that’s alwayswelcome,” concludes Mohamed. Did I see a twin-kle in his eyes? — By A Yogesh

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W hen City & Country spoke withDatuk Jagan Sabapathy a year ago,there was a certain reservationsprinkled with plenty of cautionas he answered questions on the

Bandar Raya Developments Bhd (BRDB) group.At the time, the group had just under-

gone a change in shareholding with DatukMohamed Moiz J M Ali Moiz acquiring acontrolling stake of 32.75% in the companyfrom Multi-Purpose Holdings Bhd. Now thechairman of BRDB, Mohamed Moiz firstemerged in the corporate limelight when hisprivately held Effective Capital Sdn Bhd wasgiven the task of ensuring the orderly mi-gration of shares of Malaysian companiesthat were frozen on the Singapore-basedCentral Limit Order Book.

In those days, the market had been curi-ous on the new thrust for BRDB, known fordeveloping high-end products in the exclusiveresidential enclave of Bukit Bandaraya inBangsar, Kuala Lumpur. The question was,would the company move away from prop-erty development towards manufacturing viaits 56% interest in Mieco Chipboard Bhd? Orwould it continue to build quality high-endproducts such as Tivoli Villas, Sri Penaga andBangsar Puteri?

Well, a year later, Jagan is all smiles andbrimming with confidence, enthusiasm andpassion as he talks about the progress thatthe group has made in the past year and itsambitious plans.

To those who thought the company wouldfade from property development, the chiefexecutive officer has this to say: “No! CapitalN O with flashing lights and ringing bells! Infact, we’re more focused now, more drivenand eager to move the property benchmarkhigher with our projects.”

On Aug 16, the group unveiled its newvision, mission and logo, and a new set ofcorporate values to strengthen its brand inproperty development. And the group haslined up an impressive array of projects tobe unveiled in 2004-05, a list that few de-velopers can match.

By the look of things, BRDB’s property plateis pretty full. Its RM1.3 billion flagship projectCapSquare is back on track and ready for itsmaiden launch next month. The project, pre-viously called Capital Square, had been stalledsince 1998 due the economic crisis of 1997-98.

The Bangsar Shopping Centre (BSC) is100% occupied with prospective tenantsqueuing, says Jagan. The group has 20 acresof land scattered in Bangsar and there areplans to extend BSC.

Several niche and boutique projects inthe Klang Valley are scheduled for launchin the next year or so, among them beingthe “61/2-star” residential project in JalanBinjai, Kuala Lumpur. Others include thenine-acre “6-star” condo project in Bangsardubbed the Kerry Hill project and the 12-acre condo project in Segambut (see table).

Elsewhere, plans are afoot to develop twoparcels of land in Ukay Heights, acquired lastyear for a total of RM59 million. No details areimmediately available except that this projectis scheduled to be put on the market early nextyear. Then there is also the planned launch ofa project at Langgak Golf next year, for whichdetails are not yet available.

Beyond our shores, BRDB has finalised itsdebut overseas project in Lahore, Pakistan.The 50:50 partnership with the Defence Hous-ing Authority of Lahore will be developing a340-acre mixed township with a gross devel-opment value of RM1.5 billion.

Mieco’s contributionSo, BRDB’s focus on property will be steppedup. But the role of Mieco in the group cannotbe dismissed. For the year ended Dec 31, 2003,the group recorded a turnover of RM339 mil-lion, of which RM182 million or 54% camefrom Mieco.

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CONTINUES ON PAGE 21

If anything, we are getting betteryear by year. And we’ve taken thebar higher. The aim is for BRDB to bethe top property developer in town,to be the best. — Jagan

BRDB’s RM1.3million

CapSquareflagship project,

stalled since1998 due the

economic crisisof 1997-98, isnow back ontrack and isready for its

maiden launchnext month

Five of BRDB’s planned launches in 2004-05

CapSquare• Formerly known as the Capital Square project• On 15.2-acre freehold land in Jalan Munshi

Abdullah, Kuala Lumpur• Initial plans were to build 750,000 sq ft of

retail space• New master plan offers 3.8 milllion sq ft of

integrated development• Net retail space of 103,312 sq ft will be retained

for recurrent income• Gross development value of RM1.3 billion• Project component: Four office towers (including

the existing Menara Multi-Purpose); four signatureoffice buildings, two high-rise condo blocks, a 4-storey shopping centre and a 300m boulevard orretail street.

• Condos to be launched next month (indicativepricing: RM450 psf; indicative built-up: from1,200 sq ft)

• Retail component to be launched in January. Detailsnot available.

• Designed by international retail design consultantSudhakar T Desai

Jalan Binjai project• Flagship development• Gross development value of RM400 million• On two acres of freehold land in Jalan Binjai,

Kuala Lumpur• 500,000 sq ft of residential space (condominiums)• 50,000 sq ft of retail/commercial space (to be

rented out)• Indicative pricing for condos is RM1,000 psf

Extension to Bangsar ShoppingCentre (BSC)• On a 1.75-acre freehold plot right behind

the existing BSC• Will be linked to BSC via a courtyard• Also designed by Sudhakar• To be launched next year• Will add another 100,000 sq ft in retail space

for rent at BSC• Will also offer 100,000 sq ft in office space

for rent

Kerry Hill project• On nine-acre freehold plot behind BSC• Gross development value of RM550 million• To be launched end-2005• Designed by Australian architect Kerry Hill, who

received an Aga Khan Award for Architecture in2001 for designing the 5-star Datai Hotel inLangkawi Island

Segambut condos• On 12-acre freehold land in Segambut• Land acquired in 2003 for RM59 psf or

RM33 million• To be developed in three phases• Comprise four to five blocks of condos• To offer one million sq ft in residential space• Gross development value of RM344 million• Expected to be launched end 2004• Indicative pricing of RM320 psf to RM350 psf

for a price tag of RM400,000 to RM500,000• Indicative built-up of 1,200 sq ft onwards

BRDB

Jagan expects property development to upits contribution in the next year or so withthe launch of several multi-million ringgitprojects. The contribution to group revenuewill climb to 60% against 40% in manufac-turing.

Investors, he says, should look at thegroup and its twin business focus positively.When there is a slowdown in the propertymarket, the group can fall back on its ma-nufacturing activities. “What other propertydeveloper[s] can claim to have the same ad-vantage?” asks Jagan.

Listed on the Main Board of Bursa Malay-sia since 1998, Mieco is now Malaysia’s topchipboard manufacturer. The plan is for Miecoto emerge among the top three chipboardmanufacturers in Asia-Pacific with the com-pletion of its new plant in Kechau Tui in KualaLipis, Pahang, early next year.

The RM300 million factory, designed andbuilt by a German company, DieffenbacherGmbH, will triple the production capacityfrom the current 300,000 cu m per year to940,000 cu m. This, says Jagan, will enableMieco to meet the increasing overseas demandfor chipboards.

BrandingListed in the Properties section of the MainBoard since 1968, BRDB celebrates its 40thbirthday this year.

Expect more from BRDB

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Sunway on trackto regainingpast gloryS etbacks do not deter Sunway City Bhd

from picking up the pieces and mov-ing on, declares Tan Sri Jeffrey Cheah,founder and chairman of the SunwayGroup.

He is in a rather contemplative mood forthis interview. Attired formally in a suit, hequietly acknowledges Sunway City’s placeamong the top 10 in The Edge Malaysia TopProperty Developers Awards 2004.

“We are back in action and there won’t beany dwelling on the past,” he says. “Thegloom and doom period is over and done with.Subsequent to our restructuring exercise lastyear, we have set the path to rebuild what wehave lost.”

The group suffered a severe backlash fromthe 1997/98 Asian financial crisis. However,with its ongoing corporate restructuring anddegearing exercise, Cheah asserts that thegroup is back on track, with its focus on prop-erty development and investment.

Sunway City was incorporated as Sri JasaSdn Bhd before a name change to Sunway CityBhd in April 1996. What started out as 494acres of former mining and quarrying land inPetaling Jaya expanded to 800 acres and trans-formed into Bandar Sunway. The townshiphas since gone on to successfully encapsulatethe developer’s vision of creating “Resort Liv-ing within the City”.

Sunway Lagoon Resort, the developer’sflagship project, opened its doors in 1992 andSunway College’s development started thesame year. Then in December 1996, SunwayLagoon Resort Hotel, a five-star deluxe hotel-cum-convention centre, opened for business.This was followed by Sunway Pyramid, Ma-laysia‘s first fully themed shopping, entertain-ment and fun mega-mall, in August 1997 andthen The Sunway Medical Centre in 1998.

“Bandar Sunway was our landmarkproject, a comprehensive township that noone expected to turn out the way it did. How-ever, it became our trump card, somethingthat helped to build our name and bail us outduring the hard times,” says Cheah, who waspicked “Property Man of The Year 1993/94”for the Sunway Lagoon development by Fiabci(International Federation of Real Estate)’sMalaysian Chapter. The water park is deemedto be the only one built 150ft below road levelin a quarry crater.

A lot of property development has to do withtiming, and given the thriving property market,Cheah feels that now is the time for the groupto move aggressively with its new launches.

“We have targeted exciting propertylaunches in our main project sites; this willkeep us occupied throughout the year. We arealso in the midst of securing more land to re-plenish our depleting stock. We are definitelylooking somewhere within the Klang Valleyand also as far as Penang. The market is bull-ish, so we are maintaining a very positive out-look,” he enthuses.

Jewel in the crownA discussion on Sunway City’s achievementswould be incomplete without mentioningKiara Hills, an exclusive residential develop-ment coming up on Mont’Kiara, a muchsought-after address in Kuala Lumpur. In fact,

it would not be wrong to call Kiara HillsCheah’s favoured project for the moment.

And it is easy to see why.It is in Kiara Hills that the Sunway group,

better known for its medium to high-end hous-ing developments, is bent on stamping itsmark of quality. Cheah is clearly passionateabout this project which is designed withluxury in mind. The exclusive and elevatedenclave of 32 acres will house 88 freeholdbungalows designed by Cheah as “the ulti-mate dream home”. In addition to the bunga-lows would be 34 units of luxurious court-yard homes.

“Five designers have combined their tal-ents to come up with exclusive designs forthe bungalows. These will have the ambienceof resorts, with traditional Asian elementsthrown in, such as kampung-styled roofs,well-landscaped gardens and unique indoorand outdoor baths. The outdoor bath is defi-nitely my favourite,” chuckles Cheah, point-ing to the five show bungalow units completewith pools.

He is pleased that Kiara Hills, dubbed the“Beverly Hills of Malaysia”, has set a newbenchmark in pricing for bungalows in thearea, with prices ranging from RM4.5 millionto a cool RM5.9 million.

“Owing to the Sunway brand, we are ableto command a premium price; 10% to 15%higher than the usual high-end bungalowunits in the vicinity,” explains Cheah.

With land area ranging from 6,684 to11,442 sq ft, the built-up comes up to 6,234to 7,977 sq ft. Each unit has six rooms and sixbathrooms but this is subject to, as far as pos-sible, changes required by a purchaser. Thegross development value of the 88 bungalowunits has been estimated at RM450 millionand at press time, the developer had sold 48units.

Phase Two of Kiara Hills features 34 court-yard homes with total estimated developmentvalue of RM85.8 million. With built-up rang-ing from 4,420 to 5,200 sq ft, the units arepegged at around RM2.5 million or more.These are now for sale.

Cheah says there are plans for a thirdphase.

Property galoreWhile going upmarket, the developer is notabout to ignore the lesser-priced market. It iscurrently developing a 110-acre freehold hous-ing project north of Damansara in a joint ven-ture with landowner Syarikat PermodalanKebangsaan Bhd. The Sunway SPK Damansaraproject is expected to feature mainly 21/2-sto-rey terraced units, which are priced fromRM538,888 onwards. The Sunway brand hasalso been extended to Shah Alam via SunwayKayangan and Sunway Damansara in KotaDamansara.

The current bestseller in the developer’sportfolio is Sunway Damansara, a jointventure between Sunway City and theSelangor State Development Corp. The 400-acre development is part of the leasehold4,000-acre Kota Damansara. With TamanTun Dr Ismail, Damansara Utama, BandarUtama and the Tropicana Golf and Coun-try Resort in its neighbourhood, Sunway

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Damansara has become a popular location.“Besides the location and product, we be-

lieve our track record and branding havehelped boost sales,” offers Cheah.

Apart from these launches, the developeris also looking at getting started on BandarSunway’s final tract of 163 acres dubbed Pre-cinct Selatan. Scheduled to be launched in thefirst quarter of next year, the project will boastgood architectural designs.

“It will have a huge lake as its main fea-ture and I can assure you that it’ll be fantas-tic,” says Cheah. The development will com-prise 5,000 residential units ranging frommedium to high-end.

Cheah also talks about the company’s 1,300-acre project in Tambun, Ipoh — this was post-

poned because of the recession but is back ontrack and expected to be completed in six years.Now almost 20% complete, the developer isconcentrating on the water theme park that’sbased on Sunway Lagoon’s concept.

“We have also commissioned spa operatorsto create a spa centred on the Tambun hotsprings. With our lifestyle residential develop-ment comprising bungalows and semi-de-tached houses, it will be a novelty township,almost similar to Bandar Sunway,” says Cheah.

The developer is planning a succession oflaunches by the end of this year at seven dif-ferent projects in the Klang Valley and Ipoh.Worth nearly RM1.2 billion, these are esti-mated to bring in sales revenue of no less thanRM850 million.

Kiara Hills: Dubbed the ‘Beverly Hills of Malaysia’

Cheah: We are back in action and there won’tbe any dwelling on the past... we have set thepath to rebuild what we have lost.

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Looking for new landbankIn the past 12 months, the group has under-

gone a branding exercise aimed at ensuring thatit stays ahead of competition. This culminatedin the recent unveiling of the group’s new logo,vision, mission and values. It aspires to attractboth new and younger customers to its futureproducts such as serviced apartments atCapSquare while retaining its loyal followers.

The new values of BRDB are to be pro-active, engaging and responsive, to go beyondthe benchmark and set a high bar for itselfand the property industry. These will be donewhile engaging the community in its projects.On top of this, the group will be responsiveto changes in the market — similar to its moveto change the plans for the stalled CapSquare.

Maintaining profit despite lower revenueIn The Edge’s inaugural Ranking of Top Prop-erty Developers in Malaysia last year, BRDBcame in fourth behind IGB Corp Bhd, SP SetiaBhd and IOI Properties Bhd. This year, thegroup dropped two places to sixth, with thefourth and fifth placing going to MK LandHoldings Bhd and Sime UEP Properties Bhd,respectively.

For financial year (FY) 2003, the BRDBgroup posted a lower revenue of RM339 mil-lion from FY2002’s RM351 million, due mainlyto a lower contribution of RM157 million bythe property division. In FY2002, propertyaccounted for RM185.6 million in turnover,the amount boosted by the RM50.5 milliondisposal of its 247-acre freehold commercialland at Seremban 2, Negri Sembilan.

It must be noted, however, that group pre-tax profit for FY2003 improved by 4% toRM62 million for FY2003, against the RM60million posted in FY2002. This is due to profitrecognition arising from the completion ofproperties sold in previous years. There werealso gains of RM10.1 million from sale of mar-ketable securities.

Certainly, Jagan expects BRDB to be strongerfinancially given 2004-05’s planned propertylaunches with a total potential gross develop-

FROM PAGE 18 ment value of RM1.5 billion, starting withCapSquare next month.

Indeed, unaudited first-quarter results forFY2004 show BRDB posting a turnover ofRM94.3 million, up 39% from RM67.9 mil-lion posted in the corresponding quarter lastyear. Group pre-tax profit also jumped signifi-cantly from RM7.8 million in the first quarterof FY2003 to RM21.6 million.

The group attributes the strong resultsmainly to more property sales with 42 unitssold compared with only 20 units in the cor-responding quarter in FY2003. This is toppedby a 27% rise in Mieco’s revenue to RM49.6million due to strong chipboard sales. The firstquarter of 2004 also saw a write-back of im-pairment loss of marketable securities ofRM3.8 million, against an allowance for im-pairment loss of RM5.9 million in the corre-sponding quarter in FY2003.

In the next few years, the group plans tomore than double its current gross rental in-come of RM30 million a year to RM70 mil-lion, as part of its risk management strategy.This will be achieved with the extension tothe BSC, the CapSquare project and the JalanBinjai project totalling some 253,312 sq ft ofretail space.

For 2003, BSC recorded a 10% growth inrental returns of RM27.5 million from RM25million in 2002. This translates into 92% ofthe group’s rental income of RM30 million inFY2003, with the remaining 8% coming fromits retail centre in the Permas Jaya townshipin Johor.

Creating values for buyersOne of the observations about BRDB has beenthat it has been quiet in 2003 with no newlaunches.

This, Jagan explains, has been a deliberatemove so that the group could focus on timelydelivery and quality of its properties sold, as wellas to acquire landbank in the Klang Valley.

The group, he continues, had wanted toconcentrate on its core value of creating valuefor buyers such as that of its two projects in

Bukit Bandaraya — Bangsar Hills and PalmyraBangsar.

Launched in 2002, the 11-acre Bangsar Hilloffers exclusive gated community living with31 resort-style bungalows priced betweenRM4.6 million and RM7.1 million (land area:8,643 to 22,204 sq ft; built-up: 6,360 to 8,200sq ft). These have been sold out.

The group spent about RM8 million onBangsar Hills’ softscape and hardscape whichincludes a linear park running throughout thedevelopment, tropical trees and plants of lo-cal and imported variety, walkways and roadsmade of natural stone and a Balinese-stylewater feature at the entrance. “The quality ofthe product is such that the units have appre-ciated in value by 25% to 30% from the origi-nal price,” says Jagan.

The value of Palmyra Bangsar, alsolaunched in 2002, has also gone up by 30%to RM550 psf from the RM490 to RM500 psfrange, according to Jagan. The project com-prises 60 spacious apartment units, each withthree parking bays, priced from RM1.5 mil-lion to RM2.5 million (built-up: 3,051 to 5,021sq ft). All units have been sold.

Increasing landbankBRDB does not have a huge landbank similarto that of plantation-based companies. Its 683acres in the Klang Valley and Johor have anestimated gross development value of RM4.56billion.

This is inclusive of its acquisition last yearof several tracts of prime land in the Klang Val-ley for niche and high-end developments.Among the new buys: 6.25 acres of residentialland in Taman Duta; three adjoining parcelsmeasuring 11 acres in Segambut next toMont’Kiara; 1.8 acres in Hulu Klang; 0.58 acresin Langgak Golf; and three parcels of adjoin-ing land totalling two acres in Jalan Binjai.

BRDB, Jagan says, will continue to sourcefor new plots to expand its landbank in primelocations in the Klang Valley, those with im-mediate- to medium-term development poten-tial of 12 to 24 months to minimise holding

cost. These plots must also have a superiorpotential return of 25% to 30% of the grossdevelopment value.

Lahore project starts geographicaldiversificationThe group is looking at geographical diversi-fication to protect it from economic downturnsin the country. BRDB’s partnership with theDefence Housing Authority of Lahore, a hous-ing pension fund for the army, involves thebuilding of a 340-acre mixed developmenttownship that will see an 18-hole interna-tional-class golf course, bungalows, semi-de-tached homes, a retail centre, shopoffices andcondominiums. BRDB plans to start selling theproducts next year.

The joint venture came about through thenetworking of Mohamed Moiz, whose familyhails from Pakistan. Jagan is excited aboutPakistan and he does not discount the possi-bility of greater BRDB presence there.

Besides Pakistan, the group also has beenoffered to develop several projects in Chinabut Jagan terms the property industry thereas “toppish” or saturated. BRDB, he adds, hasalso received offers to develop projects in In-dia but he finds the property market there abit more “restrictive”.

Going forwardExpect to hear more from BRDB, says Jagan.“If anything, we are getting better year by year.And we’ve taken the bar higher. The aim is forBRDB to be the top property developer in town,to be the best.”

The condominiums and retail space expectedto be unveil in Jalan Binjai in November at anindicative price of RM1,000 psf for the residen-tial units will underline the group’s desire to setthe benchmark in the property industry. Design-ing the project is renowned architect Lord Nor-man Foster. Without elaborating, Jagan says thisproject will change the skyline of the city. “Itcertainly will be an icon of Kuala Lumpur.”

BRDB will be an interesting property devel-oper to watch. — By Hazatul Syima Haron E

Among the main launches wouldbe the 190 units of 21/2-storey terracedhouses in Sunway SPK Damansaraand 16 units of linked bungalows inSunway Damansara. The latter will bepriced from RM2.5 million. Prospec-tive buyers in Ipoh will be given achance to be a part of the Sunwaybrand with the launch of Garden Vil-las in Sunway Ipoh City. The 48 units,with a built-up of 2,000 sq ft, are ex-pected to be priced from RM210,000.

Banking on its strengthsBesides these development activities,Cheah is looking at other sources ofrecurrent income. One is the four-starPyramid Tower at Sunway LagoonResort Hotel, which opened its doorsrecently. The RM220-million hotelwith 534 rooms is expected to chalkup RM120 million in revenue by theend of this year. According to Cheah,the hotel is expected to attract mainlybusinessmen and holidaymakers

A new wing is being constructed at the Sunway Pyramid Shopping Centre. It will have a state-of-the-art design and facilities and isexpected to be opened in April 2007

E

from around the world. “We are alsoplanning to promote it as a conven-tion centre, ideal for exhibitions andcorporate events.”

Another highlight for the groupwill be the second phase of SunwayPyramid Shopping Centre, whichwill boast a state-of-the-art designand facilities. The new wing, whichwill be called Sunway Pyramid 2,is under construction. It is expectedto be opened in April 2007 and will

add 700,000 sq ft of lettable retailspace to the existing gross built-upof 2.5 million sq ft. This wing of-fers a gross built-up of 1.03 millionsq ft and the expected rental ratewill be similar to that of the mainshopping centre — ranging fromRM10 to RM25 psf.

The new wing’s layout will in-clude a boulevard overlookingSunway Lagoon’s man-made water-fall and an internal bus station. Thenearly RM450-million Phase Twowill feature speciality restaurants,concept stores and exclusive enter-tainment centres once it opens itsdoors in three years.

“With the construction of the newphase, we would be able to recap-ture our position as one of the pre-mier shopping centres in the KlangValley,” states Cheah.

Sunway Pyramid has won TheBest Shopping Centre Award 2000from the Malaysian Chapter of theInternational Real Estate Federation(Fiabci). As for Sunway Lagoon Re-sort, it won the Fiabci Prix d’Exce-llence Award 2002 in the leisurecategory.

LandbankWith its current landbank of 2,500acres scattered over the Klang Valley,Ipoh and Penang, the developer will

be kept busy for the next 8 to 10 years.The group is looking at replenishingits landbank. “We are definitely look-ing within Klang Valley and, ofcourse, other states such as Penangand Johor. If possible, we would tryto avoid joint ventures,” says Cheah,who adds that this year marks theSunway group’s 30th anniversary.

“We have survived the roughperiod and with our resolve for ex-cellence, we will emerge again asone of the top property developersin the country,” says Cheah. Prop-erty development will contribute atleast 80% of the group’s earnings inthe next two years, he adds.

For the year ended Dec 31, 2003,the group made a pre-tax profit ofRM107.13 million on a turnover ofRM728.64 million. For the first quar-ter of FY2004 ended March 31, un-audited group pre-tax profit wasRM46.29 million achieved on a rev-enue of RM255.07 million. In com-parison, for the first quarter endedMarch 31, 2003, group pre-tax profitwas RM21.52 million on a turnoverof RM170.13 million.

“With all the plans put into action,we’re sure of recapturing our pastglory. Whether or not we’re ranked,we will continue with our motto ofgiving the best in everything,” saysCheah resolutely. — By A Yogesh

Mcc_20n21_512.pmd 8/18/04, 9:49 PM21


I&P rides on trustW hen talking about quality devel-

opers, the name Island & Peninsu-lar Bhd doesn’t immediately cometo mind. Why? The company’sstrength in building quality homes

and creating communities was not well publi-cised until a few years ago, explains its man-aging director Dr Radzuan Abdul Rahman.

“There has always been a structured con-sistency in the quality of our homes and inour success in creating happy communities.But it may not have been articulated as such,”he stresses.

Yet the fact that I&P has been rankedeighth among the top 10 property players byThe Edge is indication enough that it is a de-veloper to be reckoned with. Certainly, its cus-tomers will attest to this.

Radzuan shares a case of customer loyaltywith City & Country: “A Penangite called us tosay he was planning to buy property in KualaLumpur and that he only wanted to buy anI&P home. We asked him why. His reply wasthat not only did he live in an I&P home, grow-ing up with his family in Penang, but his sib-lings, aunts, uncles and cousins had all boughtour homes in Kuala Lumpur and Penang!”

And this is not an isolated case, saysRadzuan. After all, I&P has housing develop-ments up north — Taman Sri Nibong, DesaMutiara I and II and Bayan Heights. In theKlang Valley, there are Taman Setiawangsaand Bandar Kinrara.

I&P’s strong following was seen recentlyin the take-up of its homes in the TamanSetiawangsa development. According toRadzuan, “a good number of the purchasers

were those upgrading from their smallerhomes in the same area”. And in BandarKinrara, the developer is known to price itsunits lower than the developers nearby. This,explains Radzuan, makes for better capitalappreciation for the buyers.

A new frontierThe 40-year-old I&P has recently moved intonew territory, one that is bound to keepRadzuan and his team very busy.

Under a major rationalisation exercise byPermodalan Nasional Bhd, the controllingshareholder of Golden Hope Plantations andI&P, the core businesses of the two compa-nies have been streamlined, with I&P emerg-ing with the property development business.

Now I&P will have to take on new chal-lenges, explore new options, set higher stand-ards and realise better returns.

“We will continue to be driven by our guid-ing principle, that is, to build on the trust of ourbuyers, employees, contractors, suppliers andrelevant authorities. We will also continue todraw strength from our brand name where onecan expect quality, timely delivery and reason-able pricing for our products,” Radzuan says.

But even with its stringent policies, thecompany had problems of late delivery anddefects in its Ampang 971 townhouse project.Launched in 1997, the 124-unit townhouseproject on Jalan Ritchie, off Jalan Ampang,was completed in 2000.

To address the problems, I&P implementeda quality check mechanism requiring its non-operational staff to inspect the stages of con-struction from a buyer’s perspective. This

I&P’s housing developments in the KlangValley are Taman Setiawangsa (right) and

Bandar Kinrara. Going forward, Bandar Kinrarawill feature strongly in the developer’s plans .

worked and the issues of poor quality anddelays were immediately rectified.

Going forward, the company has the edgein being the developer with the largestlandbank in the country, post-rationalisation.Its portfolio has grown from 3,034 acres to19,053 acres. To handle this, Radzuan has al-ready devised a master plan that will involveteaming-up with other parties to speed up de-velopment on its tracts wherever possible.

To meet raised expectations, the developeris also fast-tracking its migration into the high-end sector. As the company lacks a trackrecord in this area, it is actively consideringpotential partners, including Singapore firms,which have expressed interest to participatein its joint-venture plans.

Certainly, I&P’s new status, plans andideas will bring new critics with new com-plaints. But so far, it has been smooth sail-ing. Its annual general meeting on July 20went well, with over 200 shareholders at-tending. Radzuan says he was pleasantly sur-prised at their unanimous support for themanagement and its plans.

“Everyone present gave us their full sup-port. They basically told us they were veryhappy with the management and that theybacked our plans 100%. In fact, one of themsuggested that a retirement fund be set up forthe directors of the company so that we re-main in good health to be able to steer thecompany forward,” Radzuan laughs.

For the year ended Jan 31, 2004, I&P posteda group turnover of RM555.1 million, up 13%from FY2003’s RM490.7 million. Group pre-tax profit for FY2004 improved a significant

49.3% to RM165.7 million.Radzuan is happy that I&P is among the

top 10 property developers as ranked by TheEdge, but he has also set ambitious targets fornext year. He “hopes to move up a fewnotches from eighth position this year”.

How does he plan to do it?

The great leap forwardThe professor in him (Radzuan was withUniversiti Putra Malaysia as a lecturer andassociate professor from 1969. He left in 1980as dean of the Faculty of Resource Economicsand Agribusiness) is still there. This is mir-rored in the lingo Radzuan uses to get thecompany to look at the future.

He has chosen the rocket and its enginesas his theme: Engine 1 refers to I&P, engine 2turnkey contractors, engine 3 joint-venturedeals and engine 4 strategic land sales.

“At meetings, when I say ‘do we haveenough horsepower to undertake this projectwith engine 1 alone?’ they know what I amtalking about. It’s the same when I say ‘dowe need to go for engine 2 or 3 or do we gostraight for engine 4?’ They understand. It isa lingo that everyone in the company under-stands, and it sort of hastens the pace,”Radzuan explains.

More importantly, while this provides themotivation for the workforce to be excitedabout the projects looming ahead, the real tasklies in striking the right balance when consid-ering the “engine” options. The other challengewould be to increase the capacity of engine 1as time goes by and this can only be done bysetting targets on when the company can re-


Mcc_24n25_512.pmd 8/18/04, 9:10 PM24


linquish dependence on its other three options.“Two years from now, we should be able

to let go of engine 4, three years to drop offengine 3 and at least five years before we getrid of engine 2,” he reveals.

The expanded landbank will also meanthat the company, unlike its pre-rationalisa-tion days, will be dealing with less and lessfreehold land. But Radzuan is the least wor-ried about this reality.

“That will have nothing to do with thequality of homes we aspire to deliver. Any-way, the difference between freehold andleasehold land is more conceptual that any-thing else,” he adds, waving the notion aside.

Project focusI&P’s 40 years of existence has been pepperedwith less than successful stories. Like the free-hold Bayu Lakehomes project taking shape inPajam, Negri Sembilan.

Planned as a country home development,the project was launched in 1996, just a yearbefore the financial crisis hit the sector. Toadd to its misfortunes, the planned infrastruc-ture link — the much-talked about KasehHighway — has yet to materialise.

But I&P is done with waiting for things tohappen. Instead, the developer is working ata catalyst in the form of a learning institutionto rev up interest in the township. But no de-tails are immediately available. Some 1,011units of bungalows and terraced houses of the5,527 properties planned in the developmenthave been built.

For now, all eyes are on what Radzuancalls I&P’s crown jewels — 1,400 acres of free-hold land in Shah Alam known as Harun Es-tate. Flanked by up-and-coming developmentslike Kota Kemuning and Bandar Botanic, thisarea is one of the Klang Valley’s current de-velopment hotspots.

Hence, it comes as no surprise whenRadzuan reveals that “many parties” haveexpressed interest in taking part in I&P’s de-velopment plans there.

“We see Harun Estate as a raw diamondwaiting to be cut and polished to rival, andmaybe even surpass, the other crown jewelsof the new enlarged I&P group, such as BandarKinrara, Damansara Heights and the BukitJalil land,” he says.

For now, Bandar Kinrara features stronglyin its plans, going forward, where the devel-oper has built only 8,604 properties (compris-ing bungalows, semidees, terraced homes,apartments and limited shophouses) of the17,986 planned in the popular township, whichis expected to be fully developed in another 10years. In October, the developer expects to puton the market 27 units of 2-storey detachedhomes pegged from RM1.3 million.

Meanwhile, on its 105 acres of freeholdland in Bukit Jalil, I&P plans an exclusive resi-dential project comprising luxury bungalowsand semidees. This will entail the use of en-gine 3 to tie up with expertise that will helpthe developer deliver quality high-end homes.

I&P is definitely set for very busy yearsahead. — By Jennifer Gomez

We will continue to be driven by our guidingprinciple, that is, to build on the trust of our buyers,employees, contractors, suppliers and relevantauthorities. We will also continue to draw strengthfrom our brand name. — Radzuan

SUHAIMI YUSUF/THE EDGE

Mcc_24n25_512.pmd 8/18/04, 9:11 PM25


Low-profile Boustead Properties shines

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We first look for a catalyst in any potentialproject. Without this, you are just offering a run-of-the-mill development. Also, we like to give themarket that something extra. — Ghazali

A sound reputation and strategic ap-proach has been the recipe for theBoustead group’s success on the lo-cal property scene.

As part of its rebranding initiative toproject a single corporate identity, its propertysubsidiary SCB Developments Bhd underwenta name change to Boustead PropertiesBhd. Together with the plantation di-vision Boustead Plantations Bhd,Boustead Properties, the property arm,forms one of the main growth enginesof Boustead Holdings Bhd.

Boustead Properties registered anunaudited group revenue of RM75.71million for the second quarter endedJune 30, 2004, 61% higher than theprevious corresponding period’sRM47.13 million. Unaudited group pre-tax profit for the quarter just endedcame to RM27.85 million — 23% higherthan the previous corresponding peri-od’s contribution of RM22.59 million.

For the year ended Dec 31 2003,Boustead Properties chalked up a grouprevenue of RM237.8 million or 5.6%higher than FY2002’s RM225.2 million.Group pre-tax profit for FY2003 stood atRM119.8 million — 32.7% higher than FY2002’sRM90.3 million.

When City & Country met Boustead Proper-ties’ executive director Datuk Ghazali Mohd Alione morning, he was in high spirits. The com-pany had made its maiden appearance on TheEdge’s ranking of the country’s top 10 prop-erty developers, coming in at ninth place.

As a developer, Boustead Properties is con-servative and low profile, says Ghazali. “Wedo not market ourselves actively or have atagline like most others. This is in line withour group’s philosophy.”

“We believe we are a developer that deliv-ers what we promise by working within thelaw,” he adds. “In terms of management, I thinkwe have a quality workforce which is dedicated.Even the CEOs employ a direct approach andare willing to get their hands dirty. We also haveour shareholders to thank for their support inthe decision-making process. Without their con-sensus, things would be stifled.”

It is common knowledge that Boustead Prop-erties’ fortunes have been boosted significantlyby its ongoing 360-acre mixed development atMutiara Damansara, a popular address inPetaling Jaya. Boustead Properties is develop-ing the township through Mutiara Rini Sdn Bhd.

Boustead Properties’ other jewel in thecrown is Taman Mutiara Rini in Skudai, Johor.More than 3,000 units of houses, shophousesand apartments have been launched in thistownship, which also features a school, play-ing fields, petrol stations and a 60-acre “Ur-ban Forest”, among others.

Gem of a developmentGhazali is full of praise for Mutiara Damansara,and with good reason. It is a significant con-tributor to Boustead Properties’ profits.

Of the 2,400 homes planned for the township,1,899 have been launched so far. Forty per centof the township’s development (about 144 acres)is designated for commercial use and 60% of thisarea has either been sold or developed.

The attractive address has given the de-veloper the edge in promoting its products,the latest being the Surian condominiums.Ghazali says that despite a crowded condomarket, Boustead Properties managed to sell60% of the 376 units in less than four monthsof the launch in early April this year.

The landed homes in Mutiara Damansaraare so hot that they were sold by ballot whilethe land was tendered — to ensure that “theyfetched their deserved price”.

“We have developed around 50% of the landand are slowing down our launches. We believe

in maximising long-term gains on the land byadopting a ‘hold-and-sell’ approach rather thanmaking quick profits,” says Ghazali.

This strategy needs no justification. Ghazalisays the bungalows launched at RM1.1 millionabout 21/2 years ago are now worth RM2.2 mil-lion on the secondary market. The semidees

sold at the bumiputera price of RM750,000 arenow going for RM1.3 million or so, he adds.

Pricing strategyThe capital appreciation trend has promptedthe developer to pace the sale of its corporatelots, each time pricing it higher. “Three yearsago, we sold to Ikea at RM99 psf but todaythe land commands RM240 psf. We ask foran increase of RM25 to RM30 psf each timewe sell a plot of land,” Ghazali says. Somewell-known names such as Proton Kedah,Petronas and Bentley School of Music haveopened shop in the retail hub.

The corporate lots sold so far support TheCurve, the developer’s lifestyle mall, as wellas other retail centres like Ikea, Ikano PowerCentre and Tesco’s flagship store in Malay-sia. “Our plan is to attract the daytime popu-lation. The portfolio mix of tenants has re-moved the need for The Curve to have an an-chor tenant,” says Ghazali.

He adds: “We have had offers for the landfor the development of serviced apartmentsbut we said no. We have to be selective aboutwho we sell to in the commercial area as thiswill affect the value of the land.”

To improve accessibility, Boustead Prop-erties has completed a RM17-million upgradeto Persiaran Surian. A further RM20 millionwas spent to build alternative connections toLebuhraya Damansara-Puchong and thePenchala Link. “Despite the excellent networkof roads serving the area, access must be madeeasy. It is no good if you can see but can’ttouch,” Ghazali declares.

He is also upbeat on Taman Mutiara Rini.“We were the first to work with the Forest

of the “build-and-sell” concept because thereis enough control in the industry. “Much ofour success can be attributed to our judge-ment when selecting good consultants andcontractors as well as observing the competi-tors’ shortfalls,” he says.

“One must also not bite off more than onecan chew,” he adds. “In Johor, we aim to sell600 to 700 units a year but our target for KL ismuch lower since there is a higher margin ofreturn here — by three to four times.”

Besides property development, BousteadProperties also provides support for othercompanies in the group, deriving income fromproject management. The group’s investmentproperties include the 28-storey MenaraBoustead, 20-storey Menara Affin and 7-sto-rey Wisma Boustead, all of which are locatedon Jalan Raja Chulan. These enjoy 95% oc-cupancy, turning in recurrent income.

Future plansAs for future projects, Ghazali would only dis-close a few details. “We have something inKulai, which is at the first stage of approval,and we have identified strategic landbank inKedah and Sarawak. Small pockets of land inthe Klang Valley are being looked at for vari-ous types of development.” He says the de-veloper is in no hurry to proceed with devel-opment at these places, maintaining that tim-ing is crucial.

And where does this player see itself 10years down the road? Ghazali says it will con-tinue to deliver its projects on time and hashigh hopes to develop on behalf of the gov-ernment or a government-linked company.

It has no plans to venture abroad, butthis is not cast in stone. After all, as Ghazalisays, a good developer can operate in anyplace or country through thick and thin. —By Vikki Choong

has generated in sales is one good reason topraise it. But Ghazali also takes pride in hiscompany’s mantelpiece.

The prized Mutiara Damansara townshipwas awarded the Malaysian Institute of Plan-ners 2003 Planning Excellence Award for the“Development below 500 acres” category.

Taman Mutiara Rini also won twoawards — Best Planned Develop-ment Award 1998 and the MalaysianInstitute of Planners Award 1999.

Explains Ghazali: “We first lookfor a catalyst in any potential pro-ject. Without this, you are just offer-ing a run-of-the-mill development.Also, we like to give the marketsomething extra.

“As the property sector is themost regulated in the country, wehave been proactive in bringingabout changes to the procedures in-volved. We are lucky to have workedclosely with the authorities and tohave shared their support.”

Ghazali speaks proudly of thecompany’s introduction of the houseowners’ manual. “When you buy a

car, you get a manual. So we thought why notprovide the same convenience for buyers ofour houses. It provides that extra something.They can even refer to which shade of paint touse when they repaint their house. Of courseother developers soon took notice and followedsuit.”

StrategyWhen asked about the company’s strategy,Ghazali says, “A bit of luck, knowing when toseize opportunities and capitalising on theuniqueness of every landbank. So far, I wouldsay 99% of our projects have been a successbecause we have looked for landbanks that of-fer a catalyst — that extra something.”

He stresses the importance of learn-ing to anticipate the market and plan-ning ahead, even for rainy days.

“We weathered the crisis pe-riod because of our sound rela-tionship with the government.Also, we weren’t as gung-hoas some developers, so wehave little unsold stock,” hesays.

“We believe any slow-down in our sales is dueto the bumiputera quota.At the time, we even sentour marketing people tomosques to encouragebumiputeras to buy. Thiswas to ensure that the50% bumiputera quotawas taken up.”

Ghazali says BousteadProperties is not an advocate

Research Institute of Malaysia [FRIM] on theproject. We wanted to create something spe-cial by planting jungle trees in open spaces togive the township pleasant surroundings.”

Of the 3,800 units of the township put onthe market, 90% have been sold. “Overall, ourunsold stock inventory is very small. I thinkthis is because we stick to a standard designwhich we know works,” says Ghazali.

Award-winning successThe RM280 million that Mutiara Damansara

Boustead Properties’ fortunes have been boosted significantly by itsongoing 360-acre mixed development at Mutiara Damansara

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Mcc_28_512.pmd 8/18/04, 9:33 PM28


Sunrise brand stands out

S unrise Bhd stands out notonly as a developer thatmade it into the top 10 of TheEdge Malaysia Top PropertyDevelopers Awards 2004,

but, more significantly, has alsobeen ranked the best companybased on its qualitative attributes.

On a different front, Sunrise hasbeen noticeably busy of late, puttingmore launches on the market andexpanding its landbank. Irrespectiveof the pace, the company remainscommited to offering quality prod-ucts and customer service, sayschief executive Datuk Michael Yam.

Indeed, such qualitative at-tributes have been associated withSunrise’s pricing. “For one, ourproducts sell at a 20% premiumover other similar offerings inMont’Kiara. Rental rates too are sig-nificantly higher because of ourstrength in property management.Owners are enjoying yields in accessof 10% on their Sunrise investmentsand this has a lot to do with ourquality standards. Across the board,secondary values for some of ourolder projects are hitting RM500psf,” offers Yam.

He illustrates the company’s em-phasis on customer service with arecent example: On his way backfrom London for business, he stop-ped over in Prague to meet a Ma-laysian family who had purchasedthree units in Sunrise’s Mont’KiaraAman and Damai projects.

How does the company attain itsconsistency in quality?

“We have been using the sameIrish contractor, Mivan, for the past15 years, since our first condo project,Mont’Kiara Pines. They specialise insystems formwork construction. In away, it has become a culture withinthe enlarged group of people involvedto deliver the best quality for a Sun-rise product,” Yam reveals.

Sunrise has outlined plans to takefull advantage of the economic cy-cle in the aftermath of the 1997 fi-nancial crisis, explaining its aggres-sive sourcing for new landbank. Inthe past two months, it has acquiredabout 40 acres (through purchaseand joint ventures with land own-ers) in three locations in Mont’Kiaraand the nearby Dutamas area, val-ued at between RM17 and RM135psf. This means that Sunrise is setto remain in the area for anotherdecade or so.

Some of these tracts offer poten-tial for medium-term developmentwhile others will need to mature. Thesoonest to be unlocked is a 17-acreparcel, with a launch expected withinthe “next 12 to 18 months”. Whiledetails are sketchy, it looks likecondos will be built on these tracts.Yam says looking at the fast-chang-ing trend that has evolved over thepast four to five years, it would notbe possible to plan too far ahead interms of size and theme.

“Take Mont’Kiara Bayu. At thesoft launch during the recession inMarch 2000, we offered a range ofsmaller units sized from 798 to 1,280sq ft. Priced at an average of RM300psf, these were all sold in fivemonths. In the first quarter of 2001,

we released the bigger units inMont’Kiara Damai at an averageof RM388 psf. These were all soldin nine months.”

Yam is also upbeat about in-vesting overseas — Sunrise is nowpresent in the UK and Australia.“Our overseas investments con-tribute positively to our bottomline so we will actively pursue vi-able opportunities abroad. Wealso have the benefit of cross-bor-der experience, where we canlearn how things are done in otherparts of the world,” says Yam.

In Australia, Sunrise, throughits subsidiary East Urban Pro-perties Pty Ltd, has teamed upwith housing developer Multiplexto jointly develop 128 residentialunits in five apartment blocks ofup to five storeys. These wouldsit on a 3.85-acre freehold parcelin Carlingford, Sydney.

Through associate companyMilequay Ltd, Sunrise is in an-other joint venture with CorovestInternational Ltd and WharfsideRegeneration Ltd to redevelopthe existing Cranfield Hills prop-erty in Ipswich, London, into anew waterfront project by theThames River.

For the year ended June 30,2003, Sunrise recorded a grouprevenue of RM174.28 million anda group pre-tax profit of RM42.32million. For the nine monthsended March 31, 2004, the groupachieved unaudited revenue ofRM186.23 million, significantlyup by about 57% from the previouscorresponding period’s RM118.86million. Group pre-tax profit for thenine months ended March 31, 2004showed RM37.58 million or a 27%rise from RM29.66 million before.Based on Sunrise’s closing shareprice last Wednesday of RM1.66, itsmarket capitalisation stands at aboutRM700 million, with RM421.69 mil-lion in paid-up capital.

Project focusSunrise is synonymous with Mont’-Kiara. To date, the developer hascompleted seven Mont’Kiara condoprojects comprising 2,300 homesbesides Plaza Mont’Kiara, an officeand retail complex. Sunrise has alsolaunched 47 bungalow lots calledThe Residence.

To date, slightly more than half ofthese bungalow plots pegged at anaverage of RM240 psf have been sold.Situated over 12.4 acres, this projectoffers buyers the opportunity to livein a landed home in Mont’Kiarawithin a secured gated community.

A development in Mont’Kiarawhich Yam is especially proud of isMont’Kiara Damai. With only 230units built on a 8.3-acre freeholdsite, it is currently Sunrise’s lowest-density project there. Launched inthe first quarter of 2001, all the unitswere sold in nine months.

The most recent launch in theSunrise stable is the Kiara DesignerSuites. Visibly excited about thisproject, Yam calls it “a unique op-portunity for purchasers to buy intoan almost ‘build then sell’ plan”.

This is how it works: A purchaser

only needs to put a 20% downpayment on the purchase priceand take a loan for the necessaryamount. The servicing of themortgage only starts when theunit is completed. The developerwill pick up the tab for the inter-est payment on the amountdrawn down during the con-struction period.

Coming up on a three-acretract, the joint venture with Land-marks Bhd offers 324 units in a 29-storey tower block. Pegged fromRM350,000, more than 60% of theunits sized from 1,088 to 1,428sq ft have been sold since registra-tion started six months ago. An of-ficial launch of the units was heldon Aug 2.

But with the properties sellingwell, why the need to offer theadditional incentive? Accordingto Yam, this is a test bed for themarket’s response to such an in-centive. To Sunrise, this is akinto offering buyers the benefit ofbuying a home with minimal riskon their part, and having to payonly when the project is com-pleted.

Complementing Plaza Mont’-Kiara on the commercial front isMont’Kiara Solaris. Work hasstarted on the shopoffice block com-ing up on a 13-acre freehold site,which will be built in two phases.

Staying aheadGiven Sunrise’s association withMont’Kiara, does the developerhave brand power elsewhere?

Sunrise’s venture south with

were not familiar with the Sunrisebrand. But when constructionreached the rooftop, buyers came,”says Yam.

To date, Sunrise has built andhanded over 115 units of 2-sto-rey terraced houses in the projectwhich Yam dubs the DamansaraHeights of Seremban due to its lo-cation and terrain. Planned tocomprise 3,000 housing and 500commercial units, completion ofthe project is expected in anothersix years.

Sunrise’s labour in SerembanForest Heights has not only at-tracted buyers but the interest ofother developers as well. Sunrisehas teamed up with MCL LandLtd, the listed property arm of Sin-gapore-listed group Jardine Cycleand Carriage Ltd and a memberof the Jardine Matheson Group ofCompanies, to jointly develop theproject on a 50:50 basis.

MCL Land’s acquisition of a50% interest in Seremban ForestHeights in May was via the pur-chase of 50% of the issued andpaid-up capital of Tropical Terrain,Sunrise’s subsidiary which is de-veloping Seremban Forest Heights.

“The fact that MCL Landchose Sunrise as a partner is alsotestimony to our reputation as aquality developer” Yam stresses.

Seremban is not a short-termplay for Sunrise. The developerplans to look at other develop-ment activities in strategic loca-tions there.

Ahead of the packUndoubtedly, the success en-joyed by Sunrise has enticedmany developers into Mont’-Kiara. How does Sunrise view therising competition?

Yam replies: “Of course, somemarket share will be taken awayfrom us but the amount is insig-nificant. Buyers who want to buyinto this address know our repu-tation by now. As such, the rea-son they would go for the otherdevelopments around here couldboil down to two factors: eitherthey do not have the budget fora Sunrise unit or their purchaseis for investment purposes and sothey are not concerned with buy-ing into products that have astamped mark of high quality.”

Yam offers yet another perspec-tive to competition — given thescarcity of land there that can bedeveloped at any given time, de-velopers can only collectively puton the market, at most, 1,000 unitsin a year. As such, Yam reasons,there will always be demand.The company is also moving to-

wards joint ventures. Yam saysSunrise has secured three partner-ships with landowners in Mont’-Kiara and is in the process of final-ising the fourth.

Going forward, Sunrise lookspoised to join the big boys’ league.As long as the company sticks to itshigh-quality products and customerservice, it looks like the brand willnever go out of style. — By JenniferGomez

Seremban Forest Heights, a 480-acreproject about 3km from the town’scentral business district, seems to beattracting buyers — although notinitially.

“When we first marketed ourhomes in April 2001, we communi-cated to prospective buyers that weare a reputable developer and that weare backed by their former MP, ourformer chairman Tan Sri Lee SanChoon. But they did not appear to beconvinced as, understandably, they

The most recent launch in the Sunrise stable is the Kiara Designer Suites, which Yam calls‘a unique opportunity for purchasers to buy into an almost ‘build then sell’ plan’

PICTURES BY ABDUL GHANI ISMAIL/THE EDGE

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Yam dubs his obvious favourite, Mont’KiaraDamai as the trendsetter project among Sunrisecondos in Mont’Kiara

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