EVEN as the dust starts to settle after the implementation of the goods and services tax (GST) that kicked in last month and the vision on the ground gains greater clarity, it is becoming obvious that while some developers are choosing to delay their launches, there are still some savvy ones who are tilting towards more positive sentiments. These developers are willing to take the bull by the horns by launching their projects to the market in these uncertain times.
Admittedly, if one were to compare the slew of launches this time round to last year, having coursed mid-way through round the second quarter of 2015, it is obvious that there are way fewer property launches now, signalling a cautious approach being adopted by most developers.
And yet, there are a handful of the more optimistic developers who are putting no stops to their launches as in the case of Trinity Group Sdn Bhd. “Investment in properties is a good hedge against inflation. When GST was first implemented in Singapore and Australia, their inflation rate went up in the first two years,” observes Trinity Group CEO (chief executive officer) Datuk Andy Khoo Poh Chye.
He says that to have a sustainable property market, it would be prudent to “control the flame but not put out the fire.” By this, he means that although it is good for banks to be stringent in granting endfinancing to purchasers, he maintains that they should exercise greater flexibility in not over-tightening the loan eligibility, especially for the affordable and mid-range properties priced below RM700,000.
However, having said that, Trinity Group continues to forge ahead with its launches in confident assurance that there is still benefit for purchasers, in view of anticipated future capital appreciation on its properties. As it is one of the savvy developers riding on the emerging global trend of rejuvenation and the redevelopment of mature townships, Trinity Group is looking with renewed interest at such locations as part of its value creation strategy.
Discovering hidden gems
Mature neighbourhoods such as Puchong, Seri Kembangan and Bukit Jalil have proven to be property gold mines for the company in overcoming challenges such as land becoming more scarce and hence, increasingly in cost. It helps that connectivity has already been established with a ready network of highways and infrastructure readily in place in these mature townships.
Having already built a solid reputation for carving a niche in terms of “bringing affordable luxury living” to its buyers, it is also looking for hidden gems in mature townships and is not oblivious to the fact that there is much potential in these neighbourhoods. “We launched The Zest @ Kinrara 9 in Bandar Kinrara, Puchong, six years ago and Zeva @ Equine South in Puchong South, Seri Kembangan, and Z Residence in Bukit Jalil three to four years ago and prices there have since doubled. I see KL South representing Puchong, Seri Kembangan and Bukit Jalil as unpolished gems waiting to be discovered. In fact, if you look at the wave of properties launched some five to seven years ago in these locations, you will see that property prices have since doubled,” he observes.
Zeva @ Equine South, which is spread across 3.7 acres and expected to be completed in June, has a gross development value (GDV) of RM282mil. Being the first-of-its-kind, integrated development in Seri Kembangan comprising 446 serviced apartment units and 320 studio units (ranging between 454 sq ft and 1,536 sq ft) with 12 shops and boutique retail units occupying a total gross area of over 250,000 sq ft, about 95% of its units have already been sold.
The growth potential for this development is expected to be high as its location provides ideal connectivity to Cyberjaya, Putrajaya and even to the city via Lebuhraya Damansara-Puchong (LDP), South Klang Valley Expressway (SKVE), Besraya Highway (Besraya), Maju Expressway (MEX), North-South Expressway (PLUS) as well as the proposed Serdang-Kinrara-Putrajaya Expressway (SKIP) and Kinrara Damansara Expressway (Kidex).
The landscaped Floating Garden provides a cooling atmosphere between the two by two blocks of Z Residence .
Its close proximity to upcoming infrastructure, such as the LRT station (Ampang Line) and the proposed MRT Line 2 (Taman Sri Serdang), further helps to maximise capital appreciation and rental yield.
“We foresee much future potential in these areas due to the infrastructure (upgrades) and other upcoming facilities. On the other hand, parts of Seri Kembangan/Puchong South which were once rubber and oil palm estates have today been transformed into thriving townships surrounded by popular hotspots which include shopping malls, hypermarkets, educational hubs and a host of eateries, food joints and restaurants, financial institutions and places booming with commercial activities.
“Even property expert Ho Chin Soon recommends Zeva as having the potential to rise in value appreciation within the first-tier radius of the investment centre of gravity of Greater Kuala Lumpur,” he maintains.
Trinity Group’s The Zest @ Kinrara 9 development in Puchong with a GDV of RM250mil that was launched in 2009 comprising serviced apartments with an average built-up area of 1,205 sq ft also recorded good capital appreciations, showing an increase from its original selling price of about RM276,888 hovering at RM230 per sq ft to around RM675,000 in terms of its sub-sale price or approximately RM560 per sq ft.
Trinity Group’s innovative integrated marketing approach ascertains upcoming trends to set it on the cutting edge of new concepts to enhance the lives of its purchasers and the community at large. It is for this reason that as a niche boutique developer, its ability to stay agile has enabled it to venture into the mature neighbourhoods of Puchong, Seri Kembangan and also Bukit Jalil in a quest to unlock the potential of the land.
In Bukit Jalil, it unveiled its freehold Z Residence @ Bukit Jalil development comprising 1,136 condominium units with built-up areas ranging between 1,032 sq ft and 1,407 sq ft spread across 6.7 acres. The development that has a GDV of RM580mil, which was completed on scheduled in June last year, achieved a capital appreciation of 168% as of January 2015 compared to its launch in 2011.
Commenting on the key catalysts taking shape in mature townships such as Bukit Jalil in terms of redevelopment and rejuvenation, he anticipates property prices in this mature precinct to appreciate. This is a far cry from the early days whereby Bukit Jalil was once a secondary jungle.
“Today, Bukit Jalil has grown into a bustling township with key amenities and conveniences located in the established neighbourhood. Furthermore, with the upcoming Pavilion 2 in Bukit Jalil, the mall will bring new excitement and a fresh alternative, which will attract a large catchment area that will bring up the value of the surrounding properties. This will transform the classic high-rise residential area into a shopping hub,” he says drawing a parallel to Mont’ Kiara some 10 years ago, which has transformed from a lush jungle park to an affluent township.
Having just launched Trinity Aquata KL South in the suburban enclave of Sungai Besi on approximately 3.58 acres following an overall water theme, he says the fact that it is a KL address and freehold, and being located in close proximity to Puchong holds the development in good stead for capital appreciation.
He extols the fact that this development bears a KL address with good connectivity. Already, another project is being planned for kick-off in the first quarter of next year comprising serviced apartments in Serdang that will be located near the new station in Puchong.
Following the success of The Zest @ Kinrara 9, which won The Edge Malaysia-PEPS Value Creation Excellence Award in 2013, developer Trinity Group Sdn Bhd has come up with another winning project in Z Residence, which earned a merit award in the residential category.
Z Residence, located in Bukit Jalil, Kuala Lumpur, is an improvement on The Zest with more thought and better planning, group managing director Datuk Neoh Soo Keat tells The Edge.
“For us, winning the award is secondary. Our main priority is the value we create for the public. Yes, the award is important as a recognition of the work we have put in, but the tangible acceptance from the purchaser is the main driver for us,” Neoh says.
Z Residence, which was launched in 2011, was sold out in just six months. The project was developed with the community in mind, with 50% of the development dedicated to environment conservation and greenery, Neoh says.
“The Z Residence is our most ambitious project to date.”
One of the five units Trinity submitted for the 2015 award, which was sold at the developer’s price of RM339,888 on Aug 2, 2011, was sold on Sept 5, 2014, for RM660,000 — a capital appreciation of 101%. Today, prices range from RM688,888 to RM928,888. The development has achieved an average capital appreciation of 86% since the launch.The condominium project, on a 6.7-acre site with a gross development value of RM580 million, comprises 1,136 units spread over four blocks of 26 and 27 storeys. The built-ups range from 1,032 to 1,407 sq ft and the units were launched at an average price of RM347,888.
The condominium also comes with impressive amenities including a 55m infinity pool, a sky lounge perched 130m above ground level, a floating garden and three-tier security system. Green features include rainwater harvesting and double-glazed windows to deflect sound and reduce up to 50% of solar heat gain into the building.
The project was conceived to address the shortage of affordable housing, says Neoh, who has a background in town planning. Neoh saw the potential the 6.7-acre site could offer.
“When we committed to the land four to five years ago, it was on the outskirts, in an industrial area with no infrastructure. It was an area where a lot of unhealthy activities were taking place. For instance, we saw drug addicts hanging around.”
The group bought the land for RM22 million, which some deemed expensive at the time, but Neoh had a vision to transform the area by enhancing the infrastructure. He spoke to the local authorities and spent a lot of time analysing the place to see what the group could do to add value to the area.
“The market price for such condominiums back then was about RM400 to RM500 psf but we tried to bring it down to RM300 psf for affordability. We spoke to the local authorities to see if we could compensate for the mark down in prices by reducing the unit size and increasing the number of units instead.”
The group also spent over RM3.6 million to build a link connecting Z Residence with the Bukit Jalil Highway to improve connectivity, cutting travel time by 10 minutes. The link connected two roads, Jalan BK1/20 and Jalan 4/155, to reduce traffic congestion.
“We had a choice — we could just buy over the land, build our project and sell it off. But as a responsible developer, we wanted the residents and the public to benefit from the project in the long term,” Neoh says.
Effective cost control
So, how did the group ensure that it met its objectives to provide affordable houses with quality amenities?
“It all came down to cost control. Our design was very practical and we worked with a really good contractor from Sunway. We used steel bars with a diameter of 1.8m. Instead of four conventional 1.2m bars, we used two 1.8m bars. That saved us almost 40% of our construction cost, which translates to about RM6 million for the foundation,” Neoh says.
“We had the support of Putra Perdana Construction to advise us on using the right materials that fit into our value engineering system as well. We wanted to work with materials that are inexpensive but are of good quality. We sourced our top grade double-glazed glass from China.”
The residents of the neighbouring Bukit OUG condominium were concerned about the levelling of the slope at the project site for fear of landslides. The group had to stop work and took the time to conduct numerous dialogues with the residents to announce additional measures to minimise the impact of the development. This was done together with the local municipal council and Kuala Lumpur City Hall.
“We told the residents of Bukit OUG that we would take precautionary measures such as installing effective silt traps to avoid soiling existing roads and we would cut the sandstone one metre at a time until it was the same level as the Bukit OUG condominium,” Neoh says. The residents of Bukit OUG also benefitted from the extra land they gained after the chopping of the slope.
“The buildings at Bukit OUG condominium were quite run down, but after the slope was chopped down the residents were willing to put in money to repaint the buildings to add value to their condominium. They saw their units appreciate almost 100% from about RM120,000 to RM240,000 after that,” he says.
Currently, Z Residence is 60% occupied. The group estimates that there is a 65:35 ratio of owner-occupiers and investors. Neoh believes this is an ideal mix for a property development.
“If the whole condominium is bought by investors, it would be a ghost town if no units are rented or sold. However, if the whole building is for own stay, we would not have any new transactions and we would not be able to give you the valuation of the appreciation of the units,” Neoh laughs.
As for the maintenance fee of 18 sen psf, he says it is sufficient. When the group was managing the development for a year, there were enough funds to maintain the facilities as it had an effective management. However, the current management body is facing some difficulty as it has been able to collect only 60% of the maintenance fees.
“As a developer, we will see how we can assist the current management committee to increase efficiency in managing the building and also in their collection.”
Next challenge
The next challenge for Z Residence is to see growth in rents. Early purchasers get a rental yield of 8% while the later buyers enjoy yields of about 5%. Neoh says this is average and he expects the number to go up to at least 9% to 10%.
Neoh expects the commencement of the Ampang LRT extension line to push up the rental rates.
“The rental rate should be about RM2,000 to RM2,500 but it is currently at about RM1,500 to RM1,800. ”
The Awan Besar station, which is about 1km away, started operations on Oct 31.
Neoh is not resting on his laurels. He is looking to develop more projects that will create value for his purchasers. The group launched Trinity Aquata @ KL South, a condominium project in Sungai Besi, Kuala Lumpur, in May this year. It is expected to be completed in 2018.
“At Trinity Group, we want our purchasers to identify with the feeling of security and sustainability our products deliver. We want them to have the feeling of coming home to something they can look forward to after a long day at work. Our team will continue to work towards our our mission of building communities and enriching lives,” Neoh beams.
Following the success of The Zest @ Kinrara 9, which won The Edge Malaysia-PEPS Value Creation Excellence Award in 2013, developer Trinity Group Sdn Bhd has come up with another winning project in Z Residence, which earned a merit award in the residential category.
Z Residence, located in Bukit Jalil, Kuala Lumpur, is an improvement on The Zest with more thought and better planning, group managing director Datuk Neoh Soo Keat tells The Edge.
“For us, winning the award is secondary. Our main priority is the value we create for the public. Yes, the award is important as a recognition of the work we have put in, but the tangible acceptance from the purchaser is the main driver for us,” Neoh says.
Z Residence, which was launched in 2011, was sold out in just six months. The project was developed with the community in mind, with 50% of the development dedicated to environment conservation and greenery, Neoh says.
“The Z Residence is our most ambitious project to date.”
The condominium project, on a 6.7-acre site with a gross development value of RM580 million, comprises 1,136 units spread over four blocks of 26 and 27 storeys. The built-ups range from 1,032 to 1,407 sq ft and the units were launched at an average price of RM347,888.
One of the five units Trinity submitted for the 2015 award, which was sold at the developer’s price of RM339,888 on Aug 2, 2011, was sold on Sept 5, 2014, for RM660,000 — a capital appreciation of 101%. Today, prices range from RM688,888 to RM928,888. The development has achieved an average capital appreciation of 86% since the launch.
The condominium also comes with impressive amenities including a 55m infinity pool, a sky lounge perched 130m above ground level, a floating garden and three-tier security system. Green features include rainwater harvesting and double-glazed windows to deflect sound and reduce up to 50% of solar heat gain into the building.
The project was conceived to address the shortage of affordable housing, says Neoh, who has a background in town planning. Neoh saw the potential the 6.7-acre site could offer.
“When we committed to the land four to five years ago, it was on the outskirts, in an industrial area with no infrastructure. It was an area where a lot of unhealthy activities were taking place. For instance, we saw drug addicts hanging around.”
The group bought the land for RM22 million, which some deemed expensive at the time, but Neoh had a vision to transform the area by enhancing the infrastructure. He spoke to the local authorities and spent a lot of time analysing the place to see what the group could do to add value to the area.
“The market price for such condominiums back then was about RM400 to RM500 psf but we tried to bring it down to RM300 psf for affordability. We spoke to the local authorities to see if we could compensate for the mark down in prices by reducing the unit size and increasing the number of units instead.”
The group also spent over RM3.6 million to build a link connecting Z Residence with the Bukit Jalil Highway to improve connectivity, cutting travel time by 10 minutes. The link connected two roads, Jalan BK1/20 and Jalan 4/155, to reduce traffic congestion.
“We had a choice — we could just buy over the land, build our project and sell it off. But as a responsible developer, we wanted the residents and the public to benefit from the project in the long term,” Neoh says.
Effective cost control
So, how did the group ensure that it met its objectives to provide affordable houses with quality amenities?
“It all came down to cost control. Our design was very practical and we worked with a really good contractor from Sunway. We used steel bars with a diameter of 1.8m. Instead of four conventional 1.2m bars, we used two 1.8m bars. That saved us almost 40% of our construction cost, which translates to about RM6 million for the foundation,” Neoh says.
“We had the support of Putra Perdana Construction to advise us on using the right materials that fit into our value engineering system as well. We wanted to work with materials that are inexpensive but are of good quality. We sourced our top grade double-glazed glass from China.”
The residents of the neighbouring Bukit OUG condominium were concerned about the levelling of the slope at the project site for fear of landslides. The group had to stop work and took the time to conduct numerous dialogues with the residents to announce additional measures to minimise the impact of the development. This was done together with the local municipal council and Kuala Lumpur City Hall.
“We told the residents of Bukit OUG that we would take precautionary measures such as installing effective silt traps to avoid soiling existing roads and we would cut the sandstone one metre at a time until it was the same level as the Bukit OUG condominium,” Neoh says. The residents of Bukit OUG also benefitted from the extra land they gained after the chopping of the slope.
“The buildings at Bukit OUG condominium were quite run down, but after the slope was chopped down the residents were willing to put in money to repaint the buildings to add value to their condominium. They saw their units appreciate almost 100% from about RM120,000 to RM240,000 after that,” he says.
Currently, Z Residence is 60% occupied. The group estimates that there is a 65:35 ratio of owner-occupiers and investors. Neoh believes this is an ideal mix for a property development.
“If the whole condominium is bought by investors, it would be a ghost town if no units are rented or sold. However, if the whole building is for own stay, we would not have any new transactions and we would not be able to give you the valuation of the appreciation of the units,” Neoh laughs.
As for the maintenance fee of 18 sen psf, he says it is sufficient. When the group was managing the development for a year, there were enough funds to maintain the facilities as it had an effective management. However, the current management body is facing some difficulty as it has been able to collect only 60% of the maintenance fees.
“As a developer, we will see how we can assist the current management committee to increase efficiency in managing the building and also in their collection.”
Next challenge
The next challenge for Z Residence is to see growth in rents. Early purchasers get a rental yield of 8% while the later buyers enjoy yields of about 5%. Neoh says this is average and he expects the number to go up to at least 9% to 10%.
Neoh expects the commencement of the Ampang LRT extension line to push up the rental rates.
“The rental rate should be about RM2,000 to RM2,500 but it is currently at about RM1,500 to RM1,800. ”
The Awan Besar station, which is about 1km away, started operations on Oct 31.
Neoh is not resting on his laurels. He is looking to develop more projects that will create value for his purchasers. The group launched Trinity Aquata @ KL South, a condominium project in Sungai Besi, Kuala Lumpur, in May this year. It is expected to be completed in 2018.
“At Trinity Group, we want our purchasers to identify with the feeling of security and sustainability our products deliver. We want them to have the feeling of coming home to something they can look forward to after a long day at work. Our team will continue to work towards our our mission of building communities and enriching lives,” Neoh beams.
Trinity Group Sdn Bhd, pemaju hartanah Residence yang menampilkan unit kondominium mampu milik kemudahan mewah, akan melancarkan beberapa projek hartanah baru disekitar Lembah Klang bermula tahun depan membabitkan nilai pembangunan kasar (GDV) RM1.31 bilion.
