Saturday July 28, 2012
High demand for high rise
By JACK WONG
PROPERTY developer Lee Onn Construction Company, which has built some 3,000 units of residential properties in Kuching, is embarking on several more high-rise apartments and condominiums to ride on the rising demand.
Managing director Tan Guek Kee says Lee Onn has completed five medium to high-end apartment projects in recent years and is currently developing two more apartment projects D'Infinia Residences and Ensyn Avenue and a condominium project called D'Jewel along Jalan Sharip Masahor in Kuching.
D'Infinia Residences along Jalan Lapangan Terbang comprise 45 units in seven-storey blocks and features amenities like a swimming pool, gym and a playground. The three-bedroom units are sold starting from RM533,000 and would be ready by year-end.
Ensyn Avenue consists of 111 units of three- to four-storey apartments. The medium range apartments along Jalan Stapok are sold from RM225,000 each.
D'Jewel, with gross development value (GDV) of RM90mil, will have two tower blocks housing 118 units. The towers house three- to four-bedroom units from 1,800 sq ft priced from RM715,000. The penthouse units covering some 4,000 sq ft each are sold for about RM1.98mil.
The development with green landscape will feature a sky garden. Other amenities are a swimming pool, tennis courts and a gym.
“About 50% of the 118 units in D'Jewel has been sold. Most of the buyers are young professionals, with some from Sibu and Bintulu.
“The project's foundation works was completed, and the units will be delivered to the buyers in 24 months,” Tan tells StarBizWeek.
Lee Onn's five completed apartment developments are Saville Suite (108 units), Ryegates 1 (73 units) and Ryegates 2 (20 units), Stackes 128 (128 units) and Arcadia (64 units).
Tan says Lee Onn is focusing on apartment and condominium developments in the past five years as more youngsters, particularly professionals, like modern living in high-rise buildings which provide security services.
According to property consultant CH William Talhar and Yeo Sdn Bhd (WTWY), high-rise condominium projects in Kuching, which were hit by poor take-up rates in the mid-2000s, are making a comeback.
In its Sarawak Property Market Review 2011 and Outlook 2012 report, WTWY says the launch of D'Infinia Residences, Tribeca Condominium & Suites along Jalan Urat Mata and Viva City along Jalan Wan Alwi could very well mark the rejuvenation of high-rise condominium projects.
Other earlier-launched condominium projects include the 22-storey Riverine Sapphire by RB Development Bhd and Tropics by Regal Advantage which are both under construction.
WTWY says that as Kuching city becomes gradually built up with development land prices reaching an all-time high of up to RM70 psf, condominiums and apartments are becoming more popular both for the developers because of the economies of scale of higher density development and for the buyers as a more affordable housing alternative.
“It is anticipated that the condominium/apartment sector will be increasingly popular in the coming years as more young first-time buyers seek out these units in keeping up with modern living,” it adds in the report
Tan says Lee Onn received lukewarm response when it developed its first apartment project Saville Suite in Hui Seng Garden 10 years ago.
“There was then very little interest among Kuchingites for apartment living. We sold barely six of the 108 units when it was opened for booking. The sales increased to 70% after we mounted a big campaign to publicise the project and offered various incentives to the buyers.
“Units with two bedrooms were only sold for RM175,000 and it was RM220,000 for three-bedroom units. These units now fetch double their original prices,” he adds.
Tan says that as land prices in the city area have gone up drastically in recent years, more developers are embarking on high-rise developments with strata titles instead of landed properties due to the Sarawak government's stringent housing policy.
“In the city area, the government allows the construction of up to eight units of houses, be it semi-detached or terraced houses, on every acre. In the prime areas, land prices have doubled over the past six years due to fast property development activities.
“Land in Stampin and Airport areas has risen to between RM3mil and RM4mil per acre,” he said.
Tan says that for condominium projects, developers could build up to 24 units per acre.
Low-profile Lee Onn, which is currently implementing nine property projects simultaneously, has shifted its development to the city's outshirts, like the new growth centre of Jalan Batu Kawa-Matang, which has seen robust development after the completion of Batu Kawa Bridge across Sarawak River and the new road that provides another link from the city to Bau and Sematan districts.
Genesis Walk on 6ha along Jalan Batu Kawa-Matang is the biggest among the nine projects.
Tan said Genesis Walk, which is an integrated development with a GDV of RM110mil, would have 132 units of retail outlets within a shopping mall, 100 apartment units on top of the retail arcade, 20 units of shophouses and a showroom.
About 80% of the shophouses priced from RM800,000 have been sold. Also taken up are all the 66 units on the ground floor of the mall.
Tan says Lee Onn's upcoming project in Sri Moyan, Batu Kawa where it has completed 1,400 units of various types of residential homes, is a residential scheme comprising 420 units. The project is located about 1km from Genesis Walk.
Lee Onn distinguishes itself as the first developer in Sarawak to have completed a high-end residential scheme called Symphony Lane 1 in Seng Goon Garden with most of its houses equipped with lifts.
Out of the 18 houses, owners in eight of the semi-detached houses and two detached houses enjoy the comfort of lifts to move around. The four-storey houses with basement car parks completed last year were sold from RM1.33mil.
Under construction now is Symphony Lane 2, comprising 16 units of three-storey houses priced from RM1.28mil.
Tan, a contractor turned property developer, says his first biggest achievement was completing Kenny Heights project with 103 units of semi-detached and terraced houses within 18 months and delivered just before the Asian financial crisis in 1997. The semi-detached houses were sold between RM320,000 and RM350,000, but according to Tan, their current market price is around RM800,000.
“I am a conservative, prudent and hands-on developer. I work hard and am frequently on the ground to monitor the progress of every project,” says the 72-year-old self-made businessman in his first-ever interview with an English newspaper.
Tan says Lee Onn is able to deliver its projects with speed as it has a group of experienced and efficient contractors, some of whom had worked for him for more than 20 years.
“Their jobs are just to construct the houses and shophouses. They need not have to worry about finance and sourcing for building materials which are all taken care of by Lee Onn.
“Lee Onn has built up its reputation as a developer by being innovative in the design of its every project to accommodate the tastes of house buyers and delivering quality houses on time,” he adds.
Asked if the steep increase in house prices here has created bubbles, Tan does not think so, as he says there is still demand for residential homes. However, he is quick to add: “Two years down the road, I do not know.”
He says the demand for commercial shophouses and retail outlets in shopping malls in the city has slowed down as this segment may have reached saturation point.