Property
Alex Ooi aims high via Ideal
Joseph Wong 
An artist’s impression of Queens Waterfront
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Ideal Property Group executive chairman Tan Sri Alex Ooi is often referred to as Penang’s Condo King. And it’s for good reason – he aims to launch 20,000 residential units by 2020.

However, he has his work cut out to achieve his lofty goal, having delivered over 12,000 units. He has targeted to launch another 4,908 units this year.

Ooi wants to launch 20,000 residential units by 2020

The total gross development value (GDV) in six different projects is RM2.89 bil. “We will be launching these projects in stages over four quarters as we still have projects under construction,” Ooi tells FocusM.

“These projects are on Penang Island with easy access to major amenities, and hence offering a high appreciation value, whether for self-stay or investment purposes,” he says.

The RM550 mil Queens Residences 2, comprising 475 units, will be launched in Q1, followed by the 970-unit Sunsuri Serviced Apartments and the 1,628-unit Bukit Ayun development in Q2.

Sunsuri has a GDV of RM428 mil and Bukit Ayun RM700 mil, he says.

In Q3, the RM565 mil I-Residences (855 units) and RM400 mil Ideal Vision Park Phase 3 (480 units) will be launched followed by the RM245 mil Imperial Ville (500 units) in Q4.

Ooi, 47, comes from a family of property developers. Both his father and grandfather were in the property business, but Ooi did not inherit Ideal from his father as the property business had been sold off then.

Not surprisingly, the computer engineering graduate chose to follow his family’s business footsteps when he started Ideal. Prior to returning to his roots, his initial set-up provided property business process outsourcing services to landowners, semi-government bodies and private companies.

It was only in 1997 that he decided to develop his own property projects, taking advantage of the financial crisis then to build up Ideal as a niche developer.

 

Banking on affordability

Living up to his nickname, all six of Ooi’s projects are high-rises, with a strong focus on affordability.

“Ideal strives to build sustainable community-oriented developments with an affordable housing price tag,” he says, adding building affordable homes is a way of giving back to the community. To achieve lower prices, he says Ideal practises prudence when selecting construction materials.

“Ideal redefines affordable housing by delivering value-added high-rise residential units complemented with a high number of recreation facilities.”

“All our developments are located at prime locations and deliver quality and value at affordable prices.

“The surroundings have been carefully planned to include schools, markets and other facilities for homeowners to live, work and play. Infrastructures are well planned with additional access points to ease traffic.”

Naturally, with a higher density, Ideal can reduce pricing and maintenance fee can be shared across a larger resident population, says Michael Geh, senior partner of Raine and Horne International Zaki Partners Sdn Bhd.

However, pricing is only one factor, he says, adding buyers consider a multitude of factors.

Buyers looking for homes will still buy but investors will be more picky, says Geh

“Gone were the days when people just bought property, especially post-2012 during the property boom. Now, buyers seeking homes, either as first-time purchasers or to upgrade, will still buy.

“But investors will be more picky. They will look at the viability of the project that will suit their criteria,” he says.

Geh points out that Ideal has established itself in Penang, having delivered some 12,000 units.

“It will be interesting to see how he (Ooi) markets the 4,908 units,” he says, adding the Penang market is still buoyant for affordable units.

Ooi confirms most units to be launched by the company will be priced affordably.

 

JV a fast way to grow

The group is also on the lookout for potential joint ventures (JVs) as the business model is one of the fastest ways to grow the business, says Ooi.

“Ideal started buying [more] land in 2011 but our earlier projects were mainly on joint-venture basis with landowners.

“We started as a property consultancy, offering ideas to prove the building blocks with clientele which included semi-government, listed and private companies.

“Ideal met its turning point in 2008 with our flagship JV project at Bayan Lepas involving a 108-acre (43.7ha) land which consisted of eight phases of development. The project, One Residences, comprised landed, high-rise and retails units,” he says.

The JV propelled Ideal into a dominant property developer in Penang.

Nevertheless, Ooi says the company remains prudent despite its success amid the current property market conditions.

“Most are saying 2018 will be a flat and challenging year for the real estate market, but some remain positive. The market was slow for the past two years but key industry players still manage to secure their revenues,” he adds.

He opines that the global economy and 14th general election are depressing the property market.

The weaker ringgit and the general economic conditions have caused many investors to remain cautious, he says.

“While there is still demand for property, it is at a slower pace. However, in good or bad times, there will always be disguised opportunities. Affordable properties are expected to bring a new wave to the market.

“So there is a need for strategic adjustments on products, pricing and sale strategies.”

 

More incentives needed

Raine and Horne’s Geh says economic growth is a significant factor driving property trend, and thus the government should provide more incentives, particularly for affordable housing projects, to drive the industry.

Ooi agrees, highlighting stringent rules and regulations on development in Penang are hindering the industry.

“Enterprises and private companies may play their roles in creating more job opportunities to improve local economic activities as well as targeting expatriates for cross-country businesses.

“(But) the government could help on the loan approval policy to enable the younger generation to get affordable mortgages,” he says.

In the meantime, Ooi also has to content with Ideal’s ongoing projects, including the RM300 mil Amarene, RM378 mil Summerskye Residences, RM550 mil Queens Residences 1, RM520 mil Imperial Grande, RM495 mil Forest Ville, RM1 bil One Foresta and RM800 mil I-Santorini.

Both Amarene and Summerskye Residences are part of the freehold RM2 bil Ideal Vision Park in Bayan Lepas.

The 10.1ha development will comprise 1,945 condominium units and 150 shop offices. The Amarene will have two towers housing 410 units with three bedrooms and two bathrooms, with built-ups of 1,100 and 1,200 sq ft.

Summerskye Residences will house 507 residential and 78 commercial lots in four 19-storey blocks and a 18-storey tower. The 78 commercial units are three-storey commercial shop lots. The built-ups for the residential units are similar to Amarene’s.

The freehold Queens Residences 1 at Queensbay consists of 500 units in two towers, with five layouts ranging from 950 to 1,650 sq ft.

Imperial Grande, Phase 3 of The Imperial Park in Sungai Ara, offers three bedrooms and two baths with a built-up of 1,000 sq ft. The freehold residential project has 932 units.

The freehold Forest Ville and One Foresta are both located in Bayan Lepas. The former has two high-rise towers with 991 condominium units with sizes ranging from 1,000 to 1,050 sq ft.

The latter, also comprising two towers, has 1,343 units with a standard built-up of 900 sq ft featuring three bedrooms and two baths.

I-Santorini, a freehold mixed development project in Tanjung Tokong, consists of three blocks housing 2,155 units. It will also have concept shoplots on the ground and first floors.

Each residential unit has three bedrooms and two baths, with a standard built-up of 850 sq ft.

Ooi says about 80% of the projects have been sold, indicating there is still a market for such properties in Penang, which is why Ideal has committed to the 20,000 target.

Enlarging land bank

LIKE any progressive property developer, Ideal Property Group is continually increasing its land bank even as it unlocks the value of existing one.

“Our current land bank is located on Penang Island, mostly in Bayan Lepas, covering about 250 acres (101ha),” says Ideal executive chairman Tan Sri Alex Ooi.

“We are in negotiations to acquire more land, but that will be announced once we have finalised the deals.”

The acreage is expected to increase if the South Reclamation Scheme (SRS) proceeds as planned. The project involves the reclamation of three man-made islands involving 1,698ha south of Penang. Islands 1, 2 and 3 are expected to cover 930ha, 445ha and 323ha, respectively.

SRS Consortium, the appointed Project Delivery Partner (PDP) of the plan, is a joint venture between public-listed Gamuda Bhd, Loh Phoy Yen Holdings Sdn Bhd and Ideal Property Development Sdn Bhd. Ideal Property Development holds a 20% stake.

“Ideal will continue delivering high-rise units which suit market demand and within affordable range,” says Ooi of the land acquired by the group.

“We aim to create more sustainable communities in which our housing projects conveniently complement upgraded infrastructure and major amenities such as schools, markets, community complexes, places of worship and recreational areas,” he says.

Aside from housing development, Ooi says Ideal has reserved some land for corporate social responsibility (CSR) purposes.

“For instance, the development near Queensbay is planned to include a sports centre with an aquatic centre of FINA (International Swimming Federation) standards, a UCI (Union Cycliste Internationale) standard velodrome and also an international/private school,” he says.

 

Giving back

Ideal believes in giving back to the community as it is among the most important and valuable gestures of an entrepreneur.

Ooi says this is why the group carries out CSR activities such as providing land and building a school as well as upgrading its facilities.

The developer, he adds, has also been widening roads, constructing a community complex, building religious centres and beautifying the landscape.

“We are creating a legacy to serve as a main guiding principle.” 

Returning to Penang

Most property developers start their projects on their homefront, usually in places where they set up shop, before venturing overseas. However, it’s the reverse for Ideal Property Group.

“We started in Cambodia. Before Penang, Ideal completed a few projects in Cambodia [including] a luxury gated community called Ideal Homes and Attwood Business Centre,” says the group’s executive chairman Tan Sri Alex Ooi.

The project, with a gross development value (GDV) of US$8.1 mil (RM36.7 mil), comprises 22 units of landed property within a gated and guarded community. The business centre has 165 office units with a GDV of US$15 mil.

After completing the project, Ooi brought the group back to Penang where he has remained since.

“There is no plan to go overseas for now. At the moment, Ideal will still concentrate on its motherland with several major projects on hand,” he says.

Penang, he adds, has a good reputation as a hot tourism destination and famous food haven, offering a multi-cultural and liveable lifestyle.

And if Ideal were to expand its territory, it would be in Kuala Lumpur where the group can use its experience to develop high-rise affordable housing, he says.

Ooi reveals he has no immediate plan to list the company, but will do so if it needs financing.



This article first appeared in Focus Malaysia Issue 274.