Property
GuocoLand spreading its wings
Aliff Yusri 
Damansara City serves as a visible testament to what GuocoLand can and has delivered, says Kong
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WITH its RM2.5 bil flagship development Damansara City in Kuala Lumpur completed, GuocoLand (Malaysia) Bhd is ramping up its presence in the township segment.

The property arm of tycoon Tan Sri Quek Leng Chan’s Hong Leong Group, GuocoLand was primarily known for developments in Rawang and Sepang prior to Damansara City’s launch.

The mid-sized developer is helmed by group managing director Datuk Edmund Kong, who joined in January last year. He brings a wealth of technical knowledge and experience in the township space, notably in the planning and design of the highly successful Desa ParkCity project in KL.

A registered professional architect, Kong was involved in the design and planning of Desa ParkCity

“We want to strengthen the brand, and for our purchasers to be proud to purchase a GuocoLand property. To do that, they need to associate that property with quality, not just in terms of workmanship, but overall planning and execution,” Kong says.

 

Expertise and experience

Kong has more than a quarter century of experience in the industry, starting after he completed his Bachelor in Architecture at the University of Cardiff, UK in 1989.

He returned to Malaysia in 1994 where he joined BEP Arkitek Sdn Bhd as a senior architect, specialising in luxury condominiums and mixed developments over the next nine years.

“When it comes to architecture, I prefer a more contemporary approach, with practicality and place-making as major priorities. I’ve applied this wherever I can in my subsequent projects, growing with the field as design evolves,” says Kong.

Still a registered professional architect with the Board of Architects Malaysia, he went on to join Perdana ParkCity Sdn Bhd in 2003 as director of project and product planning of Desa Park-City. The company is a unit of the Sarawak-based Samling Group.

Launched in 2002, the 189.2ha township has since become an industry byword for success in township design and landscaping, transforming the demographics of surrounding Kepong into one of the Klang Valley’s most desirable addresses.

“I learned a lot from Desa ParkCity, especially in terms of efficiencies in planning and operation,” he says.

 

Community of close distances

Kong went on to serve as chief operating officer with TA Global Bhd and later Tropicana Corp Bhd as group managing director and executive director before joining GuocoLand.

At GuocoLand, he was tasked with revitalising its brand direction. Acknowledging it is no small task realigning the momentum of an entire development firm, even a smaller one, he is banking on core placemaking principles to take GuocoLand to the next level in the township space.

“The business is no longer about just building houses, it’s about building places. That’s what architects and developers need to do now, because if you create a sense of belonging for your purchasers, they will speak that much louder on your behalf,” says Kong.

“I call it a ‘community of close distances’, with an emphasis on tangible values. Residents should be able to conveniently walk or cycle to facilities and amenities, which act as social venues and effectively serve as the ‘heart’ of a township.”

He also notes that such features need to be holistically planned to be effective. As an example, he notes that cycling paths in many developments are just three feet wide, limiting their usability, aside from a lack of bike parking facilities.

As such, he adds, township design can be challenging due to the number of components that need to be planned for. However, a well-planned development can offer purchasers and residents a balanced mix of amenities within easy reach, allowing for a self-sustaining community.

Knight Frank Malaysia Sdn Bhd managing director Sarkunan Subramaniam echoes the need for successful townships to cater for a range of components, ranging from accessibility, infrastructure, greenery and security features to recreational, educational, retail and healthcare facilities.

“In addition, a healthy mixture of products in a township, such as various types of landed and high-rise products, gives purchasers more options and widens a developer’s potential target market,” says Sarkunan.

 

Placemaking in practice

These elements are evident in GuocoLand’s reimagination of the masterplan for its 404.7ha Emerald Rawang township in Selangor.

The 963mil Emerald Hills enclave is envisioned as a getaway from the bustle of surrounding Cheras


Launched as Kota Emerald in 2001 in collaboration with Hong Bee Land Sdn Bhd, it is split into the 276ha Emerald West and 128.7ha Emerald East, with Emerald West generally offering higher built-ups and price points.

Upon joining GuocoLand, Kong and his team revisited the township with an eye to bringing its remaining 145.69ha in line with contemporary trends.

The revised masterplan, which will include a range of landed and high-rise offerings, has a total gross development value (GDV) of RM2.5 bil.

“Emerald Rawang started nearly 20 years ago, and it shows in the designs throughout, which are typical of terraced housing schemes back then,” says Kong.

“Rawang already has existing industrial, educational and retail amenities, so our update will focus on residential and lifestyle facilities, including a clubhouse, central park, and recreational and commercial centres.”

The developer has an ambitious list of launches planned for the township, including the 5.67ha Chloe Residence, comprising 142 terraced units with a total GDV of RM120 mil, and 12 Points, featuring 12 units of double and triple-storey shopoffices with a total GDV of RM20 mil.

Both are targeted for launch by year-end. For Q1 next year, launches include Phase Two of The Rise, encompassing 106 units of zero-lot bungalows with a total GDV of RM200 mil, and the RM250 mil Brooklyn’s Place, a freehold condominium offering 287 units with built-ups from 764 to 1,064 sq ft.

Slated for launch in Q1 next year, Brooklyn’s Place is representative of GuocoLand’s reimagination of Emerald Rawang


GuocoLand’s commitments in Emerald Rawang capitalise on growing demand for housing in Klang Valley’s northwest development corridor.

“While development and infrastructure are generally trending southwards from Kuala Lumpur, the northwest growth corridor, including places like Rawang and Sungai Buloh, cannot be discounted,” says Sarkunan.

“The area has a lot of pull factors to recommend it by, including KTM rail connectivity, cheaper prices and landbank availability in Ijok, which have drawn developers such as Eco World and KLK Land,” he adds.

One factor driving Guoco-Land’s current focus on landed townships is the escalation of service charges in high-rise developments.

“Nobody wants to pay through the nose for maintenance costs. This can be a factor in landed properties as well, which is why we manage our numbers to keep charges reasonable while still providing residents with enjoyable amenities,” says Kong.

“I should stress that this doesn’t mean we’re targeting the low-cost or affordable segment. The market is facing a flood of affordable homes, and we need to distinguish ourselves from that, not necessarily in the luxury space, but quality mid-range at about RM600 psf,” he explains.

 

Breaking into new markets

Aside from Emerald Rawang, the developer will also be launching new projects in Cheras, including a residential enclave and transit-oriented development.

“Instead of creating a new brand, which would be alien to the market and resource-intensive to promote, we chose to leverage on GuocoLand’s existing Emerald label, which is linked with quality in the mind of our purchasers,” says Kong.

“Emerald also has associations with gemstones and ‘green’, which is timely because the market has been trending towards environmentally-friendly practices for some time.”

Dubbed Emerald Hills, the residential enclave is envisioned as a serene getaway from the bustle of the surrounding city, comprising 181 terraced homes and 1,378 condominium units with built-ups from 805 to 1,125 sq ft.

It is situated on 19.17ha of freehold land in the Cheras township of Alam Damai, and is targeted for launch by end of the quarter with a GDV of RM963 mil.

GuocoLand is also developing the RM1.5 bil Emerald Square, a 4.35ha integrated development in Batu 9 Cheras encompassing service apartments, hotel and office components.

Located next to the Taman Suntex MRT (mass rapid transit) station in the Sungai Buloh-Kajang line, the project is scheduled for launch in Q1 next year.

“The Cheras market is now moving towards high-rise projects, where even 10 years ago such launches would have had trouble with uptake, as purchasers were more inclined towards landed properties,” says SkyBridge International Sdn Bhd CEO Adrian Un.

“But with dwindling land availability and the MRT stations now coming up throughout the area, a window exists for both high-rise developments and landed properties to do well during this transition period, which is why you see developers like Ekovest Bhd and GuocoLand committing there,” he adds.

 

Solid predigree

While acknowledging the competition in the area – not least from Gamuda Land Sdn Bhd’s similarly-named and themed Jade Hills and Jade Square developments in neighbouring Kajang – Kong is optimistic about GuocoLand’s prospects, banking on the developer’s pedigree and portfolio.

“We’re fortunate in that we’re part of the Hong Leong Group, which means we have strong financial backing. We leverage on that, so cash flow or completion issues are less of a concern,” Kong says.

He also notes the completion of Damansara City serves as a testament to both investors and potential purchasers as to what it can and has delivered.

The RM2.5 bil mixed development, which includes two 27-storey residential towers under DC Residensi, the F&B-centric retail hub DC Mall, 19-storey Wisma Guocoland and 33-storey Menara Hong Leong office towers, and 312-room Sofitel Kuala Lumpur Damansara hotel, was completed in October 2015.

Moving forward, the developer is seeking to unlock the value of its extensive landbank assets to the south, including about 1,214ha in Sepang, Selangor and 1,565.7ha in Jasin, Melaka.

“The Jasin landbank has been earmarked for an industrial park, with the government having signed a ‘friendly city’ agreement with Guangdong province in China,” says Kong.

“For Sepang, we’re looking for partners to bring in economic growth to the area before developing its residential potential.”

He adds that both projects are “mid-term” in scope, and anticipates moving forward only in the next few years.

Growth markets for GuocoLand

GUOCOLAND (Malaysia) Bhd’s upcoming township launches are positioned in areas with strong growth potential, as a surge in younger purchaser demographics drives residential demand in Rawang and Cheras, Kuala Lumpur.

Youths under 18 years make up nearly 30% of the population, driving household formation across the nation. However, this is balanced by end-financing challenges and a housing supply mismatch, as seen by plateaus in transaction prices across the two areas.

Subsale prices for bungalow, semi-detached and terraced homes in GuocoLand’s Kota Emerald (now Emerald Rawang) have increased steadily since its launch in 2001, from a median price of RM111.28 per sq ft (psf) to a plateau of RM320.56 in the first quarter (Q1) of 2012.

“Though accessibility within and to Rawang has improved significantly, the area’s population, inclusive of Selayang, is currently about 150,000. That figure needs to reach a critical mass before the subsale market can really take off,” says SkyBridge International Sdn Bhd CEO Adrian Un.

Residential properties in the township transacted at a median of RM319.58 psf in Q1 this year, according to Brickz property portal based on data from the Valuation and Property Services Department.

Closer to KL, Emerald Hills and Emerald Square represent GuocoLand’s maiden ventures into the Cheras market, amidst a surge of launches from industry heavyweights such as the Sunway Group and Ekovest Bhd.

“Cheras has always been a healthy market for linked, terraced, semi-detached and bungalow homes, but recently, luxury high-rise properties have also seen popularity with the children of long-term residents moving out from the nest,” says Un.

Landed and high-rise offerings in the area have trended upwards from RM131.31 psf in Q1 2001 to RM394.39 in Q1 this year, with noticeable troughs in 2010 and 2012.

While price growth in the KL suburbs has dropped off since 2015, this is expected to change with the completion of the Sungai Buloh-Kajang line of the Klang Valley MRT (mass rapid transit) system running through the area.

 

 

 

 

Part of the Hong Leong empire

MID-SIZED property developer GuocoLand (Malaysia) Bhd’s steady growth is better understood in relation to its status as a member of the Hong Leong Group.

Established in 1963 by Tan Sri Quek Leng Chan and his uncle Kwek Hong Png, the Hong Leong Group’s core businesses today include financial services, property development and hospitality.

 The conglomerate’s diverse holdings have placed the Quek and Kwek dynasty among the richest families in Asia, with combined assets worth US$23.3 bil (RM96.7 bil), according to Forbes.

 Listed on Bursa Malaysia, GuocoLand is connected to the larger financial group via the Singapore Exchange-listed GuocoLand Ltd, which is itself a unit of the Guoco Group, listed on the Hong Kong Stock Exchange.

Joining the GuocoLand team last year, group managing director Datuk Edmund Kong brought with him a wealth of experience.

Aside from his 27 years in the industry, he also scouted GuocoLand director (sales and marketing) Lillian Lung and executive director Lee Wee Kee, both of whom served with him in Tropicana Corp Bhd as general manager (sales and marketing) and senior general manager respectively.

Rounding out the team is chief financial officer Justin Quek (no relation to Leng Chan), with more than two decades in finance and accounting, including stints with major developers Sunway Construction Sdn Bhd and Mah Sing Group Bhd.



This article first appeared in Focus Malaysia Issue 260.