Johor-based Focal Aims Holdings Bhd has achieved more than encouraging results with Saujana 0-Lot, its RM200-million maiden development in the Klang Valley. The company is better known as the developer of the 2,500-acre Kota Masai township, located 30km east of Johor Bahru.
Philip (seated) believes the prospects in Klang Valley are better. Seen here with him Shawn Yee, Focal Aim's group general manager
Focal Aims embarked on its first development outside Johor last year, after having secured a 25.9-acre freehold site off the Federal Highway for RM62 million two years ago. Saujana 0-Lot was soft-launched in October last year, and the developer says it is pleased with the market's response thus far. Of the 45 semi-detached units and three detached villas launched in the first phase, fewer than 10 units remain unsold today.
Focal Aims attributes the high-end, gated development's good performance to its competitive pricing and good location.
According to group executive director Philip Yee, the developer had toyed with the idea of entering the Klang Valley market two to three years ago. "There isn't much excitement in the Johor Baru property market. In the Klang Valley, however, prospects are better simply because the market is more dynamic and populated," he tells City & Country.
He adds that the group is actively scouting for land in the Klang Valley. However, it is only interested in small parcels for high-end projects. "Apart from the higher land cost in the Klang Valley, the turnaround time is also faster with smaller developments. But the land has to be in a choice and established location."
Saujana 0-Lot features semidees and detached villas built on elevated land. To be developed over five years in three phases, the project is among the first in the Klang Valley to boast the zero-lot concept. RB Land Holdings Bhd has also launched such a development, called 10 Baiduri, in nearby Subang Jaya.
When the Peremba Group wanted to dispose of a piece of land in 2005, Focal Aims saw its opportunity to enter the Klang Valley. "The site fitted our criteria — good location, small in size. It was just right for us to focus on our lifestyle concept," says Yee.
Being a new player in the Klang Valley, Focal Aims needed to capture the market's interest. "We wanted something unique and different to give us an edge. We came across the zero-lot concept in Australia and Singapore when we were there to check out the latest home designs. For conventional semidees and bungalows, the land setback is 10ft, but we are offering a 20ft setback, which makes the garden area wider. Hence, there is zero boundary or no connecting wall between the units," says Yee.
"While the land title is for a semidee, we are in fact offering buyers a bungalow for the price of a semidee. A standard semidee at Saujana 0-Lot costs only RM1.48 million (land area: 4,000 sq ft; built-up: 3,500 sq ft), which works out to only RM370 psf," he adds. Maintenance fee is not more than RM400 a month and the plan is to deliver the first batch of homes by September 2008.
Most of the buyers are locals who discovered Saujana 0-Lot through the billboards and balloons present near the site. After the completion of two show units at the end of July, the developer raised the price of the remaining units by RM100,000. But this did not hurt sales as over 10 units were sold.
The developer is in the midst of obtaining the final approval for plans to launch 48 units (38 semidees and 10 detached villas) in the second phase by 1Q2008. While the size of the homes in this phase remains the same, the developer plans to change their exterior. Prices in the second phase may start from RM1.8 million.
About the developer
The main shareholders of Focal Aims are Peremba Group's Tan Sri Mohd Razali Abdul Rahman, the Pang brothers — Pang Choo Ing and Pang Yon Tin — and the Yee brothers — Philip Yee and Yee Oy Chong (Focal Aims' group managing director).
The Peremba Group's other projects includes Saujana Resort. Long-time friends and business partners, the Pang and Yee brothers have worked together for more than 20 years. While the Pangs were primarily in construction, the Yees were in the logging and saw-milling business. When they decided to strike out into property development, the brothers roped in mutual associate Mohd Razali to set up Focal Aims in 1994.
On why they decided to venture into the property business, Yee says property sentiment in Johor was positive in the 1990s. "As we had the relevant experience, we decided to team up. At the time [in 1994], the Johor government was planning to construct a coastal road to link Johor Baru to Pasir Gudang. With an existing education institution there, the Kota Masai site is also near the Tanjung Langsat industrial area, which incidentally falls under the Iskandar Development Region," explains Yee.
Recognising the potential in the Kota Masai site, Focal Aims purchased it for RM180 million. Its next challenge was to gain the market's confidence and populate the township.
"We started off with regulated housing and although these were in the low and low-medium-cost category, we built 2-storey terraced houses and the response was good," says Yee. After that came the medium-cost terraced houses and semidees priced from RM100,000. Building the regulated homes first proved to be the right decision. "As it incurs holding cost, most developers build regulated housing towards the tail end of a project. But it was an opportune time for us as the houses were completed before the Asian financial crisis. So, we were not badly affected by the crisis," Yee adds.
It was during the financial crisis that Focal Aims was presented with a golden opportunity. "A manufacturing company listed on the Second Board of Bursa Malaysia, Sandar Industries Bhd, ran into trouble and we were invited to be the white knight. We seized the opportunity and in 2001, Sandar Industries was transferred to the Main Board and eventually, Focal Aims became a listed company," Yee explains.
Launched in 1995, the RM3-billion Kota Masai will boast over 25,000 properties in 10 phases when completed. The 25-year development comprises mostly residential units (92%), and to date, the developer has completed more than 14,000 properties, generating sales of over RM1 billion. Kota Masai has a population of about 70,000.
According to the developer, it is left with 1,200 acres to build another 11,000 properties. This will keep it busy for the next 10 to 15 years. The township will also feature a 400-acre golf course, a 45-acre commercial square, an 80-acre educational institute and a hotel.
Kota Masai lies adjacent to Johor Corp's Tanjung Langsat and the Pasir Gudang port. Other projects nearby include Sime UEP's Taman Pasir Putih, Redez Properties' Bandar Bistari Perdana, Scientex' Taman Scientex, Malaysia Pacific Land's Nusa Damai and Mah Sing's Sierra Perdana.
Current launches at Kota Masai include 1-storey (18ft by 65ft; RM95,000) and 2-storey (16ft by 55ft; around RM93,000) homes.
Yee reveals that the developer tested the market with the launch of high-end products of more than 60 units of 2-storey semidees priced at around RM280,000 within a gated precinct two years ago.
"It took more than a year to sell all the units; if these had been our normal terraced houses, they would have been sold within two months. Our high-end range took longer to be accepted by the market," admits Yee, adding that Focal Aims will launch products that match market preference and only when there is demand at Kota Masai.
Yee says it used to launch more than 1,000 properties annually. "But the size of our launches has scaled down to between 300 and 500 units, due to the increase in supply. Although Johor has the highest overhang in the country, this is not an issue for us because of our affordable pricing," he says, adding that their annual stock usually takes 12 months to clear.
He also says Focal Aims is not affected by the entry of big players from the Klang Valley into the Johor property market. He explains: "Even before S P Setia and Mah Sing made their appearance here, there was already competition from the other Johor developers. As Kota Masai is an affordable township with landed properties, our target market is different from that of the others."