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Monday, September 8, 2008

Malton’s strategy to weather slowdown

MALTON Bhd sees the potential to build up its exposure in the commercial and high-end residential property sector to weather the slowdown in the medium-end residential property market.

“The challenging market conditions, fuelled by rising construction costs and petrol prices, have resulted in a slower take up of property. Developers with ongoing projects have to be ingenious to ride out the tough times,” director of sales and marketing Tracey Lai told StarBiz.

Tracey Lai explaining the development plan for The Grove.

She said while a slowdown has crept into the residential market, there was still room for more commercial projects, especially Grade A offices in Petaling Jaya.

Being an integrated developer helps as Malton’s construction division undertakes most of the company’s construction needs. This act as a buffer against any need for cost renegotiations with contractors or stalling of projects.

“Our target market is very niche and provide some form of cushion against any excessive margin erosion caused by the rising construction costs,” Lai said.

She said in keeping to the company’s market-driven and buyer-centric product policies, its line up of projects would be targeting at the high-end market.

Malton’s strategy is to focus on product differentiation and the right branding for a broad spectrum of upmarket lifestyle products, Lai added.

“We believe high-end property products will continue to enjoy good take up as high net worth investors are quite insulated from the prevailing high food and fuel prices. Many are looking to invest in properties to hedge against rising inflation.

“While there are still uncertainties in the market, we believe an equilibrium will be reached in due course and the market will become buoyant again,” Lai said.

She said despite the prevailing caution among potential buyers, the property market would still be a good investment for investors, given the good rental yields and capital appreciation to be made.

“Developments at popular and prime locations will continue to attract buyers as decent yields could be reaped.

“Compared with many other countries in the region, Malaysia’s real estate products are still very much under priced and even with the full impact of cost increases, prices are relatively lower.

High-end properties in the country are considerably more affordable compared with in other countries,” she added.

Besides the quality workmanship and finishes, initiatives such as Malaysia My Second Home programme have also helped to attract foreigners to the country’s shores.

Liberalising guidelines such as the exemption of real property gains tax and relaxation of foreign ownership restrictions have also fuelled foreign buyers’ confidence in the market.

“There is still room to further raise the attractiveness of local real estate to foreign investors. This will largely depend on the Government’s efforts to ensure a healthy and stable economy and further liberalise foreign ownership guidelines.

“In the current challenging times, there is a need to be market savvy and more buyer specific. We have to work a lot harder to connect with and reach out to the buyers that include South Koreans, Chinese, Middle Easterners and Russians,” Lai said.

Malton has a number of interesting high-end residential and commercial projects that have a total gross development value (GDV) of RM2.1bil.

An artist's impression of a waterscape Villa at The Grove @ SS23 to be developed by Malton in Petaling Jaya.

One of its latest lifestyle offerings is the high-end gated development, The Grove in SS23, Petaling Jaya. The project on a 4.8 acre freehold land comprises only 35 exclusive three-storey bungalows and link bungalows priced from RM3mil to RM3.8mil each.

The Grove, with GDV of RM119mil, is planned for launch in October.

The designer homes, with six plus one en-suite bedrooms with a feature lift, boasts of a tropical garden living experience complete with water features.

The other upmarket residential projects include The Pearl @ KLCC and Amaya Saujana @ Saujana Subang. The Pearl @ KLCC comprises a high-end condominium project along Jalan Stonor and within the KLCC enclave.

The 41-storey block of 177 luxurious condominiums are spacious residences from 3,000 to 20,000 sq ft, including seven duplexes and three penthouses.

The 13-storey residential suite block of Amaya Saujana offers 318 residences priced from RM605,000 to RM918,000.

An artist's impression of the V-Square commercial project.

Malton’s flagship commercial development is V-Square (VSQ) – an integrated commercial project comprising two blocks of corporate tower, a block of corporate business suites, and two blocks of corporate offices, with retail space on the ground floors.

The project on a 2.6-acre plot in Jalan Utara, Petaling Jaya, will have a GDV of RM207mil.

By The Star (by Angie Ng)

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