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Saturday, June 26, 2010

Encorp Strand to pull in the crowd

When Encorp Strand, in Kota Damansara, Petaling Jaya was completed in late 2007, there may have been some concern about who will be occupying these 265 units of shops and office space.

Datuk Seri Mohd Effendi Norwawi in his office, which overlooks the construction work on the mall and boulevard

Today, most of the ground floor units are tenanted. The story of Encorp Strand, with a gross development value of RM1.34bil by Encorp Bhd is pretty much linked to Dataran Sunway, another commercial development located adjacent to it across the road by the Sunway group.

Dataran Sunway, of about the same size as Encorp Strand, was the first to take off. Because it was the first to market, it was popular with investors and tenants. Investors, seeing the popularity and vibrancy it generated, bought into Encorp Strand when it was put on the market.

Says a real estate agent: “It is normal for any commercial development to take six months to a year to have tenants. Now the place is vibrant.”

With tenancy picking up and prices doubling in the secondary market, Encorp executive chairman Senator Datuk Seri Mohd Effendi Norwawi is encouraged with the work they have put in to create yet another hub.

The gross development profit (GDP) from the project is expected to be about RM300 mil. This comprises the GDP from the 265 units Shop Offices (less the 29 units retained by the company), the Garden Office and the serviced residence component.

The GDP excludes developments that will be retained by the group, namely the mall and its elevated car parks, the Boulevard, the 29 shop offices and the Garden Office car parks.

Besides Encorp Strand in Kota Damansara, the company also has projects in Penang, Shah Alam and Puteri Harbour in Iskandar Malaysia, Johor. Its three core businesses are property development (an on-going project with a gross development value of RM2.1bil), construction management (with an order book of 1.8bil) and government concession (housing project valued at RM2.2bil).

On the on-going changes at Encorp Strand, Effendi says his three-storey shop units were RM1.08mil in 2005. Today, some of them are priced at more than RM2.2mil in the secondary market while the four-storey units with lift are priced at RM3.2mil. It was previously RM1.8mil.

An agent who declined to be named said the capital value is growing faster than the rental.

Last week, they launched their second component, the Garden Office comprising 258 units of office suites on 2.6ha. It is currently 60% sold.

This project comprises 14 blocks of six and seven storeys with built-up ranges from 1,705sq ft and 2,510sq ft. It was sold at an average price of RM700 per sq ft.

The Garden Office is not designed as a single block, but a total of 14 blocks located in clusters around a stretch of landscaped area in the centre.

The second thing going for it is that it is low rise, comprising six to seven storey blocks. The third element is its use of open space with a rooftop garden for some of the blocks. On paper, the concept is aesthetically pleasing. Whether Effendi will be able to pull it off is another matter because rooftop gardens are not easy to maintain and there are several here.

The other interesting feature about Garden Office is that it will be connected to a larger and more comprehensive commercial development comprising its already completed shop and office suites via a walkway. The Garden Office is expected to be completed in 2013 with a gross development value of RM320mil.

Says Effendi: “Encorp Strand will be the most happening place when we are through with it.”

He could be right. Despite it being leasehold, Kota Damansara has become home to many. It is the 400,000 households within a 5km radius that Effendi hopes to draw to Encorp Strand. He is offering different components to attract the crowd. Besides the Garden Office, he is also planning to build a neighbourhood mall and on top of it will sit a 40-storey serviced apartment.

About 60% of the 280 units will be studio units of about 650 sq ft, 30% 2-bedroom units of about 1,000 sq ft.

He is targetting the young executives. To be launched next year, the studio units will be selling at about RM360,000.

“We have been getting quite a bit of enquiries for the serviced apartments,” he says.

Effendi has roped in the services of French architect Nicolas Ayoub to give the entire 18ha that make up Encorp Strand a bit of ooomph!

In some aspects, it will be a more pleasant place than its competitor across the road. For one, the roads are wider. For another, there is more open space.

Effendi promises his project will be of a superior product.

“Together with the office space, shop lots, Encorp Strand will be an integrated development comprising five components.

Work on the mall and boulevard started last year and is expected to be completed in 2012.

“We are creating a community in this 45 acres. The mall will have several anchor tenants - a cinema, a bowling alley, possibly a performing arts theater, a fitness centre and all the basic amenities that make up a township in this single location,” he says.

With The Curve a 10-minute drive away, and the newly opened Giza Mall in Dataran Sunway, and the Giant Hypermarket next to Encrop Strand and the Sun Suria Industrial Park, Effendi does not think there is any over supply of commercial and retail area.

“Encorp Strand will be very self-contained. It will be different from Dataran Sunway and the 40-storey block will be among the highest in this part of Petaling Jaya,” he said.

He has promised more than 3,000 car parks. With the way things are moving in Kota Damansara, whether that will sufficient is difficult to say. That place seems to attract people like bees to honey. What is missing is public transport which is currently in the pipeline.

By The Star

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