Cover Story: Building up the brand

This article first appeared in City & Country, The Edge Malaysia Weekly, on June 12, 2017 - June 18, 2017.

Ritz Avenue will have two blocks offering 190 SoHo units and 730 serviced apartments

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In the reception area outside the office, constant chatter and the occasional laugh can be heard. An unassuming man with an authoritative air is speaking on the phone.

Approaching footsteps are heard on the wooden floor as Poly Ritz Development Sdn Bhd CEO Wong Siew Woon walks in. He extends his hand and shakes hands with a firm grip.

After we are ushered into his office and comfortably seated on the settee, he introduces himself as he serves us hot tea brought in by an assistant. Moments later, we are joined by company founder Chan Teck Chong, the gentleman who was on the phone earlier.

According to Chan, Poly Ritz came about through a merger of two companies — Winfill Construction Sdn Bhd and Pro Master Construction Sdn Bhd — which went through a reorganisation in the late 2000s and early 2010s.

The two companies, controlled by the same group of owners, started off in 1999, building highway and railway infrastructure.

Among the projects they were involved in, Chan says, was the double-tracking project from Rawang to Ipoh, which was under DRB-Hicom Bhd. “But, at the end of the day, payment was very difficult to collect. An opportunity came along and we diversifed into property development.”

Their maiden development was Pandan Business Park in Kampung Pandan, consisting of 15 units of 3 and 4-storey shophouses, followed by 16 units of semi-detached factories in RichWay Industrial Park.

The two companies subsequently merged to become Poly Ritz. The name was chosen mainly for tax and branding purposes, Chan explains. “We want to brand ourselves so that, in the future, when people see the name ‘Ritz’ on a development, they will know it is done by us.” Revenue, he says, comes solely from property development and “we have no other ventures at the moment”.  Adds Wong, “Winfill Construction still exists [as a unit] but only does in-house construction work now. We no longer go for outside construction projects.”

The first residential development undertaken under the Poly Ritz name was Residence 33 in Kota Kemuning, comprising 37 high-end bungalows. Launched in 2011, all have been taken up.

Three launches are being planned this year: Ritz Avenue, Ritz Communities and D’Ritz Residency. The latter two will be jointly developed with Debao Property Development Ltd — a China-based developer that was listed in Singapore in 2000. Debao, which has its headquarters in Foshan, was founded in 1994 and made its name building various residential and commercial developments in China.

Wong says when he heard that Debao was expanding to Southeast Asia, particularly Malaysia, he seized the opportunity to join forces with it.

“We decided to partner Debao because we believe it is quite experienced [in building] high-rise developments in Foshan. Also, it is listed in Singapore,” Wong says.

“We have formed two companies with Debao, where we each have a 50% stake — Poly Ritz Green and Poly Ritz Communities. These companies will oversee D’Ritz Residency in Jalan Kuchai Lama and Ritz Communities in Salak South, respectively.”

The launch of three developments within a short span of time may raise concerns about funding. However, Wong assures that Poly Ritz is in good financial position.

“If we want to be more aggressive and go for mass production, funding has to be in order. This is why we invited Debao to partner us. Apart from tapping its expertise, it is supporting us financially.”

“We are joining hands with Debao to raise funds. Any shortfall will be covered by taking a loan.”

 

The Ritz Avenue

The Ritz Avenue in Jalan Kuching, with a gross development value (GDV) of more than RM600 million, comprises two towers. Occupying 4.24 acres of freehold land, the two blocks will offer 920 units — 190 small office/home office (SoHo) units and 730 serviced apartments. The podium will have 26 retail lots. The first block will be launched between August and September. The built-ups of the units will range from 560 to 1,085 sq ft, with selling prices of RM580 to RM620 psf. There will be a total of 2,137 parking bays, with two parking bays allocated for every unit. Construction will be completed in 2020.

Facilities on level 10 include a swimming pool, indoor gym, forest walk and Zen garden while the rooftop will feature a roof garden, observatory and leisure area, among others. Nearby amenities include schools, a wholesale market and supermarkets.

Chan says Ritz Avenue is strategically located and has two entrances, leading to Jalan Kuching and Jalan Sungai Tua.

“We are very particular about our location. That is our main priority … we put in a lot of effort to study the locations we buy into,” says Wong.

He says the target market is young people. The SoHo units would be suitable for fresh graduates while newlyweds and young families can consider the bigger 3-bedroom serviced apartments.

“We don’t cater for investors but rather, end-users,” Chan says.

Wong is confident of a good response due to the pricing, location and facilities.

Metro Homes Sdn Bhd director See Kok Loong says while there are more high-rises in the area compared to the past, the market has yet to be saturated. The selling prices for Ritz Avenue, he feels, are suitable for the current market.

In older developments such as Symphony Heights by Hua Yang Bhd, similar-sized units are going for RM400 to RM500 psf, with average rental yields of 3.5%.

See says the older high-rises, built in the 1990s, had higher built-ups and a lower selling price.

New projects like DEX Suite, Kiara East, by SBC Corp Bhd, and EcoSky by Eco World Development Group Bhd are going for RM550 to RM700 psf, he says.

 

Ritz Communities and D’Ritz Residency

Ritz Communities in Salak South, Kuala Lumpur — which comes under the government’s affordable housing scheme RUMAWIP —is expected to be launched as soon as this month.

The leasehold project will comprise two blocks with a total of 1,120 units, with built-ups of 800 sq ft. The selling price is RM300,000. Spanning 3.21 acres, the development has a GDV of more than RM450 million. It is within walking distance of the Salak South light rail transit (LRT) station, which will be linked to it by a pedestrian walkway.

Meanwhile, D’Ritz Residency in Jalan Kuchai Lama, to be launched in October, sits on a 3.53-acre tract and has a GDV of more than RM900 million. The freehold development will comprise two blocks with 1,128 residential units, and 20 retail lots at the podium.

With built-ups of 868 to 1,250 sq ft, the units are selling for RM680 to RM720 psf.

The concept and design comes from Debao and is similar to what is found in Hong Kong, Chan says. For this particular development, private living is emphasised. It is designed in a way so that  all four sides of the building will have access to sunlight, and the sun can be seen from every room, says Chan.

“We believe our design is outstanding and our pricing is very attractive. Although you might think it is a high-density development, I can assure you that you will enjoy absolute privacy, modern living and a good living standard,” says Wong.

 

Future plans

“Our thinking is that we won’t get involved in construction anymore in the future. Development will be our core business,” says Chan. Poly Ritz aspires to become a major property developer like S P Setia Bhd in the longer term, he adds.

“We might go into agriculture — we are thinking of having another division in this area. Right now, we are negotiating to join hands with some China parties interested in agriculture, but there is a long way to go.”

However, the most important thing at the moment is to build up the brand and show the company’s capability.

“Our purpose right now is to build buildings in the low or medium-price range. But if we come across a good piece of land and an opportunity in the high-end market, we will go for it,” says Chan.

“We have big plans but we have to be realistic and think of the current market situation. Of course, it goes without saying that being a responsible developer is our topmost priority,” adds Wong.

After the three launches that have been lined up, Poly Ritz will be embarking on a 1Malaysia Civil Servants Housing Project (PPA1M) in Gombak. The joint-venture project comprises a high-rise and there will be about 1,800 units on 18 acres of Malay reserve land, Chan says.

Poly Ritz does not have any land at the moment and is sourcing for parcels around the Klang Valley.

Moving forward, there are plans to develop a small township of about 500 acres in Semenyih or Sepang. Poly Ritz also plans to expand to other states in Peninsular Malaysia.

In the long term, “we are looking to join hands with the state or federal governments on certain projects, where they can come up with some ideas and both parties will have mutual benefits,” Chan sums up.