Glomac resumes Puchong project

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GLOMAC Bhd recently resumed the development of the Lakeside Residences township in Puchong — seven years after the first phase was launched in 2005.

But buyers do not seem to be deterred by the delay, with all the units offered under the recently launched second phase snapped up on the first day.

The project started in January 2003 as a joint venture with the previous landowner, Score Option Sdn Bhd, to develop 90 acres of the entire 200-acre parcel.

Glomac then launched the maiden phase, dubbed Rhapsody in 2005 which has since been completed and handed to purchasers. However, a dispute between the two partners brought the development of subsequent phases to a halt.

In January 2011, Glomac, via its subsidiary Glomac Alliance Sdn Bhd, announced the proposed acquisition of the 200 leasehold acres from Score Option for RM77 million. The deal was concluded in June this year.

"The proposed acquisition will now allow Glomac to take full control of the 90 acres under the earlier joint-venture agreement and further extend its landbank in the same location to 200 acres, to further capitalise on the proven success of Phase 1 of Lakeside Residences," the company had said in a Bursa Malaysia announcement in January 2011.

Phase 1, comprising 102 units of 2-storey terraced homes with built-ups of 2,100 sq ft and priced from RM325,000 onwards, was fully sold, completed and handed over in August 2008.

Phase 2, known as Sonata, commands a gross develoment value of RM75 million and offers 105 units of 2-storey terraced houses with built-ups of 2,120 to 2,358 sq ft. Priced from RM680,000 to RM937,521, all the units were taken up on the first day of the launch. With some 700 registrants for the 105 units, sales were done via balloting.

The overwhelming response has prompted the launch of at least two more phases by next year, says Glomac CEO and managing director Datuk FD Iskandar FD Mansor.

Phase 3 will offer 139 units of 2-storey terraced homes, while Phase 4 will offer 75 units. These two phases will have a GDV of RM94 million and RM54 million respectively.

FD Iskandar aims to launch Phase 3 by end-2012, and Phase 4 by next February. He foresees the take-up rates to be just as good as the previous launches.

The designs for both phases have been finalised and building approvals obtained, but specifications and finishings are still being firmed up, he says. Standard units in Phase 3 will have a built-up of 2,167 sq ft while those in Phase 4 will have a built-up of 2,045 sq ft.

The pricing, says FD Iskandar, will be similar to the second phase, but with a slight increase due to higher construction costs.

"The outlook for our development in Puchong is great. Purchasers have faith in the location of our project as well as its gated concept," he tells City & Country. Lakeside Residences is located near Bandar Metro Puchong, Pusat Bandar Puchong and Taman Perindustrian Puchong. Also nearby are Tesco Hypermarket, IOI Puchong Mall and Tractors Engineering Complex.

Amenities in the gated and guarded development include a clubhouse, park and recreational areas. There are also plans to upgrade the nearby lake — a 25-acre retention pond — by putting in a jogging path.

Glomac aims to launch Phase 5 in FY2013, which ends in April. Phase 5 is also expected to offer 2 storey terraced homes, but with bigger plots and built-ups.

"We are still tweaking the plans, but it will be a comprehensive plan for a proper township," says FD Iskandar. "There will be more than 1,000 units of landed properties, more than 1,000 units of condominiums, shopoffices and also a retail centre."

Sonata will only occupy about 20 acres, and the entire development will take five to six years to complete, he says.

Outlook"To acquire 200 acres in Puchong today is impossible," says FD Iskandar. "We're offering landed terraced houses now but looking down the line two years later, there won't be any landed properties available in this area. They'll all be stratified property and apartments."

On the location of the project, he says that within the next five years, this part of Puchong won't feel so far [from the Kuala Lumpur city centre].

"The greater Kuala Lumpur area used to be called the Klang Valley. The definition of greater Kuala Lumpur covers an even wider area... Last time, greater KL was just until Petaling Jaya, now it goes as far as Shah Alam. With a better public transport system, places that seemed far five years ago, won't feel far today," he explains.

Glomac is the developer of two other townships in Selangor — the 1,000-acre Saujana Utama in Sungai Buloh and the 345-acre Saujana Rawang in Rawang.

FD Iskandar says developers need to educate the public to not just focus on established housing areas like Bangsar or Taman Tun Dr Ismail in Kuala Lumpur, especially with the government initiative to provide better public transport systems. This also means developers can look at new areas where accessibility will be improved in the future.

Puchong is one of these areas, with the light rail transit (LRT) extension line running through it.

The proposed LRT extension line starts from Sri Petaling Station and passes through Kinrara and Puchong town centre, ending at Putra Heights. The 17.7km extension will be served by 12 new stations, seven of which are located in Puchong. Station 7 is the nearest to Glomac's Lakeside Residences. The area also has good connectivity to Subang Jaya and other nearby areas.

Moving forwardGlomac recently acquired agricultural land in Sungai Buloh and Dengkil in Selangor, but has yet to decide on the design concepts and plans. A land parcel measuring 191.7 acres in Dengkil was purchased in June for RM66.8 million while a 199.7-acre parcel in Sungai Buloh was purchased in February for RM44 million.

"I'm still looking for more land," says FD Iskandar. "I'm keeping my eyes open in the Klang Valley since this is where our forte is. We're are also looking at other places like Johor and Penang, but our strength is definitely still within the greater Kuala Lumpur area."

Glomac has a total undeveloped landbank of 801 acres with a GDV of RM7 billion. "If we launched RM1 billion worth of properties each year, the current landbank will only last seven years so we can't be too complacent," he says.

The developer also has plans to grow its recurring income base, including rental income from its products. Glomac's investment properties, according to the latest audited accounts, are worth RM59.1 million and include Menara Glomac within the mixed commercial developments Glomac Damansara and Plaza Kelana Jaya.

The company's headquarters currently occupy seven floors of the 17-storey Menara Glomac and it is looking to lease out the rest of the office tower. Glomac is also building a mall beside it, which could contribute to recurring income, he says.

Glomac Damansara is a freehold development along Jalan Damansara offering shop offices, serviced apartments, a boutique retail mall, office blocks and office towers.

The serviced apartments, Glomac Damansara Residences, were launched in 2011. Comprising two 26-storey towers offering 356 units, with built-ups of 875 to 2,475 sq ft, 75% is currently taken up. Facilities include a tropical-themed elevated garden, a 100m leisure pool, extended glass-edge swimming pool, 200m jogging path and a waterfall. Other amenities include a gymnasium, multi-purpose hall and barbecue area.

FD Iskandar says the rental yield from these investment properties could be around 6% to 7%. Glomac, he adds, will continue to remain focused on property development activities as the returns are higher.

This story first appeared in The Edge weekly edition of Nov 26-Dec 2, 2012.