IT was a bright sunny morning when City & Country visited boutique developer Orando Holdings Sdn Bhd's show office in Taman Pertama, Cheras. Datuk Dr Eng Wei Chun, the managing director of Orando, was all prepped up and looked at ease in a suit paired with a bright yellow bow tie.
As we toured the show unit of the company's latest development — Vila Vista in Taman Pertama, Cheras — Eng reveals that Orando was approached by two investor groups from Singapore and Hong Kong to purchase its latest development en bloc. However, he declined to accept the lucrative offer, which would have secured the company a large profit while saving it a huge amount of work. Instead, he has opted to continue to market the project locally.
"While growth [in the property industry] is important, it must be healthy and sustainable," explains Eng, who holds an honorary PhD in international marketing management. He says he hopes the Orando brand can grow in such a way too.
Eng started his career as a quantity surveyor before forming Orando a decade ago with the late Indonesian businessman Atun Susila. Atun was active in the plantation business in Indonesia. Currently, Eng and Atun's son, Darwin Teo, oversee the day-to-day running of the business.
The company started out with a small project in 2003 called Sri Angkasa Homes, located on Jalan Puchong in Kuala Lumpur. The development had a gross development value (GDV) of RM13 million and consisted of 16 units of semi-detached homes on a 2-acre freehold land. The units were sold at RM250 psf or at a starting price of RM750,000.
This was followed by a 0.5-acre project around 2005 in Taman Yarl, with a GDV of RM3.5 million. The project consisted of only four semi-detached homes priced from RM800,000, or about RM230 psf. The prices have now tripled to about RM800 psf.
Next was Vistaria Residensi in Taman Kobena, Cheras. The project, with a GDV of RM44.5 million, sits on a 2-acre leasehold land. Vistaria was sold out within two days after its launch in August 2009. The units were priced at between RM310,000 and RM330,000 (RM235 to RM250 psf).
The development, which has 128 condo units with sizes from 1,315 sq ft, was handed over in July 2011. According to the developer, units at Vistaria currently transact at about RM630,000 — more than double its launch price of about RM300,000. Rental rates are hovering at around RM2,500 per month.
Eng credits the project's unexpected success to the location — the development is in a mature 40-year-old township. "We realised that many of our buyers wanted to be closer to their family. Many have parents or relatives staying around the area," he says, adding that there is a lack of lifestyle condominium projects in Cheras catering for this market.
In May 2011, Orando launched its second condominium project — Sky Vista Residensi — in the same township, Taman Kobena. The project was equally well received by the public; all 206 units spread across two blocks were sold out within a week of the launch. Sky Vista has a GDV of RM131 million and is sited on about two acres of freehold land. The units, which range from 1,450 to 1,700 sq ft, were sold for between RM550,000 and RM760,000 or about RM380 to RM440 psf. The units are currently transacting for about RM650 psf. The project is set to be completed by mid-2014.
Following the success of its first two high-rise developments in Cheras, the developer launched Vila Vista in May. It is located a stone's throw from the upcoming Taman Bukit Ria MRT station.
Looking out of the window in the Vila Vista showroom, Eng points out, "The station is currently being constructed. As you can see, it is located within walking distance so there is no need to worry about driving or parking."
According to Eng, the response has been excellent — some 75% of the units have been sold. The leasehold 1.5-acre project has a GDV of RM123 million. The 39-storey condominium will house 137 units, with sizes ranging from 1,576 to 2,039 sq ft. Levels nine to 19 will only have six units per floor, while higher levels will have four units per floor.
The selling price of Vila Vista ranges from RM550 to RM715 psf or an absolute value of RM739,000 to RM1.87 million.
The condos are designed in such a way that there are two entrances to the master bedroom — one from the inside of the unit and another from the outside. This provides the owners with the option to seal off the entrance in the inside of the unit and convert the master bedroom into a studio apartment, which can be rented out.
Vila Vista is accessible via Jalan Loke Yew, Jalan Cheras and the Middle Ring Road 2. Amenities nearby include UCSI University, AEON Cheras Selatan Shopping Centre, Tesco Extra and Giant.
Targeting families and young working adults
The management of strata developments has been a hot topic among homeowners in recent years. After all, a weak management will affect the condominium's reputation in the long term. This in turn can devalue the development, causing a decline in rental prices and value in the secondary market.
Eng says his company is acutely aware of this problem. Thus, owners who intend to rent out their units will have to sign an agreement with the management. The agreement states that should the house owners choose to rent out their units to blue-collar foreigners, the management will charge them 10 times the maintenance fee. The maintenance fee for all of Orando's condominium projects is 20 sen psf.
Based on the positive feedback received from its customers from the first high-rise development, Orando decided to implement this ruling for all its condominium projects. According to Eng, this has resulted in a number of repeat buyers.
Are there any setbacks to this strict ruling? Eng smiles and says, "Not really. Our target market is families and young working adults".
Eng reveals that Orando will be launching another condominium project within the next two years. "This project will be located in Segambut, which neighbours Mont'Kiara. The land area is about 3.5 acres."
The project is still in the planning stages.
Eng adds that the company plans to remain as a niche developer and its main agenda is to build its brand image and expand its landbank in the Klang Valley. "We are targeting small pockets of land in matured neighbourhoods."
He believes that there is more room for the property market to grow as long as the rental market remains sustainable, with at least 3% rental return.
This story first appeared in The Edge weekly edition of June 17-23, 2013.