City & Country: Building Kuala Lumpur Harley Street

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Jalan Ampang in Kuala Lumpur boasts several landmark buildings housing medical and health-and-wellness related services, among them Gleneagles Hospital and the Ampang Puteri Specialist Hospital.

That has given the Al–Hidayah Group, owner of a 4.88-acre commercial tract on the thoroughfare a brainwave — to complement the health-related facilities found within 3km of the plot.

To do this, the group is developing Olive 108, a RM920 million project designed around the “wellness concept”, reveals Al-Hidayah group chief executive Ismail Mustaffa.

The group is a diversified business corporation involved in Islamic financing via its Al-Hidayah Investment Bank Labuan, an offshore investment bank under the Labuan Financial Services Authority; agro-based industries; education; information technology and property development. It is currently developing some apartments in Morocco but Olive 108 marks the group’s debut in the Malaysian property development scene.Olive 108The wellness concept, Ismail tells City & Country, was chosen because of the presence of the wellness-related facilities in the area such as hospitals, insurance companies as well as the head office of the Social Security Organisation (Socso).

Even the project name, Olive, was selected for its association with health and wellness. “Jalan Ampang has all the ingredients to be developed into a wellness-focused enclave of Kuala Lumpur city like Harley Street in London which houses all kinds of medical assistance facilities. Projects and developments here can be coordinated by the authorities to turn Jalan Ampang into a wellness street,” says Ismail.

The developer has done its homework — discussions with the Gleneagles Hospital and Ampang Puteri Specialist Hospital have confirmed that medical tourism in Malaysia is on the rise.

“More and more people are coming from the Middle East and Indonesia to Malaysia for treatment and these people don’t come alone. They come with their families and they should stay in a comfortable place near their loved one while they are here,” he adds.

Olive will be built in two phases, with the first comprising three condominium blocks — two rising to 20 storeys and the third to 10 storeys. Phase two will have one block of serviced apartments and an office block, each 20 storeys high and sitting atop a 3-storey retail podium.

There will be a total of 242 condominium units. Sized from 1,900 sq ft to 2,500 sq ft, these will be priced at an average RM750 psf. Meanwhile, the 210 units of serviced apartments will be smaller, from 750 sq ft to 1,500 sq ft and these will be sold at a higher average of RM900 psf.

The gross floor area of the office block is 15,000 sq ft per floor. The project will be served by 1,300 parking bays on two basement levels. Each condo block will have its own access to the car park. The developer has chosen Korean builder Kukdong Engineering & Construction Co Ltd — one of the builders of the Petronas Twin Towers — for the construction of Olive 108. In all, the project has a gross floor area of 1.3 million sq ft and 400,000 sq ft of car park space.

The Al-Hidayah Group unveiled all the condo and serviced apartment blocks in May in Singapore and Malaysia. At press time, interest has been shown for 80% of the units. The group hopes to start construction by year-end. First to be built will be the condo blocks, followed by the serviced apartment and the office block within six months.

The developer is targeting foreign corporations looking for staff accommodation as well as Koreans, Japanese, Iranians and Indonesians.

As for the offices, the developer is trying to attract local medical practitioners. Unit size and indication pricing of the offices were not immediately available.

The developer is watching the market closely and is not oblivious to the current soft office space market.  “We are concerned ... There are a few alternatives before us. We can redesign 10 of the 20 storeys in the block into serviced apartments, considering the demand,” Ismail says.

As for the retail podium with 93,000 sq ft, the developer is targeting wellness-related businesses like spas, pharmacies, health food outlets, banks and insurance companies. It may sell the podium en bloc or keep it for recurring income.

The Olive 108 site used to belong to the Malaysian Armed Forces. Al-Hidayah got the land in a swap with the Ministry of Defence. It signed a privatisation agreement with the Ministry to build a new camp site on Jalan Padang Tembak in exchange for the leasehold land on Jalan Ampang.

LandbankSet up in 1995 as a company involved in electrical construction works, the Al-Hidayah Group went into subcontracting of civil works before moving on to becoming a main contractor. Under the government’s private funding initiative (PFI), the group built a 3,600-unit student hostel for Universiti Kebangsaan Malaysia (UKM) under the build, operate, transfer (BOT) concept. The hostel was completed in 2005.

In Alor Gajah, Melaka, near the A’Famosa Resort, the group owns a 190-acre site on which it has built the Advanced Technology Training Centre (ADTEC) and Malaysian Institute of Chemical Engineering Technology (MICET) on a full turnkey basis. They were completed in 2005 and are now operational.

The Group will also develop the curriculum, supply teaching materials and conduct training for teaching staff for the two institutions. The two institutions occupy a total of 73.8 acres, while 50 acres has been reserved for another foreign university to set up campus here.

“We have to build the population here first before we build homes. So we decided to get education institutions to set up campuses here. We are also talking to three universities from Canada and Australia to set up their campus here. Once we have these universities, we have the critical mass and we can start building houses,” Ismail says of the site.

The remaining area will be developed within five years. Plans are for landed homes such as bungalows, semi-detached homes and townhouses, targeting Singaporeans looking for weekend homes. Located near to Simpang 4, the site is only a short distance from the North-South Expressway.

This project in Melaka has a gross development value of RM170 million.

The Al-Hidayah Group is also planning for its 382-acre land in Tebrau, Johor, which will be developed in the next 10 years. Comprising residential, commercial and office components, the project will be based on the eco concept, with a green lung and a river created within the city.

The site will be carved out into four tracts. The developer is looking for local and overseas joint-venture partners.

As for the project timing, the developer is taking the cue from the market.  “We are looking at a GDV of RM13 billion but it will depend on how much the market can absorb. It has to be something unique to attract people there. The project is located along Jalan Tebrau and is 8km to Johor Baru,” Ismail says.

The group also has a 14-acre tract in Bentong, Pahang on which it plans to build 18 units of homesteads of about half an acre each. The developer is now developing the concept for the RM30-million project located just next to the Bentong Golf Course.

MoroccoThe Al-Hidayah Group ventured into property development in Morocco in 2008. In a 1,000ha (2,471 acres) new township located 20km from the capital, the group purchased 27ha (66.7 acres) to build 5,000 apartment units in three phases.  Known as Maraja-Al-Bahrain, the RM1.2 billion low-rise project is being developed in three phases and will be completed by 2013, says Ismail.  The first phase of 600 units were recently completed and handed over in May 2010. Work on Phase two started early this year.

“We joined some business missions organised by the government and we went to several countries, including Morocco in 2005. Many people went to the Middle East which we thought was over-crowded. We saw the opportunity here.

“The Morocco government was building houses as the country was fast developing while more and more people were moving into the city and housing demand was increasing. The majority of the homes are in the medium range and the rest in the high-end range,” Ismail notes.

The group has a regional office in Morocco with 25 staff and from there, it plans to venture into other countries like Libya, Saudi Arabia and Mauritania.

It was also appointed to conduct a feasibility study on ICT development in that country, and is doing a study on vocational training.

The group will also be developing a Waqf land project with the Islamic Development Bank (IDB) under a 50:50 joint venture to build student hostels for University Moulay Ismail in Morocco for 4,000 students. The first phase is currently under construction and is scheduled for completion by end-October.

“From time to time, we need funding for our projects overseas and our Al-Hidayah Investment Bank Labuan offshore bank will raise funds and facilitate the funding arrangements. All its clients are from overseas,” Ismail says.

The company is also the plantations consultant to the Peru Ministry of Agriculture as it is embarking on a 9 million-acre oil palm plantation project.

According to Ismail, the group may also be appointed as the turnkey agriculture contractor to develop oil palm plantation of over 75,000ha in Peru, including supply of seeds, plantation materials and construction of Infra-structures, housing and public amenities. The project is expected to cost about RM10 billion.

“We are done with the feasibility study and to make sure that the project will be successful, we made a proposal to become the turnkey agriculture contractor,” he adds.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 819, Aug 16-22, 2010.