Cover story: From infrastructure contractor to developer

This article first appeared in City & Country, The Edge Malaysia Weekly, on February 17, 2020 - February 23, 2020.

Core Residence @ TRX is the first residential development to be launched in Tun Razak Exchange

An artist’s impression of Core Residence @ TRX

The developer will emphasise furnishings and quality in Core Residence @ TRX

Pictures by Core Precious

Zhang (left, with Looi): We are open to joint ventures and partnerships and many landowners in Kuala Lumpur and Penang have approached us

Photo by Mohd Shahrin Yahya/The Edge

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Welcoming visitors at the Core Residence @ TRX sales gallery at Level 5 of Menara Khuan Choo in Kuala Lumpur is a green wall with a metal signage depicting one of the main elements of the development — a green building within a city.

The sales gallery is bright, thanks to the abundance of natural light from the large windows. Around the scale model, sales personnel are busy introducing the development to potential buyers in various foreign languages.

Core Residence @ TRX is developed by CORE Precious Development Sdn Bhd — an 80:20 joint venture between China Communications Construction Group (CCCG), a Fortune 500 global corporation, and WCT Holdings Bhd. It is the first residential development to be launched in Tun Razak Exchange (TRX).

A RM40 billion development in Kuala Lumpur, TRX is slated to be the country’s first international financial district. The 70-acre development will be connected by two MRT lines —Sungai Buloh-Kajang line and Sungai Buloh-Serdang-Putrajaya line — and is set to become the next mega catalyst development that will spur economic growth in the country.

First overseas development project

The China-based CCCG is principally engaged in the design and construction of transportation infrastructure as well as dredging and heavy machinery manufacturing. Its businesses cover ports, terminals, roads, bridges, railways, tunnels, civil work design and construction, capital dredging and reclamation dredging, container cranes, heavy marine machinery, large steel structure and road machinery manufacturing, international project contracting, and import and export trading services.

Ranked 93rd on the Fortune Global 500 list last year, CCCG is involved in infrastructure projects such as the Mombasa-Nairobi Railway in Kenya, Shanghai-Hangzhou High-Speed Railway in China and Hong Kong-Zhuhai-Macau Bridge.

The company has been in Malaysia for more than 20 years and currently has more than 3,000 employees. Its projects in Malaysia include the Sultan Abdul Halim Muadzam Shah Bridge (Penang Second Bridge), land reclamation works in Port Klang and the Sabah Ammonia Urea Terminal Project.

It is also the main contractor for the upcoming 640km East Coast Rail Link that connects various parts of the east coast with the west coast.

CCCG started its property development division in China in 2010 and, by 2018, the group had total assets of RMB481 billion and total revenue of RMB488 billion.

Speaking with City & Country in Mandarin, CORE Precious chairman and managing director Zhang Bao notes that the group has been involved in international development projects as an investor and Core Residence @ TRX is its first development project outside China.

CCCG formed its international business division in 2015 and Zhang was appointed its general manager. The company’s land bank has increased, along with its infrastructure business, which has expanded to more than 100 countries, as it buys parcels of land where it has infrastructure projects. It also receives land in exchange for infrastructure work.

The property development division in CCCG Malaysia has more than 20 employees. “We have been in Malaysia for more than 20 years. We brought many of our investors and partners to China to check out our development projects there and they encouraged us to bring our development skills to Malaysia,” Zhang explains.

“So, it was not a rash decision to do our first project here. Also, Malaysia is stable in terms of property prices. As a developer, we look at the market stability … We don’t want prices to go up and down drastically.”

CCCG will emphasise furnishings and quality in Core Residence @ TRX, as the project will be a showcase of the company’s expertise and play a key role in boosting its presence in Malaysia.

“This project allows people outside China to know who we are, what we do and our quality … We want to show them that the properties we build are comfortable, including [the large] spaces and fixtures,” he says.

For example, the development will use the variable refrigerant flow (VRF) system, which uses ducted indoor units. The units will look more aesthetically pleasing and the VRF system works only at the needed rate, thus allowing for substantial energy savings, explains Zhang.

Fixtures will be from international brands such as Teka, Yale and Grohe. 

The development also has two conditional green certifications: Green Building Index (Gold) and Leadership in Energy and Environmental Design (Certified).

“As contractors ourselves, we can control costs better. We are not here to make maximum profit with just one project … We are here for the long term. So, after we hit our profit target and when the numbers allow, we want to provide better-quality fixtures and furnishings to our customers. It is important to show people our quality, even at the expense of lower profits. We want to build confidence among buyers with this project.”

Core Residence @ TRX

The 1.65-acre freehold mixed-use project with a gross development value of RM1.4 billion will offer 700 residential units — ranging from 624 to 1,022 sq ft and priced at an average of RM2,200 psf — in three towers.

There will be six retail units, totalling 2,000 sq m, on the ground floor and rooftop. These will be open for sale at a later date.

The residential units will be furnished with kitchen cabinets, a hob and hood, microwave oven, refrigerator, bathroom cabinets, a washer-dryer combo and wardrobes in all the bedrooms.

Phase 1 of the residential component was launched last November and all 200 units were sold within a month, says sales and marketing director Goodwin Jeffrey Looi. “About 80% of the buyers are foreigners, including some who are staying in Malaysia. The buyers are from more than 10 countries, including the US, Indonesia, Vietnam, Singapore, South Korea, Canada, the UK, Hong Kong and China.”

“We will put up the remaining units for sale gradually,” he explains.

The facilities at Core Residence @ TRX include a function hall, reading room, an indoor playroom, outdoor lounge and a recreational park at Level 7, as well as a gymnasium, wading pool, swimming pool and pool deck on the rooftop (Level 50).

Another feature is the facial recognition system instead of the usual access card system. The units will have a five-way smart lock at their entrances. The developer is looking to offer optional furniture packages near the completion of the development, which is scheduled for early 2024.

Zhang says the three towers will be connected for safety purposes, and that the company wants to turn Tower 3 into a serviced residence; it will extend an invitation to a five-star hospitality operator.

“We are now selling units at Towers 1 and 2 only, and the buyers believe in TRX’s value appreciation because it is a core economy location. We are still planning Tower 3,” he says.

Apart from the MRT lines, the development is also connected via roads such as Jalan Tun Razak, Maju Expressway as well as Stormwater Management and Road Tunnel.

CCCG Malaysia not only hopes to launch more developments in the country, but also wants to turn the Kuala Lumpur office into its main office in Southeast Asia, as it wants to expand into neighbouring countries.

“We have a good team in Malaysia now, so we want to continue to develop more projects here … especially when 80% of our staff [in the property development team] are locals; we want to offer them career advancement or professional growth,” Zhang says.

“We are open to joint ventures and partnerships and many landowners in Kuala Lumpur and Penang have approached us. We have a few projects that are being planned. Our focus will be on residential projects and we hope we will be able to launch a new project by the end of this year, if not early next year.”