Ideal Property positive about southwest Penang

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DATUK Alex Ooi, chairman of Penang-based developer Ideal Property Group, comes from a family of developers. In fact, he is the third generation of developers in his family — his grandfather started developing properties in 1968 and his projects include Taman Guan Joo Seng in Green Lane, Minden Heights, Reservoir Garden and Western Garden in Penang. Ooi's father came into the business in 1989.

After graduating with a Bachelor of Science in Computer Engineering from Ohio State University, Ooi returned to Penang in 1994 and worked as a process engineer for about a year before joining his father's company as marketing and finance director. He went on to become the CEO of the company but then left and started Ideal Property Group in 2002.

City & Country met Ooi recently at a hotel in Kuala Lumpur. He walked into the hotel lobby alone with nothing but a backpack — rather unassuming considering how he has managed to successfully grow his company and other investments in the country.

Ideal Property Group is involved in investment, property development and business process outsourcing. Its investment portfolio includes hotels, serviced apartments, commercial shoplots, development land, palm oil estates and office lots while its property development division is involved in the building of residential, commercial, light industrial and office suites. Business process outsourcing comprises property design and concept service, property marketing advisory, property evaluation and monitoring services, and project financing advisory services.

To date, Ideal Property Group has completed more than RM1 billion worth of projects, mostly in Penang. Its first two projects in Bukit Mertajam and Butterworth started in 2003. The developer has also completed two projects in Cambodia — a luxury gated community called Ideal Homes, comprising 22 bungalow units with a gross development value (GDV) of US$8.1 million (RM24.9 million) and Attwood Business Centre, comprising 165 office units with a GDV of US$15 million. Both projects, located in Phnom Penh, were completed in 2007.

Ooi says the company started buying land about three to four years ago, as earlier projects were mainly on a joint-venture basis with landowners. It owns 70 acres of undeveloped land in Penang, mainly in the Bayan Baru area.

In March, the developer acquired a 12-acre seaside parcel near Queensbay Mall in Bayan Lepas. It plans to reclaim about five acres of land for a private beach. While he declines to share details on the development, Ooi says the initial plans for this much anticipated project involves high-end condominiums, and the developer is targeting both local buyers and buyers from outside of Penang.

On-going projects

Ideal Property Group is busy with projects in the southwest district of Penang, which includes Bayan Baru, Bayan Lepas (including the Free Trade Zone area), Bukit Jambul and Balik Pulau. According to Ooi, the developer's three major on-going projects are its existing integrated development known as One Residence, One Imperial Condominium and the first phase of Ideal Vision Park.

Launched in 2009, the 100-acre One Residence in Sungai Ara has over 1,800 units and is almost sold out. So far, 1,000 units have been completed. The whole project includes Fiera Vista, Tree Residency, Ideal Haus and i-Park.

Fiera Vista comprises four blocks of condominiums with 470 units and a GDV of RM275 million. Built-ups range from 1,450 to 1,650 sq ft and units are priced at RM350 to RM420 psf.

Tree Residency features 2-storey terraced and semi-detached homes, with a total of 316 units. With a GDV of RM315 million, it has built-ups of 2,280 to 3,005 sq ft and units are priced between RM350 and RM400 psf or from RM780,000 per unit.

Ideal Haus consists of 118 units of 2-storey terraced houses with a GDV of about RM100 million. Units are priced between RM925,000 and RM1.4 million each.

i-Park is a mixed-use development with 642 units of apartments and 12 offices. With a GDV of about RM30 million, its low-cost units are priced at RM42,000 while shopoffices are RM300,000 per unit.

Meanwhile, Phase 1 of One Imperial Condominium in Sungai Ara comprises five blocks of condominium with a GDV of RM400 million. It has a total of 768 units, with built-ups ranging from 1,050 to 1,300 sq ft.

"Since its launch in January, 95% of the units have been sold. Units are priced around RM420 to RM450 psf. Phase 2 (Imperial Two), comprising 816 units with a GDV of RM465 million, will be launched at end-2013. The third phase (Imperial Three) — a mixed-use development with a GDV of RM600 million and a total of 745 condo units and 80 shoplots — will be launched at end-2014. Imperial Four will have 545 condo units and a GDV of RM300 million," says Ooi. S P Setia Bhd's Setia Greens project is less than 1km away from the development.

"Each year, we plan to offer about 2,000 units to the market. It could be a phase from each of our existing developments. That is our target," he adds.

Another significant on-going project is Ideal Vision Park in Sungai Ara. Ooi says the first phase, known as Tree Sparina (568 condo units), is open for registration with indicative prices at RM500 to RM550 psf. It is situated in Bayan Lepas, next to the airport.

The freehold 25-acre development has a GDV of RM2 billion. There will be six phases in total, comprising 1,945 condo units, 200 shoplots, a block of small office home office (SoHo) with a total of 190 units, and a purpose-built international school for Straits International School (SIS). Indicative prices for the condo units are RM480 to RM550 psf. The developer plans to keep half the shoplots for recurring income. Meanwhile, SIS targets to accommodate about 800 to 1,000 students and the school will have a net usable area of about 85,000 sq ft.

"My vision is to upgrade the whole Southwest area. Many Penangites, especially those living on the other side of the island, refer to the southwest district area as far (over another hill) or even slightly backward. Before 2005, places like the town area, Tanjung Bungah and Tanjung Tokong were the focus for developments. After 2005, you saw more developers moving to the southwest district.

"Aside from land scarcity on the island and lower land prices, the Penang government has also reduced the number of hillside developments. So I believe the southwest district is the next hot location," Ooi says, adding that he is from Bayan Baru and is, therefore, familiar with the area.

He says it is easier to sell properties for instance in Bayan Baru as he can sell a higher number of properties at a faster rate, compared with selling a lower number of properties with a higher-priced psf at a slower pace in areas such as Tanjung Bungah or Batu Ferringhi.

Prices for the developer's completed projects have seen significant increases over the years. Its 1-Sky condominium project in Bayan Lepas, with a GDV of RM118 million, was launched in 2009 at RM250 psf. Upon completion at end-2012, its 1,250 sq ft unit was sold at RM450 psf. Another example is Sathu Terrace at its One Residence development in Sungai Ara. The 2-storey courtyard terraced homes (22 ft by 75 ft) were launched in 2009 for RM625,000 but recently transacted at RM1.05 million.

Commenting on the property market in Penang, Ooi says, "I think the property market in Penang will be bullish for the next few years, particularly on the island, mainly due to the stricter hillside development guidelines and scarcity of land. Property prices are expected to continue rising as the market continues to boom. There is old money in Penang and people still prefer to invest in properties. Foreigners (about 3%) from Singapore and other countries are buying properties in Penang and we have seen an increase in foreign interest in the past two to three years. The local state government is also doing a good job promoting Penang."

Most of the buyers for Ideal Property Group's projects are from Penang Island and about 20% are from Butterworth, Sungai Petani and Alor Setar. "All our developments are gated and guarded. Our condominiums come with full facilities. Moving forward, we will work on our branding for Ideal Property Group. The first step started in May with our new projects (Ideal Vision Park) where our buyers will enjoy a 24 month plus 24 month defect liability period or warranty for our products. We believe in the quality of our houses and we want our buyers to know that the quality is assured when they buy a property from Ideal. We have also rolled out our customer relationship management programme and I personally head it.

"At least [when] they [customers] see my face, they are happy. It is also good to lead by example. When my colleagues see me do this, they will follow and be passionate when handling customers. Also, any matters can be solved quickly this way. We currently have about 30% to 40% repeat buyers for our projects," he says.

This story first appeared in The Edge weekly edition of Jun10-16, 2013.