This article first appeared in City & Country, The Edge Malaysia Weekly on December 20, 2021 - December 26, 2021

For Kedah-based Eupe Corp Bhd, developing its first project in the Klang Valley — Novum at South Bangsar — is about creating a new way of life for its residents, an iconic building that defines the location and a new way of connecting with people. After all, Novum means “new thing” in Latin.

Managing director Datuk Beh Huck Lee believes that a property developer’s responsibilities and challenges go beyond what the industry is trying to address today. Developers should build a sustainable residence for the people who are going to live there for the years to come, he tells City & Country.

“At Eupe, we talk about the core concept of ‘shared value’, which is about creating more value for customers. What we offer to people is better value today that will ultimately benefit us at the later stage. That’s why Eupe is trying to do things differently from others. We believe that in whatever we do, we do our best. We cannot control everything; we just take that leap of faith,” says Beh.

Eupe could always choose the easy path, he adds. “We know the location is good. We could have easily chosen the quick kill, sell it as fast as possible and get the highest return on investment (ROI) possible. Or, we could go for the maximum profit and develop a commercial development. Alternatively, we could choose the conventional method, which is copying what others have been doing.”

“[But] we want to be different, so we have to be better than our competitors,” Beh insists.

Such an approach explains how Novum won The Edge Malaysia-PEPS Value Creation Award this year.

The innovation that Novum aspires to create is defined in three ways: “New Bangsar”, “New Lifestyle” and “New Digital Life”.

In New Bangsar, Novum captures the spirit of its location in South Bangsar, which boasts excellent internet connectivity and transport accessibility, along with a myriad of retail, service and leisure facilities.

New Lifestyle is shown in its lifestyle facilities that push innovation and creativity to new heights. The features include a gourmet kitchen, a business centre and an entertainment hub with the latest in home cinema equipment. There are also “moodscapes” to cater for every lifestyle need, from tranquil spaces for quiet moments to shared spaces residents can enjoy with friends and family, and active spaces for all fitness and well-being needs.

New Digital Life is a convenience offered by the developer’s very own app through which residents can order groceries, book Novum facilities and services, as well as get the latest lifestyle information, via their smartphone.

Launched in March 2016, the RM575 million Novum is a mixed-use development that offers 654 apartment units, 75 small office/home office (SoHo) units and three shoplots in three blocks. Ranging from 647 to 1,441 sq ft, the units are furnished with kitchen cabinets, a kitchen hood and hob, microwave, air conditioner, a hot-water system and shower screen.

In June last year, all apartment and SoHo units were sold and handed over to their buyers, who are paying a maintenance fee of 40 sen psf. The development’s occupancy rate is about 72%.

Being a new player in the Klang Valley is a “key killer”, as local buyers would not have heard of it, says Beh. In Novum’s case, it led to more buyers from closer to its base up north during the initial marketing phase. Later, more and more Klang Valley buyers came on board until buyers from the north ended up forming less than 10% of the total. They comprised four main groups: business owners, young professionals, senior corporate employees and upgraders.

An earlier issue for Novum was the longish site of 66m by 156m. It was also flanked by two empty lots, whose starting date of development was unknown to Beh.

“When we launched the project in 2016, we didn’t just open and sell [it] to the public. Our marketing team personally engaged those who had expressed interest to get their feedback. We then worked on the process of improving the project, and we made some changes to the concept to make it better,” he says.

“For the two [lots] next to ours, we needed to ensure that the residents would still feel comfortable when development began. So, a lot of thought went into the project. It was also about making sure the building would be well maintained over time.”

Novum was intended to be an iconic development from the start, shares Beh, incorporated within the developer’s four sustainable eco-

design frameworks — iconic design, healthy air, green community and smart connectivity. Each of these design principles is integrated into the project to create greater long-term value for buyers and stakeholders.

He explains that an iconic development is “not to show that the residents are rich” but about giving them an identity. He believes that once the residents define the project as something they can associate with, they will have a certain pride in the place and call it home.

“We put in a lot of effort and thought into creating distinctive lifestyle components for the development. We also properly linked the facilities, and we aimed to build a community where people would want to interact with each other. Pockets of garden retreats for recreation have been incorporated into the design of the towers. When the development becomes something [the residents] treasure, they will take care of it,” he points out.

“I keep talking about iconic buildings because I think for long-term appreciation, people must identify with the buildings, and we want to give Novum a unique identity. We are still improving the development because it is not unusual to overlook certain things during the planning stage. Also, we are trying to put in things that will help reduce the maintenance cost.”

According to five recorded transactions, the capital appreciation ranges from 12.5% to 22.4%, which Beh thinks is a reasonable rate. One of the transactions involved a serviced apartment — a Type B4a unit that was sold to the first purchaser at RM817,000 in April 2016. This unit was subsequently sold on the secondary market for RM1 million in February 2020, translating into an upside of 22.4% in about four years.

Beh attributes it to the fact that the group did not target the investor market. “We have been targeting owner-occupiers, and that’s why we have been putting effort into fulfilling their needs. When they appreciate what you put in, and if they have holding power, they will not simply rent the place to anyone. If we can entice them to live here, then we can have a very vibrant place. This will reduce investment activities such as Airbnb which, in turn, will ensure that the amenities will be properly used and maintained. This will translate into people wanting this space and eventually lead to higher appreciation potential. It is a circle, and you have to start it right.”

With regard to capital appreciation, he says, “As long as we can beat our competitors by a bit, we are happy. My benchmark is that the rental always has to be better than tha of the neighbours by 1% to 2%. Also, I believe once buyers get hooked to a building, the subsale volume will drop, which in turn will give a high appreciation.”

According to Beh, the formula for success is, first and foremost, developers have to be reasonable and keep some money on the table to allow some upside for the buyers. Second, it is about developing a place where one wants to live and not think about playing it safe.

Then, it is important for developers to give their properties a unique appeal to certain groups of people, and avoid being too generic without any special offerings.

“Most importantly, while planning, implementation and everything else are crucial, property management is [equally] important to make sure the property is properly managed,” says Beh.

“We are also exploring new technology to be introduced to the property to reduce long-term maintenance cost. Of course, macroeconomics is also important.”

In the end, he surmises, “There is no magic formula. Just do the things that need to be done.”

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