EUPE Corp Bhd may not be a familiar name to many of us. However, the Kedah-based developer has been around for more than 25 years. Group managing director and CEO Datuk Beh Huck Lee says it commands 50% of the property market in Sungai Petani, Kedah, and has the capacity to deliver more than 1,200 houses a year.
To date, Eupe Corp has completed more than 20,000 residential homes, offices, and commercial and industrial units throughout the state. It also owns and manages the 18-hole Cinta Sayang Golf & Country Resort in Sungai Petani and built the town's first high-end condominiums, called Sky Residences, within the resort.
During their launch in 2008, the condos were sold for RM220,000 onwards. Recently, one of the 1,500 sq ft units changed hands at RM540,000.
Eupe Corp is now looking to expand and expects to launch two projects in the Klang Valley later this year, or by 2Q2014. The first will be in Bangsar South and the second in Cheras. Both are on a joint-venture (JV) basis with the landowners. Also in the pipeline are residential projects in Australia.
"Being our first in Kuala Lumpur, this [Bangsar South project] is very important to us. We are well-known in Kedah as we have been developing there for a long time. We have gone through two recessions. Annually, we have the capacity to deliver more than 1,200 houses," Beh, who was raised in Sungai Petani, tells City & Country.
"In KL, people do not know us, so we lean on our alliances. Fortunately, we are also dealing with suppliers and contractors, some of whom we have dealt with before.
When asked why Eupe Corp decided to expand into the Klang Valley, he says, "When we look at the market we are in, we like to pride ourselves on being township developers, but clearly, the affordability level in Kedah is a lot lower than in the Klang Valley. We have the benefit of stability in sales and construction, as it takes a certain period to complete [a project], so you know how your cash flow is.
"We have a big [300-acre] landbank in Kedah. Now we are just trying to maximise returns to our shareholders. KL is definitely more exciting and the people can afford a more expensive and up-market type of development. At the same time, I can take advantage of the low gearing percentage [cash flow predictability] that we have. So, we have the best of both worlds.
"I also see it from another angle. KL gives me the opportunity to learn. I can get exposed to a new, vibrant market."Choice of locations
The first project, a 50:50 joint venture with the landowner, will come up on a three-acre freehold parcel fronting the Federal Highway, next to UOA Group's Bangsar South development.
Why Bangsar South? Explains Beh, "Since 2009, I have hired one person to stay here and help source land for us. There are so many suburbs here and each is different in nature. The competitors and markets are different. We started combing the market, marking out the areas we wanted to get into. We then started talking to the agents.
"The location — Bangsar South, is very close to Mid Valley City and appeals to the younger generation who enjoy the facilities and infrastructure. To the west is Universiti Malaya. A project there could have an impact on the area and we think the location is great."
The indicative gross development value (GDV) of the project, unofficially known as Resonance, is close to RM450 million. When it will be launched depends on the approvals. The initial plan calls for three blocks of apartments, SoVos and commercial units. Pending the approvals, the three blocks could be as high as 45 storeys.
The JV — Eupe Bangsar South Development (JV) Sdn Bhd, is between Eupe Corp's wholly-owned subsidiary Eupe Kemajuan Sdn Bhd and Bangsar South Developments Sdn Bhd.
"We feel the luxury of living today is not about owning the most expensive thing or the most things for that matter. Today, property prices of RM700 psf and RM800 psf are actually beyond the reach of a lot of people. Yet, property developers are competing to develop the most luxurious, the most high-end … we are starting to go overboard," observes Beh.
"Who is going to pay for this? The buyers. Smart buyers know there will be a cap. So everyone [developers] going in the same direction is not necessarily a good strategy."
As for the company's Cheras project called The Weave, details are not available as plans have not been finalised.
According to a filing with Bursa Malaysia, the leasehold land for the project was acquired from Datuk Bandar Kuala Lumpur in 2012 for RM35 million.
Will the developer be looking at other states apart from Kedah and the Klang Valley? Beh says Eupe Corp has plans for two residential projects in Australia, with a combined GDV of more than RM140 million.
"We are not looking to expand further at the moment. Our capability as a township developer could be applicable to any town in Malaysia. However, we will be focusing on our projects in hand over the next two years," he adds.
Moving in the same direction
Eupe Corp was founded by Datuk Paduka Beh Heng Seong and Datuk Wira Tajuddin in 1986 as Eupe Kemajuan Sdn Bhd.
Datuk Beh Huck Lee, group managing director and CEO, took over from his father in 1995 when he was just 25 years old. Raised in Sungai Petani, the eldest son in the family went to Australia for his tertiary education and graduated in 1994 with a degree in Commerce and Engineering.
"I actually did not want to be in property. But my father wanted to retire to join the government, so he needed someone else to take over and I was half forced into it," he laughs.
"To be frank, when I took over, my challenge was not to complete the projects, as we had competent people doing that, some of whom had been with him for more than 15 years.
"My task was to change Eupe Corp from a 'Chinaman company', where there was a president and that president was a dictator who knew everything. That kind of structure is less inclusive and does not allow gradual improvement of the organisation, which is not necessarily right and fitting for this era and the market. When I first went into the company, I was one of the youngest CEOs," Beh says.
"I am interested to see how things are put together efficiently and eventually realising your dream. Between property and manufacturing, I find property to have a more unique blend as every project could be different and you deal a lot with the end products and with the customers you sell your products to.
"If I were in manufacturing, I could be making a product and selling to someone I did not know … it is the marketing person who will tell me what products are in demand. In property, we deal directly with the customers and we have a chance to come up with something to offer them, and be efficient in the building process while controlling the cost and the delivery. This includes the interior design. So, there is a good blend in this special industry."
Beh says his main goal is to make everything more systematic. "When I first joined, I could not find answers to anything. I actually took tuition from the employees. After working hours, I asked them to guide me in filling up certain forms. I asked the people in the purchasing department to introduce me to our suppliers. That was what I went through to learn everything, from how walls are plastered to learning the whole process. The learning part was fun actually," he smiles.
In 1994, on the advice of a corporate banker friend, Beh started preparations to list the company, which eventually took place in 1997.
Asked if his dad was impressed with him, Beh laughs. "I've got to ask him," he says, "but seriously, I am thankful to him because he placed his trust in me. When he stepped out of the company, he really left all the decisions to me. In terms of influence, perhaps he shaped my personality but in terms of business strategies, I think our styles are quite different and we [the company] have changed quite a lot."
The company is a lot more structured now, Beh points out. Before, his father called all the shots, but Beh has since delegated the responsibilities to his team and believes the company is more integrated now.
Talking about his journey as a developer thus far, he says, "Holding this position, I want to make it an organisation that fits not only my aims but also the corporate career aims of all the employees, so we can grow together.
"The corporation has a greater mission. It must have a life. It is there because of the people behind it, so we must get them all together and move them all in the same direction.
"Many a time, when you hit hurdles and when you look at this as a challenge beyond just reporting the numbers [profit], it becomes a mission that is both exciting and challenging."
This story first appeared in The Edge weekly edition of July 22-28, 2013.