This article first appeared in City & Country, The Edge Malaysia Weekly on December 5, 2022 - December 11, 2022

Boutique property developer Rivertree Group is debuting its first industrial project Esteem Business Park in Meru, Klang.

Formerly a contractor, the company ventured into property development in 2015. Some of its earliest projects include shopoffice development 20 Rivertree in Serdang and condominium Sutera Pines in Sungai Long.

Since then, it has completed several other projects such as Garisan — a 2½-storey terraced homes development — in Puchong, and Rivertree Signatures, a retail development in Bukit Raja, Klang.

Rivertree Signatures has two commercial phases, namely DUO and UNO, as well as a retro-inspired KFC drive-thru. As we make ourselves comfortable in the developer’s latest Bukit Raja sales gallery, which occupies one of the contemporary-looking corner units at UNO, Rivertree group managing director Datuk Simon David Leong remarks that the shops are doing better than he expected.

“We didn’t expect the take-up rate to be so good. Launched at end-2019, the units at UNO were sold out during construction, handed over in April this year and have been 100% tenanted since then. Many units are currently undergoing renovations,” he says during the exclusive interview with City & Country.

In addition to the standalone KFC drive-thru, other confirmed tenants at UNO include A&W, emart24, Pizza Hut, Komugi, Coffee Bean & Tea Leaf, Da Long Yi Hot Pot, Tealive and 7-Eleven’s 7 Café. The commercial development has around 80% of F&B tenants, Leong adds.

With a gross development value (GDV) of RM79.17 million, UNO, the second phase of Rivertree Signatures, comprises 24 units of 1-storey shops with mezzanine floors and seven units of 2-storey, dual-frontage shops with mezzanine floors.

The 1- and 2-storey shops at UNO, measuring 22ft by 77ft and 37ft by 83ft respectively, were priced from RM1.71 million to RM3.68 million. The shops are currently fetching monthly rents ranging from RM7,500 (intermediate) to RM13,000 (corner) for the 1-storey units and from RM10,000 (intermediate) to RM18,000 (corner) for the 2-storey units, Leong notes.

Rivertree sales director Nancy C P Ng says: “As a small developer, we don’t have so many projects at one time, so we are able to spend time and energy in ensuring that for each and every one of our projects, we assist purchasers [with leasing out their units]. For example, at UNO, we provided [complimentary] pre-leasing service nine months before it was completed. And we are glad that all the buyers have agreed to let us [manage] the tenant mix.”

Leong chimes in: “We try to control the tenant mix as much as possible so that the property values go up by virtue of their yields. And the owners realise that letting us handle [the leasing] is good for them.”

Located at the heart of the Taman Perindustrian Meru Selatan industrial hub and near established townships such as Bandar Setia Alam, Bandar Bukit Raja, Meru and Kapar, Esteem Business Park spans 10.03 acres.

“Industrial development has been booming over the last two years, especially after supply chain disruptions. We saw the trend [of industrial developments] coming and bought this piece of land two years ago. We were supposed to start work last year, but [completing the land deals] took us awhile due to the [nationwide lockdowns],” says Leong.

With a GDV of RM180 million, the freehold, medium industrial development comprises 39 industrial units, which will be developed over two phases.

Phase 1, comprising 19 units, had its soft launch in June. According to Ng, all units except one have been sold. “We have one unit left as the [prospective buyer’s] loan did not go through. For the other units sold, we have a balanced mix of investors and end users mainly in businesses such as furniture, e-commerce, logistics and warehousing.”

Esteem Business Park is accessible via Jalan Meru and Jalan Haji Salleh, and close to seaports and major expressways, including the NKVE Setia Alam Link, Guthrie Corridor Expressway, Elite Highway, NKVE and Shapadu Highway.

Intermediate units in Phase 1 with a built-up of 8,142 sq ft measure 35ft by 138.7ft. End lots with a built-up of 9,322 sq ft measure 40ft by 138.7ft while the corner units with a built-up of 10,517 sq ft measure 45ft by 138.7ft. Unit prices in the first phase range from RM3.998 million to RM4.718 million.

In addition to its innovative and modern design featuring full-height glazed windows and large screens that allow for natural lighting and good ventilation, Esteem Business Park’s unique feature is its spacious built-ups.

“Although technically a terraced factory development, the units are very big. Hence, we call it a ‘super-sized jumbo factory’. There is even a 40ft-wide parking bay for cars and even a trailer. These are typically what you get with semidee or detached factories,” Ng points out.

Also, the units are 2-storey, in addition to having a mezzanine floor in front, adds Leong.

“Most factories are 1-storey at the back. In our case, we have three floors in front, including the mezzanine for the office, and an entire first floor.

“Why did we do this? This is a post-Covid design. Due to the boom in logistics and last-mile delivery, [such features] are very much in demand now as businesses are stocking up several months in advance in case of another lockdown, rather than the 11th-hour or just-in-time stocking,” he explains.

Moreover, Esteem Business Park’s flexible floor layouts can cater to various industries. For example, the units can be used as a service centre, showroom, factory outlet, central kitchen, cold storage, warehouse, logistics and courier service centre.

The units offer double ceiling heights of 30ft and 10ft to add to their flexibility and maximum space utilisation.

Says Ng: “The standard height for terraced factories is about 25ft, except for the built-to-suit ones. At Esteem Business Park, we follow a semidee specification, with a first floor that has a 10ft ceiling height.”

The units will also come ready with a hoist for goods, which can be upgraded to a service lift for passengers and cargo at an additional RM80,000 (for Phase 1). Its heavy-duty ground and first floors can take a maximum load of 10kPa, whereas the built-in mezzanine, up to 5kPa. Units come with a power supply of 200Amps.

The units’ motorised roller shutter, which is 16ft in height, will be convenient for forklift access while their unobstructed wide frontage and driveway will allow a direct and sheltered drive-in for loading and unloading.

The development’s main access roads of 66ft and 40ft-wide dedicated back roads provide convenient access for trucks and lorries, as well as their ease of circulation. For security, there is 5ft of external fencing as well as CCTVs and alarm points for each unit.

Leong also highlights that Esteem Business Park is a proper medium industrial development. “It is very common for the industrial players here to operate their medium industries in light industrial factories. There are also plenty of illegal factories around. We foresee [the legalisation of illegal factories programme] in Klang to get more aggressive as it is already happening, and the fines are heavy.  People may not realise it now but in the next one to two years, we believe more companies, especially if they are listed, will want a proper medium industrial development.”

As with its earlier projects, the developer will also offer complimentary pre-leasing services for Esteem Business Park’s investor buyers, he adds. 

Ng adds that the developer will also build a guardhouse at Esteem Business Park. “We believe this development will do well because companies want to conduct business with peace of mind.”

The remaining 20 units in Phase 2 will be launched in 2Q2023. These will offer similar factory sizes with built-ups ranging from 8,006 sq ft for the intermediate units, 9,161 sq ft for the end lots and 10,330 sq ft for the corner units. Prices have yet to be firmed up by the developer.

Ng foresees Esteem Business Park will attract more trading companies. “Such companies operating in typical shoplots will eventually look at our product when it is ready. This is because typical shoplots are around 1,500 sq ft per unit. If they rent two 3-storey shoplots en bloc, which add up to around 9,000 sq ft in total, the rent is more expensive than leasing a factory unit here.”

She adds that the hoist is also an added convenience for transporting goods up and down the property, compared to climbing  up the stairs in a typical shoplot format.

According to Ng, industrial units in the area are fetching rents of around RM2 psf. “At RM2 psf, buyers are still getting a return on investment that is above 5.6%.

Referring to the tagline “We Dare to be Different” emblazoned on a wall in the sales gallery, Ng adds: “We always like to recreate and reinvent. We like to find the niche that the market does not have.”

On the drawing board is a co-living development in KL city centre. Details are still under wraps, but Leong lets on that the project will be “the first-of-its-kind in Malaysia”.

“This is because there are only three to four of such products in the world,” he claims.

The KLCC project, which is slated to be launched in 4Q2023, will be designed by architecture firm RSP Architect along with project consultants such as RWDI and Thornton Tomasetti, according to Leong.

“They are the ones involved in the KLCC and Merdeka 118 projects. Basically, everyone here is well known except for Rivertree,” he quips.

Also in the planning stage is a mixed-use development with an F&B component. “We find F&B very interesting and an industry we can invest in because Malaysians like to eat,” Leong observes.

“We always believe that developments shouldn’t be done for the sake of just doing [them]. It becomes very dull. We want to keep developments lively and interesting, like UNO [and the retro-inspired KFC] … who would have thought that we could do something like this in Klang, but it worked.”

Meanwhile, the business will continue to run lean, Leong stresses. “The Malaysian market is very small, and we believe we have to remain very niche and selective. We see the market bouncing back only in 2024. In the meantime, we will continue to keep an ear on the ground.”

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