This article first appeared in The Edge Financial Daily, on April 7, 2016.

KUALA LUMPUR: Titijaya Land Bhd, which is expecting the property market to improve by the second half of 2016 as Malaysia’s economy stabilises, has roped in Capitaland Ltd’s wholly-owned unit, The Ascott Ltd, to manage its two upcoming serviced residence projects in Penang and Selangor, which have a collective gross development value (GDV) of RM4.1 billion.

The group inked a residential management agreement yesterday with Ascott to effect the collaboration, which Titijaya group deputy managing director Lim Poh Yit said will serve as a valuable avenue for the property developer to enter the international market.

“We will be able to benefit from Ascott’s global platform, professional management and marketing road map set out for Titijaya’s anticipated developments,” he told pressmen after the agreement was signed.

The deal is for 10 years, with an optional five-year extension, if mutually agreed on. Titijaya will remain the rightful owner of the land, property and facilities throughout the term.

The Penang project is located on the south-east of the island. The serviced residence has a GDV of RM2.6 billion, with 200 units, ranging from studio to two-bedroom apartments, said Poh Yit.

For the RM1.5 billion GDV Shah Alam project, Poh Yit said the 250-unit serviced residence in Glenmarie will be located at the intersection of major highways — the Elite Highway, the Guthrie Corridor Expressway and the New Klang Valley Expressway.

“The property will be part of a mixed-use development that houses offices and one of the largest shopping malls in that vicinity,” he said.

Titijaya expects to launch both projects by 2017, and will offer guests a choice of studios, one- and two-bedroom apartments with facilities such as a gymnasium, swimming pool, launderette and residents’ lounge.

Poh Yit said the partnership will deliver synergistic benefits to both parties by leveraging on Ascott’s global presence and Titijaya’s development expertise.

“Ascott’s core competency has been in the extended stay market, which has put them in a very resilient position and given them a strong competitive edge, with an excellent occupancy rate track record,” he said.

Meanwhile, Titijaya group managing director Tan Sri Lim Soon Peng shared that he expects the property market to improve in the second half of the year.

“We are seeing oil prices and [the] ringgit beginning to stabilise now, which help in creating a [more] stable economy by the second half of 2016, and brings about a better property market as well, as banks will be more willing to lend during this kind of environment,” Soon Peng told The Edge Financial Daily after the signing ceremony.

But Soon Peng said there are still opportunities in the current environment — just that location has become an even more important factor that determines the success of a project.

“Urban demand remains strong due to urbanisation. So if we price a unit below RM500,000, there will still be demand. But high-end products in suburban areas could be slow as buyers are getting more cautious,” he said.