Singapore-based contractor-cum-property developer Sim Lian Group Ltd has seen early signs of success in its first foray into the Kuala Lumpur central business district.
The 33-storey Grade A office block in KL Trillion, a mixed development undertaken by Sim Lian’s unit Perumahan SLG Central Sdn Bhd in Jalan Tun Razak, has seen sales of 38% following a preview in Singapore early last month.
The RM250 million office block comprises 216 units the size of which ranges from 1,076 to 2,583 sq ft. The units in the office tower are now open for preview sales in Kuala Lumpur, says Perumahan SLG Central director George Wan.
“So far, 50% of the buyers have been foreigners,” he observes. “The average selling price of the units is RM898 psf. This will be increased gradually. It is the promotion period now and [prices] will see an increase of 5%.”
Besides the Green Building Index-certified office block, the freehold project consists of a 5-storey podium with 40 signature office units (built-up: 1,135 to 2,250 sq ft) and two 40-storey towers of serviced apartments above the podium. It also offers more than 1,300 parking bays.
The developer has not decided whether to sell or keep the offices in the podium yet as it is still awaiting approval from the relevant authorities. This is expected in the next three to four months after which the offices will be launched.
Located next to The Intermark — the redevelopment of City Square by MGPA Asia Developments in Jalan Tun Razak — the 4.5-acre KL Trillion has one million sq ft of sellable space and an estimated gross development value (GDV) of more than RM1 billion.
The developer says it launched the office block, which has a saleable area of 304,587 sq ft and is expected to be completed in four years, now due to the favourable economic conditions.
“It is called Trillion because we have three blocks. Also, the name Trillion sounds abundant, plentiful and prosperous. That will help sales. KL Trillion is by far the group’s biggest project in Malaysia in terms of value. Our two landed property projects in Johor have a GDV of less than RM100 million each,” Wan says.
He adds that offices are a good investment here, with yields in the KL CBD at about 9% based on current market rents for Grade A offices.
Sim Lian’s Taman Bukit Bayu development in Senai, Johor, was launched in June last year. Located within Iskandar Malaysia and expected to be completed by December next year, it offers 106 units of 2-storey terraced homes and four semi-detached homes.
Sim Lian also entered into a joint venture with landowners to develop 30 acres in Kulai into a landed property township called Desa Baiduri. It launched 19 shoplots at the end of last year, half of which have been sold so far.
Coming back to KL Trillion, the built-up of the serviced apartments ranges from 2,000 to 3,000 sq ft. The developer may build the units as serviced residences in move-in condition, equipped with kitchen cabinets, wardrobes, air conditioners, floor furnishes and furniture. It came up with the idea after seeing the high occupancy rate at nearby PNB Darby Park Executive Suites.
“Sometimes, Middle Eastern people come here for two months to shop and they don’t want to stay in the hotels because they want to cook. A serviced suite would be ideal for them. Alternatively, we may sell them as serviced residences because investors may want to buy them as a holiday place in KL or rent them out. We haven’t decided whether to run them as serviced residences — meaning we don’t sell — or go for the sell-and-leaseback option and appoint an operator,” Wan says.
The facilities in KL Trillion include a 300m jogging track, tennis court, squash courts, clubhouse, gym, children’s pool, childcare centre, swimming pool and Jacuzzi on the environmental deck of the sixth floor.
According to Wan, KL Trillion is ideally located — fronting Jalan Tun Razak — and offers cityscapes and views of Genting Highlands. It is a convenient place for people to work and stay.
Although KL Trillion will keep the developer busy for four years, it is looking for other land proposals, especially in high-end locations like Mont’Kiara and Damansara, after seeing the good response to the development.
“We will do one project at a time; it is more prudent that way. You don’t put all in one basket and get jammed up later. Of course, as time goes by, land cost will go up but the selling price will also go up accordingly.
“We think KL still has the potential because the land here is relatively affordable compared to other Asian cities due to the government’s liberalisation [of land regulations]. We prefer to do it on our own because we are an experienced developer and contractor but [so far there has been] nothing concrete yet,” says Wan.
Sim Lian had started off as a construction company in 1976. It was listed on the Singapore Exchange in 2000 and ventured into property development the following year.
The group is also involved in other supporting businesses like electrical and civil engineering, metal works, trading of industrial lubricants and the leasing of mobile sanitation.
Its profit in FY2010 was S$108.2 million compared with S$39.65 million the previous year. Revenue too increased, from S$575.45 million to S$759.7 million.
To date, Sim Lian has launched more than 12 projects in Singapore and Johor, including The Dew Executive Condominium, The Jade, The Pearl @ Mount Faber and Viz @ Holland. It was also the first private developer in Singapore to embark on the Housing Development Board’s pilot design, build and sell scheme with the development of The Premiere @ Tampines.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 857, May 9-15, 2011