UNITED Malayan Land Bhd (UM Land) is eyeing more high-end boutique development, especially serviced residences in Kuala Lumpur and other cities in the country, to cater to the fast-changing lifestyle of city folks.
Encouraged by the good response to its maiden project, Seri Bukit Ceylon serviced residences, which registered a take-up rate of 70% since its April launch, the group is looking for more strategic land for such development.
UM Land chief executive officer Ismail Abd Halim said the foray into niche development would complement the group's core business of township development and provide a buffer for a stable income stream to the group.
Although property is a stable industry, we need to generate new income stream to ensure shareholders get to enjoy good dividend payout when there is a general economic slowdown. Minority shareholders will turn to dividend income as there is less capital gain to be made in a soft equity market. Hence, the need to venture into an array of income-generating activities during such times, he told StarBiz in an interview.
Ismail said while a relatively mature township was able to churn out income of about RM40mil to RM50mil a year during the good times, it could be affected by about 60% in a slowdown.
UM Land is building two townships the 3,700-acre Bandar Seri Alam in Johor and Bandar Seri Putra on 898 acres in Bangi, Selangor.
He said although land cost was much lower in township development, it was considerably higher in boutique projects, especially in places like Kuala Lumpur and other cities.
The 32,000-sq ft plot at Lorong Ceylon was purchased from Danaharta in 2000 for RM16.5mil.
Ismail said the advantage of boutique development was that it had a shorter turnaround time of between three and four years while township development usually would take more than 10 years.
Seri Bukit Ceylon, located within KL's Golden Triangle and about five minutes' walk from Starhill and Lot 10 retail malls, caters to the fast-growing group of young professionals and executives who like to be where the action is, according to Ismail.
This whole new experience of convenience of city living is what we are offering and with just a touch of an elevator button they are off to work, shopping, recreation and entertainment, all within easy reach without the hassle of being stuck in the rush-hour traffic, he said.
Ismail said that with broadband Internet connectivity and state-of-the-art facilities, a home at Seri Bukit Ceylon could also double up as a small-office home-office, a trend fast catching up among the young.
The 25-storey block offers 247 serviced apartments, duplex business suites and penthouses. The property comes with attractive leaseback options to corporate investors or individuals and will have landscaped courtyards, barbeque areas and self-serviced laundrettes. Other facilities include a swimming pool, wading pool, sauna, spa and a gymnasium.
In March, project developer UM Residences Sdn Bhd signed an agreement with The Ascott Group of Singapore, a leading international serviced residence chain, for the sale of 48 units of the serviced residences. The project will be marketed under the Somerset brand name.
A total of 96 units will be operated as serviced apartments under the name Somerset Bukit Ceylon Kuala Lumpur. We are looking to sell 48 more units en-bloc to another buyer on leaseback to Ascott for its serviced apartment operation, he said.
UM Land chief operating officer Henry Leong said the Ascott name had lent prestige to the whole development as the five-star Ascott hotels in major cities around the world were distinct for their high-service standards.
We are glad to be associated with Ascott and with the hospitality sector showing signs of recovery, the project will be timely to capture the next wave of upswing, he said.
Construction of the RM80mil project commenced recently and expected to be completed by early 2005. Another launch is slated later this year, offering 27 duplex units and five penthouses.
UM Residences general manager Chia Lui Meng said the 1,000-sq ft duplex units located on the three-storey podium were good for either residences or business suites.
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