SITIAWAN-based Yu Neh Huat Bhd's presence in the Klang Valley property market will be further strengthened when the group makes Kuala Lumpur its corporate headquarters by 2008.
Steering the group's plans is executive chairman Datuk Dr Yu Kuan Chon who sees the Klang Valley as the country’s fastest growing market, and the place to be for a developer.
According to Dr Yu, it has become “quite necessary” for developers to have a presence in this robust market, especially Kuala Lumpur, in order to join the league of the reputable and leading property boys.
“It is not enough to be the market leader in your home ground although that is a good start for most companies. Beyond those start-up years, if the ambition is to grow bigger in the property game, then the place to be is Kuala Lumpur,” he told StarBiz in an interview.
Having projects in the right addresses and within the vicinity of other high profile developments, especially in the Kuala Lumpur inner city, is an advantage being sought by developers these days. Projects situated in these locations have the power to raise the profile and reputation of these companies.
Maintaining a high profile certainly bodes well for the bottomlines of these companies as most of these projects with good addresses can provide very comfortable margins.
Yu Neh Huat's efforts to become KL-focused will pay off handsomely for the group when it sees its revenue and earnings surge in the next six years.
Dr Yu said the group's three projects in Kuala Lumpur - 163 Residence, Wisma YNH and Radiant Kiara - would contribute to 80% of group earnings from financial years ending Dec 31, 2006 to 2012.
Presently, all the group's earnings are contributed by Yu Neh Huat's traditional markets in Sitiawan and Ipoh. The group's bread-and-butter project, Bandar Manjung Point, located on 1,000 acres in the Sitiawan-Sri Manjung-Lumpur corridor, will feature 20,000 affordable homes and commercial properties for a total gross development value (GDV) of RM1.5bil.
About 500 units with sale value of RM100mil are expected to be launched a year. The project, which took off more than 15 years ago, will take another 20 years to complete.
The other ongoing projects are commercial developments in Ipoh - Medan Ipoh and Medan Bercham.
Last year, the three projects in Perak brought in sales of RM110mil and they will continue to register monthly sales of RM300,000 and regular cashflow to the group. Yu Neh Huat's three Kuala Lumpur projects are set to bring in sales.
Marking the group's debut in Kuala Lumpur is 163 Residence in Jalan Perak. With an average price tag of RM800 per sq ft, 163 Residence (comprising 310 serviced residences in a 55-storey block, a retail podium and a 14-storey office block) will yield a total GDV of RM218mil. Since the launch of the serviced residences in February, sales of between 60% and 70% have been achieved. The fully furnished residences with built-up of 450 to 2,500 sq ft are priced from RM800 to RM1,000 per sq ft for a GDV of RM80mil.
Dr Yu said buyers who leased back their units to the company, to be operated as serviced residences by a reputable hospitality group, would be able to reap guaranteed rate of return of 8% per annum for two years. The office block will be sold en-bloc to a corporate buyer.
Yu said the group's Kuala Lumpur developments would have a mix of 70% commercial and 30% residential components in view of their well-sought after addresses.
Two other projects in the pipeline are a condominium development, Radiant Kiara in Mont'Kiara, and a commercial- cum-serviced residences in Jalan Sultan Ismail, with the proposed name of Wisma YNH for the office block and 168 Residence for the serviced suites
Supported by their Kuala Lumpur inner city addresses, both 163 Residence and Menara YNH have the advantage of high visibility and limited supply, which will drive demand for these properties.
Radiant Mont'Kiara, scheduled for launch at the end of the year, will feature 238 condominiums of 1,800 to 2,100 sq ft. The homes will be priced from RM330 per sq ft. Construction is scheduled to kick off next month for completion in 2008.
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