DRIVING along the Lebuhraya Puchong-Damansara (LDP) to Sg Buloh, one would not miss the developments opposite Damansara Perdana just before the toll plaza. Known as Empire City, it is currently about 60% complete.
There was a time when construction workers used to work late into the evening till 8pm or 8.30pm. But from the start of the year, one would be hard-pressed to find any movement there even at 10am on a week day.
A check with a sales and marketing staff from Mammoth Empire Holdings Sdn Bhd, the developer of Empire City, reveal that it may be delayed until 2015. The offices, hotels and serviced apartments and shopping mall are being built simultaneously and had been scheduled to be ready by the end-2014.
Empire City is among a couple of fairly large-scale developments along that stretch of the LDP. It is being developed by the same company that built Empire Subang mall in Subang Jaya.
Occupying 23 acres, Empire City is about half the size of Mid Valley City. Several years ago, when Empire City projects were launched, they were sold with the help of agents, and Mammoth Empire declined press interviews.
Today, the management continues to shy away from the press until 14 days ago when the company and Iskandar Investment Bhd signed an agreement to undertake a RM4bil joint venture in Iskandar Malaysia, Johor.
The other hefty project along the LDP is the 48-acre Damansara Avenue development in Bandar Sri Damansara by TA Global Bhd, the property arm of stockbroking business TA Enterprise Bhd. Both sandwich the toll plaza.
Mammoth Empire has more land in the Damansara Perdana area and work is ongoing.
That short stretch of the LDP between Taman Tun Dr Ismail and the Sri Damansara is a hive of activity but the Mammoth Empire management dismisses concerns about “over-building”.
“These days, we have to make decisions fast," executive director Datuk Danny Cheah tells StarBizWeek.“Even the pace of development has to be quickened. We aim to complete the buildings concurrently or we will have this or that building partially completed.”
The firm's managing director Datuk Sean Ng adds: “Phase one of Empire City has RM5bil in gross development value (GDV). What you see now is only part one. We have parts two and three as well. Part two will have a theme park and a concert hall.
"We are providing both the hardware and software. Hotels such as the Marriott and Autograph Collection (Marriott's independent hotel brand) will be opening in phase one."
Ng says the earthworks for phase two of Empire City have started while the third phase is still under planning. Construction will be carried out on a staggered basis. He declines to reveal the total GDV of all three phases.
“We have to deliver first. Tenants for Empire City will surprise the consumer,” he promises. “I always say Malaysia is a dreamland. Whatever you can dream, you can build."
But judging from the morning and evening peak hour traffic and the ongoing MRT construction, one cannot help but wonder how bad the congestion will get before it becomes better.
Empire City, according to various property portals and the company’s official website, will have 6,000 residents and 4,000 office workers. The entire project has 10,000 car parks.
Damansara Avenue, at 48 acres, about the same size as Mid Valley City, will also have office blocks, commercial and retail components. All these developments are expected to add to the congestion in that stretch of less than 10km between Taman Tun Dr Ismail and Sri Damansara.
It is also these “concurrent” developments in and around Damansara Perdana that makes one wonder how infrastructure like transportation and road systems are going to hold up.
This issue came up during a chat with HCK Capital Sdn Bhd. In an interview, group chief executive officer Lim Ching Choy says the company will be selling about 30 storeys of the office block known as HCK Tower.
HCK Tower is among the last blocks to be built in Empire City. HCK Capital is part of the HCK Capital group, which is involved in property development, property investment and management with interests in media, food and beverage and manufacturing businesses.
The firm's executive chairman Tan Sri Clement Hii is also the managing director of the SEGi University Group.
Lim says HCK Tower was purchased last December en bloc as part of the group’s property investment business.
They would now like to sell part of the office block which sits on a four-storey mall, giving it a total of 42 storeys. The HCK group will occupy the top six floors.
“There are five components to this office block – two hotels, a shopping mall, residential components, other offices and leisure and entertainment amenities," he tells StarBizWeek.
He is also positive that HCK Tower's floor plates of 10,500 sq ft will help boost sales.
“Our target are office users within a radius of between 5km and 10km from Empire City. In Damansara Perdana, the office suites are between 500 sq ft and 1,000 sq ft. There are no offices for sale in the 1 Utama development and at The Curve.
“This means that HCK Tower is the only offering with the five components. You may be able to get large floor plates in Bangsar South, but you have to buy the entire block which is between 80,000 sq ft and 100,000 sq ft.
“There is no supply of integrated development with a 10,000 sq ft floor plate and 24-security in this location which is for sale on a strata basis."
The company is selling the office premises at an average of RM760 per sq ft, or about RM8mil for one floor. The price increases as one goes higher.
On the possibility that Empire City may be delayed a bit, Lim says he does not foresee any issues with Mammoth Empire completing the project.
“The completion should be in 2015 and ours is the last block to be built. Mammoth Empire has already completed the shopping floors and the basement parking area. There is no collection (of money) from these components.”
A research report by Knight Frank, Real Estate Highlights for the first half of 2013, notes that the Kuala Lumpur office market continues to display resilience with marginal movements in average rental and occupancy rates. The report says that while there is mixed performance in occupancy, achieved rental rates remain competitive.
“Despite the subdued performance and cautious outlook, developers continue to announce new projects with office space as an integral component,” the report says.
For the first half of the year, the cumulative supply of purpose-built office space in KL City was flat at 48.3 million sq ft while KL City Fringe (including areas such as KL Sentral, Mid Valley City, Bangsar and Pantai) recorded a 2.1 million sq ft increase to 19.6 million sq ft following five new completions – four at KL Sentral and one along Jalan Damansara.