The 7-acre mixed development will have a PJ Utara address
Glomac Bhd will be launching the second phase of its mixed commercial development Glomac Centro V this weekend, three years after it launched its first phase in 2012.
Both the Centro projects are located next to each other – the second phase comes with alphabet ‘V’ – on 7 acres in Kayu Ara, next to the Sprint Highway with a Petaling Jaya Utara address.
The concept for both is fairly similar with developments in the same genre – with a total of 738 units sitting on top of two-storey commercial shop offices. The differentiating factor is the price/built-up areas of the serviced apartments.
The interest in the two leasehold projects is not so much its design or overall layout but its location and future potential.
It is tucked in the middle of squatter-like surroundings. The last decade or so have seen small-scale developers entering the scene, converting pockets of land into low and medium-rised apartments or town houses. However, these projects tend to be smallish in nature with units ranging between 10 and 20, or thereabouts.
Notwithstanding the potential for future development, one must bear in mind that getting rid of squatters is no easy task. A drive in the area in the evening will reveal that they have ready water and electricity supply, which means clearing the area for development will take time and resources. Some of them are so entrenched there that they have even built bungalows there.
The serviced apartments units in second phase Glomac Centro V is smaller than the ones in phase one. Built-up areas range from 560 sq ft to 1,000 sq ft, says Glomac group managing director/CEO Datuk Seri Fateh Iskandar Mohamed Mansor in an email.
The combined GDV for the new phase is RM277mil, with the residential portion having a GDV of RM230mil, and RM47mil for the shop offices. It will have 394 apartment units on 26 storeys and 18 units of double-storey, double frontage shop offices on 3.1 acres.
There is a premium on both projects with average price for the serviced apartments at RM 817 per sq ft (psf) and RM882 psf for the shop-offices. Maintenance for the serviced apartments is at Rm4.40 per share unit which is equivalent to about 35 sen psf and the shop offices at RM8.70 per share unit (about 60 sen psf). Specification for phase two will be higher compared to phase one. The number of car parks vary according to size of units. There are no additional car parks for sale.
Phase two will have pool and other condominium facilities. There are provisions for a cafeteria, day care centre, laundry and surau.
Says Fateh Iskandar, who is also Real Estate and Housing Developers’ Association Malaysia president: “With the increase in cost of materials and the impact of the goods and services tax (non-claimable for residentials), the overall cost of construction has increased by 30% since the first launch three years ago. Therefore, the pricing has followed accordingly. However, due to intelligent unit designs, 59% of all units available will be under RM500,000 and all units under RM1mil, with two car parks included for all units.”
Phase one was launched in 2012, when property prices were running rather high. That development comprised 344 apartment units on 29 storeys with 56 units of two-storey shop-offices.
Today, 81% of phase one is sold. What remains are the bumiputra units. About a third of them are reserved as bumiputra units. There are some shop offices still available averaging RM788 psf. Phase one GDV adds up to RM382mil, with RM264mil for serviced apartments and RM118 for the shop-offices. This project is essentially plain vanilla products while phase two will offer more amenities. In terms of size, phase-one apartment units are larger with built-up areas of between 1,100 sq ft and 1,600 sq ft, averaging RM700 psf.
Maintenance cost is 20 sen psf for the apartments and 25 sen for the shop offices. Phase 1 shop offices come with 2 carpark lots with the possibility to purchase additional ones.
The Centro strategy is to have shop offices and apartment units leveraging against each other. But in reality, Centro’s catchment area will be much larger as about 500m away, there is Metro Kajang Bhd’s Pelangi apartments.
Known as Pelangi Damansara 2, there are about 1,600 units over several blocks. Launched in 2000, the units are well occupied today. In time to come, the Bandar Utama MRT station will be another plus factor although this will be a bit far to walk – slightly less than 1 km from Glomac Centro. Next to Pelangi Utama Residences is a single block of six-storey shop offices known as Dataran Pelangi Utama where the ground floor units are well occupied.
Says Fateh Iskandar: “Glomac believes that this area has a pent-up demand for price-sensitive residential products. Location is the key and these developments represent one of the few remaining ‘developable’ areas in the PJ-Damansara area.
“Commercial activities are also in demand, based on the surrounding population and current demand for rental of nearby shop-offices.”
He says during the course of the construction period of both projects, the surrounding area will be spruced up.
Across the highway, there is another shop-office block known as 10 Boulevard with a Sprint Highway frontage. It comprises four blocks of six and seven-storey shop offices. That project was completed several years ago. While 10 Boulevard has good frontage, it does not have as huge a catchment area as the Centro’s project. Access to Boulevard is another factor.
Other than Centro, Glomac recently launched 82 units of double-storey landed housing in Lakeside Puchong from RM898,000 onwards. To date it has sold 90% of them, with the remaining being bumiputra lots.
“Loan rejection is an issue (in the) overall property market; rejection rate is around 40%. However, due to the demand for this project, we are seeing a (lower) rejection rate of about 15%. Those who cancel are easily replaced,” says Fateh Iskandar.
As for the company’s overall view of the sector, he says there are many factors currently affecting the property market, ranging from the recent tightening measures by Bank Negara to the introduction of GST.
“We believe purchasers may adopt a ‘wait and see’ attitude as a result of the GST issue. We fully expect stabilisation (with respect to GST) to come in between 6 and 12 months post-GST.
“We are optimistic about landed properties priced below RM1mil in good locations. We are also cautiously optimistic about high-rise (or mixed) developments. For high-rise projects, location, accessibility and quantum pricing are now more important than ever before.
“In this regard, Glomac has planned and adapted (itself) quite well. We are fortunate that the majority of our high rise developments are within easy reach of MRT or LRT stations,” he says.
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