GEORGE TOWN: Property developer IJM Land Bhd will start construction of the second phase of The Light Waterfront, a RM3bil joint-venture project, along the Tun Dr Lim Chong Eu Expressway by year-end.
Senior general manager Datuk Toh Chin Leong told StarBiz that the master plan for the second phase had been submitted to the local authorities.
The second phase comprises a retail mall with 1.6 million sq ft of gross floor area, an office tower block with 540,000 sq ft of gross floor area, a convention hall and function rooms with 100,000 sq ft of gross floor area, two residential towers, and two hotels.
Of the RM3bil development cost, RM678mil will be for the residential component, RM270mil for the office tower, RM580mil for the hotels, RM330mil for the Penang Waterfront Convention Centre, and RM1.18bil for the mall and retail outlets.
Toh said IJM would leverage on its Singapore-based partner Perennial Real Estate Holdings Ltd to bring in reputable tenants for the mall and retail outlets.
“The residential and office towers are for sale,” he added.
Toh said that the integrated commercial project’s good location would mean long-term recurring income for the company.
“We can hold on to commercial properties such as retail outlets, hotels, mall and convention centre to generate recurring income. Amid a tough market we don’t have to worry about finding buyers and bank loan approvals.
“With the surrounding lifestyle amenities, the office and residential in the commercial area will appeal to high net worth investors,” Toh said.
IJM Land planned to attract multinational corporations to lease the offices due to the location of The Light Waterfront near the free industrial zone.
“Given the high price of properties on the island, residential units can also be leased to young executives who prefer to rent rather than own a property to stay on the island,” Toh said, adding that the residential units were designed for this market.
He said rental rates for residential units in The Light Waterfront are between RM3,000 and RM8,000, depending on size, location and furnishing.
According to Toh, the projects in Penang will contribute about RM240mil to the company’s revenue for the 2017 fiscal year ending March 30, 2017, compared with RM168mil for the 2016 fiscal year.
“The projects planned for launching this year are The Trehaus with a gross development value (GDV) of RM64.7mil in Bukit Jambul, and The Waterside Residence (RM260mil GDV) for the second phase of The Light Waterfront.
“These projects should help the company realise the targeted RM240mil sales,” Toh said.
The Trehaus and The Waterside Residence would be launched respectively in August and September.
“We are confident that the Trehaus, a low-density condominium project of 46 condo villas, would do well due to its prime location in Bukit Jambul, which is next to the Bukit Jambul hill and close to key amenities such as an international school, the Penang Bridge and Penang International Airport,” he sid.
The Trehaus condo villas would be priced from RM1.4mil.
The Waterside Residence comprised 256 units of condominiums facing the sea in the second phase of The Light Waterfront.
According to Toh, the company used to launch four to five projects a year in Penang before 2014.
“Since 2014, the company has been introducing one to two projects a year, due to the slowdown in the property sector in Penang.”
For this year, the company planned to launch only two projects in Penang. Next year, the company planned three projects for the first quarter, with two on the island and one on the mainland.
The two projects on the island are The Terrace in Bukit Jambul and 3 Residence @ Karpal Singh Drive in Jelutong – both high-rise projects priced between RM550,000 and RM650,000.
“The properties are priced within this range because these are the most marketable prices,” Toh said.
In Seberang Prai, Toh said the company would launch the Senjayu in early 2017, a project with GDV of RM69mil.
The first phase of Senjayu, comprising 140 double-storey terraced houses on an 11.7-acre site in Jawi, would be priced from RM480,000.
To date, IJM Land has developed and sold more than 1,000 houses for the first phase of The Light Waterfront.
“The company still has 100 acres of land bank for the development of the second phase.
“After the second phase, the group still has 85 acres of landbank, which has yet to be reclaimed for future development,” he said.
According to Toh, the strategy will be to develop a broad range of products with different pricing and built-up areas due to the slowdown.
“But what these projects will have in common is their strategic location.
“The projects are always located near interchanges and amenities regardless whether they are on the island or in Seberang Prai.
“The different price range strategy is to allow us to tap into a broader custom base with different incomes and product needs. Not everyone needs a large apartment.
“Thus we have launched products of smaller built-up areas for recently married young executives and those with small families. From our survey, the most marketable properties are those within the price range of RM600,000 to RM800,0000,” he said.
In March, IJM Land achieved Excellence in the StarProperty.my Awards 2016 Wow Award (Most Iconic Development) category from the Star Media Group.