Where land is scarce, the sky’s the limit

Impacted by high-land cost in Penang, Ivory Properties Group Bhd will focus on building high-rise properties on the island.

Group chairman and chief executive officer Datuk Low Eng Hock says the price of landed properties may be beyond the affordability of most due to exorbitant land prices.

”We hardly come by a big parcel of land to plan for landed projects on the island. Most are pockets of land suitable for high rise development.

”We don't think planning for landed properties will work; the property prices will be very expensive,” Low adds.

The cost of a plot of net land in a prime area like Pulau Tikus is between RM500 and RM600 per sq ft. In Tanjung Bungah and Batu Ferringhi, land is priced between RM300 to RM400 per sq ft, while in the South-West district it is between RM100 and RM200 per sq ft.

The land price today is about 20% more than a year ago.

Ivory plans to launch only high-rise schemes in the second half of this year. These include:

the first phase of the RM10bil Penang World City (PWC) project in Bayan Mutiara

the RM300mil third and fourth phases of the residential towers for Penang Times Square

The Bay, a RM130mil sea-fronting condominium block in Batu Ferringhi

and the RM400mil City Mall and City Residence project in Tanjung Tokong

These are some of the key projects that will spur the growth of the group over the next five years.

Last year, Ivory acquired the 102.56 acres for the PWC project for RM1.072bil and 2.4 acres for The City Mall and City Residence in Tanjung Tokong for RM40mil.

The 1.1 acres for the The Bay project in Batu Ferringhi was acquired for RM25mil in 2010.

Despite the high land cost, Ivory plans to keep a percentage of the properties affordable.

The first phase of the PWC project on a 10-acre site, with an RM800mil gross development value, comprises approximately 1,500 condominium units, of which about 15% will be affordably priced between RM300,000 and RM500,000 for units with built-up areas of 600 sq ft and 800 sq ft.

“Subsequent phases for PWC will also see 15% of the properties priced in the affordable range of between RM300,000 and RM500,000. These units were in the entire master plan as a value-added component from the very early stage, even during the tender exercise for the project,” Low adds.

Low says the group also wants to position The Bay project as a medium to high-end scheme, as investors' preference for luxurious super-condominiums has dried up.

As for the City Mall and City Residence project, the plan is to develop 80% residential units and 20% of three-storey commercial lots.

“We are looking at selling the City Mall and City Residence units each for between RM700,000 and RM750,000. The City Mall will have a gross built-up area of 600,000 sq ft. For the residential towers for Penang Times Square, there will be 700 condominium units of various sizes, ranging from 400 sq ft to 1,200 sq ft,” he says.

To differentiate Ivory from its competitors, Low says the group will use architectural and cultural themes of a particular country in the Penang World City project.

“As we are planning for a world class city within PWC. Economies of scale is of the essence. We need a huge number of Penangites to call Penang World City their home. That is why PWC has affordable components,,” he says.

There would be Chinese, Korean, Middle Eastern and European villages in PWC, so that the properties can be marketed in that particular country through an appointed real estate agent, he says.

“We want to create a world culture in order to attract tourism and foreign investors and to differentiate PWC from the other mega-development projects on the island. These parcels will be solely for en-bloc sales to expatriates,” he says.

Last July, Ivory won the right from Penang Development Corporation to purchase and develop the PWC project in Bayan Mutiara after edging out four other parties, including SP Setia Bhd,.

Ivory offered RM240 per sq ft or RM1.072bil for the entire site, the highest, , securing with it the right to develop on the existing 67.56-acre site and another 35 acres that will be reclaimed over the next three years.

Tropicana Ivory Sdn Bhd, a joint-venture company in which Dijaya Corporation Bhd holds a 55% stake, and Ivory Properties Group Bhd the remaining 45%, is the developer of the PWC project.

On the City Mall and City Residence, he says the residential components will sit above the retail outlets. It will have an open tropical style interior design featuring giant palm trees, water features with lots of natural lighting, to blend with the architectural design of the residential component,” he adds. - By David Tan (The Star)