Cover Story: OSK Property lines up RM1.7 bil in offerings for 2024

TheEdge Mon, May 27, 2024 04:00pm - 3 weeks View Original

This article first appeared in City & Country, The Edge Malaysia Weekly on May 20, 2024 - May 26, 2024

It is another busy year for OSK Property Holdings Bhd, the property arm of OSK Holdings Bhd (KL:OSK), as it continues to expand its land bank and has lined up projects to the tune of RM1.7 billion in gross development value (GDV) for 2024.

“We have been actively looking out for land acquisition opportunities to further increase our land bank and have also been very busy working on getting the relevant approvals from the authorities to ensure that our projects are ready to be marketed,” says CEO of property development Ong Ghee Bin during an exclusive interview with City & Country at the cheerful and naturally lit Shorea Park sales gallery in Puchong, Selangor. He is joined by general manager of sales and marketing Aemy Lim and assistant general manager of sales and marketing Jesslyn Yee.

Shorea Park is one of the many ongoing developments in OSK Property’s portfolio. The developer has already launched two phases of serviced apartments at the 27.77-acre site — Mira (908 units, GDV: RM366 million) and Anya (750 units, GDV: RM393 million) — and plans to introduce the third phase, Nara, next month.

Mira was fully sold within the first year of its launch and the project is targeted to be completed and handed over this year. As for Anya, the project has achieved a 70% take-up rate since its launch in February 2023.

“We have another three phases to go. The third phase, Nara, will also be a high-rise serviced apartment project, similar to the first two phases. As for the last two phases of Shorea Park, they are still on the drawing board,” Ong says.

With a GDV of RM353 million, Nara will offer 709 units of serviced apartments on 4.34 acres. The built-ups will range from 560 sq ft (1+1-bedroom) to 1,055 sq ft (4-bedroom) at a starting price of RM460,000 for the open market units and a fixed price of RM250,000 for the 560 sq ft Servis Apartment Mampu Milik (SAMM) units.

“We formulated the entire Shorea Park development with natural themes: the water element at MIRA, the wood element at ANYA and the floral element at NARA. We will be introducing floral design concepts at the development, which is very apt as this third phase is situated right next to a one-acre central park. We will also be introducing park living with NARA,” Lim says.

Hana Hills, Taman Melawati

The developer is planning to launch Hana Hills, the second phase of its Taman Melawati development, in August. The first phase, LEA by the Hills, comprises 344 condominium units, of which 70% have been taken up since the project’s launch in July 2022. The RM233 million, 2.9-acre development has attracted interest from mainly first-time homebuyers and young families, according to Yee.

Hana Hills, which is opposite LEA by the Hills, has a GDV of RM182.8 million and will offer 297 condominium units on a 2.61-acre parcel. Units range from 3- to 4-bedroom layouts, with built-ups of 958 sq ft, 1,152 sq ft and 1,184 sq ft to suit various lifestyle needs and preferences. The selling price is upwards of RM595,000.

Yee says all units at Hana Hills come with a balcony or a terrace for the biggest 1,184 sq ft layout. “The layouts at Hana Hills have been carefully thought out to address market needs. Based on Phase 1, we found that the market preferred having a balcony or terrace in their unit and those with a terrace are our fastest-selling units despite being priced at a premium. We also saw strong demand for 3- to 4-bedroom units, which are ideal for young families.”

Next to Hana Hills, the developer has a Rumah Selangorku (RSKU) project known as Nuria, which opened for sale on March 18. With a GDV of RM63 million, Nuria offers 275 units with built-ups of 850 sq ft and 900 sq ft at a selling price of RM200,000 and RM250,000 respectively. Registration of interest for the RSKU units can be made via the Lembaga Perumahan Hartanah Selangor website or the developer, she adds.

Its facilities deck (Photo by OSK Property)

Mori Park Phase 1, Shah Alam

One of the new locations the developer is venturing into this year is Section 13, Shah Alam, with Mori Park — a five-phase leasehold transit-oriented development (TOD) on a 15.4-acre parcel located 800m from the Stadium Shah Alam LRT3 station that is currently under construction.

“Mori Park is the first TOD in Shah Alam and the LRT3 should be running by next year,” says Yee. “The development is also well-connected to other main cities in the Klang Valley via a network of major highways such as the Federal Highway, NKVE (New Klang Valley Expressway), Kesas (Shah Alam Expressway), Guthrie Corridor Expressway, Elite (North-South Expressway Central Link) and LKSA (Kemuning-Shah Alam Highway).”

Phase 1 of Mori Park is Alia, a RM398.1 million mixed-use development offering 22 retail lots, 76 flexi suites and 812 serviced apartment units on 3.54 acres. The developer plans to launch the first phase in July.

The serviced apartments at Alia range from the 550 sq ft 1-bedder SAMM unit types to the 829 sq ft 3-bedder to the 958 sq ft 3-bedder with dual key option. The selling prices of the open market units start from RM478,000, while the SAMM units are priced at RM270,000.

The retail lots on the ground floor measure 996 to 1,319 sq ft and the flexi suites on Levels 1 and 2 are 550 sq ft in size. The selling price of the commercial components starts from RM320,800 for the flexi suites and RM531,800 for the retail lots.

The open market serviced apartment units at Alia, says Yee, will come with a balcony and the target market for this project is predominantly first-time homebuyers. “This project is also ideal for those working in Shah Alam, Subang and Glenmarie as well as faculty members and hospital staff from Management and Science University (MSU) and the MSU Medical Centre nearby. Investors can also leverage the good rental demand in the area.”

An artist’s impression of the single-storey superlink terraced homes at Eastfield, one of the last available phases at the Yarra Park development in Bandar Puteri Jaya, Sungai Petani (Photo by OSK Property)
Rubica, a 230-unit serviced apartment project, is the seventh phase of OSK Property’s 33.4-acre Harbour Place development in Butterworth and is slated for completion in 3Q2026 (Photo by OSK Property)

Taman Lang Aman and BPJ Business Park in Sungai Petani

In Kedah, the developer is planning to launch Taman Lang Aman, a new 50-acre development near its successful 2,500-acre Bandar Puteri Jaya (BPJ) township development.

Located in the town of Amanjaya in Sungai Petani, the Taman Lang Aman development is surrounded by mature amenities including shopping malls, supermarkets, schools and hospitals, and is connected to the Sungai Petani Eastern Bypass, making it convenient to travel north and south of Sungai Petani, Lim explains.

With a GDV of RM125.1 million, Taman Lang Aman will comprise 430 units of terraced houses measuring from 20ft by 70ft to 20ft by 100ft; 144 units of Rumah Makmur Kedah medium-cost homes and Rumah Aman Kedah low medium-cost homes with a land size of 22ft by 60ft; one block of low-cost apartments; and 22 shopoffices.

The developer is targeting to launch the first phase comprising 233 units of open market 2-storey terraced houses with a GDV of RM108 million as well as 86 units of Rumah Makmur 2-storey townhouses with a GDV of RM17.2 million in December. Prices of the open market 2-storey homes start from RM520,000, whereas the Rumah Makmur and Rumah Aman units have a fixed price of RM200,000 and RM90,000 respectively.

Lim says Taman Lang Aman targets first-time homebuyers, small to medium families looking for 3- to 4-bedroom homes and professionals working nearby.

“We have been in Sungai Petani for more than 20 years with Bandar Puteri Jaya, which is close to being fully completed. We have recently launched the latest commercial phase and we’re planning to launch the last phase of residential development (Phase 5) by the end of the year. So, we have been looking around in the vicinity for more land and found this site, which is a short distance away from Bandar Puteri Jaya.

From far left: Artist’s impressions of BPJ Business Park, the latest commercial phase at the developer’s 2,500-acre Bandar Puteri Jaya township development in Sungai Petani, and its semi-detached shopoffice units (Photo by OSK Property)

“With Taman Lang Aman, we want to create a self-reliant development. As with every new development, we want to have the population before putting in the commercial component, so we will be providing the residential component first.

At Bandar Puteri Jaya, the developer has opened for sale this month BPJ Business Park, the latest commercial phase at the township. “We are confident that this is going to be another hotspot for F&B as we have already signed a tenancy agreement with McDonald’s and we are going to commence construction very soon,” says Ong.

Strategically located next to Jalan Kuala Ketil — the main access to Kuala Ketil, Kulim and Baling — and fronting the Sungai Petani Eastern Bypass towards the North-South Highway toll, the commercial hub has a GDV of RM83.7 million and comprises 94 units of 2- and 3-storey terraced shopoffices, 16 units of 2-storey semi-detached shopoffices and four drive-through units with McDonald’s occupying one.

“We foresee a good response, especially from investors from Kedah and Penang, as this business park is surrounded by a population catchment of almost 200,000 from Bandar Puteri Jaya, Bandar Utama and Bandar Seri Astana,” says Ong.

The developer plans to hold the semidee shopoffice units for lease while the terraced units are priced from RM820,900.

As for the last residential phase at Bandar Puteri Jaya, the company plans to introduce Phase 5 in October. The entire Phase 5 will offer 5,343 units in total, consisting of 2-storey terraced houses, semidees, bungalows, Rumah Makmur and Rumah Aman units as well as low-cost apartments.

“We foresee strong demand for residential properties in Kedah due to the upcoming Kulim Hi-Tech Park as well as the migration of population from the neighbouring suburbs to the growing Sungai Petani market. With BPJ Business Park and Phase 5, this completes the entire Bandar Puteri Jaya development,” says Lim.

Artist’s impressions of the Phase 14 (Irumia) double-storey terraced homes at Iringan Bayu, Seremban (Photo by OSK Property)

Other ongoing developments

The developer’s other ongoing projects include Iringan Bayu in Seremban, Negeri Sembilan; Yarra Park in Bandar Puteri Jaya, Sungai Petani; and Rubica at Harbour Place in Butterworth, Penang.

At its Iringan Bayu landed township development, the developer has completed 2,453 units of 1- and 2-storey terraced houses and semidees and has launched three new phases in 4Q2023.

“When we started Iringan Bayu, it was 770 acres. Today, it is 1,668 acres, as we have acquired adjacent land along the way. The development is divided into Parcel A, where we have completed 2,453 units; Parcel B, where we went on to launch three new phases (Phase 12: Seriya, Phase 13: Ledaya and Phase 14: Irumia) comprising 642 units last year,” says Ong.

This year, the company intends to launch three phases in Iringan Bayu with a GDV of RM300.2 million. The first of the three phases — Reveria 15A, offering 290 units of 2-storey terraced houses — was recently launched in March. The remaining two phases, with 137 and 212 units respectively, are targeted to be launched in July.

Parcel A will comprise 5,114 homes in total upon its completion while Parcel B will have 1,602 units.

As for Yarra Park, Ong says the developer launched the remaining units at the 420-acre development last year and most of the precincts have received the certificate of completion and compliance (CCC). “All units are sold except for the remaining 1- and 2-storey terraced houses at Eastfield and Springfield, which comprise 297 and 99 units in total respectively.”

Up north, the developer’s only ongoing project is Rubica, the seventh phase of its 33.4-acre Harbour Place master development. Launched in October 2022, the RM137 million project, comprising 230 units of serviced apartments with built-ups ranging from 946 to 1,335 sq ft, is slated to be completed by 3Q2026.

According to Ong, the eighth phase of Harbour Place is slated for launch in July. Harbour View Residence will be an affordable housing development with 373 apartments and a GDV of RM146.4 million.

Meanwhile, in December 2023, the developer commenced vacant possession for YouCity III in Cheras, Selangor.

“We are currently handing over 800 residential units to their owners and this is also the first TOD for us. Confirmed retailers at the development’s retail component include well-known brands like TMC supermarket, The Coffee Bean & Tea Leaf, Starbucks, Believe Fitness, FamilyMart, Health Lane pharmacy, Pizza Hut, MR DIY, 7-Eleven, House + Co, ZUS Coffee and Manatee Swim Academy,” says Ong.

On the international front, the property arm’s ongoing project is the A$2.8 billion (RM8.77 billion) Melbourne Square in Melbourne, Australia — a 51:49 joint venture development between OSK Property and the Employees Provident Fund. Phase 1 (known as MSQ) of the larger five-acre mixed-use development, which comprises 1,054 apartment units in two towers, 6,100 sq m of retail space and a one-acre park, was completed in 1Q2021. The second development phase, BLVD, comprising 591 apartment units in a 73-storey tower, was launched last October. BLVD has a GDV of A$656 million and should be ready in 2026.

The lake view of the landed township development that is home to 2,453 units of completed terraced houses and semidees (Photo by OSK Property)

Staying the course

The developer continues to remain steadfast in its commitment to building affordably priced homes.

“I would say that over the last five to six years, we have done well catering for the M40 income group and we continue to push our team to focus on the price range that is suitable for this group.

“Of course, we also have plans for high-end projects as we still have the land next to our main office at Plaza OSK downtown. This will be earmarked for a different market, but otherwise, our playing field is [mainly] in the affordable price range, which is our DNA and where we do well in,” he adds.

In addition to the upmarket development next to Plaza OSK in Jalan Ampang, the developer also has a mixed-use development in Sentul in the pipeline.

Meanwhile, Ong says construction costs as well as compliance costs are still the main challenges for the property business. “Construction costs are still escalating for the time being, albeit slowing down, but nowhere near pre-Covid-19 levels. Market affordability is still limited, with a compression of margins towards developers. Therefore, as a developer, we will need to think of more ways to improve value engineering.

“Apart from that, compliance costs are still a major challenge and we hope that the authorities will be more accommodating to the industry by lowering costs and enabling developers to build homes that are priced more affordably in return.”

In terms of outlook, Ong is sanguine about the property market in the near and long term. “The slight increase in transaction volume from 2022 to 2023 is a positive sign for the industry. The commercial sector also saw a healthy increase in transaction volume in KL, Selangor, Penang, Negeri Sembilan and Kedah in the same period, sparking more interest in the development of commercial properties.

“As for the long term, our country still has a very young population with major interstate migration, especially to major cities in hopes of better job opportunities, and thus demand for homes will grow in tandem with the influx of population movement, which will benefit the property development industry. The addition of more affordably priced residences will also be necessary to cater to the needs of the young population that is looking to have their own homes.”

With 30 years in the property business and counting, OSK Property continues to grow its presence in areas surrounding its existing flagship townships, namely Iringan Bayu and Bandar Puteri Jaya, as well as its high-rise developments in the central region. “We are looking at the Klang Valley, mainly for high-rise projects, and also in Negeri Sembilan, Kedah and Johor for township development,” says Ong.

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