12 Jan 2007
IT takes more than the right numbers to build homes; there is no doubt. So, it’s interesting to hear what an accountant-turned-property developer has to say about building homes. Insas Bhd group managing director Datuk Wong Gian Kui is a number cruncher by profession, but through Insas’ ventures into the property market, he now wears a developer’s hat as well.
Listed on Bursa Malaysia’s main board, Insas Bhd is known for its stockbroking business, but slowly but surely, it is banking more and more on property development to boost its bottom line.
Insas made its debut in the property development arena with the RM60 million Putra Residen in Bukit Rahman Putra, Sungai Buloh. The project is expected to be officially launched in March but already, 50% Of the units have been sold since last December, says Wong.
The 10.2-acre freehold Putra Residen, developed by Insas’ subsidiary Hastanas Development Sdn Bhd, comprises 57 units of “zero boundary bungalows” set in a contemporary tropical design. With only five units per acre, the bungalows have built-ups of 3,605 to 3,843 sq ft and these are tagged at RM835,000 onwards.
Putra Residen may be Insas’ first foray into property development but before that, it had had a hand through an affiliate company, Baktihan Sdn Bhd, in the late 1990s in the development of the popular RM220 million Subang Business Centre in USJ, Selangor.
Still, Insas is not only a relatively new kid on the block insofar as property development is concerned, but a small player at that. But that’s about to change.
Determined to make an impact in the market, the developer has already lined up for the next three years projects with gross development value estimated to total between RM420 million and RM450 million, Wong tells Propertyplus when met at the newly-renovated office of Insas’ property division in The Boulevard, MidValley City.
Speaking with obvious passion about property development, which he describes as “something you can see and feel”, Wong reveals that this year alone they have lined up five new launches, including that of Putra Residen.
Next month, the 2.94-acre Ampang Putra Residency will be put on the market. Located on Jalan Ampang Putra and near landmarks like One Ampang Avenue, Galaxy Complex and Excella Business Park, the project offers 18 units of 3-storey shops and 367 units of serviced apartments. The shops cost RM900,000 onwards, while the serviced apartments are tagged from RM220 to RM230 psf.
“Response to the RM110 million project has been amazing despite not having been advertised. We have sold 17 of the 18 shop units. The buyers were mainly our business associates who felt the pricing was affordable,” he shares.
The serviced apartments are housed in two towers, with Tower A (181 units) to be launched first. There will be three unit types, the studio (607sq ft), Type A (1,290sq ft) and Type B (1,234 sq ft).
Wong is again positive about the market response to the serviced apartments. “I live in Mont’Kiara and what I have observed there is that whenever a new condominium comes up, the expatriates will buy units there. The same can be said with Ampang Putra Residency as we have a large Korean community living there,” he says.
He says the serviced apartments would appeal to expatriates as there are not many new residences in the area. To further attract buyers, the developer has spent over RM1 million to create a show unit that Wong is very pleased with, describing it as one with the “wow factor”.
Other projects lined up for 2007 include 184 units of 2- and 2½-storey terraced houses and townhouses in Taman Fadasan, Jinjang. Also scheduled to be put on the market next month, the units with built-ups of 2,290 sq ft to 2,600 sq ft have indicative prices of RM420,000 onwards. Phase two of this project will offer 68 units of 2- and 3-storey shopoffices. The total GDV for the project has been estimated at between RM120 and RM130 million.
Then in April, the developer targets to unveil 18-units of 3-storey superlinked homes (land area 22ft by 150ft; built-up 5,000 sq ft) in Kepong under the built-then-sell concept. The RM20 million project is already 80% completed and their indicative prices are RM800,000 onwards.
Come the second half of the year, Insas expects to put on the market exclusive semi-detached homes in Taman Bukit Teratai, Cheras. The RM130 million project sits on 22 acres. Details are being fine-tuned.
For any property launch, timing js crucial. Wong sees market sentiments improving this year, thanks to a better stock market and the rolling out of the Ninth Malaysia Plan. He says: “The glut is mainly in mass market projects but we are a niche developer with parcels of land in viable locations. So, it’s safe to say that we are not affected by the market softening.”
The developer is actively sourcing for land. On the property division’s role in the Insas group, Wong expects it to be significant in the current financial year with a 20% to 30% contribution towards profits. “Moving forward, we expect the contribution to increase to 40% as we strengthen our brand name and acquire more properties. However, our core business will remain as stockbroking,” he adds.
Wong, a member of the Malaysian Institute of Accountants, was with Harun, Oh & Wong and Stoy Hayward London Chartered Accountants before joining Insas in 1992. He recalls: “In the early 1990s Insas was undergoing a restructuring. Together with several of the other directors, mainly Datuk Thong Kok Khee, we came forward as white knights to aid the company.”
Over the years, he shares, the company has invested, among others, in property developer IGB Bhd, Melium Group and the Gleneagles Intan Hospital and Medical Centre. “Although we had not been developing property for the past few years, we have been active in project financing such as our involvement in the Mesra Terrace project in the Duta/Segambut area.” The recently completed Mesra Terrace is developed by the Palam Mesra Group and it comprises 40 units of 4-storey terraced and semidetached homes.
“Like most big companies, we faced financial complications during the crisis. At the peak of the downturn, we had over RM600 million in bank borrowings, which disabled us from venturing into any other market than our core business. We have managed to repay all debts and now have over RM200 million in the bank,” he says, adding that all current property projects are funded internally by Insas. For its financial year ended June 30, 2006, Insas posted a 21% rise in group net profit to RM21.13 million despite a lower revenue of RM163.39 million.
The venture into property development was also prompted partly by the quiet stock market in the last three years.
There is no doubt that the property market will be hearing more of the Insas brand.
Source: The Sun
by Allison Lee