City & Country: Gamuda shifts focus back to Klang Valley
IT has been more than a year since City & Country sat down with Chow Chee Wah, managing director of Gamuda Land Bhd. For the last two years, the developer has focused its attention on Vietnam.
Now, with the Vietnamese economy on the downturn, Gamuda is shifting its concentration back to the Klang Valley market, "which is still very important to us".
"We have been spending the better part of the last year scouting for new landbank in the Klang Valley. A few of our projects are coming to their tail end and we need new land for more developments," he says.
Gamuda acquired two leasehold tracts, measuring 724 and 89 acres, in Rawang. The two parcels, just north of the Rawang South interchange, are estimated to have a combined gross development value of RM5.4 billion.
According to Chow, Gamuda has yet to finalise the plans for the bigger parcel but is looking at an integrated township with residential and commercial products.
As for the 89-acre tract, a gated community is being planned. "We think it is the right size for a gated community and the connection via the Kuala Selangor Expressway (LATAR) will ease the commute to Petaling Jaya, which is only 25km away," he says.
Meanwhile, the developer is keeping itself busy with several new developments in the pipeline.
One is a 7-storey wholesale mall on a 13-acre parcel of freehold commercial land in Bandar Botanic. The first block, with a net lettable area (NLA) of 230,000 sq ft, has been operational for over a year. Foundation work on the second block, with an NLA of 320,000 sq ft, will begin in the next two months.
Another project is in Kelana Jaya, opposite Paradigm Mall, on 4.9 acres of freehold land. The development, with a GDV of RM631 million, will offer serviced suiteswith built-ups between 450 and 750 sq ft. According to Chow, estimated prices are from RM850 psf. The name has yet to be decided on.
"We are targeting young purchasers and parents who want their children to stay nearby," he says.
Gamuda is known for large township projects like Bandar Botanic in Klang and Kota Kemuning.
But with several of its projects coming to the tail end of their development, it is embarking on smaller projects.
"Valencia can be considered fully sold and in terms of land, we've developed all the remaining tracts," says Chow. "For Kota Kemuning, we are developing Gamuda Walk on the final parcel of 3 over acres."
Gamuda Walk comprises 3 storeys of retail space and 7 storeys of office suites, called Biz Suites. The Biz Suites range from 600 to 800 sq ft and are being sold at RM550 psf.
"Our target market for Biz Suites are young entrepreneurs and retirees who are still active in their advisory roles as well as small consultancy firms," Chow says.
He says the company is attracting retailers to occupy the leasable space and targets to open Gamuda Walk by December next year. The take-up has reached 93%, with 216 units of the 231 units sold. Gamuda is retaining three retail levels for recurring income.
In Bandar Botanic in Shah Alam, Gamuda has two remaining phases on which it will build bungalows, link homes and terraced houses.
Meanwhile, Jade Hills in Kajang is almost 40% completed. "We still have a balance of 188 acres out of 338 acres," Chow says. "The earlier phases that include terraced homes and cluster homes have been fully taken up so now, we will be launching semi-detached homes and bungalows."
In Kuala Lumpur, the developer is launching a project in Jalan Pudu opposite Tung Shin Hospital.
Dubbed Robertson, the development comprises 3 towers of 10, 42 and 46 storeys, as well as a wholesale mall with a NLA of 122,000.
Chow says it will wait until the foundation work has reached a certain stage before launching the residential units. Robertson will offer 810 fully furnished units of between 500 and 850 sq ft, at a price tag of RM1,200 psf.
As it is located opposite Tung Shin Hospital, Gamuda will be selling the residential units to buyers looking to capitalise on Malaysia's medical tourism and those working in the CBD area, according to Chow.
"We are going to sell it and the possibility is people may rent it for medical tourism accommodation and support. Those who have to come to Malaysia on a regular basis for medical reasons might wish to rent long term there rather than stay in a hotel every time they visit," he says.
The majority of those registering for Robertson are locals, he says. Many are young couples buying for their own stay and parents buying for their children, he adds.
But while it has put Klang Valley back in the spotlight, Gamuda is closely monitoring its projects in Ho Chi Minh City. The company has close to 650 acres of undeveloped landbank in Vietnam with a GDV of RM13 billion.
With all the developments to its names and many of its townships already mature, one would think that the Gamuda brand would be well known among house buyers.
Unfortunately, says Chow, that's not the case. Gamuda may be known to the older generation of buyers, but with younger investors, the company's branding just hasn't left a strong impression yet.
"What we realise is that, although we are involved in a lot of projects like Kota Kemuning, Valencia and Jade Hills, in terms of awareness, people tend to know more about our projects and less about the developer behind them. Our strategy, moving forward, is to try to link our brand and the project," he says.
He says the company is changing its target market to a younger demographic.
"Their philosophy when buying a home is very different compared with the baby boomers," he says. "We feel that in order for us to communicate with them, we cannot just continue being what we are and we want to make that change so we are within the same wave length as the Gen Y."
It has been a cautious year for Gamuda, which is banking on its loyalist buyers to snap up the smaller projects it has coming on stream.
"Now we're down to smaller parcels in the Klang Valley so there's a lot of combinations of products we can introduce to the market in a lot of different locations," Chow says.
Its GDV in Vietnam is estimated at RM13 billion, and "with the two parcels in Rawang, we are able to come back to RM13 billion in terms of GDV in the Klang Valley," he says. As such, "we don't have to rely so heavily on overseas value."
Chow says the developer has recovered from its previous hiccups in Vietnam and is not actively looking at other countries. However, it has potential partners in Australia and even in London that have approached the company on joint development of projects. He says it is not ruling out such opportunities if they can add value to the company.
"For companies like Gamuda, we want to maintain our income for sustainability and growth. So while continuing to develop, you have to be on the lookout for the next opportunity so that you don't end up with nothing left to develop," Chow says.