Quill has the right formula
DATUK Jennifer Low, interior designer-turned-property developer and group managing director of the Quill Group, is proud of the feathers in her cap, and perhaps rightly so.
She was just named the Property Woman of the Year at the Malaysia Property Awards (MPA), the first woman to win the award.
“I think awards are important. Winning awards are important milestones for any company, especially awards judged by your peers,” she says.
“The MPA is the Oscars' of the real estate and property development industry, and every winner has the right to be proud of his/her achievement,” she was quoted in a daily.
Low has come some distance from her days as an interior designer with MAA Architect in 1981. She struck out on her own five years later with Quill Design, an interior design firm.
Starting from scratch, her first office was 100 sq ft, and her first design job worth a paltry RM3,800.
Saved by the bank
“In the same year Quill Design was set up, I was asked to complete an urgent interior design and renovation work for Citibank and Overseas Union Bank.
“Although we had little time to do it, when we finished it to the satisfaction of our clients, Quill Design received good references. We then received jobs from other leading banks including Hong Leong Bank, Ambank, RHB, Public Bank and Maybank,” Low says.
Over time, Low felt her firm was becoming inadequate to meet the needs of an expanding business. She then decided to partner her former colleague at MAA Architect, Datuk Michael Ong, and set up the Quill Group in 1987.
The company today bills itself as a one-stop design, construction and development specialist. It is also a diversified group, having ventured into the automobiles industry and with its own real estate investment trust (REIT) listed on the Main Market of Bursa Malaysia.
Some of Quill's properties include the international business process outsourcing centres of HSBC, IBM and DHL in Cyberjaya, the BMW headquarters, and the Quill 7 office tower, which houses Axiata and Nokia Siemens, in the KL Sentral district.
At the freshly-concluded MPA, the company's new Quill 6 building in Lebuh Ampang where HSBC Malaysia has set up base scooped the FIABCI award under the office development category. Quill 6 is a 22-storey, Leadership in Energy and Environmental Design-certified office built amid pre-war shophouses in the heart of Kuala Lumpur.
The building has achieved the feat of being appointed by HSBC as its benchmark for new HSBC buildings worldwide.
Built on resilience
Quill's business model has mainly been to construct custom-built high-rise office buildings for large multinational corporations (MNCs). “We have therefore been less affected by downturns,” Low says.
The company uses a design, build, lease, and transfer model, meaning it owns the properties it builds and leases them out to tenants. Quill 6, for instance, has been leased to HSBC for 15 years.
When asked why Quill does this when rental yields have remained largely flat over the years while property prices have skyrocketed, Low replies: “We will excel in what we do best. Yields will always be market-driven and we must be competitive to meet it.”
“We don't build boxes and walls then put up a for lease' sign,” she explains. “Product differentiation and location is one area that we give much consideration, but above all, we work very closely with our prospects and engage them from the concept and design stage as well as assist our clients in planning for their future space requirements.”
Low says the company takes a pragmatic approach to its property development. “The challenge is overcome during the initial engagement and not after the fact when the space is available. That means we work with real demand and not indiscriminately add to supply and then worry about price and be put at the mercy of market conditions.”
Nonetheless, the high cost of building materials is an issue Quill grapples with. “We need a mix of policies to deal with matters like this. The industry itself cannot manage cost escalation issues. A key strategy to deal with higher cost is efficiency and improvement in design, specification and utilisation. Price, cost, demand, and supply will eventually stabilise to a level acceptable by users,” she says.
Quill has considered investing in land but as strategic land is expensive, its land investments are on a very selective basis. Most of its land investments, Low says, are currently in the Klang Valley and Cyberjaya.
Quill plans to move into residential properties and Low says its first project is a joint venture with Malaysian Resources Corp Bhd at KL Sentral called The Sentral Residences, which is seeking a Green Building Index (GBI) certification.
The company also plans to launch its own residential project in Kuala Lumpur by the end of the year.
Diversification, Low says, is the name of the game and a key strategy for Quill. “When Quill decided to diversify its business activities, we had an opportunity to move into the automobile business and we decided we would venture into the high-end space. In 2009, we accepted the BMW dealership and in 2010, we became the sole Rolls-Royce importer and dealer in Malaysia.”
Two upcoming property projects are in the retail and healthcare sectors, namely the Vision City Mall, which may be launched early next year, and the Quill Orthopaedic Specialist Centre, which is set for launch next month.
Quill has the ability to raise private debt capital through its partnerships with international finance and insurance houses such as Great Eastern Insurance, Kuwait Finance House and UOB Bank.
To form its REIT arm Quill Capita Trust Quill joined forces with Singapore-based property development company CapitaLand.
A green believer
Quill is quite focused on the green agenda. Its Quill 6 building boasts several innovative green features such as rainwater harvesting facilities, a green rooftop terrace, and recycling areas. It uses 75% natural lighting during the day.
Low says although the margins between a GBI-certified and non-GBI-certified building do not differ by much, she foresees an inevitable paradigm shift to green architecture.
She describes green buildings as having three economic characteristics. First, it adds to the marketability of a property and increases its appeal, especially to foreign MNCs. “This is certainly a niche property segment that is short in supply and will remain so for some time to come. Such properties should command a green premium on its rental and certainly we are talking about premium tenants,” Low says.
Second, a green building is made to function at optimum energy levels and uses less water and energy, which translates to continuous and long-term savings in energy cost and lower operating cost.
“Given the certainty of the rising cost of energy, electricity, oil and gas, and water, it is only more economically compelling for us to adopt green building technology starting now and for the future,” Low points out.
Third, Low sees the initial investment cost as a sunk cost and will be immediately offset by the green premium. “Although it has a high initial investment outlay, it provides economic benefits to both the building owner and its tenants. “We do not look at initial outlay per se as it is too internally-focused. We look at the bigger economic picture, market dynamics and paradigm shift that will put us ahead of the game and at the forefront of green initiatives.”
Low says there is no shortcut to success, with “hard work, lots of drive and perseverance” being the only sure paths. “Gender should not be an issue or a barrier to success. Have the will and determination to succeed and you will gain success. Women should remain confident and aspire for success in any field they choose to work in,” she adds.
On her advice to aspiring property developers, Low says: “Success does not come easily or quickly. Work hard, stay focused and understand your business environment well. Building a business is not easy. One will need to build a network of people who will trust and support you.”
By The Star Online