YTL Land: An innovative builder
The Edge, July 24, 2006
BY JENNIFER GOMEZ
This is the first time YTL Land & Development Bhd has made it to The Edge Top Property Developers list since the award was introduced in 2003. Needless to say, its executive director Datuk Yeoh Seok Kian is pleased.
"We are humbled to be given this honour. It's just been five years since we came into being, so it is an accolade for the whole team," he says.
In 1999, YTL Corp Bhd took over the helm of Taiping Consolidated. Following a corporate restructuring exercise which was completed in April 2001, the company became known as YTL Land & Development Bhd. YTL Land's strength comes from its 50 years of experience in the construction business.
"We have made enough mistakes to know what to do and what not to do. And we always try to push the envelope; we are not into cookie-cutter type of developments," Yeoh says.
YTL Land's inclination to innovate, meanwhile, has garnered the developer a promising reputation in the marketplace. Take Lake Edge in Puchong. Set within a lake environment and more importantly, offering unconventional architectural designs that appeal to modern house buyers, the project is one of YTL Land's developments that attest to innovation. It had the town talking when it launched 175 units of courtyard houses pegged at prices from RM380,000 in April 2004; the units were sold out within three days.
Says Yeoh: "We put in a lot of innovation; we think the Malaysian market is ready for this kind of thing. A lot of our young people have been overseas and they see the products there and want the same kind of offerings here."
He declines to talk about himself in relation to the company he has steered since its inception, insisting that it's a team effort.
Recalling the company's beginnings, he says: "We started off in Bercham, Ipoh. Itwas our first project in the midst of the 1980s recession. It used to be a new town village, and we transformed the area. The same with Pantai Hillpark - it used to be a squatter area. Lake Edge was a disused mining pond, and Sentul was not the best of areas previously. We like to transform such areas - give us the worst sites, we are quite used to it."
YTL Land is synonymous with the urban revitalisation of Sentul where over 294 acres of freehold land has been effectively split into Sentul West and Sentul East by the existing Sentul KTM Komuter station and its tracks. The development is planned to comprise residential units (about 7,000 of them), commercial offices and retail outlets, and is expected to be ready in the next seven to eight years.
Sentul East caters for the younger homeowner as the units there are relatively smaller and the overall development more vibrant. Sentul West, on the other hand, caters for larger, more mature families who require larger homes and a leisurely lifestyle. Here, the key features that have been attracting purchasers are a 35-acre park, the Kuala Lumpur Performing Arts Centre situated at the fringe of the park and a koi centre.
Having handed over Tamarind, a 498-unit condominium development in Sentul East to buyers a year ago, its ongoing launch, Saffron, is doing well. Since a soft launch in March 2006, 70% of the 467 units have been taken up, making it the best received residential project in Sentul thus far.
The prices for these units start at RM239,000. Yeoh says they have had their fair share of repeat buyers. "Most of our buyers this time are those who bought in our first phase, Tamarind; others have brought their friends."
Yeoh attempts to correct any misconception that schedules for Sentul East have been deferred. "Technically it's ongoing. Sometimes, the situation is beyond our control when approvals take longer that expected. A lot also depends on market conditions," he explains.
The first phase of Lake Fields, its other development in the Sungei Besi area, is due for completion. Lake Fields was launched in March 2004 with its first product Meadows. The uniqueness of Meadows lies in the generous space accorded to the layout of the 3-storey homes that come with a column-free interior while the living room is 20ft in height. Within two months of its launch, all 514 units were sold. It is due for completion by December this year, ahead of schedule. Approvals are pending for the next phase, planned with units similar to the ones in Meadows. Yeoh admits the issue of delay in getting approvals is becoming more acute, and YTL Land is not the only developer complaining. "Approvals seem to take longer now; suddenly the pace has slowed down," he says.
More than 10 years ago, Pantai Dalam, in the heart of Kuala Lumpur was largely known for its squatters and low-cost housing. Today, YTL's renewal of Pantai Dalam's social landscape, with the building of the city's first Mediterranean-inspired condo villas known as Pantai Hillpark, has turned it into one of the better-known housing addresses in the city. Half of the 90-acre tract has been developed and plans for the remaining tract are, as expected, innovative and fresh.
Future launches planned here include a commercial centre over a five-acre site, comprising selected retail shops, boutique offices and exclusive loft apartments. Dubbed Centrio, this mixed development will serve as a hub for the community. The remaining 40 acres will be reserved for an exclusive enclave of 223 units of semi-detached homes and bungalows called Pantai Peak. An alternative access from Pantai Panorama direct into Pantai Hillpark is also on the cards.
As for their landbank, Yeoh says they have enough to keep themselves busy for some time, but adds that they are always on the lookout for more. "We've got to be selective; there is a lot of land in Johor for instance, but that's not where the market is. We think Penang, especially the island, is a ready market but landowners there are asking for the sky. But we are looking and we are in talks with some people," was all he would say for the time being.
Yeoh admits he is concerned about the direction of the property market. "I'm a little bit worried about interest rate hikes - they seem to be a dampener. Also, the recent fuel price increase has eaten into purchasing power."
He adds: "We have Sentul East and West, and if the market slows down, we have the East, where the units are smaller and hence, more affordable. We also have landbanks in not so strategic areas like Johor and Ipoh, where we will continue to build more affordable types of units."
This year, YTL Land plans to launch some RM500 million worth of properties. For the financial year ended June 30, 2005, the group recorded a pre-tax profit of about RM44.8 million on the back of RM175.5 million in revenue.
Q&A
How would you sum up the past year - the challenges faced; lessons learnt and achievements of the company?
Each year brings trials and challenges as well as achievements. Having turned 50 last year, we've given a lot of thought to what we've achieved over the years, and I must say it's been a wonderful journey so far, and I look forward to seeing it continue into the future.
Your take on the prospects of the property market for the second half of 2006 and 2007.
The global economic scenario at the end of last year into the first half of this year has not been very rosy as oil prices have continued to soar, and the steroid-pumped economies of the West have slowed down substantially. Property is generally one of the first industries to feel this pinch of inflation, and it has certainly made itself felt in the past 12 months as developers nationwide have been constantly reinventing the wheel to create more and more real estate possibilities to keep the industry afloat. What has since resulted is a slew of very intelligent and very creative mixed developments that bring together commercial, retail and residential properties catering for almost every kind of niche market available.
I expect this trend to change, as developers become increasingiy selective about the products and services they launch. Looking forward, I think the emphasis will be on answering the needs of specific consumer targets.
Going forward, what are your priorities, concerns and business strategies?
With the economy as it is, the property market at the moment favours buyers, so we're focused on riding this trend successfully by providing homes that live up to the most stringent quality standards, as well as the most modem living standards. This in turn builds a strong relationship with customers, and, in turn, will ensure continuity and provide for a long-term partnership with them.
As far as business strategies are concerned, close inspection of our residential properties has shown us that as communities mature and new ones crop up, commercial and retail facilities to support them are usually inadequate. Commercial development is going to be a focus for us in the future, as we launch commercial complexes to support our developments in Sentul, Lake Edge and Pantai Hillpark.
In addition, given Malaysia's business climate for foreign investment, we have seen substantial opportunities for the local property sector in foreign markets. The relaxation of legislation on purchase by foreigners has led to an irresistible "Malaysia My Second Home" programme, making it easier for local developers to market their products overseas. Previously labelled as a white elephant for Malaysian property and foreign policies, the programme has evolved into one that we are all proud of. Its new management under the Ministry of Tourism indicates a keen interest by the government to develop this programme further, and the impact on YTL will be quite tremendous as we have been successfully courting property markets in Hong Kong, Singapore and Indonesia, and look forward to expanding our reach to the rest of Asia this year.
What do you see as your company's strengths and weaknesses? Your recipe for success?
We celebrated our company's golden anniversary last year, marking half a century of our operations in Malaysia. And the core of the company - construction - has been the key to our success as a property developer. We've had the luxury of being creative with our designs, yet had the expertise to ensure they are safely built, at an affordable and manageable cost. And all the savings we've been able to make with our knowledge in construction has been passed on to our buyers.
But apart from that, we have a lot going for us - we have good people, brilliant products, and the trust we have instilled in our consumers as a developer. We are fortunate to have been in the right place at the right time, as the communities we have developed have come into their own, becoming the desirable addresses we envisioned.
Our recipe for success is simple: we develop homes from a homeowner's point of view, taking into account what peo- ple really look for in a home. And rather than build houses for people to reside in, we have developed communities for people to live in. Instead of just selling a house, we offer our buyers a lifestyle; a sanctuary.
Comments on the performance of your products currently on the market.
This year promises to be an important one as we see additional elements in our Sentul masterplan come to life. Owners of The Maple are due to receive their keys as early as mid-July, and residents of The Tamarind have also settled into their homes. Sentul Park has turned out to be more beautiful than we imagined, and the success of the Kuala Lumpur Performing Arts Centre speaks for itself. We are also handing over keys to residents in Lake Edge, with more homes in this fantastic location to be ready in the coming months.
We are busy at the moment with new residential developments scheduled to be launched, as well as a mixed bag of retail and commercial lots - The Saffron in Sentul East is doing well with 60% units sold before the official launch. It's encouraging to note that several buyers of The Saffron are repeat customers, which is testament of their trust and confidence in the YTL brand.
There's also a lot going on in Pantai Hillpark, which is maturing into a well-respected and popular development. We've just introduced Centrio, a mixed development pulling together retail, commercial and residential facilities in a fabulous combination of creative spaces for people to live, work and play in.
It looks like a good year indeed, as we are able to deliver on the YTL promise of a truly valuable, branded home.
Comments on emerging as one of The Edge Top Property Developers for 2006
I am indeed honoured and privileged to be selected as one of The Edge Top Property Developers.
The property scenario in Malaysia has grown in leaps and bounds, and my peers and I have a lot to be very proud of as we've all contributed to its success.
Awards like this, which give credit to creative, responsible developers, pave the way for even more competition in the future, making Malaysia an increasingly attractive property investment option for both the local and international markets.
Your wish list
For the real estate sector to continue enjoying growth through the implementation of a more attractive tax treatment for real estate investment trusts.
Continued evolution of the Malaysia My Second Home programme, as this encourages foreign investment in the country and has facilitated substantial property investments in Malaysia by people from all over the world.
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