City&Country : PLB Land keeps its focus on Penang

The weather was fine on the Wednesday morning that we drove to Balik Pulau, about 35 minutes away from the Penang International Airport. We were fascinated by the rows of old shophouses in the small town centre as we made our way to the site of PLB Engineering Bhd’s Prestige III Central Park City that was just minutes away. Before reaching the show units on the 50-acre tract, we passed several houses built alongside a river with bridges running across it. Definitely not something we see back in Kuala Lumpur.

Ong: Land is scarce in Penang, property prices are high but people still want to buy properties here

Datuk Ong Choo Hoon, founder and group executive chairman of PLB Engineering, greets us warmly upon our arrival and obligingly sits down for a chat with City & Country. PLB Engineering has a market capitalisation of above RM100 million and currently, PLB Land Sdn Bhd — the wholly owned property development arm of the Bursa Malaysia-listed construction company — contributes 50% to group revenue. Ong expects this to grow in the near future.

He says the group is constantly on the lookout for parcels to boost its current landbank of 200 acres. It prefers to acquire land via its subsidiaries, which translates into low initial capital outlay for the land, which in turn enables the developer to offer houses at affordable prices. For example, the land for the developer’s most recent project in Balik Pulau cost a mere RM17.80 psf. Buying via subsidiaries also means decisions can be made faster, Ong points out.

“Our strategy is to focus on property development as a continuous process. I believe that for every project we develop, we need to find two or three more new sites for other developments. We now have enough landbank for projects to last us another eight years. “I believe the affordable housing market is the way to go. Overseas investors, like those from the Middle East and the Chinese, who seem keen to purchase our projects on an en bloc basis, have approached us but we prefer and are confident of the local market,” he says.

As we listen to Ong talk about the company, his passion for and commitment to it become clear, as does the fact that the septuagenarian gets very involved in all the projects under the PLB group. Indeed, he visits all its development sites in Penang seven days a week and actively participates throughout the acquisition, planning and development stages of the projects.

“We started out in 1973 as Kok Hoon Machinery Engineering, specialising in steel foundry and engineering works. We went into construction and later property development in 1999 when a developer was unable to pay us because it was facing financial difficulties. It could not sell the houses, so we took over. Our first project as a developer was a medium-sized one called Taman Delima Indah in Juru, Seberang Perai, Penang. Since then, we have completed about RM600 million worth of properties, mainly in Penang,” Ong says.

Meanwhile, the group’s construction arm has built significant projects in Penang, Kuala Lumpur and Johor for clients such as Permodalan Nasional Bhd, Kumpulan Wang Simpanan Pekerja, Majlis Perbandaran Pulau Pinang and DNP Land Sdn Bhd. To date, it has completed projects worth about RM2 billion. PLB Land has launched several projects so far this year and is looking to launch a few more. The combined gross development value (GDV) of the projects is RM400 million. 

Ong says investors are bullish about the Penang property market based on the response to PLB Land’s projects. For example, its Prestige V project in Batu Maung (GDV: RM70 million) was opened for sale in June last year and has since been fully sold. The mixed-use development, located just 3km from George Town, comprises 6 double-storey shopoffices and 74 double-storey terraced homes priced at around RM800,000 and RM728,000 respectively.

The Prestige brand is used for several of PLB Land’s projects, depending on their location and concept. “Our prices are competitive compared with those in the surrounding developments and we offer different properties to accommodate multi-level family living within the same development. Most of our buyers are owner-occupiers. We do not encourage bulk buyers or speculators,” Ong says.

“Land is scarce on Penang island, property prices are high but people still want to buy properties here. Our buyers are mainly locals. Actually, 90% are Penangites and they buy for themselves.” The buyers are mostly parents wanting to upgrade their own homes or purchase units for their children, or those who are working overseas or elsewhere in the country but prefer to own a property in their hometown. They are also either repeat buyers or would have heard of PLB Land’s projects, Ong remarks.

Latest launch 
The group’s latest township Prestige III Central Park City in Balik Pulau features a three-acre park. Located just 30 to 45 minutes from George Town, Prestige III has a GDV of RM280 million. It offers 198 single-storey and 224 double-storey terraced houses, 30 double-storey semi-detached houses and 57 double- storey shopoffices. Phases 1 and 2 were launched on April 28 while the third and final phases are expected to be launched within two years. Ong says 90% of Phase 1 and more than 50% of Phase 2 have been taken up. “Our Summer Villas — a part of Phase 1 that consists of 40 double-storey semidees — were sold within a week.

An artist's impression of 2-storey terraced houses in Prestige III Central Park City in Balik Pulau

We offered early bird rebates of RM20,000. An interesting feature for Prestige III is the three-acre open space that has jogging tracks and dancing squares. We have landscape professionals looking into the plans. Prestige III is also the only development in the area with a river. We are looking into building piers so our residents can do some fishing,” he adds. Prices for the two types of Summer Villas start at RM618,000 while the terraced houses in Phase 1 were sold for about RM500,000.

An artist's impression of semidees in Prestige V in Batu Maung

In terms of capital appreciation in PLB Land’s completed projects, Ong cites the 2-storey terraced homes in Prestige Jelutong, which were sold for RM800,000 in early 2010 and are now changing hands on the secondary market at RM1.4 million. That aside, the terraced houses in the first project under the Prestige brand — in Teluk Kumbar — were opened for sale at RM468,000 at a preview (no launch) in 2008 but were recently transacted on the secondary market at RM700,000.

Upcoming projects

An artist's impression of PLB Land's condominium in Sungai Nibong, which will be launched by 1Q2013

PLB Land is looking to launch several projects in Penang — on the island and the mainland — by the end of the year or early next year. A condominium in Sungai Nibong is slated for launch either in 4Q2012 or 1Q2013 and comprises 98 apartments in a 16-storey tower. It is said to be the first project approved in the state government’s efforts to increase the density of property developments in Penang. The project has an indicative GDV of RM72 million and the units have built-ups of 1,200 to 1,500 sq ft. So far, says Ong, it has attracted about 3,000 registrants.

In September, PLB Land will be launching a few smaller projects, such as a light industrial development offering only 10 units in Mak Mandin, Prai. The 2.8-acre project has a GDV of RM11 million and its units will have land areas of 8,000 to 10,000 sq ft. Another industrial construction is planned for launch at the same time in Auto City, Juru, Butterworth. This three-acre plot with a GDV of RM17.54 million will comprise 10 light industrial units as well.

Planned for next year is a 70-acre mixed-use development in Paya Terubong, which will be launched in a few phases. The first, which has an estimated GDV of RM342 million, sits on 14.8 acres. Plans for the phase include 1,200 apartments with a built-up of about 1,000 sq ft and an indicative price of RM285 psf. The second phase may comprise bungalows, semidees and condominiums.

Also in the pipeline is an apartment project in Zoo Road in Ayer Itam, close to the Kek Lok Si temple. The developer hopes to launch the project in December next year and plans 200 units with an indicative price of RM400 psf each. Another project will come up in Teluk Kumbar, in which the developer plans 68 double-storey terraced houses and semidees and 10 double-storey shopoffices with an indicative GDV of RM47 million.


This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 916, June 25-July 1, 2012