Bringing Bangsar to PJ

LOW profile OSK Property Holdings Bhd’s most prominent project is the rejuvenation of Atria mall in Damansara Jaya, Petaling Jaya.

It used to be “the mall to go to” in the 1980s. In March 2007, the group bought the property from property group Lien Hoe Corp Bhd for a cash consideration of RM75mil.

When it launched the 392 units of small office flexible office (SoFo) suites, it was among the most highly-priced high-rise property in that area.

“We launched the SoFo suites in November 2011. It was sold within seven hours,” executive director Ong Ju Xing says of the record-making launch. Sales of the SoFo suites hit RM1,100 per sq ft (psf), the highest on a psf basis.

At the bottom of the twin SoFo towers is a five and a half-storey shopping gallery with a net lettable area of 470,000 sq ft, comprising 250 shops, which will be OSK Property’s source of recurring income.

Announcements to Bursa indicate that OSK Property has acquired two companies Atria Shopping Gallery Sdn Bhd and Atria Parking Management Sdn Bhd to operate the mall which is targeted to open in the third quarter of next year.

“We’ve got strong tenants coming in whom we are unable to disclose at this point. This mall will cater to an untapped market,” says Ong, the younger son of Tan SriOng Leong Huat.

OSK Property’s plan is to position the place as a high-end neighbourhood mall similar to Bangsar Shopping Centre and the Gardens Mall which PJ does not have currently.

“Damansara Jaya is one of most affluent residential areas in PJ but Atria lost its lustre as it did not keep up with the times,” Ong says, “Also, new malls came up in the area.”

Ong says the group sees a huge potential in Damansara Jaya as it is a proven site for a neighbourhood mall.

“The population (there) is looking for more high-end and customised products and services.”

The statuesque young man adds: “We would be able to carve out a niche for ourselves in that area.”

Purchasers comprise the older generation who have lived there for decades and new families who have moved into the neighbourhood.

Ong has also noted the substantial hike in property prices in Damansara Jaya.

“Back in 2007, shoplots were transacted at about RM1mil a unit. Now, the same intermediate shoplot is transacting for over RM4mil,” he says.

With the project nearing completion, Ong is hopeful of creating another Bangsar Baru.

“After Bangsar Village I and II came up, a lot of shoplots in the Telawi area underwent a transformation. New retail concepts came in attracting very different sets of clientele,” he says.

On why the group maintains its modest public profile, the media-shy Ong says: “The market is very intelligent. Even when we are low profile, the serious investor or buyer will know about our projects.”

OSK Property does not believe in land-banking either. It attributes that strategy to the umbrella group OSK Holdings Bhd and its conservative approach of allocating resources in nine industries. “We buy land when the area is ready for development.”

“The group’s philosophy is to run a sound company, not risk the business at the expense of growth,” Ong says.

The group’s portfolio includes a mixed development in Shah Alam called Emira and SoFo suites in the business district of Sri Damansara called Opus Suites.

The company will launch Emira’s boutique retail shops and serviced apartments towards the end of this year and in the first quarter of 2014, respectively.

The group did not reveal any plans on Opus Suites, however, other than it would be launched next year.

OSK Property’s other ongoing project includes mixed development Pangaea in Cyberjaya. Phase 3, comprising two condominium blocks called Eclipse Residence, was launched recently.

Phase 4 and 5 comprise a boutique hotel and office, shopping gallery and a street mall. The shopping mall will have 300,000 sq ft of net lettable area.

It has also launched Vale II, a modern-concept low density townhouse development in its nature-inspired township Sutera Damansara. Ong says this is the last parcel of landed property within the township and is by far the best location as it sits on a hilltop.

It is close to 70% sold. Vale I will be completed by the end of next year and Vale II, a year later.

Recently, the group has also gone into industrial property development. These are mainly large scale factories, warehouses and showrooms in Section 22, Shah Alam. The project is called Gravitas.

The group is also planing to build the largest mall in Sg Petani, Kedah within its sprawling 2,582-acre township development named Bandar Puteri Jaya.

OSK Property’s total gross development value is about RM9bil with Pangaea taking up the largest slice at RM3.5bil, Bandar Puteri Jaya at RM2bil followed by Atria at RM1bil. - The Star

Linking developments in PJ Sect 13

ABOUT 10 new developments with a gross development value of RM4.7bil have been approved in Section 13, Petaling Jaya, a check with developers involved shows, and these projects are causing much concern to residents in Sect 12 and in the larger PJ area.

They are worried the projects will cause overdevelopment and traffic congestion in the area.

It is uncertain if the Budget 2014 measures with regards the property sector – an increase in taxes and banning of developers interest-bearing scheme – will result in a go-slow among developers there. It seems unlikely.

Recently Fraser & Neave Holdings Bhd (F&N), one of the largest developers there with 12.75 acres, says it will launch 900 units of service apartments in the fourth quarter of next year. The project comprises a mall, small office home offices (SoHos), corporate office and a 250-room hotel. It will be a joint venture with Singapore-based FCL Centrepoint Pte Ltd.

The project is located at the Jalan Kemajuan-Jalan Universiti junction while at the other end of Jalan Kemajuan-Jalan Semangat, Best Western Hotel will be part of the CentreStage development that will be ready next year.

This means that at this juncture, two hotels with a total of about 600 rooms are being planned there. PJ Hilton, Crystal Crown and Lisa De Inn are three of the nearest hotels in the vicinity.

Section 13, developed under the Special Area Action Plan mooted by the Petaling Jaya City Council, will have an 85-bed Columbia Asia Hospital on 2.5 acres. Construction is estimated to be completed by November next year and the hospital operational by the first quarter of 2015, a statement from Columbia Asia Sdn Bhd says.

Medical facilities

The company is 30% owned by the Employees Provident Fund and the remainder held by US-based fund International Columbia USA LLC. It has 10 facilities in Malaysia.

This facility and another in Klang will be its 11th and 12th property. It has other medical facilities in India, Indonesia and Vietnam.

“The company believes in setting up smaller hospitals – fewer than 100 beds – built in residential areas for accessibility and efficiency,” a statement says.

Currently, the slant of Section 13’s various developments is towards residential. Interest in the leasehold land, which has between 50 and 55 years more to run, is due to its convertibility from industrial to commercial use. In Section 13, parcels of five acres and below have a plot ratio of 1 to 3.25; a one-acre site can have a maximum built-up 3.25 times its foot print. Parcels of 5-15 acres have a plot ratio of 3.5 times and beyond 15 acres, 3.75 times.

One of the largest parcels is the Colgate Palmolive land. Redevelopment will take time because of the capital investment in the form of machinery, a source says. The same applies to the Dutch Lady land. F&N freed land for redevelopment when it moved to Pulau Indah.

A similar scenario is expected with the other landowners as land value rises above the value of old machinery, says Ahmad Jefri Clyde from Garis Architect who helped draw up the Special Area Action Plan years ago.

There is also nothing stopping landowners, or developers, to buy out neighbouring sites to amalgamate adjacent plots, Clyde says. The F&N land is an amalgamation of two parcels. There are two adjacents parcels in the Colgate Palmolive land. This increases the land size, and thus raises the plot ratio.

The F&N site is interesting because its larger land size frees it to have a variety of components. The trend in real estate development today is towards mixed use with residential, retail, hotel and office components integrated in one location. This is only possible with larger land area. Compare this with the less than one-acre site of Avenue D’Vogue which has 360 units of SoHos.

Reduce congestion

Congestion and lack of open space are the two challenges there. Because land parcels are privately owned, this makes it difficult to release land for open space.

In order to reduce congestion within and in the peripherial of Jalan Universiti, Jalan Semantan and Jalan Kemajuan and in the internal roads like Jalan 13/2, Jalan 13/4 and Jalan 13/6, developments within these three major roads must be connected or linked within and with other developments in the area. Linking Plaza 33 with the up-and-coming former Jaya Supermarket development will enable access to two areas by foot and reducing traffic volume.

Public transport is also unsatisfactory. As these 10 projects become a reality, there will also be more traffic.

Bearing in mind that public transport is a federal government matter and Section 13’s impending congestion is a local authority matter, the Petaling Jaya City Council may need to impose on developers to do the needful, that is linking the developments with sky bridges or foot paths.- The Star