Bringing something new to the Raub property market

PROPERTY buyers these days want lifestyle living, which seems to have become more of a necessity than a luxury. Not only that, some want to enjoy the concept without having to move out of the areas they are familiar with. Green Target Group’s latest residential development — The Colonial — in Raub, Pahang, is offering just that, its managing director and CEO Datuk Tan Hong Lai (pictured, below) tells City & Country.

He says The Colonial is poised to be the first of its kind in Raub. Sitting on 87 acres of freehold land, which Tan had bought from a long-time friend in August last year, it has a gross development value (GDV) of RM350 million and will be developed in four phases.

The inspiration for The Colonial is Raub’s rich heritage. “The town has many old buildings from 1908, such as the police stations and the council building, which are well preserved. We want to leverage the historical aspect of the town. Our designs will be modern but feature colonial aspects, such as white horizontal lattices for the balconies and rooftops,” says Tan.

“We want to bring Kuala Lumpur’s lifestyle to Raub but our homebuyers won’t have to pay KL prices. And they still get to enjoy the same kind of facilities. We are looking for sustainability and our responsibilities don’t end with the sale of our properties. It does not work that way,” Tan explains.

“We want a development that creates a lifestyle. Our plans to achieve that include designing a grand entrance to welcome our residents home after a long day at work, building a multipurpose clubhouse, laying jogging tracks that promote healthy living and incorporating a manicured landscape.”

On the most important thing to do before planning any kind of development, Tan, who is a quantity surveyor by profession, emphasises researching the area before committing to any project. “Study and research the feasibility of the area,” he says.

For The Colonial, Tan researched Raub town and approximates its population at around 100,000. “Whenever I start any development, I do a statistical analysis beforehand, such as the area’s population, the upcoming developments and accessibility to and from it. For a town with some 100,000 people, there would be about 20,000 families there if we were to break it down to families of five. So for our 600 homes, we would have to target about 3% of the population.

“I am comfortable about investing in Raub because I know it has a lot of cash-rich investors,” Tan says.

He also takes comfort in the fact that The Colonial is a landed residential development and that the market condition in Raub is relatively stable despite a slowdown in the property market. “Property sells in good times and bad. It is just a matter of when. For landed properties, I can build them phase by phase. If the times are good, they can be sold off. If not, they will be sold when the market recovers. But for high-rises, if the response is not encouraging, I still have to build a whole block of them,” he explains.

“In a small town like Raub, people don’t get affected by market sentiment that much. So, whether it is good times or bad, the market doesn’t change much.”

The Colonial can be reached via several highways, such as the Karak Highway and Central Spine Road. It is a three-minute drive from Raub town and 20 minutes from Bentong town. According to Tan, the project is about an hour’s drive from Mentakab, Fraser’s Hill, Kuala Lipis and Genting Highlands, and about 1½ hours from the KL city centre.

“It is quite normal to see students taking the bus from Raub to KL during the weekend for tuition classes and to hang out at the malls in KL. So, it isn’t as far as people may think,” he remarks.

Tan, who hails from Pulau Ketam, recalls how his parents pushed him to work hard and buy them a house in KL. “At The Colonial, you get a similar lifestyle for half the price. Not only that, I am sure the older generation would be happy to live around their old friends,” he comments.

VPC Alliance East Coast property consultant and registered valuer Gary Wong believes 2-storey terraced houses are still the best-selling property types in Raub. He notes that the average price of such properties is RM200 psf to RM225 psf while the average rental yield is 4% to 5%. “The residents are mostly owner-occupiers comprising young working couples and small families, and are involved mainly in agricultural and retailing activities,” he says.

Wong believes the value of properties located close to the new Universiti Teknologi Mara main campus and Institute Kemahiran Mara will rise as the population of students and lecturers increases. “The rental yield of the residential and commercial properties might also rise in tandem,” he says.

The residential property market in Raub will remain stable for the next three to five years, he adds. “At the moment, the supply and demand of residential properties in the town are in equilibrium. What will help its development are efforts to alleviate traffic congestion, an increase in job opportunities and more incentives for entrepreneurs and farmers to undergo training and secure loans for business expansion.”

The first phase of The Colonial will consist of 130 units of 2-storey terraced and super-link terraced houses under the Portico series with built-ups from 2,083 sq ft onwards. Prices start from RM450,000.

“A typical 2-storey terraced house in Raub is already going for more than RM450,000. For the same price, our homebuyers will also get a lifestyle complete with modern facilities,” Tan points out.

The Colonial is open for registration now but will only be officially launched in August.

Tentatively, Phase 2 will include 2-storey terraced, super-linked terrace, cluster detached and semi-detached houses.

How Green Target was born

Tan’s background is quantity surveying, which he studied in the University of Greenwich, the UK. “I came back to Malaysia in 1991. Back then, I decided to pursue quantity surveying because all my friends were doing it. I was proud to be a professional and be associated with a professional body — the Royal Institution of Surveyors Malaysia,” he recounts.

Tan’s responsibility as a quantity surveyor saw him doing feasibility studies for his clients on land they had purchased, making sure the construction and production cost was managed as efficiently as possible. “When I saw how much profit they made at the end of the day, I wanted to venture into property development as well,” he recalls. So, in 2007, Tan and his good friend, Datuk Amir Arif Kamarudin, a professional town planner with a degree in urban and regional town planning, joined forces to set up Green Target. Tan’s initial plan was for the company to be a boutique developer. However, he and Amir knew they were capable of doing much more with their combined expertise.

Green Target’s first project — Greenhill Residences — was on 75 acres of leasehold land next to the Bukit Cerakah forest reserve in U10, Shah Alam, along the Shah Alam-Batu Arang Expressway. All of the residential development, consisting of twin villas and bungalows, has been launched and sold.

Subsequently, in 2011, the group built 71 factory lots, named 228 Smart Industrial Series (SIS), in Semenyih that comprised 28 two-storey linked factories, 26 two-storey semidee factories, 16 three-storey semidee factories and one 3-storey detached factory. “So far, all of the factory lots have been sold,” Tan comments.

Then in 2013, the group embarked on a mixed-use development, called MesaHill @ Nilai, in Negeri Sembilan. With a GDV of RM1 billion, MesaHill sits on 15 acres of freehold land and is comprised of serviced apartments, retail lots and a business hotel. The group is also in the middle of developing the biggest shopping mall in Nilai, which is slated to start operations next year. Says Tan, “My friends felt I was crazy to build a mall in Nilai because they thought the town was dead. Perhaps, they had some bad experience of investing in Nilai. As a quantity surveyor, I had done my research and I knew the town’s feasibility. Nilai has a population of about 400,000. The big hypermarkets are there, Tesco and Giant, but the residents in Nilai are travelling to Mid Valley Megamall and The Gardens Mall for their shopping. All these are signs of a growing town. I know there is demand there for a mall.”

Part of Tan’s vision for the long term is to have sustainable passive income by owning a mall. “Selling houses is not easy. It is always good to have passive income,” he opines.

Despite the challenging property market, Tan remains confident. In fact, he says the stringent lending guidelines by the central bank is a blessing in disguise. “To be honest, I really appreciate what the central bank has done for us developers. As a developer, I can’t check the credit-worthiness of my buyers. However, the banks can and if such stringent requirements are imposed, I can be sure the successful buyers whom the banks approve have the means to service the housing loan and not be over-geared,” he comments.

He says the group is planning a 500-acre development in Pengerang, Johor and is looking to develop more projects in the Klang Valley. “As a developer, my vision is to continuously build good quality housing for the nation and to have better and better projects in the pipeline.”

Green Target achieved sales of RM200 million last year and is targeting the same this year. As for listing the company, Tan wants to ensure it is 110% ready for it before any plans are made. “Being small is beautiful for us now. We are not big boys yet but we are definitely very adventurous and ambitious.”

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This article first appeared in City & Country, a pullout of The Edge Malaysia Weekly, on Feb 29, 2016. Subscribe here for your personal copy.