City & Country: Gamuda Land's high-rise projects in Melbourne and Kelana Jaya

Masochistic? Gamuda Land, the property arm of Gamuda Bhd, has launched its maiden Australian project in Melbourne, amid concerns of an oversupply of apartments in the city that may hurt investment potential. Meanwhile, it plans an August launch its condominium in Kelana Jaya, Selangor, in a soft market.

The developer remains undeterred. It says it has the right product and strategy to attract buyers.

661 Chapel is a 30-storey tower it is building in the South Yarra suburb, and HighPark Suites — its Kelana Jaya project with an “elevated” park — will launch in August.

661 Chapel St, Melbourne

Melbourne was ranked most liveable city by the Economist Intelligence Unit for the fourth consecutive year in 2014. Its appearance on Gamuda Land's radar screen is no surprise.

But it was a chance meeting with a 70-year-old Australian developer who owned a 1,435 sq m plot in South Yarra that opened the door to the Gamuda Land's first project Down Under.

“We had been looking at Australia for many years but we wanted the right location and to satisfy the needs of our existing customers who were keen to invest in the continent,” says Gamuda Land managing director Chow Chee Wah. He claims the location of 661 Chapel St gives it good investment potential and will interest not just foreign buyers, but locals.

“If you want to buy property in Australia, you must find one that appeals to a foreign buyer. It must also be right for a local to invest in or to buy from the foreign buyer when the unit is ready,” he explains.

The land parcel was purchased for A$40 million (RM112.50 million) last December and the project was named after its street address. As there was already a development order obtained for it, Gamuda Land could start work quickly.

Located just 4km from the Melbourne city centre and at the start of Chapel Street, 661 Chapel St is also close to the Yarra River and next to the Melbourne High School. The street is known for its boutiques, clubs and eateries.

According to property research company RP Data, South Yarra is about four sq km in size and had a population of about 19,144 as at 2011. Its population is mostly aged between 25 and 34 years old, most of whom are professionals.

Chow says South Yarra is a mature and affluent neighbourhood of mostly landed property, not unlike Bangsar in Kuala Lumpur. With the prices of landed properties trending upwards, many locals are looking to move into high-rises, which are in short supply in the area.

661 Chapel St has a gross development value (GDV) of A$146 million and offers 169 apartments with a built-up area of between 41 and 266 sq m. There are three design layouts: 1-bedroom (indicative selling price: A$540,000), 2-bedroom (A$950,000) and 3-bedroom (A$2.6 million). The kitchens will be fitted out with cabinets and appliances, such as dishwasher, cooktop, range hood and oven. Bedrooms will be carpeted, and the rest of the flooring will be timber.

Six floors of the tower, including a basement, will be given to 129 parking bays connected by two high-speed lifts. He adds that most of the 2-bedroom and 3-bedroom units will come with a parking bay as part of the purchase.

Amenities include a covered drop-off area that also acts as a buffer against street traffic. The lobby has a double-volume ceiling and a library setting that facilitate casual business meetings.

The sixth floor, which is just above the parking area, will have a 25m pool cantilevered over the covered drop-off area, a spa, a resident’s lounge and gym, a steam room and sauna, a 20-seat theatre, two private dining rooms, a wine room and a barbecue area. There will also be two sky gardens, — one each on 22nd and 27th floors — with barbecue facilities.

Directly opposite 661 Chapel St is the Malcolm St tram station, while the South Yarra railway station is about a seven-minute walk away is , which is two stops away from the Flinders St railway station in Melbourne.

The launch Down Under will be held in September, the KL launch having taken place in June. 

While 661 Chapel St ticks all the boxes, the Reserve Bank of Australia has expressed concern that Melbourne’s high-rise boom might be approaching saturation point. A 1Q2015 report by CBRE Australia forecasts challenges for the Melbourne rental market, citing “the substantial number of units being completed within the next few years in inner city" and "the ability of the city's rental market to absorb rapid new stock additions”.

The situation is not yet critical, but is Gamuda Land’s plan to build a high-rise in Melbourne a good idea?

Chow believes 661 Chapel St will not be affected as a low-density development in a good location, unlike those in the city centre. “We are not looking at [developing] a very high number of units. Our project has only 169 units, so there are not many to sell; the project is quite exclusive,” he says.

HighPark Suites

This RM628 million project occupies a five-acre freehold parcel and features two towers with two conjoined sections, at the 29th and 33rd storeys. However, the sections share a common lift core. This high-rise has been certified with a provisional gold rating by the Green Building Index.

With 512 units, the South tower will be launched first, and the North tower, also with 512 units, will be launched later. There are four unit types: Type A (260 units; built-up area: 452 sq ft), Type B (204; 603 sq ft), Type C (36; 743 sq ft) and Type D (12; 840 sq ft).

Dual-key and duplex units are available. Selling prices starts at RM900 psf, and the service charge is between 52 and 55 sen psf.

There are also 19 cabana units, nine of which are on the seventh floor, where the elevated park and facility podium are located, and the rest on the 10th floor. They have a  built-up area of between 495 and 1,001 sq ft and are priced between RM470,000 and RM880,000.

Gamuda Land is offering a deferred payment programme for buyers of HighPark Suites. “You pay a 5% down payment and sign the sales and purchase agreement. Then over the next 30 months, you pay about 1% every two to three months until you reach 15%. And before the completion of the project, you pay the remaining 80% through a bank loan or other means,” says Chow. He adds that during the 30-month period, the buyer could save enough to take a smaller mortgage. The deferred payment scheme applies to the South tower and The Robertson, another high-rise development by Gamuda Land in Kuala Lumpur.



 

HighPark Suites’ facility and park podium on the seventh floor covers 2.66 acres. It comprises a 1km jogging track and 29 other features, including a 50m swimming pool, aqua gym, playground, putting green, reading area, and herb and maze gardens. There will also be free WiFi for residents and visitors.

Gamuda Land expects to interest young local urbanites and empty nesters, says Chow, adding that the elevated park is designed for healthy living and to alleviate safety and traffic concerns. 

The project's commercial viability is enhanced by 43 retail lots with a net lettable area of 22,000 sq ft, which Gamuda Land will manage to ensure a good tenant mix.

Managing director of iProp Realty Victor Lim says apartments in Kelana Jaya and elsewhere in Petaling Jaya are perenially in demand, but at the right price. HighPark Suites is centrally located and has good amenities nearby, such as Giant hypermarket, as well as good connectivity, he points out.

Given the soft property market, is the timing right for its launch?

Chow thinks so. “Granted, the property market is soft. But this is not the first time we are going through a down cycle." He says it is more more important to come up with a good payment scheme that potential buyers can commit to.

“Also, constructing new developments in a down cycle means that when the market comes back up, people can buy ready-built products. Most of the time, people want to buy a ready or almost-ready product as their first choice.”

More projects to come

Gamuda Land has five other projects total estimated GDV of RM28 billion in the pipeline to keep it busy beyond 2017.

By the end of the year, it will launch the first of five towers in its condominium project in Bukit Bantayan, Kota Kinabalu. The RM750 million project sits on 19 acres of ffreehold land and has 1,500 units with an average price of RM500,000, says Chow.

The project will be similar to HighPark Suites, with good lifestyle amenities. Chow says Sirim and the Institution of Engineers Malaysia are studying how to incorporate earthquake-proof elements into the design code. (Sirim is Malaysia’s research and standards development organisation.)

Next year, Gamuda Land is developing GBI-certified townships in Rawang, called Seri Serai and Serai Springs. The former is an 800-acre project with a GDV of RM4.7 billion while the latter encompasses 89 acres and has a GDV of RM515 million.

In 2017, two townships are planned in Kuala Langat — the 1,530-acre Tanjung 12 with a GDV of RM19 billion and the 257-acre KK 257 with a GDV of RM2.6 billion. Also to feature in 2017 is a 250-acre project in Kota Kemuning, the land for which Gamuda Land recently acquired.

A longer version of this article first appeared in City & Country, The Edge Malaysia Weekly, on June 22-28, 2015. Subscribe here for your personal copy.