Trinity Group: Creating value for the community

Following the success of The Zest @ Kinrara 9, which won The Edge Malaysia-PEPS Value Creation Excellence Award in 2013, developer Trinity Group Sdn Bhd has come up with another winning project in Z Residence, which earned a merit award  in the residential category.

Z Residence, located in Bukit Jalil, Kuala Lumpur, is an improvement on The Zest with more thought and better planning, group managing director Datuk Neoh Soo Keat tells The Edge.

“For us, winning the award is secondary. Our main priority is the value we create for the public. Yes, the award is important as a recognition of the work we have put in, but the tangible acceptance from the purchaser is the main driver for us,” Neoh says.

Z Residence, which was launched in 2011, was sold out in just six months. The project was developed with the community in mind, with 50% of the development dedicated to environment conservation and greenery, Neoh says.

“The Z Residence is our most ambitious project to date.”The condominium project, on a 6.7-acre site with a gross development value of RM580 million, comprises 1,136 units spread over four blocks of 26 and 27 storeys. The built-ups range from 1,032 to 1,407 sq ft and the units were launched at an average price of RM347,888.

One of the five units Trinity submitted for the 2015 award, which was sold at the developer’s price of RM339,888 on Aug 2, 2011, was sold on Sept 5, 2014, for RM660,000 — a capital appreciation of 101%. Today, prices range from RM688,888 to RM928,888. The development has achieved an average capital appreciation of 86% since the launch.

The condominium also comes with impressive amenities including a 55m infinity pool, a sky lounge perched 130m above ground level, a floating garden and three-tier security system. Green features include rainwater harvesting and double-glazed windows to deflect sound and reduce up to 50% of solar heat gain into the building.

The project was conceived to address the shortage of affordable housing, says Neoh, who has a background in town planning. Neoh saw the potential the 6.7-acre site could offer.

“When we committed to the land four to five years ago, it was on the outskirts, in an industrial area with no infrastructure. It was an area where a lot of unhealthy activities were taking place. For instance, we saw drug addicts hanging around.”

The group bought the land for RM22 million, which some deemed expensive at the time, but Neoh had a vision to transform the area by enhancing the infrastructure. He spoke to the local authorities and spent a lot of time analysing the place to see what the group could do to add value to the area.

“The market price for such condominiums back then was about RM400 to RM500 psf but we tried to bring it down to RM300 psf for affordability. We spoke to the local authorities to see if we could compensate for the mark down in prices by reducing the unit size and increasing the number of units instead.”

The group also spent over RM3.6 million to build a link connecting Z Residence with the Bukit Jalil Highway to improve connectivity, cutting travel time by 10 minutes. The link connected two roads, Jalan BK1/20 and Jalan 4/155, to reduce traffic congestion.

“We had a choice — we could just buy over the land, build our project and sell it off. But as a responsible developer, we wanted the residents and the public to benefit from the project in the long term,” Neoh says.

Effective cost control

So, how did the group ensure that it met its objectives to provide affordable houses with quality amenities?

“It all came down to cost control. Our design was very practical and we worked with a really good contractor from Sunway. We used steel bars with a diameter of 1.8m. Instead of four conventional 1.2m bars, we used two 1.8m bars. That saved us almost 40% of our construction cost, which translates to about RM6 million for the foundation,” Neoh says. 

“We had the support of Putra Perdana Construction to advise us on using the right materials that fit into our value engineering system as well. We wanted to work with materials that are inexpensive but are of good quality. We sourced our top grade double-glazed glass from China.”

The residents of the neighbouring Bukit OUG condominium were concerned about the levelling of the slope at the project site for fear of landslides. The group had to stop work and took the time to conduct numerous dialogues with the residents to announce additional measures to minimise the impact of the development. This was done together with the local municipal council and Kuala Lumpur City Hall.

“We told the residents of Bukit OUG that we would take precautionary measures such as installing effective silt traps to avoid soiling existing roads and we would cut the sandstone one metre at a time until it was the same level as the Bukit OUG condominium,” Neoh says. The residents of Bukit OUG also benefitted from the extra land they gained after the chopping of the slope.

“The buildings at Bukit OUG condominium were quite run down, but after the slope was chopped down the residents were willing to put in money to repaint the buildings to add value to their condominium. They saw their units appreciate almost 100% from about RM120,000 to RM240,000 after that,” he says.
Currently, Z Residence is 60% occupied. The group estimates that there is a 65:35 ratio of owner-occupiers and investors. Neoh believes this is an ideal mix for a property development.

“If the whole condominium is bought by investors, it would be a ghost town if no units are rented or sold. However, if the whole building is for own stay, we would not have any new transactions and we would not be able to give you the valuation of the appreciation of the units,” Neoh laughs.

As for the maintenance fee of 18 sen psf, he says it is sufficient. When the group was managing the development for a year, there were enough funds to maintain the facilities as it had an effective management. However, the current management body is facing some difficulty as it has been able to collect only 60% of the maintenance fees.

“As a developer, we will see how we can assist the current management committee to increase efficiency in managing the building and also in their collection.”

Next challenge

The next challenge for Z Residence is to see growth in rents. Early purchasers get a rental yield of 8% while the later buyers enjoy yields of about 5%. Neoh says this is average and he expects the number to go up to at least 9% to 10%.

Neoh expects the commencement of the Ampang LRT extension line to push up the rental rates.

“The rental rate should be about RM2,000 to RM2,500 but it is currently at about RM1,500 to RM1,800. ”

The Awan Besar station, which is about 1km away, started operations on Oct 31.

Neoh is not resting on his laurels. He is looking to develop more projects that will create value for his purchasers. The group launched Trinity Aquata @ KL South, a condominium project in Sungai Besi, Kuala Lumpur, in May this year. It is expected to be completed in 2018.

“At Trinity Group, we want our purchasers to identify with the feeling of security and sustainability our products deliver. We want them to have the feeling of coming home to something they can look forward to after a long day at work. Our team will continue to work towards our our mission of building communities and enriching lives,” Neoh beams. TEPEA 2015

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This article first appeared in City & Country, a pullout of The Edge Malaysia Weekly, on Dec 7, 2015. Subscribe here for your personal copy.