By Sharina Ahmad
The property overhang issue in the country is prevalent in Johor which saw the highest number of unsold completed properties.
According to the latest property market transaction data for 2019 to Q1 2020 by the National Property Information Centre (NAPIC), Johor recorded unsold completed properties of 5,468 units, accounting for 18.4% of Malaysia’s overhang properties.
Nevertheless, developers, which undertake proper market research, will know how to avoid unsold units by catering to the needs of the people.
For Kuala Lumpur-based construction and property developer Temokin Holdings Sdn Bhd, its strategy to penetrate the Johor market where the landed segment is key.
“Looking at the different property data sets accumulated in the NAPIC, I think we’re quite right to say a lot of the units or pent up demand is not so much in the high-rise segment, but more targeted into the landed segment of the market,” its CEO Tan Chien Chyi told Property Advisor.
The turnkey civil engineering company started venturing into property development in 2018 with its maiden housing project ‘Mahligai’ in Nusa Damai, Johor via Temokin Development Sdn Bhd.
“The landed market has been quite ‘safe’ in the Johorean market because it’s something they are used to,” Tan said.
He opined that the same scenario of overhang occurred in the Singaporean market, due to the abundance of the high rise projects.
“I don’t think buying property in Johor will be able to compete in terms of the level of development offerings. Hence, the landed property seems to be the segment that we are quite confident in as a developer.”
According to CBRE|WTW, the overhang was mostly due to the oversupply of high-rise units, mainly serviced residences and small office, home offices (SoHo) units, which could take more than five years to be absorbed into the market.
As for the landed unsold residential units, it said if the market is trading upwards and the economy is still growing these unsold stocks will take two years to clear.
Tan believed that property development is all about adding additional value to a property above its current worth.
“We aim to offer the most practical and livable space for our customers, an offering that adds value to the project.
“Other than that, we’ve realised how customer service is something that our development industry still needs a lot of improvement in,” he said.
Mahligai is a three-phased landed project that has a total gross development value (GDV) of RM105 mil. It consists of 163 units of landed property and the prices for the two-storey terrace units start from RM480,000.
“To date, we have a take-up rate of 95% for phase 1, 60% for phase 2, and phase 3 will be launched in 4Q this year,” Tan said.
The company expects to launch two more projects by the end of this year, namely Diami @ Melati which consists of 24 units of superlink houses under Malay Reserved Land with a total GDV RM46 mil and a joint venture with Tropicana Corporation Bhd, Tropicana Temokin called Tropicana Miyu with a total GDV RM283 mil.
According to Tan, there are two types of property investors; one with multiple properties (serial investor), and the other one is for own stay.
“What we see in the market is that most of the Johoreans are purchasing for their own stay and they want to look at the locality whereby it’s mature and near their other family members.
“If we look at our close comparisons such as UM Land, Mah Sing, EcoWorld; each of them has their offerings. But we believe that there are a dollar and cents behind the way you approach and there’s also a non-dollar and cents approach.
Tan said both approaches are used to create value propositions for buyers.
“For example, we launched our Kita Bersama programme together with the local council, the police and the firefighters. That has created some traction in the sense of placemaking, which is not commonly used in Malaysia.
“When we started, it was more of the developer giving ideas, seeing what can be done. But what we’ve learned to get to the top is the process of doing it. As a developer, we give ideas, now we’re receiving it also from the community,” he said.
The programme was part of the developer’s philosophy of connecting communities, seeking to promote closer engagements between the developer, local community and stakeholders to foster neighbourliness.
House plan design plays an important role
According to Tan, proper house design is one of the significant aspects to entice buyers.
“The design is very important and also something that’s rather updated. Our real focus is on the next generation of buyers, so we take into account both traditional and modern lifestyles to create an updated product to suit an updated lifestyle.”
He also shared that the company had tied-up with Telekom Malaysia to provide a year’s free internet for buyers.
“It’s one of the things that I think is very critical since nowadays everyone has a device. It’s an added value because Telekom owns most of the network in Malaysia in terms of the cabling and telecommunications,” Tan added.
Sharina Ahmad is a writer for PropertyAdvisor.my, Malaysia’s most comprehensive source of property data, property analytics and insights.