Malaysia Real Estate & Property Agent...

BY Racheal Lee Mei Nyee of City & Country, The Edge

In a little less than a decade, Boustead Properties Bhd (formerly known as SCB Development Bhd) has managed to lift the profile of Mutiara Damansara in Petaling Jaya to become a highly sought-after real estate development like the nearby Taman Tun Dr Ismail (TTDI) and Bandar Utama townships.
When Boustead Properties brought in Ikano Corp Sdn Bhd and Tesco Stores (Malaysia) Sdn Bhd to set up shop in Mutiara Damansara in 2000 and 2001 respectively, industry observers were confident the new township had the potential to emulate its neighbours TTDI and Bandar Utama. The move was a smart one. According to transaction statistics on the freehold tract, land value had recorded an impressive appreciation in less than 10 years. From RM99.12 psf in 2000, the value of vacant commercial land in Mutiara Damansara has now risen almost fourfold at RM380 psf and above.
In the 360-acre development, only 60 acres are used for corporate and retail lots, while the remaining 300 are for residential properties, a primary school and shopoffices. Mutiara Damansara was once part of Bukit Kual Estate, an oil palm estate-cum-rubber plantation owned by the See Hoy Chan group. The area now has 30 acres of undeveloped land.
Through a privatisation agreement, the Armed Forces Pension Fund (LTAT) procured the land in exchange for building houses for members of the armed forces throughout the country. However, lacking technical expertise, LTAT then sold the land to Boustead Properties' wholly-owned subsidiary, Mutiara Rini Sdn Bhd, at RM15 psf in 1999. This move kept the land within the LTAT group, which controls Boustead Holdings Bhd, the parent company of Boustead Properties.

Overwhelming response
According to filings with Bursa Malaysia, the 13.06-acre (568,893 sq ft) vacant land on which Ikea and Ikano Power Centre now stands was sold to Ikano Corp in October 2000 for RM56.39 million, or only RM99.12 psf. Currently, the shopping centre is 100%-occupied with about 120 outlets.
Four months later in February 2001, an 8.1-acre (352,836 sq ft) piece of land was sold to Tesco Stores for RM45 million, or RM127.54 psf. The hypermarket opened in March 2003 and has 25,000 sq ft of retail space, according to Henry Butcher Malaysia Sdn Bhd chief operating officer Tang Chee Ming. Sweden's Ikea also joined the fray, setting up its largest Asian store in Mutiara Damansara, with a shop floor area of about 270,000 sq ft, in August 2003.
Boustead Properties' trump card was the development of The Curve shopping mall adjacent to Ikea, Ikano Power Centre and the Tesco hypermarket. The shopping complex, built in 2003 for RM194 million, comprises two levels of basement car parks with 2,400 parking bays, a 3-storey shopping mall and a 12-storey hotel — Royale Bintang Hotel. The mall, with net lettable area of 680,000 sq ft, boasts 212 dining and fashion outlets. It currently has an impressive occupancy rate of 97%. The four-star Royale Bintang Hotel features 150 rooms, two meeting rooms, a lobby café, a poolside barbecue area and a 400-seat banquet room. It has an occupancy rate of 95%.
Next to The Curve, Boustead Properties built a 200,000 sq ft entertainment complex — Cineleisure Damansara — with Singapore's Cathay Organisation Holdings Ltd on a 50:50 basis. However, its executive director Datuk Ghazali Mohd Ali says the company is buying the remaining shares from the Singaporean party.
"We took over the management of Cineleisure on Jan 1. We are going to rebrand the building and change the name within the next six months. Also, we are going to build a hotel, tentatively named Royale Surian Hotel, located behind Cineleisure," he tells City & Country.
The four-star hotel, which will be managed by Royale Bintang Hotel, will consist of 300 rooms, a conference room for 1,000 people, retail shops and a mini ice-skating rink. Boustead Properties will begin construction of the Royale Surian Hotel in 1Q2009 and it is scheduled for completion in two years. Ghazali is optimistic that the new hotel will boost daytime traffic to The Curve and nearby developments, which typically experience peak traffic during weekends and at night.
Property consultants say home buyers were actually looking forward to Mutiara Damansara's launch, given its close proximity to the popular TTDI and Bandar Utama. Mutiara Damansara saw its first public launch of residential properties in March 2002, comprising 29 semidees and three bungalows. There are about 2,000 units in the area now.
Henry Butcher's Tang says location and accessibility are the main factors for the overwhelming response to Mutiara Damansara. "After TTDI, people had been looking for properties in neighbouring townships such as Bandar Utama and Mutiara Damansara," he adds.
With the entrance of big retail players, property values in the area have gone up. "Big players like Ikea, Ikano and Tesco have further boosted values," says Tang. Other well-known names have also set up shop in Mutiara Damansara, adding to its attraction. Auto players have made their presence felt there with showrooms for Mercedes-Benz, BMW and Lexus marques.

Corporate attractions
Boustead Properties has also disposed of land in Mutiara Damansara to other corporates over the years. This includes one-acre corporate lots to Petronas (petrol station), Lexus (showroom), Cycle & Carriage (showroom), Proton (platinum showroom), UAC Bhd (corporate office), Batu Kawan Holdings Sdn Bhd (corporate office) and Bentley Music (office and retail). Other companies include Dialog Group Bhd, TSR Bina Sdn Bhd, Mudajaya Group Bhd, Great Eastern and Glomac Bhd.
The corporate office of UAC (a subsidiary of Boustead Holdings) is 80%-occupied, with rents at RM4 and RM4.10 psf, according to Ghazali. The 10-storey office block has a net lettable area of 138,000 sq ft. It has 348 parking bays. Its tenants include Boustead Building Materials Sdn Bhd, Hyundai Motor Company, Reckitt Benckiser, Shiseido Malaysia and Tesco Store.
The Batu Kawan corporate office block has just been completed and is awaiting its certificate of fitness. The 11-storey office tower, with a 5-storey office podium, has a built-up area of 1.94 million sq ft. Targeting corporates, the building will be opened for rent by 2Q2009 at RM4.30 psf.
For guitar and music enthusiasts, having the Bentley Music headquarters in Mutiara Damansara is a boon. Of the 100,000 sq ft net lettable space in the 6-storey Wisma Bentley Music building, Courts Megastore has leased three floors of 60,000 sq ft for 10 years at a monthly rent of RM420,000 for the first two years.
Apart from the instrument showroom on the third floor, there is an auditorium for 400 people for events and concert performances. Level 5 is where the Bentley Music management office and another two office suites are located. The asking rents for the two offices, each with a built-up of 10,000 sq ft and 6,000 sq ft, are RM5.20 and RM6.20 psf respectively.
Meanwhile, Mudajaya plans to put up a low-density luxurious 16-storey Grade-A corporate office block with only 52 office suites while TSR Bina is slated to develop a 17-storey office block for U-ni Magna Sdn Bhd, but the company has not decided on the construction date. Great Eastern, Glomac and Dialog Group, which have each acquired plot in Mutiara Damansara, are still working out their plans to develop their land.
At Mutiara Damansara's main commercial and retail centre in the vicinity of The Curve, commercial land is now at a premium as a major portion of available land has been developed or snapped up. However, Boustead Properties still has a one-acre parcel as well as 10 adjoining parcels totalling 10 acres.

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