Mah Sing Group Berhad to enter Sabah property market

Posted on : 27-03-2012 | By : Sabah Today | In : News

27 March 2012

KOTA KINABALU: Mah sing Group Berhad will be entering the Sabah property market with a mixed development dubbed Sutera Avenue along the coastal Highway here.
The estimated gross development venue (GDV) of RM830million will be on a 8.67acres of prime commercial land.

A joint development agreement was signed for the proposed joint development of 4.26 acres prime for an entitlement of RM39 million or approximately RM210 per square foot (psf). RM25 million shall be paid in 4 tranches over 9 months and the remaining RM14 million shall be satisfied via units upon the completion of the development.

Mah Sing is also entitled to exercise an option for 4.41 acres of adjacent land at an entitlement price of RM216 psf or approximately RM41.5 million within 6 months of this agreement.

Mah Sing’s Group Managing Director Tan Sri Leong Hoy Kum said,” We are keen to enter the Sabah market due to the vibrancy of its economy which has benefited from the wealth of natural resources including oil palm, timber and oil and gas.”

“Tourist trade is strong and provides a large market catchment, coupled with the domestic population base. Kota Kinabalu together with the surrounding towns of Penampang, Tuaran and Kota Belud has a population of approximately 800,000.

“Our maiden foray into Sabah is sited on a very prime and highly visible location in Kota Kinabalu’s CBD, and coupled with our planned offerings which meet market demand, we are very excited about the prospects of this new market,” he said.

Based on preliminary plans, Mah Sing intends to offer multi-storey shop offices fronting the Coastal Highway and complemented by street mall retail lots and serviced apartments for the first phase of 4.26 acres.

These shop offices with generous lot sizes will incorporate a new and unique concept (inspired by Mah Sing’s 30 Jewels and Gourmet Street shops in its flagship Icon City Petaling Jaya), appealing to both business owners, investors and future tenants.

The retail units will be designed for F&B and street mall retail concept, in synergy with the shop-offices. This will create a vibrant retail buzz with alfresco opportunities.

The serviced residences will incorporate contemporary lifestyle concepts that will be sought-after by both local and foreign buyers.

Sutera Avenue occupies one of the most prominent CBD sites in Kota Kinabalu city. It is located diagonally opposite the 5-star Sutera harbor Resort and KK Times Square, and has direct road frontage to the Coastal Highway, one of Kota Kinabalu’s main thoroughfares.

Others landmarks, nearby includes the Sabah UMNO building, Ming garden Hotel and Asia City.
The project will be the southern entry point to Kota Kinabalu city’s CBD from the Kota Kinabalu International airport which is just 3.9km away.

According to the WTW Property Market 2012 report, major condominium developments launched in the CBD have seen developer selling prices at new benchmark prices.

In addition to increasing land costs and scarcer choice development lands, the hype on condominiums is also spurred by the favourable economic climate backed by earnings from good palm oil prices over the last few years.

The existing supply of purpose-built office space in Kota Kinabalu currently enjoys high occupancy rates of 91% due to the lack of new supply and the conversion of some office buildings to hotels in the last 1-2 years.

Rents and values are rather stable although there are some upward movements in rents and values for prime and newer office buildings within the CBD.

The retail sector remains stable with established retail malls and those with good management and differentiated offerings maintaining high business levels.

Strategically situated close to a world class resort, shopping mall, offices and condominiums, the lands surrounding Sutera Avenue are already fully developed.

Besides Kota Kinabalu and surrounding townships’ population estimated at approximately 800,000, the catchment will also comprise domestic tourists from other states and foreign buyers looking for a good investment.

Sabah’s wealth of natural resources has created an economic boom and its breathtaking landscape has also made Sabah a popular choice for both tourists and business travelers, so much so that tourism is expected to contribute over 10% of Sabah’s GDP.

This is Mah Sing’s second land deal in as many months, as the developer has a land banking target of acquiring new projects with potential gross development value of RM5billion in 2012. With the acquisition of Sutera Avenue, the Group’s land bank now stands at 1,226 acres with remaining GDV and unbilled sales worth an estimated RM16.27 billion, giving them strong earnings visibility for the next 5 to 7 years.

(Source: New Sabah Times)