Hap Seng jumps on the bandwagon

HAP Seng Consolidated Bhd will focus on developing its property arm, Hap Seng Land Sdn Bhd, to carve a niche for itself in the property development business.

It currently has more than RM2.56bil worth of projects lined up excluding its maiden project in Peninsular Malaysia located near Cyberjaya.

As a brand, Hap Seng is known more for its Mercedes Benz dealership in Peninsular Malaysia and plantations in Sabah although it has other core businesses. Hap Seng Land chief operating officer David Khor says although the company has been in property development business in Sabah for quite a while, the growth in prices over in the Klang Valley has been far more attractive. Its interest in the property sector the Klang Valley was further boosted when profits and revenue for property development made considerable contributions to its first half year results ended June 30 this year.

The property division contributed 29% and 77% to consolidated group revenue of about RM2bil and profit before tax of RM551mil respectively, for the first six months of this year. It was 8.7% and 13% to total revenue and profit before tax of RM1.6bil and RM394mil respectively for the same period a year ago. The improvement in revenue was mainly due to improved sales from mainly high-rise residential developments Nadi Bangsar and The Horizon Residences located opposite the Tun Razak Exchange in Kuala Lumpur.

Horizon was launched last year and is 95% sold. Nadi in Jalan Tanduk, off Jalan Maarof in Bangsar – yet to be launched – is 72% sold.

The third high-rise residential project, currently known as JTR 2, is also located at Jalan Tun Razak, adjacent to Dua by Eastern & Oriental Group.

Both locations are proven and established. One part of Horizon will be facing the Royal Selangor Golf course. The company paid a premium for some of its land because it “wanted to be associated as a niche market developer,” Khor says.

“We will focus on niche developments in the Klang Valley,” he says. He adds that the condominium glut is not a deterrent by virtue of the location of their projects.

Hap Seng Land’s first project in the peninsula is the 100-acre D’Alpinia, located in what is currently known as Puchong South. It bought the land in 2000 and launched it in 2007. Although it has a Puchong address, that project is 9km from Cyberjaya.

Khor says because D’Alpinia is its first project in the peninsula, coupled with its location and the nature of the site, the company embarked on a build-then-sell scheme (BTS). It is about 30km from the city centre and 20km from Petaling Jaya. Access to the city will be via the Maju Expressway (Mex Highway).