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KUALA LUMPUR: OCR Group Bhd targets to launch its largest-ever property development in Shah Alam with a gross development value (GDV) of at least RM750mil in the first quarter of 2022.

The boutique integrated property developer OCR Group said on Monday the 26.9-acre Shah Alam project will consist of 2,892 affordable housing units along with retail spaces and it will be built in phases. The entire project is expected to be completed by 2026.

Managing director Billy Ong Kah Hoe said the project showcases its expanded capabilities and increasing prowess in the property development scene.

“This single-largest undertaking denotes the huge potential we see in Shah Alam as it has a unique blend of old-school charm and thriving modernity in commercial, financial and recreational aspects.

“There is still much room for Shah Alam to grow with its already-large population continuing to expand, hence we are confident this project would enjoy a strong take-up rate,” he said.

OCR Group said the development is in the self-sustaining city of Shah Alam which has seen its population rapidly growing to over 650,000.

The Shah Alam project will be easily accessible via the Guthrie Corridor Expressway (GCE) and the New Klang Valley Expressway. The Damansara-Shah Alam Elevated Expressway (DASH), which will soon be completed, will enhance accessibility to the project.

Ong said the Shah Alam project, under its “Essential Living” series, will be sold at attractive prices and caters to the existing population and new joiners to Shah Alam. The development is 25 minutes away from Kuala Lumpur City Centre.

“Coupled with our upcoming RM105.90mil GDV project along Jalan Alor in the Kuala Lumpur City Centre, OCR’s future launches in the next two years are boosted to RM1.6bil,” he said.

OCR Group also aims to launch its urban living project along Jalan Alor in 2022. The 0.33-acre development comprises a 10-storey small office home office (SOHO) development comprising 120 units of SOHO and 8 retail lots, and is slated for completion in 2025.

OCR Group proposed to acquire 80% equity interest in Stack Builder and 100% in Wonderland Projects from Ong, who is the managing director and substantial shareholder, along with various other owners of the companies for RM62.4mil cash consideration.

The payment will be via issuance of 328.5 million OCR shares, with no direct cash payout by the group.

Stack Builder owns the land at Shah Alam and Wonderland Projects the Jalan Alor property. Upon completion of the equity acquisitions, OCR will remain as the controlling developer of the developments.

Source from The Star, 02 Aug 2021

Previndran said the majority of the overhang units were residential properties as opposed to serviced apartments in the RM500,000 to RM1 million range.

“For me, this overhang is a past legacy. It was around pre-Covid days and will be around unless corrective action is taken by the developers themselves,” he said.

Previndran said despite the ongoing pandemic, the demand for residential properties in Klang Valley remained steady.

He said mortgage approval trends continue to rise and there are more sales as developers have become creative at driving sales.

The steady demand for residential properties was mainly driven by strong digitalisation by the developers, price readjustment to suit buyers’ affordability, and new launches that catered to what the market wanted.

Previndran said demand was further boosted with Bank Negara maintaining the record-low overnight policy rate of 1.75 per cent, and the ongoing Home Ownership Campaign which ends on December 31, 2021.

He said in terms of the value of transactions, there was a growth of about 28 per cent in the first quarter of 2021 (Q12021) as compared to Q12020.

In terms of volume, there was an increase of about 19.5 per cent in Q12021 as compared to Q12020.

“We truly have a resilient market. I think the important point to note is Q12021 is actually just before the MCO (Movement Control Order) whilst the numbers you see in Q42020 and Q12021 are after MCO, truly reflecting a strong and pent-up demand of buyers,” said Previndran.

Previndran said what his firm is observing is that the high net-worth individuals (HNWI) and ultra HNWIs are still very active in the market.

“They are paying top dollar for properties that otherwise would not be in the market, and they are also looking at opportunistic deals in high-end locations. The main artery and the pump of the residential market are properties priced below RM500,000 which are sort after by our bourgeoning middle-class market,” he said.

Previndran said there also seems to be a “pricing overhaul” of the overhang, where developers with inventory that have not been moving are going into the market at discounts ranging up to 45 per cent.

Meanwhile, the Iskandar market is the most hit market in Malaysia with its overhang close to double Klang Valley.

Previndran said that last year the overhang in Iskandar grew three times more as compared to Klang Valley by 27.94 per cent in terms of the number of units.

“Again, like Klang Valley, I do see it increase next year as the properties launched in 2019, which were already part of the problem, come into the picture,” he said.

In Iskandar, 73 per cent of the overhang are serviced apartments and in the RM500,000 to RM1 million range.

“I think the very astute Johor developers saw this coming and switched to landed properties very quickly as you can see from the incoming supply, planned supply, and new planned supply, which is 100 per cent landed. This has also resulted in very good sales, as you can observe the sales numbers in Q12020 as compared to Q42020.

“However when we compare Q12020 to Q12021, in terms of the number of units, there was a drop of 10 per cent, but in terms of value, it increased to by about four per cent. Our research shows a lot of residential properties and well-located condos were picked up mainly by locals,” said Previndran.

Source : New Straits Times / Kathy B. , 28 July 2021.

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