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Good news for buyers of Newgate Avenue apartments
12/06/2006 The Star By S.C. CHEAH

WORK to revive the abandoned Newgate Avenue serviced apartments in Taipan 2 town centre in USJ21, Selangor, will begin end of this month and the good news is that the purchasers will not have to pay any more money to the new developer.

The rehabilitation effort is being undertaken by two experienced developers: Datuk Dr Loke King Loong, a respectable Seremban-based developer with 30 years of experience in the housing industry and Chong Kee, a specialist in rehabilitating abandoned projects.

Both men have formed a 50:50 joint-venture company called Pinggiran Setia Sdn Bhd to revive the project abandoned in July 2003 after it was about 60% completed. The previous developer Solarglow Sdn Bhd had sold 93% of the units.

The original resort-style plan will be retained, but the name will be changed to Newgate 21. There will still be 1,153 apartment units housed in four 33-storey blocks with two basement and five elevated car park levels and a three-storey podium for the retail units.

''We will keep it exactly as it is. We feel that it is not practical to change the concept, as the structure is about 60% completed and most of the units have been sold. We also feel the original concept with a commercial podium is best for Taipan 2 as it will liven up the place,'' said Chong, who is Pinggiran Setia Sdn Bhd executive director.

What's the bottom line?

Chong said the project would cost RM75mil to complete and expected revenue to come from the balance of the end financing of about RM53mil, sales of the remaining 81 units to be pegged at the original developer's price and sales from the car park bays.

''We are left with a free commercial podium with 265,000 sq ft of lettable space, which we will lease out. If fully tenanted it can fetch about RM750,000 a month in rentals,'' he added.

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From left: Chong Kee, Datuk Dr Loke King loong and Jessica Loke. They are reviving the Newgate Avenue serviced apartment project in USJ21.

 

Pinggiran Setia managing director Jessica Loke, who is also Dr Loke's daughter, said it was such a waste to leave an abandoned project like Newgate Avenue that was sited on a strategic and prime location.

''We are planning to build a neighbourhood mall where residents in the area can shop for their groceries and eat out. We are also signing up an international supermarket cum hypermarket as our anchor tenant,'' she said.

Jessica said for an abandoned project to be successfully revived, it was vital to win back the purchasers' confidence and the co-operation of all parties involved.

As such all the purchasers' monies would be paid to a reputable accountancy firm that would make payments to the contractors and consultants upon vetting their claims for work done.

In this way, the purchasers need not be afraid that the developer would abscond with their money.

Jessica said it would be like the HDA project account.

''We hope to complete this project within 24 months as we are also committed to our retail tenants. The earlier they come in, the sooner we can collect rentals from them. We don't need to have any fanciful show units as most of them have been sold. Our job is to complete them as soon as possible. We are choosing a good day to re-launch the project, possibly end of the month ,'' she added.

Jessica said the podium would focus on the ''e-Centre'' as the main attraction, with retailers providing the latest range of IT gadgets and equipment.

''Additional features like providing an online shopping platform to residents and retailers are also in the pipeline,'' she added.

Jessica said under the scheme of compromise, the purchasers would waive all liquidated ascertained damages from the previous developer.

This include waiving their right to make any late delivery claims and to give up a 10-year transferable Resort Condominiums International membership entitling buyers to a week's stay locally or at any of the over 3,400 holiday resorts worldwide that was part of the original purchase deal.

She said a creditors' meeting was held last December and 99% of the purchasers voted in favour of the agreement to revive the project.

Chong, who has revived four other abandoned projects said: ''When considering an abandoned project, I first look into the interest of the buyers as if I am the buyer before I lay out the conditions to negotiate with the banks.

''The impact is much greater on an individual buyer than a bank. Hence, I always negotiate on the basis that the bank has to take a bigger step to minimise further damages to the buyers to ensure the success of completing an abandoned project. The developer also needs the bank to assist as a partner in all aspects to bring the project to the end.''

When Newgate Avenue, with a two-in-one concept (serviced condominium and retail) was launched in 1999, many people made a beeline for the sales office in USJ21 to view its interesting design concept that boasts a 1.2-acre facilities area, including a larger than Olympic-sized landscaped swimming pool, two jacuzzis, open air cafeteria/bistro, gymnasium, two squash courts, cinemarette, business centre and playground.

The Newgate 1 and 2 (Block A and B) were to have one, two and three-room units while Newgate 3 and 4 would have two and three-room units. The 418-sq ft one-room units priced from RM66,800 were snapped up. The 615-sq ft two-room and the 842-sq ft three-room units were priced from RM88,800 and RM132,800 respectively. Two of the blocks were completed up to level 21, and the other two up to level 17, before they were abandoned.

Since then, Newgate Avenue and Rhythm Avenue serviced condominium (formerly by Saujana Utama Sdn Bhd), less than a kilometre away, have stuck out like sore thumbs.

Rhythm Avenue with 277 retail and 1,039 apartment units was fully sold when it was abandoned.

It was reported that the 1,000 plus buyers had to fork out up to RM900 a month on interest, as their banks had released up to 90% of their loans as progress payments.

 

 

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