|White knights to the
12/06/2006 The Star By S.C. CHEAH
Although the last recession is behind us and several new developments are
in full swing, there are still many abandoned projects, some more than a
decade old, littered throughout the country.
Between 1990 and December 2005 the Housing and Local Government Ministry
identified 261 abandoned housing projects with a total of 88,410 units,
involving 58,685 purchasers for properties worth RM8bil.
It was reported that 87 projects were revived and completed by some white
knights. Of late, more white knights have entered the fray, some making a
name for themselves.
S.C. CHEAH takes a look at three such projects – an integrated project in
Kuala Lumpur, a serviced apartment in USJ and an abandoned hotel in Klang.
WHILE most developers start a new development from scratch, Bluestone
Group Malaysia (BGM) prefers to do it the hard way by reviving abandoned
All its current three projects (gross development value in brackets) in
the Klang Valley, namely the Puteri KL (RM200mil), Taragon Yap Kwan Seng
(RM34mil) and Taragon Puteri Cheras (RM26mil) were formerly abandoned
projects. The last two will later be renamed Puteri YKS and Puteri Cheras to
reflect the Puteri brand name.
The Puteri KL was formerly Menara Li Foong that had been left uncompleted
for more than a decade, while Taragon Yap Kwan Seng was bought for about
RM5mil from a financial institution after the original developer failed to
service its loan.
The 3.3-acre freehold land where the current Taragon Puteri Cheras stands
was originally meant for 300 apartment units to be developed by the Li-Foong
Group, which is also the developer of the adjacent Venice Hill condominiums.
Taragon Puteri Cheras will have 141 private town villas and duplex units
in three- and four-storey blocks within a gated and guarded community with
24-hour CCTV and guard patrol. The prices are from RM155,000 to RM338,000.
BGM is confident of completing the project by December 2007, about 14
months ahead of schedule.
BGM managing director K.H. Sim said the company had completed piling
works for Taragon Yap Kwan Seng, which was due for completion in June 2007,
also 14 months ahead of schedule.
''We’ve done almost 80% sales. We are going to do up a show room using an
actual unit to give people some ideas on what they can do with theirs. It
will also serve as a model for contractors to follow,'' he said, adding that
the units were very reasonably priced from RM368 psf for a 3+1 bedroom,
1,800 sq ft unit.
Although the price had risen to about RM438 psf, Sim said it was still
way below the prices of other condominiums in the vicinity, some of which
were priced from RM700 psf to over RM1,000 psf.
''All our bedrooms come with attached bathrooms. The master bedroom has a
jacuzzi that can seat two persons. Other high-priced apartments do not have
attached bathrooms for all their bedrooms. We are also looking at something
big in Kuala Lumpur,'' said Sim, who was sourcing more land and properties
in good locations to invest in.
Sim said it was more difficult to rehabilitate an abandoned project than
start a new one as the former involved many problems and issues. These may
include clearing legal and financial matters like litigation and
The building structure will also have to be properly inspected and may
have to be re-designed. ''There is also the marketing issue of whether the
new product follows the market trend and whether people are prepared to buy.
Then, there is the stigma of abandoned projects. Banks are also quite
reluctant to finance such projects,'' Sim said.
Despite the many obstacles, Sim feels all parties concerned should play
their part in helping to revive abandoned projects as an uncompleted
property is of no use to anyone. Besides being eyesores, they have become
breeding grounds for mosquitoes, rats and snakes, and even haunts for
''Reviving an abandoned project can help a lot of purchasers who have to
continue to service their loans. Local councils can perhaps lower their
''Instead of building something new, one should try to finish the
project. When you start a new building, capital is not deployed in a very
efficient way as such funds could be better used elsewhere. It is better to
clean up the mess so that banks can go back to the business of lending
money, as it is not in the business of holding assets,'' he said.
He added that a revived project could also generate revenue in terms of
assessment for local councils as well as create jobs for contractors,
suppliers and others.
Sim, who is BGM’s major shareholder, has extensive experience and
knowledge of Malaysia’s property market. He has developed residential
townships, golf courses, resorts, shopping complexes and industrial parks.
He has an engineering and accountancy background and has held senior
positions at Colliers, Talam/Europlus Group and the Kayman Group.
BGM was established in 2003 and is in the business of property
development, investment and real estate management services. It is also
aligned to the international Bluestone Asia Group that focuses on property
investment, development and fund management in Asia Pacific. The group is
also part of the Allstones Group that specialises in real estate development
and investment in South-East Asia.