The Malaysian Reserve - Tropicana sets 30% of RM50b landbank for affordable homes
TROPICANA Corp Bhd plans to utilise between 20% and 30% of its 526ha landbank in the Klang Valley, Johor Baru and Penang for the development of affordable homes with an estimated gross development value (GDV) of RM6 billion. Group CEO Datuk Yau Kok Seng said the company is expected to build 10,000 to 15,000 units of affordable homes with built-ups between 60.39 sq m and 92.9 sq m, with average selling prices of below RM500,000. He said the projects would be launched within the next five to seven years. "Year-on-year (YoY), we are expecting a RM 1 billion growth in revenue on the back of all the planned initiatives he told reporters at the Tropicana Urban Homes launching ceremony in Petaling Jaya last Friday. As it is, Tropicana's total landbank has the potential of unlocking some RM50 billion worth of GDV.
The strategy to develop more affordable housing projects is spurred by the current glut and over saturation in the high-end and upper-middle propertv segment. Yau said the management plans to diversity the firm's revenue model in order to achieve a stronger and healthier balance sheet moving forward. "We do not believe that our focus to embark on more affordable housing initiatives would dilute our brand, as previously we are known to cater towards the more affluent segment. "We expect our revenue and sales to return to more than RM2 billion in the next two financial calendars/' he added. Tropicana Urban Homes, encompasses the Tropicana Aman and Tropicana Heights that are located in Kota Kemuning, Shah Alam, comprising about 3,000 units and 1,023 units respectively.
The combined GDV for the development stands at approximately RM1.7 billion, which is expected to enter the market within the next nine months. Priced between RM300,000 and RM500,000, the Tropicana Urban Homes units range from 60.39 sq m to 92.9 sq m. Yau said the Urban Homes project is the company's private initiative to complement the government's mandate to help build more affordable homes in the country. "Our move to build quality homes in strategic urban areas of our existing and new landbank is in line with our government's initiative to increase the affordable housing supply and ownership to more than one million units by 2020 he added.
Yau said that there are no fixed criteria for buyers who are interested in any of the u n its, but the targeted audience for the Urban Homes are mostly first-time homebuvers and young professionals. "Many developers have also embarked on affordable homes, but typically they are on a standalone basis, and we like to differentiate ourselves because our affordable homes are similar to a normal condominium unit. "Our products are priced competitively at below RM500 per sq m, which is a selling point to attract buyers as most of the high-rise developments surrounding the area are normally priced at over RM600,000," he said.
Yau said that the Urban Homes is aimed at aiding first-time homebuvers, middle-income professionals, young homebuyers and new families that aspire to have modern living and get on the property ladder. "(liven the shortage of strategically located homes at affordable price tags that cater to the needs of young and aspiring homebuyers. I am confident that Tropicana Urban Homes will be well received, coupled with the company's excellent track record on delivering quality homes he said.
Located next to the growing affluent neighbourhood of Kota Kemuning, the development encompasses over 1,000 acres (404.7ha) of both residential and commercial components. Tropicana will also build a 10-acre Tenby International School campus, that takes advantage of its easy access to six major highways Lebuhraya Shah Alam, the Federal Highway, Lebuhraya Kemuning Shah Alam, Expressway Lingkaran Tengah, South Klang Valley Expressway, and the up-and-coming West Coast Highway.
