It has been more than a year since City & Country caught up with Jesselton Waterfront Holdings Sdn Bhd executive chairman Datuk David Chu just before he launched the RM600 million Jesselton Residences in Kota Kinabalu in June 2011.
Jesselton Residences is a mixed-use development in the central business district of Kota Kinabalu. The project comprises three 30-storey towers located beside one of Sabah's largest malls, Suria Sabah. It will offer 100,000 sq ft of retail space over three levels and 333 apartments upon completion in 2015, says Chu, admitting that three is his favourite number.
"The response has been very good with a take-up of 70% so far. We have set a new benchmark in Kota Kinabalu as we are selling the units at prices comparable with Kuala Lumpur. Most of our buyers are from Kota Kinabalu while the others are from Sarawak and Brunei. There's also been interest from Hong Kong and China," Chu told City & Country in a recent interview in Kuala Lumpur.
Standard units range from RM600 to RM900 psf while the penthouses are about RM1,500 psf. The units will offer views of the South China Sea and the islands of Tunku Abdul Rahman Park.
Residents will be able to walk to Suria Sabah, like how One Menerung residents in Bangsar, Kuala Lumpur, are able to walk across to Bangsar Shopping Centre to buy groceries or dine.
The ground floor of the retail component will be kept by the developer, which plans to attract branded stores and fine-dining restaurants as tenants.
The lower ground and first floors are for sale at RM2,000 psf and RM2,200 psf respectively. "It's still considered very cheap compared with the other malls nearby such as Times Square or even Wisma Merdeka. I understand that Suria Sabah, for example, is selling its lower ground floor for about RM3,000 psf. We have sold over 50% of our retail space so far," he adds.
Twin towers of SabahCome next year, Chu plans to launch what he refers to as the "twin towers of Sabah" project. It will be the highest condominium towers in Sabah and probably even Malaysia. The project comprises two 56-storey purely residential condominium towers on a 5-acre site in the Luyang area, about 10 minutes from Kota Kinabalu city.
The condos will have views of Mount Kinabalu, the sea, the city and the Sabah Golf and Country Club. The project is planned for launch in the later part of 2013.
Before that, Chu wants to take his whole team to Kuala Lumpur, or maybe even Hong Kong, so they can explore the twin-towers concept further.
While he is still looking for a good name for the project, Chu says it will have a total of 800 units with an indicative gross development value (GDV) of RM650 million.
"Smaller units are getting more popular so we're offering units ranging from 600 to 2,800 sq ft," he says. Indicative prices for the units are about RM650 psf, along with full condo facilities including a sky garden.
"Young buyers these days want to live in iconic projects [an address or a landmark]. In fact, the condo market in Kota Kinabalu has been very hot the past two years. Even the big boys [developers] from Kuala Lumpur have been coming to Kota Kinabalu," he adds. Indeed, building developments that are exceptional in their design seems to be the way Chu is going with his projects.
Depending on market conditions, he may launch another residential project close to the "twin towers" next year. Called Jesselton Heights, it will have a GDV of RM500 million.
Design and pricing aside, Chu strongly believes that location is the key factor in a project's growth potential.
"It doesn't matter how big your site is, it's all about the location. That's our main focus although finding land in good locations is very hard these days. Be it in Singapore, Australia, the US, Hong Kong or London, go for the location and you can't go wrong," he says.
"I always tell my customers that I have the best location in Kota Kinabalu and if they don't dare buy my property, there's no other place for them to buy. I also like to build something very special … an iconic project that stands out."
Chu says properties in Kota Kinabalu have been selling very well, be it commercial, retail or residential, and his outlook for the Sabah property market remains positive. "I believe demand will continue growing, especially for smaller units. I also expect the tourism market to grow further in Sabah next year.
"Many Sabahans are their own bosses in industries such as plantations, for example. They are cash rich. After the 2008 financial crisis, they didn't want to invest in stocks or put their money in fixed deposits. They feel that buying property is the best option as values keep increasing every year. The capital gains are always good."
Moreover, Kota Kinabalu has the second busiest airport in Malaysia and even more travellers are expected to arrive when the open sky policy takes effect in 2015. The policy was approved by the Cabinet in November and will see 37 routes connecting Kota Kinabalu with Asean countries and China.
"One needs to be financially strong to be a developer in Sabah. To obtain a licence you have to pay 5% of your gross development cost to the housing board as a bond. You have to keep it there until you get the certificate of fitness. In Kuala Lumpur, you just have to pay RM200,000 regardless of how much your project is worth. So you rarely see abandoned or incomplete projects in Sabah," explains Chu, who is also executive director of public-listed Widetech (M) Bhd.
He also owns the 90-room Kudat Golf & Marina Resort (the hotel, not the golf course) but does not plan to acquire or build more hotels in the state. Built in 2003, Kudat Golf & Marina Resort is about 2½ to 3 hours drive from Kota Kinabalu.
This story first appeared in The Edge weekly edition of Jan 7-13, 2013.