M Group has recently acquired a new freehold project in Mukim Petaling, within a 10km radius of KLCC. Learn more on our blog!
M Group Berhad's wholly owned subsidiary M Group Properties Sdn Bhd today acquired prime freehold land in Mukim Petaling measuring approximately 4.63acres for RM90.3million. The land cost is inclusive of development charge.
This will be a quick-turnaround niche development as the land comes with development order obtained, but in view of the prime location, M Group intends to revisit the development plans in order to fit current market demands.
Based on preliminary plans, the project will have an estimated gross development value of approximately RM500million. The most affordable 2-bedroom units would have an indicative built up from 700sqft and indicative starting price from RM428,000.
The project will enjoy a large captive target market as the land straddles the highly populated and established neighbourhoods of Old Klang Road, Sri Petaling, Bukit Jalil and Salak South, and is within a 10km radius of KLCC, Cheras, Ampang, Petaling Jaya and Seri Kembangan. These are densely populated residential communities which are highly accessible via major highways and trunk roads. Access to the NPE and Silk Highways are just 1.1km away, KESAS and KL Seremban Highways within 2.8km and MEX and Smart Tunnel within 4.8km. It is only 800m to the upcoming Taman Naga Emas MRT station along MRT Line 2 which is on track to be completed by July 2021 and fully operational by 2022. This station would enjoy Park and Ride facilities.
Based on population analysis and market survey, M Group intends to target mainly first-time homebuyers and upgraders. Access into the land is available via Jalan 2/149 and M Group will build a direct access from the existing road to the new development. The project is targeted to commence in the second half of 2019 and developed over a span of 4 to 5 years.
M Group's Director of Group Strategy and Operations Lionel Leong said, "The location is very prime and we intend to plan 2-bedroom units for first time homebuyers, with an indicative built up from 700sqft and indicatively priced from RM428,000. We believe there will be a large pool of these buyers as their families may be staying within the surrounding established neighourhoods. From the actual transactions listed in JPPH, we also see high demand for bigger units. These larger units would be ideal for buyers who are currently staying in older homes and want better security and facilities to cater to their young families and children. For this target market, we intend to design 3 to 4-bedroom units. We shall be doing a registration of interest exercise soon."
The acquisition will increase M Group's prime landbanks to 2,109 acres, with total remaining GDV and unbilled sales of RM26.2billion. This is in line with M Group's focus to increase its presence in the Klang Valley, especially in the affordable range. With this acquisition, 67% of their landbank is in the Klang Valley. By virtue of its economic dominance, the value and volume of property transactions in the Klang Valley (Kuala Lumpur and Selangor) is by far the highest in the country. According to the National Property Information Centre (NAPIC), in 2017, the value of residential property transactions in the Klang Valley itself was RM32.3 billion, accounting for nearly half of the RM68.5 billion achieved in the whole of Malaysia. In terms of demand, 47% of the total transaction value of RM68.5 billion for the residential sub-sector in 2017 came from units with price points between RM300,000 and RM1 million (similar to 48% in 2016) per NAPIC's report. By stepping up land acquisitions in the Klang Valley with focus on affordable pricing, M Group will be better positioned to meet the market demand.
M Group's Group Managing Director Tan Sri Dato' Sri Leong Hoy Kum said, "This acquisition fits our strategy of landbanking for niche projects in good locations which are ready for immediate development. Various recent survey has shown that 92% of Malaysians prefer to buy than rent, with the top 3 influencing factors being price, location and security and safety. We will continue our strategy of providing homes with luxury features at affordable rates as we believe demand will persist for the right product in the right location, at the right pricing."