Sungai Besar developers set sights higher
Laura Lee 
An artist’s impression of Nova Heritage Development’s terraced houses in Bedena Valley

SUNGAI Besar, the main town and administrative centre of Selangor’s Sabak Bernam district, is seeing several smaller developers targeting the medium to high-end residential property segment with selling prices almost comparable to those in Kuala Lumpur.

Despite the challenging property market, they are bullish about prospects for projects in the area, where a majority of the residents are farmers and fishermen or working in plantations.

For example, Teluk Intan-based GSM Sdn Bhd launched phase one of its Taman Arapaima project in Panchang Bedena in Sabak Bernam in October 2016, with prices starting from above RM500,000 to over RM2 mil.

They comprise 35 double-storey terraced units with four bedrooms tagged at RM558,000-758,000, 18 double-storey semi-detached houses from RM738,000 to RM888,000, 16 double-storey cluster semi-dees at RM788,000 and two double-storey bungalows at RM938,000 and RM2.69 mil respectively.

Covering 3.64ha, phase one is expected to be completed in mid-2018. GSM managing director Guee Sia Mim says although the prices are considered steep, 70% of its units have been sold to-date to locals for their own occupation. They include the two bungalows, where the land area for the RM2.69 mil unit is a huge 15,000 sq ft.

On the remaining 1.2ha of land under phase two, Guee tells FocusM he will wait and see first as it is not so easy to sell now. He was previously developing small projects in Sungai Besar at the lower price range.

For those eyeing good returns from their property purchase in Sungai Besar, Guee admits investing there will be “very difficult” as the return is slim and rental very low. He says a double-storey terraced house can only fetch a monthly rental of about RM600 to RM700.

Alice Lau, a negotiator with Full Homes Realty Sdn Bhd which sells agricultural land and residential properties in Sungai Besar, advises investors to put their money into KL properties as the values “can appreciate much faster”. 

She observes property prices of developments sited near Sungai Besar town are costlier and prices have moved up due to its proximity to Sekinchan, a tourist area.

Tan acquired Nova Heritage Developments to carry out his development activities

Encouraged by the trend of building medium to higher-end properties in Sungai Besar, Datuk Steven Tan, an entrepreneur-turned-developer, bought Nova Heritage Developments Sdn Bhd to carry out his development activities.


He will be pricing his soon-to-be-launched properties from RM488,000 to RM1.2 mil. He is not unduly worried about his purchasers’ ability to service the loan for his medium to high-end homes. He adds most of them indicated they can fork out 50% of their property payments in cash.

Tan, who hails from Sungai Besar himself, adds that over 90% of his buyers are from the local Chinese community, comprising mainly his neighbours, schoolmates and friends.

He has mopped up 12.1ha of agricultural land in Sungai Besar for his maiden gated and guarded Bedena Valley project at Taman Oscar. The project will be developed over five years.

The first phase, which will occupy 2.4ha, will have a total of 266 units comprising 22 double-storey terraced houses (20ft x 50ft) while the rest will be double-storey semi-dees (30ft x 45ft).

The terraced units, offering four rooms, will be priced from RM488,000 to RM588,000 while the prices for the semi-detached units with four rooms and ensuite bathrooms will be from RM738,000 to RM1.2 mil.

Tan estimates the project’s gross development value (GDV) at RM164 mil.


Raising land level

The project will be launched in May and completed only in 2021 instead of the normal 24 months. “I have applied for extension of time for the project to be completed within 36 months as I need a year to prepare the land for development.

“We have to do soil refill to raise up the level of the land to prevent flooding,” the 36-year-old developer explains. He notices similar property types built by developers in Sungai Besar are located at quite low levels, which might not be suitable as it is close to the district’s coastline.

Besides offering housebuyers a modern design, he says the units will have 13ft-high ceilings. To make his offer attractive to housebuyers, Tan, who is also the managing director of WKL-Eco Earth Sdn Bhd, is offering four free e-Cond air-conditioners per unit. e-Cond, a green product recently launched by WKL Eco Earth, claims to be the first eco-friendly air-conditioning system.

Phase two of the project, over 4ha, will be launched next year. Tan says it will comprise 180 semi-detached houses of similar size to units in phase one. With a GDV of RM142 mil, this will be a joint-venture with the landowner.


Red tape obstacle

Sharing his experience as a new developer there, Tan laments the conversion from agricultural land for such developments can take seven months.

“It takes far too long to get the necessary approvals from the local councils and state government agencies.”

Another concern is end-financing from banks. “We have to build up to 80% first before we can get the bank’s approval,” he says, pointing out this is tantamount to the build-then-sell concept.

He says there are not many agricultural plots left in Sungai Besar for development. Coupled with the red tape and difficulties in obtaining end-financing for his projects in Selangor, Tan is turning his attention next to residential developments in Teluk Intan, Perak.

When asked why in Teluk Intan, Tan says he was introduced to property development by his developer friend from that town. He has since acquired two pieces of land there and plans to build 16 single-storey semi-detached units, measuring 30ft x 55ft, on 0.8ha near the town area in August.


Return on investment

Tan’s advice to property investors is “Keep buying as much as you can”. And to newbie developers entering the market, which he finds to be still promising, he urges them to be prepared with ample cash, depending on the size of their project due to the end-financing woes.

Hawson and Hanson’s projects will comprise 60 semi-detached units, says Cheah

Tan is looking at 30% profit margins for his new ventures. While some of the big boys in the property market have been saying they are unable to make such project margins these days, one can understand why he is able to do so looking at the price of land sold in Sungai Besar.

A check with the Property Guru portal reveals a piece of leasehold agricultural land of 0.41ha in Bagan Sungai Burung in Sungai Besar, is up of sale at RM150,000. Formerly an oil palm plantation, the lease for it expires in 2074.

Another developer with an upcoming property project in Sungai Besar is Hawson and Hanson Sdn Bhd. The development, covering over 2.4ha, is also targeted at the higher-end market.

According to Hawson and Hanson shareholder Cheah Sia Seng, it will comprise 60 semi-detached units measuring 30ft x 50ft and priced from RM1.18 mil to RM1.28 mil.

The project will start in May and expected to be completed in 2020.

This article first appeared in Focus Malaysia Issue 267.