Orando chalks up high-rise success

by **Cals** Sat 15 Jun 2013, 15:09

Saturday June 15, 2013
Orando chalks up high-rise success
By JOHN LOH
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[You must be registered and logged in to see this image.]Bedroom of Vila Vista condo.
FEW small-time developers can lay claim to selling out their maiden condominium in two days flat, but this is exactly what happened to [url=http://archives.thestar.com.my/search/?q=Datuk Eng Wei Chun]Datuk Eng Wei Chun[/url].
After dipping his toes in the business eight years ago with four units of semi-D in Old Klang Road's Taman Yarl, the contractor-turned developer followed that with a row of landed homes in Taman Sri Angkasa, Puchong.
Before long, he and his partners at [url=http://archives.thestar.com.my/search/?q=Orando Holdings Sdn Bhd]Orando Holdings Sdn Bhd[/url] were ready to try out their first high-rise. The Cheras-based developer tasted success with the leasehold Vistaria in Taman Pertama, a 21-storey condominium that was 100% sold within days of its launch.
Not only did Orando, of which Eng is managing director, hand over the keys six months ahead of schedule, but the prices of the units had more than doubled to RM600,000 from when they were unveiled four years ago.
“My purchasers are now making more than me,” the affable Eng tellsStarBizWeek during an interview at the gallery for his latest project, the 39-storey, 1.5 acre Vila Vista, also in Taman Pertama.
Like Orando's inaugural condominium venture, the RM123mil gross development value (GDV) Vila Vista, touted as the tallest residential tower in Cheras, saw brisk sales for its 137 units, with only two or three non-bumiputra units left since it was launched on May 5. All four penthouses will be kept by the directors, possibly for renting out.
Orando's second residence project in the area, Sky Vista, was rolled out two years ago at an average price of RM630,000 per unit. It was fully sold in two weeks.
Starting small
Before he was a contractor, the 40-year-old Eng trained to be a quantity surveyor at a local college.
As an impressionable young boy, he observed that all of his father's customers who drove fancy cars were contractors. The senior Eng ran a hardware shop in Setapak, Kuala Lumpur.
His father had owned a lucrative timber trading business, but that took a turn for the worse when the market crashed in the late 1980s.
[You must be registered and logged in to see this image.]Eng: ‘My purchasers are now making more than me’.
Eng got his first job at age 22 with Syarikat Pembinaan Setia, then a pure construction firm. At 28 he struck out on his own as a contractor.
“I didn't have a lot of money,” he recalls. With what he could muster, Eng bought a Pajero for use both as transport and an office. His first contract was worth RM1mil for waterworks.
Eng's choice to specialise in infrastructure construction would later come in handy. When he was 33, he won a substantial water treatment job. However, because of his lack of capital, Eng sold his company to listed builder [url=http://archives.thestar.com.my/search/?q=PJI Holdings Bhd]PJI Holdings Bhd[/url].
It was while he was working for PJI that Eng gave serious thought to property development. “In construction, the most difficult part is collection. This is a challenge all contractors face,” he explains.
So he roped in the (now late) father and uncle of Orando [url=http://archives.thestar.com.my/search/?q=Darwin Teo]executive director Darwin Teo[/url], who were businessmen from Indonesia. Eng has a 25% share of Orando. The firm's seed capital was RM1mil.
After serving his mandatory three years in PJI, Eng resigned to concentrate full time on Orando.
Eng had to learn the hard way the stereotype that all developers are cut-throat and unscrupulous.
Orando's Sky Vista provoked the ire of local residents when the company began work on the site, which sat on the edge of a forest reserve.
They had mistakenly assumed that Orando was encroaching on protected forest. “I had to explain to them,” Eng says. “We built a retaining wall. People like to believe that developers are cunning. But as developers, we also want the other stakeholders to do well.”
Maintenance collection at 97%
Eng cites this piece of advice from an ex-boss: “When you face the public, you can't make 100% of the people happy.”
Still, Eng is heartened by the fact that less than 40% of Vistaria's buyers submitted a defect list. “Even today, our maintenance collection stands at 97%,” he declares.
A home, to Eng, is made up of more than just four walls. “For me that isn't good enough. You are not selling concrete products, but a lifestyle,” he says.
Orando prides itself on delivering homes that are akin to fine Swiss watches, with amenities such as a grand lobby, a garden terrace in every unit and three-tier security.
The firm even interviews interested buyers and discourages them from renting out to migrant workers, on whom it would impose a maintenance fee 10 times the regular amount.
Not that he has anything against foreign labour, but Eng feels he has to maintain a certain level of quality in the tenant mix for the good of all.
In addition, the materials used in Orando's properties must have Sirim approval. “Some people ask me how I manage my workmanship,” says Eng, whose accessory du jour is the bowtie.
“It's simple. Besides being the project coordinator, we pay our contractors promptly. For example, if you're a worker and the payment is always late, when you are plastering the wall you may wonder, This month got pay ah?' That's how you get bad workmanship.”
Land deals
At least one online property forum has denounced Vila Vista as “sky high homes at sky high prices”.
Eng shrugs. “My buyers were bankers, CEOs and company directors. Surely they see value,” he quips. The most expensive unit, spanning some 2,060 sq ft, had a RM1.3mil price tag, while the highest transacted price per sq ft in Vila Vista came close to RM630.
Looking ahead, Orando is weighing its options for a piece of land it bought in Segambut for RM40mil, or RM262 per sq ft, from private landowners.
Eng says the 3.5 acres, which enjoys proximity with Desa Park City and[url=http://archives.thestar.com.my/search/?q=UOA Development Bhd]UOA Development Bhd[/url]'s Scenaria, may see condominiums worth RM200mil being built on it.
Orando currently has a GDV of between RM500mil and RM600mil, he says, and it is keen on adding to its landbank.
Eng is non-committal when asked if Orando intends to grow its GDV to RM1bil. “I can't predict the market,” he answers. “That is for fortune tellers.”
The company was at one point mulling over a listing with a group of developers, but the plan fizzled out. For now, Eng, who early in his career put himself through night classes to study business and management, says he can't find a reason to sell the business.
“The ceiling is still high up there. City-to-city, KL is more affordable than Jakarta, Bangkok and even Ho Chi Minh City.”