Tambun Indah still on land hunt

by **Cals** Wed 12 Mar 2014, 12:40

Business & Markets 2014

Written by Kang Siew Li of theedgemalaysia.com

Wednesday, 12 March 2014 10:37

KUALA LUMPUR: Tambun Indah Land Bhd continues to hunt for additional land in its traditional stronghold of Seberang Prai, Penang, and its first piece of land in Kuala Lumpur, said managing director and founder Teh Kiak Seng.

In Seberang Prai Tengah and Seberang Prai Selatan, the property developer has been approached by several landowners interested to sell their land. However, “nothing has been finalised,” said Teh.

In Kuala Lumpur where land prices are high, Tambun Indah hopes to enter into joint venture (JV) with landowners to develop their land. Under such a JV deal, the landowner provides the land while Tambun Indah bears all other expenses related to the land development.

In return, the landowner is compensated by the developer with a portion of the completed units.

Teh told The Edge Financial Daily in a recent interview that the group is looking to expand its landbank only in mainland Penang and Kuala Lumpur due to the large residential market in these two areas.

“We have no intention of going abroad just yet as we are not big enough. You have to know the market well before you go [and] doing business overseas is not easy. You have to deal with different guidelines, different [work] environment and different requirements.”

Teh said the group will have no problem funding the land acquisitions as it is in a net cash position. As at Dec 31, 2013, its cash and cash equivalents stood at RM113.8 million.

Tambun Indah, he said, continues to see good potential for further development in Seberang Prai as property prices on Penang Island have risen beyond the reach of many Malaysians due to land scarcity there.

“Also, there are more job opportunities on the mainland, especially with the opening of the Batu Kawan industrial estate, the setting up of Swedish home furnishing store Ikea and the development of a proposed international theme park there,” Teh said.

Tambun Indah’s 1,100-acre (445.15ha) flagship Pearl City township in Seberang Prai Selatan is one of the main beneficiaries of these developments, with 12 nearby industrial parks located within a 15km radius from the township.

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Teh: We have no intention of going abroad just yet as we are not big enough.

“We [Pearl City] have the advantage of location. We are five minutes from the North-South Highway, 15 minutes from the new Penang Second Bridge and one minute from the proposed Ipoh-Padang Besar electrified double track station,” said Teh.

The Penang Second Bridge was officially opened on March 1 and is expected to change the landscape of Seberang Prai Selatan.

Tambun Indah is currently the market leader in Seberang Prai Selatan, accounting for 40% of property sales. “For the whole of Seberang Prai, we account for 14% of all sales. We want to improve and grow bigger,” said Teh.

With the opening of the Penang Second Bridge, he sees more people moving to Seberang Prai Selatan where house prices are lower than those in Seberang Prai Tengah and Seberang Prai Utara.

“For instance, the average price of a two-storey terrace house in Seberang Prai Utara is about RM600,000, while that in Seberang Prai Tengah is RM500,000 to RM550,000 and Seberang Prai Selatan about RM400,000.”

Teh believes the government’s plan to relocate the Royal Malaysian Air Force (RMAF) base to Teluk Air Tawar in Seberang Perai Utara will be a boon to Seberang Perai’s property market.

“The existing airbase sits on 1,007 acres of prime land in Seberang Prai Utara. There is a lot of land surrounding the airbase. At the moment, there are not many projects there,” he said.

Under a land swap deal, TSR Capital Bhd, via a JV with Lembaga Tabung Angkatan Tentera and Pembinaan Bukit Timah Sdn Bhd, will be given the existing air base land in return for building a new RMAF base at a location yet to be determined.

The parcel of land has been slated for an integrated mixed-use project, with a potential gross development value of more than RM10 billion and is expected to take at least 10 years to develop.

“The proposed project is good for Penang. More supply [of homes] will help stabilise land prices. And whichever place the new air base is located, it will also help to develop the area. But it has to be away from the residential areas,” Teh added.

This article first appeared in The Edge Financial Daily, on March 12, 2014.