'White knight' in Johor property sector
04/02/2008 City & Country

Johor-based property developer Mahabuilders Sdn Bhd has a knack for reviving abandoned projects and turning them into thriving townships. And it has been so successful at this over the past nine years that it has often been called the southern state's "white knight".

Even the company's head office in Taman Baiduri, a 15-minute drive from the JB city centre, was once part of an abandoned project. Now, the area is a bustling township with 27 shopoffices and 115 units of 2- and 3-storey houses. Taman Baiduri was Mahabuilders' maiden foray into property development in 1999.

Starting out as a contractor in 1983 under the name of Mahadun Benaan Sdn Bhd, the company slowly grew and changed to its current name in 1994 under its founder and managing director, Mustapha Hassan.

As a contractor, Mahabuilders was involved in notable projects such as JB's Menara Tabung Haji, Hospital Sultan Ismail, Dataran Bandaraya Johor Bahru and Menara MPJBT.

Since its entry into property development in 1999, the company has been involved in projects with a total gross development value (GDV) of over RM1 billion.

Within nine years, it has positioned itself as one of JB's leading developers with an undeveloped landbank of 650 acres and a current development portfolio that includes 7,000 residential and commercial units.

The company is en route to a listing on Bursa Malaysia's Main Board soon.

City & Country spoke to Mustapha and his general manager, Abdullah Yusup, to gain an insight into what makes the company tick.

Says Mustapha: "Taking over an abandoned project is not easy. There are many issues, from legal to socio-economic factors, that need to be resolved.

"Our involvement in property development started with Taman Baiduri. Later on, other abandoned projects came our way and we worked hard to revive them.

"Over the years, we have revived eight such projects and are working on a few more.

"We carry out due diligence on each project. The process is very tedious as it involves various parties from the existing developer, buyers, creditors, contractors, material suppliers and the authorities.
"We have built our company on a lot of hard work and perseverance.

"Our Pandan City project is an example of how we pulled our resources together to get it back on its feet."

Pandan City is a sprawling 40-acre site in Tebrau, near the Pandan wholesale market in JB. The project was abandoned more than six years ago after the original developer ran into financial problems. The site became quite an eyesore near the JB exit of the North-South Expressway until Mahabuilders came into the picture in mid-2007 and revived it.

Now, it is fast taking shape as a one-stop city with modern facilities and impressive standards. To be completed in stages within the next three to four years, Pandan City will have 97 units of shop offices, a 102-room business hotel, a 76-bed hospital, more than 300 units of apartments, a 20-storey office tower block, a multi-storey commercial centre, a night bazaar, an entertainment city, a wholesale walk and a wide range of other facilities.

By June this year, the 97 units of shop offices, the business hotel and the private hospital are expected to be completed.

Pandan City is also poised to be a much sought-after business address in JB due to its location in the Iskandar Development Region (IDR), a government-backed initiative that is scheduled to transform IDR into one of the country's high growth corridors.

According to Abdullah, Pandan City's wholesale walk is suitable for retailers and business operators of various sectors such as automobiles and accessories, electrical and electronic appliances, information technology, furniture, canned food, organic food and others.

Easy accessibility to the North-South Expressway and the Pasir Gudang Highway is another key feature. Pandan City will also be directly connected to the new Eastern Distribution Link (EDL) Expressway.
With these links comes direct connectivity to Singapore, the ports of Tanjung Pelepas and Pasir Gudang, and the Senai international airport.

Pandan City, adds Abdullah, will house the country's one-of-its-kind chicken processing centre (CPC).
"The CPC will have top-notch features that will make it totally free from noise, odour and pollution.

"It will complement the development of Pandan City and create scores of jobs and business opportunities," he says, adding that the state government has awarded the company a 15-year concession to manage the CPC.

Abdullah says the state government has also endorsed Pandan City as a "tourist spot", which should bring in a high volume of local and foreign visitors. Pandan City is undeniably the jewel in the crown for Mahabuilders.

"The company has, to date, completed reviving eight abandoned projects with a total GDV of RM338.6 million," he offers.

The projects include Skudaiville's 400 units of apartment, 317 units of 1-storey houses in Taman Renggam Jaya, 50 units of residential and commercial units in Taman Nesa, 304 units of medium low-cost apartment, 64 units of 2-storey houses and four units of semi-dees in Taman Skudai Baru.

In Taman Desa Idaman and Sri Pelentong, the company revived more than 560 units of commercial and industrial properties with a GDV of RM240 million.

Revived projects currently under construction include 1,500 units of medium and medium-low cost apartments in Larkin, 400 units of apartments in Skudai, and 400 units of residential and commercial properties in Simpang Renggam.

Other projects launched by the company and under construction include 78 units of shop houses in Taman Perling, 632 units of apartments in Bandar Nusajaya, 1,500 units of residential and commercial properties in Desaru, 2,500 units of low and medium-cost apartments in Bukit Indah and a 160-acre tract in Kluang for mixed development.

The project in Larkin carries a GDV of RM150 million and comprises apartments of 800 to 1,050 sq ft in size with prices ranging from RM50,000 to RM130,000.

The Desaru project is spread over 138 acres and carries a GDV of RM150 million while in Bukit Indah, the company is building 2,500 units of low and medium-cost apartments with a GDV of RM124 million.
In Kluang, the GDV is RM400 million and involves the development of 1,600 residential and commercial units. The project is expected to be ready in 2012.

Within the Port of Tanjung Pelepas area, Mahabuilders is looking at an abandoned project that carries a GDV of RM70 million.

The project, over a 17-acre tract, comprises 336 units of medium-cost apartments, 336 units of low-medium cost apartments and a multi-purpose hall-cum-clubhouse. Mahabuilders will fully furnish these units under the government's BTS (build then sell) scheme. Buyers need to pay only 10% of the cost until the units are fully completed.

"We also plan to launch 400 units of medium-cost apartments in Kebun Teh, Larkin. The development will be called M'tiara Apartment and carry a GDV of RM80 million," says Abdullah.

Mahabuilders also plans to build a resort project on 70-acres in Desaru called "The Lost Atlantis". It will have hotels, bungalows and apartments, as well as retirement homes.

"The next three to five years will be an exciting period for the company," says Mustapha.

"The bulk of our projects will then be completed or near completion, setting the stage for bigger things.
"Although profit margins are traditionally smaller when we take over abandoned projects, we see satisfaction in making a 'dead' place come to life.

"It also gives us tremendous satisfaction when aggrieved buyers of abandoned projects come to our office to personally thank us for reviving the projects.

"That is some thing we can't measure in monetary terms."

Mustapha says the company has a construction order book of more than RM200 million with property development as its main contributor. He says the company is looking forward to its listing on Bursa Malaysia and plans to replicate its success in reviving abandoned projects in other parts of the country.
"We also want to expand our landbank," he adds.