MALACCANS LOVE THEIR HISTORIC STATE, BUT THEY LOVE CHIC DEVELOPMENTS AND LIFESTYLES TOO
BY Zoe Phoon
Ten years on in Malacca, the astute and agile developer Hatten Land Ltd is going great guns, embracing what the state has to offer, at times turning to the past.
Nothing succeeds like success. Hatten Land is already eyeing the Southeast Asian property market, and for now it’s also venturing into wellness tourism, one of the world’s fastest growing tourism markets, via its Satori mixed development in Malacca, and medical tourism in Selangor, Malaysia’s most developed state.
Hatten Land is one of the niche developers in the country. Specialising in integrated residential, hotel and commercial developments, its projects are well positioned in the heart of Malacca town with sea-facing vistas and proximity to tourist attractions.
Analysts say the developer is benefiting from the transformation of Malacca. So, what is the state’s appeal as a real estate investment destination?
That’s one question Property360 asked in a wide-ranging interview with Hatten Land executive chairman and managing director Datuk Colin Tan, because its developments are mostly located here (completed, ongoing and in the pipeline), including an integrated project with an estimated RM942 million GDV.
“If one looks at the long term at the various ongoing mega projects and infrastructure developments happening in the state, we are confident that it will become very appealing as a real estate investment destination,” said Tan.
According to him, Malacca is already an iconic destination for its heritage and history which draw local and foreign tourists.
It attracts 16 million tourists annually and is ranked among the Top 10 best tourism destinations in Asia 2017 by Lonely Planet, one of the world’s largest travel guide publications.
The state’s potential as a bustling tourism destination will lead to business and job opportunities for locals.
Also citing Malacca’s ideal location in between Malaysian capital Kuala Lumpur, Johor and Singapore, Tan said that with better and faster connectivity between the states and Singapore, more people will be encouraged to visit or work in Malacca while families will be incentivised to consider it as a first or second home.
“The KL-Singapore High Speed Rail (HSR) project will serve as a major catalyst for rapid development and will lead to a boom not only for tourism but for the housing industry, too.
“Other big developments that will make Malacca an attractive destination include the new deepsea port due for completion in 2023. It is expected to draw an additional 2.5 million tourists per annum over the next 12 years and create 15,000 jobs.
“The many developments and infrastructure projects will make the state attractive for businesses,” he noted.
Furthermore, he said the Malacca government welcomes foreign investors with open arms and provides much support with its investor-friendly, pro-business and ease of doing business stance.
Tan’s outlook for the Malacca property market?
“Again, if one looks at the long term at the various ongoing mega projects, infrastructure developments and population projection of the state, we are confident that the property market will become alluring to investors.”
His advice to those looking to buy property here as an investment: Malacca is a very strong and high yield potential spot when it comes to property investment. It is anchored by very strong history and culture coupled with the increasing tourism numbers annually.
The growing visitor arrivals every year have shown tourism as the next big thing for Malacca, home to numerous fascinating places including Jonker Walk and St Paul’s Hill.
Not only this. Many major upcoming projects such as HSR, deepsea port and Melaka Gateway, among others, will further boost Malacca’s growth with the increasing footfall and property prices, he shared.
“The many developments and infrastructure projects will make Malacca an appealing destination for businesses and homeowners.
“We’re confident of full take-ups for our developments as Hatten Land is known for its 10-year track record in developing award-winning integrated residential, hotel and commercial developments in Malacca,” Tan continued.
Progress surpasses expectations
Hatten Land’s current development portfolio in the state comprises Hatten City phase 1, Hatten City phase 2, Harbour City, Vedro by the River, the MICC Project, and the recently launched Satori wellness-themed mixed development.
On the projects’ status, he said Hatten City phase 1 was completed in March 2016 and comprises Elements Mall, SilverScape Residences, Hatten Suites and DoubleTree by Hilton. SilverScape (745 units) is 85% sold, Hatten Suites (589 units) 93%, and Elements Mall 34%.
Hatten City phase 2 is 75% completed and will be ready this year. Over 60% of the residential units had been sold.
Vedro by the River, a 2.14-acre retail mall, was completed in 2Q 2017.
Expected to be ready by 2020 is Harbour City which consists of Harbour City Mall, Harbour City Suites, Harbour City Resort and Harbour City Luxury Hotel.
The group intends to launch the hotel, the last phase of the Harbour City development, by June 30, 2018.
Satori, Malacca’s first wellness hub, is a 2.05-acre integrated development unveiled on July 21 this year by the Malacca chief minister. With an estimated GDV of RM300 million, Satori will comprise a mall, hotel and serviced residences and will be developed over three years.
The MICC Project, with an estimated RM942 million GDV, is a 9.34-acre integrated development that will consist of shopping mall, cineplex, convention hall and auditorium, meeting rooms, hotel and a serviced apartment block. It will be launched in FY2018.
The progress of these projects has surpassed expectations, Tan said.
In the meantime, Hatten Land has entered into memorandums of understanding for the proposed acquisition of assets.
These involve acquiring 8.86 acres of leasehold land for the Movie-Town mixed development comprising retail, residential and hospitality units, and another 66 acres of leasehold land for the Plot K to E Project in support of the One Road One Belt or OBOR initiative. Both are located in Malacca.
The company also plans to venture into medical tourism with the purchase of 25.55 acres of freehold land in Cyberjaya, Selangor, to be developed over three phases.
This mixed development with an estimated GDV of RM3 billion will include a hospital, retail space, offices as well as residential and hospitality units.
Dark clouds and silver linings
Meanwhile, the cost of living is rising and the economy is seen to be not generating sufficient employment and opportunities. On the Malacca scenario, Tan said:
“The cost of living is rising generally due to the fact Malacca is approaching developed-state status. But property prices in Malacca are still lagging behind the prices in KL, which is much developed.
“For Hatten Land projects, key infrastructure works in Malacca will support tourism and investment in the area and lead to capital appreciation of the properties in the vicinity, potentially increasing demand for our projects.”
Citing National Property Information Centre data, he said transactions of dwelling units in 2014 and 2015 exceeded 8,000 per year. Barring unforeseen circumstances, the transactions in 2016 are expected to stay above 8,000 residential units.
On news reports that the government is considering making it mandatory for foreign buyers to pay in US dollars when buying property in the country, and that it may also raise the minimum price for property they buy, Tan said:
“We feel that to motivate developers, the government needs to allow free market options instead of restricting developers and buyers in pricing.
“By increasing the minimum property price for foreigners, it will make the investment in a particular place less attractive and will in turn cause the investors to explore other investment options around neighbouring countries, which in turn will cause an outflow of funds.
“By making it mandatory for foreign buyers to pay in US dollars, it will serve as incentive to buyers due to the conversion rate.”
On such impact on the Malacca property market, he said the latter is still attractive overall as the minimum purchase price for foreign buyers is RM500,000.
On issues that might affect the market in the remaining months of 2017 and in 2018, and how Hatten Land would tackle them, he expects increased supply and lower demand for property and lower loan approvals due to more stringent loan approval.
He said Hatten Land has taken further steps to provide extra service such as offering Developer’s Loan and further property discount to ease the pain of buyers.
Despite the lacklustre Malaysian property market, he sees a silver lining in every cloud:
“Although investors and buyers remain cautious about the property market in view of the economic slowdown, we are optimistic that the nation’s economy will improve soon.
“Genuine demand for homes is still strong, given Asians’ propensity to own rather than rent properties, and Malaysia’s young age profile.
“The government has also introduced various schemes to ease first-time homebuyers’ financing burden.”
Moving forward, he said the Hatten group will continue to identify new opportunities in Malaysia and overseas, adding, “We have set our sights on becoming a regional property developer that will cater to the growing demand for integrated developments in Southeast Asia.”