GuocoLand banks on foreign buying power

KUALA LUMPUR: GuocoLand (Malaysia) Bhd is undeterred by the slowing property market in the country and is banking on foreign buyers to take up a bulk of its flagship development Damanasara City.
The company, which officially opened Tower A of the DC Residency for sale yesterday, is confident of achieving 100% sales of the luxury residential tower by year-end.
"It is highly achievable because we are not only selling to the locals. We are taking this product overseas due to the slow local market," its general manager of marketing and sales Kenny Wong told reporters at a briefing yesterday.
"We have a very good response from Singapore while Cambodia is cash rich, but they are unsure of the Malaysian market," he said.
To date, more than 60% of Tower A has been taken up, following private showings and previews here and around the region. Wong said about half of the buyers to date are from Singapore and Hong Kong.
"We did a few rounds of private invitations and we see very good take up rate from foreigners, especially Singaporeans. In fact with the weakening ringgit, it actually appeals more to the foreigners. Of course locals, we have a fair bit of purchasers from the Damansara Heights area who are looking for strata developments," said managing director Tan Lee Koon.
Foreigners, who are only allowed to purchase properties priced RM1 million and above, may find it more appealing to buy properties in Malaysia with the current weak ringgit.
Tower A is one of two towers named DC Residency, the residential portion of the RM2.5 billion Damansara City project located at Damansara Heights.
The two 28-storey towers offer 370 units for sale, priced at RM1,350 per square foot (psf). Both towers will be completed by year-end.
Wong said Tower B has not been opened for sale yet. He said the opening will depend on the progress of Tower A as well as market conditions.
The company is also in the midst of finalising agreements with tenants for its 19-storey office tower within Damansara City. To date, it has secured 70% occupancy for the second tower, including two global multinational corporations.
"We are expecting, within one year of completion, to be able to hit 95% occupancy," said Tan. Rental for the 19-storey office tower is RM7 psf.
The first office tower, a 33-storey building, has been sold to the Hong Leong Group, which will relocate its operations by mid-2016. GuocoLand, which is currently located in HP Tower, will also relocate to the new office tower.
The Damansara City project also comprises a mall with 169,000 sq ft of net lettable area named DC Mall and a 5-star hotel.
The developer has already secured tenants for 50% of the mall's lettable space while the 312-room hotel will be operated under the Clermont brand from London. The mall and hotel will be opened in the second quarter and end of 2016 respectively.
On whether it would inject these assets into Tower REIT, Tan said it is an option but it has not decided yet.
Tower REIT currently has Menara HLA and HP Tower in its portfolio. HP Tower is currently 78% occupied. It also owns Thistle Johor Baru and Thistle Port Dickson Resort.