PETALING JAYA: Lagenda Properties Bhd is committed to developing affordable houses below RM200,000 and positioning itself as an affordable homes developer, working towards launching one township a year.
Managing director Datuk Jimmy Doh Jee Ming (pix) pointed out that the current house prices are unreachable to most buyers. Although the average Malaysian household income for the B40 group is RM4,849, it is not a blanket number for the rest of the country.
“Each state has its own recorded average and we’re aware that the average income in Perak is RM2,476. Over the years the income rate has increased gradually, even so it’s still insufficient and there’s a huge unmet demand for affordable housing,” he told Property Take in an interview.
“Most people believe that the affordable housing range is below RM300,000, but that’s not the case. Theoretically, if individuals in the lower income category have no other loans or financial commitments, they could potentially afford a house above RM200,000. Even so, realistically, due to their other commitments and expenses, homes priced above RM200,000 are beyond their affordability.”
In Kedah, for example, the average household income is RM2,355 (B40), RM2,827 (M40) and most of them can be categorised as first-home buyers.
“With that average income, the maximum house price they’d be able to afford is RM190,049 and RM228,109, which is why we at Lagenda are pushing to build homes for the B40 in every state that are actually affordably priced below RM200,000 (single-storey terrace units with three bedrooms),” said Doh.
Lagenda’s current projects are in Perak, comprising Bandar Baru Setia Awan Perdana (BBSAP) in Sitiawan and Lagenda Teluk Intan (LTI). To date, BBSAP has sold 7,885 units since 2016, while LTI has sold 2,594 units since March 2019. It wants to consistently deliver sales of 2,000 units a year a township.
For 2021, Lagenda eyes RM1 billion in sales, from over RM700 million for the first 11 months of 2020 from BBSAP and LTI.
Doh said Lagenda wants to launch one new township a year from 2021 onwards by constantly being on the lookout for land to deliver its mission. In 2021, it will focus on its project in Tapah, Perak, and, in 2022, Sungai Petani, Kedah. Each township will take five years to complete.
Targeted to be launched in mid-2021, Lagenda Tapah will have a potential gross development value (GDV) of RM2 billion and is earmarked as Lagenda’s third township.
Doh said Tapah is a good alternative to Ipoh, as with recent demand for affordable housing stemming from the retiree segment who would like to retire in the vicinity of Ipoh, but are often priced out because of high cost of homes.
“Many retirees prefer landed homes. We believe Tapah will attract a lot of migration from Ipoh, as we plan to launch terrace homes at RM140,000, semi-detached homes at RM170,000 and bungalows at RM190,000.”
Lagenda Sungai Petani is targeted to launch in Q2’22 and will have a potential GDV of RM1.5 billion-RM1.8 billion. It is earmarked as Lagenda’s fourth township and its first affordable housing project outside Perak.
For Lagenda, there has always been a high demand for single-storey terrace houses as they are conveniently designed, with most people preferring to buy landed properties compared to high rises, as well as a large market of retirees alongside first-time home buyers and families to cater to.
Doh emphasised that Lagenda will stay focused on affordable housing and expand out of Perak, with no intention of moving into high-end properties.
“We want to position ourselves as an affordable homes developer, going to the 20 million Malaysians who live outside of the main cities to provide proper, quality, landed properties and within the affordable price range.
“Within a township, we target to build 10,000 houses. To do so, we need 1,000 acres when looking to build a township. Whether through a joint venture agreement or an outright sale, at the right price, we’re positive on acquiring landbanks in the future at competitive pricing.
“Cost efficiencies allow us to maintain cost of homes below RM200,000, as we purchase land in bulk at strategic locations for future and current developments.”
Doh pointed out that due to the Covid-19 pandemic, there is more affordable land to acquire – indeed a buyers’ market as asking prices for real estate are competitive at this point. Lagenda has more than 2,000 acres of landbank earmarked for future development (excluding Sungai Petani).
Lagenda is able to maintain a certain standard and not compromise the quality of its affordable houses, as it buys materials in bulk, thus it is able to optimise both cost efficiency and building structure. It is also able to insource its own construction and building materials capabilities which heightens Lagenda’s cost advantage. The group acquired three firms in August 2020, bringing synergy and cost optimisation to its property, construction and materials sourcing capabilities respectively.
Although an affordable housing project, Lagenda provides facilities and amenities that would benefit and add value to the residents’ lifestyle in a 1,000-acre township, like a club house, pool, futsal court, multipurpose hall, two football fields and badminton courts. Lagenda also manages the shoplots in its townships.
Meanwhile, Doh said it is exploring the Industrial Building System for future developments although it is currently using conventional labour.
“With the current sluggish property market condition whereby not many developers are launching projects, there’s an abundance of labour and contractors which we’re happy to utilise as we build in bulk.
“While we optimise cost efficiency, we’re also able to keep quality in check with reliable contractors and labour.”
