PETALING JAYA: The halt of the mixed development Selayang Star City project since early this year has raised eyebrows in the property market, giving rise to concerns that it could be a sign of more such occurrences.
Disgruntled buyers have expressed their anger on property blogs, questioning the delay of the project, which comprises a shopping mall, a hotel and three blocks of serviced apartments.
In response to SunBiz via email, the project developer Leadmont Development Sdn Bhd said construction works for the mixed development project are expected to resume in October, upon completion of its remodelling exercise.
The group said the delay has noting to do with its financial position, but to better prepare for the group’s future launches.
Stressing that there is no issue of cash constraint, it explained the remodelling exercise is aimed at reducing the group’s burden going forward. However, it did not give details for the remodelling on whether it includes any bank borrowings going forward.
“As financial institutions have been cautious in lending to retail in recent years, our funding strategy has been always to minimise bank borrowings. For example, this project is funded (by far) by cash without any bank borrowings, (with) land and construction free from encumbrances.
“In order not to overly exhaust the cash position of our company and to balance the commitments in some of the potential new launches, we had to remodel our construction progress and financial model, with inputs and support by main contractors, our tenants and financial institutions,” it noted.
In an email reply to SunBiz, however, the Selayang Municipal Council said it has been informed by the developer that there was a change in the contractor for the Selayang Star City project, without mentioning the reason.
According to the Selayang Municipal Council, currently a total of five abandoned projects are being revitalised within the area, including Gombak Perdana Villa, Apartment Selasih, Taman Sedaya (Astana Square), Selayang Spring Barisan Tenaga Perancang and Taman Sri Garing projects.
Meanwhile, there are three projects that are under the revitalisation plan, namely Taman Selayang Mutiara, Rancangan Tersusun Kg Kiai Arshad and Projek Pembesaran Kg Baru Kundang.
Nonetheless, Leadmont said it is optimistic that Star City Mall, which spans about 1 million sq ft, will be completed by 2018, while the serviced apartments, together with the Holiday Villa Hotel are to be completed in 2019, with an average take-up rate of 60%. Another block of serviced apartments is yet to be launched.
The build-ups of the units range from 624 sq ft to 1,280 sq ft, with an average selling price of about RM620 per sq ft.
Leadmont general manager (business development and investment) Lum Youk Lee had reportedly expected the mall to open its doors by the second quarter of 2017.
Leadmont said the group continues to receive support and trust from its retailers, despite predicaments of changes to the opening date.
The group has managed to secure a tenancy rate of above 75%, including supermarket, departmental store, cinema, fitness and bowling.
“We remain optimistic with this unique integrated retail product, truly one of its kinds in Selayang by far,” it added.
Leadmont’s completed projects include centreSTAGE PJ, Amansiara Business Park Selayang, and Leadmont Hill Cheras, to name a few.
It also has an upcoming project at Jalan Sultan Ismail, which is slated for launch within the year.
A check with the Companies Commission of Malaysia shows that Leadmont Group, which was established in April 2000, registered a net profit of RM20.42 million on the back of RM268.5 million in revenue for the financial year ended Feb 28, 2015, the latest financial results available.
Wong Tzy Jian holds a 99.7% stake in Leadmont, while Wong Hon Chong and Lai Kui Yin own the remaining 0.2% and 0.1% stake respectively.
Source: The Sun Daily