Plenty of land for development with Country Heights

By THE STAR

AMID the current economic uncertainty, Country Heights Holdings Bhd is not targeting any aggressive launches this year, as it is focusing on selling its existing and completed properties. However, the company will stay flexible with its plans to adapt to the current volatile external environment.

“No point launching (projects), if you can’t sell above 60% (of the units)… it will only restrain your cash flow.

“We have set out different targets for different scenarios, so in case the market hits a downturn, we can react promptly. If the US recovers, the sentiment can change very fast…,” says Mark Rozario, the group’s managing director in an interview with StarBizWeek.

He says Country Heights has plenty of land available for development in most of its existing projects, as the company typically retains close to 20% of its completed units for investment purposes.

For example, for its projects Country Heights Kajang and Cyber Heights Villas, it kept 100 units of the 500 villas for each project. These units are not pledged to the banks.

In addition, the company retains about one million sq ft of bungalow vacant lot in Country Heights Kajang. He says that the values of these vacant lots have appreciated to RM70 from RM6 per sq ft since it was first launched.

Very soon, Country Heights will offer bungalow lot landowners in the College Heights development in Pajam, Negeri Sembilan a special package to help them build their dream home which includes building to obtaining the certificate of fitness.

There will be five types of designs for landowners to choose from. However, for the package to work and to allow contractors to build the homes at a 30% discount, it needs to have at least 30 units of bungalow.

The average costs of constructing a bungalow with this package is between RM300,000 and RM400,000 or RM130 per sq ft.

According to Mark, Country Heights gearing ratio is less than 0.5 times, which he considers as “comfortable” based on the industry standard. In addition, he says the group’s assets are undervalued as most of them are carried in the books at historical prices which has since appreciated significantly.

On the property market outlook, he says the domestic market has not been too badly affected; some potential buyers are merely holding back on committing to big item purchases for the time being until market sentiments recover.

“A lot of this is related to confidence and the situation may recover fairly quickly.”

Banking on other drivers

Over the medium-term, he says the group’s main growth driver will be its hospitality, leisure and health division as well as the property investment divisions.

“We will expand our healthcare business (prevention sector) aggressively, as this sector is recession proof,” he says.

Towards this end, the company will expand its healthcare screening facility at Palace of The Golden Horses to 22,000 sq ft which is expected to be completed in three months.

“We have also just launched a traditional Chinese medicine centre at the Palace Beach and Spa few months ago,” he says.

So far, Country Heights’ healthcare division has about 12,000 memberships, all of them from the Klang Valley. Going forward, the company plans to extend its memberships overseas as well as include a wider demographic such as senior citizen, children and expatriate.

The company has another healthcare screening facility at Plaza Mont’Kiara.

He says the other growth driver for the company is the property investment division, particularly the Mines International Exhibition and Convention Centre (MIECC). The company has plans to install more exhibitions events.

However, for the long term, Country Heights core activity and earnings driver will still very much be property development.

This year, Country Heights expects to chalk up an annual revenue of RM200mil and capital expenditure of RM30mil.

Launches ahead

Country Heights’ rainforest development in Sarawak, the Borneo Highlands Resort, will launch 18 super-luxury bungalow lots this year.

This project, with one super-luxury bungalow lot per golf hole would cater to the international market.

The size of bungalow lots varies from one to two acres and will be priced and sold in US dollars. (The indicative price is US$4mil-US$5mil per lot.)

During the launch of Phase 1 to 3 of the smaller bungalow lots last year, Country Heights managed to sell 80 out of 103 lots.

Recently, it launched 46 lots of Phase 4 bungalows.

“There is huge potential for international market. No where in the world is there this kind of (rainforest development) environment. We didn’t cut down the trees, the golf course is built on the original terrain.”

Currently Borneo Highlands Resort’s existing landowners have already built about 30 bungalows. This development covers 5,000 acres of land but the company will only develop 1,000 acres for now.

As for the Country Heights Damansara project, after seeing only a handful of landowners building their dream homes there a few years ago, the numbers have slowly grown to 30 households today and by the end of this year, new homes are estimated to reach 100 units.

Mark expects over 200 homes to be built in the next three years. Country Heights launched a “build and sell” concept for ten of its vacant lands to encourage more landowners to build their bungalows.

“It helped a lot and things (sales of vacant lots and construction of new bungalows by landowners) can go quickly as well,” he said.

To date, it has completed six units of bungalow and sold four of them. Four other bungalows are still under construction.

Out of the 380 bungalow lots, it has sold 280 lots. That leaves another 60 lots available for sales, as the company will keep the remaining 40 lots.

Apart from that, Country Heights has also allocated 23 acres of land for cluster bungalow and 6 acres of land for the condominium development.

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