The Edge Markets, Photo Credit to The Edge Markets
clock 29-11-2019
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SCP Group Diversifies Its Business

SCP Group’s highly-anticipated Desa Sri Hartamas development — once slated for a 33-storey building with small office/home office (SoHo) units — is now set to become a serviced residence tower managed Somerset of the Ascott.

Previously known as The Societe, the freehold project occupies a 0.54-acre parcel, which had been an open-air car park, at the junction of Jalan 19/70a and Jalan 27/70a. The SoHo project was launched last year but the developer has since bought back all the units, says general manager Chuah Jin Teik.


“We see potential [in having a hotel in Desa Sri Hartamas] … as we also want to expand the company’s business, we decided to buy back all the sold units to convert the building into a serviced suite tower,” he tells City & Country. More than half of the 308 SoHos had been taken up since the launch of the project.


“We spent a lot of money in the process but in the long term, we foresee that the serviced residence business will do very well. It was not an easy decision because the sales response had been good.”


New venture


Known as Somerset @ Desa Sri Hartamas, the development will have 308 serviced residences with built-ups of 498 to 750 sq ft each. Project manager Lucas Wong says there will be studio, one-bedroom and two-bedroom units as well as duplex lofts.


There will also be a retail area with 4,500 sq ft of indoor space and 1,500 sq ft of al fresco space, which SCP Group is looking to rent out to a food and beverage operator.


“It will be completed the third quarter of next year and opened the end of that year … we chose Somerset because it is an Asian brand and it understands the local market. This location will never go wrong and it is for the group’s portfolio — changing from a pure car park operator to a developer and now, a hotel owner,” says Wong.


“Converting the development into a serviced suite tower involves a lot more work but there are exciting times ahead. We need to complete the tower according to the operator’s requirements and there will be hotel amenities such as a swimming pool, function room and gymnasium. There will also be a car park podium with 458 parking bays, which will be opened to the public.”


SCP Group’s plan to expand into the hospitality business does not stop there. It recently bought a six-acre freehold parcel in USJ, Subang Jaya — close to Da Men Mall — where it plans to develop a serviced suite tower similar to Somerset @ Desa Sri Hartamas, reveals Chuah. Nevertheless, the development is still in the planning stage.


“Our next hotel will be in USJ … this is exciting because the South Quay-USJ 1 BRT (bus rapid transit) station is located diagonally across from the development, so we will provide a walkway to connect to the BRT station. There is also some LRT stations nearby, and the area is well connected with various highways,” says Chuah.


“The USJ development is estimated to have a GDV (gross development value) of RM800 million and will have three residential blocks, one serviced residence block and limited shops. We are targeting to develop it in two phases, with Phase 1 scheduled to launch in the second half of next year. All units will have north-south orientation.”


He adds that the developer sees potential in serviced apartment units of about 600 sq ft each as its target buyers are parents as well as investors who plan to rent out the units to students from the near universities.


The Birch


SCP Group has had several launches this year, including The Birch in the Jalan Sultan Azlan Shah (formerly known as Jalan Ipoh) area. Located in Jalan Kasipillay, the freehold development is just a stone’s throw from the upcoming Sentul West MRT station, which is scheduled to be fully operational in 2022.


Taking up 1.86 acres, the RM300 million development will offer 681 serviced apartments in two blocks. With built-ups of 611 to 983 sq ft, the units will have 2 bedrooms, 3 bedrooms or 3+1 bedrooms. They are priced from RM350,000 to just under RM600,000, or an average of RM580 psf.


Block B, which has seen an 80% take-up rate, was launched in August while Block A was launched the following month and has seen a take-up of 20% so far. The development is scheduled for completion in January 2023 and construction has reached Level 8.


Chuah says The Birch has an attractive price considering its Kuala Lumpur address and proximity to the city centre.


“The Sentul West MRT line is a three-minute walk away and it is just five stops from KLCC. The development is attractive to investors because the rental market is expected to be good. Also, it has a freehold commercial title with residential units only … there are no shops, so security will be tight,” he adds.


“The building’s design is unique as it will have a lot of red bricks, similar to buildings in the olden days. The architect loves this style and that’s why he came up with the design … we saw that it would be something different and unique, so we decided to adopt it.”


The Birch will have three-tier security as well as CCTV and panic buttons at the car park. Facilities will include a gymnasium, reflexology path, children’s playground and Olympic-length infinity pool. The indicative maintenance fee is 30 sen psf.


The development is in close proximity to the Sentul KTM and LRT stations and is accessible via the Duta-Ulu Kelang Expressway, Jalan Tun Razak, Jalan Kuching and Jalan Sultan Azlan Shah. Nearamenities include Sunway Putra Mall, Lourdes Medical Centre and Sentul Medical Centre.


Wong says SCP Group plans to launch one more project — Flora Residency — before the end of the year. It is located next to KL Traders Square, which is a 17-acre development that the group has completed.


“Flora Residency has a GDV of RM165 million. There will be 550 serviced apartments on a 1.44-acre parcel. Priced at RM300,000, each unit will be 800 sq ft and come with 3 bedrooms,” he adds.


Earlier this year, SCP Group launched Cheras Traders Square — a 30-acre serviced apartment project in Balakong, Selangor — and several projects in Menggatal and Kolombong in Kota Kinabalu, Sabah.


With the boom in tourism activities in Kota Kinabalu, Chuah says the developer is looking to venture into the hospitality industry there. While it is still sourcing for suitable land, he reveals that it plans to develop a hotel rather than a serviced residence.


In term of land bank, SCP Group has 20 acres in Menggatal that are slated for the development of linked houses and walk-up apartments. In Kuala Lumpur, it has 4.3 acres in Jalan Langkawi, Setapak, and 4.8 acres in Segambut that are slated for serviced apartment developments.


“We usually don’t buy land to keep because the holding cost is high. The development in USJ will be the next exciting project for us while that in Segambut is in the planning stage and we plan to launch it in 2021,” says Chuah.


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