PETALING JAYA, 13 July: The weak property market has given birth to many “innovative” marketing packages, the most recent being a guaranteed buyback scheme for a high-end property, which has been the segment hardest hit.
Property consultant CBRE-WTW projected residential property prices in the high-end stratified segment could drop by 10% to 15% this year as the market cools and prices become more realistic.
O&C Resources Bhd’s (OCR) “The Pano” project at Jalan Ipoh, Kuala Lumpur, for example, offers to buy back units from buyers within a year’s time upon vacant possession. Buyers can expect to reap a gain of 15% to 20% from their purchase price, depending on unit type.
According to an agent at its sales gallery, the purpose of having the buyback scheme is a reflection of the company’s confidence in the project as well as to bring profit to the house buyers.
“This is a win-win situation for both developers and buyers. Of course, this scheme has boosted our sales, there are not many units left except for the big units,” she told SunBiz.
OCR did not respond to queries as at press time.
With build-ups between 609 and 1,800 square feet a unit, the project is priced at around RM800 per square foot, with selling prices starting at RM500,000.
The density of the project is quite low, with 363 units in total. It’s gross development value is RM200 million and it is expected to be completed in 2020. It is just about 300 metres from the Jalan Ipoh MRT station of the Sungai Buloh-Serdang-Putrajaya Line.
The project was launched early this year and more than 80% of the units have been taken up, according to the sales agent.
OCR’s package is the latest in a long line of rebates and guaranteed rental schemes which developers have come up with to stay ahead of the competition.
A property consultant who declined to be named, however, said the scheme is very much dependent on the credibility of the developers and the success of the project.
“What happens if the property market remains soft a few years later and the developer does not have sufficient cash flow for the buyback scheme?” he asked.
OCR, formerly known as Takaso Resources Bhd, manufactures and exports condoms and baby care accessories. However, to turn around the group after suffering losses for over a decade, it started diversifying into property development and construction last year, with the entry of mid-sized developer OCR Land Holdings Sdn Bhd.
The group registered a net profit of RM2.35 million for the nine-month period, versus a net loss of RM732,000 in the same period a year ago.
The stock rose 1.5 sen to 57 sen on 210,700 shares done yesterday, with a market capitalisation of RM140.17 million.
— THE SUN