This article first appeared in City & Country, The Edge Malaysia Weekly on January 22, 2024 - January 28, 2024

When JRK Group founder and managing director Datuk Seri Jerry Kwan Aik Khai diversified into property development in 2019, it was not the most ideal timing, given the global outbreak of Covid-19 in early 2020. Kwan did not let this obstacle deter him from launching the construction business company’s maiden project in July 2020, however, as he understood that setbacks are a given in the transformation of any business.

“There was never a time when I considered pulling the handbrake and putting the launch of JRK Senesta on hold,” Kwan tells City & Country in an exclusive interview. “One reason is that I am very confident about the project. I know its ins and outs and have done feasibility studies and market research. The project was designed based on market demand.”

Located in Semenyih, Selangor, the single-block condominium development has 110 units with built-ups ranging from 988 to 1,240 sq ft and priced from RM290,000. The project has a gross development value (GDV) of RM36 million and was fully sold within a year of its launch. The project was completed and handed over to buyers in 4Q2023 without delay, despite the disruption caused by the pandemic.

Kwan attributes the success of the first launch to the pandemic. “We almost did not have competitors at that time. Most developers had put their launches on hold because of the uncertain market. Our project had more market attention than expected … Though launching the project in the midst of a pandemic may not be a good idea, the fact is that the crisis did indirectly help us to achieve our sales target faster than expected,” he says.

Market competition aside, Kwan says the success of JRK Senesta would have been impossible if not for the high quality of the project and the correct price point. “JRK Senesta is a boutique development, but it is the result of our blood, sweat and tears. It is our maiden project, a milestone for JRK Group to transform from a contractor into a developer. Profit-making was not the priority in this project. We wanted to declare our name to the market and set a quality benchmark for the team.”

Starting out as a subcontractor that focused on roofing in 2004, the company was expanded by Kwan and his brother over the years and became a main contractor in 2009. Being a main contractor was never Kwan’s ambition, however, because it would have prevented him from pursuing his dream of building projects that met his expectations. He says: “I have always wanted to become a developer, especially after expanding the business. But as much as I want to be a developer, I also know it is crucial to build up my network and war chest, as well as accumulate more industry experience and knowledge. So, I took action only in 2014 by setting up JRK Group.”

In the early days, JRK Group’s core business was still building, and Kwan was actively growing its land bank. The first plot of land — the site of JRK Senesta — was purchased in 2017. Then, between 2017 and 2019, the company bought four plots in Bukit Jalil, PJ South (developed over two phases), Puchong and Damansara Kuala Lumpur with a combined land size of 20 acres.

Kwan recalls: “As expected, there were many challenges in launching JRK Senesta. We didn’t manage to obtain financing support from the commercial bank because we were the new kid on the block. We had nothing to prove our ability to complete the project. So, we funded the project internally. It was also why we could not afford to postpone the launch, and we had to make sure every decision we made was right and every penny we spent was well considered.”

Nonetheless, Kwan has never compromised on the quality of the building. “As a builder myself, I fully understand the consequences of cutting corners. You may save some time and money now by doing so, but I believe a poorly built project will eventually come back and haunt you one day, bringing even more losses to you in the future.”

He made it a point to use better-quality building materials and fittings for JRK Senesta, such as aluminium frame top hung windows and aluminium frame casement windows, as well as lightweight trusses for the roof structure.“Is it not the usual material used for projects in this price range, as it is more expensive. I built the project as if I were building it for my own stay. If I am not happy with the product, how can I hand it over to buyers, who gave JRK Group a chance?”

Asked how the group managed to keep the project low density and high quality as well as sell at a lower-than-average market price on a plot acquired only a few years ago and located in a booming property hotspot, Kwan smiles and answers without hesitation: “I cut my margins. For example, when other developers are making RM1 for a project such as JRK Senesta, I decided to take a cut  to make only 70 sen.

“Property development is a very competitive industry no matter when. For new developers like us who intend to stay for long, reputation and brand name are key to expanding our market share. To do that, we need to put the profit aside first to focus on what we want to build now for future organic business growth.”

JRK launched its second project, JRK Convena, in 2Q2021. A transit-oriented development in Bukit Jalil, JRK Convena occupies a 1.64-acre freehold plot located about 250m from the Muhibbah LRT Station, which it will be connected to via a covered walkway. The project has a GDV of RM195 million.

The low-density, 35-storey single-block development houses a total of 332 serviced apartments with built-ups ranging from 735 to 1,050 sq ft. The project, slated for completion in 4Q2024, is priced from RM452,000 and was 90% sold as at January 2024. “Quality and price point are our key marketing strategies. If the project is designed based on market demand and priced slightly lower than the average market price, it will sell. Another strength of JRK Convena is the location. It is just a stone’s throw away from the Muhibbah LRT Station and 3km from Pavilion Bukit Jalil. I have no reason to put the launch on hold,” Kwan says.

In October 2021, JRK Group unveiled its third development, JRK Delta, which is also its first commercial project, in PJ South and has a GDV of RM135 million. It comprises 70 two- and three-storey shoplots with built-ups ranging from 2,842 to 8,151 sq ft and was priced from RM1.69 million, or RM660 psf. The project was fully sold within a year and will be handed over to buyers in the middle of this year. “PJ South is full of potential. We are very lucky to get this piece of land from a master developer of a 70-acre township there. The neighbourhood lacks a commercial hub; so, we have to act fast and push the project to the market first. The project was well received because of incoming residential supply in the next 10 years,” Kwan says.

Adjacent to JRK Delta is a 1.3-acre commercial land owned by JRK Group. It will be developed into a commercial plaza project called Plaza JRK Delta and be launched this year.

While the project details are still being finalised, Kwan discloses that Plaza JRK Delta will be a 7-storey retail hub comprising 20 units. The ground floor will boast a grocer and drive-through chain restaurant, which most likely will be leased out and managed by JRK Group, while the rest of the units are for sale.

“We are not doing a strata shopping mall or a neighbourhood mall. It is more like the shoplots that we have in JRK Delta, but they are being built vertically. The 7-storey building has simple and straightforward common facilities such as elevators and public toilets, but not a centre hall like shopping malls. So, it is not the place for window shopping,” he explains. The estimated GDV for this project is RM120 million.

He elaborates that each level has only two to four units, targeting F&B and services for daily needs. The project also has a 3-storey basement carpark, with about 400 parking bays, to serve both shoppers and diners of JRK Delta and Plaza JRK Delta.

Meanwhile, JRK Group also plans to roll out its third residential project, called JRK Celestia, in Puchong in 2Q2024. It is a 17-storey condominium with a total of 220 units and built-ups ranging from 834 to 1,074 sq ft. Prices are estimated at RM580 to RM680 psf and the project has a GDV of RM132 million.

Also in the pipeline this year is a two-acre plot in Equine Park in Seri Kembangan, Selangor, that JRK Group acquired last year. It will be developed into a serviced apartment project with about 460 units and its estimated GDV is RM220 million.

Kwan hopes to launch JRK Elysia in Kuala Lumpur this year. “It is our first luxury project, designed to capture the local market, retirees and upgraders.”

He says JRK Elysia, which is in the process of obtaining approval from the authorities, is not just another luxury condominium, but a high privacy duplex condominium with a private lift lobby, direct lift access to carpark bays and a private wading pool in every unit. The project has an estimated GDV of RM240 million.

“We have had this land since 2018, but we are taking our time to design the project because it is our first high-end project in a very prime area. We hope to launch this project in the second half of this year, to bring our total GDV of new launches this year to RM750 million,” Kwan says, adding that the company aims to double its sales this year to RM200 million.

To stay afloat in the highly competitive industry, Kwan says it is crucial to understand the project and numbers.

“I am a micromanagement type of boss; so, some staff may not like me,” he smiles. “But I aspire to be a knowledgeable and hands-on developer. It is the only way to go long and far in this industry.

“With plans to fully transform JRK Group from a construction player into a property development company, I had initially wanted to dismantle the construction business but changed my mind after encountering underperforming main contractors.”

The construction team has been retained to take on internal projects to better control the quality of the products, he adds.

Kwan continues to look out for potential development land in the Klang Valley, as well as joint-venture opportunities. He is also trying to come up with more diverse products to cater for the mass market.

“Over-gearing is risky for a developer of our size. So, I am looking for a JV opportunity for bigger-scale projects, such as landed residential and industrial property, for now,” he says.

While boutique developments in good locations in the Klang Valley remain the main focus segment for JRK Group, he believes small and mid-size industrial parks are full of potential, owing to the boom in e-commerce.

“I am looking at the market gap to offer stylish and modern industrial parks for individual social media influencers and small e-commerce teams to use as an office, workshop, video and photo shoot studio, packaging and production facility, as well as storage warehouse. The environment of the industrial park has to be green and pleasant with many green common areas, moving away from the traditional industrial park setting,” Kwan says, adding that he is in talks with some land owners to make his ideal industrial park development a reality.

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