This article first appeared in City & Country, The Edge Malaysia Weekly on February 12, 2024 - February 18, 2024

Since the outbreak of the pandemic, many businesses have had to rethink their business model for commercial viability. Some have ventured online and/or diversified into new business segments. Construction firm TSR Capital Bhd, meanwhile, decided to expand its existing business, namely its property development arm.

CEO Ng Kim Keong says the pandemic years were not kind to the construction industry with increased labour and material costs, coupled with a labour shortage.

“In the past few years, contractors have been suffering because the projects we tendered before the MCO (Movement Control Order) became unprofitable. There were extra costs that needed to be incurred due to escalating labour and building material expenses … That’s why we were having problems during that period and made some losses. [Fortunately], we have completed all the projects we took on before the MCO and it is now a new start for us. Things are clearer now and it has become easier for us to do projections and forecasts,” he tells City & Country.

Executive director Joshua Lim Dian Hoong concurs, adding that contractors cannot remain static. “The MCO changed the whole landscape. We experienced the worst ever labour shortage during that period … We have had to do a lot of things to control our cost and our decision to further expand into the property development sector will help us a lot.”

Ng says TSR Capital’s construction business had previously contributed to close to 90% of the group’s revenue. This year though, it will focus on both its construction and property development arms and is targeting a 50:50 contribution from the segments.

The management believes the target is achievable as TSR Capital has several launches and joint-venture projects in the pipeline. The group already owns several development tracts, allowing it to move forward with lower costs. It currently has 60 acres of undeveloped land in Bandar Enstek and Port Dickson, both in Negeri Sembilan.

The first property TSR Capital plans to launch this year is the RM324 million Daya Residence in Kwasa Damansara, Selangor, where the construction of some of the 3-storey semi-detached homes has reached the rooftop. The management hopes that the progress of the project will help build the public’s confidence in the group.

To be developed over two phases, the project will launch Phase 1 this quarter and Phase 2 at end-2024. The whole development is scheduled for completion by 1Q2027.

Phase 1 has 34 semidees and a bungalow while Phase 2 comprises seven town villas and 218 condominium units.

The semidees will come in four lot sizes of 35ft by 70ft (built-up: 3,329 sq ft), 36ft by 75ft (built-up: 3,790 sq ft), 37ft by 75ft (built-up: 3,971 sq ft) and 38ft by 70ft (built-up: 3,680 sq ft). With six bedrooms, 6+2 bathrooms and three parking bays per unit, the semidees are priced at RM804 psf on average, or from RM2.6 million to RM3.3 million.

As for the 3-storey bungalow, it will have a lot size of 4,373 sq ft and built-up of 5,004 sq ft. Priced at RM4 million, or RM804 psf, it will have seven bedrooms, eight bathrooms and four parking bays.

For Phase 2, Lim says the 3-storey town villas will be akin to terraced homes but with a larger built-up of 2,975 sq ft. They are priced from RM2 million, or RM720 psf. The condominium units will have built-ups of 960 to 1,550 sq ft and prices from RM755,000 to RM1.12 million (RM750 to RM780 psf).

“We started in Kwasa Damansara as the main contractor for the infrastructure works there and we got to know about the project. The location is superb and we know the kind of investment being put into the project, such as the road system and green ratio. A few years ago, Kwasa Land called for an RFP (request for proposal) where it would provide the development rights and we won the tender,” Lim explains, adding that the group has secured another infrastructure contract in Kwasa Damansara worth RM104 million, which will be completed by April 2026.

“Daya Residence is next to Kwasa Damansara’s central park, Taman Bandar, which was completed by us. ‘Daya’ means ‘energy’ [in Malay] and it means residents will feel recharged after a busy day and they can spend quality time with their families here. With 6.52 acres and a total of 260 residential units, it is 40 units per acre and it is low density.

“The landed units will have no gates because the development is gated and guarded. It is a stratified development with the concept being modern and minimalistic. Daya Residence’s unique features are that it is freehold and located next to the central park,” says Lim.

Next to the guardhouse at the entrance of Daya Residence is a clubhouse, which will have a swimming pool, wading pool, barbecue area, jogging path, gymnasium, children’s playground and multipurpose room. Lim adds that there will be a space inside the clubhouse that can be turned into a café. The service charge, inclusive of sinking fund, is 28 sen psf per month. 

Phase 1 will be on the left side after the guardhouse while Phase 2 will be on the right. There will be a barrier gate at the entrance to each phase that will allow car access for only residents of that particular phase. However, residents will have free access to the whole development on foot.

Daya Residence has received more than 800 registrations, with the majority being young professionals and couples aged above 30.

The group’s other projects scheduled for this year include a water theme park and a commercial development in PD Waterfront, Port Dickson. The RM35 million commercial development will comprise tourist shops with a combined built-up of 6,950 sq m.

Beyond 2024, TSR Capital plans to unveil a condotel development and the Retail Village by the Sea in PD Waterfront, as well as the Ritz Business Centre in Bandar Enstek in 2025.

With a gross development value of RM112 million, the condotel development will be similar to TSR Capital’s existing project there, D’Wharf Hotel & Serviced Residence, but the units will have different sizes and can be rented out to tourists.

The Retail Village by the Sea is a RM190 million seafront retail development that spans nine acres, with a total built-up of 22,000 sq m. The 2-storey shops will be developed on the shore and over the sea.

The Ritz Business Centre at Bandar Enstek is a 20-acre freehold hybrid commercial building for warehousing, repackaging, retail, workshops and restaurants with office space. It will have large built-ups of 6,500 to 12,000 sq ft.

Other than developing its own land, Ng says TSR Capital is also keen on joint ventures. The group is in negotiations to develop an 80-acre project in Langkawi, Kedah, and a 100-acre project in Kuantan, Pahang.

Meanwhile, TSR Capital ventured into the food distribution sector during the MCO, bringing in a honey product from Australia. “It is a new set-up … It is a potential business with good opportunities. We are looking to expand our food distribution business,” reveals Ng.

In the property development industry, he says one significant challenge the group has faced is navigating the regulatory changes that impact a project’s timeline to launch. “We have actively communicated with the regulatory bodies, asking for clarification and working together to simplify procedures. Our team has engaged in extensive dialogue with the regulatory authorities, seeking to understand requirements, address concerns and expedite necessary approvals.

“Another challenge, owing to evolving market conditions, is securing funding within the desired time frame. We have proactively collaborated with our financial partners, adjusting our financing strategy to align with the prevailing economic dynamics,” he adds.

Ng explains that adjustments to the project timeline is important to ensure that any delays are minimised and there will be no compromise to the quality or integrity of the project.

“Moving forward, we have incorporated these experiences into our planning processes, implementing measures to enhance our preparedness for potential challenges. Our commitment to transparency and collaboration with stakeholders remains unwavering, and we are confident in the successful launch and progression of our projects,” he says.

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