Premium homes for millennials
By Timothy Tay
/ EdgeProp |
Herman and Joan Chang, father-and-daughter team at niche property developer Macly Group, intend to launch a new brand that meets the needs and aspirations of younger home buyers.
Macly Group's new residential brand targets young home buyers who aspire towards a certain lifestyle (Pictures: Macly Group)
Herman Chang, founder and managing director of niche property developer Macly Group, believes that as a businessman, it is important to “respond to, and capture opportunities”. From January to May 2018, Macly Group made three en bloc purchases totalling over $128 million.
The first purchase in January 2018 was a stretch of nine single-storey shophouses located at Lorong K, Telok Kurau Road, for $35.5 million. It was launched a month later as FiveNine, an exclusive, 15-unit, five-storey boutique condo development.
All the units are three-bedders, with typical sizes of 1,055 sq ft each. By end-March 2018, the project was 100% sold, at prices ranging from $1.56 million to $1.87 million apiece or at an average price of $1,509 psf. FiveNine is a freehold project located in prime District 15 in the East.
FiveNine, an exclusive, 15-unit, five-storey boutique condo development by Macly Group
In February 2018, Macly Group purchased Riviera Point along Kim Yam Road for $72 million. The new development will be called The Iviera: “We just dropped the ‘R’ in front of ‘Riviera’ ”, quips Chang.
He intends to offer what he calls “the perfect layout” for the units at The Iviera: three-bedroom apartments with sizes ranging from 900 to 1,000 sq ft. The project, located at the corner of Kim Yam Road and River Valley Road, is also within the prime District 9 locale. There will only be 51 units in the boutique development which sits on a freehold site of 14,579 sq ft.
The sale price for the former Riviera Point translates to a land rate of $1,461 psf per plot ratio (psf ppr). “I believe we have a price advantage as we bought the site for about $1,470 psf ppr,” says Chang. “We will try to differentiate our product to give it a competitive advantage in terms of value proposition and price.”
New brand for premium homes
Chang will also be launching The Iviera under a new brand headed by his elder daughter, Joan. Both the brand and The Iviera are expected to be launched sometime in the middle of this year.
“My father is very open to new ideas and accepts that the younger generation comes in with fresh ideas. He listens and adapts to the changes,” says Joan Chang (Picture: Samuel Isaac Chua/EdgeProp Singapore)
“For new residential developments which are in premium locations, home-owners want a brand that they can associate with quality and their desired lifestyle,” says Chang.
Joan, representative of the millennial homebuyer, is “28 going on 29” while her father is of the Generation-X cohort, who’s “58 turning 59”. She believes she can offer “a lot of new and fresh ideas” relevant to her generation under this new brand. She is coy about revealing the brand name at this stage.
“We want to create our own niche of premium and exclusive projects under this new brand,” says Joan, who is marketing manager of the Macly Group. “We have taken special care to select more premium fittings and furnishings for The Iviera. I believe this attention to detail will differentiate our project in the market.”
She identifies the primary target audience as owner-occupiers – couples and young families working in the CBD and who aspire to live in a prime District 9 address. She also sees demand coming from “second-generation families” – those whose parents live in the prime districts and whose adult children want to live near them.
Catering to millennial homebuyers
Pointing out some differences between herself and her father, Joan says: “These days, millennials spend $5 for a cup of coffee, compared to his generation where they are happy with ‘kopi’ at the market. People in my father’s generation see marble fittings as luxurious, but for my generation, that’s not necessarily the case.”
Joan sees homebuyers moving towards “a theme-centric, experiential lifestyle” type of residential developments. “That’s why some new developments are launching with a colonial- or a Nyonya-theme,” she observes. “This is something you wouldn’t have seen 10 years ago.”
After rejuvenating Lloyd’s Inn with her contemporary branding sense, Joan Chang is bringing her premium touch to Macly Group's future residential projects
Chang concedes: “We know there’s a niche of homebuyers – in Joan’s generation – who want a certain lifestyle. They are our target audience. After all, not everyone wants to live in a big development with a few hundred units. I’m confident that there will be a significant number of buyers who will be attracted to our product.”
While the more premium, freehold projects in the prime districts will be launched under this new brand headed by Joan, other projects will continue to be developed under Chang’s Macly Group.
These include the new development on the site of five terrace houses in the Guillemard Road/Lorong 28 Geylang area that Macly Group purchased for close to $20.55 million in May 2018. The five houses sit on a freehold site occupying a total area of 12,839 sq ft. According to Chang, the site has received approval for redevelopment into a part-eight, part-five storey project with 47 apartments.
Opportunities beyond shoebox apartments
Chang has been in the property development business for more than three decades, since he founded Macly Group in 1987. He started by developing conventional and strata landed housing, predominantly in the East, before venturing into the development of freehold apartment blocks in the Geylang area.
He firmly believes in seizing opportunities and has done it time and time again. One such opportunity came by in 2004, when the real estate market was still in the doldrums. Chang pioneered the concept of compact or “shoebox” sized apartments, starting with Mackenzie 138, a boutique 35-unit development located near the Little India MRT Station. Launched in 2004, the project was fully sold within a month of its launch. Unit sizes range from 431 to 870 sq ft, with absolute prices from $337,000 to $570,000 and average price of about $730 psf.
Between 2004 and 2011, Macly Group developed and launched some 20 residential and mixed-use projects with more than 1,000 units and the shoebox apartments trend that it started, continues today.
33 Residences is another latest residential development by Macly Group
When it comes to developing projects overseas, Chang believes in forming joint ventures with other parties. In Kuala Lumpur, The Colony by Infinium, a mixed-use development, is jointly developed with Roxy-Pacific Holdings. The latter is Macly Group’s long-term joint-venture partner in several projects in Singapore, for instance in mixed-use developments in Singapore such as The Millage @ Changi, Centropod @ Changi and Eon Shenton.
The Colony by Infinium is a freehold development with 723 residential units in two residential blocks sitting on top of a commercial podium with 32 commercial shops.
So far, about 460 residential units (64%) have been sold, says Chang. Given the location in the Kuala Lumpur City Centre, he sees the commercial units as being ideal as a medical center for those working or living in the city centre who need regular post-treatment or recovery services.
Growing hospitality footprint
Chang sees opportunity in growing the hospitality business too. He has let Joan spearhead the business. Having graduated from Singapore Management University with a double degree in marketing and finance, Joan spent two years as a business analyst at Huttons Asia.
“Since the age of about 12, I had always followed my dad to visit showflats or project sites," recalls Joan. “But ironically, it was my stint at Huttons that developed my interest in real estate.”
Today, Llody's Inn Singapore is a contemporary boutique hotel under Joan's belt
She enjoyed being involved in the marketing and sales of new projects as well as in secondary market deals. “I learnt a lot in my two years at Huttons,” she says. “Nobody cares who your family is when you’re on the ground. You just have to serve your clients.”
It was while she was at Huttons that she became interested in the hospitality sector. She saw the opportunity to revamp Lloyd’s Inn, which has been owned by her father since he purchased it in 1990. For much of the past two decades, it was run as a budget hotel.
Under Joan’s watch in 2013, the hotel underwent a massive transformation to become a brand “relevant to customers today”, she says. Joan is not afraid of rolling up her sleeves and doing the hard work. “At Lloyd’s Inn, I did housekeeping, cleaned toilets, front office duties to get the hang of running a hotel,” she says.
It has certainly paid off. Since its make-over in 2014 Lloyd’s Inn has won several awards, including TripAdvisor's Top Bargain Hotel 2015, Best Minimalist Hotel 2016, in the Hotel & Spa Awards, and Joan also won the inaugural Best Marketing Idea Award at the 2016 Singapore Tourism Awards.
The successful revamp of the Lloyd’s Inn in Singapore spurred her to grow the footprint of the hotel business beyond the city-state. She opened a 101-room Lloyd’s Inn in Bali and since it opened last October, average occupancy rate is now at 85%.
In May, Masterchef Singapore finalist Sharon Gonzagos will headline a new F&B concept at Lloyd’s Inn Bali
This May will see a new bistro and spa at Lloyd’s Inn Bali. The F&B business is in partnership with Masterchef Singapore 2018 finalist Sharon Gonzago.
Ushering in ‘a new era’
“We prioritise design aesthetics and guest experience at our hotels,” says Joan. “If there were too many rooms, we wouldn’t be able to provide that kind of experience.”
Adds Chang: “The optimal balance between achieving our desired return on investment and keeping our unique selling points in terms of design, service and experience is about 100 rooms.”
Under construction now is the Lloyd’s Inn in Bukit Bintang, Kuala Lumpur. The 109-unit project is about 80% complete, notes Chang. He is expecting completion to be sometime in 2020.
Besides Malaysia, Macly Group is also developing projects in Indonesia with a local partner there.
Macly is capitalising on the success of its hotel in Singapore, and at least two more hotel properties are in the pipeline, including a Lloyd’s Inn in Kuala Lumpur
Over the past three decades, Macly Group has had a “very lean team”. “We have only six people in Singapore, including me,” says Chang.
“People are always shocked when I tell them that we have only six people,” adds Joan.
However, Macly Group has seven people in the Malaysian office and another 10 in the Jakarta office. The hospitality business has over 30 people today. Chang is preparing for a younger team headed by Joan to take over his business in the coming years. “They now observe how I solve problems, starting from when we buy the land and develop the plans,” he says. “Along the way, I also show them how to solve various problems that arise”.
For now, Joan says her father’s strengths complement hers. “He is a practical person and I’ve always been more a lifestyle person,” she says. “So sometimes, when there’s a vision that I want to achieve, he will offer his views from a practical point of view. So I’ve learnt a lot from him in that respect."
The launch of the new brand will take Macly into a new era, says Joan.
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