Redeveloping large tracts of land in Monterez club will lose its value | Malaysian Institute of Estate Agents

Redeveloping large tracts of land in Monterez club will lose its value

2020-09-04

Real estate based golf resort developments in Malaysia are world-class and many compete in a limited market offering various types of homes, bungalow lots, a clubhouse, and an 18-hole golf course and they sell very well.

The definition of what constitutes a "resort" varies greatly. A resort can refer to a single destination in a coastal area with hotels, resorts, and a golf course, or to one that includes luxury bungalows, villas, serviced apartments, hospitality facilities, and lifestyle offerings in a city or town centre.

Well-planned resorts offer proximity and easy access to natural, scenic, and recreational amenities that make them very attractive to property buyers.

Besides an operational golf course, the key components of a golf resort include residential real estate for sale and/or accommodation facilities such as hotels or detached residential real estate for rent and they are supported with ancillary sports and leisure facilities.

So when a developer builds a resort with luxury homes and apartments promising a view of the golf course and markets it with a physical environment offering a resort-like holiday experience with many accommodation types, sporting and leisure activities, and support services, they should keep the promise of the development.

A builder which value adds versus a greedy developer

In Malaysia, it is rare to see developers develop the green lung or land that houses some facilities in a golf resort years after they have sold the properties.

What they might do is improve the landscape and build more properties on available vacant land surrounding the golf courses to expand and enhance the overall development.

Take for example Sime Darby Property Bhd and its 145.7ha Alya Kuala Lumpur (KL) resort, formerly known as Kuala Lumpur Golf & Country Club.

The property group reaffirmed its commitment to the continuing growth of its resort real estate development masterplan by enhancing the value of Alya KL.

The Alya KL master development covers two 18-hole championship golf courses, a clubhouse, and eight development parcels.

The development parcels, spanning 24.7ha and surrounding the two golf courses comprise residential (bungalows, condominiums, townhouses and serviced apartments), commercial, retail, and hospitality components, with a gross development value of over RM8 billion.

"If you are residing in Alya KL, then naturally the value of your land will increase. People will look at buying your property in the secondary market if you are selling because they know the value will appreciate in years to come.

"A greedy developer is one who will try to build more houses within the resort development years after it has sold all the properties to maximise land use. They will redevelop land that is occupied by sports and leisure facilities. If they do this, then it is wrong and the residents should take legal action. The relevant authorities should be involved," said a senior property consultant.

He cited the Monterez Golf and Country Club (MGCC) in Shah Alam, Selangor where the developer is planning to redevelop large tracts of the club's land into a high density mixed-use commercial/residential development project.

MGCC is an exclusive golf resort featuring an 18-hole golf course, a clubhouse, bungalows, and zero-lot land. The majority of the properties overlook the scenic golf course view.

The leasehold development was completed in 2009 by master developer Melati Mewah Sdn Bhd, a wholly-owned subsidiary of MWE Holdings Bhd.

Locals and some expatriates bought properties there because of the concept, club amenities and facilities, and to own a home with a view of the golf course.

During the development, Melati Mewah adopted the concept of Mayan civilisation, which is reflected in MGCC's architecture, lifestyle and culture, creating an unforgettable experience in modern leisure living.

The clubhouse offers state-of-the-art facilities; among them being a swimming pool, squash court, tennis court, basketball court, volleyball court, karaoke and visual room, pool table, sauna, playground, and wellness sanctuary.

These facilities are available to the public with a nominal fee, but some features are exclusively for members like the snooker room, gymnasium, table tennis, children library and playroom.

The golf course and clubhouse provide a vital recreational, sporting and social avenue for existing residents and expatriates, and those from eight other surrounding housing schemes - Cahaya SPK, Elmina, Bukit Jelutong, Denai Alam, Sunway Kayangan, Kayangan Heights, Damaisuria Subang and Subang Permai.

MGCC has over the years produced many notable golfers like Gavin Kyle Green, his brother, Galven Green, and Jeremiah Kim who are now professional golfers.

James, who owns a property overlooking the golf course said the houses at MGCC are all individually designed and constructed.

"You won't find a home that is identical in MGCC so the sale price varies from one property to another," he told NST Property.

A quick look at some property portals show that there are some bungalows for sale now, for around RM3.5 million for a unit that is 9,000 square feet.

But James thinks the price of the properties in MGCC will start to fall if the plan by the developer to redevelop the large tracts of the club's land goes through.

It was reported that Melati Mewah had entered into a joint development agreement (JDA) with Pristine Primavera Sdn Bhd to develop nine pieces of leasehold land measuring about 48.2ha, among which two parcels are used for operating the 18-hole golf course and clubhouse.

MWE had announced the JDA with Pristine Primavera on November 30, 2016.

They reportedly planned to build high-density residential and commercial properties on part of the 61ha site that houses the golf course and clubhouse. The new development would see the construction of almost 2,000 houses, 540 apartments, and a range of commercial structures, with a gross development value (GDV) of RM1.5 billion.

"Golf club residents are unhappy over the development plans. Any new development would contravene the sale and purchase agreement (SPA) owners signed with the developer when they purchased their properties at the resort years ago.

"During the launch, the properties were marketed as a resort development with recreational facilities and this attracted many homebuyers as each purchase came with a free club membership. Some paid a premium for views of the golf course. Some of the residents purchased a home in the secondary market at a much higher price as they liked the view and the environment.

"When a developer sells a project promising a peaceful environment and green lung, among other things, they should keep to it and not cheat buyers years later for their gain. Redeveloping large tracts of land in Monterez club will lose its value," he said.

The Shah Alam City Council (MBSA) had on September 4, 1992 approved for the MGCC as an integrated development with an express condition that at least 75 per cent (or 60.7ha is retained as a golf course.

But the properties at MGCC are at risk if the council's new rezoning plan (MBSA Local Plan Draft 2035), which outlines land use and development from the year 2021 to 2035, goes through.

"Why the double standard now? We want to know what transpired between 1992 and today? Has the developer been given the approval to redevelop the golf course and clubhouse? We understand that large tracts of land in MGCC were transacted at around RM150 million to RM160 million.

"If this redevelopment plan goes through, all other developers in Malaysia might suffer as the public will no longer have trust in what they build and offer in the market," James said.

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