Amidst the sluggish property market, a developer has pledged to repurchase the units it sold at a luxury residential project in Kuala Lumpur for a premium, reported the Sun Daily.
O&C Resources Bhd has guaranteed to buy back the units at The Pano within a year after the buyer gets vacant possession. Depending on the unit type, purchasers can gain a profit of 15 percent to 20 percent.
With a gross development value (GDV) of RM200 million, the 363-unit luxury project is located near the Jalan Ipoh MRT station. Unit sizes range between 609 sq ft and 1,800 sq ft, while the properties are priced from RM500,000 each.
According to one of O&C’s property agents, the buyback scheme is a testament of the developer’s confidence in the luxury development.
“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 said, adding that over 80 percent of the units have been sold since the project was unveiled earlier this year.
The upscale development is targeted for completion by 2020.
However, an expert advised prospective buyers to be prudent, as buyback schemes are contingent on the developer’s reputation and financial status as well as the project’s success.
“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?” asked a property consultant who wanted to remain anonymous.
Previously known as Takaso Resources Bhd, OCR primarily produces and exports condoms and baby care products. But to reverse the company’s losses, it branched out into construction as well as property development in 2016 via OCR Land Holdings Sdn Bhd.
For its nine-month period in the current fiscal year, the group recorded earnings of RM2.35 million compared to a net loss of RM732,000 in the corresponding period in the prior year.
OCR’s buyback scheme is among the ‘innovative’ marketing promos offered by developers, besides rebates and guaranteed rental schemes. This is to entice customers amidst a weak housing market, with the high-end segment suffering the hardest blow.
In fact, CBRE-WTW predicts that prices of upscale houses in Malaysia could decline by 10 percent to 15 percent in 2017.
Image sourced from The Pano
This article was edited by the editorial team of PropertyGuru. To contact them about this or other stories email Editorial-MY@propertyguru.com.my
For more information on new top homes, check out PropertyGuru’s New Property Launches and Project Reviews
