Malacca central to growth of Hatten Land

Artist’s impression of Vedro by the River, one of four Hatten Land development projects in Malacca. Due to the ample supply of relatively cheap land banks in the city, Hatten says, it has been able to price its offers more attractively.
Artist’s impression of Vedro by the River, one of four Hatten Land development projects in Malacca. Due to the ample supply of relatively cheap land banks in the city, Hatten says, it has been able to price its offers more attractively. PHOTO: HATTEN LAND
Mr Colin Tan.
Mr Colin Tan. ST PHOTO: CAROLINE CHIA

Developer, which starts trading on Catalist today, sees great potential in Malaysian city

Hatten Land is counting on the potential of Malacca's property and tourism market to drive growth.

As the developer gears up for the start of share trading on the Catalist board today, its chairman and managing director Colin Tan is happy with sales of pipeline projects

"Across the four projects we're developing in Malacca, we've sold about an average of 50 per cent so far. This gave us revenue of over RM400 million (S$126 million) last year, and we have RM800 million more to recognise from July 1, 2016 onwards, based on sales agreements," he told The Straits Times.

"Beyond this, we still have some RM2 billion worth of sales to push out. I'm confident we can accomplish this, hopefully, within the next couple of years."

Hatten Land is the result of a backdoor listing bid by Malaysia's private developer Hatten Group, helmed by brothers Edwin and Colin Tan.

The group's business is mostly centred on Malacca.

ROOM FOR GROWTH

The city's allure as a heritage town is known internationally, and there's still a lack of good quality waterfront mixed-use projects there. I expect the demand for residential units like ours to stay strong. In the hospitality segment, Malacca is still lacking some 8,000 hotel rooms, and our projects such as Harbour City are also poised to plug that gap.

MR COLIN TAN, Hatten Land's chairman and managing director.

The group struck a $386 million reverse takeover (RTO) deal with VGO Corp late last year, with VGO acquiring Hatten's Sky Win Management Consultancy to form Hatten Land.

(In an RTO, a listed firm will issue shares to a private firm that is usually looking to go public. The private firm then takes control of the merged and listed entity.)

This is the second RTO listing on the Singapore Exchange in three weeks, following the Feb 16 Catalist debut of Pacific Star Development, a developer with projects in Iskandar and Bangkok.

Hatten Land has four projects in Malacca. Hatten City Phase 1 and Phase 2 are adjoining mixed developments with residential and retail units. They are at least 80 per cent completed.

Vedro by the River, a mall near tourist favourite Jonker Street, is mostly completed. And work on Harbour City - a bayfront project combining mall, resort, hotel and theme park - has just started.

Beyond Malacca, a project in Cyberjaya, Selangor, is on the cards.

Hatten's Malacca focus means it has a dominant 30 to 50 per cent share of its high-rise apartment market, Mr Tan said. He noted that the city's good connectivity - with Kuala Lumpur, Johor Bahru and, of course, Singapore all within a 200km radius.

Due to the ample supply of relatively cheap land banks in Malacca, Hatten has been able to price its offers more attractively, "with upwards of only RM950 per sq ft, compared with Iskandar's RM1,000 to RM1,500 range", Mr Tan added.

"The city's allure as a heritage town is known internationally, and there's still a lack of good-quality waterfront mixed-use projects. I expect the demand for residential units like ours to stay strong.

"In the hospitality segment, Malacca is still lacking some 8,000 hotel rooms, and our projects such as Harbour City are also poised to plug that gap."

Malacca will remain Hatten's business focus for a while yet, following its recent acquisition of over 32h of leasehold land there.

But Mr Tan is not content with staying put: "Obviously we are getting listed because we want to expand into a regional developer.

"We are looking at overseas markets including Indonesia, Laos and Myanmar for potential projects akin to Hatten City. Early discussions have started."

A version of this article appeared in the print edition of The Straits Times on February 28, 2017, with the headline 'Malacca central to growth of Hatten Land'. Print Edition | Subscribe