Oh dear the hailatness has set in. We are not immune from all the woes that are afflicting property developers and contractors around the world.

Chinese affluent are disposing their luxury goods as seen in SCP. Is the time of conspicuous luxury consumption over?

This post has been edited by Cavatzu: Aug 18 2022, 11:44 PM

The buyers for this project will be super atas and loaded. They will make a lot of noise.

I wanna see Tropicana Uncle v2. Peasants forget that people don’t become rich by being cincai. They can be your worst nightmare if things don’t go their way.

This post has been edited by Cavatzu: Aug 19 2022, 11:51 AM

The fact that less than 20% sold and 80%+ of them are foreigners means that this project may not be viable.

Even wealthy locals aren’t really keen on something like this.

This post has been edited by Cavatzu: Aug 19 2022, 06:36 PM

Normally that would be the case but the protracted lockdowns have had a lot of negative impact on their wealth too. Already there’s talks of that market segment cutting back on discretionary spending. The fact that Malaysian property is so dicey in terms of holding their value is another added concern and they would likely walk away. Only those that are sought after by both locals and expats like DPC truly hold their value if not appreciate.

Safe to say that super high spec high rises are not a viable business model anymore for developers unless you’re in a boom cycle.

It makes sense for them to just scrap this development and start over. Price it at just above 1k psf as a medium high end build.

I mean maintain the build but strip out the luxury stuff and price it lower. But I saw wrongly, the tower 1 has sold quite well. It’s the tower 2 that is slow selling.

Regardless this is such a capital intensive build and super luxury stuff is really being seen as quite unnecessary.

It’s so much flash when in reality if you wanted to really dress up a 1 bedroom unit. 2-300k in reno would more than do the trick. People who can see through the gimmick will realise this is poor value.

I’m starting to think fully furnished doesn’t work for super high end units. If there’s one thing that rich people like is to be unique. Homogeneous design may not work for them but it works for low to mid range investment type units where it’s all bundled into the loan.

This post has been edited by Cavatzu: Aug 21 2022, 06:35 PM

True also, having the convenience factor baked in. Paying Rm 2M+ for a 700 sqft place is still a lot of money especially when it’s so high above the median price point and more importantly will not hold its value. Many people assume the rich will buy something just because they can afford it. I can assure you it’s not true.

Malaysia was always seen as the cheaper alternative to the high flying Asian cities so it’s mid range at best. If the local developers think Mainlanders or Hongkies are utterly ignorant then they are in a world of shock. There’s news channels over there just discussing property 24/7. Bangkok is a lot more fun than Malaysia for very similar offerings.

They can commence bankruptcy proceedings against you or you get a very bad mark on your credit file. Jobs in finance will be closed to you and of course you can’t access any loans. The loan collectors will be bloody annoying too.

Well sometimes it’s no use flogging a dead horse. When you are priced 3X of a typical high end Malaysian property and only reliant on buyers not of the country. What justification is there? Malaysia is not a tax haven nor exactly a friendly place to get long term residency status so why the need to line the pocket of this fledgeling developer?

They need to pivot and they better do it quick. Locals who bought here - you should know better.

This post has been edited by Cavatzu: Aug 22 2022, 05:35 PM

Umm it doesn’t make fiscal sense for any company to throw money at something that doesn’t work. Having money is one thing, investing in something that is not profitable is another.

Somehow people here thinking throwing good money after bad is the norm. How wrong they are…

This post has been edited by Cavatzu: Aug 22 2022, 07:50 PM

The problem is that this is a product mismatch. Would you continue building something that no one will or can afford to buy? They are backed into a corner. If they lower prices now, the initial batch of VIPs will be pissed.

For all we know, the initial buyers may be looking to get out of their purchase also if they don’t see the value anymore.

One has to be so wary of these first time developers. They bite off more than they can chew and it ends in failure and tears. This is a very ambitious one too.

Well in a way. This is a very singular committed development. It’s a do or die type scenario. If they walk away, then it’s game over for their brand.

In my mind, their background is actuarial and insurance so very by the numbers. Luxury marketing is a whole different ball game. There’s only 3 branded residences in Malaysia.

I’m just quoting the CEO of KSK. But of the top of my head, Banyan Tree and Ritz Carlton.

Uncle Google says 4 Seasons and St Regis as well so 4 completed. Yoo, Ascott and Sofitel are the upcoming ones.

This post has been edited by Cavatzu: Aug 23 2022, 11:49 AM

They wanna play in this luxury lifestyle segment then they have to spend on frivolous things unfortunately. One can be smart about it but it’s a necessary evil.

Genting Cruises did. My point is subsidiaries can be left to die if there’s no further viability. This is risk mitigation 101.

This post has been edited by Cavatzu: Aug 24 2022, 03:53 PM

No millionaire would pledge their personal wealth towards this. They should have JV for this scale of project.

Nonetheless a good case study for dynastic wealth family businesses and what not to do.

This post has been edited by Cavatzu: Aug 24 2022, 07:16 PM