Jakel is associated with a successful textile retailer. But not many people are aware that the family-run business is embarking on a new business venture in property development. Parked under Jakel Development Sdn Bhd, the company launched its maiden residential property project in Cheras, Kuala Lumpur, last month.
The project, named after silk textile J. Dupion, is a 1.7-acre leasehold development. It features two 39-storey blocks with 399 units of condominiums ranging between 800 sq ft and 2, 249 sq ft and 11,000 sq ft commercial space, which is equivalent to 15-unit retail lots with an estimated gross development value (GDV) of RM400mil. The group is planning to sell the units at between RM680 per sq ft and RM780 per sq ft.
Textile to property: Mohamed Faroz (right) and Mohamed Nizam posing with a scale model of the development which features two 39-storey blocks with 399 units of condominiums ranging from between 800 sq ft and 2, 249 sq ft and 11,000 sq ft commercial space.
Jakel Trading Sdn Bhd group managing director and chief executive officer Datuk Mohamed Faroz Mohamed Jakel said the group had been involved in the real-estate arena since 2003, pioneered by his late father Mohamed Jakel Ahmad.
“We started with buying shop houses for leasing and bought plots of land as investment. But since 2009, during the economic downturn, we started to accumulate land more aggressively,” Mohamed Faroz tells StarBizWeek.
He declines to reveal the group’s total landbank, but says most of it is in the Klang Valley. Mohamed Faroz took over the helm of Jakel Trading in 2009. One of his visions for the group is to shift the public perception on the Jakel brand as just a textile retailer.
“Mitsubishi Group is also involved in the textile trading business and today it has diversified into various businesses,” he says.
He explains that the family decided to venture into property development as it holds a lot of opportunities, especially since its property investment of more than 10 years has been contributing recurring income.
Jakel’s property portfolio comprises shop lots in the vicinity of the Masjid India area in Kuala Lumpur, Bangi, Cheras, Shah Alam in Selangor and also in Johor Baru. Despite the subdued property environment, Mohamed Faroz is upbeat on the long-term prospects of the sector. The implementation of the goods and services tax is also another factor.
In tune with the market“We do see the property market softening at the moment, but we believe that investment in property can be lucrative if you identify the right location, coupled with a product mix that is in tune with the market,” he adds.
About 70% of its residential units in J. Dupion have already been sold, just a month after launching , while the commercial space will be leased. Mohamed Faroz says the group has done market research to pursue products that meet customer needs with attractively-priced properties in strategic locations.
“We found that in Kuala Lumpur, customers prefer smaller condominium units,” Mohamed Faroz says, adding that 50% of the J. Dupion development caters to the demand.
The development is located at Jalan Sembilang off Jalan Loke Yew in Cheras, 5km from the city centre. It is accessible via the Cheras Kajang Highway, Sungai Besi Highway, East-West Highway and the MRR2.
The main highlight of the project is its proximity to the upcoming MRT Line (Taman Pertama Station), which is slated for completion in the first quarter of 2017. This will help to maximise capital appreciation and rental yield. The Taman Pertama Station is four stations away from Bukit Bintang.
The day-to-day necessities can be bought at Tesco and the upcoming home furnishing store, Ikea. Pantai Hospital in Cheras and Taylor’s International School are also in the neighbourhood. Among the facilities are an infinity pool, multi-purpose hall, jacuzzi and gymnasium, on the podium level on the ninth floor.
Interestingly, Jakel is also planning an integrated development comprising commercials, residential and retail components, a stone’s throw from the J. Dupion project. This development will feature a shopping mall, apartments, hotels and office space.
The integrated development project, known as Dupion Island, will be built on 14-acre on the previous Cheras Velodrome land.
“We are planning to build a covered walkway to connect the J. Dupion project with the MRT station, which will also be linked to the Dupion Island project,” says Jakel Trading chief operating officer Mohamed Nizam Mohamed Jakel.
He says the group is planning to launch property projects with total GDV of RM3.5bil in the next five years. Mohamed Nizam, who is also the deputy chief executive officer of Jakel Development, says the group targets to launch two projects in Wangsa Maju in second quarter of next year, which will comprise three blocks of residential apartments.
Jakel Group, operates 20 stores nationwide and employs close to 5,000 workers. In terms of sales, Jakel Group has been growing steadily, especially over the past five years. Its revenue compounded annual growth rate stood at 20% per year.
More shopping mallsHaving successfully opened the world’s largest standalone textile mall, Jakel Mall, in Jakel Square in Kuala Lumpur in February, the group has two more malls in the pipeline.
One of them will be in Seksyen 7, Shah Alam on seven acres with an estimated GDV of RM1.7bil, while the other will be in Bangi on a about three acres with a GDV of RM850mil. In 2012, Jakel Group bought the Cap Square north and south towers for more than RM300mil. Combined, the two retail podiums have a total gross lettable area of more than one million sq ft.
Subsequently, the group redeveloped Cap Square into Jakel Square, comprising Jakel textile mall with an area of 330,000 sq ft, a hypermarket, a four-star syariah-compliant hotel, the first in the country, of more than 300 rooms, and 2,543 car parking bays.
The mall is also expected to welcome Middle East’s largest hypermarket chain Lulu Group that operates a big grocery, IT and electronics supermarket chain in Abu Dhabi, in the later part of this year. Lulu will be occupying more than 300,000 sq ft of space in Jakel Square.
Mohamed Nizam says the development of both malls in Shah Alam and Bangi would have the same concept as the Jakel Square. He explained the Shah Alam project would comprise one textile shopping mall, one Lulu hypermarket, retail space and three blocks of residentials. Lulu is expected to occupy about 250,000 sq ft of the development.
“Both malls will have the same concept as the Jakel Mall, which would take about three years to complete,” Mohamed Nizam says.
He adds that the group is targeting to start construction in Shah Alam and Bangi in 2017 and 2018 respectively. Jakel started as a Muar carpet wholesaler for small traders and was founded by Mohamed Jakel Ahmad in 1983.
“When we came to Kuala Lumpur nobody knew about Jakel and we had to build the Jakel name from nothing, but with hard work and aggressive brand building exercise we were able to grow Jakel to what it is today,” says Mohamed Faroz.
He says the group receives close to 100,000 visitors to its mall per month.
Jakel opened its first retail branch in Segamat in 1985. It built strong market presence nationwide by venturing into textile retail trading and supplying textiles to both the government and private sectors.
Its first store in the Klang Valley was opened in 2007 in Jalan Masjid India, Kuala Lumpur that involved a capital outlay of RM30mil. “For our venture into the property development sector, we would also need to build our brand first, just like how we built our brand in the textile retailing business,” Mohamed Faroz says.
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