Property Hunter Magazine October Issue 2014 | Page 30

/// Hot Topic

Mixed Development

/// HOT TOPIC

Getting the right mix

O

ver the last decade, mixeduse developments have
increased its stake in the
local property market and the
reasons for this are many, namely
traffic congestion, increased
fuel prices, changing consumer
demographics and a longing for
a sense of space and community
cohesion. Urban planning and
real estate development are
moving in tandem with this shift
in development pattern and are
increasingly responsive to the wants
and needs of the public.
The concept is certainly not new
and is in fact being embraced with
the end user who is demanding
the space, the developers who
are supplying the space and the
planning and policy makers who are
regulating the space.
In his research paper (MixedUse Development in Theory and
Practice: Learning from Atlanta’s
Mixed Experiences; 2011), Joshua D.
Herndon said that sorting the fact
from the fiction and developing an
in-depth understanding of both the
possibilities and the limits of mixeduse development are essential if the
positive aspects of the concept are
to be maximized.
Doing so requires some questions
to be considered. For example,

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how has the arrangement of land
use changed over time? What
are the necessary characteristics
of a mixed-use development?
What are the different ways of
conceptualizing mixed-use projects?
And what are the goals of mixed-use
development?

Incentives for land use change
Accessibility and connectivity are
the two main incentives for property
development and this can be clearly
illustrated with the development of
new townships on the east coast
of Sabah. Hap Seng Properties
Development is one of the most
established developers of housing in
Sabah with developments in Lahad
Datu and Tawau bringing about a
significant change in land use in the
area.
John Tan, COO of Hap Seng
Properties Development, opines
that land use in these two east coast
towns had to evolve out of necessity.
“Mixed-use development means
decentralization of old towns that
can no longer sustain its population
growth,” he says.
We have been in this business
for more than 40 years and
we understand the market
demographics well enough to

Hap Seng Properties Development has made considerable contributions to
mixed-use development in Sabah in the form of its Bandar Indah township
project in Lahad Datu. From left: Caroline Yong (Senior Sales & Marketing
Manager), COO John Tan and Willie Pang (Senior Manager – Marketing &
Leasing) looking over the Bandar Indah project model.

Aeropod Retail Shops

know what the public needs. And
for Tawau and Lahad Datu, it is
affordable housing and space.”
As a diversified company with
interests in construction and
building materials, Hap Seng was
able to leverage on its construction
cost to offer housing as low as
RMRM210,000 per unit for a terrace
house some two years ago. Today, it
plans to still provide housing within
this range as it sees it as part of its
corporate social responsibility as
much as a good investment.
Its Bandar Sri Indah project in
Tawau is the largest commercialresidential township development
in Sabah, with a land area that is
three times larger than the current
Tawau town centre. It is located midway between the town and airport,
about 15 minutes’ drive either way,
and comes equipped with modern
infrastructure and landscaping
for homeowners to experience a
modern lifestyle.
Tan adds, “We do not see ourselves
as just house builders but as
township developers.”
“We started planning the project
some 8 – 9 years ago on a 1,368
acre piece of land that used to be
oil palm estates. Tawau town was
getting too congested and high

land prices were making housing
unaffordable for the lower income
group. Public facilities and amenities
were also in bad shape due to age
and lack of maintenance.”
When completed Bandar Sri Indah
will have 7,493 residential units
(992 acres), 788 commercial units
(96 acres), 527 industrial units (103
acres) and 28 acres of open space.
“People generally prefer
landed property and this is the
characteristic we maintained in
our development project which
comprises mainly of terrace houses.
We also focused on providing all the
basic amenities for the convenience
of the residents like shops, offices,
markets, schools, bus/taxi terminal,
community hall, sports and
recreational centres, all within easy
reach.”
Tan concedes that mixed-use
development requires heavy
financing but if there is a demand
for it, it is a matter for finding the
right mix for the right market.
Creating an entire township requires
long-term commitment and a solid
foundation built on trust that you
will deliver on your promises. The
Bandar Sri Indah example will
hold Hap Seng in good stead as
one of the pioneers in mixed-use
development to make its mark in

Sabah.

Connecting to the future

six bus lanes and even air space
provision for future LRT or MRT
expansion,” he adds.

As the lines between city and
country being to blur with the
development of new hubs for
business, living and leisure, future
proofing would be of paramount
importance.

The Aeropod project is currently
looking at constructing four
flyovers with internal and external
connectivity to Jalan Kepayan to
ensure a constant flow of traffic to
the area.

Timothy Lim, senior manager for
project planning and development
at SP Setia, developer of the massive
Aeropod project in Tanjung Aru,
pointed out that location and
accessibility are key factors in
mixed-use development as they will
determine the project’s long-term
success.

A mixed - use development project
is very challenging as it is not only
about location and accessibility but
also about finding the right tenant
mix to attract the right crowd.
Aeropod spans approximately 60
acres and featuries a mix of retail,
offices, F&B, serviced apartment,
SOHO, Corporate Office, boutique
hotel, and 5-star hotel.

“Future proofing is to ensure that
we plan our connectivity well before
we develop so that we won’t have
to waste time and money on land
acquisition or building tunnels
around built-up structures,” he
explains.
“When we submitted our project
plan, the local authorities requested
for future expansion plans so we did
a study of the various connectivity
corridors around Kota Kinabalu
and its suburbs. Aeropod itself is a
transportation hub which integrates
the existing railway station plus

The tenant mix has to be able to
generate the perfect balance of
live/work/play dynamics to attract
a new generation of workers and
residents who want to spend less
time commuting in their cars and
more time indulging in leisure and
recreational activities.
As a transit oriented development,
Aeropod also has the advantage of
attracting a wider mix of workers
from the city and suburbs who
would find the convenience of a
well-organised transport hub a huge

Aeropod Transportion Hub

plus point.
Lim, who prefers the term integrated
development as it represents the
more cohesive nature of a multipurpose development that includes
sustaining the well-being of its
residents and visitors, feels that
developers have to value-add their
projects to remain relevant.
He highlights SP Setia’s Bukit
Indah project in Johor where after
it was already completed, they
had returned a few years later to
redevelop the streets for the benefit
of the residents there.
“This has been our practice for the
last 5 to 6 years as we consider
facility management a very

important issue. More so for an
integrated development project as
there are so many more parameters
to consider from the commercial
and residential perspectives.”
While many mixed-use
developments are enormous, there
are smaller developments with a mix
of everything. The only difference
is the economies of scale. Sabah
has made great strides down this
path but it would be indeed prudent
to future-proof its trajectory with
the necessary infrastructure and
connectivity blueprint to ensure we
get the mix just right for now and
into the future

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