Tuesday, April 30, 2013

The Problem With UMLand's Seri Bukit Ceylon

Earlier I wrote about some issues in Seri Bukit Ceylon, at one time, the star of the Bukit Ceylon expat enclave. It wasn't until I attended the AGM on the 20th of March recently I learnt more about the depth of the problem.

To prevent myself from being sued, I will just present as much facts as I can as what I am about to write implicates certain individuals, the former building manager, Henry Butcher and also the developer, UM Residences, a subsidiary of UMLand.

As we all know, Seri Bukit Ceylon was built by UMLand in a JV with Singapore's Capital Land. I actually attended the 1st AGM by the Joint Management Body (JMB). I was really impressed by that meeting and the positive gestures given by UMLand, at that time helmed by CEO Andrew Wong. When he handed over the management of the building to the JMB, he very generously wrote off the deficits from the accounts so the JMB can start at par and also provided the JMB an office at a nominal rent of RM1.


This office is to become one of the center of dispute between UMLand today and the management body. Much has changed...

UMLand or their subsidiary UM Residences actually owns the office, and other properties in the building which includes the former Somerset's lobby, an empty hall on the 4th floor facilities deck, a shop currently tenanted by a popular restaurant, Neroteca and they used to own a small but prominent shop on the ground floor which has since been sold. 



Let me talk about the shop 1st of all, as I used to have an interest in it. This shop is located at the front of the building and it was initially occupied by Kiosk. When Kiosk went belly up, the shop became vacant and I immediately approached UM Residences for an opportunity to rent it as I was then interested to run a little juice bar. I understood then the rent was only RM1,200/month. However, I was told I will not be able to rent it because the city council (DBKL) will never allow plumbing to be installed in that shop. So, I dropped the idea and the shop was eventually taken up by Neroteca as an annex. I was upset later to find out that Neroteca was allowed to build plumbing to supply water to a sink in the shop.

After a couple of years, Neroteca gave up the shop and it became vacant again. That time, I again approached UM Residences (UMR). I was told the developer might be interested to sell the shop. When I enquired for more details, the UMR manager said I should make an offer and write in. So, I did write in my proposal to rent the shop at RM1,800/month, to turn the shop into a trendy juice bar in a joint venture with one of the largest retail outlet in Malaysia. I thought by this offer, UMR would be interested as the business will add value to Seri Bukit Ceylon, at that time one of their flagship development. But to my dismay, UMR was not interested in this at all... 

At that same time, I also approached UMR to make an offer to purchase the shop through an agent. Later I was told, the shop has been rented to a sundry shop operator who is doing this....



I think immediately, the value of Seri Bukit Ceylon, or at least the perception that it is a high end condo dropped several notches. Recently, I found out that the estate agent whom I engaged to negotiate with UMR apparently bought the shop and rented it to this sundry shop operator for RM2,000/month.

A lot of other things are happening. As we know Somerset are now just operating their 48 units remotely. Well, UMR who owns the lobby sold it - yes, they sold the lobby! And the new owner of the lobby, we don't know who, has already begun to renovate it.



This now suddenly reminds me of a case recently in Petaling Jaya where the apartment's car park was sold off leaving the apartment dwellers nowhere to park their cars.

UMR is really on a selling spree... because now they have given the Seri Bukit Ceylon management body till end of April (today) to vacate the office as they want to sell it too. On paper, I think UMR, since they own that office and are renting it to the management body at a nominal RM1 have all the rights to sell the office. However, morally I think this is wrong... UMR have the obligation to provide the management body a suitable space to operate as an office. The space they have now offered to provide is a small, dark store room at the back of the building.



This is what UMR call a suitable office for the management body! This is, in UMLand's opinion, suitable for a high-end serviced apartment... I am utterly dismayed and awed by their class!

Then Henry Butcher left. This got all the owners concerned. But there are a lot going on which nobody knows what is really going on as there are 2 sides of the story. From what I know, this is the 1st building management AGM I attended where the audited accounts was not tabled. Apparently the accounts till today has not been properly audited. I approached the Management Body's Treasurer about this. He explaint that the reason was because Henry Butcher has not been able to explain and account for all the figures to his satisfaction. To be fair to Henry, I asked why was this not explaint to the owners during the AGM? At least the un-audited accounts could have been presented and all the disputed figures highlighted to the attention of all the owners. 

There are also a lot discussed about the role of Henry Butcher, as a professional building management company but I will not write here as I have not been able to verify them. 

With all these troubles, some owners actually approached me and asked me is this the time to sell and cash out from Seri Bukit Ceylon? My answer is pretty simple... NO... especially after what I have highlighted in this blog. Haha... 

But honestly speaking... I say NO, don't sell because Seri Bukit Ceylon is still an attractive building to tenants and owners' alike. There are a lot of potentials ahead especially after the completion of the MRT  and One Ceylon just minutes walk away. Menara PMI next door has also been sold and the new owner is expected to make the place into a nice office building. Plus where else can you find such a location at this price? I say there are no perfect properties. The density of Seri Bukit Ceylon is still small enough for the group of owners to do something and get the building in shape again. And this is exactly what we have done in the AGM. The market value for a 1br unit here is about RM600k today. Where else in Bukit Bintang can you buy a 640sf 1br unit for this price? All the new launches are smaller in size and priced no less than RM900k so what are we afraid of? No new competitor can come down to the rent level of Seri Bukit Ceylon today and no existing competitor in the vicinity can also go up to the same standard and size of this property. 

So, let's just keep it for now. We are after all, long term investors :)   




16 comments:

apex property investment said...
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john said...
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Allison Zoie said...
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Richard Teo said...
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john said...
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sinleong said...
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apex property investment said...
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john said...
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Richard Teo said...
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azerque said...
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ahmad Adam said...
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apex property investment said...

A Best has taken over the somerset units and are doing very well. When I was there, they said 90% occupancy rate. They are starting to take back some units from owners for rental. They offered 2 bedroom 937 sqft unit @ RM3000 for 2 years tenancy and for 1 Bedroom RM2200-RM2400. This is way lower than what somerset used to offer.


TodayBlogNews said...

but now they going to sell the remain unit as rm800 per sqf.

sinleong said...

If anybody wants to sell at RM800psf pls get in touch me with fast

apex property investment said...

Any info on how the market is moving? Anyone got valuation done recently?

apex property investment said...

Any info on how the market is moving? Anyone got valuation done recently?