At the very cry of ‘abandoned project!” everyone goes into a frenzy avoiding the project. But is it really as bad as what everyone thinks it to be? No, it’s not! In fact, some the best projects that have turned out in recent years were products of abandoned projects!
Before looking at some of the most successful revived projects in the market, let’s take a look on what constitutes an abandoned project.
Defining Abandoned Projects
Announcing a project as ‘abandoned’ is not as simple as the developers make it seem, as there are criteria to be fulfilled. The most important one is that the project has to be completed no later than the delivery date stated in the Sale & Purchase agreement - which therein lies the problem for many buyers.
Most of the developments need a minimum of 3 years to complete, but many a time the development is abandoned within the first or second year of the development. When the buyer finds out about the situation, they will naturally stop servicing their payment; which will then lead to a penalty from the bank.
From the developer’s side, when they decide to abandon their project, they need to register in the High Court under Section 218 for ‘Petisyen Penggulungan’, and the project has to be confirmed as abandoned under the Ministry of Housing and Local Government under Section 11 (1) (c) of Act 118.
Unfortunately for many buyers, there seems to be a big time gap with the developers and authorities filing a project as abandoned, during which time they will still need to service their loan. Hence in the comparatively recent years, the banks have begun to stagger the loans doled out to the developers to proceed with their project.
Once the project is abandoned and the buyers no longer need to service their loan, there is the slight burden off them; but then there is still the issue of owning a home in an abandoned unit. But fortunately for some of them, their ownership has continued throughout the years and have even led to great profit for some of them.
Here is a look into some of the most successful abandoned projects in Malaysia’s history, starting from the least popular.
Putra Intan Condominium is an excellent example of an abandoned to completed project within only 5 years. The original developer of this condominium was blacklisted shortly after it cried off its project. The buyers of this condominium suffered the losses, and despaired of ever fulfilling their dreams of owning a new home.
But fortunately for them, Rimbun Corporate Advisory Sdn Bhd stepped in to intervene and take over the project. They funded the project with their own internal resources. This company has taken up the challenge, and has been stepping in to revive several abandoned projects.
As a result, Putra Intan Condominium which went on sale in the year 2002 and was supposed to be completed in 2005 but was abandoned, came back to life and was completed in January 2010 instead - and presented the Certificate of Fitness (CF) form to the residents in December 2010.
La Cottage, Puchong
Puchong is famous for being dotted with abandoned projects, and La Cottage is another one such example of a dream dashed. La Cottage was a project of Talam Corp, the developer that busted big time with their most infamous project being the Bukit Beruntung township.
La Cottage, a project of double storey terrace homes, was launched in the year 2003. It had a launch price of approximately RM132,400 - a very decent price for the dream it was offering. The project was supposed to be completed in the year 2005, but somehow or another works on it stopped in the year 2003 itself.
The buyers of this project were heartbroken to find that construction of their dream homes were being abandoned and that they were going to be stuck with the loan nevertheless.
Fortunately for them, Rimbun Corporate Advisory Sdn Bhd again stepped in to save the day. Works on the project once again picked up, and La Cottage was completed in approximately the year 2012.
This would be one of the more surprising abandoned projects. Royalle Condominium is now a low density condominium that is very much sought after by families. But at one point of time, it was a solitary figure against the twilights of North Kiara. It was almost completed, but the previous developer ran out of funds right at the end. So there were homes that were more or less ready for occupancy but did not have their Certificate of Fitness.
The buyers who owned a parcel of Royalle Condominium were frustrated, but fortunately for them, Wisdom Realty Sdn Bhd came into the picture not long later and took a hand. After conducting a thorough inspection of the development and fixing up everything, Royalle Condominium was transformed into the elegant and upmarket development that it now is.
This is another project that caused many buyers much pain. Residensi Laguna was once known as Sunway Belvedere, and it was supposed to be a grand scheme of a home - from Talam Corp. It was abandoned in approximately the year 2002, and was left empty for almost ten years before the leading Malaysian developer, IJM, took over.
Many new buyers were apprehensive of making a purchase here as the foundation of the development was built by Talam whereby IJM only completed the later stages. But many buyers took the leap and never looked back as this condominium makes excellent rental returns.
Residensi Laguna is situated within walking distance to Sunway College and Sunway Pyramid. The nearby highways also include the Damansara-Puchong Highway (LDP), the Federal Highway and the New Pantai Expressway (NPE).
This will be one of the most popular projects of all times in Ara Damansara. The Maisson is a gorgeous high end condominium located in the last remaining residential spot in Ara Damansara, overlooking the million-dollar landed properties of Ara Damansara and the neighbourhood playground.
The Maisson was previously known as Platinum Damansara. It was originally launched in about 2005 under the developer Kumpulan Langkawi Resorts. Development of the project proceeded well for about 2 years before it stopped, after the buyers had already completed approximately 83% of their payment. Howls of fury could be heard when the developer called off.
When Newfields stepped in to revive the 7-year abandoned project, they requested the original buyers to top up 25% of their original buying price as restoration costs. While this did not sit very well with many of the buyers, those who did so were well compensated with the capital appreciation of The Maisson. It was said that the original launch price of the Maisson stood at approximately RM360,000, but the cheapest and smallest unit is now selling for RM405,000.
The Main Place is be one of the worst - and best - of revived projects. This project was abandoned not once, not twice, but three times since its inception. Buyers of this project had given up all hope after being disappointed time after time for 16 years while the framework of the building seemed to perish under the harsh elements.
The development of The Main Place was first abandoned in the year 2001, after 63% of it was completed. After two failed attempts to revive it, Bina Puri finally arrived on the scene to save the project. Bina Puri poured RM180 million into the construction costs to complete the development.
The original buyers of The Main Place have profited handsomely from their purchase, as the original price of the building was between RM150 and RM205 psf. The price of the units here have now increased to between RM580 and RM700 psf.
Abandoned Projects - A Hidden Blessing?
Project abandonments are sadly not isolated cases. They are more common than what the public realises. Approximately 261 projects were abandoned between the years 1990 to 2005, affecting 88,410 housing units and 58,685 home buyers.
Amongst some of the more popular projects that carried much hope but was later abandoned is The Boss in Klang, Bandar Alam Perdana in Ijok and the infamous Bukit Beruntung. A complete list of abandoned projects can be viewed at the National House Buyers Association.
Nevertheless, there is still hope for owners of abandoned homes, as the government is moving aggressively to revive these projects to save the affected buyers. According to the country’s prime minister in December 2014, 74% of the abandoned housing projects have already been saved, so it will only be a matter of time until all affected buyers get their dream homes.