Dato’ Vincent is a highly successful award winning entrepreneur, who is also the managing director of Andaman Group. Under his helm, the company has achieved RM2 billion gross value and won coveted awards such as Most Valued Developer 2013 and SME Young Entrepreneur.
Andaman recently adopted a new tagline, ‘Generating value, creating wealth’. What is the rationale behind this change?
“Andaman is into property business for the past 10 years and only during our 9th year anniversary, we finally realized what went wrong all the while. We noticed how we could perform better, the things we did wrongly, and how to move forward.
After completing a sum of 20 projects, that was when we adopted the tagline, ‘Generating value, creating wealth’.
What we mean by saying this? We realized that we wanted to be a developer that creates value and we decided on a perfect strategy – we want our customers to make money at the point of purchase. Andaman’s customers do not have to wait for the price to appreciate over the years!
That was the reason for adopting such tagline.”
Andaman is well-known as the GRR King – providing many Guarantee Rental Return projects. How was this status achieved?
“During the first five years of Andaman, we created many GRR projects. We offered 8% GRR for 6 years, 10 years, and even some projects with 25 years.
How did we do this? Prior to the launching, we constantly signed contracts with any education institutes or companies to take up the lease, for them to occupy this building with GRR. Unlike some developers, we do not launch first and then search for tenants later.
Moreover, Andaman’s GRR is risk-free, as the GRR is always signed with the developers of the projects and not with some associates or newly incorporated firms. Several developers tend to set up new firms and find the easy way out when problems arise. This poses risks to the buyers.
In addition, certain developers tend to sell their units above market value to safeguard the GRR that they are obligated to pay in the future. But Andaman does not incorporate future rental into the selling price and always focuses on providing the lowest selling price for our customers, in that particular geographical area.”
Why did Andaman decide to develop a high-end condominium in Perak, a market fully conquered by landed properties? Why chose Perak when other developers are heading towards the hotspots?
“Recently, Iskandar Malaysia created a huge buzz in the property market, where developers were out-beating each other to purchase lands and to develop high-end projects.
That was when Andaman went the other way around and focused on the outskirts. We went to places like Ipoh, Cyberjaya, Serdang, Bangi, Slim River and Batu Pahat before anyone else and our projects performed above expectation. We gained a very high return on investment.
We developed Upper East @ Tiger Lane and fulfilled customers’ needs for condominiums, in a place where the prime market is conquered by landed properties. We purchased the land at a lower rate and generated more profit compared to the other developers who mainly focused on the hotspots.
Now, Andaman has already fulfilled the market needs. We put a high-end condominium, set in the best location in Ipoh, with a lower-than-market-value selling price; now other developers are unable to launch another condominium in Ipoh, because the demand is no longer there.”
Why did Andaman decide to launch a project in Iskandar Malaysia now, especially when other developers started focusing elsewhere?
“Currently, all the big buzz for Iskandar Malaysia is gone and many developers are heading away from this place. They are no longer acquiring lands, but are struggling with existing lands, as well as approved and on-going projects.
This is the best time for Andaman to step in. We are developing a high-end serviced apartment dubbed the ARC @ Mount Austin. Just within 60 days of launching, a total of 700 units were already sold out, out of the total 1800 units.
How is this possible? Mount Austin is a matured vicinity with twelve existing developers. Yet, Andaman has the best location of all, adjoining a golf course. The location for the other projects are also within this vicinity, but none enjoys the golf course view.
Andaman offers a high-end luxurious freehold residence, which is gated and guarded, and comes with an Olympic-size swimming pool. Our project is located on the land owned by the Johor Bahru City Council (MPJB) and our strategy is to attempt a joint venture with them.
So when we established a joint venture, we did not have the land purchasing cost, as well as the need to acquire a bank loan. Hence, we planned to develop a luxury residence, and not some affordable or low-cost projects.
We compared the price offered by the other developers in the surrounding, picked the lowest price and reduced the price by 20% for our project. Buyers also enjoy an additional 5% early bird discount. When Andaman entered the market, buyers stop considering the other projects there as they knew they can make money at the point of purchase with us.”
Robert Kiyosaki, the financial literacy activist, has predicted that the property market will crash in 2016. How well is Andaman prepared for this?
“Andaman is a private group and almost 90% of our developments were completed without acquiring any loans. We are light and agile, and definitely waiting for the market to crash as per Robert Kiyosaki’s prediction.
We are more than ready and well-prepared for the inevitable. Currently, we have many projects going throughout Malaysia, and we are generating good profit at the same time.
Andaman is more stable than some developers who are saddened with million ringgit loans, sometimes even billions, having to serve interests and unable to grow.
If the market crashes, Andaman will be in the position to take over a few of the other developers’ projects and there are high possibilities to take over other property firms as well. So, Andaman is foreseen to outshine if the property market collapses.”