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By: Professor Dr Salina Daud, Dr Nur Sofia Nabila Alimin, Dr Norhana Mohd Aripin, Dr Mohd Hanafiah Ahmad, Dr Suhaidah Hussain
Dato’ Shahrul Nizam Abdul Aziz is the Group Chief Executive Officer (CEO) of Tanah Makmur Berhad (TMB), and under his leadership, the company successfully expanded its operations into property development by 2024, leading the creation of the flagship 2,100-acre Kota Sultan Ahmad Shah (KotaSAS) township. He describes TMB’s strategic move as capitalizing on its strategically located land holdings to monetize them through property development, while the established oil palm plantations continue to provide a stable income. Dato’ Shahrul Nizam views TMB as a "community developer" rather than just a property developer, focusing on building a full township where people can "live, work, play, exercise, relax, and enjoy the environment," including residential, commercial, and living components. This approach stems from the understanding that most people buy homes "to live in, not for investment," requiring the design to include essential features such as commercial components, service areas (like hospitals and clinics), schools, and recreational spaces. He highlights that TMB has a competitive strength due to possessing a large, continuous set of land (2,100 acres) in Pahang, unlike other developers. Furthermore, Dato’ Shahrul Nizam emphasizes TMB’s commitment to environmental sustainability, noting the necessity of incorporating green technology and sustainable materials and fitting all commercial rooftops with solar panels.
Q1: TMB initially focused on the agribusiness, specifically the palm oil sector. How has TMB leveraged its existing assets to facilitate its strategic shift into property development, and how do the two business segments relate today?
We recognized that we could capitalize on our extensive land holdings, which are strategically located, and chose to monetize this land through property development instead of relying solely on the oil palm business. Even while we develop smaller parcels for property development, the oil palm plantations on other undeveloped areas continue to operate, providing a stable income. This creates a symbiotic relationship: the oil palm business offers a stable cash flow, while the property development business adds additional revenue streams driven by economic growth and demand. This balance allows us to benefit from both stable and growth-driven income streams.
Q2: TMB's flagship project, Kota Sultan Ahmad Shah (KotaSAS), is described as more than just a residential area. How do you define TMB's role in the property market, and what key components are essential to the modern township design?
We consider ourselves a community developer. Our goal is to build a full township that includes residential, commercial, and living components, creating a space where people can live, work, play, exercise, relax, and enjoy the environment, as well as gather and interact. We operate under the understanding that most people buy homes to live in, not purely for investment. Therefore, our designs must ensure the area is truly livable, incorporating essential features like commercial components, residential areas, service areas (such as hospitals and clinics), schools, and recreational spaces.
Q3: The upcoming East Coast Rail Link (ECRL) and the establishment of the Pusat Pentadbiran Sultan Ahmad Shah (PPSAS) are major developments in Kuantan. What specific business opportunities do these infrastructure and administrative changes unlock for TMB within the KotaSAS township?
In terms of immediate opportunities, we possess 380 acres of land that have been gazetted near the central business district, right next to the PPSAS area. With government offices relocating into this area, we see a crucial opportunity to attract large companies to set up regional offices on the East Coast. These developments have already made KotaSAS a highly favourable residential area in Pahang.
Q4: TMB is committed to sustainability. What steps are you taking, both in design and construction, to incorporate environmentally responsible practices into projects like KotaSAS?
Environmental sustainability is a significant and growing concern that directly influences how we design and build properties. We are focused on reducing the environmental footprint of our projects by incorporating green technology and sustainable materials. We incorporate sustainability and Green Building Index requirements into our architectural plans. For example, all commercial buildings in KotaSAS will be fitted with solar panels on their rooftops to decrease dependency on non-renewable energy sources. In construction, we utilize technology to help reduce waste, speed up the building process, and, in turn, lower labour costs and increase productivity.
Q5: The property development sector is highly susceptible to external pressures, including economic shifts and regulatory changes. Can you describe some of the immediate challenges impacting TMB's project efficiency and profitability?
We face dual challenges from regulatory mandates and difficult terrain. Firstly, changes in government regulations, such as altering a 50-meter buffer on land with a slope of 25 degrees or more, directly affect our overall efficiency and effectiveness. Secondly, the terrain, particularly in the northeastern part of KotaSAS, is challenging due to too many valleys and large rocks. Because the land is not level, we must spend a considerable amount of money to flatten it and break up the rocks, which significantly adds to the overall development cost. Furthermore, when interest rates are raised by the Central Bank, this raises the cost of borrowing for home buyers, making it harder for them to afford properties. We also experienced budget disruption when the diesel subsidy was removed, resulting in a rise in prices for materials like cement, bricks, and sand, which increased construction expenses.
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