Developers should rebrand abandoned projects to gain homebuyer’s confidence

This is because homebuyers are naturally cautious when considering properties with a history of abandonment or financial instability 


WHITE knight developers play a crucial role in revitalising abandoned or troubled real estate projects. 

These developers, often driven by a sense of responsibility or opportunity, step in to rescue projects that have faced financial or logistical challenges. 

Their involvement can breathe new life into otherwise neglected properties, transforming them into attractive and viable options for potential homebuyers. 

In the real estate market, where trust is paramount, white knight developers have the opportunity to rebrand their projects effectively. Homebuyers are naturally cautious when considering properties with a history of abandonment or financial instability. 

The success of white knight developers goes beyond mere financial gains, it represents a commitment to community development and urban renewal. As these developers undertake the challenge of resurrecting abandoned projects, they contribute to the overall improvement of neighbourhoods and urban landscapes. 

According to NCT Group of Cos group project director Yap Chun Theng, homebuyers are worried that the project might be abandoned again. 

“Therefore, the reputation and track record of the white knight developer can significantly influence the perception of the house buyer. 

“Moreover, how we rebrand the project also plays a crucial role,” he told The Malaysian Reserve (TMR). 

One example was the Billion Court project in Genting Highlands, Pahang, which was abandoned in 2002. 

NCT Group revived the project later into the Grand Ion Delemen which began its operations in 2016 as a serviced residence. 

Yap explained how some referred to it as a haunted house after years of being abandoned but they have successfully rebranded it as the highest altitude full-fledged serviced apartment in Malaysia, earning an entry into the Malaysian Book of Records (MBOR). 

The group did the same with their serviced apartment Grand Ion Majestic in Genting Highlands, which not only changed buyers’ perceptions but also received several accolades from MBOR. 

The Grand Ion Majestic is a 0.81ha freehold project spanning three towers and 1,668 units, with completion expected by the first quarter of 2024 (1Q24). 

Each of the 1,668 units, ranging from 380 sq ft to 1,500 sq ft, have selling prices ranging from RM480,000 to RM1.1 million. 

Being a white knight developer may be rewarding but it comes with many sets of challenges, Yap says

Challenges Of White Knight Developer

Being a white knight developer may be rewarding but it comes with many sets of challenges. 

The process of securing a project involves a tedious process of briefing buyers, assessing site conditions and re-evaluating design which involves various stakeholders. 

However, Yap explained that with these challenges they have developed the ability to master strong management skills as they facilitate discussions and solutions effectively. 

“Of course, we recognise that this is an ongoing process, and there is always room for improvement as each project is unique. 

“Hence, we always approach each project as a brand-new project and an open mind,” he said. 

On the other hand, reviving abandoned projects requires perseverance, patience, problem-solving skills and the strength to overcome both expected and unexpected obstacles. 

Yap shared that while they were reviving Grand Ion Delemen, they were met with environmental and geographical conditions as many suppliers found it challenging to send the materials to the site due to the sloping access road. 

Another example would be the weather conditions going up around Genting Highlands that was very unpredictable. 

“At times, we would need to implement and execute a new or different construction methodology. 

“It is always a battle between keeping to the project timeline and ensuring the workers’ safety,” he said. 

To overcome these challenges, Yap strived to differentiate themselves from the original project developer as well as consulting local authorities to understand the latest requirements for abandoned projects, as regulations and requirements can change over time. 

NCT Group also managed to revive the biggest abandoned project in Malaysia which was Taman Kenanga into Salak Perdana in Sepang, Selangor.

The group took over the project, measuring 127.5ha, and developed it into a service apartment and commercial hub called Acacia Residences and Salak Perdana Business Park, respectively. 

Revitalising the biggest abandoned project in Malaysia also had its flaws where it was discovered that it had been tampered with or damaged by unknown individuals even though it passed a quality check. 

Therefore, the group decided to rebuild the compromised structures which resulted in additional costs as well as the challenging communication with homeowners. 

The Grand Ion Majestic is a 0.81ha freehold project spanning 3 towers and 1,668 units, with completion expected by 1Q24 (Pics source:

Tax Incentives and Stamp Duty Waivers

Yap explained that he received tax incentives from the government to revitalise abandoned projects. 

These included a double deduction of interest expenses in loans for these projects while stamp duty on the loan agreement was waived due to a government initiative at the time. 

According to the Inland Revenue Board of Malaysia’s Rescuing Contractor and Developer Public Ruling No 12/2013, the private sector is rewarded with tax incentives and special tax treatment for rescuing contractors or developers involved in rehabilitation projects, effective from 2013 and subsequent assessment years. 

Yap also welcomed Prime Minister and Finance Minister Datuk Seri Anwar Ibrahim’s announcement of a special financing guarantee of RM1 billion to encourage developers to restore identified abandoned projects. 

The government has allocated RM2.47 billion for people’s housing projects next year, including an RM1 billion guarantee fund for responsible developers. 

Over 28,000 housing units with a gross development value of RM23.37 billion have been revived, and RM546 million will be allocated for 36 projects. 

“Although currently there are lack of specific details on the special financing guarantee, we are pleased and encouraged by the government’s effort. 

“We fully support the government’s commitment to ensuring the completion and delivery of homes to the homeowners,” Yap said. 

As for now, NCT Group is working closely with the Local Government Development Ministry on their list of abandoned projects which are being updated from time to time. 

“We are diligently combing through this list, keeping a close eye on our next project. 

“If we come across a project that fits our expertise and capabilities, we will be more than happy to take on the responsibility as the white knight,” Yap explained. 

As of Jan 31, 2023, there have been a total of 437 sick projects and 115 abandoned projects which have been identified by the ministry. 

Dealing With Legal Issues

Meanwhile, Infra Segi Sdn Bhd’s subsidiary 168 Park Selayang Sdn Bhd has finally launched Bole Residence’s last residential tower (Block B) on Oct 6. 

The tower was held in the leasehold mixed-use development 168 Park Selayang in Selayang, Selangor. 

Bole Residence is a 49-storey tower with 956 units beginning at RM397,000 and is expected to be completed by 2026. 

The residence features a smart home system with smart switches and locks, which can be controlled via a phone application. 

The 168 Park Selayang took up the initiative as a white knight developer in 2021 to revive the project which was once known as the Selayang Star City project. 

Upon completion, the 2.8ha Selayang Star City development will feature 2,269 designer suites and a 305 serviced suite-Holiday Villa Hotel, atop a five-storey mall measuring 550,000 sq ft. 

In 2016, Selayang Star City developed Leadmont Group announced construction resumed in October, with service apartments, a hotel and Star City Mall expected by 2019, but the project stalled in 2017. 

According to 168 Park Selayang business development director Lorenz Tong Poh Sun, they had to go through a legal mitigation for years which is a judicial management scheme. 

“We are actually the first company that went through this scheme and it took us about five years to complete the entire scheme,” he explained. 

The Companies Act 2016 introduced provisions on judicial management in Malaysia, allowing the High Court to set aside a judicial management order on creditor application, ex debito justitiae (on account of justice), despite the lack of express power in the Act. 

The judicial management is a court-appointed liquidator responsible for rehabilitating and rescuing financially distressed companies by devising restructuring schemes for creditors’ approval, and if rehabilitation isn’t possible, a judicial manager is appointed. 

Cleaning Up and Making It Trendier

Apart from legal issues, the company faced construction issues, said Tong. 

He gave an example where back in 2016, the entire superstructure was already up to the seventh level as well as the car parks which had to be cleaned up first. 

“From there, we started to construct the complete level eight. Then we move on to level nine which is the facility area,” Tong said. 

The company also faced another issue where the already built project design was outdated which necessitated an upgraded design and demolishment of some already built structures. 

“So, there’s actually a big gap between what it was and what the current markets actually demand,” he said. 

The Bole Residence is Infra Segi’s first rehabilitation project as a white knight developer and it helped them to be known. 

With Malaysia getting out from yet another economic hardship courtesy of the post-pandemic world, white knight developers such as NCT Group and Infra Segi emerge as essential catalysts in the real estate industry, rescuing abandoned projects and reshaping the narrative surrounding them. 

Moreover, the impact extends beyond profit margins as white knight developers become integral agents of positive change, fostering community development and urban renewal. 

In their pursuit of transforming neglected projects into thriving, vibrant spaces, these developers not only create new housing opportunities but also inspire confidence and stability in the neighbourhoods they serve. 

  • This article first appeared in The Malaysian Reserve weekly print edition