PETALING JAYA: Blue Duck Tech Sdn Bhd aims to replace up to RM500 million in rental deposits per year in the local property industry, which it hopes to achieve within the next five years via its Zero Deposit Programme.
Founder and CEO Earnest Wong said the programme, launched in 2021, intends to assist tenants in securing residential rental or commercial property without the need to pay a hefty upfront deposit. Instead, the tenant will pay a small fee to cover the cash deposit.
Wong said the company which is in the financial technology property segment, has replaced “more than RM12 million of rental deposits”. Based on reports, he said, the monthly gross rental value for residential and commercial properties in Malaysia totalled RM6 billion.
He reckoned that if the average was three months of rental deposits, it would be close to RM18 billion.
Wong said Blue Duck hopes to replace RM500 million in rental deposits per year and expects to achieve its target “five years from now”. Additionally, it aims to increase its market share to 5% within the same timeline.
However, he said the company is essentially focusing on zero deposit solutions, unlike other companies with similar offerings on the market.
“We work with all the stakeholders in the property sector to offer our solutions. We also have the USP (unique selling point) of giving focus on the tenant’s side rather than the landlords in terms of our product mainly because we need the tenant to actually commit,” he told SunBiz.
He said the company operates on business-to-business (B2B) and business-to-consumer (B2C) models. B2C consists of operators as well as property managers, which manage the properties on its platform. Consumers comprise tenants and landlords.
Currently, there are around 1,000 active tenancies on its platform and close to 90% of its tenants are below 35 years old.
In terms of revenue contribution, Wong said properties in Klang Valley contribute about 70%, followed by Johor Bahru 20% and Sabah 10%.
The company, he said, is targeting to grow by 50% this year, by partnering with players in the local property ecosystem.
“Previously, we worked with tenancy managers, now we’re expanding ourselves to property managers. So, we work with the property managers in town to expand our influence and increase adoption (for our offerings) and gain more market share.
“With property managers on board, then I can introduce more business tools and then we work with those ecosystem partners and they are already familiar with our products ... it’s a natural growth, because the market is still very new and 50% is very conservative,” Wong said.
On outlook, he opined that the company is benefiting from increased interest rates due to the overnight policy rate hikes, as it discourages home ownership and indirectly uplifts the rental market.
“Loan costs are getting more expensive. In terms of buying a property, the cost will be slightly more than in the previous years, which will discourage a lot of people from ... home ownership. With that, there’s an opportunity for us. Living is still a basic necessity for everyone, whether you are a home owner or renter.
“Our industry will continue to move (forward). (From what) we see on the market, if the interest rate goes up, it will also drive up the rental rate as well. For the past few months, the per square of the room and unit rental has increased more than 10% to 15%, which is alarming but that’s how the market goes.
“We are in the position to help the tenants ... landlords and the industry. We need to position ourselves better in order to capture a bigger market share,” Wong said.
Blue Duck plans to expand to Thailand and Indonesia and is open to talking to investors.
Source: The Sun Daily
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