Property News - Why Properties in Kuala Lumpur, Malaysia?

According to KL Traders, Malaysia Offers Significant lifestyle property opportunities. Read the article below posted by KL Traders:

LIFESTYLE RETURNS

There’s an enormous amount of high end residential development in the likes of Bangkok, Kuala Lumpur and Singapore. Which of these cities particularly excite you and why?

Asia-pacific provides a great mix of residential real estate investment opportunities for the speculative purchaser, conservative investor, owner-occupiers and holidaymakers. Residential projects within the Asia region have been extremely buoyant over the past two years, particularly in cities where we’re seeing rapid growth in urbanization driven by strong economic development, commerce and favorable legislative changes to foreign investment.

Malaysia and Thailand have probably been the two biggest markets within the region that have attracted foreign investors. In Malaysia, residential development has been primarily focused within Klang Valley, encompassing the KLCC area and surrounding suburbs. Malaysia has shown signs of strong growth based on the fundamentals that support real-estate capital appreciation. Population growth, increased tourism, relaxation of foreign-investment regulations and consistent GDP growth (above 4% per annum) provide a stable base on which to grow. Malaysia’s recent introduction of the ‘Malaysia My Second Home’ programme, aimed at attracting foreign retirees and medium-term vacationers, has already seen positive results in real-estate capital appreciation.

Inner-city apartments located around KLCC and the Petronas Twin Towers have been a major focus for local Malaysian developers, who have been keen to capitalize on a growing expatriate-influx and affluent local professionals. For the investment market, yields for typical apartments can range between 5 - 8% and are expected to rise with capital values in the medium to long term.

While there are a substantial amount of residential projects currently under construction in Malaysia, few development sites remain for residential use, which will support both the rental market and secondary sales market. Furthermore, we expect rising capital values to be sustainable given recent banking regulation changes allowing foreigners to leverage up to 90% of the property’s value, bolstering return on equity for investors.

Does Malaysia Offer Significant lifestyle property opportunities?

Yes, the lifestyle and resort market is also experiencing very strong growth. The emergence of strata hotel/resorts around the region has seen a new product line evolve that provides investors with a balance between a second home and investment property. Asia’s growing number of budget airlines and increased international direct flight routes will further attract tourism to the region, driving rental yields and occupancy for lifestyle-type property.

Tourism in Malaysia is set to grow exponentially, with a slowdown in the Bali market and density of mature resort destinations like Thailand. Existing but relatively un-tapped destinations like Langkawi, Kota Kinabalu, Penang and Port Dickson are all earmarked for redevelopment to international five-star standards. Over the last year, we’ve seen two of the largest multi-national hotel chains establish themselves in Malaysia (Four Seasons Langkawi and Le Meridien Kota Kinabalu. This trend will continue as tourism continues to be driven into Malaysia. -- Luxury Properties magazine

Property News Oval - GuocoLand buys KL condo project

GuocoLand & Oval Serviced Residents, Kuala Lumpur, extracted from the Star Online:

Friday August 10, 2007

GuocoLand buys KL condo project

By C.S. TAN

PETALING JAYA: Property investor and developer GuocoLand Bhd has agreed to buy a condominium project being constructed at Kuala Lumpur City Centre (KLCC) which may have set a new benchmark price for an en bloc purchase in that area.

GuocoLand, a member of the Hong Leong Malaysia group, announced late on Wednesday that its wholly-owned subsidiary, Astute Modernization Sdn Bhd, had entered into a share sale and purchase agreement with Eriton Sdn Bhd, Mohd Shukri Abdullah and Deepak Jaikishan a/l Jaikishan Rewachand to acquire the entire equity of Titan Debut Sdn Bhd for RM71mil cash.

Titan Debut had in April signed an agreement with Oval Residences Sdn Bhd to buy all the 140 units of serviced apartments, known as Oval Apartments, for RM404.58mil cash.

Construction of Oval Apartments was about 30% completed and was expected to be ready by December next year, GuocoLand said. The project is located along KLCC's Jalan Binjai.

The proposed acquisition was expected to increase the gearing of GuocoLand from 8% to 22%, the company said.

Tan Sri Quek Leng Chan

The net book value of Titan Debut was RM86,735 as at end-July, GuocoLand added.

Given the price that GuocoLand would be paying for Titan Debut and the latter's net book value, it is believed this means the owners of Titan Debut would make a profit of about RM70.9mil from owning the project for a mere four months. This truly makes it a titan of a debut for the owners.

As for GuocoLand, the price of RM71mil for Titan Debut, and RM404.58mil to develop Oval Apartments, which would have a total built-up area of 586,356 sq ft, means it would be paying about RM810 per sq ft for the apartments.

This is probably a record price for an en bloc purchase of a condominium project in Malaysia.

Even so, the price appears to be a fair one, and GuocoLand can choose various options, including selling the serviced apartments individually for RM1,600 per sq ft or more, when they are completed. The price could rise on completion of construction, which would be double its current price.

That is a reasonable target as One KL, a luxury condominium being developed by Datuk Chua Ma Yu, was being sold at an average of RM1,400 per sq ft, while The Binjai, developed by KLCC Holdings Bhd, was expected to be sold at about RM2,000 per sq ft.

Hong Leong Malaysia controls GuocoLand through GuocoGroup Ltd, which is listed in Hong Kong. GuocoGroup is also the major shareholder of GuocoLand Ltd, listed in Singapore.

GuocoLand Singapore has expanded its pipeline of projects in Singapore and China well, and its share price had more than doubled to S$4.78 yesterday. That gave it a market value of S$4.2bil (RM9.6bil), almost five times the size of GuocoLand's market value of RM2bil.

Hong Leong Malaysia's chief Tan Sri Quek Leng Chan may be trying to replicate GuocoLand Singapore's success in Malaysia, as a fund manager said: “He is now seen to be investing almost half a billion ringgit here” through GuocoLand.

Property News - KL’s 10 most expensive condos

Another interesting article by the Star Online:

Monday July 30, 2007

KL’s 10 most expensive condos

The excitement in the property sector over the spiralling condominium and land prices in the KLCC area over the last four months seems to be gaining momentum. Top property consultants tell StarBiz how to separate the wheat from the chaff.

WHICH single condominium development in Kuala Lumpur is considered to be the priciest in Malaysia? The dust hasn’t settled on this issue as two purported contenders for the title have yet to be launched.

According to KL property experts, the 10 most expensive condominium developments based on current prices are all sited in the Kuala Lumpur City Centre (KLCC) area (see Table A) except Pavilion Residence. However, if the yet-to-be launched Four Seasons and Binjai developments were taken in account, those falling below RM1,000 per sq ft would be out of the list.

But the “asking price” and “transacted price” may not necessarily match. Currently, the costliest average price per sq ft has been transacted at RM2,000 for the One KL project. This development is noted for its marketing strategy of one swimming pool on every floor. The tower has 35 levels.

Developers who launched their condominium projects earlier are now frantically revising the pricing policy for their remaining units. And those who have yet to launch are now trying to push the limits.

But all eyes are trained on the Binjai and the Four Seasons projects – touted to fetch more than the current benchmark of RM2,000 per sq ft. The Binjai management purportedly “screens” prospective buyers and even require an interview. The showhouse has long been off-limits even to ordinary tycoons.

Foreign as well as local interest in Kuala Lumpur’s luxury condominium developments seem to have been spurred by the Government’s relaxation of residential ownership rules for foreigners and the waiver of real property gains tax (RPGT) recently. And what’s happening in Singapore’s high-end condominium property market is having an effect on KL.

High-end properties in KL’s prime residential locations are considered to be the cheapest in the region. This has given rise to the rare phenomenon of residential property fetching even higher rentals than office property in KL. For example, the office rental rate at the UOA building in Jalan Pinang was recently transacted at RM3.80 per sq ft while a tenant at 3 Kia Peng condominium is in negotiations to renew his tenancy for RM4.50 per sq ft.

Demand for the “best” condo-developments is at an all-time high with record-breaking prices per sq ft quoted – even for land in the KLCC area. For instance, the plot of land occupied by the Hakka Restaurant at Jalan Kia Peng was reportedly sold via tender for over RM1,300 per sq ft recently – a record price.

And what do our local market experts have to say about such transactions and dizzying prices?

Avare

S.K. Brothers Realty (M) Sdn Bhd general manager Chan Ai Cheng said: “Technically, all KLCC condominium developments are considered to be high-end properties in terms of price and quality. Super-condos – as opposed to high-end condos – are merely super 'big' in terms of size alone.

“The pricing structure of high-end KLCC condos will depend on whether they are located within the first tier or second tier of land.”

The Petronas Twin Towers are regarded as the epicentre of the KLCC area, with the surrounding lands viewed in terms of concentric bands with the first tier being closest to the towers.

For example, the first-tier condo-developments will include projects like One KL and K Residence and the second-tier will include Hampshire Park, The Meritz and Cendana.

Property agents look at the desirability of condo developments based on various factors depending on the targeted tenants for the units to be rented or leased out.

The development must be easily accessible and the type of neighbourhood should suit the targeted tenants. Does the neighbourhood offer a ready catchment of tenants such as expatriates?

If the targeted tenant is the young and happening type of expatriates instead of family-oriented expatriates, then the condo-development should be near the bars and entertainment areas.

One Menerung

Land status is very important. If the development is on commercial land instead of residential land, then the rental yield will be affected by the commercial rate for quit rent and utility bills. For example, your monthly electricity and water bills will be charged the commercial rate.

The track record of the developer is equally significant. Certain established developers like Tan & Tan have their own following. These repeat buyers will buy anything they build, explained Chan.

Unlike the old days, developers now will usually have done all the studies they need to formulate their pricing policy. They would price their property at what the market needs now.

But buyers ought to be aware that if a developer were to build all the condo units in the same size, you will have a tough time renting out your particular unit. You will be competing with many other owners trying to rent out their units.

Also, the team of consultants engaged for the project is important. Buyers generally like “branded” properties. For instance, the Troika developers have engaged Foster and Partners and astute buyers are confident that with such a prestigious architectural firm, the condo design won’t be easily “outdated”.

Buyers of high-end condos who wish to rent out their units have to understand the expatriate rental scale. For instance, a multinational executive transferred to KL may only have a monthly rental budget of RM5,000 and ambassadors may have an average of RM15,000. So, if you wish to rent out at RM20,000 a month, you are looking at a tenant in the top position in a multinational. The question you must ask is “Who is going to be your tenant?”

Property News - Are KLCC condos overpriced?

The following post is about the price condos around KLCC area, published by The Star Online:

Monday August 20, 2007

Are KLCC condos overpriced?

By S.C. Cheah

IS the condominium market in and around the Kuala Lumpur City Centre (KLCC) area overheated and over-saturated?

Depending on whom you are talking to, the answer is yes or no. If you are asking a gung-ho developer which has just launched a very high-end condominium development, he or she will urge you to buy now, in the firm belief that prices will appreciate further.

There is plenty of room for capital appreciation, as land is scarce in the very prime KLCC area and prices are a fraction of those in Singapore, the US, Hong Kong and Britain.

KLCC, with its imposing Petronas Twin Towers, Suria KLCC shopping centre, Mandarin Oriental Hotel and several tall Grade A office buildings and condominiums, is Malaysia's “Shinjuku” (Tokyo's skyscraper sub centre).

However, if you ask some industry experts, they may warn of an oversupply situation looming in the horizon. “Dark clouds” have been gathering over the horizon of late with the US subprime loan market debacle, the weakening ringgit and the stock market slump likely to further dampen confidence in the property market. Will there be a credit crunch in Malaysia?

I feel that the price spiral in the very high-end condominium market has been too sharp, too soon. In less than two years or so, KLCC condo prices per square ft (psf) have more than doubled from RM1,000 psf to RM2,000 psf for the top-end project.

When word got round that the price of Datuk Chua Ma Yu's One KL had hit RM1,600 psf, the situation spread like wild fire. Then came Four Season's RM2,000 psf. Suddenly everyone wants to jump on the price hike bandwagon. Land prices suddenly skyrocketed.

Magna Prima Bhd revised its price upwards from a range of RM3.1mil to RM8mil to a new range of RM3.9mil to RM11.9mil for its six-star 78-unit Avare condominium at the KLCC Park! Others coming on stream are the Troika, The Binjai, Marc, Ampersand@Kia Peng and K-Residence.

More and more new players are zooming into the area and, with spiralling prices of very limited bungalow land, only the bold and bountifully cash-rich developer can hope to zap up the pricey land.

Bukit Kiara Properties Sdn Bhd is eyeing two pieces of land in the KLCC vicinity while OSK Property Holdings Bhd is said to have acquired about 28,000 sq ft of land in the Jalan Yap Kwan Seng area to build a high-end condominium.

Further off in the Jalan Madge-U-Thant area, Nam Fatt Corp Bhd has a proposed high-end condominium called Gallery@ U-Thant there. The 50-unit project boasts one of the largest unit sizes in the vicinity with 3,200 sq ft to 4,555 sq ft for standard units.

GuocoLand Bhd (a member of the Hong Leong group) is reported to be paying about RM810 psf to buy the Oval Serviced Apartments being constructed along KLCC's Jalan Binjai. It is said to have set a new benchmark price for an en bloc purchase in that area.

An artist’s impression of the Crest Jalan Sultan Ismail

One developer told me that foreigners were coming in to buy the high-end condominiums. “There is a South Korean company which is keen to buy a whole block but its target price is around RM1,300 psf,” he said.

Another very prime area to watch that has good potential for high-end condominiums is the small hill at Cangkat Kia Peng where some bungalows enjoy a good view of the KLCC area.

With prices of KLCC condominiums and serviced apartments reaching new highs, developers of some new high-end condominiums on the KLCC fringe are smiling, as their prices are much more affordable – more than 50% cheaper.

For example, Crest Worldwide Resources Sdn Bhd, which is developing the RM357mil Crest Jalan Sultan Ismail comprising a 44-storey residential tower and a 26-storey corporate tower, is pricing its luxury residences with sizes between 616 sq ft and 7,593 sq ft (super penthouses) from RM650 psf to RM900 psf.

According to Khong & Jaafar Research, The Crest Serviced Residences is one of the best value-for-money investments in the KLCC precinct where valuations obtained from various valuers placed the prices of high-end serviced residences in the KLCC precinct at a minimum of RM700 psf now and they are rapidly moving towards RM1,000 psf.

“The prices for The Crest units are expected to be RM1,000 to RM1,200 psf upon completion, depending on the size. On the completion date, the gain is expected to be more than RM250 psf,” it added.

Property Market 2004: Kuala Lumpur & Selangor

Another post extracted from CH Williams Tahar & Wong:

This is published in 2004 but I find it useful for those who are interested in real-estate, Malaysia

Selangor & Kuala Lumpur 2003 Events/Announcements

• January 2003 - The closure of the Jalan Kuching toll gates brought a great relief to motorists in January 2003. The 16-lane toll plaza was built after the flyover at the Jalan Ipoh/Kuching interchange was opened in 1986
• The concessionaire for the 25 km Guthrie Corridor Expressway (GCE) from Batu Tiga in Shah Alam to Kuang announced in January 2003 that the RM386 million expressway will be completed in the 3rd quarter of 2004. The GCE will form the western link of the Kuala Lumpur outer ring road and complement the North-South Expressway in Rawang. In an announcement made in July 2003, Kumpulan Guthrie plans to sell its interest in the GCE in order to focus on its core business ie plantations and property development.
• January 2003 Announcement - Work on the RM140 million project to upgrade and align the stretch of road from Jalan Duta to Jalan Segambut is expected to be completed in 2005.
• The RM450 million Penchala Link connecting the LDP at Sg Penchala to Mont Kiara is expected to be opened in 2004. The 5.5 km link which includes a 710 metre six-lane tunnel is the final phase of the Sistem Penyuraian Trafik KL Barat (Sprint) Highway.
• The long-awaited Shah Alam Public Transport Terminal project on a 40 hectare site in Section 13 Shah Alam was approved in April 2003. The new RM10 million project will be the nerve centre for Shah Alam located adjacent to the existing Makro hypermarket.
• The RM3 billion 37 kilometre SILK Highway connecting Balakong through Bandar Sg Long, Jalan Semenyih, Sg Chua, Sg Ramal and Saujana Impian is expected to be completed in April 2004.
• The flash flood that hit the Federal Capital in June 2003 led to the government’s decision to proceed with the Storm Water Management and Road Tunnel (SMART) to alleviate the recurring flood problems in Kuala Lumpur and also ease traffic congestion. The construction of RM2.5 billion SMART tunnel is underway in Sg Besi and is expected to be completed in 2006. On completion it will span 9.7 kilometres and will include the construction of holding basins or retention ponds.
• The KL Monorail Mass Rapid Transit System was commissioned on 31st August 2003. The RM1.8 billion project runs through from Titiwangsa to KL Sentral via Medan Tuanku, Raja Chulan, Imbi, Maharajalela before heading to KL Sentral in Brickfields.
• September 2003 Announcement – the RM1 billion New Pantai Expressway (NPE) will be the 3rd direct link between Kuala Lumpur and Petaling Jaya. The 19.6 kilometre intra-urban highway running on an east-west alignment starts at Jalan Tujuan in Subang traversing through Bandar Sunway, Jalan Kelang Lama, Jalan Templer and onto Pantai Dalam to Jalan Bangsar. The stretches involved the relocation of almost 2,000 squatters who are being relocated to alternative housing in Pantai Dalam under the highway construction contract. The NPE is expected to be completed in early 2004 and toll collection to commence in June 2004.
• Work on the 2.5 kilometre Rawang Bypass from Jalan Ipoh to Rawang commenced in 2003 and is expected to be completed in 2004.
• Construction on the RM60 million 2.8-kilometre Mahameru Elevated Highway commenced in 2003 and is expected to be completed in 2005

The closure of the NKVE Bukit Lanjan interchange, as a result of a landslide in December 2003, marked a milestone that also indicated that the transportation infrastructure system in the Klang Valley needed a boost. Infrastructural projects presently under way and slated for completion in 2004 / 2006 are:

• Penchala Link
• SILK Highway
• New Pantai Expressway
• Rawang Bypass
• Mahameru Elevated Highway
• Guthrie Corridor Expressway (GCE)

In 2003, the corporate headquarters for Malaysian operations of oil & gas companies, Shell and ExxonMobil underwent ownership changes. Bangunan Shell was sold by tender, and Pernas International Holdings Bhd sold its stake in Menara ExxonMobil to KLCC (Holdings) Bhd.

In September 2003, I&P Bhd announced a rationalisation exercise involving Golden Hope Development (GHD) and SPPK to enable I&P to streamline the operations of the I&P Group and to enable it to focus on its existing core business activities i.e. property development. Both GHD and SPPK are principally involved in the property development business.

Major property launches/transactions in 2003 include

• January 2003 Announcement: Bandar Raya Developments Bhd proposed to purchase three pieces of freehold land adjacent to Mont Kiara for RM33.15 million for a condominium and townhouse project.
• January 2003 Announcement that Jaya Jusco Stores Bhd has acquired 17.5 hectares of land in Kepong from Magna Park Sdn Bhd and City Hall for RM36.07 million. The land will be used to develop a RM60 million shopping centre
• February 2003 disposal of 51% interest in Arena Johan Sdn Bhd (owner of Menara Exxon-Mobil), a wholly owned subsidiary of Pernas International Holdongs Berhad to KLCC Holdings Berhad at a consideration of RM282 million
• April 2003 Announcement – KPJ Healthcare Bhd acquired three parcels of land (approximately 3 acres) for RM28.271 million to build a new hospital. KPJ is relocating its existing Hospital Tawakal to the new site located adjacent to the current location at Jalan Pahang.
• April 2003 Announcement – In a move to replenish its landbank in prime areas, Island & Peninsular Bhd proposed to acquire 22 hectares of leasehold land for RM46.1 million in Bukit Jalil.
• April 2003 Announcement that Metacorp Bhd acquired Bangunan Shell Malaysia located in Damansara Heights for RM79 million under a tender exercise
• Wisma Setia 2, a 13-storey building together with 168 car parking bays, was sold in April 2003 to Permodalan Nasional Berhad, at a price of RM57.52 million or RM451 per square foot
• May 2003 Announcement – KL Kepong Bhd has proposed to acquire 995.5 acres of freehold land for RM136.47 million. The acquisition would give KL-Kepong a strategic landbank with good potential for property development. The site, Bukit Darah Estate is located on Jalan Kuala Selangor and is expected to enjoy better accessibility when the Guthrie Corridor Expressway (GCE) is completed.
• June 2003 Announcement – Advance Synergy Capital Bhd (ASC) purchased land and other assets for RM29 million from the Lion group’s land and building in Shah Alam. The land accommodates a 4½-storey office building (Suzuki Building) and a single-storey Silverstone Building located in the Lion Industrial Park in Section 22 Shah Alam. The acquisition was made to centralise the ASC bus transportation operations under its existing core business by making use of the premises to design, build, deploy and maintain buses
• In June 2003, a 3.7 acre leasehold site on the Federal Highway was purchased by Idaman Harmoni Sdn Bhd (subsidiary of Mega First Corp Bhd) for RM18 million.
• July 2003 Announcement – Selangor Dredging Bhd has proposed to acquire 9.2 hectares of freehold land in Taman Melawati for RM21 million. The acquisition is said to enable the company to expand further into property development activities.
• July 2003 Announcement – Bandar Raya Developments Bhd purchased 3.13 acres of freehold land for RM17.1 million. The sites include:
  • 1.78 acres of residential development land in Taman Ulu Gombak for RM4.6 million
  • 33,200 sq ft of land within Ukay Heights in Ulu Klang for RM3.3 million
  • 25,500 sq ft site in Langgak Golf for RM9.2 million.
• Glomac Bhd’s quest for increasing its landbank was announced in August 2003 when it proposed to buy 80 hectares of land in Ijok, Kuala Selangor for RM34.3 million from Izasaja Sdn Bhd.
• October 2003 – Lien Hoe Corporation Bhd disposed its subsidiary, Atria Property Sdn Bhd (owners of Atria Shopping Centre, a 4-level shoping complex with annexed carparks) for RM101 million
• October 2003 Announcement that SP Setia Bhd has acquired a 13 acre parcel of freehold land for RM48.22 million in Sri Hartamas.
• Seri Tegamas, a wholly owned subsidiary of Crest Builder Holdings Berhad has purchased an industrial land at Section 19 for RM30.4 million (or RM126 per sq ft) in October 2003
• November 2003 Announcement that Kris Components proposed to purchase 99.54% stake in Mid Valley City which owns Mid Valley Megamall. This proposal is still subject to approvals by relevant authorities
• December 2003 KLSE Announcement on the proposed purchase of The Mines Shopping Fair at RM325 million, The Mines Waterfront Business Park at RM100 million and The Mines International Exhibition & Convention Centre at RM230 million.
• High-end residential launches took the lead with regard to new residential projects in 2003:
  • Stonor Park by Beneton Properties offering 142 condominium units
  • Mont Kiara Aman by Sunrise Berhad offering 345 condominium units
  • Bungalow lots within Mutiara Damansara by Boustead Holdings Berhad
  • HighBank Condominiums in Federal Hill (Bukit Persekutuan) by Tan & Tan offering 80 units
  • Sutra Bukit Tunku by Sunrise Berhad
  • Damansara Idaman’s exclusive bungalow enclave

OFFICE

The office sector continued to perform well in 2003 with an overall occupancy rate for Klang Valley improving from 78% in 2002 to 81% in 2003. Office space in Kuala Lumpur Central Area (KLCA) remains popular with occupancy rates achieving 83% compared with only 78% recorded in Kuala Lumpur Metropolitan Area (KLM). KLCA supplies almost 60% of 58.8 million square feet office space in Klang Valley. Only one office building was completed during the year, namely PNB Lot 1406 at Jalan Raja Laut. Another 665,000 square feet is expected to enter the market in 2004, contributed by Menara Marinara, Menara Axis and Yayasan Tun Razak.

The take-up rate for office space in Klang Valley is approximately 2.03 million square feet in 2003; almost similar to the amount of space taken up in year 2002. Approximately 96% of the space taken up is within KL. Movements of occupiers were mainly government offices and subsidiaries of companies to their own buildings such as Vision City Tower 2, Maju Perdana and TH Perdana in KLCA and Menara Telekom and Dataran Maybank in KLM.

Transactions of office buildings were more active in 2003 compared with 2002 and these transactions include:

• In April 2003, SPPK sold Wisma Setia II, in the Damansara Business District (DBD), together with its anchor tenant, KPMG to Permodalan Nasional Berhad at a consideration of RM57.52 million
• The disposal of 51% interest in Arena Johan Sdn Bhd (owner of Menara Exxon-Mobil), a wholly owned subsidiary of Pernas International Holdings Berhad to KLCC (Holdings) Berhad at a consideration of RM282 million in February 2003
• Bangunan Shell was sold to Exclusive Skycity Sdn Bhd, a subsidiary of Metacorp Berhad at RM79 million in April 2003. The building has a net lettable area of 213,000 square feet and 326 car parking bays. The sale is with a leaseback to the existing tenant.
• In June, Wisma Amsteel, Klang was sold to Selangor and Kuala Lumpur Teo Chew Association at RM23.4 million or approximately RM200 per square foot.
• In September, unsold units totalling a net lettable area of 155,224 square feet in Wisma Massalam, Shah Alam was sold at a consideration of RM48.52 million to ABS Land Properties Bhd as a part of a proposed fund raising exercise by Sunway Holdings Incorporated Berhad.
• In November, Wisma Perdana at DBD, an 11-storey building with a net lettable area of 92,183 square feet changed hands at a price of RM36 million to subsidiaries of Selangor Properties Berhad.
• In December, Amanah Raya Berhad bought Kompleks Kelana Centre Point Tower 3 from a subsidiary of Glomac Berhad for a consideration of RM50 million. The building has a net lettable area of 118,574 square feet and was previously occupied by Ericsson. Ericsson has moved its operations to Cyberjaya in early 2003.

KLCA office buildings remained the preferred address as reflected in its high occupancy rates compared with decentralised office locations in the Klang Valley. Grade Premium A and Grade A offices particularly recorded respectable occupancy rates of about 85%. Rentals achieved averaged from RM4.50 to RM6.00 per square foot. Upgrading and refurbishment works were being carried out at Wisma Perdana and Menara Prime. Megan Ambassy, along Jalan Ampang which was planned for office has seen a change in use i.e. it has been converted to hotel suites (operated by Holiday Villa Kuala Lumpur). Similarly, the Tri-Star project at Jalan Tun Razak is being changed to serviced suites to be known as Golden Avenue. In the city centre, City Properties Management, the developer of Avenue-K, has announced a change in use of one of its two tower blocks. Its 43-storey tower has been converted from office to serviced suites (to be known as K-Residence) and will be launched in 2004.

RETAIL

Despite the looming sentiment that the retail sector in the Klang Valley is saturated, the sector has not been void of new developments in 2003. The retail space grew from 23.76 million square feet in 2002 to 26.93 million sq ft by end of 2003 with the bulk of the new supply contributed by the completion and official opening of Berjaya Times Square (2.1 million sq ft) at Jalan Imbi and One Utama 2. The competion of One Utama 2 as well as Ikea, Tesco and Ikano Power Centre (and the Curve in 2004) at Mutiara Damansara, PJ would provide Klang Valley residents an alternative shopping destination to KL which traditionally accounted for more than 70% of the total retail space in the Klang Valley.

2003 also saw the continued expansion of Jaya Jusco, Giant, Carrefour and Tesco in the Klang Valley with the opening of new outlets or purchase of new sites. This includes Tesco stores at Mutiara Damansara, PJ and Bandar Bukit Tinggi, Klang; Carrefour at Plaza 393 in Cheras and Giant at Bandar Bukit Tinggi, Klang. Giant and Jaya Jusco each purchased a site at Kelana Jaya and Kepong respectively for their new outlets.

Additionally, IKEA which was occupying approximately 81,500 square feet in 1 Utama moved to its own premises in Mutiara Damansara. This Ikea Store, which occupies 385,000 sq ft and is reputedly to be the largest in Asia, was officially opened in August 2003. Subsequently, Ikano Power Centre which adjoins Ikea opened in December 2003. Its 420,000 sq ft complex houses Aussino, Harvey Norman, ACE, Padini, Citadium Sports, Cold Storage, Popular Bookstore and Pet Safari.

The space formerly occupied by Ikea in 1 Utama was eventually wholly taken up by Jaya Jusco’s furnishing department and a car centre. It was officially opened in December 2003.

In One Utama 2, Parkson-U and Giant are the anchor tenants. The complex is reported to have secured tenancies for approximately 70% of its available space.

Times Square’s soft opening was in October 2003. Reputed to be the largest mall in Asia with 2.1 million sq ft retail space, it houses a functional amusement park operated by Cosmo’s World and a newcomer, British based anchor tenant, Debenham’s.

Other projects include:

• A commercial centre announced for Bukit Jelutong in Shah Alam - sprawled over 80 hectares within the 800 hectare township, the centre will comprise a mosque, retail complex, bowling centre, cinemas and offices to cater for the needs of the Bukit Jelutong township
• The Selangor Economic Development Corporation and Ikaz Engineering (subsidiary of Sunway Mas) proposed that Bangi will go commercial with the development of Bangi Town Centre (BTC) which will form part of the 70-acre commercial parcel. On completion it will comprise shopoffices, a 4-storey mall, a 20-storey office tower and shop apartments adopting Singapore’s Bugis Street as its main theme. It is expected to be completed in 2008.
• Dataran Ara Damansara (by developer Sime UEP) was launched in 2003. It is the 9.68 acre commercial precinct within the 299 hectare township of Ara Damansara. On completion, it will comprise 96 units of 3-5 storey shopoffices.

The notable transaction of a retail centre in 2003 was that of Atria Shopping Centre, a 4-level shopping complex with annexed car parks, in October 2003. Lien Hoe Corporation Berhad disposed its subsidiary, Atria Property Sdn Bhd (owners of Atria Shopping Centre) for RM101 million.

HOTEL

The impact of the war in Iraq and the unexpected SARS outbreak in East Asia brought occupancy rates to a low 50% in the middle of the year. With the aggressive promotions conducted by the Ministry of Culture, Arts and Tourism Malaysia both locally and internationally since early 2002, occupancy rates of Klang Valley hotels improved drastically by end of the year to an average of 70%. 4 and 5 star hotels performed better than 3 star hotels due to competitive and cheaper tariffs offered by these hotels and the growing confidence amongst tourists in this part of the world. In 2003, KL played host to the 13th NAM Summit in February and the 10th OIC Summit in October.

The cumulative supply of hotel rooms in Klang Valley in 2003 is 26,285 rooms provided by 85 hotels. KL contributes 76% of the total supply out of which 69% offered 4-star and 5 star accommodation.

Only two hotels were completed in Klang Valley, namely The Westin in the famous Bukit Bintang area and The Residence Hotel, off Jalan Raja Laut. Both hotels are located in Kuala Lumpur and provide a total of 436 rooms. Prince Hotel opened 148 additional rooms, having first launched in 2002 while The Westin offered its first 288 rooms in September 2003.

Mutiara Hotel Kuala Lumpur also completed its refurbishment works, soft launching 105 rooms in mid 2003 and was fully opened by year end. Wentworth Hotel, closed in 2001, re-opened during the second half of 2003 offering 265 rooms. Four more hotels in various stages of construction will further add supply to the 4 and 5 star hotel rooms; these are Hilton KL Sentral, Le Meridien both of which are in KL Sentral development, the new 4 star 580 room hotel, Traders Hotel (Shangri-La Hotels and Resort Group’s second brand), at the Kuala Lumpur Convention Centre at KLCC and Sunway Pyramid Tower Hotel at Sunway City. The former Holiday On The Park is also under refurbishment; it was earlier sold to Petronas Retirement Benefit Fund in 2002.

The supply of serviced apartments in Kuala Lumpur is set to increase with the launch of projects such as MARC Serviced Apartments, adjoining the existing The Ascot at Jalan Pinang; and Seri Bukit Ceylon at Changkat Raja Chulan. Both will be under the management of the Ascot Group Ltd.

Average room rates for 5 star and 4 star hotels in Klang Valley have improved slightly at around RM200 and RM120 per night respectively by end of 2003 while 3 star hotels’ average room rates remained stable.

RESIDENTIAL

Coupled with low interest rates, attractive mortgage loan packages and confidence in the economy, the residential sector continued dominate the Klang Valley market with new launches. Of the known launches in 2003, 44% of these units comprise landed residential units out of which almost 80% of these units are situated within the Klang Valley region.

Notable launches include :

• Within the KLCA, KLCC (Holdings) Bhd launched its 168 unit luxury condominium units at KLCC.
• In April, 142 units of condominium known as Stonor Park was opened for sale by Beneton Properties offering two layouts at 2,314 square feet and 3,326 square feet priced from RM1 million.
• In Mont Kiara, a new condominium project by Sunrise Berhad, Mont Kiara Aman comprising 345 units with average floor area of 1,668 square feet, is priced at RM420 per square foot.
• HighBank Condominiums, Sri Bukit Persekutuan developed by Tan & Tan is a low-rise, low density apartments with large built-up areas of 1,811 to 3,574 square feet for standard units and 5,231 square feet and 9,408 square feet for penthouses. The price for standard units starts from RM450 per square foot.
• Mutiara Damansara has also launched its bungalows known as Phase 1B1 and 1B2 comprising 58 units double storey bungalows priced between RM1.55 million to RM1.8 million
• Sunrise Berhad also launched its Sutra Bukit Tunku in October 2003, offering 24 units of 3+1 and 4+3 bedrooms with floor areas ranging from 2,929 square feet to 4,111 square feet priced at RM578 to RM623 per square feet for standard unit
• Bandar Utama Development has successfully sold almost 200 units of their latest 2½ storey terraced houses at BU6 priced at minimum RM588,000 for a 22’ x 75’ with built up area of 2,885 square feet. These units were sold on a “build and sell” concept i.e. with Certificates of Fitness For Occupation .
• Sunway Rahman Putra, a 27.5 acre development within the Rahman Putra Golf and Country Club, was launched in middle 2003. It comprises 41 double storey bungalows and and 112 superlink courtyard homes with built-up from 3,400 sq ft which are priced at RM1.3 million to RM1.9 million and from RM657,000 to RM1.1 million respectively.
• Desa Parkcity launched its Adiva Courtyard Homes (78 parkhomes, 66 courtyard terraces and 16 courtyard apartments) at prices of ranging from RM272,000 to RM928,000.
• Damansara Idaman, near the Tropicana Golf & Country Club, is an exclusive bungalow enclave was first launched in December 2003. Each bungalow would have land areas between 8,000 to 11,000 square feet with built up area of 5,500 to 6,300 square feet and are priced from RM2.2 million.

Improved accessibility within the Klang Valley area seems to play an important role in the development and success of new growth areas. These are evident looking at developments that are being created particularly along highways such as the LDP, SPRINT and Guthrie Corridor Expressway (GCE), et cetra.

DEVELOPMENT LAND

There were more activities in land sales to developers in 2003 compared with 2002 particularly lands around the KLCC area. Developers appeared to be bullish about luxury condominiums in prime city centre locations and have acquired lands for their high-end residential developments. Others bought these prime lands as part of their landbank.

Commercial land or land with commercial potential within the Kuala Lumpur city centre were transacted at prices ranging from RM375 to RM540 per square foot while prime residential lands changed hands at RM195 to RM360 per square foot.

Residential development lands in the suburban locations are generally sold at prices ranging from RM17 to RM25 per square foot for 20 to 50 acre plots. The Mont Kiara area continued to attract investors with prices achieving between RM60-80 per sq ft for residential development land.

In the greater suburban location, development lands within the Ijok – Sungai Buloh belt and Bukit Jalil also attracted property developers, such as :

• KL Kepong Bhd acquired Bukit Darah Estate in Rawang from The Bukit Darah Company Ltd for a consideration of RM136.47 million in cash. The 398 hectare oil palm estate is located adjacent to KL Kepong’s Ladang Coalfields currently being developed as Desa Coalfields
• In August 2003 it was announced that KUB Malaysia Bhd disposed a 50.86 acre plot at Bukit Jalil to Perumahan Kinrara Bhd for a consideration of RM39.3 million.
• It was announced in July 2003, Worldwide Bhd bought a 124.3 acre land in Puncak Alam for a cash consideration of RM20 million
• Glomac Bhd has acquired a 200 acre plot of leasehold land adjacent to their existing development known as Saujana Utama and Sungai Buloh Country Resort from Izasaja Sdn Bhd for a price of RM34.3 million.

INDUSTRIAL

In tandem with economic growth, the number of approved projects with foreign participation increased by 35.1% from 2002. According to MIDA, foreign investments valued at RM15.638 billion were approved in 2003 compared with RM11.578 billion in 2002; 75.7% of these approved investments are within the industries of basic metal products, transport equipment and electronics & electrical products. Manufacturing industry also expanded from 4.0% in 2002 to 8.2% in 2003 (Department of Statistics, Malaysia).

Transactions of industrial premises were more active in 2003; notable ones include :

• In June, it was announced that Silverstone Corporation Berhad entered into a Sale and Purchase Agreement with Aesbi Power Systems Sdn Bhd to dispose a freehold 15.2 acre site with industrial premises at Lion Industrial Park, Shah Alam at a consideration of RM29 million.
• Wisma Hagemeyer, Jalan Tandang, PJ was also sold in June to Polyrak Molding (Malaysia) Sdn Bhd at RM18.2 million. The building has an approximate built-up area of 175,760 sq ft (with an unexpired term of 54 years) and measures approximately 80,500 sq ft.
• Nine plots of industrial land with a combined land area of approximately 542,670 square feet in Rawang Integrated Industrial Park was sold to Gadang Holdings in July for a consideration of RM8.7 million. In the same debt settlement exercise, 168 factory lots were also transferred to Gadang for a consideration of RM7.62 million.

PUTRAJAYA & CYBERJAYA

Putrajaya is expected to house all government departments and ministries by 2005. Of the five parcels in Precinct 1, four has been developed and occupied while construction of offices for another 10 ministries in Precincts 2, 3 & 4 are in advanced stages of construction. The developer, Putrajaya Holdings Bhd, also announced that 67,000 residential units will be completed in stages by 2012.

Other than Wisma Putra, government buildings that are reported completed in 2003 are Ministry of Finance (MOF), Kementerian Perdagangan dalam Negeri dan Hal Ehwal Pengguna (all in Precinct 2) and Palace of Justice (Precinct 3). The buildings housing Ministry of Agriculture, Immigration Department, Ministry of Domestic Trade and Parcel E Government Complexes, Menara PJH and Menara PJC are still under construction and are expected to complete in 2004/5.

Other buildings completed in Putrajaya in 2003 include:

• Putrajaya Shangri-La in Precinct 1 which was opened in February 2003.
• Alamanda, Putrajaya’s RM300 million (700,000 sq ft) shopping centre is scheduled for opening in 2004. Alamanda is located on a 9.6 hectare site within Precinct 1. The anchor tenant will be Carrefour.
• The RM650 million Putrajaya Convention Centre was handed over to the government in June 2003. The 10,000 seat centre is sprawled over a 51-acre site located in Precinct 5 hosted the 10th OIC Summit in October 2003.

In Precinct 15, work is in progress for the development of 205 acre Putrajaya Diplomatic Enclave (PDE) which comprises 61 embassy lots, office chanceries, townhouses, a town center, an international school and shop-apartments/offices. Presently, twelve countries have already registered interest to move to PDE.

In Cyberjaya, several multinationals (MNCs) have taken up space. These include Ericsson, HSBC, DHL, Shell IT International, Nokia, IBM, Intel, Fujitsu, Microsoft and BMW.

Other MNCs are also looking for sites in Cyberjaya to set up their call / data centres and the response is reported to be favourable.

In addition, two tertiary educational facilities have been set up within Cyberjaya, i.e.

• Malaysian Multimedia University sprawled over 200 acres
• Lim Kok Wing University College of Creative Technology (LUCCT) with a campus sprawled over 17 acres.

2004 Market Outlook

The residential sector itself accounts for over 70% of all property transactions in KL/Selangor, rendering it the mainstay of the property sector since 1997. It is expected to lead the market well into 2004 with the continuing low interest rates and favourable economic climate. The demand and prices for landed residential properties, that continue to flourish along the new arterial highways leading into the city and its regional centres, is expected to increase. Developers of high-end hi-rise residential projects within the city centre will be actively launching units introducing innovative packages and lifestyles.

The continuing demand for any available development land, be it pockets within the city fringes or vast plantation land with close proximity to the new arterial links in the Klang Valley, is expected to be tapped for immediate development.

As rentals for office space stabilise in Kuala Lumpur in 2003; and with minimal new entries into the supply of office space in 2004, occupancy rates are expected to improve. This could lead to an upward pressure on rentals especially in sub-markets where current occupancies are good.

Selected retail centres which are currently enjoying almost full occupancies will continue to do well. The other centres should consider repositioning by making changes to the trade mix or even considering a change of use.

Barring all external factors, that had affected the tourism industry in 2003, the hospitality sector is expected to see improving occupancy rates in 2004. Four new hotels are expected to enter the market in 2004 ie KL Hilton and LeMeridien both located within KL Sentral; Sunway Pyramid Tower & Hotel in Sunway City and Traders Hotel in KLCC.

The general property market outlook for 2004 appears promising due to strong domestic demand (especially for residential properties) and increasing foreign interest.

Property News - Fewer new projects as land costs escalate

This is a fact published by The Star Online:

Monday July 30, 2007

Fewer new projects as land costs escalate

IS the KLCC area already saturated with high-end condo developments?

KLCC is the heart of the real estate market and is the prime property hotspot of the nation, said S.K. Brothers Realty (M) Sdn Bhd general manager Chan Ai Cheng.

“Any city in the world has its own renowned residential enclaves. Think of Hyde Park in London and Central Park in New York. This is the best address in Malaysia!” she said.

“KLCC looks like it is saturated because of the timing of the launches – one after another. But the fact is, land is scarce.”

Henry Butcher Marketing Sdn Bhd chief operating officer Tang Chee Meng said there were concerns that there could be an oversupply situation looming in the horizon with so many new projects under construction.

“However, any oversupply situation is in relation to a particular period only. And if the economic conditions do not turn adverse, it is a matter of time before the units are filled up,” he said.

Land is scarce in the KLCC area and with land costs having escalated beyond the RM1,000 per sq ft mark, it is conceivable that there would be fewer new projects coming on stream.

Tang said it could become less attractive for developers unless the prices of the units could be pushed up further.

Some projects cater to the different needs of buyers. Some buyers want good views while others prefer convenience and proximity to entertainment centres.

Chan said that when you invested in a KLCC condo, you need to know the type of tenant you were targeting.

For instance, the Binjai is touted to have the most beautiful view of the KLCC Park and the Petronas Twin Towers. Initially when it opened for registration, the price per sq ft was supposed to be RM700-RM800. The indicative price has far exceeded that today.

The other highly anticipated launch is the Four Seasons mixed development project, sited next to Menara Maxis.

Explained Chan: “If you were to buy into a project early, certain developers offer ‘early bird special’ price or an easy-to-own package deal including the 10:90 variant. This means that you pay only 10% downpayment and nothing more until the project is ready. You will save on interest costs. By that time, the project is ready and you can rent out the condo unit and use the rental to pay your bank loan instalments.

“The condo layout must be practical and there should be a variety of built-up sizes available so that you won’t be competing with other owners if all your units are of the same size. For instance, the Idaman Residence project offers sizes of 800 sq ft, 1,000 sq ft, 1,500 sq ft, 1,700 sq ft and 2,100 sq ft. Here the segregation of types is very distinct for the purpose of renting out.”

A buyer must also consider how much capital appreciation the property can gain.

“At what entry level are you going in? If I were to buy at, say, RM1,000 per sq ft, what’s the likelihood of the price moving upwards? What are the neighbouring launches selling at? Are they priced higher? Don’t get carried away with the show unit which is designed to seduce the prospective buyer.”

Avare

Chan highlighted key features in selected condominium projects that made the developments popular:

· Idaman Residence – Choice of units with not many competing types within the development.

One KL – Each unit comes with a swimming pool.

Cendana – Tie-up with Renaissance Hotel KL & most buyers are repeat Tan & Tan customers.

Marc Residence & K-Residence – Proximity to KLCC.

Troika – Designed by Foster & Partners architectural firm headed by multiple award-winning Lord Norman Foster.

Avare – Unique external façade of a glass-curtain walling.

Pavilion – Mixed development concept.

Meanwhile, Henry Butcher Marketing Sdn Bhd chief operating officer Tang Chee Meng's top three picks are:

Binjai – Location with unobstructed views of the Petronas Twin Towers and it being developed by KLCC Holdings. Its list of prospective buyers are the who’s who in the country.

Four Seasons – Prestigious brand name can add value to the development.

One KL – Prime location and unique concept with a pool for every unit.

Chan said a developer might price his or her development very high but pricing alone did not necessarily reflect nor guarantee a luxurious development.

An unfortunate fact of local property development is that what you see in the show unit may not necessarily be what you get. Defects and flaws are commonplace.

Luxury condo-developments in other parts of KL (listed in Table B) may not be quite as expensive as those in the KLCC area but prices are coming “pretty close,” she said.

Property Intro: Map of Kuala Lumpur, Selangor Malaysia

Have a look at the map extracted from MapQuest. The properties that I am going to introduce are those around Kuala Lumpur & Selangor, Malaysia...

The booming of the properties have led to a strong buying power from foreigners. Let's start to venture into properties the next few days onwards.

Property Intro: Kuala Lumpur, Malaysia

Extracted from About.com: Asia Travel

Aug 26 2006

Kuala Lumpur, the capital of Malaysia, is not the sort of historic city that Malaysia has in nearby Melaka. Nor does it have the resort attractions of either Penang or Kuantan. But it has its own attractions, the sorts of attractions that exist in most national capitals - a national museum, a national art gallery, parks, Southeast Asia's biggest mosque, and architectural marvels like the Petronas Towers (the world's tallest building).

The city was created out of jungle by the British in 1857. It is one of Asia's more spread out cities and is usually thought of as being divided up into neighborhoods or sorts: Sentral, Chow Kit, Ampang, Bukit Bintang, and Chinatown. Mid-Valley and the Outskirts area are also usually included as outlying areas. Kuala Lumpur International Airport is in the town of Sepang, in the Outskirts area; the town also hosts the Formula One Malaysian Grand Prix each year at Sepang International Circuit.

Kuala Lumpur is often referred to simply as "K.L." The city is served by an extensive network of transportation links. This map from Urbanrail Dot Net shows the city's KTM train lines. You can find a more detailed map showing how the KTM rail system interacts with other transportation systems in KL at the ITIS site.

Getting around KL is a little easier if you have a nice large gridded street map. It helps to know where the city's main attractions are. Passion Asia has an additional map of the city's attractions.

It never hurts to know where to find the hospitals in a city.

The two best web sites for location maps of major hotels in KL are probably Precision Reservation (PR) and Maps-Guide Dot Org.

• PR's Chowkit map shows 11 hotels; Maps-Guide's shows nine in Chowkit.
• PR has three major hotels on their Chinatown maps; Maps-Guide shows two in Chinatown.
• PR has some 35 major hotels shown on their map of Bukit Bintang & Ampang in KL's Golden Triangle area. Maps-Guide has separate maps of those two areas and shows 17 in Bukit Bintang and 13 in Ampang.
• PR's map of the Lake Garden area in Sentral KL shows three major hotels; Maps-Guide has two in Sentral.

Maps-Guide also has maps of major hotels in the Mid-Valley and in the Outskirts areas around KL.

Enjoy Kuala Lumpur...