Property News - KL’s 10 most expensive condos - Properties in Malaysia

Wednesday, January 16, 2008

Property News - KL’s 10 most expensive condos


Another interesting article by the Star Online:




KL’s 10 most expensive condos

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?”

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