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Monday,
February 18, 2008 |
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In the this article
we look at new price benchmarks and growing
interest from real estate investors in the
property hotspot. |
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THERE
is no imminent worry of a price bubble
in the residential and commercial
property markets around the Kuala
Lumpur City Centre (KLCC) enclave
given the existing strong demand,
especially for quality developments,
according to developers and property
consultants.
They concurred that
the market was still able to absorb
the incoming supply although in the
short term, there might be an oversupply
in
the residential sector.
In the next one to
two years, 3,000 more residences will
come on stream in addition to the
existing 6,000 units.
In the commercial
market, a lack of Grade A office space
has resulted in high occupancy and
rental rates for offices.
Zerin Properties
Sdn Bhd chief executive officer Previndran
Singhe said the price level of RM2,000
per sq ft for upmarket apartments
now was reflective of the pent-up
demand for such units in the KLCC
area.
“The next price
level will be around RM2,500 to RM3,000
per sq ft (psf), and going forward,
the really good projects may even
touch RM3,500 psf. |
K.C
Chong |
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“We
expect the market to reach equilibrium in
the next three years,” Previndran
told StarBiz. The escalating price of land
in the KLCC area has also driven prices
upwards. |
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From
about RM500 to RM600 psf about three to
four years ago, land price has breached
RM1,000 psf, with those closest to the Petronas
Twin Towers, such as along Jalan Kia Peng,
fetching around RM2,000 psf. |
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The
rising land price has driven developers
to turn to alternative locations like Jalan
Aman and Jalan Damai, off Jalan Tun Razak,
where land can still be purchased at RM350
to RM500 psf. |
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Bukit
Ceylon, with land going for RM500 to RM600
psf, is another good alternative. |
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According
to E & O Property Development Bhd marketing
and sales director K.C. Chong, the RM2,000
psf level for apartments in the KLCC area
has been breached by only a small number
of units in certain developments. |
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“Prices
generally average RM1,000 to RM1,500 psf,
hence there is still room to move upwards,”
he said. |
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Chong
said that while looking at the price trend,
it was also important to consider the absolute
price of the property as the built-up of
the units differed. |
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“The
higher prices allow developers to offer
properties of a higher quality, with better
finishes which local developers have been
unable to offer previously,” he said. |
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“We
are a now able to compete better on the
world stage, offering products which are
comparable to our overseas competitors.” |
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Mah
Sing Group Bhd president and group chief
executive Datuk Seri Leong Hoy Kum said
that despite the steep price appreciation
in the last two years, real estate around
the KLCC was still considered cheap compared
with those in other cities like Singapore,
Bangkok and Hanoi. |
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Datuk Seri Leong HoyKum |
“KLCC's
top-end condominium price at RM2,000
psf is only 20% of Singapore's high-end
condominiums which are priced around
S$4,000 psf,” Leong said.
Manfred G. von Nostitz,
former Ambassador of Canada in Malaysia,
concurred that Malaysia's real estates
were still undervalued and under exposed
to foreign investors.
The prices of apartments
in Toronto are in the range of RM3,000
to RM4,000 psf while in Singapore,
they are between S$2,000 and S$4,000.
“Malaysia has
much to offer - relatively cheaper
real estate, sophisticated legal system,
good infrastructure, political stability
and good economic prospects. The transparent
land and property laws are also reassuring
for investors.
“The Malaysia
My Second Home programme, if successfully
implemented, should also provide a
big boost to the property market,”
he said. |
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Von Nostitz is working
with some local partners to attract European
and American private equity funds to invest
in Malaysia's real estate. |
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Although
Malaysians are the biggest purchasers
of residences in the KLCC area, foreign
buying is growing and today accounts
for 30%
to 35% of the units sold.
The exemption of
Foreign Investment Committee approval
for foreign buyers of properties priced
from RM250,000 and exemption of real
property gains tax last April have
spurred strong buying interest from
Singapore, Hong Kong, Indonesia, and
Britain.
Apartments that have
been sold out after the relaxation
of the guidelines include Cendana,
2 Hampshire, K-Residence, Park Seven
and Binjai Residency.
Leong said more modern
global designs could also be expected
as developers were now engaging international
architects for their projects.
“These cutting-edge
architecture will be a much welcome
addition to the Kuala Lumpur skyline,”
he said. |
Manfred G. von Nostitz |
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(Source: http://biz.thestar.com.my)
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