New face for old landmark in KL City Centre

Monday, October 22, 2007
By THE EDGE

It is a tired 34-year-old office building in the heart of Kuala Lumpur's Golden Triangle. But its owners knew its location made it the right piece of property to be tapped to its full potential.

With just a few more floors of the 22-storey building to be refurbished, Menara Hap Seng Sdn Bhd — the owners of Menara Hap Seng — is excited about unveiling the RM60-million makeover of the former MUI Plaza on Jalan P Ramlee by year-end.

Menara Hap Seng Sdn Bhd is a wholly owned subsidiary of Main Board-listed Hap Seng Consolidated Bhd, which had bought the building together with an adjacent piece of land in 2004.

Property development is one of Hap Seng Consolidated's core businesses. The group is among Sabah's largest developers of townships and mixed landed developments. Its current projects in East Malaysia include Taman Kingfisher Sulaman in Kota Kinabalu, Bandar Sri Perdana in Lahad Datu, Astana Heights in Sandakan, Taman Miramas in Semporna and Bandar Sri Indah in Tawau. Menara Hap Seng marks its entry into the Klang Valley property market.


The once-grey building now sports sleek contemporary features and fittings and is envisioned to become a landmark Grade A office building in the Golden Triangle. Located opposite Shangri-la Hotel and behind Menara Weld, it is within walking distance of KLCC.

Many, even KL-lites, may not know this but the building was originally designed as a hotel, reveals Datuk Paul Ng, the chief executive of Hap Seng Land's property division.

This inspired the new owners to leverage on the building's unique design in its refurbishment plans, giving the office building the feel of a modern city hotel.

"For an office building, the design is rather peculiar. You will notice the long driveway and the systematic window grid, which are characteristics of a hotel. While researching the building's history, I found out that it was originally designed to house the former KL Hilton but for some reason that did not work out," says Ng.

The first three floors of the building will now be the retail podium of Menara Hap Seng, comprising a grand lobby, lounge areas, cafés and restaurants offering moderate to fine dining, and speciality stores. "This is where business meets leisure," says Ng.

To emphasise the "hotel" features of the building, the landlord will introduce services often found at a hotel lobby and entrance, such as valets and concierge service. There will even be a doorman to greet you as you walk in. About 75% of the building has already been leased out, with many of the tenants scheduled to come in once the refurbishment is completed. More offices will be open for lease then. The tenants include Maybank, CIMB, Mitsui-Sumitomo Insurance, The Korean Trade and Investment Agency and Borneo Oil & Gas Sdn Bhd. Those that were there before the new owners took over make up about 30% of present tenants.

"We are selective about our tenants because we want those who will utilise the facilities that we have here," Ng says, adding that the group wanted to offer Grade A offices in a prime location because "the demand is there, and also because we can keep them for investment".

One floor will be dedicated to serviced offices while the top five floors of the building will house the group's headquarters, which are currently in Petaling Jaya. Other facilities include high-speed elevators, spacious corridors and foyers, quality finishing, a modern building control system, 24-hour security and controlled access.

Chanced buy
According to Ng, Hap Seng acquired the building in 2004 by chance. "One of Hap Seng's businesses is selling Mercedes cars. (The group is the authorised dealer for Mercedes-Benz and Smart vehicles in Peninsular Malaysia).

"We were looking for a suitable site for our Mercedes showroom in KL and found this vacant lot. It so happened that the owner of the vacant lot owned the building (MUI Plaza) next door. So we thought, 'why not kill two birds with one stone and buy both the properties since it is under the same owner?' So we went knocking on the owners' door and persuaded them to sell the building as well. So we ended up buying two properties instead of one."

Hap Seng's impressive Mercedes-Benz Autohaus showroom is now located on a 31,000 sq ft site at the intersection of Jalan Sultan Ismail and Jalan P Ramlee, with Menara Hap Seng next door.

"At the time, we paid RM166 million for the building or around RM480 psf, a price one would have considered rather steep then. But we still went for it," says Ng.

Why? "As a property developer, one must have an eye for potential and visualise the opportunities. You must have the gut feel when it comes to investments and we had the gut feel for this property. And we believe it was the right decision and the money we paid for it has been worth it. It did not seem like a good buy at the time but on reflection, it is a good buy because today, the speculative pricing per sq ft, I would say, is almost RM800 psf," he adds.

Ng has 25 years of experience in the industry, with a background in architecture and property consultancy.
According to him, in 2004, the rental rate for MUI Plaza was around RM3.20 psf. Today, the rates for Menara Hap Seng range from RM4.70 to RM5 psf. "The rate for our next release of office space, which will be when the refurbishment is completed, will probably be around RM5.50 psf," he offers.

Each floor has a space of 13,000 sq ft and the minimum space for lease is 900 sq ft. The rental for the retail lots at the three-level retail podium ranges from RM5 to RM15 psf.

Mass housing
In Sabah, Hap Seng is known as a township and mass-housing developer, particularly in Tawau where it developed its first project. Among its townships is Bandar Sri Indah, which is 10 miles outside Tawau. It is the largest commercial-residential township develoment in Sabah, covering 1,368 acres. The total development consists of over 8,300 homes, 700 shoplots and 550 industrial lots. It also has amenities such as schools, a bus terminal, government departments, a market and a 300-acre ecopark.

Hap Seng has also built affordable housing in Sandakan, Kota Kinabalu and Lahad Datu. To date, it has erected over 8,000 mixed types of properties in excess of RM1 billion and still has more than 2,000 acres of undeveloped land.

However, the group realised that the property action was in West Malaysia, especially in the Klang Valley. It thus started scouting for opportunities to build or rebuild niche properties in strategic locations here. "We have developed our brand in Sabah but it is West Malaysia that has the potential for greater things for us.

"In KL, we want to focus on niche developments such as high-end condominiums and commercial buildings and towards this end, we are busy looking for land and good investment buildings," Ng says.

The developer is in the midst of completing the purchase of three vacant lots, one on Jalan Tun Razak and two on Jalan Kelang Lama. "When developed, we expect the total gross development value (GDV) for the three projects to be more than RM600 million," Ng discloses.

"We are a new developer here on an acquisition trail. We believe our strategy to acquire more land or old properties with potential for redevelopment must be based on prime locations and we don't mind paying top dollar for it. Location is very important for investment," he says, revealing the developer's deep pockets.

However, he adds, property owners are holding back from selling, in anticipation of price increases in the near future.

Puchong development
Besides Menara Hap Seng, the group hopes to launch its 88-acre D'Alpinia development in Puchong by year-end. The development comprises 76 acres of residential homes made up of superlinks, detached and semi-detached houses priced from RM300,000 to RM1 million plus, and 12 acres of commercial development. The total GDV is expected to be more than RM500 million.

"Unlike in Sabah, the KL market expects a lot more, so we have to provide a lot more. Things like auto gates, CCTV security systems, filtered water systems, all these will be standard features in our D'Alpinia homes because purchasers today consider these items as essentials in a home. Most of the time, they have to renovate and add these features on their own but with our homes, they probably won't have to," says Ng.

There was strong response to a pre-registration exercise for D'Alpinia's Phase 1A of 154 units. "There were 1,500 registrants when our whole project, when completed, will offer only 1,000 odd units. It looks like our reputation in Sabah has preceded us," Ng says.

Besides property investment and development, Hap Seng Consolidated is involved in credit financing, trading (fertilisers, automotive, building materials and petroleum), stone quarries and plantations. The group is one of the largest oil palm plantation companies in Sabah, with a total planted area of about 32,700ha. The group plans to list its plantation assets by year-end.

As at Jan 31, 2007, Hap Seng's paid-up capital stood at RM622.66 million while shareholders' funds stood at RM1.53 billion. For FY2007 ended Jan 31, it registered a profit after tax of RM121 million on a turnover of RM1.7 billion.

CapitaLand buys 62pc of Sungei Wang's retail area, KL City Centre

Thursday, June 26, 2008

The Singapore-based CapitaLand Ltd has bought 62 per cent of the retail area at Sungei Wang Plaza for RM595 million.

The purchase covers 510,418 million sq ft retail area and parking bays at the mall, which enjoys close to 100 per cent occupancy and more than 24 million visitors annually.

CapitaLand, which is also the largest real estate company in Southeast Asia, had undertaken an asset securitisation structure for the purpose, which its spokesperson said was the most suitable platform at the moment.

"This asset base structure the company has decided upon is the most optimum capital structure for the purpose," the spokesperson told Business Timess yesterday.

The mall is held by a special purpose vehicle, Vast Winners Sdn Bhd, which has issued three tranches of senior medium- term notes and a tranche of subordinated Class D medium- term notes.

Under the exercise, CapitaLand subsidiary Gain 888 Investments Pte Ltd has fully subscribed to the subordinated Class D medium-term notes, worth about RM338 million, which are under equity bond.

The remaining Class A, B and C medium-term notes, which fall under debt, are undertaken by a Malaysian financial institution.

Commenting on the acquisition, chief executive officer Pua Seck Guan said the purchase puts CapitaLand's plan to create a Malaysian retail real estate investment trust (REIT) this year on track.

CapitaLand had earlier bought Gurney Plaza in Penang and Mines Shopping Fair in Seri Kembangan, near Kuala Lumpur. Collectively, the three assets amount to approximately RM2 billion.

"Through our proactive management and by leveraging on our retail real estate management expertise, there are tenancy remixing opportunities to create significant value at Sungei Wang," Pua said in a statement.

Last year, Landmarks Bhd sold Sungei Wang Plaza for RM284.8 million cash to Kencana Property Management Sdn Bhd, which is 70 per cent owned by Abdul Jaliludin Jamalludin and 30 per cent by Simon Wee Howe Yew.

Opened in 1977, the eleven-storey mall has over 824,000 sq ft retail area, more than 800 retail outlets and 1,300 parking bays.

By New Straits Times (by Zurinna Raja Adam)

BB Plaza to make way for MRT station

Wednesday, June 27, 2012

Landmark: The iconic 38-year-old BB Plaza, located in the heart of Kuala Lumpur, will be demolished to make way for the MRT project.

KUALA LUMPUR: The 38-year-old Bukit Bintang Plaza (BB Plaza) will need to make way for the construction of a My Rapid Transit (MRT) station, contradicting earlier reports that only the front of the property and basement will be needed for development purposes.

UDA Holdings Bhd officials, who earlier met with BB Plaza’s tenants to clear up the confusion on the status of the property, said they had been asked to vacate the premises by MRT Corp by the end of the year in a meeting two weeks ago.

UDA, a wholly-owned entity under the ministry, owns BB Plaza as well as several other commercial properties in central Kuala Lumpur, Ipoh and Johor Baru.

UDA group managing director Ahmad Abu Bakar said at a media briefing that Tradewinds Corp Bhd, a property and hotel conglomerate majority-owned by media-shy tycoon Tan Sri Syed Mokhtar Al-Bukhary, had expressed its interest to acquire the property.

“We discussed it at the board and have related the offer back to the ministry, so we’ll wait for the decision,” he said, adding that there were parties who were interested to either jointly develop or acquire the property.

According to recent reports, Tradewinds Corp had approached UDA to redevelop BB Plaza under a 50:50 joint venture which the latter’s board had declined because the returns were not lucrative enough.

MRT Corp, the body tasked with overseeing the development of the MRT line, have previously said it has no plans to acquire BB Plaza, valued at an estimated RM500mil.

Ahmad said UDA had no plans to redevelop the property on its own due to the lack of funds. “There’s been talk of redevelopment but not in the near term as we don’t have the funds because we’re trying to clean up our balance sheet,” he clarified.

UDA’s senior vice-president of property management Syed Ahmad Nazri Syed Kamaruzaman said the company was just as surprised as the tenants that the property was going to be demolished.

“We had a meeting with the tenants because of the confusion over the status of the property especially after reports came out saying that BB Plaza will not be demolished. In all our meetings with the ministry, the understanding is that the property will be demolished,” he said.

Syed Ahmad Nazri said a letter from MRT Corp only requested UDA to vacate the front of the property while Ahmad pointed out that this has caused a lot of confusion.

“Initially MRT Corp told us that they just need the front portion and that the station will be underground.

“They said there was no need to demolish the whole building. Later on when we discussed with them, they said the whole building will have to be brought down, so this is the confusion of the last one month or so,” he said.

Meanwhile, Syed Ahmad Nazri said compensation for the tenants was discussed but it was the stance of the company that compensation should come from MRT Corp.

“In fact we’ve passed the claims of several of the tenants to MRT Corp and they have come back to us asking for more information. Even though there’s nothing formal, we’re working towards it,” he said.

By The Star

Growing supply of office space in Klang Valley

Saturday, January 23, 2010

PEPS president James Wong (inset) says there’s a large amount of new office space being developed around the fringe of Kuala Lumpur including Petaling Jaya, Damansara, Puchong and Mont’ Kiara.

KUALA Lumpur’s office market is in for a tough year in 2010 with the expected completion of another 4 million sq ft of new office space which may further dampen rental and occupancy rates.

Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector (PEPS) president James Wong says there is also a large amount of new office space being developed around the fringe of Kuala Lumpur including Petaling Jaya, Damansara, Puchong, and Mont’ Kiara.

This is in addition to the 4 million sq ft completed last year of which a number of the buildings are still unoccupied although there are tenants that may be moving in later this year.

“With such a large amount of new office space, demand will not be able to keep up with the growing supply and this will result in more unoccupied space. Overall occupancy and rental rates are expected to face downward pressure this year,” Wong tells StarBizWeek.

He says while offices that are well-planned, managed and marketed will achieve high occupancy, there will be those that will be left vacant.

“Office occupancy and take-up in the city used to be around 2 million sq ft when the market was at its peak around late 2007 but it has since dropped to just over a million sq ft now,” Wong adds. The overall office occupancy rate is expected to decline further to about 80% this year from around 87% in the last quarter of 2009.

According to Wong, office demand is driven by the performance of the economy which in turn is a function of business investments.

“In Malaysia, a large part of this is foreign direct investments (FDIs). Hence, the key is to attract FDIs and to draw up incentives to change the economic model of the country to being knowledge-based and driven by high-technology.”

Hopefully, the Government’s aim of achieving a high income economic model will provide an impetus for higher take-up of office space, he says.

“The market’s revival will also depend on the implementation of the two stimulus packages and their spin offs to the economy,” Wong adds.

DTZ Nawawi Tie Leung executive director Brian Koh points out that the global economy will continue to be filled with uncertainties this year and inflow of FDIs are not expected to pick up in the near future.

“Within the next three to four years, there will be 14.4 million sq ft of purpose-built office space scheduled to be completed. Unless there is a surge in demand, the additional supply will cast a dampening impact on rental and occupancy rates in the next few years,” he says.

Koh agrees that a possible upside for the market will be the new economic model which will hopefully lift economic growth, especially in the services sector.

Re-Group Associates executive chairman Christopher Boyd says with office space vacancies hovering around 13%, it is still very much a tenant’s market.

“Tenants are spoilt for choice and rental rates have come off by around 20% to 25% so far, with grade A office space fetching between RM5 and RM6.50 per sq ft, while grade B from RM4 to RM5.50 per sq ft,” he says.

Boyd says despite the higher supply, Malaysia’s office market is not likely to crash.

“In fact, the low rental rates here are a boon for businesses. Being consistently inexpensive is a good thing for the business people as it makes it easier for them to plan ahead and make decisions,” he notes.

Zerin Properties chief executive officer Previndran Singhe concurs with Boyd, saying the rental correction in the office market is not alarming and “is just a normal market cycle.”

“The concern that the over supply will adversely impact the office market will only be short term and things should recover, especially with the ongoing liberalisation of the various business and financial services sectors.”

Demand for office space should pick up among oil and gas companies and financial services providers, he says, adding that building owners need to be more innovative to attract the right tenants. “In fact, landlords have become more realistic in how much rent they can ask for and rental rates will find their new equilibrium in time to come,” he says.

ECM Libra analyst Bernard Ching notes that there has been a pick up in the office property sub-segment with more local investors looking for quality assets.

In the last quarter of 2009, the investment market jumped by about 58% to RM1.39bil against the previous quarter. The purchasers comprised mainly real estate investment trusts, the Employees’ Provident Fund and government-linked companies.

Some of the notable deals concluded recently include a 50% equity interest in Menara Citibank by Hap Seng Consolidated Bhd, the acquisition of Tower D, Glomac Damansara by Lembaga Tabung Haji as well as the acquisition of a retail/office tower in Southgate by Permodalan Koperasi Felda.

Ching notes that the office market is expected to see more foreign participation in the coming months as the global economic recovery gathers momentum.

“This follows a series of well received economic initiatives to liberalise the economy to attract foreign participation, including the repeal of the Foreign Investment Committee which regulates mergers and acquisitions in the country,” Ching says.

By The Star (by Angie Ng)

Hap Seng buys half of Menara Citibank, KLCC

Saturday, August 8, 2009

Hap Seng Consolidated Bhd has bought half of Inverfin Sdn Bhd, owner of Menara Citibank in Jalan Ampang, Kuala Lumpur, for about RM310 million. Its subsidiary, Hap Seng Realty Sdn Bhd (HSR) bought all interests in Inverfin owned by CapitalLand Ltd and Amsteel Corp Bhd.

The remaining half of Inverfin is owned by Menara Citi Holding Co Sdn Bhd. A Citibank Malaysia spokesperson said it is not in talks to sell its 50 per cent stake in Inverfin. Late last year it wanted to sell its interest in Inverfin to IOI Corp Bhd but the deal fell through.

The Amsteel stake comprising 2,000,001 shares is presently charged to RHB Investment Bank Bhd. This confirmed a Business Times report on June 30 2009 that Hap Seng was interested to buy half of Menara Citibank.

Inverfin is a special purpose entity and investment company formed for the sole purpose of owning and operating Menara Citibank.

At the end of August 2007, Inverfin issued medium term notes of RM160 million to selected investors where it charged Menara Citibank as security in respect of the notes.

Menara Citibank is built on a parcel of freehold land, measuring 12,694 sq m and has a net lettable area of 68,156 sq m.

Inverfin is the proprietor of Menara Citibank, and shares the use of five levels of basement car parks with the proprietor of an adjacent property known as "Hotel Nikko".

The purchase price of Inverfin is based on 50 per cent of the net asset value of the company as at June 30, after taking into account the agreed property value of Menara Citibank which is fixed at RM607,45 million. It is understood that Hap Seng is paying RM850 per sq ft of lettable area.

The transacted prices of prime office buildings within the Golden Triangle and the Central Business District were in the range of RM800 to RM1,200 per sq ft of lettable area.

The gross rental revenue based on the latest audited accounts of Inverfin for the financial year ended December 31 2008 was approximately RM48.76 million, giving a gross yield of 8.03 per cent.

Inverfin's operating profit was RM38.13 million, giving a net yield of 6.28 per cent. The rental revenue and operating profit are expected to improve with the rent rollover for year 2009 onwards, Hap Seng said in a statement to Bursa yesterday.

Hap Seng said the purchase is consistent with the group's corporate business direction of expanding its property division both for development and investment holding.

Menara Citibank is located in an established commercial precinct and is expected to rise further in popularity.

Hap Seng proposes to borrow from banks up to RM200 million to pay for the purchase, while the balance will be paid by internally generated funds.

With the acquisition, Hap Seng's gearing ratio is expected to increase from 1.06 to 1.14 based on its audited accounts as at December 31 2008.

By Business Times

Kwong Hing buys Menara Pan Global, KL City Centre

Friday, August 20, 2010


Property developer and manager Kwong Hing Group pays an estimated RM160 million for the 38-storey building in Jalan Puncak, off Jalan P. Ramlee

Property developer and manager Kwong Hing Group has bought Menara Pan Global, located within the Golden Triangle, for an estimated RM160 million from PanGlobal Bhd, sources say.

Menara Pan Global, a 38-storey building in Jalan Puncak, off Jalan P. Ramlee, houses 18 levels of office space with a total built-up of 400,000 sq ft.

The 18-year-old building also houses nine levels of hotel suites operated by Pacific Regency, while another eight levels have a total of 420 parking bays.

A source told Business Times that Kwong Hing paid a deposit for the purchase last week.

The group, whose prized assets includes Wisma Hamzah Kwong Hing in Lebuh Ampang, now has assets valued at RM600 million.

An official from Kwong Hing declined to comment when contacted.

It is understood that Kwong Hing may invest further to upgrade both the office space and suites to better compete with offices in the Golden Triangle.

The office lots are said to have 70 per cent tenancy.

Similarly, Kwong Hing will do some work on the 153-suite Pacific Regency, famous for its rooftop Luna bar, to improve its average room rate.

This purchase will see the group venturing for the first time into the hospitality sector.

A source said that the management team and the staff of Pacific Regency will be maintained where possible.

However, the name of the building could change.

It is understood that the sale forms part of PanGlobal's restructuring exercise. The company was delisted from Bursa Malaysia in July last year.

The Kwong Hing group's properties include Wisma KH in Jalan Sultan Ismail, Plaza Pengkalan in Jalan Ipoh and Wisma Fui Chui in Jalan Cheng Lok.

It also owns shopping centres along Jalan Tuanku Abdul Rahman and Jalan Petaling and Bangunan HSBC in Medan Tuanku.

By Business Times

POSTED BY KIMBERG AT 11:11 AM
LABELS: COMMERCIAL PROPERTY, KUALA LUMPUR

S'pore firm buys Wisma Goldhill, Jalan Raja Chulan, KL City Centre for US$57.4m

Saturday, June 18, 2011


Singapore-based Eagle Indo has purchased the 36-storey building from Jeddah-based Saudi Economic Development.

Kuala Lumpur: Singapore-based Eagle Indo Pte Ltd has bought Wisma Goldhill office building on Jalan Raja Chulan for an estimated US$57.4 million (RM174.5 million).

The 36-storey building was sold by Jeddah-based Saudi Economic Development Co (Sedco), 11 years after it had acquired it. Sedco had then paid RM115 million for the building.

It is understood that the acquisition was done through a locally incorporated company known as Klang Valley Projects Sdn Bhd.

The new owners are expected to refurbish the building to obtain better yields. The building is now 67 per cent occupied

Wisma Goldhill, which sits within the Golden Triangle, is located next to Menara Boustead and opposite Menara ING. According to sources, the deal for the sale was completed on Wednesday. Attempts to contact real estate adviser DTZ in Malaysia failed. DTZ, in a report from Singapore dated April 2011, said that it had "brokered" the sale between the parties.

Wisma Goldhill, completed in 1993, was developed by Singapore-based Goldhill Group. The building, with a total built-up area of 444,000 sq ft and net lettable area of 270,000 sq ft, has some 270 car park bays. Major tenants at Wisma Goldhill include Bank of America Malaysia Bhd, KAF Discounts Bhd and Thai Airways International.

Meanwhile, Sedco has other interests in Malaysia. It owns 24.58 per cent in Gefung Holdings Bhd via its affiliate Pacific Quest. Gefung is a company which processes, trades and provides contract workmanship of high-quality marble and granite slabs.

Recent commercial transactions within the Golden Triangle in the past year include the sale of Menara Pan Global to Kwong Hing Group. PanGlobal Bhd sold a building located off Jalan P Ramlee for RM160 million.

Another deal that made history, with the highest price per sq ft ever paid for a piece of land in Kuala Lumpur, was the sale of vacant land for RM7,209.80 per sq ft by Millenium & Copthorne Hotels plc.

Urusharta Cemerlang (KL) Sdn Bhd bought a total of 29,127 sq ft of the land on Jalan Bukit Bintang for RM210 million.

By Business Times

POSTED BY KIMBERG AT 10:11 AM
LABELS: OFFICE TOWER

Tradewinds to redevelop Crowne Plaze Hotel and Kompleks Antarabangsa

NST 29 June 2012

KUALA LUMPUR: Tradewinds Corp Bhd (TCB) confirmed today that it will demolish the Crowne Plaza Mutiara Hotel and Kompleks Antarabangsa in Jalan Sultan Ismail to pave the way for a RM6 billion mixed development project.

The company said it will redevelop the 2.8 hectare land on its own, and not via a joint venture as reported previously.

The project comprising grade A+ offices, serviced apartments and retail space, is scheduled to be completed in seven years.

Speaking to reporters after meeting with stakeholders here, its Chief Executive Officer Shaharul Farez Hassan said the project will be funded by bank loans and debt equity, with a ratio of 70:30.

"We are talking with a few banks now," he added. 

Crowne Plaza is a 35-storey hotel with over 500 rooms while Kompleks Antarabangsa is a 21-storey office building. 

The project once completed, will reportedly, be known as the Tradewinds Centre. The hotel will be officially closed on Jan 2, 2013, then demolished by the end of the first quarter.

On compensation to Inter Continental Hotels Group (IHG), the current operator of Crowne Plaza Mutiara Hotel, he said a negotiation will be arranged for this as IHG still have few years to manage the hotel.

"There’s a provision for all the unionised employees in the collective agreement and that is something that we will address together with them and the union. So, normally that is channel that they request us to negotiate and speak to them, collectively. So, that's what we'll do," he added.

Besides this, Shaharul Farez said Tradewinds will also demolish Mutiara Burau Bay Resort in Langkawi to be redeveloped into a new five-star resort.

He said some RM200 million will set aside for the proposed redevelopment, 100 per cent owned by Tradewinds Corp, once completed.

The cabana will be closed in the first quarter of 2013 and ready in three years. Despite the closing of these hotels, he said Tradewinds would still able to secure sufficient revenue from the hotel segment that contributed about 65 per cent to its revenue last year.

"Other hotels will be able to cushion the impact of the closing of several hotels." Tradewinds also owned Hilton Petaling Jaya hotel and Pelangi Beach & Spa Resort Langkawi as well as few other hotels and resorts in Langkawi, Johor, and Pahang. 

On Istana Hotel, he said there is a possibility for redevelopment, but not in the near-term as the Tradewinds Centre and redevelopment of Menara Tun Razak will keep the group busy for a few years. -- BERNAMA

Stable office rentals in KL City Centre

Thursday July 19, 2012

By THOMAS HUONG

huong@thestar.com.my

KUALA LUMPUR: Rental rates for purpose-built offices in Kuala Lumpur were generally stable in the last three years, except for certain suburban and city centre areas which showed an upward trend, according to the 2011 Purpose Built Office Rent Index (PBO-RI) for Federal Territory of Kuala Lumpur. 

 “Looking at the data... the market is still good,” National Property Information Centre (Napic) director Dr Zailan Mohd Isa said at a pre-launch briefing of the 2011 PBO-RI which will be launched today. 

The rent index has four regions, namely Kuala Lumpur City Centre-Golden Triangle (KLCC-GT), Centre Business District (CBD), within city centre (WCC) and suburban. 

According to the rent index, average monthly rentals for purpose-built offices in the WCC region had increased gradually from RM2.92 per sq ft in the first quarter of 2009 to RM3.46 per sq ft in the fourth quarter of 2011. This meant that average monthly office rentals in the WCC region had increased 18.5% over a three-year period. It was also noted that average monthly office rentals in the suburban region had appreciated by 13.2% over a three-year period, rising from RM3.10 per sq ft in the first quarter of 2009 to RM3.51 per sq ft in the fourth quarter of 2011. 

The suburban region includes Bangsar, Bukit Kiara, Damansara Heights, Jalan Pantai Baru, Jalan Istana and Jalan Syed Putra. “Companies may be relocating to the suburban areas,” said Zailan. Meanwhile, although the KLCC-GT region is the most sought after location in the city, average monthly office rentals were stable (a slight rise from RM4.60 per sq ft in the first quarter of 2009 to RM4.66 per sq ft in the fourth quarter of 2011).  However, the CBD region suffered a drop in average monthly office rentals, from RM3.46 per sq ft in the first quarter of 2009 to RM3.27 per sq ft in the fourth quarter of 2011. 

For the entire Kuala Lumpur region under review, average monthly office rentals had increased sightly over a three-year period, from RM3.91 per sq ft in the first quarter of 2009 to RM4.04 per sq ft in the fourth quarter of 2011. The rent index, which will be produced on a quarterly basis, is developed by Valuation and Property Services Department (JPPH), with assistance from Universiti Teknologi Mara (UiTM) and University of Malaya. Zailan said it was the first rent index of its kind in the Asean region. 

“It is based on data from actual rental agreements, and not asking rates.” The rent index defines purpose-built offices as buildings with office use of not less than 75% of net lettable area, and has compiled rental data from 6,831 tenancy leases from 167 buildings. Zailan said the rent index's aim was to provide a guide on current market rentals for investors, and a benchmark for the financial stability of the country. 

“We also want to attract multinational corporations to set up regional headquarters in Kuala Lumpur,” she said. Zailan also said the PBO-RI would be expanded eventually to cover all the major cities and towns in Selangor, followed by Penang and Johor. “Getting data is the most dificult part. We urge all property managers and owners to co-operate with us in providing data.”

MERRY X'MAS & HAPPY NEW YEAR 2010 TO ALL MY FRIENDS

X'mas Eve @ Bukit Bintang

Bukit Bintang, Kuala Lumpur

New York has its Fifth Avenue.
Tokyo has Ginza.
Singapore has Orchard Road.
And Kuala Lumpur has Bukit Bintang.

Bukit Bintang (or Star Hill) is the name of a shopping and entertainment district in Kuala Lumpur, and the road that runs through it, Jalan Bukit Bintang. The area is home to many landmark shopping centres, cafés, clubs, shops, malls and specialty shops.This area is also popular among tourists and locals, especially youths.

Location:

Bukit Bintang is located within three main roads: Jalan Bukit Bintang starts from Jalan Pudu and intersects with Jalan Sultan Ismail. The district is bordered by Jalan Raja Chulan at the north and Jalan Imbi at the south. There are a number of hotels and restaurants located in the area, as well as hawker-styled eateries, the place of which provide cheap dishes in a laidback usually open atmosphere.

Bintang Walk:

Bintang Walk is located along the Jalan Bukit Bintang shopping strip. This place has been transformed over the last 5 years to be one of the busiest shopping haven. Cafes, restaurants, clubs, shops, malls and more fill up this street. On weekends, thousands of locals as well as tourists promenade along Bintang Walk and its shopping centres. Almost every major nightlife event happens here such as the New Year's countdown, Merdeka eve celebrations, as well as fashion shows, street concerts and parties.

Shopping:

Bukit Bintang is one of the city's shopping districts offering a variety of merchandise to suit every taste and budget. The city's major shopping outlets are located in this area, including Berjaya Times Square, Bukit Bintang Plaza, Imbi Plaza, Kuala Lumpur Plaza, Low Yat Plaza, Starhill Gallery, Sungei Wang Plaza, Lot 10 and the newly opened Pavilion KL.

Imbi is a vibrant commercial area located near Bukit Bintang and being a popular tourist spot, the district is especially crowded during public holidays and peak hours. The Berjaya Times Square shopping complex and hotel is located in Imbi. Jalan Imbi is the main road running through this area.

Food:

Jalan Alor is an entire street dedicated to hawker stalls that serve up local delights ranging from Chinese, Indian, Indonesian, Thai, Malay and even fusion food. Located right next to Bukit Bintang road, Jalan Alor is extremely popular with the locals for offering delicious food served in a traditional open-air atmosphere, with chairs and tables on the curbs and road-side.This is one place that is busy both during the day and night, catering to working people during lunch time and tourists in the evenings. Hawkers operate from one end of the street to the other. The stalls are mostly erected on the kerbs of the streets, but some restaurants also operate from shop lot premises behind the kerb.

Indoor Theme Park:

Cosmo's World Indoor Theme Park can be located at Times Square. Families can bring their children for roller coaster rides and other excitement in this theme park conveniently located within the city. There is also a mini arcade in Sungei Wang Plaza located on the second floor which attracts many young people drawn to it's racing simulators and shoot-em-up games.

Massages & Spa:

There is health-related attraction that Bukit Bintang is most famous for; foot/body massages and Spa. Many shops along the Bukit Bintang Street offer exotic foot treatments. These incorporate reflexology, which stimulates pressure points on the foot through massage. Among the claimed benefits of foot massages are a better blood circulation, cures to certain ailments and a balanced, detoxified body. In these shops, patrons sit on reclining long chairs and spend up to an hour or more getting their feet treated to a thorough massage. Charges go by the time spent and how complex or wide the area which the massages cover. The shops are usually open till late night, which is when they get the most customers who come in after a tired day of work.

Monday August 11, 2008
Condo prices in Mont’ Kiara, Sri Hartamas hit new high
By S. C. Cheah


New projects in these areas attract investors and home owners
THE high-end property boom of the last few years, particularly in the top two prime locations in the Klang Valley – KLCC and Mont' Kiara/Sri Hartamas, has made it increasingly more expensive to own a condominium, serviced apartment or landed property.
In the case of Mont Kiara (MK) and its adjacent Sri Hartamas, an affluent neighbourhood popular with expatriates, prices of newly launched condominiums have shot up to over RM800 psf with some hitting the RM900 psf mark!

In the early 1990s, condominiums built by the Sunrise Bhd Group such as the MK Pines and MK Palma were around RM300 psf.
Despite fears of over building, soaring prices and congested vehicular traffic, this neighbourhood has continued to attract both investors and home owners, Today, it has evolved into a very self-contained, much sought-after residential enclave of top quality condominiums, bungalows/villas and other high-end residential properties.

As Henry Butcher Marketing Sdn Bhd chief operating officer Tang Chee Meng said there was now a greater variety of property types available compared to the early days of Mont' Kiara's development.

“While the earlier developments have average built-up areas of 1,200 to 1,800 sq ft (MK Pines, MK Palma and Vista Kiara) catering to small and medium sized families, the newer projects that have been launched in Mont' Kiara and Sri Hartamas offer a greater variety of unit types catering to different budgets and preferences,” he said.

They range from very small studio units of 400 to 600 sq ft (Mayfair and Dorchester) catering to singles; small units of 600 to 800 sq ft (Verve Suites, One Kiara) catering to singles and newly married couples; standard sized units of 1,000 to 2,000 sq ft units (One Kiara, Kiara 3, Cerian Kiara) catering to small and medium sized families and large units of 2,000 to 3,000 sq ft units (11@MK, Seni Mont' Kiara) catering to more well off families.

“There are also the super large units of above 3,000 sq ft (Matahari, MK10) for the well heeled. As the prices of the condominiums in Mont' Kiara and Sri Hartamas have gone up, the profile of the buyers also indicate that they are now of a higher income group,” he said, adding that condominium prices in Mont' Kiara have gone up significantly.

“While the prices of condos in Mont' Kiara used to be around RM300 to RM600 psf in 2006, newer projects launched since 2007 have pushed the prices to new threshold levels of RM600 to RM900 psf.”

“Some of these new projects are Sunway Vivaldi (RM800 to RM900 psf), Palazzio (RM840 psf), and Matahari (RM800 psf). Generally for a RM1mil property, based on an 80% loan and an interest rate of 5% per annum for 20 years, the qualifying monthly income is RM15,000 whilst the monthly income required to qualify for a 80% loan for a RM2mil home will be RM30,000,” he said.

According to Tang, the nearly sold-out Kiara 1888 that Henry Butcher marketed has risen 25% to 30% although it is still under construction while Kiara 9 has been released at new benchmark prices. Meanwhile, the current economic uncertainties have seen some people adopting a “wait-and-see” attitude. There are also signs of over-building in many places including Mont' Kiara.

Tang agreed that while rentals have remained stable, vacancy rates appeared to have increased due to the large number of units that have been completed in Mont' Kiara. “One of the chief concerns of potential investors is the fear of oversupply of condos in Mont' Kiara and whether the rental market will hold. Another concern is the worsening traffic congestion due to the increased number of residents in the area,” he said.




The Soho KL at Solaris Mont Kiara

With scarcity of land in Mont' Kiara, industry observers believe that developments in Mont' Kiara will spill over to Segambut. “We believe that in years to come, Mont' Kiara and Segambut will be linked up in a seamless corridor by the new developments. For the moment there is still a price disparity as projects at the Segambut side are still significantly cheaper. In future this price disparity may be narrowed although we believe that there will always be the price differential,” he added.

Tang said overall the property market would be soft, in view of the political uncertainty as well as the slow down in economic growth but the Mont' Kiara/Sri Hartamas area would still continue to attract interest.
“However, investors are now more cautious and will be more selective. Projects with more innovative concepts undertaken by reputable developers will still be able to attract interest, provided that investors are convinced that the pricing is fair value vis a vis the design and quality of the project,” he said.

Fears of a bubble in KL's luxury condo market
Daily Express, published on: Monday, March 13, 2006

Kuala Lumpur: The Malaysian capital's luxury condominium market, which has enjoyed an unprecedented boom over the past two years, is facing the threat of oversupply, experts say.

Some 23 high-end condos are being constructed around the Petronas Twin Towers - the world's second-tallest building - including one plush development that features private swimming pools for each of its 94 units.
At the end of last year there were 1,222 apartment units in the city centre, but industry analysts say that figure will rise to at least 5,000 once the developments now under construction are completed.

"Luxury condominiums and serviced apartments especially in Kuala Lumpur city centre are unlikely to experience the bullishness of previous years," said leading property consultant C.H. Williams Talhar and Wong (WTW) in a recent report.

"There are some concerns of oversupply," said WTW managing director Goh Tian Sui. Condos launched off the plan in the second half of 2005 were "a bit slower" compared to earlier launches, he said.

"If sales slow down, developers will not be optimistic and raise prices... unless you are really very niche, and you are facing the Petronas Twin Towers," he said.

Malathi Thevendran, executive director of research and consultancy at Jones Lang Wootton Malaysia said that city centre condos started to "mushroom" from mid-2003 thanks to an economic recovery and lower interest rates.

"In terms of sale prices, new benchmarks have been achieved," she said. The price of premium condos in the area has more than doubled, breaching RM1,000 (269 dollars) per square foot, from an average of 500 ringgit previously.

Buyers are now faced with a minimum price tag of 500,000 ringgit for a studio with a fashionable address. The same amount could easily purchase a comfortable four-bedroom family house in the suburbs. "However, there has been a slight slowdown in take-up" since last year, Thevendran said.
"This could be because most of the pent-up demand by the locals has been met through the earlier launches of projects," she said adding that Malaysian buyers were becoming "more discerning." As a result, she said developers were increasingly looking towards the foreign market, particularly neighbouring Singapore and the Middle East where investors find Kuala Lumpur prices comparatively low.

WTW's Goh said Malaysia's property market was unlikely to remain buoyant in 2006, citing inflationary pressure from higher interest rates and fuel prices. "It is not really the boom times of the previous years," he said.
On the flip side, he said the hotel sector was expected to continue to perform well in 2006, anticipating higher tourist arrivals and further room rate hikes.

The capital is currently seeing a number of new hotels shooting up around the landmark twin towers, in a building boom fuelled by a bullish outlook for the economy and tourism industry.

At least four new hotels - the Four Seasons, Grand Hyatt, Traders and Novotel - are under construction in the city centre, as the government targets a record 20 million tourist arrivals to the country next year.
Despite the warnings of an imminent bursting of the up-market condo bubble, AmSecurities property analyst Chong Tjen San said there are "arguments to support both views".

Buyers will continue to be lured by the prospects of inner-city living, and top-notch facilities in the area include a soon-to-be-opened luxury hospital, he said.

Neither rich Malaysians nor overseas investors will feel the pinch from hikes in interest rates and prices for petrol and electricity, he said.
But nevertheless luxury apartments in the city centre have reached prices never seen before.

"Most people still feel that there is a bubble emerging," he said. - AFP

Luxury condo prices dive in KL

Luxury condo prices dive in KL
Feb 19, 2009 - The Business Times
Pauline Ng In Kuala Lumpur

PRICES of luxury condos in the Kuala Lumpur City Centre (KLCC) area have dived 15-20 per cent as the economic downturn bites and foreigners try to cash out for the best they can get, says a real estate consultant.

Malaysian buyers were the first to sign up for the high-end condos in 2004 during the onset of recovery after the 1998 Asian financial crisis, Rahim & Co managing director Robert Ang said on Monday. They bought at a half the price of foreigners who went into the market in 2006-07.

'Most foreigners bought at appreciated levels, so they are flexible about asking prices,' he said. 'But Malaysians, having bought earlier, are getting returns of 7-8 per cent and have no reason to sell unless they are cash-strapped. Also, they can refinance as the cost of funds has decreased.' The only bright spot is that so far there have been no forced or fire-sales, Mr Ang told a news conference.

Rahim & Co's executive chairman Abdul Rahim Rahman said he believed prices in the KLCC area would have softened anyway because of oversupply.
An estimated 1,760 units will be completed in the area this year, adding to 1,200 in the past two years.

Mr Ang said: 'The apartments are not well occupied, so there has been some strain on rental yields and returns, which at the end of last year were 4-5 per cent.'

At the peak, top KLCC apartments were edging towards RM3,000 (S$1,254) per sq ft. But most projects are now selling at RM1,000 plus psf in the resale market, though developers are still asking about RM2,000 psf for premium units under construction, such as at OneKL.

It is highly unlikely that better times are around the corner. Sellers and buyers know the market has yet to feel the full impact of the global economic slide.

Just on Monday, Malaysia's Deputy Prime Minister Najib Razak said the government's 2009 economic growth target of 3.5 per cent may not be achieved, as exports and production figures collapse. Although property players claim the overall market is still liquid, fear of the unknown has led to a near-collapse in demand for luxury condos.

Mr Ang said Rahim has advised clients to defer new launches of luxury developments to the second half or third quarter. On the brighter side, landed property prices have held up so far, he said.

In the past three years, many foreigners went into Kuala Lumpur real estate, buying as many as a third of the units in some KLCC projects. They were attracted by the weak ringgit and a market that had not run up as much as others.

But now, some of them may be about to pay the price. After Malaysia's last recession in 1998 the property market took about four years to recover. Mr Abdul Rahim reckons things could move faster this time - if the economic decline can be swiftly arrested.

Should KLCC Investors Yield Or Maintain?

Tuesday, April 14, 2009

Should KLCC Investors Yield Or Maintain?

Recently, in the KLCC region, there have been a flurry of viewings and some transactions for the newly completed projects. Most projects completed in 2009 range from RM700-1200 persf in the secondary market, but do note that these are deflated prices as compared to their initial high back in 2007. From my own personal observation, transactions and even potential viewings were greatly diminished towards the end of 2008, and it was only after the Chinese New Year that things have started moving again. Buyers are slowly coming out in hopes of securing themselves some great bargains.

The question is this, most properties in the KLCC area are worth much more than they are being transacted at now. Do note that value of a property might not be similar to what is being asked for and transacted at ultimately. In dire times like this, vendors are lowering their expectations and hence the lower asking prices. Vendors who can hold on to their investments will prefer to lease their units out while waiting for prices to stabilise once again towards the end of this year. They know that their units can easily be transacted at 20% higher than what it is going for now in just a matter of a year from now. With this, there have been reportedly more landlords in the market now than there are vendors, and this in turn has seen a slight drop in rental rates.

So, in a stagnant economy like this one, what should investors do? When I say investors, I am referring to vendors and landlords, not so much buyers as in my previous post, I have made it clear that there is no better time for buyers to purchase than now. Bank interest rates are at an all time low, as low as 3.2% for the thereafter rates, and prices of prime property are realistically affordable now. But back to vendors and landlords, should they accept current prices of indication of the value of their properties? Should vendors accept lower transaction prices and landlords taking in the first tenants to offer?

I am with the opinion that if you are not able to hold on to your properties to see them surge to their rightful values in the coming years, then yes, you can accept offers that are on average 20% lower than what would have been when times were good. You see, contrary to assumption that most KLCC property owners are bleeding from their investments, the one thing that most folks forget is that these owners are also the ones who were enjoying capital gains on paper as much as 50-60% back in 2007. With the recent tumble in prices, it will take a genuinely lousy investment with a hopeless location to garner its owner losses.

Let's just say that the worst performing development in the KLCC region is still seeing an average of 10% capital appreciation. Don't forget that that this seemingly small capital gains may translate to lump sums of RM150K on average, which is by far higher than any other mediocre investment in the less prime areas. So, with KLCC investments, despite the fact that we are seeing price drops now, few owners out there are actually incurring losses as you would have thought. There is a difference in lower profit margins and total losses.

Rental rates have dropped too in recent times, due to a glut of landlords in the market as opposed to vendors. However, there have been tenants enquiring for rentals as well as they know that now is the time to lock in affordable rental rates. I would suggest to landlords to still screen through their prospective tenants instead of taking the first one to offer because problematic tenants are just as bad as having your unit untenanted, if not worse. However, be realistic with asking rentals. You may not enjoy the surplus that you would have hoped for, and possibly may have to accept rental offers that can barely cover your total monthly expenses. I would say that anything around a break-even is good enough for now. It will help you scrape through and prolong your investment to see values returning to their previous high in a couple of years or so from now.

In other words, do investors settle for lower transaction prices now or do they lease their units out while waiting for the economy to stablise? It all depends on your situation. If you are not so keen on facing possible rental issues and problems, then perhaps you would like to release your units for their lower accepted prices now. A gain is still a gain, and most KLCC properties are still seeing a gross capital appreciation of 30% on average. If you are fine with taking time to furnish your properties and lease them out in the hope of selling them when prices soar once more, then by all means.

I wish to point out that there are advantages to both scenarios. Some may have further ventures to move on to, and will see the exit route a better option rather than staying put with their current portfolio. Some may realise that prices today are not reflective of their actual values and would prefer to delay sales. It all depends on your obligations and directions, and not one decision is deemed better than the other. I have seen folks who heave sighs of relief for not getting into the KLCC bandwagon thinking that recent times have shown that it is clearly a bad idea. They cannot be further from the truth, because KLCC investments are KLCC investments, and there can never be better performing properties out there irregardless of good or bad times. Even at its worst, KLCC properties are still performing at levels equivalent to others at their best.

The Star, Monday April 13, 2009

Office rentals in KL to fall by this year
By Angie Ng

Rates in KL expected to drop by 10% to 15%

OFFICE rental rates in Kuala Lumpur are expected to drop by 10% to 15% from their peak of about RM8 per sq ft this year amid the economic slowdown. Although office occupancy rates are still holding up quite well, rental rates are expected to fall from their earlier highs due partly to new office space coming onstream.

DTZ Nawawi Tie Leung executive director Brian Koh said that at least a dozen new office buildings, with a total net lettable area of 4.13 million sq ft, would be completed in KL and other parts of the Klang Valley this year.
Of these, four – Menara Worldwide, G Tower, Fraser KL and The Icon – are located in KL’s golden triangle, while the rest are in central commercial areas and other decentralised areas such as KL Sentral, Bangsar and Petaling Jaya. Amid uncertainties and fears of a long global economic downturn, occupancy costs are expected to decline in many business districts around the world, led by the contraction in occupier demand.

According to DTZ Research’s 2009 global office occupancy costs survey, covering 114 business districts in 49 countries and territories worldwide, the seismic disruption of the global financial system, which started in mid-2008, has wiped out much of the strong growth recorded by many office markets over the past few years.

The annual survey looks at the main components of occupancy costs in major office markets across the globe and provides a ranking based on total occupancy costs per workstation.

About 78% of the 114 business districts surveyed expect occupancy costs to fall this year, 3% expect a slight increase, and the balance 19% expect costs to remain stable.

Only the Middle East and Africa regions, and central and eastern Europe registered positive annual growth in office occupancy costs of 28% and 11% over the previous year, while other regions witnessed declines in costs.
All business districts surveyed in western, central and eastern Europe, and central and south America expect occupancy costs to fall this year.
In North America, occupancy costs are expected to remain stable in 61% of the business districts surveyed, while a further 39% – comprising mainly the largest business districts at the heart of the financial turmoil – are predicted to experience a significant decline in occupancy costs.
About 76% of the markets surveyed in the Asia-Pacific expect office occupancy costs to fall and 24% see costs remaining stable over the year.
In the Middle East and Africa regions, 30% of the respondents expect some increase in occupancy costs, while the rest expect costs to fall throughout this year.

DTZ said the prospects of an impending supply glut in some markets and the wider adoption of flexible work practices leading to reduced space consumption would help drive down occupancy costs, especially across Europe and the Asia-Pacific region.

Space utilisation standards across most regions are expected to decline as companies focus on space optimisation and cost reduction measures.
Meanwhile, new, better-designed offices with larger floor plates and fewer columns will gradually contribute to greater efficiency in space layout.
In terms of rents and other outgoings per sq ft, Moscow, Hong Kong and London (West End) are the top three most expensive office locations in 2009.

However, due to a higher space utilisation standard per workstation, Tokyo (Central 5 wards) was the world’s most expensive office location on a cost per workstation basis. Its space utilisation per workstation was 144 sq ft compared with Moscow’s 84 sq ft, Hong Kong’s 118 sq ft and West End London’s 118 sq ft.

Tokyo (Central 5 wards) has overtaken London (West End) as the most expensive office location on a cost per workstation basis.
London (West End), which had been the most expensive office market on this basis since 2001 when DTZ first compiled such rankings, was ranked fifth.

Property Outlook 2009

The Malaysian property scene experienced drastic changes in 2008, moving from a boom at the end of 2007 to uncertainties in the midst of general elections and increasing construction costs, and slowing into a relatively quiet market towards the end of last year.
Notwithstanding the gloomy outlook, the Malaysian property market has been notably slow compared with those in the rest of the region, says Allan Soo, managing director of Regroup Associates Sdn Bhd.
“We were branded as laggards, and effectively, we really only had a boom from 2007 compared to Singapore, which had prices sky-rocketing from 2005. Our euphoria was very short-lived as well, so prices have not really had a chance to go crazy although you could say that supply of some sub-sectors, like high-end condominiums, does look like a ski slope,” explains Soo.
With banks tightening their loan terms, obtaining loans for development, factories and shop-houses have been difficult in the last three years. All these, says Soo, suggest a soft landing without any major drop in prices for land, retail centres and landed properties.
“We expect a drop in prices for high-end condominiums in areas where there was more activity in the last two years, as the supply of condominiums would more than double in these areas in the next three years,” he says.
Soo feels that land prices would not drop substantially, as banks will not be able to process defaults until 2010 at the very least. Therefore forced sales will not be the order of the day as far as development land opportunities are concerned. “However, it may be that some smaller players may give up later this year and such opportunities may be worth considering then,” he adds.
Executive director of Knight Frank Malaysia, Sarkunan Subramaniam, expects a slowdown with property prices decreasing by five to 10 per cent from the first quarter, as the slower economy brings down demand and some good bargains arise in the later part of the year.
“The feeling (for the first half of 2009) is down. The property market in 1H 2009 will be very quiet and slow as developers are delaying major project launches due to the lack of market demand. Property purchasers are holding back in the hope that prices will come down further or search for fire-sales,” explains Sarkunan.
While prices may fall, Soo does not foresee any opportunities for bargain hunting. “Prices won’t crash to the floor as they have not gone through the roof previously. You could wait a little to pick some nice condominiums in the best locations at a good discount, although it will be hard to predict how much the quantum will be,” he explains.
Klang Valley property scene
The Klang Valley property scene has been slow in the past two to three months; there were many enquiries for fire sales but zero transactions, says Sarkunan. According to him, there will be more pressure on the rental market, especially in the high-end residential properties within the vicinity of KLCC and Mont’ Kiara due to the numerous newly completed projects within the area.
As for the office sector in Klang Valley, Sarkunan reveals that the office rental rate has stabilised between RM7 psf and RM9 psf for prime offices in the city. There is also a new trend in the Klang Valley office sector where increasingly, office developments are adopting green features such as energy saving, reduction of wastage and water usage, as well as the use of environmentally friendly materials.
Meanwhile, the performance of shopping malls in Klang Valley has been on the slow side, with most centres experiencing a decline in shopper traffic, by as much as 10 per cent since March last year.
“Everyone is expecting that after Chinese New Year, the worst will be seen and it is likely that some centres will drop rents just to fill up space and of course, sales will be the order of the day. The fact that 4.2 million sqf of space was added to the already massive supply of 33 million sqf in 2007 meant that the market was saturated by the end of 2007 and for most of last year.
“Fortunately, there were no major openings planned last year, so only a fraction (just over one million sqf) was added last year. Another 1.5 million will come on stream this year, but this will not impact the rest,” says Soo.
The Malaysian REITs sector has been performing well, although the market is not excited due to small portfolios and the odd properties some of them have, says Soo.
“Of greater significance is that both Sunway and CapitaLand abandoned their respective plans to list their REITs, which were the largest ones as market sentiments were deemed too weak last year,” he says. Sunway’s listing would have included Sunway Pyramid, the hotel and commercial buildings, while CapitaLand’s listing would have included Gurney Plaza, Sungei Wang and The Mines.
“This year may be a difficult year for REITs as rents will be impacted in most cases and the resultant yield or dividend may not show a rise as expected of REITs,” adds Soo.
This year would also most likely be a tough year for the property industry. “General sentiments are understandably weak and the market can be described as lacklustre, but some are expecting the market to become active by the second half,” says Soo.

Source: iproperty

Seri Maya Condominium is getting popular...

Seri Maya Condo is a condominium comprising of lowrise and highrise blocks. Seri Maya Condo is conveniently located in Jalan Jelatek, off Jalan Ampang with 10 minutes drive to KLCC. The Jelatek LRT Station is situated just opposite Seri Maya Condo - the residents of Seri Maya Condo can reach KLCC in 15 minutes via LRT. For those who are working in KLCC, they will find Seri Maya Condo very convenient and easily accessible, either by car or by LRT. Hence, Seri Maya Condo has become an alternative to KLCC condo.

Besides the good infrastructure, another advantage of Seri Maya Condo is near to amenities such as: -

• Fairview International School;
• Sayfol International School;
• Carrefour Hypermarket;
• Giant Hypermarket;
• Hock Choon Mini Market;
• Great Eastern Mall;
• Ampwalk;
• Sucasa Hotel;
• Victoria Steak House;
  
• Embassies; and
• KLCC
  

The rental in Seri Maya Condo is at least 50% cheaper than the rental in KLCC Condo. This is also one of the reasons why the expats from KLCC moved to Seri Maya Condo. For instance, a fully furnished apartment (900sf approximately) in KLCC (Marc Serviced Residence) is rented at RM6000 while in Seri Maya Condo you can get a 1800sf fully furnished apartment with the same amount!

Now you know why Seri Maya Condo is getting more and more popular, especially among the expatriates - 80% of the residents in Seri Maya Condo are foreigners/expatriates. Seri Maya Condo is now the favourite dwellings for Japanese, Korean, Chinese, European, Iranian and many other Middle Easterners.

Seri Maya Condo is developed and managed by Tan & Tan Developments Berhad, one of the most reputable high-end property developer in Malaysia. They are the developer of Hampshire Park, Desa Kuda Lari Condominium, Sucasa Service Apartment, Micasa Service Apartment and the recently completed Cendana Condominium. So, you can be assured of the quality of management and maintenance in Seri Maya Condo.

If you need further information about Seri Maya Condo, please feel free to call Max Yong at 012-286 8877.

seri maya condo to let seri maya condo for sale seri maya condo for lease seri maya condo for rent

...an message from Executive Chairman of Rahim & Co