Genting facelift boosts property values

property
DIGITALEDGE
WEEKLY
SEPTEMBER 21
2015
Genting facelift boosts
property values
Resorts World Genting is undergoing a 10-year programme that is
expected to exceed RM5 billion. The rejuvenation masterplan is
expected to boost tourist arrivals and property values, which are
already seeing an upward trend with new launches in the vicinity.
Chai Yee Hoong has the story on Page 2.
PHOTO BY SAM FONG
P2
SEPTEMBER 21
2015
property
cover story
SAM FONG
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Genting Highlands Resort — now
renamed Resorts World Genting — has
grown into a ‘city of entertainment’
with casinos, hotels and theme parks
SENIOR
MANAGING EDITOR |
AZAM ARIS
EDITORIAL TEAM
EDITOR |
ROSALYNN POH
DEPUTY EDITORS |
E JACQUI CHAN,
WONG KING WAI
ASSISTANT EDITOR |
LAM JIAN WYN
SENIOR WRITER |
RACHEAL LEE
WRITERS |
ZATIL HUSNA WAN FAUZI,
CHAI YEE HOONG,
RACHEL CHEW,
HANNAH RAFEE,
TAN AI LENG,
NATALIE KHOO
ADVERTISING &
MARKETING
CHIEF
MARKETING OFFICER |
SHARON TEH
(012) 313 9056
GENERAL MANAGER,
DIGITAL MEDIA |
KINGSTON LOW
( 012 ) 278 5540
SENIOR SALES
MANAGERS |
GEETHA PERUMAL
(016) 250 8640
GREGORY THU
(012) 376 0614
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(012) 386 2831
PETER HOE
(019) 2215351
ACCOUNT MANAGERS |
CHERMAINE LIM
(017) 613 6392
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(012) 710 6220
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(016) 218 5908
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(017) 281 4787
SHANNON LEONG
(012) 677 5345
SHARON LEE
(016) 330 1571
HEAD OF MARKETING
SUPPORT & AD-TRAFFIC |
LORRAINE CHAN
EMAIL |
[email protected]
CORPORATE
PUBLISHER &
GROUP CEO |
HO KAY TAT
MANAGING DIRECTOR |
AU FOONG YEE
DEPUTY MANAGING
DIRECTOR |
LIM SHIEW YUIN
WE WELCOME YOUR
COMMENTS AND
CRITICISM. SEND
YOUR LETTERS TO
THE EDGE, PO BOX 8348,
PEJABAT POS
KELANA JAYA,
46788 PETALING JAYA
PHONE (03) 7721 8018
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PSEUDONYMS ARE
ALLOWED BUT PLEASE
STATE YOUR FULL NAME,
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Reinvigorating
Genting
Highlands
LAURELCAP
Average prices of existing developments
DEVELOPMENTS
AVERAGE PRICE (RM PSF)
Genting View Resort
Genting Permai Resort
Bunga Raya Apartments
Mawar Apartments
Amber Court Villa D’Genting
Awana Golf and Country Resort
Ria Apartments
2012
2015
280
300
450
530
180
380
500
430
450
680
780
380
620
800
INCREASE
(%)
34.88
33.33
33.82
32.05
52.63
38.71
37.50
MOHD IZWAN MOHD NAZAM
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B Y C H AI Y E E H OONG
ith its cool, spring-like climate —
sitting 1,800m high on the peak
of Gunung Ulu Kali in Pahang —
Genting Highlands is a popular
getaway for city folk.
Resorts World Genting — formerly known as Genting Highlands Resort — is an
integrated resort development, complete with casinos and theme parks, built by the late Tan Sri Lim
Goh Tong and has been a catalyst for tourism since
it opened its first hotel in 1971.
Located approximately 55km or an hour’s drive
from Kuala Lumpur, Genting Highlands is accessible via the Karak Highway and major trunk roads.
There is also a cable car service from its satellite
town Gohtong Jaya.
The shoplots in Gohtong Jaya are almost fully
occupied and house many eateries and restaurants
as well as general amenities such as a clinic, a money changer and convenience stores.
Other attractions include the Chin Swee Caves
Temple, lavender farm, mushroom farm, strawberry farm, Honey Bee Farm and Insect World, and the
Lim Goh Tong Memorial Hall.
Further atop the mountain, First World Plaza
at Resorts World Genting is a shopping complex
that houses the indoor theme park and First World
Hotel. Apart from its casino and theme parks, the
resort also holds concerts and events at the Arena
of Stars amphitheatre and Genting International
Convention Centre.
Genting Highland’s success can be traced back
to the 1960s, when Lim and his partner Tan Sri Mohammed Noah Omar got 14,800 acres alienated to
build the resort.
Commending the private company’s efforts in
developing the resort without any assistance from
the government, the first prime minister of Malaysia
Tunku Abdul Rahman granted Lim the first and only
casino licence in the country to help accelerate the
development of the area.
Over the years, the area has grown from a modest
resort into a “city of entertainment” with casinos,
hotels and theme parks. It is the only legal gambling
outfit in Malaysia.
a
to
ro
37
R
Due to land
scarcity [at the
top of] Genting
Highlands,
many
developments
have been
proposed for
Gohtong Jaya
— Chan
On Dec 17, 2013, prime minister Datuk Seri Najib
Razak launched the RM5 billion Genting Integrated
Tourism Plan (GITP), which is aimed at enhancing
Resorts World Genting as a major tourist hub.
The 10-year masterplan will see the development,
expansion, enhancement and refurbishment of the
hotels, theme park and infrastructure, including
the development of a RM1 billion Twentieth Century Fox World theme park and Genting Premium
Outlets, at the resort.
Executive director of JS Valuers Research and
Consultancy Sdn Bhd Chan Wai Seen says while
Genting Highlands Resort is a key tourist attraction in the country, its development has been less
vigorous compared with other tourist areas such as
Melaka, George Town and Kota Kinabalu.
However, he says, the announcement of the GITP
has attracted a number of new developments.
“Due to land scarcity [at the top of] Genting Highlands, many developments have been proposed for
Gohtong Jaya,” says Chan.
According to LaurelCap Sdn Bhd executive director Stanley Toh, most developers will bank on
the expansion of the resort and casino. As long
as the casino is in operation, he says, demand for
properties in the area will grow.
According to Toh, the Twentieth Century Fox
World amusement park will no doubt be the main
draw for property developers and investors, but
he notes that concerns about bank loans and loan
margins are a major drawback.
As the area will see an incoming supply of over
3,000 residential units, Toh says supply will outweigh demand.
“There were many Chinese buyers a couple of
years back, but that market segment has diminished.
The current situation in China is not helping as well.”
Looking at the current lacklustre property market,
Toh does not foresee too many new developments
in Genting Highlands and Gohtong Jaya.
“However, I am quite certain that in the longer
run, the property market will swing back and demand for apartments in Genting Highlands will
return,” he says.
Spurring property development
and values
Residential supply will come from ongoing developments such as Ion Delemen at Genting Highlands
with 673 units (by NCT Group of Companies), Midhills at Genting with 796 units (by LBS Bina Group),
Vista Residences with 378 units (by Fututech Bhd),
Windmill Upon Hills with 1,108 units (by PJ Development Holdings Bhd) and geo38 Residence with
579 units (by Pesat Bumi Sdn Bhd).
According to LaurelCap data, there are about
11,000 hotel rooms and apartments in Genting
Highlands and Gohtong Jaya. Around 1,900 units
are apartments and serviced apartments.
Existing residential developments include Genting Permai Resort by Berjaya Group; Genting View
Resort by Pasdec Holdings Bhd (which comprises Meranti Apartment, Kempas Apartment and
Ramin Apartment), Amber Court Villa D’Genting
by Samaworld (Malaysia) Sdn Bhd, Bunga Raya
Apartments, Mawar Apartments, Ria Apartment,
Kayangan Apartment and Awana Golf and Country
Resort (by Genting Group).
The hotels in the area are Genting Grand Hotel,
Maxims Genting, Resort Hotel, Theme Park Hotel
(currently undergoing renovation), First World Hotel,
Awana and Seri Malaysia Hotel.
Along with the increase in property development activities, values of apartments in Gohtong
Jaya have increased since the announcement of
the GITP, says Chan.
He notes that unit prices of developments such
as Mawar Apartments and Bunga Raya Apartments
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P3
SEPTEMBER 21
2015
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‘Buyers are looking at both capital gains and rental yields’
PICTURES BY SAM FONG
F R O M P R E V I O U S PAG E
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have appreciated from RM320 to RM537 psf and from RM550
to RM704 psf respectively.
Among the many factors that contributed to the different
pricing levels are the properties’ features and leaseback arrangements, he adds.
According to Toh, Amber Court recorded a 52.63% increase
in average prices from RM180 psf in 2012 to RM380 psf in 2015.
“The spike in value at Amber Court is mainly attributed to the
repainting and refurbishment of its common areas.”
According to LaurelCap data, Mawar Apartments recorded
a 32.05% growth in average prices from RM530 psf in 2012
to RM780 psf now, while average prices at Ria Apartments
rose from RM500 psf in 2012 to RM800 psf, an increase of
37.5%. At Awana, average prices of apartments grew from
RM380 psf in 2012 to RM620 psf.
“Currently, the newer launches are in the RM700 to RM900
psf range. It also depends on their proximity to Genting Highlands Resort. The closer the development is to the resort, the
higher the price you can demand. Existing developments in
Gohtong Jaya are currently fetching RM600 to RM700 psf
while those nearer the resort are commanding above RM800
psf,” Toh says.
Due to the high demand for rooms, many residential units
in Genting Highlands and Gohtong Jaya have been turned
into holiday homes. Chan notes that buyers are looking at
both capital gains and rental yields.
However, he says, with the increase in the real property
gains tax, many purchasers may hold on to properties for
rental income.
Toh similarly notes that the investment trend in Genting
Highlands shows that people are purchasing units for capital gains.
As a reference, units at Genting View Resort are priced at
between RM160,000 and RM570,000, and those at Genting
Permai Resort, between RM130,000 and RM340,000.
Genting View Resort has 113 fully furnished serviced
apartments of 1, 2 and 3-bedrooms with built-ups of 630 to
1,065 sq ft. The penthouse measures 1,881 sq ft.
Genting Permai Resort offers 220 fully furnished serviced apartments with built-ups ranging from 570 sq ft for a
1-bedroom, 1-bathroom unit to 1,029 sq ft for a 3-bedroom,
2-bathroom unit.
Toh says the two projects are very competitively priced
within Genting Highlands and the Klang Valley and are affordable for most purchasers looking for a holiday home.
In addition, Chan says more people are choosing to live in
Genting Highlands due to the easy access to the city centre.
Infrastructure and public amenities in the area have also improved. “The cool weather is an attraction as well.”
The residents of Genting Highlands are a mix of owner-occupiers and tenants who comprise retirees and nationals
from China and Singapore.
Toh notes that Amber Court houses most of Resorts World
Genting’s workers while apartments in Gohtong Jaya are
mostly occupied by retirees and holidaymakers.
What to expect
Chan remains positive on the outlook of the property market in Genting Highlands and expects the GITP to enhance
tourism in the highlands. He adds that the residential de-
Prices of existing developments such as Mawar Apartments have appreciated since the announcement of the GITP
SHAHRIN YAHYA
Apart from
the casino and
the weather,
Twentieth
Century Fox
World, which
will be opening
its theme park
next year, will be
the main draw
for property
developers and
investors — Toh
The shoplots in Gohtong Jaya are almost fully occupied
velopments can double as holiday homes and serviced
apartments for the hospitality sector.
Moving forward, Chan says, developments in Genting
Highlands should be carried out systematically to preserve
the area’s natural attributes and sustainability.
Toh says an improved public transport network and an additional access road to Genting Highlands will help the area
tremendously and the Twentieth Century Fox World theme
park is definitely a development to watch out for.
The 25-acre theme park is taking shape at the site of
the former theme park at Resorts World Genting and will
feature 24 rides and cinematic attractions, which include
action, adventure, animation and sci-fi genres and incorporate spectacular special effects.
While the outdoor theme park ceased operations in September
2013, the First World Indoor Theme Park has remained open.
According to Genting Malaysia Bhd senior vice-president
of theme park and tenancy Thomas Ng, land clearing is
nearly completed and construction of the foundation will
start very soon. The theme park installations will take place
in phases from next year, with a soft opening planned for
December next year.
Work has reportedly started on the RM200 million
Genting Premium Outlets, which will be Southeast Asia’s first
hilltop premium outlet centre. The 600,000 sq ft development
offers a leasable area of about 300,000 sq ft, inclusive of
4,000 parking bays, and is expected to be completed in the
E
last quarter of 2016.
CHU JUCK SENG
The story of Genting
In 1964, the late Tan Sri Lim Goh Tong was working on a hydroelectric
power plant at a hill resort in Cameron Highlands when he got the
inspiration for Genting. The hill resort, which was mainly patronised by
British colonists seeking refuge from the tropical heat, gave him the
idea to build a highland resort near Kuala Lumpur.
He later found an ideal site at the peak of Gunung Ulu Kali, one of the
highest spots on the Pahang-Selangor border. On April 27, 1965, he set
up a company known as Genting Highlands Bhd with the late Tan Sri
Mohammed Noah Omar. Between 1965 and 1970, they obtained approval
for the alienation of 12,000-acre and 2,800-acre tracts from the Pahang
and Selangor governments respectively, according to the Genting Group.
Lim devoted all his time and energy, and pooled all his resources into
creating the highland resort with roads, proper infrastructure, clean
water and electricity supply.
The Highlands Hotel (now known as Theme Park Hotel) was
completed in 1971.
In 1997, the 3.38km Genting Skyway cable car system was installed
to provide transport to the hilltop from Gohtong Jaya.
To date, Genting Highlands Resort has five hotels – Genting Grand
Hotel, Maxims Hotel, Resort Hotel, Theme Park Hotel and First World
Hotel as well as two apartments (Ria and Kayangan) and Awana Golf
and Country Resort.
The 7,351-room First World Hotel was recently named the world’s
largest hotel by the Guinness World Records.
Lim passed away on Oct 23, 2007. According to news reports, the
patriarch’s funeral was a grand affair that saw close to 20,000 people
pay their respects, either in person or through tributes. The wreaths
took up a 1km stretch of road.
Lim’s vision has paved the way for many other developers to
complement the resort with projects such as Genting View Resort and
Genting Permai Resort, located at the foothills, and Amber Court, which
is located a stone’s throw from First World Hotel.
His son, Tan Sri Lim Kok Thay, is currently chairman and chief
E
executive of Genting Bhd.
P4
SEPTEMBER 21
2015
property
the edge-mah sing millionaire contest
PICTURES BY PATRICK GOH
(From left) Danny, Lily, Crystal, Brian, Leong, Mah Sing’s marketing and special projects deputy general manager Rachel Leong, Au and Ng
The Edge-Mah Sing Millionaire Contest winner
chooses Icon Residence at Mont’Kiara
MAH SING GROUP
B Y TAN A I LENG
I
t wasn’t an easy decision but after careful consideration,
Brian Lim Choon Wah — the winner of The Edge - Mah
Sing Millionaire Contest — has decided on his dream
home. He redeemed his RM1 million cash voucher for
a 1-bedroom condominium unit in Icon Residence at
Mont’Kiara, Kuala Lumpur.
The contest — a historic collaboration between Mah
Sing Group Bhd and The Edge Media Group — has enriched
not one, but two people, as Brian decided to share ownership with his only and younger sister, Crystal Lim Ai Ping.
The siblings were accompanied by their parents, Danny
Lim and Lily Yoong, to sign the sale and purchase agreement at their dream home on Level 13A of Icon Residence
last Thursday.
They choose a unit with a built-up of 1,115 sq ft, which
comes with a kitchenette fitted out with appliances and
cabinets.
Mah Sing Group’s group managing director and chief
executive Tan Sri Leong Hoy Kum and CEO Ng Chai Yong,
together with The Edge Communications Sdn Bhd and The
Edge Property Sdn Bhd managing director Au Foong Yee,
witnessed the signing.
“I want to thank Mah Sing Group and The Edge for
organising this wonderful contest, giving me a once-ina-lifetime opportunity to own this beautiful home,” says
the 32-year-old IT project manager, who was so excited
he could not sleep the night before the signing.
The interior of a show unit
Icon Residence in Mont’Kiara was completed in June
Brian says he had a long discussion with his family
about which property to choose. Their choices included
Ferringhi Residence in Penang, M City in Jalan Ampang,
D’sara Sentral in Sungai Buloh and Southville City in Bangi.
Crystal says it was a difficult decision as Mah Sing
Icon Residence
Icon Residence Mont’Kiara is located in one of Klang Valley’s
most sought-after locations. This upscale development offers excellent accessibility due to its strategic location adjacent to a comprehensive network of highways and access
roads that include the SPRINT Expressway, Penchala Link,
North-South Expressway, Damansara-Puchong Expressway
and Duta-Ulu Kelang Expressway.
The Kuala Lumpur city centre is just 15 minutes away
while popular hotspots such as the commercial hub of
Bukit Bintang, and corporate centres of Jalan Sultan Ismail,
Jalan Tun Razak and Jalan Ampang, are a 25-minute drive.
The development comprises three towers with 290 residential units, with built-ups ranging from 1,100 to 4,000 sq ft.
Icon Residence offers a range of 1- to 4+1 bedroom units as
well as six penthouses. There are only two to six all-corner
units per floor, offering contemporary interior layout designs.
Icon Residence provides residents with comprehensive facilities such as a sky garden lounge, picnic lawn,
herb garden, cascading pond, gymnasium and meditation
E
and yoga deck.
had offered them so many good properties. After nearly
a month of deliberation, they decided on Icon Residence.
Brian says as Mont’Kiara is considered a hotspot in the
Klang Valley, he believes Icon Residence will enjoy very
good capital appreciation, not only for its location and
nearby amenities but also for the eye-catching design.
“I plan to stay in this new unit. Although other options
such as renting it out had crossed my mind, I decided to
keep it as my new home and enjoy all the facilities here,”
he adds.
Leong says the contest not only gives the winner an
opportunity to own a house, but a good start to move forward and achieve new milestones.
Icon Residence, he adds, is a good choice as it is located in one of the most sought-after locations in the Klang
Valley. The condo has enjoyed a take-up rate of 94% since
its launch in 2012. The current average selling price of
the development, which was completed in June, is about
RM1,000 psf.
Au hopes his first “pot of gold” will be a good start for
him and help him to achieve even more in the future.
The online contest, which started from June 20 to July
31, attracted thousands of participants who hoped to win
a RM1 million cash voucher to purchase any Mah Sing
Group residential property in Malaysia.
The 21 lucky finalists battled it out at the grand finale
on Aug 22 at the Southville City @ KL South sales gallery
in Bangi. Brian successfully went through four rounds of
E
elimination challenges to emerge the winner.
property
|
P5
SEPTEMBER 21
2015
KLANG VALLEY OFFICE monitor (2Q2015)
Office market remains firm in 2Q2015
B Y H ANN A H R A FE E
T
he office markets in Kuala Lumpur
and Beyond Kuala Lumpur (Selangor) remained firm in 2Q despite
completions with a total NLA of
1.13 million sq ft, according to the
digitaledge/Knight Frank Klang
Valley Office Monitor 2Q2015.
“The market remains challenging. Having
said that, there are companies looking for
opportunities ... following the depreciation
of the ringgit. These companies are exploring consolidation as well as asset acquisition,” says Knight Frank Malaysia managing
director Sarkunan Subramaniam.
The review period saw the completion of
Naza Tower (NLA: 506,000 sq ft), Crest Jalan
Sultan Ismail (NLA: 190,000 sq ft) and Menara Centara (NLA: 166,000 sq ft), bringing
the cumulative supply of office space in Kuala
Lumpur City to about 49.82 million sq ft. There
were no completions in KL Fringe, so its cumulative supply remained at 21.72 million sq ft.
The cumulative supply of office space Beyond Kuala Lumpur (Selangor) was recorded
at 17.73 million sq ft following the completion of Top Glove Tower (NLA: 267,000 sq
ft), a Grade A office building in Shah Alam.
As at 2Q, the total cumulative supply of
purpose-built office space in both Kuala
Lumpur and Beyond stood at 89.21 million
sq ft, and is expected to grow by about 4.8%
to 93.53 million sq ft by the end of 2015.
“With prolonged political uncertainties in
the country, market sentiment and confidence
remain weak and low. Potential investors and
companies who have plans to invest in the
country or to expand their work space are
likely to adopt a wait-and-see attitude before
committing,” says Sarkunan.
According to the monitor, the overall occupancy rate in KL City dipped 1.5% quarter-on-quarter (q-o-q) to 83.9% due to the
newly completed Naza Tower. The average
occupancy rate dropped 2.6% q-o-q to 75%.
The review period saw the average rental
rate in both KL City and KL Fringe improve marginally to RM6.18 and RM5.71 psf respectively.
Beyond Kuala Lumpur, the average rental rate
remained stable with no change at RM4.19 psf.
“Interest level in the oil and gas (O&G) segment has declined significantly following the
plunge in crude oil prices, which has consumed
their earnings, with some already undertaking
[cost] cutting measures,” adds Sarkunan.
The quarter saw net absorption in Kuala
Lumpur of about 315,596 sq ft, which was a
sharp increase of 89.2% q-o-q but a decline
of 50.78% y-o-y. For Beyond Kuala Lumpur,
net absorption was recorded at 69,371 sq ft.
As for the outlook for 3Q, overall occupancy and rental levels are expected to drop
due to the high level of incoming supply, par-
Average Rental Rate (RM PER SQ FT/MTH)
Location
Grade
Old Central Business District
Overall
82
73
64
2012
1Q
2013
1Q
2Q
Prime A+
11.00 11.50
Grade A
6.23 6.15
Grade B
4.66 4.66
Average-GT
5.54 5.41
Change (%)
-5.55 -2.66
Grade A
4.60 4.75
Grade B
3.72 3.80
Average-CBD 4.22 4.39
Change (%)
7.42 3.99
Average
5.19 5.21
Change (%)
-0.50 -0.23
11.38
6.25
4.90
5.70
5.47
5.10
4.03
4.62
2.86
5.50
5.27
10.25
6.64
5.06
6.01
2.50
5.26
4.30
4.83
2.84
5.81
2.55
10.33
6.64
5.06
6.02
0.10
5.26
4.30
4.83
0.00
5.81
0.08
Grade A
4.75 4.85
Grade B
4.00 4.00
Average-DH
4.25 4.24
Change (%)
-1.16 0.62
Grade A
6.00 6.00
Grade B
5.70 5.80
Average-KLS 5.90 5.93
Change (%)
-8.29 0.56
Grade A
5.46 5.59
Grade B
4.30 4.15
5.29 5.27
Change (%)
-4.02 -0.49
Average
5.02 4.99
Change (%)
-4.12 -0.17
4.95 5.00 5.00
4.14
4.21 4.21
4.32 4.39 4.39
1.10
0.51 0.00
6.00 6.27 6.44
6.00
6.10 6.10
6.00 6.24 6.40
1.12 -2.07 2.52
5.47 5.60 5.60
4.60 4.78 4.78
5.28 5.43 5.43
0.39
1.48 0.00
5.07 5.32 5.38
1.58 2.36 1.14
3Q
4Q
2014
1Q
2Q
3Q
2015
1Q
4Q
2Q
10.42 10.50
6.68 6.68
5.06 5.06
6.03 6.04
0.21 0.10
5.26 5.26
4.30 4.30
4.83 4.83
0.00 0.00
5.83 5.83
0.18 0.08
10.75 10.83 10.92 11.00
6.96 6.96 6.99 6.99
5.10 5.10 5.10 5.10
6.20 6.21 6.23 6.25
2.75 0.09 0.27 0.36
5.42 5.42 5.42 5.42
4.40 4.40 4.40 4.40
4.97 4.97 4.97 4.97
2.76 0.00 0.00 0.00
5.99 6.00 6.01 6.04
2.82 0.08 0.24 0.38
11.33 11.33
7.21 7.21
5.15 5.15
6.38 6.39
2.13 0.03
5.61 5.61
4.53 4.53
5.13 5.13
3.24 0.00
6.17 6.18
2.29 0.03
5.03 5.12 5.20
4.29 4.29 4.29
4.51 4.54 4.56
1.46 0.55 0.55
6.53 6.48 6.54
6.20 6.20 6.20
6.49 6.46 6.51
0.43 -0.52 0.77
5.72 5.73 5.75
4.85 4.85 4.85
5.54 5.55 5.56
1.84 0.19 0.19
5.49 5.52 5.54
1.36 0.52 0.44
5.40
4.37
4.68
2.07
6.78
6.30
6.73
3.06
5.90
4.95
5.70
2.27
5.70
2.46
5.43
4.37
4.69
0.21
6.78
6.30
6.73
0.00
5.90
4.95
5.70
0.00
5.71
0.04
4.34
4.34
4.71
4.08
4.4
3.83
3.63
4.7
3.92
3.5
4.17
4.19
4.76
4.08
4.41
3.8
3.63
4.7
3.91
3.5
4.17
4.19
KL Fringe
Damansara Heights / TTDI
KL Sentral
Mid Valley City / Bangsar / Pantai
Average-MVC/Ban/Pan
Overall
5.00
4.24
4.41
0.51
6.48
6.10
6.43
0.49
5.61
4.78
5.44
0.19
5.40
0.34
4.92
4.24
4.45
0.77
6.51
6.10
6.46
0.46
5.61
4.78
5.44
0.00
5.42
0.32
5.28
4.29
4.59
0.55
6.57
6.20
6.53
0.38
5.77
4.85
5.57
0.28
5.57
0.37
Beyond KL (Selangor)
Petaling Jaya Commercial District
Bandar Utama / Mutiara Damansara /
Damansara Perdana /
Damansara Uptown
Ara Damansara / Tropicana / Kelana Jaya
Petaling Jaya overall
Average
Subang Jaya Commercial District
Puchong
Bandar Sunway
Subang Jaya overall
Average
Shah Alam
Cyberjaya
Overall
Note: Tracking of Beyond KL (Selangor) only commenced in 1Q2015
ticularly in 2H when about 4.3 million sq ft
of office space is expected to be completed)
together with the effect of the Goods and Services Tax and challenging office sentiment.
“Moving forward, market sentiment may remain weak due to a slowing economy, further
depreciation of the local currency and political
uncertainties, among other reasons,” he says.
Nonetheless, the investment market is
expected to remain active. With several good
grade buildings in the market for sale, offering yields of 5% to 6%, and the weak ringgit,
there are opportunities for funds and investors, both local and foreign.
“[However], there will be fewer leasing
enquiries in general as the market awaits
closure in response to the current political
concerns that are affecting confidence levels
and market outlook. Still, with cost-cutting
measures by O&G companies, and fewer
contracts in general, there will be more work
space available for subletting,” says Sarkunan.
There will also be more pressure on occupancy levels due to more impending completions, he adds.
Meanwhile, rental rates for well-located good
grade offices “are expected to hold firm in the
short term”, and landlords of newly completed
Mid Valley
City/Bangsar
/Pantai
Golden
Triangle
Damansara
Heights
Central
Business
District
Overall
(KL Fringe)
Overall
(KL City)
KL Sentral
12.0
1Q 2 3 4 1Q 2 3 4 1Q 2 3 4 1Q 2 3 4 1Q 2 3 4 1Q
‘10
‘11
‘12
‘13
‘14
‘15
Golden Triangle
Grade A
5.6
115.5
KL Sentral Grade A
Overall
(KL City)
Mid Valley City/ 109.0
Bangsar/Pantai
7.2
4.0
55
122.0
Prime A+
8.8
Steady rents amid lower
occupancy
Overall rental rates in Kuala Lumpur remained
steady despite the weakening market and
poor sentiments. Grade A rents in KL City
— Golden Triangle (GT) Prime A+ (RM11.33
psf), GT Grade A (RM7.21 psf) and central
business district (CBD) Grade A — were unchanged from the previous quarter.
CO N T I N U E S N E X T PAG E
2005=100
RM psf/month
Golden Triangle
10.4
buildings with none or limited pre-leasing commitments are expected to offer more incentives
to attract tenants in a highly competitive market.
Rent index
Average rental rate
%
91
2011
1Q
KL City
Golden Triangle
Average occupancy rate
100
2010
1Q
Grade A
Overall
(KL Fringe)
Central
Business
District Grade A
Damansara
Heights Grade A
1Q 2 3 4 1Q 2 3 4 1Q 2 3 4 1Q 2 3 4 1Q 2 3 4 1Q
‘10
‘11
‘12
‘13
‘14
‘15
Central
Business
District
Overall
((KL City)
Golden Triangle
KL Sentral
Overall
(KL Fringe)
Damansara
Heights
Mid Valley City/
Bangsar/Pantai
102.5
96.0
1Q 2 3 4 1Q 2 3 4 1Q 2 3 4 1Q 2 3 4 1Q 2 3 4 1Q
‘10
‘11
‘12
‘13
‘14
‘15
P6
SEPTEMBER 21
2015
property
KLANG VALLEY OFFICE monitor (2Q2015)
|
Overall occupancy rate in KL dipped from the last quarter
ABDUL GHANI ISMAIL
F R O M P R E V I O U S PAG E
Concurrently, Grade A rental rates in KL
Fringe remained unchanged for the most part.
KL Sentral (KLS) Grade A and Mid Valley City/
Bangsar/Pantai Grade A were at RM6.68 psf
and RM5.90 psf, respectively. Still, there was
a 0.56% increase to RM5.43 psf from the last
quarter for Damansara Heights (DH).
The average rental rate for Beyond Kuala
Lumpur in 2Q was RM4.19 psf q-o-q. Likewise, rental rates for Petaling Jaya (RM4.41
psf), Subang Jaya (RM3.91 psf), Shah Alam
(RM3.50 psf) and Cyberjaya (RM4.17 psf) were
more or less the same as in the last quarter.
“For 2Q, there were marginal movements
in the average rental rate and occupancy
level in KL City, KL Fringe and Beyond KL,”
says Sarkunan.
Meanwhile, the overall occupancy rate
in Kuala Lumpur dipped from the last quarter, to 83.9% from 85.2%. “Naza Tower, with
506,000 sq ft NLA, has yet to achieve significant occupancy,” he notes. The average CBD
occupancy has risen to 89.5% from 88.5% in
the previous quarter. The GT recorded a 2%
decline, from 84.5% to 82.8%.
Nonetheless, the occupancy rate in KL
Fringe improved across all its categories, with
the overall average up by 1.3% to 88.9%. KL
Fringe covers Damansara Heights, KL Sentral,
and Mid Valley City/Bangsar/Pantai, where
occupancy has increased by 1.7%, 0.5%,
and 1.8%, respectively. “The decentralisation trend continues,” says Sarkunan. “There
were notable movements and expansions in
selected office buildings in these locations.
For example, in KL Sentral, space committed during the review period totalled about
92,000 sq ft, including Menara Allianz Sentral, Nu Tower 2 and One Sentral.”
For Beyond KL, the overall occupancy rate
declined to 75% from 77% in the first quarter.
Petaling Jaya has recorded 82.1%, thanks
to the rising Petaling Jaya commercial district
(89.4%) and Ara/Damansara/Tropicana/Kelana
Rent index
Index (2005=100)
KL City
Golden Triangle
Old Central Business District
Overall
2010
1Q
2011
1Q
2012
1Q
1Q
2013
2Q
3Q
100.0
100.0
100.0
97.7
104.0
99.8
103.0
109.5
105.4
108.7
114.5
111.3
108.8
114.5
111.4
100.0
100.0
100.0
100.0
99.8
100.6
99.5
99.6
101.7
101.7
99.8
101.2
103.3
105.8
102.5
106.1
103.3
108.5
102.5
107.3
4Q
1Q
2Q
2014
3Q
4Q
1Q
2015
2Q
109.0
114.5
111.6
109.1
114.5
111.7
112.1
117.7
114.8
112.2
117.7
114.9
112.5
117.7
115.2
112.9
117.7
115.6
115.3
121.5
118.3
115.4
121.5
118.3
103.8
109.0
102.7
107.7
104.6
109.5
102.7
108.0
106.1
110.0
104.6
109.5
106.7
109.4
104.8
110.1
107.3
110.3
105.0
110.5
107.9
110.7
105.3
111.0
110.1
114.1
107.7
113.7
110.4
114.1
107.7
113.7
4Q
1Q
2015
2Q
KL Fringe
Damansara Heights
KL Sentral
MVC / Ban / Pan
Overall
Average occupancy rate (%)
Location
Grade
2010
1Q
2011
1Q
2012
1Q
2Q
2013
3Q
4Q
1Q
Prime A+
99.0 99.0
Grade A
92.7 74.6
Grade B
93.3 83.9
Average-GT
95.4 84.5
Change (%)
1.5 -11.0
Grade A
95.9 70.7
Grade B
100.0 95.0
Average-CBD 97.0 75.4
Change (%)
2.1 -22.2
Average
95.7 82.8
Change (%)
1.3 -13.2
99.9
76.6
85.7
85.7
-1.9
82.1
74.0
79.2
-6.1
84.6
-2.6
85.7 85.7
78.5 79.5
84.4 84.0
82.6 82.8
0.1
0.2
81.5 81.1
69.6 73.9
77.2 78.5
-2.5
1.7
81.7 82.1
-0.4
0.5
92.1
80.8
83.3
84.8
2.5
80.8
74.0
78.3
-0.2
83.8
2.0
92.1
83.5
83.8
86.0
1.4
80.9
72.9
78.0
-0.4
84.7
1.1
92.1
79.3
83.8
84.4
-1.9
86.7
89.4
87.6
12.4
84.9
0.3
92.1 92.9 93.3
80.5 80.2 78.4
83.0 84.9 84.5
84.5 85.3 84.5
0.2
0.9 -1.0
86.8 86.5 86.7
80.8 92.5 92.0
84.6 88.7 88.6
-3.5
4.8 -0.1
84.5 85.9 85.2
-0.4
1.6 -0.8
94.5
78.7
83.3
84.5
0.0
86.7
91.8
88.5
-0.1
85.2
0.0
95.2
74.5
83.3
82.8
-2.0
87.7
92.5
89.5
1.1
83.9
-1.5
95.2 95.5 98.7 97.9
83.4 78.5 84.2 82.1
89.1 85.9 90.5 89.0
0.2
0.9
0.8 -1.7
95.3 95.3 63.2 64.1
98.0 98.0 92.0 92.0
97.1
97.1 72.4 71.9
0.0
0.0 -25.3 -0.7
84.1 72.5 89.7 90.6
52.5 88.0 95.6 95.1
76.6 78.2
91.9 92.2
-5.6 -12.6
2.6
0.4
86.2 83.9 85.0 84.1
-2.4 -6.9 -7.0 -1.1
97.2
81.9
88.5
-0.5
66.6
92.0
73.7
2.5
94.1
95.8
94.7
2.7
85.7
2.0
88.8
84.5
86.8
-2.0
59.3
92.0
67.7
-8.2
93.8
95.8
94.5
-0.2
82.7
-3.6
89.6
85.7
87.8
1.2
59.6
92.0
67.9
0.3
96.4
93.1
95.2
0.7
83.2
0.7
89.6 90.4 89.0
85.7 85.7 86.5
87.8 88.1 87.8
0.0
0.4 -0.4
62.5 65.4 75.1
92.0 92.0 92.0
68.8 71.0 78.7
1.3
3.3 10.8
97.0 96.4 95.9
92.7 92.7 92.5
95.4 95.0 94.7
0.2 -0.4 -0.3
82.6 83.4 86.5
-0.8
1.1
3.7
88.5
86.9
87.7
-0.1
77.9
92.0
80.9
2.8
95.9
94.8
95.5
0.9
87.8
1.5
91.8
86.3
89.2
1.7
78.4
92.0
81.3
0.5
97.8
96.1
97.2
1.8
88.9
1.3
87.7
89.4
92.5
92.2
1Q
2014
2Q
3Q
KL City
Golden Triangle
Old Central Business District
Overall
KL Fringe
Damansara Heights
KL Sentral
Mid Valley City / Bangsar / Pantai
Grade A
Grade B
Average-DH
Change (%)
Grade A
Grade B
Average-KLS
Change (%)
Grade A
Grade B
Average-MVC/Ban/Pan
Overall
Change (%)
Average
Change (%)
94.0
93.5
93.8
1.0
93.0
96.0
94.9
3.2
81.4
70.0
78.6
0.1
88.2
2.0
Beyond KL (Selangor)
Petaling Jaya Commercial District
Bandar Utama / Mutiara Damansara /
Damansara Perdana /
Damansara Uptown
Ara Damansara / Tropicana /
Kelana Jaya
Petaling Jaya overall
Subang Jaya Commercial District
Puchong
Bandar Sunway
Subang Jaya overall
Shah Alam
Cyberjaya
Overall
Average
Average
58.8 59.2
81.4 82.1
87 83.6
32.5 32.9
73.7 87.7(1)
63.3 68.3
81.8 54.3(2)
77.2
71.7
77
75
Note: (1)The significant improvement in the overall occupancy for the Bandar Sunway locality is due to the entry of new tenants which include Linde, and
Energizer – taking up > 36,000 sq ft of space at The Pinnacle.
(2)
The overall occupancy for Shah Alam declined to circa 54.3% following the recent completion of Top Glove Corp Bhd’s new flagship building,
Top Glove Tower in Setia City. The building which offers 240,466 sq ft of lettable area (office) and 2 floors of retail space (26,564 sq ft) has yet to
achieve significant occupancy.
Sarkunanan:
For 2Q, there
were marginal
movements in
the average
rental rate and
occupancy
level in KL City,
KL Fringe and
Beyond KL
Jaya (59.2%), and stability in Bandar Utama/
Mutiara Damansara/Damansara Perdana/Damansara Uptown (92.2%). Subang Jaya saw
an overall increase to 68.3% from the previous
quarter, with Subang Jaya commercial district,
Puchong and Bandar Sunway recording 83.6%,
32.9% and 87.7%, respectively.
However, there was a considerable decline
in occupancy levels in Shah Alam, dropping
from 81.8% to 54.3%. The decline followed
the recent completion of Top Glove Corp
Bhd’s new flagship building, Top Glove Tower in Setia City. The building, which offers
240,466 sq ft of lettable area (office) and
two floors of retail space (26,564 sq ft) has
yet to achieve significant occupancy.
“Generally, Shah Alam is not a well-established office location compared with Petaling Jaya, Subang Jaya and Bandar Sunway.
Unlike Shah Alam, these vibrant commercial
locations and established townships are well
populated and enjoy good connectivity and
accessibility — these areas also have public
transport links such as the LRT (existing and
extensions), KTM Komuter and BRT. These
factors are important for staff recruitment
and rentention,” says Sarkunan.
“Lesser-known office areas such as Shah
Alam and Puchong attract different classes
of tenants. This is due to location, accessibility, connectivity, office grade and so on,” he
adds. Cyberjaya also experienced a decline,
from 77.2% in the last quarter to 71.7% in 2Q.
Noteworthy transactions and
movements
In 2Q, there were three noteworthy transactions — Menara Raja Laut (NLA: 397,939 sq
ft) in Kuala Lumpur for RM553 psf, Wisma
AmanahRaya (NLA: 153,908 sq ft) in Kuala
Lumpur for RM507 psf, and 22 storeys of
stratified parcels within Iconic Office (Block
N), Empire City @ Damansara (NLA: 238,932
sq ft) in Petaling Jaya for RM650 psf.
In addition, there were a few notable
movements in 2Q. In KL City, they were at
Menara Binjai, Cap Square Tower and Naza
Tower among others. In KL Fringe, there
were movements in Sunway Tower, Menara
Allianz Sentral, Nu Tower 2 and One Sentral.
In Beyond KL, movements were recorded
in Prima 6 in Cyberjaya and The Pinnacle
in Sunway.
BAE Systems Detica (M) Sdn Bhd will expand its office in Menara Binjai to 11,200 sq
ft, while Tenaga Nasional Bhd will expand its
office in Nu Tower 2 by 28,000 sq ft. However,
Ranhill Worley Parsons is looking to downsize
its office in Sunway Tower by 38,000 sq ft.
In terms of new tenancy, Nettium Sdn Bhd
will take up 11,200 sq ft in CapSquare Tower,
while Naza Group will take up 25,000 sq ft in
Naza Tower. Danajamin Nasional Bhd will take
up 24,000 sq ft in Menara Allianz Sentral and
Nu Tower 2, while Pelaburan Mara Bhd will take
up 40,000 sq ft in 1 Sentral. Ansell Malaysia
Sdn Bhd is set to take up 47,000 sq ft in Prima
6, while Linde, Energizer and a few others are
set to take up 36,000 sq ft in The Pinnacle.
CO N T I N U E S O N PAG E 9
SEPTEMBER 21, 2015
P7
AUGUST 10
2015
HOME
MY
EXHIBITION + AWARDS
CONCOURSE AREA
GROUND FLOOR
BANGSAR VILLAGE 2
KUALA LUMPUR
ORGANISED BY
IN ASSOCIATION WITH
AWARDS PRESENTATION
3 OCTOBER 2015 (SATURDAY)
EXHIBITION
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P8
SEPTEMBER 21
2015
property
auction market
PATRICK GOH
The auction market provides an opportunity for buyers to purchase properties in property hot spots like Bangsar
Demand outstrips supply of auction properties
KENNY YAP
ABDUL GHANI ISMAIL
NG CHAN MAU
B Y Z ATIL H US N A WAN FAU Z I
T
he supply of foreclosed properties up for auction
has dropped as banks have foreclosed on fewer
homes since 2012, according to several property auctioneers. This shortage is worrying, as
demand for auction properties is still very high,
they tell digitaledge Weekly.
Property auctioneers say the declining number of foreclosures could be attributed to homebuyers being more capable of servicing their loans on time and potential purchasers
being able to afford more expensive properties.
The declining number of homes put up for auction by banks
is also linked to better personal financial management, while
more stringent loan regulations have reduced the number of
mortgages approved and, consequently, defaults, they add.
However, auctioneers are optimistic about the auction
market, especially with properties that were bought under
the developers’ interest bearing scheme (DIBS), which was
abolished last year. Under the scheme, which consultants
estimate drove up the prices of properties by 5% to 25%,
buyers must service interest on loans for completed properties that, depending on the interest rates, may be even more
expensive than usual.
Affordability drives demand
Foong Chon Wai, a licensed auctioneer with Ng Chan Mau
& Co Sdn Bhd, describes the auction market as livelier due
to higher demand compared with previous years, as it provides more affordable options than what’s offered on the
primary market.
“People are more aware of the auction market, where
they’re able to buy properties that are being auctioned [at
a lower price] compared with those in the primary market.
As we know, many developers are launching their products
at above RM500,000, so affordability has become an issue
for those who want to purchase a property,” Foong explains.
Foong adds that the average number of bank foreclosures
he has received in the first half of this year (1H2015) has decreased by 70% from the same period last year.
Executive director of Property Auction House Sdn Bhd,
Danny Loh, has also seen a 60% decline in the number of cases submitted to the auction house over the past three years.
“There aren’t many affordable houses nowadays, with most
new launches in the urban areas priced above RM400,000.
Such prices are beyond the means of the general public. So,
buyers look for bargains in the auction market,” says Loh.
“Buyers understand what is a good buy, so when they see a
property at what they consider an affordable or good price,
these are sold during the first auction itself. Now, we see
fewer cases of homes in repeat auctions.”
Founder and CEO of Ehsan Auctioneers Datuk Abdul Hamid
P V Abdu says there’s always a good crowd at every auction.
“This is regardless of the respective state’s restrictions —
Loh says it’s hard to gauge the
prospects of the auction market
because it depends on bank
foreclosures
Hamid says Johor has one of the liveliest
markets, mainly because of the higher
purchasing power of its bidders
for example, in Penang, you can only purchase one property
at auction and you cannot put it on sale for the next 10 years.
This is the state government's action to curb the speculators'
market. The event room when auctions are held is always
full,” says Hamid.
He reveals that Johor has one of the liveliest auction markets, mainly because of the higher purchasing power of its
bidders compared with those in the Klang Valley and Penang.
“Most Singaporeans, especially investors, prefer to buy
properties in Johor as prices in Singapore are very high,”
says Hamid.
“A number of business owners are buying properties in
Johor and using them as workers’ hostels. All of these factors have made Johor a livelier auction market compared
with the Klang Valley and Penang.”
Location matters
Aside from affordability, location is another pull factor for auctions, says Property Auction House’s Loh. “You get a chance
to purchase properties in established neighbourhoods like
Bangsar, where new launches are likely to be pricier.”
Ehsan Auctioneers’ Hamid says because new launches
within established areas are very expensive, and quite unlikely
due to scarcity of land, the auction market provides an opportunity for buyers to snap up these properties for a good price.
Loh says the auction market is also a good place to
source for land and commercial buildings. When bidding
for properties within a property hotspot like Bangsar, there
are several reasons bidders are willing to pay above market
price, he explains.
Foong says people are now more
aware of auctions, where they can buy
property at a lower price
“It’s natural for people to buy above market price when
the property is what they want, and it’s also because properties within certain hotspots are limited so they grab when
they can,” says Loh.
Ng Chan Mau’s Foong notes that sometimes, auction
properties can create new price benchmarks compared with
similar properties in the secondary market.
Foong recalls that a 2-storey shop lot in Bangsar was sold
for RM2 million two years ago, which was more than the market price at the time. “It creates a new price benchmark for
properties in the respective areas, which usually happens in
popular areas like Bangsar.”
Moving forward, Foong believes the number of bank foreclosures will increase again in the near future as properties
purchased under the DIBS from two years ago are completed. This is because buyers who are unable to cope with
their loans are unable to dispose of their properties to pay
off their mortgages.
While Loh is unsure how the market will perform, he hopes
the auction market will take a turn for the better in the future.
“Unlike the property market, it’s quite difficult to gauge the
future prospects of the auction market because it depends
on the banks giving out foreclosures,” he says.
Hamid notes that the performance of the auction market varies in locations.
“I can’t give a general outlook for the auction market as it
depends on the location. Popular locations such as Bangsar
and Puchong are most likely to find buyers, while locations
further out like Bukit Beruntung may take longer to sell, translating into slower sales for the area.”
property
P9
SEPTEMBER 21
2015
offshore
US investors snapping up new homes for rentals
I
CNBC
t was widely deemed a temporary play: Large-scale investors buying thousands of discounted foreclosed properties
during the worst of the US housing crash and turning them
into single-family rentals. When home prices recovered,
they would surely sell them for a hefty profit. The housing
market is recovering, albeit more slowly than expected.
Foreclosure volume is way down and home prices are way
up, but these investors are not selling.
They are buying more, and now they are buying new.
“I actually think that we’re coming into perhaps the most
compelling three or four years that I’ve seen since I’ve been
in the business,” says Doug Brien, CEO of Starwood Waypoint
Residential Trust.
Brien, standing in front of one of his company’s rental
homes in a brand-new housing development in Lawrenceville,
Georgia, near Atlanta, says builders are the next frontier for
institutional investors.
“For us operationally, being able to have a brand new
home that typically has a warranty, that works well for us.
We can also customise floor plans that work for the business,” adds Brien.
Starwood Waypoint, which launched its business seven
years ago, now owns more than 16,000 single-family rentals, the vast majority of which were foreclosures. So
far, it has purchased about 200 brand new homes
from builders, with an average price point of around
US$180,000. These homes represent about 5% of the
real estate investment trust’s portfolio.
“I think the institutional capital is still looking at
this very carefully, because there’s a belief, and I support
that belief, that it is a long-term hold and there’s yield and
there’s appreciation to be had,” says Tim Sullivan, practice
leader at Meyers Research. “But the real challenge for capital
now, for the institutional capital sources, is that the massive
low-lying fruit is gone.”
That fruit, cheap foreclosures, offered investors a relatively low-risk play, because they could buy homes at well
below the cost of replacement, and not only would they see
|
The nation’s homeownership rate, which continues to fall, is
now at the lowest in half a century
rental revenue but also property price appreciation. As this
new interest develops, however, builders are starting to offer institutional buyers bulk discounts. Not only does it help
builders grow revenue, but it gets them closer to normal
levels of production, which has been a real struggle thus far.
Miami-based Lennar Corp, one of the nation’s largest
homebuilders, is experimenting with the single-family rental
market itself. It made a smart hedge during the housing crash
by putting up multifamily apartment buildings. It now
has 20,000 apartment units under construction, according to company reports. This year, Lennar took
that one step further, opening its first single-family
rental community in Sparks, Nevada.
“One of the big criticisms of the single-family rental
world is that they’re all kind of one-offs in unique locations
with unique amenities. The scalability of the management
is what gets it complicated. This makes it much more like
an apartment community in that it’s all together and can be
managed by a single entity,” says Stuart Miller, Lennar’s CEO.
Miller says Lennar will probably start another rental community, or possibly two.
“I’m surprised more builders haven’t already taken the
plunge,” says Sullivan.
Miller didn’t say if Lennar would start selling to large-scale
investors, but Brien says he has purchased some of Starwood
Waypoint’s homes from at least one public builder. Mostly,
he targets smaller, local builders.
“In some instances, we’re going in and buying the first 10%
of a development, in some instances, we’re coming in and buying the last 10% of a development, and what they’re trying to
do is build more homes, and we’re enabling them to increase
their volume and their sales velocity by buying homes,” says
Brien. “We’re talking to bigger builders who want to set up a
buying programme with us, where we take down certain percentages of different developments and communities that they
have around the country, and that’s pretty exciting.”
Brien claims demand is stronger than ever, especially for
new product. When Starwood Waypoint first began renting
its homes, the vast majority of its tenants had gone through
foreclosure and had no choice but to rent. Today less than
half of his tenants went through foreclosure; they are renters
by choice, and they are willing to pay a premium for newly
built homes.
In many of the nation’s actively selling, master-planned
communities, which don’t build homes just for rent, there are
a significant number of renters anyway.
“Our research, which we confirmed with the CEOs of several of the institutional investors, shows that these renters
live in detached homes primarily because that is the preferred lifestyle. Most of them did not even consider renting
an apartment,” writes John Burns of John Burns Real Estate
Consulting in a recent report. “They prefer to live in a detached home and are renting either because of necessity,
flexibility or choice.”
The nation’s homeownership rate, which continues to fall,
is now at the lowest in half a century. While home sales are
improving, both homeowners and renters are feeling less
confident about the housing market now than they were even
at the beginning of this year, according to online real estate
database company Zillow. Fewer overall say now is a good
E
time to buy. — CNBC
KLANG VALLEY OFFICE monitor (2Q2015)
Indonesia’s Mulia Group planning TRX development
F R O M PAG E 7
Notable announcements
Hong Leong Bank Bhd is disposing of a freehold, 27-storey
office building in Jalan Raja Laut, Kuala Lumpur, to Hong
Leong Assurance Bhd for RM220 million (about RM552.85
psf on NLA). The property is part of the assets and liabilities
of the former EON Bank Bhd that were vested in HLB in July
2011, in light of the EON Bank takeover.
Meanwhile, e-government services provider M.Y. EG
Services Bhd (MyEG) plans to borrow RM108.74 million to
acquire part of an office tower at Empire City, Damansara
Perdana, Petaling Jaya. It has proposed to acquire 22 storeys of a 35-office tower known as Iconic Office at Block N
for RM155.35 million (or RM650 psf on lettable area), that
is expected to be built by December 2015.
Goldis Bhd is putting its nine-year-old GTower on the market
for RM1.2 billion. GTower is an integrated building with 1.4
million sq ft in gross built-up and 820,000 sq ft of NLA. It is
Malaysia’s first green commercial building and was awarded
Singapore’s Building and Construction Authority Green Mark
Gold Standard certification.
Meanwhile, South Korea-based Hana Daol Fund Management is in the process of finalising the sale of Nu Tower
1 in KL Sentral to the Malaysian Communications and Multimedia Commission (MCMC) for over RM200 million. The
Nu Tower 1 and Nu Tower 2 are part of the Lot G offices and
hotel jointly developed by Aseana Investment Ltd — an associate of Ireka Corp — and Malaysian Resources Corp Bhd,
the master developer of KL Sentral.
Over at the international financial district, Tun Razak Exchange (TRX), Indonesia’s leading property developer Mulia
Group is planning to develop the landmark Signature Tower.
The developer has entered into a sale and purchase agree-
SAM FONG
podium with parking bays
and one floor of retail space.
The Federal Land Consolidation and Rehabilitation
Authority’s (Felcra) Menara
Felcra project, meanwhile,
on a 4.26-acre site in Jalan
Semarak, will comprise a
35-storey office tower that
will serve as the authority’s
new headquarters, a 43-storey residential tower, a retail
mall, and an auditorium and
a banquet hall. Part of the office will be leased out, while
12 floors will be occupied
by Felcra.
The overall occupancy rate in KL City dipped 1.5% quarter-on-quarter to 83.9% due to the
In Petaling Jaya, food and
beverage company Fraser
newly completed Naza Tower
and Neave Holdings Bhd is
ment for the development rights of the plot with 1MDB Real
poised to launch Fraser Square, a RM2 billion integrated proEstate Sdn Bhd, the master developer of TRX, for RM665
ject at Section 13, by 2Q2016. It is a joint venture with Singamillion. The tower is poised to be a Prime Grade A office in
pore-based Frasers Centrepoint Ltd. Fraser Square is set to
Kuala Lumpur.
be developed over five phases and will comprise 900 serviced
In Brickfields, Seni Nadi Land Sdn Bhd will undertake the
apartments on top of a shopping mall, small offices/home
development of two parcels of land worth an estimated RM2
offices (SoHo), and corporate office and hotel components.
billion where the former Brickfields district police headquarTop Glove unveiled its 23-storey Top Glove Tower in Seters and barracks were located. Seni Nadi, through Senibina
tia City, Shah Alam. In addition to 14 floors of office space,
Sentral Sdn Bhd, plans to build two Grade A buildings on the
the building also offers 26,564 sq ft of retail space over
107,865 sq ft site.
two floors and another seven floors of parking space. The
It is also likely that the other parcel (measuring 101,669
total cost of the land and building is RM141 million. The
sq ft) will comprise a 31-storey office block (first phase) and
company will occupy two floors while the rest of the floors
E
a 24-storey office block (second phase) atop a seven storey
will be leased out.