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Showing posts with label ProjectKL2020. Show all posts

The Sungai Buloh - Kajang MRT - How will it benefit you? - Part 1.

This is going to be a multi-post serial thriller with regards to the Sungai Buloh - Kajang MRT. I have done some in-depth study of the alignment, and I thought I want to share some of it with you all. =)

The STATIONS

Sungai Buloh

It starts here. This is somewhat very near to the KTM station; hopefully it'll be integrated together with the KTM station then. I believe the residents of Damansara Damai would utilize the MRT a lot, after this township seems to be the largest within its immediate vicinity. It'll be interesting to see how MKLand makes good of the MRT for its Damai developments.

Kg Baru Sungai Buloh

For those who are not so sure where this is, this is where I had the poon choi last week. I'm not sure how the Kg Baru Sg Buloh titles are, whether it is subdivided properly already or not - but by the looks of things, perhaps there could be some sort of redevelopment in this area.

RRI

Major piece of landbank - now to be developed by EPF/MRCB. Too early to see investment returns right now, but I'll be looking forward to see how the area is planned out.

Kota Damansara

This one seems to be for the south side of the RRI rather than Kota Damansara.

Taman Industri Sg Buloh

The industrial lots + built-ups are going for about RM400psf around this area. With the MRT coming along, it will be easier for these factories to attract workers/staffs - hence gives added value to their properties. Property prices should go upwards by at least 20-30% upon completion of the MRT.

PJU 5

This station seems to be very close to Seri Utama Damansara as well as the Taman Sains Selangor. A major beneficiary would be SEGI University College as well as Sri KDU International School. Okay - maybe not so much for Sri KDU - but definitely a plus point for SEGI.

Dataran Sunway

This station is right on the fringe of the Dataran Sunway/Kota Damansara area - especially GIZA Sunway. However, most of the land here have been developed already; and buildings are rather new - low chance of redevelopment. But prices, especially rentals should go up quite a bit. Tune Hotels to benefit a lot from this. I would think that TUNE Hotels would benefit from this tremendously as most of its customers/tenants are the no-frills users - hence they'll probably be MRT commuters.

The CURVE

Perfect for the shoppers at The Curve; it would be interesting to see how the feeder bus routes are for this location. Mutiara Damansara land and residential properties would appreciate a lot. I believe the retail rental rates at The Curve / Ikano would increase substantially as well. The Mutiara Damansara commercial land plots are already selling at all time highs - having the MRT there would still push it higher by another 15-20%. =)

One UTAMA

Another direct beneficiary station - the one being One Utama. Some people have come up and complained of the station's location - especially those from TTDI. I believe this MRT would benefit One Utama's rental rates a lot, and also its surrounding residential rentals. But the key factor here is this... the MRT would be able to reduce traffic congestion in this area. Every weekend, I see a massive amount of jam here, all going into One Utama. Perhaps with the MRT we would see smoother roads. I think the MRT would also pave way for a further extension to One Utama perhaps(?) - the golf driving range plus open air car park outside the New Wing now just seem like the perfect place to add on a Phase 3 of One Utama.

TTDI

The location of this station seems to me, to be next to the BOMBA / Sinaran TTDI condominiums. I would rather have the station closer to the Pasar Besar area. I dont see why the residents are complaining as this should somehow ease the congestion in the area too.

Section 17

This station would need another look at; based on the indicative location, I dont see many people using this station, as there are not many residences near it. With its location right next to the SPRINT highway, the location of this station might even pose a danger to its users.

Section 16

Assuming they build a proper pedestrian bridge and all around it, then the location of this station would directly benefit the tenants of Phileo Damansara I and II, as well as the CP Tower. I believe the room rates for Eastin Hotel would go upwards too due to its convenience.

Pusat Bandar Damansara

This station would benefit all those who are working at Pusat Bandar Damansara and Menara Milennium. On top of that, the students at HELP University College would benefit too. But the main beneficiary would be Damansara City 2 - which is the next flagship development by Guocoland. =)

Semantan

Another station that benefits HELP University College students. On top of that, I believe the rental prices at Menara HP and its surrounding office towers should pick up a lot, and would be hitting the RM8-9psf/month rates soon.

KL Sentral / Pasar Seni

Both are already home to existing LRT/monorail lines. KL Sentral - already a transport hub, stands to become a super transport hub with over 10 different modes of transportation in its station.

Merdeka

This station cuts through the Warisan Merdeka developments, comprising the controversial 100 storey skyscraper tower. A project of this massive size requires good connectivity links - and the MRT just adds on to this.

Bukit Bintang Barat

I'm interested to see how the line goes underground (maybe?) for this stretch. The surroundings to benefit directly includes the room rates at Royale Bintang / Federal Hotel - and then this would also indirectly benefit the Pudu Jail redevelopment with its close vicinity. Berjaya Times Square would also indirectly benefit.

Bukit Bintang Timur

I cant really tell where this station is located exactly - but by the looks of things, the station would be quite close to Pavilion / Fahrenheit 88 / Starhill intersection. Seems like the ideal place to put up a station to benefit the shoppers. Major beneficiaries are the Malton Group (who somehow/someway owns Pavilion and Fahrenheit 88 directly and indirectly) and the YTL Group (Starhill / J W Marriott / Ritz Carlton / Lot 10).

Pasar Rakyat

Some still call it Pasar Rakyat - but yes it is still Pasar Rakyat until it is being redeveloped into the KL International Financial District. For this site, I think it would require more than just 1 MRT station to ease the congestion in this area. I think the rental rates in the local buildings here would pick up too - I see a good upside for buildings like Wisma Technip etc.

* * * * *

Anyways, this is Part 1. Lets see how much time I have to write out the other parts LOL.

Kuala Lumpur's New MRT Map Alignment.

I believe this is the project that everyone is thinking and talking about the most recently. Yes.. it is the multi-billion dollar *new* MRT!!! =)

Note: The following is a personal study of the MRT alignment and routing, which is supposed to benefit my future prospective projects. But I have decided to share it with you all - perhaps to give me more input too. Thanks.

I found this picture online - the proposed MRT alignment by MMC-Gamuda.

The RED line starts from Serdang… and reaches Pandan Indah, before cutting in to about… Dataran Perdana, and cuts onto Sultan Ismail/Bukit Bintang area.

It is supposed to cut through Changkat Bukit Bintang area.

What’s interesting – as well as puzzling me – is.. how the line will cut through to reach Maybank… and then towards Jalan Parlimen side.

An immediate look on the Google Maps show that… it would be cutting through Jalan Ceylon / Changkat Bukit Bintang etc…. (sounds kinda ridiculous isn’t it? Already no space for road there) Perhaps it will be underground for this area then.

In MMC-Gamuda’s proposal, there is a Bukit Ceylon station – hence I believe this is true then.

The alignment in KL City Centre area... as plotted out on Google Maps.

The MRT to pass through Tropicana City Mall?

Further to that, this line will also stop at Bank Negara area, Pusat Bandar Damansara, Universiti Malaya, PJ Section 16, Damansara Intan (Tropicana City Mall?), Uptown, Bandar Utama, Mutiara Damansara(at the fringe of The Curve), Pelangi Damansara (maybe due to high population area), and end up at Kota Damansara… (which I believe is NOT THAT deep inside, perhaps stop just before Giza).

There is supposed to be a Green line – Kepong to Kajang line, but not too clear on the newspaper pictures that I saw during their ETP coverage – it doesn’t pass through Bukit Bintang area, but this line - it does reach KLCC and Kg Baru.

The Circle Line… is in major contrast to London Underground’s Circle Line. London’s Circle Line covers ALL of ZONE 1.

Our KL circle line… looks like its going around the MRR2 (along Pandan Indah etc etc…), towards Sentul, and then somewhat cuts through Pusat Bandar Damansara, stops at Midvalley as well, and then Sg Besi and Chan Sow Lin too.

The circle line will reach here too. =)

Okay, you all can go buy properties along these MRT/extended LRT lines now. Sure can get some capital appreciation. LOL.

The Kuala Lumpur of the 1970s vs Today.

I found a series of pictures online, and I thought it might interest some of us who stay in and around Kuala Lumpur. Anyways, it is some pictures of the yesteryears, vs how it is currently.

Jalan Pekeliling (Jalan Tun Razak) of the 1970s.

No flyover, no Tawakal hospital etc etc... nothing much yet.

No monorail or LRT here yet either.

A more current picture of the same area... in 2009.

The flyover, LRT, monorail... all in already LOL.

Anyways, on a happier note... I look forward to next month. In less than a month, we celebrate the Chinese New Year... during this time, my office will be off for a couple of days. But it is NOT the holiday that I miss - the one that I miss.... is the CLEAR ROADS!!!! =)

Being a KL boy has its benefits. My hometown also nearby only in Kajang, which is just 15 mins away. That means... I get to avoid all the JAMS!!!!!!!! =)

Federal Auto Headquarters, MidValley.

Automotive company Federal Auto Holdings Bhd plans to redevelop its current headquarters in Kuala Lumpur into a 26-storey commercial building. The new building, due for completion in June 2013, will have a RM12 million Volvo showroom and Federal Auto will lease or sell any unused space to generate revenue.The company, an 86 per cent-owned subsidiary of MBM Resources Bhd, makes up about 10 per cent of MBM's total revenue.

The location of the site. =)

An artist impression of the building. =P

With this new development coming soon, as well as S P Setia's Setia Eco City near the Abdullah Hukum LRT Station (just opposite MidValley) as well as future phases of MidValley City, I think the area is going to go through a major change - a change that would be good for the economy, but may not necessary be good for traffic though. =(

YTL's d7, Sentul East.

Yesterday as I was driving along Jalan Ipoh, I decided to turn into Sentul East to check out hows the latest developments around. To my surprise, YTL's d7 had already been completed. It shows how long I havent been in the area...

The d7 boutique offices, by YTL Land and Development Bhd.

The RM80 million freehold d7 development features duplex offices, boutique offices with retail and food & beverage outlets encased in lush landscaping, water features and artistic sculptures in the atrium. Apart from being fully broadband enabled, the offices are accessible by lifts and the building watched over by 24-hour state-of-the-art security systems.

I am very impressed at how YTL has transformed SENTUL - with its signature Sentul East and Sentul West, I think Sentul today is no longer the Sentul of before. Today, SENTUL represents a prime address; in fact, it represents a form of class and standards that Sentul never had.

One more picture of the YTL d7 development.

The Northshore Gardens, Desa ParkCity.

The Northshore Gardens - is a 40-storey high-end condominium project in Desa ParkCity, one of the most prestigious newly established gated neighbourhoods in KL. The Northshore Gardens boasts of a scenic natural landscape overlooking a park and a lake, and has a commanding view of the city skyline.

The Northshore Gardens, Desa ParkCity.

A super awesome view of the entire Desa ParkCity - including the famous lake. =)

The Developer

Incorporated solely for property development in 1990, Perdana ParkCity has since successfully completed One Ampang Avenue, a 640-unit high-rise condominium project in Jalan Ampang. Currently, through a subsidiary company, Sarawak Land (Kemena Park) Sdn Bhd, it is developing the master- planned Bintulu ParkCity in Bintulu, Sarawak. This 180-acre project is an extension of the existing Bintulu Town, and is projected to be the new business focus and residential enclave of the community.

Strategic location.

Perdana ParkCity Sdn Bhd, the developer of Desa ParkCity, is a Samling-controlled company. Samling Strategic Corporation, the principal shareholder, is a Malaysian conglomerate with diverse local and international businesses that include forest management, wood products, plantations, and property development. In addition, it is also the controlling shareholder of two public companies listed in the KLSE, namely, Lingui Developments Berhad and Glenealy Plantations (Malaya) Berhad.

The view from the Northshore Gardens. =)

Most of its surrounding is low rise, so your views are uninterrupted. =)

A breathtaking view from the Penthouse floor.

The swimming pool.

Who said that you cant get greens in a condo project?

The beautiful full-glass gym, facing the swimming pool.

The podium floor.

The podium floor houses some nice deckchairs for a good view of the park.

This is what relaxation is all about.

The Zen garden.

All the best environment and setting for your beloved condominium.

A towering 40 storeys, with only 274 units.

The grasscrete driveway.

Vertical landscaping at its best.

Another view of the supertall tower.

I bring you - the Northshore Gardens, Desa ParkCity.

The Northshore Gardens – a showcase of ingenious architecture and planning with lavishness and grace – marking the loftiness of the owner’s living standard. This is a modern 40-storey condominium tower overlooking the Central Park lake garden and the Waterfront commercial cum retailed outlets. It is strategically located at the most prime area of Desa Parkcity. There are 8 basic floor layout plans offering from 904sf to 2,476sf, from the smallest 1+1 rooms (studio unit) to the biggest 4+1 rooms (family unit), catering the needs of different groups of residents.

Other than the stylish modern chic design, what else can we expect from this condo?
High level of security /
Beautiful lawn and pavilion /
Water features /
Adult and Kid’s Pool /
Thematic pool and pool decks /
Saunas and jacuzzi /
Barbeque area /
Multi-purpose hall /
Garden party lawn /
Landscaped garden and cabanas /
Recreational deck / Outdoor fitness area /
Floating Gym

AND also:
Designer’s kitchen cabinet with hob and hood
Split units of air-conditioners for living, dining and all rooms
Water heating system
FREE membership of the exclusive Parkcity Club
Enrollment privilege to SJK(C) Kepong 3, Parkcity

Property Outlook 2011.

I will be giving a little talk on the Residential Outlook for 2011 at the upcoming PROPERTY OUTLOOK 2011 training by Starfish Training Sdn Bhd.

Do come and support ya! =)

KL's Office Markets Remain Strong.

Recently, there has been plenty of writeups and articles, as well as remarks and opinions from various industry players with regards to the Klang Valley office markets.

To me, I believe that the Klang Valley office markets is expected to remain stable, and in fact, considerably quite bullish, at least until the 1st half of next year. My views has been influenced by the strong economic indicators recently such as the ETP, of which the Government has identified over 130 Entry Point Projects (EPP) to generate business, investments as well as job opportunities.

One project that has been generating a lot of resistance from the mass public is the 100 storey Warisan Merdeka. This, although it was announced by the PM Datuk Seri Najib Tun Razak in the Budget 2011, is not a budget allocated project - instead it will be undertaken by the Permodalan Nasional Berhad (PNB). It is expected to start in 2011, and to be completed by 2015, with about 2,200,000 sf of nett lettable space to offer.

While many have objected this project, I for one think that this project will further transform that part of Kuala Lumpur into an established financial and business hub, making Kuala Lumpur a much more attractive location to invest in.

The Petronas Twin Towers - still fetching the country's highest rental and occupancy rates for offices.

Looking at various tables and statistics, I believe that Kuala Lumpur's average occupancy rates are at very good and encouraging figures; I see that all areas, including the Prime Grade A+ offices, Grade A offices, as well as the secondary offices in areas such as the Golden Triangle, the rest of Kuala Lumpur's business district, Damansara Heights etc are all registering more than 92% average occupancy rate.

Rental rates meanwhile shows pretty impressive rates too.

In the Golden Triangle, the Prime A+ office buildings, namely the Petronas Twin Towers and its other counterparts in the same area are fetching an average of above RM9psf! The Grade A offices are doing a good RM6psf, with the secondary offices fetching about RM4.50psf averagely. At the outer locations, the offices are fetching averagely between RM3.80-RM4.70psf, which I believe is an encouraging figure.

Menara Wakaf at Jalan Perak - fully leased out to Bank Islam, MAIWP and Tabung Haji.

While rentals have been good, the sales market have seen some interesting transactions. Aseana Properties Ltd sold their jewel in Mont Kiara, the 1Mont Kiara (1MK) to a real estate fund related to Li Ka-shing's Cheung Kong Group in Hong Kong for a whopping RM333million. A Singaporean investor bought a chunk of the Crest Worldwide offices for about RM80million.

On top of that, the REITs also have been assisting and pushing the office/commercial markets.

Recently listed Sunway REIT worths about RM3.8billion worth of assets; and early this month, announced that it is shopping around for new assets and buildings, worth at least RM500million apiece to acquire in order to expand its asset size. It has set a target to double its assets base within the next 5 years. Pretty interesting isnt it?

So, in my opinion, the next time someone tells you that the office markets in Kuala Lumpur are hitting a bubble, reply him this - perhaps you dont think so, and why not sit back and let him be proven wrong. =P

Developments at Cyberjaya.

I previously mentioned that Cyberjaya is indeed a current property hotspot.

Anyways, what about CYBERJAYA some of you may ask?

The master developer of Cyberjaya, Setia Haruman was appointed and awarded awhile back to be the master planner, designer as well as constructing all the infrastructure works for the Cyberjaya Flagship Zone (CFZ), as well as marketing and selling of land parcels and other real estate developments. Recently, there were quite some land transactions in the area - creating and allowing for some new developments to come from other private developers.

Some of the current developments in the area includes:-

The Domain Service Apartments @ NeoCyber.

The EMKAY Group
- The Domain Service Apartments, NeoCyber and BizAvenue II, Cyberjaya
- MKN Embassy TechZone Phase 1 and NeoCyber Office Tower, Cyberjaya
- Shell Business Service Centre
- CBD Perdana

S P Setia Bhd
- A high-end 156-acre gated community development Setia Eco Villa in Cyberjaya

UEM Land Bhd
- Symphony Hills, Cyberjaya

Suntrack Development Sdn Bhd
- Summerglades in Perdana Lakeview West

Other developers with developments around Cyberjaya includes:-

Mah Sing Group Bhd - Garden Residence and Garden Plaza @ Cyberjaya
OSK Property - A low-rise condominium project in Cyberjaya
Paramount Corporation Bhd - A high-end mixed development in Cyberjaya
Glomac Bhd - Glomac Cyberjaya retail offices
Ikhasas Sdn Bhd - Shaftsbury Square

WHY DO I SAY THAT CYBERJAYA IS A PROPERTY HOTSPOT?

Like I mentioned before, the ease of connectivity has made Cyberjaya very attractive. The opening of the MEX Highway - enables travelling from Cyberjaya to KL City Centre in 15 mins or less! With other highways surrounding it, Cyberjaya has become a new place to be. On top of that, Cyberjaya is also known as the 'Silicon Valley' of Malaysia - and this ICT Hub has received numerous investments and proposals within the zone.

So, looking for a place to invest? Why not look at Cyberjaya...

What industry players say... vs What I Say.

The property sector, be it commercial or residential, has been hogging the limelight in recent months in terms of its direction and outlook. Last weekend, the StarBizWeek’s Angie Ng and Eugene Mahalingam obtained the views and thoughts of several industry players on the road ahead for the property scene, the measures currently being considered by regulators to stabilise the market as well as the measures they would like to see incorporated in the soon-to-be tabled Budget 2011.

I thought... this would be pretty interesting to see if I would agree, or disagree, and... I might as well comment on them too!

Not Across The Board.

DATUK MICHAEL YAM, Real Estate and Housing Developers’ Association president.

The steep increase in property prices is not across the board. A report by RAM stated that elastic supply and normalisation of monetary and financing conditions make a property bubble unlikely to develop and that the tension between over-valuation and affordability will ensure a stable and improving market.

We believe that the steep price increases are only in scattered locations in KLCC and landed housing units in the Greater Kuala Lumpur area. This does not represent a bubble but a short-term deviation from fundamentals due to isolated speculative activities in the KLCC area for high-end condos.

In the case of landed houses – single and double-storey terrace houses and semi-detached houses – there is a shortage of supply especially in good locations to meet real demand. As a consequence of this inequilibrium, the limited existing stocks are commanding good secondary market prices while new launches are being sought after. This is a reflection of actual demand by locals who have to contend with paying a premium for well-located landed properties that are limited in stock and scarce in supply caused by shortage of land particularly in urban areas.

Except for a few selected apartments sold at premium prices in the KLCC areas presumably due to their unique or iconic features, there is still adequate supply in the market at attractive prices especially for owner occupiers. Our view is that despite the uniqueness of KLCC, it is still neither an investment destination for global investors nor for international speculators.

Capital appreciation except for the short period before the 2008 global financial crises coupled with the Government’s drive to attract investors has been relatively unattractive. The perceived inconsistency of policies and knee-jerk reaction to such hearsay (that rocketing prices caused by property speculation particularly foreigners) has exacerbated the lack of interest in our world-class properties. Moving forward, the KLCC area needs an infusion of foreign investment to sustain the present price level.

I would agree that it is not across the board for the steep increase in property prices. A property bubble is also unlikely to develop as the current relationship between affordability and property prices is still considered to be pretty stable. REHDA Present Datuk Michael Yam is an industry veteran - where he single-handedly groomed Sunrise Bhd into what it is today - and I believe he is the perfect person to comment. However, I actually oppose one part of his statement. "Despite the uniqueness of KLCC, it is still neither an investment destination for global investors nor for international speculators..." - for international speculators, Yes. But for the global investors, I would rather disagree though. KLCC should be seen as the next upcoming location to be at - our property prices are still amongst the region's cheapest. So - it is the duty of the industry players to showcase our beauty and properties to the outside world...

It’s sustainable

TAN SRI LEONG HOY KUM, Mah Sing Group Bhd president and group chief executive.

We think the property market is sustainable and the current buying pattern is backed by sound economic fundamentals and genuine purchasers. A steady employment market and low mortgage rates are encouraging more first time homeowners to buy property. The market is flushed with liquidity and government tax incentives have also encouraged home purchases. Low deposit rates will also act as a push factor to drive property demand. All these factors have encouraged healthy demand for properties.

We do not see a strong risk of a property bubble happening yet and there is no sign of overheating. The price increase in properties has not been broad-based, but demand driven and rather selectively in prime locations.

The strong demand and price premium reflect a project’s prime location, concepts and exclusive features. To provide for the buyers, there is also cost for research and development activities. Higher construction and land cost are also factors for the premium price charged for some of the projects. New launches are concept and lifestyle driven, and have been designed to fit current market needs. For example, residential properties with large built-ups are popular to house three generations under one roof. Security has become a top priority and that’s why gated and guarded projects are doing very well. In areas like Mont’ Kiara and downtown Kuala Lumpur, residential suites would be the preferred option for singletons, or investors seeking rental returns.

Amongst the property players, Tan Sri Leong is someone whom I admire a lot - he has been instrumental in transforming Mah Sing from a non-player, into amongst the top property players in the country. He thinks the property market is sustainable - I would agree as well. There is some strong demand for selected locations - and hence command a price premium like what he has mentioned. However, do bear in mind that overall cost of development has been on the rise, not just on land cost alone - cost of research and development and higher construction costs are some of the key factors for the premium price charged for some of the projects. As a construction player, I do agree, and also admit - that construction costs have been on a rise and this has been translated in increased property prices.

Target the speculators

ELVIN FERNANDEZ, Khong & Jaafar Sdn Bhd managing director.

The residential market this year has been fairly stable. However, on account of the unusual financing packages that we have (e.g. 5/95), interest rates are still low and banks are still giving out loans. There has been a “run-up in prices” in a few selected areas and this is cause for concern. This is the reason for the lower mortgage loan-to-value ratio (LVR) that’s currently being studied by Bank Negara. You need to tame the real estate cycle. (When property prices go up) it is good for the house owner and for the developer. But it is not good for the country when prices run ahead of fundamentals.

The LVR is a good move. The authorities should be constantly vigilant of house prices running ahead of the fundamentals. You need specific mechanisms to control the real estate market. In the past, tools used to tame asset bubbles were only monetary in nature, such as interest rates. But when you raise or reduce interest rates, it has a broad effect (and not just specific to real estate). These policy measures must be such that first-time house buyers are not caught by it while the speculators are targeted.

Like what Mr Elvin has said - interest rates are still considerably low - and most importantly, banks are still giving out loans. He commented a word of caution - "When property prices go up it is good for the house owner and developer.. but it is not good for the country when prices run ahead of fundamentals..." - I agree with this part too. The government should not do anything to slow down the market - but instead, 'tame it'. I also feel that developments should concentrate within the Klang Valley region - or specifically, central Klang Valley only. As developers and the Government keeps on promoting the Greater Klang Valley or rather, outskirts of KL or PJ... it does not justify with property trends anywhere else around the world.

Looking good for next two years

CHRIS BOYD, CB Richard Ellis Malaysia Sdn Bhd executive chairman.
The property market is going strong this year. There will continue to be challenges, especially in the high-rise residential market because of large supply in some localities. The landed residential sub segment is strong and will continue to remain this way. The retail sub segment is stable. The (retail) market successfully digested the supply that came in when the Pavilion mall was completed (in 2007).

Even hotels are experiencing excellent business at the moment and will continue to do so. The property market in general is looking good for the next two years. Finance is still cheap and readily available, which is critical to the residential sub segment. Historically, the residential market has shown that its capable of self-regularisation and can easily correct itself without external intervention. (On Budget 2011) It would be nice to see more financial incentives for green buildings. It’s on the radar but didn’t get realised in the last budget. It would be nice to see more measurable steps towards sustainability. (However) it is a mistake to rely solely on the Government to make the property sector more attractive.

Property market going strong etc etc... Agreed. High-rise residential market... Yes we all love it!!! Retail segments... mmm... the market has successfully digested Pavilion. But - my concern is... look at some of the newer ones, or the smaller ones. We have Fahrenheit88 re-launching again, and then there are plenty of other smaller ones coming up too. How is our small population going to take up all the different malls this time around? Perhaps, Mr Chris Boyd should answer on the outlook for the retail market. I am neutral on this really. =)

Still promising

KUMAR THARMALINGAM, Malaysia Property Inc CEO.

The Malaysian property sector is looking promising across the board. The mood is that construction costs are going up and this is spurring people to buy property quickly. Banks are also cautious. They always to their due diligence on the buyers. They may only give a 70% loan if they think that is all the purchaser deserves. The industry as a whole is stable. This positive trend will continue for the rest of the year.

If there is a 0.5 percentage point increase in interest rates, I don’t think it would make a difference to the average consumer. We won’t see any impact if the West goes into a double dip recession because our regulatory system and our banks are stable.

Very optimistic, and very positive. I believe there are a lot of property investors out there who are listening to his words and advice - thats why the market is still booming. I would love it if there are more veterans like Mr Kumar Tharmalingam out there - who would speak to the international and global investors - be it from Hong Kong, Indonesia, Middle East or wherever it may be - to look at Kuala Lumpur deeply. Come and put money in KL!!!

Mini-boom seen

PREVINDRAN SINGHE, Zerin Properties CEO.

The outlook (for the property market) is stable and we expect prices to continue rising. We expect a mini-boom in the second quarter of next year. (On the possibility of raising the quantum of real property gains tax) It would defeat the Government’s intention of making Malaysia a real-estate destination. (Hopes for Budget 2011) We’d like to see the removal of taxes for real estate investment trusts and more efficiency in the Government department on the real estate side.

Mr Previndran Singhe is hoping that the Government wont raise the RPGT quantums - same here. It will definitely be a 'shooting-ourselves-in-the-leg' situation if they were to do that. I am hoping that they will be more incentives in the Budget 2011 for the property sector - make Malaysia a real-estate destination!

Banks not holding back loans

JAMES WONG, VPC Alliance (M) Sdn Bhd managing director

The Malaysian property market in the first half of 2010 has improved significantly compared to the first half of last year. This is because a lot of developers are launching new projects and are offering easy payment schemes, such as 5/95. This has attracted a lot of buying interests, especially in places where homes are more affordable. We still expect to see a hike in prices for landed residential properties. This is partly because banks are not holding back on their lending policies.

In countries such as Singapore, Hong Kong and China, their central banks have come up with pre-emptive measures to cool the property market. When Bank Negara announced it was studying the LVR, there were a lot of protests, but I feel this a good move for the market. Perhaps they should exclude certain buyers from the cap of 80% (loan), such as first-time buyers or make it applicable for properties above RM500,000 only.

Lowering the LVR would seriously tame the market - but I think it will only a short glitch in the property market. It would create a more refined investor base - those who can really afford, rather than speculators. This way, there would be lesser risks for bankers - and it would be a good move for the market.

Make it easier for first-time buyers

CHANG KIM LOONG, National House Buyer’s Association honorary secretary-general

There are a lot of young professionals (lawyers, architects, engineers) coming into the market today and many of them can’t even afford homes. In Kuala Lumpur, you can’t get a bungalow for RM250,000. The rates of houses are increasing by leaps and bounds every year. It is surpassing the average annual income increment. Unless you have a rich father that can pay for you, the affordability of houses is seriously becoming an issue.

I understand that you have terrace houses within Desa Park City (Kuala Lumpur) that are going for RM1mil. It’s ridiculous! How to afford? The Government has to come up with some kind of a price-control mechanism for houses. With prices like these, it’s only the rich that can buy, especially foreigners.

(On LVR) There should be a threshold to help curb speculation. For first-time buyers, 90% and onwards loans are fine. But for subsequent purchasers, the quantum should be less. Alternatively, a higher loan quantum (90% and above) should be given for homes that cost less than RM500,000.

Mr Chang here seem to be a little pessimistic about the market though based on his remarks. I would rather not comment - however, in some ways, Mr Chang is correct. From the young professional point of view - property prices are really getting too high. As our Prime Minister has been wanting the country to grow into a high-income nation - perhaps higher income first before the sharp increase in property prices?

No cheap house

MELISSA RAM, Virgin Properties Sdn Bhd chief operating officer

The local property market is certainly on an uptrend and prices have been escalating. Even when there’s a slight downturn, property prices just don’t seem affected. You just can’t seem to find a cheap house at the moment. (On LVR) I think it’s a good move as it will only encourage people that have the means to purchase property to apply for loans. You should only buy a house if you have the funds. On the downside, it would mean that poorer people would not be able to afford houses. However, this measure could encourage people to save up before buying a home.

Another pessimistic comment. I believe that as long as the banks still give out loans, chances are the markets would remain good. Perhaps they need to loosen up a bit for the 1st-time buyers though.

Okay - we've seen what the industry players have to say. How about my say?

I have had quite a number of people and friends asking me where to invest - where is the property hotspot in Kuala Lumpur right now. From my point of view - I believe that the Malaysia property market is still very bullish right now. Premium locations - such as the KLCC area, Bangsar, Damansara Perdana and most parts of Petaling Jaya would remain as the hotspots to invest in. Dont forget Mont Kiara - although there is some major traffic congestions in the area - but it is still the darling of the market.

One thing that the property market is experiencing undeniably is that fact that rental yields are dropping. Since the recent financial market slowdown, a lot of expats have been sent back to their countries as large corporations are downsizing. We no longer hear of sky high rental prices anymore paid by all these MNCs - however, from what I see - the market is getting its rebound now. Lower rental yields should not deter investors/buyers from investing in property - it is becoming the norm already. If you are still expecting between 9-10% yields like 5 years ago - perhaps it is time to get updated!

KL's Property Hotspots - Part 3.

I posted a little blog post about KL's Property Hotspots on Monday, which received some very interesting responses. I received some comments on that blog post - which prompted me to do a reply to those comments yesterday - with regards to Mont Kiara. On Monday, @Patchay also posted up my recommendations on LYN - and then of course, he posted up HIS own opinions as well.

@Patchay's list included...

1. KLCC (include certain areas within KL City)
2. Mutiara Damansara/Bandar Utama
3. Desa ParkCity/Damansara Avenue
4. Puchong/Kinrara
5. Taman Tun Dr Ismail (for secondary market)
6. Bukit Jalil
7. Bangsar/Pantai area
8. Setia Alam in Shah Alam
9. Cyberjaya
10. Mont Kiara/Sri Hartamas
11. Damansara Utama/Uptown/Jaya/SS2
12. Old Klang Road
13. OUG/Kuchai Lama
14. Damansara Perdana/Kota Damansara
15. KL South/Cheras North
16. Setapak
17. Kelana Jaya
18. Subang Jaya/USJ
19. Seri Kembangan/Jalan Sungei Besi
20. Sentul
21. Desa Melawati/Dato Keramat

Potential areas for next BOOM:
1. Section 13/14 PJ
2. Section 52 PJ
3. Kelana Jaya
4. Ampang Hilir (for concept development only)
5. Areas between Shah Alam and Klang, in particular the catalyst will be Setia Alam

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I admit that to some of the locations - I would agree with him. But a few others... unfortunately I dont. There will be some which will be in-betweens, but anyways, this just prompted to work on this Part 3 of the KL's Property Hotspots posts.

KLCC area is already one of my favourite hotspots, together with Mutiara Damansara and Damansara Perdana. Desa ParkCity is also a good location too. Most of these places have extremely high growth potential - and I would recommend the mentioned locations to any investor who is interested to invest in some form of property around here.

Bandar Utama.

I would say there is plenty of potential in Bandar Utama - however, the potential is not as impressive as I would say. Linkhouses used to be sold for RM500,000 here years ago, sold overnight, through balloting and so on. Today it is still the same - but at 3 times the price. There was only one developer - See Hoy Chan Holdings and I would say they planned the whole township very well. Today, the link houses can fetch even RM1.5million for some of the 2.5 storey types.

However, I would say, the area is a victim of their own success. The location of One Utama in the heart of Bandar Utama has made the area overly congested and every weekend, it is practically a nightmare getting into the area. With its strategic location and good connectivity (it connects Mutiara Damansara, Kota Damansara, Ara Damansara and so on) of over 50,000 homes within its radius, the infrastructure in Bandar Utama needs to be upgraded.

That being said - I would say that current prices of RM450-RM550 psf (built-up) would easily go up to hover at about RM800 psf (built-up) in 2012. It is still everyone's favourite location - and most would kill just to stay there... I wont stay here, but I would invest here.

Puchong/Kinrara area.

This area has benefited a lot from the development of Putrajaya. With the LDP that cuts right across Puchong area (with a slip-road to Kinrara) and heads direct to Putrajaya, Puchong is in a very prime location. The investment potential in this area is tremendous, but do bear in mind that you need to get the right part of Puchong to benefit from this. I would say, your property would need to be as close as possible to the Sunway LDP toll. Puchong is also a victim of its own success... today's residents are all fuming everyday due to the ridiculous traffic jams going in and out of Puchong.

Current prices hover between RM280 - RM350 psf for a decent apartment. I think this price would probably manage to get about RM400 psf by 2012. That is not much, but unless the authorities is planning to resolve the traffic solution permanently - I would say this would remain the main concern for Puchong investors. I would also bet on the LRT extension to help to grow Puchong's investment potential further - but that... would take some time.

Taman Tun Dr Ismail.

The investment potential in TTDI area is good, but not great. There is technically no more land available for development in TTDI area already, so whatever you see now, thats about it. Properties in TTDI area have been on a steady increase over the years; rental yields would be good as well, but thats would probably be that.

The other problem with TTDI is the same as Bandar Utama's - the congestion problem is a major issue. But TTDI has an advantage - it carries a Kuala Lumpur address, but a Petaling Jaya (off the peak KL) location.

Setia Alam area.

Two of the country's largest developers have major projects here - namely S P Setia as well as Mah Sing. If you were to consider the location of Setia Alam carefully, you'll find that the area is actually closer to Klang than Shah Alam. There is some room for expansion for this part of 'Shah Alam' though. It will take time though.

Based on what I see on the maps, there is an abundance of land around here, and it can expand in so many different directions. Houses are currently sold at RM650,000 upwards for a 2,700 sf built up unit - about RM 240 - 260 psf (built up). I think the prices should be able to reach RM750,000 by end of next year; in terms of appreciation, perhaps an inflation-adjusted 15% would be realistic.

The other locations??? Like I mentioned, Old Klang Road / Kuchai Lama and OUG areas are existing matured neighbourhoods that I would put my money on, KL South area would need more time though. As for Setapak / Wangsa Maju area - the potential is there, but nothing great about it. Rental yields there are good because of the TAR College students though. I see a lot of potential in Kelana Jaya as it still has certain small tracts of undeveloped land.

As for Subang Jaya and USJ... I think lets not look in this direction yet. Subang Jaya, USJ, and its new fringe townships Putra Heights as well as USJ Heights represent a massive area to be developed - and I'm just hoping it wont become a situation of oversupply here. As for Seri Kembangan area - plus Balakong as well - there is some potential here as well. This place should also enjoy a good 20-25% appreciation over the next 1-2 years. Sentul has been a location that I havent touched on - but it has plenty of potential.