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Spotlight on KL CBD Properties

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The future looks bright for properties located in the Kuala Lumpur central business district (CDB) at the “Invest in Malaysia, Invest in Kuala Lumpur” series of three forums held in Singapore, Penang and KL.

Held across three weekends from 30 April to 14 May, the forums collectively drew close to 200 participants who were keen to find out more about the potential of KL and of investing in KL city centre properties from the line-up of highly credible speakers from both the public and private sectors.

Tapping on his extensive experience in real estate, Mr. Christopher Boyd, Executive Chairman of CB Richard Ellis Malaysia focused his presentation on the property outlook for KL. He revealed that condominium living is relatively new to Kuala Lumpur and well designed projects perform very well.

He observed that the take-up rate of condos for the first quarter of 2011 has been high in the 65% to 88% in prime areas such as Mont’ Kiara, Ampang Hilir, the CBD, KLCC, Bukit Tunku, U-Thant and Bangsar. The Financial crisis of 2008 did not impact much on condominium prices in the three main condo markets in KL and their prices in fact increased, he said.

“The value of condos has been pretty stable since 2009 despite very sharp increase in land and construction costs. The value of landed housing however has increased strongly due to the shortage of land. Now, condominiums in the city centre are beginning to look cheap by comparison.”

Looking at properties values at RM500,000 and above which foreigners are eligible to purchase, Mr. Boyd said demand for such high-end condominiums is increasing and prime projects in KL have seen exceptional returns with average gross rental yields of almost 6%.

Mr. Chris Tan, PEMANDU’s Director spoke about the Economic Transformation Program (ETP) at the forum by presenting important information on Malaysia’s strategic thrust towards developed nation status in the ETP.

Mr. Tan addressed four important aspects which will put Malaysia on track towards being a high income economy. The four issues he mentioned were to create a safe environment, promoting a vibrant economy followed by improving basic infrastructure and putting in place a cohesive urban public transportation.

The Greater Kuala Lumpur/ Klang Valley (Greater KL/KV) aspiration, Mr. Tan said, is to be amongst the global Top 20 most livable cities by 2020, while simultaneously achieving a Top 20 ranking in the city economic growth in terms of GDP.

Head of Strategy Malaysia, Macquarie Capital Securities (Malaysia) Sdn Bhd, Mr. Yeonzon Yeow presented his insights on investing in equities and properties in Malaysia while Ms Fionna Chuah, Head of Sales, Property Division for Eastern & Oriental Berhad introduced one of KL’s prime CBD properties, St. Mary Residences.

According to Ms. Chuah, St Mary provided the best value proposition for each unit as the prices were already locked in before the tender was called in 2008.

“We launched this project in mid-2005 and when we called for a tender in 2008 to build this project, land and construction costs were lower than today. So, for the specifications we offer, buyers get an incredible value for the price”, she said.

Describing the positive response to St Mary, she said that 80% of the first tower was sold within a month when it was first launched in 2009. Ms Chuah said E&O is a lifestyle developer in a true sense of word. “We run hotels, the Delicious F&B chain, malls and marinas. We understand hospitality & lifestyle and we transfer this well-honed expertise into the residential projects that we develop”, she assured.

The half-day forums organised by Eastern & Oriental Berhad were held at Seri Tanjung Pinang, Penang and the St Mary Residences Sales Gallery in KL. The Singapore forum was held at ION Orchard.