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Saturday, November 24, 2007

Icon Mont' Kiara to help fill vacuum for Grade A offices

Commercial Offering: An artist's impression of the Icon Mont' Kiara

Mah Sing Group Bhd's lcon Mont' Kiara office development project in Kuala Lumpur is expected to fill a vacuum for Grade A office space in the area.

In a statement yesterday, the property developer said there is a shortage of Grade A, purpose-built office developments to meet the needs of the residents in the exclusive enclave.

"Besides Plaza Mont' Kiara, which is nearly fully tenanted, commercial offerings in the area are mainly multi-storey shop offices. The nearest comparable Grade A office is Menara TM at Jalan Pantai which was completed in year 2001.

"Asking rentals are hovering around the RM5.50 mark representing a double-digit rental increase of some 38 per cent from 2002," Mah Sing said.

Mont' Kiara is home to 250,000 households with a population of one million within a 5.5km radius. There are about 5,900 units of completed condominiums in the location, with an additional 4,500 units scheduled to come onstream in the next four years.

"The upside potential is clear where nearby supply of offices such as Solaris Mont' Kiara and Solaris Dutamas shop offices are sold at RM650 per sq ft," the company said.

Based on a national average for property appreciation of 10 per cent per annum in capital values, prices for good office buildings would easily breach the RM950 per sq ft mark within the next four years.

"At a eight per cent yield, asking rentals should well exceed the RM6 per sq ft mark. When compared to the current rental market in Solaris, which is between RM4 and RM5 per sq ft per month, and Menara TM, at RM5.50 per sq ft, there is definitely a lot upside for capital appreciation and yield expectations in terms of grade A offices in Mont' Kiara," it added.

Mont' Kiara is minutes away from Kuala Lumpur, Petaling Jaya, Bangsar and Damansara through an extensive network of roads and expressways comprising Jalan Duta, Persiaran Duta Mas, Lebuhraya Mahameru, Jalan Kuching, Penchala Link, Kerinchi Link, Sprint Highway, Lebuhraya Damansara-Puchong, North-South Expressway, New Klang Valley Expressway and the new Duta-Ulu Klang Expressway.

Mah Sing said another hotspot for Grade A offices will be in the KLCC vicinity, where the demand for prime office space is led by the expansion of the oil and gas sector, telcos and Islamic banking.

With sustained economic growth and increased commercial activities, occupancy and rental rates are on the rise, and quality commercial properties are snapped up quickly. Prime commercial buildings in the Golden Triangle where KLCC is the epicentre is enjoying occupancy of 99 per cent at the close of the second quarter of 2007.

By New Straits Times

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