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Monday, May 26, 2008

New highway helps push projects

While township developments have mushroomed in prime locations in the Kuala Lumpur city centre, the northern corridor of the Klang Valley is slowly catching up in development activities.

Steadfast Realty principal Lee Wai Kong said the northern corridor had been quite remote previously but developments have started to pick up since the opening of Guthrie Corridor Expressway (GEC).

The 25km-long GCE connects Bukit Jelutong in Shah Alam to Kuang, near Rawang, and complements the North-South Expressway and New Klang Valley Expressway.

Lee believes that traffic on the highway would eventually pick up although it is quite slow at present.

“There is no doubt that the GCE has brought positive effect around the area but new developments are not as rapid as developments in the Kuala Lumpur city centre,” he noted.

“Although developments along the highway have picked up, we do not expect an immediate intense development in these areas. It will probably take another five to 10 years before we can see a property boom in these areas.”

Lee pointed out that property prices in these areas had also been going up steadily since the opening of GCE.

“Locations closer to Petaling Jaya or Shah Alam can command a better pricing although rental yields are still relatively low.

“Exclusive developments are a different story altogether. They could see better appreciation in value but not in yield. Therefore, locations like Rawang and Selayang might not seem so attractive,” he added.

He said Rawang was just another suburb and the housing demand would be fuelled by locals. He said it would be tougher for Rawang to capture the spillover from Kuala Lumpur.

“I think the development in Selayang will be much faster than in Rawang because of the connectivity. Selayang, which links to north Kuala Lumpur, can command better pricing as well,” he said.

Far no more

Meanwhile, Axis REIT Managers chief operating officer and executive director Stewart LaBrooy said land prices in Jelutong had been rising.

“Jelutong and Shah Alam have become more popular and generated a lot more interest today. A lot of new developments have started since the highway was opened,” he said.

He pointed out that there was a time when people were saying Kota Damansara was far, but people did not mind the distance now as the infrastructure was in place.

“The distances start to appear shorter, thanks to a reduction in travelling time,” he said, adding that Jelutong had good connectivity to the rest of the Klang Valley via major highways.

LaBrooy said more people were moving away from KL.

He said some property owners were “trading up” their current property. Some property owners sell their properties in KL at a high premium and buy a semi-detached or bigger property in the suburb.

He agreed with Lee that Rawang was a “local play”. “Personally, Rawang is just Rawang. The property prices are increasing but at a slower rate,” he said.

LaBrooy said Rawang did offer some good properties but some property buyers were “buying into the address” of the property. Buyers were willing to pay for a prestigious address, he added.

He expected more activities in these areas, going forward, but hoped the new developments would not cause a property overhang.

Developers attracted

Ho Chin Soon Research Sdn Bhd director and master mapmaker Ho Chin Soon opined that the GCE was constructed in such a way that it benefited Sime Darby Property Bhd.

“There is not much increase in property prices in this area but properties here will rise in tandem eventually with the Klang Valley,” he said.

Developments have started to pick up since the opening of the 25km-long Guthrie Corridor Expressway in 2005

The growing attractiveness of the northern corridor of the Klang Valley has not gone unnoticed. More and more developers have bought land in these areas.

Analysts said that the corridor, being strategically located at the confluence of major highways in the Klang Valley, had encouraged homebuyers to move there.

“GCE brings about the development of Bukit Jelutong, Bukit Subang and neighbouring housing areas,” an analyst said, adding that the highway had also helped properties nearby to appreciate in value.

An analyst with a local brokerage said property prices were moving up in the neighbouring areas of Kuala Lumpur and at the Sungai Buloh boundary.

“With soaring property prices in prime areas like Damansara, it makes sense for people to invest in Sungai Buloh, which is bordering Damansara. Therefore, newly developed properties in Sungai Buloh can be an option for investment,” he said.

He added that property prices were expected to pick up eventually.

Rawang, which is further north, was not exactly a development hotbed, said another analyst. He said that although the area had been growing at a steady pace, it was never a first priority for homebuyers. This is despite property prices there being cheaper.

“A homebuyer could probably get a semi-detached house in Rawang at the price of a link house in Mont'Kiara,” he said.

Setia Eco Park in Shah Alam is one of the developments that have benefited from Guthrie Corridor Expressway

“Developments that are doing well due to their locations near a major highway include Setia Alam, Setia Eco-Park and Alam Perdana that are connected by the Setia-Meru Link, as well as Sierramas and Valencia, which are accessible via the Sungai Buloh Interchange,” an analyst said.

He added that it was very important for any development to have a dedicated link to a highway so that residents would not need to travel far by going through another development.

By The Star

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