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Monday, August 11, 2008

Verve Suites beats the odds in weak market

The success of the Verve Suites in the high-end Mont' Kiara neighbourhood has proven once again that product differentiation is vital in today's stiff competition.

Instead of building another condominium, Bukit Kiara Properties Sdn Bhd (BKP) continued its tradition of offering niche and innovative products, this time in the form of fully furnished serviced suites and introduced sky lounges each with a different concept.

BKP managing director N. K. Tong said when Verve Suites was first conceptualised over three years ago, it set out to create something different, exciting and innovative.

N.K. Tong

“What has happened since has even caught us by surprise. Verve Suites first introduced the concept of the sky lounge; with the Vertigo Living Concept spread over 6,000 sq ft. It was a bold move because we gave up the most valuable piece of saleable real estate, the penthouse, to be a common facility,” he said.

“Since then, we have introduced two other living concepts, the Hypercubes Living Concept and the Concentrico Living Concept in the subsequent blocks in Verve Suites,” he told StarBiz.

What will be the living concept for the fourth and final block?

Well, Tong is keeping mum except to say that it would be very much based on feedback from customers and the BKP team.

On rising construction costs, Tong said all Verve Suites phases were moving according to schedule.

“Rising prices are a challenge and a fact of life. It will have a direct impact on costs, reduced profit margins, and rising selling prices. Each successive block of Verve Suites has continued to appreciate in price, and our customers are understanding and philosophical in their approach,” he said.

Tong said some had bought units in all the three Verve Suites blocks, and were looking forward to the preview of the fourth block, even acknowledging that the price would further increase.

“This is a good time to buy properties. While costs continue to rise, we at BKP have to accept reduced profit margins but continue selling at today's pricing. This will benefit our customers as they lock in properties at historical prices, while costs continue to rise,” he added.

Tong said Mont' Kiara's success was also reflected in the increasing land prices over the years: from RM5 to RM10 psf in the early 1990s to RM50 to RM70 psf at the end of the 90s and into the early 2000.

“Today, the prices are probably around RM200 to RM250 psf. This increase has forced developers to develop new projects with larger units, to defray the high cost of land. This trend works in favour of Verve Suites as its compact units become highly sought after, being unique as well as affordable,” Tong said.

Recent secondary transactions of BKP's Hijauan Kiara units have reached close to RM660psf, a 40% capital appreciation from the original RM470 psf when it was first launched in mid-2005.

Tong believes that Mont' Kiara and the KLCC were both critical in putting Kuala Lumpur and Malaysia on the global real estate investment map.

“Ironically, Kuala Lumpur has been previously bypassed by foreign investors, retailers and institutions alike, because we were not big enough, from a visibility point-of-view. With the thriving development in the KLCC and Mont' Kiara areas, more foreign investors are beginning to take notice, beyond the usual Singaporean investors.”

By The Star (by S.C.Cheah)

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