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Monday, April 27, 2009

Langkawi still developers’ attraction

RIDING on its status as a duty-free port and as an internationally-known resort island, Langkawi is still attracting developers from Penang and Kuala Lumpur despite the economic crisis.

The attraction of Langkawi is that the imported and high-quality finishings used for development are sold without duties and sales tax, which enables developers to price high-end properties very attractively, compared with those in Penang.

This advantage offsets the 10%-15% higher construction cost in Langkawi, which is due mainly to the transportation of raw materials.

For example, a terraced property in a prime location in Langkawi could be obtained for about RM230,000, compared with about RM280,000 for a similar property in Seberang Prai. Similarly, a 1,000-sq-ft serviced apartment in downtown Langkawi could go for about RM250,000 against about RM480,000 on Penang island.

Langkawi’s reputation in the region as a Malaysia My Second Home destination and as a holiday getaway has also of late, attracted foreigners in the sailing fraternity to purchase or rent properties there.

The economic crisis has yet to affect properties in Langkawi. According to Penang-based valuer C.A. Lim & Co proprietor Lim Chien Aun, property prices in Langkawi have yet to drop.

“However, the volume of transactions and enquiries has declined by about 80% for the first three months of 2009,” he said.

In Langkawi, developers are focusing on serviced apartments and landed properties, such as double-storey terraced and semi-detached houses, as they attract the most demand.

One project that should boost Langkawi’s tourism industry is a high-end commercial scheme from Thong Sin Development Sdn Bhd, a Penang-based property group.

Managing director K.C. Tan said the project, to be named San Marina, would be located on an 4.6-ha site facing the Andaman Sea.

“About 55% of the area would be used for serviced apartments, and the remaining 2ha for commercial development.

“We plan to model the resort after some of the sea-fronting Mediterranean towns in Europe, with the serviced apartments on top of the commercial properties,” he said.

“There would be around 170 units with a gross built-up area of about 300,000 sq ft. We have not decided on whether to sell or rent them out.”

Tan said the commercial properties would be rented out to enable the group to have a balanced tenant mix.

“The commercial properties will be designed to suit a particular business theme, that includes al fresco dining and boutiques. The plan is also to have a state-of-the-art convention centre to house a recreation clubhouse, a spa, restaurants and meeting rooms,” he said.

All apartments would overlook Pulau Dayang Bunting, Pulau Tuba and the harbour of Kuah town, Tan said.

“This is our second serviced apartment project in Langkawi, following the 147-unit Century Suria Serviced Apartments launched nine years ago. We have sold a significant portion of the Century Suria apartments, the remainder will be sold or rented out.

Other serviced apartments in Langkawi include the Sri Lagenda, Perdana Beach Resort and Kondo Istana, all of which were developed in the early to mid-1990s.

The monthly rentals for serviced apartments generally start from RM1,200 on the island.

Intra Harta (North) Sdn Bhd registered valuer Muzlini Said said the value of serviced apartments had appreciated by 10%-20% over the past three years.

“The Century Suria, for example, priced at about RM200,000 a unit in 2006, is now selling for RM290,000. The Perdana Beach Resort, about RM190,000 in 2006, is now at RM250,000.

“These apartments have built-up areas of 930 to 1,100 sq ft and have two or three bedrooms,” she said.

For landed residential properties, the launches are usually small, from 60 to 80 units per launch.

Bertam Development Sdn Bhd property manager Tan Cheng Chooi said the company’s recent launch of 59 double-storey terraced houses and eight double-storey semi-detached houses in Taman Bukit Indah, an established residential enclave close to Kuah town, had received very good response.

Bertam Development is a subsidiary of Kuala Lmpur-based property group Bertam Alliance Bhd, which is listed on the second board.

“We have sold all the non-bumiputra units. The houses will be completed by August,” he said.

Muzlini said the appreciation of landed residential properties in Langkawi had been about 15% in the past five years.

“The selling price of a terraced property has increased to about RM230,000 from RM180,000 five years ago, while a semi-detached house is now RM320,000 from RM250,000 before,” she said.

By The Star (by David Tan)

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