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Saturday, November 7, 2009

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St Mary Residences to set new benchmark in Jalan Raja Chulan

ANIL, 45, from India works in the oil and gas industry. Managing projects on a piecemeal basis, his work entails quite a bit of travelling. Anil flies into Malaysia several times a year, sometimes it is a week, sometimes two.

Renting an apartment is not cost effective, likewise staying two weeks at a hotel. Accommodation has always been an issue, until about a decade ago with the appearance of serviced apartments, which he can rent on a weekly or monthly basis.

“I just need a decent place to return to after work where I can call for room and housekeeping services but without having to bear rates equivalent to hotel charges.

“Hence, a serviced apartment seems to be the best option. Occasionally, I use the gym and of course, Internet connectivity is a must. If I want to meet friends, there are food and beverage outlets nearby,” he says.

Anil belongs to a group of mobile workers who have to pack up and leave at the drop of a hat. They have no time to cook, or to be bothered with the daily household chores that come with renting a condominium.

An artist’s impression of Eastern & Oriental Bhd’s St Mary Residences, which will be located in the central business district of the KL City Centre.

As the city and the job market evolve, Kuala Lumpur will be seeing more serviced apartments entering the market. By 2012, Kuala Lumpur will have another addition with the entry of Eastern & Oriental Bhd’s (E&O) St Mary Residences CBD in Jalan Tengah, behind Menara Weld. The project is jointly developed by E&O and the Lion Group.

When it was launched in June, prices average RM1,000 per sq ft with early bird purchasers paying about RM900 per sq ft. The second launch was priced 25% higher at an average of RM1,250 per sq ft.

Although the project is currently marketed as a new home, a second home or an investment, the 657 units are being fitted like a hotel room with 34,400 sq ft of retail space. It will also have a one-acre park.

There may be plans to provide housekeeping services later on.

Comprising three blocks, Tower C and A are currently on the market while Tower B, which will have about 200 units, will be returned to the Synod of the Diocese of West Malaysia, the previous owner of the 4.04-acre freehold tract.

The development will have a swimming pool and a clubhouse as well as a meeting and function room.

Says an industry source: “St Mary will be more for the rental market, although there may be buyers who want to stay. The developer will also build an office block close by. So the possibilities are there, particularly with Tower B being returned to the church.”

When Tower C was launched, E&O priced it cautiously. It was among the first project to be launched in the city after the September 2008 fall of Lehman Brothers. E&O group itself had not launched anything in 2007 and 2008.

With the good response, it appears it had underpriced the project and are trying to get back on the pricing. To justify that increase, it enhanced the package by offering a more furnished unit right down to curtain railings, while those from the first phase only had a fitted kitchen with appliances. At the same time, buyers for the first phase enjoy a capital appreciation, the source says.

There are several serviced residences in the Jalan Raja Chulan vicinity with unit sizes ranging from 500 sq ft to about 2,000 sq ft. In the case of St Mary Residences, the developer is offering reasonable sizes, says Regroup Associates Sdn Bhd executive director Paul Khong.

It has the right target segment for investment purposes – the units are small from about 1,000 sq ft to 2,300 sq ft. On a per unit basis, it is affordable. E&O also provides the 10/90 financing package which make it convenient for buyers.

Khong adds that only selected niche developments within a good location, a right theme/concept and a branded developer will be able to carry a premium price in their projects.

E&O executive director Eric Chan says the company has made the project as convenient as possible for the regional market. It aims for foreigners to constitute 20% of buyers in Tower A.

A major consideration is utility rates will be on a commercial basis. Generally, when a developer build on commercial land, the project comes with retail facilities as opposed to a project on residential title, which will not have the retail podium.

The setback is that for a project with a commercial title, the utility rates will be 25% to 30% higher compared with one on a residential title.

In the case of St Mary Residences, although the project is on commercial land, the developer has managed to keep the utility rates at residential levels.

For those who bought into St Mary with the intention of renting out their units, they may have a bit of trouble due to the current economic slowdown, an industry source says.

“Many would have invested in it to sell or rent. The global situation is still wobbly and it is difficult to say what 2012 will bring,” the source says.

At press time, Pacific Regency located near St Mary Residences is having a 70% occupancy rate.

A customer service officer says since Pacific Regency offers short and long-term stay, it has a pretty good following compared with those that offers only a minimum of a year’s lease.

About 60% of Pacific Regency’s guests stay on a daily basis while the rest take a longer lease. Most of its guests are from the oil and gas sector.

“In terms of cost, we are more economical than a hotel, and there are only five-star hotels in the vicinity. We also offer housekeeping and 24-hour room service.

“This is what most of our guests need. We also have three dining outlets for those who want to meet visitors in a restaurant setting,” she says.

There are other choices for people like Anil who want the option of short and long-term stay other than Pacific Regency. There is UBN Tower next to Shangri-La Hotel which offers a minimum of a year’s lease, and closer to the Mandarin Oriental, there is also the Ascott in Jalan Pinang.

Operated by Singapore-based The Ascott Group, its portfolio in Kuala Lumpur also includes Somerset Ampang, Somerset Seri Bukit Ceylon, Marc Service Suites and Seri Bukit Ceylon Residence.

According to its website, The Ascott is the world’s largest international serviced residence owner-operator with around 19,000 units in key cities of Asia-Pacific, Europe and the Gulf region, as well as about 6,000 units which are under development. It has three brands internationally – Ascott, Somerset and Citadines.

The Ascott Group is a wholly-owned subsidiary of CapitaLand Ltd, one of Asia’s largest real estate companies.

One Residency, located behind Hotel Istana, is the latest addition this year but it will be St Mary Residences that will be interesting when it is completed, as it is expected to set a new benchmark in the Jalan Raja Chulan vicinity. E&O, after all, prides itself as a lifestyle developer and it will make sure that the project spells l-i-f-e-s-t-y-l-e.

By The Star (by Thean Lee Cheng)

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