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Saturday, March 27, 2010

Prospects in retail sector positive

Despite the generally soft sentiment in the commercial property market, there are a number of projects underway in Kuala Lumpur and the Klang Valley slated for completion over the next two years.

Most of these new retail projects are of smaller scale and located in the suburban areas. Subang Avenue in Subang Jaya has an estimated net lettable area of 250,000 sq ft, SSTwo Mall in SS2 Petaling Jaya (463,000 sq ft), 1 Shamelin in Cheras (420,000 sq ft), Citta Mall in Ara Damansara (424,000 sq ft), Solaris 2 in Dutamas (300,000 sq ft) and Viva Homes in Jalan Loke Yew (688,000 sq ft).

In Kelana Jaya, a new project Taragon Kelana Commercial Centre was launched last week for completion in the third quarter of 2011.

The project by Blackstone Seven Sdn Bhd, a unit of Allstones Group Asia, comprises five retail lots, eight blocks of shop offices and 60 office suites with a gross development value of RM80mil. Located on 1.1 acres, it is targeted for completion in the third quarter of 2011.

Allstones chairman K.H. Sim says the office suites range from 1,045 sq ft to 1,388 sq ft and priced at RM407 per sq ft. Every unit comes with a free carpark.

According to Sim, more than 60% of Taragon Kelana has been sold. “The trend for small businesses now is to own their offices in a secured environment instead of renting in upper floors of shop houses. This is a niche market we are targeting,” he says.

DTZ Research, in its latest Property Times report, says while prospects in the retail sector are positive, rentals are expected to remain soft especially in the suburban areas given the completion of more new shopping centres.

The lively food and beverage sub-sector continues to provide support to rental rates.

CB Richard Ellis Malaysia executive director Paul Khong says the office market is also seeing more new developments including the advent of a new generation of green buildings.

Generally these green office spaces can fetch rental premiums of at least RM1.50 per sq ft on top of the average rates of RM5 to RM6.50 per sq ft.

New office buildings to be completed this year include Menara Waqaf with 340,000 sq ft of net lettable area, Menara Worldwide (275,000 sq ft), HSBC’s new annexe building (129,000 sq ft), BRDB Tower (223,000 sq ft), Capital Square Office Tower 2 (600,000 sq ft), Menara Kencana (255,000 sq ft) and One Mont Kiara (380,000 sq ft).

Potentially adding to the future supply is a 100-storey skyscraper in Kuala Lumpur proposed by Permodalan Nasional Bhd.

IGB Corp Bhd is awaiting approval to build two high-rise office towers totaling 600,000 sq ft in the last phase of its Mid Valley City development. Construction may commence in early 2010 for completion in three years.

Khong adds that the local commercial real estate market is seeing growing interest from overseas institutions.

Comprising mainly Singapore, Australia, German and South Korean funds, he says they are keen in shopping malls and office buildings that are leased to good tenants.

“These are canny investors with wide experience in the region and when the right opportunity appears they are keen to buy. With further relaxation of the requirements for local equity, Malaysia will continue to attract foreign capital from a variety of sources including sovereign funds and some of the major names in the industry.”

Khong says office rentals are expected to remain competitive this year in view of the 2.4 million sq ft of new supply expected to be completed this year in Kuala Lumpur. As of fourth quarter 2009, the cumulative supply of Grade A office space in the city stood at around 29.9 million sq ft.

By The Star

Efforts to clean our rivers plausible

MALAYSIANS generally have quite poor maintenance practices and culture when it comes to public facilities, which explains why there are many dilapidated and neglected public places around.

From parks to beaches and rivers, it is common to find them in a state of neglect and unkempt with rubbish and other unsightly objects.

Take our beaches and rivers for example. Their condition is far from the picturesque scene that we see in postcards, which usually show pristine clear blue water lapping up sandy beaches or winding down green meadows and lawns.

Many of them are very unsightly and have been severely polluted with debris and all kinds of pollutants.

So, when the Selangor government announced that it is planning to rehabilitate and develop the Klang River by appointing four companies to undertake the project two weeks ago, those who still care about what’s going on around them must have been relieved to know that help is on the way to salvage the 120km river that meanders from Klang to Shah Alam, Subang Jaya, Petaling Jaya, Kuala Lumpur and Ampang Jaya.

Its objective to rehabilitate and clean up the badly polluted river into a new source of water supply will earn it many supporters given that water is fast becoming a scarce resource in various parts of the country.

The plan to develop its economic potential in the commercial and tourism sectors is also laudable to promote new sources of income for the people.

On the other hand, there are also those who must have doubted whether such a massive and ambitious project can pull through successfully.

Their doubts are understandable because the last time the proposal to clean up and develop the Klang River was made in the 1990s, nothing came out of it.

This time around, Selangor Mentri Besar Tan Sri Khalid Ibrahim says the entire project to clean, rehabilitate and develop the river is expected to take 15 years and it will attract RM50bil worth of investments.

Whether the project will be off to a good start and be successful at the end of the day depends on the persistency and will power of its promoter and project partners.

But in this instance, the public, including the squatters by the river banks and factory operators, need to play their part by watching over and caring for the river by not polluting it further.

As in all public projects, the most important criteria to ensure success is to have a strong political will to drive the project through expeditiously and efficiently.

Due diligence should be undertaken to ensure the project’s viability and how best to implement it to reap greater value for the people.

Instead of just stressing on the economic value to extract the maximum return from the project, it is necessary to ensure that it will also improve the people’s quality of life and living standards.

There should be proper balance between the need to preserve the natural eco-system and environment across the length and breadth of the Klang River and its surrounding land; and how much to be opened up for development.

Development of the river should focus on low-density projects and preferably they should be environment-friendly buildings that promote the green way of life.

The projects should blend well with the natural environment and identity so that it will not be lost to development.

After all, the Klang River has a long history as a busy waterway for merchants and traders during the country’s early days.

To ensure the river stays clean and sustainable for many generations to come, steps must be taken to educate the people that they are also stakeholders and should uphold their responsibility as joint caretakers.

Forming river watchdog groups and cleanliness awareness campaigns way before the river project takes off should be effective.

If the littering and polluting persist, heavy fines should be imposed on repeat offenders who indiscriminately dump factory waste or garbage into the river.

If the project is implemented efficiently, it will turn the river into a new resource for Selangor’s economy and promote more healthy and sustainable projects for the people.

·Deputy news editor Angie Ng recalls with fondness the clean streams and rivers she enjoyed with her siblings during her younger days in Penang.

By The Star