Two things came as a surprise to the marketing consultant behind what will be the world's first Banyan Tree Signatures in Kuala Lumpur how quickly it was sold out, and more astoundingly, that most of its customers were Malaysians.
“As you know, Malaysians are currently not a condo-buying group, especially when the price is high, and they usually prefer landed property,” remarks Tracey Lai, the marketing director of 1 Pavilion Property Consultancy Sdn Bhd, which handles sales and marketing for the RM1.4bil high-rise due to be completed in 2015.
Sandwiched between the Prince Hotel and Residence and Hakka Restaurant on Jalan Conlay opposite Pavilion KL, which some may remember as the site of the former Wisma MISC, Banyan Tree Signatures is well on its way to becoming the “most desirable address” in the capital, if its selling price and speed are any indication.
Lumayan Indah Sdn Bhd is developing Banyan Tree Signatures on a 1.46 acre plot at the junction of Jalan Conlay and Jalan Raja Chulan.
Set to tower over the Golden Triangle at a whopping 55 storeys, it will also be one of the tallest residential landmarks here.
Lai tells StarBizWeek in an interview that while its average selling price per sq ft was RM2,000, which is already at the top end for its location, the highest transacted price came close to RM3,000 per sq ft for the smaller units at the upper floors. In terms of the rental, Lai reveals that Banyan Tree Signatures is expected to be priced at RM10 per sq ft or higher, eclipsing even Pavilion Residences' RM8 per sq ft.
And for a development of its stature, Banyan Tree Signatures is sure to have courted some similarly high-profile, high net worth tenants. On this Lai is coy, holding firm to the confidentiality of her clients.
“There were prominent people who bought this but we can't divulge,” she says with a smile.
“About 70% of our buyers were local and 30% from Japan, Hong Kong, South Korea, Taiwan, UK, Middle East and Singapore, as well as a few from Indonesia. We did approach foreign buyers but the local take-up was so fast. Many were in fact referred to us.”
Lumayan Indah had, in fact, only signed the agreement with Singapore-listed Banyan Tree in October last year, after which some 80% of the private residences were snapped up within months.
Storied brands
The reason for this, Lai believes, is the confluence of the two brands backing the project Banyan Tree, known for its ultra-luxe spa resorts in various exotic locales, and Pavilion, owner of the award-winning shopping complex on Bukit Bintang.
Banyan Tree will manage the hotel and spa itself, giving the added allure of the service and amenities the brand is renowned for.
Imagine high ceilings, floor to ceiling windows, the tinkle of champagne glasses, and warm glow of crystal chandeliers against an evening panorama of KL.
Top that off with the ability to summon a limousine, yacht or even private jet through its concierge these are but some of the things in store for the owners.
The single-block development consists of 441 private residences, 51 serviced residences and 50 hotel suites, which are located at the two uppermost floors. Like the apartments, the hotel will also be the most expensive in town, Lai says.
The spa, a hallmark of Banyan Tree, will take pride of place on level 53 and the residences below. Plans are also in store for a rooftop deck with a gourmet sky bar and restaurant modelled after the Vertigo and Moon Bar of the Banyan Tree Bangkok.
Lai explains that the private residences were mostly sold to investors, with owner-occupiers making up some 30%.
“Our role does not end here (upon the sale) as we will be looking at property management for the owners, for example if they are overseas or busy and need someone to care for and rent out their units.”
Banyan Tree ventured into residences six years ago, but the one here will be the first under its “Signatures” concept, a model centred around the development of mixed use residences that will allow the firm to maximise returns vis-vis single-use projects.
How Banyan Tree got to where it is, is the stuff of real estate legend. In 1984, Ho Kwon Ping, former financial journalist and economics editor of the now-defunct Far Eastern Economic Review, along with his wife and brother, saw potential in a disused 600-acre tin mine in Phuket, Thailand.
Following years of site rehabilitation, they unveiled the maiden Banyan Tree resort in 1994, a precursor to the 30 hotels, 60 spas, 80 galleries and two golf courses they own today.
Couture living
The next item on Lai's agenda is the Pavilion Couture Suites, the last piece of the puzzle for Pavilion KL.
Situated on the corner between Chulan Square and the Westin hotel, the suites will be built exactly above the mall's retail floor, on which the street-fronting stores of Herms, Chopard, Versace and the rest currently stand.
“The interesting thing is we have been getting enquiries even though there isn't much information about it,” Lai says of the serviced residences, whose preview was on Thursday.
The suites, 175 of them, will feature sizes ranging from 686 sq ft to 2,206 sq ft, with some 70% of them smaller than 1,000 sq ft, Lai points out.
“We haven't determined the pricing yet, but it should be within RM2,500 to RM3,000 per sq ft,” she says, explaining that this was originally intended to form Pavilion's hotel component, but those plans were shelved in favour of the demand for private residences.
But with so many developments descending on the Bukit Bintang-KLCC stretch, most recently the proposal to build the Harrods Hotel right between Pavilion and Banyan Tree Signatures, is there cause for concern?
“A prime location is where everything comes together. You can't have your own brand standing alone without the support of other brands. A consumer wants choice,” Lai retorts.
“When you see many world-renowned brands converging in one place, it is a good sign, it means we have the potential to grow.”
Besides, she contends, the sheer force of big-ticket projects such as the RM26bil Tun Razak Exchange a few blocks away would only serve to enhance the appeal of the surrounding real estate.
Buying local
One thing Lai feels strongly about is how Malaysians sell themselves short when it comes to the local property market.
“If you compare us to other global cities, we are at the low end. I just returned from Singapore and you're talking about S$3,000, S$5,000 and S$7,000 per sq ft in the central business district (CBD),” she quips.
“Even in KLCC, we have been stagnant for a long time. We haven't moved from when we were hit by the financial crisis in 2008. My personal view is that the our CBD is very underpriced.
“We hit the RM2,000 per sq ft level years ago and nobody has dared to push beyond RM3,000. Our banks got a little worried as well about our prices.”
The problem, she adds, is that buyers tend to put their money elsewhere without thinking everything through.
“In my experience, a lot of our customers are Malaysian, yet they return here to purchase real estate.
“At the end of the day, we all want to come home. And you don't want to be stuck with a property that is 14 hours away and that will cost you a lot of money to manage.”
As someone who interacts regularly with investors, Lai has seen how foreign property purchases can backfire.
“A client of mine had her Melbourne apartment in the CBD revalued downwards by 10% at the point of completion. And when she decides to sell, it must be to an Australian.
“Malaysians can be so fearful that we're paying too much for our own properties so they go overseas and pay a lot of money for properties whose returns are 2% or 3% net.
“To be fair, a lot of people have made their money investing overseas. But the common belief that you can save on rental when your children study abroad by buying a foreign home is difficult unless you have currency gains and your returns are really good.
“You can do the same thing here for less risk.”
On her pick for the best locations to invest in, Lai says prime properties are ever reliable. “Good prime property will always have ready buyers, and they are the first to bounce back.”
By The Star
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