Stratified developments becoming a way of life

As stratified developments become a way a life, good maintenance and management have become an issue.

EARLIER this year, a new set of property managers replaced the previous one in the condominium that Siti lives. Not having a current account, she paid her quarterly management fees in cash. She was told that the receipt would be put in her postbox. It never came and she soon discovered that the property management company had absconded with the money.

As stratified developments which include condominiums, service apartments and gated and guarded projects become a way of life, good maintenance and management have become an issue.

Good management and maintenance will improve the value of the asset. This applies to all segments of the property market, be it residential, commercial or industrial.

Hence, the third reading of the Strata Management Bill 2012 on Monday is crucial, says Assoc-Prof Ting Kien Hwa, head of Centre for Real Estate Research at Universiti Teknologi Mara.

“Currently, property management is part of a service provided by valuers, who are regulated by the Board of Valuers, Appraisers and Estate Agents.

The work of valuers can be broadly divided into three areas property management, valuation work and real estate agency work.

This means that property management is a regulated profession and delinquents risk having their licence suspended.

For the last five to six years, managing stratified properties has become an issue, he says. As more of us live in gated and guarded developments, and high rise condominium and serviced apartments, property management is evolving to become a lucrative industry.

Ting says the Board of Valuers is in the process of creating a third register to accommodate property managers. Valuers and real estate agents are governed by two registers and the Board of Valuers are working on creating a third one for property managers.

Says Ting: “This is a similar situation as in the early 1980s when there were many illegal real estate agents. They were given a one-year period to register with the board.”

Ting says the duty and responsibilities of property managers go beyond just collecting money and managing a property. The word “managing” covers a whole gamut of expertise and responsibilities. These include insurance valuation, the appropriate rate of service charges to levy on owners, managing service providers like security guards and cleaners, gardeners and managing tenants and rental rates among other duties.

Depending on whether it is a residential or commercial property, some issues may overlap.

To claim that valuers want to monopolise the property management industry is incorrect, Ting says.

“Some parties say they want to liberalise' the profession. Just as engineers and architects are regulated by the Institute of Engineers and Pertubuhan Akitek Malaysia respectively, so property managers are regulated by the Board of Valuers because property management is part of the work of valuers. This is the situation in the United States, Britain and Australia. Shall we then liberalise' the achitecture and engineering profession by allowing more people who are untrained to practise as architects and engineers because architects and engineers are monopolising' the industry?” Ting asks.

Ting says this argument to liberalise the profession and cut out the monopoly does not hold water at all.

He says there are currently 8,000 trained property managers in the country and every year, 450 more graduates enter the job market.

The local public universities provided courses in property management in the late 1960s because they knew there would be a need for this.

Malaysian Institute of Professional Property Managers president Ishak Ismail says: “The Government was visionary enough to foresee a time when stratified housing will become part of the Malaysian property landscape. The first condominium was Desa Kuda Lari in the KLCC area.

“Today about four million people live in stratified projects. About 80% of all the stratified projects are managed by joint management bodies and management committees. About 20% are outsourced and of this about 58% are managed by illegal property managers.”

Ishak said over and above the various issues that fall under property management, two sets of skills are needed the hard skills in managing the property and the soft skills in people management.

He says there is a need to put in the proper regulations to regulate property managers in order to improve the value of our property assets. There must be no conflict of interest because it involves public money, be it house owners or tenants of commercial properties, he says.

By The Star

Mah Sing, China firm in deal on 3 towers at Mont' Kiara project

KUALA LUMPUR: Mah Sing Group Bhd, Malaysia's fifth largest property developer by revenue, has partnered a Chinese firm to build three towers at its RM408 million Icon Residence Mont' Kiara project in Mont' Kiara, Kuala Lumpur.

The firm, a diversified group from China, will build the towers in exchange for 96 units from Mah Sing.

The units are worth a combined of RM220.8 million, or an average RM1,200 per square foot, said Mah Sing group managing director-cum-group chief executive Tan Sri Leong Hoy Kum.

Icon Residence Mont' Kiara comprises three towers with a total of 260 units. Each unit is worth an average of RM2.3 million.

With the Chinese firm taking up 96 units, this would mean Mah Sing has sold 60 per cent of the project since the project launch in June this year.

Leong said this is the first arrangement between Mah Sing and the Chinese firm and also the first of its kind for the group.

He said this arrangement will free up the construction cost for Mah Sing, allowing the group to use its cash flow for other opportunities.

Leong added that it will also set a precedent for similar arrangements in the future for Mah Sing's other projects.

"This is a win-win arrangement for both parties as we believe there is plenty of upside to the project once it is completed, and Mah Sing effectively does not have to come up with further cashflow to complete the project," Leong said.

Dubbed an architectural masterpiece, Icon Residence Mont' Kiara is a one of its kind serviced residence and the first in the region to adopt a distinctive Mediterranean theme.

It will be Green Building Index and Green Mark compliant with some features, such as variable refrigerant flow air-conditioning system with energy saving benefits and automated waste collection and rain water harvesting system.

Leong said the project has attracted strong interest from Hong Kong, China, Singapore, Indonesia, Taiwan, Korea and Malaysia.

Meanwhile, Leong said Mah Sing will not revise its sales target of RM2 billion for 2011. The company has achieved RM1.7 billion as at September 2011.

By Business Times

Mah Sing secures RM221mil bulk sales in Icon Residence Mont Kiara

KUALA LUMPUR: Mah Sing Group Bhd has secured a RM220.8mil bulk sale of 96 units of serviced residences in Icon Residence Mont Kiara, at an average pricing of RM1,200 per square foot.

The units were taken up by an established Chinese corporation that would undertake the construction of buildings and external works of the entire project in return for the 96 selected units, Mah Sing said in a statement today.

Mah Sing will be the sole marketing agent for the 96 units. “This is indeed an innovative arrangement as it frees up the construction cost for Mah Sing and allows us to use our cash flow for other opportunities. “It also sets a precedent for similar arrangements in the future for other Mah Sing projects,” said Mah Sing Group Managing Director/Chief Executive Tan Sri Leong Hoy Kum without naming the Chinese corporation.

Icon Residence Mont Kiara, dubbed the first in the region to adopt a distinctive Mediterranean theme, comprises 260 units in 3 iconic towers.

This bulk sale brings the take up of the project to more than 60%.

Mah Sing said the project had attracted strong interest from Hong Kong, China, Singapore, Indonesia, Taiwan, Korea as well as Sabah and Sarawak.

“Mah Sing intends to start a series of roadshows to these countries to reach out to its registrants and facilitate their purchase,” it said.

By Bernama

GLCs vs private developers?

UEM Land Bhd's acquisition of Sunrise Bhd, which developed Mont'Kiara in Kuala Lumpur, created the country's largest property development company by market capitalisation.

PETALING JAYA: When Sime Darby Bhd acquired a 30% stake in Penang-based Eastern & Oriental Bhd, it was just the latest in a series of acquisitions led by government-linked companies (GLCs) in private sector property developers.

Late last year, government-owned UEM Land Bhd acquired Sunrise Bhd to create the largest property development company in Malaysia by market capitalisation.

Last year too, Malaysian Resources Corp Bhd (MRCB) and IJM Land Bhd proposed a merger which would have created the country’s second largest property player with a market capitalisation of over RM7 billion and a landbank of over 9,000 acres (3,600ha), but the deal fell through. Analysts and market observers speculated that it was because neither could decide who would lead the merged entity.

In addition, most of the private property developers now have a major government-related shareholder, usually a fund.

For instance, S P Setia Bhd’s two largest shareholders are Skim Amanah Saham Bumiputera (20.1%) and the Employees Provident Fund (15%), while its CEO Tan Sri Liew Kee Sin owns a 12% stake, according to its latest annual report.

In the case of Mah Sing Group Bhd, managing director Tan Sri Leong Hoy Kum holds a 35.2% stake while various government-related funds such as Koperasi Permodalan Felda Malaysia Bhd, Permodalan Nasional Bhd, the EPF, Kumpulan Wang Persaraan and Valuecap Sdn Bhd collectively own a 20.8% stake, according to its latest annual report.

“What we notice is that the government or GLCs are buying into private sector companies. We can’t help but wonder if this is the crowding out effect and if the government is looking to become a dominant player in the property sector,” said an analyst.

In Hong Kong or Singapore, the government’s role in property development is clear cut: to ensure the steady release of land to avoid either overbuilding or excessive speculation and to ensure the availability of affordable housing for the population.

“Over here, the government is mainly buying into developers that operate mainly in the high end of the market. In other words, not the ones that build affordable residences,” he said.

On the other hand, there is almost an equal urgency to privatise parcels of government land in strategic areas. In 2009, the government decided to swap a 62.5-acre piece of prime land in Mont’Kiara for a RM628 million trade and convention centre by the Naza Group.

It is also privatising the 495-acre plot of land on which the Sungai Besi air base is sited, the proposed 75-acre Kuala Lumpur International Financial District project near Jalan Tun Razak and the 3,300-acre Rubber Research Institute land in Sungai Buloh.

In fact, part of the rationale for the MRCB-IJM Land merger was to give the merged entity an edge in developing the EPF-led development of the Sungai Buloh project.

So, as the government releases more of its land to the private sector, it seems — ironically — to be taking a bite out of the companies that would most benefit from these projects.

A market observer said there may be another reason for the government’s increasing interest in the property sector. “They may be acting as the buyer of last resort. If you talk to developers, some of them think that Malaysia is already fully supplied with homes. Many families have multiple homes and have bought for the next generation. In addition, our household debt to GDP is relatively high at about 75%, so the propensity to borrow is limited. Thus, some developers may be cashing out,” he said.

The increases in housing prices have generally lagged GDP growth since the end of the 1997-98 Asian financial crisis, but over the last two years there has been a surge in prices, which is generally regarded as making up for the lag in prices for the last decade.

“Housing prices went up by an average of just over 3% annually while GDP growth in the same period was about 5% to 6% a year. The increases in housing prices usually track GDP growth, so there was obviously a lag. But it may be because housing supply increased substantially in that time.

“In the last two years, however, there was a large jump in prices so it was more of a ‘catching up’ than the start of a bubble. After this one-off re-rating though, it is unclear if prices will continue rising and the housing developers may be cashing out,” the analyst added.

This suggests the government could be functioning as a buyer of last resort, especially since there has been little foreign merger and acquisition interest in listed Malaysian property developers.

Still, it could just boil down to attractive valuations. After all, the majority of Malaysian property stocks have generally — and long — been undervalued and most trade well below their revised net asset value, and some even below their historical book value.

Thus, some of the acquisitions are seen as advantageous to the GLCs. One such example analysts cite is UEM Land’s purchase of Sunrise, which was priced at single price-to-digit multiples, and came with strong branding, a large pool of unbilled sales and a pipeline of ready-to-launch projects that will support UEM Land’s near-term earnings.

Other analysts disagree with the notion of GLCs being buyers of last resort. UOB Kay Hian Research head Vincent Khoo dismissed the perception. “Every company is looking for growth opportunities and the property sector, which has been booming for the past few years, would be their target.”

But why only the high-end developers? “You don’t maximise your profit by selling cheap houses,” said Khoo.

MIDF analyst Sean Liong agreed. “All these funds have a mandate to get certain returns. That’s it. I don’t think there is any hidden agenda. And I don’t think the GLCs have an unfair advantage when it comes to bidding for the privatised land.”

Affin Investment Bank property analyst Isaac Chow was more succinct. “If it’s a business move, it’s a business move. It’s just a matter of investment.”

By The EDGE Malaysia

Mixed outlook for property in H2

Reapfield says prices in the condominium market, excluding Mont’Kiara and KLCC, have not gone down and rental remains strong.

PETALING JAYA: The outlook of the property market is mixed, with developers reporting firm sales while property agents report tell-tale signs of a slowdown in certain market segments.

Rahim & Co executive chairman Datuk Abdul Rahim Rahman said: “The market is giving a mixed indication, but what is happening in the United States and Europe is very serious and will have an effect on this part of the world. For example, the take-up rates of newly-launched condominiums have been very encouraging with more than 60% sold just a few months after launching. However, on the rental market, leasing has been less active and rental rate has not increased that much.”

“The quick and healthy take-up rates reported by developers mean that people are still confidently investing despite the seriousness of the US and European debt issues,” he said.

He expects the number of launches to continue to be fairly healthy with good take-up rates, especially for those outside the Kuala Lumpur city centre

“The market is not saturated. Although prices of landed units may have gone up quite a bit, it is possible to buy detached houses at RM1mil in Shah Alam,” he said.

Senior vice-president Gerard Kho of real estate consultancy Reapfield, reckoned that the market might be rather flat when compared with the first half of this year and the whole of last year. The market during the last 18 months have been exceptionally buoyant and the full impact of the US-Europe problems were not factored in by the market then.

“We are not sure what will happen in the second half of this year, but we are taking a cautious stand,” said Kho.

He said the prices of landed units would continue to go but they are seeing a disparity between asking price and transacted price widening. This disparity was seen a couple of months ago, he said. Prices have gone up compared with the first half of this year but the increase was less.

“We expect this situation to continue - growing disparity between asking and transacted price,” Kho said.

As for the condominium market, excluding the KLCC and Mont' Kiara, prices have not gone down and rental remains strong. Kho said prices were flat in the Mont'Kiara and KLCC market.

The company was also seeing more listings coming into the market which means there were more units available now and buyers were waiting on the sidelines looking for a good buy, he said.

“But they are not going for fire-sale prices,” he said.

“People today will be buying at more realistic prices, unlike the first half of this year when they were prepared to pay more than the current market prices. As more stocks entering the market, the market may soften but despite that, high-rise units costing less than RM500,000 are expected to do well.

“If one is looking at the Klang Valley specifically, whether the market is up or down, there will be demand,” he said.

Kho said in terms of market activities, the first half of this year was the most buoyant compared with the Jan-June 2009 and Jan-June 2010 periods.

As for the healthy take-up rates, this may largely be attributed to the attractive lending terms offered by the banks together with the various rebates offered by developers.

In a 23-acre development known as Empire City next to the Lebuhraya Damansara-Puchong (LDP) by the Empire Group, a marketing agent reported that sales have been brisk with five to six units sold on a daily basis about two weeks ago.

Known as serviced office suites, the units are located on top of what will be a five-star hotel.

“This enables the buyer to apply for a 90% loan because this project is on a commercial title. If it were a residential title, he can only get 70% loan, if this is his third mortgage,” the agent said.

He explained that buyers need only pay a deposit of RM5,000. There is a 5% rebate. If a unit costs half a million, a buyer gets RM25,000 discount. He needs to pay the remaining 5% (RM25,000) upon signing the Sale and Purchase Agreement, less the RM5,000 booking fee. His initial capital outlay amounts to only RM20,000. The entire 23-acre development is expected to be completed by 2015.

Rebates have become a feature in today's launches and may be a sign of the competitive property market, particularly for condominium sales.

In a three-acre development in Jalan Kiara 3, near Mont'Kiara heading towards Segambut, Mitrajaya Homes group relaunched Kiara 9 Residency over the weekend. The completed project comprises about 200 units of condominiums and 16 units of 3.5 storey villas. The condominium block is 70% sold, the villas, 50% sold.

There is a 20% rebate for condominium units facing west, those facing east, a 12% discount and those facing another upcoming condominium block, a 15% discount.

Some of the discounts could go as high as RM200,000. Landed villas come with a 5% rebate.

As an indication, a 2,200 sq ft unit complete with cabinet fixtures and electrical appliances on the 10th floor facing another ongoing block of high-rise apartment is priced at RM1.7mil, and a discount of up RM256,000 has been given.

By The Star

Mah Sing to launch RM2.5bil projects

Tan Sri Leong Hoy Kum with a model of Icon Residence@Mont’Kiara

PETALING JAYA: Mah Sing Group Bhd will launch RM2.5bil to RM3bil worth of projects in the Klang Valley, Penang and Johor this year to meet its sales target of RM2bil for the current financial year ending Dec 31.

Group managing director and chief executive Tan Sri Leong Hoy Kum said the projects would comprise an array of commercial, residential and industrial properties.

The two commercial projects are Icon City Petaling Jaya and Star Avenue@D'Sara, while the industrial project is iParc 3@Bukit Jelutong.

Residential projects lined up for launch in the Klang Valley include Hijauan Residence in Cheras, Kinrara Residence, Aman Perdana, Bayu Sekamat, M Suites@Jln Ampang, M City@Jln Ampang and Garden Plaza in Cyberjaya.

There are also three residential projects to be launched in Penang Legenda@Southbay, Icon Residence and Ferringhi Residence. The project in Johor Baru is Sierra Perdana.

Leong said Mah Sing's RM2bil sales target for this year was higher than the record sales of RM1.5bil achieved last year.

As at April 11, the developer recorded sales of RM738mil, which was about 37% of its sales target for this year. Mah Sing also has unbilled sales of RM1.3bil as at Dec 31, 2010 that will be realised over the next two to three years.

For the financial year ended Dec 31, 2010 (FY10), Mah Sing achieved profit after tax and minority interest of RM118mil, a 25.5% increase over RM94mil in 2009. Group revenue for FY10 was also higher at RM1.1bil against RM702mil previously.

Leong said Mah Sing would aggressively expand its land bank and was now looking for suitable prime land in greater Kuala Lumpur, Penang island and Johor Bahru.

Last year, the group undertook 10 land acquisition exercises. This year, it has so far signed one deal.

“These are prime land which can yield remaining gross development value (GDV) and unbilled sales of about RM14.1bil. It should keep the group busy for the next seven years,” he added.

Leong said Mah Sing aimed to buy land that could provide GDV of RM7bil to RM12bil this year. He said the group had the resources to fund the acquisitions.

Besides making outright land purchase, the group is also open to joint ventures with land owners.

“We are scouting for land near the proposed MRT stations, as the new transport infrastructure would create higher value for these land,” he added.

Mah Sing's upcoming projects that are located near the proposed MRT stations along the Sungai Buloh-Kajang line include Star Avenue@D'Sara (near Taman Industri Sungai Buloh station) and One Legenda and Hijauan Residence (near Taman Suntex station).

Projects along the proposed circle line include M Suites (near Great Eastern mall stop), M City (near Ampang point station) and Icon Residence Mont Kiara (near Matrade stop).

Star Avenue@D'Sara, the first night-guarded concept shop-office development, is one of the first new commercial projects coming up along Jalan Sungai Buloh. The RM402mil project comprises 3-storey shop offices and retail lots.

The RM980mil Kinrara Residence is a medium-high-end residential project on about 139 acres in Puchong. It comprises superlink residences, semi-detached units and bungalows.

M-City@Jalan Ampang will feature residential suites, designer small-office home-office (soho), sky villas and boutique retail units on five acres of freehold land.

The RM1.2bil project is targeted for preview in the second half of this year. Its first-phase preview will be designer soho and 3-storey boutique retail shops.

Icon Residence Mont' Kiara will feature 260 partially-furnished residences with a GDV of RM408mil. The development will offer about 200 different unit layouts in three iconic towers of 26, 28 and 36 storeys.

Dubbed garden terraces in the sky, the residences will have price tags from RM1.148mil.

By The Star

Going up, down or sideways?

Mont’Kiara, predominantly an investor proposition, is facing a high rate of vacancy.

Is there a softening in the condominium market? Some locations seem to be doing better than others while others are not doing as well as before.

ABOUT two to three weeks ago, a developer promoted a friend-bring-friend sale, whereby if a friend were to buy a condominium unit, the introducer will get a small reward. That project, located in a desirable location, was launched last year, amid much fanfare.

In another project, a developer is offering a 20% rebate. This enables buyers to pay 10%, enjoy a 20% discount off the purchase price and get a 70% loan. This 30:70 ratio satisfies Bank Negara's ruling (announced last November) which requires buyers of third and subsequent residential properties to fork out a 30% down payment.

In another part of Kuala Lumpur, a developer launched a condominium and had 80% sales on the first day, prompting the company to open up its second block just a few days after the launch of the first block.

At the same time, analysts are reporting that there will be a re-rating of property prices and that prices will go up. If their judgement call is correct, why are developers coming up with innovative schemes in order to sell their high-rise condominiums while other projects are selling like hot cakes?

Says SK Brothers Realty Sdn Bhd general manager Chan Ai Cheng: “The term softening property prices' is selective, it depends on location, type of properties and pricing. That 30:70 ruling by Bank Negara has not affected the market where buyers buy to stay, but it has affected those who are buying for speculation, or buy in order to flip it after it is completed.”

Chan says that ruling has been very well-implemented because most of her buyers now are those who buy in order to stay, and that 30% downpayment is not an issue with them.

“Most of our buyers are serious buyers, they buy to occupy and when you buy to stay, that 30% down payment is not an issue. It is only when you are buying to invest, or to speculate that you think many times before forking out that 30% money up front,” Chan says.

Much of SK Brothers' work involves helping developers to market their projects.

Like S K Brothers, Reapfield is also seeking good sales from their negotiators. Senior vice-president Gerard Kho says the fact that the company increased its negotiators from 700 last year to 800 this year testifies that the market is good.

Unlike S K Brothers who help developers to market their projects, Reapfield's sales are from the domestic, secondary market.

“When Bank Negara announced that ruling, we were concerned but our agents told us not to worry, that developers and buyers will work around it and today, that is what we are seeing. Overall, the market is adjusting to it, and a rebate is one of the ways to do it,” he says.

Nevertheless, there are certain things to note in the condominium market, excluding the KLCC market because that market is different, a real estate professional says.

“Condominium prices are not the only things to watch out for, although that is one of them. The rate of rental and its rate of increase or decrease says a lot about a location,” he says.

Mont'Kiara, predominantly an investor proposition, is facing a high rate of vacancy. “You can see that when you go by that area at night. Although the “how many units are lit up” principle may not be entirely accurate, it provides a good gauge of how popular a condominium project is.

“The next thing to look out for is rental rates are they sliding? We are seeing that happening here in Mont'Kiara. Investors are accepting a lower rate of returns, of about 4% compared with 7% to 8%. Will it go down to 2.5%. I hope not, but how much further will investors go?”

He says these are signs of a market going down. Right now, because it is location-specific, there is not much concern. The company he works for is nevertheless, keeping tabs on that market. Mont'Kiara, on average, is priced about about RM600 to RM650 per sq ft today, although some may be launched at about RM800 per sq ft.

While Mont'Kiara offers mostly high-end condominium units, over at Damansara Perdana, the situation is slightly different. Prices are lower at Damansara Perdana and because of this, it enjoys a bigger market with both owner-occupiers and tenants. Because of its proximity to good amenities, it has a good rental market with a 430 sq ft studio unit at Ritz Perdana being rented out for RM1,200 to RM1,300. The older blocks in Perdana Exclusive (two rooms with 860 sq ft built-up area) are rented out for RM1,400 to RM1,500.

“The studio is doing better in both the rental and in the for-sale market,” he says.

In the event there is a softening, the condomininium market will be affected first, he says. Over at the KLCC market, there was much euphoria there and prices just escalated. Today, although prices have come down, that location seems to be holding well.

“The KLCC condominium market offers a different product and it is a market that does not follow the trend,” says Reapfield's Kho.

RAM Rating Services Bhd head of real estate and construction ratings Shahina Azura Halip says demand for residential properties will remain healthy. This is supported by domestic economic growth, healthy demographics with 40% of the population aged between 20 and 44 years and 37% below the age of 20, rural-urban migration (urbanites as a percentage of the total population in Malaysia increased from 68% in 2005 to 71% in 2009) and low unemployment rates (less than 4% between 2006 and 2010).

“The high-end condominium market is envisaged to be more challenging given the substantial incoming supply. In Kuala Lumpur, where the bulk of such properties are located, the inventory of high-end condominiums summed up to almost 31,000 units as at the end of the third quarter of last year. This is projected to be joined by over 7,000 units in the next five quarters. This is expected to cap the potential upside for the prices of these high-end abodes.

“The demand and supply dynamics vary according to location. The outlook on the broad sector may not necessarily translate into similar views on different locales. Areas such as Mont'Kiara and KL central business district are facing huge incoming supply, which probably explain the incentives that may be offered to push sales for certain developments. According to statistics from Ho Chin Soon, the incoming supplies in these two areas are expected to increase by a respective 24% and 25% between 2010 and 2012.

“Prices of high-end units in these areas had fallen in 2009 and had only shown slight increase in the second half of last year. Dampened by the supply situation, rental rates for high-end condominiums in these areas have also been reportedly declining in the last few years.

“We think they are unlikely to recover this year due to the large incoming supply. Rental rates for luxury condominiums in KLCC, for example, have fallen from about RM5 per sq ft in 2007 to around RM4 per sq ft in the third quarter of last year,” Shahina says.

By The Star

Several parties offer to buy 1 Mont’Kiara from Aseana

PETALING JAYA: London-listed Aseana Properties Ltd has been approached by several parties to purchase 1 Mont’Kiara (1MK) development, a retail cum office space development, but no decision has been made so far, a statement from Aseana Properties said.

“As this asset is situated in a prime location in Kuala Lumpur, it is inevitable that we continue to receive offers from interested parties. Any confirmation of a transaction will be announced to the relevant regulatory authorities,” a statement from Ireka Development Management Sdn Bhd said.

Aseana Properties owns 1MK while Ireka Development Management, a wholly-owned subsidiary of Ireka Corp Bhd, is managing the property. 1MK is developed by Ireka Corp Bhd.

It was reported on June 11 that a real estate fund management company affiliated with Hong Kong’s Cheung Kong Group has made a bid for it. Property tycoon and the world’s 14th richest man Li Ka-shing controls Cheung Kong Group.

1MK is the newest retail centre and is scheduled to be completed by the third quarter of this year. It is situated at the entrance to Mont’Kiara and is located directly opposite Plaza Mont’Kiara.

The project is located on 3.4 acres and comprises several components: a 34-storey office tower which is already 92% sold, a 20-storey office suite tower which will be put on lease and a five-storey retail block. The residential components which consist of Ireka @ Kiara 1 and Ireka @ Kiara 2 have already been completed. The different components are interconnected.

The bids were for the 20-storey office suite tower which has a net floor area of 185,000 sq ft while the retail block has a net lettable area of 250,000 sq ft, which is about half the size of The Gardens at Mid Valley Mega Mall.

To give an indicative price of the 20-storey block, the first phase which comprises the 34-storey office tower block was sold in 2007 at an average price of RM550 per sq ft. The asking price in the secondary market is about RM700 per sq ft today while the unsold units from the developer in hovering between RM680 and RM700 per sq ft. At RM680 per sq ft, the 20-storey office suite tower market value would be RM126mil while the retail block, with a mark-up value of a conservative 20% more than the office space market value would be RM204mil. That would total up to RM330mil. It was reported that Cheung Kong Group made a bid for this 20-storey office suite tower and five-storey retail block for RM300mil.

SK Brothers Realty Sdn Bhd general manager Chan Ai Cheng said other than Plaza Mont’Plaza, there is nothing to compare with 1MK.

Solaris@Dutamas and Solaris@Mont’Kiara are commercial areas, but they are four-storey high and do not have office tower blocks, nor the residential or retail elements enjoyed by 1MK, according to Chan.

1 Mont’Kiara was developed as a joint venture with Singapore-based CapitaLand, one of Southeast Asia’s largest property developer.

CapitaLand Commercial (M) Sdn Bhd in a statement said CapitaLand’s interest in 1MK is through the Malaysia Commercial Development Fund (MCDF), a real estate private equity fund.

“The MCDF, which owns 14.9% of 1 Mont’ Kiara, has an active portfolio management strategy where the fund will seek to divest its properties at the appropriate time. As 1 Mont’ Kiara enjoys a prime location, there has been continuing interest by other parties to purchase the development,” the statement from CapitaLand Commercial said.

CapitaLand owns an effective 21% stake in MCDF, a private equity fund which is managed by its wholly-owned financial services business unit, CapitaLand Financial Ltd.

By The Star

Sunrise confident of brisk sales for 28 Mont' Kiara condo

Property developer Sunrise Bhd is hoping to repeat the success of its 10 Mont' Kiara luxury condominium project in Kuala Lumpur with another similar project within the vicinity.

The 10 Mont' Kiara, featuring a 42-storey tower with 320 units, was sold out within months of launch.

Sunrise assistant general manager of projects department, Raymond H.C. Cheah (picture), said 28 Mont' Kiara is a 41-storey condo building, comprising 460 units with built-ups from 3,000 sq ft to 4,000 sq ft. Total gross development value of the project is RM800 million and is targeted to be completed in three years.

Cheah said 100 units of the condo had been taken up since its soft launch last Saturday.

"We are confident about sales (for 28 Mont' Kiara) due to its location and features of the property," Cheah said after the media walkabout of 10 Mont' Kiara in Kuala Lumpur yesterday.
He said the price of 10 Mont' Kiara condo units has appreciated by almost 30 per cent since it was launched three years ago.

"The units were sold at about RM500 per sq ft then and now they are fetching RM700 per sq ft.

"This track record has made our previous customers come back to buy more Sunrise properties, especially since second time Sunrise property buyers will get a 2 per cent discount (off total purchase price)," said Cheah.

Sunrise has completed the 10 Mont Kiara project and is in the midst of handing over the units to their owners.

By Business Times (by Zurinna Raja Adam)

Integrated mixed development for Bangsar South

Villa Mont'Kiara is the first boutique project under UOA.

UOA Holdings Sdn Bhd’s urban renewal initiatives of the Kerinchi squatter colony into an integrated mixed development called Bangsar South has taken off well with about a third of the commercial precinct currently under construction and two residential blocks completed to-date.

The 60-acre development, located off the Federal Highway, kicked off in 2007 and will take around 10 years to complete.

UOA general manager David Khor says Bangsar South will comprise 34 office blocks, one retail block, and seven residential blocks.

This will translate into a total gross lettable space of 5 million sq ft of office space, 600,000 sq ft of retail space and more than 2,000 residential units for a total gross development value of RM2.5bil.

So far the company has sold RM253mil worth of boutique office towers of 10 to 11 storeys to corporate buyers who will have the naming rights for the property.

The residential properties were opened for sale since 2007 and so far 60% of the 470 units have been sold.

The retail space on the three storey The Sphere boutique mall is only available for lease.

So far, the company has sold eight office blocks worth a GDV of RM253mil and another six blocks have been completed. Two of the completed blocks have been rented out and another four blocks are available for en-bloc sale or rental.

The selling price for the office space is around RM700 psf while the asking rental rate is RM4.50 psf.

Khor says UOA has improved the infrastructure access between the residential and commercial precincts by widening the main road leading into the area into three lanes and upgraded the Putra LRT’s Universiti station. Pedestrian pavements and sheltered pavilions have also been built.

Some of the completed office blocks in Bangsar South

According to him, Bangsar South projects will continue to be the main growth driver for the company over the medium to long term.

“Going forward, the development in Bangsar South should remain the company’s focus as it will contribute positively to the company’s bottomline over the next seven to 10 years,” he adds.

The company also has other on-going niche development projects in Taman Desa, Segambut, Bangsar and Kepong just to name a few.

Its investment properties in both commercial and residential properties will continue to contribute stable investment income on an annual basis. “We anticipate both the commercial and residential components to be well balance in the future. Their contribution will largely depend on the demand and supply of properties in the coming years,” Khor says.

By The Star

Bungalow project to help Sunrise lower gearing

KUALA LUMPUR: Sunrise Bhd expects to reduce its net gearing level of 37.5% with proceeds from The Residence @ Mont’Kiara project, which has registered bookings totalling RM88.4mil.

As the bungalow development was already completed, all proceeds would immediately reduce the company’s current net borrowings of RM346.7mil, said executive chairman Tong Kooi Ong.

On new projects, he said Sunrise would time and price future property launches based on prevailing market conditions.

“We will take into consideration what the market demands are when establishing our costs and product mix,” he said at an analysts briefing yesterday.

The high-end segment would take longer to recover from the current economic downturn, Tong said, adding that there would be greater demand for affordable properties.

“We have a range of potential projects that we can scale up or down depending on the market situation,” he said.

Among the developments in the pipeline are its MK 20 and MK 28 projects within the Mont’ Kiara area and its Solaris Towers project off Jalan Sultan Ismail in Kuala Lumpur.

Tong said Sunrise would launch one of these projects by 2010.

On another note, Tong said the company’s directors had yet to decide whether to declare dividends for the financial year ending June 30.

“We are still undecided. While people buy shares because of the dividends, for this year, we feel that would not be the best decision. We feel our shareholders will benefit more if we invest in assets instead.”

Tong hinted that Sunrise was looking to purchase land for development purposes within Kuala Lumpur but outside the Mont’ Kiara area.

Meanwhile, the company’s net profit for the third quarter ended March 31 surged 48% to RM30.57mil from RM20.64mil in the previous corresponding period.

Revenue rose 5.3% to RM165.22mil against RM156.96mil previously.

The rise was attributed to new sales of some of its property projects, primarily 11 @ Mont’ Kiara and 10 @ Mont’ Kiara. For the nine months ended March 31, Sunrise chalked up new property sales amounting to RM247mil.

“As of March, we have unbilled sales totalling RM965mil which will underpin earnings until end-2011,” Tong said.

By The Star

Sunrise wins best residential awards in AsiaPac Property competition

10 Mont'Kiara

KUALA LUMPUR: Two luxurious condominiums under construction by Sunrise Bhd have won best residential awards in the Asia Pacific Property Awards 2009 competition.

Sunrise said on April 29 that 10 Mont’Kiara won in the category for “Best High Rise Architecture in Malaysia” and 11 Mont’Kiara for “Best High Rise Development in Malaysia”.

The Asia Pacific Property Awards were established in 2008 and were selected by independent judges selected by the International Property Awards organisers.

Twenty-one countries in the Asia Pacific zone took part in the coveted property awards this year which was sponsored by CNBC Arabia Television.

The luxurious bungalow-in-the-sky twin-tower 10 Mont’Kiara boasts 332 lavish units with sizes ranging from 3,478 sq ft to 4,090 sq ft and sprawling penthouse units of 7,500 sq ft.

11 Mont'Kiara

The iconic Green Mark-rated 11 Mont’Kiara presents five uniquely patterned curvilinear towers with a total of 339 units each enjoying a grand 270º view. With two private abodes per floor, unit sizes start from 2,700 sq ft with a choice of eight unique designs.

Limited units in both condominiums, located next to each other at Jalan Kiara 1, are available for sale.

By The EDGE Malaysia

Depreciating high-end condos

Property prices in KLCC and Mont’Kiara areas could stabilise if economy recovers

PETALING JAYA: Property values of high-end condominiums in Kuala Lumpur City Centre (KLCC) and Mont’Kiara are expected to retrace by up to 20% to 2006 levels by the first half of next year, according to Kenanga Research.

The average capital values of KLCC and Mont’Kiara in 2006 were RM943 and RM466 per sq ft respectively, compared with RM1,128 and RM564 psf respectively currently.

If the Kenanga Research projection is right, this would mean the luxury residential segment in these prime locations could fall by as much as 16% to 20% over the next year, on top of a 6% to 10% depreciation since their peak.

Average prices in KLCC peaked at RM1,291 psf in the first half of last year; for Mont’Kiara it was at RM598 psf in 2007.

However, the research house in its report on Monday said property prices in these locations could stabilise if the economy recovered earlier and/or investors had strong holding power.

The research house also expected selling pressure to accelerate when an additional 11,000 condominium units are completed in the next two years, with 60% of these units in the KLCC area.

It should be noted that the number of people putting up their properties for sale should not be used as a measure of actual transactions.

“With the rental opportunities and capital values in a downtrend, property investors will be pressured to unlock their cash to fund other investments,” it said.

Khong & Jaafar Sdn Bhd managing director Elvin Fernandez said due to the economic downturn, property values at Mont’Kiara and KLCC could return to levels that may be sustained by rental returns.

“How low they will go and whether they will overshoot on the downside will depend on the severity of the downturn, going forward,” he told StarBiz in an e-mail.

Fernandez noted that prices in these locations had appreciated steeply between 2005 and 2007, and to sustain these high prices, the rentals had gone up in tandem.

“But there was a constraint in the charging of rentals simply because the expatriate community was not about to pay or couldn’t afford such rentals,” he said.

OSK Research analyst Mervin Chow expected at least a 20% downside risk and prices to bottom in 2010.

“About 30% and 40% downside (in property value) is a reasonable expectation,” he told StarBiz.

He said KLCC and Mont’Kiara condominium prices had already come off by 10% to 20% since late last year. Some properties in these areas, however, still enjoy capital values close to their peaks last year.

By The Star (by K.C.Law)

Mont’Kiara’s glooming challenge

Mont’Kiara is a sought after address for high-end condominiums.

The best way to check out a location is to take a drive. If the aim is to determine whether the place is occupied, take that drive at night. And so there is Mont’Kiara ahead of you, nice and sprawling, with a lot of high-rise condominiums, many of them in darkness.

The older and more established ones are about three-quarters full, the newer ones are struggling at between 30% and 50% occupancy. With about 2,000 units added to the market this year, this general average could fall further, says Regroup Associates Sdn Bhd executive director Paul Khong.

As the economic crisis deepens, questions about the state of some locations have risen. Ireka Corp Bhd has been, by far, the most forthright developer about the situation there. Though cautious, executive director Lai Voon Hon admits it will not be rosy for the short term. Ireka has built about 2,000 units there.

“We will see a slow down in the property market in terms of sales volume. That is a result of people’s confidence. But the present scenario will not be as bad as the last 1997/98 Asian financial crisis,” says Lai, who has chalked up six projects there, some of which are joint-ventures with Singapore’s CapitaLand group.

Because of the tough times across the board, buyers are taking a wait-and-see attitude with big purchases such as these. “Sales have been slow,” says Lai.

“Some think the situation will recover in the third quarter, others say it will take a year. But developers are not dropping their prices. It is in the secondary market that buyers may be forced to sell, preferring to convert their assets to cash. We will bound to have that as many units will be completing this year.”

There are about 6,800 completed units there. The ongoing projects will comprise another 5,000 units, out of which about 2,200 units will be handed over this year.

Both developers and analysts say prices there have not gone up as quickly or significantly as KLCC. Most of the prices are close to construction price and land cost.

“Developers are not making super profits. Even if they drop, it will settle at a fair level,” says Lai, adding that the normal profit in Malaysia generally is 5% to 30%.

While Lai and the real estate fraternity believe Mont’Kiara will ride out the downturn, there are several issues brewing there. Several weeks ago, StarBizWeek highlighted the situation in KLCC. But while that location boasts emblems of Kuala Lumpur’s boom and the glittery lifestyle it will one day spawn, Mont’Kiara is not iconic.

For more than a decade, expatriates have singled out Mont’Kiara when posted to Kuala Lumpur. They still do.

Most of the projects have a large expatriate community that accounts for about a third or more of its occupants, a fact that Sunrise Bhd used to be very proud of some years ago.

Sunrise built about 4,000 units of condominiums there, about half of what’s available today. It is the largest developer there. With retrenchment high on the list, some of them may be going home.

Says an analyst: “Mont’Kiara’s saving grace is that it has proven to be a property investment hot spot. Because of the fantastic yield it generated years ago of up to 10% or more, Malaysians and foreigners invested in that market. (The yield is about 7% to 8% today.) Many of them have several units. With retrenchment running high, rental may be an issue. This applies to both the rental and for sale markets.”

Those who bought earlier are also expected to convert their assets to cash. Agents and valuers have mixed views how much prices have dropped but the range is between 5% and 20%, depending on the project, from its peak. There are different grades of condominium in that location, with prices ranging from about RM450 per sq ft to about RM900 psf. If prices and rental continue to spiral downwards, the older units will suffer.

Says Khong of Regroup: “We are currently looking at about 10% to 15% drop in rental rates from the peak at this moment and would expect it to move southwards a bit more when the bulk of the uncompleted units come into the market.

“Previous rentals were trading at about RM3 to RM4 psf for the mid-grade projects and currently we are seeing lower asking rental at about RM2.50 to RM3.50 psf. The older and more established ones are enjoying about 70% to 85% occupancy whilst the new ones are struggling at about 30% to 50% currently. With more and more new projects completed, this general average could be therefore lower.”

Another consideration when buying into that market is Mont’Kiara’s neighbour, Sri Hartamas. The two largest developers there are Hong Kong-based Mayland group which developed the Plaza Damas shopping mall, and Dutaland group with its upcoming Kenny Heights project.

While Mont’Kiara units range between 1,200 sq ft and 3,000 sq ft or more, the units offered by Mayland average about 500 sq ft. On a per acre basis, this means there will be more units.

At this point, the developer has already built 1,800 units above and around Plaza Damas. Another 1,500 units will be added to the Sri Hartamas market in about three years when it completes Hartamas 3, which is located across Plaza Damas.

Dutaland has about 90 acres in Hartamas. It is also expected to have high-rise in that location. While the location is holding out well, the pressure is mounting.

By The Star (by Thean Lee Cheng)

It’s business as usual for condominium developer Sunrise

Sunrise Bhd general manager (branding and corporate communications) Joachim Ng says it will be business as usual for the condominium developer in Mont’Kiara.

Although the global financial crisis has affected sentiment, Ng says its projects have been almost fully sold, except for some bumiputra-reserved units and the newly launched Mont’Kiara Residence.

“We have been through many cycles and will continue to be prudent in controlling costs and monitoring cashflows. But as we said earlier, we are fortunate to have a large pool of unbilled sales that will tide us through this period.

“We will also continue building on our brand proposition and creating value for all stakeholders. After this crisis, we think buyers will gravitate towards time-tested and proven developers in the next upcycle,” Ng says. They will also be watching for opportunities to make good asset purchases at favourable prices, he says.

On the large number of high-rise developments in Mont’Kiara and scepticism among analysts and property consultants that prices and yield will hold, Ng says the reality is there is an irreversible trend towards high-rise living in Kuala Lumpur.

“Increasingly, locals are opting for condo living because of security, facilities, landscaping and lifestyle,” he says.

Ng says 15 years ago, locals made up only 10% of the condo population in Mont’Kiara. Now they comprise 35% in Sunrise-built developments.

As of Sept 30 this year, the company’s unbilled sales amounted to RM1.37bil, equivalent to 2.6 times its average annual revenue over the past three years, Ng says.

With 82 acres left besides Seri Kembangan and Mersing, Ng says the company is constantly on the lookout for opportunities that may come its way.

Its existing land-bank in Mont‘Kiara will see it through at least another decade. Most of its projects are on three to eight acres.

He says Mont’Kiara Residence, comprising 19 fully completed bungalows priced at RM6.5mil upwards, was launched in mid-November at the height of the global financial crisis.

He says the company has secured strong interest for nine units. Sunrise has four other ongoing projects – 10 Mont’Kiara (90% sold), 11 Mont’Kiara (80% sold), Mont’Kiara Meridin (90% sold) and Solaris Dutamas.

“These will be completed in the next two years. We have several other projects pending approvals and will wait for better market conditions,” Ng says.

Mont’Kiara Meridin is expected to be completed in the beginning of next year, and the 17-acre Solaris Dutamas by the end of next year. Completion of the 10 Mont’Kiara and 11 Mont’Kiara is expected at end-2009 and 2011 respectively.

“From now till next year, we will focus on marketing Mont’Kiara Residence bungalows. MK28 in Mont’Kiara will be launched when sentiment improves.

By The Star (by Thean Lee Cheng)

Keen interest prompts latest YNH launch

An artist's impression of the Kiara 103 project

YNH Property Bhd is targeting to officially launch its RM1bil Kiara 163 suites, a mixed development project in Mont’ Kiara, Kuala Lumpur, next month.

The project comprises a 23-storey office tower (175,000 sq ft), two 42-storey serviced apartment blocks (595,000 sq ft), retail podium (142,000 sq ft), and an auditorium (175,000 sq ft).

“We are launching the project due to keen interest from prospective local and foreign purchasers and also due to its prime location.

“There are always investors who look at property investment as a good hedge against inflation.

“We have secured about RM260mil in sales for the office and retail space to-date,” said group corporate services head Daniel Chan.

Chan said that to add value to Kiara 163, the retail podium and serviced apartments had eye-catching architectural designs and recreational facilities.

The two 42-storey serviced apartment blocks had a unique curved block design that was accentuated by the extensive use of glass windows, he said.

“The apartments will be equipped with facilities such as a swimming pool, jacuzzi, a gym, squash court with garden setting, and an entertainment pavilion,” Chan added.

The four-level retail podium is positioned as a neighbourhood retail centre catering to affluent expatriates and the local population.

“Food and beverage outlets, a supermarket, specialty stores which deals in fashion, eyewear and watches as well as service providers, including laundry outlets and medical and dental clinics, are on our list of retailers.

“The unique feature of the retail podium is the sunken outdoor courtyard where the food and beverage outlets will be located,” Chan said.

The office tower block, which would provide an alternative to corporate headquarters that did not require a city centre address, was also designed to accommodate small home-office units, Chan added. “This would help us tap into diverse markets,” he said.

The group’s other mixed-development projects, Duta Kiara 1, Duta Kiara 2, Duta Kiara 3, Duta Kiara 5, Duta Kiara 6 and Project 3KL, located in Mont’ Kiara, Hartamas and Kuala Lumpur city centre, would be launched over the next two years, Chan said.

These projects have a total gross development value (GDV) of about RM2bil.

“Our projects in KL and Mont’ Kiara, such as the Fraser Place KL and Ceriaan Kiara, have been well received with Fraser Place KL achieving sales of about 99% and Ceriaan Kiara 87% to-date,” said Chan.

Fraser Place KL is scheduled for completion soon, while Ceriaan Kiara will be ready by end-2009.

In Manjung the group’s “bread and butter” township development will continue to contribute to earnings for the next 20 to 30 years due to the demand from employees of the Lumut Naval Base as well as workers at the oil and gas fabrication and biodiesel plants there.

On the status of Menara YNH, the group had accepted Kuwait Finance House’s offer to buy 50% of the iconic “Grade A” office tower in January, Chan said.

“This property, located in the central business district, is designed by a world-renowned architect firm, Fosters and Partners.

“We are not in a rush to sell the second block as we want to get the best value for our shareholders.

“Based on our earnings before interest, tax, depreciation and amortisation of 50%, we are able to achieve a yield of above 7.20% if the rental is conservatively priced at RM3.80 per sq ft,” he said.

Chan said the company’s dividend policy was at least 30% of profits but the group had paid a higher rate in the past few years.

By The Star (by David Tan)

Sunrise going ahead with super-condos amid challenges

Sunrise Bhd is continuing to launch “super-condos” in Mont’ Kiara despite fears of an economic slowdown.

In the pipeline is the 460-unit 10 Mont’ Kiara which may set a new benchmark price.

The company, which was the first property developer to launch the RM1mil “super-condo” eight years ago, continues to set new benchmarks not only in pricing but also quality and service.

Sunrise general manager (branding & corporate communications) Joachim Ng recalled how Sunrise shocked the market when it launched its Mont’ Kiara Damai in 2000, the first “super-condo” that broke the RM1mil per unit mark in Mont’ Kiara.


Joachim Ng

Since then, the public-listed company went on to launch more “super-condos” priced at an average of RM1mil and above. They include Mont’ Kiara Aman and Mont’ Kiara Banyan.

In 2006, Sunrise launched the 10 Mont’ Kiara where the units were priced above RM2mil each or about RM530 per sq ft (psf). While other developers went for smaller units, Sunrise continued building large units of 2,500 to 4,000 sq ft.

“The success of 10 Mont’ Kiara showed that this affluent suburb can take a price level of RM2mil,” he said, adding that another benchmark was set when it launched the 11 Mont’ Kiara last September at RM700 psf and climbing to RM890 psf for the latest units.

Ng said 65% of Sunrise’s residents were foreign expatriates and their families, mainly from Japan, Korea, Britain, the United States, Sweden, India and Indonesia. The average occupancy of its condominiums is 82%.

“Sunrise spearheaded the development here 15 years ago. Its philosophy has always been creating value-added products and it gave so much back to its purchasers in terms of excellent services from property management, security, traffic control to cleaning public roads,” he said.

He said new players who came in about five years ago had benefited from Sunrise’s efforts. An example is the Solaris Mont’ Kiara where its many food and beverage outlets would meet the growing demand for eating and entertainment facilities. Solaris Dutamas Phase 1 is due for completion this September while the project would be finished in first quarter of 2010.

“The other developers are riding on Sunrise’s infrastructure. While we’re trying to differentiate ourselves from others, they have no problem identifying themselves with us as they too call their area Mont’ Kiara although they are further away,” said Ng.

Ng said Singapore’s Building and Construction Authority (BCA) recently conferred the Green Mark Certified Award to 11 Mont’ Kiara, making it the first residential development in Malaysia to achieve this distinction in environment sustainability in several criteria: energy and water efficiency, indoor environment quality, innovation and site/project management.

Sunrise, which had won numerous awards, was also named Malaysia’s Best Residential Developer in Euromoney’s 2008 Liquid Real Estate Awards. It is also thrice winner of the Malaysia Property Award (formerly known as FIABCI Award of Distinction) in 2005, 2001 and 1997 for Best Residential Development and was named Forbes Asia 200 Best Under US$1billion Company 2005.

Ng said although Sunrise’s condominiums were priced at a premium (10% to 15% more), it offered a host of services to its buyers.

“You may pay slightly more but in the long run it’s actually cheaper as you get to enjoy so many kinds of services and facilities,” he said, as he showed the security command centre in Plaza Mont’ Kiara where staff monitor the 38 CCTV cameras placed at strategic spots in the Jalan Kiara area. This Safe City concept has given residents and visitors a sense of security.

Ng said the company spent about RM1mil yearly just on security (not including security in the condominiums) and cleaning services.

It has also spent RM1.5mil on Fun Zone (opened in Sept 2006), a 4,000 sq ft upbeat community area for its 12,000 residents living in its 11 completed condominiums. Located at Aman Walk retail deck along Jalan Kiara 2, the centre is the brainchild of Sunrise Bhd executive chairman Tong Kooi Ong, who wanted the residents to foster closer bonding through free activities as reflected in its seven themed “planets”: arts, books, cuisine, drama, music, nature and sports. There is also a large play area called Space Explorer play-gym that is very popular with the children.

Sunrise has built over 4,000 completed residential and commercial units in 11 condominium and two commercial projects (Plaza Mont’ Kiara/Solaris Mont’ Kiara). This does not include the Solaris Dutamas and several high-end condominiums like the 10 Mont’ Kiara, 11 Mont’ Kiara and Mont’ Kiara Meridien - all under construction. It has another 100 acres in the area to be developed over the next decade.

There is an estimated 6,000 condominium and commercial units completed by other developers in the area.

Ng feels the “congestion issue” had been overplayed as the current heavy traffic is mainly due to construction activities. Jalan Kiara 1 (recently made into a no-parking zone) would be widened by three feet and there would be more access roads in the future, he added.

By The Star (by S.C.Cheah)

Condo prices in Mont’ Kiara, Sri Hartamas hit new high

Artist's impression of II Mont Kiara

The high-end property boom of the last few years, particularly in the top two prime locations in the Klang Valley – KLCC and Mont' Kiara/Sri Hartamas, has made it increasingly more expensive to own a condominium, serviced apartment or landed property.

In the case of Mont Kiara (MK) and its adjacent Sri Hartamas, an affluent neighbourhood popular with expatriates, prices of newly launched condominiums have shot up to over RM800 psf with some hitting the RM900 psf mark!

In the early 1990s, condominiums built by the Sunrise Bhd Group such as the MK Pines and MK Palma were around RM300 psf.

Despite fears of over building, soaring prices and congested vehicular traffic, this neighbourhood has continued to attract both investors and home owners, Today, it has evolved into a very self-contained, much sought-after residential enclave of top quality condominiums, bungalows/villas and other high-end residential properties.

As Henry Butcher Marketing Sdn Bhd chief operating officer Tang Chee Meng said there was now a greater variety of property types available compared to the early days of Mont' Kiara's development.

“While the earlier developments have average built-up areas of 1,200 to 1,800 sq ft (MK Pines, MK Palma and Vista Kiara) catering to small and medium sized families, the newer projects that have been launched in Mont' Kiara and Sri Hartamas offer a greater variety of unit types catering to different budgets and preferences,” he said.

They range from very small studio units of 400 to 600 sq ft (Mayfair and Dorchester) catering to singles; small units of 600 to 800 sq ft (Verve Suites, One Kiara) catering to singles and newly married couples; standard sized units of 1,000 to 2,000 sq ft units (One Kiara, Kiara 3, Cerian Kiara) catering to small and medium sized families and large units of 2,000 to 3,000 sq ft units (11@MK, Seni Mont' Kiara) catering to more well off families.

“There are also the super large units of above 3,000 sq ft (Matahari, MK10) for the well heeled. As the prices of the condominiums in Mont' Kiara and Sri Hartamas have gone up, the profile of the buyers also indicate that they are now of a higher income group,” he said, adding that condominium prices in Mont' Kiara have gone up significantly.

“While the prices of condos in Mont' Kiara used to be around RM300 to RM600 psf in 2006, newer projects launched since 2007 have pushed the prices to new threshold levels of RM600 to RM900 psf.”

“Some of these new projects are Sunway Vivaldi (RM800 to RM900 psf), Palazzio (RM840 psf), and Matahari (RM800 psf). Generally for a RM1mil property, based on an 80% loan and an interest rate of 5% per annum for 20 years, the qualifying monthly income is RM15,000 whilst the monthly income required to qualify for a 80% loan for a RM2mil home will be RM30,000,” he said.

According to Tang, the nearly sold-out Kiara 1888 that Henry Butcher marketed has risen 25% to 30% although it is still under construction while Kiara 9 has been released at new benchmark prices.

Meanwhile, the current economic uncertainties have seen some people adopting a “wait-and-see” attitude. There are also signs of over-building in many places including Mont' Kiara.

Tang agreed that while rentals have remained stable, vacancy rates appeared to have increased due to the large number of units that have been completed in Mont' Kiara.

“One of the chief concerns of potential investors is the fear of oversupply of condos in Mont' Kiara and whether the rental market will hold. Another concern is the worsening traffic congestion due to the increased number of residents in the area,” he said.

With scarcity of land in Mont' Kiara, industry observers believe that developments in Mont' Kiara will spill over to Segambut.

“We believe that in years to come, Mont' Kiara and Segambut will be linked up in a seamless corridor by the new developments. For the moment there is still a price disparity as projects at the Segambut side are still significantly cheaper. In future this price disparity may be narrowed although we believe that there will always be the price differential,” he added.

Tang said overall the property market would be soft, in view of the political uncertainty as well as the slow down in economic growth but the Mont' Kiara/Sri Hartamas area would still continue to attract interest.

“However, investors are now more cautious and will be more selective. Projects with more innovative concepts undertaken by reputable developers will still be able to attract interest, provided that investors are convinced that the pricing is fair value vis a vis the design and quality of the project,” he said.

By The Star (by S.C.Cheah)

Bukit Kiara Properties Sdn Bhd's sells 40% of latest Vogue Tower

Bukit Kiara Properties Sdn Bhd's (BKP) has sold about 40% of its latest 255-unit Vogue Tower in Verve Suites that was previewed on June 21 to an exclusive group without any advertisements.

This is the third of the four-tower Verve Suites on a 5.87-acre freehold land and is BKP's third project in Mont' Kiara. The first two are the Aman Kiara and Hijauan Kiara that are fully sold and completed.

BKP managing director N. K. Tong who is pleased with the sales over four weekends said the company has over 13,000 registrants, many of whom were repeat buyers.

The Verve Suites was planned to have 881 units in the four towers. However, Tong said the number of units in the fourth block called Vox Tower had not been decided yet.

As expected, BKP has increased its price where the average selling price of the Vogue Tower unit is about RM930 psf (minimum is RM850 psf) for the two unit size of 462 sq ft (one bedroom) and 932 sq ft (two bedrooms) with prices from RM399,000 to RM988,000.

Although the price is higher than the 240-unit Viva Tower (first block/initial RM570 psf) and the 188-unit Vibe Tower (second block/initially RM650 psf) that were launched in 2006 and 2007 respectively, the Vogue Tower's pricing is deemed “reasonable” considering that all Verve Suites units come with top quality furnishing and fixtures including Bosch kitchen appliances.

There are four interior design themes: Centro Jazz and Cosmo Grove (both 462 sq ft type) and Verdant Luxe and Metro Bliss (both 932 sq ft type).

BKP has demolished its Pavilion show gallery and moved to an even bigger show gallery with four Vogue Tower show units on the first two floors of the Verve Shops (a 60,000 sq ft of retail space for lease only) where construction had reached the roof level.

A posh show kitchen with Gaggenau (the Rolls Royce of kitchen systems) appliances for the Vibe Tower's Hypercube sky lounge is also on show at the new gallery.

The Vogue Tower also has a sky lounge like the other two towers. It's called The Garden of Concentrico on the 31st floor that provides a “Back-to-Nature” escapade with facilities like the Aqua Gym, Cinema Paradiso, Podium Panorama and Dinner Alfresco.

The Metro bliss is one of the four interior designs of Vogue Tower

There will be a range of aqua exercises including water aerobics that the family will enjoy at the Aqua Gym. At the Cinema Paradiso, one can enjoy a big screen movie under a starry night setting or view the entire Mont' Kiara while lying on a hammock at the Podium Panorama. You can also dine at the Dinner Alfresco under the open sky amidst a green setting.

By paying only 33psf service charge (inclusive of sinking fund), Verve Suites residents can have access to all the sky lounges that are the signature selling points. Instead of having a big living space in one's unit, one can have huge and varied dining, recreational and entertainment facilities in all sky lounges including the ample facilities such as two tennis courts, squash courts, badminton court, multi-purpose hall and two swimming pools at the recreational deck below.

The third swimming pool is at the Vibe Tower's Hypercubes Lounge on the 27th floor that also boasts of its unique entertainment concept.

Meanwhile, BKP's Aman Kiara (completed nine months ahead of schedule) became the first bungalow and duplex condovillas project in Kuala Lumpur to obtain approval for its strata title application recently.

By The Star (by S.C.Cheah)

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)