Wednesday, November 23, 2011

Villa Scott at Brickfields

Earlier we talked about Brickfields and the KL Sentral area which is seeing quite a lot of development lately. The government seems to think that Brickfields represents the Indian community in Malaysia and with the recent fall-out in the last general elections where droves of Indian votes desserted the governing party, the government decided to spend some money to spruce up "Little India" in Brickfields to appease the community.

With this good intention comes the gravy train and the haphazard implementation such as this pedestrian bridge complete with lifts on both sides. Nothing wrong with this except that the pedestrian bridge is one of the shortest we've ever seen.... The lifts are of course necessary as Brickfields is also the home of a blind community. This will really come a long way to help them cross this busy road.

Except that, on a slightly longer stretch, the same contractor has constructed a pedestrian bridge with a lift only on one side. Such a compassionate design...

Nevertheless, Brickfields has been seeing some kind of boom with new condos touching on RM800++psf. Over at KL Sentral, the new launches are all well above RM1000psf. But so it seems... the older ones are still struggling to hit the all time high prices of the newer or newly launched projects.

Villa Scott is situated over at the other end of Brickfields. It's one of the older condos and many years ago, I actually considered buying a 2 bedroom unit here for about RM250k. Well, those days are gone, and prices have since gone up beyond RM450k for a unit here. The larger 3 bedroom units, owners are asking for RM690k. Whether they sell it or not, I am not sure.

But one thing for sure, rental hasn't really gone up a great deal. There are 2 newer condos adjacent to Villa Scott now, Scott Sentral and 633 Residency. With competition... and a glut, and the ageing hardware inside the condos, Villa Scott can barely fetch RM3000/month for a fully furnished 2 bedroom unit.

If you buy a unit here for investment or own-stay, you'll need to at least gut and replace the bathrooms with more modern fittings and tiles in order to compete with the neighbours. That will set you back at least RM30k for the 2 bathrooms.

The floor is marble tiles for the living and dining area, including the corridors, cheap tiles for the kitchen and carpets in the bedrooms. The kitchen and bedrooms need to change at least, that'll be RM10k for some cheap laminated wood floors and modern tiles for the kitchen.

This large 1500sf 3 bedroom unit has a maid room and bathroom... not much need to change here. But definitely the cabinets have to go... RM2k to pay someone to remove it and another RM50k to get a new one with nice Teka wares.

And the rest of the furniture have to go too... so, that's another RM15k to spend on new stuffs but I won't record these as one would need new furnitures too if purchasing a brand new modern unit.

So, the total cost of acquisition and refurbishing is still well below RM800k, the cost one would have to pay to acquire a similar sized brand new unit at Mutiara Residency or 633 Residency... That's your control but what you cannot control is the common areas....

While the pictures seems spectacular from afar... and the list of facilities seems standard, the condition is not so standard...

A closer look at the details reveal blocked toilets...

rotting doors...

smelly gym...

but things are certainly functioning... like this in-house barber

There appears to be effort to spruce up the place. The walls seems like they're recently painted so there might be some hope... but I think it will be tough at this price....

Thursday, November 17, 2011

2 condos at One Menerung can fetch RM70,000 rental per month!!

Few days ago, I almost fell out of my chair reading about how confident some investors have in our property market. Actually, our property market is not doing too badly compared to other countries in the region but this can be a bit far fetched.

The National FeedLot Corp (NFC) chairman who is in the middle of a scandal right now has defended his company's decision to use money intended for cow rearing projects to be invested instead in 2 condos (not 1) at the One Menerung in Bangsar. Apparently, both condos are being rented out for RM70,000 per month returning 12.9% per annum!

Before punters start falling over each other to grab a unit at One Menerung, property experts issued a caution. The experts say that the highest rental that can be expected for even the penthouse at Bangsar’s One Menerung condominium is about RM24,000 per month.

I think this is more a case of criminal breach of trust and corruption rather than an extraordinary success at property investments....

Sunday, November 13, 2011

Who have been buying all these multi-million Ringgit Condos?

Well, we almost got our answers this month... First, the opposition alleged that the family of a Minister who owns a company which received millions in loans from the government have been using the loan money to purchase a condo.

The money for the condo unit at One Menerung, Bangsar, was supposedly taken from the RM81 million given by NFC as a loan to the National Livestock and Meats Corporation (NLMC), a subsidiary contracted as its marketing development agent, PKR said."

Then, an apparently highly educated government backbencher came forward to confirm that indeed, money from the loan has been used to purchase the condo...

Khairy said that because of the delays, NLMC decided to use some of the money (RM10 million) to purchase the apartment as it would receive some returns.

“According to my research, it is indeed true that NLMC had bought an apartment in One Menerung, Bangsar. This investment was made with money channelled to NFC from the special loan account (SLA), which is regulated by the Finance Ministry as well as the Agriculture and Agro-based Industries Ministry,” he said.

Khairy, the Rembau MP, said that it was also true that NFC had transferred RM81.2 million to NLMC."

He went on to slam the opposition for being short-sighted. But for sure, this backbencher has confirmed 2 more important things:-

1. Property is a very safe investment

“The management (of NLMC) decided that property asset was the safest investment, which gives the best returns, and which can be sold at any time when cash is required for operations,” he said.

It is easy to sell off your RM10million condo any time to reap a huge profit whenever the cash is needed. All those people who complain about the gloomy high end property market don't know what they are talking about.

2. Soft loans given by the government for a national agriculture project can be used to fund property speculation - nothing wrong with that at all.

And maybe 3 things.... cows can fly!

Tuesday, November 1, 2011

Casa Kiara Unit for Sale

Mont Kiara is a popular area for expats as there are 2 international schools and various nice pubs and eateries catering to this community. Casa Kiara is located right beside one of these schools, the Garden International. It is a favourite among many of the expat teachers working next door.

There is this 2 bedroom unit, about 1200sf up in the market now. Although this unit faces another block, it is on the 3rd floor directly above the swimming pool.

The unit comes with quality furnishing, including built-in cabinets - it is to be sold lock, stock and barrel. Unlike many furnished condos in the subsale market which I constantly have to calculate how much it would cost me to throw out the old furnitures, this one is quite tastefully and simple furnished.

The kitchen is indeed very nice, with nice black granite top.

It was previously rented out at RM2,700/month, with the tenant just moving out. I am not an expert of Mont Kiara and not a favourite too as I feel Mont Kiara is over-built. However, Casa Kiara is located beside a popular school which makes it hard to go wrong. The location edges the rest.

Despite that, Casa Kiara too, as I understand is priced below the Mont Kiara average in terms of sales as well as rental and on top of that this is probably a better time to buy it as there is a construction next door. Therefore, the noisy part of the construction will be over by the time you take vacant possession. You'll be dealing directly with the owner, with transaction done straight through a lawyer. With the agency commission out of the picture, you'll get the best value out of this investment.

If you are interested, drop me an email @