Najib launches KLIFD amid concerns

Syed Jaymal Zahiid

 | July 30, 2012

Analysts warn that the financial district project, first announced two years ago, risked destabilising the entire KLCC property market.

KUALA LUMPUR: Prime Minister Najib Tun Razak today launched the Kuala Lumpur International Financial District here amid warnings that the project may create a property glut and distort the capital city’s property market.

The project, which Najib said would generate RM26 billion in gross development value and 500,000 jobs, aimed to make the country’s capital the region’s financial hub.

Its developer, Putrajaya’s development arm 1Malaysia Development Bhd, said the state of the art infrastructure and technology used to construct the district named after Najib’s father, the Tun Razak Exchange, was expected to attract global players to relocate here.

The KLFID was one of several key infrastructure projects listed under the 10th Malaysian Plan along with other mega constructions like the redevelopment of Sungai Besi and Kg Baru meant to boost the city’s potentials under Najib’s grand Economic Transformation Plan.

But analysts said, the project, which was first announced two years ago, risked destabilising the entire KLCC property market, which was already suffering from a high 17% rate and could create “deplorable” traffic conditions that would erode the attractiveness of KLCC as a place for corporates.

“Similar to the impact from redevelopment of Kampung Baru, these projects (the KL Financial District project and the Sungai Besi airport redevelopment) particularly the Dataran Perdana (KL Financial District) could threaten the prospects of commercial properties in the Golden Triangle and in the long run the larger part of the Klang Valley, too,” said a 2010 report by OSK Research.

It added that outlying commercial hubs such as Petaling Jaya, KL Sentral, Mid Valley, Damansara Heights, Mutiara Damansara and Damansara Perdana would likely benefit from a potential exodus from the city centre within the next five years as worsening traffic congestion in the city and existing high rentals drove tenants out.

Singaporeans snap up Malaysian property as ringgit weakens

http://www.themalaysianinsider.com/malaysia/article/singaporeans-snap-up-malaysian-property-as-ringgit-weakens/

By Clara Chooi

July 22, 2012

KUALA LUMPUR, July 22 — More Singaporeans are streaming across the Causeway to buy up property in Malaysia, taking advantage of the weakening ringgit which has fallen by 2.7 per cent in the past year to reach a 14-year low against the Singapore dollar.

Singapore’s Straits Times (ST) reported today figures from Malaysia Property Inc — an agency that promotes Malaysia’s real estate abroad — showing that the total transaction value of real estate here had spiked by 28 per cent last year to RM137.8 billion from RM107.4 billion in 2010.

Of the total, the paper said, two per cent were foreign investments.

Noting the trend, local agents have also been increasing efforts to lure Singaporeans into investing in the Malaysian property market through heavy advertising, roadshows and road trips for potential buyers to visit sites.

Citing property agency HSR’s overseas department head Donna Lim, the daily reported that the number of exhibition visits from Singaporeans alone had seen a sharp incline from last year.

Property agent Propnex was cited as saying that Singaporeans had purchased 50 units through them in the second quarter of the year, double the amount purchased in the first quarter.

Leisure Farm Singapore head Peter Lim said Singaporeans had bought 35 units in Johor’s Iskandar region over the past two months, compared to merely a dozen in the first two months of last year.

“The weakening Malaysian ringgit, the lure of owning landed property and familiarity with the country are reasons they (Singaporeans) cite for looking north,” the daily wrote.

But although the capital of Kuala Lumpur continues to have its lure, Singaporean investors are finding better familiarity with Johor and are particularly attracted to the state’s bustling Iskandar region.

Citing Malaysia Property Inc, ST reported that in the first half of 2010 alone, foreigners made up only four per ent of Johor’s property transactions for purchases above RM1 million.

“In the corresponding period last year, however, that figure shot up to 25 per cent,” the paper wrote. “Much of the demand has been generated by the buzz over the Iskandar region, earmarked by the Malaysian government as a major growth area for the country.”

According to Edwin Tan, director of the Paragon Residences @ Straits View Malaysia project in Iskandar, Singaporeans booked 116 units during a roadshow earlier this month while only 54 bookings were made by Malaysians.

Apart from Johor, the ST reported that many Singaporeans have also been venturing further up north in Malaysia to scout for potential investments in Malacca, Kuala Lumpur and Penang.

Hunza Properties senior marketing and sales manager Lily Tan was cited as saying that Singaporeans account for some 15 per cent of the firm’s unit sales in its newest condominium Gurney Paragon in Penang.

“The weakening of the ringgit against the Singapore dollar is expected to further stimulate demand. It has fallen by 2.7 per cent in the past year to reach a 14-year low against the Singapore dollar,” ST wrote

M-City Sohos in Ampang

I can't believe I wrote about Elements and M-Suites in 2010, more than 2 years ago. Back then, we were already talking about paying over RM1000psf for an apartment which is not even in the CBD. While both projects are not even completed, remaining units are flogged by the developer at prices that have appreciated about 10% to 20% from when they were launched. Slightly a year after, developer Mah Sing launched another pod of pigeonholes here at Ampang Hilir, the 1000+ units M-City which is at the junction of Jalan Ampang and the MRR2 highway.

The master-plan of this development is quite interesting. They've got 2 main blocks flanking a series of hanging gardens and the lowest garden on the facilities deck even has a man made river running through it. The first 3 floors are retail lots so this is really a mixed development of residential, offices and retail. Not something we would be excited about after the Empire Subang fiasco... 

A year after M-City was launched, I chanced upon this project again at a property fair in Penang this month. Incredibly, despite selling like hot cakes, there was a real choice unit available on a high floor with un-paralled and un-blocked views of the Ampang lakes. It's about 500sf, comes with a car park with a price tag of just under RM600k after discounts. On top of that, the developer is offering a very easy own package with a 2% down-payment (i.e. RM3k) which can be paid over 36 months with 0% interests if I have a particular bank's credit card, DIBS and zero SPA and Loan fees. On top of that, the balance 10% of the downpayment is waived  - so easy to own!!

 

I would say, thank GOD for the Bank Negara's 70% loan ruling for 3rd property purchased with loan, which means that despite the DIBS, I still have to fork out 20% cash during construction. If not for this, anyone thinking with his heart (or with his d*&^ if he was thinking of keeping his mistress here), would have signed up straight away. 

I think I have said enough about studio units and SOHOs. We're flooded by this type of development (When are developers going to consider building homes for the young families?). The fact that such a choice unit is still available at this late into the launch suggests that:

1. Developers may have kept certain units away from the market during launch thus giving us the impression that they were selling really well thus adding more pressure on potential buyers. This is also necessary to prevent all the good units to be snapped up by the small pool of buyers leaving the bad units harder to sell when these buyers have already spent their money

2. Some early buyers may have difficulty securing their loan - but this rarely happens 1 year after the property has been launched

So, what does this suggest? I think if you go to a property launch and found that all the choice units have been taken up, don't get stressed... come back a year later and it might just appear...

Party at St Mary's

I've written and posted quite too much about St Mary's and wasn't planning to post anymore until I have my keys and wardrobes done. However, since so many people have asked me how the party went, I'll just post one more...

This party was held to celebrate the official completion of the project. There was a speech, pretty girls, food, wine and tour of the grounds. This was the 1st time the general public had an opportunity to view the much touted central park facilities. To be honest, I was rather disappointed but perhaps I set my expectations too high. Although the landscaping and facilities were done up quite nicely but they were very mediocre to say the least. Much was centred around the swimming pool and the jacuzzi pods but apart from these, there were little else.

There is no sauna!

And the gym turned out to be rather small and it is now located where we did not expect it to be.

And where we expect the gym to be, it turned out to be an empty room with mirrors...

Certainly, everybody's expectations were set quite high. Upon walking into the reception, 2 of my ex-girlfriends were waiting there...

But sadly for those who expected a lucky draw to win these babies, it turned out they were free gifts to buyers of the RM10million super-penthouses.

E&O has also brought in their new celebrity chef to serve us western dim sum.... tuna with pickle and half a quail egg, a spoonful of pasta, soup in a glass and a bite of chocolate cake. But the wine and champagne were really wonderful.

But I hardly met many buyers there. Many of those who turned up are real estate agents and already I am inundated by sms and calls from agents who somehow found the buyers list from someone. I've also learnt that there are very few buyers who actually plan to stay here. Mostly over 90% bought for investment purposes. In fact, there was one aunty who bought 4 units!!

So, apart from the pool and the pods, other facilities are just the standard children's room, playground, lounge and really, that's about it...

...and yes, it does seem like medium cost. The lobby or waiting lounge is outdoors...

Somehow, the marketing point that St Mary models after New York's Manhattan style seems to be rather far fetched considering it would be too cold to wait outdoors in New York during the winter. The lift lobby is protected by an intercomm system so you would cal your friend and if he doesn't let you in, you'll have to wait outside....

Nevertheless, it was easy to sit back relax and enjoy the views until nightfall and it was time to go have dinner...

Said good-bye to my ex...

and collected my personalized framed photo before going home...

TRIBECA @ Jalan Imbi

The Low Yat Group has embarked on this rare project on an equally rare plot of land on Jalan Imbi. There aren't many plots of land on Jalan Imbi actually, so they are actually going to demolish a block of shops for this. The crux of this investment is the Kuala Lumpur International Financial District (KLIFD) which is planned to be built in the South of the Tribeca project. This KLIFD plan has already generated much development of luxury housing along Jalan Tun Razak. 

Tribeca is a zone in Southern Manhattan. The acronym stands for Triangle Below Canal Street which is  basically a web of streets with buildings and business of character that also includes one of New York's Chinatown. 

The Jalan Imbi Tribeca however, will be a 318 unit development comprising studio units mainly and some 2 bedroom and loft units. It will be completed by 2016 but they are already selling at a price of RM1600psf and up. So, the smallest studio unit at 510sf will start from RM950k as the smaller units are priced higher psf... They are now teasing the market by releasing the 1st 20 units, which by noon last week were already almost 50% subscribed. For this pre-launch, they claimed that the selling price is at least RM100psf lower than the eventual launch later this year and expected to be at least RM500psf lower than the price at completion - such open speculation... 

One of the 2 major selling points that the sales people were pushing were the 5 PODS, or common areas which unlike most condos which have them concentrated in a facilities deck, these are spread out over the various floors, like a sky lounge. There are 5 themes which are Jungle, Social, Chi, Biz and Club - for you to choose according to your fetish of the moment.

The other main point is this Green Building concept (GBi) which I see a lot of developers are starting to implement in their projects. GBi involves heavy investments on building management systems and also materials to enable the building to mainly conserve energy. The obvious advantage of course is to reduce electrical consumption which for most buildings of this calibre, is the highest part of the maintenance costs. However, they have set maintenance fees at RM0.55psf which hardly potrays any benefit of having an energy saving building. This can be attributed to the commercial title which means much higher utility bills and also pay-back on the GBi investments. The worry of course is, by the time the cost is paid back, that's the time you need to spend on re-investing or heavier maintenance of the building systems. This concept is hardly tested at the moment.

The floor is arranged like a clothes iron, similar to the Flatiron Building in New York. 

   

The corridors are built inside the building like some hotels I've been to such as the Mandarin Oriental in Singapore. 

So, of the 2 floors released in this pre-launch, I find the corner 2 bedroom units particularly attractive - because they are the minority units as well as the  natural light friendly layout but the price starts from RM1.5million for these.

This seems kinda steep for just 900sf. For the "lower budget", there are the 510sf studios... nothing particularly exciting or different here except that you pay almost a million for each.

The 660sf offers 1 big room and a smaller room which might seem more attractive to be used as a SOHO.

So, at the end of the day, is this project viable? At this entry price, I am a bit nervous. With all the corruption endemic in Malaysia and the bad governance of the Federal regime, Malaysia might find it steep to reach the status to promote a KLIFD, let alone become one. So, we are not quite Singapore but in 5 years time, I am not sure...

Regalia

Mayland's flagship project in the city is finally coming to Vacant Possession. This is long over due as they have been facing many issues with the project, some reported here. 

Regalia is located at the junction of Jalan Kuching and Jalan Sultan Ismail. It is not quite a junction as the access is not exactly very straight-forward. The current access is a sharp left from Jalan Kuching towards the City, just as you passed the Jalan Tun Razak junction. If you miss this one, especially during peak hours, you are pretty much screwed as you have to go quite a long way via Chow Kit to make a U-turn. 

Mayland is constructing an alternative access which is off the ramp from Jalan Kuching towards Jalan Sultan Ismail (see arrow below).

The ramp takes you directly into the lobby of Regalia.

As with all Mayland's projects, this is yet another trademark pigeon hole, altogether 1100 units arranged in 3 blocks facing a triangle which houses a green garden and swimming pool.

Somehow, reminded me of Hong Kong...

The units facing inside are somewhat quite claustrophobic because of the high density and the tall towers, 37 floors... but Mayland has tried to make it seem as luxurious as they can.

Up above on the 37th floor, they built an infinity pool complete with lounging facilities and steam saunas for men and women. The view up here is quite breath-taking and completed with a conference hall. This is definitely quite a selling point. 

In addition, on the 2 floor lobby facilities deck, they have a mini mart, gym, lobby lounge, cafeteria, swimming and playground facilities.

But I must warn parents that the playground facility pictured above is not safe. The developer should wrap all hard metal surfaces with foam as it is very unstable, kids can fall and really kill themselves!

The swimming pool on the 5th floor deck looks very nice but I wish they do not have balconies on the corner studio units as this will encourage bad people throwing things or themselves into the pool.

Having said that, these studio units - with balcony, 590sf Type A3 still have some units in the market (approximately 3 units left when I wrote this). In my opinion, for any investments close to RM300k to RM350k, these are best buys because they are the only studio units with balconies and only have 32 units in total. Unfortunately, they don't come with car parks and I understand they will be renting out car parks at RM200/month. The only compliment is, the maintenance fees will be relatively low at RM0.35psf. 

Most purchasers prefer units facing KLCC - in Block Milan and parts of block Madison because these views are unlikely to be blocked any time. Those in block Madison and parts of block Melrose facing Kenny hills won't be too great as they also face the busy Jalan Kuching which is quite noisy. Despite the bad access and location of Regalia, the plus points are the relatively close distance to the city center and the developer is also constructing a covered walkway to the KTM and LRT stations.

With 1100 units in the inventory, I understand that only 70% of units have been sold so far. Most of those remaining are quite undesirable as they either have bad layouts like this super huge studio....

or they were facing too close to Villa Putera or Villa Puteri condos, which are really run down...

or most people just do not like how the internal units are just so cramped and close together like living in a communal housing ala Chungking Mansion in Kowloon...

You can also see you neighbour having a bath!

Regalia was launched 4 - 5 years ago and reportedly, many people bought 1st hand at around RM400psf. Today, the prices has risen beyond RM600psf. This is within the expected curve of property appreciation over 4 years but way below the expectations of some buyers who speculate and touting RM1000psf in the online property forums.

Like any high density projects, I do see there are some nice "buy-able" units and indeed some of these have popped back up into the sales board, not mysteriously as I found out that many initial buyers gave up on their purchase due to financial fatique. Some of these are quite nice units and they are still below market price for KL City Center or not so center properties...