Monday, June 17, 2013

House Number 83 - Part 3


Sunday, June 16, 2013

Investing In Offices - Vertical Suites @ Bangsar South

Lately, I've written much about Bangsar South here (SouthView) and here (KL Gateway). It might seem I am a bit gung-ho about this new enclave but I am also cautious that we might have an over-built situation. If we are taking a quick and fast calculation at the back of an envelope, it looks like we're going to see about 10,000 additional residential units in this area. 

Pantai Panorama +600 units
Pantai Hill Park Phase 1-5 and including Centrio about +2,500 units
Vista Angkasa +400 units

KL Gateway +800 units
Southview +1,200 units
Park Residences +2,100 units
Camelia +720 units
Upcoming YNH Project +1,000 units

Can the population support this? 

I estimate there are going to be about 22 blocks of offices in Bangsar South, which includes the existing Horizon and future KL Gateway tower etc... Estimating a full capacity block housing about 2,000 people, we will have about 40,000 to 50,000 work force in Bangsar South at its peak. Say 10% of them are going to be out-station and expat workers, that's 4,000 and assuming half of them will reside in Bangsar South, that means.... 2,000 people vying for 10,000 properties... 

Although we cannot assume all 10,000 of these are open for tenancies or they may house residents working in other locations in KL or PJ, the figures are still worrying... especially when a big chunk of these are going to be studio units - which all go after a certain segment of the market. 

Yes, Bangsar South does seem like it's going towards a glut...

Yet, it may seem contradictory about my sentiments of Bangsar South in my earlier writings but I never denied there is going to be a glut in RESIDENTIAL properties in this area. It all depends on the unique proposition of each property - for example, I think KL Gateway is attractive because it is closest to the LRT Station which may appeal to people working in as well as away from Bangsar South. 

A lot of reports I have seen are also talking about a glut in office space. Again, it all depends on the uniqueness of the office or commercial buildings in the competition for tenants and in this case, Bangsar South has a strong position in being one of the MSC Zones - which means that companies who want to enjoy benefits of the MSC which includes lucrative tax breaks, they have to be situated in one of these zones.

I classify them into the following zones and the reasons for their inferiority against Bangsar South:

1) KL City and KL Sentral - although central, they are too expensive

2) Cyberjaya, PJ and Bandar Utama - bad public transport for now and far for employees from other parts of the Klang Valley

3) Bangsar South - a balance of the 2 above

So, seriously I do think the offices in Bangsar South are really worth considering - especially Vertical Suites where there are smaller sized units which can serve as a start-up incubation or sub-contractors and suppliers who serve as supporting casts to the larger corporations in the Horizons.

Developer UOA first launched the Vertical I last year with sizes starting from about 700sf. They all went very quickly. Now comes the 2nd block of the trio with units starting from 878sf - priced from RM720k onwards i.e. about RM820psf up from just under RM700psf for Vertical I. The 3rd block on this podium is going to be a hotel.

Having experience running a start-up IT company, my confidence lies in the lack of small GRADE A office units in the Klang Valley - especially one that comes with MSC status. So, the smallest type B units are expected to go very quickly. At today's benchmark, I believe the rental will be no less than RM4,000/month and offices are often rented out bare i.e. you save on expensive renovations and furnishings.

I am not selling for UOA or any developer in Bangsar South for that matter. Nor am I an estate agent. But as a purchaser of Vertical Suites II, I am entitled to a finders fee if any of you identifies me as your introducer. Not doing so will not do anything to increase your early bird purchase discount which today stands at 5% + 2%. So, if I get the finders fees, I'll split it half with you... what say you?

Sunday, June 9, 2013

Freehold Bangsar SouthView Residences by UOA

We're not even recovering yet from the excitement of Bangsar South's KL Gateway and yet there is another launch coming up in this area. But this time, it is Freehold. The location miraculously is right beside the KL Gateway site, separated by a future new access road into the area from the Federal Highway. Miraculous because everything around it is Leasehold - so one wonders how developer UOA pulled this one off...

The launch is expected to be this month and UOA is taking in registrations. Unit sizes start from 620sf up to 1100sf and from the look of the architect rendition, it's going to be one of those high density pigeon holes - 2 blocks with over 600 units per block!!

Indicative launch price is below RM1000psf and as with any launch these days, it will come with discounts. Nevertheless, do expect the smaller units to be around the RM1000psf price tag - similarly with KL Gateway, although the 2bedroom units were sold at RM650psf, the 1br studios went for almost RM1000psf. UOA's Southview expected to be more than that since it is Freehold. So who is going to rent or live there? The price of the 620sf units are expected at around RM650k and above - so it means the rent has to be over RM3,200/month to make it worthwhile. 

I can absolutely say that Bangsar South is attracting many MNC's being a Multimedia Supercorridor Zone. The 2 major commercial complexes - Horizon and Vertical Suites should have a population of about 20,000 to 30,000 workers at the future peak, with a sizeable number of expats. With KL Gateway, Southview and future launches coming up, I think there will be a pool of at least 3,000 to 4,000 apartments in this area. It does point towards a glut but this depends on how Bangsar South will be able to attract tenants from neighbouring areas such as Bangsar, Midvalley and PJ, especially with competition from SP Setia's project nearby. 

However, I can point out 2 key advantages of South View as an investment - Bangsar South's MSC status and the Freehold title. Expect this project to be a snatch when it launches this month.

Tuesday, June 4, 2013

House No. 83 - Part 2

In House No. 83 Part 1, we saw how the place looked like before and during renovations. In this part, the house is just taking shape. You can see the difference that has been made in the transformation. 

The front of the house has been extended by 5 feet... which actually made a lot of difference in terms of space. 

We also added a balcony...

The back of the house was also extended, also by 5 feet. While it made no difference to the size of the rooms upstairs, there is an addition of an "open-concept" bathroom to each bedroom. 

Basically, we left the bathroom open to enable natural sunlight to come in to the room via the bathroom entrance and tempered glass wall of the shower area.

Downstairs living room has been turned into something like a communal hang out zone... we'll soon furnish it with bean bags and cushions to give the room a warm homely feel.

All the bathrooms typically have a raw look, with just bare concrete walls. This is intentional because this house is basically an investment and will be sold after a few years. Normally, the new owner does not share the same taste as the previous owner in terms of colour and tiles. While wall colours are relatively easy to change, tiles need to be hacked off which costs a lot of money. So, a bare concrete wall will enable the new owner to do as he pleases when he takes over the house in the future....

In the next part, we'll talk about the facade....