ROUGH DAYS AHEAD, BUT HOTSPOTS SUCH AS BANGSAR SOUTH CONTINUE TO LURE INVESTORS
BY Chris Prasad
The property market could well be in one of its longest-running slumps since the 1997 Asian Financial Crisis, but industry experts will be quick to tell you that, even then, the market was not completely devoid of opportunities.
Though it can be argued that compelling real estate prospects are not plentiful right now, those who have long-subscribed to the “cash is king” ideology will tell you different, because they now find themselves in very advantageous territory.
Why? Because while banks are being less than liberal about loans, they still desperately need to generate business, and that means they will be extremely accommodating to lower risk individuals who require less than an 80% or 90% loan. In fact, in order to attract your business, they may also throw in additional enticements such as attractive interest rates and flexible payment schemes.
Also, developers will be anxious for your attention, and that probably means better bargaining power, a speedy purchasing process and some “extras” thrown in to make the deal sweeter.
Generally, those with adequate disposable income will enjoy a less competitive environment, and that often means they are in a position of power when it comes to bartering for better deals.
Nevertheless, this does not mean that caution should be thrown to the wind. These are indeed uncertain times, but in such a climate buyers can find a certain measure of certainty in properties that are located within established and proven areas – where opportunities, though limited, are still available.
Typically these are prime areas that are strategically located, well connected and where scarcity of land will continue to drive values up despite a souring overall economic outlook. Neighbourhoods such as such as KLCC, Mont’ Kiara and Damansara Heights fit the bill, and while properties here are pricey, the potential for capital gains in these locales make a strong case for investment attention.
Leading property consultancies such as Knight Frank Malaysia Sdn Bhd, however, have put their money on the continued lustre of Bangsar South in Kuala Lumpur for a combination of reasons: it is an extension of the consistently popular Bangsar neighbourhood, it is a beneficiary of improved rail transit connectivity and it has MSC status.
Commenting on the importance of MSC status in the current market scenario, Knight Frank Malaysia’s managing director Sarkunan Subramaniam said the provision would mean a number of incentives – including tax breaks – which makes the vicinity attractive to technology companies and start-ups.
“All in all, well-located, good grade office buildings and those with MSC status are expected to continue to perform well,” he said, adding that Bangsar South has proven itself to be among the most competitive locales in this respect within the Klang Valley.
Concurring, Knight Frank Asia Pacific’s head of research, Nicholas Holt, said the relatively low rental cost in Bangsar South (regionally) has given the area a lift with young tech enterprises.
The company’s recently released Global Cities Report 2017 also ranked Bangsar South among the most attractively priced locales (for purchase and rental) among the 28 international cities it surveyed for tech start-ups.
The significance of this is a prolonged attractiveness for both a local and expatriate working and living community that will have a spillover effect on the value of all types of properties in the surrounding area.
In terms of residential property, this has translated into quick take-ups for a number of high-rise condominiums that have emerged in the vicinity. However, much of the existing stock is made up of compact and mid-sized units that offer less than 2,000sq ft of space.
Seeing an opening to cater to the surprisingly untapped demand for larger living spaces in Bangsar South, up-and-coming projects such as The Estate are now reaching out to this target market with standard units sized between 2,346sq ft and 3,110sq ft. The RM650 million project is a boutique luxury development by Bon Estates Sdn Bhd.
“Bangsar has always had strong appeal as a residential address. It is an established area for upmarket properties and has consistently attracted an expatriate crowd. More recently, the extension into Bangsar South has boosted the overall commercial lure of the vicinity, which is why Bon Estates was keen to get involved in the area,” explained Bon Estates managing director Goh Soo Sing.
Making this project particularly worthy of attention is the fact that its units will be attractively priced at RM750psf, which is notably lower than the RM900psf to RM1,000psf transacted at existing projects offering similarly sized units, such as The Park Residence located nearby.
The Estate, taking shape on 3.68 acres along Jalan 112/h is also situated on one of the last remaining freehold parcels in the area.
Goh said the project will not be relying on the offer of large space alone to create an enticing value proposition for homeseekers and investors. It will also boast the lush Bukit Gasing forest as its backdrop, feature extensive landscaping within its perimeter, offer quality fittings and finishing, and it will be Green Building Index (GBI) certified with energy efficient features.
“We chose to add more appeal by achieving GBI certification for our project, as we believe green buildings will hold more weight among discerning buyers in the future, which in turn, further enhances the value of the investment and the potential for capital growth,” he said.
To be launched in the first quarter of 2017, The Estate will comprise two 46-storey towers that will play host to 328 condominiums.
“It is a low-density project of just four units per floor, so each unit is a corner unit. North-facing units will have a view of University Malaya and the KL City skyline beyond it, while south-facing units will overlook the Bukit Gasing forest,” said Goh.
Standard units come in options of four-plus-one or five-plus-one bedrooms, while there are also a limited number of duplexes and penthouses up for grabs. About 40% of the units will feature the dual-key concept to reach a broader market of buyers and enhance the prospect of rental income.
Larger units in Bangsar South are rare, said Goh, which has led to very positive rental yields of between 7% and 9%. Choosing to adopt a more conservative outlook – given the prevailing slow market conditions – he still anticipates rental yields of 6% to 7% because of the lack of supply.
Inside, buyers can expect spacious open concept layouts, ceiling heights of 11ft and attached baths at every bedroom. Residents will also enjoy private lift lobbies, a generous allocation of four car-parking bays (situated side-by-side) and various energy-efficient utilities – including six charging stations located within the premise.
Among the facilities made available to residents are a 2,000sq ft gym; a lap pool, family pool, children’s pool and a sky pool; cabanas with Jacuzzis; party rooms; a sky dining outlet; community café; sunken lawn; tea garden; and pavilion.
Bon Estates aims to provide a “living, well-crafted” ambience, and in line with this, a large section of the common space at The Estate will feature artistic landscaping that will be expertly fashioned by renowned landscape architect firm Seksan Design.
Goh is confident about sustained capital growth for properties located in Bangsar South, given its central location and easy connectivity to a number of major urban hubs within the Klang Valley.
Meanwhile, rapidly diminishing development land in the area ensures quick returns for investors and its MSC status will serve to sustain long-term demand for an already established and highly-popular KL suburb.