The Star: Monday July 30, 2007


IS the KLCC area already saturated with high-end condo developments?

KLCC is the heart of the real estate market and is the prime property hotspot of the nation, said S.K. Brothers Realty (M) Sdn Bhd general manager Chan Ai Cheng.

"Any city in the world has its own renowned residential enclaves. Think of Hyde Park in London and Central Park in New York. This is the best address in Malaysia!" she said.

"KLCC looks like it is saturated because of the timing of the launches - one after another. But the fact is, land is scarce."

Henry Butcher Marketing Sdn Bhd chief operating officer Tang Chee Meng said there were concerns that there could be an oversupply situation looming in the horizon with so many new projects under construction.

"However, any oversupply situation is in relation to a particular period only. And if the economic conditions do not turn adverse, it is a matter of time before the units are filled up," he said.

Land is scarce in the KLCC area and with land costs having escalated beyond the RM1,000 per sq ft mark, it is conceivable that there would be fewer new projects coming on stream.

Tang said it could become less attractive for developers unless the prices of the units could be pushed up further.

Some projects cater to the different needs of buyers. Some buyers want good views while others prefer convenience and proximity to entertainment centres.

Chan said that when you invested in a KLCC condo, you need to know the type of tenant you were targeting.

For instance, the Binjai is touted to have the most beautiful view of the KLCC Park and the Petronas Twin Towers. Initially when it opened for registration, the price per sq ft was supposed to be RM700-RM800. The indicative price has far exceeded that today.

The other highly anticipated launch is the Four Seasons mixed development project, sited next to Menara Maxis.

Explained Chan: "If you were to buy into a project early, certain developers offer 'early bird special' price or an easy-to-own package deal including the 10:90 variant. This means that you pay only 10% downpayment and nothing more until the project is ready. You will save on interest costs. By that time, the project is ready and you can rent out the condo unit and use the rental to pay your bank loan instalments.

"The condo layout must be practical and there should be a variety of built-up sizes available so that you won't be competing with other owners if all your units are of the same size. For instance, the Idaman Residence project offers sizes of 800 sq ft, 1,000 sq ft, 1,500 sq ft, 1,700 sq ft and 2,100 sq ft. Here the segregation of types is very distinct for the purpose of renting out."

A buyer must also consider how much capital appreciation the property can gain.

"At what entry level are you going in? If I were to buy at, say, RM1,000 per sq ft, what's the likelihood of the price moving upwards? What are the neighbouring launches selling at? Are they priced higher? Don't get carried away with the show unit which is designed to seduce the prospective buyer."

Chan highlighted key features in selected condominium projects that made the developments popular:

Idaman Residence
- Choice of units with not many competing types within the development.

One KL
- Each unit comes with a swimming pool.

Cendana
- Tie-up with Renaissance Hotel KL & most buyers are repeat Tan & Tan customers.

Marc Residence & K-Residence
- Proximity to KLCC.

Troika
- Designed by Foster & Partners architectural firm headed by multiple award-winning Lord Norman Foster.

Avare
- Unique external façade of a glass-curtain walling.

Pavilion
- Mixed development concept.

Meanwhile, Henry Butcher Marketing Sdn Bhd chief operating officer Tang Chee Meng's top three picks are:

Binjai
- Location with unobstructed views of the Petronas Twin Towers and it being developed by KLCC Holdings. Its list of prospective buyers are the who's who in the country.

Four Seasons
- Prestigious brand name can add value to the development.

One KL
- Prime location and unique concept with a pool for every unit.

Chan said a developer might price his or her development very high but pricing alone did not necessarily reflect nor guarantee a luxurious development.

An unfortunate fact of local property development is that what you see in the show unit may not necessarily be what you get. Defects and flaws are commonplace.

Luxury condo-developments in other parts of KL (listed in Table B) may not be quite as expensive as those in the KLCC area but prices are coming "pretty close," she said.