iProperty: June 25, 2007

A fast-paced metropolis with all its exhilarating diversions - stylish crowds, trendy eateries and five-star restaurants, a myriad of designer retail outlets as well as a vibrant and colourful nightlife - is what waits within the thicket of Kuala Lumpur's impressive skyscrapers.

Night or day, the country's thriving capital is fast becoming a destination to remember.

For the majority, a trip into the city centre in the name of shopping, entertainment or work is all we can afford but to the affluent, who are only accustomed to the finest things in life, a lifestyle of luxury within the city that never sleeps has never looked better.

And where does luxury reside? Hands down, most would say the prestigious Kuala Lumpur City Centre (KLCC).

Marked by the country's distinctive and iconic 88-storey Petronas Twin Towers, which not only boasts a view to die for but along with it, a 50-acre park, the popular shopping destination Suria KLCC mall, the opulent five-star Mandarin Oriental hotel as well as the KLCC Convention Centre.

The address has quickly reached extraordinary heights and has evolved into a strong magnetic force, pulling locals and foreigners into its nucleus of luxury.

Even today, the city has not reached full bloom with the many high-end residential projects still taking shape. And with the recent abolishment of the Real Property Gains Tax (RPGT) in April as well as the easing of Foreign Investment Committee (FIC) rules, owning a piece prime property within the pulse of the city has become a more feasible dream come true for many - near and far.

The beginnings of something great
What was once the site of the Selangor Turf Club & Race Course, the renowned Kuala Lumpur City Centre project is situated on 100-acres of prime land within the heart of the capital.

Owned by the national oil company Petronas, the project was borne out of the vision to create an integrated place to work, shop, reside and visit within a conducive and inviting environment.

Construction on the iconic project commenced in the mid-90s, comprising of the Petronas Twin Towers, Menara Maxis, Menara ExxonMobil, Mandarin Oriental hotel, Suria KLCC, the KLCC Convention Centre and Traders Hotel.

In total, the prestigious area comprehensively features 18.3m sq ft of office, commercial, retail, hotel, residential, entertainment and exhibition space within one single area. And also commands the highest rental rates - within the Petronas Twin Towers and Suria KLCC.

The main features that set the project apart from other developments in the city are its infrastructure, accessibility and wide green spaces. Boasting a tranquil haven within the city, the 50-acre gazetted public park - that is unique to the mini-metropolis - includes a symphony lake, a 1.3km jogging track as well as a children's playground that spills over 2 acres.

The success of the project has raised and set the bar for both commercial and residential properties surrounding the distinguished area. The iconic development has not only become a site to see, but one of the most sought after views and locations in the city.

The ascent of luxury and exclusivity
In just two years, residential property prices around the Kuala Lumpur city centre have shot through the roof. In certain instances, the cost of land and prices of built-up space have doubled.

Most would unanimously agree that the catalyst to the sudden rise of residential properties in the city centre can be attributed to one project - the Binjai - which at its debut, was and still is touted to be the most exclusive development in the KLCC vicinity.

Undertaken by KLCC Property Holdings parent company KLCC Bhd, the Binjai will be the only residence that boasts a truly premier address, a spectacular view of the Petronas Twin Towers as well as the perfect vista of the park's lush greenery.

To date, property consultants expect the units in the Binjai to surpass the RM1,600psf mark.

And for those who are still searching for the most exclusive buy, look out for the Four Seasons Service Residence. Prices are expected to start from RM1,800psf to RM2,000psf.

With a new benchmarks continuously being established, a feverish amount of development has swiftly sprung up around the vicinity.

The phenomenon has not only brought developers to rework their numbers but has also sent them scrambling to buy land in the vicinity in hopes of capturing the essence of exclusivity and luxury with a prestigious and exclusive location.

According to a CIMB report on the KLCC condo market, vacant land prices have soared from RM400psf to RM500psf two to three years ago to a whopping RM600psf to RM800psf.

Even with the scarcity of land in the city centre, condominium projects are mushrooming in the KLCC vicinity, such as Avenue K Residence, The Avare, The Binjai, Suria Stonor, The Meritz, 2 Hampshire, Hampshire Residence, Fairlane Residence, Hampshire Park, Cendana, The Oval, Park Seven, Binjai Residency, myHabitat, Lot 163, Idaman Residences and The Troika - each contending for the most prestigious address in the city.

In addition to the upcoming developments, there are many new and existing condos on the periphery that are within a few minutes drive to the heart of the city. These include The Marc, Dua Residency, Parkview, The Corinthian, The Orion, Taragon, 1A Stonor, Menara and 8 Persiaran Hampshire.

The city's landscape is continuously evolving, with new developments on the rise and several in the works - their unique and distinctive facades each adds a little something to Kuala Lumpur's already impressive skyline.

Hype or substance?
With over 6,000 units streaming in the market - all touting luxury, exclusivity and prestige - an inevitable question surfaces: Can the market sustain a sudden surge in up-market units, most of them being priced over RM1 million? With several surpassing the RM5 million mark for a penthouse unit.

According to the experts in the sector, the outlook remains upbeat.

Raine Horne International Zaki + Partners Sdn Bhd senior negotiator Gavin Chong said, "There is still a demand for up-market projects in the KLCC area, not only from foreigners but locals as well. In fact, demand is on the rise."

"The take-up rate has improved compared to last year since the RPGT has been abolished. 50% of the new projects have been sold to foreigners," he added.

While SDB Properties Sdn Bhd senior sales and marketing manager Leon Kim Yoke also reported "an increase in enquiries since the RPGT has been exempted" for its 105 units within 20-storey Park Seven, located just 700 meters away from the infamous KLCC development.

Zerin Properties chief executive officer Previndran Singhe also shares the same outlook. His answer to what he calls "the million dollar question" is a "resounding yes". However, he does offer several words of caution:

"Not all projects will succeed as there are important issues to consider, such as knowing the difference between serviced apartment and residential condominium, great layouts and finishes that will last, reliable developers that have the capacity to complete, a location that is truly accessible to KLCC and prices that will allow you to ride the wave instead of one that is already reflective of any capital appreciation."

Magna Prima Bhd chief executive officer Lim Ching Choy also concurs that only certain projects will be in high demand.

"There is not much supply of condos that exclusively provide built-up areas ranging from 3,000sq ft to 5,000sq ft. There are less than 250 units offering this type of units, instead of a mix of large and small within the same project," he said.

"And there are very few which are located on designated residential land, versus commercial, which are then designated as serviced apartments."

The group's prestigious development - The Avaré - is such a project that will offer the affluent built-up areas starting from 3,800sq ft situated on residential land. The condo also boasts an uncompromising view of the Petronas Twin Towers as well as the 50-acre park, being only 800 meters from the towers.

Compared to other projects - The Troika is priced from RM1,500psf to RM1,800psf and One KL from RM1,600psf - The Avaré is only tagged from RM1,200psf to RM2,000psf.

"We've achieved an 85% take-up rate. 45% are local buyers and the remaining 65% from foreigners. With the right location, product and a project featuring international standards, demand is definitely strong," said Lim.

Still a good buy, for now
With property prices sky-rocketing in neighbouring countries, such as Singapore, Hong Kong, Thailand and Australia, among others - a condo within the heart of the KLCC vicinity is still considered a good buy.

"Give another five to 10 years from now, once all the land banks available are fully developed. Properties in the area will come to the level same as New York City, where the prices are sky high and the returns from the property are more than 10% per annum," Zerin Properties head of agency Bryan Kumar said.

"If I am an investor I will put my money to purchase a property around KLCC area as I find it will never go wrong. The demand will always be there. It is matter of timing," he concluded.

Leon also shares a similar view, "Living at KLCC area means owning a piece of property that will definitely appreciate in time, just like all other major cities in the world."

Singhe dubbed KLCC as "irrefutably the prime property hotspot of the nation," adding that, "There is a growing belief that residences in the Golden Triangle will someday be on par with world renowned residential enclaves such as Hyde Park in London and Central Park in New York."

Land is quickly becoming a rare commodity in the area said Lim, "Even now, land prices have doubled and low-density and well-positioned developers are limited. These properties have definitely potential to fetch higher prices in a short span of time."

Although to most of us, a million ringgit property is just a mere vision within deep slumber, to the select few, a residence within Kuala Lumpur city centre's exclusive address is still highly affordable - night or day. But for how long? It remains to be seen.