Lanson Place to operate Bukit Ceylon Residences in 2012

LANSON Place Hospitality Management Ltd will operate a RM207 million property known as Lanson Place Bukit Ceylon Residences in Kuala Lumpur in 2012.

This will be Lanson Place's third property in Malaysia and form part of the Verticas Residenci development in Bukit Ceylon by Wing Tai Malaysia Bhd. The tower, to be managed by Lanson Place, is owned by Wing Tai Malaysia and Lanson Place's parent company, Wing Tai Properties Ltd. Wing Tai Properties is listed on the Hong Kong Stock Exchange.

The management company's senior vice-president Graeme Laird described the upcoming accommodation as "comfortable and chic" and said that it would have 150 keys with one- to three-bedroom units.

The property has set new standards in the serviced apartments as it has very large units, with a one- bedroom unit measuring 1,100 sq ft and larger ones reaching 2,000 sq ft.

When asked about return on investment for this property, Laird said: " We did not calculate the payback period. The expected gross rental yield in a stabilised year could reach more than 10 per cent. So this would be from year three of operation."

The Bukit Ceylon property hopes to garner an average of RM500 per night when it opens.

Meanwhile, its four-star Lanson Place Ambassador Row with 221 keys closed last year with an average room rate of RM207 and an occupancy of 72 per cent.

This year, it hopes to garner RM250 and fill 70 per cent of its room inventory.

It also operates 132 units in Lanson Place Kondominium No 8, which consists of purely residential apartments.

Where next in Malaysia for Lanson Place? Laird said it could be keen on Penang and Kota Kinabalu in Sabah if the right properties become available and the destinations can support high-end serviced apartments.

But its more immediate priority is to upgrade Lanson Place Ambassador Row in 2013 to lift the product and position it further up- market.

By Business Times

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Supply of office space in the city to considerably exceed demand

PETALING JAYA: The supply of new office space in Kuala Lumpur will be overwhelming this year making the market soft and competitive as tenants will get to pick and choose the best deals.

DTZ Nawawi Tie Leung executive director Brian Koh said an additional 2.3 million sq ft in new office space this year will put more pressure on the market.

He estimated that the average rental rate for office space in the city would ease by 5% to RM5.90 per sq ft compared with last year's figure.

“Demand will not grow as fast as supply and this will result in a vacancy rate of 12.5% this year. With the increase in new office space, the rate of unoccupied space is expected to go up to 15% by next year,” he told StarBiz.

Koh said an estimated 13.2 million sq ft of new office space was in the pipeline in the city between this year and 2013.

He said the target to have 100 multinational companies based in Malaysia and the proposed growth of the services sector would augur well for office space demand.

In its latest market report, DTZ Research said the overall occupancy rate of office buildings in Kuala Lumpur decreased from 87.1% in the third quarter of 2010 to 86.4% in the fourth quarter due to weak demand.

Total office space in the city stood at 63.1 million sq ft of net lettable area. It added that office rentals continued to be under pressure in thefourth quarter of 2010 due to competition with average prime office rent going at RM5.97 per sq ft per month in the fourth quarter of 2010.

Knight Frank executive director Sarkunan Subramaniam said office rates were expected to come under pressure and rentals would trend downwards as “completion coming onstream from new and refurbished buildings is expected to overshadow tenants' demand.”

Last year, 2.495 million sq ft were added to the market.

The new buildings included Menara PJD (414,00 sq ft), HSBC new headquarters (175,000 sq ft), Cap Square Tower (600,00 sq ft) CCM headquarters (281,000 sq ft), MIDA Building (283,000 sq ft) and BRDB Tower (221,000 sq ft).

He said the buildings, coupled with those completed in 2009 which were still being leased out, gave existing buildings stiff competition.

Sarkunan said the average rental and occupancy as of the fourth quarter of 2010 have dipped slightly to RM5.09 per sq ft and 92% respectively. Prime office rentals in the city were between RM6.50 to RM10.00 per sq ft.

“The tenant-favoured market environment will continue to prevail. There could be more incentives other than rent-free periods for negotiations,” Sarkunan said.

It would be tough to retain tenants and attract new ones, he said. “Tenant rapport is key. It is important to understand the geographical location and service type concentration in the area and target such tenants,” Sarkunan said.

He said good grade office buildings in good locations, supported by amenities and public transportation would continue to be favoured by tenants.

Offices within integrated developments that offer complementary support components such as retail and hotel facilities as well as MSC-status are expected to perform well.

CB Richard Ellis executive chairman Christopher Boyd was optimistic that the market would be balanced this year with very little hangover from last year.

“Since the end of last year we have been hearing of more multinational companies, financial institutions and oil and gas companies looking to expand their operations here.”

Boyd said rentals in most prime buildings in city's golden triangle were from RM6.50 to RM7.50 per sq ft and from RM5 to RM5.50 for secondary buildings.

“However, from the middle of next year supply will considerably exceed demand while rentals and occupancy rates are expected to weaken.”

He said a total of 4.21 million sq ft in new office office space will be completed in Kuala Lumpur this year and 5.46 million sq ft more will come onstream in 2012.

By The Star

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SP Setia plans project, in talks with govt on KL site

SP Setia Bhd plans to undertake a mixed residential and commercial project in Bangsar, Kuala Lumpur, giving the government a 20 per cent share of its net profit from it.

The 16.3ha of prime land along Jalan Bangsar, where it proposes to undertake the project, is owned by the government.

SP Setia is currently in talks with the government to be given that land in exchange for building an integrated health and research complex for the Ministry of Health (MoH) on 22.4ha of land it owns in Setia Alam, Shah Alam.

It told the stock exchange yesterday that its unit, Sentosa Jitra Sdn Bhd (SJSB), has the government's in-principle approval for the land swap proposal.

The proposal was mooted by SJSB to the government along the lines of the public-private partnership concept.
The land in Bangsar currently houses five National Institute of Health agencies under the MoH's purview, which will be relocated to Setia Alam.

SP Setia said SJSB had finalised its design and costing for the new complex, to be known as the 1National Institute of Health (1NIH), and is now ready to commence negotiations with the MoH and the Public-Private Partnership Unit in the Prime Minister's Department.

The proposed new 1NIH will serve as a hub and centre of excellence for health research, training and consultation at both the local and global level.

"The land swap nature of the deal means that the MoH/government will not have to fund any part of the cost for the construction of the new 1NIH complex."

This, it said, will be paid for by the difference between the current market values of the Bangsar and the land in Setia Alam.

SP Setia told the stock exchange in a separate filing later that it plans to place out up to 15 per cent of its issued and paid-up capital. The issue price will be determined by way of book-building.

By Business Times

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Guocoland to launch Damansara City 2 by Q3

GUOCOLAND (Malaysia) Bhd hopes to launch its RM1.9 billion flagship development, known as Damansara City 2, in the third quarter of this year, an official said.

The property arm of the Hong Leong group will build the integrated development in Kuala Lumpur's Pusat Bandar Damansara, over a 2.2 million-sq-ft area.

It will comprise two office blocks, a 300-room hotel, a 260-unit serviced apartment block and a retail centre.

"We hope to launch it, hopefully, in the third quarter. The gross development value is not really firmed up yet, but it could be between RM2 billion to RM2.5 billion. We're selling only the serviced apartments," managing director Yeow Wai Siaw told Business Times yesterday.
He said work on the project could start immediately once all approvals were obtained. He is targeting for the project to be completed in about 30 to 36 months.

The project by Guocoland was first announced by Prime Minister Datuk Seri Najib Razak yesterday. It was one of 19 projects he unveiled under the government's Economic Transformation Programme.

Guocoland's share price gained 11 sen to RM1.35 in the stock market yesterday.

By Business Times

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Boustead in talks to buy army base land for RM8b project

Boustead Holdings Bhd may build mixed commercial and residential properties worth more than RM8 billion on the 98ha Batu Cantonment army base at Jalan Ipoh, Kuala Lumpur.



The group's main shareholder Lembaga Tabung Angkatan Tentera (LTAT), which holds a 59 per cent stake, is in talks with the government to buy the land and is close to sealing the deal.

Boustead deputy chairman and group managing director Tan Sri Lodin Wok Kamaruddin is hopeful that it will be involved in the land development.

"Hopefully the deal could be secured soon. Everyone is working hard to make it happen. If LTAT can buy the land, we will do a feasibility study to decide on the most viable properties to build," he said.

"It is a good site for a mixed development. It would be the kind of project that one would want to pursue on this prime land," Lodin told Business Times.
He said Boustead may build medium to high-end houses, commercial and residential towers, shophouses, small office/home office and a mall.

The government is selling some of its prized land bank around Kuala Lumpur and the Klang Valley at current market value for redevelopment.

These include the Batu Cantonment land, 24ha at Jalan Cochrane, the 1,320ha Rubber Research Institute land in Sungai Buloh, and smaller parcels at Jalan Stonor, Brickfields, and Bukit Ledang, off Jalan Duta.

It is unclear how much the Batu Cantonment land is worth but according to Previn Singhe, founder and chief executive officer of Zerin Properties, the market value for unconverted land at Jalan Ipoh is now between RM40 and RM80 per sq ft.

Previn said the development will attract foreign investments as it is closely located near the KLCC.

"The shear size of the development offers a lot of promises. Prices of real estate along Jalan Ipoh have always been stable with good movement ... it's not as docile as how one thinks.

"This project will have a positive impact on Jalan Ipoh if done well and if the developer can tap on the commuter line nearby, and the proposed Kepong-Kajang line," Previn said.

The Batu Cantonment army base, which has been there for over 40 years, will be relocated.

In 2002, the Perak state government had earmarked a 680ha site in Batu Gajah for the relocation.

By Business Times

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Making KL a greater place

With the NKEA in mind, it is time to make GKL a livable place which is clean and peaceful, and filled with environment-friendly economic activities producing high-quality, high-value goods and services.

MANY analysts compare, rather simplistically, the economy of Singapore with that of Malaysia. This is like comparing apples with oranges.

The two economies cannot be compared in that simplistic manner because of the markedly different economic structure of two, with Malaysia having a large rural sector and abundant land, and Singapore, a service-oriented trading economy.

It would be more meaningful to compare Singapore with Greater Kuala Lumpur (GKL), or what was often referred to as the Klang Valley.

After all, the latter is already very urbanised and is endowed with modern infrastructure.

The inclusion of GKL as one National Key Economic Area (NKEA) is befitting given that it is the epitome of our economic space and national urban system.

In fact, we can take up issue with the physical and development planners of GKL if the region fails to perform socially, economically and culturally, on the scale achieved by city economies like Singapore and Hong Kong.

The GKL region should be the leader in productivity and intellectual capital creation in various fields especially in services such as finance, education, communication and the arts, and high-value manufacturing where intellectual capital and K-economy-related activities are the natural choice.

To date, the GKL has expanded much on the basis of organic growth.

The processes of population concentration and agglomeration have led to what GKL is today.

Its status as the national capital attracts many business houses to establish their headquarters in Kuala Lumpur, thus putting pressure on space and impacting property value.

Thanks to earlier efforts, we have been able to avoid GKL from becoming a primate city, such as Manila, Mexico City, Bombay, and Cairo, with the attributes of over-population.

Indeed, the earlier years of development concern for regional disparity restrained GKL from overexpansion and as such, growth was dispersed to other parts of the country, as expected by the spirit of federalism.

In fact, on realising this, the seat of Federal Government administration was moved to Putrajaya, leaving Kuala Lumpur to become the financial and commercial centre of the country.

In line with the NKEA objective, let us make GKL a livable place, clean and peaceful, and filled with economic activities which are environment-friendly yet producing high-quality, high-value goods and services.

These activities will have a high content of intellectual capital.

GKL does have the potential to attract high-return activities such as banking and finance, tourism, advertisement and professional services such as legal, accounting, engineering, healthcare and arts and design.

The presence of premier tertiary educational institutions in and around GKL can help spur the growth of these activities in the area.

The lower costs such as rentals of premises in the GKL compared with the rates in Singapore, Hong Kong and Bangkok can attract these services.

In the same breath, GKL should not be the location of manufacturing activities which demand high-labour content and low technology.

Other places where labour is still plentiful can be the location of such industries.

This is one reason why regional corridors are established.

The GKL, which covers various urban conurbations and the surrounding townships of Klang, Kajang, Bangi, Putrajaya, and Shah Alam, has to be targeted as a planned modern urban space and that its untoward features of squatters, traffic jams and unhygienic stalls have to be phased out or upgraded speedily to befit the region as the foremost urban centre of the nation.

The transition has taken place, with Shah Alam, Bangi and Putrajaya leading the pack, but its momentum has to be expedited.

The mindset of urbanites in GKL have to change fast to accommodate the emerging status of GKL.

It is heartening to see that public transport has been given due emphasis in the National Key Result Area and the NKEA of the current administration.

Indeed, the issue of traffic jams in the city of Kuala Lumpur, especially on Friday evenings and particularly when it rains, demands a strong political will to address as it is the consequence, in part, by our car ownership policy.

On this matter, an independent transport and road planning body can be given the task to plan and carry out road and transport planning in the region, having regard for the current multiplicity of agencies with power to influence transport system in GKL.

A final point that is worth reflecting is the position of Kampung Baru and Chow Kit in the context of future urban renewal expected to take place under the impetus of the NKEA of developing the GKL.

The cultural and historical elements of urban planning have to be equally considered and there is no better window than capitalising on the opportunities arising from new developments of GKL, which has to grow with an identity of its own.

By The Star

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Foreign interest in high-end KL condos set to grow

FOREIGN interest in high-end condominiums in Kuala Lumpur will accelerate next year with the impact from Economic Transformation Programme's Greater Kuala Lumpur plan, property market players said.

The economic crisis in the past two years had seen a dip in foreign interest leading to a 30 per cent drop in prices.

"Going forward, we expect a return in buyer interest from Singapore, Hong Kong, Indonesia and more recently from the Middle East," said Eric Y.H. Ooi, organising chairman of the forthcoming Fourth Malaysian Property Summit at a briefing yesterday.

Prices of these high-end units in the city centre, ranging from RM1 million and RM2 million, have caught up with previous peak levels.

Foreign ownership to local ownership, which was at 30:70 per cent ratio, is expected to increase.

"Come 2011 we will be able to see whether foreign interest will be better than the past two years or to the peak in 2007/2008 when it was 50:50 per cent ratio," Ooi said, adding that there had been drop in interest from European investors.

Ooi, who is also managing director of Knight Frank Malaysia, described the Malaysian property market scene as probably one of the most attractive in the region with fewer number of ownership restrictions.

Foreign investors are attracted to the higher yield from these high rise investments at 5 per cent compared to landed properties, which provide between 2 to 3 per cent yield.

He said it would be interesting to see the property market scene when the second-tier Chinese investors from the mainland are allowed to purchase overseas properties. Already there has been a spike of Chinese interest in properties elsewhere in Australia and Singapore.

Past president of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia James Wong expects the inflow of foreign buyers to increase in 2012 with the implementation of the ETP.

"With the Greater KL and billions of ringgit in the MRT (mass rail transit) and LRT projects, we can expect to see an influx of expatriate population as seen during the last boom when the Petronas Twin Towers was taking shape," Wong said.

He added that unlike China and Singapore, Malaysia is not expected to see property asset bubble in the foreseeable future.

Wong also expects non-performing loans ratio (NPLs) to go up in the first quarter of 2011 although not at alarming rates.

He attributed it to the 5 to 10 per cent easy down payment scheme to purchase properties.

The Fourth Malaysian Property Summit organised by PEPS will be held at the Sime Darby Convention Centre in Kuala Lumpur on January 18.

It will have an overview of the property market performance and outlook for the office market, retail market, industrial market, high end condominium and REITs.

PEPS president Choy Yue Kwong said the property summit is also relevant to those who wonder whether it is the right time to sell their properties for alternative investments or right time to buy or invest or do nothing and wait for property prices to appreciate further.

By Business Times

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Freehold serviced apartments in the middle of the city

Green living: The sitting room in the studio showhouse unit of VUE Residences Serviced Suites.

If you are looking for an abode that offers chic lifestyle amid tall skyscrapers, then look no further than the VUE Residences Serviced Suites located along Jalan Pahang, Kuala Lumpur.

Developed by Prinsiptek Corporation Berhad (PCB), the freehold project comprises 23-storey with a roof garden/sky garden on the 24th floor. The first to seventh floors are multi-level carparks where residents are entitled to a parking bay per unit. There are 340 car park bays.

PCB group managing director Datuk Foo Chu Jong said the project is surrounded by various prominent landmarks like the Suria KLCC, Pavilion Shopping Centre, Titiwangsa Lake Garden, KPJ Tawakal Specialist Centre, Prince Court Medical centre, Istanan Budaya, and the National Art Gallery and it just five minutes away from the Chow Kit monorail station and Titiwangsa LRT station.

With 72 units, every floor has a combination of four models ranging from 500 sqft studio units to the bigger two-roomed units and the 1003 sqft three-roomed units.

“There is an indoor lap pool, gymnasium and a 24-hour security to give residents a peace of mind” added Foo.

Prices range from RM370,000 to RM772,000 and the project is expected to be completed by Dec 2013.

PCB’s other notable projects are The Prince in Bangkok, Section 8 Bandar Baru Bangi, Serdang Perdana Sky Villas, Ampang Prima Condominium and Section 7 Shah Alam.

By The Star

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The regeneration of Sentul

When the YTL group took over Taiping Consolidated Bhd in 2001, one of the priced assets that came with it was a piece of land in Sentul.

Much of the early concept for that master plan development stemmed from the Sentul KTM Komuter station and its tracks which split the 294-acre land.


Datuk Yeoh Seok Kian ... ‘We will monitor demand for future residential and commercial projects.’

It was on this basis that the group decided to make Sentul a transport hub, leveraging on the commuter station that was already there and the golf course, which it had turned today into a private park for residents.

Sentul is located 5km north-west from the heart of Kuala Lumpur and 45 minutes from KLIA. Taiping Consolidated eventually became YTL Land & Development Bhd (YTL Land), a 64% subsidiary of YTL Corp Bhd.

Executive director Datuk Yeoh Seok Kian recently unveiled Sentul's first commercial development d7, a seven-story block comprising 20 retail stores on the ground floor, 78 office suites and 34 duplex offices in Sentul West. The project is completed and 100% sold.

Another project d6, on Sentul East, is being planned. A sky bridge connects the two. d7 was launched at RM380 per sq ft a few years ago.

It is expected to be priced about RM650 per sq ft in the secondary market. Rental rates are between RM3.50 and 4.00 per sq ft.

The seven storey project will have offices, retail and food and beverage outlets. It will be a low-rise office building with courtyard and communal spaces.

It will have two unique office layouts duplex units with skylights, pantry and spacious interior and office suites, which come as empty shells with flexible configurations.

Yeoh says the company will build residential and commercial projects with a total sales value of about RM8bil over the next seven years. That location will be among YTL Land's largest property development.

The plan was to characterise the two halves differently. Over time as Sentul West becomes more established, the community is likely to be more senior and relatively more sedate, compared with the community in Sentul East which will cater more to the up-and-going younger group of people living there, he says.

Covering 186 acres, Sentul West will be the crown jewel of the location comprising a 35-acre private park and residences, offices and retail shops.

Sentul East, which spans 108 acres, with all its vibrancy, will set the tone for modern downtown living.

Yeoh says between 15% and 20% of its targeted projects for that location has been completed since work started on that site in 2002, beginning with The Tamarind in Sentul East and subsequently The Maple in Sentul West.

We will monitor demand for future residential and commercial projects to ensure good buying interest for each project, Yeoh says, alluding to the uncertainties that plague the global economy today and the effects on Malaysia's property market.

But for now, he says there is much they can be proud of. Public infrastruture has improved significantly over the years and Sentul now had a iconic development the new KTM train station, a connecting hub that anchors Sentul West and Sentul East.

Pedestrian sidewalks and skywalk, improved traffic systems, LRT and commuter trains are also part of Sentul's transportation plan, Yeoh says.

Sentul Link also provides access to Jalan Sentul and Jalan Ipoh by connecting Jalan Mahameru at the intersection of Jalan Kuching.

This access helps alleviate existing traffic congestion at the Jalan Mahameru-Jalan Ipoh, Putra World Trade Centre intersection, he says.

When completed, Sentul will have a mixed development of 7,000 units of residential properties, commercial offices and retail outlets.

We are also trying to improve Sentul's past image of being a place that's often plagued by criminal activities, Yeoh says.

He says too often, city development projects tend to focus on decentralisation and the relocation of communities, which ultimately results in cities losing their identity.

The regeneration of Sentul is not just about renewal of the physical environment and wealth. It is also about the renewal of its community, their access to local services and their relationship with the area and the people that live and work there, he says.

YTL Land, which has a market capitalisation of about RM1.05bil, currently has a land bank (with no holding costs) of over 2,000 acres with a sales value of about RM12bil.

By The Star

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