|July 31st, 2007, 06:44 AM||#1|
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KL’s 10 Most Expensive Condos
KL’s 10 Most Expensive Condos
Sunday July 29, 2007
Excitement in the property sector over the spiralling condominium and land prices in the Kuala Lumpur City Centre (KLCC) area over the last four months, seems to be gaining greater momentum. What's happening to the prices?
Which single condominium development in Kuala Lumpur is considered to be the priciest in Malaysia? The dust hasn’t settled on this issue as two purported contenders for the title have yet to be launched.
According to KL property experts, based on current prices, the 10 most expensive condominium developments (please refer to Table A below) are all sited in the Kuala Lumpur City Centre (KLCC) area with the exception of Pavilion Residence in Bukit Bintang, which is still quite close by. However, if the yet-to-be launched Four Seasons and The Binjai developments were to be taken in account, those falling below RM1,000 per square foot would be out of the list, unless...
But the “asking price” and “transacted price” may not necessarily match. Currently, the costliest average price per square foot has been transacted at RM2,000 for the One KL project. This development is noted for its marketing strategy of one swimming pool on every floor. The tower has 35 levels.
Developers who launched their condominium projects earlier, are now frantically revising their pricing policy for their remaining units. And those who have yet to launch, are now trying to push the limits.
But all eyes are trained on The Binjai and the Four Seasons projects – touted to fetch more than the current benchmark of RM2,000 per square foot. The Binjai management purportedly “screens” prospective buyers and even require an interview. The show house has long been off-limits even to ordinary tycoons.
At the 2004 press conference to announce The Binjai: (L-R) Jones Lang
Wootton senior vice-president Rohan Padmanathan together with KLCCH
director and group chief executive officer Datuk Ishak Imam Abas architect
David Whitfield of Allen Jack + Cottier.
Foreign as well as local interest in Kuala Lumpur’s luxury condominium developments seem to have been spurred by the Government’s relaxation of residential ownership rules for foreigners and the waiver of real property gains tax (RPGT) recently. And what’s happening in Singapore’s high-end condominium property market is having an effect on KL.
And high-end properties in KL’s prime residential locations are considered to be the cheapest in the region. This has given rise to the rare phenomenon of residential property fetching even higher rentals than office property in KL. For example, the office rental rate at the UOA building in Jalan Pinang was recently transacted at RM3.80 per sq ft while a tenant at 3 Kia Peng condominium is in negotiations to renew his tenancy for RM4.50 per sq ft.
Demand for the “best” condo-developments is at an all-time high with record-breaking prices per square foot quoted – even for land in the KLCC area. For instance, the plot of land occupied by the Hakka Restaurant at Jalan Kia Peng was reportedly sold via tender for over RM1,300 per square foot recently – a record price.
And what do our local market experts have to say about such transactions and dizzying prices, notwithstanding the recent dip in the stock market.
Chan gets all excited when talking about high-end properties
S.K. Brothers Realty (M) Sdn Bhd general manager Chan Ai Cheng gets all excited when talking about her favourite subject, high-end properties.
“I love properties and when I go into a luxurious show unit, I get all excited. And when the sales agents take a look at my face, they think they have a sale!” says the property consultant.
But don’t let her pretty looks fool anyone, as this lady is a tough customer who knows all the in’s and out’s of a favourable or unfavourable property.
Carmen Chua, eldest daughter of tycoon Datuk Chua Ma Yu, credits her
father for the opportunity to work on One KL. The condo development is
currently the costliest based on average price per sq ft.
She can easily judge how much yield the property will likely generate or the percentage of capital appreciation in the shortest possible time.
Says Chan: “Technically, all KLCC condominium developments are considered to be high-end properties in terms of price and quality. Super-condos – as opposed to high-end condos – are merely super “big” in terms of size alone.
“The pricing structure of high-end KLCC condos will depend on whether they are located within the first tier or second tier of land.”
The Petronas Twin Towers are regarded as the epicentre of the KLCC area, with the surrounding lands viewed in terms of concentric bands with the first tier being closest to the towers.
Close View: Like many of the condominium developments that have a direct
view of the Petronas Twin Towers, K Residence condo prices seem to be on
a continuous upward trend.
For example, the first-tier condo-developments will include projects like One KL and K Residence and the second-tier will include Hampshire Park, The Meritz and Cendana.
Property agents look at the desirability of condo developments based on various factors depending on the targeted tenants for the units to be rented or leased out.
The development must be easily accessible and the type of neighbourhood should suit the targeted tenants. Does the neighbourhood offer a ready catchment of tenants such as expatriates?
If the targeted tenant is the young and happening type of expatriates instead of family-oriented expatriates, then the condo-development should be near the bars and entertainment areas.
Land status is very important. If the development is on commercial land instead of residential land, then the rental yield will be affected by the commercial rate for quit rent and utility bills. For example, your monthly electricity and water bills will be charged the commercial rate.
The track record of the developer is equally significant. Certain established developers like Tan & Tan have their own following. These repeat buyers will buy anything they build, explains Chan.
Unlike the old days, developers now will usually have done all the study they need to formulate their pricing policy. They would price their property at what the market needs now.
But buyers ought to be aware that if a developer were to build all the condo units in the same size, you will have a tough time renting out your particular unit. You will be competing with many other owners trying to rent out their units.
Also, the team of consultants engaged for the project is important. Buyers generally like “branded” properties. For instance, the Troika developers have engaged Foster and Partners and astute buyers are confident that with such a prestigious architectural firm, the condo design won’t be easily “outdated”.
Buyers of high-end condos who wish to rent out their units have to understand the expatriate rental scale. For instance, a multi-national executive transferred to KL may only have a monthly rental budget of RM5,000 and ambassadors may have an average of RM15,000. So, if you wish to rent out at RM20,000 a month, you are looking at a tenant in the top position in a multi-national! The question you must ask is who is going to be your tenant?
Is the KLCC area already staturated with high-end condo developments?
KLCC is the heart of the real estate market, and the prime property hot-spot of the nation, says Chan.
“Any city in the world – such as Bangkok, Singapore and Shanghai – have their own renowned residential enclaves. Think of Hyde Park in London and Central Park in New York. This is the best address in Malaysia!
“KLCC looks like it is saturated because of the timing of the launches – one after another. But the fact is, land is scarce.”
Some projects cater to the different needs of buyers. Some buyers want good views while others prefer convenience and proximity to entertainment centres.
So when you invest in a KLCC condo, you must know the type of tenant you are 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.
Whether a condo-development qualifies to be “high-end” depends on various factors such as:
· Large built-up and mega-size units
· Quality of the finishing
· Grand entrance statement
· Posh Feel
· Feeling of having arrived
· Royal ambience
What should a buyer be aware, when buying a high-end condo especially in the KLCC area? Chan cites the following guideline:
· Timing of entry into a project
· Design and sizes of units
· Car Park allocation
Explains 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 per cent downpayment and nothing more until the project is ready. You will save on interest costs. By the 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 800sq ft, 1,000sq ft, 1,500sg ft, 1,700sq ft and 2,100sq ft. Here the segregation of types is very distinct for the purpose of renting out.”
A buyer must also consider how much more capital appreciation can the property gain.
“At what entry level are you going in? If I were to buy at say RM1,000 per square foot, 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 highlights key features in selected condominium projects that has 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 Bhd customers
· Marc Residence & K Residence – proximity to KLCC
· The Troika – designed by Foster & Partners architectural firm headed by multiple award-winning Lord Norman Foster
· The Avare – Unique external façade of a glass-curtain walling
· Pavilion Residence – mixed-development concept
· Watch out for the Four Seasons and The Binjai.
But in assessing these condo-developments as a good real estate investment, one must evaluate them based on:
· Land Tenure – Freehold/Leasehold
· Land Status – Residential/Commercial
· Developer’s track record – Branding
· Team of consultants
· Unique feature
· Maintenance charges
· Car park facility
· Choice of Units (Range of built-up sizes)
· Timing of Purchase
· Pricing – Capital appreciation and rental returns
A developer may price his or her development very high but pricing alone does 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 common place.
Luxury condo-developments in other parts of KL – as listed in Table B below – may not be quite as expensive as those in the KLCC area but prices are coming “pretty close”, says Chan.
Last edited by nazrey; August 6th, 2007 at 06:56 AM.
|July 31st, 2007, 06:50 AM||#2|
Join Date: Sep 2003
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Lure of KLCC condos
Sunday July 29, 2007
Condominium prices in the famed KLCC neighbourhood seem to be in a state of flux with foreign investors and fund managers zeroing in only on prime developments that offer potentially good returns.
According to Henry Butcher Marketing Sdn Bhd chief operating officer Tang Chee Meng, the most popular properties are those that actually face the Petronas Twin Towers.
“The KLCC area offers instant recognition due to the prestigious Petronas Twin Towers and a lot of buyers are partial to units with prime views. The location also offers convenience in terms of shopping, entertainment, recreation, transportation links as well as proximity to major office buildings. In terms of living environment, places like Bukit Tunku, Damansara Heights and Bangsar are however better choices,” says Tang.
“However, many are wary that, today you may have the view of the towers but tomorrow you may not. There are still parcels of land for property development around the KLCC focal point so buyers have to beware of future high-rise developments.”
The KLCC area offers instant recognition due to the prestigious Petronas
Twin Towers and a lot of buyers are partial to units with prime views.
Of late, Tang and other property consultants like him, have been busy briefing foreign clients on which high-end condominium developments are worth investing. But most of them only want to buy in the KLCC area.
“A lot depend on when the condo-development is to be completed and what rental will the units fetch. Investors normally look at the yield and capital appreciation.
“We get a mixed group of investors. Some are institutional investors managing foreign funds while some are property traders like those from Singapore who buy and sell. They take up a chunk of 30-50 units. And they sell them off through their network in Singapore. There are some who hold on. These traders may have lost out on opportunities in Singapore so they turn to KL and don’t intend to lose out again.
“For instance, those who have bought Marc Residence units at the initial average price of RM600 per square foot, can now sell them for RM1,200-RM1,300 per square foot. We have a client who sold at RM1,350 just last week.
“Investors who have benefitted from their capital gain, are now ready to re-invest in the property market or stock market.”
Land in the KLCC area is relatively scarce although
many projects have been launched or are being launched.
Mindset of Developers
But Tang cautions that not all so-called “high-end” condominium developments in the KLCC area are worth investing.
“It is very important for the buyer to look at the financial strength and track record of the developer in undertaking similar high end projects. In high-end projects, quality is very important as we are dealing with buyers and tenants from the high income group who are very fussy. If the project is poorly constructed and managed, the capital value and rentals of such units could be impaired. They should also go for more exclusive projects with lesser number of units because rentals could be depressed if there are too many units in the same development put on the market.
“People buying KLCC properties are paying a lot of money and expectations for high-end projects are very different from buying ordinary units.
“Also, the mindset of developers used to building ordinary residential properties are very different from those familiar with building luxury properties.
“Not only is the quality of the finish important but the cost management and design aspects are all different.
“When someone pays RM3mil to RM5mil for a high-end property but the overall quality of the development is poor, there will be a stigma.”
Suria Stonor: prices of remaining condo units have been
revised between RM1,000 and RM1,250 per sq ft.
Also, Tang explains that stigmatised properties are impossible to rent out at the expected rental rate. He adds that among those who can afford high-end condos, the price factor is not a major consideration.
The ability to complete the project as well as the yield and capital appreciation are the major factors.
Inexperienced developers may not be able to overcome an unexpected rise in material costs which in turn will affect the bottom-line and cash flow. Contractors who are not getting paid will slow down or cut back on their workforce.
Material cost can be anything from cement, steel, aluminium and copper. Developers may not have forward contracts.
Surprisingly, completed condo developments that have lost their prime view of the Petronas Twin Towers – due to neighbouring developments – may still attract buyers.
For example, the completed Stonor Park condominium development which originally cost RM600 per sq ft, can now fetch a monthly rental of RM13,000 a unit compared to RM8,000 previously. And there aren’t many units available as most are occupied.
Explains Tang: “Even if there is no prime view, people are still willing to buy because you can see the units you are purchasing. You can determine the quality of the workmanship and there is no worry that the project will be abandoned.”
For the most luxurious condo-developments in the KLCC area, Tang lists them as:
· Four Seasons – yet to be officially launched but rumoured to be above RM 2,000 and up to RM3,000 per sq ft.
· The Binjai, KLCC – yet to be released for sale but purportedly in the range of above RM2,000 per sq ft.
· K Residence – revised asking price for one of the penthouse units up to RM2,000 per sq ft
· The Troika – revised pricing up to RM1,800 per sq ft
· One KL – sold at up to RM1,600 per sq ft
· The Avare – revised pricing up to RM1,500 per sq ft
· Marc Residence – resale at RM1,000-RM1,250 per sq ft
· Pavilion Residence – 1st block sold at RM 900-RM1,000-plus per sq ft
· Suria Stonor – revised pricing of remaining units at between RM1,000-RM1,250 per sq ft.
· Dua Residency – developer’s revised pricing for remaining units at around RM1,000 per sq ft.
· The Oval, KLCC from RM700-RM1,100 per sq ft (pricing may yet be revised)
· Park Seven from RM800-RM1,000-plus per sq ft
Some of the latest projects to be launched in the KLCC area will be above RM1,000-plus per sq ft.
It is a fact that there aren’t any condominium developments outside the KLCC area which are more expensive or grander.
Prices for The Troika condo units have just
been revised up to RM1,800 per sq ft
As for Tang’s list of the most expensive condominium developments, he says it has yet to be seen whether they can be considered good investments.
“Yet to be seen until they are completed. Rentals have to rise to new benchmark levels in order to provide a better yield to investors. However, compared to other major cities, KL’s residential prices are still cheap, so there could be room for capital appreciation, provided that the economy and stock market continues to perform well.”
Is the KLCC area already staturated with high-end condo developments?
“Of course there are 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.
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 could be lesser new projects coming on stream as it could become less attractive for developers unless the prices of the units can be pushed up further. What should prospective buyers look for when they are shopping for a high-end condo?
“Prospective buyers should obviously look for a location which is not only considered a high-end area but one which has easy access and a good neighbourhood, that means, neighbouring houses or developments should be of a comparable standard.
“Potential for capital appreciation and attractive returns are, of course, very important considerations, so the designs have to be not only outstanding but practical and able to cater to the preferences of the targeted end users.”
And Tang’s top 3 picks?
· The Binjai – location with unobstructed views of the Petronas Twin Towers and it being developed by KLCC Holdings. It’s 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
And just what is the difference between a high-end condo unit and a “super-condo” unit?
“A super-condo would, in my view, be one which is situated in a prime residential area, enjoys a premium pricing (RM 1,000 per sq foot and above) and has an extraordinarily large built-up area,” explains Tan.
“In the past, units with built-up areas of 3,000sq ft would be termed a super-condo as that would typically be the size of a penthouse. However, in recent times, 3,000sq ft units have become common and some condos have built-up areas of around 10,000sq ft, so perhaps, super-condos should now be those above 5,000sq ft.”
|July 31st, 2007, 03:00 PM||#3|
Join Date: Oct 2002
Location: Float Temple
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soo one kl is officially the most expensive apartment in KL eh.. the renders looks better in that pic i think..
|August 3rd, 2007, 05:52 AM||#4|
Join Date: May 2006
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er if you read the article it says the four seasons and troika are most expensive. cant have high price if no name or showroom la