From backwater to property hot spots

TYPICALLY, when prime land in the city centre becomes scarce, fringe areas become the next natural target for both investors and developers. Besides the “location, location, location” mantra, there are many benefits to reap from this move — high demand, good investment opportunities and readily available amenities and infrastructure.

This is true for Kuala Lumpur city centre. Its fringe areas — Imbi, Cheras and Pudu — have seen numerous ongoing and planned redevelopment projects. Some pockets of land, owned by Kuala Lumpur City Hall (DBKL) or individual owners, have also been earmarked for future developments.

Property consultants agree that the fringe areas are an extension of Kuala Lumpur city centre due to their proximity to the Golden Triangle and public transport.

According to Zerin Properties head of research and consultancy Roja Rani Applanaidu, the Imbi area is demarcated by Jalan Imbi, which stretches from the Jalan Pudu intersection to the intersection of Jalan Bukit Bintang. It features various commercial developments such as hotels (Melia Hotel, Federal Hotel), office buildings (Amoda building, Plaza Berjaya), and shopping complexes (Plaza Imbi, Plaza Low Yat, Sungai Wang Plaza and the Berjaya Times Square).The rest of Imbi consists mostly of pre-war shops.

Pudu was home to several historical buildings such as Pudu Jail (which has been demolished to make way for Bukit Bintang City Centre or BBCC) and Puduraya bus terminal that has since been renamed Pudu Sentral.

The Pudu area has a mix of old and new buildings — shoplots, budget hotels, office buildings (Menara Maybank), condominiums (Casa Mutiara, Sri Emas), hospitals, schools and places of worship.

“Properties in the Imbi-Pudu location have always been in demand due to their proximity to Bukit Bintang shopping district, Kuala Lumpur city centre and public transport such as LRT and Monorail,” Roja Rani tells City & Country.

“Investors mainly invest in such residential properties due to high demand from foreigners for their strategic location. However, the surrounding areas, which feature relatively old and rundown buildings, made the area unsavoury and dodgy. They are also prone to traffic congestion.”

Stretching from Kuala Lumpur to Kajang in Selangor, Cheras is the southeastern suburb of the city that saw houses sprouting up due to the rapid development of the tin mining and rubber plantation industries in the early years.

“A large part of the area has been developed into housing estates, with numerous mid to small business centres and shopping malls available for residents. It has a high population density as more than 60% of the housing consists of condominiums and apartments.”

Among the existing and ongoing redevelopments in the fringe areas are Sunway Velocity in Cheras, IKEA Cheras, MyTown Shopping Centre, BBCC and Tun Razak Exchange (TRX).

Developed by Sunway Bhd, Sunway Velocity is a 23-acre integrated development with residences, a shopping mall, a hotel, a medical centre, offices and shops and a two-acre park. This piece of land previously featured wooden houses, light industrial lots, old workshops, showrooms and an open-air retail centre known as Queen’s Park. The shopping mall will be opened on Dec 8.

Located not too far away are IKEA Cheras and the upcoming MyTown Shopping Mall. Jointly developed by Boustead Holdings Bhd and Ikano Pte Ltd, IKEA Cheras was opened last year while the shopping mall will be unveiled by the next quarter. Previously, there were old government quarters in this area.

The long-awaited BBCC is being built on old Pudu prison site. The 19.4-acre tract is one of the last big parcels of prime land left in the heart of Kuala Lumpur and it is jointly developed by UDA Holdings Bhd, Eco World Development Group Bhd and the Employees Provident Fund.

TRX was formerly known as Kuala Lumpur International Financial District. To be built on 70 acres in Imbi, the site will boast offices, condominiums, hotels and shops. This piece of land was previously occupied by squatters, flats and shophouses. This once sleepy backwater is now gaining attention and ready to be transformed.

Henry Butcher (M) Sdn Bhd COO,Tang Chee Meng notes that this fringe area has always been viewed as an old and unfashionable part of town. He cites Pudu, which is also known as poon san pah in Cantonese, which literally means “half jungle”.

“This place has generated a lot of interest among investors and this has led to more developers acquiring land in the area and launching more projects. As a result, property and land prices have shot up,” he says.

Zerin Properties’ Roja Rani concurs, citing a transaction last year which saw a 8,362 sq m (90,008 sq ft) parcel in Jalan 1/77B — located near Berjaya Times Square — transacted at RM388 million or RM4,310 psf.

She adds that land and property prices have risen significantly, with recent land transactions showing that prices have caught up with those in Bukit Bintang and KLCC.

The area is connected via several monorail and LRT stations as well as highways such as SMART Tunnel, Maju Expressway and Sungai Besi Highway.

VPC Alliance (KL) Sdn Bhd managing director James Wong notes that this fringe area still has other land parcels in Jalan Peel, Jalan Cochrane, Jalan Pudu, Jalan Tung Shin, Jalan Alor, and Jalan Imbi.

He foresees more massive developments in this area as there are still many pockets of land or underutilised properties that can be redeveloped.

“The high prices of the new residential launches in this area are mainly due to attractive facilities and finishes offered by the developers,” he says. “Velocity Residence at Sunway Velocity Phase One was launched in 2011 and the condominium units were priced at RM800 psf. In 2015, a unit was transacted for RM1,097 psf, a price rise of about 9.28% per annum. Phase Two was launched in 2014 and came with a selling price of about RM1,200 psf.”

“The buyers in this area are mainly Chinese who are keen on investing in shoplots and apartments/ serviced apartments which are not too large in size,” he adds.

Future prospects

Roja Rani notes that traffic congestion and flash floods are common in this area, but she still sees bright prospects because of the many upcoming projects, including MRT stations.

Other major upcoming developments in the vicinity are KL118 (Warisan Merdeka) and the redevelopment of Plaza Rakyat, the redevelopment of SRJK (C) Jalan Imbi by Elite Starhill into a mixed-use development, Tribeca Bukit Bintang, One Cochrane condominiums, The Locus @ KLCV and The Weave@Cheras.

Henry Butcher’s Tang foresees more developments coming onstream with the depletion of land bank in the KLCC and Golden Triangle areas.

“When the MRT line is completed in the future, it will boost connectivity and enhance the attractiveness of the area. The state of the economy and the prevailing sentiments of the property market will be the limiting factors to development of the area,” he says.

VPC Alliance’s Wong agrees that the enhanced connectivity will be a pull factor, alongside other upcoming amenities such as shopping malls and educational institutions. He says this will attract more young professionals as well as those in the medium to high-income group.

“We also foresee a lot of massive developments as there are still many pockets of land or underutilised property that can be redeveloped,” he says.

The upcoming Sungai Buloh-Kajang MRT line is one of the main catalysts for growth in this fringe area as it runs through the city to connect Sungai Buloh in the northwest to Kajang in the southeast of the Klang Valley.

The MRT line, when it is fully operational by the end of next year, will be connected to several of these new redevelopments, including Sunway Velocity (Maluri station), IKEA Cheras and MyTown Shopping Centre (Cochrane station), TRX (Tun Razak Exchange station) and BBCC (Bukit Bintang station).

This article first appeared in City & Country, a pullout of The Edge Malaysia Weekly, on Nov 28, 2016. Subscribe here for your personal copy.