AN OVERSUPPLY of high-end condominiums in Kuala Lumpur's most popular residential spots notwithstanding, developers are taking heart from strong uptake in recent launches and new benchmark prices.
While prices for landed residential property in the Klang Valley have remained robust, the interest in luxury condos, or rather those with a unique selling point, has been a surprise.
In June, Malaysia recorded what is believed to be its biggest condo transaction - that of a super penthouse in The Binjai On The Park for RM38 million (S$16 million). One of only two, the 14,300 sq ft triplex was sold at about the equivalent of RM2,660 psf to an unidentified corporate chieftain who owns properties worldwide, yet loved the unobstructed views of the Kuala Lumpur Convention Centre (KLCC) skyline afforded by the penthouse.
In nearby Mont Kiara, private developer Bukit Kiara Properties (BKP) has also been creating waves. Last month, it sold about four-fifths of the 200 plus units of its fourth and final block in the development called Verve Suites, at an average RM1,200 psf. Although the apartments come with fittings and furnishings, the cost per sq ft of the 'designer units' is close to prices in many developments in the Kuala Lumpur city centre.
Interestingly, secondary transactions have been much slower, a point that realtors attribute to BKP's easy financing scheme. A buyer need only pay 2.5 per cent in down-payment - or as little as RM20,000 - because of the developer's 5 per cent rebate and bank financing of up to 92.5 per cent. The developer also absorbs interest charges during the construction period as well as the legal fees for the sales and purchase and loan agreements.
Easy terms are a factor, but Verve Suites is very different from others in the market, BKP maintains. As with its previous blocks, the company 'sacrificed' the highest floor, which commands a premium, to build a common area for the use and enjoyment of residents. In its latest called the Vox Tower, the main pull is a sky beach, 37 storeys above ground 'with the magnificent view of the Kuala Lumpur skyline as the backdrop'.
Could buyers be planning to flip the property in three years when it is completed? BKP sales manager Jenny Phui tells BT with a shrug: 'I have a customer - just retired - who bought a unit in all four blocks. That's why he said he doesn't want to come here - because he will get tempted.'
The loyal customer would have purchased a unit in the first block at an average RM560 psf in 2006, rising to RM750 for the second block and to RM950 for the third.
Most of the purchasers, however, are yuppies aged 30-45 years keen on the lifestyle concept.
With liquidity swirling and yields on fixed deposits a mere 2.6-3.6 per cent, many prefer to invest in property despite supply outstripping demand in areas such as Mont Kiara, in which average occupancy has been pegged at about 75 per cent.
Increasing land scarcity notwithstanding, developers continue to maximise space by building more condominiums, perhaps buoyed by such sentiment.
Over the next few months, developer Mah Sing Properties will officially launch Icon Residence Mont Kiara, a 260-unit development whose modular design the company says is inspired by the Greek island of Santorini.
Despite indicative prices of RM1,100-RM1,200 psf, some 6,000 applicants - and counting - have registered their interest, drawn perhaps to the landscape and water features which hint of a 'Mediterranean feel'.
Source: Business Times, 5 Aug 2010