Going for high-end projects

Construction of residential projects in progress at KL inner city.

Good demand for high-end and super high-end residential properties is offering a silver lining to industry players in an otherwise dampened housing market.

Amid rising construction costs and a softening demand for bread and butter property products, developers are feeling the heat of squeezed margins and lower profits. Those with the acumen for high-end luxurious products are venturing into more of such products to meet their target sales and earnings projections.

Industry players said the launch of more high-end properties, especially in the high-rise segment, has placed Malaysia on the radar of international investors.

Exclusive developments with iconic architecture and designs have helped Malaysia move up the real estate value chain.

The high-end and super high-end residential projects, which are targeted at high net worth Malaysians and foreigners, will not be much affected by the spiraling cost increases that are affecting a broad segment of the population.

These luxurious residences, which are deemed one of the cheapest in the region, offer potential for good capital appreciation and yields.

The positive environment in the country’s property market, including investor friendly policies and tax breaks, good infrastructure, easy access to financing and strong upside potential is raising Malaysia’s prominence as a real estate hub.

According to Real Estate and Housing Developers Association president Datuk Ng Seing Liong, Malaysia still offers foreign investors low entry prices and good capital appreciation potential and the onus is on developers to augment the country’s good standing in real estate investment by offering quality properties to investors.


Ng Seing Liong

“Projects that emphasise exceptional quality of life and designed with unique Malaysian characteristics to meet the needs of the savvy homebuyers, including the international community, should do well,” Ng told StarBiz.

New price benchmark

Popular locations for high-end landed properties have traditionally been Bangsar, Kenny Hills and Ampang, with new development concepts and price benchmarks cropping up over the years.

Today, there are even super high-end landed residential properties with price tags of RM15mil to RM30mil a unit, or at RM3,000 per sq ft (psf).

SP Setia Bhd’s Kenny Hills Grandé project in Bukit Tunku, Kuala Lumpur will be one of the most upmarket residential projects to be introduced in the market when it is launched at the year end.

The 15 bungalows with average land sizes of 15,000 sq ft and built-up from 18,000 to 22,000 sq ft will be priced at RM30mil a unit.

These trophy mansions with “colonial chic” architecture will set a new benchmark for the super high-end sector.

“We are essentially offering the buyers an entirely customised and personalised experience in building their ultimate dream home in the most coveted address in Kuala Lumpur, minus all the administrative hassle. With a price that spells the pinnacle of luxury, we believe this project will appeal to the well-heeled and status conscious,” SP Setia group managing director and chief executive officer Tan Sri Liew Kee Sin said.


Tan Sri Liew Kee Sin

Another interesting project is the enclave of 77 Bayrocks garden waterfront villas at the Sunway South Quay in Sunway Integrated Resort. Sunway City Bhd (SunCity) is pricing the 2- and 21/2-storey villas between RM4.5mil and RM7.7mil.

Since the project’s recent soft launch, sales have reached close to RM140mil, SunCity managing director Ngian Siew Siong said.

E & O Property Development Bhd marketing and sales director K. C. Chong said despite the current economic changes in the country, the company would focus on innovatively designed homes with outstanding architectural concepts and thoughtful layout, such as those in Seri Tanjung Pinang in Penang.

“In Kuala Lumpur, we continue to place emphasis on premium homes located in prime locations, although we will have to ensure that we deliver these homes with the accompanying finesse expected of our projects.

“In the current challenging times, we will need to look more at our design planning, be more innovative in terms of materials and finishes, and concentrate on the issues which are more important to our target markets,” Chong said.

Bungalows in the sky

Meanwhile, response has been good for the new project launches in the high-end condominiums market, dubbed bungalows in the sky.

Industry players said at current prices of around RM2,000 or US$625 psf, the super high-end products were still below benchmark rates of US$3,205 in Singapore and US$2,470 in Hong Kong, making them very attractive to foreign investors.

Real estate consultants Knight Frank Ooi and Zaharin Sdn Bhd anticipate prices of high-end condominiums to hit a new high of RM3,000 psf this year as new products are targeting at a niche market driven mainly by foreign demand.

“Interesting luxury projects that stand out such as the The Binjai, Millenium Residence, Four Seasons Place, and St Regis Residences in Kuala Lumpur could push benchmark prices to new highs,” managing director Eric Ooi said.


Eric Ooi

The Regent Residences (across the Petronas Twin Towers), with benchmark pricing at an average of RM2,600 per sq ft, has been receiving good response from foreign interests, since its pre-sales in April 2008.

The market also saw the entry of Sunway Vivaldi in Mont’ Kiara, setting a new benchmark in the Mont’ Kiara locality, with average pricing of RM850 to RM900 psf. The 228 condominiums with built-up of up to 4,000 sq ft are priced from RM2.6mil to RM6.3mil.

By The Star (by Angie Ng and Yvonne Tan)