Rahim & Co Chartered Surveyors Sdn Bhd, one of the largest property consultancy firms, said at a press conference that the outlook was good despite a soft market in the rental of high-end condominiums. Executive chairman Datuk Abdul Rahim Rahman said average prices in the secondary high-end condominium market fell by 29% between the second quarter of 2008 and the second quarter of 2009 but this sub-segment of the residential market had been on the uptrend since the third quarter of 2010, increasing by 13%. Prices of new launches range between RM750 and RM2,500 per sq ft (psf).
“The leasing market has not fully recovered. Rental rate has remained low at about RM4.30 psf compared with its high in 2008 at RM4.90 psf. With the various projects to be implemented under the ETP to make city living more vibrant, we expect the market to be on the uptrend by 2012,” said Abdul Rahim.
In locations like Shah Alam, landed units by the more reputable developers are snapped up within six months. “People are buying because for RM2mil or so, they can buy the same type of houses which cost RM6.5mil to RM7mil in the city. That is why the launches outside KL are doing well, coupled with the fact that there is no landed launches within KL itself because of the scarcity of land. In locations like Bangsar and Sri Hartamas, only condominiums are launched,” he said.
In view of this, Shah Alam, Rawang, Selayang and Sg Buloh have become the hot spots today. The effects of the 2008 financial crisis also put pressure on the rental rate in the office sector, which enjoyed a peak of between RM6.50 and RM8 psf in 2007/2008.
He said there were limited transactions in 2010 but capital values rose to an average of RM775 psf after a sharp decline of 19% in 2008/09. Net yield is estimated to be between 6% and 7%.
Abdul Rahim cautioned that in the next five years, an estimated 14.5 million sq ft of new office space would be completed, of which about 27% would be located in the suburbs.
He added that with selling prices of between RM500 and RM1,000 psf, some companies in the city centre were relocating to new office buildings in the suburbs due to lower rental rates, opportunity to own their own space, and convenience which helps recruitment and retention of staff.
“With the recovery in the economy expected to continue in the second half of 2011 and the effects of the ETP being felt, the office market may stabilise in the short term but will continue to be challenging in the long term,” he said.
In the retail property market, Abdul Rahim was upbeat about this sector, noting that retail sales were forecast to increase from RM137bil in 2010 to RM227bil in 2014.
For this year, 13 new malls are expected to be opened offering a total of 4.5 million sq ft of retail space, including two malls that are being refurbished and rebranded, Intermark (previously City Square) and Viva Mall (previously UE3 Mall).
By The Star
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