Stable office rentals in KL

KUALA LUMPUR: Rental rates for purpose-built offices in Kuala Lumpur were generally stable in the last three years, except for certain suburban and city centre areas which showed an upward trend, according to the 2011 Purpose Built Office Rent Index (PBO-RI) for Federal Territory of Kuala Lumpur.

“Looking at the data... the market is still good,” National Property Information Centre (Napic) director Dr Zailan Mohd Isa said at a pre-launch briefing of the 2011 PBO-RI which will be launched today.

The rent index has four regions, namely Kuala Lumpur City Centre-Golden Triangle (KLCC-GT), Centre Business District (CBD), within city centre (WCC) and suburban.

According to the rent index, average monthly rentals for purpose-built offices in the WCC region had increased gradually from RM2.92 per sq ft in the first quarter of 2009 to RM3.46 per sq ft in the fourth quarter of 2011.

This meant that average monthly office rentals in the WCC region had increased 18.5% over a three-year period.

It was also noted that average monthly office rentals in the suburban region had appreciated by 13.2% over a three-year period, rising from RM3.10 per sq ft in the first quarter of 2009 to RM3.51 per sq ft in the fourth quarter of 2011.

The suburban region includes Bangsar, Bukit Kiara, Damansara Heights, Jalan Pantai Baru, Jalan Istana and Jalan Syed Putra.

“Companies may be relocating to the suburban areas,” said Zailan.

Meanwhile, although the KLCC-GT region is the most sought after location in the city, average monthly office rentals were stable (a slight rise from RM4.60 per sq ft in the first quarter of 2009 to RM4.66 per sq ft in the fourth quarter of 2011).

However, the CBD region suffered a drop in average monthly office rentals, from RM3.46 per sq ft in the first quarter of 2009 to RM3.27 per sq ft in the fourth quarter of 2011.

For the entire Kuala Lumpur region under review, average monthly office rentals had increased sightly over a three-year period, from RM3.91 per sq ft in the first quarter of 2009 to RM4.04 per sq ft in the fourth quarter of 2011.

The rent index, which will be produced on a quarterly basis, is developed by Valuation and Property Services Department (JPPH), with assistance from Universiti Teknologi Mara (UiTM) and University of Malaya.

Zailan said it was the first rent index of its kind in the Asean region.

“It is based on data from actual rental agreements, and not asking rates.”

The rent index defines purpose-built offices as buildings with office use of not less than 75% of net lettable area, and has compiled rental data from 6,831 tenancy leases from 167 buildings.

Zailan said the rent index's aim was to provide a guide on current market rentals for investors, and a benchmark for the financial stability of the country.

“We also want to attract multinational corporations to set up regional headquarters in Kuala Lumpur,” she said.

Zailan also said the PBO-RI would be expanded eventually to cover all the major cities and towns in Selangor, followed by Penang and Johor.

“Getting data is the most dificult part. We urge all property managers and owners to co-operate with us in providing data.”

By The Star

Napic: KL office rentals stable over past 3 years

KUALA LUMPUR: Office rentals in Kuala Lumpur had remained stable over the past three years until end-2011, easing concerns over a possible property bubble.

This is based on data from the Purpose Built Office Rent Index Wilayah Persekutuan Kuala Lumpur (PBO-RI WPKL) produced by National Property Information Centre (Napic), a unit under the Valuation and Property Services Department of the Finance Ministry.

The first edition of the index will be launched today by Deputy Finance Minister Datuk Dr Awang Adek Hussein.

Napic director Dr Zailan Mohd said the index, the first of its kind in Asean, would be used as a tool to gauge the health of the country's economy.

It was also created to attract multinational companies to set up headquarters here, she said.

PBO-RI was designed to provide an overview of the office rental index for Kuala Lumpur, with special focus on investment grade building.

In line with the Financial Soundness Indicators by the International Monetary Fund, the index can be used as a benchmark for the financial stability of the country.

At a pre-launch briefing held yesterday, Zailan said looking at the overall data, the capital's purpose built office market was healthy. A purpose built office in this context is one with at least 75 per cent of space for office.

Overall, office rentals within the Kuala Lumpur-Golden Triangle zone are higher than average.

In the fourth quarter, the rent per sq ft was RM4.66 compared with the median rent of RM4.50 per sq ft.

The highest rent per sq ft in this zone is at RM11.50.

Similarly, rentals in the suburban areas including Bangsar, Bukit Kiara and Damansara Heights are termed "extreme high rent" as per-sq-ft rent in the final quarter of 2011 was RM3.51.

By Business Times

Ken Holdings to buy land for green township project

PETALING JAYA: Ken Holdings has proposed to acquire land owned by Malaysia Building Society Bhd (MBSB) for RM56.17mil for the development of a green township.

In filings with Bursa Malaysia, the company said it would be acquiring the entire stake of MBSB's unit, Gadini Sdn Bhd. Gadini is the registered and beneficial owner of four parcels of land measuring a total of about 992,433 sq ft in Johor. The company said the estimated gross development value and cost for the potential development of the properties is about RM1.2bil and RM914.5mil respectively.

“The proposed development is hence expected to result in an estimated gross development profit of about RM300.9mil for the Ken Holdings Group over the next six to seven years commencing in 2013. It's too preliminary to ascertain the exact gross development value, gross development cost and gross development profit for the proposed development at this juncture,” it said.

By The Star

MBSB selling Gadini to Ken for RM56m

KUALA LUMPUR: Malaysia Building Society Bhd (MBSB) is selling 100 per cent stake in its property development unit, Gadini Sdn Bhd, to Ken Holdings Bhd for RM56.17 million.

MBSB said the proposed disposal was in line with its objective to sell non-income generating assets, foreclosed properties and properties previously acquired.

The company said the exercise is expected to be completed in the fourth quarter of this year and proceeds from the disposal would be utilised for the expansion of its financing business.

By Business Times

Hua Yang profit up as works progress

PETALING JAYA: Hua Yang Bhd posted a higher net profit of RM16.47mil for its first quarter ended June 30, compared with RM11.48mil in the previous corresponding period. Revenue surged to RM97.96mil from RM61.75mil previously.

In filings with Bursa Malaysia, it said steady construction progress recognition especially for its service apartments projects in Klang Valley including One South and Symphony Heights as well as Taman Pulai Indah in Johor Baru and Bandar University Seri Iskandar at Perak were the major contributor to the higher revenue and pre-tax profit.

By The Star