KL’s high-end condo market sees drop in rental, capital values

PETALING JAYA (May 21): The first quarter of 2015 (1Q2015) saw significant new supply of condominiums, reported DTZ Research.

In its report “Property Times Kuala Lumpur 1Q2015: Cautious Sentiment Aggravates Uncertainties”, the research firm said there was a drop in both rental and capital values for the high-end condominium market.

There were 1,377 condominium units completed during the period, 10 times more than for the same period last year. Among these were The Horizon Residences (335 units) on Jalan Tun Razak and Laman Ceylon (230 units) on Jalan Ceylon.

For the remaining quarters of this year, an additional 6,562 condominium units are expected to enter the market, with some 7,939 units expected to be completed by year-end.

“The higher new supply will definitely put some pressure on rental values, especially in the city centre,” the report states.

Some of the major developments that are expected to be completed this year include the Banyan Tree Residences (441 units) on Jalan Conlay and M City Residential Suites (1,118 units) on Jalan Ampang.

Meanwhile, average rents of high-end condominiums in Kuala Lumpur eased 2% to RM3.42 psf per month – a drop from RM3.49 psf per month in the previous quarter.

Due to cooling measures, overall average prices fell 3.2% quarter-on-quarter in 1Q2015 to RM749 psf from RM774 psf in 4Q2014.

The period under review also saw the launch of Tropicana the Residences on Jalan Ampang. The project, part of the proposed W Hotel, offers 353 luxury apartments in a 55-storey tower. It will have 1-bedroom, 2-bedroom and 3-bedroom units with built-ups of between 710 sq ft and 1,604 sq ft, and an average price of RM2,500 psf, according to the report.

“Developers will need to rethink strategies to attract demand, and will be turning to more affordable housing, if their landbank are suitable,” the report said.