THOSE familiar with Jalan Klang Lama (or Old Klang Road) in Kuala Lumpur will know that this area was synonymous with traffic jams and flooding in the not-too-distant past. Today, things have changed — there is a six-lane carriageway, less flooding thanks to the deepening of the Kerayong River, and evidence of development and prosperity in the surrounding neighbourhoods.
As it is situated midway between Kuala Lumpur and Petaling Jaya, the area is attracting investors and house buyers. Looking to get in on the action is developer Bukit Kiara Properties (BKP), which is set to leave its mark in the area with a redevelopment project named Verve Suites KL South.
"This is our first brownfield redevelopment. We had to make sure the building had good "bones" when we acquired the property – a good structure that we could do a lot with," says BKP group managing director Datuk NK Tong. Although the BKP brand continues to be used in Malaysia, the company has been officially known as Albatha Bukit Kiara Holdings Sdn Bhd since the Bukit Kiara Group merged with the Al Batha Group (UAE) in October 2008.
BKP acquired the existing two-tower structure of 24 storeys each in 2011 from its Singaporean owners. It had been empty for two years before that and was formerly rented by a local college.
In the beginning, the plan was to refurbish and restore the original apartment blocks and about 50,000 sq ft of retail space but plans were re-evaluated as there were already nearly 500,000 sq ft of shops and offices next to the property in The Scott Garden development.
Because of this, Tong decided to focus on the residential element, which is BKP's area of expertise. In the process of redesigning, Tong and his team soon found their ideas gravitating towards the fully-furnished serviced apartment concept, which it had successfully developed in Mont'Kiara, Kuala Lumpur.
Vox, the last tower at BKP's four-tower Verve Suites Mont'Kiara with a gross development value of RM625 million, has been 95% sold with prices averaging RM1,250 psf. The first three towers — Viva, Vibe and Vogue — were fully sold earlier and have occupancy rates of between 70% and 80%. The first tower was launched in 2006 with a selling price of RM600 psf. Rental rates, according to Tong, are between RM4.50 and RM6 psf with yields of between 7% and 9%. In total, there are 933 fully-furnished units ranging in size from 462 st ft to 1,394 sq ft. Each tower comes with uniquely themed sky lounges, with facilities and recreational spaces on the roof.
"It wasn't that we wanted to buy this property (in Old Klang Road) and turn it into Verve Suites. We actually questioned if KL South could take this product," explains Tong. "But when we looked at what was happening in the area, we realised that the Verve Suites concept is ready for this neighbourhood. It evolved very nicely; we weren't trying to push a square peg into a round hole. It fit like a glove."
Verve Suites KL South
With an estimated GDV of RM310 million, Verve Suites KL South sits on a 1.36-acre commercial freehold site. The two towers will be refurbished at a cost of RM126 million and once completed, will have 321 serviced suites, 45 SoHo units and three retail units on the ground level. Each floor will have eight serviced suites with built-ups ranging from 555 sq ft to 876 sq ft. There are four designs — one with 1-bedroom, while the other three come with 2-bedrooms. All units are fully furnished. Prices start from RM600,000 for the 1-bedroom units and RM750,000 for the 2-bedroom units. The estimated yields, according to Tong, are between 5% and 7% and the preview for the apartments begins this month.
Meanwhile, the SoHo units range from 550 sq ft to 1,800 sq ft. They will be launched at a later date and the selling price has yet to be set.
The original design of the two blocks had four units per floor but it was decided that the space would be split into smaller fully furnished units. Tong says if they had kept the original units (built-ups of about 1,400 sq ft), they would have left them unfurnished because owners would want to fit it out themselves. However, with smaller units, Tong believes buyers will appreciate how the space is optimised.
At this point, some buyers might complain that building smaller units is one way for developers to make more money. Tong begs to differ. "I could have made more money if I left the building as it is because I would have done less work on it," he explains. "All I had to do was paint the walls, tile it up and then flip it."
Vercadiscos sky bridge
One of the unique aspects of this development is the Vercadiscos sky bridge.
"The bridge is inspired by one of the oldest bridges in the world — the Arkadiko in Greece," explains Tong. "This ancient bridge connected two cities, allowing both to prosper. The concept of connection and progress is the inspiration for the double-volume sky bridge."
The idea of the sky bridge was mooted when Tong realised they could not replicate the sky lounges at the Mont'Kiara Verve Suites.
"We looked at the rooftop but because it is an existing building, the lifts stop one level short of the roof on a residential level. This would have disturbed residents on that level if people wished to reach the roof," Tong explains. "The roof also has water tanks and a lift motor room that doesn't allow for open views."
To not compromise the Verve Suite lifestyle experience, BKP decided to build a bridge between the two towers instead. The double volume bridge will connect at the 14th and 15th level and is designed to take a maximum load of 120 tonnes. Facilities on the RM5.2 million bridge include a theatrette, sky gym, chill-out areas and a kitchen and dining area for private functions.
Besides the sky bridge, there will also be a podium level with an open roof on level two with facilities like a swimming pool, sundeck area and reflexology path. A recreational deck with garden canopy, reading pods and an open multi-purpose area with a partial basketball court will be located on the fourth level.
The refurbishment of the existing building is aimed at gaining the Singapore Building & Construction Authority's (BCA) Green Mark certification for existing buildings — the first of its kind in Malaysia, Tong says. The project will feature energy-efficient lighting in common areas, water-efficient fittings, rainwater harvesting and recycling bins at each block.
Growth in high-rise buildings
Prices of condominiums and apartments in Old Klang Road have been on a steady uptrend over the past 10 years, says Landserve Sdn Bhd managing director Chen King Hoaw.
"For instance, prices of units in Casa Desa, Taman Desa, measuring 1,110 sq ft have escalated from an average of RM270,000 in 2005 to RM560,000 in 2012, up 107% over the last seven years. Similar units in the older Faber Heights with a floor area of 936 sq ft have also seen prices climbing from RM213,000 in 2003 to RM440,000 in 2012, also up 107%."
Units in Papillon Desa Hill, with an average size of 1,787 sq ft, surged 47% to RM1.15 million in 2012 from RM780,000 in 2008.
"The soon-to-be completed Seringin Residences in Happy Garden, with asking prices nearing RM600 per sq ft, would be another benchmark for future condominium developments in Old Klang Road," says Chen.
For serviced apartments facing Old Klang Road such as Saville Residence, with a unit size of 1,237 sq ft, prices have grown to RM650,000 in 2012 from RM460,000 in 2008, Chen highlights.
"Given its proximity to Kuala Lumpur and Petaling Jaya as well as its freehold status, the prospects of modern high-rise residences in Old Klang Road is good," Chen concludes.
As KL South continues to expand, Old Klang Road properties will be sought after, with BKP's Verve Suites KL South in the midst of all the action.
BKP's future projects
In Kuala Lumpur, the proposed Verve Suites KLCC on Jalan Tun Razak — a luxury apartment development on 0.9 freehold acres, is still in the planning stages. There is no indication of its design concept as yet. However, Tong says the launch could be in 2014. It has an estimated GDV of RM350 million. Another KL project, also in the planning and approval stages, is the RM100 million The Ambangan development in Persiaran Madge. Situated in the middle of KLCC's Embassy Row, it sits on 0.96 freehold acres.
This story first appeared in The Edge weekly edition of Jun10-16, 2013.