City & Country: Standing the test of time

When his father told him of plans to demolish some of the pre-war shophouses he owned to make way for a shopping complex, Ng Ping Ho was quick to make his father change his mind.

“I have always wanted to do something long term with old shophouses, and at the same time was inspired by certain backpacker places I have seen overseas,” says Ng.

As it panned out, BackHome KL — a budget hostel for backpackers from around the world — was born in July 2009. Ng created this oasis in Kuala Lumpur’s Jalan Tun H S Lee by combining four adjoining pre-war shoplots, giving the hostel a built-up of 6,036 sq ft.  BackHome KL budget hostel for backpackers on Jalan Tun H S Lee.  Photos by Lee Lay Kin

Construction began in mid-2008 after about a two-year wait for the necessary approvals. Ng spent RM1 million on the renovation, of which some RM800,000 was spent on structural work alone.

“This project is a personal one. If you look at it from a business point of view it may not be the greatest business idea,” Ng laughs. “But if you have the means to do it, then it is something nice to do. You bring life to the area and the community gets rejuvenated.”

While some might consider pre-war shophouses mere relics of a long-forgotten past, these historical structures are a firm reminder of how Malaysia had come through the years of colonisation to emerge as one of the more prosperous economies in Southeast Asia.

Indeed, this heritage is preserved by those, like Ng, who give pre-war shophouses a facelift while still providing a viable workspace. This adaptive use can be seen in areas such as Jalan Tuanku Abdul Rahman (TAR), Lebuh Ampang,  Jalan Hang Lekiu and Jalan Tun H S Lee, all in the so-called older part of Kuala Lumpur.

Standing tall
Most of Kuala Lumpur’s pre-war shophouses were built in the 1880s, with most having weathered the passage of time. They have not lost their appeal due to their prime location and easy accessibility.

In the past, this real estate had their rents capped by the Rent Control Act 1966, whereby owners of these premises could only charge an average rent of RM200 per month.  The Act was repealed in January 2000, sending market values of the shophouses up to anywhere from RM600,000 to more than RM2 million, depending on the micro location.

The shophouses on Jalan TAR are in great demand as they are on one of the city’s major thoroughfares.

“Over the years, Jalan TAR has experienced major transformation, and most of the pre-war shops have been redeveloped or extensively renovated,” Wong Wai Kun, director of YY Property Solutions’ valuation department, tells City & Country.

However, only the eastern quadrant of Jalan TAR —  from Dataran Merdeka to Bulatan Pahang — has these pre-war shoplots, and they are either two or three storeys. The land sizes vary between 1,500 and 2,400 sq ft. These are now mostly occupied by financial institutions, budget or boutique hotels, fashion outlets, F&B outlets, goldsmiths, pharmacists and wholesale carpet dealers, among others, says Wong.

Some of the units in the area have been replaced by 5-storey buildings. Those on Lebuh Ampang have a footprint of between 1,300 and 1,700 sq ft and are occupied by financial institutions, an educational institution, tailoring facilities and F&B outlets, as well as shops that provide wholesale goods and supplies predominantly for the Indian community.

In Jalan Tun H S Lee and Jalan Hang Lekiu, the shops have an average land area of 1,312 to 2,200 sq ft and they usually operate as budget hotels, F&B outlets and retail shops.

Most of these properties are owned by private corporations, and some belong to the Ng and Loke Yew clans, some of the oldest families in the country.

Pre-war shophouses in Jalan Hang Lekiu and Jalan Tun HS Lee usually operate as budget hotels, F&B outlets and retail shopsYY Property Solutions’ Wong explains that these pre-war shops are situated in what the Kuala Lumpur City Hall KL City Plan 2020 categorises as the Kuala Lumpur secondary heritage zone. In this zone, the buildings are less contiguous. They are also a mixture of newer and older ones with significant historic merit.

“The main difference between a secondary zone heritage building and a primary one is the type of buildings within a specific area. The primary heritage zone has buildings which are contiguous and contain groups of structures gazetted under the Antiquities Act 1976. The Antiquities Act covers buildings that are at least 100 years old and more. However, this Act is now superseded by the National Heritage Act, which covers buildings that are over 50 years old. It is likely that most, if not all, of these pre-war buildings will be gazetted under the National Heritage Act in the future,” Wong adds.

Examples of buildings in the primary heritage zone are those around Merdeka Square and the old KL railway station.
Plans to alter or renovate the structure of buildings in both the primary and secondary heritage zones have to be reviewed by Kuala Lumpur City Hall before they can be carried out.

Few transactions
Pre-war shops in KL see few real-estate transactions. However, when they do come on the market, they are able to command surprisingly high prices. At press time, four adjoining shophouses on Jalan Tun H S Lee are for sale. Wong says the owner is asking for RM8.95 million for an en bloc sale of the four units which have a total land area of 7,184 sq ft. It is understood that a few years ago, the asking price for a single shophouse here was RM2.2 million.

Wong also says that in general, shops sized between 1,600 and 2,200 sq ft on Jalan Tun H S Lee, Lebuh Ampang and Jalan Hang Lekiu are going for between RM1.8 million and RM2.3 million.

Business Space Zerin Properties’ Jack Chong says values in Jalan Tun H S Lee depend on several factors, such as micro location, built-up, the number of storeys and building condition.

“Shops near Bangunan Hong Leong to where Bangkok Bank is will fetch a higher price because the area is always busy, while shops located at the other end — near St John’s school — are cheaper because activities there are comparatively slower,” he adds. Last year, several units on this end of the road changed hands, with one going for as low as RM990,000.

On Jalan TAR, Wong says a 2-storey unit with land area of 2,000 to 2,300 sq ft is valued between RM1 million and RM3.75 million, and that in October 2009, a 2-storey shop here went for RM1.1 million.

Although transactions are slow, rents have increased steadily over the years. According to Wong, records show that in 2000, rents in Jalan TAR ranged from RM14,000 to RM20,000. In 2008, this rose to between RM20,000 and RM26,000. The rents of units on other roads in the area are not immediately available.
Some of the pre-war shophouses on Jalan Tuanku Abdul Rahman. Photo by Patrick Goh
Investors cautioned

For those thinking of investing in this part of the city, there are several things to consider. First, there are not many units on the market for sale or rent at the moment. Second, as the buildings have some historical importance, there are stringent rules and regulations over what can or cannot be done to the structures.

Still, if one is patient, the wait may be well worth it.

“In terms of location, Jalan TAR is and will always appeal to investors for its strategic location, with offices, shopping centres and hotels nearby,” says YY Property Solutions’ Wong.

Meanwhile, the shops on Lebuh Ampang are especially popular with the Indian community. This is also where most buses and taxis congregate. Businesses that are flourishing here include F&B and retail outlets that cater for students and office workers, he adds.

“There are certain limitations for Jalan Tun H S Lee and Jalan Hang Lekiu due to the narrow one-way streets, lack of parking space and high traffic. Due to its strategic location, the nature of business will be confined to tourism or businesses that do not require walk-in customers,” says Wong.

The possibility of creating a new avenue of economic wealth for the country through heritage buildings is possible, but it will take time. For the moment though, the pre-war shophouses in Jalan TAR, Jalan Tun H S Lee, Jalan Lekiu and Lebuh Ampang will continue to not only provide a valuable retailing space, but also serve as invaluable historical landmarks.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 795, Mar 1-7, 2010.

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