City&Country: Cover Story-- Exciting times ahead

When it comes to real estate, easy access into an area is definitely appealing to both investors and homebuyers. Hence, the recent announcement of the construction of a 2km elevated interchange that will link the Federal Highway to Shah Alam’s Section 7 has been welcome news for the business community and residents there.

Up to 3,000 vehicles currently ply Persiaran Kayangan, Persimpangan Permai, Lebuh Keluli and Persiaran Bestari daily to get into Section 7. The construction of the interchange is expected to not only reduce traffic congestion on these roads, but also boost the socio-economic development of Section 7 when it is completed in 2013.

A beneficiary of the new infrastructure and improved accessibility will be I-Bhd, the developer of the 72-acre i-City development near the Sungai Rasau toll in Section 7, as the new ramp (from Kuala Lumpur) will start right after the toll on the Federal Highway and lead into i-City. The ramp on the opposite side of the highway (from Klang) will take motorists directly into the car park of the future i-City Mall.

“We are planning our development to take advantage of the new interchange, and first up will be our serviced residences. We want to take advantage of the new interchange by launching our residences and developing the mall,” says I-Bhd CEO Datuk Eu Hong Chew.

Eu believes the new interchange will boost the development of Section 7 as an up-and-coming urban centre, with i-City as a catalyst.

I-Bhd first developed i-City into a digital technology hub, and then moved on to making it a tourist destination. Now, with the upcoming interchange, the developer feels that the time is right to embark on its next phase of growth, the serviced residences and mall.

The RM58 million interchange will be funded by the developers that have projects in the area — I-Bhd, IJM Land, the Selangor State Development Corporation (PKNS), which is also the project manager, and nine other private and joint-venture companies. Each developer’s contribution is based on traffic and the gross development value (GDV) of its projects.

Selangor Menteri Besar Tan Sri Khalid Ibrahim, who officiated at the ground-breaking ceremony on Oct 4, voiced hopes that the interchange would serve as a catalyst for the growth and development of Section 7. “The project will not only draw investors, but also increase property values here,” he said.

Spanning 1,200 acres, Section 7 not only comprises housing estates, commercial and industrial areas, but is also home to educational institutions such as University Teknologi Mara and Universiti Selangor. A 500-bed hospital is currently in the works.

“Section 7 started off as an industrial area, but over the last 10 to 15 years, there have been more residential and commercial developments. Now, industrial properties form only a small portion of the area. Section 7 has established itself as an educational hub over the years, and since i-City introduced the tourism component, it has also become a tourist destination,” says Eu.

“With better access and ensuing growth in the area, there is potential for the industrial sites to be upgraded to commercial status like what is being carried out in Petaling Jaya’s Section 13,” he adds. The former industrial area of Section 13 in PJ is quickly becoming a commercial centre as developers and landowners take advantage of the land’s conversion from industrial to commercial status to redevelop old industrial properties in the area into more viable ones.

Eu notes that residential values in Shah Alam’s Section 7 have been climbing steadily. Citing some 2-storey semidees near i-City as an example, he says these were selling at RM750,000 five years ago, but are twice the price today. “We would like to think that it was partly due to i-City’s development that residential values in the area have doubled,” he says with a smile.

Other upcoming and ongoing projects in Section 7 include a shopoffice project by IJM Land, PKNS’ Kristal View and Kristal Height apartments, as well as semidees and bungalows by Sejagat Emas (M) Sdn Bhd, Era Wangsa (M) Sdn Bhd and RCP Astanaz Development Sdn Bhd.

i-Residence
I-Bhd aims to launch its serviced residences — dubbed i-Residence, its first residential project in i-City — early next year, pending approval of the development order. However, publicity and a registration exercise will begin soon.

“The serviced apartments will set a new benchmark in Shah Alam in terms of product and pricing,” says Eu. The freehold apartments will have an estimated GDV of at least RM160 million.

The project will see 350 units housed in two 33-storey towers and 20 villas. Sitting on a 2.4-acre-site in the northern portion of i-City, the number of units has been increased from the initial figure, following an increase in plot ratio from 1:3 to 1:5.

Eu discloses that with the increase in plot ratio, the residential component of i-City has been increased to about 30% of the entire development. Previously, the retail component made up two million sq ft of i-City’s proposed built-up space, offices made up five million sq ft while residential made up only 0.5 million sq ft. Now, 2.5 million to three million sq ft of the development will be dedicated to residential and residential-type projects, including hospitality projects, while the built-up space for retail and office components remain the same.

i-Residence offers three unit types, ranging from 700 to 1,500 sq ft, while the villas (duplex) range from 2,400 to 3,900 sq ft. The indicative price for the apartments is from RM370 psf.

On top of the usual facilities that come with a luxury lifestyle condo, i-Residence will also feature facilities that reflect i-City’s positioning as an intelligent city. “All the properties in i-City will be integrated into our IT infrastructure or technology platform, which enables residents to seamlessly connect to the Web, not just to surf the Internet but for household convenience as well. We will be the first developer to focus on this,” Eu says.

The project will also feature modern architecture and views of the LED lightscaped garden, one of the main tourist attractions in i-City.

Residents and tenants here will also benefit from i-City’s MSC cybercentre and international park status. Its international park status makes it the only area in Shah Alam to allow entertainment offerings such as cinemas, karaoke and F&B outlets. They are also allowed to operate 24 hours. “i-City is different from the rest of Shah Alam,” stresses Eu.

“Within Shah Alam and Klang, we don’t think we can find lifestyle homes such as those found in KLCC that cater for young professionals. So with this, Section 7 can be the upmarket part of Shah Alam,” he says, adding that the serviced residences will complete the concept of i-City as a place to live, work and play.

Most of the homes in Shah Alam are landed properties, thus the developer will indeed be transforming its skyline. “Shah Alam is traditionally a landed housing market, so we are out to change the perception that high-rises have value as well. What more, unlike most properties in Shah Alam, it is freehold.

“We are not selling to traditional buyers here, so we are going for a niche market, including foreigners, professionals working in i-City and up-and-coming young professionals in Klang and Shah Alam,” he says. The new interchange into Section 7 she adds, is expected to improve the area’s commercial viability, in tandem with the commercial growth there as more professionals are expected to live and work here.

i-City Mall
Work on the one million sq ft mall will begin early next year as well, and to have a new ramp leading traffic from Klang directly into the mall’s car park is certainly a coup of sorts. “The survival of the mall depends on the accessibility,” says Eu, obviously pleased. The proposed mall is part of a three million sq ft mixed-use development that comprises retail outlets, offices, hotel and residences.

Plans are for the mall to sport a “theme park within a mall” concept, not unlike the Mall of America in Minnesota, US, which was designed by the Jerde Partnership, which also designed I-City’s master plan.

The i-City Mall will house the various attractions that make up i-City’s tourism/recreational component. This includes more of the LED lightscape, theme park rides and the popular SnoWalk attraction introduced this year, among others.

“The theme park will be the anchor in the family-oriented mall,” says Eu, adding that i-City already receives some 90,000 visitors a week, mainly for the LED lightscape and SnoWalk where one can experience snow fall and enjoy snow activities. A partner has been found to manage the mall, but Eu declines to provide any names.

The mall has been designed to fit into the contours of the hilly terrain. When asked whether it will be a green building, Eu says all of i-City will eventually aim for the Malaysian Green Building Index certification.

The mall has a unique natural feature as the developer has decided to incorporate about half a kilometre of the Sungai Rasau riverfront into the mall. “The mall fronts a portion of Sungai Rasau, which flows between the mall and the Federal Highway for about 1km, so half of this riverfront will be incorporated into the mall.

“Currently, this portion of the river is a built-up cemented river drain. What we want to do is to turn the river drain back into a natural river with natural banks like some rivers we have seen in Singapore. We will start the pilot project on a 200m stretch of the river soon where we will remove the concrete banks, and clean and beautify that stretch of river at an estimated cost of RM3 million,” says Eu.

Besides being inspired by the rivers in Singapore, I-Bhd also visited the Cheonggyecheon River urban renewal project in downtown Seoul in February. The creek used to be dirty and unsightly, with an elevated highway built over it. But in 2003, the mayor at the time decided to make a radical move by removing the highway and restoring the river to its natural state. It is now a public recreational area and the pride of Seoul, having won numerous accolades as a successful urban renewal and beautification project.

The mall will be kept by the developer as an investment property for recurring income. “The development model we are looking at is that by the time we finish developing, we will be able to receive recurring income from both retail and tourism,” says Eu, adding that it plans to open the mall by 2014. Current revenue contribution from leasing the shopoffices is about 40%, while tourism contributes about 50% of group turnover.

To recap, i-City’s development area was initially 7.5 million sq ft, but with the increase in plot ratio, the development area has been raised to about 11 million sq ft. The GDV of i-City has therefore been raised to about RM3 billion, from RM2 billion previously.

When completed the development will offer office towers, shopoffices, hotels, a data centre hub, technology centre, serviced residences and regional shopping mall. Those completed so far include Phase 1 of the Cybercentre Office Suites, comprising six blocks of 3 to 5-storey shopoffices with a net lettable area of 300,000 sq ft and 44 retail units; Phase 2 which offers another 200,000 sq ft of shopoffices; and a 50,000 sq ft data centre. The developer is currently looking for institutional investors for three blocks of offices, offering 150,000 sq ft of space.

To date, only 20% of i-City has been developed, with about 10 years to go before completion, so one can expect more exciting times ahead for the city within the city of Shah Alam.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 880, Oct 17-23, 2011