City&Country: Cover Story-- Facelift for Old PJ

Breathing new life into PJ

Participants at a recent international conference on urban regeneration were stumped when local town planner Ahmad Jefri Clyde threw a question at them: Where is the centre of Petaling Jaya?

“Really, think about it,” he prompted the crowd of 200, comprising members of city councils, architects, surveyors and residents’ associations. “If you had to arrange to meet someone in PJ after 5pm on a working day, where would you ask to meet?” Ahmad Jefri posed the question when he presented a paper entitled “Regeneration: The potential in Petaling Jaya.”

A simple query indeed but it does highlight the point that though the country’s first planned township has been around since the early 1950s, where exactly is its core?

Petaling Jaya, commonly known as PJ, was orginally intended to function as a satellite town to complement the then-rapidly expanding metropolis of Kuala Lumpur. The township began as a 1,200-acre rubber estate along Old Klang Road, with the building of 800 houses in Sections 1 to 3 in what is still known today as “PJ Old Town”.

This was soon followed by an expansion of Sections 51 and 52, which house industrial and commercial buildings, including institutional buildings like Filem Negara, Bangunan Persekutuan, the sessions and magistrate’s courts, Arkib Negara and the PKNS headquarters.

PJ today is a bustling city, strategically nestled between KL and other up-and-coming areas like Damansara, Puchong, Bangsar and Bandar Sunway. It became a city in June 2006 and now covers some 97.2 sq km, making it one of Selangor’s largest — and oldest — townships.

At the same conference on Nov 30, Selangor Menteri Besar Tan Sri Abdul Khalid Ibrahim created some excitement when he announced that 2,375 hectares in the state comprising Petaling Jaya, Klang, Kajang and Ampang Jaya urgently need regeneration over the next two decades.

Of this, about 70% or 1,672ha are located in PJ’s established industrial, commercial and residential areas of Sections 13, 51, 51A and 52.

Ahmad Jefri, a former town planner with the Brisbane City Council, also identified Sections 1 to 4, 8, and 19 and the Sungei Way Free Trade Zone in PJ as being in need of redevelopment.

Ahmad Jefri is among several consultants on urban regeneration now working with the Selangor government to revitalise key areas in the state. He believes that with regeneration, Sections 51 and 52 have the potential to become a new economic hub for the Klang Valley.

“The regeneration of these areas is of national importance for the survival of the country and the economy,” he told the conference delegates.“Cyberjaya is also a new economic centre, but what makes PJ special is that it is an urban renewal project,” he later told City & Country, adding that PJ was also much smaller in size than Cyberjaya and boasted a large population.

Demand in Sections 51 and 52 still strong
The development landscape in Sections 51 and 52 varies considerably, though they may be located next to each other. Section 51, which spans some 370 acres, is primarily an industrial area dotted with limited commercial units for office or warehousing purposes. Most of the area is run down and served by potholed roads. Roadside foodstalls are common, with some of them using old bedsheets as shades. There is also a distinct lack of parking spaces.

Section 52, also known as PJ New Town or PJ State, covering some 227 acres, houses the PJ Civic Centre, several institutional buildings, commercial lots, the Lotus restaurant and State Cinema.
In a way, the regeneration of Section 51 is already under way — the tract formerly operated by Soon Seng Industries fronting the Federal Highway has been sold and marked for redevelopment, according to PA International Property Consultants (KL) Sdn Bhd’s managing director, Jerome Hong.

“The 9.3-acre plot was sold on Aug 28, 2009, to Mitrajaya Holdings Bhd for RM28 million,” says Hong, adding that its lease is due to expire in 2067. Another notable transaction is the sale of a piece of land measuring 3.16 acres at No 1, Jalan Kilang (51/204) by Federal Paint Factory Sdn Bhd for RM10.7 million in March last year.

Other projects are also coming up in the area. Axis real estate investment trust’s (REIT) newly acquired Nestle House is undergoing a RM7 million refurbishment. Mah Sing Group’s acquisition of the Panasonic site in Sungei Way also promises major redevelopment, says Hong. “Easy accessibility to the Federal Highway ensures that demand for this locality is strong and consistent,” he adds in an email interview with City & Country.

While rental and purchase prices in the area have never been “cheap”, prices are likely to continue to climb with prospects of regeneration and redevelopment. According to Gerard Kho, senior vice-president of Reapfield Properties Sdn Bhd, industrial office spaces in the area are leased from RM1.80 to RM2.30 psf and average sales value is RM350 psf.

Over at Section 52, property prices have been rising in recent years. Associate director of Raine & Horne International Zaki + Partners Sdn Bhd James Tan points to the 3-storey shops facing Menara MBPJ Tower on Jalan Tengah — priced at around RM1.5 million three to four years ago, they are now going for RM2 million to RM2.5 million.

“The current going rate for the 3 and 4-storey shops fronting the main road ranges from RM3 million to RM3.5 million. However, rents are not that high as business activities tend to slow down after office hours,” he offers.

PA International’s Hong says some recent properties on the market include 2-storey shopoffices fronting Jalan Yong Shook Lin that are going for RM1.95 million and three units of 3-storey shopoffices, including one corner lot, on Jalan 52/2 that are tagged at RM10.8 million.

Rents for ground floor shopoffices in PJ New Town are about RM8,000 for those facing the main road, while inner rows are going for about RM6,000 a month, says Hong. Those on the first and second floors are being leased from RM2,000 to RM3,000.

According to Hong, the rent for the former Saito College building is RM30,000 a month. This comprises two units of 2-storey shopoffices, with one of them being a corner unit.

Raine & Horne’s Tan says while demand is still strong, supply is limited with hardly any new space coming onstream except for bungalows on Jalan Timur and Jalan Utara in Section 52 that are being converted into office space.

“Occupancy in PJ New Town has always been consistently high, with newly vacated ground floor units being let out quickly,” says PA International’s Hong. “However, the recent completion of a newer scheme nearby known as 8Avenue in Section 8 has seen some new tenants relocating there from PJ New Town.”

Tackling the issues faced
While poor public transport links and infrequent bus and train services are common shortcomings, delegates remain divided on whether existing roads needed to be widened in the already-congested areas.
Some maintain that widening the roads will not reduce traffic congestion, but PA International’s Hong feels such a measure is inevitable as both Sections 51 and 52 are only served by two LRT stations at Asia Jaya and Taman Jaya.

Other concerns raised by the speakers at the Nov 30 conference include the issue of affordable housing, the absence of a specific governing body overseeing urban regeneration and a lack of political will to ensure sustainable living for the community without businesses having to sacrifice their bottom line.
Issues of environmental and infrastructure deterioration and poor waste management systems were also raised.

To overcome these problems, delegates and property consultants have called for an extensive traffic study of the area, feedback from all PJ residents on a masterplan, and hiring urban regeneration experts to helm the renewal project. Broad pedestrian walkways and bicycle paths, commercial buildings connected by skybridges and central transport hubs were also suggested.

It was acknowledged that Malaysians needed to change their attitude towards walking considering that most would drive even for short distances. It was also highlighted that concerns over personal safety and poor pedestrian access to commercial centres would have to be addressed by all parties while looking into the renewal of PJ as a whole.

It is worth noting that property consultants don’t see the regeneration of Sections 51 and 52 as a catalyst that will revitalise PJ as a whole, although areas around them such as Sections 7,8,10 and 51A will see a spillover effect by way of rising property prices.

“Prime PJ land has never been cheap,” says PA International’s Hong. “The commercial potential is already factored in by sellers in most cases. A regeneration exercise will increase the land value...”
Raine & Horne’s Tan says the redevelopment exercise will “breathe new life into old areas”, providing more employment opportunities for the Klang Valley dwellers.

iProp Realty Sdn Bhd managing director Victor  Lim agrees, saying the old areas will certainly see a revival.

Committed to regeneration
The state government has declined to confirm that Sections 51 and 52 will lead the regeneration exercise. Nevertheless, state executive councillor and chairman of the local government, research and development committee Ronnie Liu says “areas that were no longer functional” will be slated for redevelopment first.
Acknowledging that Sections 51 and 52 do display this characteristic, including the presence of empty factory lots, Liu says the government has plans to kick-start the regeneration exercise by 1Q2010.
He adds that many of the proposals the conference delegates mooted like setting up a special-purpose vehicle to oversee efficient and comprehensive regeneration strategies are “good”.

“A lot of these suggestions have successfully been implemented in other parts of the world; with adaptations and modifications, they can also be put to use for Selangor,” he says. “We need to strike a balance to make sure that the interests of the state, business community and people are all taken care.”
However, achieving this balance will require more than just talk. Surveyor Tan Keng Heng, managing director of Allied Group Property Consultant (Selangor) Sdn Bhd, says it will require “iron political will” at all levels to achieve a balance between promoting social wellbeing and making maximum profit.

“The government needs to resist the temptation to allow private enterprises to only maximise profit. It should also spur redevelopment efforts by having clear and transparent guidelines on land use, density, and plot ratio,” says Tan after presenting his paper “Real Estate Opportunities in Urban Regeneration of Cities”.

He suggests that developers be given added incentives to venture into urban regeneration. The government should also be quick and transparent in awarding building approval. Tan also calls for the “outdated” Land Code to be re-examined, saying clarity is needed on the issue of premiums for commercial properties and extension of leases.

“The government should give a 75% to 80% discount for the extension of non-residential leases if the land is being used for redevelopment,” says Tan, adding that most of the impetus to drive urban regeneration, except on state or federal-owned land, lay with property developers in the private sector.

Whatever the concerns, PJ, starting with Sections 51 and 52, needs an overhaul sooner rather than later. As iProp’s Lim points out, urban regeneration cannot be sustainable if the people and the environment are not considered. Ultimately, it must make economic sense for the private and public sectors to get involved.

“A balance between these three elements must be achieved for the project to work,” he adds.

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 786, Dec 21-27, 2009.

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