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Rejuvenating Jalan Cochrane
The redevelopment of the land on which the old government quarters sit in Jalan Cochrane, located in the north of Cheras, Kuala Lumpur, is set to begin when the civil servants living there move out by June. The area available for redevelopment is believed to total over 60 acres, divided into two parcels — a 36-acre tract near Kampung Pandan and 24 acres near Jalan Peel.
The talk is that home furnishing store IKEA is planning to set up its second store in Malaysia here. According to a source, the Swedish furniture giant is in the process of finalising the purchase of about 11 acres of land in the area at RM320 psf.
The IKEA store will reportedly have 400,000 to 500,000 sq ft of net floor area. If this becomes a reality, it will serve as a magnet for shoppers and bring greater vibrancy to the area.
IKEA’s franchise owner, Ikano Corp Sdn Bhd, meanwhile, may take up 
another 12 to 15 acres for the development of an integrated shopping complex on a joint venture basis. The integrated shopping complex will have apartments and hotels and be located above the proposed underground MRT station in Jalan Shelly, according to the source. The proposed IKEA store and the integrated shopping complex will be connected by link bridges.
According to recent news reports, Lembaga Tabung Angkatan Tentera or LTAT will build 15- to 20-storey apartments for government servants in Jalan Cochrane. The RM200 million project is expected to be completed within 30 months but it is not clear if the Boustead Group, of which LTAT is the single largest shareholder with a 59.2% stake as at last Tuesday, will be leading the project. This is because 1Malaysia Development Bhd (1MDB) is still in the picture. A sovereign wealth fund set up by the government, 1MDB focuses on strategic development projects in the areas of energy, real estate, tourism and agribusiness.
Nevertheless, if the IKEA plan becomes reality, the area may see a boost in popularity in the same way the IKEA store and Ikano Power Centre helped enhance the appeal of Mutiara Damansara. Boustead Group unit, Boustead Properties Bhd, is the master developer of the award-winning 360-acre Mutiara Damansara in Petaling Jaya, Selangor, where the first IKEA store in the country and Ikano Power Centre are located.
If the plan takes off, the proposed second IKEA furniture store and the shopping complex by Ikano Corp in the Cochrane area, which could collectively span over 23 acres, will be bigger than the Ikano development in Mutiara Damansar,a, which takes up 13.06 acres.
LTAT obtained the Mutiara Damansara land in exchange for building quarters for the armed forces throughout the country. As it lacked technical expertise, it sold the land to Boustead Properties’ wholly-owned subsidiary, Mutiara Rini Sdn Bhd, for RM15 psf in 1999. This move kept the land within the LTAT group.
As part of its strategy to enhance the Mutiara Damansara township , Boustead Properties brought in IKEA and built Ikano Power Centre in its 60-acre commercial precinct. The 13.06 acres on which IKEA and Ikano Power Centre now stand was sold to Ikano Corp in October 2000 for RM56.39 million, or RM99.12 psf. The shopping centre, which has about 120 outlets, is 100% occupied.
Property values in the township have quadrupled since the first development in 2000. Vacant commercial land in the township is believed to worth at least RM450 psf today, compared with RM380 psf in 2008.
Meanwhile, apart from the land occupied by the government quarters, there is another parcel in Jalan Cochrane next to the newly-completed Malaysian Anti-Corruption Commission buildings. A signboard indicates the land belongs to the Ministry of Health, and it is believed an integrated health complex comprising a clinic, a day-care centre, an old folks’ home and hostels will be built there.
Jalan Cochrane and Jalan Peel
City & Country recently visited the Jalan Cochrane and Jalan Peel neighbourhood. Accessible via Jalan Tun Razak and Jalan Cheras, the area is a mere 10 minutes’ drive from the Kuala Lumpur City Centre. As we turning into Jalan Peel from Jalan Cheras, just before Jusco Taman Maluri, we are greeted by wooden squatter houses and car workshops.
Despite its unkempt look, Jalan Peel is no stranger to food lovers as a number of restaurants operating out of wooden structures have been drawing the crowds for many decades. The area is famous for its steamed fish, yong tau foo and pumpkin porridge steamboat. Almost parallel to Jalan Peel is Jalan Cochrane, where the pre-war government staff quarters are located.
While the redevelopment of government land in the area is imminent, that of private land there is believed to be on the cards as well. It is learnt that the site of Jusco Taman Maluri Shopping Centre, one of the oldest Jusco outlets in the country, will also be redeveloped after its lease expires within the next few years. It will involve the shopping complex site, the adjacent open air car park and surrounding squatter 
homes. It is learnt that these properties are owned by Syarikat Maluri Sdn Bhd.
This part of Cheras, which comprises mainly freehold properties, is an established area. The main township there is the 160-acre Taman Maluri, which was built on former mining land and developed by Syarikat Maluri Sdn Bhd, which is linked to former finance minister Tun Daim Zainuddin. Jusco Taman Maluri Shopping Centre, located in Jalan Cheras, has been a landmark in the area for more than 20 years.
Other builders are already tapping into the redevelopment potential of the area. Sunway City Bhd, for one, is building a commercial project known as Sunway Velocity on a 22-acre freehold site in Jalan Peel. Piling works are now going on, with the first launch, consisting of retail shops and office suites, expected to take place by early next month.
The mixed commercial development will offer office suites, office towers, serviced apartments, shoplots and a shopping mall with a net floor area of more than 800,000 sq ft. The RM1.5 billion project is expected to be completed by 2015.
Queen’s Park, a 5-acre open-air retail centre that has been open to the public for some time as a hub for international brand outlets, will be demolished as part of the redevelopment.
Located diagonally opposite Queen’s Park are Plaza 393, Queen’s Avenue and some old shophouses. Plaza 393, developed by specialist comtractor-turned-developer TSI Group, consists of three blocks of 12-storey medium-cost serviced apartments with 462 units atop a 2-level retail podium, where Carrefour is the anchor tenant. Units there were sold at between RM190 and RM200 psf last year, according to data by Henry Butcher Malaysia.
TSI Group also built Queen’s Avenue Business Park, comprising eight blocks of 9-storey hybrid office towers with 310 office suites and 48 shops. These are being leased from RM1.40 psf.
Located diagonally opposite Plaza 393 is a row of old shophouses, known as “Wai Sek Kai” (Cantonese for Food Street), which is a a popular spot for foodies at night, with specialities that include like ikan bakar and sup kambing.
Another landmark in the area is the SMK Convent Jalan Peel, next to Plaza 393, as well as Sacred Heart Church, situated behind a row of car workshops.
There are also wooden shophouses along Jalan Peel, some of which are vacant as the pace of redevelopment in the area picks up.
Excellent location
Chan Wai Seen, director of JS Valuers Research & Consultancy Sdn Bhd, says the location is excellent as it sits on the fringe of the city centre, less than 4km away from the Bukit Bintang shopping belt and the KLCC.
“This area was one of the earliest to be developed in Kuala Lumpur ... the neighbourhood is a bit old so it does not appeal to the more affluent population in the city. Despite its strategic location, property values did not appreciate as much as other areas on the fringes of the city, such as Bangsar or Damansara. This can be attributed to the lack of land for development. You need large tract to create an attractive neighbourhood,” Chan tells City & Country.
However, with new projects by established developers such as Amaya Maluri and Sunway Velocity, new benchmark prices are being recorded in the area. Amaya Maluri @ Taman Maluri is a development by Malton Bhd, located just next to Jusco Taman Maluri Shopping Centre. This mixed development leasehold project comprises 25 units of duplex retail shops and 398 units of serviced apartments in two 19-storey blocks. The apartment units are sized from 1,127 sq ft to 2,508 sq ft and tagged from RM433 psf. Spanning over 2.7 acres, the RM215 million project is fully taken up and is slated for completion by December 2012.
Chan says a comprehensive master plan is needed to fully realise the potential of this location.
Positive prospects
Henry Butcher Malaysia Sdn Bhd COO Tang Chee Meng says the Jalan Peel area is occupied predominantly by Chinese businesses and residents.
The residential developments that have come up over the past few years have been mainly medium-cost residential projects in view of the income profile of the target market.
The Sunway Group’s acquisition of the 22-acre site from TSI Group for its Sunway Velocity project, he says, will bring more excitement into the area as it offers better quality and more innovative lifestyle-driven concepts.
This mixed development will be augmented by the government’s redevelopment of the adjacent Cochrane area. The proposed Kuala Lumpur International Financial District (KLIFD) in the nearby Imbi area may also benefit the project. If these redevelopment projects are successful, he believes the whole area will see a massive transformation, leading to greater investor interest.
1MDB is expected to develop the KLIFD, which is less than a 5-minute drive from Jalan Cochrane. A MRT station is planned for the KLIFD — one stop away from the Cochrane station.
Sitting on a 75-acre site, KLIFD is one of the crucial components of the Greater Kuala Lumpur initiative to transform Kuala Lumpur into an international hub for banking and finance and related professional services.
“Property values will also move up if these projects can be implemented successfully and on schedule. As it is, we are beginning to see higher property prices there, as evident from the prices of new launches in the area. For example, asking prices of Amaya Maluri @ Taman Maluri are currently around RM460 to RM480 psf while completed apartments nearby are in the range of RM200 to RM350 psf,” Tang tells City & Country.
Taman Maluri already has an LRT station while the proposed Sungai Buloh-Kajang MRT line will also stop there. This, Tang says, will enhance public transport and make it more accessible for residents and visitors.
From the underground Cochrane station, the line will head towards Taman Maluri where commuters can switch between the Ampang LRT and the new MRT line.
“The property market in the Jalan Peel/Jalan Cheras area will take off as more modern, innovative and better quality developments are introduced. This will enhance the image of the area and stir more interest and demand for properties. The completion of the MRT line will enhance public transport in the area. The investment potential should be good, especially for commercial properties, as values are expected to rise once the new developments come onstream,” Tang says.
JS Valuers’ Chan is even more bullish as he sees this area as another Bangsar or Mid Valley City in the making. “This part of Cheras is an established neighbourhood and has great redevelopment potential. The area is ripe for rejuvenation. We expect the MRT and the Cochrane redevelopment to encourage the redevelopment of many other old properties in the area. We are quite excited about the prospects for this area as we believe the Cochrane redevelopment will enhance the value of the surrounding areas as well, just as Bukit Bandaraya in Bangsar improved the Bangsar locality,” he says.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 849, Mar 14-20, 2011
