Putrajaya has held its own despite the prevailing perception that a city of government offices and civil servants would not attract much attention among real estate investors.
New launches in Putrajaya are seeing high take-up rates within a short period of time, according to Putrajaya’s master developer, Putrajaya Holdings Sdn Bhd (PjH), a subsidiary of Petronas property arm KLCCH.
“Most PjH projects are sold within six months of their launch,” says CEO Datuk Azlan Abdul Karim.
One of PJH’s latest products, Sera, comprising 40 units of 3-storey luxury waterfront twin villas, has sold some 34 units within a month.
Units in the RM90 million project have built-ups of 4,026 to 5,035 sq ft and land areas of 3,414 to 8,562 sq ft, with price tags that range from RM2.16 million to RM3 million.
Sera is a crescent-shaped development located on 5.6 acres of freehold land in Precinct 8, sitting on gently sloping terrain that offers vistas of Putrajaya Lake.
Azlan says the development offers some green and sustainable features such as solar water heaters, a rainwater harvesting system and water-efficient sanitary fittings. Sera is expected to be completed in April 2013.
The first terraced homes launched by PjH some 10 years ago were priced at only RM230,000.
Recently launched terraced homes start from RM610,000. Semi-detached units are currently priced from RM2.3 million compared with a mere RM400,000 when Putrajaya was opening up.
While construction costs have gone up, Azlan notes that the home prices are increasing due to the growing demand for property in Putrajaya. This is especially true for homes located near the government quarters.
“Taman Tun Dr Ismail, Ampang Hilir and Bukit Damansara were all meant for government servants and property values in these areas have appreciated tremendously over the years and continue to rise. Few would consider buying property in Bukit Damansara initially as it was developed mainly for senior civil servants. Now, houses there are very expensive. The same goes for Ampang, which was a government servant area that boomed.”
One reason for the demand could be the draw of living in the same neighbourhood as government servants who may be professionals or high-ranking and well-known public personalities.
Putrajaya’s property market is slowly picking up and Azlan believes that real estate values will continue to increase as the area sees further development.
The township’s early development was focused on government buildings and quarters, he says. However, the overall plan was to build a city for the people as well as for government administration.
“The commercial office space is equally divided between the government and private sectors. We plan to have about 65,000 houses in Putrajaya and only 35,000 government quarters.”
Much of the interest comes from homebuyers who like the well-landscaped and open green spaces the city offers.
The township consists of 20 precincts. Once completed, the development is expected to have about 65,000 residential units with 350,000 residents and a working population of 500,000. Currently there are 21,024 homes with 67,000 residents and a working population of 35,000.
Focus on commercial projects
Putrajaya, one of the largest urban development projects in the country, is envisaged to be “A Garden City. An Intelligent City”. To date, almost half of the 12,184.76-acre (4,931ha) freehold township has been developed with government buildings, housing, infrastructure, public utilities and amenities.
Azlan says almost 80% of the government buildings have been built and the remainder is expected within a few years.
The focus is now on commercial developments. This sector holds a lot of untapped potential as only 10% of the commercial components in Putrajaya have been developed.
“The development of the commercial sector depends on market demand, so we create demand. For instance, we are currently discussing with a university in the UK to set up a branch in Putrajaya,” says Azlan.
If the deal goes through, Putrajaya will benefit from an intake of 3,500 students. Azlan adds that the university is looking at Putrajaya because of its completed infrastructure.
He says people are starting to see the potential in Putrajaya, and PjH has received many joint-venture (JV) offers.
“We’ve got many local and international companies knocking on our doors.”
Putrajaya is recording a 90% occupancy rate and top quartile rental rates for its government and commercial buildings.
Upon completion, government office space will total 3.8 million sq m (40.9 million sq ft) of gross floor area (GFA) from 2.9 million sq m currently. Meanwhile, commercial space is expected to be about 3.4 million sq m GFA from the 300,000 million sq m to date.
PjH has completed RM1.68 billion in total gross development value (GDV) of commercial projects here so far, which includes the Diplomatic Enclave, Alamanda mall and Pullman Putrajaya Lakeside.
Commercial buildings and offices that are still under construction in Putrajaya have a GDV of RM861 million.
Azlan says PjH is planning a stratified development in Precinct 8 with a proposed GFA of 28,000 sq m, tentatively known as Lot 8C1. There are two components to the project. The first will comprise a 4-storey showroom, shops and offices.
The second component will be 3- and 4-storey stratified en bloc-style shops and offices, developed along the contours of the Putrajaya lakefront to take advantage of the panoramic views.
Putrajaya will also see the development of a 350-room three-star hotel and office tower on Lot Z10 in Precinct 1, which is expected to be completed by October 2012. The development will comprise a 16-storey hotel tower, 11-storey office tower, 3-storey podium and two levels of basement parking.
PjH will be developing a corporate office at lot 2C2 in Precinct 2 which will aim for a Green Building Index (GBI) certification. The building will offer 581,040 sq ft of floor space.
Another significant development will be an international hub at Precinct 8 — a mixed-use development of office suites, retails and SoHos that will be launched by 2012 or 2013 with an estimated GDV of RM1.5 billion.
One of the residential developments in the pipeline is the Maritime Residence, which is a collection of contemporary condominiums located across the water from the Putrajaya Maritime Centre.
“The condominium has a nautical-inspired design. The buildings are reminiscent of a boat’s hull, arching from one side of the building to another,” he says, adding that each floor is configured to replicate a ship’s deck. The tender for the project will be closed in a few months’ time.
Another future residential development is New Haven in Precinct 18, which has a classic English theme, while Palladium 11 is a modern enclave of semidee and terraced houses. On parcel 8-4H, PjH will develop 40 units of semidee houses.
As the country gears towards green and sustainable developments, PjH stands among the pioneers of green initiatives in the country.
Green open spaces make up 38% of Putrajaya. The wetlands and large water bodies are produced by utilising small natural streams which run through the area, covering 12% of Putrajaya.
Some of PjH’s efforts include biomass composting and community recycling. Green initiatives include the use of NGV buses and the Park & Ride concept to reduce air pollution. The infrastructure for a monorail line is also available in Putrajaya. “The infrastructure is there but it depends on the government’s decision,” says Azlan.
He is proud of the fact that the Putrajaya Lake has been classified as a Class 2B water body, which means that it is safe for people to have body contact with the water. “We work hard to maintain the water quality by using natural filters. There are even some parts of the lake that are Class 1 — we can drink the water from the lake. This is something that we are proud of, so we are mindful of the environment when we are carrying out construction in Putrajaya. In fact, some foreign countries are coming here to learn how we do it.”
Putrajaya will be fully developed by 2020 and PjH knows that it has to face challenges which include changing people’s perceptions about Putrajaya.“For one, the demographic [leans heavily towards] one race, and this brings about other issues such as spending power, insufficient captive market [and] not many incentives compared with Cyberjaya with its MSC status,” says Azlan.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 864, June 27-July 3, 2011
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