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Cover: University town in the making

Kampar reinvents itself

I’ve not lived in Kampar for very long — just 70 years!” quips long-time resident Wong Kim Foo. “From the 1940s to the 1970s, Kampar depended on the tin mining industry. People then didn’t have to worry about jobs.”

However, the good times ended in the 1980s when the tin mining industry collapsed and the once-thriving town, about 35km south of Ipoh in Perak, became the proverbial “sleepy hollow”. It was bypassed by development and its residents began leaving in droves to greener pastures.

However, the former mining town is now undergoing a renaissance of sorts as it seeks to reinvent itself as a premier university town.

A former grocery store owner, Wong attributes the change in Kampar’s fortunes to one of the town’s old boys. “Fortunately, we had a Member of Parliament, Tan Sri Hew See Tong, who brought in two Taiwanese factories and also TAR College,” he says. “Then Kampar improved slightly. Now with Utar [Universiti Tunku Abdul Rahman], the changes are unbelievable.” (Hew is a former three-term MP of Kampar.)

The arrival of Utar in Kampar was made possible by the Perak government donating over 1,400 acres of land for the university to set up its main campus there. Since its official launch in 2007, Utar has become Kampar’s new economic lifeline, with students arriving from all over the country.

As a result, there has been a boom in property values — there have been several new developments to cater for the growing population. At the moment, although the student numbers are relatively modest — about 9,000 for Utar and 2,300 for Kolej Tunku Abdul Rahman (KTAR) — it has been predicted that the number of students could exceed 20,000 in 10 years’ time, says MCA’s Datuk Lee Chee Leong, the MP for Kampar. So, more and more investments will flow into the area over time, he adds.

It is undeniable that Utar’s presence is bringing prosperity back to Kampar. The town’s property market is full of activity, with some areas being more active than others.

“The commercial and housing areas are all located around the two campuses. Construction works have not stopped, not even during the economic downturn,” says Lee.


Property boost
Property projects currently on the market are Taman Kampar Perdana by Kemajuan Emax Group of Companies, Taman Bandar Baru Selatan by Villaworld Sdn Bhd and Westlake Homes by Huges Corp Sdn Bhd, says CH Williams Talhar & Wong’s Ipoh division director Heng Kiang Hai.

So far, only 35% of the Westlake Homes development has been completed. The development, which sits on about 200 acres, is just 300m away from Utar and is effectively the de facto hostel for the university. The university’s website states that Westlake is its “main campus accommodation”.

There are almost 800 houses there even though the land can accommodate up to 1,900 units. About 620 of the completed homes have been sold and most of them are occupied.

The 2 and 3-storey houses — targeted at Utar students — come with 12 to 13 rooms, each with an attached bathroom. Each house can comfortably accommodate 15 to 20 students.

Although the houses were designed and built primarily for students attending the university, there are buyers who live on the ground floor while renting out the upper levels to students for recurring income.
Rents for single occupancy ranges from RM215 to RM310 per month while that for twin-sharing is RM190 to RM230, according to the Utar website.

Although there is much land to be developed, the developer is wisely not rushing the development. “We will build according to demand. We are working very closely with Utar to ensure we meet the student housing demands accordingly,” says Hew, who helms Huges Corp.


Attractive yields
Danish House Sdn Bhd manages the houses that have been bought for investment by investors who hail from various parts of the country. Hew conservatively places yield projections at 8% per annum.

And so far, those who have bought into the development are happy with their investment.

“Compared with other properties, even those in the Klang Valley, Westlake’s properties give a much higher rental return,” says B S Ng, general manager of an engineering company based in Kuala Lumpur.

Another investor, former Selangor executive councillor Datuk Ch’ng Toh Eng, bought a house in Westlake because he was invited by Hew to consider a purchase. Ch’ng, a long-time MCA leader in Selangor, is happy with the management of his property.

Chew Boo Kiang, a retired civil servant from Penang, saw an advertisement for Westlake Homes, and was motivated to buy two houses for investment based on Utar’s reputation. “I am confident about Utar’s ability to attract students, hence investing in Kampar was a good investment decision,” he says.

Goh Kit Ching, who runs his own consultancy in KL, bought into the development on the recommendation of some friends and has not been disappointed so far. “The returns are good,” he says.

Even Wong, who earlier shared his memories of Kampar, saw the investment potential and bought five 2-storey houses, each measuring 16ft x 40ft, in 2008. Each house provides him with a rental income of RM850 to RM900 per month.

The Westlake developer is currently building its latest phase — 133 3-storey terraced houses that are expected to be completed by 2010. The new houses are priced between RM400,000 and RM450,000. A similar 3-storey house in an earlier phase was sold for RM338,000.


Other developments
While Westlake Homes is an ongoing development, the other projects in the vicinity have been completed. Taman Kampar Perdana is a mixed development built on 73.43 acres and comprises terraced houses, flats, apartments and shopoffices. Its location is ideal as it is situated along the road that leads to Utar’s main entrance. Its construction cost was in the region of RM70 million, with land cost at about RM15 million.

The houses, flats and shop lots are fully sold, and 80% of the apartments have been taken up. There are 324 2-storey and 68 1-storey terraced houses, 240 units of low-cost flats (4-storey), 112 units of medium-cost apartments (4-storey), and 77 units of 2-storey shopoffices.

The 2-storey terraced houses were sold in batches, with prices ranging from RM125,000 to RM198,000. The 1-storey houses started from RM86,800, the low-cost flats RM35,000, and the apartments RM80,800. The shopoffices were sold for RM278,000.

Another plus in this area is the opening of a Tesco hypermarket which will cater for the population of Kampar and also provide potential opportunities for part-time work for students living in the neighbourhood.

Chee Yee Meng, manager of Bidang Mantap Sdn Bhd, a subsidiary of Kemajuan Emax Group of Companies, says the occupancy rate is about 70% at the moment for the entire Taman Kampar Perdana development.

Heng of CH William Talhar & Wong (Ipoh) says house values have increased in Taman Kampar Perdana over the years. For example, a 2-storey terraced house measuring 20ft x 70ft launched in 2005 went for RM148,000. The current selling price is between RM150,000 and RM160,000, an increase of 1.35% to 8%. Other 20ft x 70ft houses launched in 2005 for RM198,000 are now selling for about RM210,000, or 6% higher.

Chee says rents for terraced houses are between RM750 and RM900, while for flats and apartments they are RM300 and RM500 respectively. As for shopoffices, the ground floor starts from RM2,000 and the upper floor is going for RM800.

Taman Bandar Baru Selatan, located in the south of Taman Bandar Baru Kampar, is a completed mixed development by Villaworld Sdn Bhd. The development sits on more than 50 acres and has  72 1-storey and 530 2-storey terraced houses.

Heng says the 2-storey units, measuring 20ft x 65ft, were sold for RM116,880 in 2003. Since then, every subsequent launch has seen a price increase. Today, the selling price is between RM135,000 and RM140,000, representing a rise of 15% to 20% over five years.

Another phase of 2-storey terraced houses, measuring 20ft x 70ft, was built in Taman Bandar Baru Selatan. The houses were priced at RM138,880 in 2003. Prices are now between RM145,000 to RM150,000 — a 4% to 8% increase. An additional 50 2-storey shops were then constructed; rents are going for between RM700 and RM800.

While Taman Kampar Perdana and Taman Bandar Baru Selatan incorporated commercial buildings into their development, there are no commercial units in Westlake Homes. However, at just a stone’s throw from the student housing stands Dataran Kampar and its 215 units of 3 and 4-storey shops developed by Batu Sinar Sdn Bhd, a company related to Huges Corp.

Some 194 units have been sold, and the occupancy rate is 70%. A 3-storey intermediate unit went for RM298,000 in 2002, while a similar one was sold five years later for RM520,000 or 74% higher. According to Heng, the rent for a 3-storey shopoffice is between RM2,400 and RM3,000. This commercial development on 26 acres has a gross development value of RM81 million.

Seeing an opportunity for investment, the 70-year-old Wong snapped up two units of 3-storey shopoffices, measuring 20ft x 60ft, in 2005 for RM298,000 each. Several interested parties wanted to buy the shopoffices, but he’s not selling them.

Besides these areas, which are in the vicinity of Utar, the residential neighbourhood of Taman Bandar Baru Kampar has also benefited from the influx of students. Developed by Batu Sinar, construction started in 1989 and finished in 2001. It comprises a total of 2,092 houses. There are 620 1-storey houses, 1,385 2-storey houses, 39 2½-storey houses, 44 semidees and four bungalows. It is a mature neighbourhood, with nearly 100% occupancy.

During their launch in early 2001, the 1-storey houses sold for RM30,000 to RM69,000. They are now valued at RM70,000 to RM100,000. The 2-storey houses, which were sold for RM25,000 to RM115,000, now have asking prices of RM70,000 to RM160,000. The 2½-storey units that went for RM140,000 are now going for RM200,000, while the semidees that were sold for RM188,000 to RM240,000 are now valued at RM288,000 to RM328,000.


Infrastructure and amenities
The increase in student population has seen an increase in amenities in Taman Kampar Perdana. The current level of activity is manageable although in the long term, infrastructure enhancements must be made to ensure that traffic flow is smooth.

“Kampar town needs to provide better public transport and amenities like cinemas, shopping complexes and so on to keep pace with its growing population,” says Heng of CH Williams Talhar & Wong.

Now that Kampar has been proclaimed a full-fledged district, Heng says it is hard to predict how this will impact property prices all round but he believes that in the long run, the bigger allocation of state government funding for infrastructure improvement will help Kampar to keep pace with the private developments occurring in the area.

A bigger population also means more businesses setting up shop in Kampar, and Heng sees the successful ones as those catering for student needs, such as eateries, stationery shops, entertainment outlets and convenience stores.

The increase in revenue and population in Kampar could see it being promoted yet again from district to municipality. “Kampar has a population of 93,000 and last year’s revenue was RM12 million [to the South Kinta District Council],” says Lee, the MP for Kampar.

“We need to have a population of 100,000 and a revenue of RM20 million to attain municipal status,” he adds. This can only mean more state funding to further develop Kampar, as well as adjacent areas.

However, there is unlikely to be a rush to Kampar just yet. “At the moment, the student population is not enough to sustain all the existing businesses. However, the expansion of Utar will help ease the problem,” Heng says.

Apart from Westlake Homes, no other housing development will be starting here anytime soon. Heng says, “There is some land located across the railway line to the west of Westlake which has been approved for housing development. However, no further details are available.”

However, Lee is more optimistic about Kampar’s prospects in the medium to long term. “Direct investment in construction and property activities will easily exceed a few billion ringgit in three to five years,” he says.

“From a centre of tin mining in the old days, Kampar has evolved into a district and town with education as its centre spot. Certainly, the town will be flooded with development and economic activities to cater for the community’s increasing needs,” he adds.

The former mining town that looked set to fade away into obscurity has been given a new lease of life. Could it become one of Malaysia’s premier university towns in the coming years?

 

This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 769, Aug 24-30, 2009.

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