Jalan Imbi poised for growth
Kuala Lumpur’s Golden Triangle is popularly recognised as the country’s main commercial hub with world-class shopping centres, hotels, offices and trendy shops that are bordered by Jalan Bukit Bintang, Jalan Sultan Ismail and Jalan Imbi. While Jalan Bukit Bintang and Jalan Sultan Ismail are littered with modern shopping centres and office buildings respectively, the physical landscape of Jalan Imbi differs as it portrays a mixture of new and traditional buildings.
The Jalan Imbi artery starts from the intersection of Jalan Pudu right through to the intersection of Jalan Bukit Bintang. From the Jalan Pudu side to Jalan Sultan Ismail, this part of Imbi features hotels like Melia Hotel, office complexes such as Plaza Berjaya, Bangunan Amoda and Plaza Imbi and the massive mixed development of Berjaya Times Square. From Jalan Sultan Ismail to Jalan Bukit Bintang, this is the more traditional part of Imbi that features mostly pre-war shops.
Apart from shopping centres, similar pre-war shops can also be found on Jalan Bukit Bintang. Although it is perceived that the values of the pre-war shops on Jalan Bukit Bintang are generally higher than those on Jalan Imbi, the prices can be very erratic, says James Wong, VPC Alliance (M) Sdn Bhd’s managing director, who attributes it to the imperfection of the property market.
Take a 2-storey corner shop with a land area of 2,045 sq ft fronting Jalan Bukit Bintang but located closer to the Jalan Pudu intersection. The owner purchased this lot in 2007 for RM1.3 million and sold it 15 months later for RM4.3 million. An almost similar sized intermediate lot on Jalan Imbi (land area: 1,726 sq ft) was sold earlier this year for RM2 million.
Three years ago, a 3-storey shop with a land area of 2,135 sq ft on Jalan Bukit Bintang was sold for RM4 million. A similar unit on Jalan Imbi, with a land area of 1,675 sq ft, was sold in 2007 for RM1.6 million.
Although some property consultants feel that Jalan Imbi has never caught up with the more affluent Jalan Bukit Bintang, this may not be the case for long. VPC Alliance’s Wong believes that over time, the shops on Jalan Imbi will eventually be amalgamated to pave the way for new developments as commercial land in the city centre becomes scarcer.
Tang Chee Meng, Henry Butcher Marketing Sdn Bhd chief operating officer, concurs. With new developers coming in to redevelop some of the existing properties in the area, he feels that Jalan Imbi may catch up with its more “glamourous” cousin. “The Imbi area has been viewed as a potential extension of the Bukit Bintang shopping district and, therefore, has always attracted interest,” says Tang.
New developments in the pipeline include Nova Square — a mixed commercial development that will feature a hotel, serviced apartments and offices atop a six-level retail podium. The development, with an estimated gross development value (GDV) of RM1.27 billion, is sited on a 3.3-acre freehold tract at the junction of Jalan Bukit Bintang and Jalan Imbi. TA Enterprise Bhd’s property arm, the soon-to-be-listed TA Global Bhd, acquired the site four years ago for RM83.71 million, or RM625 psf, from Kumpulan Europlus Bhd.
In January 2008, a significant transaction saw a half-acre plot located on Jalan Yap Tai Chi, off Jalan Imbi, change hands for RM45.73 million or RM2,100 psf. The site is currently being used as an open car park. The purchaser, Pinnacle Trend Sdn Bhd, is a wholly-owned subsidiary of YTL Corp Bhd. The tract is located next to Dorsett Regency Hotel (owned by Far East Consortium International Ltd) and opposite The Ritz-Carlton Kuala Lumpur, which is owned by the YTL Group.
Another developer, too, has been acquiring properties on Jalan Imbi. Since last year, Asia Pacific Land Bhd (AP Land) and its wholly -owned subsidiary Bakti Dinamik Sdn Bhd have been on an acquisition spree to build up landbank. So far, AP Land is believed to have accumulated more than 25,000 sq ft of land in the area for about RM30 million. In June 2008, AP Land purchased four plots, totalling 8,049 sq ft, located opposite a chapel from Atlantic Heritage (M) Sdn Bhd for RM11.73 million. Two months later, Bakti Dinamik acquired a 3-storey building on a 2,445 sq ft site from Yau Woh Sdn Bhd for RM3.6 million and a 6,265 sq ft tract from Two Friends Sdn Bhd for RM4.2 million or RM670 psf.
In February, it was reported that Bakti Dinamik had entered into an agreement with Grand Damansara Sdn Bhd to buy an 8,330 sq ft plot in the same locality for RM10 million or RM1,200 psf. According to AP Land, these tracts are being considered for future commercial projects.
For Ho Chin Soon, master mapmaker and principal of Ho Chin Soon Research Sdn Bhd, this part of Jalan Imbi is suitable for developments like hotels, entertainment outlets and boutique shopping centres.
“As the areas surrounding Jalan Imbi like Jalan Walter Grenier and Jalan Bukit Bintang have night clubs, shopping centres and numerous entertainment spots, the new developments for Jalan Imbi should complement these establishments,” says Ho.
However, Ho adds that it will be difficult and time-consuming for a party to accumulate shops in a contiguous manner from the various individual owners. “If an owner is reluctant to sell, the prospective buyer is either forced to pay a high price or is kept waiting. This process of buying up contiguous lots can easily take five to 10 years.”
Take the shops now occupied by Overseas Restaurant: those familiar with the deal say the restaurant started out with only one shop. Subsequently, it took the operator close to a decade to acquire the other three shops as it encountered numerous problems with the owners to reach an agreement on the sale price.
Famed for its Chinese cuisine, many visit the Imbi area for traditional hawker fare or to dine at fine restaurants like Overseas Restaurant and Tai Thong Restaurant. Food and beverage outlets and a growing number of launderettes are the main types of business found in this neighbourhood. Most of the 2 to 4-storey shops were built by different developers dating back to the pre-war days.
During those early days, the Imbi area from Nova Square to the intersection of Jalan Imbi and Jalan Sultan Ismail was dotted with bungalows and, among the Chinese community, it was popularly known as “Pak Luk Kan”, which literally meant 106 bungalows.
According to VPC Alliance’s Wong, several plots around Jalan Imbi were owned by Loke Wan Tho and family as well as the Low Yat Group, which is the single largest shareholder in AP Land. In the 1950s, a row of shops, where Sakura Restaurant is located, was built. These were formerly 2-storey houses that were converted for commercial purposes. A decade later, a row of shopoffices, where Overseas Restaurant and Chef Rasa Sayang Restaurant are located, was built. These were formerly 4-storey shop apartments.
Fronting Jalan Imbi are a Chinese temple, a chapel and Dorsett Regency Hotel. Another high-rise commercial property located at the Jalan Imbi and Jalan Sultan Ismail intersection is the abandoned Nas Pavilion project. Those familiar with the development say the project was first launched by Metro Jelita Sdn Bhd in 1990s as CN Gallery. The project was to have featured two office towers and a hotel block atop a retail podium on a 1.35-acre freehold tract.
Following the 1997/98 Asian financial crisis, Metro Jelita went into receivership and Urban Shift Sdn Bhd took over and renamed the development Nas Pavilion. Urban Shift relaunched it in early 2004 and the components were changed to feature three blocks of serviced apartments atop a retail podium.
Urban Shift opened two blocks, comprising more than 400 serviced apartments for sale, with average prices of RM350 psf. The third block, with 68 duplex serviced apartments, was launched in mid-2004 for about RM400 psf.
The word on the ground is this abandoned project has recently been taken over by a new owner who is also eyeing the adjoining 1.4-acre tract currently being utilised as an open car park. This site was formerly the Cho Tek apartments.
City & Country visited Jalan Imbi recently and spotted close to a dozen vacant units on the ground floor of these 2 to 4-storey shops. Interestingly, only a handful of these units carried “to let” signs. VPC Alliance’s Wong says many of the owners are unwilling to sell their shops because of the capital appreciation potential. Thus, it is difficult to ascertain the real value of the properties.
He adds that demand for the shops comes mainly from investors and those who want to purchase for their own use. “Before the 1960s, there were mostly clinics, law firms and travel agencies in this area. Today, there are a lot of Chinese eateries,” he says.
Recently, an intermediate 3-storey (lot size: 20ft by 115ft; built-up: 6,300 sq ft) was put up for lease for RM16,000. According to a real estate negotiator marketing the site, it was formerly a restaurant and the owner is not willing to sell even though he has received numerous offers. For this lot, the ground floor can easily be leased for RM6,000.
According to another real estate negotiator familiar with the Imbi area, the owner is asking RM8,000 for rent for the ground floor space measuring 1,500 sq ft of his intermediate 2-storey shop. Meanwhile, the ground floor (built-up: 1,800 sq ft) of a 3-storey corner shop is up for lease for RM10,000 monthly.
Data provided by Burgess Rawson Sdn Bhd showed that there was a lot more buying activity in 2007 than last year.
Susie Tiong, Burgess Rawson executive director, believes one of the contributing factors is the possible redevelopment of Pasarakyat located on Jalan Melati, which is nearby Jalan Imbi. “Thanks to Jalan Imbi’s prime location, the announcement of the redevelopment of Pasarakyat saw developers showing keen interest in the land here,” she says.
The Pasarakyat development comprises a group of buildings that include a wholesale market, showrooms, a restaurant and a bus terminal.
It was reported that Pasarakyat had leased the parcels of land from the government for 15 years, with an option to renew for 15 more. However, as Pasarakyat has not been a notable success, it was also reported that it may make way for Dataran Perdana, a project that will see high-end condominium towers, retail-cum-office blocks and hotels and tourist-themed developments built around a public park.
Tiong says the data also revealed that apart from developers like AP Land, some shopowners on Jalan Imbi are buying the units there. “These buyers are accumulating [the units] because they are either keen to expand their business or to invest,” she says.
A registered agent with a well-known valuation firm in Kuala Lumpur says corner shops, such as those occupied by Hong Leong Bank, are among the more popular lots, commanding the highest values due to their size. He also says that a budget hotel operator has been on the lookout to acquire old shops and sees the potential of Jalan Imbi.
It is understood that an owner of a 2-storey corner lot and an adjoining lot is asking RM10 million for both units. Collectively, it has a land area of 5,250 sq ft and built-up of 9,500 sq ft. It is currently tenanted for about RM30,000.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 757, June 1 – 7, 2009.