Kerinchi’s rebirth

THE Kerinchi and Pantai area located south of Bangsar in Kuala Lumpur is a growing property hotspot. The area has benefitted from the on-going 60-acre integrated development of Bangsar South by UOA Holdings Bhd, which acquired a portion of Kampung Kerinchi for redevelopment in 2005. The area that was once mainly a settlement of urban pioneers, has become a catalyst for the development of other property projects there.

The property mix here is varied: there is low to medium-cost housing such as the Taman Bukit Angkasa flats; not-so-old, mid to high-end apartments such as those in Pantai Hillpark; and new high-end condos such as those in Bukit Pantai and Bangsar South. New projects in this area are being marketed as an extension of Bangsar, the most obvious
being Bangsar South.

Real estate agents and consultants expect demand for properties here to rise due to its excellent location and accessibility, especially with the Federal Highway and two light rail transit (LRT) stations (Universiti and Kerinchi) at its doorstep. Mid Valley Megamall is just down the road and Kuala Lumpur city centre is theoretically mere minutes away.

The gentrification of the area has boosted the values of some older properties as well.

In theedgeproperty.com’s analysis of transactions in the Kerinchi/Pantai area, including Bangsar South, it was found that the flats in Taman Bukit Angkasa completed decades ago enjoyed a 21.1% average price psf growth to RM195 in the 12 months leading to the third quarter of 2014 (3Q2014). It is also the highest price psf growth in the area. (See Chart 1)

   

Taman Bukit Angkasa Flats is located on Jalan Bukit Angkasa, off Jalan Kerinchi in Pantai Dalam. It is a low-cost development consisting of 21 blocks on leasehold land, accessible via Jalan Kerinchi that connects to the Federal Highway and the New Pantai Expressway (NPE). The Angkasapuri KTM station is within walking distance.

COO of Henry Butcher Marketing Sdn Bhd Tang Chee Meng says it is no surprise property values for Taman Bukit Angkasa Flats have gone up because of its strategic location.

“Kerinchi is halfway between Petaling Jaya and Kuala Lumpur city centre and is therefore very centrally and conveniently located.

“Current asking prices [for the Taman Bukit Angkasa Flats] are around RM275 to RM282 psf. Rental yields are quite good and can be as high as 7% to 8%. Such attractive yields entice investors and the market outlook should be positive. However, if the flat is not properly maintained, this will restrict growth prospects in the future,” says Tang.

Steady capital appreciation

Generally, Tang says the price psf of older non-landed residences in the vicinity should enjoy steady capital appreciation due to their central location. Low-medium and medium-cost properties in the area have more upside potential although their appreciation would be at a slower rate to that of higher-value properties, due to the limited number of buyers and lack of maintenance.

Data by theedgeproperty.com shows that non-landed residences in the RM100,001 to RM200,000 price range (mostly low-cost flats) accounted for the largest market share of transactions (21.3%) in the 12 months to 3Q2014.

CBD Properties (KD) Sdn Bhd executive director Daphne Chan believes the findings indicate that old non-landed properties in the same area have been undervalued compared with newer projects.

“Flats in Taman Bukit Angkasa and Kondo Rakyat are in hot demand. These old properties are still undervalued while rental demand is huge,” Chan says. She adds that the flats have a wide tenant mix of local families, university students and foreign workers.

The mid-end property segment has also done well, with sales of non-landed homes between RM500,001 to RM600,000 accounting for the area’s second-largest market share (14%). This was followed by transactions of homes between RM1 million to RM1.5 million (5.6%).

Notably, Pantai Hillpark 5 enjoyed strong price appreciation, with the average transacted price growing 20.2% year-on-year to RM429 psf while The Park Residences in Bangsar South saw average price psf grow 16.4% year-on-year to RM726 psf in 3Q2014.

Hartamas Real Estate (OUG) Sdn Bhd team manager Janet Chong, who is familiar with properties in the area, sees great potential in its non-landed residences, especially those located close to the commercial area.

“The Park Residences, for example, is one of the most sought-after properties in the area. The transacted price has increased as much as 50% over the past four years,” she says, adding that a unit with a built-up area of 1,485 sq ft was transacted at RM1.2 million recently. The freehold development was among the top five projects with the highest year-on-year average price growth psf in 3Q2014, according to theedgeproperty.com data.

“The current price psf of non-landed homes near Bangsar South is between RM850 and RM900. One unit could easily be rented out at RM4,500 to RM5,000 per month,” says Chong.

Chong believes the estimated 60:40 ratio of locals to foreign tenants is supporting the price growth. “South of Bangsar is so close to KL city centre and it is accessible by all kinds of public transport. Foreign expats from Japan, China, India and Dubai are often looking out for a unit here, because it is convenient and peaceful to stay here and work in KL,” says Chong.

Despite the price growth recorded by the properties mentioned above, non-landed residences in Kerinchi/Pantai saw a 16% overall drop in average price psf to RM421 in 3Q2014 from RM501 a year ago (see, Chart 2). However, theedgeproperty.com notes that the price fall was due to an unusually large number of transactions of lower-end flats during that quarter. In comparison, prices in the preceding year had grown 22.7% year-on-year.

The outlook for the area remains positive, says Henry Butcher’s Tang. He believes transaction activity and average price psf will pick up in the near future because of the many new mid to high-end condominium projects to be launched in the area, such as Nova Pantai by Malton Bhd and Secoya Residences @ Pantai Sentral Park by IJM Land Bhd.

The 58-acre Pantai Sentral Park is the largest new mixed-use development project, with a gross development value of RM2.5 billion, while Secoya Residences is in its second phase of development. (Its first phase, Inwood Residences, was launched in mid-2014.)

Other soon-to-be-completed mid to high-end condominium projects in the area include Saville @ The Park by MKH Bhd (July, 2015) and South View Serviced Apartments by UOA Holdings, which was 90% sold before its official launch (2016). “These projects will help to lift the area further and gradually push up property values,” says Tang.

He thinks there isn’t an oversupply situation in the area yet. “There are still small parcels of vacant land available for development. Generally, I believe residential land of around three to five acres in a good location would probably be priced at RM200 and above psf.”

All the non-landed residences here have appreciated in value due to the transformation of the area from an urban pioneer settlement into a middle to high-income neighbourhood. They also benefit from a central location. “With the continued development and upgrading of the Kerinchi area, properties here can be expected to appreciate in value,” says Tang.

How it all began

Located beside the Federal Highway near Universiti Malaya, Kampung Kerinchi is thought to have been founded by a group of Sumatrans hailing from a place called Kerinchi in Indonesia in the 1890s.

They had first set foot in Bukit Nanas and Sungai Besi as early as the 1850s and later settled in Kampung Kerinchi, where they cultivated the land.

While the Kerinchi area has since grown as an urban hamlet halfway between Kuala Lumpur city centre and the satellite town Petaling Jaya, the village itself is shrinking and little of what it used to be is left, apart from large blocks of public housing near the Kerinchi LRT station. A significant portion has been redeveloped into the integrated property development project called Bangsar South, among others. Bangsar South features several modern office towers, mid to high-end condominiums, as well as retail and commercial spaces.

Prior to construction, the developer had carried out upgrading works in Kampung Kerinchi in 2007, which saw the widening of the main access road, new pedestrian walkways and landscaping works, in an effort to make the area appealing to potential buyers. Road improvement works continue today.

Landmarks in the Kerinchi/Pantai vicinity include the Angkasapuri building, Universiti Malaya, Pantai Hospital, and the Universiti and Kerinchi LRT stations.

Existing residential projects in the immediate vicinity of Kampung Kerinchi consist of affordable apartments and flats such as Vista Angkasa Apartments and Sri Angkasa flats.

This article first appeared in The Edge Property, the property pullout of The Edge Financial Daily, on June 5, 2015. Get the full pullout here and view video here.
For a quick and brief analysis of the property market in Kerinchi/Pantai:
PROPERTY SNAPSHOT Growing interest South of Bangsar
PROPERTY SNAPSHOT What’s affordable in Kerinchi/Pantai?
PROPERTY SNAPSHOT What are projects priced in Kerinchi/Pantai?
PROPERTY SNAPSHOT What’s hot in Kerinchi/Pantai?