The value and potential of real estate hinge on its location. But it is not sufficient to go macro on the location factor; one needs to go micro as well.
Picture this: Taman Tun Dr Ismail (TTDI) is a popular address in Kuala Lumpur. While the housing estate generally constitutes an attractive investment, certain parts of it command premium prices compared to the rest.
For instance, the Za’aba area (Phase 1 in TTDI) is priced at a discount to the Athinahappan (Phase 4) or Sulaiman (Phase 5) areas.
Location specifics aside, an array of other considerations are key to pricing — whether the real estate sits on elevated ground, what is its frontage and the profile of the developments next to it and so on.
There is nothing new about range pricing in an area — it is the response to supply and demand. A recent illustration is the disparity in the valuations accorded to the Lai Meng Primary School/Lai Meng Kindergarten and Wisma Angkasa Raya on Jalan Ampang. Clearly, these two properties are greatly different in their attractiveness (see story on Page 4).
Magna Prima Bhd has proposed to buy the school and kindergarten and relocate them to Bukit Jalil, away from the heart of KL. The developer will then redevelop the Jalan Ampang site into an integrated RM1.3 billion commercial development, comprising office and residential towers with a gross floor area of some 1.2 million sq ft.
The details of the integrated project and its impact on traffic flow in Jalan Ampang are not immediately clear. What is clear now is the traffic congestion caused by the school and kindergarten. Without any doubt, the learning institution has outlived its presence in KL’s super-prime commercial hub. There is no place for nostalgia.
So, a piece of advice on the all-important “location, location, location” mantra in property investment — go micro. Check out the location-within-location aspect of a property.
Au Foong Yee is editor of City & Country
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 749, April 6-12, 2009
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