New infrastructure to boost values

WHEN it comes to property investment, Ho Chin Soon’s latest mantra is “follow the infrastructure”. In his presentation entitled “Looking below the radar: Emerging hot spots” at The Edge Investment Forum on Real Estate 2013, the engaging director of Ho Chin Soon Research Sdn Bhd said the expanding infrastructure network in the country and spread of urbanisation will boost property values in certain areas that are now below the investment radar.

Penang

Using the aerial photos of Penang island taken by his company, Ho showed the changing landscape of North Penang and pointed out its potential for further growth. He noted that the areas surrounding the proposed 6.5km undersea tunnel from Gurney Drive to Bagam Ajam in Butterworth; the 4.2km expressway bypass from Gurney Drive to Persiaran Tun Dr Lim Chong Eu; the 4.6km expressway from Persiaran Tun Dr Lim Chong Eu to Bandar Baru Air Itam; and the 12km road linking Tanjung Bungah with Teluk Bahang will see a favourable impact from these new infrastructure.

“The proposed 12km road from Tanjung Bungah to Teluk Bahang will change the character of Batu Ferringhi and Teluk Bahang,” said Ho. He cited the recent purchase of land by several local tycoons in Teluk Bahang as an example of its rising popularity and potential.

Moving on to Penang South, Ho highlighted the Second Penang Bridge as a boost to this part of the island. The bridge, which connects Batu Kawan in Seberang Perai to Penang’s Batu Maung, is expected to be completed in July. Upon completion, the 24km-long bridge will be the longest bridge in Southeast Asia. “The hot spots will come and may even go from Batu Maung to Teluk Kumbar,” said Ho.

Klang Valley

In the Klang Valley, the construction of new highways will have an impact on the properties of the serviced areas, said Ho. He believes the proposed Damansara-Shah Alam Elevated Expressway (DASH), which will start from a Lebuhraya Damansara-Puchong interchange at Puncak Perdana in Shah Alam and end at the Penchala Link along the SPRINT Highway, will be a catalyst for growth for Shah Alam North.

“New highways can change the way you drive. Last time, when I had to come to this part of the city [Mutiara Damansara] from my home in Pekan Ampang during office hours, it was a big headache. This morning, I used the Duta-Ulu Kelang Expressway, no problem at all. So for example, using DASH will allow you to travel to Mont’Kiara, Kuala Lumpur, from Shah Alam North in only 15 minutes,” said Ho.

Closer to the KL city centre is Cheras South, which will be one of the key beneficiaries of the Sungai Buloh-Kajang (SBK) mass rapid transit (MRT) line, said Ho. “Most people don’t know much about Cheras South unless they live there. There have been a lot of new developments in the area recently and the construction of the SBK line is progressing well. You can see the pillars are up and soon, work will start on the stations,” he added.

Ho noted that the recent launch of Selangor Dredging Bhd’s RM431 million Windows On The Park luxury project in Cheras did very well. It has to date sold 73%. “There were a lot of upgraders who bought units at Windows On The Park. It’s not the only development launching in the area — Mitraland Group Sdn Bhd’s Vina Versatile Homes is also launching soon,” said Ho.

He noted that UDA Holdings Bhd, the developer of Bandar Tun Hussein Onn, is planning to launch three or four condominium towers in the area by year-end. An MRT station under the SBK line will be placed in Bandar Tun Hussein Onn. “In the years to come, UDA will be one of the major players in Cheras South,” said Ho. “Cheras South is quite a mature area. There is hardly any land left so the prices are going up.”

From Cheras South, Ho moved on to an even lesser known area — Pekan Ampang, Selangor. “We are going to look at Pekan Ampang because I have a house there,” joked Ho. “The place is changing. Not many people know there is a big catchment there and very importantly, Pekan Ampang is tipped to house one of the stations under the future MRT circle line.” The circle line is an orbital line around Kuala Lumpur city, which is said to include stations in Ampang, Midvalley City and Mont’Kiara. Even though it has not been announced, Ho is “quite certain” there will be an MRT station in Pekan Ampang.

Zooming in on an aerial photograph of the area, he pointed out a building that is still under construction next to the existing light rail transit (LRT) station, which he believes will be a multi-storey car park. “In two to three years’ time, the multi-storey car park in Pekan Ampang will be ready and once the SBK line is completed, work will start on the circle line.”

Citing the proposed KL-Singapore high-speed rail (HSR), Ho noted, “Sime Darby Bhd has announced that it will develop an education hub in Pagoh. Why? Because it knows Pagoh will be one of the stations along the HSR line. It knows what is coming.” In November last year, Sime Darby signed a joint-venture agreement with Tunas Selatan Pagoh Sdn Bhd to develop the RM992.6 million Pagoh Education Hub under a private finance initiative. Upon completion, the campus will be leased out to the Ministry of Higher Education, Universiti Teknologi Malaysia, International Islamic University Malaysia and Universiti Tun Hussein Onn Malaysia for 20 years.

New hot spots to rival Bukit Bintang

“In time, there will be new hot spots that can rival some of the current popular commercial areas, such as Bukit Bintang,” offered Ho. He told investors to look closely at Kota Damansara, in particular Sunway Nexis by Sunway Bhd and Tropicana Gardens by Dijaya Corp Bhd. Sunway Nexis, an integrated development, sits near Sunway Giza Mall in Dataran Sunway.

One of the stations on the MRT SBK line will be located in Dataran Sunway while Tropicana Gardens will have a direct linkage to an elevated MRT station. “Imagine coming home using the MRT. From the station you walk to the mall to have your dinner, then you go up to your apartment to sleep. But you can’t sleep, so you go downstairs to catch a movie instead. This is the vision,” said Ho.

He noted that phase one of the Tropicana Gardens serviced apartments was fully sold at about RM900 psf while phase two, where 80% of the units have been sold as at April, are now selling at RM1,100 psf. The integrated development offers residences, offices and retail space.

“Just down the road is Dataran Sunway and there you also have Sunway Nexis. Sunway knows the importance of an MRT station, thus it is building a dedicated link from Sunway Nexis to the station so people can walk to their homes or offices come rain or shine. People weren’t so sure about this place before but I think it has become quite popular,” offered Ho. Sunway Nexis is located about 80m from the MRT station and has a gross development value of RM500 million.

“The other place you should look at is the Cochrane area in Cheras, KL, where an MRT station will be located. After Bukit Bintang, the MRT will go to the upcoming Tun Razak Exchange project and from there, the next stop is the Cochrane station. You should also look at Sunway Velocity there, which has been under the radar because I think many people can’t visualise what it can become in the future,” said Ho. Sunway Velocity comprises retail shops, offices, serviced apartments, a hotel and a one million sq ft shopping mall. It is located about 100m from the Cochrane MRT station. Sunway has proposed to build a covered pedestrian link bridge to the station.

LRT extension and bus rapid transit (BRT) line

There could be a new centre of activity in Puchong soon due to the proposed LRT extension and IOI Properties Bhd’s 80-acre IOI Vivo City, said Ho. The proposed Ampang LRT line extension starts from the Sri Petaling Station and runs through Puchong before ending at Putra Heights. The 17.7km extension will have 13 new stations. Two of the stations will be located near IOI Vivo City.

“At 80 acres, IOI Vivo City is almost as large as PJ State or New Town. One day, maybe in 10 years’ time, the centre of activity in Puchong will shift from Bandar Kinrara to IOI Vivo City,” said Ho, advising investors to study the LRT lines very carefully to see where the potential lies.

Another interesting infrastructure development is the BRT Sunway line, which will link areas in Sunway and Subang Jaya with seven halts. One of the key beneficiaries will be Sunway South Quay, said Ho. Sunway South Quay is an integrated township with a 28-acre lake in Sunway Resort City. The BRT is a transit system that uses a separate bus ways with feeder services, rapid boarding, high service frequency and pedestrian access.

When asked by a member of the audience about investment opportunities in the north of the Klang Valley, Ho said it’s better to focus on the south of the Klang Valley. “If you want to look at properties in the north, a lot depends on the developers’ brand and what they want to do. The upside is that you can get cheaper properties in the north,” offered Ho.

To another question about the type of properties and location to buy in Pekan Ampang, Ho quipped, “You can buy my house. Sure make money.” Turning serious, Ho went on, “As a whole, the investment opportunities in Ampang will depend on the exact location of the MRT circle line stations, which will be announced very soon.”

However, he cautioned investors not to rush into buying properties based on the initial alignment of the circle line. “I remember after the announcement of the SBK line alignment and stations, the alignment was changed and some of the stations were taken out after receiving public feedback. You have to be very careful,” advised Ho. “All these areas that I have mentioned are below the radar. But as the infrastructure construction progresses and as construction starts in some areas, the value of the properties will escalate.”


This story first appeared in The Edge weekly edition of May 20-26, 2013.