Quiet 1Q in the Klang Valley

KUALA LUMPUR: The Klang Valley property market has been quiet in the first quarter of 2011 (1Q11). Though it has picked up, property consultancy PPC International Sdn Bhd does not expect the market to be vibrant in the coming months.

According to PPC, school and festive holidays in January and February — the New Year, Thaipusam and Chinese New Year — contributed to the slowdown which began at the tail end of 2010.

“However, there have been sporadic new launches of development schemes, residential deals, and retail and commercial transactions,” said PPC managing director Siders Sittampalam.

He added that 2Q would see some improvement over 1Q as there are more transactions of commercial and residential properties this month.

“We do not anticipate a very vibrant market in the following months given the current rise in prices of fuel and essential items and local and international events — such as the impending general election in Malaysia and natural disasters like the earthquake and tsunami in Japan, which may dampen the global economy.

“As the property market works within the framework of the economy, it is bound to be affected,” Siders said.

Other factors such as the reduction of the loan-to-value ratio to 70% for third-house buyers and the probability of further rises in interest rates could have an impact on the property market.

In its market review for 1Q11, Siders said the residential segment saw some new property launches in Shah Alam, Puchong, Damansara and Kajang with selling prices ranging from RM260,000 to RM5.4 million.

For landed properties, low-density developments were more popular with terraced and semi-detached houses in preferred locations within the Kuala Lumpur city fringes.

“Kajang, Puchong, Klang, Cheras and Sungai Buloh have been the popular locations for new launches,” the report said.

PPC said stratified properties such as condominiums and apartments are well sought after in the secondary market in locations within the Klang Valley as evidenced by the volume of transactions in late 2010.

“House buyers look for unique features and proximity to the city centre with good accessibility via highways,” said Siders.

The report noted that in 1Q, there were not many new launches of high-end residential properties, which could imply that demand for this segment had stabilised.

In the commercial/office sector, the report said that last year there were several new Grade A offices within KL City and its fringes, including Petaling Jaya. They are Hampshire Place, Menara Worldwide and HSBC’s new headquarters which add to the existing 59 million sq ft of office space.

“The asking rents ranged between RM5.50 and RM7.50 psf a month with the occupancy rate from 55% to 70%,” it added.

There are new office buildings due for completion from April 2011 to 2013 within Petaling Jaya, indicating an increasing supply of premises with better facilities. These include Plaza 33 in Section 13 that will have a net lettable area (NLA) of 500,000 sq ft and Point 92 in Damansara Perdana with 158,112 sq ft. Both are scheduled for completion next year.

In the retail sector, there is a rising trend of neighbourhood malls. These medium-sized shopping complexes have emerged largely to cater to residents who prefer to shop close to their homes to avoid traffic congestion and have more time for family-oriented activities.     

Last year, there were new entries of medium-sized malls such as One Mont’Kiara, Empire Shopping Gallery (Subang) and SS Two Mall. Some new shopping malls to be launched this year and in early 2012 are Citta Mall, Ara Damansara and the Festive Mall in Danau Kota, Setapak.

This article appeared on the Property page, The Edge Financial Daily, April 15, 2011.