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KUALA LUMPUR (June 1): Despite the growth of Shah Alam, the capital city of Selangor is still undersupplied in terms of real estate products.
There is a lack of commercial and retail lifestyle products in Shah Alam, according to property experts at a recent forum. They foresee good potential for such products in the future.
The property forum on Investment Opportunities in Shah Alam on Thursday was organised by Sime Darby Sunrise Development Sdn Bhd, a joint venture company between Sime Darby Property Bhd and Sunrise Bhd, a wholly-owned subsidiary of UEM Land Holdings Bhd
"Shah Alam is at its tipping point, particularly commercial investments," said Previndran Singhe, group CEO and founder of Zerin Properties. He noted there is a perception of a low income demographic in Shah Alam.
Restrictions imposed by the state government on entertainment and commercial activities to a certain extent have created some negative perception. "However, all this is dramatically changing with the improving accessibility. You see new developments that are reflective of the changing income level and choice in real estate.
"And entertainment is not what it used to be. As the younger generation comes up, the trend is shifting towards active, lifestyle-based developments," said Previndran.
Jones Lang Wootton executive director Malathi Thevendran concurred, citing statistics that showed the average gross monthly household income in Selangor has exceeded the Federal Territory of Kuala Lumpur.
In fact, the average gross monthly household income in Selangor, which stands at RM5,962 in 2009 is above the Malaysian average of RM4,025, according to data from the Economic Planning Unit and Department of Statistics.
"As infrastructure improves, it opens more parts of Shah Alam for development. Shah Alam has seen good growth in terms of product launches over the past few years," said Malathi.
What are lacking, added Malathi, are commercial activities. She put the retail space supply of the Klang Valley at 47.5 million sq ft of which, Shah Alam makes up about 1.4 million sq ft.
"That's only 3% of the Klang Valley stock. There is tremendous potential and opportunities for malls and a commercial hub in Shah Alam. It's timely for developers to look at this," said Malathi.
Creating a focal point for activities is a crucial factor for an area's growth, said another panellist Ho Chin Soon, director of Ho Chin Soon Research. He feels that a mall, for instance, need not capture only the neighborhood catchment but the surrounding areas as well, citing for example 1Utama.
Real Estate and Housing Developers' Association Malaysia (Rehda) president Datuk Seri Michael Yam, who moderated the forum, believes Shah Alam offers good potential in both residential and commercial investments.
Speaking from his personal experience, Yam said he bought a landed house there for RM1.3 million and sold it for RM2.3 million two years after its completion. He also bought two apartments for about RM400 psf and sold it at RM680 psf within the same time frame.
There are, however, issues that need to be tackled, said Yam. At the moment, Shah Alam does not seem attractive to younger people.
"For a city to thrive, we need the young to come and live. And that is the question now — how do you get them to come and live in a so-called no sin, no drinks city?" questioned Yam.
He also felt that the 30% bumiputera housing quota could hinder capital appreciation in the long run. "You need a bit of a free market for property values to grow on the secondary market," he added.
This story appeared in The Edge Financial Daily on June 1, 2012.
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