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KUALA LUMPUR: Investors should aim to sell their shop office investments about three years after the handover from developer to maximise their earnings, Reapfield Properties Sdn Bhd senior vice-president Gerard Kho said.
Speaking at The Edge Investment Forum on Real Estate 2011 titled "Buy, sell or hold?", he noted that the three-year maturity rule is based on a research done by Reapfield Properties on previous transactions.
"Based on our research, shop offices generally appreciate 56% from the developer's price upon the handover. A year later, it goes up 67%, and 105% on the second year," he added.
Rental yield for shop offices, however, in general stand at 7% in the first year and subsequently drop to 5.3% a year later.
Kho noted that in the Klang Valley, Seri Kembangan/Taman Equine, Solaris Dutamas/Mont'Kiara, Bistari de Kota/Kota Damansara, Kota Kemuning as well as Puchong are among the five areas to consider when investing in shops.
"Investors must also think of the businesses that are doing well when they invest in shop offices in a certain area. The shops they are buying should be fronting massive activities and population, while watching the fundamentals like yield and businesses," he said.
He added that big magnets like hypermarkets and public transportations are also factors to look into when investing in shops.
The forum was organised for The Edge readers and presented by UOB Malaysia with the support of S P Setia Bhd.
For the full coverage of The Edge Investment Forum on Real Estate 2011, read the April 18 issue of City & Country, the property pullout of The Edge Malaysia.
