KUALA LUMPUR: Property is one of the main focuses of the recently-launched Economic Transformation Programme (ETP) roadmap, as the development of industrial, commercial, residential and even tourism centres are expected to help kickstart the transformation of Malaysia into a high-income economy.
The thrust on property is also crucial given the government’s vision to transform the Greater Kuala Lumpur/Klang Valley area into one of the world’s top 20 cities in terms of economic growth as well as livability.
Property projects form part of the 131 entry-point projects (EPP), and 53 EPPs, with a total investment of US$97 billion (RM301.6 billion), are already in various active stages of investment.
Some of the projects announced include the relocation and setting up of five wafer fabrication plants by German firm LFoundry in Kulim Hi-Tech Park, Kedah, over the next five years with the initial investment of RM214 million and total estimated investment at RM1.9 billion.
Another notable project is what is touted as the first six-star hotel in Kuala Lumpur — the St Regis Kuala Lumpur, which involves a RM1.2 billion investment. Offering 208 hotel rooms and 160 serviced apartments in KL Sentral, the building will be managed by six-star luxury hospitality brand St Regis.
The all-suite hotel will be built on a 2.2-acre freehold site in the 72-acre KL Sentral, one of the largest commercial developments in Kuala Lumpur.
St Regis Kuala Lumpur will have a total development area of 1.4 million sq ft and will be developed by One IFC Sdn Bhd, a joint venture between CMY Capital and Malaysian Resources Corp Bhd (MRCB). CMY Capital is wholly owned by prominent businessman Tan Sri Chua Ma Yu, while MRCB is the master developer of KL Sentral.
ONE IFC Sdn Bhd CEO Carmen Chua believes that the development’s proximity to the KL Sentral transportation hub will contribute to its success.
She expects the hotel to attract a historically untapped market of high-income tourists as the St Regis brand caters to heads of states, diplomats, dignitaries and captains of industry.
“St Regis Kuala Lumpur will create a new benchmark in the hospitality industry and service sector and it will be a new landmark in the country’s international tourism promotion.
“It will have 200,000 sq ft of convention facilities and we will be one of the hotels with rooms that are among the largest in the world. Construction will begin next month and it is scheduled for completion and opening in November 2014. We are now at the final stage of getting the approval,” she told The Edge Financial Daily.
However, she declined to reveal the exact room size, alongside details such as the cost per room and the number of floors. A management and operations agreement for the project with Starwood, the owner and operator of the St Regis brand, was signed in June 2008.
While the selling price of the serviced-apartment component has yet to be determined, Chua said the price tag “will be comparable to” its recently-completed residential development One KL. This project is located opposite the Petronas Twin Towers.
The serviced apartment component is scheduled for launch in 2Q2011. Located atop the hotel component, it will be managed and operated by St Regis.
The St Regis brand, which was established over 100 years ago, is the high-end brand under the Starwood portfolio. Starwood also owns and operates The Luxury Collection, W, Westin, LeMeridien and Sheraton.
Chua noted the RM1.2 billion investment is entirely private sector-driven and it is one of the largest private sector initiatives under the ETP. With a positive contribution towards economic activities expected until 2014, the project’s economic activities and its multiplier effects will contribute towards achieving an average 6% GDP growth rate under the 10th Malaysia Plan.
The investment also represents 3% of the funding required for Tourism EPP 12 of “Improving rate, mix and quality of hotels”. Total funding required for the tourism sector under the ETP will be RM39.9 billion to construct the estimated incremental rooms required by 2020, with RM38.7 billion from the private sector.
“[It is] in line with the ETP to increase tourism and tourism spending by attracting a higher-yield segment as well as increasing per capita incomes of the large employment base in the tourism sector,” she said.
St Regis Kuala Lumpur is expected to create a total of 6,200 jobs in the design, construction and hospitality industries.
In line with the objective of promoting KL as a global/regional headquarters location and attracting 100 multinational companies, Starwood has set up an office in Kuala Lumpur as its Southeast Asia regional office.
The St Regis KL’s interior designers have also committed to set up their regional headquarters in KL to serve Asia.
Chua believes that these moves can help attract local and foreign talents, spur greater economic activity, as well as generate demand for additional high-value employment.
This article appeared in the Property page, The Edge Financial Daily, October 29, 2010.
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