Catching up with fashionable 'sibling'
Conventional wisdom says "location, location, location" is key to success in property purchases and investment. Sometimes, however, having the right name may be just as important as the location. In the case of Mont'Kiara and Segambut Dalam, two residential enclaves separated by a highway, the difference couldn't be more distinct.
Just south of the intersecting Jalan Duta-Sungai Buloh Expressway, trendy Mont'Kiara has become one of the Klang Valley's property hotspots, a junior version of Bangsar. Just five minutes' drive away from Mont'Kiara's northern border, Segambut Dalam has been likened to a poorer stepsister of Mont'Kiara. Plagued by a chronic image problem fuelled by haphazard development, squatter settlements, traffic congestion and inadequate infrastructure, Segambut Dalam seems to be relegated to playing second fiddle to its fashionable "sibling" to the south.
Despite being handicapped by all these factors, Segambut Dalam may yet be able to leverage its proximity to some of the Klang Valley's most prestigious addresses to move up the property value chain. Astute developers have already discovered that an effective strategy for success in the Segambut area is to rename their developments and distance themselves from the Segambut name. This has been done with relative success for upmarket developments such as Dutamas and Bukit Prima Pelangi.
Ironically, even Mont'Kiara was once part of Segambut. In the early 1990s, property doyen Datuk Alan Tong Kok Mau acquired 12 parcels of land totalling 100 acres in the Segambut Rubber Estate. In a shrewd and pivotal move, Tong renamed that portion of the old rubber plantation, which was then full of undergrowth and with poor access, as Mont'Kiara. The rest, as they say, is history.
Tale of two townships
Mont'Kiara was targeted for upper market development from the beginning as it is nearer to high-end areas such as Desa Sri Hartamas, Bangsar and Damansara Heights, says Metrohomes Sdn Bhd director See Kok Leong. Like Bangsar, Mont'Kiara has become a magnet to expatriates of various nationalities and is especially popular with the Japanese and Koreans.
"Mont'Kiara was planned and designed in such a way that developers like DutaLand, Sunrise and Kiaramas could plan better developments and provide better infrastructure. On the other hand, the developments in Segambut Dalam are not as well planned. Most of the land is agriculture land inherited from the previous generation. It is also difficult to remove squatters from the area," See tells City & Country.
Henry Butcher Malaysia Sdn Bhd COO Tang Chee Meng says the population in Mont'Kiara is made up of upper and middle-income classes as well as expatriates, while Segambut Dalam has a mixed population.
Property consultants point out there will still be a price gap between properties in Segambut Dalam and Mont'Kiara. "Condominiums in Segambut Dalam fetch between RM250 and RM300 psf, while condominiums in Mont'Kiara can easily go for at least RM400 psf. Newly launched condominiums in Mont'Kiara can even see prices surge to between RM800 and RM1,000 psf," says Tang.
Official information from Kuala Lumpur City Hall (DBKL) shows that the border between Mont'Kiara and Segambut Dalam is the Jalan Duta-Sungai Buloh Expressway. The size of the area bearing the name of Segambut Dalam has gradually been whittled down over the years due to the renaming of certain areas.
The most prominent example is perhaps Dutamas, located to the east of Segambut Dalam, which still carries the same postcode as the latter. Among the developments in Dutamas are Prima Duta, Changkat View, Sutramas Condominium and Duta Ria Condominium.
Property prices compiled by Metrohomes (see table) show that those in Dutamas have been on a roller-coaster ride — going up and down. See says the fluctuating property prices are due to weaker demand in Dutamas than in Mont'Kiara. "There is no benchmark price for properties in Segambut Dalam. When the demand is high, the property prices go up and when the demand is weak, they go down," he says, adding that property auctions that are more frequent in Segambut than Mont'Kiara have also contributed to the lower prices.
Rebranding potential So, can we expect to see more areas in Segambut Dalam renamed just like in the case of Mont'Kiara and Dutamas? Yes, definitely, says Henry Butcher's Tang.
"Developers don't want to name their developments after Segambut. They will name their developments to position them as prestigious projects. Bukit Prima Pelangi is one of the examples. It is situated within the vicinity of Kampung Segambut Dalam, but it does not carry the name 'Segambut'," says Tang.
The freehold 70-acre Bukit Prima Pelangi is a RM600 million development project by Harmony Property Sdn Bhd. The first phase of Bukit Prima Pelangi's 2-storey terraces, superlinks, medium-cost apartments and condominiums was launched in 2002.
Ho Chin Soon, the founder of Ho Chin Soon Research Sdn Bhd, tells City & Country that some developers use the name "Kiara" for their developments to fetch better selling prices, such as Changkat Kiara in Dutamas, Segambut.
Consider two of the developments along Jalan Kiara 3 in Mont'Kiara — Impian Villas and Kiara 3.
Impian Villas is a gated compound of twenty-six 3-storey terraced houses with a built-up of 3,481 sq ft for intermediate units and 4,500 sq ft for corner units. At press time, some 16 of the 26 units had been sold since Impian Villas was launched last October. The houses are priced between RM926,000 and RM1.53 million each, or RM266 and RM340 psf.
Kiara 3 is a 24-storey condominium block with 160 units sized between 1,515 and 2,574 sq ft. A foreign property acquisition website shows that each unit is priced between RM749,616 to RM2.09 million, or RM495 to RM812 psf. Built on a 1.8-acre freehold site, the condominium has a gross development value (GDV) of RM120 million. This means that the selling price per sq ft of Impian Villas is only half that of Kiara 3, which is just one plot away.
Besides the location and the name, accessibility also plays a key role in determining property values. VPC Alliance (KL) Sdn Bhd managing director James Wong says that squatters are not the only factor contributing to the weaker demand and lower prices in Segambut Dalam.
"Poor accessibility is also a major issue. Winding and twisting roads form the existing network. With the houses built close to the roads, it is difficult to plan a more efficient road system within the locality," says Wong.
Metrohomes' See points out that access from Duta Tropika and Menara Matrade into Segambut Dalam has been improved. He says the surrounding squatter homes may have to make way for infrastructure developments such as access roads before property values in Segambut Dalam can go up.
"The agriculture land in Segambut Dalam was sold from around RM130 to RM150 psf in 2007. We believe more land will be used for development in the near future," adds See.
City & Country explored the only road into Segambut Dalam from Mont'Kiara — Jalan Kiara 3 — and the adjacent Jalan Segambut, and came across a mix of completed and ongoing developments of high-end condominiums, luxury apartments, villas and terraced houses, while proposed developments are expected on some plots.
The Garden International School, and niche developments such as Ceriaan Kiara by YNH Property Bhd, One Kiara by Monday Off Development Sdn Bhd, Kiara 1888 by Prisma Melody Sdn Bhd and Kiara 9 by Mitrajaya Holdings Bhd are currently under construction. These projects are expected to provide a total of 564 condominium units, 52 villas, 226 luxury apartments as well as sixteen 2½-storey terraced houses.
The first of the two blocks of the three-acre Ceriaan Kiara, which has a GDV of some RM200 million, was launched in April 2007 at RM350 psf onwards despite the primary condo market being priced then at an average of RM500 psf.
The second block, underwritten by CIMB-Mapletree (a joint venture between CIMB Real Estate Sdn Bhd, a wholly-owned subsidiary of the CIMB Group and Mapletree Capital Management Ltd), was put on the market in January 2008 at RM440 psf and above.
Opposite Ceriaan Kiara is One Kiara, a two-tower condominium project on a 3.25-acre freehold land in Mont'Kiara with a GDV of RM550 million. The built-up for the condo units is from 2,174 to 3,907 sq ft, while it is 5,059 sq ft for the two duplex units and 6,329 to 7,115 sq ft for the four penthouses.
Kiara 1888 was launched in February 2006 at RM480 psf. It has a total of 132 condo units and 52 villas, with built-up ranging from 1,238 to 3,983 sq ft and a GDV of RM140 million. The project has been completed and is waiting for its certificate of fitness (CF).
Meanwhile, Kiara 9 is a project comprising 16 units of 2½-storey terraced houses of 2,694 sq ft and 194 condo units that are 1,661 to 2,201 sq ft in size. The project, which has a GDV of about RM230 million, was launched in March last year at RM700 psf onwards. Some 50% of the units were sold before any official launch, and the project is due for completion by end-2010. Driving further up the narrow and winding Jalan Kiara 3, City & Country saw two developments in the midst of the squatter settlements — Kiara 3 and Impian Villas.
In contrast to the hectic development on the Mont'Kiara side, just a few minutes' drive along the same road crossing under the Jalan Duta-Sungai Buloh Expressway revealed a dearth of property developments on the Segambut Dalam side.
Pembinaan Purcon (M) Sdn Bhd appears to be the only developer with its maiden high-end project, Laman [email protected]'Kiara, along Jalan Segambut. The company is developing sixteen 3-storey semidees and two 3-storey bungalows there.
VPC's Wong says the expansion of the Mont'Kiara residential enclave northwards to Segambut Dalam has been effectively arrested by the elevated highway and availability of land in Mont'Kiara that will keep major developers busy over the next decade.
"As undeveloped vacant land is still available to the northeast of the existing Mont'Kiara enclave and south of the road buffer zone, this will naturally encourage development in that direction rather than northwards into Segambut Dalam," says Wong.
For example, Wong believes that the DutaLand project in Sri Hartamas (Kenny Heights) to the east of Mont'Kiara will reinforce the attractiveness of Mont'Kiara compared to Segambut Dalam.
Segmented into nine land parcels with a total of 88 acres, Kenny Heights will be developed over the next 10 to 15 years. The project by KH Land Sdn Bhd, a subsidiary of DutaLand Bhd, has a GDV of RM2 billion.
The land will be developed as commercial real estate, including offices, hotels, retail, food and beverage, entertainment establishments as well as high-end residential property. It will also offer facilities catering to medical and educational tourism.
"In view of the many other more attractive options available, Segambut Dalam is likely to remain a 'shanty town' in the shadows of these competing developments unless the government allocates funds to substantially upgrade the infrastructure in this area," says Wong bluntly.
"Mont'Kiara will still remain the choice of investors and expatriates due to the established presence of international schools, shopping malls and active night scene," adds Wong. He expects Segambut Dalam to lag behind Mont'Kiara and Dutamas due to the various ongoing developments in the two areas. He anticipates the land parcels in Mont'Kiara to be fully developed over the next 8 to 10 years, and only then will major developments move north towards Segambut.
Henry Butcher's Tang is optimistic that Segambut Dalam could soon become a more upmarket development with the squatters expected to be relocated to allow for more development projects, particularly as Mont'Kiara is seeing less land available for development.
"It is just a matter of time," says Tang. For Segambut Dalam, time may be its biggest enemy as the vision of the area becoming a Mont'Kiara or a Sri Hartamas may take a long while to come to fruition.