PETALING JAYA: The industrial appearance of Section 13 in Petaling Jaya, Selangor may give way to commercial properties if a proposed Special Area Plan (Rancangan Kawasan Khas or RKK) for the area is gazetted.
It goes without saying, that the conversion of land status from industrial to mixed use or limited commercial will benefit various parties, especially landowners who wish to develop their properties.
"Section 13 is generally seen as too valuable an area to remain industrial due to the scarcity of good commercial land in this prime part of the city," says Jerome Hong, managing director of PA International Property Consultants (KL).
"Hence the proposed conversion presents ideal development opportunities to landowners."
Having the status of the land converted may also enable the area to seek MSC (Multimedia Super Corridor) status. This will attract multi-nationals to the area thus making Section 13 a vibrant commercial hub.
"By awarding the area MSC status we will leverage on the strengths of the city with its large pool of colleges and universities, strong middle class, large pool of knowledge workers, high per capita consumption and excellent connectivity," says Stewart LaBrooy, CEO/Executive Director of Axis REIT Managers which manages several properties in Section 13.
Depending on the land use, the RKK stipulates conditions governing plot ratios, maximum built-up, height limit restrictions and commercial activities, along with other suggestions.
A public hearing was held in February 2009 was held for interested parties to give their feedback on what was proposed in the plan. The Petaling Jaya City Council (MBPJ) is currently deliberating on the feedback.
Owners and developers will most likely see higher returns for their investment upon conversion.
James Tan, associate director of Raine & Horne International Zaki + Partners believes rentals of RM3 to 3.50 psf for office space and RM5 to RM6 psf for retail can be obtained with land values going for RM270 to RM300 psf upon conversion.
On the other hand landowners are reminded of the initial conversion and redevelopment costs as they are required to pay a premium for converting their land status from industrial to mixed used or limited commercial.
Additional costs may be incurred in extending the lease back to 99 years, as most properties here are leasehold with 60-odd years left. Furthermore, the premises will also need rebuilding or refurbishing for commercial use.
Read the full report in the July 6, 2009 issue of City & Country, the property pullout of The Edge Malaysia.
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