LOCATED within Kuala Lumpur’s Golden Triangle, the residential enclave of Bukit Ceylon, or Ceylon Hill, sits on hilly terrain and is surrounded by lush greenery.
It is close to the central business district and the Bukit Bintang entertainment and shopping district, and has easy access to major highways and public transport stations, including the upcoming mass rapid transit (MRT) station in Bukit Bintang.
Bukit Ceylon covers about 50 acres and is bordered by Jalan Raja Chulan, Persiaran Raja Chulan, Jalan Ceylon and Lorong Ceylon.
Due to the scarcity of land in the city, Bukit Ceylon’s strategic location has attracted a number of developers, resulting in a significant increase in the number of residential high-rises in the neighbourhood. These projects are mostly targeted at travellers and expatriates.
According to VPC Alliance (M) Sdn Bhd managing director James Wong, many of the newer buildings were completed between 2012 and 2014. “There were 1,168 condos in Bukit Ceylon in 2012. By 2014, the figure had risen to 2,225.”
High-rise developments completed in the last two years in Bukit Ceylon are Laman Ceylon (by Eminent Ace Sdn Bhd), Sixceylon (by Midah Istimewa Sdn Bhd, a subsidiary of Symphony Life Bhd), Suasana Bukit Ceylon (by Exquisite Skyline Sdn Bhd, a subsidiary of United Malayan Land Bhd) and Verticas Residensi (by WingTai Asia) (see Table 1).
One of the earliest condominiums in the neighbourhood is Sixceylon, a redevelopment of Bolton Court (built in the late 1970s), which has 215 units in the 33-storey block.
The 27-storey Laman Ceylon has 230 serviced residences while the 34-storey Suasana Bukit Ceylon has 310 serviced apartments. Over at Verticas Residensi, three 43-storey towers offer 423 units.
C H Williams Talhar & Wong Sdn Bhd managing director Foo Gee Jen says the supply of luxury high-rise residential units in KL city centre has doubled since 2010, with the bulk being serviced residences.
Because of this, he expects the property market in Bukit Ceylon to remain flat for both the short and long term. “As at end-2014, the average occupancy rate remained stable. However, the completion of several developments in the coming years is expected to put more pressure on existing condominiums, resulting in a drop in the average occupancy rate and a more competitive rental market.”
Echoing Foo’s observation, Wong says while residential property prices are expected to remain stable in the short term, the large increase in the number of high-rise units has resulted in a slight oversupply in Bukit Ceylon, putting downward pressure on the occupancy rate and rents.
Zerin Properties CEO Previndran Singhe says the property market in the area is expected to be slightly challenging in the shorter term. “The oversupply is making it a tenant’s market with more opportunities for negotiation.”
A promising location
While the current situation may be rather challenging in Bukit Ceylon, Previndran adds that its long-term outlook is anticipated to be robust. “The supply from new developments will gradually taper off due to limited future supply, coupled with the potential arising from scarcity of land.”
Wong, too, opines that property prices and supply in Bukit Ceylon will eventually reach an equilibrium because of the limited vacant land in the city.
He notes that according to the KL City Plan 2020, which has yet to be gazetted, many parcels in Bukit Ceylon will be rezoned from “residential” and “open space” to “commercial”, and the permitted plot ratio will be increased from the current minimum of 5 to 7.
“Vacant land and residential property prices are expected to continue to rise due to the scarcity of land in KL and the KL City Hall’s (DBKL) incentive to raise the plot ratio as well as the rezoning of the parcels,” he says.
He adds that the upcoming increase in the plot ratio has attracted developers looking for land to develop, and many landowners are planning or have started developing their idle parcels.
He also notes that six adjoining parcels in Jalan Changkat Raja Chulan and Jalan Bukit Ceylon, owned by Crystal Nectar Sdn Bhd, have been approved for the development of a 37-storey serviced apartment block and a 3-storey retail podium with a plot ratio of 11.
According to Previndran, developers are attracted to the area mainly because of its reputation as a prime residential enclave, its strategic location and future potential.
He says apart from being able to enjoy good views of the city skyline, potential homebuyers are attracted to the green and serene surroundings (more than what is available in KLCC) within the Golden Triangle.
Located a stone’s throw from the central business district, Bukit Ceylon’s easy access is also a plus.
Previndran opines that the upcoming Bukit Bintang MRT station will add significant value to the property market in the area, especially the residential segment.
Amenities in the vicinity include F&B outlets, shopping malls, entertainment centres, medical centres and schools as well as the Bukit Nanas Forest Reserve.
Ongoing developments in Bukit Ceylon are Vida Bukit Ceylon by Spritzer Resources Sdn Bhd and The Manhattan Residen 61 by United Engineers Ltd, which are scheduled to be completed in 2016.
Vida Bukit Ceylon comprises 71 serviced apartments and Manhattan Residen 61, located in Jalan Raja Chulan, will have 129 units, to be managed by the developer’s hospitality brand, Park Avenue.
Developers with future projects in the area are TA Global Bhd and Pavilion Group.
A predominant rental market
While landed homes in Bukit Ceylon are mostly owner-occupied, many of the condominiums and serviced residences are leased out, mostly to expatriates.
“Developments in Bukit Ceylon serve the purpose of rental investment and are mostly serviced residences,” says Foo.
According to Previndran, the residential rental market there is robust but less active than that in the KLCC area. He says the average rent in Bukit Ceylon is RM3.50 to RM4 psf, with an average yield of 3.5% to 4.5%.
Wong says the average rent of newly completed condos in the area is RM4.20 psf while that of older condos dropped 3% to RM2.64 psf last year.
As for luxury condos and serviced residences, Foo says their average asking rent as at 3Q2014 was between RM4.40 and RM4.50 psf and their average asking price was between RM1,000 and RM1,200 psf. “Those who have invested in Bukit Ceylon are likely to look at the rental return, targeting the tourist market. For instance, developments such as Verticas Residensi and [email protected] Ceylon (by UOA Group) offer a 6% guaranteed rental return, an indication of a good rental market,” says Foo.
According to theedgeproperty.com, the average asking monthly rent for Verticas Residensi is RM8,230, or RM4.83 psf, while that for Seri Bukit Ceylon is RM4,311, or RM4.14 psf. However, the average asking rent in Bukit Ceylon can be as low as RM2.39 psf (City Gardens Condominium).
There are many serviced apartments managed by hoteliers — Invito Hotel Suites by UOA Group, Seri Bukit Ceylon (formerly known as Somerset Seri Bukit Ceylon) by A Best, Lanson Place by Lanson Group (a member of WingTai Asia), The Maple Suite by MapleLee Property Sdn Bhd and Parkroyal Serviced Suites to name a few.
According to Foo, Invito Hotel Suites is part of [email protected] Ceylon and UOA Group has reserved 126 units for hotel use. He says Seri Bukit Ceylon also has the same arrangement.
The daily room rate in Bukit Ceylon is between RM250 and RM420 and the occupancy rate is good, at 60% to 70%, he adds.
According to Previndran, the sizes of Lanson Place’s serviced apartments are 915 to 2,056 sq ft; The Maple Suite, 1,184 to 3,445 sq ft; and Seri Bukit Ceylon, 584 to 1,260 sq ft.
Increased activity in secondary residential market
On the secondary residential market, Wong says there was a slight increase in transaction value and volume in the first nine months of last year due to the completion of several projects such as Verticas Residensi, Laman Ceylon, Sixceylon and Suasana Bukit Ceylon.
Comparing transacted prices of condos in 2009 and 2014, he notes that they have increased 34.1% to 76.22% over the last five years and he believes that buyers and investors continue to see opportunities in the secondary market given the rising prices in the primary market (see Table 2).
He also notes that the primary residential market showed a slow take-up rate, based on the launch of Vida Bukit Ceylon and The Manhattan Residen 61 since November 2012. As at end-2014, only 70% of Vida Bukit Ceylon and 60% of The Manhattan Residen 61 have been sold, he says.
“The slow take-up rate for the two developments is mainly due to their large built-ups, as much as 5,607 sq ft [at Vida Bukit Ceylon], which are not in high demand, and high selling prices of RM2,041 psf upwards for a unit [at The Manhattan] with a built-up of 588 sq ft,” he says, adding that The Manhattan has been priced above the market average.
According to Foo, overall prices of condos and serviced apartments have not fluctuated much. He says developments launched in 2010 were priced between RM800 and RM950 psf while those launched two years later were sold for RM1,000 psf, up 5% to 10%.
Previndran says prices have increased 20% to 30% over the past five years. “The residential market is flat except for the newly completed Laman Ceylon, which is seeing a good take-up rate.”
Grade B offices
Apart from hotels, serviced apartments, shopoffices and houses converted to offices, there are several office buildings in Bukit Ceylon — Menara AIMS, MCB Plaza, Menara PMI, Menara Boustead, Bangunan KWSP, Wisma Goldhill, Plaza See Hoy Chan and Bangunan AmBank Group. Foo says many of them can be considered Grade B office buildings.
The office buildings have a mixture of tenants, mainly subsidiaries of the building owners, insurance companies, financial institutions, legal and accountancy firms, and small and medium enterprises. He says the average asking rent for office space is between RM3.50 and RM4.50 psf.
The latest transaction recorded in Bukit Ceylon was in 2Q2013 — the 15-storey Menara PMI, sitting on 2,459 sq ft of freehold land with a net lettable area of 104,011 sq ft, which was sold for RM60 million (RM577 psf) to Admiral Gateway Sdn Bhd. Previndran says there is a possibility that the new owner will redevelop the building.
Wong hopes that the old office buildings will be refurbished to provide Grade A office space.
Land and traffic matters
Bukit Ceylon consists primarily of freehold land, and Wong says most of the vacant parcels are located on the west side of the hill. He adds that there are still 11.8 acres of such land in the area.
“As the parcels are relatively small, future developments would most probably be high-rise condominiums,” he says.
According to Previndran, there are about 20 available parcels of development land of 20,000 to 40,000 sq ft each, priced at RM1,300 to RM2,000 psf.
Foo says the undeveloped plots are located along the slope of Jalan Ceylon and adjacent to as well as opposite Lanson Place. (See Table 3 for recent land transactions in Bukit Ceylon).
Jalan Raja Chulan is the busiest road in the vicinity, followed by Jalan Changkat Bukit Bintang. However, Wong notes that the Jalan Bukit Ceylon, Persiaran Raja Chulan and Jalan Ceylon areas are relatively quiet due to lack of development.
Cars parked along narrow roads are a common sight in the neighbourhood, and Foo believes that a covered pedestrian walkway linking to Bukit Bintang will liven up the area.
Previndran says the area can be a bit congested during peak hours and when it is raining. He believes that the neighbourhood has room for improvement in terms of traffic flow, landscaping, walkability and security.
This article first appeared in City & Country, The Edge Malaysia Weekly, on July 20 - 26, 2015.