KUALA LUMPUR (July 20): The prices for high-end condominiums here rose 4.4% to RM784 per sq ft in the second quarter of 2018 (2Q18), while the completion of two residential developments during the quarter has added a "substantial" supply of 1,168 condominium units into the market, said Nawawi Tie Leung Property Consultants Sdn Bhd (NTL).
“The two developments are The Fennel in Sentul East (916 units) and Dorsett Residences in Bukit Bintang (252 units),” NTL said in its latest “Kuala Lumpur 2Q18” property report, which was released today.
Going into the second half of 2018 (2H18), NTL said some 5,260 high-end residential units are expected to be completed, of which 40% will be in the city centre.
Following Pakatan Harapan’s victory at the 14th general election on May 9, NTL said the Kuala Lumpur property mart will be facing a short-term pain for a long-term gain.
At the same time, NTL has also praised the new government’s effort to build at least one million affordable homes and introduce a special housing loan scheme, which will encourage youths to buy their first home.
“These initiatives will likely increase the number of transactions and encourage more affordable housing projects by both public and private sectors,” the property consultant added.
As for the office market, NTL observed that there were no additional supply within the segment in 2Q18, as the bulk of new office completions were slated to come in 2H18.
“The office market in KL is expected to remain challenging in 2H18 as there are currently no major catalysts to boost demand in the short-term to meet the new supply of close to four million sq ft in net lettable area of office space by end-2018,” it added.
NTL said the average month rental rate for office space in 2Q18 remained steady at RM5.98 per sq ft, while the average occupancy rate continued to be at 80%.
"(There was) no major upside in demand as businesses continue to be cautious with emerging external risks such as the (US-China) trade war," it said.
Still, NTL said that the opening of Alibaba’s first regional office in Bangsar South could help to jumpstart the country’s emerging e-commerce sector.
Alibaba, the China-based internet services giant and owner of Hong Kong's South China Morning Post newspaper, is pouring over US$100 billion investment to establish an e-commerce hub in the country, which will be a brick-and-mortar warehouse backed by artificial intelligence technology.
While the Pakatan Harapan government’s policy uncertainties are likely to hold investors in the short-term, NTL said confidence in the new administration will further boost the country’s economic growth and attract foreign direct investments which are likely to produce a positive outlook in the medium term.
“Businesses are generally adopting a wait-and-see attitude on the back of policy uncertainties,” the property consultant firm added.
Meanwhile, NTL said the opening of Shoppes at the Four Season Place in May had pushed up the retail space in the city centre to 31.1 million sq ft.
The 65-storey tower include a hotel, residential units and a retail podium, that is mainly occupied by department store Robinsons.
Built at a gross development value of around RM3 billion, Four Seasons Place is backed by Venus Assets Sdn Bhd, a company linked to hospitality mogul Tan Sri Syed Yusof Syed Nasir and Selangor ruler Sultan Sharafuddin Idris Shah.
On the investment side, NTL said the market witnessed six major deals, which are worth a total of RM709.4 million and involving eight property assets.
Some of the assets involved in the investment transaction deals are Thistle Hotels in Johor Bahru and Port Dickson, Impiana Hotels in Kuala Lumpur City Centre and Ipoh and Wisma UOA Pantai.
“Hotel property is the theme for the review period, as some hotels changed ownerships,” it said.
Going forward, NTL said the current oversupply in the property market remains a reality that will need more time to consolidate.
“Hopefully the new economic policies and greater transparency will generate new user demand and this can only augur well going forward,” it said, adding that “like the voters, the market is looking at better days ahead”, it said.