As the population grows and urban migration increases, rapid expansion of cities and towns becomes unavoidable. Therefore, it is no surprise that townships are sprouting up farther from the Klang Valley. It was not that long ago that locations such as Sepang or Nilai were deemed to be too far away from the city centre.
Real estate consultancy firm ExaStrata Solutions Sdn Bhd CEO Adzman Shah Mohd Ariffin notes that the Greater KL Southern Corridor has been developing rapidly over the last few years. “In particular, Seremban 2 (by IJM Land), which has seen rapid population growth. Some 80% of the 3,800-acre township has reportedly been completed. The neighbouring 5,233-acre Bandar Sri Sendayan by Matrix Concepts Holding Bhd is also progressively developing into a self-contained township with good amenities, clubhouse facilities and recreation.
“The beautiful Sri Sendayan mosque, with its beautiful Middle Eastern-inspired design, is also a well-known landmark that attracts visitors from all over the country,” he says.
Another area that has benefited from good connectivity is Nilai in Negeri Sembilan, where Bandar Baru Nilai, famous for its Textile City and industrial developments, has provided employment, adds Adzman Shah. “Easy accessibility to Kuala Lumpur as well as Kuala Lumpur International Airport (KLIA) and klia2 has made Nilai a sought-after location. Another area in Nilai that has enjoyed growth is the 5,119-acre Bandar Enstek (by TH Properties Sdn Bhd).”
Situated in the same corridor is Sepang, which has generally enjoyed rapid growth due to its proximity to Putrajaya and KLIA, says Adzman Shah. “Cyberjaya is also located here and offers high-end residential, technology, education and research hubs. It is certainly positioned strategically, being close to Putrajaya and the two international airports.”
“Serenia City and Nilai Impian are some of the latest townships being developed in the corridor. They have stirred up interest as they are being developed by one of the largest and more established developers in Malaysia, Sime Darby Property Bhd (SDP),” he says.
According to JLL Malaysia country head Y Y Lau, Sepang, Bandar Enstek, Bandar Sri Sendayan and Seremban2 can generally be regarded as popular commuter or satellite towns in the Klang Valley. This can be partially attributed to their tranquil environment and affordability.
“Large developments such as Bandar Enstek, Bandar Sri Sendayan, Kota Seriemas (PNB Development Sdn Bhd) and Bandar Ainsdale (SDP) have steadily gained momentum over the last few years, especially in regard to industrial and residential development,” she says.
Henry Butcher Malaysia (Negeri Sembilan) director Siew Weng Hong notes that Bandar Sri Sendayan, Seremban 2 and Bandar Enstek by TH Properties Sdn Bhd are part of Seremban. “Seremban, one of the seven districts of Negeri Sembilan, covers about 13.9% of the state but its population accounts for 60% of the state. It is the most important area in Negeri Sembilan. These three townships are the new growth areas.”
CBRE | WTW group managing director Foo Gee Jen says Malays make up more than half of the population in these areas, followed by Chinese and Indians.
“The areas are dominated by the productive age group of 15 to 29-year olds, who are the main contributor to local consumption and to boosting purchasing power.
“Most of the population are nucleus families made up of young working professionals, including those from the aviation industry in Sepang, and a mix of manufacturing workers and civil servants from Bandar Enstek, Bandar Sri Sendayan and Seremban,” shares Foo.
According to Foo, organic drivers such as urbanisation and population growth have initiated development in the corridor.
“A significant portion of the population growth is accounted for by internal migration from neighbouring states and areas, predominantly Selangor, Kuala Lumpur and Putrajaya, on a quest for employment opportunities and better-value-for-money residential properties, in terms of space and quality,” he says.
Industry plays a big role in the growth of the corridor. Some of the industrial estates and parks are TechPark @ Enstek by TH Properties Sdn Bhd, Nilai Industrial Estate, Arab-Malaysian Industrial Park by Arnica Corp Sdn Bhd and, the latest, Sendayan TechValley by Matrix Concepts.
“In the last 10 years or so, big names have set up their factories in these areas,” says Siew.
Foreign companies operating there include Akashi Kikai Industry, Hino Motors Manufacturing, Daihatsu and Safran Landing Systems.
“The 1,100-acre Sendayan TechValley, which is directly linked to the North South Expressway, is anticipated to be a major economic zone. It is designed to support a wide spectrum of industries, from conventional manufacturing to knowledge- and innovation-based. It illustrates how industrial parks could be the pacemaker of population growth and future property demand for their respective localities,” opines Foo.
Located in Bandar Enstek, the 1,100-acre TechPark @ Enstek is currently home to Coca-Cola Bottlers (M) Sdn Bhd, Kelloggs Asia Product, Bio Molecular Industries and Renal Laboratories Sdn Bhd.
“In 2018, JLL completed one of the largest transactions in the market involving Ajinomoto’s RM86-million investment in a single industrial plot (18.86ha) in Bandar Enstek,” says JLL Malaysia’s Lau.
Another factor that is driving growth in the corridor is connectivity.
Lau notes that two mega infrastructure projects — High Speed Rail (HSR) and East Coast Rail Link (ERCL) — are set to build their stations in Malaysia Vision Valley 2.0 (MVV 2.0), with Labu housing an HSR station and Seremban and Nilai, ECRL stations. “This can further boost economic activity in these areas. JLL’s recent survey shows people see HSR as the mega infrastructure project that can stimulate the economy,” she says.
“Apart from their proximity to KLIA, continuous improvements in connectivity have [resulted in] more housing demand in these areas. New highways — namely West-Coast Highway (WCE),
Senawang-KLIA Expressway and Lekas-KLIA Expressway (LIKE) — will connect existing ones. Additionally, the proposed HSR will not only enhance connectivity but also capital values,” says Foo.
ExaStrata’s Adzman Shah says good accessibility to highways and the two airports has always been a key factor in the growth of the corridor.
“KTM Komuter services serve part of the corridor as well, making it convenient to commute to Kuala Lumpur for work. The new Nilai-Labu-Enstek expressway will open up opportunities when development land is unlocked for development. Provision of modern shopping amenities and educational facilities within self-contained townships has also attracted [people to live here],” he says.
One of the biggest catalysts of growth in the Southern Corridor is Malaysia Vision Valley 2.0 (MVV 2.0), which will cover 153,411 ha in Port Dickson and Seremban. Envisioned as a world-class metropolis, the state-led, private sector-driven project is expected to attract RM290 billion worth of investments over 30 years.
Phase 1 (2015-2045) will comprise high technology and industrial parks (2,838 acres); an integrated transport district (8,796 acres); an aerospace valley (16,000 acres); a maritime hub (3,960 acres); and tourism services and others (2,910 acres). Phase 2 will cover 42,500 acres.
During the launch in December 2018, master developer SDP unveiled the first of six projects in Phase 1, which is a high-tech industrial park covering 2,838 acres across Hamilton Estate, Labu Estate, New Labu Estate and Kirby Estate in Negeri Sembilan.
The first project is the 69.72-acre freehold XME Business Park in Nilai Impian, the first managed industrial park in Negeri Sembilan. It has a gross development value of RM520 million.
According to SDP, it will be launching a 419-acre industrial development next year with a GDV of about RM600 million. The industrial development will be connected via the new Nilai-Labu-Enstek Expressway, North-South Highway and the existing local road networks. The developer owns 2,838 acres within MVV 2.0 and is currently reviewing the remaining parcel of more than 2,300 acres and its estimated GDV.
“MVV 2.0 is a growth corridor that emphasises competitiveness, inclusivity as well as sustainability and clean technology. It aims to drive Malaysia to become a high-income nation. It is designed to be a very significant catalyst for the developments in the area, including Negeri Sembilan in general,” says Lau.
CBRE | WTW’s Foo concurs, noting that MVV 2.0 is poised to be the main development catalyst in Negeri Sembilan and form a new growth corridor south of Greater KL.
“With industry being one of the main focus points, MVV 2.0 could attract investments and improve job opportunities. MVV 2.0 does enjoy some competitive advantages over the other industrial locations and is capable of tapping the decentralisation of the Klang Valley.
“Apart from connectivity, industrial parks under MVV 2.0 are able to incorporate the concept of being environmental friendly, as well as cleanliness and guarded and secured premises, thereby reshaping the image of industrial properties in and around Seremban,” says Foo.
Lau says as MVV 2.0 is projected to create around 600,000 jobs, it can stimulate population growth and inbound migration.
“This has a huge significance and could increase Seremban and Port Dickson’s current population of 740,700. The correlation between economic development and population growth will be a crucial aspect for MVV 2.0’s success.
“As projected in previous market studies, the potential increase in economic activity and population will likely benefit real estate in all sectors — whether conventional residential, commercial, industrial or alternative sectors such as aged care and education. New research can further estimate the degree of the benefits and ways to capitalise on the current market trend,” she says.
Foo notes that while industrial activities are expected to be the main employment generator, MVV 2.0 also focuses on liveability and economic sustainability.
“Therefore, apart from infrastructure enhancement, more commercial and residential developments are expected to co-exist with the industrial parks, leading to a multiplier effect on job creation and population growth,” says Foo.
According to Lau, development drivers identified for MVV 2.0 are hi-tech investments, specialised services, tourism and skill-based education and research.
“However, in light of recent developments (global and national), some of these sectors are more challenged than others. Despite the market research and studies done previously involving MVV 2.0, including by researchers in JLL, it is important for developers and investors in MVV 2.0 areas to relook at their plan and restrategise going forward,” she says.
Lau sees some potential challenges facing MVV 2.0, including limited commercial elements. “Difficulty in sustaining the population, especially the night-time population, can be eased with more commercial developments such as F&B, retail and entertainment. Market and feasibility studies focusing on this sector should be considered by developers and investors, apart from residential and industrial.
“In addition, demand for more workplaces and offices is also imminent with the population growth. Securing strategic land parcels can benefit investors in the medium and long term. Other factors include the general economic downturn affecting development, especially mega projects,” she adds.
Property prices on the rise
Landed property is preferred in the corridor.
ExaStrata’s Adzman Shah says prices in the area are relatively lower than those closer to Kuala Lumpur’s urban areas. “Terraced houses in well-planned townships with modern security and safety features continue to be marketable. Prices generally range from RM450,000 to RM800,000. The farther away, towards Seremban, the lower the price.”
Foo notes that property prices in these areas have been increasing moderately in the past few years. Double-storey terraced houses are the most in-demand residential properties.
“In the secondary market, prices of single-storey terraced houses range from RM300,000 to RM350,000 while double-storey terraced houses are fetching RM460,000 to RM520,000. The asking rental rates for both property types range from RM800 to RM1,200 per month,” says Foo.
According to Henry Butcher’s Siew, average prices for new launches in gated and guarded developments such as Seremban 2 and Bandar Sri Sedanyan are from RM500,000 to RM600,000.
“Landed property is still the preferred choice because unlike in the Klang Valley, we still have land. There were some condominiums launched in the last five or six years but the take-up rates have not been as good as landed properties.
“Requirements have also changed over the years. A decade ago, gated and guarded developments were new in some parts. Now, they are a must for new house buyers,” says Siew.
According to data from Henry Butcher, a two-storey terraced house in Zebrina, Seremban 2, was transacted at RM230,000 in 2005. Transacted prices rose to RM320,000 in 2010 and are now at RM500,000.
In Bandar Sri Sendayan, a single-storey detached house (Idaman Villa) was transacted at RM310,000 in 2010 and prices have risen to RM600,000 this year. In Bandar Enstek, a two-storey semi-detached house (Persada Aman) was transacted at RM380,000 in 2010 and prices have risen to RM580,000 this year.
A bright future
The consultants agree that the organic drivers and MVV 2.0 will bring more growth to the corridor.
Siew believes that, despite its relatively distance from urban centres, the Klang Valley Southern Corridor will grow in popularity. “Take Seremban, for example. To me, it is like Kajang a few decades ago. Back in the 1980s and 1990s, KL people said Kajang was so far away, but now, it is considered a suburb of KL and is no longer seen as an ‘ulu’ [remote] place. It will take time, and infrastructure still needs to be improved, but eventually, places like Seremban will become an extension of Greater KL and people won’t say it’s so far away,” says Siew.
Foo believes that the industrial belt in the Southern Corridor will bring in more job opportunities, human activities and ultimately, development potential in the long run.
Price will remain a factor. As Siew notes, RM600,000 will get you a 1,000 sq ft condo unit in KL but in places like Seremban, you can get a 2,500 to 2,800 sq ft house.
With all these factors in place, the future should be bright for the corridor.