Aug 29, 2015 Last Updated 6:10 AM, Aug 28, 2015

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PETALING JAYA: Naza TTDI Sdn Bhd is targeting to launch a residential project in Kwasa Damansara by the end of next year.

Naza TTDI was awarded 12.7 acres of freehold land in Kwasa Damansara, a land formerly owned by the Rubber Research Institute, after fulfilling the criteria set by master developer Kwasa Land Sdn Bhd following a bid involving other local developers.

“We are currently in the planning stage and expect to launch this development at the end of 2016,” Naza TTDI deputy executive chairman and group managing director SM Faliq SM Nasimuddin said in an e-mail reply.

He said the project would have a gross development value of RM440mil. Despite the current property market slowdown, Faliq said the company still believed in creating a product that would have unique and innovative features, adding that there would be demand to make this project a success.

“We are excited to be part of the Kwasa Land development and we believe that based on our experience and track record, we are able to add value to the overall development,” he said.

According to reports, other bidders for the project were Johor Land Bhd, MKH Bhd, Paramount Corp Bhd and TH Properties Sdn Bhd.

Kwasa Land said Naza TTDI’s proposal comprised a theme park, contemporary designs, private green courtyards and recreational club facilities.

Kwasa Land, which is a unit of the Employees Provident Fund, said the company’s proposal included a gated community with residences in clusters of four with each unit enjoying an open corner.

 

The award letter, dated Aug 24, stipulated conditions for the parties to finalise and sign the development rights agreement within 60 days.

In the same statement, Kwasa Land managing director Datuk Mohd Lotfy Mohd Noh said the evaluation adjudicated by an independent evaluation panel stated the bid offered a good net present value return to Kwasa Land at about RM88mil or equivalent to RM160 per sq ft.

“The bid by Naza TTDI delivered on the desired criteria set by Kwasa Land.

“The independent evaluation panel are confident that the proposed contemporary living concept and the pricing strategy, best meets market expectations,” he said.

The parcel awarded to Naza TTDI would have 1.8 acres allocated for a vehicle-free central park and would be connected to a 42-acre urban park. Despite developing the parcel for a residential project, as much of the existing greenery as possible would be retained, with the green area covering 55% of the total built area.

Naza TTDI’s project is located just 200 metres from Kwasa Damansara’s central business district, where two MRT stations have been planned.

Greater KL office space is expected to reach 100 million sq ft this year

DESPITE a rapidly growing supply and intensifying competition amid a tenant’s market where opportunities to shop around are plenty, good offices in central locations, especially within Greater Kuala Lumpur (KL), will continue to do well.

According to Savills Malaysia executive chairman Chris Boyd, the office market within Greater KL is already “quite sizeable.”

“The office market is expected to reach 100 million sq ft this year. That’s bigger than Singapore and on par with Bangkok and Manila,” he tells StarBizWeek.

Greater KL refers to an area covered by 10 municipalities surrounding Kuala Lumpur, each governed by local authorities, namely Kuala Lumpur City Hall, Perbadanan Putrajaya, Shah Alam City Council, Petaling Jaya City Council, Klang Municipal Council, Kajang Municipal Council, Subang Jaya Municipal Council, Selayang Municipal Council, Ampang Jaya Municipal Council and Sepang Municipal Council.

Boyd says the office market in Greater KL currently stands at around 97.7 million sq ft.

“That puts occupancy rates at around 85%.

“Vacancy rates are at 15%.”

However, Boyd says the office market in Malaysia has a cyclical trend.

“There will be short periods of undersupply, followed by long periods of oversupply.

“The last undersupply period was back in 2008, during the global financial crisis.”

Boyd points out that demand for office space in KL is traditionally driven by the oil and gas (O&G) and banking/finance sectors.

But with oil prices going down, O&G players will be cautious about expanding or relocating this year.

“Because of this, many O&G firms have put their expansion plans on hold. Moving, costs a lot of money. So right now, many are just waiting and making use of their existing space.”

According to Boyd, with at least 17 million sq ft scheduled to be completed by end-2017 in Greater KL, occupancy rates are set to deteriorate in 2015 and beyond, and could be less than 80% overall in two to three years.

Despite the strong supply growth in city centre areas since 2009, landlords of new, better quality buildings have remained steadfast and, for the most part, held rents firm or raised them only slightly.

“Landlords don’t like to reduce rents because then they have to hold it through two or three renewal terms. They would rather hold the rents and maybe offer rent-free periods.”

Boyd says it is common for landlords to offer rent-free periods for up to three months.

He adds that older, less highly-specified buildings are likely to struggle even more as landlords look to retain tenants.

“There is demand for good quality suburban space. In the past, it was normal to build low-specified buildings in sub-urban areas.

“But today, that doesn’t work anymore.

“That would be a mistake. Today, you need to build high-specified buildings if you want to attract good tenants.”

Early this year, global agents Savills acquired a substantial shareholding in local property consultancy firm, CB Richard Ellis (CBRE) Malaysia. The firm started trading under the Savills brand from March 1.

The Savills Malaysia brand name will be officially launched on Aug 27.

According to Savills Malaysia’s latest Asian Cities report, office space within Greater KL stood at 96.6 million sq ft as at last year - a 2.9% increase from 2013.

Three office buildings were completed in KL during the second half of 2014, namely Menara Hap Seng 2, Menara MBMR and Sunway Velocity V Office.

These three buildings represent about 720,000 sq ft of additional office space. In total, about 2.9 million sq ft of office space was completed in Greater KL in 2014, which is less significant than in 2013, which saw a completion of 5.1 million sq ft, with a substantial portion of that new supply located in KL Sentral.

Gross passing rents did not see any significant increase between the first and second halves of 2014, averaging RM7.79 per sq ft per month against RM7.76 per sq ft six months earlier.

The overall vacancy rate in Greater KL stood at 13.1% as at the second half of 2014, which is an improvement compared with the first half of 2014 (14.2%), thanks to a moderate number of completions recorded which gave the occupancy rate the opportunity to improve.

 

JOHOR BARU: State investment firm Johor Corp (JCorp) is finalising details to develop a multi-billion ringgit township and an industrial park in Kota Tinggi district, northwest of Johor Baru, next year.

JCorp president and chief executive officer Datuk Kamaruzzaman Abu Kassim said the two projects would cater for the Pengerang Integrated Petroleum Complex (PIPC).

“We see there is a need for a large scale housing scheme and an industrial park with the support services for the oil and gas (O&G) related activities in the PIPC,’’ he told StarBiz.

Kamaruzzaman said JCorp’s units Kulim (M) Bhd and Johor Land Bhd would undertake the two projects with a gross development value of RM3bil.

He said the projects located on a 4,046.85ha of land within the Sungai Papan and Sungai Lebam areas, would include 404.68ha for the industrial park.

“We expect to start the projects next year and they will keep Kulim and Johor Land busy for the next 10 to 15 years,’’ added Kamaruzzaman.

 

He said the land for the industrial park project belonged to the Southeast Johor Development Authority while the state government would allocate the land for the township projects.

“We are taking over land from Kejora for the industrial park and exchanging it with land held by us in other parts of the Kota Tinggi district deemed suitable for the authority,’’ said Kamaruzzaman.

He said the development of the industrial park would be based on similar concepts in European countries with the components supporting the needs of the O&G companies.

“The industrial park is expected to create about 1,000 job opportunities for locals,’’ said Kamaruzzaman.

Separately, he said JCorp would sign an agreement with the Muar Municipal Council and the Muar Furniture Association to develop a furniture hub in Bakri, Muar.

Kamaruzzaman said the signing ceremony would take place this quarter and the furniture hub project on a 404.68ha site would commence in the first quarter of 2016.

He said the hub would house some 300 members of the association currently scattered in the Muar district and also those operating on temporary sites.

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