Properties of vast potential in the Klang Valley

(From left): Saeed, Shanker, Un, Gambero, Tan, Tang and Khairudin at the forum.

STARPROPERTY.MY held a forum called “Property investment opportunities in the western corridor of Klang Valley: Is Shah Alam sustainable in the long run?” which was moderated by REI group of       companies CEO Dr Daniele Gambero. The speakers were Ho Chin Soon Research senior manager Khairudin Ya’cob, IQI Group Holdings chief economist Shan Saeed, Henry Butcher COO Tang Chee Meng, Malaysian Institute of Estate Agents president Siva Shanker, SkyBridge International CEO Adrian Un and Chur Associates founder Chris Tan.

PETALING JAYA: Selangor is the richest state in Malaysia in terms of Gross Domestic Product (GDP), and of the many urban centres in the state, Petaling Jaya (PJ) is the most active in terms of property development. The areas that are hot on buyers’ radar is the stretch from PJ/Subang Jaya to Shah Alam, and goes west to Port Klang. This stretch is also referred to as the western corridor.

For the past two decades, property projects remained almost unchanged but the landscape is fast changing with the launch of new township developments in Shah Alam and Klang such as Bandar Bukit Tinggi, Setia Alam, Setia Eco Park, Aman Perdana, Cahaya SPK, Denai Alam, City of Elmina, Bandar Botanic and Tropicana Aman. The western corridor is today one of the more exciting corridors and the entrance of big developers has changed the property landscape.

S P Setia is credited as one of the first developers to introduce master-planned community living in northern Klang through its Setia Alam project in 2004. SkyBridge International CEO Adrian Un said: “All this while, Shah Alam has never been heavily favoured. The game-changer of Shah Alam has been S P Setia. I am not siding with the company but it is a game changer. Because of the company, people have taken notice of Shah Alam. The i-City project is a plus point.”

Growing population

Shah Alam’s population of approximately 750,000 is among the highest in Selangor. This is vital in ensuring an area’s sustainability. IQI Group Holdings chief economist Shan Saeed said, ”Whenever I look at any place or land, I look at population and job creation.”

“When I moved from Chicago to Kuala Lumpur three years ago, I looked at three key criteria – political stability, economic stability and financial stability. In Dubai, 80% of properties are owned by foreigners. In KL, it is the opposite.”

In Klang, the population is approximately one million, and there is potential spillover from those living in Klang to invest in Shah Alam as Shah Alam is closer to the centre of gravity. Greater Kuala Lumpur’s centre of gravity has shifted towards Kinrara, spurred by the proposed new Serdang-Kinrara Putrajaya Expressway, Kinrara-Damansara Expressway , Sungai Besi- Ulu Kelang Elevated Expressway, and Damansara-Shah Alam Highway (Dash).

Saeed added, “Shah Alam will remain on investors’ radar because it is close to Port Klang. The Japanese have chosen Penang and Port Klang as their manufacturing hub for the long-term.”

Current and future infrastructure

The western corridor is now home to modern award-winning township developments and all the necessary amenities including sports stadiums, tourist attractions, golf courses, recreational parks, higher learning institutions, and shopping centres.

The key factors contributing to the growth of the western corridor is infrastructure and accessibility. The network of highways serving the corridor include:

>        Federal Highway (connects KL to Klang)

>       NKVE (Jalan Duta to Bukit Raja)

>       Federal Highway Route 2 (Batu Tiga to Sungai Rasah)

>       Kesas (Sri Petaling to Pandamaran)

>        Guthrie Corridor (Shah Alam and Rawang)

>        Elite Highway (connects to Nilai and a few highways)

>       Kemuning-Shah Alam expressway (LKSA)

>       Proposed Dash highway (Damansara Perdana to Shah Alam)

Additionally, the KTM Komuter connects Batu Caves to Port Klang, with stations in Shah Alam, Padang Jawa and Batu Tiga.

Ho Chin Soon Research senior manager Khairudin Ya’cob said the extension LRT project that is being built will connect to Bukit Jalil and to Kelana Jaya, and while the MRT blue line will cover from Sungai Buloh to Kajang. The Prolintas highway development connects Damansara to Shah Alam, and can be linked to Sprint Highway or the LDP, which will help to enhance the value of property in these parts.

Additionally, the LRT 3rd line’s (Bandar Utama–Klang) is awaiting approval and alignment has yet to be released. Ya’cob said, “The main thing is not to be near the alignment, but position properties near the stations.”

On the uptrend

From 2011 to 2013, there has been a consistent decrease in the number of transactions from 430,000 to 381,000. Despite this, the transaction value has steadily increased from RM137bil to RM152bil.

Malaysian Institute of Estate Agents president Siva Shanker opined, “If there is GDP growth, it is usually between 2% and 5%. During recession, it is minus 2% or minus 3%. We are now at minus 11%! What people don’t recognise is that we are already in the middle of the bubble and it is already here. Is it right time to invest? Looks like there is no wrong time to invest in Malaysia, as it seems to be on the uptrend all this while and we are in the middle of the bubble.”

Brand conscious

Malaysians have become brand conscious as they evaluate both the project’s and developer’s image.

This is evident especially in the Kuala Lumpur city centre. Some projects in the KLCC area are priced from about RM1,000 to RM1,700 per sq ft, while some are able to price their properties from RM3,500 to RM4,000 per sq ft due of branding. That’s 300% higher than the average neighbour.

In Shah Alam, i-City could be the go-to destination for the area when it starts building a brand name for itself. i-City was conceived as an MSC hub, but it is much more than that as it is self-contained with leisure, office and residential components. i-City is a fully integrated digital city comprising a shopping mall, corporate office towers, Cybercentre office suites, hotels, apartments, data centre, innovation and theme park.

Gen-Y

When it comes to property purchase, the older generations tend to stick to developed neighbourhoods that they are familiar with and would prefer landed properties. The Gen-Y is more receptive to new areas, especially when they are educated about the uniqueness of developments.

Chur Associates founder Chris Tan said: “Gen-Y should be trained to look at products differently.

“The Gen-Y lack information. Despite the availability of social media, education is still required. They should look at affordable subsale housing that are still within reach. Unfortunately, they are trained to look at new things, and not old houses.”

Gen-Y should also switch on their “trading up” mentality. By going for things that they cannot afford, and ignoring those that they can, Gen-Y will constantly complain about properties being out of their reach.

Gen-Y should think about purchasing lower priced properties first. After all, property is a good hedge against inflation. When the lower-priced property increases in value, capital appreciation can be used to slowly trade up to better properties.

For those who are looking into purchasing commercial properties such as SoHos, and SoFos, SkyBridge International’s Un advised, “With the implementation of the Goods and Services Tax in April 2015, developers should educate Gen-Y buyers.

“They are on a tight budget. They might have factored all the financing, but six months later they might be surprised to discover that they have to pay for the 6% upon full loan disbursement.”

Shah Alam and Klang have definitely outgrown their image as sleepy old towns. In the past decade, there has been an influx of infrastructure, connectivity and townships which opened up the western corridor of the Klang Valley. A pop duo once sang “Go West” and looking at the heightened attention on the western corridor, it seems that many property investors are certainly agreeing with them. - The Star