The current scenario at the KL Sentral area is that the commercial space enjoys 97% occupancy, the five hotels of four to six stars are usually full, and tenants in the area are multinationals as well as local large corporations such as Shell, Allianz, Maxis, PricewaterhouseCoopers (PwC), GE, SBM and Google.
Of the residential component, some 1,000 condominium units in the area have been completed over the years and fully sold. Rental here is about RM5 per square feet.
Two towers (The Sentral Residences), next to the newly opened six-star St Regis Kuala Lumpur hotel and residences, are expected to be completed in Q1 2017. Currently, less than 10 units of the total 752 units are left.
On the secondary market, units of Suasana Sentral Loft, also known as The Loft, were transacted from RM360 per sq ft in 2004 to RM1,000 per sq ft in 2016. At the peak, it was RM1,250 per sq ft in 2012.
The rental yield is 5% now and used to be better at 6% to 7%. In 2015, the Kuala Lumpur market in general continued to favour tenants with gross yields for high-end condominiums averaging between 4% and 5%.
The facility-rich Suasana Sentral Loft condominium was completed in 2008 and fully sold out. About 40% of the buyers were foreigners and expatriates. Designed for CBD living at its most convenient, it’s only a five-minute walk to the KL Sentral transit hub where eight rail systems pass through. It also connects to major roads and highways.
Demand for commercial space in strategic and well connected locations shows no signs of dampening. For example, office space in KL Sentral CBD is near full capacity. This proves that building spaces with comprehensive connectivity are still in high demand.
Providing easy access to public transport is a huge pull factor for companies looking for office space so their staff can reach their workplace without much hassle.
KL Sentral CBD continues to attract international businesses as it was designed to offer an integrated urban lifestyle.
On the city’s property market in general, real estate professionals say softening demand was noted in the high-end condominium segment in 2015 amid a cautious market with a lower volume of transactions.
Asking prices and rentals stayed flat. With high supply in the pipeline of existing and incoming projects, the segment continued to face stiff competition both in terms of pricing/secondary sales and rental market.
Developers with niche residential project reviewed their products, pricing and marketing strategies, and widened their target catchment by marketing overseas.
The lacklustre demand was impacted by the economic slowdown, tight lending guidelines and weaker job market. But there was no drastic drop in the number of previews and new launches.
On the city’s office market segment, real estate professionals expect the outlook to remain cautious with lower net absorption as plans for expansion and relocation are put on hold.
However, the Kuala Lumpur CBD office market is expected to see a higher absorption rate from 2016 to 2018 with demand expected to overtake supply of new office space of about 1.5 million sqft. The market has now stabilised in terms of rental.
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