New projects to change KK's landscape
Published on: Friday, March 13, 2015
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Kuala Lumpur: Kota Kinabalu's landscape is set to change with the expected completion of several large-scale integrated developments by major developers.They include The Loft apartments and Imago shopping mall, Riverson Suites and Gleneagles private hospital, and the Oceanus shopping mall and Pelagos Suites.

"In particular, Jesselton Quay by SBC Corp Bhd and Mah Sing Group's Kota Kinabalu Convention City are paving the way for the regeneration of the old Jesselton port area which will also be home to an international cruise terminal and international convention centre," says Knight Frank, a leading independent global property consultancy headquartered in London.

"Both developments are of mixed use in nature and will comprise a combination of retail, office, residential properties and hotels," it says.

"Major mixed use developments such as Aeropod Tanjung Aru (by SP Setia), Sutera Avenue and PacifiCity are continuing to progress through construction and the release of new phases are being received well by the market as evident from the favourable take-up rates," it says.

"There were not many residential launches in 2014 but there are a few that are worth eyeing," says a property observer.

Among them are the Harrington Suites, by Interland Properties Sdn Bhd, Jesselton View by Bina Puri Holdings Bhd and Sutera Avenue Residences by Mah Sing group, incidentally the same properties that Knight Frank highlighted.

Harringston Suites has 116 units in five layouts sized from 2,445 sq ft to 3,455 sq ft and are priced from RM1.8 mil to RM2.9 mil.

Jesselton View is a low-density apartment development with only 80 units housed in five-storey and 11-storey blocks. The size ranges from 809 sq ft to 2,922 sq ft and are priced from RM522,000 to RM2.08 mil.

Priced from RM605,000 onwards, Sutera Avenue Residences comprises 320 units of serviced apartments in three towers, with built-up areas ranging from 726 sq ft to 1,220 sq ft.

"These are high-end properties which will set a new standard of living in Kota Kinabalu and are likely to push property values up," the property observed says.

"There is a strong demand for upmarket properties. The value of property transactions in Sabah has more than doubles in the last nine years, fed by the state's population of over three million people," he said.

Knight Frank also notes two medium-cost property developments, namely by Greenfield City Sdn Bhd and SCP Inanam 2 Sdn Bhd respectively.

Greenfield Residences have two and three-bedroom units with built-up areas from 821 sq ft to 1,084 sq ft. The units are priced from RM300 psf.

Asthon Tower, located at Kolombong, is a 28-storey tower of 391 condominium units with built-up areas ranging from 870 sq ft to 948 sq ft and priced between RM361,800 and RM504,000.

There has been no new supply of office space over the past two years with the total existing supply remainingg at 6.2 million sq ft with a healthy occupancy rate of 91pc, says Knight Frank.

"Based on current market values, yields are averaging at about 5pc per annum," it says.

But this year will see a few properties coming into the office rental market. Menara Hap Seng, located in Kota Kinabalu city centre, is slated for completion by April and Riverson Suites, developed by Riverson Corp Sdn Bhd, is also slated to be completed this year.

The 14-storey Menara Hap Seng with green features comprising a three-storey retail podium and 10 office floors on the upper levels.

It offers a total net floor area of 174,569 sq ft at monthly rental rates ranging from RM5 psf to RM5.50 psf. Shell Malaysia is believed to have already committed to four floors in the building.

Riverson Suites, located at the southern fringe of Kota Kinabalu's central business district (CBD), a six-storey building comprising 60 office units, has a built-up area of 20,000 sq ft floor.

The current average asking rental of office space in the city ranges from about RM2 psf to RM3.50 psf per month.

In KK Times Square, it ranges from RM2.60 psf to RM3.50 psf per month, while in Wisma Tun Fuad Stephen and KWSP building, asking rental averages at RM3.50 psf per month," it says.

As for the retail rental market, since the completion of the Suria Sabah shopping space in Kota Kinabalu has remained constant at 4.6 million sq ft with an average occupancy rate of 86.3pc.

"We foresee a very exciting time for the retail sector when the anticipated new retail developments such as Oceanus Waterfront Mall, Imago Mall at KK Times Square Phase II as well as Riverson Walk come on-stream," the Knight Frank team says.

"These retail properties are situate towards the southern corridor of the city. Oceanus Waterfront Mall is set within the Kota Kinabalu City Waterfront development, a project developed by Sunsea Development Sdn Bhd," it says.

Oceanus fronts a 2km-long waterfront boardwalk overlooking the stunning seafront with food and beverage outlets, offering waterfront lifestyle and leisure, strategically lined along the boardwalk.

It is set to be a prime tourist hotspot. Both Imago Mall and Riverson Walk are situated at the southern fringe of Kota Kinabalu's CBD and next to Sutera Harbour Resort.

The Tanjung Aru Eco Development covering 299ha along the Tanjung Aru beach is poised to create new tourism assets for Kota Kinabalu and cement Sabah' position as a world-class tourist destination.

The state government-initiated project, which has a gross development value (GDV) of RM7.1 bil, is expected to start next year.

The current masterplan comprises approximately 4,500 apartments, 150 villas, 475 terraced houses, six hotels, retail space, a golf course and marina split into seven zones that will be sold via tender towards the end of this year.

Some 160ha of the area of Tanjung Aru developmenr will be reclaimed from the sea and this has been a bone of conention by a local conservation group which criticised Sabah Chief Minister Datuk Seri Musa Aman for allegedly lacking in transparency with regards to the project.

Meanwhile, the north corridor of the city will also be a main focus for new developments and launches this year with the highly-anticipated Jesselton Quay and Kota Kinabalu Convention City developments unfolding to the public.

The lack of new launches last year will lead to pent-up demand from investors although domestically, the affordability gap is expected to widen with higher land prices and unpending goods and services tax (GST) inApril, says Knight Frank.

"Bank Negara's tightening of lending measures and anticipated hikes in interest rates will carry through 2015 and as household debt levels continue to be reined in, we expect lacklustre response for new projects until lending conditions improve," it says.

The pool of well-heeled local buyers and the untapped foreign investor market will be critical to the successes of new launched this year, it adds.


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