KL address at a premium

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Posted on February 12, 2019 | 1802 views | Topic : Best@ , News & Articles , Property News
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By Ng Pau Ling

KL’s Golden Triangle has performed well as a business and

lifestyle hub
Smack in the middle of modern Kuala Lumpur is the Golden Triangle, a prime
commercial, entertainment, and shopping locality with grade-A offices and high-end
residences.

KUALA LUMPUR, 11 Nov — Cyclists passing by Petronas Twin Tower during the OCBC Cycle Kuala Lumpur 2018.
More than 2,000 cyclists from all walks of life converged in the heart of Kuala Lumpur in the morning for the fourth
edition of the 42k OCBC Cycle Kuala Lumpur 2018 – spanning two loops of 21 kilometres and stretching across some
of the capital most iconic landmarks in the city centre. –fotoBERNAMA (2018) HAK CIPTA TERPELIHARA

These most valuable addresses in Malaysia’s capital are a triangular area bounded by
three roads: Jalan Pudu, Jalan Ampang and Jalan Tun Razak.

The Kuala Lumpur of old was originally established in the mid-1800s in an area covering
Masjid Jamek, Lebuh Ampang, Jalan Petaling and Jalan Tun Perak. It was a business
district built on the confluence of the Klang and Gombak rivers.

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“Over the years, the old town became saturated with developments. To meet the
demand of a growing population and for more development, the Golden Triangle
emerged as the new focus of commercial activities in the city,” said Savills Malaysia
managing director Datuk Paul Khong.

Some of the early developments in the

Golden Triangle include Sungei Wang
Plaza (1977), Bukit Bintang Plaza
(1979), Lot 10 (1991) and Berjaya
Times Square (2003); as well as the
Hilton Hotel, Regent Hotel, the
demolished Equatorial Hotel, and the
soon-to-be-demolished Concorde
Hotel on Jalan Sultan Ismail.

“Three major developments

Savills Malaysia managing director Datuk Paul Khong.
contributed tremendously to the IZZRAFIQ ALIAS / The Star. June 7, 2018.
area’s growth: Bintang Walk by YTL
Corporation Bhd (in the 1990s), the
Kuala Lumpur City Centre (KLCC) Petronas Twin Towers (1999) and Berjaya Times Square
by Berjaya Group (2003),” said Landserve Sdn Bhd managing director Chen King Hoaw.

The Golden Triangle has since performed well as a

business and lifestyle hub, thanks in part to being
well-connected by public transport including the LRT,
Monorail and MRT SBK lines.

“The Sungai Buloh-Kajang MRT line goes directly into

the heart of the Golden Triangle with a station just
outside the KL Pavilion Elite. Besides that, the KL
Monorail has a stop in front of Sungei Wang Plaza
and Lot 10,” said Khong.

The on-going MRT 2 also has stations in the Golden

Triangle, such as Ampang Park and KLCC East. Apart
from the rail system, the Go KL free city bus service
is available in the KLCC, Bukit Bintang and Chinatown
areas and stops at various tourist attractions and Landserve’s managing director Chen
business sites. King Hoaw

Together, the public transport network not only

disperses traffic to improve public mobility but also provides better connectivity between
the city and suburbs.

Record high land prices

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Urbanisation, investment opportunities, and new infrastructure have given the Golden
Triangle a boost – and subsequently, land prices have increased substantially.

Kampung in City: The biggest Kampung in the Golden Triangle of Kuala Lumpur – Kampung Baru.

Currently, city centre land values are up to RM4,000 per square foot (psf) or more for
prime parcels – depending on location, planning control and approval.

“The highest land price in the Golden Triangle involved a 29,127 square feet (sq ft) piece
of land located between the Grand Millenium KL Hotel and Pavilion KL. It was transacted
for RM7,200psf in 2010,” noted Khong.

“There is a ‘special purchaser’ element in this deal, whereby the purchaser wanted to
realise the ‘marriage value’ of the site via a transfer of plot ratio from the neighbouring
Pavilion KL. This site is now occupied by Pavilion Elite,” he added.

According to Chen, the highest land sale in the Golden Triangle in the last two years was
a 3.46-acre freehold plot in Jalan Raja Chulan that sold for RM325.5mil.

“In terms of per square foot prices, the highest transaction was the 48,673 sq ft at Tun
Razak Exchange – a deal that closed at RM307mil or RM6,307psf,” he said.

Wave of redevelopment

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As one of the earliest developed locations in Kuala Lumpur, the Golden Triangle is rich
with old and new buildings including pre-World War Two structures.

But there is a limited amount of landed properties concentrated off Jalan Imbi. Many of
these terraced, semi-detached and detached houses have been converted to commercial
usage.

“For some time now, the older low-rise buildings sited on sizeable plots have been
targeted for redevelopment especially when the market was on the upswing,” said
Khong.

Chen concurred, adding that historical shophouses are generally refurbished into budget
hotels to cater to tourism. For landed properties, the common practice is to demolish
and rebuild in order to unlock the land value.

“Landed properties in the Golden Triangle are much sought after by developers and
investors. A small plot of land can fetch up to RM4,000psf,” said Chen, adding that some
developers bought several plots in a row to use for a big project.

Notable on-going and completed redevelopment projects include KLCC (formerly the
Turf Club), Equatorial Plaza (formerly Hotel Equatorial), the 70-acre Tun Razak Exchange
(TRX) with the 106-storey The Exchange Tower (formerly the old government quarters),
the Bukit Bintang City Centre (formerly the Pudu Jail site), and the 118-storey PNB Tower
(formerly Stadium Merdeka).

Buyers seek rental returns

Currently, major residential projects in the Golden Triangle comprise high-rise
apartments, condominiums and serviced apartments.

Based on Landserve’s data, residential unit prices are from RM650,000 to RM10.5mil.
Luxurious properties such as Oxley Tower sell for RM2,200psf to RM2,500psf.

Land Size Transacted Price Price

Location (square feet) (RM) (RM per square foot)

Persiaran Stonor 24,756 103mil 4,160

Jalan Kia Peng 43,852 180mil 4,104

Tun Razak Exchange 48,673 307mil 6,307

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Source: Landserve Sdn Bhd

Chen said owners of newer high-rise residential projects in the Golden Triangle are
mainly from the medium to high-income groups, and a large number of foreigners. Most
of the buyers are seeking rental returns and long-term capital growth.

Built-up
area
Price Rental
(square
Project Type feet) (RM) (RM)

Binjai Residency Serviced 2,174 to 1.7mil to 2.3mil 6,000 to 8,000

apartment 2,207

The Troika Serviced 967 to 7,556 1.3mil to 6,000 to

apartment 10.5mil 13,000

3 Kia Peng Serviced 2,906 to 2.6mil to 3.0mil 7,000 to 9,500

apartment 3,305

Pavilion Residences Serviced 1,307 to 2.07mil to 6,500 to

apartment 2,405 4.1mil 12,000

Berjaya Times Serviced 581 to 1,097 650k to 700k 2,500 to 5,500

Square apartment

Vipod Suite Serviced 657 to 807 1.07mil to 3,000 to 6,000

apartment 1.5mil

Dua Residency Condo 2,066 to 1.6mil to 5,000 to 8,000

2,282 1.87mil

Source: Landserve Sdn Bhd

“Property prices and rental in the Golden Triangle are holding up well, but there are
downward pressures as buyers remain cautious about investment policies,” he said.

He noticed that previously, the Golden Triangle had a balanced mix of foreign buyers
from various parts of the world – but in recent years the buyers have been mostly Asians,
particularly from China.

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“Hopefully, the demand from these countries will continue because we need foreign
investors and tenants for a healthy property market – no matter residential, commercial
or office space,” said Chen.

Challenges and opportunities

Khong foresees a slow property market in 2019 following the introduction of the “entry
and exit” taxes, such as the increase of stamp duty to 4% for properties worth more than
RM1mil and the higher RPGT tax by 5% across the board after five years – while Chen
expects the property market to remain subdued in 2019.

“However there are freebies and promotion packages available, and the market now
allows for price negotiation. So it would be the best opportunity for upgraders and first-
time home buyers to enter the property market,” said Chen, adding that investors who
are looking for office and industry premises can also find great deals in the current
market.

As for retail malls in the Golden Triangle, Khong reckons that competitive mega
suburban malls such as Mid Valley and Gardens Mall, One Utama, and Sunway Pyramid
will face significant challenges. Moreover, online retailing will also impact this business
sector.

Despite the current market conditions, Khong believes that the Golden Triangle will
remain a prime shopping hub and the best commercial address in Kuala Lumpur.

“It is the heart of the city; foreign investors and the high-net-worth individual will always
seek out the best location for property investment. The KL Golden Triangle will always be
in their sights,” he added.

Read more about what makes the Golden Triangle special here, or sign up for the full
Best@Golden Triangle here.

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