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Strong demand for high-end KLCC properties







Despite Malaysia´s softening property market, demand for high-end residential developments in the  Kuala Lumpur city centre vicinity remained strong in the third quarter, with prices now surpassing the RM 2,500 per sq ft level, according to DTZ Nawawi Tie Leung.

DTZ report notes that Malaysia´s residential market is already showing signs of cooling down with overseas buyers shying away from the property market in light of the global financial situation. However, some niche projects managed to garner reasonable response both from local and overseas buyers.

The Binjai on the Park, notably, achieved a new benchmark price. 171 of its units achieved sales of RM 3,000 per sq ft, in its soft launch in the third quarter of 2008.

“As the only condominium project with an unparalleled view of the Petronas Twin Towers and direct access to the KLCC Park, it sets a new standard for competitors in the KLCC location,” the report states.

The Binjai on the Park, developed by Layar Intan Sdn Bhd, is considered Kuala Lumpur´s most sought after address.

On the investment front, Malaysia´s investment market remained active in the third quarter despite the unsettled sentiments in the local political scene. Investment sales were up 41 percent from RM 1.315 billion in the first quarter to RM 1.849 billion in the third quarter.

Three major transactions took place in the third quarter with the sale of Menara Citibank to IOI Bhd at RM 733.6 million, being the highlight.

“The price achieved by Menara Citibank at RM 967 per sq ft was below the previous benchmark price and reflected cautious biddings amongst the dozen or so interested parties. Nevertheless, the yield based on 2007’s income, at 4.7 percent looks aggressive,” the report states.

Two other deals that took place were the sale of Menara Standard Chartered to ING at an unofficial price of around RM 300 million and the sale of The Pearl @ KLCC (a high-end condominium currently under construction) to Flora Bliss (a consortium led by Kuwait Finance House) for RM 550 million.

Meanwhile, the Malaysian government is doing its bit to boost its property market across the board. In the domestic market, medium to affordable homes valued up to RM 250,000 per unit, will be given 50 percent stamp duty exemption. This applies to both transfer of ownership title as well as loan agreement.

The Malaysian government has also drawn up an ambitious plan under Malaysia Property Incorporated (MPI) in a joint initiative with FIABCI, the country´s real estate body, to promote Malaysian properties overseas. This plan, which has a budget allocation of RM 25 million, aims to establish Malaysia as a favourable destination for international property investment amongst the affluent jet-setters. However, it is too early to assess the success of this programme as the Malaysian government had only launched it in October this year.











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