What’s the definition of KLCC Properties? It is pretty confusing when one listens to some buyers/investors or developers who claimed that their properties are KLCC properties.
We are not talking about Kuala Lumpur City Center’s properties here but the premium KLCC properties that surrounding the Petronas Twin Towers (the Landmark of Kuala Lumpur). The problem is, there isn’t any definition, guides or standards to classify the properties that fall under this so called KLCC premium location. Some even treat the properties in Imbi or Pudu location as premium KLCC properties and priced it ridiculously.
Although it could be controversial, PropCafe would like to take challenge to step into this grey area and carve out the Premium KLCC properties from the rest.
Firstly, PropCafe would like to define “KLCC Properties” as “The properties that surrounding Kuala Lumpur Petronas Twin Towers”. In order to differentiate KLCC Premium Properties from Kuala Lumpur City Center Properties (which can be a very big coverage), PropCafe has studied land’s premium, distance, and surrounding roads of Petronas Twin Towers and finally came out two zones, namely KLCC Zone 1 and Zone 2. Those outside these two zones, unfortunately, PropCafe will not view it as KLCC properties but Kuala Lumpur City Center’s Properties
With this zoning information, hopefully it can help the investors to understand the pricing differentiation within KLCC properties itself and also between KLCC properties and those outside these zones. As an investor, one can use relative pricing approach by using the zones to evaluate whether the premium of the development is fairly priced. And hopefully, developers will be more sensible to price their properties according to this zoning. Of course, many of the developers may disagree, but who care? As long as, we understand the zoning and worth of premium attached, we can make more sound decision to buy or not to buy.
The Map – Zone 1 is surrounding by the boundary road of:
Jln Ampang (partial), Jln P Ramlee (partial), Jln Perak, Jln Conlay, Jln Kia Peng (partial),and Jln Binjai.
Note: Those properties which are direct fronting (or direct right and left side of) the boundary road of Zone 1 will still be considered as Zone 1 properties. One can observe it in the map below. However, those further away from the bpundary will be treated as Zone 2. Key criteria here is direct fronting the boundary road.
The Map – Zone 2 is surrounding by the boundary road of:
Ampang-KL Highway (partial), Jln Sultan Ismail (partial), Jln P Ramlee (partial), Jln Raja Chulan (partial), Jln Bukit Bintang (partial), and Jln Tun Razak (partial)
There is no right or wrong definition. As a passionate property lover, PropCafe always like to make property investment decision to be as sophisticated as possible since it involves significant amount of money, more so at the current level of property price. This has motivated PropCafe to start this zoning exercise for KLCC properties and at the same time carved out those non-KLCC properties so that Propcafe can easily weight the worthiness of any new launch whivh is surrounding Petronas Twin Towers (or outside KLCC/Kuala Lumpur City Centre).
PropCafe is also happy to share the consolidated information of the “KLCC Properties” (with two different category i.e. two different zones). PropCafe will try its very best to update this information as frequent as possible. Bear in mind that we are not valuers or real estate agents, so kindly re-confirm the information from a qualified valuer, especially on the “the current indicative price” of the properties below.
Summary Listing of KLCC Zone 1 and Zone 2 Properties:
Note: Location of each property is shown in the map above according to its number.
The existing indicative price above clearly shows a higher premium of Zone 1 than Zone 2. It is still hard for Zone 2 properties to break RM1,000psf unlike Zone 1 properties. It seems like, capital appreciation wise, Zone 1 in average is till perform better than Zone 2.
The majority of KLCC Zone 1 properties hasbetter façade, class, and quality. The land cost and architectural design could also contribute to its higher premium.
The maintenance fee for Zone 2, in general, is cheaper than Zone 1.
Why does one want to purchase KLCC properties?
It is just like asking a man why he likes posh and luxury car. For the rich, it is about possession of expensive items to meet their desire and reaffirm their success. Well, put it in layman term, it is like “Stamp Collection” especially KLCC properties most of the time giving better and more elegant concept and façade. But we are talking about a very expensive hobby here. Most of us are not in this group, and this group is less sensitive for pricing and they don’t read PropCafe (ha)! Therefore, it is no point to discuss the investment strategies from this group of buyers here.
How about the mass market or property lover like us? PropCafe always believe on the basic of the relevancy between property value and scarcity of land. This is exactly the key words here in KLCC property investment. The land surrounding Petronas Twin Towers is getting lesser. One can notice that most of the open car park areas are now under construction for mall, office or residential developments especially the Zone 1 and 2 above. There are not many lands left!
The purchase of KLCC Zone 1 and 2 is always best if one can hold for longer term. You can easily observe the long term capital appreciation for the properties surrounding its key landmark in any of the capital cities across the world. It doesn’t mean that one cannot flip it but due to the scarcity of the land in the city, one will capture more values from it. That’s why, for the “centre of centre location’s” property values is always there regardless the cycle. Yes, some kneejerk or firesales happened during bad times but it bound back equally fast as well. PropCafe editors witnessed the dropped of KLCC properties during 2007 and tried to get “durian runtuh” but unfortunately it was so hard to grab the fire sale or value buy because it was snapped up in no time.
So, if you have decided to go into KLCC property investment, then make sure you have the holding power. If you do, KLCC properties are there for you to own! If you don’t but yet want to be in the party, then continue to read the following section.
What to invest in KLCC Zone 1 and 2?
This is a million dollar question. Clearly, KLCC is not for everyone as most of the developments are likely at the highest pricing bracket of entire Klang Valley.
Medium/Big Size Unit – Let’s talk about the buyers of this luxury segment. KLCC properties are mainly held by affluent investors who like to collect luxury properties and have high level of holding power. Many of them treat it as “stamp collection” especially those nice and sleek developments that designed by famous architect like Norman Fosters, example Troika. You can notice so many units are empty without light at night but there is no crashing in price (of course, on and off there are some fire sales which are unavoidable in any market). Many rich families are holding it as their “resting suites” for weekend KL shopping spree or for their next generation use. This is particular obvious in mid to big size type of units. How about rental? Expatriate rental market for this mid-big size unit is there but relatively smaller. Those expatriates with family members are more likely to rent a more “family” type of environment and landed properties like Tropicana. Mont Kiara, Bangsar, Damansara Height, and Desa Parkcity. So, when it comes to invest in mid to big size KLCC zone 1 and 2 properties, it is really a different league and different ball game.
Small Size Unit – As for the small size apartment in KLCC zone 1 and 2, the buyers are more from mass market compare to above as the pricing of RM600k to RM1mil level is more affordable to many. Based on the listing above, even though the list is long, small size and nice condo/service apartment in this area is still relatively rare. The demand of rental market on this tyoe of unit is clearly there. Many single/couple or young family expatriate will still prefer to stay around Zone 1 and 2 than PJ/Outbound. There are many reasons for this. Many of them could be new to KL and it is less risky to start thier first year in the city centre especially this group may not own vehicle or not fancy of having one. This reach for this expatriate group ( mid to high level management corporate figures) is wider than the above market and the rental of RM4 to RM6 psf for the 600 to 800sf is surely within their housing allowance and budget.
If you are interested on KLCC properties, the list above should help. Many (property agents, journalist, investors, valuers etc) claimed that KLCC properties are over-supplied. Well, by looking at the list above, no one will object it. However, does it means all KLCC properties are not investable? I personally do not think so. You need to understand which type of units are oversupplied and how is the expatriate rental market there. Check with agents and do more survey if possible by yourself. See where are those expatriates staying now (can be colleagues, friends’ colleagues, relatives’ colleagues etc). There are always bargain buy appears once awhile (and most of the time, these units don’t wait for you!). Once you have done that, then here you go… … Congratulation to be a proud owner of KLCC properties (oh! make sure it is within Zone 1 and 2 :)). Those who are not season investors but love to own a piece of KLCC properties, simple … … drive around Petronas Twin Towers! My rule of thumb is, those properties that fronting or beside the main roads which can be seen from your driving seat are the one to first fall into your list, this visibility test will hardly go wrong! Next, check the pricing above and pick the small unit that can fit your bills (purchase price and installment) and equate it to the rental market of RM4 to 6psf!
How about ownstay? With the pricing of the area like TTDI (eg. Ascencia), Kota Damansara (eg. Tropicana Garden), Old Klang Road (eg. Verve), Damansara Height (eg.Damansara City) etc are all launched at above RM1,000psf, KLCC properties look relatively cheap! It is inevitable that Malaysian are still mentally not ready to stay in the center of city, those who are ready should take this opportunity to reap the benefit of narrow spread (in term of psf) between KLCC and non-KLCC properties. It is mind boggling to see recent launches in non-prime location to ask for RM700 to RM800psf where you can clearly see there are still have choices in KLCC Zone 1 and Zone 2 properties in this range. So either KLCC properties are now undervalued or the rest are overvalued. The spread has to be wider!
Disclaimer: The above statements are solely based on write opinion. Please do your own homework. No one know your appetite and requirement better than yourself! 🙂 Hunting of KLCC property starts now!
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