Construction of the MRT and LRT extensions has not even reached the halfway point and developers are already capitalising on the potential value of the upcoming upgrade of Klang Valley’s transport infrastructure. It is not hard to find flyers highlighting a development’s proximity to the nearest train station, but it is pretty difficult to really gauge what its completion means for the property market.
iProperty.com Malaysia spoke to Christopher Chan, associate director of Hartamas Real Estate (Malaysia), Warrick Singh, principal of Asian Land Realty and James Tan, associate director of Raine & Horne International about what they expect the MRT and LRT extensions to change in the real estate industry.
What are some of the prime properties along the MRT, LRT extension and BRT lines?
Christopher Chan (CC): Some of the key areas and projects to look out for include:
- Sunway Geo’s mixed development project located next to the Sunway BRT stop
- Equine Capital Bhd’s development which is located near the BRT line and the LRT extension near Summit USJ Shopping Mall
- Tropicana Gardens as it is directly linked to the Dataran Sunway elevated station
- Sunway Velocity which has direct access to the underground interchange MRT stations at Cochrane and Maluri
- EkoCheras, which is located next to the Cheras MRT station
Warrick Singh (WS): I honestly feel that any property along any of the lines – LRT, MRT and BRT – would be a good investment in lieu of Malaysia’s young, dynamic and educated population.
The main issues of any good property alongside this infrastructure would be affordability and financing. Land in the city is generally expensive and developers, to maintain margins, look at high plot ratios and densities. To ‘bridge the gap’, Kuala Lumpur may have to go the way of Singapore and build ‘shoebox’ apartments within an integrated development.
James Tan (JT): I would look at places such as:
- The Kelana Jaya MRT connection and its surrounding developments – H20 Residences (Titijaya Land Berhad), Pacific Place (MN Global Assets Management) and Centro (GLOMAC)
- SS15, SS17 and SS18 in Subang Jaya will all benefit from the station near Summit USJ Shopping Mall
- USJ 20 has a station very close to the development by One City Properties
These are only some of the areas that will be directly impacted by the new system. Most of these places will benefit from the population boost and increase in daily traffic. Places such as Pusat Bandar Puchong and Sunway Southquay will definitely see a great increase in people travelling to and from the area. Once the lines are integrated, people can move from Puchong to Klang in just a matter of minutes thanks to the linked transportation.
With the Circle Line operating within the city centre as well as the upcoming mega project Bandar Malaysia and its surrounding Golden Triangle Apex, what are some concerns investors should look out for?
CC: I believe that it is good to first know the confirmed alignment of the Circle Line 3 before rushing in to buy the properties there. Investing in properties next to or near MRT stations is ideal, but at the moment the exact alignment is unconfirmed.
Purchasing something in the first phase of any development should be good because one can expect to get the maximum returns compared to those who purchase later as the developer usually increases the selling price over time.
WS: At its core, Bandar Malaysia is a city within a city and may have features of a world-class financial centre complete with incentive tax breaks.
The new High Speed Rail (HSR) system is, perhaps literally, a stone’s throw away from Bandar Malaysia which is positioned in such a way that it is able to draw the spin-offs from an already vibrant Kuala Lumpur Central Business District (CBD).
There is already concern for an overhang of commercial office space in the area, but specific tax breaks and reduced assessment rates/quit rent rates could serve as crutches through this gestation period.
JT: As many have mentioned, the oversupply of office space is a problem. If the Circle Line 3 does not become operational on time, this area will not survive. If it does start booming, however, it could pose stiff competition to Taman Desa due to its proximity to Kuala Lumpur’s town centre.
Do you believe that under the RRIM project by Kwasa Land Sdn Bhd, the government should intervene and take into account provisions for affordable housing?
CC: The developments over the past few years have been mostly of the upper-middle price range variety, creating a vacuum in regards to properties for the sizeably large population who are in the lower and lower-middle income range.
In light of this and the government’s objective to build more affordable housing as provided in Budget 2014 under PR1MA, I am of the opinion that provisions for affordable housing must be made here to cater to this segment of the populace.
WS: The country’s growing number of youths needs affordable housing and RRIM appears to be the last bastion of affordability in the area. All efforts should be made to have affordable housing as its principal theme, setting the tone for the CBD and suburb planning.
JT: Yes, no questions asked; the government needs to provide it. As per usual, however, it is how they end up managing it that will determine its success. They must manage the qualification and eligibility of buyers, the prevention speculation and issue purchasing criteria. They also have to work with the banks as affordable housing stops capital appreciation, which ultimately affects the banks’ expectations.
Despite claiming to alleviate traffic, most congestion takes place where current LRT stations are situated. How can this problem be rectified for the upcoming stations?
CC: We would need to ensure that the overall MRT, LRT, BRT, KTM, bus and taxi services complement one another to form a successful integrated transportation system. For example, there is a real need to ensure that the feeder bus services to the stations are on time and efficiently run. This would help guarantee that the public will use the buses instead of driving their cars to the stations and parking them there, resulting in a jam in the areas surrounding the stations.
WS: Bridging the gap between the lines would create an effective, reliable and punctual public transportation system. Applying expensive peak hour tolls as well as a hybrid of certification of vehicle eligibility (COVE) and public transport personal income tax breaks could be beneficial to this goal.
JT: As both a value and land economist, my opinion is that sufficient parking and sufficient drop-off areas need to be provided. Sadly, this will not work in highly populated areas due to the lack of space and the costs involved. Cheap car parks would be a great option but this may not be economically viable for the operator. However, these costs need to be absorbed or subsidised for the benefit of the consumers and nation. If you look at things in the long run, traffic takes up time and time is money. Productivity hours lost will, perhaps someday, affect the country’s GDP and these costs cannot be quantified.
Integration is key when it comes to public transportation. What steps should the relevant authorities take to ensure there is a systematic integration of the public transport infrastructure in Klang Valley?
CC: Ideally, the integration, planning and design should be done before the formal handover of the complete viaduct construction to the station developer at a particular station.
MRT Corp and Syarikat Prasarana Negara Bhd should immediately discuss the integration of the proposed Circle Line 3 and MRT Sungai Buloh-Kajang Line in Bandar Utama for seamless connectivity so as to avoid unnecessary costs incurred by connecting the two lines at a later stage.
WS: Integration is the mother of all connectivity. Town planners need to steer clear of haphazard planning and pay attention to the corresponding plot’s ratio and density. Currently, an overturned trailer in a connecting tunnel can throw the city into a traffic pandemonium nightmare. Legislation must take the form of a tiger that bites all those who run afoul of current building by-laws and other misdemeanours.
JT: A one-card system across the board should be introduced. Currently, if you park your car in Petaling Jaya and later go to Klang, you cannot use the same parking ticket. Similar to the Touch ‘n’ Go smart card, there needs to be a one-card system which works for all lines and networks. For example, if you stay in Putra Heights and want to get to the city, you would have to take the LRT, BRT and KTM – that is a total of three different cards.
Disclaimer: The opinions stated in the article above are solely of the three interviewees quoted, namely Christopher Chan of Hartamas Real Estate (Malaysia), Warrick Singh of Asian Land Realty and James Tan of Raine & Horne International, and are not in any form an endorsement or recommendation by iProperty.com. Readers are encouraged to seek independent advice prior to making any investments.