With the supply of land-bank getting scarce in the Klang Valley, it’s not surprising to see developers expanding their presence in “not-so-prime” locations.
This was evidenced as recently as last week, when SP Setia announced it was acquiring a RM381.2mil plot of land in Rinching, located mid-way between Semenyih and Bangi old town, to be followed soon after by Mah Sing Group Bhd’s purchase in Rawang for RM92mil.
“Granted, it is often developers with prime land-bank in Kuala Lumpur and Penang that stand to benefit more from rising property prices,” says an industry observer.
“But property conglomerates such as SP Setia and Mah Sing are well-known brand names with a proven track record. They can probably attract buyers and chalk up sales even if they bought land in Timbuktu,” he adds in jest.
A huge boost to the land acquired by SP Setia and Mah Sing is that they are both well connected. Malaysia Equity Research in a report pointed out that the former’s Rinching land is located within 15 minutes from the proposed Bandar Kajang MRT station. “(It is) near the terminal station for the approved MRT Blue Line (Sungai Buloh-Kajang) and 25km south of KLCC (which is 40 minutes via existing highways).”
The report also says SP Setia is planning to replicate the success of its twin flagship Setia Alam and Setia Eco-Park development, including investing in infrastructure to improve connectivity.
An analyst at a local bank-backed brokerage says investing in infrastructure is “part of the package” when developing land that is considered “less prime”.
Similarly, analysts are also positive about the connectivity for Mah Sing’s Rawang land. The developer has proposed to develop a mixed township, M Residence@Rawang, that includes beginner homes on 90.3ha.
“M Residence@Rawang is directly accessible from the North-South Highway, being only 10km from the exit point at the Rawang toll via Jalan Batu Arang. The Kuala Lumpur-Kuala Selangor Expressway (formerly known as Latar Highway) was opened in June,” says UOB KayHian in its research report.
“The Rawang KTM Station is also a short drive away, within 12km from the land, according to the management,” it adds.
According to Mah Sing, the M Residence@Rawang township has an estimated gross development value of about RM948mil and preliminary plans include two-storey link homes, townhouses, semi-detached homes, three-storey shops and various facilities and amenities.
“M Residence@Rawang is expected be developed over three to four years and the group is also actively scouting for more well-located mega township land that fit the group’s business model of quick turnaround and allow for value enhancement,” the company says.
The first launch is slated for the first half of next year for the mass market, in line with the Government’s call for private developers to build more affordable housing.
The move to provide affordable homes has been praised by analysts and industry observers and considered a good way to attract buyers in less prime land within the Klang Valley.
“With absorbitant property prices today, especially in the Klang Valley, it is becoming increasingly difficult for first-time home buyers to even place a downpayment for a house,” says one industry observer.
On the proposed Mah Sing development, UOB KayHian says: “The price tag for a two-storey link house (built-up of about 2,000 sq ft) is indicatively priced from RM390,000 onwards, or RM195 per sq ft. Ground checks indicate that selling prices for a two-storey link house in nearby developments such as The Emerald and Bandar Country Homes range from RM150 per sq ft to RM250 per sq ft.
“We believe the township concept should be able to attract buyers given the decent selling prices.”
Macquarie Research in its recent report says Mah Sing’s project could see good demand with the significant rise in property prices in Kuala Lumpur and Klang Valley in the past year.
“As a comparison, Kuala Lumpur Kepong Bhd (KLK) launched its link houses in June this year in Bandar Seri Coalfields with prices ranging from RM328,000 to RM368,000. We understand from KLK that the sales for the launch were very strong with over 90% sales achieved, primarily due to upgrader demand.
“Mah Sing’s new land is further up north of KLK’s project, but has good connectivity with the KL-Kuala Selangor Expressway and is 20km from Rawang city centre.”
SOURCE: The Star
