Several projects hope to follow the high-value footsteps of St Regis and The Banyan Tree KL although launches are tentative.
By Chee Su-Lin | Sulin.firstname.lastname@example.org
Ever since The St Regis Kuala Lumpur in KL Sentral and Banyan Tree Signatures Pavilion Kuala Lumpur blazed a trail with launches around the RM2,000 per sq ft mark in 2011, there have been several other projects also eyeing this market.
These include the serviced apartments on top of the W Hotel on Jalan Ampang, the Ritz-Carlton Residences Kuala Lumpur next to Concorde Hotel, Le Nouvel KLCC next to Avenue K, RuMA serviced apartments near KLCC, 8 Conlay on Jalan Conlay, as well as The Four Seasons Place next to KLCC.
Even though the high-end KLCC market has been in the doldrums ever since the late 00s, it seems that remarkable sales have been achieved for the St Regis and Banyan Tree projects.
These are not your average high-end condos. They tout brands which most associate with hotels while offering furnished apartments (as at least an option) and concierge services.
“When we first started working on the St Regis Hotel and Residences, it was about bringing a new concept to Malaysia, a new product offering, a new type of quality and setting new benchmarks in pricing and quality,” says developer CMY Capital’s executive director Carmen Chua. CMY Capital also developed OneKL near KLCC, that is famous for offering a pool with every apartment.
“St Regis is about understanding what the top 5% of the market wants, not just the Malaysian market but internationally as well,” she says. “The brand standards imposed are so high that cost of the hotel rooms has breached a new benchmark of RM2mil per room. The apartments would also be looking at a similar commitment to quality.”
Due to open in December 2014, about 65% of the apartments have been sold and the current prices average at about RM2,500 per sq ft. Built-up areas range from 820 sq ft for a luxurious studio apartment to 4,253 sq ft for a three bedroom apartment. Absolute prices range from RM2.1mil to RM10mil.
“We’ve even had people combining a 3-bedroom, 2-bedroom and 1-bedroom apartment together,” reveals Chua. With combined square footage of over 8,300 sq ft, these are buyers who are capable of dropping nearly RM17,000,000 in one go!
According to Chua, most of her buyers are Malaysian. “We sell from our own database, friends and people we know in Malaysia. That’s our core strength.”
When it comes to the Banyan Tree Signatures KL, meanwhile, all units were sold out not long after its launch at an average price of RM2,000 per sq ft, says its developer, Lumayan Indah Sdn Bhd.
“Even though many people are now talking about landed properties, you can see that when you have a good location and strong branding, there are still good opportunities,” says Tracey Lai, director of sales & marketing for 1 Pavilion Property Consultancy. “If you look anywhere in the world, the CBD will always remain the most prime location. There’s a scarcity factor there.”
“Yield percentages are admittedly not at their peak, as in any global city,” says Lai. “If you look at returns in Hong Kong and Singapore, they are now at a lower percentage, maybe even 3% to 4%. Nevertheless, high net worth individuals are still looking for places to park their wealth and bricks and mortar is still seen as a safe haven… Ultimately, my portfolio of buyers are not first-time buyers; they are savvy buyers.”
Lai’s team is next working on the launch of Pavilion Couture Suites, as well as another project in Mont’Kiara. She suggests that the former may be priced at around RM2,500 per sq ft although she did not reveal when it may be launched.
DTZ Nawawi Tie Leung Sdn Bhd managing director Eddy Wong is optimistic that this trend sees the high-end KLCC market ascending to the the next level. “Yes, most of the new developments being planned are looking at RM2,000 per sq ft and higher,” says Wong. “These projects offer a different value proposition; some are branded (Four Seasons Residences) while some are designed by reputable international architects (Ole Scheeren, Skidmore Owings & Merrill, Jean Nouvel).”
According to Wong, unit sizes are also trending smaller and developers are paying more attention to space planning, and the overall living environment and lifestyle experience. “All these bodes well for the market and we think this is going to be an exciting year for the KLCC market, having being in consolidation mode for the past year or so,” he adds.
RM2,000 plus per sq ft but when?
Several other projects are also keeping mum on when they will be launched, however. A source close to Le Nouvel KLCC next to Avenue K is confident that prices may rise beyond RM2,400 per sq ft. Even though construction has begun, however, he could not intimate when sales would open.
Developed by Wing Tai Asia (also the developer of Verticas in Bukit Ceylon), this project bears the name of its French Pritzker-prize winning architect, Jean Nouvel, and offers 197 units of 3+1 and 4+1 bedroom apartments.
Similarly, hundreds of millions of ringgit has been spent by developer Berjaya Corporation Bhd on construction works for its Ritz-Carlton Residences next to Concorde Hotel, but no word has been released on when the 300 units will be launched.
When it comes to Dijaya Corp Bhd’s serviced apartments above its W Hotel project on Jalan Ampang, prices previously mentioned to the press hovered at around RM2,000 per sq ft. The developer has clarified, however, that the apartments will be managed by Dijaya rather than Starwood Hotels and Resorts Worldwide, which manages the W Residences brand.
Now known as The Residences by Tropicana, they will occupy the 25th to 53rd floors. Registration is open at www.theresidences.com.my and they will be launched “sometime this year”, according to a spokesperson.
Then there is that other high-profile branded residence–the Four Seasons next to KLCC–to be developed by a company jointly owned by the Sultan of Selangor, and businessmen Tan Sri Syed Yusof Syed Nasir and Ong Beng Seng. In the works since 2007, no official announcement on construction works has been made recently.
One that is scheduled to launch in March is Ireka Corp Bhd’s RuMa Hotel & Residences. Located on Jalan Kia Peng, where the Top Hat restaurant used to be, RuMa units are relatively mid-priced since most of the units are sized under 900 sq ft. With average pricing at about RM1,900 per sq ft, most units average at around RM1.7mil.
The apartments would be managed by “an award winning international hotel operator” with whom the agreement is being finalised, says the company’s spokesperson.
Not all branded residences are created equal?
St Regis’ Carmen Chua seems quick to set her development apart from the rest when we talk about this trend. She emphasises the pedigree of the St Regis brand, which was started in 1904 by the Astor family, which also established New York’s Waldorf-Astoria Hotel. The St Regis is the highest brand in the Starwood portfolio and famous guests include ex-US president George Bush, People’s Republic of China President Hu Jintao and Marilyn Monroe.
Much ado is made about St Regis’ butlers, with each floor promising one dedicated butler. “I was in the St Regis Singapore and Hilary Clinton was staying there a couple of months ago,” relates Chua. “One of my friends works in the Department of State and when he walked in with Hilary, he introduced me to her. He said, you must come for the speech that she is giving tomorrow. I changed my flights but I had no dress. I actually sent the butler out to get a dress for me and it worked!”
Other services include a resident botanical service, which provides floral arrangements for your dinner parties or maintains your plants while you’re away. “My personal favourite is the grocery shopping and delivery,” she adds. “If you’re lazy to go out, you just call them up and they can buy for you your milk and eggs or whatever and stock up your fridge for you.”
Within the apartments, ceiling heights scale above 3m, walls are panelled with wood to achieve perfectly even surfaces, and included fittings include Bulthaup cabinets, Miele appliances, Lema wardrobes, as well as Toto toilet-bidets with covers that automatically lift upon sensing your presence.
All very attractive indeed. If as many sales as have been made on just the St Regis and Banyan Tree KL projects as have been divulged, however, that would make over 600 units priced over RM2mil, and some at RM10mil, committed to by buyers. Which can’t leave that many active buyers left in this rarefied realm of real estate. This perhaps explains why other developers are reticent on announcing dates for their launches.
“The critical factor influencing the timing of the property launches is the impending election, and its outcome,” suggests Wong. “It is understandable if some developers choose to launch after the elections.” Wong believes that once the market settles down after the elections, however, it will be business as usual.
Various commentators from PropertyTalk and Lifestyle group believe that this would have a positive effect on other KL city centre projects that come in at lower prices. “Looks like Summer Suites (Phase 1), Face Platinum 1, SoHo Suites KLCC, ViPod KLCC and St Mary are good buys!,” said property blogger Patrick Chay. Nancy Ng Property, meanwhile, said that RM2,000+ per sq ft projects are good news for her, since she is a Face Platinum suites owner.
Commentators from the PropertyWTF forum, meanwhile, seem to have the concensus that buyers of this segment are conscious of owning top tier properties, and consider such properties trophy buys. “Developers have to make [the perception of exclusivity] obscene as you only have a small elite market pool to fight for… the purchasers just want to be known as owning the most expensive property,” says Emyght who suspects some of these buyers to be millionaires from China.
Indeed, for those of us who don’t belong in such categories of buyers, RM2,000 per sq ft sure sounds like a mouthful to chew on, no matter how attractive the property, especially given the market segment’s recent history. Nevertheless, leasing out such properties would offer attractive income streams. And who hasn’t fantasised about living in a hotel where invisible hands cater to your every need?
Ultimately, be it for the general elections, inflation or the impact of globalisation, demand for such top tier properties could just be a waiting game, as is often said for the property market as a whole. And eventually, more and more of these bergamot-scented lobbies, butler serviced rooms and “branded” lifestyle packages will become a reality for at least some of the more well pampered of us.