• Insight into Malaysia Corporate Asset

     

    Office transactions were rather quiet in 2016 with six office buildings sold for a total value of RM818 million. The investment market has been equally inactive in 2017, with only four office building transactions, although these aggregated a higher total investment amount of about RM1.4 billion.

     

    The four transactions recorded during the year concerned the sale of The Ascent @ Paradigm, bought by EPF from Jelas Puri Sdn Bhd for RM321 million, Menara Prudential, bought by KL 33 Sdn Bhd from OCBC Properties (M) Sdn Bhd for RM125 million, Wisma Selangor Dredging, bought by Golden Eagle Realty Sdn Bhd from Selangor Dredging Bhd for RM480 million, and Vista Tower, bought by AmanahRaya REIT from BlackRock Inc. for RM430 million

  • Major Office Building Transactions

    Most of the high-quality office space in KL were transacted in the range of RM1,000-1,200 per sq. ft.. However, there were two prominent office buildings sold for more than RM1,200 per sq. ft., i.e. Integra Tower (in 2015) and Platinum Sentral (in 2014). High-grade office buildings with high occupancy rates in KL are always attracting local buyers, including institutions, REITs and private buyers.

    2007 Major Transactions

    2007 was a landmark year as far as major transactions are concerned. The most significant benchmark cases were the Icon and Menara Glomac transactions which were investment fund-led but without prelets in sight. In each case, it was the Kuwaiti Finance House which inked the deal and the commercial space market is now quoting prices of RM1,120 per sq ft as a result. Yields have been compressed but in the case of the Menara Bumiputra-Commerce we do not see a benchmark as it is below 5% with little built in rental growth. Already 2008 looks like continuing this trend although we are not sure the price of RM1,120 will be surpassed.

    2008 Major Transactions

    There were four major transactions of office buildings in the 2H 2008, namely Menara Citibank, Kenanga International building and Menara Standard Chartered located in Kuala Lumpur, and CP Tower in Petaling Jaya. During the 4Q of 2008, however, two major office transactions were aborted. First of all, the sale of Menara Citibank to IOI Corporation Berhad was cancelled by the purchaser in November with the effect of economic slowdown being given as the reason. Secondly, the sale of the Kenanga International building to Tower REIT was rescinded in December when certain condition precedents were not met. Meanwhile, Menara Standard Chartered was sold by Reco City Sdn Bhd (affiliate of GIC Real Estate Pte Ltd) to ING Insurance Bhd in November. In December, PHBB (Pelaburan Hartanah Bumiputera Bhd) bought CP Tower from CIMB-Mapletree.

    The Malaysian real estate investment market ended 2009 on a strong note with a surge in activity in the final two months of the year. Throughout the year there were a total of 13 major transactions of office buildings in the Klang Valley with a total transaction value of RM1.789 billion. Also significant was the sale and leaseback of the CIMB group’s branches and offices nationwide to the Employee’s Provident Fund for a total consideration of RM302.45 million. By year nd, a number of local and overseas funds had re-entered the market and we foresee continued strong interest in acquiring high quality office assets.

    16 major purpose-built office building transactions were reported in 2010, the majority of which involved acquisition by real estate investment trusts (REITs). Significant deals involving REITs include the sale of Menara UOA Bangsar ower, Wisma UOA Damansara II, Sunway Tower, Menara Sunway, Dana 13, Menara PKNS, and FSBM Plaza.

    11 major purpose-built office building transactions were reported in 2011, with three of the acquisitions involving real estate investment trusts (REITs). Significant deals involving REITs include the transaction of Putra Place via public auction and Prima 9 and Prima 10 office buildings in Cyberjaya. Other transactions included the involvement of foreign companieswith the likes of Wisma Goldhill, Bangkok Bank and U1 Office Tower as well as local corporations.

    The most significant office transaction during the quarter was the sale of MBSB HQ by PJ Sentral Development Sdn Bhd to MBSB for a total consideration of up to RM239 million. The building is located in PJ Sentral Garden City and its 27- to 30- storey office building comprise a total of 281,455 sq ft of net lettable office space. Other transactions included 3 office buildings in Horizon in Bangsar South for a total consideration of RM369.25 million to a different company for each tower.

    The office investment market was active during the review period with 10 recorded transactions worth a total of around RM1.35 billion in value. Significant office transactions include the East Wing of The Icon, Jalan Tun Razak (RM226mil, RM843 per sq ft) and Menara Sapura Kencana, Jalan Dutamas (RM260 mil, RM920 per sq ft) amongst others which are detailed in the table below.

    The investment market was fairly active in 2014 recording five notable transactions with a combined value of about RM1.12 billion.

    The investment market was active during 2015 recording nine notable transactions with a combined value of circa RM2.95 billion

    Notes:
    (1) Fitters Building Services Sdn. Bhd., a subsidiary of Fitters Diversified Bhd., has signed a sale and purchase agreement with GCP Tower Sdn. Bhd. to purchase the freehold property, which comes with 70 parcels of office lots and 363 units of car park bays. It intends to redevelop the site into a small office home office (SoHo) concept building.
    (2) Hong Leong Bank Berhad (HLB) has disposed Menara Raja Laut, a 27-storey office building in Jalan Raja Laut, Kuala Lumpur, to Hong Leong Assurance Berhad. As at 18 March 2015, the building has an occupancy rate of 41% (36% of which are being occupied by HLB and its subsidiaries).
    (3) Integra Tower, a 39-storey grade A office building with LEED Platinum certification, forms part of The Intermark development that also comprises Vista Tower, Double Tree by Hilton and the Intermark Mall. The office tower which comes with 850 car park bays is being acquired by Retirement Fund Incorporated (KWAP).
    (4) AmanahRaya Reit has disposed Wisma AmanahRaya, a 15-storey purpose-built office building with two basement levels constructed on two pieces of leasehold land in Jalan Ampang, to Annex Sentral Sdn. Bhd., a wholly-owned subsidiary of AmanahRaya Development Sdn. Bhd. (a wholly-owned subsidiary of Amanah Raya Berhad). As at 27 May 2015, the 48-year-old office building is being fully tenanted by Amanah Raya Berhad and the tenancy agreement will expire in August 2016.
    (5) Menara Hong Leong (Office Tower A) is a 33-storey purpose-built stratified office building (71% completed as at May 2015) within the on-going integrated commercial development of Damansara City Kuala Lumpur. The indicative cash consideration for the entire issued and paid-up share capital of DC Tower Sdn. Bhd. is RM189,333,000. The value of Office Tower A is calculated based on RM1,150 per sq. ft.
    (6) Malaysian Resources Corp Bhd. (MRCB) has proposed to sell Menara Shell together with a five-storey podium and a four-storey basement car park in the locality of Kuala Lumpur Sentral to MRCB-Quill REIT (MQ REIT) for RM640 million.
    (7) AmFIRST Real Estate Investment Trust (REIT) is disposing of a 13-storey office building known as AmBank Group Leadership Centre at Jalan P. Ramlee for RM36 million. The freehold building comprises a 10-storey office block, a penthouse and a three-level car park.
    (8) The purchase consideration of RM540 million includes the retail component, namely Tropicana City Mall, which has a NLA of 448,248 sq. ft. and is about 89.2% occupied while the office tower is fully occupied. The apportionment of the two different components, however, is not available.
    (9) Block N, known as the Iconic Office, at Empire City Damansara is a 45-storey corporate office tower which is physically completed (as at December 2015). The Certificate of Completion and Compliance (CCC) of the office building is expected in early 2016.

    Most of the high-quality office space in KL were transacted in the range of RM1,000-1,200 per sq. ft. However, there were two prominent office buildings sold for more than RM1,200 per sq. ft., i.e. Integra Tower (in 2015) and Platinum Sentral (in 2014). High-grade office buildings with high occupancy rates in KL are always attracting local buyers, including institutions, REITs and private buyers.

  • Building Index

    1.1-KL Trillion
    1.2-Menara Bangkok Bank
    1.3-Fahrenheit Office Tower
    2.1-Plaza Sentral
    3.1-KL Eco City
    4.1-Vertical Corporate Tower
    5.1-Bangsar - Menara UOA Bangsar
    5.2-Bangsar - Menara Mutiara Bangsar
    6.1-KL Gateway - Menara Suez Cap
    7.1-Menara MBMR @ Mid Valley
    7.2-The Met Corporate Towers @ KL Metropolis (New Launching, available by 2022)

  • 1.1-KLCC - KL Trillion

    KL Trillion
    Size: 1087sq.ft / 1959sq.ft / 2583sq.ft / 5000sq.ft / 11280sq.ft

    Half Floor: 5000sq.ft

    Full Floor: 11280sq.ft
    Partly Fitted with minimum 2 rooms, airocon, ceiling and lighting
    Rental: RM5.50psf
    Sale: RM1600psf
    1087sq.ft Video A
    1959sq.ft Video B
    2583sq.ft Video C
    5000sq.ft Video D
    5000sq.ft Video E

    Video D Facing Genting View,

    Video E Facing Jalan Tun Razak

    - near to LRT or MRT station. – Ampang Park LRT
    - near to F&B – The Intermark Mall
    - In house parking and nearby open space car park.

  • 1.2-KLCC - Menara Bangkok Bank

    Menara Bangkok Bank
    Size: 775sq.ft / 1012sq.ft / 1055sq.ft / 1744sq.ft / 2067sq.ft / 2540sq.ft / 2831sq.ft per unit

    Half Floor: 6000sq.ft

    Full Floor: 12000sq.ft
    Bare Unit
    Rental: RM8.00psf
    Sale: RM1800psf
    Full Floor Plan
    Walkthrough Surrounding Video
    Menara Bangkok Bank Video List

    - near to LRT or MRT station. – Dang Wangi LRT and Bukit Nanas Monorail
    - near to F&B – Quill City Mall, Suria KLCC Mall
    – In house parking and nearby open space car park.

  • 1.3-KLCC - Fahrenheit Office Tower

    Fahrenheit Office Tower
    Size: 8662sq.ft x 2 Floors
    Price: RM1400psf
    Fahrenheit Office Video

    - near to LRT or MRT station 

    – Bukit Bintang Monorail
    - near to F&B – Pavillion, Fahrenheit & Lot 10

  • 2.1-KL Sentral - Plaza Sentral

    Plaza Sentral

    Size: 6608sq.ft
    Size: 6608sq.ft
    Size: 10689sq.ft
    Size: 10689sq.ft
    Size: 10491sq.ft
    Size: 31869sq.ft
    Price: RM1200psf

    Plaza Sentral Video List

     

    By MRCB

    72 acres

    Tenure: Freehold

    Completion Year

    Plaza Sentral: 2001-2006

    Axiata Tower: 2009

    Nu Tower: 2013

    Q Sentral: 2015

    Market Transaction: RM1000-RM1600psf

  • 3.1-KL Eco City- Menara 1 Strata Office

    Menara 1 @ KL Eco City
    Size: 1370+1035+1035+1049= 4489sq.ft (Half FLoor Facing Bangsar South)
    Size: 1045+1031+1031+1455= 4562sq.ft (Half Floor Facing KLCC)
    Total Size: 9051sq.ft
    Rental: RM5.00psf
    Sale: RM1500psf
    Floor Plan
    KL Eco City Flying Drone Video
    KL Eco City Integrated Green Development Video
    KL Eco City Walkthrough
    KL Eco City Unit Video

    - near to LRT or MRT station. – Abdullah Hukum LRT & KTM
    - near to F&B – KL Eco City Mall
    - In house parking and nearby Multi-storey car park

  • 4.1-Bangsar South - Vertical Corporate Tower

    The Vertical Corporate Tower B
    Size A: 1063sq.ft
    Size B: 2435sq.ft
    Size C: 1063sq.ft + 2435sq.ft= 3498sq.ft
    Size D: 2435sq.ft + 2142sq.ft + 2464sq.ft = 7041sq.ft
    Size E: 1063sq.ft + 2435sq.ft + 2142sq.ft + 2464sq.ft = 8104sq.ft
    Size F: 18900sq.ft (Full Floor)
    Bare Unit
    Rental:RM6.20psf
    Sale: RM1200psf
    Bangsar South Surrounding Video
    Video 1063sq.ft
    Video 2435sq.ft
    Video 2142sq.ft
    Video 2464sq.ft
    Floor Plan (Strata Floor)
    Floor Plan (Full Floor)

    - near to LRT or MRT station. – Kerinchi Station
    - near to F&B – Nexus & The Sphere (Opening Q2 2018)
    – In house parking with more than 10,000 bays

  • 5.1-Bangsar - Menara UOA Bangsar

    Menara UOA Bangsar
    Half Floor: 11899sq.ft
    Full Floor: 21191sq.ft
    Rental: RM5.00psf
    Sale: RM1100psf
    Bare Unit/Partly Fitted
    Menara UOA Bangsar Floor Plan

    - near to LRT or MRT station. – Bangsar LRT
    - near to F&B – F&B Podium and shop around Bangsar Utama
    - In house parking and nearby Dataran Maybank Bangsar parking bay.

  • 5.2-Bangsar - Menara Mutiara Bangsar

    Menara Mutiara Bangsar
    High Floor - Level 17 (Mutiara Bangsar is a 18 Storey Building)
    Unit 1: 1087sq.ft (Tenanted till Oct 2018)
    Unit 2: 3401sq.ft (Tenanted till Jun 2018)
    Unit 3: 1345sq.ft (Tenanted till Apr 2019)
    Unit 4: 980sq.ft (Vacant)
    Unit 5: 1302sq.ft (Vacant)
    Unit 6: 926sq.ft (Vacant)
    Unit 7: 1206sq.ft (Tenanted till Aug 2019)
    Total :10247sq.ft
    Price: RM550psf
    Menara Mutiara Bangsar Floor Plan
    Proposed A: Take take Unit 4,5,6-Phase 1-3208sq.ft
    Proposed B: Take take Unit 1,2,3,7-Phase 2-7039sq.ft
    Proposed C: Take take All units, move in in stages while collecting recurring rental.

    - near to LRT or MRT station. – Abdullah Hukum LRT & KTM
    - near to F&B – In house foodcourt, KL Eco City Mall and NSTP Food Court
    - must have parking space – In house parking and nearby Multistorey car park

  • 6.1-KL Gateway - Menara Suez Cap

     

    Menara Suez Cap @ KL Gateway
    High Floor (Above between level 25 and level 30)
    Size: 11600sf
    Price: RM1200psf
    Menara Suez Cap Full Floor Plan
    Menara Suez Cap Video

     

    - near to LRT or MRT station. – Universiti LRT
    - near to F&B – KL Gateway Mall
    – In house parking and mall parking

  • 7.1-Menara MBMR @ Mid Valley

     

    Menara MBMR @ Mid Valley
    Size A:2314sq.ft+3026sq.ft= 5340sq.ft
    Size B:2458sq.ft+2933sq.ft= 5391sq.ft
    Total Size: 10731sq.ft
    Bare Unit
    Rental: RM5.00psf
    Sale: RM1300psf
    Menara MBMR Surrounding Video
    Menara MBMR Ground Floor Video
    Size A Video
    Size B Video

    - near to LRT or MRT station. – Mid Valley KTM
    - near to F&B – Mid Valley Mall
    – In house parking & Open space car park

  • 7.2)The Met Corporate Towers @ KL Metropolis (New Launching, available by 2022)

     

     

    The Met Corporate Towers (Strata Unit)
    Launching Price: RM900psf-RM920psf
    Executive Level 10-25 800-2584sq.ft per unit Floor Plan:
    Premier Level 26-31 3606-4231sq.ft per unit Floor Plan
    Prestige Level 32-39 16104sq.ft per floor with 12 tittles
    Full Brochure info

    Highlight Feature:

    1) Another benchmark like KL Sentral, KL Sentral is having MIDA, Invest KL, Pemandu and master developer MRCB, KL Metropolis is having MITI, Matrade, Mitec, Duta High Court, Hap Seng and master developer Naza.
    2) Having strong branding present in market with maximum exposure overlooking MITEC, MATRADE, MITI and Duta High Court in 75acres masterplan of KL Metropolis
    3) Investment opportunity to become corporate landlord with scalability (for own used and leasing opportunity)

    - near to LRT or MRT station

    - Segamut KTM, Monorail & MRT 3 KL Metropolis
    - near to F&B – KL Metropolis Mall
    - In house parking

  • Supply & Demand

    The existing supply of office space in Greater KL stood at 119.2 million sq. ft. of net lettable area (NLA) as at Q3/2017. Existing supply has grown at a compounded annual growth rate (CAGR) of 5.2% over the past 12 years, with an average annual addition of 4.53 million sq. ft.. Out of the total office supply, 38.4% or 45.8 million sq. ft. is located in KL City, followed by KL Suburban areas (31.5% or 37.6 million sq. ft.), and outer KL (30.0% or 35.8 million sq. ft.).

     

    KL Suburban saw the emergence of new office locations such as Mid Valley City, KL Sentral and Bangsar in the last decade, offering better quality buildings than the aged office supply in Damansara Heights. Meanwhile, in Selangor, most of the office developments are located in Petaling Jaya (PJ), followed by the north of PJ such as Damansara Utama, Bandar Utama, Mutiara Damansara and Damansara Perdana. New office completions in 2017 were mostly located in KL Suburban and Selangor, followed by KL City with a combined total new office space of 3.78 million sq. ft.. Some of the prominent office buildings include Menara Public Bank 2, Menara Suezcap 1 @ KL Gateway, The Vertical Corporate Tower B, Pillars 12 @ KL Eco City and Pinnacle PJ.

    Greater KL is defined as the combination of Kuala Lumpur City, suburban Kuala Lumpur and Outer KL. Kuala Lumpur City (KLC) comprises the Golden Triangle (GT) and the Central Business District (CBD). KL Suburban refers to the KL city fringe areas such as Damansara Heights, Bangsar, KL Sentral/Brickfields, Mid Valley, Pantai/Kerinchi, Mont Kiara, and KL North. Outer KL encompasses the geographical boundaries of the state, including Subang Jaya, Petaling Jaya, Shah Alam, Klang, Seri Kembangan, Puchong, Cyberjaya and Putrajaya (excluding government offices), among others.

    Source: Savills Research

    A sentence or two describing this item.

    Vacancy Rate in 2017

    Renal Rate in 2017

     

    Comparative Market Analysis

     

    METHOD 1 (comparing with completed subsale properties within the same vicinity)

    Vertical Business Suite
    Mixed development : Office + Hotel + Convention Hall
    Completion Date : 2015
    Land size : approximately 3.76 acre
    Tenure : Leasehold

    Block A-420 units
    Per Floor: 12 Units
    Built up size : 735sq.ft per unit - 13,664sq.ft per floor
    Block A Launching: RM850psf

    Block B-256 units
    Per Floor: 8 Units
    Built up size : 878sq.ft per unit - 13,037sq.ft per floor
    Block B Launching: RM900psf

     

    🔶Q Sentral @ KL Sentral - Rental RM7psf
    15,000sq.ft per floor
    RM24mil (RM1600psf)

    🔶Plaza Sentral @ KL Sentral - Rental RM6psf
    9917sq.ft per floor
    RM11.90mil (RM1200psf)

    🔶Northpoint @ Mid Valley - Rental RM5.50psf
    9505sq.ft per floor
    RM10.45mil (RM1100psf)

    🔶Menara 1 Strata Office @ KL Eco City - Rental RM5.00psf
    9051sq.ft per floor
    RM12.67mil (RM1400psf)

    🔶Menara MBMR @ Mid Valley - Rental RM5.00psf
    10,731sq.ft per floor
    RM15.02mil (RM1400psf)

    🔶Menara UOA Bangsar @ Bangsar - Rental RM5.50psf
    21,191sq.ft per floor
    RM23.31mil (RM1100psf)

    🔶Menara Suze Cap @ KL Gateway - Rental RM5.50psf
    11,600sq.ft per floor
    RM13.92mil (RM1200psf)

     

    METHOD 2 (comparing with completed properties in other vicinity)

    🔶Menara Bangkok Bank @ KLCC - Rental RM7psf
    12,000sq.ft per floor
    RM16.80mil (RM1400psf)

    🔶KL Trillion @ KLCC - Rental RM6psf
    11,280q.ft per floor
    RM15.79mil (RM1400psf)

    🔶PJ Exchange - Rental RM4.50psf
    13,000sq.ft per floor
    RM11,70mil (RM900psf)

    🔶UOA Business Park - Rental RM4.50psf
    22,377sq.ft per floor
    RM23,49mil (RM1050psf)

     

    METHOD 3 (comparing with under construction properties in other vicinity)

    🔶The Met Corporate Towers @ KL Metropolis
    16,104sq.ft per floor
    RM16.10mil (RM1000psf)

    🔶Oxley Tower @ KLCC
    10,000sq.ft per floor
    RM20mil (RM2000psf)

    🔶Aspire Tower @ KL Eco City
    18,715sq.ft per floor
    RM29.94mil (RM1600psf)

    🔶Pavillion Embassy @ KLCC
    10,366sq.ft per floor
    RM12.95mil (RM1250psf)

    Conclusion
    Obtaining cash flow rental with high capital appreciation catalyst would be the priority objective. It has to be determined by latest hard facts. Investing commercial property should be about taking well calculated risk. By doing so, a proper comparative analysis will set your position well.
    The property should be making money at the first point with equity when buy acquiring not disposing.

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