With its luxurious fully glazed and curved facade, this office building is a looker located just next to the SPRINT highway, opposite Tropicana City Mall. Yet, even though it was handed over to its strata title owners since early this year, it is still only about 10% to 20% occupied, says an estate agent who sells units there.
Signs recently came out for a furniture retailer to take up the ground and 1st floor, while one floor was sold to a Japanese company, she says. Nevertheless, the rest of the units remain empty.
Unsurprisingly, prices and rentals have dropped. Launched at about RM270 per sq ft, owners had originally listed the units for RM550 per sq ft, but some of them are now willing to go down to RM440 per sq ft, she adds. “Asking rental has also gone down, from originally RM4 per sq ft to RM2.50 or even RM2 per sq ft.”
These prices are just asking prices going down, however, says Siva Shanker. “Take condos around KLCC for example, people were asking for RM2,500 psf and then in 2008, 2009, people didn’t want to buy anything anymore, so prices dropped to RM1,700 or RM1,800 per sq ft. But these are mainly asking prices. In reality many of the good locations stayed flat in transacted price. People are still making money compared to the price they first paid.”
Hopefully, this would ultimately mean more realistic prices. Given the banning of DIBS and credit controls, credit may be less and less easy to come by, but prices may ideally approach fundamental values and keep the market moving.
The increase in real property gains tax will also make it more attractive to rent than flip. “Instead of trying to sell at a high price, rent it out for the next two to three years,” advises Siva. “Don’t leave it empty, waiting for it to turn. You don’t know how long it will take. Get a rental income.”
I hope this ultimately means all those properties we are told are so scarce and in-demand but end up empty would, rather than just being owned and held, actually be occupied and lived in. Just seems to make more sense, doesn’t it?
