Yes, I have firm interest in Kota Kinabalu as well. I fly to KK no less than once per year for the past 15 years. At this moment, I am only exposed there via a small condo unit which I had rented out for RM950 / month. Bought it slightly over 2 years ago for just RM182K. So, yes, the rental ROI is pretty good no matter where you compare it to. In Penang, a RM500,000 condo may only yield you a rental of RM1200 – RM1,500. In KL, I wrote in another article before, one Kepong condo of RM250,000 can yield a rental of RM1,100-RM1,300. The condo is not too far away from 1Borneo Mall which I think is still KK’s largest mall to date.
So, what’s up in KK market for 2014?
According to Maxx Media (S) Sdn Bhd Director Michael Hiew, ‘The RPGT increment and removal of DIBS has done little to discourage genuine buyers and investors in East Malaysia. The majority of investors in East Malaysia are relatively cash-rich and are looking at the long-term game. Most of them are from the tourism, agriculture, as well as the oil and gas industry – the three largest contributors to the local economy.’ This statement itself is a very good booster to your property investment plans in KK.
For those who thinks Penang International Airport is busy, think again. KK International Airport handles at least 30-40% more passengers than Penang International Airport. There are direct flights to 10 countries and in 2013, over 2 million foreign tourists visited KK. KK is more than just the amazing beaches. It has also the highest peak in ASEAN, Mount Kinabalu. If you have never scaled it before, I suggest you to try. It may not be as tough as HIMALAYA but in my last trip, out of 11 able bodied human beings, only 6 made it to the peak. There are also the highlands, the national forest park, national marine park and many more attractions. Suffice to say, ‘no wonderlah so many tourists go to KK’.
Currently, a lot of developments are continuing and within the next few years, you will see more and more high-rise developments. There are already very little if any land available in the KK city centre. Thus, the growth would come from ‘greater KK’ area which is where the 1Borneo Mall is and beyond. In fact if you want to know, the amount of land available is definitely still huge.
What are some of the projects available? Well, there’s Jesselton Twin Towers, 56 storeys high and GDV of RM650 million. How does it look like? Please refer to the left. Besides this, there are also the Harrington Suites with unit sizes starting from 2,455sq ft onwards. One more would be SBC Corporation Berhad’s joint venture with the Suria Group. This is the Jesselton Quay, a mixed development with a GDV of RM800mil. Mah Sing would also be developing the Kota Kinabalu Convention City (KKCC). This is an integrated project with a GDV of over RM1.4 Billion.
Typical prices ranges from RM500psf to RM800psf for high-rise developments while some premium developments would be even higher, perhaps matching KL / Penang too.
Wait, if you have never been to KK before, I think it’s time to go for a holiday. Don’t think about any investment. Go and enjoy first. Only if you get that ‘gut feeling’, then only you think about investing there. KK is not going to run anywhere. I am still thinking about climbing Mount KK one more time before I am way too old and way too fat to climb in a few more years.
written on 25 Jan 2014
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