Slowdown? Prices per sq ft increased for ‘strong interest’

This project ‘wrapped’ itself around The Star newspaper today (19 Nov 2015). It’s those cover wrap which costs a fortune to advertise. Yes, I think it’s part of the project launch advertising and promotion activity. The project is 8 Conlay by KSK Land Sdn Bhd. Well, luxury projects are having a bad time in Singapore. Just google for lots of negative news. However, amidst the slowdown in total transactions here in Malaysia, one developer had just launched a new project with an upward revision of its price per sq ft. Original price per sq ft is within the luxury category at RM2,700 per sq ft. For its launch, the price per sq ft has been adjusted to RM3,200 per sq ft. This moved its gross development value by nearly RM 1 Billion! (From RM4.5 billion to RM5.4 billion).
wpid-img20151120075341.jpgDoes this mean the whole market is coming alive again? I seriously do not think this is representing the recovery of the property market BUT it does prove that there are many super wealthy people who loves Kuala Lumpur city centre. Specifically, Jalan Conlay. This project is an integrated one and has branded residential, retail and hotel components. Its managing director Joanne Kua said, “We are aware of the recent property slowdown but among the 70% reserved units, 80% of them were reserved by Malaysians.” The developer is also going to market 8 Conlay to the international market and said that it is not too worried about the project. 8 Conlay is positioned as a branded luxury which she said normally commands better capital yield for the longer term. This is a higher level than the regular luxury units.
A good point to note is that the RM3,200 is not considered a record for Kuala Lumpur city because Joanne said that they are benchmarking it with other branded residences around the world. This is where the current price tag per sq ft remains one of the lowest. The project is on a four-acre land and has two YOO-interior designed branded residence towers of 57 and 62-storey blocks that will be connected via two sky bridges at level 26 and 44. These are complemented by a 68-storey five-star hotel, services suites and a lifestyle retail component. Kempinski Hotels, the oldest luxury hospitality group from Europe will provide services for the branded residence towers as well as managing the hotel tower.
I think this is a niche market. Not every developer should try to do this because a ‘lifestyle’ product is a very subjective one and many times, what we believe the super wealthy may like may not be what they actually like. For Conlay 8, based on the current results, it does point to the fact that it has met the buyers’ expectations of branded luxury. Maybe it’s the developer’s ability to sell the concept or maybe it’s due to the top notch luxury brands that accompany it. As a Malaysian staying in KL, I would welcome more of these developments. This is especially if it can also help to brand KL as another branded luxury property destination for the super-wealthy. Anyway, this was something which Singapore managed to do pretty well with its Sentosa. Perhaps it’s now out turn. Happy anticipating.
written on 19 Nov 2015
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