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1 2 3 4 5 6 7 8Consider The Rentability Of An AffordableCommercial PropertyTHE STAR:By Housing InvestmentsBy Thean Lee Cheng | Oct 22, 2011Although global sentiments remain weak for the moment, it is business as usual as developersmove ahead with their property launches. In the Klang Valley in the next couple of monthsand even into the new year, developers will be offering apartments with small built-up areas.These are essentially serviced apartments but developers prefer to call them by various othernames.
Some of these names include the following - versatile office suites, small office home office(or Soho), lifestyle suites, small office versatile office or office suites. Whatever names theyare called, all of them share several features.These properties are built on commercial titles, not residential titles. Because they are on landwith commercial title, utility charges will be 25% to 30% higher than if they were built onresidential land. And because they are located on commercial land, developers offer that“office” component, hence the name small office, home office. Maintenance charges will alsobe higher compared with projects on residential titles.A second feature they share is the built-up area. Most of these units are sized between 400sqft and 600sq ft. Some may be as large as 800sq ft or even larger. Generally, however, theytend to hover around 500sq ft. Most of them will be one-room or studio apartments. Thosewith larger built-up areas may have two rooms.One may ask, if they are so small, how can it be a home and an office at the same time? Thisgoes back to the land title again.The built-up of these properties are cut rather small because of high land cost. If thedeveloper were to offer a three-bedroom apartment of about 1,200sq ft, these properties maybe out of the reach of many. As it is, it is the smaller units which tend to sell faster.A close scrutiny will show that most of these units are located in pretty urban or commercialareas which means there are conveniences close by. In the case of Section 13, Petaling Jaya,properties like Centrestage, which is currently being constructed, will be close to the Section14 commercial area.But besides Section 14, there are also the commercial areas of Section 17, Section 19 andSEA Park within a 10km radius.The project will, therefore, leverage on the old commercial areas in the vicinity. Two blocksare being developed by Tetap Tiara Sdn Bhd, the developer who built the Jaya Onecommercial blocks located at the Jalan University-Jalan 13/6 corner. Other servicedapartment projects are being planned in Section 13.Over in Ampang, Kuala Lumpur, serviced apartment projects are being planned in andaround that area. The projects will leverage on the commercial areas in that locality.Developers are also featuring its proximity to the Petronas Twin Towers as a selling point.Serviced apartments are also being launched in relatively new areas in and around the KlangValley. This includes Empire City by the Subang-based Empire group. Empire City is locatedon 25 acres of commercial land opposite Damansara Perdana. Blocks of office towers,serviced apartments and a hotel will be located along the Lebuhraya Damansara-Puchong.In Sri Damansara, TA Global Bhd will be having serviced apartments too. There will be othersimilar projects in Kota Damansara.The proliferation of these 500 sq ft apartments is also as a result of the financial crisis.Developers have learned that smaller units are easier to rent and sell than a 2,500 sq ft unit.The many empty condominiums around the Petronas Twin Towers is an example. Most of
the units there are 2,000sq ft and above. Now those who are planning projects there arebuilding units under 2,000sq ft. By cutting the size small, these smaller units are also moreaffordable.Here then is the catch. Buyers, fearing that property prices may go up further, are going forthese smaller units with the hope to either flip sell them after completion, or to rent them out.But while developers are able to make their projects affordable, can they make themrentable?Most of these small units are priced around RM500,000. At that price, they have temptedmany into signing on the dotted line. But the buyer must also consider the fact that instead ofone big 2,500sq ft unit, there are now five small units, which means there are now a largenumber of small apartments.The density has increased. The higher the density, the longer it will take to rent out that unit,or to sell later on. Instead of one owner offering to rent or sell his 2,500 sq ft unit, a buyer isnow competing with four others to rent, or to sell, their units.So do not make a decision because you can afford that RM500,000 unit, but considerrentability and other factors that contribute to that rentability, like accessibility and theavailability of basic amenities. ShareThis Highrise Office Buildings Office Space Retail Consultancy & Services Commercial/Retail Condominium Landed House Land Industrial Auction Properties CBD Newspaper Listings CBD Ipropertys ListingsView Our Agents Petaling Jaya Kuala Lumpur Kota Damansara Sri Hartamas Puchong Ara DamansaraHottest Properties
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