Serviced apartment boom in Klang Valley
02/08/2004 The Star
MOTORISTS travelling along Jalan Tun
Razak in Kuala Lumpur must have noticed two large banners with the
words “Golden Avenue Serviced Apartment” hanging on the uncompleted
Tristar Service Apartment project.
The Tristar project, undertaken by
Instangreen Corp Bhd, was about 30% completed (with more than 80% of
its 700 units of apartments and offices sold) before it got into
trouble. The uncompleted structure next to an LRT and monorail
station had become an eyesore over the past few years.
The LBS Bina group, in reviving the
project recently, became one of the latest reputable developers to
jump on the serviced apartment bandwagon.
The freehold Golden Avenue comprises
739 units of serviced apartments in a pair of 20- and 23-storey
blocks atop an 11-storey car park and a five-storey retail podium.
The fully furnished units, with sizes ranging from 305 sq ft to
1,452 sq ft, are priced from RM153,000 to RM727,000. Purchasers get
5% guaranteed rental returns for the first two years and free
five-day stay per year.
LBS Bina assistant general manager
Christina Kaw said the Golden Avenue's units were priced around
RM500 per sq ft (psf) compared with between RM400 psf and RM600 psf
for some serviced apartments in the city.
She said Tristar had an office tower
and a serviced apartment tower. “However, we have converted both
towers into serviced apartments as we feel that offices are
difficult to sell. We are giving a wider range of layouts,” she
said, adding that response had been encouraging since the soft
launch about a month ago.
Another project that has been revived
is the former CN Gallery, now renamed as NAS Pavilion, which was
launched on Jan 9 this year. Strategically located next to the
Berjaya Times Square and a stone's throw from a monorail station at
Jalan Imbi, it will have 438 units of furnished serviced residences
with prices ranging from RM198,800 to between RM568,680 and RM1.6mil
for the nine penthouses. Sales have been quite good.
One can expect more of such projects
to be revived. Everyone seems to be pretty gung-ho over the improved
economy and many developers have been launching and reviving
serviced apartment projects in the city and the outskirts. Certain
stalled office and hotel buildings also have the potential of being
turned into serviced apartments.
The current serviced apartment boom
is reminiscent of a similar boom prior to the last recession that
hit this country in the middle of 1997. Keen competition has forced
developers to woo buyers with lots of goodies, including hefty
discounts and themed concepts.
The Golden Avenue serviced
apartments will be built on the abandoned Tristar
There seems to be some haste in
launching these projects with the Housing and Local Government
Ministry planning to legislate such developments, as they do not
fall under the ambit of the Housing Development Act (HDA).
As if in anticipation of new laws
that might affect their projects, some developers have included
conditions in their sale & purchase agreement (SPA) to protect
themselves. These include having the purchaser refunding to the
developer any additional fees, expenses, charges or taxes as a
result of the coming into force of any laws, by-laws, rules or
regulations after the execution of the SPA.
Developers of serviced apartments
feel that legislating serviced apartments would not prevent projects
from being abandoned. “You can have the Housing Development Act but
all it takes is for an ingenious developer to mess things up. What
is more important is to have a responsible developer,” said one
Although there is no requirement for
a HDA project account for serviced apartments, developers feel that
buyers should not be unduly worried as lending banks imposed strict
“The banks impose an escrow condition
on the project's finances. They want to be a signatory to a project
account to ensure that all income and expenses are properly
verified. They also want to know the sales update.
“Banks are very careful on whom they
lend to these days and they want to have a say,” said Masteron Sdn
Bhd general manager Alex Tan.
Klang-based Titijaya Group has a
project account for its e-Tiara serviced apartments in Subang Jaya
and its SPA is very similar to the normal SPA. More than 90% of its
304 units had been sold since its launch in May.
So who else are into the serviced
apartment business? Well, practically everyone from big names to
The Choy Fook Onn & Sons Realty,
through its unit Utararia Development Sdn Bhd, is creating a
Japanese garden with a large Koi pond in its Koi Tropika serviced
condominium in Puchong.
Its Phases 1 and 2 had been fully
sold. There are two 10-storey and two 20-storey condominium blocks
and two shop office blocks. The units are priced from RM115,920 with
built-up areas of 846 sq ft to 1,188 sq ft. The phase 3 block
launched in April was about 80% sold early this month.
Many buyers were attracted by the 10%
rebate and free items, including a parking bay worth RM5,000,
imported kitchen cabinet, lighting fittings and fixtures, two air
conditioning units, iron grills at the entrance and dry yard,
plaster cornices for living, dining and rooms, water heater, shower
screens for bathrooms, ceramic tiles for dry yard, and ceiling fans
for two bedrooms.
The Mayland Group has several
serviced apartments in Kuala Lumpur. These include the Windsor and
Waldorf Tower luxurious serviced apartments at Sri Hartamas that
boasts a 60,000 sq ft Balinese-themed sky garden cum clubhouse, The
Tower downtown serviced apartment opposite to Capital Square and the
Park View serviced apartment opposite the KLCC.
The Heritage serviced residence (next
to the Mines Resort City) in Seri Kembangan also drew a lot of
interest. The studio unit is priced from RM159,990 where 90% of the
first block was sold within three weeks of launch late last year.
There are several new serviced
apartments in Petaling Jaya. They include the Millenium Place smart
serviced apartment in Section 14, where the units are priced from
RM179,800, Sunway City Group's high-end furnished serviced suites in
Bandar Sunway and the 60-unit Perdana View boutique serviced
residence in Damansara Perdana. They have been reported to be
Among the new ones in Kuala Lumpur
are the 900-unit Berjaya Times Square Service Suites, UMLand Bhd's
247-unit Seri Bukit Ceylon serviced residence, Goldhill Group's 38
Bidara (from RM488,888) and its newly launched 176-unit Goldhill
Gardens in Jalan Raja Chulan where a one-bedroom unit is priced from
RM398,000. Units come with free items like car park bay, designer
kitchen and wardrobe worth RM100,000. There is also the proposed
240-unit Casa Mutiara (from RM100,000), Sri Acappella near Giant
Shah Alam, and the Amcorp Serviced Suites, off the Federal Highway.
The proposed RM3bil Pavilion Kuala
Lumpur, a world-class integrated commercial development, will
feature a luxurious serviced apartment apart from a six-star hotel,
shopping and entertainment mall and a corporate office tower.
However, not everyone is turning
their commercial land into serviced apartments. TTDI Harta Sdn Bhd
recently launched two condominiums in Taman Tun Dr Ismail. The
Residence condominium sits on residential land while The Plaza
condominium is on commercial land. Both are priced at around RM260
psf and buyers get two free parking bays.