KUALA LUMPUR: The different sectors of the economy must leverage on the high speed rail (HSR) project currently being planned between Kuala Lumpur and Singapore, said MKH Bhd managing director Tan Sri Eddy Chen.
He said long-term planning was crucial and highlighted the Japanese example of how its shinkansen (high speed rail) opened up new integrated townships along its route.
Speaking at the “Invest and succeed in mixed use development” seminar organised by Malaysia Property Inc last Thursday, Chen, who is also Malaysia Shopping Malls Association president, said the connectivity would help to create a slew of new industries.
Sungai Buloh-Kajang Mass Rapid Transport (MRT) has changed the real estate scene in Kajang, the HSR is expected to be an even greater game changer, he said.
Land prices around Kajang has increased from RM7-RM8 per sq ft to RM17 per sq ft as a result of the MRT.
Chen said: “It does not seem to matter to them that the MRT is scheduled for completion only in 2017. The MRT has helped to close the gap between the city and Kajang. We are seeing Kajang apartments now selling between RM400 and RM500 per sq ft. These are prices at Mont’Kiara and Seri Hartamas.
“Perception and reality do not match, but perception is playing an important role,” he said.
He said every town that the HSR would be passing through has the potential to be turned into an integrated city.
Chen advocated working towards marketing Seremban as an enterprise or tech valley or regional headquarters for biotechnology because it is near research and training centres. Malacca’s tourism potential can be strengthened as visitors need not drive once the HSR is operational.
He identified car rental and clipper buses services that offer several hop on-hop off stops.
Visitors may continue their journey to Singapore after that.
The HSR would make such day trips spontaneous. There would be a need for malls, new hotels and other forms of rental arrangements and location logistics services, he said.
On whether the HSR would benefit Singapore or Malaysia more, Chen said Singapore would benefit from any development around it.
Another speaker, CB Richard Ellis executive chairman Chris Boyd characterised the Klang Valley’s office market as “an abundance of choice at low prices”, resulting in a flight to quality.
While the office glut has been brought up time and again, a new feature in the sub-segment is the five million sq ft of small offices, home offices (SoHos) entering the market. He said Greater Kuala Lumpur would see office space totalling 100 million sq ft this year with total supply at 95.5 million sq ft as at the second quarter.
This figure excludes office blocks with less than 100,000 sq ft and those less than 10 storeys high. It also excludes Putrajaya and Cyberjaya. A total of 23 million sq ft will be entering the market by 2017, of which a quarter of them will be in the city centre. National Property Information Centre latest figures have it at more than 111 million sq ft.
Boyd said the SoHo market came in different names SoFos (small offices, flexible offices) and SoVos (small offices, versatile offices) and can be used as either offices or residentials.
“They will compete with the upper floors of shop houses which are becoming dinosaurs,” Boyd said.
In the retail scene, Boyd said Malaysia has 50 million sq ft of retail space, which was ahead of Singapore and 18 malls with 10 million sq ft entering the market.
“Second and third generation malls are struggling,” he said, adding that Malaysia had three of the largest malls in the world and 70% of the world’s top brands.
“Our attraction is the number and the variety,” he said, adding that retailers find it “easier to come here” as they need only to negotiate with five major landlords compared with “hundreds” if they aspire to enter London’s High Street market.