Kuala Lumpur Commercial Land Values Drop In 1H14

KUALA LUMPUR: Commercial values of sites for prime offices here have dropped 2.7% in the first six months of the year amid a “challenging leasing environment”, said Knight Frank Asia-Pacific head of research Nicholas Holt in the Prime Asia Development Land Index report for the first half of 2014 (1H14).

Meanwhile, values of residential sites were stagnant, reflecting the slowed luxury residential market after cooling measures, said Holt.

Similarly, growth of land values in Singapore was flat as the total debt servicing ratio ruling slowed sales of non-landed homes in the core central region by 52.5%, causing prices of units to drop 4.8% and demand for land to soften.

In contrast, values of residential land in Bangkok (18.2%) were the highest in the region, followed by Phnom Penh (13.7%) and Jakarta (11.6%).

Commercial land values in Bengaluru, Jakarta and Phnom Penh rose 9.2%, 8.3% and 7.6% respectively.

On Bangkok, Holt said values of prime residential land in the city were driven by high demand as condominiums were the most profitable projects.

On the other hand, business confidence and subsequently demand for commercial sites there was affected by the political turmoil.

“However, the [prospects] of commercial sites will likely improve, given limited supply in the pipeline, and the ongoing demand for high-grade office space,” he said.

Meanwhile, Knight Frank expects land prices in Jakarta to moderate in the future as luxury property prices appreciate at a slower pace and prime office rents decreased in the second quarter (2Q).

In Phnom Penh, landmark projects such as The Bridge condominium and Vattanac Tower office development set record condominium prices of over US$3,000 (RM9,437) per sq m and office rents of over US$25 per sq m in 2Q.

In Bengaluru, India, new sectors emerged to shore up demand for office spaces.

The overall Prime Asia Development Land Index for 1H14 rose 4.9% and 2.9% for residential and commercial sites respectively, representing slower growth compared with 9.8% and 7.7% respectively a year ago.

The index is weighed down by China where prices in most key markets  peaked in 1Q14, with exceptions such as Shanghai’s office sites which rose 1.3% and Beijing’s residential sector which shrank 2.5%.

Meanwhile, land transaction volumes in Asia dropped 5% from a year ago, but investment inflows rose 76.1%.

Source – The Edge Malaysia

Food for thought: In a property climate like this, investors and home buyers are constantly watching and waiting for good buys. Many continue to say that the Singapore property market “will crash”, so they can enter to buy. I always like to ask them whether they bought anything in 2009, as it was the last rock bottom. Many were not aware, so how can they know when is the next crash is they were ignorant of the last one? I can only say, if you do find a good deal, take it. Awesome! :)

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