KLCC Properties

There’s organic growth and there’s transformational growth. I believe that the KLCC area will experience transformational growth when affluent Malaysians finally view the KLCC area as a desirable place to live. City living is still a relatively new concept in KL, consequently it is the only major city centre where there is minimal to no premium for city living. This is especially surprising given KL’s notorious traffic jams and weak public transportation system.

Prior to the completion of the Petronas Twin Towers in 1998 KL was a fragmented city without a focal point. The 1997 Asian Financial Crisis delayed the development of the area but from 2003 to 2008 there was a speculative boom with thousands of units launched and prices reaching record levels. However, there wasn’t a corresponding real demand. There weren’t enough expatriate tenants and affluent locals weren’t interested in living in the city. Coupled with the 2008 Global Recession, KLCC property prices plunged. We are currently at levels where KLCC property prices are similar to those in affluent residential suburbs, Bangsar, Damansara Heights, etc.

	Size	Price	Psf
KLCC Properties
Oval	3,750 sf	RM4.5m	RM1.2k psf
Avare	3,800 sf	RM3.8m	RM1.0k psf
One KL	3,285 sf	RM3.9m	RM1.2k psf
Park 7	3,083 sf	RM3.7m	RM1.2k psf
Bangsar/DH
One Menerung	4,385 sf	RM5.3m	RM1.2k psf
Bangsar Peak	2,950 sf	RM3.0m	RM1.0k psf
Twins Damansara	1,480 sf	RM1.4m	RM950 psf

My view is that things will change dramatically. For a start, with the completion of the first phase of KLCC condos the area does not feel like a construction zone anymore. The reality is that there will be some 4-6k families living within walking distance of the Twin Towers. Granted it may take time as owners face the reality of slashing rents to get tenants. However, with such a high concentration of affluent families the lifestyle services will follow. Café’s and restaurants, child enrichment centres for the many families, speciality grocers, etc. Interconnectivity has already improved with the completion of the air-conditioned walkway linking the area to Pavilion.  The development of Lot 185 and 167 (towards KLCC mosque) will further improve interconnectivity and expand the lifestyle offerings of Suria Mall, and Platinum Park will add an extra dimension.

When the lifestyle components come online and the walking culture catches on affluent Malaysians will finally appreciate the appeal of city living. This will be turning the point, expatriates have been the early adopters but their numbers are not sufficient. If all that happens is that KLCC prices regain their pre-2008 peaks prices would increase by 50-100%.