NORTH KIARA REBRANDING IS THE NEW BUZZ WORD
By: Daniel Sim
Rebranding and redevelopments are two words that can clearly define North Kiara with many developers are starting to create their mark there in recent years.
“Developers have branded the more developed area of Segambut as North Kiara. A lot of condominiums have been built in this area starting from Changkat Kiara all the way to the French School,” global real estate services provider Savills (formerly CBRE) director Sr Paul Khong told Property Insight.
“The crucial point about where you are staying in a particular location is branding. The first impression or perception of the location is important. What would you say if someone told you that he or she is staying in Damansara Height? Your first impression is that the location is good in the sense that the perception about the area would be of somewhat upper class,” enthused Khong.
Khong stated that it would not be a workable formula for developers to build and market their high-end products in a low-end area; therefore to rebrand North Kiara, developers would need to redevelop the area.
There is no firm boundary delineating the location of North Kiara. To many investors, this area can be generally construes as the Segambut vicinity.
According to executive director Sr Susie Tiong of Burgess Rawson, a professional firm providing services in property valuation, management, consultancy and real estate agency in Malaysia, the North Kiara is an area covering parts of Segambut (Bukit Segambut, Segambut, etc.) and areas surrounding Matrade Exhibition and Convention area. Kepong, Desa Park City and Seri Sinar are all nearby the Segambut area.
“Basically as you drive along Mont Kiara area, you will see many condominiums being built there but you will see a vast difference in terms of the surrounding property developments as you cross into Jalan Segambut from Jalan Kiara 3, where the surrounding Segambut areas consist of villages and squatter homes,” she said.
In Khong’s view, meanwhile, Mont Kiara is a slightly superior neighbourhood to the extent that he nicknamed this area as a condominium city, but because of the Malay reserves land status quo, where the property develop can only be sold to Malays, the projects will usually be 30% to 50% lower than the normal open market.
The hilly terrain also resulted in land scarcity. Many of the developers will have limited option to build their properties in Mont Kiara unless they move outside of this prestigious area. In this case, the developers chose to move northward to the northern side of Kiara.
“There is a strong element of redevelopment in this area. Little by little, the more established villages were being redeveloped. One of the reasons is the strategic location, and because of this more and more developers started creeping into this area. This was also partly due to the present of International school such as the ‘Lycee Francais De Kuala Lumpur’ or the French school of KL which currently is located a stone throw away from Concerto Kiara, one of the developments in North Kiara,” mentioned Khong.
He further stated that at the moment only a small part of North Kiara is being redeveloped and it will take some time for an existing mid-low development to be transformed into a landscape with high-end development. Therefore he estimated it will be unlikely for the majority of the property projects to be priced higher than the condos built in Mont Kiara.
Buyers who want to buy condos in the area of North Kiara will have many options as prices do not usually go very high until the whole neighbourhood matures. These condominium prices will be further pressured by the current competitive transactional prices in Mont Kiara.
Prices for newer products in North Kiara ranges between RM500-RM600 per square foot and the older ones would be ranging from 400 per square foot. Comparatively, prices for products in Mont Kiara range between RM600-RM700 per square foot.
THE LANDSCAPE OF NORTH KIARA
Mont Kiara can be viewed as a natural extension of the Bangsar Damansara Height belt and developments are spilling into Segambut Dalam where land is cheaper than those in Bukit Kiara proper.
Tiong said that the spill-over effect of Mont Kiara such as the pricing for both the property and the land that caused North Kiara to be developed. She believed that in time there will definitely going to be more and more development surfacing in this area, with developers still focusing on predominantly residential units specifically in the condominium section with some pockets of landed properties.
According to land and data map maker Ho Chin Soon’s book “LOCATION, TIMING & BRANDING”, there were just two existing projects and three under constructions in 1994. There were over 50 projects in Mont Kiara alone in year 2010. According to CEO of Ho Chin Soon Research, Ishmael Ho, the success of North Kiara will be depending on what is happening in Month Kiara.
Ishmael however cautioned that the Mont Kiara market in itself is a little bit strange. He believed that the people in this area have the purchasing power, and therefore there is a tenancy trend whereby tenants will shift to newer places while leaving the old place empty. Whether this will affect the prices in North Kiara is yet to be seen.
Ishmael added, “Unlike Mont Kiara which already has an office component, I do not foresee developers building property products that are for commercial usage in North Kiara. This is because if they do, the entire commercial property will be in a decentralise area. North Kiara is not located in a Central Business District area where all the offices are concentrated. Another usual practice in the industry is that when you want to do a development, you want to do the same components that complement each other.”
“There are actually still lands available in Mont Kiara despite of the hilly terrain and the Malay Reserve Land,” Ishmael said, “So why are developers still choose to move up north?”
Ishmael explained that even though there are still lands available for development in Mont Kiara, developers later realised that these lands belong to individual plot owners.
“But when you really do a more thorough research into these plots of land and their landowners, you would realise that they will all link back to one mega property developer UEM Sunrise. With the land bank in Mont Kiara, UEM Sunrise is taking their own sweet time to develop these plots of land, but it will be one of the main property development players in this area for many years to come,” explained Ishmael.
Ishmael advised developers who want to develop North Kiara to create the right product with the right pricing as buyers in this area are very price sensitive, a little movement upwards or downwards might trigger unexpected results.
“There is no dedicated bus lane going into North Kiara for the time being and there is also no confirmed MRT lines scheduled to be constructed that will link directly into this area,” said Ishmael. However, property developments built adjacent to Jalan Segambut will have a direct link to both the North South highway and also the Duta Ulu Klang highway (DUKE). In addition, there is also the Segambut KTM station.
Besides the French International School, this area is also nearby to Garden International School and the America Mont Kiara International School which would attract foreign investors. This area is also nearby to Publika and 1Mont Kiara shopping malls.
“As our population expands and developments press on within the confines of a limited space, it is interesting to see the phenomenon of an ‘urban sprawl’. This basically means the uncontrolled expansion of urban areas,” said Hartamas Real Estate (Malaysia) Sdn Bhd associate director Christopher Chan.
“The consequence of this is that certain portions of the populace gets pushed out to the outer-lying areas due to reasons such as the scarcity of land and that the prices in the existing areas are priced out of their reach,” he said.
“We can witness this in a number of places like the population from the center of Greater Kuala Lumpur moving up north to places like Rawang which was formerly a quiet town and towards the South East to as far as Semenyih,” he noted. “We can see this phenomenon happening in North Kiara too. The area has undergone subtle but significant changes over the past years. Though the location may not be in high demand at the present time, it sure will be in the near future.”
According to Chan, the reason is that, with the ever expanding population in existing Mont Kiara over a small area, the inevitable is happening and will continue to happen: the population of Mont Kiara of approx. 15,000 will spill over to the nearby areas such as North Kiara.
The existing prices in Mont Kiara are high and comparable to prices of new developments in the city, Chan said. “The new developments such as Arcoris, Pavilion Hilltop and Residensi 22 were sold at RM 900 psf onwards. It is interesting to see how steep prices come about through time. Five years ago, there were hovering at about RM 400 psf. This means that this was out of reach for some people and they would then have to look into the nearby areas like North Kiara where prices are more affordable.”
With improvement in connectivity and accessibility, according to Chan, it will augur well for North Kiara. “With the new 1.4 km two-lane carriageway from Segambut to Mont Kiara; Phase One of the RM 48 million project connecting Segambut to Mont Kiara (which includes a 182.5m-long flyover above Jalan Segambut) and Phase Two which involves the construction of a flyover from Jalan Segambut to Jalan Lang Emas in Segambut, this would all be good for North Kiara.”
Scarcity of existing land in Mont Kiara has caused developments to spread towards the North Kiara area. This has benefitted North Kiara and will continue to do so.
The name of ‘Kiara’ has a different sound and meaning to it, as compared to ‘Segambut Dalam’, Chan said. “Branding which takes on the name of the existing prestigious and successful neighbourhoods has done remarkably well for many spots like Bangsar South (formerly known as ‘Kampung Kerinchi’) and Subang West (which is actually located in Shah Alam). Branding it seems has now totally transformed the real estate landscape. I must give due credit to the property developers for being so ever creative in this respect,” he ended.
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