Commercial Properties in Bangsar Posted : on 10/3/15
When Bangsar was developed in the early eighties, it was never envisaged to be the commercial hub it is today. However to put it in proper perspective, while there is a fair amount of commercial activity in Bangsar, it is not a commercial hub in its true sense as compared to other commercial hot spots like Mid Valley or Bukit Bintang. What makes Bangsar a unique and one of a kind commercial location is the fact that it appeals to a select type of clientele not only residing in Bangsar but from all parts of the city and Petaling Jaya. Bangsar has over the years evolved into a very niche styled commercial hub, something which will be difficult to emulate anywhere else.
If one was carrying out a feasibility study on the development of a shopping complex, serious consideration would be given to the proximity of existing shopping complexes in the vicinity and the population in the immediate and surrounding areas. An important factor would be to ensure that there is the necessary critical mass to make the complex viable.
In this instance Bangsar has defied all logic with the existence of two complexes within close proximity (BSC & Bangsar Village). Both the complexes are doing extremely well with many retailers waiting in line to secure a space in these complexes. Admittedly the profile and the purchasing capability of the patrons to these complexes are different. Most of the products offered there, generally cater to the affluent few.
Another unique feature that Bangsar offers in terms of commercial activity, are the bungalows located along jalan Ma’arof which are being used for showrooms. The rental rates and the value of these bungalows have escalated significantly over the last ten years. Demand is strong with many waiting in line to rent or purchase these properties. These bungalows are residential in nature but are allowed limited commercial use. This means that the local authorities allow these bungalows to be used for showroom and office purposes only. Their license to operate is renewed yearly and is subject to strict conformity to its specific use.
As for the shop offices, occupancy is almost 100% and presently there are hardly any units to let or for sale. Feed- back from estate agents actively working in Bangsar will confirm that there are many purchasers wanting to buy in, but most of the owners are not keen to sell even at prices that exceed current valuation.
Office buildings in Bangsar such as the Menara BRDB, Wisma Volkswagon, UOA Bangsar, Wisma Syed Kechik etc are all enjoying high occupancy levels. Demand for office spaces in these buildings, have been consistently strong.
Many who purchased office spaces in Bangsar such as UOA Bangsar are now enjoying good rental returns and are presently enjoying a substantial increase in the value of these spaces.
If one was a savvy investor and made purchases based on a return on investment (ROI) in Bangsar, the numbers simply will not add up. Returns on these commercial properties, based on present selling prices and prevailing rental rates will range between 2.5% to 4%.
With selling prices of the shops ranging from RM6 to 8 Million in the Telawi area and prices per sq ft exceeding RM1,000 per sq ft for the commercial bungalows, the returns are not exciting. So the assumption is that investors are buying in for the capital appreciation.
The big question on everybody’s mind now is, how much more will these properties appreciate and will the rental rates, be able to keep in tandem with the escalation of purchase prices.