Within the past two years, a few embassies have sold the land for which their building is on. The British High Commission sold theirs for RM294.97 million or RM2,200 per sq ft. Total land size was 1.22ha. (131,320 sf) It’s in Jalan Ampang. The German ambassador’s residence in Jalan Kia Peng is being valued at RM200 million or RM2,500 per sf. The latest one would be the French embassy which is bigger, at 3.23 ha (347,674sf). French Embassy’s deal would however be completed only later than October as it will be handled by its new ambassador who will only be arriving in Malaysia in October.
Personally I think this will continue because the rationale is simple. If you needed to go to the embassy, you will go to the embassy even if it is in Putrajaya. There is much to gain by the disposal of the land which has appreciated tremendously and no one knows if this value would continue to be so strong in the future especially with the continuous slow transactions for properties thus far. The embassies can gain a one off huge profits which can help to maintain their embassy better. Perhaps they can even expand their embassy size if it’s slightly further away. I think this will not be the last, which one is next? There are still the Spanish Embassy, the Royal Thai Embassy, Uzbekistan Embassy, Ecuador, Finland, Azerbaijan, Russian, Myanmar and many more in the smaller roads leading in from the main Embassy row.
In terms of new developments, these areas are considered very prime and many expats love to live there as it’s convenient to their working place. To be honest, none of these expats would be willing to drive through jams after jams everyday just to reach their office. Besides, irregardless of what we always think about ‘expensive’, the cost of maintaining them here nearby KLCC is definitely still considered ‘affordable’. As an example, the typical rental for an apartment in CBD area in Singapore for an expat starts from S$3,000 (RM7,800) for a 600sf apartment to S$5,000 (RM13,000) – S$8,000 (RM20,800) for a mid-range apartment. This goes up all the way to S$25,000 or higher for a 2,500sf off Orchard Road. Plus, there are also the super rich Malaysians too who may just want to own a unit there in case they got too drunk to drive after a long Happy Hour session.
written on 13 Aug 2014
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