Property
Putrajaya real estate holds potential
Ang Hui Hsien 
Many buyers are drawn to the city’s peaceful environment and organised masterplan
advertisement[x]

BEFITTING its status as the country’s federal administrative capital, the Federal Territory of Putrajaya has a landscape dotted with government buildings and a population comprising mainly civil servants.

Putrajaya holds appeal for government employees, says Premendran 

As a result, residential developments there are skewed towards housing this community, as pointed out by iProperty.com general manager of customer data solutions (Asia) Premendran Pathmanathan.

“In Putrajaya, nearly 80% of the residential homes are government quarters, so residential is not a big market there other than for government employees,” he says, noting only 83 transactions were recorded for houses from September 2016 to August last year.

The city, he adds, holds appeal for government employees. Thus, those who live there also work within the federal territory.

SMY Valuers and Consultants Sdn Bhd senior real estate negotiator Mohd Aidil Halim disagrees, stating most of the buyers come from other areas which are drawn to the city’s peaceful environment and organised masterplan.

“The residential market in Putrajaya is performing well but is mainly focused on the M40 and T20 segments. Most of the new developments are landed properties, with very few focusing on condominiums,” he points out.

M40 (middle 40%) and T20 (top 20%) refer to monthly household incomes of RM3,861 to RM8,319 and RM8,320 and above respectively.

Aidil admits government servants have been indicating strong interest following the announcement of plans to develop public housing programmes such as 1Malaysia People’s Housing Programme (PR1MA) and 1Malaysia Civil Servants Housing Programme (PPA1M) in the area.

Premendran and Aidil agree the performance of residential properties is substantially better than those from the commercial sector which suffers from low demand.

Premendran notes only seven transactions for commercial properties were recorded within the June 2016 to May 2017 period.

 

Slow commercial performance

Incorporated as the city’s master developer and financier in 1995, Putrajaya Holdings Sdn Bhd says property buyers there comprise public and government staff, with the latter purchasing Civil Servants Reserve Units (CSRU).

Putrajaya Holdings senior general manager of development division Hassan Ramadi reveals a majority of the purchasers are owner-occupiers and demand from CSRU buyers is growing.

There is indication of positive response and continuous support from purchasers, says Hassan

“Despite soft market sentiments, Putrajaya Homes Sdn Bhd has registered a 31% increase in total sales last year for year-on-year comparison,” he notes.

Putrajaya Homes, which is a subsidiary of Putrajaya Holdings, launched several properties last year, including Rosa Flora comprising 338 apartments, eight semi-detached units named The Thymes, 65 hyperlink terrace in the latest phase of Duta Villa as well as 1,062 PPA1M units.

Taking this as an indication of positive response and continuous support from purchasers, Hassan reveals 70% of the RM386 mil recorded for total sales comes from the residential segment while commercial properties contributed the rest.

Unsurprisingly, office spaces in the city are primarily occupied by government agencies and ministries while those from the private sector are from industries like education and services.

At present, there are two shopping malls serving the retail needs of the community – Putrajaya Holdings’ Alamanda Shopping Centre which opened its doors in 2004 and IOI City Mall by IOI Properties Group Bhd.

iProperty.com’s Premendran believes these two malls are more than sufficient to cater to the needs of the people living there.

“I don’t think there is a need for more malls as demand for them is not very strong. People who live in Putrajaya tend to visit other shopping malls like Mid Valley Megamall [in KL] and Sunway Pyramid [in Subang Jaya] on weekends,” he points out.

 

Retail destination

Aidil agrees these two malls are enough, although he notes IOI City Mall has overtaken Alamanda Shopping Centre as the first choice in retail destination for local residents.

He adds many outlets operating in Alamanda Shopping Centre have either moved out or closed down their businesses, which he sees as an indication that the commercial segment in Putrajaya is struggling.

Lack of public transportation has affected the area's appeal, says Aidil

“With the high rental rates and current economic trend, most of the companies and tenants are struggling in their businesses. Hence, most of the businesses that can afford the rental rates are those dealing with end-users such as eateries and hypermarkets,” he explains.

However, IOI City Mall seems to have survived the odds. Opened in November 2014, the shopping centre reportedly averages half a million visitors a week.

In its Asia-Pacific Real Estate Market Outlook report for 2018, CBRE|WTW mentions the mall as one of many innovating on tenants mix strategy, asset enhancement initiatives and place-making.

“One of those is the concept of retail-taintment whereby conventional outdoor leisure and entertainment activities are being incorporated into retail centres,” it states, citing District 21 in IOI City Mall as an example.

Concurring that Putrajaya as a preferred destination for government employees is PropertyGuru Malaysia country manager Sheldon Fernandez, who points out developments in its surrounding neighbourhoods have also somewhat negatively affected its appeal.

“Putrajaya has largely been a location favoured by civil servants, those working at KLIA [Kuala Lumpur International Airport] and upgraders from surrounding areas such as Sepang, Salak Perdana and others.

“With these areas now being developed in their own right, perhaps some of the lustre for Putrajaya has diminished,” he explains.

Although Putrajaya is not necessarily seen as an undesired location, it is merely not the top choice in the real estate market at the moment when compared to other emerging locations.

This, Fernandez believes, could be a possible explanation for the drop in asking prices for properties in the area over the last two years.

Aidil points out the lack of a comprehensive public transportation system in Putrajaya might have also negatively affected its appeal as a place to live in.

Currently, the city is home to Putrajaya Sentral, a bus hub and a KLIA Transit station which ferries passengers to and from locations such as KLIA, klia2 and KL Sentral. The local bus service, on the
other hand, seems to be faring better.

“With good management driven by Putrajaya Corp, Nadi Putra now covers almost every area in Putrajaya. It has also expanded its bus service to surrounding areas including Cyberjaya, Dengkil, Seri Kembangan, Serdang and Bangi,” highlights Aidil.

Putrajaya Corp is the authority administering the Federal Territory of Putrajaya and falls under the purview of the Federal Territories Ministry.

Offering a different view is Premendran who does not think public transportation is an essential component for residents.

“Putrajaya is more for the government. People who live there mostly work there so public transport is not that critical,” he points out.

 

Bright future

Despite less-than-desirable sentiments, Fernandez remains optimistic of the city’s long-term prospects. “In the long run, Putrajaya – being the administrative capital, close to KLIA and connected by new urban rail networks – will continue to prosper with an upward trajectory expected.”

Being located in the southern corridor of the Klang Valley which has attracted many property players also bodes well for the federal territory’s future.

“The southern corridor has been rather active the last few years. Areas such as Kajang, Bangi, Nilai and Sepang have all seen a lot of new property developments. The take-up has also been quite encouraging,” observes ExaStrata Solutions Sdn Bhd chief real estate consultant Adzman Shah Mohd Ariffin.

He explains areas with easy access to highways tend to be better received, as are those within proximity to the airport.

“Proximity to good infrastructure and amenities also helps to boost the sale of properties. The future HSR [High Speed Rail] line will also encourage further growth in the area,” he adds.

Aside from the HSR, accessibility in Putrajaya is expected to get a further boost from the scheduled completion of the Sungai Buloh-Serdang-Putrajaya Mass Rapid Transit Line (MRT Line 2) in 2022 as well as Serdang-Kinrara-Putrajaya Expressway (SKIP) and Lebuhraya Putrajaya-KLIA (MEX II) in 2021.

CBRE|WTW describes the completion of infrastructure projects over the next two to three years as pillars of growth for the residential sector and property market in general.

“The much anticipated MRT Line 2 and Line 3, DASH [Damansara-Shah Alam Highway], West Coast Expressway [WCE] and others would enhance the connectivity between city centre and surrounding areas.

“They are poised to bring more positive impact to the landed residential sectors in the Klang Valley,” it states in its report.

Birth of a city

THE idea to form a new administrative capital to take over from Kuala Lumpur, which had grown congested, was mooted by Tun Dr Mahathir Mohamad in the 1980s while he was still serving as the nation’s prime minister.

Following negotiations with the Selangor state government, the federal government bought over what was then known as Prang Besar.

A combination of putra and jaya which respectively means prince and success in Sanskrit, the site was renamed Putrajaya after the first Prime Minister of Malaysia Tunku Abdul Rahman Putra.

Its location was ideal, sitting 25km to the south of KL – which remained as the nation’s commercial and financial capital – and 20km north of the KL International Airport.

The masterplan for the close to 5,000ha site was drawn up based on two themes – as an Intelligent City, it was one of two smart cities alongside information technology (IT) hub Cyberjaya.

Separated by a mere 5km, the vision was for both townships to be equipped with a fibre optic network providing high-speed computer links and occupied by high-technology companies in a manner similar to the Silicon Valley in the US.

 

Garden City

The second theme was that of a Garden City or City in a Garden, with close to 40% of the land dedicated to green areas and open spaces for public recreation activities.

This also includes a wetland system comprising 24 cells where water flows into the 400ha man-made Putrajaya Lake – the city’s central feature which doubles as a natural cooling system and a venue for water activities.

Construction of the biggest-ever real estate project in Malaysia began in 1995, the same year Putrajaya Corp was established under the Perbadanan Putrajaya Act 1995  to manage and administer the city.

In 1999, government officials began relocating to Putrajaya and in 2001, it was declared as a Federal Territory – the third in the country after KL and Labuan. By 2012, most of the ministries had shifted there save for the International Trade and Industry, Defence and Works Ministries.

Statistics from 2016 put the city’s population at 84,400 people, with bumiputras making up 94.19% followed by foreigners and Indians at 3.79% and 1.3% respectively. 


Architectural icons

WHILE the 400ha man-made lake and 200ha wetlands are what draw visitors, the government buildings in Putrajaya are also an attraction themselves due to their distinctive architecture.

One example is the office of Putrajaya Corp, the local authority administering the city. Known as Perbadanan Putrajaya Complex, the building is a modern interpretation of traditional Islamic architecture, with an entrance arch inspired by the patterns of a traditional Malay songket.

Another is the six-storey Perdana Putra which houses the Prime Minister’s Office as well as the offices of the Deputy Prime Minister and Chief Secretary to the government. It was also one of the first buildings in Putrajaya to be completed.

Influenced by Malay, Islamic and European cultures such as Palladian and Neoclassicism, the structure features a green-glazed roof, onion-shaped dome and wrought iron motifs of the national flower – the hibiscus.

Following the same architectural elements is the prime minister’s official residence Seri Perdana Complex which also has a green dome.

The building also doubles up as a venue for official state functions and banquets to host heads of state, heads of government, state dignitaries and the public.

Paying ode to Malaysia’s rich history is the 68m tall Millennium Monument which is shaped like an obelisk and constructed of solid metal structures.

Built in the shape of a hibiscus, the structure sports etchings commemorating important milestones and periods in the country’s history dating from the 1400s until 2000.

The tapering tower is divided into different sections to denote different eras of pre-independence, the past (1957 to 1970), present (1971 to 2020) and future (2020 and beyond).

When night falls, the Millennium Monument becomes a beacon, projecting light at 360 degrees which is visible from various locations in the federal territory and acts as a guide for cruise boats.



This article first appeared in Focus Malaysia Issue 274.