KL auction property market update #9 - The Pearl @RM518 psf

In May I wrote a post at 360 KLCC that expressed my surprise a luxury KLCC condominium unit at the Pearl, Jalan Stonor sold at auction for RM578 PSF. Back in May it was the first time I think but cannot be 100% sure any 5* KLCC condominium was transacted at below RM600 PSF for the past two years.

Of course as readers of this blog might know, a 3800+ SF unit at Kirana Residence (perhaps you might have noticed my main blog -360KiranaResidence.com is all about Kirana Residence, a luxury KLCC condo) was also subsequently put on the auction block at its 4th outing at a price below RM600 PSF.

Today in my WhatsApp messages was a notice from J my auction agent that a bigger The Pearl unit on the same floor is up for auction at a even lower price of RM518 PSF. Wowza! Some Branded Residences in KL just down the road at Jalan Conlay are still marketed at more than RM3000 PSF. That's nearly 6 x more in PSF than the auction price unit at the Pearl.

According to Star Property the 179 unit Pearl at 2A Stonor Road was launched at RM870 PSF in 2011 by Malton. All the units are 3000+ SF and above.

🤠's Dua Sen: Accordingly to Knight Frank's recent Real Estate Highlights 1H2022 report, the KL high end condominium market is reporting a slight increase in asking rentals. Transaction property prices for several high end condominium enclaves also reported slight increases. Knight Frank Malaysia though noted a big increase (+5300 units) in supply coming on stream in 2H2022. See figure below .

As a former professional stock picker aka investment analyst I think vacancy rates are very important to assessing if a recovery in rentals is imminent. If vacancy rates are say 30-50% at high end KLCC condos, a large supply this 2H 2022 and in 2023 might kill off any green shoots of recovery in KLCC rentals.

Last year, Zerin Properties managing director and CEO Previndran Singhe said more vacancies are being observed in newer secondary-market assets, mainly high-rise properties that were recently bought. “In previous years, occupancy rates in KLCC were at a high of 80% to 90%, but with new products coming in, we have observed a drop of about 10% in total occupancy.

Knight Frank's report I noted mentioned nothing about the vacancy rates at KL high end condominiums. So did all of the Property Market Updates by PropertyGuru, Nawawi Tie Research et al that I recollect reading in recent months. I wonder if this is the elephant in the room nobody wants to mention?

What do YOU think?

Answers please from Research Heads, investment analysts or real estate professionals marketing High End KL properties. Perhaps Zerin Research might want to do an updated survey of vacancy rates at high end KLCC condominiums in 1H2022?