In KL, old is gold, says property expert

tiong nam 1

KUALA LUMPUR: If you own property in the Tiong Nam settlement in Chow Kit, Pudu and the old parts of Sentul, a veteran property expert suggests holding on to them for the next 15 years.

Speaking to FMT, Ernest Cheong said these areas were “brown fields”. The term refers to developed areas that may be under-utilised and under-maintained and are ripe for redevelopment.

“The Tiong Nam settlement, Pudu and the older parts of Sentul are like Queenstown, Tiong Baru and Toa Payoh in Singapore in the 1960s and 1970s,” Cheong said.

“When Singapore was ejected from Malaysia, these areas comprised mainly low-rise and low-end private residential properties that were redeveloped by the Singapore government for public housing.”

He had a word of caution for those believing they should “cash out” now on their properties because of the sluggish economy and the uncertain political climate.

With Kuala Lumpur almost depleted of green fields and undeveloped land, cashing out would be a mistake for those with properties in the brown fields, he said.

“You should never resort to panic buying or panic selling. I know of many people who, in the aftermath of the May 1969 riots, sold their properties in Pantai Hill and Bangsar for as little as RM1 per square foot and migrated to Australia.”

Ten years afterwards, properties in Pantai Hill and Bangsar, were going for as much as RM100 per square foot, he said.

Cheong acknowledged that some people were at present worried about Malaysia’s future, but he said the economy would likely recover in 10 to 15 years.

“That is when the developers will come in to redevelop, and they will go after brown fields because it doesn’t make sense to develop new lands outside of the inner city centre of Kuala Lumpur,” he said.

“Cities grow organically. They must have infrastructure, they must have jobs and opportunities for businesses. KL already has infrastructure and services, and developers won’t be aggressively developing lands 20km or 30km outside the city and hoping people will flock there.”

He said this meant there would be pressure to redevelop brown fields, adding that such redevelopment activities would likely start with the Tiong Nam settlement, Pudu and old Sentul.

He also said Kampung Baru would be the most ideal brown field in Kuala Lumpur, but noted that the complex land ownership issue there would make it difficult for redevelopment to happen any time soon.

Recently, the Kampong Bharu Development Corporation (PKB) said the area would need to be developed bit by bit due to the nature of land ownership there.

There are 1,350 plots of land in Kampung Baru and 5,000 heirs to them, making it a challenge for PKB to secure clean titles to redevelop parcels of land in the area.

“So if you own properties in the Tiong Nam settlement in Chow Kit, Pudu and older parts of Sentul and you don’t need to raise cash for emergencies, my advice is to hold on to these properties for now or you may regret it,” Cheong said.

“In 10 to 15 years, I believe these properties will be worth at least five times their current value.”

Cheong has been a chartered surveyor for more than 40 years.

According to him, the average price of land in the Tiong Nam settlement is about RM1,200 per square foot. For residential properties in Pudu, it is about RM900 per square foot and for those in old Sentul, it is RM600 per square foot. For commercial lots, the average prices would be at least double those amounts.

Kampung Baru redevelopment to be done bit-by-bit