Cheras KL malls ready to shine

JALAN Cheras, Kuala Lumpur is one of the busiest roads in the country and despite the congestion road users have to face daily, it is still the most convenient and popular route that leads out from the Kuala Lumpur city centre southwards towards Cheras and Kajang. It is connected to the Cheras-Kajang Expressway and is linked to Jalan Pudu, Jalan Peel and Jalan Loke Yew.

Using this road, one can easily reach as many as 10 shopping centres and malls in Cheras, including neighbourhood hypermarts such as Giant Taman Connaught, Tesco Extra Cheras, Aeon Big @ Jalan Peel and Aeon Maluri, and shopping malls such as Cheras Sentral, Ikon Connaught, Cheras Leisure Mall, Viva Home Shopping Mall, 1 Shamelin and IKEA Cheras. The total net lettable area (NLA) of these 10 malls amounted to 4.46 million sq ft as at August 2016, according to market research group Stratos Consulting Group Sdn Bhd managing director Tina Leong, who estimates the local population within a 10km-diameter around Jalan Cheras to be around 694,500.

“This shows that Cheras residents get to enjoy 6.42 sq ft NLA per capita while the average in the Klang Valley is around 8.3 sq ft NLA per capita as at August,” Leong notes.

Soon, there will more shopping malls in Cheras, specifically along the popular Jalan Cheras. Among the malls currently under construction are EkoCheras Mall, Sunway Velocity and MyTOWN Shopping Centre (MyTOWN).

Leong estimates that the NLA per capita will increase to 10.03 sq ft by end-2018, mainly due to the population growth to 715,650 and the increase in total NLA of the mall space to 7.18 million sq ft.

When asked if there was an oversupply of mall space in Cheras, Malaysian Association for Shopping and High-rise Complex Management (PPK) advisor and RCMC Sdn Bhd director Richard Chan believes not.

“If there is an oversupply, rent and occupancy rates of the shopping malls should be going down, but if you look around Jalan Cheras, there are malls that are still asking for higher rents,” he says.

He cites Cheras Leisure Mall as an example. “It is doing very well and is maintaining strong rentals. This shows that demand is still healthy indicating no oversupply in the area”. However, not all malls in the area are performing just as well. Chan thinks it is because many of them have similar offerings.

“Each mall needs to be unique in order to differentiate itself from others. For instance, the upcoming MyTOWN is located beside IKEA Cheras, so it has a strong pull factor,” Chan shares.

Benefitting from the MRT

Meanwhile, Knight Frank Malaysia’s retail consultancy and leasing associate director Rebecca Phan says shoppers in Cheras will have more shopping choices upon the completion of Sunway Velocity and MyTOWN by this year end and the first quarter of 2017, respectively. Meanwhile, EkoCheras Mall will be opening in the first quarter of 2018. These new malls, she adds, will benefit from the completion of the Mass Rapid Transit (MRT) Sungai Buloh-Kajang Line.

“When fully completed by early 2017, the ongoing MRT Sungai Buloh-Kajang Line will further enhance accessibility and connectivity to the area from Jalan Cochrane to Taman Mutiara near Cheras Leisure Mall,” Phan notes. There are five MRT stations strategically located along Jalan Cheras, namely Cochrane, Maluri, Taman Pertama, Taman Midah and Taman Mutiara.

In addition, the area along Jalan Cheras can also expect some positive spillover from mega projects nearby, including the Tun Razak Exchange (TRX) and Bandar Malaysia township development where the terminus station of the proposed KL-Singapore High Speed Rail (HSR) will be located, Phan adds.

However, she also warns that malls need to do more to attract visitors as consumers nowadays are very discerning in their spending. Furthermore, the traffic along Jalan Cheras is notorious and the frequency and loyalty of shoppers may be affected if the mall’s management does not put in the extra effort in marketing and promotions as well as the level of services provided, she says.

On the other hand, PPK vice-president Lum Youk Lee believes traffic congestion along Jalan Cheras could actually benefit shopping centres in the area. “Traffic jam is a constant challenge in Cheras but this may not be bad for the shopping malls in the area as local Cheras folks may prefer to avoid travelling further away and shop closer to home instead,” he explains.

He also notes that EkoCheras Mall and Cheras Leisure Mall will hit the "critical mass" factor in the Cheras retail market when the former opens in the future.

“Cheras Leisure Mall, which is still relevant to the community's retail and social needs, is a sizeable mall that has been irreplaceable for two decades whereas EkoCheras Mall is another sizeable mall to be built on the west side of Jalan Cheras. It will be very interesting to see how these two malls with 20 years of age difference can split the pie, one on the west side and one on the east side.”

He says that Sunway Velocity and MyTOWN, which are expected to open at the end of this year and the first quarter of next year, respectively, will certainly offer new retail options in the northern parts of Cheras.

Shopping malls are a boost to residential properties

ALTHOUGH some may think that there are too many malls in town, including in Cheras Kuala Lumpur, malls can draw homebuyers looking for property with amenities close by.

“If you have a choice of buying property in a project not too far from a shopping mall, would you do so? I believe many people would consider a shopping mall nearby as a plus point when buying property,” KGV International Property Consultants director Anthony Chua says. He adds that, in general, properties near well managed shopping malls have higher asking prices than those further away.

For instance, based on TheEdgeProperty.com’s analysis, Segar View Condo, which is 231m away from Cheras Leisure Mall, had an average transacted price of RM575 psf as at September 20, average rental of RM2.06 psf and indicative rental yield of 4.3%. Meanwhile, Laman Midah, which is 1.84km away from the same mall, had an average transacted price of RM522 psf, average rental of RM1.58 psf and indicative rental yield of 3.64%.

Segar View Condo is located at Taman Segar, Cheras. The two-block condominium was completed and handed over in 2006. Laman Midah, however, is nestled in Taman Midah near to a university. It is a short drive to Cheras Leisure Mall.

“Projects that are near to a mall can attract individual tenants. Projects that are a long walking distance away from a shopping mall attract families more. Generally, I would say projects nearby amenities enjoy more stable price appreciation and tenancy,” Chua says.

“Shopping malls play an important role in creating demand for residential properties as people respond to market changes in trends and lifestyle. Most urbanites now are accustomed to staying or working close to shopping malls where everything is within easy reach. This has resulted in not only demand from owner-occupiers but also investors who find residential properties near shopping malls easier to rent out,” says One Sunterra Properties principal Sara Lai. Nevertheless, she points out that malls are not the only reason for capital appreciation.

According to data from the National Property Information Centre (Napic) collated by TheEdgeProperty.com, in 1Q2016 the average transacted price for non-landed homes in Cheras KL was RM366 psf, compared with RM354 a year ago. Meanwhile, the average transacted price in 1Q2016 for landed homes was RM377 psf, up from RM363 psf a year ago.

As at August, according to One Sunterra Properties, the average transacted price of non-landed properties in Cheras KL has been fairly stable hovering between RM400 psf and RM600 psf, with the exception of Amaya Maluri at RM750 psf and V Residences in Sunway Velocity at RM950 psf.

The average prices of landed homes (2-storey intermediate terraced houses) range from RM700,000 to RM800,000 now, up between 5% and 10% from a year back, offers Lai.

“The outlook on the overall property market in Cheras KL is favourable with the near completion of MRT Line 1 (Sungai Buloh-Kajang Line). Along with more modern and bigger shopping malls, Cheras has also seen the growth of private and international schools in the last five years. With Cheras located immediately outside the city centre and well connected via major roads and highways, we believe that Cheras KL will continue to be attractive to both owner-occupiers and investors,” Lai says.

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This story first appeared in TheEdgeProperty.com pullout on Sept 23, 2016, which comes with The Edge Financial Daily every Friday. Download TheEdgeProperty.com pullout here for free.