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More and more developers have been offering the small office/home office (SoHo) category to the local market recently. As the name suggests, these are lifestyle products that combine working and living spaces under one roof. Though not something new, more of these products are coming up in the Klang Valley.
Among those launched over the past three years are Empire Subang SoHo and Empire Damansara by Mammoth Empire Group; Subang SoHo by Titijaya Group in Subang Jaya; Centrio by YTL Land & Development Bhd in Pantai Hillpark Kuala Lumpur; PJ5 SOHO in Kelana Jaya, Petaling Jaya, by Ong Chong Realty Sdn Bhd; Binjai 8 in the KLCC area by UOA Holdings Sdn Bhd; Scott Garden SOHO Suite @ Metro Centre by Aston Villa Sdn Bhd in Old Klang Road; and Parklane SoHo Duplex Suites by SIMA Group in SS7, Kelana Jaya.
Coming up soon are Damansara One by Crest Builder Sdn Bhd in Damansara Perdana and Damansara Avenue by TA Global Bhd in Bandar Sri Damansara.
SoHos offer convenience and flexibility because people can work and live in the same space. Property consultants say demand for them is growing, going forward, due to the changing trend in the market towards home-based jobs.
According to UOA Holdings’ general manager David Khor, the developer had initially wanted to build serviced apartments in its Binjai 8 project. It had bought the one-acre freehold site together with a development order for serviced apartments but changed its mind after a market study showed good demand for SoHos, he says.
“After we bought the land, the marketing team conducted a study and found that people were looking for SoHo developments. So, we decided to change our plan and build these instead,” Khor tells City & Country.
Located behind Nikko Hotel, Binjai 8 consists of a 40-storey tower that houses 310 SoHos, with built-ups of 753 to 1,700 sq ft. These are priced from RM1,100 psf.
Meanwhile, YTL Land & Development Bhd recently completed Centrio — a mixed commercial development with mainly SoHo apartments. The leasehold 3.8-acre project has a gross development value (GDV) of about RM100 million.
The development has five 7-storey blocks that house 238 SoHo apartments with built-ups of 623 to 1,536 sq ft; 23 boutique offices with built-ups of 829 to 2,344 sq ft; 23 duplex boutique garden offices with built-ups of 911 to 1,551 sq ft; and 21 retail units that comprise seven duplexes and 14 single lots with built-ups of 661 to 2,821 sq ft.
YTL Land has retained the retail units for lease at RM7 psf. Rents for the SoHos are between RM3 and RM3.50 psf.
Karen Tan, customer relations manager of YTL Land, said at a recent press briefing that the developer polled a focus group and discovered that urban youths, especially those working in the creative and service industries, prefer SoHos as these offer them greater flexibility in terms of working hours and space.
Evolution
One could say a SoHo is a combination of a traditional shopoffice and a high-rise office as the sizes of these units are similar to those of shopoffices but they are housed in high-rises that come equipped with recreational facilities such as gyms and swimming pools.
Christina, a property investor, bought a SoHo in Selangor in 2007 at about RM350 psf and plans to sell it upon its completion next year.
“Many people, like graphic designers, human resource and IT executives, and even writers, work from home. If they are single, they may prefer to work where they stay for the sake of convenience. They also save on travelling cost,” says the 35-year-old.
She reckons that the SoHo she is holding now could cost at least RM500 psf now, based on market prices.
Property consultants, like PA International Property Consultants (KL) managing director Jerome Hong, believe advancements in ICT, which allow seamless connection and communication as well as a significant reduction in document storage space and full-time staff in companies, have contributed to the demand for SoHos.
“The SoHo lifestyle is well received by young urban individuals and single working groups that spend long hours at the office. Easier connectivity, flexible working hours as well as limited support service workers also facilitate home offices,” Hong says.
Besides the development of high-speed broadband, “living in” your office saves commuting time and expenses as well as reduces start-up costs for new businesses, he adds.
“A bigger office space means higher operating costs. Some multinational companies are offering employees ‘work-from-home’ benefits which in turn save them overheads.
“It is also due to a rising demand for better quality of life… less unproductive hours spent commuting between home and the workplace and more hours spent with the family. It will have better flexibility in terms of working hours and space,” Hong comments.
Nevertheless, he notes that traditional office space will continue to be developed as the main business space as they provide corporate credibility and confidence to a company that a home office may not.
SoHo developments are mostly located in self-contained or established neighbourhoods with good amenities. YY Property Solutions Sdn Bhd director Tiffany Goh says the design, functionality and micro location of an area with good accessibility and amenities are critical to the success of a SoHo development.
“Such developments need to be around amenities. Nevertheless, things still depend on the product and the end users. It is more sensible to have SoHo developments in the city in a thriving commercial area where your clients are nearby. Others may prefer to work outside the city centre,” she tells City & Country.
The availability of public transport, such as the LRT and commuter trains, as well as the flexibility of a space to be easily converted into an office/workstation area or bedroom/private space as and when required are also important considerations for a SoHo user.
SoHo buildings with commercial titles are subject to town planning requirements for commercial developments, including the allocation of parking bays, plot ratio and building height.
Unlike stratified offices, a SoHo would have its own facilities, such as a kitchenette and bathroom, and other common facilities like a waiting lounge and business centre. Most SoHo developments come in the form of a duplex to separate the living and working spaces.
However, there may be inconveniences when it comes to meeting clients as some developments do not provide conference rooms. In such situations, the occupiers would have to go out to meet their clients.
YY Property Solutions’ Goh says most stratified offices do not provide centralised air-conditioning while the toilet/washroom may or may not be considered part of the strata office space, depending on the developer’s layout.
The jury is still out
She says it is too early to estimate the success of SoHos in the country. “One question is, is it really practical and does Malaysia have an adequate pool of young entrepreneurs/professionals who work from home? They may also end up being popular only for tenants and we are not sure how this type of property would fare on the secondary market.
“Most of the SoHos have relatively small built-ups and they are a low entry investment compared with shopoffices. It may be too soon to gauge their investment returns as not many projects have been completed and put up for sale on the secondary market. But we have witnessed capital appreciation in the recently completed Empire Subang. Prices have risen by 30% to 35% from the developer’s launched price in 2007,” she adds.
According to Hong, the prices of YTL Land’s Centrio SoHos are reported to have climbed about 115% from RM280 psf in 2006 to as high as RM600 psf now. He believes the demand for SoHos is likely to gain momentum and appeal particularly to the young and the IT savvy.
However, the usual considerations apply when buying such a property. Besides location/accessibility, developer’s track record, economic aspects, potential yields, development concept, functionality, flexibility of layout and pricing, other important factors are security and the quality of property management.
This article appeared in City & Country, the property pullout of The Edge Malaysia, Issue 826, Oct 4-10, 2010
