Singapore-based property developer Oxley Holdings is planning a new mix-used development in Malaysia's capital Kuala Lumpur that is supposed to change the city's skyline due to its futuristic appearance and location close to the iconic Petronas Twin Towers.
The development will comprise of two six-star hotels as well as serviced luxury apartments, a retail mall and custom-built offices with high-tech equipment. The investment for the project, named Oxley Towers, is 3.5bn Malaysian ringgit, slightly more than $1bn, and construction will commence later in 2014.
Local media reported that Oxley Holdings, a Singapore Exchange-listed company with a market capitalisation of $1.76bn, is talking to investors from the Middle East, US and Japan to finance the project. It is also addressing Middle East hospitality firms for the operation of the hotels, while the mall would be run by companies from the US or Japan. The hotels and the mall could eventually be sold to the operators.
According to the New Straits Times, there is already strong interest for the serviced apartments from property buyers, among them investors from the Middle East. The apartments, which are marketed worldwide, are sold at around $925 per square foot, but are said to have quite a significant appreciation potential, given the location and unique structure of the project.
Oxley Holdings defines itself as a "lifestyle property developer" of residential, commercial and industrial projects. Its flagship developments are Robinson Square and Oxley Tower in Singapore, as well as a number of posh residential buildings and commercial centres in the city state.
Lately, the company embarked on an overseas expansion, with the largest development being The Royal Wharf in London, a new 363,000-square-metre waterfront development on the shores of the River Thames. The project with around 3,400 residential units is the largest London mixed-use site since the Battersea Power Station development, which, by the way, is a Malaysian investment.
Oxley is also developing a massive 45-storey mix-used development in Cambodia's capital Phnom Penh for $300mn, called The Bridge, one of the few such projects in the country where Oxley also pursues three other projects.
In Malaysia, apart from the new Kuala Lumpur project, Oxley currently has seven other projects worth more than $3bn in total underway, including developments in Penang, Selangor, Johor and Iskandar Malaysia. Given investors' interest, there could be more projects added to the pipeline in the future. The company has also ventured into China and is developing two projects there.
In general, Kuala Lumpur is still a hot spot for property investors despite the Malaysian real estate market has cooled down a bit from its surge from 2010 to 2012, where prices in some areas went up by 20 to 35%. Depending on the quality of a development and a location with limited supply and scarcity of land such as in downtown Kuala Lumpur, appreciation can still be significant, say property experts.
The Malaysian Institute of Estate Agents expects the market to consolidate in 2015 and hit a new high by 2016 while growth in property value should balance out at a healthy rate of between 5 and 10%.
© Gulf Times 2014
