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Three distinct strata office spaces worth a combined RM35 million and owned by private investment group, X2, are up for sale in the KLCC area.

X2 is selling an office block in Megan Avenue 1, Jalan Tun Razak, a Penthouse in Megan Avenue 2, Jalan Yap Kwan Seng and two floor spaces in an office building in Menara Avenue, Jalan Tun Razak.

It is understood, the owner of X2 bought the office spaces in the late 1990s at about one third of the price. X2 also owns several other commercial properties and residential units.

Zerin Properties chief executive officer Previndran Singhe said the owner is selling the assets to fund his business expansion in the Southeast Asian region.

“He is a motivated seller who is disposing of the units in a bid to expand his business. The idea of motivated sellers is not to sell fast. He is not under any compulsion to sell. The deal will close when there is a right offer on the table,” Previndran told NST Property.

Zerin Properties is the exclusive marketing agent for the strata office spaces owned by X2. Megan Avenue 1 (formerly known as Megan Phileo Promenade) is an office complex comprising five 10- to 12-storey blocks.

It is the predecessor of Megan Avenue 2, which is located just a few hundred metres away from it. This office building is built together with Menara Avenue and Menara TM Asia Life.

X2 owns a 12-storey building (Block C1) in Megan Avenue1 with total office space of 20,000 sq ft. Itis selling the building for RM13.8 million of RM695 per sq ft (psf).

Previndran said the owner has approval obtained from the Joint Management Body (JMB) for hotel conversion.

“As a former hotelier myself, I believe the enbloc property would be suitable for conversion into a small boutique hotel. It is an easy way to maximise asset values within today’s markets.

“X2 is also open to a sales and leaseback option, yielding an ROI (return on investment) of six per cent to the new owner,” he said.

Megan Avenue 2 is a commercial office building in which X2 owns a fully-fitted penthouse on the 20th floor with built-up of 5,340 sq ft. The sale price for the penthouse is RM5.5 million or RM1,000 psf.

In Menara Avenue, X2 owns the ground and mezzanine floors with total size of 17,287 sq ft.

The fully furnished units are selling for a combined RM15.8 million or about RM900 psf.

“X2 is looking at selling them all en bloc. However, interested buyers can make an offer to buy them separately. These are strata-title properties with freehold status and rarely you will come across anything like that in the KLCC area for sale. They are walking distance to Ampang Park LRT (light rail transit) station and the new MRT station.

“I don’t think there is such thing as a good time or bad time to sell properties. When you want to sell, you just want to sell. On the other hand, people who are looking to buy, if they find a good asset, they will buy no matter what the market situation is,” said Previndran.

DEMAND FOR FLEXIBLE SPACE

Previndran said there’s more demand now for strata offices within the KLCC area, driven by the increasing take-up of flexible space by corporate businesses and small and medium enterprises.

“The high returns from strategically-located office spaces have driven independent flexible space operators to expand their footprints in the market,” he said.

High returns from strategically-located office spaces have driven independent flexible space operators to expand their footprints in the market.

“The Kuala Lumpur market has seen an influx of flexible space operators, with names such as Common Ground, WeWork and Colony, expanding their presence. We believe that flexible working environments and co-working spaces should accelerate within the next five years,” said Previndran.

According to his research team, the take up of flexible office space is less than five per cent of total office stock in developed cities, but could grow to the region of 25 per cent within the next decade or so.

Previndran said the ease of access via public transportation further adds to the value of the properties in the flexible space landscape given that the target demographic requires ease of access to travel to and from the different branches of their preferred flexible space operators.

He noted that start-ups and small and medium enterprises (SMEs) are the growth drivers for the increase in demand for flexible spaces.

“Cost-saving factor is a compelling reason for a startup or a SME to opt for a flexible space as opposed to a conventional office.”

According to Previndran, X2 has an arrangement with a co-working space operator for the 17,287-sq-ft office space it owns in Menara Avenue.

“The contract starts as soon as the new owner comes in. The findings by the co-working space operator show that the office space could see a yield of 33 per cent a year, given the location,” he added.

News Source: New Straits Times, 15 November 2018

 

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