Rebranding Putrajaya

Ayer@8 at Lot 8C1 will be Putrajaya’s first waterfront commercial development with alfresco dining.

CROSSROADS: Catapulted from a rural backwater to a federal administrative capital within two decades, the transformation of Putrajaya has reached a crossroads. Will it be able to transcend its roots as a government-based township, evolve with the times and broaden its appeal among property investors?

Historic relocation: In 1993, the government of Malaysia embarked on a historic project of relocating its federal administrative capital from Kuala Lumpur, a move that was deemed necessary due to the explosive growth of KL city and its increasing congestion. The idea had actually originated as far back as the mid-1980s when the then Prime Minister, Tun Dr Mahathir Mohamad mooted the idea of a new administrative centre to spread development more evenly outside central KL. The government eventually chose Prang Besar, Sepang, an area 25km outside of KL that was previously known more for its dense jungles, palm oil and rubber estates.

Self-governing: Hence, Putrajaya was born. Named after the first Malaysian Prime Minister, Tunku Abdul Rahman Putra, it is a huge planned township and an “Intelligent Garden City” spread over 12,000 acres in the Southern Growth Corridor and Multimedia Super Corridor.
It was an ambitious development, not only featuring the new administrative capital and government buildings but also housing, infrastructure, public utilities and amenities, all created in synergy with distinctive architectures
blending with its natural green environment. Putrajaya was officially declared the new federal administrative capital in 1999, and in 2001, Tun Mahathir Mohamad formally proclaimed it as a self-governing federal territory (the third after Wilayah Persekutuan and Labuan) in a handing-over ceremony of the Putrajaya township from the Selangor state.
Growing reputation: Although it is still relatively new compared to other established townships in Kuala Lumpur, Putrajaya has progressed by leaps and bounds over the years. Previously, the conventional wisdom held that Putrajaya was mainly a place for government servants. Now, with its vicinity to Kuala Lumpur International Airport (KLIA) and several popular landmarks, it has grown in reputation as a tourist attraction.
Putrajaya’s property market has also gained more attention from investors who are looking for options outside the crowded areas of central Klang Valley. On its 12th anniversary as a Federal Territory, NST RED spoke to Datuk Azlan Abdul Karim, Chief Executive Officer of Putrajaya Holdings Sdn Bhd to get his views and updates on the latest developments in Putrajaya.
RED: How far into the Masterplan has Putrajaya developed since it became the third Federal Territory in 2001 (after KL & Labuan)?
AZLAN: It has gone well so far. Things have progressed according to plan. The implementation of the Masterplan is by the Putrajaya Corporation (Perbadanan Putrajaya) as the statutory authority and Putrajaya Holdings Sdn Bhd (PJH) as the Master Developer. The initial development phase was to develop government buildings and quarters. Phase 1 was completed between 1996–2000 and Phase 2 was completed between 2000–2010. Our total area is over 12,000 acres (one third the size of Kuala Lumpur) and our main development components can be divided into three areas — core areas of government offices, commercial, mixed, sports/recreational and civic/cultural development (1,242 acres), peripheral areas which includes residential development (1,769 acres) and diplomatic precinct, lake, wetland and green areas (4,442 acres).
See Table 1
table1
RED: How has the property market in Putrajaya performed in relation to the escalation of property prices in Klang Valley/Greater KL in recent years?
AZLAN: According to DTZ report for Q4 2012, 2013 will probably see the highest new supply of offices recorded since 2005.
Notwithstanding that, for the next five years we are planning for delivery of office spaces in Putrajaya averaging 360,000 sq ft (from an initial plan of 600,000 sq ft) but for shoplots/office suites, there will be an increase from 127,000 sq ft to 300,000 sq ft.
Our first office suites will be delivered in FY2013/14 as part of the retail planning for the International Hub. This is after taking into consideration:
• Office market remains lacklustre, there is more supply than demand;
• Projected decline in demand by government for office space due to more stringent approvals and lower budget allocation;
• Shift of focus from office space to office suites. Demand for small offices of 3,000 to 5,000 sq ft by Small and Medium Enterprises (SMEs) expected to increase; and
• Shift focus from office space to shoplots.
Market demand expected to be overwhelming in this sector.
Be that as it may, demand from government for office space is expected to continue with more government offices in Klang Valley being relocated to Putrajaya. Currently, government departments located outside of Putrajaya
occupy about 1.8 million sq ft of office space.
Taking cognisance of this, PJH’s planning includes maintaining an adequate “stock” of office space to ensure availability of space to cater to the government’s future demand. This is to prevent government offices from being relocated in offices in the surrounding vicinity like Cyberjaya.
PJH has a total of 801 acres of land in Putrajaya that is yet to be developed.
From the total acreage of undeveloped land, 385 acres are allocated for commercial development, while the remaining 416 acres are allocated for residential development.
Based on the overall Putrajaya Masterplan,
it will take more than 20 years for the township to be fully developed and mature. However, we still have 38,160 residential units to be developed (25,615 units of public housing and 12,545 units of government quarters) and there is no pre-set time frame for them to be developed. The launching of these units is dependent on the market demand.
RED:Some are predicting Putrajaya to be a property hotspot in the near future. Do you agree and if so, what will be the catalysts for this to happen?
AZLAN: I wholeheartedly agree! Putrajaya has a wide variety of unique features such as a well-planned city, Putrajaya Lake, high green content, great accessibility and superior infrastructure and facilities. These factors go a long way towards making Putrajaya relevant and attractive to property investors. Also, for long-term sustainability, Putrajaya is now focusing on:
• Green City — Green Development to promote sustainable living. We have embarked on construction of green buildings e.g. Lot 2C2;
• Promotion of a cosmopolitan township
by building the International Hub @ Precinct 7 & 8;
• Education Hub — Heriot Watt University Campus to attract mass population and create spillover effect on Residential
& Commercial Development;
• Theme Park/Recreation @ Precinct 5 — to create vibrancy and inject life into Putrajaya; and
• Medical Tourism @ Precincts 4/5.
RED: What are the key projects launching in 2013 (commercial/residential)?
AZLAN: As far as current commercial developments are concerned, Lot 8C1 will be completed this year with the construction of 24’ x 75’ and 26’ x 75’ stratified-styled showrooms/shops/offices with a total Gross Floor Area (GFA) of 301,389 sq ft.
There will be two major components:
• A four-storey stratified showrooms/ shops/offices, designed with spacious ground level retail/showrooms fronting the main roads with small commercial retail outlets throughout the upper floor sections; and
• A three and four-storey stratified, en bloc shop/offices, developed to follow the curve of the waterfront edge to take advantage of the panoramic views of the lake.
There is also the development of Green Building Index (GBI) Certified 3-star business hotel and office tower on Plot PZ10, Precinct 1. Strategically located in Precinct 1, the development is connected to Alamanda Putrajaya Shopping Centre and it is hoped that the hotel and office tower will further enhance the vibrancy of Putrajaya. Operation is scheduled to start in March 2013. The main components of the development are:
• 16-storey Hotel Tower
• 11-storey Office tower
• 3-storey Podium with hotel support facilities i.e. Fun Pub, Coffee House, Café, Meeting rooms, Banquet Hall and Back of House facilities.
• Outdoor swimming pool.
• 2-level basement car park (minimum of 295 car park bays with 4 handicapped bays and 119 motorcycle bays).
Menara PJH is our new corporate headquarters (HQ). We have just started occupying this building in July 2012. The building is GBI Gold rated with a GFA of 581,040 sq ft. Currently we have Edinburgh Business School as our tenant, offering MBA programmes for postgraduates.
Future Putrajaya developments (residential):
See Table 2 & 3
table2 table3
RED: What are some of the key attractions of Putrajaya for property investors? What are the areas that need to be improved to make it more desirable to property investors?
AZLAN: Private sector investment in Putrajaya is an integral component of the development strategy. The main objectives are to create the hype and speed up development of commercial land, immediately increase the value of certain plots of land, bring in selected investors into Putrajaya and inject variety and vibrancy into Putrajaya.
Of course, there are areas that need to be improved and some of the key challenges include changing people’s perception that Putrajaya is only available
to the government.
The demographics are very heavily skewed to one race (Malay) and this brings about other issues such as spending power, insufficient captive market, etc. We are also surrounded by competition such as IOI, Cyberjaya, Mah Sing and there is a lack of incentives compared to Cyberjaya with its MSC status.
The ongoing green initiatives is to gain further understanding on the concept of achieving green city status by defining the roles of government agencies in this realisation. Through partnerships between public, government
agencies, businesses and local government on programmes and project implementation, we are striving to meet guidelines and regulatory requirements to make Putrajaya a green city.
RED: What are the current demographics of property investors in Putrajaya? Are there any restrictions to the transfer of properties in Putrajaya?
AZLAN: For private properties in Putrajaya, there are no particular restrictions, but for government servants purchasing houses in Putrajaya with 25 per cent discount, they have to meet the following guidelines i.e. they must be confirmed in their employment, have not purchased any houses in Putrajaya and they cannot sell the houses within 20 years after purchase except in a situation of transfer/sell to parents, spouses or children.
See Table 4
table4
RED: What are the latest updates on the proposed Mass Rapid Transit (MRT 3) North-South Line from Selayang to Putrajaya? How crucial is public transportation to the long- term growth and development of Putrajaya?
AZLAN: The project is under the purview of the Economic Planning Unit (EPU) and other relevant agencies. If approved, the project will consist of the following:
• MRT Line 3 Putrajaya is a proposal to link Selayang to Putrajaya (part of the Greater KL planning);
• 58-km line from Bandar Baru Selayang to Putrajaya; and
• Linkage to the Express Rail Link (ERL).
Public transport is important for the long-term growth and development of Putrajaya. As such, the proposed extension of the MRT line from Kajang to Putrajaya Sentral will increase inter-/intra-city transport into Putrajaya and alleviate the traffic parking woes within the area.
Putrajaya being the federal administrative centre needs a first class public transportation system to ease the federal capital’s gridlock, reduce the current high proportion of car users and spur the ‘park and ride’ concept. It is important
to stimulate transport connectivity and inculcate behavioural change among citizens. Furthermore, the link to ERL at Putrajaya Sentral will allow travellers to connect to KLIA.
To stimulate vibrancy of Putrajaya, we need to increase global connectivity by encouraging tourism, migration of professionals and encouraging the inflow of people to propel the city forward. With this in mind, PJH’s next focus will be to build office towers, retail, an entertainment strip and medium-to-high end housing to create vibrancy for Putrajaya. With PJH creating an educational hub in collaboration with overseas universities, the transportation connectivity will serve students and encourage them to commute and study at these new universities.
Transportation is also critical for Putrajaya to connect with other densely populated areas, encourage a greater inflow from the Klang Valley and tap the population of Kajang (743,000 people), Subang Jaya (583,000), Petaling
Jaya (577,000) etc.
It will also boost the commercial and retail sectors by encouraging the inflow of workforce for businesses, enhancing the volume, quality and purchasing power of demographics for major retailers, enhancing real estate values and increasing capacity to attract businessmen, tourist and investors.
RED: How does Putrajaya Holdings plan to tackle the various issues and challenges in its property development?
We aim to rebrand and re-position Putrajaya as a city for all and not only for the government. PJH’s focus remains on the development of Putrajaya and maximising the value of Putrajaya’s existing assets. PJH is considering seed/iconic/propulsive development projects within Putrajaya that will add value to PJH’s existing and future developments in Putrajaya.
The Economic Transformation Programme (ETP) has identified the following initiatives to reinvigorate Putrajaya:
• Reshape the main boulevard — boulevard to be enhanced with vibrant activities e.g. retail shops, upscale street vendors and Food & Beverage (F&B) to generate foot traffic;
• Leverage waterfront potential — to host waterfront retail & large scale leisure developments e.g. water theme park;
• Increase connectivity — undertake detailed assessment to review feasibility of reviving the monorail service. ‘Park & ride’ stations to be increased to at least four from existing one; and
• Draw economic activity — develop a world-class political science university and exploring partnerships with established private developers to develop selected plots in Putrajaya.
RED: Do you think Cyberjaya competes with Putrajaya in terms of attracting property investors?
AZLAN: At present, Putrajaya appears to be commanding top quartile rental rates for its buildings with 90 per cent occupancy rate, for both government and commercial buildings. As for residential, PJH has delivered more than 5,000 units of public homes within 10 years.
As PJH aspires to increase its market share, managing the supply and planning of commercial and residential units into the market is critical. We strive to achieve this by creating appeal based on the 3 ‘X’ factors – ‘eXclusive’, ‘eXtra’, and ‘eXtraordinary’ spaces.
We also need to create more awareness on what is available in Putrajaya.
It is a fantastic place to live in and raise the family with peaceful living, low crime rates and environmentally-friendly. Asset management will also play a significant role in ensuring that the PJH buildings continue to be in demand and attract top quartile rental rates.
RED: What would be your advice to potential property investors in Putrajaya?
There is definitely great potential for property investors. Putrajaya is the biggest integrated urban development project in Malaysia, combining government, commerce and residential community in a unique setting. The city is the hub of the federal government and is intended to be developed as a commercially vibrant city with the presence of private sector activities in areas such as Green City Development to promote sustainable living (e.g. Lot 2C2), International Hub @ Precinct 7 & 8 to promote Cosmopolitan Township, Education Hub (University City Campus/Private Chinese School) @ Precinct 18 to attract mass population and create spillover effect on Residential
& Commercial Development, Theme Park / Recreation @ Precinct 5 and Medical Tourism @ Precincts 4/5 to create vibrancy and inject life into Putrajaya.
Our homes are uniquely designed to suit the lifestyle of Malaysians in general and we ensure high quality in all areas — design, materials, architecture, finishing, etc (e.g. YARA Lakeside Twin Villas). Putrajaya is well linked via the Intercity Transport System with seven entry and exit points.
It has high-speed road and rail linkages to national highways, expressways, dedicated highways and railways ( e.g. LDP, MRR, SKV, ELITE, MEX, SILK and SKIP). It also has good intra-city transport system consisting of buses and private vehicles via North-South Expressway and Express Rail Link (ERL) Services from Western Transport Terminal.
There are plenty of amenities of a full-scale township within 5km radius, such as schools including international and smart schools, hospital, shopping complex (Alamanda), ERL, bus service, hotels, wet market, parks, public swimming pools and gardens.
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