Port-related businesses a boost for property demand in Klang

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Port Klang is one of the main drivers of the Klang Valley economy.

The royal town of Klang has a lot to offer for residential and commercial purposes. It is located in the Klang district and was originally the state capital. Kuala Lumpur became the capital in 1880, and subsequently Shah Alam in 1978.

Klang is divided into North Klang and South Klang, and separated by the Klang River. North Klang is mostly residential and commercial while South Klang used to be home mainly to government offices and private healthcare facilities.

However, South Klang has experienced strong growth in the residential sector, with established townships such as Bandar Botanic, Bandar Bukit Tinggi, Taman Sentosa Perdana, Taman Sri Andalas, Taman Bayu Perdana, Glenmarie Cove, Kota Bayuemas and so on.

Newer townships include Bandar Bukit Raja, Aman Perdana and Klang Sentral. Port Klang, located in South Klang, is the country’s busiest port. Previously called Port Swettenham, it was renamed in 1972.

Klang is connected to most of the major highways in the Klang Valley, including The North Klang Valley Expressway, Federal Highway and Shah Alam Expressway and it is accessible via coastal roads from Banting and Sepang (south) or Kuala Selangor and Sabak Bernam (north).

For residents, Klang offers many malls for shopping and entertainment, including the AEON Bukit Tinggi Shopping Centre, Bukit Raja Shopping Centre, GM Klang Wholesale City and Centro Mall.

Currently, there are 8,150 properties available in Klang, most of them freehold. A Property Advisor analysis has found that the median price paid for residential properties in Klang for the first half of the year (1H2020) was RM365,000 by first-home buyers (FHB) and RM300,000 by investors.

Klang is the top transacted area in the Klang Valley. This year, due to the Covid-19 pandemic, transactions of high-rise and landed properties have decreased by 23.33% and 0.26% respectively, but it should be noted that high-rise transaction volume rose 14.87% from 2018 to 2019 and median prices in this category rose 7.14% during the same period.

Analysis by Property Advisor indicates that FHBs are mostly driving the demand in Klang, with this buyer group making up 54.46% of all transactions in the area in 1H2020.

What does the expert say?

Metro Homes Realty Bhd executive director See Kok Loong believes the increase in median prices for investors is due to the implementation of the Movement Control Order in March and new launches in certain isolated areas.

He told Property Advisor that Port Klang is one of the main drivers of the Klang Valley economy. “It has businesses that do not exist in other cities, such as freight forwarding and shipping companies and other port-related businesses.

“In addition, the area under the Klang Municipal Council has the largest population, close to one million. With the port, naturally, it is also an industrial area for exports and imports.”

According to See, there is an oversupply of properties in Klang, just as other areas in the country, and yields are comparatively low compared with Petaling Jaya or Damansara.

“Buyers and tenants are calculative because manufacturers make their profit from every single sen of savings on raw materials, utilities and so on, unlike service industry or financial market players.”

He said the upcoming potential in the next few years is in industrial properties due to the US-China trade war and Covid-19 pandemic with supply chains going regional. “Manufacturers will not put all their factories in China. They might build factories in Malaysia or Vietnam for the Southeast Asia and US markets.”

He added that there is also potential in logistics hubs because of the rapid growth of e-commerce, with logistics a critical support for the entire ecosystem.

As for commercial and residential developments, See said there are many good townships, such as Bukit Tinggi 1, 2, 3, Bandar Bestari, Bandar Bukit Raja and Bandar Botanic, just to name a few.

Moving forward, See said industrial property is expected to be in demand but with a lower asking price per square foot.

“For instance, Worldwide Izone industrial lots were transacting at about RM90 psf and up for 63,000 to 72,000 sq ft lots.

“The main selling point is its proximity to the port and self-sustaining infrastructure.”

New attractions in Klang

“We can expect more attractions to come to Klang on the back of the upcoming light rail transit (LRT) Line 3 and the opening of the West Coast Expressway, which will enhance connectivity to the airport and the northern region, including Penang,” See said.

He believes that, in the long run, Klang will be a good investment due to its growing population and port-related business as the country is still heavily dependent on international trade.

This article was written by Sharina Ahmad of PropertyAdvisor.my, Malaysia’s most comprehensive source of property data, property analytics and insights.