Ejen Hartanah Satu Malaysia: Reviving Rawang

Reviving Rawang

renaissance: Improved accessibility, increasing economic activities and population growth have raised the profile of Rawang, putting it on the radar of property investors

Sometimes when an area or location is tagged as the “next big thing” or property “hotspot”, the initial hyperbole may eventually lead to disappointment once reality sets in. However, Rawang’s rise to prominence has been gathering steam gradually over the last few years and property investors are now paying close attention to developments in the area.

The steady evolution of Rawang from a whistle-stop satellite town in Gombak into a thriving modern township has surprised some industry analysts. Ahyat Ishak, CEO and Founder of Greater Synergy Group says that although there is still some way to go before Rawang achieves elite status as other established prime areas in Klang Valley, he doesn’t think its success is a flash in the pan.

Natural progression

“It was reported recently that KPJ (Kumpulan Perubatan (Johor) Sdn Bhd) is acquiring Rawang Specialist Hospital Sdn Bhd (RSHSB) for RM50.6 million. I am sure that KPJ had done due diligence on Rawang before making such a huge investment and coming to the conclusion that the area has the potential and will face a population boom. Businesses are setting up shop there and property developers are buying more land in Rawang. These are definitely positive signs. It’s a natural progression. Rawang is quickly becoming a cool name among home buyers, just like Subang or Puchong,” Ahyat says

According to Ahyat, Rawang’s location far outside KL city centre which used to be perceived as a weakness has turned into its strength. “Rawang is actually beyond the 30km radius from mapmaker Ho Chin Soon’s ‘Locational Centre of Gravity’ which is currently at Kinrara Army Camp. Therefore, land is still relatively cheap compared to other places in central KL but property prices are picking up with quality link houses pushing RM400,000 – RM500,000. However, there are still concerns about connectivity. Although there is LATAR (KL-Kuala Selangor Expressway) and other major highways connecting Rawang, some of the road arteries at the business centres surrounding it will have to be improved to keep up with the rapid growth,” Ahyat observes.

See Kok Loong, Director of Metro Homes Sdn Bhd concurs with Ahyat’s general enthusiasm about Rawang. “It is a good choice for buyers shopping around for landed homes especially terrace houses. Land prices have reached a point that it is now quite difficult to build landed homes in popular suburban areas like Cheras or Petaling Jaya. Many industries are also moving out to the northern fringes of the Klang Valley such as Rawang.”

Another big boost to Rawang’s property market is the new MRT which is slated for completion in 2017. Rawang would then be only 10-15km away from the new MRT station, notes an industry observer.

Robust demand

The surge in interest in Rawang properties has naturally meant that more developers are flocking into the area like bees to honey. Mah Sing Group Berhad’s Group Managing Director cum Group Chief Executive, Tan Sri Datuk Sri Leong Hoy Kum is similarly upbeat on Rawang’s property market. His positive outlook on Rawang is backed up by statistics.

“We have seen continuous growth and robust levels of demand for low-rise landed properties as well as other property types. In NAPIC’s (National Property Information Centre) transaction statistics, Rawang, which is located in the district of Gombak, has the fourth highest value of transactions out of nine districts in the state of Selangor just right behind the districts of Petaling, Klang and Hulu Langat,” Leong points out.

The Mah Sing chief shares further that the year-on-year growth of 2-2 ½ storey terraces and 2-2 ½ storey semi-dees in Q3 FY2011 and Q3 FY2012 for the district of Gombak stood at 9.67 per cent and 11.14 per cent respectively, which, while lower than more populous and vast districts like Petaling and Hulu Langat, outstripped Klang, which had a nearly flat growth rate.

Connectivity challenge

According to Leong, from these statistics, one can conclude that Rawang still has high potential for growth while still providing a viable solution to the urban migration sprawling across Greater Kuala Lumpur. “This takes into consideration the relative maturity of the location in contrast to the available stock of land bank available. Rawang itself has a higher degree of penetration from property developers with secondary market statistics showing a steady increase in asking and transacted prices in the more matured neighbourhoods,” explains Leong, adding that Mah Sing’s latest gated and guarded township, M Residence 2@Rawang saw an encouraging take-up rate of 80 per cent when the first phase was previewed a couple of months ago.

This wasn’t always the case many years ago, Leong notes. “When we first went into Rawang, the main concern we had was the connectivity and accessibility. Besides the North-South Highway, Guthrie Corridor and the LATAR Highway, public access roads into the town of Rawang itself or the neighbourhoods that sprang from the town centre was lacking in terms of accessibility and in the volume of traffic that it could accommodate. We knew that the upgrading and widening works on Jalan Batu Arang would not only serve its current residents but future ones as well,” he says echoing Ahyat’s earlier point.

Changing perceptions

The other issue was the perceived lack of public transportation in Rawang, adds Leong. “Thankfully, rail access by KTM Kommuter into Rawang’s main station and an extended line meant trains would arrive at more regular intervals, allowing easy access to other major hubs in the Klang Valley. The upgrading of rail access to Rawang has enhanced its reputation as a serious contender of affordable townships to the house-buying public.”

Leong also says that the other challenge they’ve had was to change public perception that Rawang was too far away from the city centre’s CBD (Central Business District). “The CBD is usually the epicentre of socio-economic activities, pulsating with excitement. The arrival of Aeon-Jusco in Rawang has ignited the social (and retail) scene in Rawang. Correspondingly, the commercial and retail property market in Rawang is set to appreciate as the residential markets reach maturity. These are catchment areas for retailers and commercial interests to operate in.”

The Mah Sing CEO also adds that for retail and commercial activities in general, integrated centres such as shopping malls have become de rigueur in Rawang, offering retailers and businesses a place to call home regardless of the size of enterprise. “All in all, the increased demand for retail and commercial offerings points to a gradual maturing of the residential properties in Rawang and explains in part the higher supply in meeting the latent demand in this emerging hub.”

Increased awareness

What types of home buyers are fuelling Rawang’s growth in the property market? Leong admits that currently Rawang’s main investors are locals, with growing numbers of foreign buyers who have increased awareness and knowledge of the location.

“As always, familiarity with the location is one of the key reasons for property purchase whether for own consumption or investment purposes. From our township sales, many buyers have indicated that their purchases are for their own occupation, which means that the township will be well occupied upon completion. There are also those purchasers mixing own consumption and investment, with many citing the affordable price entry point, growing infrastructure and good township security and amenities as reasons that inform their purchase decisions.”

Savvy buyers

Tan Lee Koon, Managing Director of Guocoland (Malaysia) Berhad, agrees with Leong on the challenge of changing perceptions. “Although Rawang has attracted many savvy homebuyers and investors from outside Rawang in recent years, there are also many homebuyers who still know very little about Rawang’s vibrancy and the growing number of property developments in the northern corridor of the Klang Valley.”

Tan says that besides the aforementioned elements of improved accessibility and prime land scarcity in the Klang Valley, Rawang’s success can also be attributed to the wide range of properties to meet buyers’ needs and requirements.

“About five to six years ago, it was definitely a challenge to interest non-Rawang folks to consider our Emerald township in Rawang. Given our established township and product offerings from superlinks to semi-dees and bungalows, we are now attracting many working professionals and even high net worth individuals to consider setting up homes in Emerald,” Tan points out.

Capital appreciation

The Guocoland MD also adds that Rawang caters to a diversified group of homebuyers and investors, ranging from the working class to professionals and businessmen. “In recent years, we have seen a wider base of purchasers from outside Rawang, including many living in PJ, Subang, Shah Alam and even Damansara. Rawang has emerged as one of the preferred choices for landed properties among many upgraders, moving from terraced to semi-dees or bungalows. Many who had bought our properties (Ebony link homes, Amberley semi-dees) in the last two to three years are now enjoying capital appreciation of over 50 per cent. He adds that GuocoLand has developed close to 2,000 guarded homes and to date has completed over 30 per cent of its 1,000-acre township.

“Of course, its success has downsides too. With more people moving in, Rawang town has become more congested. Road upgrading, especially the busy Jalan Bukit Arang and the construction of a new flyover (just after the Rawang toll plaza) needs to be expedited to serve the growing population and vehicles,” Tan suggests.

Despite the downsides, Tan remains optimistic about its future projects in Rawang. “We are planning a number of new launches in the second half of this year which will include mid to high-end properties. We are excited about the new Emerald – a more exclusive township to cater to the discerning lifestyle needs of today’s homebuyers.”

Strong commitment

Meanwhile, a spokesman for Glomac Berhad commends both the government and the private sector for the remarkable growth of Rawang. “Over the past few years, Rawang has been transformed into one of the property hotspots in the Klang Valley. The strong demand for residential units has pushed prices up and has resulted in record sales in this area. Our government’s strong commitment in providing infrastructure and amenities is one of the main key factors driving the property market in Rawang. It is now easily accessible through many major highways like NKVE, Guthrie Corridor Expressway and LATAR, and also via the upgraded Jalan Kuala Selangor. There are many existing public amenities like schools, government health clinics, police stations, mosques and wet market.”

“The private sector has also contributed to the transformation of Rawang in providing many modern supermarkets, proposed medical centres and proposed international school. Many property developers have taken advantage of the situation and in the process have aided in transforming Rawang into a vibrant township,” the Glomac’s spokesman points out, adding that the key target market in Saujana Rawang are the 25-40 year-old professionals from various locations such as Wangsa Maju, Ulu Kelang, Selayang, Damansara, Ampang and Rawang. Most of these purchases are either for own occupation or are upgrades from apartments to landed residential.

The spokesman cites the rising costs of construction materials, prices of new land banks and lack of future supply of land as some of the main challenges faced in developing Rawang’s property market. “Nevertheless, looking on the bright side, Rawang’s property market will be given another huge boost with the completion of the MRT in 2017.”