Thriving: In Jalan TAR, the ground floor of a three- storey shophouse converted into multiple arcades could command
now a total rental of RM50,000 to RM65,000 per month.
Today, large hypermarkets and shopping complexes are the ones that are pulling the crowds, but Jalan TAR – flanked by pre-war buildings that have been preserved and readapted to fit modern-day businesses – is surprisingly, still thriving.
Minesh Doshi, who ran the reknowned P Lal store in Jalan TAR until 2008, calls it the “most expensive real estate.”
“Rentals for the ground floor can cost up to RM50,000 a month! That translates to about RM1,600 a day,” he tells StarBizWeek.
“And that’s just rentals. That means you need to make between RM3,000 and RM4,000 a day just to cover your added expenses,” Minesh adds.
He notes that the profile of Jalan TAR has since changed – with most shops today catering to mainly Muslim buyers.
“Many big names such as Mun Loong (department store) and Selangor Pewter have since moved. Also, the roads along Jalan TAR are closed on Saturdays to accommodate the pasar malam (night market) and the area has also become increasingly congested over the years.
Because of these factors, Minesh moved his business to Jalan Gasing in Petaling Jaya. P Lal started operations in Jalan TAR since 1929.
According to PPC International managing director Siders Sittampalam, properties that command the highest rentals along Jalan TAR stretches from the SOGO shopping complex to the Coliseum cinema, whilst shops located beyond the Coliseum towards Jalan Tun Perak interchange tend to command relatively lower rentals.
“Within the last five years, a number of shops along Jalan TAR have been converted into arcades which are sublet to multiple traders.
“On an average, the ground floor of a three-storey shop-house converted into multiple arcades could command now a total rental of RM50,000 to RM65,000 per month, which would translate to between RM25 and RM35 per sq ft,” he says.
Siders notes that the occupants along Jalan TAR are mainly trading in textile catering to Muslim attire, household decorations and wedding accessories, whilst along Jalan Masjid India it’s mostly Indian apparel, metal wares, goldsmith and jewellers.
“Generally, the main thoroughfare of Masjid India commands equal rental value of Jalan TAR, whereas the secondary roads off Jalan Masjid India, such as Lorong Bunus, tend to command slightly lower.”
Siders says Jalan TAR has seen renewed interest within the last three years, where many have converted their ground floor shop houses into arcades and started subletting to multiple tenants.
“Rentals soared with the coming of arcades. Traditionally, the east of Jalan TAR that houses textile businesses such as Kamdar, Sarah Hughes and Harisons tend to command higher rentals then the properties on the west housing like Maya’s, Gulatis and House of Zaira, which tend to be lower.
“However since the last five to eight years, rentals have picked up on par with the east side and both sides of the stretch have gained popularity among shoppers.”
Siders adds that properties along Jalan TAR very rarely change hands, noting that some of which have been held for many years by the proprietors. “As such, there are no bank borrowings or holding cost issues,” he says.
Siders does add, however that since Jalan TAR is predominantly catered towards textile and costumes, economic factors such as unemployment and inflation would have an impact on the purchasing power of consumers.
“If the purchasing power, in general, contracts with economic decline, then businesses would be affected and so will the level of profits. Subsequently, when the ability to pay higher rentals diminishes, rentals eventually have to give in to lower levels.”
According to Quek Wei Kin of Zerin Properties, shop office rentals are more stable for ground floor units. “Typically, the ground floor shop rental is two to three times higher than the first floor office unit.
“There will be a slight decrease for each subsequent floor upwards. Elevators would help increase rental rate of the office units. In Kota Damansara at Dataran Sunway and The Strand, intermediate ground floor shop rentals hover around RM5,500 to RM7,500 per month.”
Quek adds that in established commercial areas of SS2 and Damansara Utama, rentals start at RM7,000 and can go as high as RM11,000 for good frontage and accessibility.
“In the upmarket Bangsar Baru area, owners are asking approximately RM15,000 per month for an intermediate ground floor unit. Prices can sometimes reach RM30,000 for a prime corner unit.
“In locations serving a more niche neighbourhood crowd such as the shop offices around Plaza Damansara and Damansara Heights, ground floor rentals are at RM6,000 to RM7,000 per month.
“In Solaris Dutamas, the shop office units facing Jalan Solaris 1 have enjoyed good rental demand of between RM12,000 and RM15,000 per month for an intermediate ground floor unit.”
Moving towards downtown Kuala Lumpur (KL), Quek says sizes are more irregular in the older parts of town, with many owners prefering en-bloc rentals.
“In Jalan TAR, rentals average around RM4 per sq ft and sizes range from 2,000 sq ft to 15,000 sqft for an enbloc rental. On Jalan Bukit Bintang itself, ground floor rentals range from RM15,000 at the portion around Federal Hotel to about RM30,000 for the shops facing Fahrenheit 88 and Lot 10.”
According to Quek, the current shop office market is flat, with some older locations and properties facing downward pressure on rental.
“Take up rates will continue to be strong in established locations with good foot traffic, accessibility and road frontage. The rentals will remain stable with perhaps a slight trend upwards in hot areas.
“The biggest impact on shop office locations is accessibility and some locations are being impacted by the upcoming MRT and LRT extensions. We also see shops close to malls and hypermarkets having the positive spillover of the shopping crowd.”
BY EUGENE MAHALINGAM
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