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Are Serviced Residences a Good Investment?

Are Serviced Residences a Good Investment?

  • Post Author: 8 Conlay Admin
  • Post Category: Uncategorized

Malaysia’s economic growth in 2020 has been a roller coaster ride so far. Wading through a pandemic and an international lockdown, the Malaysian property market’s outlook seems to also be riding in tandem with the economic situation. To the outsider, things may look grim.

For experts, however, many actually believe there will be a turnaround, and property will rebound. However, they anticipate that the property market will only improve slowly and gradually. So, even though demand and prices for Malaysian property may be stagnant or even low right now, selected prime and strategically located properties will still attract investors.

It is worth noting this, and if you are in the market to purchase a property, this is a good time to look for some good deals. You do not need to shy away just because everyone is.

Once you have decided that you are in the right circumstances to purchase a property (i.e. great credit, great savings), it is time to start your research into the properties that are in the market now.

Because location plays an important role in property investments, this article will focus on Kuala Lumpur City Center properties known as “Serviced Residences”. Another reason why we will discuss the benefits of investing in a serviced residence is that these property types are very popular amongst Malaysian and foreign investors. 

In the past, serviced residences have proven to provide positive rental yields, and have great capital gains on record. That said, the allure of serviced residences is undeniable and will prove to be a good investment if it meets important criteria. 

Defining a Serviced Residence 

The general understanding of a serviced residence in Malaysia is that they provide services typically offered by an attached hotel or hotel partner. As well as being partially or fully furnished, the project can also offer other value-added services, including housekeeping, room service, concierge services and also shuttle service.

They also attract a different type of resident than luxury condominium properties, since serviced residences can cater to business travellers, expatriates and tourists, as well as local residents looking for a more hassle-free environment. 

There are some developments, however, that take this type of property to the next level. For example, the serviced residences at 8 Conlay, called YOO8 serviced by Kempinski

Featuring a roster of in-house services provided by a five-star Kempinski Hotel, and fully furnished design concepts curated in partnership with YOO, a global design brand, YOO8 further pushes the envelope on what makes a ‘serviced residence’ by creating a residential milestone in the Kuala Lumpur property market – as a true branded serviced residence. 

Now that the definition is clear, let’s analyse whether serviced residences are a good investment.

Here are five important criteria to consider when investing in a serviced residence :

1. Prime Location

Prime Location

When considering a property, a major factor that determines whether the property is valuable is the location. Despite the current slowdown of the property market, there are still areas in Kuala Lumpur that are still experiencing stable transacted prices, including Kuala Lumpur City Center (KLCC) where properties dotted near many of the city’s public transportation further adds to its investment value.

According to the Malaysian Property Market Report 2017, properties located nearby located near the Light Rail Transit (LRT) and the Mass Rapid Transit (MRT), particularly the Kelana Jaya LRT extension lines and the MRT Sungai Buloh-Kajang lines, have proven that property prices located close to public transportation continue to rise significantly as accessibility becomes more and more important. 

As one of the fastest-growing cities in Southeast Asia, Kuala Lumpur has worked diligently to improve its public transportation in the past years. Increased connectivity in the city is certainly one of the positive impacts of Malaysia’s rail transport infrastructure enhancements – and an added value for many serviced residences. 

An extra incentive to many potential homebuyers, the development 8 Conlay will feature easy access to the up-and-coming Conlay MRT station, which will be located within a couple minutes’ walking distance from its serviced residences. 

However, while convenient access to public transportation is important, proximity to other lifestyle and healthcare facilities is also a crucial component to consider. For example, serviced residences that offer fast and easy access to shopping malls, healthcare facilities and top-notch education continue to hold strong as an investment opportunity. 

2. Reputable Developer

Reputable Developer

When choosing a serviced residence, the role of a property developer is one of the most important criteria to consider. As the company in charge of laying the foundation bricks or soldering the rebars together, finding a reputable and trustworthy property developer is extremely important. 

The right property developer should be an organisation that has an overarching view and understanding of their project. They are invested in building a property that exceeds regional standards and committed to elevating the quality of life for each of its buyers. 

Good property developers will also have a holistic comprehension of the Malaysian market planning laws, the legal construction requirements, and they also have an appreciation on how to build a property that can offer good investment returns to their buyers. Often, the reputation of the developer is just as important as the location of a property. 

A simple developer checklist consists of :

  • Research the developer’s project online and read reliable property reviews 
  • Check the updated developer blacklist provided by Malaysia’s Ministry of Housing and Local Government to guarantee your developer is of good standing
  • Request a company background check from Malaysia’s Registrar of Companies (ROC), which can uncover a lot of details about the developer’s company in case they try to hide behind a newly registered company 

3. Premium Services

Premium Services

The key to a great serviced residence also lies in the company that manages its services. As many serviced residences will offer hospitality and maintenance services provided by a partner or attached hotel, it’s important to look for a company that has a great reputation for quality and commitment. 

In 2018, the serviced residences in Kuala Lumpur that were managed by premium branded management companies managed to sell with a 69% premium to its price, compared to non-branded serviced residences. This was the second-highest price premium seen amongst Asian cities.

Companies that have a great reputation and long-standing history of managing premium serviced residences will be more likely to maintain a stellar service level, and owners will come to trust this brand and feel safe and secure when renting a property managed by them.

At YOO8 serviced by Kempinski, the branded serviced residences at 8 Conlay, feature services exclusively managed by Europe’s oldest luxury hotel brand, Kempinski Hotel. Residents will have access to basic services such as a devoted multilingual concierge team, 24-hour security, valet service and shuttle service, as well as a la carte services that include housekeeping, private chef, child care and more. For a complete list, visit here.

4. Devoted After-Sales Attention

Devoted After-Sales Attention

Once an investor has decided he/she will be purchasing a property, more often than not, there is little to no after-sales follow-up. This has been known to be a bit of a sore issue for most property buyers.

When purchasing a property in Malaysia, it is a bonus if their staff is educated in different types of property purchases and tax breaks allowed by the Malaysian government for expatriates. For example, there are tax exemptions for expatriates if they purchase properties under the Malaysia My Second Home (MM2H) programme. 

Finding a property with a great after-sales team is like finding a diamond in the rough. It is rare, but not impossible. There are serviced residences that pride themselves in great after-sales services, like YOO8 at 8 Conlay, where there is a dedicated (and multilingual) team ready to assist prospective buyers with their property purchase.

Where many buyers will invest in a serviced residence for its list of services and amenities inside the property, the team at 8 Conlay believes in going above and beyond, providing quality services before, during and after the purchase. 

The developer of 8 Conlay, KSK Land, offers a range of services for its YOO8 buyers, including assistance with the MM2H application, as well as a devoted concierge team to help international buyers get acquainted with Kuala Lumpur city. The full-service concierge team at 8 Conlay, including Kempinski’s Lady in Red, will be available to assist you in English, Chinese and Japanese. 

5. Luxurious Amenities

Luxurious Amenities

Because serviced residences have the added bonus of premium branding and quality, as well as hotel-managed services, the amenities available at these types of residences are far superior to those found at standard residential apartments. 

The true test to tell if a serviced residence is serviced by a premium branded company and built by reputable developers is in how the property takes its amenities to the new heights. More than just a pool, does the property offer you an oasis? 

The added perk of living in serviced residences is that the amenities, such as swimming pools, gymnasiums, games room and a multipurpose room, will all be maintained according to the brand’s standard operational procedures. Maintenance is done at regular intervals, and there will always be a team of on-call professionals to fix any amenity breakdowns.

When this quality assurance is established and is synonymous with the brand, it will naturally attract the right clientele. Data shows that buyers favour branded residences because there is high-quality convenience offered to them. And it is fulfilled by a trusted brand. This will always bring the potential for capital appreciation of the properties managed by them.

Inside YOO8 serviced by Kempinski, the branded serviced residences at 8 Conlay, the facilities have been tirelessly curated to offer a space of absolute respite. Situated across two sky bridges high above the bustling city below, the Water Lounge (on the 26th floor) and the Green Refuge (on the 44th floor) transform amenities into an art of luxurious relaxation. 

Final Thoughts

Even though the post-pandemic property market may be slow, it’s not dead; so it makes sense to look into buying a property if conditions are ideal for you. There are currently many properties up for sale now in Kuala Lumpur, and it’s important to always make the best decision based on the facts.

While there are many serviced residences available in the KLCC market today, the facts are that not all are created equal. That’s why finding a serviced residences project backed by a reliable brand and a reputable developer is key. 

However, there are only a small number of serviced residences in Kuala Lumpur that are backed by an established brand – and at the end of the day, the quality of serviced residence truly boils down to the quality of its services.  

That is why branded serviced residences are an added value when buying serviced residences. While the number of branded serviced residences in Kuala Lumpur (and in Asia) is still limited, the branded serviced residences at 8 Conlay (called YOO8 serviced by Kempinski) take the global arena by storm by partnering with influential brands such as Kempinski Hotels and YOO.

8Conlay

So whilst the property market remains slow but determined, the serviced residences at YOO8 serviced by Kempinski at 8 Conlay offer a silver lining – and a good investment opportunity. Its prime location, premium services, attention to after-sales services, and luxurious amenities are definitely worth your time and consideration.

To learn more about the serviced residences at 8 Conlay, contact our devoted sales team here.