According to received wisdom, the holy trinity of property development is location, location and location. That’s just wrong. Market sentiment is one big kahuna, and there’s nothing this market likes more than a developer with a strong brand. Take Summer Suites, for example: a cult developer on a hot streak (Sunrise Bhd) acquires a land parcel in a prime location (KL’s Golden Triangle) and launches at the right time (Jan 2011). There’s your trinity, right there.
Word of Sunrise’s foray into the city first emerged in 2008, sparking much interest in what the successful Mont Kiara specialist was up to. The Sunrise brand was peaking, the location hot, and the market ripe for the picking. At its launch, Tower A of Summer Suites at Menara Solaris (as it was then called) sold out over one weekend, prompting Sunrise to apologise to disappointed buyers for not anticipating the overwhelming demand – and perhaps kick themselves for not selling higher. Sunrise had a second bite of the cherry almost exactly a year later in Jan 2012, when Tower B’s VOS – versatile office suites – were launched. According to some punters’ calculations, these were priced at premium of around 12% to 17% over Tower A suites. Tower B was completed just last year.
Versatile office suites? Sunrise had identified its user target market as the youngish internet entrepreneur (this was around 2008 or earlier) with a commando start-up team that works, eats and sleeps in the office. So, typical of Sunrise, it designed and specified its products to match the needs of its tightly defined user target market. The “office suites” would be small to medium-sized (469 to 1,347 sq ft), starting at an affordable RM328,000. There would be a cool swimming pool, somewhere hip to workout, meeting rooms, retail space and a business-class lobby to impress clients with. Naturally, the suites would have to be located in the Golden Triangle, so they could all work hard and play hard in an endless cycle of virtue.
Would this package be enough to convince market-moving retail and institutional investors? Initially, the location, potential upside and reputation of the developer proved irresistible. What more the option to rent the space out as an office or a residential dwelling, or both! But for one complication: because of its innovative hybrid nature, it is unclear whether Summer Suites is legally considered a commercial or a residential development (although its land title is categorised under "commercial"). This interpretation affects the purpose(s) for which it can be used, and using or renting them out as a residential dwelling may not be permitted under the law. Its legal definition also determines the statutory rights of owners, the rates of property assessment and utilities, and the regulatory authorities responsible for all the above. Summer Suites are currently rented out over Agoda, among others.
As things stand, there is an emerging market of young professionals who must commute hours daily to work because they can only afford to buy or rent properties far from the city centre. The ability to stay near their workplaces, or even at their workplaces, would address a market need and reduce the oversupply of office space in the city. The likes of Summer Suites raise important questions for housing policy and regulation.