Once a tin-mining wasteland, Bandar Sunway began its transformation in the mid-1980s. The first development at the 800-acre township by master developer Sunway Bhd was Sunway Lagoon Theme Park, which it began constructing in 1986. It is one of the earliest theme parks in the country.
More buildings were subsequently built in Bandar Sunway, which falls under the ambit of Majlis Bandaraya Subang Jaya. They include the Egyptian-inspired Sunway Pyramid shopping centre with its eye-catching lion sculpture standing guard at the entrance, Sunway Medical Centre, Sunway Hotel & Resorts as well as Sunway University. All have since become landmarks in the township.
There are also other developers in Bandar Sunway, including Nadayu Properties Bhd and Cicet Asia Development Sdn Bhd.
Today, Bandar Sunway is a self-sustaining mixed-use township with residential, commercial and industrial components. It has shopping malls, hotels, a medical centre, universities, offices, factories and a theme park.
The township is connected via public transport, namely Sunway Monorail and the Bus Rapid Transit (BRT) Sunway Line. It is also accessible via highways such as the New Pantai Expressway, Lebuhraya Damansara-Puchong and Lebuhraya Shah Alam.
“Bandar Sunway is one of the earliest and better [master-planned townships] in the country, where the developer brings in and runs its own businesses. Some of the properties have been injected into its REIT (real estate investment trust). This move plays a major role in making the township work, with its intention of creating value for the township in the long term,” Reapfield Properties group chief operating officer Jonathan Lee says.
“[When Bandar Sunway was first developed], the clear intention was to create economic activity first to draw consumers to the place, and it did well with the theme park and the shopping mall. The remaining components, such as the office buildings, hospital and university, were then integrated together. These had been planned from the beginning, and are being executed stage by stage.”
Laurelcap Sdn Bhd executive director Stanley Toh notes that the rental market in Bandar Sunway has always been strong. The high-rise residential market is especially stable as it is mainly driven by students from universities in the area.
“Bandar Sunway is known for Sunway University and Monash University Malaysia, thus the tenant profile is mainly students. There is also a huge young adult working-class population. They are attracted to the area because of the good infrastructure, facilities and amenities. The idea of walking down from your apartment or condo and taking the monorail or BRT to Sunway Pyramid appeals to the adult working class and students, while the highways provide easy access to many parts of the Klang Valley,” he says.
“There is also another segment of tenants for the residential properties, which are from the B40 (bottom 40% of income earners) and foreign workers, in Sunway Mentari and Ridzuan Condominium. They are similarly attracted to the township’s convenience and good transport network. These were the two main areas in Bandar Sunway with the best-yielding properties before Covid-19. The properties were [seldom] left vacant for too long as demand exceeded supply.”
Lee concurs, adding that Bandar Sunway also attracted expatriates before the pandemic.
“There is also the expatriate market, especially in the South Quay area. The market is not huge, but it is significant enough. There are the international school teachers, university lecturers as well as professionals from the medical centre. Sunway Group also has collaborations with foreign companies, which also bring in foreigners. It is a strategic place where kids can go to the international school there and the parents can work nearby. Everything is within walking distance and they like the environment,” he says.
“Landed properties there are older and they are mostly for own use, while the rental market is mostly at the high-rise developments. Sunway Group did a good job on the supply-demand ratio, such that all units have been taken up as the gap between supply and demand is not big. They put a lot of thought in the planning. Properties at Bandar Sunway will have a better premium in terms of rental because of the integration and because the different components are well spread out.”
Commercial and Industrial rental
Meanwhile, Toh has observed a change in the tenant profile in the industrial properties over the years. In the early days, the terraced factories adjacent to the university were mainly occupied by trading companies that acted like warehouses, storing stock and supplies. He sees a major revamp there in terms of tenant profile, demand and supply.
“They have moved towards higher-yielding [uses] with high-performance auto workshops, showrooms, sports modification centres and premium auto accessory shops. There are also cafes and bakeries there,” he explains.
“The shopoffices next to Sunway Pyramid are more than 90% occupied, commanding premium rental rates due to the spillover effects from both [developments]. The vast majority of the tenants at the ground floor of the shopoffices are F&B outlets.”
The entertainment, hospitality and leisure businesses have been badly affected by the Covid-19 pandemic. Many businesses have failed and shopoffice owners too have taken a hit when the businesses vacated their units.
Property consultants expect some changes in the rental market in the township post pandemic, due to new laws and evolving tenant demand.
Toh foresees a paradigm shift in future demand for the rental market there, following the Workers’ Minimum Standards of Housing and Amenities (Amendment) Act 2019. To comply with the regulation, owners of nearby factories will need to seek adequate accommodation for their workers.
“Gone are the days where you could stuff 20 people in a small apartment. Now, with the Act, a minimum standard has to be observed. This latest regulation will have a positive impact on the surrounding residential property market as the increase in demand for accommodation fit for human habitation outstrips supply. The rental value of these properties will see a potential increase in the years to come,” he says.
Lee, meanwhile, expects the rental market in Bandar Sunway to go through a period of correction. “There will be a time when we will have to neutralise the supply and demand to reach equilibrium. Residential units won’t be impacted much as they fulfil a basic need, so it is about the pricing. Also, work-from-home is the new norm now, so the demand for space in residential properties will be different.
“The main issue will be the commercial properties — how they are going to reinvent themselves due to the work-from-home norm, especially for retail units near the office blocks.
“Covid-19 resets everything so we cannot predict future property value like we used to do. I believe that properties at Bandar Sunway will bounce back from the impact of the pandemic faster because of its location and amenities. Also, the developer is still there [to support it].”