KUALA LUMPUR, Sept 22 — The Damansara Town Centre in Kuala Lumpur is poised to be the next hotspot in the Klang Valley for tech start-ups, property consultancy Knight Frank Malaysia predicted today.
Knight Frank Malaysia managing director Sarkunan Subramaniam believes improved traffic connectivity to the area, notably the strategic location of the nearby Mass Rapid Transit (MRT) rail station, will give the leafy suburb the impetus needed.
“The places that we have seen traditionally for the start-ups are Bangsar South, Mid Valley, KL Sentral, but I think the space to watch is Damansara Town Centre,” he said at the launch of Knight Frank’s 2017 report on global cities.
“Damansara was left behind 10 years ago. Why? Because it didn’t have that kind of rail infrastructure, LRT infrastructure, and other areas grew: KL Sentral, Mid Valley and Bangsar South.
“And now I think we are going to see a resurgence of demand in the Damansara Town area,” he added.
KL Sentral has become a transportation convergence point in the national capital, linking intercity travel via the KTMB rail with intracity commute through the light rail transport (LRT), monorail, Komuter train networks. Similarly, the former squatter colony known as Kerinchi now gentrified as Bangsar South is accessible by LRT as is Mid Valley, with the addition of the Komuter train.
Knight Frank later clarified that the Damansara Town Centre area covers the stretch from Jalan Semantan where HELP university is located to the Damansara Link of SPRINT Highway, with two MRT stations located in this area: Semantan and Pusat Bandar Damansara.
This area would include offices at Jalan Dungun, Jalan Semantan, the integrated development of Damansara City that will be completed soon and the small commercial zone better known by its Malay name Pusat Bandar Damansara, which is undergoing redevelopment, the firm said.
While Knight Frank Asia Pacific’s research head Nicholas Holt told reporters earlier that tech start-ups prefer to be located at offices with MSC status where certain tax breaks are given, he added that connectivity is now a key factor.
“What are tech start-ups looking for? Well, I’ll probably say these three Cs: cost, connectivity and cool.
“Clusters... they like to be around other tech firms; they like connectivity, it’s very important for their labour pool, for their young millennials that’s going to come work in start-ups, the office buildings have to be easy to get to,” he said.
Relatively low rental costs in Bangsar South have also given the area a lift with young tech enterprises, Holt said and shared Knight Frank’s study of rental costs for traditional office space in the tech districts of 28 global cities.
“On a cost basis, KL is very competitive in terms of the rent, 600 square feet office space, it’s of lower cost than many other cities around the world and in fact it’s only slightly more expensive than four cities of global cities,” he said.
Knight Frank’s data showed London (Shoreditch), New York (Brooklyn) and San Francisco (Mid-Market) being the most expensive tech clusters to rent and start up a business in at annual costs of US$66,706, US$62,736 and US$61,680 respectively.
For the same 600 square feet of office space, the Asian cities of Hong Kong (Cyberport, Pokfulam), Beijing (Zhongguancun), Singapore (One North) are in the top 10 list of expensive tech-start up places but had rental rates that are 40 per cent cheaper than London.
Taking up the last three spots on the top 10 list, these three Asian cities have annual office rental and start-up costs of US$40,488, US$39,090 and US$39,088 respectively.
As for Kuala Lumpur, it was ranked 24th (US$23,414), just slightly below Asian cities Seoul’s Central Business District (US$25,638) and Bengaluru’s Whitefield (US$25,359) at the 21st and 22nd spot.
The two other locations in Asian cities cheaper than Kuala Lumpur are Shanghai’s Zhangjiang Hi-Tech Park (US$19,640) and Bangkok’s Thonglor/Ekamai (US$18,132) at 26th and 28th spot in the Knight Frank study.