Gaya Street Still Sexy & Attractive

Gaya Street is earliest street use by British era to operate businesses. Recently years Gaya Street continues to grow steadily with good tenant ranging from banking to food operator. For the past 6 years when I started career in Gaya Street, commercial lots already commanding reasonable rental yield and a little bit room for capital appreciation.

Foreign Bank

I remembered one of my friend bought over 4 storey corner shop lot facing Ang’s Hotel for less than RM2M. Currently she is receiving rental income of RM7K per month for ground floor alone while she is operating her own budget hotel above the unit. I believe even if you offered her RM3M today she might not want to sell it to you. No body willing to sell “Gaya Street” shop nowadays and even there is the price will be sky rocket.

Gaya Street has been famous for its historical building like Sabah Tourism Building which still stands firm promoting latest information on Sabah Tourism industry. Their activities did help in increasing tourist arrival not only from overseas but also locally especially from Sarawak & West Malaysian. From property point of view, if you notice recently the numbers of budget hotel under renovating is increasing. In Gaya Street alone I think the numbers easily hit above 10 new hotel operators.

New Upcoming Hotel

This excluding upcoming new hotel which is under major renovation formerly known as “Gaya Centre”. I understand that the owner is spending more than RM30M to turn the office building into one of the new landmark in Kota Kinabalu Town. With the coming of new high-end shopping mall known as Suria Sabah, I believe Gaya Street with continue to be major tourist activity place. The numbers of Back Packer also increasing along Gaya Street through capitalizing of higher floor which is not commanding good rental yield in the past. The rules of the shop lot is, on average 70% of the rental collected is from ‘ground floor” and the rest which is first, second and third floor normally will received the rest of 30% of the total rental. But its different story for Gaya street, even higher floor now has been hunted by hotel operator to run hotel and backpackers business. This has push up the rental yield for overall shop lot in Gaya Street.

If you own a unit of Gaya Street shop lot, you are millionaires with rental collected not less than RM120K per annum. Not surprising if your tenant list including bank, hotel operator, finance company, food operator, insurance company, 24 hours convenience store, pharmacy or even medical centre like clinic. If you have the above tenant, I believe you are signing long tenancy agreement of not less than 10 years. Some big company like bank might tied you for more than 20 years as they spending millions of dollars into setting up the full operations of their banking systems. I heard UOB bank is spending few millions just to renovate their new offices. Bear in mind, setting up fully operated banking system is not like setting up hawker stall. It was not as simple as what we can see from outside. That why they need to signed long tenancy term so that they have the time to recover back whatever they invested in.

OCBC, Alliance Bank & RHB KK

You will be the luckiest guy in the world if bank rent from you. They will never default rental payment and some bank even take smarter move by asking you to refinance back the property to them and signed a legal rental income proceed agreement. At least they make back some of their money from you. But you are at more winning side compare to the bank who rent it from you. Remember this; they have no “choice” simply because the property is under your name. Otherwise, they will own it and save the rental.

What more you expect from your 4 storey shop lot if you are collecting good rental from ground till 4^th floor with good tenant especially established company like 7-Eleven, hotel operator, banks, clinics, pharmacy and personal care centre like Watson and Guardian. Besides, your long tenancy will free you from all the trouble from finding new tenant every year.

Entrance to Gaya Street

Gaya Street is enhancing further by its weekly activity known as Sunday market selling all local made products ranging from craft, food and even local fruit and flowers plants. Sunday is the real day for Gaya Street. The street visited not only by locals but also huge numbers of people from other places especially foreigner who will definitely make their spending there. Every dollar they spend will benefit you if you own a unit here.

Adding Gaya Street as part of your portfolio is not easy as this is consider play round of the rich. Gaya Street really never fails to maintain it “gaya” or style coming years with all the major activity happening around. It will turn out to be street that never sleeps in the near future once Suria Sabah opening next month.  Happy Investing.

 You cannot Grow Land.. CK Wong & KH Wong

 ** Gaya – is local Malay words mean STYLE

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