Property Hunter Issue 54 - May 2014 by Victor

/// COVER STORY

ECO Garden @ Jalan Bunga Raya, Tawau Sets A New Benchmark In Fine Lifestyle

MAY 2014

ISSUE 54 RM8.90

/// HOT TOPIC The Next Property Boom at KKIP /// HOT TOPIC Tawau: The Agriculture Power House of Sabah /// PROPERTY LAUNCH Riverson Walk Showcased Ultra Modern Lifestyle Mall

The Unsung Success Story of Anwar Yeo • Dato’ Jimmy Pang - Building for the Future • PH Expo Ventures to Hong Kong in September 2014 • SHAREDA to Launch Another 5000 Units to Support MYHOME Scheme • SHAREDA Releases 2013 Property Development Annual Report

06  07 | Cover Story /// Contents

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What’s inside... 08

Exclusive Coverage SHAREDA Property Hunter Expo Tawau 2014

Hot Topic Tawau: The Agriculture Power House of Sabah

Cover Story ECO Garden @ Jalan Bunga Raya, Tawau Sets A New Benchmark In Fine Lifestyle

Hot Topic KKIP Property Boom

Exclusive Interview Dato’ Jimmy Pang - Building for The Future

Feature Property Launch 90% Take Up for Taman Putra Pogun in Less Than a Month

Exclusive Interview The Unsung Success Story of Anwar Yeo

Hot Topic PH Expo Ventures to Hong Kong in September 2014

Hot Topic SHAREDA to Launch Another 5000 Units to Support MyHOME Scheme

Hot Topic SHAREDA Releases 2013 Property Development Annual Report

Special Feature Development Milestones

Feature Property Event Gleneagles Flexes Its Wings Eastward Into Kota Kinabalu

Feature Property Launch Riversion Walk Showcased Ultra Modern Lifestyle Mall

Feature Property Event SHAREDA Property Hunter Expo Returns to Sandakan for the Third Year

Contributor: Dr Daniele Gambero The Raise of the High-Rise

Contributor: Chris Tan Trending Up Legally in View of The Property Boom in Malaysia (Part 2)

Contributor: Ahyat Ishak Property Bubbles (Part 3): Lessons from my Property Exploration in Spain & Portugal

Property Listing

12 ECO Garden @ Jalan Bunga Raya, Tawau Sets A New Benchmark In Fine Lifestyle

ECO Garden will be the Group’s first project in Tawau after the success of launching the first ECO development series ECO Park in Sepanggar...

26 90% Take Up for Taman Putra Pogun in Less Than a Month

Taman Putra Pogun, a modern and contemporary landed property within the vicinity of Kota Kinabalu, has become the talk of the town...

46 Gleneagles Flexes Its Wings Eastward Into Kota Kinabalu

The Gleneagles Hospitals will soon be available to the people of Sabah via its latest addition, Gleneagles Kota Kinabalu.

Sneak Peek of June Issue

Why Are The Top Names In Development Heading To Iskandar? Hot Topic

Astaka, Topping The Sky-Scrapping Lifestyle In Malaysia

Hot Topic

Is Iskandar As Promising As Its Portrayed? Will It Be Oversupplied?

/// Exclusive Coverage

SHAREDA Property Hunter Expo Tawau 2014 Guest of Honour Message from

Y.B. Datuk Hj. Tawfiq Datuk Seri Panglima Hj. Abu Bakar Titingan Minister of Youth and Sports, Sabah It is with great pleasure that I welcome all exhibitors of SHAREDA Property Hunter Expo Tawau, an event that is jointly organised by Sabah Housing And Real Estate Developers Association (SHAREDA) and Maxx Media (S) Sdn Bhd (or Property Hunter) at Lau Gek Poh Foundation Building from 16-18 May 2014. This is the 2nd year that the expo is being held in Tawau, I applaud the efforts by the organisers to bring in property development projects from all over Malaysia and overseas to be showcased to the people of Tawau. I believe that this is also a good platform to promote local property projects developed by our local developers in Sabah. In the midst of exuberant growth in the property market, I encourage the developers to continue to deliver high quality products at a reasonable price. As property buyers become more sophisticated and well informed, it is important that the products evolve along with the changes in the market. On the other hand, it is also very important for developers to commit to develop affordable housing, as a gesture to contribute back to the community as a corporate social responsibility programme. On this note, I would like to congratulate and laud SHAREDA for their initiative and vision to complement the government to build 10,000 units of affordable homes for the local community in the next 5 years. As the economy continues to prosper, it is natural to see the demand for property to increase, particularly for investment purpose. I would like to take this opportunity to remind all property investors to be cautious when investing in a property, and to avoid speculative investment behaviour. Whilst property is a good tool in preserving wealth, it should be treated as a steady long term investment tool. Last but not least, I would like to once again congratulate SHAREDA and Property Hunter of their successful endeavours to stage the SHAREDA Property Hunter Expo in Tawau, and we look forward to more editions to come. Wishing everyone a very fruitful event. Thank you & Happy Shopping!

Y.B. Datuk Hj. Tawfiq Datuk Seri Panglima Hj. Abu Bakar Titingan Minister of Youth and Sports, Sabah

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Message from

SHAREDA President (2013-2015)

SHAREDA Council Member (2013 - 2015) Organising Chairperson of SHAREDA Property Hunter Expo 2014 Tawau

Mr. Francis Goh Fah Shun, A.S.D.K.

It is with great pleasure to welcome all participating exhibitors and visitors to the SHAREDA Property Hunter Expo Tawau 2014 at Lau Gek Poh Foundation Building from 16-18 May 2014. On behalf of the organisers, I would like to extend the sincere gratitude to our Guest of Honour Yang Berhormat Datuk Hj. Tawfiq Datuk Hj. Abu Bakar Titingan, the Minister of Youth and Sports, Sabah for gracing the Opening Ceremony of this auspicious 3 days event. This event is a continuation of a series of exhibitions that SHAREDA is organising jointly with Property Hunter to cater specifically to Sabahans living on the East Coast. We hope that the local residents in Tawau and surrounding towns would benefit greatly for the property ownership and investment opportunity taking place in their hometown. The SHAREDA Property Hunter Expo Tawau is a milestone for the industry, which marks the progress we are heading in the midst of challenges shouldered by the real estate and housing industry in Sabah. Ever since the series of cooling measures introduced by the government in year 2013, the developers and buyers are adapting to the changes. Despite that, I strongly believe that the Sabah property market will continue to grow and gain momentum this year. In line with SHAREDA’s mission to serveto the need of members throughout the state of Sabah, this exhibition acts as a perfect platform for our members to showcase their projects to the residents in Tawau, a town with significant economic contribution towards the state. With these notes, on behalf of SHAREDA, I wish to thank the Property Hunter once again to work closely with SHAREDA and its members to showcase their properties during the Tawau expo. Hence, I urge potential investors or home seekers not to miss this opportunity to visit and shop at this property expo brought to your doorstep in Tawau. Wishing everyone a fruitful exhibition and shopping! Thank you.

Dato’ Jimmy Pang Kia Lock

On behalf of the Organising Committee, I would like to welcome all exhibitors and visitors to the SHAREDA PH Expo 2014 Tawau on 16-18 May 2014 at Lau Gek Poh Foundation Building, partnership between the Sabah Housing And Real Estate Developers Association (SHAREDA) and Maxx Media (S) Sdn Bhd which is in its 2nd year running. The SHAREDA PH Expo Tawau is a great opportunity for the people of Tawau and surrounding towns to explore investments options that are available in Tawau, Sabah, Malaysia and internationally. This Expo features properties from affordable housing to upmarket condominiums as well as commercial properties. I am proud to notice that the quality and types of properties showcased have improved tremendously through the years. This is a testimony of the professionalism of developers who have now become a self regulated industry in line with our country’s vision to move towards a developed nation status by the year 2020. This Expo, like all other expos will be a wonderful opportunity for home buyers and investors to find their dream homes or investments. It will also be a time for making new friends and renewing old relationships, sharing of ideas and maybe looking into networking or joint venture opportunities. To the investors, may I suggest to you, ‘the durian does not stay on the tree forever’, so, be decisive, you may not have a second chance. Thank you.

Dato’ Jimmy Pang SHAREDA Council Member (2013 - 2015) Organising Chairperson of SHAREDA Property Hunter Expo 2014 Tawau

Francis Goh SHAREDA President (2013 - 2015)

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/// Hot Topic

Tawau: The Agriculture Power House of Sabah

awau formerly known as Tawao, is the third-largest city in Sabah after Kota Kinabalu and Sandakan. It is located on the east coast of the island in the administrative centre of Tawau Division which surround by the Sulu Sea in the east, Celebes to the south at the Cowie Bay and shares a border with Kalimantan. In the early 1890s, only about 200 people lived in the first settlement and most of them were immigrants from Bulungan in Kalimantan and some from Tawi-Tawi who had fled during the the Dutch and Spanish ruling. In 1893, a British vessel S.S. Normanhurst sailed into Tawau for the first time with a full cargo of trade items and in 1898, the British build a settlement which later grew rapidly when the British North Borneo Company sponsored the migration of Chinese to Tawau. During World War II in 1945, six massive air strikes were flown to the town, with the main target being the port facilities. At the end of the war, the city was largely destroyed and the only undestroyed remnant of

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the pre-war period is the bell tower of Tawau. Tawau quickly recovered from the devastation of the bombing. Almost all the shops were destroyed in the town, but six months later, 170 shops and business houses were rebuilt by the British. The Financial Crisis In the 1980s Malaysia was hit badly by a financial crisis which nearly ruined the entire real estate market in Tawau. Due to collapse, people had no means of serving their loans or buying new properties, and this caused a lot of projects to be abandoned, and the foreclosure of a lot of properties. Very few developers survived, most of them had to shut down their business. A lot of forced sale properties were selling at about 30% below the market price. And properties that were unsuccessful during auctions would drop down another 10% in price. Land was also selling at 10 times cheaper back then. The surplus of second hand properties that were selling dirt

/// HOT TOPIC

cheap made it hard for developers to sell or build newer properties. When the stock market recovered back in the 1990s, the demand of properties increased and property prices immediately shot up.

for business, which are fully sold. Due to the cash rich population in the oil palm industry, Tawau has high holding power..

Property Boom

The main town area can be divided into three sections, such as Sabindo, Fajar and Tawau Lama (Old Tawau). Sabindo is a plaza, Fajar is a commercial area while Tawau Lama is the original part of Tawau.

The highest property appreciation rate recorded in Tawau is fuelled by the oil palm profits. For example, a landed double storey low-cost terrace house at Taman Semarak which cost less than RM50,000 is now selling on the secondary market for more than RM120,000 for a two room intermediate unit on land less than 800 sq ft. Shop houses at Kubota Square are selling for less than RM500,000 years ago is now priced at more than RM1.3 million a block of threestorey intermediate unit. This is proof that the property prices has doubled within a few years. Tawau was Malaysiaâ&#x20AC;&#x2122;s hottest property spot from 2010 to 2012 and buyers are becoming more selective on the type of properties they invest in. There are many completed shop houses not open

Bustling City

A RM5 billion green concept township will transform Kampung Titigan, one of the oldest villages on the outskirts of Tawau until other new southeast township bordering Indonesia called Bandar Baru Titingan soon as Tawau vies to be an education hub. A new international school Charis has opened to cater to the increase of the rich local population and expatriates. Hap Seng is building Bandar Sri Indah which is Sabahâ&#x20AC;&#x2122;s largest satellite township development project at km 16 of the Tawau Airport Highway with 1,368 acres (5.54 km2) of reclaimed land is three times larger than Tawau town centre.

It will have green zones with a 1km jogging track, parks, lakes and barbeque area, surrounded by tow forest reserves, one sports centre and one community centre, business centres, shops, offices, with land allocated for 10 secondary and primary schools, one proposed college, a central market and hypermarket. Seemingly Tawau is not that much adversely affected by any property market slowdown although the rest of Sabah might have an issue with Bank Negara’s responsible lending policy guidelines. Tawau is an example of what small holding plantation agriculture can do for the income of some of the people helping them to afford to buy good property and for investments. The issue is not just building lowcost or affordable housing but how to government can assist in raising the income of the population by providing better opportunities in education, employment opening and production resources like land for cash crops. Tawau as a Tourism Hub Based on the variety of eco- and nature-based attractions in Tawau, Assistant Minister of Tourism Datuk Pang Yuk Ming is confident that Tawau can be a tourism hub that is education-based.

Pang said, “Tawau is a very strategic location as tourists go through this place to get to Semporna and Maliau Basin; but first we need to further enhance and increase the tourism products in Tawau before we expect visitors to stay here longer.” Currently, very little promotion is being held to boost tourism products such as the Tawau Hills Park, Bukit Gemok and Ulu Kalumpang Forest Reserve. And Pang believes that the variety of flora and fauna found in Tawau area can be further developed as tourist attractions and could specifically cater to family-oriented holidays. Besides promotion, Tawau also has to improve in terms of infrastructure especially the lack of hotel rooms. The Tawau and Semporna authorities and local businesses should also work together to make sure that both districts benefit from the incoming tourists that are currently transferring directly to Semporna from the airport. There is also a need for a cultural centre to be developed in Tawau to create more tourism interest. A Greener Future The phase one of Tawau Green Energy Geothermal Power Plant involving generating capacity of 36MW is expected to be completed

in 2015. The power plant at Apas Kiri, which is the first renewable and sustainable project of its kind in Malaysia, will supply 30MW to the Sabah Electricity Sdn Bhd (SESB) grid. Sustainable Energy Development Authority of Malaysia (SEDA Malaysia) chairman Tan Sri Dr Fong Chan Onn, said the plant will be Malaysia’s first grid-connected geothermal power plant. He believes that the renewable power plant is a unique prospect in the district and it is also acceptable to everyone in the community. The project undertaken by Tawau Green Energy Sdn Bhd (TGE) will reduce the utilization of fossil fuel for power generation in the state grid in line with Malaysia’s sustainable development policy and

global greenhouse gas emission reduction. The project is estimated to cost RM419 million and it has also qualified to receive a grant of RM35million from the Private-Public Partnership Unit of the Prime Minister’s Department for the access road and water treatment plant. With other mega-projects in the works and large-scale investments continuing to pour in, there will be increased opportunities for job creation and infrastructural development, thus paving the way for a more inclusive growth.

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/// Cover Story

/// COVER STORY

ECO Garden @ Jalan Bunga Raya, Tawau Sets A New Benchmark In Fine Lifestyle

ECO Garden, semi link terrace house

ubsidiary of the Chang Cheng Group, Solidius Development Sdn Bhd is embarking on an exciting new venture in the east coast of Sabah. ECO Garden will be the Group’s first project in Tawau after the success of launching the first ECO development series ECO Park in Sepanggar which was fully sold out shortly after releasing, iconic C Park integrated mixed development on Jalan Pintas - Penampang, Puncak Menggatal and Hartamas Heights in Kota Kinabalu. This prestigious residential development is set on a 5.63-acre prime land on Jalan Bunga Raya at the thriving Sin On area. The gated and guarded community will consist of 34 units of bungalow infused semi-detached houses and 16 units of semi –detached inspired link terrace houses.

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In line with Solidius Development’s aim to be more environmentally conscious, the company will be using eco-friendly building materials that are of top notch quality. Each unit is designed with practicality in mind, ensuring that residents can maximize and utilize the space of their homes. Both link terrace and semi-detached floor plan layout has been constructively scrutinized by the hands on directors of Solidius Development Sdn Bhd to achieve the balance between contemporary design, façade outlook, lifestyle needs and layout practicality. The semi-detached units have a built-up area of 4,284 sq ft and have three bedrooms with en suite bathrooms on the first floor. On the ground level, there will be one bedroom, plus a separate maid’s room located just outside the house. This will

ensure that families enjoy the added privacy, plus the elderly experiencing physical restrictions would also live comfortably without having, struggle to reach their bedroom. The semi-detached also comes with a widen car porch which is able to cater to four large vehicles and a dedicated maid’s room with attached bathroom. As for the link terrace houses, each unit has a built-up area of about 3,638 sq ft. The ground floor house a spacious family and dining room with addition of a hybrid study cum guest bedroom with en suite, and the top level has three well sized bedrooms and three attached bathrooms that can be for improved privacy and practicality. The link terrace will also benefit the extra space created in the car porch which could park up to three large vehicles.

Crossing comfort, security with serenity is key to ECO Gardenâ&#x20AC;&#x2122;s design concept. The modern and contemporary homes each have a living room and master bedroom with a 12-feet high ceiling to create a grand and spacious feel. ECO Garden, semi-detached house Crossing comfort, security with serenity is key to ECO Gardenâ&#x20AC;&#x2122;s design concept. The modern and contemporary homes each have a living room and master bedroom with a 12-feet high ceiling to create a grand and spacious feel. Customers will also have the option to choose from three types of floor finishing which includes the standard 2 x 2 ceramic tiles or wooden floor panels. The bedrooms are designed to be spacious, cozy with greater ventilation in mind and symmetrical layout to further enhance usable space. Attention to details will be given to fine quality material is used for the doors and handles, sanitary wares, light switches and workmanships. Further emphasizing on the practical use of space, the car porch pillars will be positioned close to the boundary line so that more vehicles can be parked in the compound.

A unique feature and another highlight of the development are the flattened curbs outside each unit and underground lay cable. This additional commitment by the developer will increase the overall development appearance appeal and allow welcoming guest to easily park without obstructing the road traffic flow. For the convenience of residents who enjoy throwing parties and having guests over, several open spaces will also function as parking areas for visitors. To resonate with the eco-living theme, the residential ground will be landscaped with plenty of lush greenery coupled with uninterrupted cable free views of a beautiful sunrise, sunset or gazing upon the stars. As security is becoming more of a concern with many in Tawau and Sabah in general when comes to landed properties, ECO Gardens defies odds with the development

boundary line with security electrical fencing and close circuit surveillance cameras supervise by qualified guards.

development which will have shop lots, a hypermarket and offices in the Sin On area which will further boost the convenience of this location.

This exclusive residential development is scheduled to begin construction third quarter of 2014. Estimated to be completed in 2.5 years, ECO Garden is benefit further of the well developed and established Sin On area which the preferred residential location for many locals. With the convenience of the strategically located development whereby existing amenities are just a stone throw away like SJK Hing Hwa primary school, Sabah Chinese High School, wet market, hypermarket, shopping mall Eastern Plaza and latest nightlife hotspot Kubota Square is within the 5 minute vicinity of this development. There are also breaking news of various up and coming developments such as a hospital and a 100 acres mixed-

Solidius Developments has great confidence for the future of ECO Garden with great potential capital appreciation factors and believing that the properties in and around the Sin On area, Tawau will continue to boom and the market growth will be more competitive and resilient in the coming years. The company is also thrilled to offer a new and exciting development to Tawau residents.

For more information, please call

+6012 366 3230

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/// East Malaysia Property News

EAST MALAYSIA

PROPERTY NEWS

Keep track of the latest property and real estate news plus reviews in the property market in Sabah and Sarawak

The Property Industry, the Third Main Income Generator for Sabah

Sejati Walk a project by Wah Mie Group, a reputable developer since 1979 Property development is the key economic drive for Sabah. The property sector currently ranks at number three main earner for Sabah after the oil and gas industry which generated RM 10 billion and the palm oil plantation which generated RM15.3 billion in revenue. Property development is ranked above the tourism industry which generated RM5.6 billion and manufacturing sections which gained RM3.5 billion in revenue.

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Property development created the greatest spill-over impact to the Sabah state economy through 164 job and chain sully industries. Thus constant delays of the Development Plan approval by local authorities will undoubtly inhibit the overall economic performance and progress of Sabah.

SHAREDA Showcases Properties in the East Coast

The Sabah Housing and Real Estate Development Association (SHAREDA) recently joint venture with Property Hunter to host the SHAREDA Property Hunter Expo 2014 in Sandakan. This was SHAREDAâ&#x20AC;&#x2122;s first effort in showcasing the products of their members in Sandakan. The first time SHAREDA held a property expo in Sandakan was in November 2013 in Lahad Datu. This collaboration was also between the association and Property Hunter. SHAREDA will once again join hands with

this leading property expo to showcase more developments to the people of Tawau this month. The SHAREDA Property Hunter Expo will be held on 16 to 18 May from 10:00am to 8:00pm at the Lau Gek Poh Foundation Hall. Public admission is free.

SHAREDA Members Generated RM7.56 Billion GDV in 2013

Malaysia Named World’s Top Manufacturing Location

Major manufacturing plants in Malaysia exports to Singapore and the world

SHAREDA 2013 - 2015 Council The Sabah Housing and Real Estate Development Association (SHAREDA) consists of 185 members which have successfully generated a Gross Development Value (GDV) of RM7.56 billion

through various property developments throughout the state. In the recently released SHAREDA Property Development Annual Report 2013, SHAREDA stated that the west coast region ranked at number one with RM5.133

billion GDV, followed by Lahad Datu with RM687 million GDV, the Interior Region with RM615.9 million GDV, Tawau at number four with RM5.479 million GDV and Sandakan ranked at number five with RM477.5 million.

SHAREDA Grateful for MyHome Scheme to the announcement of the MyHome 2 Scheme which covers Sabah and Sarawak. Through this scheme, first time house buyers will be able to obtain an incentive of RM30,000 to pay for the initial 10% deposit instead of a “subsidy” which is deducted from the selling price of a housing product. But the purchaser still needs to pay the 10% deposit of the deducted purchased price. According to the Sabah Housing and Real Estate Development Association (SHAREDA) president Francis Goh, the association has outline two main reasons why the medium lower income group has difficulties in purchasing affordable homes: the inability to come out with 10% deposit and the inability to show sufficient income proof to the bank to obtain 90% end financing. Due to this, SHAREDA is grateful to the government for improvising the MyHome Scheme which is targeted to first time house buyers.

The implementation of this scheme was lauded by Malaysia prime minister (PM) Datuk Seri Najib Abdul Razak. Malaysia is the third country in the world after the United Kingdom and Australia to pay incentives to the less affordable group to own homes. Goh thanked Datuk Seri Panglima Haji Hajiji Haji Noor and Dati; Abdul Rahman bin Haji Dahlan, ministers of the Wellbeing, Housing and Local Government in both the state and federal level for accepting SHAREDA’s proposal that led

As for the 90% end financing from banks for the lower income group, Goh urged Bank Negara to relax the stringent ruling for CTOS and CCIS checking, net loan value and net disposable income calculation. Goh advised all bankers to come forward to pledge support to realize the dream of the PM to create one million home ownerships for the medium low income group and young Malaysians.

Malaysia has been listed as the world’s top manufacturing location by global real estate services firm Cushman & Wakefield in its Manufacturing Index 2014 report. The index, which was published today, assess factors that affect the successful operation of production facilities across 30 countries with the largest manufacturing output, as defined by United Nations Trade and Investment (UNCTAD). Notably, the ranking primarily aims to illustrate the parameters that manufacturers should consider when evaluating the most suitable location to relocate or expand. The report analysed three principal areas – costs, risks and conditions, which were broken down again into more than 30 subcategories. To create an illustration for comparison, factors such as logistics, economic risk, the likelihood of natural disaster and energy and labour costs were all taken into consideration and weighted individually. The index took a company with highly mechanised operations that generally requires unskilled labour and

operating in a multiregional market for a single product as an example. All of the countries were ranked using this example as a benchmark and the category weighting reflect these requirements. Malaysia scored well in the risks and costs categories, emerging as one of the least expensive locations within the index. Taiwan grabbed the second place, followed by South Korea and Thailand. China, the world’s largest manufacturing country, settled at the fifth spot as it performed strongly in terms of costs, but received weak score in the risk category. “Asia Pacific continues to be at the forefront of the global manufacturing sector – and this is highlighted by the top five countries in the index all being located in the region,” commented Cushman & Wakefield’s Richard Middleton, Executive Managing Director, Asia Pacific, Corporate Occupier & Investor Services. He also noted that “locations such as Vietnam and the Philippines are also anticipated to emerge over the next few years as notable manufacturing destinations.”

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/// East Malaysia Property News

RM1.4 Billion Disbursed for Sabah Development Corridor Projects

MyHome Scheme Started on April 1

Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan studying a project from Wah Mie Group, winner of SHAREDA affordable homes platinum award in 2013

The official website of SEDIA, http://www.sedia.com.my Disbursements for projects in the Sabah Development Corridor (SDC) for the 2008-2014 period under the Ninth and Tenth Malaysia Plans are currently at RM1.4 billion. This is 85.3 per cent of the total federal government allocation of RM1.634 billion received by the Sabah Economic Development and Investment Authority (SEDIA) as at the end of February this year. Chief Minister Datuk Seri Musa Aman said by the first quarter of 2014, RM128 billion in investments had been planned and committed to, and of this, about RM38 billion had been realised. “This is also since the launch of the SDC in 2008. “We are expecting the investment momentum in the SDC to continue gathering pace, especially with the attention of global investors shifting to Asia, and economic recovery in the United States and the European Union,” he said this in his opening remarks at the 15th meeting of members of SEDIA at its office. Musa, who also Sabah Finance Minister and

SEDIA chairman, added that the authority had been in operation for five years and almost all of the SDC flagship projects are taking shape.

“SEDIA has been collaborating with Teraju through the TERAJU@ SDC programme to support Bumiputera entrepreneurs.

He called on implementing agencies to ensure that development projects are carried out according to schedule, meet the desired quality and produce the targeted outcome.

“It has also worked closely with the Ministry of Science, Technology and Innovation for 1Agro-SAIP programme and with agencies under its umbrella such as Biotech Corp, MIMOS, Agro-Biotechnology and Sirim to further boost knowledge-intensive initiatives,” he added.

“This will not only win the confidence of the people on the seriousness of the government in developing the state, but also do the same among investors to expedite the Economic Transformation Programme,” he said. Musa added domestic investments are playing a critical role in ensuring the success of the SDC. “It is indeed timely that the federal and state governments are giving emphasis to the participation of domestic investors, including the development of Bumiputera entrepreneurs, SMEs and start-ups. “I am pleased to note that SEDIA has launched several initiatives to support the development of SMEs and start-ups.

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In the oil, gas and energy sector, Musa said Petronas has been a major driver of SDC projects with investments in a gas-fired power plant, the Sabah Ammonia and Urea (SAMUR) in Sipitang, Sabah Oil and Gas Terminal and the SabahSarawak Gas Pipeline project. “Other major domestic investors include Suria Capital Holdings Bhd, Warisan Harta Sabah Sdn Bhd, Sawit Kinabalu Bhd, Innoprise Corporation, Sabah Economic Development Corporation (SEDCO) and the Sabah Land Development Board,” he added.

The MyHome Scheme, which provides a RM30,000 incentive for each affordable house, will be open for applications starting April 1. Private sector developers and house buyers interested in the scheme may file their applications online via http:// ehome.kpkt.gov.my. The scheme, announced by Prime Minister Prime Minister Datuk Seri Najib Tun Razak last year, consists of a RM300 million incentive allocation offering 10,000 units of affordable homes nationwide. “MyHome is part of a continuous effort by the Federal Government to provide affordable homes to the rakyat (people) of all levels,” said Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan at the launch of the scheme here. Under the scheme, qualified private sector developers will receive an up front incentive of RM30,000 per affordable home sold. The incentive would cover the 10% deposit required of buyers after the sales and purchase (S&P) agreement is signed. A 10-year moratorium would apply from the effective date of the S&P agreement, prohibiting a buyer from re-selling or transferring ownership of the home except if the latter is carried

out to immediate family members. The scheme is expected to benefit two categories of households. While MyHome1 is open for households with an income of between RM3,000 and RM4,000, MyHome2 is for those with a household income of between RM4,001 and RM6,000. Houses under the MyHome1 would cover a minimum of 800 square feet of space with a market price of between RM80,000 and RM120,000 in the peninsula and between RM90,000 and RM120,000 in Sabah and Sarawak. MyHome2 prices would range between RM120,001 and RM200,000 in the peninsula and between RM120,001 and RM250,000 in Sabah and Sarawak for homes measuring a minimum of 850 square feet. MyHome2 houses will have three bedrooms and two washrooms as well as basic amenities such as parking spaces, a community hall, a surau and a playground. Interested buyers must be Malaysians aged 18 years old and above who are buying a property for the first time. “Qualified buyers will be reviewed by the ministry and a selection will be done through a balloting process,” Abdul Rahman said.

/// East Malaysia Property News

RM1 Billion to Upgrade Sabah Supply of Electricity

CRECCHK Courtesy call to SHAREDA

Kota Kinabalu, Sabah The Federal Government has alloted RM1bil to improve and upgrade electricity supply in Sabah, said Deputy Energy, Green Technology and Water Minister Datuk Seri Mahadzir Khalid. “Work to upgrade power generation, transmission and distribution in Sabah, particularly its east coast, is expected to be completed within the next two years,” he told Wong Tien Fatt (DAP - Sandakan). Mahadzir said the upgrading works include improving power transmission in Sandakan, Lahad Datu and Tawau apart from the Kiwanis power plant that will increase electricity supply by 385Mw.

disruption in Sabah had shown positive results with the system average interruption duration index (Saidi) showing improvement Datuk Seri Tiong King Sing (BN - Bintulu) asked the Government to explain the rise in electricity tariffs. “Sabahans want to know how the billions in profits are spent,” he said, referring to Mahadzir’s explanation on the five sen rise in tariff from 29.52 sen per kilowatt to 34.52 sen per kilowatt. Datuk Bung Mokhtar Radin (BN Kinabatangan) urged the government to come out with a long term plan to ensure uninterrupted power supply in Sabah.

He added that efforts to address power

Work to upgrade power generation, transmission and distribution in Sabah, particularly its east coast, is expected to be completed within the next two years

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Also present (from left to right) Hon. Secretary-General Mr Ben Kong; Deputy President Mr Chew Sang Hai; CRECCHK Member Mr Kelvin Miranda; CRECCHK International Director Mr Stanley Chin; Mr Ivan Ko; Mr Francis Goh; Vice President Dato Ir. John Chee and Council Member Sr. Chua Soon Ping with Hon. Treasurer-General Mr Wesley Chai. Sabah Housing and Real Estate Developers Association (SHAREDA) received a courtesy call from delegates of China Real Estate Chamber of Commerce Hong Kong Chapter (CRECCHK) led by its Chairman, Mr Ivan Ko during their recent trip to Kota Kinabalu, Sabah. CRECC is a non-government organisation representing the real estate industry in the mainland China, and today has more than 4,500 members consists of leading real estate developers, suppliers, planning and design enterprises and financial institutions. This association, in particular the Hong Kong Chapter plays a pivotal role in exploring investments or business opportunities overseas for their members. Mr Goh welcomed the group and gave a detailed briefing on the investment opportunities, particularly

in leisure property to lure CRECC members to come as a property investors and JV partners, especially in Kota Kinabalu, which is known as “Nature City”. This is in line with the vision of Sabah Government to turn stretches of long white sandy beaches along the West Coast up to Tip of Borneo under the Sabah Development Corridor for tourism development to be known as “Kinabalu Gold Coast”. With this in place, Sabah will propel and excel in the latest development trend for leisure properties. Mr Goh also added that their visit is timely for SHAREDA’s proposed study tour to China, in which CRECC could link and build a strong network with SHAREDA members to better understand the real estate property development and market in China.

Mr Ivan Ko was very grateful and thanked SHAREDA President and Council Members for their warm hospitality and presented a memento to Mr Francis Goh and subsequently invited SHAREDA to join CRECCHK as an association member (picture below)

/// Hot Topic

KKIP Property Boom

he Kota Kinabalu Industrial Park (KKIP) is poised to be a regional distribution hub with the Asia Pacific Regional Distribution Centre. KKIP has to date attracted more than RM2.528 billion in investment value in various industry clusters, mainly from small and medium industries (SMIs). And this value is anticipated to increase by year-end and would further boost the stateâ&#x20AC;&#x2122;s economy. According to chairman Datuk Raymond Tan Shu Kiah, KKIP aims to capture RM500 million in investments next year. KKIP Sdn Bhd had developed 1,577 acres of the 4,005 acres of land gazetted to it. About 795 acres are currently in progress of being developed. That shows that almost 60% of the gazetted land area is under progress. The remaining 1,017 acres of land are reserved for future development. There are 260 entities currently in operation in KKIP, comprising 223 industrial clusters, 15 research and development and institutions, and 22 commercial entities. The logistics companies located at KKIP are using

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/// HOT TOPIC

their facilities in KKIP to break-bulk and distribute goods to the BIMPEAGA (Brunei, Indonesia, Malaysia, Philippines â&#x20AC;&#x201D; East Asia Growth Area) region including re-exporting to peninsular Malaysia. Due to KKIP itself, more than 7,049 jobs have been created, mainly from the manufacturing sector and annually. And some 10,000 trainees undergo professional skills training at various local institutions. Due to this, there is a sudden boom in population, plus both residential and commercial properties. The areas surrounding KKIP is shaping up into a conducive environment for people to earn a living and bringing up their families. It is a booming place for work, living, recreation and education. KKIP Sdn Bhd is confident that the park will continue to grow and prosper to benefit our investors, as well as the surrounding population, and is particularly happy to see that KKIP is progressively growing into a new township, nurtured by commerce, industry and centre of education and training.

Chief executive officer Dr Hajjah Tarsiah Taman said, “We have also applied for federal funds to develop an SME village at KKIP in 2015. This will house production areas, retail outlets and weekly or monthly sales venues for SMEs to showcase and sell their products.” She added that KKIP Sdn Bhd had also successfully developed 24 units of commercial shop-offices, and business was now flourishing there. Another commercial development is already submitted to the local authority, and this project has an estimated gross development value of RM150 million. Three residential projects were sold out to the tenants in KKIP and to the public at large. V24 Stage 2 will be launched early next month, while Taman Salut Perdana will launch its apartments in the third quarter of this year. Other developments located within the area that are also booming is Bandar Sierra by Dapan Holdings Sdn Bhd, Grand Merdeka by Grand Merdeka Development and University Utama Condominium (UUC) by the W Group.

be fully utilized to make it feel spacious and comfortable. The condominium allows residents to experience high end with state of the art facilities such as a 1.8acre sports complex (with two volleyball courts, two basketball courts, one futsal court and two sepak takraw courts), a clubhouse gym, pool, outdoor fitness station, children’s playground and lake garden facilities with a jogging track. The surrounding area which will have over 2,000 plants makes the environment in UUC both ecofriendly and family friendly too. In UUC, safe and comfort living is a priority. Not only are the buildings constructed with high quality materials, each unit is equipped with a smarthome system, plus the entire vicinity is surrounded by a CCTV surveillance system.

High End Living at an Affordable Price

Also, another unique feature of UUC is the WIT service provider application by the information technology wing of The W Group. This development will be the first in Sabah to use the latest FTTH Fibre to the Home technology for internet connection which is faster and more stable than the conventional copper.

Strategically located and affordably priced, it’s no wonder that 1,360 units in Phase 1 and 1,800 units in Phase 2 of UUC are completely sold out. Currently, the W Group is in the midst of completing the third phase which consists of 740 units. Designed by international awardwinning designer Alan Wong, the each unit has a layout that can

Residents can enjoy free calls using WIT VoIP services applied to the W Group properties, plus telephony and internet services are ready and immediately available when you move in. An office will also be located at the clubhouse for the convenience of everyone. The best part is that for UUC Phase 3, W Group will provide “Ready

Tenants for 12 months” whereby tenants will be secured for one year (upon the key handover) to the relief of owners. If no tenants are found for any particular unit, the W Group will still pay monthly rental to the owner within that one year period. The rates range according to the different room-type. Residents will also have the convenicent of shopping nearby as 183 units of University Utama Square, a two-storey shoplot will also be built in the near future. About The W Group The W Group was established in 2007 after the merger of the Wong Kwok Group and Wantotik Group.

The team has more than 50 years of experience specializing in the property development, construction, manufacturing, trading and services. The W Group is an ISO certified company including The W Property Collection Sdn Bhd, The W Construction Corporation Sdn Bhd (constructing company) & Taraf Handal Sdn Bhd (Management Office).

For more information: visit www.uucwgroup.com.my email sales@thewgroup.com.my call +60 88 260 727

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/// EXCLUSIVE INTERVIEW

Dato’ Jimmy Pang - Building for The Future

n the late 1970s, Dato’ Jimmy Pang left his hometown to embark on new adventures to fulfill his dreams. He believes it was God that brought him to a small town in the east coast of Sabah called Tawau where he worked in a property development company before venturing out on his own. His group of companies have been involved in developing the town into what it is today. Tawau has changed dramatically since Pang started developing properties there approximately 40 years ago. This is partially thanks to Pang who is the pioneer of many developments there. He was the first developer in Tawau to build strata title offices, low cost housing, budget hotels and gated residential homes. 16 years ago, Pang saw the tourism potential of Semporna and ventured there to build commercial shophouses in this small seaside town. Since then, he has built more than half of the shophouses in Semporna. Dare to be Different Pang said, “Innovation invites opposition. There’s always a risk when you introduce something new as you would definitely encounter resistance from the market’. However, history has proven that his new ideas have become trendsetters in Tawau. He adds: “When a person buys a property especially a house, most of the time they use their lifelong savings and sometimes they only buy one house throughout their entire life. It’s a big responsibility we are given as developers and that is why it is so important to make sure we have high quality products”. “People want good quality products and it is our duty and responsibility as the developer to deliver what is expected of us”. Pang is a man of quality instead of quantity and he prefers focusing on smaller niche projects. He was the brains behind the extension of the Tawau Township 2 in Bandaran Baru and other projects like Perdana

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Square, Perdanajaya and Corinthian Garden. There’s always a sense of pleasure and pride when Pang sees what was an empty land turned into a successful development aesthetically pleasing and functional to the local community. He explains, “Property development is not only my business, it’s my passion, and I feel great satisfaction irrespective of the size of the project or the profit margin that is made. It is important to be visionary and I believe that we should all strive to be different and forward looking. That’s how we will make this a better place for our future generation. As developers, we need to stay relevant to the needs of our buyers and this is why in our business policy, we review our strategy every five years.” The Economic Crisis Although Pang is currently at the top of his game, things haven’t always been easy. He has overcome three economic crisis and admits that the financial collapse in the 1980s nearly wipe out his company. At that time, more than three quarters of the developers were forced to stop their projects and the thing that kept Pang’s company alive was due to the grace of God and his ability to adapt and change. He recalls: “Back in the 1980s, our country’s main income was dependent on the agriculture sector and Tawau produced 80% of cocoa in Malaysia. When the economic crisis happened, the whole market collapsed and cocoa was selling below production cost. Very few people were buying properties and many were foreclosed by the banks. Some were even giving away properties as they couldn’t continue with the loans.” “Cocoa prices were suppressed for about 10 to 15 years and during this period, there were a lot of forced sale properties selling at 30% below the market price. When an auction is not successful, the prices went down another 10%, and it kept going further below market prices. Lands were also selling a prices 10 times

below what is being sold today,” Pang said.

as we are so diverse in terms of needs and incomes.

Because there were so many second hand properties on the market that were selling at such cheap prices, developers couldn’t sell or build newer properties. This created a vacuum where no new properties were being built. When the economy recovered in the 1990s due to the stock market boom, demands for properties improved and the prices of properties immediately shot up.

Another area of his concern is that due to the cooling measures, there will be a slowdown in property launches as developers will be more careful and adopt a wait and see attitude. The problem when this happens is that properties available in the market will be immediately reduced thus going against the natural flow of supply and demand. This will result in further increase in property prices.

Learn from the Past Pang is worried that history might repeat itself with the current market situation especially with the government’s new cooling measures and restrictions by Bank Negara. He explains, “A lot of people forgot about what happened in the late 1980s where there was a lot of abandoned projects because banks were tightening the lending regulations and bringing down the margin of financing”. According to Pang, the survival of every developer during an economic crisis is very much dependent on the banks. History has shown that as long as banks support the property market, it will always be able to bounce back. Hence, he urges banks not to be too strict on assessment and credit loans especially for first time buyers. With the new lending guidelines, many first time buyers do not qualify for a bank loan, this will subsequently cause further hardship for them as property prices will increase year by year. Pang predicts that prices for middle to higher end properties in Tawau will continue to rise in the second half of this year through to next year due to high land cost and higher cost of building materials which will cause the lack of supply of these properties in the market. Pang believes that the authorities are concern about a second property bubble and this is the reason for the implementation of the cooling measures. There should not be a blanket lending policy for the country

Improvements for the Future Pang believes that Semporna has great tourism potential and we are only experiencing the ‘tip of the iceberg’ in terms of tourist arrivals. At the moment, there are only 2,000 to 3,000 tourists in Semporna at any one time, and this is very little compared to internationally known tourist destinations such as Bali, Phuket and Pattaya. There is a need to build more hotels and bring in fivestar and international hotel chains to bring status to the tourism industry there. However, to achieve that, the infrastructures in Tawau and Semporna have to improve tremendously. Semporna also has a critical water supply issue. So much so that hotels are buying water by the trucks on a daily basis. This is very dangerous in terms of hygiene as any outbreak of diseases could kill the entire tourism industry. This issue is very critical and has to be addressed urgently by the authorities concerned. Tawau Airport needs to be improved and maintained properly. The facilities need to be upgraded to international standards as this will shape the first impression of visitors coming in. Basic utilities like air conditioning and water supply needs to be good and consistent. Perhaps there should also be one or two international food chains there to cater to the needs of foreign visitors,” Pang said.

Dato’ Jimmy Pang,

Chairman of JP Group of Companies

All tourists to Semporna comes in via Tawau Airport, however, many do not stop over in Tawau. Tawau is not tapping into this window of opportunity. Pang thinks that there is a need to do more promotion for Tawau’s tourism including promotional signage in Tawau Airport. He suggest that a Task Force be set up by the local authorities of Tawau and key business leaders to device a master plan to attract tourist to Tawau. The window of opportunity has opened in this market and we do not want to miss it. Looking Forward After being in the industry for about 40 years, Pang is still passionate about what he does. He is currently developing a new commercial

area in Tawau as well as a gated and guarded housing estate in Kota Kinabalu. There are also plans for a Low Rise Condominium and a few budget hotels in Semporna. The motto of JP Group of Companies is “BUILDING FOR THE FUTURE”. Pang says that is because every building that is constructed will remain for a long time into the future and as such, it is of the utmost importance that he builds good buildings that are sustainable for the future because it is the future generation that will judge our works. As responsible developers or builders, we have to set a strong foundation for the future generation to build on. The future will judge us, he says, and that is the legacy he wants to leave behind when he retires.

PHOTO: LOUIS PANG STUDIO

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/// East Malaysia Property News

Naim Roadshow Goes Beyond Offering Residential, Commercial Units

ITCC Ushers Penampang Into Modern Age To develop its hotel block, ITCC Penampang welcomes strategic partners in building four- and five-star hotel amenities. The centre plans to put up a four-star, 295room hotel, offering a distant view of Mount Kinabalu, a Unesco World Heritage Site.

(Left) Hugo Malakun, group general manager of Malakun Holdings, and Mandela Malakun, group general manager of Sabanilam Enterprise The local community have gained first-hand information about Naim Land Sdn Bhd’s latest hot-selling property developments in Kuching, Bintulu and Miri through its “Grow Your Money” roadshow here. In addition, visitors also attended a special investment seminar by Chris Tan, winner of the Prestige “Top 40 Under-40 Outstanding Young Malaysian Award. Naim’s general manager for sales and marketing Alice Ting was encouraged by the response from locals so far. “We are showcasing our new upmarket brand, the Naim Signature Collection, which features a range of residential and commercial properties with benefits of integrated development, branded finishes, multitiered security and other special facets. “We are introducing the first product under the collection, the Sapphire On The Park condominium units, which are part of the Kuching Paragon integrated development at Jalan Batu Lintang in Kuching,” she said.

Adding further, Ting also noted increased interest on Naim’s Bintulu Paragon’s Street Mall and Small Office Versatile Office (SOVO) units. “As there are limited prime Street Mall spaces for sale and leasing, as well as SOVO units for purchase, we urge all to come to the roadshow for more information,’ she urged. On other projects, Ting saw that the newly launched Bahagia Residences four-storey apartments in Miri was also gaining good responses. “With their strategic location and affordable prices, the units provide a good investment proposition to all.” In addition, Naim is also offering exciting promotions and lucky draws in conjunction with the roadshow. Participants stand a chance to win free return air tickets for two to Phuket, Thailand. “Some of the visitors have won themselves few attractive prizes from lucky draws, such as free air tickets to local destinations,” Ting added.

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After a 10-minute drive going south from the Kota Kinabalu International Airport, a huge construction site on the left side of the Jalan Pintas Penampang highway breaks the skyline. Covering more than four hectares, property developer Sabanilam Enterprise is building the International Technology and Commercial Centre (ITCC Penampang). It will combine a shopping complex, hotel, office tower, exhibition centre and banquet hall in one state-of-the-art development project. “It will be a complete package under one roof,” says Hugo Malakun, group general manager of Malakun Holdings, parent company of Sabanilam Enterprise. “We are bringing higher standards, from shopping mall operations to office space development, to push Sabah further ahead.” ITCC Penampang will be everything but ordinary. To be equipped with a fibre optic technology backbone, its internet, audio-visual and other communication links will be on par with the best in the world. ITCC Penampang’s open network set-up will also allow companies to connect directly with their respective headquarters overseas. The centre is among the first in Sabah to apply for Multimedia Super Corridor (MSC) status, which promotes the growth of information and communications technology (ICT) companies in Malaysia.

MSC offers members special benefits, which include an income tax break for up to 10 years, duty-free importation of multimedia equipment, competitive telecommunications tariffs and intellectual property protection. “We would like ITCC Penampang to be a catalyst for growth in the ICT sector in Sabah and the whole region,” says Mandela Malakun, group general manager of Sabanilam Enterprise and a brother of Hugo. “We bring technology to Penampang so local companies can benefit and learn from it and access the rest of the world.” To support this goal, ITCC Penampang will offer the 16-storey i-Office Tower, a technology and science centre, small office/home office units and incubator spaces for start-up companies in areas such as animation and game development. ITCC Penampang will also support tourism, catering to meetings, incentives, conferences and exhibitions. Its 63,000 square feet of exhibition space in the mall including the convention hall will be able to accommodate thousands of trade shows, while its banquet hall will be one of Sabah’s largest with 170 dining tables. The fourstorey shopping complex with more than 600 retail outlets will cover all the needs of the tenants and visitors.

ITCC Penampang’s hotel section holds significant economic potential as the town abounds with tourists and business travellers. With direct routes to 13 major world destinations, the nearby Kota Kinabalu Airport is Malaysia’s second-largest, with more than 5 million international passengers annually and growing. Sabah’s pristine rainforests and renowned dive sites continue to attract tourists while its growing role in the East ASEAN Growth Area is pulling business traffic into the state. “The Sabah economy is booming, and this is the best time to invest,” Hugo Malakun says. “ITCC Penampang will offer foreign businesses comprehensive assistance and an avenue to penetrate the Sabah market.” The ITCC Penampang project has been described by Sabah Chief Minister Musa Aman as “a new landmark for Penampang”. To support this vision, the Sabah Economic Development and Investment Authority provides generous fiscal incentives to investors going into Penampang’s tourism sector. These include income tax exemptions, investment tax allowances and import duty and sales tax exemptions on equipment used for hotel and tourism projects. Despite its promising economic potential, ITCC Penampang is more than a business undertaking for the Malakuns. “My parents’ vision is to transform Penampang from a sleepy town into a more vibrant place to live in,” Mandela Malakun says.

/// Feature Property Launch

/// FEATURE PROPERTY LAUNCH

90% Take Up for Taman Putra Pogun in Less Than a Month

aman Putra Pogun, a modern and contemporary landed property within the vicinity of Kota Kinabalu, has become the talk of the town since its unprecedented participation at the recent PH Expo held from March 8-10, 2014. The developer, DOCOMO DEVELOPMENT SDN. BHD., under the leadership of two tried-andtrue builders of the industry, Datuk Henry Hing and Mr. Lewis Han, saw brisk take-up of their units to 90% of its 2-Storey and 3-Storey Terrace Villas, in as little as one month. Docomo proudly held its Open House at their newly completed mock-up units 3 weeks after the expo. A total of 350 guests, including VIPs from local authorities such as the District Officer of Penampang, Mr. William Sampil; the SHAREDA team led by its president Mr. Francis Goh; the proud buyers and members of the public flocked to see for themselves Docomoâ&#x20AC;&#x2122;s commitment

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to and proven delivery of the highest quality of building materials and excellent craftsmanship, from ceiling to floor and wall finishes to sanitary fittings. Built to exact dimensions and improved specifications, the mock-up unit has won over many admirers for its aesthetic yet functional design. Just to name a few, winning location to good accessibility and unmatched hilly fresh air of Penampang, incomparable 66 feet wide access road, and a defining design of the garage with a featured common partition wall and the skylight roof to make natural light and fresh air brighten up and cool your home. Besides that, Taman Putra Pogun also boast about an 18.5ft high stairwell for the 2-Storey Terrace, a spacious 22ft wide frontage for all Terrace Villas and a mind-blowing 30ft width for its 3-Storey Link Bungalow. All these are crafted to details to build a home, not just a house. Docomo’s company motto is “building communities, bridging ties” and that is exactly what the developer is demonstrating to the owners of their homes that, community building is the brand and identity of Docomo Development Sdn. Bhd. In KK, condos and apartments are selling at RM450 - RM500 per sq. ft. today; Taman Putra Pogun Terrace Villas, landed property, only RM270 - RM320 per sq. ft., didn’t compromise its price with the qualities and workmanship- the mock up units tell it all. For more info of the project, call Docomo at 6088 - 311 911 / 312 828. Show units are opened for public viewing daily, from 9AM to 5PM.

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The Unsung Success Story of Anwar Yeo

rowing up in Tawau on the East Coast of Sabah, Anwar Yeo came from humble beginnings. After finishing his studies, he began career as a salesperson in a local bookstore in 1991 and ventured into his own school stationery supply business in 1993. In 1997, he had the opportunity to venture into the construction industry, taking on projects from private and government sectors. From then onwards, he started exploring the property development market. And because of his experience in the construction business, he learnt the importance of using high quality materials to ensure the best outcome. Having over 17 years in the construction business he has now completed projects value in excess of RM100 million. Although the financial crisis happened in 1998 and the property market crashed, luck was on Yeo’s side as he managed to get a RM5 million project. And in 2001, his company developed the Tawau College Community in Perdana Square with the development value of RM20 million. Since then, business has been booming. Yeo said, “The property industry depends highly on the local economy. I was lucky that when the financial crisis happened, I was able to acquire a lot of land at a very cheap price. And part of the reason why we are still standing strong today is because we continuously make sure our developments have good concepts, is high in quality and have good facilities.” He explained: “When I design, I think of the consumer in mind. I want the property to give them additional value. For example, our new project launch is a five-storey commercial building with an elevator. And currently, Tawau does not have an office building with a lift.” “Businesses today are very much reliant on technology and the internet. And Tawau’s internet connection isn’t that great. So for this project, we will be installing fiber optic technology to help increase the internet speed. This is something that will give value to buyers who are tech savvy,” he added.

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For this particular project there will also be eateries located on the ground floor, and Yeo will be building a 28-foot boardwalk so that restaurant owners can maximize the space and cater to more customers by putting more tables outside and providing al fresco dining options. Yeo said, “If businesses don’t make money, they won’t want to buy or rent a unit in your building. So to ensure that your building increases in value, you have to make sure that it benefits the tenants. It has to be a win-win situation for everyone.” Yeo’s interest in travelling to all corners of the world and taking adventurous study tours to gain more knowledge and inspiration in the building industry has gave him the ability to shine in incorporating his experience with the strategies, technologies, concepts and designs he have learnt around the world and put into plan back home and create a feasible and sustainable development. In 2012, Yeo’s Taipan project in Tawau fused with fresh ideas, modern architectural designs and concept is now 90% completed. This year, his company will be launching two more developments and one of them will be a gated residential development in Mile 8. D’Bayan Fruit Garden will consist of 200 units of terrace houses and residents can enjoy facilities like a clubhouse. But what’s different and exciting about this development? It has a tropical fruit garden with lots of high grade fruit trees such as durian, rambutan, mango and many more. “This fruit tree concept is very unique. I’ve been around the world and I haven’t come across such a concept before for a residential development. It creates a great community environment and connects us back to nature. And let’s be honest, most kids nowadays don’t even know how certain fruit trees look like so it will be great for education too. “Because if this unique concept, people will come and visit the property and because of that the property prices will immediately go up and this will benefit the residents

too. We will launch this project in the last quarter of 2014 and hope to complete it in two years,” Yeo said. For the last 10 years, the property market in Tawau has been booming due to the booming economy in the area. Tawau is the hub for palm oil production and with the oil and gas industry changing the game, the population and demand of properties is expected to increase. However, because of the rise in prices of construction materials, petrol, electricity, land, labour and etcetera, the prices of properties in Tawau is also expected to increase as well. Currently, one tonne of sand in Tawau cost RM50, which is the highest in the country. Tawau is located far in the East Coast causing transportation price to be expensive. Furthermore, Yeo said that the property prices will increase due to the 6% GST that will be imposed by the government on April 1, 2015. He also commented that building materials and services is expected to increase in price. “I think this is a good time for people to buy properties because it is only natural that the property prices will increase with the prices of everything else. And once the oil and gas industry in Tawau booms, the prices will hike even more,” he said. Yeo added: “The property market in Tawau has been fairly stable but a lot of developers are adopting a ‘wait and see’ attitude due to the current government cooling measures and restrictions by Bank Negara. However, I don’t think we will be affected by it that much. It’s just a guideline for the banks, but at the end of the day, the banks still need to make money. The banks will be more selective when giving out loans, but if you have a good credit history and you make payments on time, it shouldn’t be a problem.” According to Yeo, Tawau hasn’t seen its fullest potential as he believes that the city has so much more to offer. He believes that the tourism industry in Tawau has a potential to be a huge economy generator, but both the government and private sectors have to work together to make sure that

/// EXCLUSIVE INTERVIEW

Tawau has adequate facilities and promotion. When giving advice about what to look for when purchasing properties, Yeo said that it’s different for each investment. If you are looking to purchase land, make sure that it is a first lot located by the roadside. For commercial units, look for developments with unique and good concepts for this will ensure that the value will increase in time. Yeo began his investment portfolio in 2003 when he started purchasing land, houses, oil palm estate for capital appreciation and passive rental income as well as acquiring and being on the lookout for land worthy for future development plans and building up his landbank portfolio. Sooner than he notice his investment has reached to Kota Kinabalu, Peninsular Malaysia and some oversea locations. As for residential purchases, Yeo said it’s better to invest in smaller, more exclusive developments instead of larger ones. This will make your property rare and increase the value of it. Residential developments with about 30 units or so are the best. Property investment has always been his first option in investing as other investment like trust funds and term deposits only offer a return of around 3% to 4% which is comparable to the rate of inflation. He believes that property investment opportunities have much greater return in rental income as well as capital appreciation returns. He has personally had several property investments appreciate over 100% in the span of a couple of years. He also said that property investment has created wealth for many people around the world and the riches all have invested in properties. Yeo loves to share his success and knowledge unselfishly in hopes that more people will understand about property investments. He wants more people to share the same success that he has. As a token of gratitude for all his blessings, Yeo regularly supports charitable activities. He is no stranger in giving back to the community.

Anwar Yeo,

Managing Director of Premium Digital Sdn Bhd

PHOTO: LOUIS PANG STUDIO

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Youth Can Forget About Owning a Decent House in a Years Time National DAPSY Publicity Secretary Junz Wong told BN Federal Government to consider the younger generations before implementing GST. Junz said it was disappointing that BN has once again overlooked on the difficulties of Rakyat living especially the younger generations. Junz claimed that If GST was imposed on houses, lands and cars, then young generations could forget about owning a decent house after April 2015. ACCUMULATED CHAIN REACTION of GST on prices of houses :Raw materials procured from importers, port & forwarding services will be taxed. Suppliers selling the processed materials to developers will be taxed. Transportation costs to deliver these materials will be taxed. Developers buying lands will be taxed.

“Not to mention other extra burden our citizens will have to fork out such as telephones bills, electricity bills, streamyx internet bills, normal household items etc How can our younger generations afford a house by 2015?” Junz asked. SABAHAN FURTHER DISCRIMINATED BY GST Junz Wong who is also DAP Sabah Organizing Secretary said Sabahans would be most badly affected. “Sabah is arguably the poorest state with low income but extremely expensive cost of living and overpriced houses. With GST Sabahans would be paying more tax than any Malaysians outside Sabah because our goods in general are more expensive than theirs.” Junz explained. GST is a policy which will only further discriminate and marginalize Sabahans, Junz concluded.

Developer will use all the (already taxed) materials to build houses on the (taxed) land and houses sold will be taxed again. At the end of the day, all the related players will not earn less profits by the newly implemented GST and thus all burdens will be passed down to the end users which are the house buyers. The house buyers are our struggling Malaysian citizens who are finding it very hard to own houses even today.

SHAREDA to Build More Affordable Homes

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The Sabah Housing and Real Estate Development Association (SHAREDA) has agreed to build 10,000 units of affordable homes in the next five years. Each 850

sq ft unit will be selling for not more than RM250,000. SHAREDA president Francis Goh however raised his concern about the need for the government to

give SHAREDA members a buy back guarantee. To ensure that there is enough marketing activities to help promote these affordable homes, SHAREDA will organized more exhibitions such as Propex and the SHAREDA PH Expo. Goh said that through such events, SHAREDA members will be able to showcase their products to achieve satisfactory sales performance.

Ministry Urged to Build Affordable Houses in City Area: DAP DAP Sabah calls for ministry of urban wellbeing, housing and local governments to concentrate and focus on building affordable house within city or urban area instead of sub-urban area. Its chairman Jimmy Wong is in opinion that the affordable house should be built in city area, at least within 10-20km from the heart of the city, because the heavy demand for affordable house mostly come from the urban area, for example, Kota Kinabalu, Sandakan and Tawau. He added that more than 50 percent of total population is living in city now. It is therefore crucial to build more affordable houses in city to meet the demand of middle and bottom class.

According to deputy minister Halimah Sadique, government has allocated RM300 million as subsidy as high as RM30,000 to assist the qualified buyer to get their first house, which is cost from RM90,000 to RM250,000. There are 10,000 houses will be ready by end of this year in Sabah. “Due to lack of road facilities and public transport, if said affordable house was built at outbound of city, for instance, as far as 30km away from the city, it would be very difficult for house buyer or owner who are working in the city.” He added.

Wong who is also Member of parliament for Kota Kinabalu, has raised relevant issues in the parliament sitting yesterday.

He further clarified that it would be helped to resolved the problem of urban poverty. “With rising price hike, worsening traffic jam, living quality become burdening, the people who live in the city are in burden and hardly to survive with income at around RM3000.”

He is commenting to recent news that 5000 affordable houses under scheme of MyHome, an initiative by ministry, will be launched in Sabah this year.

“Therefore, I hope ministry would look into this issue seriously and come out with a new plan to build affordable house in the city area.” He said.

He questioned that “how many affordable houses have been built within this 5 years and how many of them will be built in coming 5 years?” He said, MyHome which is qualified for buyer who earned at least more than RM3000, should also given consideration and subsidies to help those who earned less than RM3000. “According to report, there are more than 60 percent of households earned less than RM3000 in 2012. It means government should really put more effort to meet the bottom class demand to fulfill their dream to own a dream house.” He said. As Barisan National has targeted in its manifesto during GE13, that 1 million of affordable houses will be built within 5 years, Wong also speak out his doubt that whether ministry could accomplish this mission and questioned that how many of them will be built in Sabah in the next 5 years.

5000 MyHome Scheme’s Housing Project to Be Launched

Haven for Property Hunters Naim’s Roadshow Offers Viable Units at Flagship Projects Across State buyers throughout the three days. “The buyers need only to settle 2% deposit to confirm their purchase. In addition, they would also enjoy cash rebates for the property.”

Sabah State Local Government and Housing Minister Datuk Seri Hajiji Noor The first housing project under the MyHome scheme will be launched in Tuaran district this month. State Local Government and Housing Minister Datuk Seri Hajiji Noor is expected to launch the Timbok Jaya project consisting of 1,200 units of affordable apartments. The scheme, aimed at encouraging housing developers to build more affordable houses and encourage home-ownership by the lower and mediumincome groups, was announced by the Prime Minister Datuk Seri Najib Razak when tabling the 2014 Budget on Oct 25 last year. Under the scheme, the government will give an incentive of RM30,000 for each affordable house to encourage developers to participate in the scheme. “Another project in Kota Marudu district consisting of 400 units will also be launched around the same time. “Apart from that, 86 units of single-storey terrace houses (Taman Luagan Jaya) will be launched in Beaufort in June, while Taman Sinar Indah, also in Beaufort, will have 589 units of double-storey terrace houses,” Hajiji said in a statement here.

Hajiji urged housing developers and first-time house buyers aged 18 years and above in Sabah to make full use of the opportunities provided under the scheme. Application for the houses starts today. The scheme will also be extended to Tawau district where Taman Sri Indah will see 1,072 units of affordable apartments being built later this year, while over 1,600 units of landed properties and apartments will be built under Ria Heights also in the district. “All the above mentioned projects of about 5,000 units will be launched this year by Sabah Housing and Real Estate Developers Association (SHAREDA) members which fall under the qualification of MyHome scheme. “I also commended the Sabah developers’ efforts in building affordable houses. I understand they are applying for 30 more projects to be included under the scheme in the near future,” he added.

Chris Tan, managing partner of Chur Associates The three-day property roadshow staged by Naim Land Sdn Bhd here provides a good opportunity for locals to invest in the company’s latest projects in Kuching, Miri and Bintulu.

hospitality components. It would bring together the diversities of modern living and business under one common address, fulfilling the demands of the present and setting the trend for the future,” Ting said.

Running from 9am to 6pm daily at RH Hotel, the event which kicked off yesterday offers buyers with attractive properties either at Kuching Paragon or Bintulu Paragon.

Also being featured at the roadshow is the exclusive Sapphire On The Park condominium project, which is the first component under the company’s upmarket brand “Naim Signature Collection”.

“The iconic Kuching Paragon is strategically located in Batu Lintang, which is close to schools and colleges. It about 10 to 15 minutes’ drive from the city centre,” said Naim Land sales and marketing general manager Alice Ting. Covering an area of some 13ha, she said it was distinctly the most contemporary integrated development to impact Kuching city. “Upon completion, Kuching Paragon would be a new landmark that introduces multi-faceted lifestyle experiences integrating residential, business, retail and

Another attraction is an investment talk “Grow Your Money’ by Chris Tan, last year’s winner of Top 40 Under-40 (Outstanding Young Malaysian) Award. Adding to that, Tan is also a regular speaker on real estate locally and abroad. Meanwhile Ting said there would also daily lucky draws, offering attractive prizes and a grand catch, which is complimentary air tickets to Phuket, Thailand, for two.

On the Bintulu Paragon, Ting said only limited prime units of Street Mall were available for sale, adding with the implementation of Sarawak Corridor of Renewable Energy (SCORE), the property should be a highly viable investment. In addition to these two, the roadshow also features other projects such as the Bahagia Residences four-storey apartments in Bandar Baru Permyjaya within Naim’s Miri sector. Ting also said the company was giving out special promotions to

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PH Expo Ventures to Hong Kong in September 2014

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property investment. For example, the stamp duty for locals is as high as 8.5%, whilst foreigners have to pay a compulsory levy of 15% of the property price. Tightened mortgage policy is making loan packages less viable for investment purpose. Property investors have since then turned to overseas properties to park their money. To people from Hong Kong, Malaysia is a familiar place due to its proximity, similar language and culture. Most of them are also very familiar with key cities such as Kuala Lumpur, Penang, Johor and Sabah. Besides, Hong Kong is also well connected by flights to many cities in Malaysia. In Sabah alone, there are four airlines serving the Hong Kong to Kota Kinabalu KK route on a daily basis. And Hong Kong is also the

he flagship exhibition Property Hunter Expo (PH Expo) organized by Maxx Media (S) Sdn Bhd will be holding their event for the first time in Hong Kong. The decision to venture into this market is due to the demand from loyal developers who have been exhibiting at the PH Expo. According to Director Michael Hiew, there is great opportunities to market Malaysian properties in Hong Kong due to the property prices here being the lowest in the region. Plus, cost of living in Malaysia is relatively low. For example, a newly launched property in the prime Central Business District (CBD) area in Hong Kong and Singapore fetches about USD2,000 to USD3,000 per sq ft as compared to properties in a CBD in Malaysia, which fetches about USD500 to USD600 per sq ft. The phenomenon now is that a middle class wage earner cannot afford a property in Hong Kong, but can afford a luxury property in prime area in Malaysia. Overall, property in Malaysia also provides a much higher rental yield in the region. The yield in Singapore and Hong Kong is typically 3%, whilst

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in Malaysia it ranges between 5% 8%. Despite the cooling measures introduced in Malaysia last year where foreigner can only purchase property in excess of RM1million and higher in some states, it is believed to have little impact in attracting foreign investment. According to a report by The Wall Street Journal on 25 Nov 2013, Chris Hahn, a director at property consultant Jones Lang LaSalle noted that most transactions by foreigners have been in excess of RM1 million even before the fresh curbs were announced, therefore he believes that properties in Malaysia will remain attractive to foreign investors, who mainly come from Singapore, Hong Kong, China and Japan where residential prices in their home markets are much higher. Aside from this pricing threshold, there are no other restrictions that hinder nonresident foreign buyers in Malaysia. The Property market also benefits from the Malaysia My Second Home (MM2H) program. There has been an upward trend in MM2H applications in recent years. The number of application approvals increased to 3,227 in 2012, from 2,387 in

According to a report by The Wall Street Journal on 25 Nov 2013, Chris Hahn, a director at property consultant Jones Lang LaSalle noted that most transactions by foreigners have been in excess of RM1 million even before the fresh curbs were announced, therefore he believes that properties in Malaysia will remain attractive to foreign investors, who mainly come from Singapore, Hong Kong, China and Japan where residential prices in their home markets are much higher.

2011, 1,499 in 2010. From 2002 to 2012, the MM2H programme attracted 19,488 foreign buyers. As of November 2013, around 22,320 foreigners were given long-stay approvals under the MM2H program. The property prices in Hong Kong are way too high even for the locals. The average middle class finds it difficult to invest in a property in Hong Kong due to limited supply and very high prices. And there is a high cost in

gateway to China. Hiew, believes that hosting the PH Expo in Hong Kong will be able to attract some buyers from China too. For more information please contact +6088 719 787

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SHAREDA to Launch Another 5000 Units to Support MyHOME Scheme

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From Left; John Tan, Chew Sang Hai, Francis Goh and Datoâ&#x20AC;&#x2122; Ir John Chee

he Sabah Housing & Real Estate Developers Association (SHAREDA) recently held a meeting with members from over 40 developers regarding the new MyHome Scheme which was launched in April 2014. The scheme provides a subsidy of up to RM30,000 for the purchase of a low-cost house for firsttime buyers. SHAREDA members previously took a pledge to build 10,000 units of affordable homes and to date have collectively built more than 11,000 units across 30 locations in Sabah. In 2014, SHAREDA members will launch another 5,000 units.

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These affordable homes consist of 850 square feet high-rise apartments which cost no more RM250,000 or single or double storey terrace homes priced at RM295 per square foot multiply by the built up area. During the briefing, SHAREDA President Francis Goh said that SHAREDA and its Sarawak counterpart SHEDA attended the National Council in Kuala Lumpur for the first time in history. And this is partly the reason that this new scheme is now extended to East Malaysia. Goh, commented that the new scheme is an improvement from the

From a survey by SHAREDA, the main reasons why people are not able to buy or own a house are because of the inability to provide a 10% deposit and inability to secure a home loan from the bank.

Developers in Sabah building affordable homes

old one as it is makes it easier for first time home buyers and the young generation to afford purchasing their own home. Previously the subsidy given to a low-cost unit was worth RM70,000, which is more than double the amount but it did not solve the root cause of the problem, which is people having a hard time paying a bigger lump sum up front for the deposit. He explained: “From a survey by SHAREDA, the main reasons why people are not able to buy or own a house are because of the inability to provide a 10% deposit and inability to secure a home loan from the bank.” SHAREDA also urged the Prime Minister Datuk Seri Najib Tun Razak to instruct Bank Negara to set a quota for all 3,000 bank branches to approved housing loans for one million buyers. “The banks should perform their Corporate Social Responsibility (CSR) by approving housing loans for one million buyers or 335 loans per bank. Thus, every bank should fulfill the quota of 335 loans for MyHome buyers at an interest rate of 4.5%,” he added. Currently, Bank Negara is applying a stringent ruling on loan procedures for instance adopting ‘net loan value’ and ‘net income’. The subsidy given is RM30,000 for one low-cost house with the selling price of RM70,000. The bank will assume that the house is on sale for RM40,000 and the

buyer will still need to pay the deposit of RM4,000 or 10%. The meeting also highlighted the formation of HAREDA Berhad, a purpose vehicle (SPV) with a primary objective to facilitate members of SHAREDA to collectively construct affordable housing in Sabah and to help rehabilitate or revive any property development.

explore, to invest and to develop more affordable housing and this is a part of SHAREDA’s CSR for the government and the rakyat. It is very hard for us to force or point a gun at any company to tell them to build houses but not to sell them at a high cost or to tell them to discard profit and do some charity. I don’t think anybody will do that, so we place them all under this umbrella.

Goh said, “The formation of SHAREDA Bhd is actually to

He added: “This company will also act as a special vehicle in

case any member project faces financial difficulties or crisis to cause them to abandon the project. This body will assist them by injecting money from SHAREDA. And in return we will get something like probably unsold units which will be charged to SHAREDA as a security.” Buyers from Sabah can log on to www.shareda.com to view the complete list of projects that this scheme is applicable to.

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SHAREDA Releases 2013 Property Development Annual Report

he Sabah Housing and Real Estate Developers Association (SHAREDA) recently launch its 2013 Property Development Annual Report. The report aims to be a relevant source of reference for related government departments, professional bodies, real estate players, SHAREDA members and counterparts such as REHDA and SHEDA. According to President Francis Goh, “In the past, SHAREDA’s members relied on market reports prepared by professional valuers and economic researchers. The report usually consists of figures that did not accurately reflect the total revenue generated by Sabah property developers.” “The gross development value of a project was not recorded due to developers’ reluctance to disclose and only the number of units of the property built was included. Absence of the right information may diminish the accuracy of such valuation. This may also affect the gross development value (GDV) and gross contract value (GCV) for precise market assessment. “Therefore, this SHAREDA inaugural annual report aims to reveal the actual data which reflects the importance of property development industry to Sabah’s economy and affirmed that this industry is performing in par with or even superior that the four main key industries namely plan oil, oil and gas, tourism and manufacturing,” he added. Besides that, the report also indentifies numerous pressing issues and problems faced by SHAREDA members with the government departments. In comments to this, Minister of Local Government and Housing Sabah, Datuk Seri Panglima Haji Hajiji Haji Noor was pleased to inform that the local government departments are more than willing to work hand in hand with SHAREDA to resolve the issues raised.

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He also added that the assistance provided by all fellow SHAREDA members in fulfilling the promise of building affordable homes is greatly appreciated by the government. By working together, he hopes that it will ensure that we progress fast as a state without neglecting any industry. Launches by SHAREDA Members in 2013 In 2013, SHAREDA members have generated an estimated GDV of RM7.562 billion to Sabah’s state economy. This was ranked third as compared to other major industries in Sabah namely, palm oil (RM15.3 billion), oil and gas (RM10 billion), tourism (RM5.6 billion), and manufacturing (RM3.5 billion). The recorded GDV is derived from various residential, commercial, industrial and mixed development projects implemented by SHAREDA. The ‘hottest’ region which produced a GDV of RM5,133,878,000 is the West Coast. Followed by Lahad Datu with RM687,000,000 the Interior region with RM615,900,000 and Tawau with RM547,936,000. Speculations of the imposition of the Goods and Service Tax (GST) and uncertainties about the Budget 2014 also affected the property market tremendously and delayed the launched of new developments in the fourth quarter of 2013. Some negative remarks and presumptions by market observers deterred investors from engaging the market. Rumours on government measures to curb speculation in the property market and the increase in Real Property Gains Tax (RPGT) to curb short term gain by property investors are some reasons for the slowdown. High Rise Developments The rising land cost and the scarcity of feasible land resulted in a statewide increase in apartments and condominiums over the years. According to SHAREDA’s recorded statistics, 4,692 units of apartments

SHAREDA President, Francis Goh presenting the annual report and condominiums were launched in 2013 with a GDV if RM 1.651 billion. The launching prices of these condominiums located within 12km radius from Kota Kinabalu range from RM380 to RM500 per sq ft. There were a few condominiums however with the price range of RM650 to RM1,175 per sq ft (within 5km from the city centre). Although it is relatively higher, it is justifiable due to its premium location with sea view. Due to limited supply of premium locations as such, it is unlikely that there will be many high end condominiums in the near future. Landed Developments Popular in Suburban Areas SHAREDA concluded that 4,421 units of landed residential products were launched in 2013. The number is lower than high-rise condominiums and due to the increasing cost of land, most landed property developments in Kota Kinabalu are moving out to suburban areas beyond 15km from the KK city centre. Many landed residential were developed in areas such as Kinarut, Tuaran, Pulutan Menggatal and Jalan Sulaman. However, landed residential developments are still highly sought after due to the lower risk of mature

of development and the demand from the market. Based on the trend of sales, landed residential has consistently achieved 100% sales performance even if the price is beyond the purchasing ability of most first-time home buyers. There were a total of 1,087 units of landed property products launched in 2013 with prices ranging from RM150,000 to RM903,000. Developers tend to build landed residential in districts such as Beaufort, Keningau and Sipitang. The landed property sector in Sandakan remained the most active, with new launches such as 115 units of two-storey terrace house in Taman Jati and 150 units of two-storey terrace house in Taman Impian, Mile 7. Commercial and Retail Properties In 2013, Kota Kinabalu experienced a momentous growth in retail malls with new launches coupled with ongoing developments in the suburban areas such as the Tuaran By-pass, Menggatal and Penampang. The mall culture gradually flourished with the intensifying number of upcoming complexes such as Imago Mall @ KK Times Square, Oceanus Waterfront Mall @ KK Waterfront, Riverson Walk and PacifiCity. It is

loan margin for retail lot acquisition. Commercial shop lots will face similar fate where the supply of such property will be reduced unless the development is situated on a prominent location. Most credit facilities are reluctant to offer bridging finances for commercial development and hence discourage developers from launching their commercial property development. Affordable Housing

SHAREDA Council members delivery reports on SHAREDA 2013 property report expected that the market would experience a substantial increase in retail space supply and also stronger competition in the retail sector when all these developments are completed. The commercial and retail scene progressively moved towards the suburban areas with their captive catchment market along main roads due to the intense competition in the city centre. For instance, Grand Merdeka Mall in Menggatal is offering prices at RM136,000/unit and retail units in suburban areas can fetch up to RM520 to RM1,00/ sq ft. A total of 9 commercial property developments were launched in 2013 consisting of two to threestory shop offices. The selling price ranges from RM300 to RM500/sq ft. There are also 152 units of industrial shops ranging from RM1.5 million to RM1.9 million that was launched the west coast region.

be accustomed with the new tax reconciliation on building materials and professional services tax. Another reason is the qualification of potential buyers in taking up loans from banks. The property development is expected to slow down this year as prospective buyers face difficulties in securing their end financing although the market demand is always present. With the strict lending guidelines imposed by Bank Negara based on “net income” and “net loan value” coupled with stringent assessment on the credit worthiness of borrower such as background check on their CCRIS and CTOS by most commercial banks will deter the ability of potential buyers to purchase property. The increased fuel price, commodities and electricity tariff will harshly reduce the disposable income of potential buyers forcing them to reconsider their loan repayment ability.

By observing the property development market in 2014, it is foreseeable that downward cycle will continue in the first and second quarter of 2014 as most developers are deterred from launching new developments. Yet, this trend will slowly diminish and SHAREDA expects an improvement in the third and fourth quarter of 2014.

The property development sector will focus on apartments and condominiums rather than landed residential. Nevertheless, some developers would be more inclined to develop landed property in suburban areas where they would vie for heavily populated suburban niche market. More launches of landed property development and commercial shop offices will be seen in small townships like Papar, Beaufort, Tenom, Keningau, Kunak and Telupid.

Developers are adopting a wait and see attitude due to the unclear policy of GST to be imposed in April 2015. Developers may need some time to adopt and implement the GST to commercial property and

The market may experience a sluggish pace for commercial property development in Kota Kinabalu, in particular shopping malls and retail outlets as most of the commercial banks will offer a low

Property Development Outlook 2014

Developers are advised to conduct feasibility studies and market surveys before launching their projects. Pre-launch market test is necessary to ascertain whether their development is feasible to commence. If the market response is not satisfactory, it is still early to revise the marketing plan as to reduce risk of project abandonment.

apartments will be built around Kingfisher Park in Kota Kinabalu and another 2,000 units of apartments in both Tawau and Sandakan. Each apartment under the PR1MA housing scheme will be sold not more than RM400,000 per unit in four major townships: Kota Kinabalu, Tawau, Sandakan and Lahad Datu. Akin to the effort and initiatives of the federal and local governments, some SHAREDA members may shift their focus towards developing affordable homes and fulfilling the pledge to build 10,000 affordable homes under the joint effort of the MLGH and SHAREDA. Besides that, SHAREDA has made several proposals to the government and Bank Negara to include the bank and financial institutions in fulfilling similar social corporate

...this SHAREDA inaugural annual report aims to reveal the actual data which reflects the importance of property development industry to Sabah’s economy and affirmed that this industry is performing in par with or even superior that the four main key industries namely plan oil, oil and gas, tourism and manufacturing,

Other than that, developers will have to be well informed of the proposed located of the SHAREDA & MLGH affordable home schemes and the PR1MA home schemes as well to avoid action market competition. Minister of Urban Wellbeing, Housing and Local Government Datuk Abdul Rahman Dahlan stressed that the average GDP per capita in Malaysia is below RM5,000. This has promoted the federal and local governments to orchestrate various affordable housing schemes and incentives, for instance PR1MA priced at RM400,000 per unit and below and MyHome Scheme lauded by the National Housing Council with RM30,000 housing subsidies allocated for first time buyers to purchase homes below RM250,000 in Sabah. SHAREDA received confirmation that 6,000 units of PR1MA affordable

responsibility as SHAREDA for home ownership to the community. Bank Negara should similarly impose a quota on all banks to proved compulsory end financing approvals to all first time home buyers. The burden of producing more affordable homes to the middle income earners would not rest only on the shoulders of private developers and government linked development companies, but also on the banks that should help achieve build 1 million affordable homes for the medium and lower income group in Malaysia. Price Hike of Building Materials Construction cost for development projects by SHAREDA in 2014 will see an expected increase of 9% compared to 2013. This is because the Malaysia Hardware Supplier Association and Sabah Hardware Traders Association both confirmed

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a 15% increase in building materials cost due to the increase in fuel and electricity tariff. Since 60% of a property development comprised of building materials cost, it is foreseeable that the GCV of any development will increase by at least 9%. This imposition of 6% GST will further burden the contract cost as well. This, SHAREDA opined that overall property selling prices will be increased by 5% in 2014. The overall construction will further increase by another 3.6% if GST is to be implemented in April 2014, making a total increase of 12.6% of construction cost in 2014.

listed companies from Peninsular Malaysia. Believing that affordability should progress with time and that the capping of prices for houses should be done based on the free market force, SHAREDA is appealing for the retraction of the policy and is providing a counter proposal with a promise that they will build 10,000 units affordable homes within the 5 years. Proposed Counter Proposal for Affordable Homes SHAREDA requests that the Government provides incentives such as:

SHAREDA’S Reasons for Opposing the Mandatory of 30% Affordable Home Policy and Implementation Mechanism

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After receiving a letter from the Ministry of local Government and Housing in Mach 2013 on the imposition of 30% affordable home policy and implementation mechanism SHAREDA have surveyed the possibility of the implementation and was worried the negative impact that will be created by such implementation.

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First and foremost, it is unfair to the higher income group will feel the discrimination by such a imposition, as they are the taxpayers who have paid the dues.

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Secondly, new developers will find it impossible to low cost housing before they even make any money. Hence, implementation of the policy will deter beginners or bumiputera developers from venturing into property development.

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Thirdly, reflecting to the report made by REHDA report, there will be an increase in risk of not being able to sell the houses. For those beginners who are ready to venture out, unless there is a buy back guarantee from the Government, they will have no other alternative but to abandonment their projects when they cannot foresee their houses being sold.

A correction should be made that Affordable Home does not mean Low-Cost Housing

90% of SHAREDA members will also find it difficult to operate within the limited pricing and will shift to other ventures. When this happens, the property market will then be controlled by a few big local developers and the big

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Subsidies for first house buying A one-stop centre for speedy approval housing schemes A waver of 15% surcharge by Jabatan Air SESB contributions are in line with TNB ruling in West Malaysia A waver land premium imposed by Land and Survey A reduction in bank guarantees by 2 % in lieu of HDL Award s being given to developers of affordable homes with recognition/ appreciation certificates The promotion of homes done jointly by Local Authorities or District Offices An assistance be given to local house-purchasers by state owned financial institutions An offer made by joint venturing with GLC’s to develop land owned by the state Allowance be given to build affordable homes where they are in demand in towns or otherwise

When studying and formulating strategy and instigating measures, SHAREDA requests for a special Affordable Home Committee to be formed between the relevant Government authorities and SHAREDA, and to include professional bodies, GLCs. SHAREDA also requests for a certain incentive to property developers so as to encourage them to build more affordable homes for the nation.

SHAREDA Deputy President, Chew Sang Hai THE ISSUES ADDRESSED BY SHAREDA Cost Sharing with TM TM and SHAREDA Council met and SHAREDA obtained a waiver of cost sharing. Nevertheless, after a few successful instances where the cost sharing was upheld, the arrangement was put to a hold for a long period of time without any grounds. SHAREDA has been trying to negotiate with TM to acquire discount in cost sharing, but to no avail. Cost sharing is unreasonable, as TELECOM is already making huge profits, and it is to TELECOM that the telephone users will be paying TM for using them monthly after they had been installed, not to the housing developers. it is totally unfair for the developers to be asked to bare half of the cost when they get no benefits at all from the installation of the phones. Moreover, the cost of raw materials in Sabah being much higher than West Malaysia, the developers in Sabah unlike those in West Malaysia will have to cough up exorbitant capitals even without the cost sharing. This indeed goes against the One Malaysia policy.

After the election of new office bearers in the late 2013, the issue was readdressed by the new President and a press released was made on the issue. SHAREDA also pleaded with the Federal Minster and State Cabinet to waive the cost sharing, resulting in TM coming making an agreement with SHAREDA to give the developers the privilege to choose either the smart partnership or the normal process of installation of cables. Developers are also allowed to choose other TELCOs at their own discretion for the installation. Reduction on SESB Consumer Connection Charges CCC charges in Sabah being more expensive by 700% than of West Malaysia, SHAREDA had requested SESB to reduce the consumer connection charges so as not to hinder the investors coming in to invest and help reduce the cost of building affordable residential homes at a meeting conducted in July 2011. As a result, SESB implemented a reduction of 50% for new electricity connections together with a new traffic was made effective by January 2012.

concurred that the renovation plans do not required submissions for approvals from BOMBA, or to the Land and Surveys Department and Town Country Planning Departments. PDC has also been urged to gazette the Penampang District Local Plan promptly so that it becomes a standard document with the zoning on the lands clearly defined. As the result of the fruitful meeting, the long period of approval has been shortened by six months. District council in turn had welcomed the offer of assistant made by PAM and IEM/ACEM and hope to discuss the matter further at later meetings. Speedy Approval of Development Plan by Kota Kinabalu City Hall (DBKK)

SHAREDA Council member, Ronnie Ang SHAREDA ‘s proposal was focused on three main items mainly, namely: Exemption of 10% zoning charges on maximum demand for affordable homes, submission of land building size requirements for estimation purposes and reviewing of the rigid cut-off date for the submission of complete electricity supply application. This too fell on deaf ears. Thereafter, a joint committee was formed by SHAREDA, FSM, IEM Sabah Branch, ACEM Sabah Branch, PAM Sabah Chapter, RISM Sabah Branch and Sabah Hotel Association and the committee met with the SESB and a pledge was made. The committee later voiced out their disappointment over SESB’s failure to fulfill the pledge made after obtaining the government subsidy. SHAREDA believed that they have been used by SESB and persistently negotiated until the 50% reduction of consumer connection charges in the electricity tariff was approved. Speedy Approval of Development Plans by Penampang District Council (PDC)

SHAREDA President Francis Goh led a delegation of its members including PAM Sabah Chapter, IEM Sabah Branch, ACEM Sabah Branch, made a courtesy call to Penampang District Council and the components of the technical committee in July 2013 to discuss and the recommendations put forward. They were: Delays of approvals due to lack of regular meetings, To send qualified architects who knows their job rather than the present one is not qualified, and Not to include Telco’s comments as the compulsory advisor, the Central board, had already rejected them. PDC accepted the recommendation and assurance was given that there will be regular meetings and that the processing of the plans will be done in the near future. The requirement of MASMA Report and Drainage to be submitted to DP for approval being the source of delay, SHAREDA proposed the detail submission of MASMA report and drainage at the building plans stage, provided DID approval given prior to BP approval. PDC accepted this deferring of the delayed submission of MASMA Report and Drainage at the BP stage on case to case basis. As advised by PAM Sabah Chapter, PDC also

Sabah Housing and Real Estate Development Association paid a courtesy call to the Lord Mayor of Kota Kinabalu City Hall to brief him in detail on items such as: Property Development being the key Economic driving force for Sabah, the contributions the Property Developers made towards the community and economy, the reasons for the price hikes, the challenges faced by property developers, the adverse impact of the Mandatory Imposition of 30% affordable homes, to produce the Affordable Home general guide line as information for DBKK and to inform DBKK about the on-line marking in the hope of reducing marketing risk. After the briefing, SHAREDA appealed for speedy approval for DPs Affordable Home Developers and to provide incentives such as: wavering for capital contribution by SESB & TELEKOM, charging uniformly for premiums, reducing the BG from 5% to 3% in lieu of HDL under 1 Malaysia one rate, providing Certificate of Recognition by MLGH and so on. Finally SHAREDA urged.

Property Developers in Promoting Leisure Property Development in Sabah SHAREDA paid a courtesy call to YB Datuk Seri Panglima Masidi Manjun and briefed him about key issues facing the leisure property development. Strong challenges have been faced by the developers such as the jurisdiction of property management and hotel management. Unlike affordable Homes these are purchased with the intention of making a return profit. As there have been many complaints raised by foreign buyers for non-fulfillments of the returns promised by developers, Datuk Masidi Manjun agreed with SHAREDA that clear guidelines and policies drafted by the State Attorney General for the Land Enactment to be introduced in Sabah should cover issues relating to leisure property development particularly horizontal subsidiary titles which are commonly applied on resort villas. Land Subsidiary tile Enactment is an important legislation law to govern all properties with subsidiary titles for sale to individual ownership. Unlike before, today developers are selling hotel suites and resort villas for sale.

A request was made to Datuk Mayor to expedite the development approval and to take initiative to gazette the local plan draft of Greater Kota Kinabalu. DBKK was reminded that any delays the approvals means a higher holding cost for the developers which will end up in a higher selling price. To this request the Lord Mayor promised to take constructive measures.

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/// East Malaysia Property News

Banks Should Adopt Affordable Homes CSR Says, SHAREDA

The Sabah Housing and Real Estate Development Association (SHAREDA) has a corporate social responsibility in providing affordable homes. But SHAREDA president Francis Goh said that this responsibility should not be shouldered by property developers only. He commented that banks earn better profits and 50% of their businesses actually depend on property development and housing products. Thus, banks should voluntarily provide fast track

ITCC Gets 100Mb Connectivity in Penampang

approval for first time house buyers and the medium lower income group even if there is a risk of non-performing loan. SHAREDA’s affordable home price is actually 20% lower than the prevailing market price, plus the 10% incentive for deposits paid under MyHome Scheme. According to Goh, the banks can easily recover back their loan amount through foreclosure and public auction in the event that buyers fail to perform their repayment.

SHAREDA Thankful for Great Partnerships

Working together: Lau (left) exchanging the signed MoU with Malakun REDtone Telecommunications Sdn Bhd has expanded its presence in Sabah following the signing of am MoU to provide Internet connectivity to the International Technology and Commercial Centre (ITCC) in Penampang.

and 16 levels of A Grade I-Office Tower.

The MoU was signed with Sabanilam Enterprise Sdn Bhd, the developer of ITCCPenampang, which has a gross development value of more than RM300 million.

“This latest collaboration with Sabanilam Enterprise continues to strengthen REDtone’s position as a leading data and broadband solutions provider for the corporate, SME and government segments,” said Lau.

The development is part of Greater Kota Kinabalu under the Sabah Development Corridor. Ribbon cutting ceremony of SHAREDA Property Hunter Expo; from Left; Michael Hiew, Tan Sri Dato’ Sri Richard Koh, Datuk Ir. James Wong, YB Datuk Au Kam Wah, Francis Goh, Quek Siew Hau, Chew Sang Hai During the opening ceremony of the SHAREDA Property Hunter Expo in Sandakan , president of the Sabah Housing and Real Estate Development Association (SHAREDA) Francis Goh extended his thanks to the Sandakan Municipal Councils which was voted by SHAREDA members as the most efficient council in giving Development Plan approval. Goh congratulated the Council under the leadership of Datuk

Ir James Wong for giving SHAREDA Sandakan members full support and cooperation to create more property developments in Sandakan for years to come. Goh also mentioned that the event was a successful due to the hard work and efforts of their organizing partners from Property Hunter, Elson Kho and Michael Hiew, plus organizing chairman from SHAREDA Quek Siew Hau.

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REDtone has been offering WiMAX services in Sabah since 2009. As part of the MoU, REDtone, a whollyowned subsidiary of REDtone International Bhd, will provide dedicated high speed 100Mb broadband connectivity to the mixed development comprising a 330-room hotel, 16-floor hotel suite (290 units), fourstorey shopping mall

Signing the MoU on behalf of REDtone was its group CEO Lau Bik Soon while Sabanilam Enterprise was represented by group general manager Ceasar Mandela Malakun.

He said they have three offices in Sabah to manage operations. “The latest project at ITCC will mark the beginning of similar projects with other large organisations in Sabah,” he said. “With this partnership, we will have an additional ISP solution which provides cost effective Internet connectivity in particular to our fibre-ready I-Office Tower, which is well suited for multinational companies,’’ said Malakun.

ITCC-Penampang is strategically located along a prime road (the Penampang bypass highway) which leads to the city centre and the Kota Kinabalu International Airport. It is expected to be completed by the end of next year. Sabanilam Enterprise is targeting both local and foreign buyers who seek business expansion and investment opportunities. REDtone is also currently implementing a project under the Malaysian Communications & Multimedia Commission’s Time 3 Programme aimed at providing voice and data connectivity in rural areas of Malaysia. It is also involved in another USP (Universal Service Provision) project under the government’s “Kampung Tanpa Wayar” initiative. Data and broadband is expected to continue to drive REDtone International’s growth this financial year and beyond.

/// East Malaysia Property News

Unregistered Agents; RM24 Billion Illegal Property Transactions question about how these brokers are running away with client’s deposits and marking up prices. Steps to improve the professionalism in the industry are taken by BOVAEA to remedy the satiation. As of May 1, all real estate negotiators must sign up as a member of BOVAEA. Negotiators must register by undertaking a one-day training course and have a valid real estate agent license under BOVAEA.

Miri, Sarawak

The flourishing property market in Malaysia has attracted more illegal buyers and negotiators. According to member of the Board of Valuers, Appraisers and Real Estate Agents (BOVAEA) Eric Lim, there are an estimated 40,000 real estate negotiators who are illegally broking deals estimated to be worth about RM24 billion each years. Malaysia Institute of Estate Agents past president K Soma Sundram said, “In 2012, real estate agents and negotiators, legal and illegal accounted for 60% of the RM142 billion worth of traction for the year. However, one third of the 60% can be attributed to illegal agents which work out to about RM24 billion worth of transactions.” Under The Valuers, Appraisers and Estate Agents Act 1981, real estate negotiators are required to practice under a principal real estate agent who has been certified. Each real estate agent is only allowed to

have 20 negotiators. The frequency of illegal agents is obvious in the illegal advertising signs that are posted to promote property for sale. Advertisements on lamp posts or by the roadside are not allowed for licensed real estate agents and negotiators. The rise in illegal real estate agents is alarming especially because no legal action has been taken against them despite the complaints from buyers and sellers. Lim said, “To date, I do not think that we have had a single successful case against an illegal agent being taken to court. BOVAEA is only responsible for our registered members whom we regulate. These illegal cases are reported to the police, but little action is taken.” BOVAEA receives about 50 to 60 complaints per month and 10 of which are on illegal brokers. The complaints raise the

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An identification tag will be given to these registered negotiators and it must be worn at all times while conduction business. This is similar to the practice in Singapore. Currently, only 16,000 negotiators have taken this one-day course. Soma commented, “The problem with the illegal agents is that many don’t know the Act, the rules of the standards. If you give your money to a legal agent or negotiator he has to deposit it into a client’s account. But an illegal agent can just take the money and disappear.” Normally a 3% service fee is charged by legal agents and negotiators. But it is usual for illegal agents to increase the asking price of the sellers and pocket the difference.

Share GST Earnings From Sabah Now that the Goods and Services Tax (GST) Bill has been passed in Parliament, Likas assemblyman Junz Wong is looking for “alternative” ways to buffer Sabahans from its impact. GST will take effect in 2015. Wong will be tabling a motion in the State Legislative Assembly today to demand that the Federal Government return to Sabah 50% of the relevant taxes collected from the state. Wong estimates that the federal government will collect about RM2 billion in GST from Sabah once the system is implemented next year. “Malaysia is not ready for GST but since the bill has been passed in Parliament, it’s pointless to fight it anymore. “The next best move (now) would be to find an alternative to further improve the life of Sabahans,” said Wong. Sabah, being the poorest state in Malaysia has always incurred a ridiculously high amount of living expenses which is not compatible with their earnings, he said. “Most of our raw materials are imported and the general public are the ones getting the brunt of the high prices. “The common man struggles to keep up with the high rising price on goods as they earn an unreasonably low income,” said Wong, who is also DAP Sabah Organising Secretary. He said this was because it is hard for the general public to involve themselves in import business due to monopolistic policies.

DEVASTATING CHAIN EFFECT Wong also described as a failure the Price Uniformity Scheme by the federal government, which allocated RM386 million to close the gap of prices in Sabah and Sarawak. “Living expenses continue to be high as the scheme does not seem to impact the lives of the people. “If nothing is being done, the accumulative chain effect from the GST would further devastate the people’s living. “With GST, Sabahans would be paying more tax than any Malaysians outside of Sabah because our goods are more expensive than theirs. “It’s a policy that will only further discriminate and marginalise Sabahans,” he said. On Tuesday in an immediate reaction to the passing of the GST Bill, Wong lamented that housing would now be inaccessible to the younger generation. He said already houses in Sabah were overpriced. “With GST, Sabahans would be paying more tax than any Malaysians outside Sabah because our goods in general are more expensive. “The implementation of GST will cause a chain reaction to the prices of houses. “Land developers and suppliers will be taxed on land, raw materials and transportation, causing less profit for the related players. “House buyers will bear the burden of the end cost, which will also be taxed,” he said.

A Blow to Sabah’s Tourism Industry and Leisure Properties in Tourist Hotspots Masidi said while it might be too early to see the full impact of the fallout from the disappearance of Malaysia Airlines flight MH370 which was filled with Chinese passengers and the Singamata abductions, “it would be foolish to assume that there’ll be a repeat of last year’s excellent performance in tourist arrivals in the state”.

First, it was the Pom Pom Island incident back in November 2013. And now, with the second kidnapping in Semporna plus the mysterious disappearance of the Malaysia Airlines flight, the Sabah tourism industry might see a dip in tourist arrivals and especially from China, which is the state’s biggest foreign market.

300 guests. And more cancellations made by guests coming to Semporna have recently been made.

A crisis management committee that was formed following the Lahad Datu intrusion in February last year is handling the latest hindrance just as it did after the kidnapping of the Taiwanese tourist and more recently the MH370 situation.

Travel agencies in mainland China have also reported a sharp drop in the number of Chinese visitors to Malaysia following calls of a tourism boycott led by Chinese celebrities. Last year more than 360,000 tourists from China visited Sabah, an increase of more than 86% compared to about 190,000 the year before.

Assistant Tourism, Culture and Environment Minister Datuk Pang Yuk Ming said, “The tourism industry is resilient but we need to soldier on and probably look into other markets such as Eastern Europe or Indonesia among others.” He admitted however the effect will be felt in the months to come and pointed out before March tourists from China made advanced bookings at many resorts between six to eight months. After the disappearance of MH370 some cancellations were made and Pang said there was one resort that claimed to have had a cancellation of about

This could adversely affect local business especially now that the Chinese government had issued an advisory for its citizens to be more cautious when visiting the east coast of Sabah following the abduction.

Two weeks after the kidnapping, Dun Jidong, a senior marketing manager at Ctrip.com, China’s largest travel booking website, said that the number of clients from northern China going to Malaysia has dropped by 50%. The Sabah Ministry of Tourism, Culture and Environment have reactivated a special committee to monitor the fallout from the latest abduction. Its minister Datuk Seri Panglima Masidi Manjun commented that the abduction has made the state’s Visit Malaysia Year (VMY 2014) very challenging.

Last year, Sabah recorded 3.4 million tourist arrivals. This year the target is 3.8 million, but some expect this number to drop with these recurring safety incidents happening. China is the third largest source of visitors to Malaysia, in which tourism is the sixth contributor of its GDP. Luo Juan, a senior analyst with market research company Forward Information told the South China Morning Post that Malaysia was facing a potential loss of up to RM4.2 billion in tourism revenue. She told the newspaper that she predicted Chinese arrivals in Malaysia this year would drop by 20% to 40%. This would represent 400,000 to 800,000 tourists. Furthermore, to gear up for the expected increase of tourists Sabah was urged to build more tourism properties such as four-star and five-star hotels. Besides hotels, there is also a surge of shopping malls to cater to this influx. The Sabah government also has plans to increase the number of tourist attractions such as the Tanjung Aru Eco Development, plus develop areas like the Kinabalu Gold Cost along the west coast up to Tip of Borneo. But with all that is happening due to the lack of security in the state, how will this affect these up and coming projects? Only time will tell.

Demand to Determine Prices, Not GST: SHEDA

www.sheda.org.my Demand will have a greater impact on property prices than the Goods and Services Tax (GST), which will be implemented in April 2015, according to the Sarawak Housing and Real Estate Developers Association (SHEDA).

12,000 new stock is added. There is always also tie over (old stock) from previous years.”

Except for residential properties, all forms of real estate are subject to this tax, said SHEDA Secretary-General Sim Kian Chiok.

Furthermore, property developers do not have profit margins of between 80 to 100 percent. He said this in response to Housing Minister Datuk Amar Abang Johari Tun Openg’s recent allegation that some property developers are enjoying a huge property margin of up to 100 percent.

As such, prices of commercial properties are expected to rise after its imposition. “But some say the market is ‘overheating’, so future prices might not necessarily move in the direction of the GST. Prices still come down to location and demand.” Despite higher construction costs, price growth could “stay even” if buying activity in the property market wanes due the GST, he opined. While Sim declined to provide forecasts on the upcoming property supply amidst the government’s cooling measures, he was able to offer data regarding Sarawak’s real estate sector.

In addition, the supply of low-cost housing will still depend on government policies and land availability.

“The big developers set trends for the entire industry. Definitely margins are not as alleged. People can refer to public listed companies’ accounts to see whether such exorbitant profits are made or not,” added SHEDA.

“Our supply in Sarawak is generally quite consistent over the years. Annually about

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/// Special Feature

/// SPECIAL FEATURE

Development Milestones Bay 21

Gleneagles & Riverson Walk

Bay 21 by Remajaya Sdn Bhd

Gleneagles & Riverson Walk by Riverson Corporation Sdn Bhd

Oceanus Waterfront Mall

The Loft

Oceanus Waterfront Mall by Oceanus Development Sdn Bhd

The Loft (KK Times Square Phase 2) by AsianPac

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/// Feature Property Event

/// FEATURE PROPERTY EVENT

Gleneagles Flexes Its Wings Eastward Into Kota Kinabalu

Dr Tan See Leng, Group Chief Executive Officer and Managing Director of Parkway Pantai Limited addressing the ceremony

Guest of Honors and officials marks the topping a success

brand that is synonymous with excellent private healthcare in the South East Asian region, the Gleneagles Hospitals will soon be available to the people of Sabah via its latest addition, Gleneagles Kota Kinabalu. The latest addition to the skyline of Kota Kinabalu city, Gleneagles Hospitals hosted a topping up ceremony today at the hospital’s construction site, which is due to open its’ doors in the 1st Quarter of 2015. The commemorative event was officiated by YB Datuk Seri Panglima Masidi Manjun, the Minister of Tourism, Culture and Environment Sabah, who was here to represent the Guest of Honour Datuk Seri Panglima Haji Musa Aman, the Chief Minister of Sabah. The ceremony was attended by top management from Gleneagles Hospitals, IHH Healthcare Berhad, Pantai

Holdings Berhad, Parkway Pantai Limited, as well as over 200 local representatives from both the government and the private sector. Dr Tan See Ling, Managing Director and CEO of IHH Healthcare Group and Group CEO of Parkway Pantai Limited mentioned in his opening speech that Sabah was the obvious and natural choice to establish the brand in this region, due to its strategic location being the gateway to Borneo. Dr Tan also added : “regardless of where we are, our emphasis has always been on the local population, bringing international standards of healthcare to the local communities”. In fact, the Gleneagles Kota Kinabalu committed to recruit local talents thus creating employment opportunity.

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Datuk Khairil Anuar bin Abdullah, Chaiman of Pantai Holdings delivering his welcome speech On the other hand, the Minister of Tourism, Culture and Environment Datuk Seri Panglima Masidi Manjun expressed his gratitude towards the establishment of Gleneagles Kota Kinabalu as it contributed towards the development of medical tourism in the state. Masidi commented not only that the people of Sabah no longer have to endure the travel to KL or overseas for medical treatment, the city of KK can now attract foreign visitors to the state to seek medical treatment. When opened in 2015, Gleneagles Kota Kinabalu will have a starting capacity of 130 beds and 80 doctors’ suites. Key facilities include 24 hours Accident & Emergency Department with Trauma and Intensive Care Centre and Cardiac Cath Lab.

Datuk Seri Masidi Manjun and Datuk Khairil Anuar starting the topping of concrete cement, witnessed by Dr Tan See Leng

Important guest and delegates, local and international

/// Feature Property Launch

Riverson Walk Showcased Ultra Modern Lifestyle Mall

iverson Corporation recently held a ceremony to showcase their lifestyle boutique shopping mall, the Riverson Walk. The development is located on a 5.5-acre of land along the coastal highway in the new KK Southern City Hub. According to its managing director Ben Kong, this will be the first mix integrated commercial development that combines a medical centre, shopping mall, office blocks and SoHo units. The brainchild of Kong, the idea of Riverson was conceived three years ago, but with an ultramodern design in mind to cater to the future generation. Expected to be fully completed in 2015, the Riverson Walk will be the first of its kind in Malaysia. The business model of this lifestyle boutique mall aims to target both the weekday and weekend crowd to fully benefit businesses and tenants. The 400 to 500 sq ft shops are designed to be manageable and easier for startup businesses by young entrepreneurs. The design concept is similar to popular shopping malls in Thailand which are occupied by smaller and unique outlets.

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/// FEATURE PROPERTY LAUNCH

To give customers a unique and pleasurable experience, each floor is designed differently. The ground floor has an oriental zen concept, the first floor has a middle eastern theme, and the second floor is more continental. The design concepts stretches all the way to the toilets which cost around RM500,000 each. Kong said, â&#x20AC;&#x153;Riverson is not a normal development, and we are proud to have created many firsts. This is a truly Sabahan project. This will be the only fully Sabahan development in the whole KK city centre strip. Even our building design and interior design is done by Sabahans.â&#x20AC;? Guests at the launch were able to learn more about the up and coming development, plus also take a site tour and enjoy jazz performances and fine dining food. Award-winning feng shui master from Kuala Lumpur Kenny Hoo also shared some light on the progress of this year including the property market. According to him, the property market will be more stable from July 2014 onwards, and he advised people to purchase properties this year as the prices will definitely go up but he said that people need to be choosy with their investment. Hoo also mentioned that particular good investments would be in seafront properties or properties with prominent water features.

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/// Feature Property Event

/// FEATURE PROPERTY EVENT

SHAREDA Property Hunter Expo Returns to Sandakan for the Third Year

he flagship SHAREDA Property Hunter Expo (SHAREDA PH Expo) returns to Sandakan for the second year. This event will be held from 11 to 13 April 2014 (10:00am to 8:00pm) at the Yu Yuan Secondary School Function Hall.

This free-to-attend exhibition is jointly organized by the Sabah Housing and Real Estate Developers Association (SHAREDA) and renowned property exhibition organizer Maxx Media (S) Sdn Bhd. It will feature over 56 booths consisting of both local and international developers, property agents and banks. The opening ceremony was graced by YB Datuk Au Kam Wah ADUN N45 ELOPURA. In his welcoming speech he said that the SHAREDA PH Expo will unite property developers, investors and home buyers under one roof to cater to the ever growing need and demand in property especially affordable homes. He said, â&#x20AC;&#x153;Since the Eighth Malaysia Plan, the government has spent RM5.46 billion to build affordable homes for the people. In order for the plan to materialize, there will be implementation in the next five years based on several housing schemes, including the MyHome, PPR for civil servants and those on the low and moderate income brackets.â&#x20AC;?

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“I would like to encourage more local developers to commit to building affordable homes as a means of fulfilling its corporate social responsibility rather than profit motivated, despite marketing risk being a constant issue in such projects,” he added. Over 20 developers and property agents will be showcasing more than 30 of the most anticipated projects from the United Kingdom (UK), Australia, Singapore and Malaysia. Top developers that will be highlighting properties in Malaysia include the Mah Sing Group, Hap Seng Properties Development, IOI Properties Berhad, Reapfield Properties, Kuala Lumpur Metro Group, Bandar Utama Development, Selangor Dredging Berhad (Properties) and many more. Sabahan developers include Wah Mie Group, Remajaya, Grand Merdeka Development, Sara Timur Realty and others. Plus, first time participant Jalin Realty will be featuring Zone 1 to Zone 6 apartments and student accommodations in the UK, plus apartments and landed homes in Sydney, Melbourne and Brisbane, Australia. According to Maxx Media Director Michael Hiew, “We feel very honoured to be able to work with SHAREDA again on this exhibition. It is our vision to bring a variety of quality property projects from both local and overseas to the people of Sandakan. As seen in our earlier expo in KK, we believe that the demand for quality properties is still high for both homebuyers and investors, which is why we are selective in bringing our exhibitors to ensure we meet the buyers’ expectation.” To further create awareness about the current property market scene, free copies of the Property Hunter magazine will be given away. Plus, visitors will also have a chance to enter the Visit and Win contest sponsored by Acer Malaysia. Three lucky winners will walk away with an Acer Smartphone each. Buyers who make purchases during the three-day event will be able to redeem vouchers from Louis Pang Studio worth RM800, for properties under RM500,000 and RM1080, for properties above RM500,000. The SHAREDA PH Expo is an annual Business-to-Consumer (B2C) event that aims to bring investors and home buyers to property developers with the ever growing demand in premium property. For more information, visit www.propertyhunter.com.my.

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/// Feature Property Event

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/// West Malaysia Property News

WEST MALAYSIA PROPERTY NEWS

Sharing news and information about various issues related to the property industry from Peninsular Malaysia.

SDB, Mah Sing Keen on Sungai Buloh SOVO units and serviced apartments. But on the basis of size, the 6.55-acre D’Sara Sentral is larger than the 4.8-acre SqWhere.

SDB at a roadshow event Sg Buloh’s property market has attracted the likes of Mah Sing Group and Selangor Dredging Bhd (SDB) thanks to its upcoming MRT line and the Employees Provident Fund’s plan to develop over 2,330 acres of former Rubber Research Institute (RRI) land. In fact, Mah Sing has recently unveiled the D’Sara Sentral, a mixed commercial project with a gross development value (GDV) of about RM900 million, while SDB launched a RM630 million mixed commercial development known as SqWhere. In terms of similarities, both projects are located near the upcoming Kg Baru Sungai Buloh MRT station, which is presently being constructed on Jalan Welfare’s opposite sides. They also offer similar components such as retail shops, small offices,

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In terms of prices, retail units at SqWhere were sold at RM825 psf, while that in D’Sara Sentral were purchased at RM950 psf. The former’s SOVO units cost RM750 psf, while Mah Sing’s is cheaper at RM650 psf. “Buyers are paying PJ prices for a Sg Buloh location. It shows they are confident in the branding and the reputation of the company when they pay that kind of prices to buy into that location,” said Kim Realty CEO Vincent Ng, adding the both projects are leasehold. “It also shows that they are still very positive about the property sector and are attracted by all that talk about the Sg Buloh growth potential,” he noted. Meanwhile, the RRI land is expected to 10 to 20 years to develop, but EPF’s subsidiary Kwasa Land is currently holding the tender process for its 64-acre town centre.

Mah Sing Acquires Shah Alam Site for RM327 Million detached, linked semi-detached, super link, bungalow and serviced apartments.

Mah Sing’s group managing director cum group CEO Tan Sri Leong Hoy Kum Mah Sing Group has acquired an 85.43acre site from Great Doctrine (M) Sdn Bhd for RM327 million. Offered on a 99-year lease, the property is located in the Sultan Salahuddin Abdul Aziz Shah golf course in Shah Alam and was sold for RM88 psf. According to Starproperty, Mah Sing plans to turn the land into an eco-themed residential development, with a gross development value of RM2.5 billion. Set to be launched in 2016, the development will feature a mix of both landed and high-rise residences, including semi-

“The land is situated in the most matured part of Shah Alam, and the location is commonly known as the Damansara Heights of Shah Alam. This is undulating golf course land, and we will create a hybrid of our high-end Lagenda and medium high-end Residence series of properties,” said its group managing director cum group CEO Tan Sri Leong Hoy Kum. Leong noted that the price agreed upon was a fair value given the favourable payment terms. Notably, 10 percent of the total consideration was paid by Mah Sing upon the signing of the sale and purchase agreement on Wednesday. The rest will be paid in one bullet payment either 30 months from the agreement date or six months from fulfilment of conditions precedent, whichever is later. An automatic extension of two months will also be granted by the vendor.

Buyers Still on the Lookout for Klang Valley Properties

Malaysia Has Highest Household Debt in Asia

Driven by a buying spree of houses and cars, Malaysia’s household debt has climbed to 86.8 percent of GDP, which is the highest in Asia..

Malaysian property buyers are still on the lookout for affordable to luxury homes in the Klang Valley despite the government’s property cooling measures. A survey conducted by the Real Estate and Housing Developers’ Association Malaysia (REHDA) showed that 51 percent of the 1,800 respondents are looking for properties within Selangor, targeting areas like Puchong, PetalingDamansara, Kajang / Bangi, Rawang / Gombak and Shah Alam. At least 35 percent indicated that they are keen to acquire houses in Kuala Lumpur, particularly in Wangsa Maju, Cheras, Bangsar and Kepong / Selayang. Majority of respondents prefer landed properties, with terraced houses emerging as the popular choice; 34 percent are aiming for semi-detached homes, while 12 percent are eyeing bungalows. For strata title properties, 24 percent prefer serviced apartments, 25 percent wants to stay in apartments and 39 percent chose condominiums.

priced from RM301,000 to RM500,000, while 27 percent said they can afford properties priced between RM501,000 and RM1 million. The survey also found that these potential buyers are searching for properties that offer good facilities such as schools, commercial centres, hospital and accessibility, like proximity to highways, LRT / MRT stations, pedestrian walks and public buses. “Pricing comes third for the respondents. People today are more conscious about connectivity and facilities. What we need is more supply of homes or they would remain unaffordable for certain households,” noted REHDA national treasurer Datuk N.K. Tong after a briefing at the Malaysia Property Expo (MAPEX) 2014.

“The ratio of household debtto-GDP is expected to remain elevated over the next few years as demand for credit is likely to remain strong, particularly from the relatively young labour force and more affluent population in urban centres,” said Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz who was quoted in the media. From 2003 to 2013, Malaysia’s household debt increased by 12.7 percent annually to reach 86.8 percent of GDP, while total household assets grew at a slower pace of 10.4 percent annually to 321.6 percent of GDP by 2013. Nevertheless, household assets are set to surpass debt levels by 3.7 times largely due to rising household income, which has encouraged asset accumulation.

As a result, the central bank will continuously monitor the situation and will implement measures to curb the growth of household debt when necessary. But for now, lending to Malaysian households remains stable despite the high GDP-to-household-debt ratio. “Household loans from the banking system continue to improve in quality across all loan segments, with delinquencies remaining low and continuing to trend downwards. This has been supported by sustained improvements in the lending and risk management practices of banks,” added Zeti. Furthermore, the debt servicing capacity of Malaysian families remains intact due to favourable employment and income conditions, while aggregate household borrowings in 2013 grew at its slowest pace of 11.7 percent since 2010.

However, the high household debt is worrying and poses a risk to Malaysia’s economic health. People who may have over-borrowed are also vulnerable to adverse financial shocks.

In terms of pricing, 41 percent indicated that they are looking for landed and strata title properties

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MRT Project to Boost Kajang Property Prices

Copy Penang’s Low-Cost Home Ownership Scheme, Guan Eng Tells Putrajaya increasing their chances to qualify for loans to cover the remaining 70 per cent.

The upcoming Sungai BulohKajang Mass Rapid Transit (MRT) line is expected to boost property prices in Kajang, according to Deputy Chief Minister Datuk Ahmad Maslan.. The last station of the MRT line, Kajang’s business activity is also expected to be enhanced by the availability of better rail, bus and taxi connectivity, he said during a working visit to the MRT project in Jalan Reko, Kajang.

to travel conveniently and safely to destinations in the Klang Valley minus the hassle of traffic jams. Set to be completed in July 2017, the high-capacity MRT project was announced by Prime Minister Datuk Seri Najib Tun Razak during the tabling of 2011 Budget on 25 October 2010. “The MRT is also expected to raise public transport ridership to at least 40 percent,” added Ahmad.

Malaysia’s most modern transport mode will allow Kajang residents

Errant Housing Developers Face Stiffer Penalties, Blacklist, From June 2014 She added that errant developers would also face stiffer penalties if they were hauled to court and convicted. The ceiling for fines will also be increased to RM500,000 from RM200,000 previously. Housing developers who abandon their projects will be blacklisted and subjected to stiffer penalties when amendments to the Housing Development (Control and Licensing) Act 1966 come into force in June. “Once blacklisted, the developer and company’s board of directors will not be able to apply or renew their advertising permit and sales license,” Deputy Urban Well-being, Housing and Local Government Minister Datuk Halimah Mohd Sadique said when answering a question raised by Gobind Singh Deo (DAP-Puchong) in Parliament.

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Halimah said the names of blacklisted developers would also be published on the Ministry’s website. Earlier, Halimah informed lawmakers that from 2009 to Feb 28 this year, the Ministry had declared 206 housing projects as abandoned. Of this, she added, a total 149 projects were revived, with 22,868 homes built. Halimah also said the Act only applied in the Peninsula, but she would propose to the Cabinet for the law to be enforceable nationwide.

Putrajaya should adopt the Penang’s Shared Ownership Scheme (SOS) and provide interest-free loans to help lower income groups afford low cost homes, Penang Chief Minister Lim Guan Eng said. He said inflationary pressure has made it virtually impossible for Malaysians who earn RM3,000 or less to afford buying their own homes, especially with the sluggish growth in wages. “With such high rates of outstanding borrowings that is 7 times their annual incomes, it is difficult if not impossible for lower-income groups to get approvals of housing loans from banks or financial institutions,” he said in a statement. “For this reason the Penang state government has introduced the Shared Ownership Scheme (SOS) for low-cost houses to help lowerincome groups,” Lim added. The DAP secretarygeneral explained that under Penang’s SOS, the state government hands out loans of up to 30 per cent of the property price and interest to those who qualify, greatly

Lim noted that those in the lower income bracket are already under pressure to keep up with the rising cost of living, having borrowed RM230.2 billion worth in household debt or 27 per cent of the RM854.3 billion in total household borrowings last year. “Bank Negara should realise that the reason for is that our income levels are stuck in a ‘glacial trap’ with inflation outpacing wage rises. “This has forced many households to rely on credit loans to make ends meet and even resort to loan sharks when they are unable to get loans from financial institutions,” he said. He slammed the central bank as being “short-sighted and uncaring at best” for allowing household debt levels to hit an all-time high of 86.6 per cent of Malaysia’s gross domestic product (GDP) and for dismissing it as not having any effect on the nation’s financial stability. The increase in household debt is a strong enough reason for Bank Negara to reinstate the recently outlawed Developer

Interest Bearing Scheme (DIBS) to enable individuals to own their first home. “There have been many complaints of banks not approving housing loans to lower-income groups because of their low repayment ability. “For the sake of housing democracy, DAP urges Bank Negara to introduce a SOS for affordable homes and public housing to help firsttime buyers qualify for loans to buy their own homes,” he said. Last year when unveiling his 2014 Budget, Prime Minister Datuk Seri Najib Razak announced that the DIBS would be banned to clamp down on property speculation and the rapid rise in property prices in the country. Under the scheme, developers incorporate interest rates on loans in house prices during the construction period, relieving housebuyers of the need to make progressive payments in exchange for higher property prices. Najib also increased the rate of real property gains tax (RPGT) to 30 per cent for properties sold within the first three years of purchase, tapering off to 20 per cent in the fourth year and 15 per cent in the fifth year, in a bid to further rein in rampant speculation.

Mah Sing Eyes Bigger Affordable Housing Stake Its 480 acres in Rawang will offer mostly link houses priced from RM400,000; phase one of Southville@KL South on 428 acres in Bangi will comprise mainly affordable apartments priced from RM338,000; and the 1,352 acres in Bandar Meridin East will have mostly affordably priced linked houses.

Mah Sing’s group managing director cum group CEO Tan Sri Leong Hoy Kum Mah Sing Group Bhd’s landbanking strategy of locking in large tracts of township land is sharpening the developer’s competitive edge to carve a bigger market share in the affordable housing sector. Following the Government’s market cooling measures that also involved the tightening of bank lending guidelines, the mid-end property market looks likely to make up the bulk of new house purchases going forward. Mah Sing group managing director cum group chief executive Tan Sri Leong Hoy Kum said that for 2014, 81% of the company’s target residential launches would comprise mainly mass to mid-segment products priced at RM700,000 and below. The company has a remaining landbank of 2,818 acres worth a gross development value (GDV) of RM26.82bil. It is targeting to improve sales by 20% from the 2013 level of RM3bil. Mah Sing will be one of the biggest exhibitors at this year’s Starproperty Fair to be held at Setia City Convention Centre in Shah Alam from May 30- June 1, in Penang at Gurney Plaza from July 24-27, in Petaling Jaya at Tropicana City Mall from Oct 17-19, and also at the Kuala Lumpur Convention Centre from Nov 21-23. “Our projects are targeted at buyers who buy for own use or for long-term rental income. Hence the take-up rate of our projects has not been much impacted,” Leong said.

Leong said several research houses concurred that property demand might improve this year due to the impending implementation of the goods and service tax (GST) in April 2015. “Buyers are expected to take advantage of the current accommodative interest rate regime given the experience in other countries where buyers purchased properties in anticipation of future cost-push inflation on asset prices,” he added. Although Mah Sing has shifted its focus to mass-market products to cater to the average buyers, it is still maintaining some higher-end products in selected locations. These include One Legenda in Cheras comprising 3-storey bungalows, Aspen in Cyberjaya within a resort environment, M City in the heart of Kuala Lumpur, Icon City, and Icon Residence. Leong said key projects by Mah Sing this year included The Meridin@Medini in Iskandar Malaysia, Johor, an 8.19-acre integrated development comprising the Meridin Linx SoVo, Meridin Exchange Corporate Towers, Meridin Walk Lifestyle Retail and Office Tower and a Wellness Residential Enclave, with a total GDV of RM1.1 billion. In the second and final phase of the project, there will be affordable small sized commercial units, the Meridin Suites and Meridin Sovo. Also in Johor, the RM5 billion Bandar Meridin East is a proposed 1,352 acre-integrated township within the vicinity of Masai-Pasir Gudang-Tg Langsat eastern growth corridor.

In the Klang Valley, Southville City@KL South in Bangi is expected to see strong demand for its 2½-storey linked houses with built-up of 2,650 sq ft priced from RM860,000. Meanwhile, Star Residence, an integrated project in Subang Bestari, is a purpose built development comprising serviced apartments and shops. In the first phase, serviced apartments from 682 sq ft, indicatively priced from RM307,800, will cater to buyers working in Subang Airport and the nearby business parks. Lakeville Residence in Taman Wahyu, Kepong, offers serviced residences with indicative built-up from 950 sq ft, 1,200 sq ft and above. The residential units have indicative price from RM668,800. The other projects include M Residence 3 in Rawang and D’Sara Sentral in Sungai Buloh\. In Penang, Ferringhi Residence in Batu Ferringhi is preparing to launch phase two to keep up with spill over demand from phase one resort condo villas and to benefit from the proposed Teluk Bahang-Tanjung Bungah new paired road. In Southbay City, the largest phase on 34.5 acres of the massive Southbay township will feature integrated commercial and lifestyle developments made up of a mixture of residential suites, office suites, Grade A offices, retail outlets, hotel and resort, and other recreational attractions. Another project in Penang is The Loft, located about 1km from the second Penang bridge, consisting of two towers housing 78 serviced residences on each block. The luxury residential suites have built-up of 1,378 sq ft to 1,680 sq ft. In Sabah, KK Convention City along the coastal highway will comprise a luxury hotel, office towers, shop offices, lifestyle retail, a business hotel and serviced residences.

AirAsia to Remain in LCCT Until KLIA2 Issues Are Solved

Despite warnings that the LCCT in Sepang will be closed on 9 May, AirAsia and AirAsia X have refused to transfer to KLIA2 due to existing safety and security problems at the new air terminal built specifically for low-cost airlines. “The move to KLIA2 is imminent. However, it will only be carried out after all issues are addressed,” said AirAsia Bhd CEO Aireen Omar. Citing Ikram Premier Consulting’s report, the company pointed out that there are depressions on KLIA2’s runway and taxiway/ apron, which would need periodic remedial measures. “This will prove to be operationally disruptive to a hub airline such as AirAsia Group which has about 400 aircraft movements in a day and at least 70 aircraft in its fleet in the LCCT,” said AirAsia. “Last year alone, the group carried 22 million passengers via LCCT. We believe it is crucial to ensure that whole remedial steps are undertaken prior to a transfer, which will mitigate risks relating to any potential aviation incidents.. Moreover, AirAsia wants to ensure that its clients will always have a smooth journey, free from hassles that might stem from such measures undertaken by KLIA2’s management, Aireen added. According to The Star, this poses a headache for government officials, given that AirAsia group is supposed to be the major tenant at KLIA2, accounting for over 80 percent of the traffic at the new airport, which is set to open on 2 May. Deputy Transport Minister Datuk Aziz Kaprawi also hoped that AirAsia and AirAsia X will join four other carriers Malindo Air, Cebu Airlines, Tiger Airways and Mandala Airlines in the move to KLIA2. In response to AirAsia’s refusal to transfer to KLIA2, representatives from the carrier will be summoned and given an opportunity to clear the air over the issues, said Parliament Accounts Committee (PAC) Chairman Datuk Nur Jazlan Mohamed.

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The Raise of the High-Rise

ecently I’ve been reading in several magazines and articles, all property market related, a number of experts explaining why the Malaysian Property market has to be looked at as a market with positive and sustainable outlook. Most of the thousands words can be summarized in few very good and “sustainable” points: 1.

Dr. Daniele Gambero

Compared to most of the “advanced economies” Malaysia is performing well and with still room for improvement. In the region comes right after Singapore. For this reason is definitely attracting a large part of the huge liquidity that from West (Europe and US) is moving East. USA

JAPAN

AUSTRALIA

MALAYSIA

CEO and co-founder of REI Group of Companies

GDP Growth

2.10%

-0.90%

0.90%

0.55%

0.63%

4.70%

Gov debt as % of GDP

101.60%

90.60%

218%

21%

92%

54.80%

Dr. Daniele Gambero is the CEO of strategic marketing consultancy firm REI Group of Companies. He holds an MBA from L. Bocconi University in Milan-Italy, Master in Communication from the University of Michigan Ann Arbour MI – USA, Ph.D in Marketing Strategies and Communication from L. Bocconi University and University of Michigan.

Gov deficit as % of GDP

-8.50%

-3.7%

-9.2%

-3.1%

-6.3%

-4%

-440 USD Bill

25.9 USD Bill

60 USD Bill

-57 USD Bill

-93.5 USD Bill

18.6 USD Bill

With his vast experience in strategic marketing consultancies, investment studies, researches, property market reports and business valuation globally, the REI Group of Companies helps Malaysian developers with business solutions relating to design, concept, strategic marketing and pricing, advertising and marketing and sale procedures for their residential, commercial and industrial projects since 2007. Dr. Gambero’s lectures attract large crowds due to his lively presentation of serious topics with deep insight into the Malaysian Property market since 2011.

Balance of current acc inflation

1.5%

1.10%

2.20%

2.70%

2.50%

Unemployment

7.20%

12%

4.10%

5.60%

7.70%

3.10%

Business confidence

-1

115.2

Consumer confidence

-14

45.2

108

-18

125.3

Raising purchasing power of GenY looking forward to own a house first and invest later. This means medium-long term market stability or, in other words, there is a medium-long term demand that has a consistently raising trend.

Malaysia is strategically located in the region

The Malaysian Government has a medium-long term Economic Transformation Plan which covers all the different layers of the Malaysian society. The final aim of the ETP is to bring Malaysia to the “Fully Developed Country” by or before the year 2020. All the economic and social indicators are showing this as an achievable target.

The stable economic panorama combined with a positive outlook will surely increase the already good incoming flow of FDI (i.e. Iskandar Malaysia alone has been reaching RM133.07Bilof committed investment with more than 50% already realized. Kuala Lumpur and Grater KL, Penang, Malacca, Ipoh and Sabah are also, in different ways attracting huge numbers of local and oversea investors. Kuala Lumpur and Greater KL for the big undergoing investment in infrastructures and in Building up the image of “world class” business destination (TRX, City of Malaysia, PJ Sentral, KL Eco City, KL Sentral and many more mega project are proceeding well and obtaining the due attention from international investors). Malacca, Penang, Ipoh and Sabah are, each of them in a different and very personalized ways, commanding serious and committed investors’ attention by presenting different interpretation of “tourism industry” (Malacca has start branding itself as alternative to Penang as Heritage and a very attractive shopping destination, Sabah with unpolluted deep sea diving and the untouched nature lovers destinations, Penang and Ipoh proposing a different way of spelling retirement homes and medical holiday).

GenY and the Malaysian Demographics While the author makes reasonable efforts to present information which he believes to be reliable, the author makes no representation that the information or opinions contained in this article is accurate and complete. Readers are advised to seek specific professional advice before acting on the views.

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A stable growth of the average income added to the “multiple incomes” mind-set of the Malaysian GenY is going to build a stable and long term foundation for a strong and consistent demand of properties priced 250k to 750k. This trend will guarantee a prompt take-up of properties in the range as above which are representing the backbone of a healthy property market.

PER CAPITA INCOME STATISTICS GDP per Capita at current prices State

2009

2010

2011

2012

Kuala Lumpur

57,040

62,075

68,072

73,931

Sarawak

31,286

34,136

39,324

Penang

30,098

33,601

35,188

Selangor

28,468

31,457

Malacca

25,397

28,328

N. Sembilan

25,595

Pahang

State by state population in 2012

2012 % on Malaysia population

GDP @ const prices 2012

RM Billion

1,768680

5.90

114,106

40,414

2,601000

8.68

71,874

37,006

1,664640

5.56

52,530

33,727

36,135

5,826240

19.44

176,239

31,093

33,550

832,320

2.78

21,953

28,586

31,295

32,511

1,040400

3.47

27,717

20,548

23,008

26,066

26,197

1,560600

5.21

30,750

Johor

18,878

21,329

23,593

24,574

3,537360

11.81

68,791

Terengganu

19,102

20,581

22,220

22,733

1,144440

3.82

19,627

Perak

15,809

17,341

19,362

20,569

2,496960

8.33

39,627

Sabah

15,515

17,118

19,038

19,010

3,537360

11.81

44,434

Perlis

15,186

16,175

16,992

18,119

208,080

0.69

3,535

Kedah

12,481

13,744

15,388

15,814

2,080800

6.94

25,307

Kelantan

8,421

9,322

10,366

10,617

1,664640

5.56

13,461

State

State by state (est) population in 2012

It is clearly visible that the greatest increment is going to happen for the third age group (50 years and above) mostly because of the “extended” life expectation. This phenomenon will substantially increase the demand of affordable houses in the market and propel for another good 8 or more years the Property Industry. Few are the decision factors that will contribute to change the current “die die must buy landed” into a more open mind toward high rise: •

2012 PER CAPITA INCOME STATISTICS GDP 2012 @ const prices

The table below indicates the growth of the Malaysian demographics projected 30 years from now (values are expressed by ,000).

GDP 2012 per Capita at current prices

2012

Yearly

Monthly

35% of monthly income = Loan repayment

RM Billion

Affordable house value (30 yrs loan @ BLR-2.3 4.4%) Per capita

Per household

Kuala Lumpur

1,718680

114,106

73.931

6,161

2,156.32

480,000

720,000

Sarawak

2,501000

71,874

40,414

3.368

1,178.74

260,000

390,000

Penang

1,654640

52,530

37,006

3,084

1,079.34

240,000

360,000

Selangor

5,626240

176,239

36,135

3,011

1,053.94

240,000

360,000

Malacca

832,320

21,953

33,550

2,796

978.54

220,000

330,000

N. Sembilan

1,040400

27,717

32,511

2,709

948.24

220,000

330,000

Pahang

1,560600

30,750

26,197

2,183

764.08

165,000

247,500

Johor

3,337360

68,791

24,574

2,048

716.74

160,000

240,000

Terengganu

1,144440

19,627

22,733

1,894

663.05

145,000

217,500

Perak

2,396960

39,627

20,569

1,714

599.93

135,000

202,500

Sabah

3,437360

44,434

19,010

1,584

554.46

125,000

187,500

Perlis

208,080

3,535

18,119

1,510

528.47

120,000

180,000

Kedah

2,080800

25,307

15,814

1,318

461.24

105,000

157,500

Kelantan

1,654640

13,461

10,617

885

309.66

70,000

105,000

•

The first will be played by the future purchasers, today’s Gen Y, who are more and more looking for high-rise building as this will allow them to live not too far away from the working place and are …. very much trendy. High-rise, even though high density, really don’t mind as it is more in line with a “Smart City” / “Green City” concept that most of the Gen Y are liking so much (it really makes sense by the way). Dual-key concept, recently launched in the market is helping in push more and more buyers towards high-rise buildings as they look into this new concept as a nice way to guest the “old folks” with you but in an independent and “private” way.

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/// Contributor

Below are two pictures representing a sad but true situation in the Malaysian past housing trend, when… “diedie must be landed”.

I do not think these images need any comment as are already showing quite clearly where we are heading unless the new vertical trend will start becoming, as it appears it is, predominant in the market.

Type of Product and Where, the New Trend and the New Hot Spot It all comes to wallet size and depth. What I mean is, let’s have a look at where most of the future purchasers will go and what they will be looking for. We have already said it above: the future is high-rise. Let me just add that a good mix of medium and high will most probably be the future scenario in the market. Where to buy is directly determined by the budget you have but, if you want to listen to a bit of wise advise, I would buy in areas with future development and not in fully developed and mature areas. This will surely allow finding more affordable values, wider choice, very good ROI and attractive capital gain. Have a look at what happened in Puchong and what is happening in Serdang, Seri Kembangan, Kajang, Bangi and Seremban just to mention few. Not later than 5 years ago you could still find properties at less than RM200.00 psf in all the areas above while today values are all above the RM350.00 psf up to a whopping RM600.00/800.00 psf of the more “exclusive” Puchong or Seri Kembangan. Moving towards these areas will also allow an “easier” search as offer is much more diversified and, talking about ease of renting, no comparison can be logically done between these areas and the more glamorous and famous, established and high end enclaves of Klang Valley and Kuala Lumpur. As a confirmation of this future trend you can compare the Malaysian National Wealth distribution in 1984 and 2012 (see the tables above and below). As you can easily see a good 60% of the Malaysian population will soon be able to afford houses priced between RM350,000.00 and RM600,000.00 that in the areas above will be equivalent to 850 to 1,200 square feet with 2 or 3 bedrooms.

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/// West Malaysia Property News

Penthouse Prices in KL Hit Record Levels

Secondary Property to Be Cheaper Says, Property Agents property sector, it is often overlooked and prices of secondary properties have remained stable throughout the years without any extreme fluctuations.

Property Hunter Expo, secondary market listings

Banyan Tree in Kuala Lumpur Penthouse prices in Kuala Lumpur have hit record levels, with the latest unit carrying a price tag of RM38 million or around RM3,200 psf. This 11,984 sq ft penthouse can be found at Four Seasons Place Kuala Lumpur. There are two such units, and the owner intends to keep one while the other is being sold to an Asian investor. Notably, market watchers are waiting to see if such price can be matched or surpassed by the next project in Kuala Lumpur. According to Foo Gee Jen, C.H. Williams Talhar & Wong’s managing director, it could take three to five years or even longer for Kuala Lumpur to see a project offer penthouses priced above RM38 million. Nonetheless, a number of luxury projects have emerged in Kuala Lumpur, such as Harrods Hotel & Residences, which is being jointly developed by Tradewinds Corp Bhd and Qatar Holding LLC, and Banyan Tree Residences developed by Pavilion Kuala Lumpur and Banyan Tree Holdings.

Foo revealed that the builtup areas in these projects range between 4,000 sq ft and 6,000 sq ft. While they are smaller compared to that in Four Seasons Place’s, the units at the two projects carry higher psf prices. “Banyan Tree and Harrods are selling their penthouses at more than RM3,300 psf. With different services and finishings, it is possible for the price to hit RM4,000 psf. We will have to wait and see if any developer can match that,” noted Foo. Assuming an average price of RM3,300 psf, the penthouses at Harrods and Banyan Tree will cost from RM14 million to RM21 million each. At RM4,000 psf, the penthouses will cost between RM16 million and RM24 million.

Tighter borrowing rules and the government’s curbs on property speculation is set to cause an influx into the secondary home market and lower prices, said the Malaysian Institute of Estate Agents (MIEA).. According to the Penang chapter of the property agents body, prices in the secondary market previously owned houses in matured locations and established residential areas could fall by as much as 15 per cent. “This year, we will see an emerging market of properties being put up for sale by investors who had been buying up new properties under the Developers Interest Bearing Scheme (DIBS) in 2011,” said MIEA Penang committee member Michael Geh in a press conference. Referring to these properties as “post-DIBS properties”, Geh said these units will probably make up 30 per cent of the secondary market in the property sector. DIBS is a structure under which developers paid for interest payments prior to the completion of the property. It will be discontinued as part of measures announced in Budget 2014. There are two main drivers of the property

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sector: the primary market, which are new property launches by developers with only 30 per cent market share, and the secondary market with 70 per cent market share. With the influx of post-DIBS properties from investors anxious to dispose of their investments, Geh said this will increase the number of units up for sale in the secondary market. Coupled with the tightening credit regulations making it harder for home buyers to get housing loans, he said the prices of these secondary properties will drop by about 15 per cent compared to last year. Paradoxically, cheaper housing need not mean an increase in transactions. “We also expect to see a decrease of transactions by 15 per cent for the first half of this year due to the credit restrictions in which home buyers couldn’t get loans to purchase homes,” he said. This year, the secondary market in Penang is expected to offer up to 20,000 units of housing within a price range of RM50,000 and RM3 million per unit. Though the market is the main driving force of the

Geh, in announcing an upcoming Malaysian Secondary Property Exhibition (MASPEX) Penang 2014, said the supply of secondary properties is between 14,000 to 20,000 units each year with an 80 per cent sales rate. “The property sector has been on a slow downward slide in the past one and a half years and we are now in the midst of the slow downturn,” he said. This is evidenced by the secondary property transactions, which decreased in the last three years. In 2012, a total 15,964 unit worth a total RM5.26 billion were transacted which was lower than in 2011, where a total 16,939 units worth a total RM4.9 billion were sold. “Last year, between January and June, a total 7,087 secondary property units worth a total RM2.63 billion, were sold,” Geh revealed, saying this could mean the whole 2013 transactions of the secondary market could be around 14,000 units, lower than in 2012. Geh said many home buyers overlooked the secondary market and are often drawn into checking out the primary market only to turn away disappointed as many new project launches are above affordable range.

Mega Tourism Projects: Key to Langkawi’s Bright Future

The mega tourism projects in Langkawi by big ticket companies is a testament that Langkawi is capable of competing with the likes of Indonesia’s Bali and Phuket in Thailand, according to The Business Times. Major companies making a beeline for the ‘Isle of Legends’ include Khazanah Nasional, Indonesian conglomerate PT Rajawali Corp and hotel management group Starwood Hotels & Resorts. But Tradewinds Corp Bhd’s (TCB) upped the ante with its RM4 billion Perdana Quay project on the island. This mammoth development is touted as the game changer that will do more than simply put Langkawi on the map. “It will be a giant magnet pulling visitors from all over the world to its endless array of worldclass attractions and venues,” said TCB Group CEO Shaharul Farez Hassan. Targeting well-off travellers who are seeking ecological and natureoriented getaways, Perdana Quay is hailed as Langkawi’s first-ever integrated leisure, retail, residential and commercial development.

The mega project also complements the Tourism Department’s ‘Naturally Langkawi’ tagline, which is being used by the government to promote the island’s many attractions such as marine parks, pristine beaches, birdwatching, jungle-trekking, mangroves teeming with wildlife and a geopark endorsed by UNESCO. In addition, one of Perdana Qua’s components is the The Burau Langkawi, a new swanky resort with a whooping price tag of RM420 million. Expected to open by end-2017, it comprises 60 luxury villas and 245 deluxe rooms. Given Tradewinds’ massive investment in Langkawi, Prime Minister Datuk Seri Najib Razak is bullish that the island will attract three million tourists each year. Apart from creating 4,200 new jobs for Malaysians, the influx of visitors is also expected to inject RM3.8 billion in the economy.

Residential Property Supply to Exceed Demand in KL, Selangor, Penang and Johor

Country Garden maiden project in Iskandar, showcasing 9000 units of residences The supply of residential properties in Malaysia for 2014 is expected to be more than that seen in 2013, driven by the rush to meet demand before the upcoming goods and services tax (GST) takes effect. PropertyGuru Malaysia Country manager Gerard Kho highlighted this to The Borneo Post, adding that excess supply will incure the same response in buying trend whereby buyers will rush to purchase residential properties before prices escalate beyond income growth level. “Cooling measures by Bank Negara Malaysia (BNM) is needed to avoid the aggressive rush that could affect us more. “Implementation of RM1 million threshold for foreign investor also help to push sales of high-end properties that may not affect the mass market or first-time home buyer,” Kho said He also noted that the buying power of residential properties in Malaysia will potentially slow down due to the tightening of BNM regulation on loans. “However, interest to purchase of homes is on an increasing trend due to the awareness of home pricing

which may rise in line with cost of living that will impact city folks significantly,” Kho pointed out. Meanwhile, on the current buying trend of residential properties in Malaysia, the country manager commented that the buying trend is “looking good” especially in urban city centre areas such as KL, Selangor, Penang and Johor, which is in the rapidly developing Iskandar area. “We have seen consistent strong search of properties in these areas from our portal. Search of apartment/condominium and terrace/link house seem to be on the rise compared to semidetached units and other high value properties.

Kho revealed that in KL, house price index rose dramatically, with nominal prices up by 14.4 per cent as an average price of a house is currently at RM650,000. This was followed by Selangor, of which house prices average at RM400,000 according to the Valuation and Property Services Department (JPPH), he explained. Kho also noted that house prices have surged in Johor (20.4 per cent), Pulau Pinang (14.3 per cent), and Negeri Sembilan (6.3 per cent).

“It is obvious that midrange properties will be in demand due to the market demand from mid-income market segment,” he explained. As for house prices in Malaysia, Kho pointed out that prices are still surging, despite anti-speculation measures. “In the third quarter of 2013 (3Q13), Malaysia’s national house price index rose by 10.1 per cent year-on-year. It was only slightly lower compared with 2012 which was 11.9 per cent,” he said.

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/// Contributor

Chris Tan

Lawyer Specialising in Real Estate Chris Tan is the founder and now Managing Partner of Chur Associates, a boutique legal practice that thrives in delivering business friendly solutions for its clients and having a niche positioning of ‘Everything Real Estate’ serving the entire value chain from the upstream to the downstream. Chur Associates is a boutique legal firm founded in 2004, specialising in designing legal solutions catered to our clients’ needs. Chur Associates’s brand promise is “We Deliver!” To that end, they offer clientsthe necessary means and methods to ensure their requirements are met. You can get in touch with him at Facebook: Chur Associates Email: consult@churassociates.com

Trending Up Legally in View of The Property Boom in Malaysia (Part 2)

nvestment is a must have for most people today as everyone is thinking to multiply the assets that we have in hand. Among the more popular investments are shares, forex, insurance and of course property. Investing in property is becoming a trend among the locals and for non-Malaysian too. Thanks to the fast growing development, loads of projects are like blooming flowers after the rain. The attractiveness of the real estate property in Malaysia is due to lower price rates as compare to China, Hong Kong, Singapore, Tokyo etc. Nonetheless, not every investor is willing to wait till the completion of the construction and keys handed over to dispose off the property. This is understandable especially when the construction may take years to complete. Below is a simple illustration on the delivery of vacant possession for buying from developers.

RESIDENTIAL

COMMERCIAL

LANDED

STRATIFIED

24 months

36 months

Developer to set the time frame

From the date of SPA

Developer to set the commencement date

Governed by Housing Development (Control and Licensing) Act 1966 (HAD)

While the author makes reasonable efforts to present information which he believes to be reliable, the author makes no representation that the information or opinions contained in this article is accurate and complete. Readers are advised to seek specific professional advice before acting on the views.

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Regulated by the agreement entered into

The period of delivery is usually stated in the Sales and Purchase Agreement. In any event that the property the Seller invested is a SOHO (that now expanded to cover SOFO, SOVO and even SOLO), the Seller may have to check if the Developer is packaging it as a residential or commercial as this will effect the delivery period for vacant possession as illustrated above. However, are the Sellers allowed to sell their property before the completion and delivery of vacant possession? This is a key question for the investors.

The attractiveness of the real estate property in Malaysia is due to lower price rates as compare to China, Hong Kong, Singapore, Tokyo etc. Trend No. 2: Selling Your Property Under Construction To those who are wondering the stand of the law on the matter, Section 22D of the HDA 1966 states that selling property under construction is actually possible with no express prohibitions. With the green light given by the legislation, the investors will then focus on the gross profit gained after selling and overlook on the fundamental issue on the process of selling. Firstly, the amount that the developer is going to charge them for the selling of property prior to issuance of Strata title, notwithstanding whether under construction or completed. Below is an illustration for such charges.

RESIDENTIAL

COMMERCIAL

Governed under HDA 1966

Not regulated

Prior to April 2007, RM500 for admin fee for consent. Normally, developer will not grant consent during construction.

Normally, developer â&#x20AC;˘ Reluctant to grant consent during construction; â&#x20AC;˘ Charge 1% of the purchase price/market value whichever higher as admin fee

After April 2007, RM50 as admin fee

While the charges are clarified, the practical issue here is the difficulties faced by the parties of the transaction and the Developer when the Seller opts to sell the property under construction as follow:1.

Developer is reluctance in interpreting the law that selling under construction is possible due to the following:a. Prior to the delivery of vacant possession, effectively the Developer is still the valid owner of the property (as the purchase price is not fully paid) and should be given the discretion to voice out their reluctance; b. Theoretically, Developer is forbid to accept advance payment for the later stages as indicated in the progressive billing; and c. Developer intends to stop speculation and manages its administration burden.

Even if the Developer is willing to apply the law as it is, the new Buyer will need to fulfill the criteria of buying the said property by cash.

If liquidity is an issue, this left new Buyer to one possible way which is to allow revocation of the first Sales and Purchase Agreement and replace the first buyer (Seller) and the new Buyer. However, the difference in pricing will then need to be addressed differently resulting in further complication of the matter.

Another factor that the Developer is concerned about is the State Authority Consent issue as it is the practice of each States now that consent shall only be sorted after the issuance of CCC.

From the above, it is obvious that the selling of property that is under construction requires much more effort, understanding and co-operation between the new buyer, the Seller and the Developer as well as also the bankers to make sure the success of the whole transaction.

This is a series of articles that examine the latest trends and issues in real estate investment. In the next issue, I will share with you on the implications of residential build on commercial title. Stay tuned. NOTES

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/// West Malaysia Property News

Young Home Buyers to Suffer as Fresh Grads Struggles to Survive Due to High Cost of Living

A tough road ahead for the next generations A majority of fresh graduates earning an average salary of RM2,500 a month are struggling to make ends meet, a recent poll by online recrutiment company, Jobstreet.com, revealed. The poll, which was carried out last month, saw 2,062 fresh graduates from various industries being surveyed on their income and expenditure. Jobstreet reported that 77% of respondents said their salary did not leave them with any savings after spending on essentials with 63% of respondents saying that the essentials included car and study loans, which were their major commitments. Due to the rising fuel prices, many respondents said transportation costs were also among their top expenses. Jobstreet reported 63% of respondents saying they spent an average of RM1,500 of their salary on these essential expenditures. To save cost, nearly half of the fresh graduates surveyed said they lived with

their parents, 30% rented out with their friends while the remaining 20% lived on their own, Jobstreet reported. “Some 87% of respondents admitted that they did not have any other income besides their salary. “This is why most fresh graduates asked for a higher than average salary during job interviews.” The poll also revealed that 60% of respondents said they expected a salary of RM3,500 for their first job while 30% expected as much as RM6,500 for their starting pay. However, 66% of employers told Jobstreet that they were only prepared to offer fresh graduates a starting salary of between RM2,500 and RM2,800, depending on their qualifications. Hence, Jobstreet said it was no surprise that fresh graduates were always on the lookout for a new job with a higher salary. “This creates the high turnover experienced by companies who hire fresh graduates, as they are trying to cope with the increasing

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cost of living,” Jobstreet said. Following the 13th general election in May last year, Putrajaya announced several measures as part of a subsidy rationalisation exercise. First came an increase in the price of fuel, which led to the cost of other goods and services rising. Then Prime Minister Datuk Seri Najib Razak announced that Putrajaya would no longer be subsidising sugar, which led to further price increases. Electricity tariffs were also increased and public anger was further raised when Putrajaya contemplated allowing toll rates to be increased. On New Year’s Eve, thousands of angry and frustrated Malaysians gathered in Kuala Lumpur and marched towards Dataran Merdeka. They voiced their anger at the rising cost of living even while the Auditor General reported various wastage and leakages in the public sector.

Johor Second Link West the Best Spot for High-Speed Rail Terminal: Experts

Tuas West (Johor second link bridge) is the most feasible location for the upcoming highspeed rail terminal in Singapore, aside from the other two possible locations recently revealed by Prime Minister Lee Hsien Loong, which are Jurong East and the city centre, media reports said. Experts noted that while the area is presently industrialised, Tuas West is the most ideal site for the planned terminal due to its proximity to Malaysia and the greater availability of land. “As we know Jurong East is further into Singapore. By considering the overall construction cost and also the time involved, to put it at Tuas West definitely will save construction costs and shorten the construction time,” said Lee DerHorng, Professor from the Department of Civil and Environmental Engineering at the National University of Singapore. Another factor that the authorities must look into is the terminal’s link to the rest of the island. In this case, Tuas West is a viable location given the planned expansion of the existing East-West MRT Line into the area.

However, there is a downside. “In Tuas West at the moment, there is no existing population catchment. So next to the malls, the government may actually have to think about rezoning some of the industrial land for residential development,” stated Nicholas Mak, Research Head at SLP International Property Consultants. Since the terminal and its train maintenance depot will occupy a large site, building the station in Jurong East would be difficult given its built-up location. As for the city centre, the possibility is even slimmer given the high construction costs and lack of available space. The high-speed rail is expected to be completed by 2020, but the decision on the terminal’s site will be announced “within the next year or so”.

/// Contributor

Ahyat Ishak Investment Expert

Ahyat Ishak is the author of the bestseller “The Strategic Property Investor” book and the founder of “The Strategic Property Investment Model & Program”, which has helped many Malaysians create immense and sustainable wealth through property investment. He first began property investing for more than a decade ago and became a property millionaire before the age of 30, having started from humble beginnings. Through his experience and learning from many successful property millionaires, he has discovered the REAL Wealth Formula™ and has also trademarked his Strategic Property Investor Model™, which is the framework for his highly acclaimed workshops, seminars and talks. Academically, Ahyat Ishak has an IT Degree and MBA with the University of Southern Queensland (USQ), Australia, specializing in Strategic Marketing. He also holds the CPT or Certified Professional Trainers with IPMA, UK. Professionally, he is an entrepreneur and is the executive director of his family’s group of companies, which he 1st joined in the 90’s. This group has businesses ranging from services, technology, trading, food, agriculture and property investment. Website: www.ahyat.com YouTube channel: AhyatPropertyTV

Property Bubbles (Part 3) Lessons from my Property Exploration in Spain & Portugal

his is part 3 of my 3 part article on my recent Spanish and Portuguese property trip, which had impacted me at the deepest level as a property investor. After traversing 3,500km across 2 nations, stopping by 7 cities, 3 ghost towns, and meeting 10 property investors there, I come back a different person. Here are the final 3 lessons I bring back from my property exploration in Spain – Portugal:

Leverage: Truly a Double Aged Sword In my workshops and seminars, I tell people that one of key reasons I love property investment is because of the fact that I can leverage. Most people know this fact about property investment, but what do I mean by that? Leveraging is basically the ability to allow me to do more, and this can be done through many angles; leverage other people’s time, expertise, risk and money. The property investment ecosystem in Malaysia today is perfect in the sense that we are able to work with many kinds of people with many kinds of expertise, who will be able to help you as a property investor. I urge you to look at these people as our partners rather than merely service providers we engage with, ie property agents, other investors, insurance agents, etc. But the most important of all is our wonderful banks! What would property investors be able to do if we are not able to leverage bank’s money to allow us to buy properties that we just cant afford to purchase with cash. Even if we can, there’s just so much you can do with that cash rather than dumping it all in property, which may not be considered liquid as compared to the rest of the asset classes you can invest in. Imagine a world where banks stop lending to us property investors. This is the story in Spain. Banks there today will not lend to Spaniards for purchase of property and the loans that have been released during the boom and now couldn’t be paid during the crash has is considered toxic! Tell a Spaniard about the power of leveraging through banks to buy more properties and you will get a whack in the face because so many of them have crashed and burned together with their investments.

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Many of their properties are now ‘underwater’ because they bought them at such a high price with maximum leverage and now the values are only a fraction of the price. The apartments in the ghost towns were sold at €300,000 during the peak, cant even sell at €70,000 today. Banks were letting them go at €50,000. Imagine for some who maxed out on their leverage and got a 90% loan of around €270,000. Not only these investors had their homes repossessed, but also saddled with a debt burden of €240,000! In situations like these, leveraging is no longer a funny thing. Leveraging has turned toxic. So while we here in Malaysia still enjoy support from our wonderful banks and are still able to leverage their money to buy more properties, just remember that leverage is a double edged sword that cuts both ways. Ouch!

Maps Don’t Lie! I often tell my students that there are only 2 things in the world that do not lie, and they are numbers and facts! In investments, I look into numbers and facts to help me balance emotion in my investment decisions. Numbers and facts do not lie, people do! But there’s 1 more thing that do not lie; maps! And if you can learn the art of map analysis, you are able to now have one more very critical tool to assist you in making property investment decisions. I am not a map expert, but a fan of maps. The real map experts are my friends in Ho Chin Soon Research, who I truly revere and admire for the amazing work that they do with their property maps. I always say that Malaysians do not realize how lucky we are having such maps, which can actually assist us in selecting assets! Because of my love for maps, I spend a little bit more time studying them and along the way have discovered certain powerful techniques in analyzing them. Along the years, I’ve been able to share these simple yet powerful skills with other investors during my workshops and seminars, things like framing or pigeon hole techniques, understanding the galaxy theory, applying the two proximity analysis methods which I call bulleye and rainbow. Having created these techniques, first applying them to analyzing the Malaysian property market, I wanted to see if I could apply it to international markets. To my pleasant surprise, my techniques could be applied in any property market, including that of Spain and Portugal. So I applied it in my analysis of the 2 ghost towns in central Spain and 1 ghost airport in the east. And what I discovered was shocking. Why? Because it made sense why they ended being ghost towns! If only the investors had just taken the extra time to analyze their investments through these simple map analysis techniques, they might have been able to detach themselves with the irrational exuberance, which shrouded the minds of many investors during the boom! Besides avoiding bad asset selection, map analysis allowed me to understand locations better. I applied the rainbow technique on Lisbon, a city that I have never been to and was able to understand the city fairly quickly. With the help of a local investor there, I was able to identify hotspots for potential investments and understand why prices acted the way they do. This was what we also did in Barcelona and Madrid, in such a short time, was able to identify why certain areas did better and why some did not. All I needed to do was to have a local map with me and one afternoon with a local investor over coffee at a Spanish café and I would be able to start framing the potential areas to invest in!

Opportunity in Crashes While I’ve shared seemingly grave lessons from my Spanish and Portuguese property exploration, I do not intend to incite fear. I also do not want to be branded as the pessimist, but rather the opposite, because that is truly who I really am, an optimist. Yes, the crash in the property market in Spain and Portugal is scary. Yes, many property investors there have crashed and burnt with the market. But no, it is not all doom and gloom! There are opportunities anywhere in the world, even in markets where it has experienced glorious boom and followed by a devastating crash, like Spain. Talking about opportunities, I always tell investors one important fact, “Always remain excited!” You know why you need to be excited? Because if you are no longer excited, you stop seeing opportunities. And there is an abundance of them in any market, especially in Malaysia! But don’t get me wrong, I want investors to be excited and NOT over-excited. Being over-excited can make you reckless and foolish, and we definitely do not want to be that in property investment. Being over-excited shrouds our senses and we may end up making compromised investment decisions. I am not saying that I make perfect investment decisions, no one does, but we need to be aware that excitement and emotions need to be managed. Just in a short trip there, my team and I was able to spot dozens of interesting investment opportunities. Different parts of Spain and Portugal had different kinds of opportunities, attracting different kinds of demand. Many investors there and in fact, this was also cited in some news reports that the property market in the part of Europe is bottoming out after a 5-6 year decline, and many investors from around Europe are starting to look into opportunities there. From my trip there, I would agree. But the funny thing is that everytime my team and I go overseas to look for investment opportunities, I end up coming back to Malaysia and buying more here!

NOTES

With the lessons that I bring back from my Spain and Portugal property exploration, I have stronger conviction of the investment strategies that I have been using so far. The most important message to investors in Malaysia is to have a strategy when investing in property. The worse strategy is when you only have one strategy. The best is when you have more than one. Know why you are buying and have a plan before you buy. Reassess the numbers and facts, and learn about the locatlity through map analysis, to affirm your investment decisions. Even when doing all this you may not get it 100% right 100% of the time, but at least to a certain extent, you will have made a calculated decision. All that I have written about my trip in the 3 months I’ve been able to contribute is in fact a reminder to myself, as I am just like any other investor, with strengths and weaknesses. May we all become great investors and may we all achieve the success that we desire through property investment! Wishing you a great investing year ahead!

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/// International Property News

INTERNATIONAL PROPERTY NEWS

Catch up on the latest property and real estate news, views and analysis from across the globe featured

Harry Potter House for Sale

Singapore Home Prices Shift Again

family, who didn’t initially realise the significance of the address..

A home with an address made famous by Harry Potter has been put up for sale for offers in excess of £650,000 (RM3.52 million). The five-bedroom executive family home on the outskirts of Watford, north west of London in the United Kingdom, wouldn’t normally stand out. It’s one of eight properties in a private gated development, but what makes this property special is its address – 4 Privet Drive. The address shot to fame in the Harry Potter books and films, and is where the young Harry grew up. In real life the home is to the Hussain

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Speaking to the Watford Observer newspaper, Dee Hussain said: “When we bought the house we didn’t realise the significance of the address. But then when I said it to my son, who was reading the books at the time, he was like ‘oh my god, that’s Harry Potter’s house’. The house was reserved by someone else but then they pulled out and we pestered the estate agent and managed to secure it. “It was totally luck that we got it and I didn’t understand the importance of the address at the time.. She added that her family receives letters from around the world from children attempting to write to Harry Potter. The property is being sold by Sterling Estate Agents, and is also being marketed through the global auction website eBay.

The housing scene in Singapore Singapore’s first-quarter home prices fell for a second consecutive quarter as tighter mortgages cooled demand in Asia’s second-most expensive housing market. According to Bloomberg, the private residential prices fell 1.3 per cent to 211.6 points within the three months ended March 31 following a 0.9 per cent decline in the previous

three-month period, in line with preliminary information released by the Urban redevelopment authority recently. However, the latest drop is the largest since June 2009. Donald Han, Managing Director of Chesterton Singapore Pte. said that will set the tone for 2014.

Singaporeans Cross Causeway to Buy Homes

Singaporean entering to Malaysia via Tuas CIQ Malaysia’s real estate market glitters brightly in the eyes of foreign buyers thanks to neighbour Singapore’s property cooling measures such as the Additional Buyer’s Stamp Duty (ABSD), Seller’s Stamp Duty (SSD) and the Total Debt Servicing Ratio (TDSR) framework. According to Nicholas Holt, Knight Frank’s Research Director for Asia Pacific, Malaysia has certainly been the recipient of a lot of Singaporean money since the tighter cooling measures there. “Singaporeans probably top the list in terms of overseas buyers in Malaysia, most notably in Iskandar, but also in Kuala Lumpur and Penang,” he noted. UEM Sunrise Berhad also added that Singaporeans are the largest foreign buyer group in Malaysia, accounting for 70 percent of all overseas purchases. According to CBRE Malaysia, in spite of the curbs, Malaysian properties are still cheaper than those in Singapore. As a matter of fact, a 1,000 sq ft condo in the city-state sells for US$800,000 (RM2.61 million) to US$960,000 (RM3.14 million), while a similar-sized flat in Kuala

Lumpur goes for about U$374,000 (RM1.22 million). Even luxury homes in Malaysia are more affordable. For instance, units at Horizon Hills, which is located amidst a golf course, are marketed online for just $270 psf compared to $503 psf for a fourbedroom HDB flat in Singapore’s central Bishan district. However, this is a blessing and a curse for the ASEAN nation. In fact, the huge demand for Malaysian homes has made them so expensive that many locals can no longer afford a house in their native land. To appease the people and to prevent a possible housing bubble, the Malaysian government introduced its very own property curbs, joining the trend in Singapore, China and Hong Kong. Under Budget 2014, Prime Minister Najib raised the real property gains tax (RPGT) to 30 percent for buyers who will sell their home within five years from the time of purchase. He also doubled the minimum property price for foreigners from RM500,000 to RM1 million. Specifically, the RM1

million price threshold took effect on 1 March for all federal administered territories – Labuan, Putrajaya and Kuala Lumpur. And Johor will soon follow in May. Penang is the only Malaysian state, where foreigners are subject to a RM1 million minimum price on the mainland and RM2 million if it is a landed property on the island. In May, the state Johor government is also eyeing an additional two percent tariff for overseas buyers across all property segments, noted REHDA Johor Chairman Koh Moo Hing. Penang is also considering a three percent levy on foreign property buyers, added its Chief Minister Lim Guan Eng. Aside from that, the government recently barred property developers from absorbing some of the mortgage interest owed by home buyers, or the so-called Developer Interest Bearing Scheme (DIBS). However, the property cooling measures are expected to end the happy times of developers and home sales could fall further. Leading developers, such as UEM, Mah Sing Group and UOA Development, are also expected to post weaker sales growth, added K&N Kenanga Holdings Bhd. Nevertheless, there are some developers who believe that the challenging times will be short-lived, and good times may soon follow. The impact of the budget measures will be temporary.

Prime Land in Southeast Asian Cities Experience Surging Price Growth second largest land price increase at 184.0% in the prime residential index and the largest increase in the prime office index at 192.3% over the last two years.

Southeast Asian markets see the fastest price growth for prime development land especially in Bangkok, Jakarta, Kuala Lumpur and Phnom Penh who make up 4 of top 5 cities in terms of price growth. According to Knight Frank Asia Pacific, the independent global property consultancy, the results show that in the two years from December 2011, 24 of the 26 markets tracked (13 residential and 13 office) saw an increase in their indices reflecting increasing prime land prices amid tight supply and strong demand. The mature markets of Hong Kong, Singapore and Tokyo saw the lowest price growth while the prime Asia residential and office development land indices increased 50.4% and 38.3% respectively over the last two years. With competition for prime development sites remaining as strong as ever, increasing numbers of developers and investors are looking overseas for opportunities. Evident from a 55% YOY increase in intra-Asian cross-border developments driving price growth in development land. Bangkok sees the highest growth in the prime residential development land index over the last two years with 190.7% while Kuala Lumpur and Phnom Penh also feature near the top of the rankings. Meanwhile, Jakarta shows the

Recent deals in the city suggest that Jakarta land values are catching up with other countries in Asia. While land prices are expected to continue on an upward trend, price growth is likely to moderate over the coming year. Transformed over the last 15 years into a relatively open, stable and democratic country, and fuelled by a growing middle class, demand for both high-end condominiums and premium office space in Indonesia’s capital has shot up over the last two years. Knight Frank Asia Pacific today launches its first-ever Prime Asia Development Land Index which derives the price of prime residential (apartment or condominium) and commercial (office) development land in 13 major cities across Asia, for the period December 2011 to December 2013. The land prices in the Index are derived using a repeat residual valuation methodology where Knight Frank essentially looks at what a reasonable developer would be expected to pay for development land, given the gross development value of the potential scheme, costs (construction, professional, contingencies, and financial), required profit, acquisition costs and relevant taxes. Knight Frank’s inaugural research ploughs through prime development land markets across 13 cities in Asia.

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/// International Property News

Short-Felt Impact on Property From Missing MH370 both developers and house buyers to go overseas.” A Wall Street Journal blog China Real Time reported that the shift in mood has started to worry some Chinese developers who have substantial investment building houses in Malaysia to sell to mainland Chinese investors. Property is among their favourite investments.

The Malaysian property sector may be affected in the short-term as a result of the missing flight MH370 but the market is expected to bounce back in the medium to long term, according to two developers and two property consultants. Kumar Tharmalingam, chairman at property consultancy Hall Chadwick Asia said: “It may not even be a blip on the radar.”. “If the matter drags on, the effect on sales will be much longer,” said a source in a text message. The MH370 effect has come into focus as a result of strong Chinese interest in the last few years. Chinese developers have bought land here while individual Chinese, deterred by anti-speculation measures in Hong Kong, Singapore and China, are buying Malaysian propertie. Country Garden Holdings Co planned to build 9,000 condominium units in Iskandar Malaysia, Johor. Other Chinese developers included Guangzhou R&F Properties Co Ltd and Agile Property Holdings Ltd with a combined investment of US$2.7bil and the Greenland Group which announced a US$3.3bil deal in two residential and hotel projects last month. Kumar, former head of

government-funded agency Malaysian Property Inc, said: “If it were a crash and the wreckage is found, we would have mourned for a week and gone home. The problem is we lost the plane. “People understand death but do not understand loss. It is confusing to be told a member of the family is dead but there is no sign of the body or the plane.. “No government body has the answer, despite all the technology at their disposal. Also, there is a one-child family in China. It means a third of the family is gone. The loss is more acute although there are other nationalities on board.” Kumar said as far as the investment climate is concerned, he would not relate the incident to the country’s property sector.

Malaysia Experienced Highest Growth in the Region, but 3.4% Decline in Property Industry Salaries

Country Garden Holdings had initially said it had “received an overwhelming response” from buyers from Malaysia, Singapore and China initially. “The MH370 incident has brought some negative impressions on Malaysia (and the) Malaysian government, and we do not preclude the possibility that this would also affect our projects in the Malaysian market,” said Country Garden in a statement. Sales in its Country Garden Danga Bay project in Johor Baru last year reached roughly seven billion yuan, which was the firm’s biggest sales contributor, Wall Street Journal reported. The company said, however, that it was still confident in its investment in the country.

Property and real estate industry professionals in Asia earned 3.4 percent less money last year, according to an annual survey conducted by the Royal Institution of Chartered Surveyors and real estate recruitment company Macdonald & Co. While overall salaries declined to stand at an average of US$96,087 in 2013, real estate professionals in Malaysia witnessed the highest growth in the region although their salaries are still the lowest in the region.

A Malaysian valuer, who declined to be named, said the property sector might not see the sales volume it would like to for a year or two.

A decrease in the number of top-level positions in the industry was cited by the report as being one of the reasons for the decline. Despite this, 56 percent of survey respondents reported they received a salary increase in 2013, however just 11 percent received bonuses – down from 46 percent in the previous year. Those who received an increase saw a 10.1 percent rise.

“Do not divide the property market according to country boundaries. Look at it as a global asset. The Chinese government wants them

Including salary, bonuses and other financial rewards, the average take-home pay for property and real estate

“If one were to condemn the country, nobody should invest in the United States after the Sept 11 incident (where planes flew into buildings),” he said.

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“We believe that Chinese buyers in the choice of overseas investment are rational,” it said.

professionals in Asia was US$140,874, according to the report which is now in its eighth year. Whilst Malaysian professionals reported the lowest salaries, it was those in China who commanded the highest salaries in Asia. Salaries in Singapore declined, with the government’s property market cooling measures being noted as one contributing factor. Staff turnover in the industry is high, with 62 percent of survey respondents also saying they are either “fairly likely” or “likely” to change their jobs within the next 12 months. In contrast, some 78 percent are either “satisfied” or “very satisfied” with their current employer. Some 66 percent also predict their employer will increase headcount this year. The survey recorded replies from 1,525 Asian real estate professionals between November 2013 and January 2014.

Chinese Overseas Buyers Are Rational Despite MH370 Incident

Singapore and Malaysia Closing in on Train Link

in the former country organise concerted boycotts of products from the latter, which hit its automotive sector hard. Still, analysts believe the effects will not be permanent.

Kuala Lumpur International Airport Growing acrimony in China over Malaysia’s handling of the MH370 crisis could jeopardise Chinese buyers’ appetite for property development here, according to the Wall Street Journal. The news comes as rancour in Beijing over the Malaysia’s continued inability to find the missing Malaysia Airlines plane that carried 153 Chinese nationals among the 239 people on board has already torpedoed the Visit Malaysia Year 2014 promotions in the country. Families of the Chinese passengers on the doomed flight and their countrymen became hostile towards Malaysia following its announcement on March 24 that satellite data showed the plane “ended somewhere in the middle of the Indian Ocean”. The absence of physical evidence of the flight led some families to label the Malaysian government “murderers” for implying that all those aboard were dead.. “For now, marketing homes in Malaysia is going to be a bit awkward. It’s just like how we don’t market homes in Japan to Chinese customers,” an anonymous Beijing-based real estate consultant told the WSJ. But the expected drop-off will not only hit Malaysian property developers; Chinese real estate firms who invested heavily in the market here could now end up with lots for which they might find fewer buyers. One such firm was Guangzhoubased Country Garden Holdings, who began venturing into the

local property market via Johor Baru in 2012. Sales in its Country Garden Danga Bay project there last year reached roughly 7 billion yuan (RM3.7 billion), and was the firm’s biggest sales contributor. “The (MH370) incident has brought some negative impressions of Malaysia (and the) Malaysian government, and we do not preclude the possibility that this would also affect our projects in the Malaysian market,” said Country Garden in a statement. But it said it was still confident in its investment in Malaysia. “We believe that Chinese buyers in the choice of overseas investment are rational,” it said. Malaysia was fast becoming the regional “darling” of property buyers from mainland China following market restrictions in Hong Kong and Singapore. In 2013, Chinese institutional and retail investors invested a total of US$1.9 billion (RM6.2 billion) into real estate in Malaysia, exceeding the US$867 million invested in Hong Kong and US$1.8 billion invested in Singapore, according to real estate consultancy Savills. The figure also topped the US$1 billion invested in Australia, but lagged Chinese investments into Britain and the United States. It is unclear the extent of the damage MH370 will ultimately deal to the property sector in Malaysia, but parallels are being drawn between the missing plane and the China-Japan tension in 2012 that saw buyers

“In the long term, homebuyers will consider more fundamental issues, like education and investment prospects of buying a home in Malaysia,” CIMB Securities analyst Johnson Hu told the US daily..

Prime Minister of Singapore Lee Hsien Loong

On Monday, Tourism Minister Datuk Seri Nazri Aziz said that “Visit Malaysia Year” roadshows in China would be halted until the MH370 case is closed.

Lee discussed the KL-Singapore high speed rail terminals and faster cross border checks between the two countries. He said that it will be a major cooperation project which will help foster the ties of both countries in many years to come.

Nazri yesterday conceded that, less than a month since the plane was lost, the falloff was already taking its toll. “I would be lying if I said that it is not affected.

Prime Minister of Singapore Lee Hsien Loong was recently at Putrajaya for the MalaysiaSingapore Leaders’ Retreat. He spoke at a joint press conference with Prime Minister of Malaysia Najib Razak.

Currently Singapore is evaluating designs and awaiting Malaysia’s decision regarding the end point of the rapid train system link. Both countries want to ensure that it will be convenient for passengers to go through immigration for both places at the same stop.

“We are sure that the Chinese passengers’ families are angry at Malaysia including some of their artists who expressed the same sentiment,” he was quoted as saying by Sinar Harian..

West and Jurong East are two locations being considered for the Singapore terminal of the proposed high speed rail linking Singapore and Kuala Lumpur. A third option is also being considered is the city centre, though Lee said that this will be more challenging due to the cost and land required.

China currently accounts for 12 per cent of tourist arrivals here, who contribute six per cent of the country’s tourism earnings or approximately RM39 billion last year..

He added: “I shared some of the considerations and possibilities with the Prime Minister, and this is something that we are working on and we will decide within the next year or so.”

On Sunday, several families of Chinese passengers of MH370 arrived in Kuala Lumpur from Beijing, and held a press conference to denounce Malaysia’s handling of the search for the plane.

Besides that, Lee said that Iskandar Malaysia is a strategic play to Singapore and Malaysia which can lift Malaysia above its global competitors and help Singapore maintain its competitive edge. But to do so, investments in the fast-growing Iskandar region need to be channeled into manufacturing as well, not just residential properties and services.

Some held aloft banners that read in Chinese and English: “You must return relatives of MH370, no strings attached” and “Hand us the murderer”.. MH370 went missing shortly after departing Kuala Lumpur International Airport for Beijing on March 8 and remains missing despite an international search involving over two dozen countries.

Lee also mentioned that developing the manufacturing sector will help create jobs and attract investments, to build an organic, comprehensive, dynamic centre for economic vitality in Johor. This will help integrate and compliment the economy of both countries. With more people expected to travel back and forth from Singapore to Johor, there is a future possibility of widening the road link in between both countries to ensure that traffic flows better between both countries especially during peak hour.

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/// Banking and Investment News

$₤ ¥ € BANKING & INVESTMENT

NEWS

The banking and investment industry has a crucial role to play when it comes to property. Read about the most recent news and trends in this trade

Malaysia, a Retail Property Goldmine “The government has been very proactive in Malaysia, particularly in the Johor Bahru region. The infrastructure investment goes in and you can see there’s going to be a big upsurge in people and the dynamics of the area will change and that will have a hugely beneficial effect on retail,” said David Raven, Lead Director for Retail Investments at the property firm. Meanwhile, JLL’s report reveals that Asian shopping malls are the latest ‘must have’ for investors, who are eyeing the region’s robust consumer spending driven by rapid urbanisation. Despite fears over the US Federal Reserve tapering and China’s slower than expected GDP growth, retail investment in Asia soared by 41 percent year-on-year to US$21.17 billion (RM69.44 billion) in 2013.

Malaysia emerged as retail property hot spot in 2013 among developing markets in the region, according to report by Jones Lang LaSalle (JLL).

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In particular, retail cum commercial projects were very sought-after last year. “The Knightsbridge mall on Singapore’s Orchard Road is a good example of this. It sold to Bright Ruby Resources, which is controlled by the Du family of China, for US$921 million (RM3.02 billion). While a hotel sits above the shops, the retail component made up more than half of the sale price at US$595 million (RM1.95 billion),” JLL noted.

However, buying existing mixed-use projects requires expertise, as well as knowledge on local rules and regulations. “Unlike other asset classes, there is the propensity for investments in retail real estate to go horribly wrong if investors fail to do their homework when purchasing,” Raven explained. It may also fail if the buyer doesn’t have the necessary skills to appropriately manage the said property. Thus, pension and sovereign funds that are planning to acquire existing integrated projects in Asia, especially those with small operational teams, will need local partners to access a particular market and manage their investments. “But competition is fierce and there is plenty of fresh capital targeting the sector, from local high net worth investors to global sovereign and pension funds. Private Equity funds raised for exclusive investment in the region are also a dominant force, particularly for riskier assets,” JLL added.

As We Wait, Properties May Become Harder to Afford property price would become and the increase of such price will be higher in rate than the increase in our salaries and savings.

logistics, utilities and inflationary pressure which will inevitably lead to escalation in house prices. In addition, the challenge to come up with the 10% down payment, be it for purchase from the primary or secondary market, will be tremendous.

Wait further to try and match the original price tag, and you will find Educated young investors at PH Expo 2014 yourself chasing after the property I recall reading a letter written to forever and lose the editor of a popular daily which out on other opportunities. caught my eye. The man related the story of the advice given by Lesson number two his grandfather and father about getting onto the house ownership Be realistic in your choice of your ladder as early as possible. He was first home. Everybody wants to a young man, a fresh graduate in buy their dream home but unless the mid-70’s with a starting salary we are realistic and practical, of RM900 per month. He came this will remain a dream forever. from a humble background and While the young man in the story every month he had to carefully above is lucky enough to buy a allocate his limited earnings to linked house in the outskirts of his ageing parents and younger Petaling Jaya during that time, it siblings as well as plan for his is now impossible for young new expenditure. graduates to purchase a landed

The Employees’ Provident Fund or EPF housing account II from the monthly contributions will help to a certain extent but it needs time to grow the fund and you still need to come up with the upfront payment and other acquisition costs – legal fees, stamp duties etc, so it makes sense to start planning and saving for your first house purchase as early as possible in your career, along with other plans like car purchases, getting married or starting a family.

With his meagre salary, he rented a place close to his place of work so that he did not need a car, ate modestly at food stalls and saved every ringgit he could. Life was no doubt rather tough in the beginning but he worked hard at his job. He built up his career and gradually moved up the corporate ladder and by then, managed to save enough to buy a small Datsun (now Nissan) for RM8,000 (with 80% loan) and also put the 10% down payment for a linked house in the outskirts of PetalingJaya priced at RM83,000. It was not near his workplace but that was all he could afford at the time. It was a choice worth his sacrifice, the location he chose to stay has today boomed into a township and the home he bought is worth more than RM800,000. Looking back, the man made a wise decision to have his own financial planning set at an early stage and we should all learn from the young man’s experience. Lesson number one Choose a property that you can afford at that particular time when you are ready to purchase. The longer one waits, the higher the

three-room unit in the same area. Whilst it may be prudent to plan ahead for future needs and family expansion or proximity to ageing parents and other priorities, we should be open to other affordable choices – perhaps a strata property, a studio or one bedroom unit, or a location further from the major urban centres where prices are relatively cheaper. Eventually, when salaries have gone up and the need for bigger units is more evident, you can upgrade to a more suitable housing unit which could be partially funded by the capital gains from your initial unit. The purchase of that bigger unit may otherwise be impossible if you wait until you have accumulated enough savings and earn a high enough salary! Lesson number three The most important lesson to first time house buyers is to start saving for your home purchase early. Prices are not going to be cheaper in the future as development costs will continue to increase due to price hikes in land, building materials, labour,

Youths of today should have greater awareness and appreciation for the importance of saving for their future and investing in property at an early age rather than constantly changing their smart phones, buying designer goods and frequently hanging out at overpriced cafés and bistros. Buying a house definitely cannot be an afterthought that youhave not prepared yourself financially for; for some who are more fortunate, you might be able to seek help from your family members in planning for your first house purchase but for those who are not, without early and proper planning you will find that you will never have enough to buy a house of your own even later in life. Let’s take heed of the lessons learnt from the young man’s life story. At some point in the future you may look back and be grateful that you purchased the home despite some struggles to make a living. The young man, now older and wiser is sitting on a lot of gain and equity for his next purchase for investment. Datuk Seri Michael Yam is the president of REHDA Malaysia. Apart from managing his own consultancy firm, he is an independent director of several public-listed companies and also a global bank in Malaysia. For feedback, please email: president_ column@rehda.com

GST Would Positively Impact the Residential Properties

Investors would doubtless invest in residential segment this year instead of next year with the coming introduction of the goods and services tax (GST) which would impact the residential property sector. According to Talhar & Wong Sdn Bhd managing director Foo Gee Jen, this is often because several perceive that the price of homes can be higher once the GST is introduced in Malaysia by April 2015.. “This would end in the buyers deciding to get homes this year rather than next year,” he told The Business Times. “The perception now could be that residential developers are going to transfer the extra costs to the consumers once GST is enforced. Therefore people would assume that they are going to pay more. Meanwhile, the residential demand, notably affordable housing, will remain extremely fuelled by a rapidly growing population of adults between the ages of 25 and 54 and expanding middle-income groups. Foo added the mid-segment rental market can remain upbeat on the rear of a healthy growth in housing demand and the residential market would stay healthy although the high level of household debt is probably going to subdue on buyers’ buying ability.. Last year, the housing market was upbeat with an estimated total of 12,808 new units of terraced, semi-detached and detached homes launched. The new supply for 2014 is estimated to fall to some 9,800 units in total particularly 1,000 detached, 1,800 semi-detached and 70,00 terraced units, Foo said. However this year, developers will face the threat of rising construction price fuelled by higher oil prices and rising material costs. The cost hike has led developers to make units of smaller floor areas, since the smaller units are progressively more popular because they are affordable to a bigger segment of prospective buyers.

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Can the Developer Confiscate Your Booking Fee? Buyers Beware !

I found my dream house. The developer’s office said the project was selling like hot cakes. Sales were on a first come first serve basis’ and I must pay a deposit otherwise she would have to give it to someone else. Or was it a booking fee she called it? I begged her to give me one week. Three days, she said. How very sweet and understanding of her. Bank loan? No problem… 85% loan margin? No problem, she assured me. If I could not get a housing loan I could always cancel and get my money back. I left the developer’s office feeling on top of the world. I had secured my dream house by paying the deposit. My dream turned into a nightmare when I could not get a bank loan. I had no choice but to forgo the house. As if letting go of my dream was not bad enough, the developer now refuses to give me back my deposit. The lady said her hands were tight because it’s a management decision. It was not stated in the option letter’ or booking form’ that my purchase was subject to the loan approval. On reading the terms and conditions in the option letter/booking form, I now realised that all terms were inclined in favour of the developer. What do I do? I just want my money back. I don’t mind if they keep a small sum for cost of paper work and for administrative purposes. The above scenario is not at all uncommon. Many house buyers are unaware of lending guidelines requiring loans to

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be tagged to net income as opposed to gross income. Many find that they are unable to obtain the financing they want and have to withdraw from an intended purchase before the sale and purchase agreement is even signed. The developer then refuses to refund the deposit or booking fee or whatever other payment which may have already been paid. The unfortunate part about this whole thing is that house buyers do not have the luxury of a learning curve in which they can acquire the necessary skills to avoid getting themselves into trouble. Very often by the time they realised that they have made a mistake, it is already too late and the result can be traumatic and financially crippling. This very noble and seemingly simple undertaking of buying a house, in a lot of cases, have gone terribly wrong. Can developers collect booking fee or deposit.. The sale and purchase agreement (Schedule G, H, I or J) as prescribed by the Housing Development (Control and Licensing) Regulations, 1989 (the Housing Regulations) provides very clearly how the purchase price is to be paid. The first 10% is payable immediately upon the signing of the sale and purchase agreement (SPA), not before. No collection of any payment is allowed before the SPA is signed. Deposit, booking fee, advance payment, administration charges are

just some of terms used by some devious developers in their vain attempts to circumvent or contract out of the Housing Regulations and to confuse, mislead and convince nave house buyers especially the first-timers.

are untruthful will not hesitate to mislead, conveniently telling “white lies” and make empty promises to make a quick buck. Some are so well trained in the art of selling they can probably sell sand to the man in the desert.

Collection of any payment by a housing developer before the signing of the SPA is an offence. This is very clear under the Housing Regulations and it does not matter what the developer calls it.

Ever wondered why the sales office told you there are only five units left but three months later there are more than 10 units still available? Did the developer’s office tell you the unit you want is already booked but called you two days later to congratulate you because the same unit has just become available? Ever gone to a developer’s office in the hope of getting the “Early Bird Discount” advertised the day before only to find that the project was launched more than a year ago?

The Housing Regulation 11(2) stated: “No housing developer shall collect any payment by whatever name called except as prescribed by the contract of sale”. (In this context’ contract of sale means the SPA). Commission of such an offence under the Housing Regulations means that the developer in question can be prosecuted, fined and/or even imprisoned under Regulations 13. Even those persons who knowingly and willfully aids, abets, counsel, procures or commands the commission of such an offence shall be liable to be punished. Prosecution, however, is in the hands of the public prosecutor whose action or non-action the house buyers are not able to dictate. House buyers and indeed the general public are of course at liberty to lodge a complaint against any developer in breach of any housing laws. Such complaints can be lodged with the Enforcement Division of the Ministry of Housing and Local Government: www.kpkt. gov.my The law as regards non-payment before the signing of the SPA is very clear and house buyers are strongly urged to understand the law and not be misled by some cunning, unscrupulous developers or their smooth talking sales representatives who either do not know the law or simply do not care about the law. Profit orientated developers care about nothing but profit. The more they sell the more they gain. They engage marketing commission agents and sales representatives whose only mission is to sell. In their quest to sell their products, some unprincipled commission agents (secondary markets included), who

Filing a claim for refund Free gifts, rebates, and waivers of this or that are also fairly commonly seen and are often stated to be for a limited time only. House buyers hurry to meet the deadline. Three months later the same advertisement appears, again for a limited time only or perhaps extended due to popular demand. Gimmicks of “Free legal fees” offer but you must use the developer’s panel lawyers are commonly marketed. The list of marketing ploys used by developers and their marketing alliance goes on and unscrupulous developers and real estate agents are not likely to stop trying to exploit vulnerable house buyers any time soon. House buyers must therefore be very wary and not be easily swayed by promises made by the developer’s office. House buyers who are already caught in tussles with housing developers over refund of booking fee or deposit are at liberty to file their claims at the Tribunal for Homebuyer Claims (the Housing Tribunal). The Housing Tribunal was set up as an alternative forum for house buyers to save them the costs and hassle of fighting with housing developers in the civil courts. The filing fee is only RM10; no lawyers are required and hearings are normally fixed within a month. The Housing Tribunal is empowered to hear disputes between

house buyers and licensed housing developers even though the SPA is yet to be signed but the claims must be filed within the time frames provided under section 16N of the Housing Development (Control & Licensing) Act 1966 (the HDA). Check out the link: www.kpkt.gov.my TTPR.

BNM to Remain Vigilant on Property Market be sustained, it said. “This will contribute towards managing household leverage, especially among the more vulnerable groups.” In addition, BNM will also keep a close watch on external borrowings and the debt level of Malaysia’s business sector so that the banking system buffers will be able to withstand potential losses from companies prone to financial stress.

Can the developer forfeit such payment? Where booking fee or deposit or any other payment is collected by the developer before the SPA is signed, the house buyer would normally have been asked to sign a document indicating the house/apartment/condominium he/ she is interested and agreeing to sign the SPA within a certain time frame, say 7 or 10 days or upon notice from the developer. This document may be in the form of an option letter, letter of offer, sales proforma, booking form or another document by whatever name the developer chooses to call it, all in an attempt to disguise a collection prohibited by law. The amount varies and in some cases it is as much as 2% of the purchase price RM10,000 for a RM500,000 house. When the house buyer decides to withdraw from the intended purchase, the developer refuses to refund the deposit, or was it booking fee, or was it …? Chang Kim Loong is the honorary secretary-general of the National House Buyers Association: www.hba. org.my, a non-profit, non-governmental organisation manned by volunteers. He is also a NGO councillor at the Subang Jaya Municipality Council.

In order to deter speculative activities, mortgage lenders for all types of properties will be required to implement thorough valuation practices, according to Bank Negara Malaysia (BNM). The central bank will also monitor the commercial property segment, given a looming supply glut in the office market, as well as the strong demand and rising prices for retail shops.. “As to the effects of the

measures implemented to ensure a sustainable property market, it continues to gain traction and this should mitigate material adverse implications on financial institutions from exposure to the sector,” BNM noted in its Financial Stability and Payment Systems Report. Non-bank financial institutions are also required to continuously enhance their lending practices, while the stringent lending standards of banks should

The central bank will also evaluate changes in lender’s risk appetite and business strategies in order to ensure that such changes are aligned with BNM’s rules. It will also look into the overseas operations of Malaysian banks, especially their payment and settlement systems. “Looking forward, local financial institutions continue to be well positioned to manage external risks. However, volatility is likely to persist in the domestic financial markets as investors adjust to US monetary policies, as well as developments in the Eurozone and China.”

EPF Property Investment Returns Surpass Target grew 10 percent to RM14.36 billion last year from 2012’s RM13.05 billion.

The Employees Provident Fund posted a gross investment income of RM1.14 billion for its investment in property and infrastructure in 2013, exceeding its annual target of RM930 million, showed the first series of the Auditor-General Report 2013. Tabled at the Parliament on Monday, the report noted that EPF’s investment in that sector

It attributed the increase to the expansion of foreign property investment in Singapore, Australia, Europe and the UK. The gross investment and infrastructure analyses in 2013 revealed that EPF’s income amounted to RM1.14 billion, or 7.9 percent from an investment of RM14.36 billion..

Moreover, EPF also received RM66.28 million for an investment in Australia last year, or 4.3 percent compared to an investment of RM1.545 billion. EPF’s total investment in 2013 stood at RM586.66 billion, of which RM14.36 billion was accounted for by property and infrastructure investment. Its gross investment income rose to RM35 billion in 2013 from the previous year’s RM31.02 billion.

“This percentage reflected an increase compared to the year before which was 4.6 percent in 2012 and 3.1 percent in 2011,” it noted.

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/// Property Listing

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my

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/// Property Listing

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my

www.PropertyHunter.com.my

/// Property Listing

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my

www.PropertyHunter.com.my

/// Property Listing

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my