Property Hunter Magazine December 2014 by Victor

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Inanam Mall The Pinnacle of Inanam /// HOT TOPIC 2014 The Year in Review /// HOT TOPIC Looking forward to 2015 A New Year, A New Beginning

DEC 2014

ISSUE 61 RM8.90

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Escape To A Luxurious Oasis Of Green In The Heart Of The City Inanam Mall To Offer New Shopping Experience Property Hunter Opens New Office with Sales Gallery Newly Launched Greenfield Residence to Offer Nature-laced Quality Condo Living www.PropertyHunter.com.my 1 EcoWorld Sibu Premium Property Showcase

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FUSION

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/// Contents

What’s inside... Property Hunter is published by: Maxx Media (S) Sdn Bhd (1043783-T)

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Disclaimer, Permission & Reprints This publication is not an investment advice. It is intended only to inform and illustrate.

No reader should act on the basis of any matter contained in this publication without first seeking appropriate professional advice that takes into account their own particular circumstances.

Cover Story The Pinnacle of Inanam: Inanam Mall

Feature Property Showcase Escape To A Luxurious Oasis Of Green In The Heart Of The City

Hot Topic Inanam Mall To Offer New Shopping Experience

Hot Topic 2014 The Year in Review

Sabah Property News

Feature Property Event Colourful SHAREDA Nite 2014 Celebrates Unity

Feature Property Event Iskandar Waterfront City Property Showcase Unveils New Luxury Developments

Feature Property Event Newly Launched Greenfield Residence to Offer Nature-laced Quality Condo Living

Sarawak Property News

Feature Property Event MIEA Sarawak Branch Hosts Inaugural Dinner

The publisher and editors give no representations and make no warranties, express, or implied, with responsibility of any of the material (including statistics, maps, articles, loan product tables, advertisements and advertising features) contained in this publication. The publisher and editors expressedly disclaim all responsibility for any errors in or omissions from the information contained in this publication, including all liability for any loss or damage suffered or incurred by any person as a result of or arising out of that person placing any reliance, weather whole or partial, upon the whole or any part of the contains of this publication. No correspondents will be entered into a relation to this publication by the publishers, editors or authors. The publishers do not endorse any company, organisation, person, investment strategy or technique mentioned in this publication unless expressly stated otherwise. The publishers do not endorse any advertisements or any special advertising features in this publication, nor does the publisher endorse any advertiser(s) or their products / services unless expressly stated to the contrary. Articles are published in the reliance upon the representations and warranties of the authors of the articles and without our knowledge of any infringement of any third party’s copyright. The publishers and editors do not authorise, sanction, approve or countenance any copyright infringement. This publication is protected under the Law of Malaysia Act 332 Copyrights Act 1987 and may not, in whole or part, be lent, copied, photocopied, reproduced, translated or reduced to any electronic medium or machine-readable format without the express written permission of the publisher. Copyrights 2013 Maxx Media Sdn Bhd. All rights reserved. www.propertyhunter.com.my

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Available monthly at leading bookstores and newsstands

West Malaysia Property News

Contributor: Dr. Daniele Gambero Budget 2015, The Strategic Planning And The Micro-Propenomy Effects Of A Macro Economic Budget (Part 2)

Contributor: Charles Tan - Double Storey Terrace in Kota Kinabalu Outskirt Is Now RM450,000 - Three Major Reasons Why Landed Is Better Than CondoHmm… - Property Prices Up Due to GST? Developers Should Just Absorb It - When Is The Best Time To Buy Property, Really?

Contributor: Chris Tan The Ten (10) Legal Commandments in Homebuying

Feature Property Event PRISM Property Summit and Expo is Bigger This Year

International Property News

Hot Topic Looking forward to 2015- A New Year, A New Beginning

Banking and Investment News

Property Listing

The Pinnacle of Inanam: Inanam Mall

64 Looking forward to 2015

A New Year, A New Beginning The property industry when through a series of changes in 2014, with new rules and regulations imposed to keep its trajectory in check, and the next year is gearing up to be an equally challenging one.

32 Colourful SHAREDA Nite 2014 Celebrates Unity

The annual dinner organized by Sabah Housing and Real Estate Developers Association (SHAREDA) chose the theme ‘Unity’ for its annual SHAREDA Nite 2014 to symbolize the key to its transformation programmes.

Sneak Peek of January 2015 Issue Hot Topic Property Market Outlook in 2015 We start off the year with a look at the property market in Sabah, Sarawak and Peninsular Malaysia. Our panel of experts weighs in on where we are now and what direction we are heading. We will also speak to representatives of developer associations in Malaysia on the challenges and opportunities they anticipate will make the biggest impact on the industry in 2015. Hot Topic Interview with Datuk Francis Goh Datuk Francis Goh was elected president of SHAREDA (Sabah Housing and Real Estate Developers Association) for the term 2013-2015. He shares with us his thoughts on his leadership of SHAREDA which has brought about constructive changes for the association, and his plans for the future.

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/// Cover Story

Inanam Mall aims to introduce new retail culture to the community by becoming the catalyst of a new era, giving the township a much needed make-over with a landmark development that will change the way people do business in the future. Inanam Mall will be the first fully air-conditioned shopping mall with 3 levels of elevated car park providing 300 car park bays which will be a most welcomed feature in this well-established high-density township. Multiple activities will be integrated into the mall to offer shoppers a wide range of retail merchandise and services such as food and beverage, beauty, health and personal care, fashion apparel, time pieces and jewelry, household products, electronics and IT gadgets, sundry, books, magazines and stationeries, leisure and entertainment, and much more all under one roof. The 159 units of shop lots ranging from 16.25sqm to 97sqm are priced from RM1,100psf to RM3,000psf. Inanam Mall has the enviable advantage of being centrally located within a large and matured community of more than 8,000 families in the vicinity of Kolombong on the western side, to Menggatal on the east, the Inanam North Bus Terminal in the north and the area around Kensington Green in the south. Its prominent location makes Inanam Mall the ideal destination to shop, relax and stay without having to travel to the city or further, providing great savings on time and fuel costs. There are ample opportunities at Inanam Mall to have a quick business lunch with a client, relax with friends and colleagues after-work or just window-shopping. Visitors who come to Inanam on business or passing through on the way to tourist destinations around Sabah will appreciate the cool comfort and conveniences of a well-appointed mall for a bit of retail therapy. A commercial centre must be equipped with complementary infrastructure to make it easy to do business efficiently. Inanam is located about 10 minutes from Kota Kinabalu city centre and 15 minutes from the Kota Kinabalu International Airport with public transportation easily available from the main bus and taxi terminals in the city and airport.

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Inanam Mall

The Pinnacle of Inanam

he northern corridor of Kota Kinabalu is developing rapidly in terms of population and infrastructure, and the demands for higher quality and more exclusive properties are on the rise.

Upyield Progress Sdn Bhd, a company founded to spearhead the commercial development of its parent company based in Sandakan, will be making its first foray in Kota Kinabalu with Inanam Mall, a shopping mall and hotel project in the heart of Inanam. The development is located on a 1.15 acre plot fronting Jalan Tuaran in one of the most prolific townships north of Kota Kinabalu, and is set to raise the benchmark for business and leisure activities. It is developed at a GDV of RM200 million and slated to complete in late 2017. Known for its lively and bustling atmosphere, Inanam is constantly on the move, and is heading towards a bigger and brighter future. Businesses thrive here where people arrive and depart from the main express bus terminal that connects Inanam to Kota Kinabalu city, and the eastern coastal towns of Lahad Datu, Sandakan, Tawau and Semporna, directly bringing in a steady stream of business and leisure travelers on a daily basis. In recent years, the town has evolved commercially into one of the fastest growing satellite towns in Kota Kinabalu.

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Inanam Mall aims to be a one-stop centre where every amenity for the busy business executive is well taken care of. A 10-storey 190-rooms hotel will be built above the mall which comes equipped with restaurant, gym, function rooms, swimming pool and internet connectivity. The hotel will be managed by a hotel management company, adding value and enhancing Inanamâ&#x20AC;&#x2122;s position as an urban commercial centre with top-notch facilities and services to attract high-level businesses into the area. In addition, a 6-storey 80-rooms budget hotel which will be managed by the developer is currently being constructed adjacent to the mall to provide more accommodation options. Guests of both hotels will boost the number of visitors and shoppers to the mall and give investors/buyers a rewarding return on their investment. Inanam has the sustainability in population and businesses to keep visitors flocking in, not limiting to the adjacent residents but also office workers, travelers, tourists, businessmen and others.

It is with confidence that Inanam Mall will become an important point for any essential services in the future development of Inanam and foresee a gain of high margin of appreciation with its operation benefiting the end users. Inanam Mall, the pinnacle of excellence in Inanam, has set the target to become a landmark property of distinction and superiority in one of the most exciting commercial hotspots in Sabah, now and in the future.

For more information please contact : Ground Floor, Lot 3, Kompleks Mutiara Inanam, Inanam, Kota Kinabalu, Sabah.

Tel: +6088-532178 Fax: +6088-432178 E-mail: upyield@hotmail.com Website: www.inanammall.com.my

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/// Featured Property Showcase

Artist’s Impression

System (RTS) which will be ready by 2018 is just 10 minutes away. Prime location Also thanks to its prime geography, residents of Citywoods will be able to enjoy an awe inspiring view of the Johor Straits as well as the Singapore skyline with ample sunshine and a gentle breeze to cool the senses. Nearby infrastructure amenities include schools, hospitals, shopping enclaves, and various tourist attractions such as Legoland Malaysia, Hello Kitty Town, Angry Birds Theme Park and Puteri Harbour Indoor Theme Park as well as various commercial centres such as Danga City Mall, KSL City, Aeon Tebrau City and Berjaya Water Front.

Artist’s Impression

Escape To A Luxurious Oasis Of Green In The Heart Of The City

owering above the hustle and bustle of Johor Bharu city is an oasis of luxurious green named Citywoods. The two serviced apartment blocks with their thoroughly modern facade are a premier urban living concept by leading property developer in the affordable housing market, Hua Yang Berhad. It is the newest residential landmark in the city and has put a twist on urban high living by pioneering a blend of style

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and sophistication like never been seen before. Close to the city yet far removed from the stresses of city living, the development offers the perfect getaway for discerning urbanites. Stylish Serenity Citywoods combines a contemporary design style with an entrance that projects class and gravitas. Each of its 417 units are elegantly designed to an extremely high standard and

/// FEATURE PROPERTY SHOWCASE

exude quality from every fine finish. Low density in nature, the 19-storey apartments have three design layouts in both Tower A and B. In Tower A, there are nine units per floor with three lift cars while Tower B has 13 units per floor and four lift cars. Units range in size from 764 sq ft to 1,249 sq ft and come in the following configurations: •

Type A: 764 sq ft in size with two bedrooms

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Type B : 958 sq ft in size with two + one bedrooms

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Type C : 1,249 sq ft in size with three + one bedrooms

Secure Peace of Mind Privacy for its residents was foremost in the minds of the designers of Citywoods, which has been realised through the unique layout of the units within each floor ensuring that each entrance does not directly face

their neighbour’s door. This layout ensures that each of the units is a corner unit and features roundthe-clock security patrols similar to a gated and guarded community. A multi-tier security system is in place including a six-level private car park with access to lift areas, CCTV surveillance at the main entrance, perimeter fencing, car park podium and corridors as well as a singlecard access system, with security personnel monitoring the building’s entry and exit points. The units themselves all feature a digital door lock with alarms for the main door and a video intercom system. Total Lifestyle Concept To complete the lifestyle experience, a whole range of resort-like facilities

will be available to residents, to help them unwind after a busy day. At the heart of the complex is the infinity lap pool, Jacuzzi, as well as both an indoor and outdoor gym. There are further special activity rooms and spaces which include a barbecue area, an event or function space, games room, KTV as well as an audio visual (AV) room and even a children’s playground ensuring that there is something to occupy every member of the family. Citywoods’ concept of ‘green’ urban living is further exemplified by a state of the art centralised water filter system which will provide clean water to all the units. Adding greenery and imbuing a lush forest-like ambience, built-in sky gardens have been established on the 11th, 15th, 19th and 23rd floors,

which helps to accentuate the feeling of being close to nature while high above street level. Convenient Accessibility Strategically located along the famed Jalan Abdul Samad, the development is sited behind the 5-star Thistle Hotel. Citywoods is just minutes away from city attractions and is well connected thanks to several major highways. Residents only need a minute to get to the Permas Bridge, three minutes to get to the Eastern Dispersal Link (EDL) and Coastal Highway, five minutes to reach Johor Bahru City Centre, CIQ and Singapore, 10 minutes to the NorthSouth Highway and 25 minutes to Senai International Airport. Even the Singapore-Johor Bahru Rapid Transit

Tucked away serenely amid a hilly landscape, Citywoods embodies the integrated aspects of nature and serenity, offering a sense of peace and tranquillity with all the conveniences of city living. Prospective buyers are not simply buying a house, but a lifestyle concept where you can leave your troubles behind when you reach home. Residents will feel at one with nature and experience stress-free and relaxing living. The development is scheduled for completion in 2017. Price starts from RM428,000 onwards and Bumiputera purchasers are entitled to a 15% discount. For further information on Citywoods, kindly head over to http://www.huayang.com.my/ and browse through our sales gallery. Alternately we can be reached at 07-221 3388. Act now, to book your unit in this exclusive residential development before they are all sold out!

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/// Featured Property Event

The development of Inanam Mall is indeed timely as it aims to provide a onestop centre to fulfill all the shopping needs from daily necessities to dining, fashion, and health and wellness products. Interest in the property development has been very encouraging with more than 35% take up rate being recorded for the 157 shoplots, consisting of 52 sub-basement units, 21 ground floor units, 43 first-floor units and 41 secondfloor units, prior to the soft launch. The property will be developed in stages starting with the budget hotel and followed by Inanam Mall, and finally the higher class 3-4 star hotel. The entire project is expected to be completed by 2017.

Inanam Mall To Offer New Shopping Experience

Visitors to the launch were impressed with the overall development that has taken into account the pressing needs of the business community in the area particularly for car park space and accommodation for their business clients. The proximity of the mall to the surrounding residential properties will also be a major factor in the success of the mall to attract customers and give positive returns to its investors and buyers. For information about Inanam Mall, please contact Tel: +6088-532178 or Fax: +6088-432178 or E-mail: upyield@hotmail.com Website: www.inanammall.com.my

/// FEATURED PROPERTY EVENT

nanam town will be transformed into a modern shopping and leisure destination with the soft launch of Inanam Mall on 8 November, 2014. The development is strategically located on a 1.15 acre plot of land fronting Jalan Tuaran and will consist of a shopping mall with a 10-storey hotel above it. Adjacent to the mall will be a 6-storey budget hotel which is currently under construction. A 3-level car park will provide an additional 300 parking bays and contribute towards easing traffic movement and management in the area. Developed by Upyield Progress Sdn Bhd with a GDV of RM200 million, Inanam Mall will be a much anticipated addition to the townâ&#x20AC;&#x2122;s rapid infrastructure development to cater to the demands of its residents.Inanam town has undergone a surge of development in the last few years with many financial institutions, retail shops, food and beverage outlets and clinics opening up to accommodate the growing population in and around the town centre.

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18  19

/// Hot Topic

March Issue

2014 The Year in Review

Positive Growth Recorded in Property Sector for Sabah’s Capital

/// HOT TOPIC

The news that mattered and opinions that influenced the property development industry throughout the year

Although property prices continued their upward climb in Kota Kinabalu in 3Q2013, the growth rate has been decelerating , a trend that has been observed since the start of 2013. SulaimanSaheh, director of Rahim & Co Research, said the sentiment varied between cautious and buoyant in the period between the 2013 general election and the announcement of Budget 2014.

January Issue New Law Overprotective, Bad for House Buyers

Tg Aru Tourism Project Valued at RM7 Billion A MICE (Meeting, Incentive, Convention and Exhibition) hotel and beach resort is among new facilities to be built under the Tanjung Aru Eco Development (TAED) project at the historic Prince Philip Park in Tanjung Aru, Kota Kinabalu. TAED is a wholly-owned State Government company under the Chief Minister’s Department. Sabah Chief Minister Datuk Seri Musa Haji Aman said TAED will become an integrated development project involving altogether 280 hectares and designed by internationally renowned architects to offer development catering for tourism, recreational, accommodation, community and commercial types of development to meet domestic and international market needs.

House prices in Sarawak are expected to climb higher following the passing of the Housing Developers Bill 2013 by the State Legislative Assemble. Housing Minister Datuk Amar Abang Johari TunOpeng said it was necessary and appropriate to review the existing law in totality in order to provide a more stringent licensing, enforcement, and compliance mechanism. Sarawak Housing and Real Estate Developers Association (SHEDA) President Zaidi Ahmad however said that the new law will cause unnecessary costs and this will be passed on to house buyers. He added that SHEDA had actively discussed with the housing ministry on the amendments but unfortunately most of SHEDA’s views and feedback were not taken into account, such as those pertaining to reducing compliance cost, and reducing the processing time to start and complete development projects.

Electricity Tariff Up by 17% from 1 January in Sabah Energy, Green Technology and Water Minister Datuk Dr Maximus JohnityOngkili said that electricity tariff will be increased by an average of about 14.89% for Peninsular Malaysia, and by about 17% for Sabah and Labuan. However, he noted that 70.6% of consumers in Peninsular Malaysia and 62% of consumers in Sabah and

Labuan will not be affected by the tariff hike as they fall within the category of consumers who use electricity at a rate of, or lower than, 300kWh a month. Rates in Sarawak will not be affected because electricity in the state is operated by staterun company, Sarawak Energy.

More Measures to Curb Speculation Puts Pressure on Property A report by Alliance Research SdnBhd said that the new Bank Negara Malaysia (BNM) ruling that requires banks to give out property loans based on net selling price, which excludes rebates and discounts, rather than gross selling price may affect loans growth for banks this year. The circular sent out to banks announced not only the expected ban on the Developers Interest Bearing Scheme (DIBS) and the interest capitalization scheme (ICS), but also an unexpected rule for all banks to determine their loan-to-value (LTV) ratio based on net selling price rather than gross selling price. The report also commented that while it’s difficult to gauge the impact on banks going forward, the fact that this new rule applies to all property financing, including first time home buyers, means that property buyers’ affordability will be affected and this will lead to lower property loans growth.

February Issue house purchasers who are mostly non-technical and unable to judge if the work has been constructed to specifications, and if the works are of reasonable quality and workmanship.”According to him, the building inspector’s report can protect the rights of the house purchasers, especially if there is any dispute and the case ended up with the Housing Tribunal.

Body Calls for Review in Sarawak Housing Policy

Engage Architect Centre to Inspect Houses to Protect Your Rights PAM (PertubuhanAkitek Malaysia) Sabah Chapter has urged the public to engage the Architect Centre, Malaysia to check their houses to protect their rights. There are 32 building inspectors in Sabah who are accredited by Architect Centre, Malaysia. Its chairman, Ar. Victor Wong said, “Their professional services could prove invaluable to

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A call has been made for the state government to review its policies on housing for fear that the younger generation will not be able to own a home of their own given the escalating property prices. The state DAP Socialist Youth Sarawak (DAPSY) chairman Wong King Wei said the report on rising house prices in the state showed that it was now a matter of policies rather than global market influences. “Part of the reasons is the rise in land cost and higher conversion of premium paid to the Land and Survey Department, like for conversion of agriculture land to mixed zone,” he said.

Construction Contracts to Drop 16% This Year Domestic construction contracts are expected to shrink by 16% to RM13 billion this year, on the back of fiscal tightening and property cooling measures introduced by the government, says Alliance Research SdnBhd analyst Jeremy Goh. “With fiscal tightening measures, we believe the slowdown in government related projects, which on average account for 72% of all the contract awards over the last five years is inevitable as a more prudent spending stance is taken,” he noted in his report. He added that there is also a risk of a slowdown for private sector awards which will likely cause construction players to look for contracts overseas.

Young Working Adults Deterred from Buying Houses in Sarawak A survey of 20 young working adults between 25 and 35 years old found a mixed response to buying a house this year. Many expressed their concern about the rising cost of living as the stumbling block to acquire a suitable home, citing income sustainability in monthly expenses as the main worry. The respondents ranging from executives to bankers, teachers, doctors and engineers all agreed that purchasing a property was considered an investment. However, 80% of them said they would hold back their decision to buy a house amid the rising cost of living and property prices.

While most of the properties sampled continued to record positive growth year on year, growth was slower quarter on quarter.

Masterplan Aimed at Capitalising on Kuching’s River The ambitious Darul Hana redevelopment project, led by Australia’s Cox Architecture (CA) and Sarawak’s JurubinaUnireka, willcomprise of 12 Malay villages along Sungai Sarawak, starting from the new Sarawak Legislative Assembly Complex to parts of Bintawa, and when completed, will more than double its present area from 300ha to 721ha. The Darul Hana masterplan is CA’s second project in Malaysia after the Kuala Lumpur Convention Centre. The Land Custody and Development

Authority (LCDA) is overseeing the implementation of the project, which it said would take between 10 and 15 years to complete.

Penang’s Second Bridge to Boost Land Prices Penang’s property prices have risen by quite a bit since the mid-2000s although the appreciation of prices has been limited to several popular locations on Penang Island, particularly Georgetown. However, since the second bridge project was announced in 2007, vacant land prices on both ends of the bridge, which connects BatuMaung on the island to BatuKawan in southern SeberangPrai, have jumped. Raine& Horne Malaysia director Michael Geh said the price of vacant land in BatuMaung on the island had increased to RM250-RM300 psf from RM50-RM60 psf. Geh pointed out that the pricing depended on whether the land had been zoned for agriculture, commercial or residential usage. He noted that with the island getting saturated, developers and investors would take more interest in building or acquiring properties in Seberang Prai.

April Issue Property Hunter Expo Kota Kinabalu Showcase Top-Notch Properties The free-to-attend exhibition held at the Sabah Trade Centre from 7 – 9 March, 2014 featured over 50 developers and more than 70 properties from Australia, Singapore, West Malaysia, Sarawak and Sabah. The event attracted more than 15,000 visitors and garnered a record breaking sale of 200 units totaling up to RM150 million. Event organizer Maxx Media (S) SdnBhd made an earlier pledge to donate RM50 for every unit sold during the expo to Habitat for Humanity, a nongovernmental organization that helps eliminate poverty by building affordable houses for the less fortunate. They managed to raise RM10,000which was topped up to RM4605.55 through donations from the public and event speakers AhyatIshak, Chris Tan, MiichaelYeoh, FaizulRidzuan and Richard Oon from their book sale at the expo.

Property Hunter E-Magazine and Facebook Fanpage Readers of Property Hunter (PH) magazine can now download a digital copy of the magazine on Google Play, iTunes, Joomag and Magzter. The digital version of the magazine will enable PH to target a different section of audience, especially those within the age group of 29 to 40 years old who are becoming increasingly dependent on modern technology.With these new functions,

PH aims to diversify and expand its audience demographics and to create a different experience for users who can now instantly get the latest updates on the property market in Sabah. In addition to the e-magazine, Property Hunter has also expanded its search function on its Facebook fanpagewhich has close to 10,000 likes. PH is the first organization in Sabah to incorporate this search function on their account which is directly linked to their website that has all the latest updates on the property sector in Sabah.

Property Prices in KK Surged Up to 100 – 150% Says SHAREDA The city is ranked third in Malaysia, after Penang and Kuala Lumpur, in terms of the rapid surge in property prices, with prices surging between 100 and 150 per cent in the past five years.Sabah Housing and Real Estate Developers Association (SHAREDA) president Francis Goh expects the trend to continue for the next five years. He commented that high end properties are more worth it and yield a higher return on investment but buyers should not be surprised with property prices because the land within 3km radius from the city centre now costs between RM300 and RM400 psf or between RM12 million and RM16 million per acre.

Unlisted Real Estate Agents Tarnishing Industry Malaysian Institute of Estate Agents (MIEA) president Siva Shanker said there are now 30,000 to 40,000 unregistered real estate agents and negotiators in the country who are profiteering through various misconduct practices which is jeopardizing the professionalism and accountability of the real estate industry. Among the misconducts reported include the misinterpretation of the size of property, miscalculation of assets valuation, failure to return deposits and delay in providing services before signing the purchase agreement. Shanker said that after the announcement of the introduction of a new tag system which will come into effect in May, real estate agents have been on the move to get themselves registered.

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/// Hot Topic

May Issue 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 SHAREDA annual report aims to reveal actual data which reflects the importance of the property development industry to Sabah’s economy and affirm the industry’s performance as on par with or even superior to the four other key industries namely plan oil, oil and gas, tourism and manufacturing, adds Goh.

SHAREDA Members Generated RM7.56 Billion GDV in 2013 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 LahadDatu 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.

MyHome Scheme Started on April 1 The MyHome Scheme, which provides a RM30,000 incentive for each affordable house, opens for applications starting April 1. The scheme, announced by Prime Minister Datuk Seri NajibTunRazak last year, consists of a RM300 million incentive allocation offering 10,000 units of

affordable homes nationwide. Under the scheme, qualified private sector developers will receive an upfront 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. 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.

SHAREDA Releases 2013 Property Development Annual Report The Sabah Housing and Real Estate Developers Association (SHAREDA) recently launched its inaugural 2013 Property Development Annual Report. The report aims to be a relevant source of reference for related government departments,

SHAREDA Property Hunter Expo Returns to Sandakan for the Third Year The flagship SHAREDA Property Hunter Expo (SHAREDA PH Expo) returns to Sandakan for the second year. Held at the Yu Yuan Secondary School Function Hall from 11 to 13 April 2014, this free-to-attend exhibition is jointly organized by the Sabah Housing and Real Estate Developers Association (SHAREDA) and exhibition organizer Maxx Media (S) Sdn Bhd. It featured over 56 booths consisting of both local and international developers, property agents and banks. 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 Kota Kinabalu, 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.”

the latest zoning for the Draft Kota Kinabalu Local Plan 2020 which sees Sabahans losing even more public spaces to make way for even more hotels and resorts. “We were shocked when we saw the new draft plan produced by Kota Kinabalu City Hall (KKCH) for Tanjung Aru beach area which shows three areas on water, zoned as ‘Hotels & Resorts’ which in turn leaves an extremely small patch of beach for members of the public,” said SEPA President LanashThanda. “This new reclamation areas and zoning for Hotel & Resorts such as those described in the Tanjung Aru Eco Development (TAED) for example is unacceptable and goes against what the majority of people want,” stressed Lanash.

Sarawak Assembly Passes Resolution Calling for 20% Oil Royalty to Boosting Local Economy The Sarawak Legislative Assembly has unanimously voted in favour of a resolution to request the Federal Government for an increase in oil royalty from 5% to 20%. The motion on the increase was tabled by Abdullah Saidol (BN-Semop) and approved. Abdullah told the House, “This motion is about our desire to review the royalty rate to a quantum more favourable to us. It can be also construed as a request for more development funds which we can channel to rural areas where basic needs like electricity, clean water and roads are still needed.”

managing director Robert Ting, prices of houses had increased at least 60 per cent over the last decade, and in some cases, even doubled or tripled over the past 10 to 15 years. He added that the demand for housing is in tandem with population growth, with figures compiled by WTWY research showing Miri division’s population growth reaching close to 440,000 in 2020 and to hit 530,600 by 2030 from 364, 500 in 2010.

Miri’s Property Outlook Remains Buoyant Demand for residential houses in Miri has increased sharply over the years with the annual take-up rate rising to more than 1,000 units currently, including low-cost houses. According to CH Williams, Talhar, Wong & Yeo SdnBhd’s

The Biggest Property Expo Returns to Tawau For the third year in the row, the flagship exhibition, SHAREDA Property Hunter Expo (PH Expo) which is jointly organized by the Sabah Housing and Real Estate Developers Association (SHAREDA) and Maxx Media (S) SdnBhd returns to Tawau. The event was held from 16 to 18

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East Coast of Sabah Property Sales Dropped in Excess of 50% in Q2 2014 Property developers are starting to feel the crunch brought on by various cooling measures that were announced in the 2014 budget. It was a knee-jerk effect that brought Sabah’s property market’s

Public Outcry at Even More Reclamation Planned for Tg Aru in KK Draft Plan 2020 The Sabah Environmental Protection Association (SEPA) expressed shock and disappointment at

The scheme was banned under Budget 2014 as it has led to spiraling property prices. This is because speculators only need to fork out a low downpayment thanks to it, and then they can sell the completed home for a quick profit.

Errant Developers Face Jail and RM500,000 Fine House buyers are now being given more legal safeguards against errant housing developers who abandon their projects. Under the amendments to the National Housing Development (Control and Licensing) Act 1966, developers of abandoned projects may be fined RM500,000 and jailed for

up to three years. House buyers will also be able to terminate sale and purchase agreements with developers if there was no progress for six consecutive months or more and seek a refund of deposits within 30 days.

More Curbs on Property Speculation In a move to further curb property speculation, developers who sell more than four residential units to a single person or a company must now register the purchaser with the housing controller within 14 days of the sale and purchase (S&P) agreement being signed. This new requirement is expected to improve transparency in the housing industry and to keep the prices of houses stable. A spokesman for the National Housing Department said that all developers must display in detail the selling price, which includes all free offers of goods, services and payments.

August Issue

uptrend to a standstill with developers and buyers adopting a wait and see attitude as to how far the implications will affect the market. Sales figures from the recent SHAREDA PH Expo 2014 in Sandakan (11 – 13 April) and Tawau (16 – 18 May) reflected this downturn with a significant drop in figures compared to last year. According to director of Property Hunter, Michael Hiew, despite a 30% increase in developer participation, SHAREDA PH Expo Sandakan posted a significant drop of 56% in property sales from RM43.5 million in 2013 to RM18.9 in 2014. Visitor numbers mirrored the weakened sales figures with a drop of 53.1% from last year.

The government should reinstate the Developers Interest Bearing Scheme (DIBS) for first-time buyers, according to the Real Estate and Housing Developers’ Association (REHDA) Penang Branch. Apart from making it easier for legitimate buyers to acquire a roof above their heads, the scheme is very helpful to first-time buyers, especially for those who are struggling to pay the mortgages of their uncompleted property as well as the rent of their temporary shelter at the same time, explained Branch Chairman Datuk Jerry Chan.

July Issue

June Issue May 2014 at the Lau GekPoh Foundation Hall. It featured feature over 32 exhibitors consisting of local and international developers, property agents and banks. Sabah Minister of Youth and Sports Yang Berhormat Datuk Haji Tawfiq Datuk Seri Panglima Haji Abu BakarTitingan said, “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,” he added.

Allow DIBS for First-Time Home Buyers: REHDA

Khoo thinks that Sarawak’s property market growth is sustainable, as it is not artificially inflated by speculators as compared to other hotspots within the country. Ho Chin Soon says, “On the property front, we see the steady increase in property and land prices over the years, with greater quantum of increase over the last few years. This is a good sign as we see a continuous upward trend in this market.”

Bintulu Market to Heat Up in Second Half of 2014 Right Time to Invest in Sarawak’s Property Hotspots “Sarawak may not be the most obvious property investment hotspot but it is certainly developing into one.” This was the key message by Chris Tan, Enoch Khoo and Ho Chin Soon, Malaysia’s renowned property investment experts. Tan opines that a hidden hotspot is always better than popular hotspots where there may be ‘over-heating’, while

Due to upcoming mega projects under the Sarawak Corridor of Renewable Energy (SCORE), Bintulu’s property market is expected to become more vibrant in 2H2014. “Most mega projects in Kidurong and Samalaju may take off then, and consequently, Bintulu will experience an influx of the working community to the town,” said CH Williams, Talhar, Wong &

Yeo SdnBhd (WTWY) managing director Robert Ting. Bintulu’s rental market is also flourishing. For instance, two to three-bedroom fully furnished condos could be rented out for RM2,000 to RM6,000 per month, noted Ting.

Datuk Seri FD Iskandar Takes Over Helm at REHDA Real Estate and Housing Developers Association (REHDA) welcomed its new president Datuk Seri Fateh Iskandar Mohamed Mansor at its annual delegates conference on June 21. Prior to his new position, he was the deputy president and most recently past branch chairman of REHDA Selangor. He is also the group managing director of Glomac Bhd.

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/// Hot Topic

landed properties are getting further out of reach for the majority of Sabah’s population.

September Issue other finalists in this category include Astro, Star Publications (M) and Dealguru Holdings. The Best Content Team award recognises the outstanding content team within a media owner operation. It assesses how the content team devises solutions for clients and the team’s ability to innovate and create powerful content based on audience and client needs. It also clearly demonstrates the content team’s excellent relationshipwith clients and agencies and its professional outlook. Property Hunter was up against Mongoose Publishing, RAPPLER, simple show Asia and SUMMIT Publishing Company for this award.

Land Prices in Kota Kinabalu Skyrocket with 30,000 Sqft Sold for RM20 Million

Property Hunter Presents Donation of RM 22,273 to Habitat for Humanity

Property Hunter Shortlisted in Two Categories at the Spark Awards 2014

The 2014 Property Hunter Expo series held in Kota Kinabau (March), Sandakan (April) and Tawau (May) has successfully raised a total of RM22,273.65 to be donated to a charitable organisation. The organiserMaxxMedia (S) SdnBhd had pledged to donate RM50 for every unit sold during its annual series of expos in Sabah for Habitat for Humanity, a non-governmental organisation that helps eliminate poverty by building houses for the less fortunate. Members of the public who visited the expos were also encouraged to donate to top up the amount pledged by the organiser. This is the first year that Property Hunter has included a CSR project to coincide with its expo series and the public response has been very encouraging.

Property Hunter has achieved another milestone in its career by being shortlisted as a finalist in two categories of The Spark Awards for Media Excellence 2014, a brand new award introduced by Marketing magazine to celebrate best practices in media solutions, products and services. The awards recognizesmedia owners who showcase their innovation, effectiveness, and value proposition to advertisers, agencies and clients. Out of the 26 contestable categories, Property Hunter was shortlisted as one of the finalists in the Best Subscription Strategy and Best Content Team categories. The Best Subscription Strategy award recognises a subscription strategy that delivers outstanding results which can either be a single campaign or part of an overall strategy that can extend to online, digital and mobile executions. The

A 30,000 sqft piece of land next to the Kota Kinabalu Chinese Chamber of Commerce building was reportedly sold for an astronomical figure of RM20million. This would account for a land cost of nearly RM700 per square feet, an almost unheard of figure and definitely the highest sale record achieved in Kota Kinabalu so far.According to sources, a well-known businessman is planning to build a 20-floor serviced apartment or SOHO (Small Office Home Office) on the plot.

70% Rejection Rate Among 1st Time Buyers The tougher mortgage rules introduced by Bank Negara Malaysia (BNM) will continue to negatively affect first-time home buyers, according to Datuk Othman Omar, Chief Executive Officer of Oxley Holdings (M) Sdn Bhd. During his term as the general manager at Selangor State Development Corp (PKNS), he pointed out that 70 per cent of housing loan applications from this group are rejected as eligibility is now based on net income rather than gross income. “Previously, first-time house buyers qualify for loans just above the border but now they do not qualify due to the loan-to-value ratio and the new credit assessment guidelines,” he says. “The new ruling punishes the first-time home buyers seeking affordable homes more compared to the high-end property buyers,” he noted.

SHEDA Property Expo 2014 It was an activity packed three days at the annual SHEDA Property Expo held at the Borneo Convention Centre in Kuching from 22 – 24 August. Sarawak’s top drawer list of housing and property developers were at the expo to impress buyers with a range of properties while other related products and services such as manufacturers and suppliers of building materials, home and lifestyle furnishings and bank also made an appearance to complement the needs of home buyers and investors.

Property Hunter Opens New Office in Mont Kiara Property Hunter launched its new establishment in Solaris Mont Kiara, Kuala Lumpur in partnership with Enoch Khoo, Director of ENK Ventures Sdn Bhd. Since the early days of the monthly magazine, Peninsular Malaysia developers and agencies have always made up a significant portion of its business portfolio. According to Elson Kho, one of the five aspiring directors of Property Hunter, the establishment of the KL office is a strategic one

as it allows the company to serve its ever growing clientele base there. “Enoch and us share the same vision in bringing quality property developments to investors in East Malaysia and at the same time,

November Issue doubling, while prices in Malacca rose the least at 50 percent. The boom came about from a strong domestic activity-driven economy, low interest rates and favourablelabour market conditions, according to the report.

to ensure that the needs of the residents are incorporated into the design. Funds for the new housing will be raised through a charity event to be organized by SHAREDA in early 2015 and construction is expected to commence by April.

SHAREDA Youth to Build New Housing for the Blind

New Marketing Platforms for Developers in Sarawak

Sabah Property Sector Outperforming

The Wallace Sheltered Workshop in Tuaran provides the blind with a place to work and stay while waiting to secure employment. Managed by the Sabah Society for the Blind, the centre currently houses 35 families but many of the houses are now in unlivable condition and unable to cope with the demands to accommodate more residents.

Some consolidation is due for the Malaysian property market following the “property boom”, according to research from a leading financial institution. A tighter monetary policy and macro prudential measures will help cool the property market, noted Standard Chartered Bank in a recent report. Housing prices rose 72 percent during the first quarter, enjoying a 6.7 percent average growth annually. Sabah outperformed with prices more than

Members of SHAREDA’s youth wing led by its Vice President, Kevin Thong paid a visit to the centre to survey the area in preparation for its CSR (Corporate Social Responsibility) project to build a new housing unit to replace the dilapidated houses. A design proposal to construct a longhouse unit with six twin-sharing rooms and a common dining and living area has been prepared and will be brought to the centre’s management for consultation

Property Hunter hosted a private event to meet with property agents, negotiators and developers in Kuching to mark its first step towards a visionary expansion plan into the state of Sarawak. The highlight of the event was the introduction of Property Hunter’s web portal and its many useful functions that were designed to be used as the agent’s personal property sales catalogue.

October Issue SHAREDA Propex 2014 The annual SHAREDA Propex held at the Sabah Trade Centre from 22 – 24 August continued to spur the Sabah property development industry with a strong show of support from its members. A total of 132 booths and 42 developers together with exhibitors for green products and theMyHome scheme gave visitors a broader perspective of Sabah’s property market today and in the future.

Government to Re-Allow DIBS? The government is open to lifting the ban on the Developer Interest Bearing Scheme (DIBS) in the

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housing market if there are compelling reasons, according to the Urban Wellbeing, Housing and Local Government Ministry. Its Minister Datuk Abdul Rahman Dahlan said the housing ministry will look into this on a case-by-case basis. “If there are some indicators that DIBS can be reintroduced we have no problem with it but the most important thing is we must be flexible and nimble,” he added. But Chang Kim Loong, Secretary-general of the National House Buyers Association, stands firm on his belief that DIBS should be permanently banned as it promotes speculation. “In the event of an economic downturn, banks saddled with too much DIBS end-financing could collapse as the losses from such DIBS end-financing will erode the banks’ capital,” he added.

PH Expo KK Commercial Edition Sabah Construction Cost Among Highest in Malaysia According to SHAREDA president Francis Goh, the cost of construction material in Sabah is among the highest in Malaysia. He says, “Building material and construction cost in Sabah is estimated to be 30 per cent higher than in Peninsular Malaysia and this is reflected in the housing price.” The price difference has been largely attributed to the cabotage policy implemented in Sabah and the higher cost of building materials such as sand, tiles and bricks. With landowners demanding higher rates to develop their land, and coupled with the high cost of construction materials, prices for

assisting developers in West Malaysia to make their entry and market their projects in both Sabah and Sarawak,” added Kho.

PH Expo KK Commercial Edition The spotlight was on commercial properties at the expo held at Suria Sabah Mall from 3 – 6 October. A diverse range of properties from Sabah and Peninsular Malaysia featuring shoplots, townships, offices and a resort gave visitors ample opportunity to explore new investments for their current and future business needs.

“We created a platform to simplify the marketing process so agents can focus on selling to the right person,” says Elson Kho, one of the directors of Property Hunter. “All they have to do is just send the listing’s link to a prospective client to see before arranging for a physical inspection, thus saving a huge amount of time and resource.”

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SHAREDA Urges Developers to Invest in Leisure Properties highlighted the potential of leisure properties development in Sabah. His proposal to further develop this sector of the property market is supported by statistics from the Sabah Economic Development and Investment Authority (SEDIA) who was also present during the talk. About 3.5 million visitors arrived in Sabah in 2013 and they spent a total of RM6.35 billion. Sabah achieved a growth rate of 8% between 2006 and 2013 and has the highest tourist spend (RM1, 810 per tourist) in Malaysia. Tourism is identified as one of the six key economic sectors in the Sabah Development Corridor masterplan and it targets to increase tourism visitor receipts to RM16.8 billion in 2020.

SABAH

Datuk Francis sees excellent prospects on investing in leisure properties and pointed out the Tanjung Aru Eco Development (TAED) as an example.

PROPERTY NEWS

Datuk Francis Goh, President of SHAREDA

Datuk Francis Goh, President of SHAREDA, has urged developers from Peninsula Malaysia to invest in resort development instead of focusing on residential and commercial properties in Sabah. He was answering a question posed during a talk organized by SHAREDA for participants of The Edge Property Malaysia Top Property Developers Networking Retreat in Kota Kinabalu recently.

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

SHAREDA Emphasizes on Unity Housing and Real Estate Developers Association). “There were a lot of uncertainties in the property market as well so the theme ‘unity’ is very appropriate to show the strength and unity among the SHAREDA members.”

SHAREDA Nite 2014 Organising Chairman, Ben Kong (SHAREDA Secretary General)

SHAREDA will be hosting its annual dinner at Magellan Sutera Harbour Resort on 14 November with the theme ‘Unity’ to signify the strength the people of Malaysia has shown in overcoming adversity by being united in thoughts, deeds and conviction. “Malaysia has gone through a very difficult year with tragedies and uncertainties which have affected everyone,” says Datuk Francis Goh, President of SHAREDA (Sabah

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Datuk Goh was speaking during a press conference to announce the programmes for this year’s annual dinner which will see several significant changes. Organising Chairman, Ben Kong explained further that the theme is soundly rooted in the strategy of the newly formed SHAREDA Youth wing which has been entrusted to conduct the association’s CSR (Corporate Responsibility) and public relations activities. “The basis of the youth wing is to unite and groom the youth in the industry to be more environmentally sensitive and socially accountable in tandem with the needs of the people in Sabah,” says Kong. “Breaking away from the norm of donating funds to a selected charity,

SHAREDA this year will, through its youth wing, undertake a voluntary project to build new housing for the residents of the Sabah Society for the Blind centre in Tuaran,” explains Kong. “The project aims to raise RM500,000 to build a 6-room accommodation with all the necessary facilities and amenities that are suitable for the needs of the sight-impaired residents. So far, at least half of the target has been reached with donations from the 191-member strong association with the balance expected to come in before the project commences in early 2015.” By implementing projects that addresses vital concerns and issues, SHAREDA hopes to provide long-term solutions and sustainable benefits for the charity recipients. “Instead of just donating money, SHAREDA has identified about four to five charities to work with and support. Once we have accomplished our mission with one organization, we will move on to the next. We want to eventually create something that

is impactful, physically visible and can be used for the long-term to assist the charity in becoming a self-reliant organization,” add Kong. To end this year on a high note, SHAREDA Youth Wing council member, Roy Chiew said they will be organizing a Show Box Giveaway at Suria Sabah Shopping Mall from mid-November to mid-December. Members of the public can donate gifts or second-hand items that are still in good condition at the various collection centres at the mall. Gifts and items collected will be distributed to seven orphanages on the west coast identified by SHAREDA with any surplus to be donated to orphanages outside of Kota Kinabalu. In keeping with the unity theme, this year’s SHAREDA Nite entertainment will feature an impressive line-up of performers which include Stomp the Rhythm, a percussion group that produces music from a variety of construction tools, soul R&B artist Poova and the dynamic jazz duo of Rozz & Meilin.

Some 60 delegates from more than 20 companies including winners, past winners and judges of The Edge Property Excellence Awards (TEPEA) 2014 that was held in Kuala Lumpur on 13 October as well as Sabah property developers and consultants, attended the three-day retreat which included site visits to several notable developments in Kota Kinabalu and a talk on investment opportunities in Sabah hosted by SHAREDA. The retreat, organised by the Sabah State Government and facilitated by The Edge Malaysia weekly, was aimed at introducing the state to

property developers from Peninsular Malaysia as a destination for potential development and investment. “These [developers] are the very people I believe can help generate stellar ideas that will form the backbone of a development blueprint for [Sabah],” said the Minister of Urban Wellbeing, Housing and Local Government Datuk Abdul Rahman Dahlan in his speech during the welcome dinner hosted by the chief minister of Sabah Datuk Seri Musa Aman. Abdul Rahman mooted the idea for a networking retreat to Kota Kinabalu during the TEPEA last year. Over three million tourists visited Sabah last year and the number of tourists is expected to increase despite recent security related challenges, and there is a need for more hotels and resorts to be developed to support tourism, said Musa in his welcome speech. Earlier in the day, Datuk Francis presented a talk on Trends in the Sabah Property Market which

He gave a comparison between the property development in Bali, where a kilometre of beach has up to 20 resorts and hotels but for TAED, a 1.6km beach has planned for only six resorts and hotels. “There is a need for more hotels, resorts and other tourism leisure properties to support the demand of the increasing number of tourists,” he said. He mentioned that this development would be a new avenue for the developers to look into as a way to move away from the active competition by local and peninsular-based developers who consistently target residential and commercial mixed development in urban areas. “Sabah lacks leisure properties like beachfront villas and paddy field villas to sell to investors. Sabah just does not have these products to sell. “If such developments happen, Sabah can be the best place for the Malaysia My Second Home programme. Sabah is the best state in Malaysia for the success of this programme,” he said.

Not Fair to Penalise the Rich (SHAREDA) president Datuk Francis Goh. He said it was unfair to implement the fuel subsidy mechanism which outlined that only those earning below RM5,000 would receive full subsidy while those earning RM5,000 to RM10,000 would get a partial subsidy.

The rich should not be penalized by excluding them from enjoying fuel subsidies, said Sabah Housing and Real Estate Developers Association

“In my opinion, being rich is not a sin. People work hard to earn money, so why penalize them?” said Francis, when met at a press conference on SHAREDA Night 2014.

He urged policy makers to “think carefully on the matter, considering the country’s tax income comes from the 15 per cent of good taxpayers who are high-income earners.” “You cannot penalize a person who is already paying taxes. In fact, the government should be indebted to those 15 per cent because without them, there would not be the RM40 billion worth of taxes paid by them,” he added. Goh compared the idea to that of a ‘Robin Hood’ culture, robbing the rich to help the poor. Such a mechanism he said would hurt the economy

in the long run as it seemed to encourage the 85 per cent to avoid from paying taxes in the future. After all, he added, Malaysia is an oilproducing country, hence, the benefit should be enjoyed by all. He also pointed out the inconveniences that will be caused by the need to screen customers’ income data at petrol kiosks to implement the programme. “We have been contributing vast taxes for the progress and development of the country. The rich have already paid their due through taxes, and should not be further penalized,” said Goh.

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PHOTO Property Hunter Opens New Office with Sales Gallery

t all started with a 150 sqft office space in Lintas Square with two other companies occupying the rest of the office lot. It was small but the confined space did not shackle the ambition and drive behind the team that was determined to bring a budding property magazine to new heights and put it on par with the more established players in the industry. Property Hunter is a multimedia platform that includes a magazine, web portal and expo that promotes new and upcoming property developments to buyers and investors throughout East Malaysia. It was born with the clear vision to enhance the general publicâ&#x20AC;&#x2122;s knowledge of property investment, particularly in East Malaysia where the industry is still growing and offers so much potential to develop further. Focusing on the essentials of advertising, whether through conventional print media or the more sophisticated social media platforms

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we have today, became the hallmark of Property Hunterâ&#x20AC;&#x2122;s strategy and it paid off with a growing list of clientele. Property Hunter moved to its new premises in 2012 with 1,200 sqft of space to accommodate its increased number of staff. With it came a new challenge to push the boundaries even further and to achieve even higher goals. Starting with developers in Sabah, the client list began to expand and include property developers from all over Malaysia. Acknowledging the fact that the developers from outside Sabah has to put in a substantial amount of time and money to organize a property showcase here, Property Hunter has come up with a solution to help them make the most of their business investment. Starting in December 2014, another 1,200 sqft of office space will be added at the Property Hunter premises to feature a sales gallery at the front and a complete office

system to manage the day-to-day running of the gallery. This dedicated space can be rented on a package basis to include catering for special events and printing services for advertising and promotion. Developers will now have the option to extend their marketing campaign from a weekend showcase to a longer exhibition with ample wall space to display their promotional materials and property model. The extended exhibition period will also present opportunities to follow up

on interested individuals who did not manage to attend the initial showcase. In keeping with the need to be energy efficient, the new office will be equipped with LED lighting throughout, an LED HD TV for presentation purposes, glass panels treated for heat resistance, and insulated partition walls to conserve electricity consumption.

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HSL to Bid in Pan Borneo Highway Project “We will bid for the works on a case-by-case basis based on our strength in the marine engineering field. We are also quite competitive in roadworks especially in coastal swampy areas that normally involved reclamation works.” Notably, the federal authorities have estimated RM27 billion in construction costs in order to complete the Pan Borneo Highway, which spans 727km in Sabah and 936km in Sarawak.

Hock Seng Lee Bhd (HSL) plans to bid for the new works in the Pan Borneo Highway project, which is expected to be accelerated by huge funding under the federal 2015 Budget, reported the media.

“As a major marine engineering and construction firm, HSL expects to have inflow benefits from the increased development allocation for the Pan Borneo Highway,” said its corporate affairs director Sonja Gan.

Works Minister Datuk Fadillah Yusof said the Pan Borneo Highway project, which was now placed under the public private partnership unit of the Prime Minister’s Department, will be fast-tracked with the upgrade of the Sarawak trunk road into a dual carriageway.

Sarawak each next year to finance their respective works packages. Moreover, a separate allocation of RM943 million under Budget 2015 will be used to fund the development of additional 635km of rural roads as well as former logging tracks for Sabah and Sarawak. “It is heartening to note that the federal government is putting its spotlight on Sarawak in view of the needs for more infrastructure development in the state,” said Gan. “Sarawak deserves more fund allocations as there is a lot of catching up to do in infrastructural development and provision of other basic amenities such as treated water supply in remote areas.”

He revealed that around RM500 million will be allocated to Sabah and

Niro Granite Unveils Trendsetting Tiles Johor Bahru, and Penang before making its fourth stop here in Kota Kinabalu. Low explained that while Niro Granite tiles caters to a wide range of taste, styles and budgets, the newly launched series aims to deliver a higher level of quality and excellent craftsmanship. Tavertine, which comes in four formats with 14 neutral colours of beige and brown tones, exemplifies the aesthetic beauty of minerals and rocks. Besides being offered in 40x80 cm and 80x80 cm size, Travertine is also available in the new large format of 60x120 cm. Putting the finishing touches to your home or office has become more gratifying with Niro Granite’s new Autumn Collection 2014 range of tiles. The exquisite and superbly crafted tile series which embody the essence of style and luxury, adding a touch of elegance in every room, was launched in Kota Kinabalu on 28 October, 2014. Niro Ceramic Sales & Services (M) Sdn Bhd sales general manager, Low Chin Guan said that the latest trend in tile design is geared towards bigger and rectangular tiles to give a room a greater sense of space and vivacity. Europe has set the trend

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with the use of 60x 120 cm tiles that incorporates marble or natural stone designs. Get a first look at Niro Granite’s latest collection with this season’s theme inspired by togetherness and spaces with the launch of Travetine, the natural resemblance of rock and Bellaza Porcelana, the everlasting design which resembles marble and wood. The polished finish of these series serves to infuse sophistication and elegance in today’s modern architecture. Travertine and Bellaza Porcelana was recently launched in Kuala Lumpur,

The new large tiles are incredibly versatile as it can be installed as living room flooring, bathroom walls, kitchen tabletops and even staircases to create a distinctive look for any surface. Larger sized tiles also means less grout, making cleaning easier and fuss-free. The Bellaza Porcelana series is introduced in three formats and four exclusive designs, namely Sapwood, Calacatta, Sandstone and Burbon Beige. Creating a truly urban and sophisticated look is easy with the classic marble and earthy tones of this series. The designs are

incorporated into each tile by digital printing technology for a refined look and given a beautiful polished finish to create a stunning effect. Low adds that Niro Granite offers its clients expert advice on the installation of its products to ensure that the best results are achieved. Developers, interior designers and architects can get in on the latest trends in tile colour and design at the company’s showroom located along Jalan Lintas. Niro Granite began 35 years ago when Niro Ceramic Group’s first manufacturing plant was founded in Switzerland to introduce porcelain tiles to the world. Its rapid growth in the Asian market eventually led to the establishment of Niro Granite Malaysia in 1988. Today, Niro Ceramic Group operates in six countries, namely Malaysia, China, Vietnam, India, Indonesia and Spain while its three manufacturing plants are located in Malaysia, Indonesia and Spain. In 2013, Niro Ceramic Group acquired the notable Spanish tile brand Zirconio and its factory.

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Holistic Approach Needed to Resolve Cabotage Policy while enforcement also used to be imposed on those offenders who are likely to simply increase the costs,” Wee told reporters after attending a dialogue session with about 120 SME entrepreneurs at a restaurant here. The SME entrepreneurs voiced their dissatisfaction and plights towards the Cabotage Policy, poor basic infrastructure, port surcharge as well as the impact of the GST (Goods and Services Tax) which will take effect from April next year. They claimed that the Cabotage Policy was keeping Sabahans poor. For example, whatever you buy for RM1 in Kuala Lumpur, you pay at least RM1.30 in Kota Kinabalu. The prices are higher by 30 per cent in the rural areas. Sabah United Chinese Chambers of Commerce (SUCCC) President Datuk Seri Panglima Gan Sau Wah said 80 per cent of the entrepreneurs in Sabah are running a small family business and yet, the coming GST will affect them directly which will cause most of them to shut down their family business. “Thus, we would be glad if implementation of GST could be delayed for the betterment of the family business sector,” he added.

Sepanggar Port in Kota Kinabalu, Sabah

Minister in the Prime Minister’s Department Datuk Dr Wee Ka Siong recently said there should be a holistic approach to overcome the unresolved Cabotage Policy imposed on Sabah which had led to the high cost of living and soaring prices of goods and services throughout the state. Wee said the Cabotage Policy was the reason for the difference in prices of goods and services between Sabah and in Peninsular Malaysia.

“It is affecting and a burden to all SME entrepreneurs, even the businessmen in state,” he said and cited as an example where the price of cement is between RM16.50 and RM20 per bag in Sabah but it costs only RM12 in the Peninsula. The prices are higher in the rural areas due to the possibility of handling charges. “Hence, there is a need to implement price adjustment and good mechanisms for striking a balance

After the dialogue, Gan submitted a memorandum about the effects of GST towards the SME entrepreneurs in Sabah to Wee. Meanwhile, Tawau Chinese Chamber of Commerce (TCCC) President Lo Shu Fui also presented their memorandum in respect of the entrepreneurs’ problems and people’s social problem to Wee for further action.

Study on ‘Youth City’ to Start Next Year inspired by Prime Minister Datuk Seri Najib Tun Razak, to identify the location and size of the city, as well as facilities. “The concept is still in its infancy. We need more time to ensure the idea is realised,” he told reporters after an interview for RTM radio programme, Ekspresi Sabah FM. Abdul Rahman said other ministries involved in the study were Youth and Sports, and the Rural and Regional Development.

A study on the concept of developing a ‘youth city’ will start next year, says Urban Wellbeing, Housing and Local Government Minister Datuk Abdul

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Rahman Dahlan.

The latter will look into the construction of studio apartment or houses, effective transportation system and location of creative industry.

According to him, an allocation has been provided to conduct the study,

He said the ‘youth city’ would be developed, according to the likes

of the youth, as 50 per cent of Malaysia’s population comprised those aged 40 and below. He said ‘youth cities’ would be set up in Sabah, Sarawak and the Peninsula. In another development, Abdul Rahman said his ministry would be reviving abandoned housing projects with a RM2.015 billion allocation next year. He said Sabah would receive the largest portion of the allocation with 16.43 per cent, followed by the federal territories and Johor, at nine per cent each. “The total number of abandoned houses is not big. The total throughout the country is less than three per cent,” he noted.

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Colourful SHAREDA Nite 2014 Celebrates Unity

he annual dinner organized by Sabah Housing and Real Estate Developers Association (SHAREDA) chose the theme ‘Unity’ for its annual SHAREDA Nite 2014 held in Kota Kinabalu on 14 November, 2014 to symbolize the key to the transformation programmes its council members are trying to bring to the association. Minister of Local Government and Housing, Datuk Seri Panglima Haji Hajiji Haji Noor graced the occasion as guest of honour representing Chief Minister Datuk Seri Panglima Musa Haji Aman. It was an evening of colour, camaraderie and community as Sabah developers, government officers and business associates gathered to toast to a year of achievements and new beginnings. A notable highlight was the announcement of the CSR project spearheaded by the SHAREDA Youth wing to build new housing for the Sabah Society for the Blind centre in Tuaran. The event was a kick-start of a fundraising initiative to raise RM500,000 for the project which will begin in 2015. Funds will be raise exclusively through the generosity of SHAREDA members who will unite firmly to make sure this project comes to fruition. Guests were entertained to a rousing percussion performance and smooth rhythm and blues during dinner which culminated in an exciting lucky draw which offered attractive prizes including a top of the line hand phone and trips to Bali, Taipei, Hong Kong, Korea and Japan.

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SHAREDA president Datuk Francis Goh 16th from (left) and council members pose with guest of honour Datuk Haji Hajiji Haji Noor

Minister of local government and Housing Datuk Haji Hajiji Haji Noor delivering his speech during SHAREDA Nite 2014

It was a fun night as guest mingled and caught up with friends before dinne

Datuk Francis Goh presenting a momento to Datuk Haji Hajiji Haji Noor with organising chairman Ben Hong looking on

The opening act Stomp the Rhythm started the evening with a rousing percussion performance

A cheque being presented to SHAREDA Youth Wing in and of its CSR project

Red, white and blue were the colours of “Unity” during the annual dinner

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Iskandar Waterfront City Property Showcase Unveils New Luxury Developments House buyers and investors in Sabah had the opportunity to view two new luxury developments in Johor at the Iskandar Waterfront City Property Showcaseheld from November 8 – 9 at the Marco Polo Hotel, Tawau. The exhibition was open from 10am to 6pm and admission was free. Iskandar Waterfront City Berhad (IWC)featured two of its latest luxury lifestyle developments at Iskandar Malaysia.

Aquaint Danga Residensi: The Crown Of The Oceanfront

ocated in the exciting new waterfront city of Danga Bay in Iskandar Malaysia’s Flagship Zone A is Aquaint Danga Residensi, a 4.19 acre mixed development comprising of 12 two-storey retail shop units as well as two 42-storey and two 43-storey residential towers totaling 818 sea-facing units spread across four towers. The property was designed by the well-known and established DP Architect who has worked on other acknowledged projects such as Singapore’s Resorts World Sentosa and Esplanade. The high-end units are the epitome of luxury offering residents up to 270-degree unobstructed waterfront views.This lowdensity development has only four to seven units on each floor to guarantee that spaceand comfort is at a premium. Each tower will also feature a variety of layout to suit the various preferences of purchasers.

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The gated and guarded residences are fully fitted with top range fittings and packed with unique features including observation lift in all towers, home automation system and even a panic buttonin each unit. Together with its multi-tiered security system that includes lift access card and CCTV surveillance, you can rest assured that your security is their top priority. Units range from 548 sqft to 1,973sqft for a typical unit and are available in one-bedroom, two-bedroom and three-bedroom variations. Selected corner units come with special designs featuring 270-degree balconies while the exclusive and limited units of London Apartments and Sky Bungalows offer access to the coveted indulgence of luxurious waterfront living lifestyle.

Waterfront Luxury You Can Afford At Tebrau Coast As the first entry project of Tebrau Coast, Botanika fulfils the demand of discerning home owners and investors who focus on the details that define

quality of life, enhanced living space, and integration with the natural environment in a home finished to the highest level of sophistication and blissfulness. Botanika is an integral part of Tebrau Coast, a 21st century waterfront city in the making which realises its potential as a truly international financial, cultural and recreational centre. It is conveniently located within easy reach of a wide range of public amenities such as international schools, commercial business centres, popular shopping malls, retail outlets, healthcare facilities, and golf and country clubs.All these conveniences are within 5 to 10 minutes’ drive. Botanika is a low-density development spread out over 6 acres of lush greenery with themed gardens and resort facilities. There are only 70 units per acre with a spacious built-up area starting from 1,126 sqft to provide a delightful sense of tranquillity amidst a modern and stylish living environment. The opening of the Eastern Dispersal Link (EDL) and Second Permas Jaya Bridge has tremendously improved connectivity and accessibility from the Eastern Corridor to Johor Baru and other parts of Iskandar Malaysia. The completion of the Mid Valley Southkey Megamall, just a stone’s throw away will further enhance the lifestyle landscape, adding room for future value appreciations to your investment in Botanika.

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Newly Launched Greenfield Residence to Offer Nature-laced Quality Condo Living M

edium and upper-income houseseekers now have a new option for verdant and healthy living environment at Greenfield Residence coming up just outside Menggatal town.The project was officially launched for public sale on November 16 at the Greenfield Sales Gallery.

phases,” said Mr. Pong Vui Seng, Managing Director of Greenfield City Sdn Bhd, the developer.

Modelled with affordability uppermost in mind, Greenfield Residence, just 1km outside Menggatal township, is located within the emerging Kota Kinabalu North New Growth Corridor with Kokol Hill as backdrop.This thriving growth centre offers residents easy accessibility to a range of public amenities and facilities such as schools, university, training institutes, hotels and shopping malls to satisfy every aspect of modern living.

The built-up space for each unit ranges from 821sqft to 1084 sqft with quality finishings for the bedrooms, living and dining areas, kitchen and bathrooms. Prices start from RM250,000 onwards. The development,slated for completion in 2017, has been receiving positive feedback with 85% take up rate to date.

“The project spread over 24.6 acres is designed as a low-density gated and guarded community incorporating nine blocks of 7-storey condominiums with a total of 766 units to be developed in three

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He added that each phase of three blocks will provide 252 condo units with only 12 units per floor to create a tranquil and exclusive living environment.

“The blocks, interconnected by landscaped pedestrian walkways, will be set around a themed centerpiece garden to serve as the outdoor activity hub for the residents,”Pong said. Lifestyle facilities offered are a swimming pool with children wading

pool, maze garden, zen garden, badminton and basketball courts, clubhouse with gymnasium for indoor sports, jogging track, outdoor fitness and community pavilion. Other facilities include 10 units of boutique shops for residents to get their daily necessities readily and ample carpark lots.

Well known Malaysian property investment analyst Ho Chin Soon presented a talk on Kota Kinabalu North Inanam-Menggatal New Growth Corridor during the launch, while lucky draws and children activities kept visitors entertained throughout the day.

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/// East Malaysia Property News

CMS Continues to Be on Radar of Hong Kong Investors Meanwhile, the first two furnaces of CMS’ 20 per cent-owned OM Materials (Sarawak) Bhd’s (OMS) smelter were just commissioned. RHB Research expect Phase 1 of the OMS project to reach full commissioning by the end of the second quarter of 2015.

Naim the Only M’sian in Top 20 Property Developers Award

“Hence, it will be the main earnings driver for FY15 while other divisions ought to indirectly benefit from the developments at SCORE.”

SARAWAK

Cahya Mata Sarawak Bhd (CMS) continues to catch the eye of regional investors, particularly in Hong Kong, on its unique position as an excellent proxy for the Sarawak Corridor of Renewable Energy (SCORE).

PROPERTY NEWS

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

Last week, the group participated in Invest Malaysia-Hong Kong 2014 event which was jointly organised by Bursa Malaysia and RHB Investment Bank Bhd. Analysts with RHB Research Institute Sdn Bhd (RHB Research) said CMS’ meeting slots were well attended by both new and existing investors. “Key topics of discussion with the management of this Sarawak-based conglomerate were its growth prospects moving forward,” it detailled in a report.

Kozin Wins State Real Estate Agency of the Year Award for Sarawak are distinguished throughout the country as leaders in their respective fields. Judging was headed by REHDA President Datuk Seri Fateh Iskandar, who explained the principle criteria of identifying “real estate practitioners who have done well in their sales as well as being innovative and unique in their services provided. We are looking for people who are different from the rest of the pack.”

“This was especially after CMS’ turnaround in late 2010.

According to a press statement, entries were independently judged by a panel selected by the MIEA comprising representatives from non-government organisations and leading business personalities, recipients of these awards

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The awards acknowledge Kozin’s merits and achievements in sales volume, marketing strategies, number of negotiators, personnel development programmes and dedication to client services. Aside from the agency, Kozin is also strongly skilled in Project Real Estate Marketing.

Naim Holdings Bhd (Naim) added another feather to its cap by being adjudged one of Malaysia’s Top 20 property developers by The Edge Malaysia’s Top Property Developers Awards 2014. Naim was the only East Malaysia-based property developer in the list of award recipients. The Award, which was established in 2003, ranks Malaysia’s best property players from the consumer’s perspective, based on their quantitative and qualitative attributes. Naim’s deputy managing director, Christina Wong said the result was a testimony that Sarawak-based property developers have the capability to join the ranks of Malaysia’s best.

“These would eventually lift CMS’ future earnings potential. With that, we maintain our buy rating on CMS and a target price of RM5, which is derived from a sum-of-parts valuation methodology.”

“We are honoured with the award. This sends an important message to all – that Sarawak companies can do it. “We would like to thank all our customers, stakeholders, the Naim team and all who have helped in making Naim what we are today,” said Wong.

He also cited an example in Kota Samarahan where the price of a double storey terrace was RM170,000 in 2011.

The Ministry of Housing is adamant to flood the housing market in Sarawak by constructing more affordable homes to counter the runaway cost of properties. According to Housing Minister Datuk Amar Abang Johari Tun Openg, these houses will be sold under RM300,000 to benefit low and medium income earners.

An artist’s impression of Naim’s Sapphire on the Park, Kuching Paragon

“Most believe that this allows the group to take on projects with attractive returns that may arise from SCORE or other opportunities.

“At this juncture, we (ministry) have to intervene to reduce the burden of Sarawakians to buy their own homes,” Abang Johari told reporters after the closing of the Maal Hijrah celebration at Masjid Jamek.

Ting attributes the win to the company’s unique way of doing business.

Kozin Real Estate (Kozin) has been awarded the highly coveted State Real Estate Agency of the Year, cementing its position as the state’s leading agency.

“As such, Investors’ expectations on CMS’ huge cash pile is high,” RHB Research opined.

Sarawak to Build Homes Under RM300,000

“We are proud of each and every one of them in helping us bring home this prestigious award. Our achievements are a result of an unrelenting focus on quality, teamwork and customer service, ensuring we create value for all our clients.”

“We believe in our people; Kozin creates a family like environment in which our staff and negotiators perform like a family, translating these values into top quality teamwork and friendly services to our clients.”

CMS is also in the midst of installing a brownfield one million tonne per annum grinding plant next to its clinker facility to meet growing demand from the second half of 2016 onwards.

“Investors were generally convinced by its outlook, driven by the initiatives rolled out at the SCORE economic region.”

Commenting on the award, Alex Ting, principle of Kozin Real Estate, said: “The great effort of our team as a family has gotten us this far.

Ting (centre) is seen receiving the State Award from Datuk Abdul Hamid Abu Bakar (second right), president of The Board of Valuers, Appraisers and Estate Agents Malaysia. Also seen are (from left) Siva Shanker, national president of MIEA, Fateh Iskandar, and Erick Kho, deputy president of MIEA. The award ceremony was held recently during Malaysian Institute of Estate Agents (MIEA) 37th Annual Dinner & National Real Estate Awards 2014

In terms of long term potential, RHB REsearch said phase 2 of OMS is currently on the drawing board, with construction possibly beginning in 2H15. Thus, its contribution can be expected from FY16 onwards. CMS’ Malaysian Phosphate Additives SB (MPA) project is also progressing well while 51 per cent-owned Samalaju Property Development Sdn Bhd may offer some upside.

Within a span of three years, the same property now is priced at RM320,000 due to several factors such as land value and rising demand. On another front, he said 3,000 units of Rumah Mampu Milik (affordable homes under Budget 2015) will be constructed in Petra Jaya, Kota Samarahan, Bintulu and Miri. Under the scheme, a single storey terrace house will be sold at RM170,000.

Wong said that Naim will continue to build products of quality for the people and be the community’s partner towards achieving its desired lifestyle. “In addition to enhancing value to our property customers, we are constantly improving our services, focusing on aspects which matter to our customers. “Our recent developments such as the Bintulu Paragon and Kuching Paragon integrated developments, which focus on multifaceted livework-play experience and SouthLake Permyjaya, Miri, focusing on security and superior lifestyle, are reflective of our quest of constantly raising the bar for the community. “More importantly, as we are also property owners individually, what matters to our customers, matters to us as well. We share our customers’ values, and these are the values which guide us in our property operations now, and in the future,” Wong remarked.

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/// East Malaysia Property News

Sarawak’s New Housing Law and Regulations to Benefit Developers and Buyers regulatory procedures and further trimming of red tape.

Lee Onn Held Property Fair Showcasing Developments

Naim Clocks 1 Million Manhours Without LTI

“This will reduce both the cost of doing business and compliance cost. In formulating the new regulations, the state government was mindful of the need to balance the interest of house buyers with that of the developers in an equitable and fair manner.” Abang Johari said under the new regulations, all new housing development applications submitted beginning this coming Saturday were required to use the new Sale and Purchase Agreement (Form B and Form C) with their house buyers. “All housing developers and their staff are urged to fully familiarise themselves with the new regulations, procedures, and requirements to ensure these are complied with to avoid compound or penalty. SHEDA Council members and government officials at the recent SHEDA Property Expo 2014

Housing Development (Control and Licensing) Ordinance 2013 and Housing Development (Control and Licensing) Regulations 2014 will come into effect on November 1, 2014. Housing Minister Datuk Amar Abang Johari Tun Openg said the new regulations, which repealed the existing Housing Developers (Control and Licensing) Regulations 1998, was formulated following consultations with key stakeholders, including Housing Developers and Real Estate Association Sarawak (SHEDA), and Sarawak Advocates’ Association. “The inputs from SHEDA, in particular, were taken into consideration, and some were incorporated into the new regulations,” he told a press

conference here yesterday. He said some of the key reasons for the new regulations were to better protect house purchasers’ rights and interests and also to address current issues facing the housing sector, such as mitigating abandoned housing projects. “It ensures that the regulations remain relevant in the face of rapid changes in the housing sector. The new regulations also provide more flexibility to determine the amount of deposit for housing developers’ licenses and improvise features of the forms for licensing, advertisement, and sales permit applications. “From housing developers’ perspective, the new regulations are a step towards simplifying housing

“The banking and financial institutions, consultants, advocates, and other lending institutions should also comply with these new regulations, including the use of the new Sale and Purchase Agreement documents for all new housing development projects.” He said interested parties and individuals who wished to know more about the changes and improvements contained in the new regulations could get copies of the ordinance and regulations from the Housing Ministry’s website http:// minhousing.sarawak.gov.my or from the State Attorney General Office’s website http://sag.gov.my. The new application forms for the housing development license and for the sale and advertisement permit can also be downloaded from the ministry’s website.

IBRACO Stutong Heights Phase 2 Open for Sale success of both phases of Stutong Heights Apartment, IBRACO will be revealing Phase 3 of the apartment project as early as end of November. Stutong Heights Apartment 2 is ideally positioned within the vicinity of the Kuching International Airport, various specialist hospitals, international educational institutions, and a myriad of commercial centres. It is also located just 10 minutes away from the city centre. Artist’s impression of IBRACO’s Stutong Heights

The highly anticipated Stutong Heights Apartment 2, Phase 2 is IBRACO Bhd’s hottest selling property, Stutong Heights Apartment, is open for sale at the company’s head office, IBRACO House. Since the announcement of its sale last week, units of the apartment were snapped up in just a few days, mirroring the success of its predecessor, Stutong Heights Apartment 1. According to a press statement, following the

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Future proposed plan include a new access road linking directly from the main access road to the apartment, which would make it a shortened and easier access route. Furthermore, being a gated and guarded enclave, and consisting of three blocks with only 99 units, the apartment provides its owners with priceless privacy and a peace of mind. Available with two-bedrooms, at 841 square feet each and three-bedrooms units, at 1,054 square

per unit, each unit is given complimentary one covered car park and two complimentary car access cards. The apartment also provides ample additional car parks for visitors and owners alike. The master bedroom of both types of units comes with ensuite bathrooms. Each block is built in a way to gives owners the freedom of selecting units facing the car parks or the nicely landscaped internal courtyard. The highlight of Stutong Heights Apartment 2 comes from its pricing. The apartment units are available at only RM269,000 and above. Government Loan is acceptable for three-bedroom units. Interested purchasers who have missed out on Stutong Heights Apartment 2, IBRACO will be revealing Phase 3 of the apartment project by end of November.

An artist’s impression showing Lee Onn’s The Royalle development which will be one of the projects that will be showcased during the company’s property fair

Lee Onn Construction Sdn Bhd (Lee Onn) recently launched a property fair at their corporate office at Jalan Lapangan Terbang The property fair includeed the company’s latest development projects including The Royalle, Moyan 3, Genesis Light Industrial Park, Residence 805, Taman Janting, and Aeroville. The group managing director, Tan Guek Kee said, “The group has always tried to build more affordable homes for the lower income group due to the rising cost of living. One of our projects, Wassion Avenue, has been emplaced under MYHome2 Scheme.” MyHome2 Scheme is a Government scheme which provides subsidy up to RM30,000-00 for every qualified applicant who is a first time house buyer with a monthly income between RM4,000 to RM6,000. The project Wassion Avenue is located at 15th Mile on the Kuching Samarahan Expressway. This gated and guarded housing estate entails 11/2 storey town houses priced at RM215,000 per unit. It is a mere 10 minute drive to UNIMAS, Kota Samarahan. Meanwhile, Aeroville Commercial Square is an upcoming commercial cum mall development covering an area of about 18.8 acres and within the proximity of Kuching International Airport. It is is expected to be an iconic lifestyle precinct of its own due to its strategic locality with easy access.

The project is broken down into two pahses whereby Phase I consist of 62 units of three storey shophouses with all the floors approved for commercial use. Majority of the shophouses are designed with double entrance facade which makes visual merchandising and advertising easier. Currently 70 per cent of sales had been achieved. Phase 2 is a three-storey mall that combines the latest trends in architecture and modern design with a total gross floor area of over 60,000 square meter comprising of some 275 boutique retail outlets, a sizable supermarket and discount store. Upon completion, Aeroville will offer a full spectrum to the public with its combination of shoplots, retail outlets, office spaces, restuarants and eateries under One Big Roof. There will be ample parking spaces of over 1100 parking spaces. Looking at the Genesis Light Industrial Park, it is located along Jalan Matang Batu Kawa which is ideal for wholesale outlets, warehouses or small and medium enterprises business operation. It is not too far away from Kuching city with a mere 25 minutes driving. The industrial building comes with different land sizes ranging from 4.27 to 29 points to cater for different purchasers/sectors need. Price per unit is from RM770,000 onwards. Interested buyers can visit Lee Onn’s corporate office for more details, terms and conditions.

Artist’s impression of Bintulu Paragon

Naim Land Sdn Bhd (Naim) achieved another milestone as it clocked one million manhours without Lost Time and Injury (LTI) for its Bintulu Paragon integrated development project. The safety achievement celebration was officiated by the general manager of Bintulu Development Authority, Datu Mohidin Ishak. Among those in attendance were Datuk Hasmi Hasnan, Naim’s group managing director, contractors and Naim’s staff. “Naim assumes Quality, Health, Safety and Environment (QHSE) stewardship by integrating QHSE best practices into our daily operations and that of our contractors,” said Naim’s group HSE manager Muhd Nasiruddin during the celebration. “In fact, our QHSE Management is a coherent system of ISO 9001:2008, OHSAS 18001:2007 and EMS 14001:2004, and is recognised by the Moody International. “As part of our commitment to QHSE, the group introduced various policies, including Healthy Workplace and Zero Accident Policy, which culminated in the formulation of our QHSE Charter in 2010. “In addition to normal regulatory requirements, we incorporate other measures, such as utilising

scrap materials in our projects, constantly scrutinising chemical storage and waste disposal to prevent pollution and strictly enforcing related policies through surprise checks by our QA/QC HSE team,” Nasiruddin explained. He added that Naim’s QHSE work culture stemmed from the top management’s values and commitment towards the same. “We are all inspired by the commitment shown by our group managing director Datuk Hasmi Hasnan, who would personally make surprise checks to our project sites around the country, lead tool box meetings and motivate us to constantly raise the bar in terms of QHSE. He has shown us that QHSE is the responsibility of everyone, and for everyone’s benefit,” Nasiruddin said. Meanwhile, works for Bintulu Paragon were on track with works on lower ground car park and retaining walls expected to be completed by end of 2014. The car park once completed, could accommodate over 1,300 cars, the largest car park in Bintulu. Works for its Street Mall and Small Office Versatile Office (SOVO) were also expected to be completed by fourth quarter of 2015 and first quarter of 2016 respectively.

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MIEA Sarawak Branch Hosts Inaugural Dinner

t was a night to remember at the inaugural dinner organized by the MIEA (Malaysian Institute of Estate Agents) Sarawak branch on 15 November at Imperial Hotel, Kuching. The evening brought together various stakeholders in the real estate industry in Kuching specifically and Sarawak generally, to celebrate a year of achievement. Siva Shankar, President of MIEA and guest of honour during the event, said in his messagethat MIEA was indeed proud of the Sarawak branch for having achieved so many milestones in the last one and a half years. Under the new leadership of Mr Wong Ho Ming, the MIEA Sarawak has stepped up its effort to be united, relevant and progressive. The most momentous occasion for the MIEA Sarawak branch was the

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set-up of its permanent office at Jalan KeretaApi on 1 October to serve as a secretariat for MIEA members as well as a place for conducting training courses for those studying to become a registered real estate agent. The branch has also conducted training sessions for negotiators to get them registered with the BOVAEA (Board of Valuers, Appraisers and Estate Agents) Malaysia. They have successfully trained 270 negotiators for both the Negotiators Registration Seminar (NRS) and Negotiators Certification Course (NCC). The culturally infused entertainment of traditional dances set the tone for a lively and successful evening that will go done as another milestone for MIEA Sarawak branch.

EMPTY

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/// West Malaysia Property News

REITs Continue to Offer Good Exposure in Current Volatile Market

Glomac Expects to See Higher Take Up Rates Next Year

WEST MALAYSIA PROPERTY NEWS

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

Real Estate Investment Trusts (REITs) in Malaysia continue to offer good exposure of a more defensive play in the current volatile market. This is on the back of other investment vehicles either directly or indirectly affected by various negative sentiments such the rise in gas and electricity charges for commercial tariffs earlier this year, increase in petrol prices and the abolishing of sugar subsidies. The research team at Hong Leong Investment Bank Bhd (HLIB Research) noted that for REIT management companies, utility expenses contribute a high portion of the total operating expenses, usually at about 40 per cent.

I-Berhad’s Liberty Tower - Is a Dampened Property Market Upon Us? “Just from the attendance and response, I think it would be sold out,” she told Business Times on the sidelines of the sales preview, here, on Saturday.

Ong said the proposed light rail transit (LRT) Line 3 through i-City and the construction of a station nearby had made the property more attractive.

Seventy per cent of the New York-themed project had been booked at a recent property fair.

This is in addition to the project’s connectivity to the Federal Highway via a direct flyover into i-City, North Klang Expressway, Guthrie Corridor Expressway and the proposed West Coast Highway.

Designed to appeal to young urban individuals, Ong said each unit, with built-up areas of 466 sq ft to 769 sq ft, will be fully furnished. I-BERHAD, master developer of the 29.2ha i-City, here, received overwhelming response to its Liberty Tower@i-City project, with 80 per cent of the units taken up during a special sales preview over the weekend. Its director Monica Ong said the project’s location, affordability and style attracted a crowd of more than 1,000 to the i-Gallery@i-City, where the preview was held. “We received overwhelming response to the Liberty Tower project. The queue started from 4am.

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Priced from RM360,000 each, the Liberty Tower@iCity was poised to revolutionise living and shopping in Shah Alam, she added.

Liberty Tower@i-City, which is slated for completion in 2018, is an integrated, self-sustaining ultrapolis comprising real estate, leisure, business and education facilities.

Ong said the encouraging response to the project was due to its proximity to the 1.5 million sq ft CentralPlaza@i-City retail mall, a joint development with Thailand’s Central Pattana Pcl.

“We are proud that Liberty Tower@i-City has directly enabled us to complement the youth housing scheme mooted by the government in the 2015 Budget.

“Liberty Tower@i-City residents will get direct access, via a dedicated pedestrian walk, to the CentralPlaza@i-City’s retail, dining and entertainment outlets,” she said.

“A major portion of our purchasers are aged 40 and below,” she added.

“Mall operators experience high electricity consumption especially in running airconditioning which represents the largest operating cost of a shopping centre,” it said. “As such, the hike in average commercial electricity tariff from 41.01 sen per kWh to 47.92 sen per kWh has significantly affected shopping malls. “In addition to the changes in electricity tariff, quit rent and assessment rate, there is also negative sentiment in the market arising from the increase of RON95 petrol price on October 1, 2014 and also the abolishment of sugar subsidy of RM0.34 per kg on October 26 last year. “This has resulted in higher prices of retail goods and services, food and beverages as well as logistic costs.” Despite all the negative sentiments hovering in the market, HLIB Research noted that majority of M-REITs has continuously reported stable improvement in rental income as management companies are able to transfer extra cost arising from the increment back to tenants via increase in rental rates or service charges.

“Based on our channel checks, prime retail malls have a long queue for tenants who are waiting to get a space in the mall. For example, Pavilion currently has over 200 potential tenants on their waiting list. “The previous fear of the negative impact of rising cost – like electricity, assessment, quit rent and so on – is now proven to be unsubstantiated as REIT operators have been able to pass on the higher cost to tenants via rental reversion or service charge. “Despite lowering tax rate for quit rent and assessment from 12 per cent to 10 per cent, Dewan Bandaraya Kuala Lumpur (DBKL) has increased the property valuation which has led to a surge in quit rent and assessment expenses. “We understand that management companies have submitted their applications to DBKL to revalue the properties downwards and we expect the reimbursement will be made in the next quarterly result announcements.” Looking at the global and domestic outlook, HLIB Research said recent macro developments pointed to a more favourable outlook for the REIT sector. “Of significance, expectations of further Overnight Policy Rate hike by Bank Negara Malaysia (BNM) have recently faded after BNM paused in September,” it stated. “Coupled with the absence of demand-driven inflation, we expect BNM to hold the OPR steady until end-2014.” The prospects of a more moderate GDP growth as well as steady interest rates environment reinforced by recent volatility in the financial market could prompt the return of appetite for defensive sectors such as REIT. “In this regard, we believe that the REIT sector offers a good exposure of a more defensive play in the current volatile market.”

Glomac Bhd is optimistic of witnessing a healthy take up rate by 2015, following a weak 2014, reported the media. MD Datuk Seri Fateh Iskandar Mohamed Mansor noted that the property market has moderated since the implementation of cooling measures announced in the previous budget. “The measures the government introduced last year such as higher Real Property Gains Tax (RPGT) and other measures have led to a few of our projects being delayed,” he said. However, Prime Minister Datuk Seri Mohd Najib Razak announced some measures that will benefit the property sector in his Budget 2015 speech. Notably, the Malaysian youth housing scheme, which allows a 10 percent guarantee for the down payment by the government for properties priced below RM500,000, will help reduce the burden of first-time buyers, said Fateh. “This enables a higher certainty of the take-up rates of housing units to go up and we are optimistic for the financial year 2015, we should be able to see healthier gains,” he said. Meanwhile, the company plans to build a RM750 million township on its newly-acquired land in Kulaijaya, Johor in March 2015. “We are looking at things that have already been done in Greater KL but maybe not in Johor for that price range,” said Fateh. To date, Glomac has landbank with potential gross development value (GDV) of RM8 billion, of which 85 percent will be derived from affordable township and landed residential developments. Fateh also revealed that the company eyes new launches with GDV of RM1 billion in 2015.

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/// Contributor

BABY BOOMER

AGEING MALAYSIA BASED ON 2012 ESTIMATE DATA is going to enhance and show a positive longsighted view over Wawasan 2020 MALE AGE GROUP FEMALE and beyond. Unfortunately our youth 75+ doesn’t appear to be as good saver as 70-74 the past generations and this comes in 65-69 as a negative point once GenYers and 60-64 GenZedders are approaching the idea 55-59 to own a house. With the 1Malaysia 50-54 45-49 Youth City pilot projects and the Youth 40-44 Housing Schemethere will be a chance 35-39 for couples aged between 25 and 40 30-34 years and with income below RM10,000 25-29 to buy a house priced RM500,000 and 20-24 below as the Budget 2015 provides 15-19 a 10% additional guarantee for the 10-14 possible approval of a 100% loan and 5-9 0-4 a 2 years monthly subsidy of RM200 to 1000 500 00 500 1000 1500 the borrowers to help them in starting 1500 (’000) (’000) up the repayment of their loan. The introduction of these measures will help boosting the affordable housing offer and further stimulate a Nationwide Home-ownership policy. Surprisingly these positive housing stimulus will be only offered to the first 20,000 applicants while, by looking at the chart above, expectation was for at least 100/150,000. GEN Y

GEN X

Dr. Daniele Gambero

CEO and co-founder of REI Group of Companies

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.

GEN Z

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.

Prioritising Well-Being Of The Rakyat

BUDGET 2015, THE STRATEGIC PLANNING AND THE MICRO-PROPENOMY EFFECTS OF A MACRO ECONOMIC BUDGET (PART 2)

or the last two strategies of next year Budget there is surely a need of in depth analysis and evaluation, this why I’ve been breaking in two parts this commentary. Let’s go through the ideas and plans presented by our PM DatoNajib and see what is in the these bags for properties.

Developing National Youth Transformation Program

GENERATION

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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FUTURE MEDIA TECHNOLOGY INNOVATIVE EDUCATION INTER-RACIAL MULTI-TASK RELATIONSHIPS WORK CULTURE WORLD EVENTS SOCIAL LANDSCAPE POLITICAL ISSUES CONSUMERIST BUYERS

Youth are the future of Malaysia and it is wise to look into their needs and aspirations and do whatever necessary to enhance the quality of their education

first, offer them better job opportunities and life-style then and create openings for them to show how much have they learned and how do they do they apply it. Malaysia is a Country with very young population and in the years to come GenYers and GenZedders will be the ones shaping the National profile and growth, we need to nurture them with knowledge, push their dreams and ambitions otherwise, somehow, we might be reversing the positive trend we are now experiencing. Education, national unity, leadership, social responsibility, entrepreneurial skills and innovation are all different aspects that Budget 2015

From education to agriculture and fishing industry there will be different kind of subsidies designed as tools to enhance the entrepreneurial skills in less developed areas. Offer of new means of transportation (electric train between Ipoh and Butterworth) and specially discounted bus routes (Rawang, Klang and Seremban to KL) will ease the connectivity between city centers throughout Malaysia and the rural areas in their proximities. This will surely impact the offer of more affordable houses in areas where land cost still allows developers to supply dwellings at very reasonable values (below RM200/250 psf). In budget 2014 the Federal Government already presented an impressive offer of “affordable houses” under different programs and this year again the proposed numbers are allowing a positive outlook to the problem of social and affordable housing. Unfortunately, as it appeared in a research conducted by an established property firm, out of almost 140,000 units promised with last year’s budget only 9,600 have been actually launched and are now under construction. This year the total number is up to 143,000 total new units which added to the left over of the last budget are totaling an impressive 273,000 new houses to be supplied to the

Rakyat. Considering that a NAPIC statistic findings, presented earlier on this year, are showing a total nationwide delivery by the Malaysian developers of less than 150,000 dwellings, my question is how the Federal Government will be able to outperform the negative performance under this important point? In general the comments that I’ve heard from colleagues and friends are ranging from the negative point of having too many agencies which are responsible for the actual final result and application procedures are all but easy and clear with the addition that the result, as above numbers are showing, is not at all guaranteed. The best thing we can do is wait and see which measures the Government will introduce to improve its performance and evaluate by the end of the next year the final results. Much more can be said about next year budget but I will leave it to each reader to go through it and decide if it is a good or bad one. Personally I’m looking at it as a very macroeconomic budget which a wide spectrum of micro-economic effect and this is index of good planning and positive growth. Performance is the key of a positive result and for this we can only wait and see if all the promises will be maintained by the end of 2015.

Sources: Department of Statistics, Minister of Home Affairs, REI Group archives NOTES

REI Group of Companies CEO and co-founder Dr. Daniele Gambero gives presentations on the Property Market and welcomes feed-back at daniele.g@reigroup.com.my “

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/// West Malaysia Property News

IOI Properties Eyes Three Asian Markets

KL-S’pore High-Speed Rail Work to Start in 2015 and ease traffic congestion at the intercity rail network. Current demand on the Causeway exceeds capacity by 33 per cent. In February last year, Malaysia and Singapore reportedly agreed, in principle, to build the HSR link between the two countries, with a target completion date of 2020.

IOI Properties Group, Chief Executive Officer, Lee Yeow Seng

Local developer IOI Properties Group plans to unveil properties with a combined gross development value (GDV) of RM3 billion in three Asian countries for the second half of the fiscal year ending June 2015. In 2H FY2015, a total of 10 developments will be unveiled in Malaysia, Singapore and China, according to its Chief Executive Officer Lee Yeow Seng. But over the next three financial years, it will roll out more properties with a collective GDV of RM10 billion in these three markets. Amidst the higher number of launches, IOI Properties is also eyeing nearly RM3 billion in sales for FY2015. In comparison, the company sold 2,667 residential and commercial units for RM1.97 billion in the previous financial year. In these three countries, the company holds 10,000 acres of existing landbank, which is sufficient for the next few years. “Of course, if there are opportunities to add further landbank in these markets, we will be on the lookout,” said Lee. Additionally, IOI Properties has successfully released several commercial and residential projects in Xiamen, China, but it is still considering investing in other cities there. “So far, we have been looking around [for opportunities]. We have been evaluating all the opportunities presented to us,” he noted. Notably, the company made its maiden venture in Xiamen, after it clinched a 7.7-acre land for a mixeduse project known as IOI Park Bay, while its second development is the 44-acre IOI Palm City in Jimei district. In Johor, IOI Properties plans to focus on township projects given the positive demand for such developments. “We are quite diversified in Johor. Our major township in Johor is Bandar Putra Kulai, where we have 6,000 acres of land and we have been developing for the past 20 years. Demand for landed properties in our township here is good,” added Lee.

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The construction of the highspeed rail (HSR) link between Kuala Lumpur and Singapore is expected to start at the end of next year. Land Public Transport Commission (SPAD) chairman Tan Sri Dr Syed Hamid Albar said the project’s feasibility study, carried out by the commission, had been submitted to the Malaysian and Singaporean governments and a meeting between the two governments would be held early next year to finalise the details. “We have been given the timeline (to complete the project) by 2020 and our target is for the construction to begin next year. “Construction will likely begin in the third quarter of next year,” he said after attending the International High-Speed Rail Conference: High-Speed Rail Accelerating Toward the Future. Syed Hamid said the exact date would depend on the outcome of the meeting between the two governments. He said both governments were expected to ink an agreement on the project, reportedly to cost RM38.4 billion, which includes the purchase of locomotives and high-speed bullet trains. “Two committees — Technical Committee and the JointMinisterial Committee — have been established to oversee the project.”

Syed Hamid said seven stations in Malaysia had been identified: Kuala Lumpur, Putrajaya, Seremban, Ayer Keroh, Muar, Batu Pahat and Nusajaya. “We have informed the state governments through the Economic Planning Unit and have received their approvals,” he said, adding that the state governments had given their feedback and SPAD would ensure that adjustments were made. On the link’s system, he said both governments had yet to decide whether to adopt the European or the Japanese HSR system. “We have been approached by several countries, including China, Japan, Spain, France, Germany and South Korea.”

In April, Malaysian and Singaporean Prime Ministers Datuk Seri Najib Razak and Lee Hsien Loong reiterated that the project would be completed in 2020. It was reported that several Malaysian and foreign firms had started talks to form consortiums to bid for the project. They include MMC Corp Bhd, which may team up with Gamuda Bhd and Chinese and European system integrators, and YTL Corp Bhd, which partners Spanish bullet train maker Talgo or CAF. Other firms are UEM Group Bhd, which is working with Ara Group to form a consortium with European companies that may include Talgo, and Global Rail Sdn Bhd, which is talking to Canada’s Bombardier Inc and Chinese firm China Railway Group.

The project is one of the entry point projects listed under the Economic Transformation Programme aimed at improving the economic dynamism of Malaysia’s capital city and liveability ranking relative to other global cities. The goal of the HSR is to reduce the travel time between Kuala Lumpur and Singapore to 90 minutes. At present, it takes up to eight hours by train between the two cities, around five hours by bus and car, and 45 minutes by flight. The link is expected to benefit both countries economically

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/// West Malaysia Property News

Guidelines for Registration of Negotiators

Penang Woos Singapore Investors Following Temasek Deal understanding with Temasek and Economic Development Innovations Singapore Pte Ltd on May 23.

To address the issue of unethical practices carried out by negotiators who are attached to registered real estate agencies and firms, the Board of Valuers, Appraisers and Estate Agents (BOVAEA) Malaysia has introduced a new tag identification system. The new system requires all real estate agents (REA) and real estate negotiators (REN) to be registered with BOVAEA and to follow a stipulated code of conduct.

PDC and Temasek are forming a joint venture company to develop the Penang Technology Park (PITP) and BPO Prime complex in Batu Kawan and Bayan Baru respectively. EDIS is providing project management services for the venture.

BOVAEA has since issued a circular to all registered valuers, appraisers, estate agents, probationary valuers and probationary estate agents to abide by the new guidelines to avoid penalties imposed on illegal transactions. Displaying the REN tag is compulsory for all registered probationary valuers, probationary estate agents and negotiators during their course of business and the tag number must be prominently displayed in all their promotional and marketing materials. Only the name and mobile number registered with BOVAEA can be used in their marketing and promotional materials including name cards, signboards and advertisements. Any amendments or additions to the REN information must be submitted in writing to the board. It is also the responsibility of the firm to notify BOVAEA should any negotiator in their employment resign and to surrender his or her REN tag to the board. The said negotiator would then have to obtain a new REN tag through his or her new firm. In the case where the negotiator’s employment is terminated, the firm is required to notify BOVAEA in writing of the termination, request to remove the negotiator’s information from the firm’s registration record and return the REN tag to the board. Members of the public have the right to inspect the REN tags of any negotiator to verify its authenticity. According to Alex J Gomez, a member of BOVAEA, the new tag system will allow the public to spot the difference between a fake REN from a registered one. “Just scan the QR code on the identification tag with a device like a smartphone, and you will receive all the details about the REN. Compare this to the details on the tag and the REN’s namecard; they should tally,” he explains. He also urges the public to take a confident stand and be conscious of their rights. Negotiators cannot refuse or restraint any client or the general public from checking or obtaining the information in the REN tag. If a REN tag is damaged, lost or stolen, it has to be replaced accordingly with a RM50 fee levied to obtain a new card. Negotiators who commit any offence such as obtaining the REN tag through duplication, falsification or by any other means; allowing any third party to use the REN number to conduct any estate agency business or to appear in any promotional materials; keeping the REN tag upon resignation or termination of employment with a firm; and to allow any third party to feature the negotiator’s information in any website, mobile application and passing-off as the Board’s website to confuse the public will be recorded and captured in the system which will be used to evaluate and determine the negotiator’s tag renewal.

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He said KPMG’s Exploring Global Frontier Report in 2009 identified Penang as one of the 31 emerging BPO (business process outsourcing) hub cities in the world.

Chief Minister of Penang, Lim Guan Eng

Amid a spat with Putrajaya over federal assistance to draw investors to Penang, the state government will boost its efforts to draw more Singaporean investors following its recent partnership with the republic’s Temasek Holdings to develop a RM11.3 billion business and a technology hub. Chief Minister Lim Guan Eng, who is leading a two-day investment mission to Singapore tomorrow, said Penang wanted to sell the message that the northern Malaysian state was an ideal location, especially in terms of human talent. Speaking in an interview in Singapore with Bloomberg TV on its “First Up” programme this morning, he said Penang offered a costeffective and talent-laden alternative that could complement what Singapore had to offer.

He said food edible oil giant Wilmar had set up a shared services outsourcing hub in Penang, while Citibank also has a global credit transactions hub that processed 25 billion transactions annually with a value of US$6 trillion (RM19.7 trillion). Speaking at a seminar on “Penang investment opportunities” later today, Lim said Singapore was Malaysia’s largest export market with a total volume of RM100 billion in 2013. In a statement, Lim’s press secretary Cheong Yin Fan said the purpose of the investment mission was to meet the Singapore business community and relevant investors. A road show to invite tenders for the state’s RM27 billion public transport plan would be held in Singapore, she said. Ahead of the mission, Lim will tonight deliver a key note address on “The 3rd Penang; BPO Prime & Penang International Technology Park (PITP)” at a dinner, and hold a dialogue with the members of the Penang diaspora in Singapore this evening.

“What we hope is to have our partners like Temasek bring in the big names into Penang,” he said on air. “We feel we can complement what Singapore requires in terms of manufacturing and services, and of course a lifestyle that they are accustomed to,” he said. Stressing that human talent was the “new oil of the 21st century”, he said Penang had it in abundance. Calling Penang the most liveable city in Malaysia, he added that “we feel that Penang has all the conditions necessary for foreign expats and investors to do well.”

The Penang government, through its development arm Penang Development Corporation (PDC), inked a memorandum of

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Three Major Reasons Why Landed Is Better Than Condo. Hmm…

oday, I had lunch with a very capable young friend. She is many years younger than me but she already owns her own business in partnership with a very prominent personality here in Malaysia. A rich one. Over lunch, we were talking about her first property and I asked why is she not thinking of buying a second one. She said, she prefers landed but these days, landed are either too expensive or too far away. She does not want to travel a long time every time just to reach her destination on time. Then, I asked her why she prefers landed over her current apartment. As usual, the three major reasons were presented.

Charles Tan Founder, kopiandproperty.com Charles loves cars but he buys properties instead. A good car gets you to your journey faster but a good property gives you returns for your comfortable retirement faster! Currently, he has properties in Penang, Klang Valley and Kota Kinabalu. His mantra for property investment is, ‘Buy Objectively’. In his previous role with a leading property portal in Malaysia, he regularly speaks about the property market in property fairs, public property talks, workshops and even as panels in property related forums. He blogs on a regular basis inkopiandproperty.com which is a popular property blog in Malaysia. The blog is dedicated to his personal views about the property market.

Double Storey Terrace in Kota Kinabalu Outskirt Is Now RM450,000

ouble storey terrace in Kota Kinabalu outskirt is now RM450,000. Is this expensive when compared to outskirts in Kuala Lumpur? For example Sungai Buloh? How about mainland of Penang? RM450,000 is not actually expensive. However, in 2007, the same property was just RM210,000. Now, it does seem high. This is an increase of 11.5% per year. Major reasons? The usual stuffs, land prices going up, building materials and labour costs. Oh yeah, including the fact that these developers wanted to maintain the same margin. Why is Kota Kinabalu properties so popular? Well, it is the capital of Sabah. Thus, with urbanisation, it meant that the population from smaller towns would be flocking to Kota Kinabalu. This meant a continuous stream of new demand and thus the price increase.

Bigger

More Land Space

Standing On Actual Land

Bigger. This was true long time ago when landed properties were the norm and high rises were all flats or apartments. Then, many years ago, the condos started. Most of the time, it was those 800 – 1,000 sf ones. These units are really smaller than the typical terrace houses then. Today, there are many more bigger units, from 1,500sf all the way to 2,500 sf. A typical 20 x 70 double storey terrace house would have a built up of just 1,400sf – 1,500sf which meant that just thinking about size alone, its no longer true that landed is bigger. Condos are actually getting bigger, more of them. Landed are getting smaller, most of them or they now give you more storeys, townhouses or superlinks etc.

Standing on actual land. Actually, this is true. If you own a landed property, you stand on the ground itself. Meanwhile, if you are in a condo, sometimes even the ground floor may not be standing on the ground because the car parks might be below. Tell me however, is standing on the actual ground really more important that having a place to stand? As usual, if your answer is that hey, I am prepared to pay a huge premium so that I can stand on my own piece of land and not standing on another person’s rooftop, ok you win. The purpose of this article is not to tell you to buy condo. It is to tell you that if you like landed, just say you like landed. Don’t give the three reasons above. You can even say I buy landed to show people that I am richer. That’s a pretty good reason too. Or you can say, my parents love only landed property. In fact there are lots of other reasons which you can attribute to just the landed ones and I would agree. As for capital appreciation reason, that’s another story altogether. Happy Investing, whether it’s condo or landed.

More land space. I am not sure how you want to compare the tiny plot of ‘grass covered land’ within your 20 x 70 terrace house with a huge park within the modern condominiums of today. Some even have a rooftop garden, complete with an infinity swimming pool. Some allows you to do BBQ on the rooftop while you chit-chat with a huge group of friends. Yes, it is true, you do not swim everyday and you also do not ask your friends to drop by everyday. If you insist that hey, the condo’s BIG plot of land is SHARED while I own my own piece of land, then yeah sure. You win. Do remember, nothing stops me from using the whole big plot of land within the condo. I am not sure if you can use your neighbour’s plot of land.

I fly to Kota Kinabalu on a yearly basis. I have successfully climbed the Mount Kinabalu before. When I arrived at the top, I realised that majority of the climbers are non Malaysians. I realised then that Kota Kinabalu is visited by a huge number of tourists. Kota Kinabalu airport confirmed it. It’s the second busiest airport in Malaysia, losing only to Kuala Lumpur and beating even the Penang International Airport which is expected to reach full capacity by 2017. Kota Kinabalu’s airport’s extension and upgrading would be completed by January 2015. This meant the number of tourists arrivals would increase even further. You may ask what does tourist number has to do with property prices.

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Briefly. Tourism numbers increase, accommodation needs increases and more hotels open, food consumption increases and more restaurants open, flight numbers increase and this spurs more economic activities. With higher earnings, where do these people spend their money? Actually, property is a good way to invest their hard earned money because at this particular moment, the malls in Kota Kinabalu are still nowhere near those in Kuala Lumpur. Yes, there’s 1Borneo but I could not rate it on the same level as established malls like Paradigm or Setia City Mall. We have not yet included those who were in Kota Kinabalu for MM2H (Malaysia My 2nd Home) too. Ok, I seriously do not think the prices can still continue its 11% growth per year. At RM450,000 it is already considered expensive because the salary range for jobs in Kota Kinabalu is without doubt lower than Kuala Lumpur. Nevertheless I see Kota Kinabalu as the beacon of property development for the state of Sabah and I seriously do think that its worth a look, especially for some diversification purpose. Just like its tourism sector which is still growing rapidly, the prices would continue inching up until everyone said, ‘no more, I could not afford. Better rent’.

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Property Prices Up Due to GST? Developers Should Just Absorb It However, this profit margin is really dependent on the type of property, the developer’s ability and all the other costs during the construction stage.

n a recent online news portal, it was reported that The Royal Institute of Surveyors Malaysia (RISM) would be conducting a study on reasons as to why property price increases and provide recommendations on remedy by end of 2014. I think RISM can also talk to HBA, REHDA, MIEA etc and everyone would more or less have different ideas about why house prices have been increasing. Of course, I would still love to hear what RISM’s final recommendations would be. Would they recommend how to reduce how prices? Well, highly unlikely. Prices, once risen would find it hard to go down, except for another round of crisis which most probably has to start in the property markets of the developed countries. SHAREDA’s President, Datuk Francis Goh said that property developers do not normally earn 20% and said that 20% is indeed a very reasonable one. Any developer who is able to earn more than 20% would be laughing all the way to the bank. The reason for this is due to the long process from day one till completion. Typically this may take up to 6 years for a developer starting from acquisition of land till the completion of the intended project. I do not think it takes up to 6 years for a seasoned developer, especially those with already existing land bank. However, 6 years is okay as a typical benchmark. In terms of the 20% profit, based on listed property developers, what he said is quite accurate. In my previous article; “Developers And Their Profit Margins” There has been many rumblings that developers earn too much. If they are willing to lower their profit margins, surely the prices can be lowered. I think I agree on some parts, especially the marketing that they do. If they continue to use traditional mediums, without any doubt that part would be ever higher. Use online effectively and the costs suddenly reduces tremendously. Black and white and one day versus unlimited videos, pictures and in colours and easily shared or forwarded? Anyway, forget about that. For

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today, let’s just run through announcements by listed property developers in terms of their profits versus revenue. In a report recently, OSK Property Holdings was a darling of some research houses. One of the reason is because its profits are expected to record a new high for the property developer. It’s outstanding performance was due to the advanced construction progress for projects such as Mirage by the Lake and Pan’gaea in Cyberjaya, Mirage Residence in Kuala Lumpur, Atria SOFO Suites in Damansara Jaya, Sutera Damansara in Sungai Buloh and Bandar Puteri Jaya (BPJ) in Sungai Petani. The profit after tax and minority interest (PATAMI) was RM50.2 million versus a revenue of RM323.7 million. The net profit margin? 15.5%. Mah Sing’s first half recorded a RM168.76 million net profit versus a revenue of RM1.35 billion. This gives it a net profit margin of 12.5%. If you ask me, I think it’s on the lower end but if you look at the net profit actual number, this is already so many times higher than that of OSK which is a mid-tier developer while Mah Sing is one of the largest in Malaysia. The improved revenue is due to the higher work progress from the groups ongoing development projects. UEM Sunrise Bhd meanwhile recorded a net profit of RM136 million versus a revenue of RM849.2 Billion. This gives it a net profit margin of 16%. Theere was a drop versus the same period last year which included a strategic sale of 17.6 ha in Puteri Harbour worth RM400.7 million. The revenue was largely contributed by the following projects in Nusajaya namely East Ledang, Imperia, Nusa Bayu and Nusa Idaman as well as those in the Klang Valley, specifically Summer Suites and Symphony Hills. Tropicana’s first six months net profits was RM97.2 million while revenue was RM655 million. Net profit margin of 14.8%. This was a higher number than the same period of last year

and it said that the property market in Malaysia is subdued because of the many cooling measures by the government. However it expects to continue to be able to tap into its sizeable and strategic land banks especially in Klang Valley and thus its performance is likely to be satisfactory in 2014. New launches include terrace homes in Tropicana Heights, Kajang, and the third serviced apartment block in Tropicana Gardens, a mixed residential development located in Kota Damansara with proximity to the Dataran Sunway MRT station. We have now learnt that most of the recent announcements showed a double digit net profit margins but none of them hit over 20%. With the slowing market, new launches may be priced more affordably and I think perhaps we can see the effects moving forward. I think double digits are still considered very healthy. There are developers in markets outside Malaysia which are already having just a single digit net profit margins. However, this profit margin is really dependent on the type of property, the developer’s ability and all the other costs during the construction stage. If the developer has owned the land for a long time, it is likely that the cost is much lower compared to a developer who bought land for development recently. Another thing that I must highlight is something I spoke about recently. With the implementation of GST next year, the potential one time increase of between 2.6% to 4% should be absorbed by the developers. SHAREDA’s President, Datuk Francis Goh validated this when he urged SHAREDA’s members to absorb this increase. Whether the members absorb or not actually would depend also on the market direction next year. If transactions continue to be so slow, I think the absorption alone may be not sufficient to move the market. A further reduction may be necessary or perhaps the relaxing of some cooling measures.

When Is The Best Time To Buy Property, Really?

veryone I know said 2014 is a slow year. Indeed, in terms of transactions it has been slow. Most of the time, the cooling measures by the government was said to be the main reason contributing to this downturn in transaction numbers. Nevertheless, the property prices has continued to inch upwards in all major property cities in Malaysia except for Iskandar which has started to face downward pressure in terms of price. REHDA (Real Estate Housing Developers Association) has announced that their members felt that pessimism in the property market will continue until first quarter of 2015. For those who are still buying secondary properties, the current market is and has been friendlier to buyers instead of sellers. Many agents are finding it hard to survive. Some have even left the profession. A few weeks ago, at a talk that I conducted in a foreign bank, there were a few participants who said they expected the property bubble to burst and they are ready to pounce. One of my colleagues predicted the same thing few months ago. He has a huge war chest ready to support his prediction. When you read more articles online and offline, majority said that the luxury condos, due to huge oncoming supply meant that prices for these units are likely to be subdued. In fact within Q4 of 2014 and just in KL, over 4,000 units are going to be ready for occupation. Perhaps the question we should ask now is, when would the bubble burst? Externally, many months ago, Arturo Bris a finance professor in Swiss Business School, IMD said that the next financial crisis would be happening in Q2 of 2015. He gave many reasons to support his prediction. It includes unrealistic housing prices, stock markets at record highs, China’s shadow banking etc. Then, just days ago, the US-based Jerome Levy Forecasting Centre said something similar. It predicted a worldwide recession by end of 2015. In fact the probability is as high as 65%!One key reason given was that many advanced economies do not have the flexibility to fight another financial crisis. One key reason is because the interest rates for many of these economies are already low. To counter a crisis, lowering the rates further is not possible. Please note that this same company predicted both the 1928 and 2007 mortgage crisis accurately, according to the online article.

What about new properties? If you have paid for a new condominium within these few months and the crisis comes in 2015, you may be laughing all the way to the bank when you get the keys to your condo in 2018, right? Most of the time, financial crisis do not last forever. During crisis, not many developers would be interested to build and not many buyers would dare to buy. Thus the total supply during the crisis would be down. Total demand meanwhile would suddenly boom as soon as there are signs that the crisis is over. So, should you quickly buy a new condominium today? Personally, I believe if you take property investment as an investment, you would be able to make decisions objectively. Let me show you with a real example from my good friend just 2 weeks ago. She was thinking of buying a RM700,000 condo of 1,000sf and hoping that it will grow to RM850,000 when it is completed. I told her, I prefer to buy a RM300,000 medium cost condo, renting it out and perhaps it can grow to RM360,000 in 3 years. Which is less risky? Which gives you more profits? I have no doubt when times are good, the RM700,000 condo would most probably give us a good profit of RM150,000. This is nearly 3 times more profits than what my medium cost condo would have given me. In fact, based on 10% downpayment and a simple Return on Investment (ROI) after 3 years, the profit percentage per annum is 70%! An amazing return no matter what form of investment you are comparing it against. What about the RM300,000 condo which gave you just RM60,000 returns after 3 years? Using the same calculation of 10% downpayment, it gives you a ROI of 67%. If you think the RM300,000 decision is better, think again. The percentage is similar but the amount is totally different. The decision is yours to make. The best answer for ‘when is the best time to buy?’ Many would say, anytime is the best time to buy. My answer would be ‘It depends on what you buy’. Happy investing or happy waiting.

Closer to Malaysia and also a favourite PR (migration) destination as well as property investment, Australia’s property market continued its climb. Today if you can only afford a AUD$400,000 property and you want it to be in the city centre, be prepared to only be able to afford an extremely small unit of just a few hundred sf apartment. Another favourite property investment destination not just for Malaysians but the world, London’s property prices have showed some signs of slowing down beginning Q3 of 2014 but within the past one year, the average property prices grew 20%! There’s just no way that majority of everyone’s salary in London could have grown by the same percentage. Closer to home and one reason why Iskandar is also slowing down, Singapore’s luxury condo prices are coming down and in percentage has hit double digits. Even the prices of HDB flats are weakening. Internally and externally, the sentiments seem to be negative, right? Well, do you believe when others are fearful, you should be brave? I am not so sure if this applies to property market because most of the time, any decision you make today, for example to buy that secondary property would only be completed many months down the road. During this period, financial crisis might have happened! You would have lost the opportunity to buy a lower priced property. You would have paid too much for your property if you buy now.

NOTES

Keep reading up on more information and articles from experts in Property Hunter to get the latest news and views in and around the market.

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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

The Ten (10) Legal Commandments in Homebuying

Thou Shalt Have No Other Doubts Before Signing The Legal Documents

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There was a Purchaser who falls in love with the decorations in a house which he immediately confirmed to purchase. The motivating factor of his swift decision was a magnificent chandelier that was hanging at the entrance hall during his viewing which he fell in love at first sight. However, he was devastated to find out the chandelier was removed during the SPA period and he has no ground under the SPA to pursue for the same as it was not mentioned anywhere specifically. Thus, when thou are purchasing a property notwithstanding from Developer or a Seller in secondary property market, make sure the fixtures and fittings that thou are entitled to are put in writing in the SPA to avoid similar disappointment when thou receive the keys to thou newly bought home. Similarly, the same is applicable to any repair job to be performed by the Seller on the property prior to delivering the keys or existing tenancy of the property.

Being in a time where affordable home are vastly introduced, it shows how uneasy to save for the deposits for thou first home. A mere 10% deposit is definitely insufficient and thou are advised to also be prepared to pay the acquisition cost such as legal fees and stamp duty and to secure a loan for the balance purchase price soonest possible.

While it is understandable of the excitement of receiving the keys to thou newly bought property near the final-stage of the SPA, be sure to check on the inventory list, the condition of the property (door lock, hinges, ceiling, wall paint, window, water taps etc) as the first thing thou enter thy new home. This is particularly important when thou are purchasing from the Developer as the residential property is subject to 24-months defect liability period. The Developer has the obligation to make good of the defect within 30 days from the date of notice or thou may hire professionals to address the issue and forward the bill to the Developer upon expiry of the 30 days.

Thou Shalt Not Commit To Purchase Without Having The Fund In Place

Thou Shalt Not Take Possession In A Rush

hou need not be a Catholic or Christian to know the 10 Commandments. According to the bible, the set of biblical principles relating to ethics and worship were inscribed on two stone tablets which were given to Moses on Mount Sinai. Thou shall elect not to observe all the 10 Commandments if thou are not its follower by religion. However, thou shall observe the 10 Legal Commandments in homebuying if thou are expecting for a smooth ride in purchasing thou greatest investment in thou life as in the eyes of law, thou are equal notwithstanding race, religion or age and are subject to the set of laws and principles governing the territory that thou reside in.

Thou Shalt Not Make Conditions Of The Property At Delivery Unto Assumptions Of Norm

There are numerous legal documents in a sale and purchase transaction. However, in many occasions the argument brought forward (both Seller and Buyer) during a dispute of a Sale and Purchase Agreement (“SPA”) was “I did not know what is in the SPA and I signed only”. The blame is then placed on the lawyer (if represented legally) for not advising properly. Do note that the lawyer is not the person who signs the SPA and he/she may not be able to advise thou properly when thou did not raise thy concerns on specific matters. Additionally, the law has deemed that thou have read and fully understand the SPA when thou signed on the dotted lines. Thus, it is always advisable to read through the SPA (at least once) and post question to thou lawyer the point that raises any doubt or concern prior to executing the SPA as there is no u-turn when dispute arises. Meanwhile, thou lawyer will also advise thou on thou risks upon conducting the due diligence on the property such as land search, bankruptcy search or company search. In short, thou shall understand the impact of the various legal documents in the process of purchasing real estate.

Remember The Timelines And Keep It Holy In most of the contract or agreement, thou shall not miss to observe the term “Time is of the essence.” There is always a timeframe for all the obligations in the SPA, taking the above for example, the date of delivery of vacant possession, the period of the defect liability period starts from date of delivery of vacant possession. The effect of the term shall make it mandatory for thou to observe the timeframe or thou shall be in breach of the SPA. Important timeframes include the period to secure a loan and date of progressive payments or balance purchase price.the issue and forward the bill to the Developer upon expiry of the 30 days.

Honor Thy Rights And Thy Obligations The SPA is a document putting down thy rights and obligations in written form. Upon thou signing on the document, the rights and obligations are binding on thou and thou shall honor the same or thou will be in breach of the agreement and may be penalized by termination of agreement, forfeiture of deposit, liquidated damages or late payment interest depends on circumstances. At the same time, if the opposite party is the one in breach, thou can use the signed and stamped document to enforce thou rights through civil courts to obtain the appropriate remedy under the agreement.

Thou Shalt Not Share The Same Lawyer Many parties are involved in a complex sale and purchase transaction, ie. agent, seller, buyer, developer, management office, local authorities, stamp office, seller bank, buyer bank, buyer bank lawyer, land office etc. Engaging a lawyer shall fill in the gap and save thou hassles for communicating and follow up with these parties. However, to save legal cost, most Seller and Buyer decide to share the same lawyer without thinking of the consequential cost in case dispute arises between the parties. Lawyers are not allowed to represent both parties in one transaction thus in such scenario, the Seller most often will be left unrepresented in the transaction.

Thou Shalt Not Take The Enforcement Into Thy Own Hand Living in the civilized society, thou are required to obey and observe the restrictions set by the law and not to breach any of it or thou may be penalized by the law enforcers. For example, if the Seller failed to deliver the keys to the Buyer in timely manner, the Buyer is not empowered to break in to the property and disturb the peace of the community by the Seller’s breach. A more civilized way is to demand for the keys from the Seller or to break open the door under the aid of law enforcers. The civilized method may be troublesome but thou may not know what is in the property and applying such way is a protection or insurance towards further unfavorable circumstances.

Thou Shalt Not Bear Thy Late Payment Interests In a SPA transaction, late payment is the least favorable thing to both Seller and Buyer, ie Seller will appreciate punctual payment while Buyer is not willing to pay additional interests. Thus to avoid mutual disappointment and to strictly adhere to IV above, it is always advisable for both parties not to delay any of their obligations under the SPA unless it is severely unavoidable. If everything is managed well, late payment interests is out of the equation. Communication is the key.

Thou Shalt Not Neglect Thy Utilities, Upkeep, Management And Maintenance A handful of the Seller and Buyer usually think that upon receiving the balance purchase price or keys from each other marks the end of the SPA, especially in sub-sale transactions. Nonetheless, there still exists a final obligation that is worth reminding to all, which is to notify the utility providers about the transfer of the ownership to the Buyer. Any neglect or ignorance from the Seller may end up with the Buyer continue using the utilities free of charge while the bills are addressed to the Seller. The utility providers are not obligated to ascertain the ownership of the property and there is definitely no internal communications between the land office, inland revenue board and the utility providers. Thus, it is the Seller’s and Buyer’s obligation to notify the providers once the SPA key to the property is delivered. These 10 legal commandments are similar to the 10 commandments, there is no legal obligation for thou to observe. Nonetheless, by following and adhering to these set of principles, thou shall minimize the risk of getting into trouble and being penalized legally, notwithstanding in life or in this case, the sale and purchase process. The experience of owning your “Dream Home” could always do with a good head start, these 10 legal commandments are therefore the tablets that keep you safe and sound.

This is a series of articles that examine the latest trends and issues in real estate investment. Stay tuned. NOTES

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/// Featured Property Event

/// FEATURE PROPERTY EVENT

PRISM Property Summit and Expo is Bigger This Year

alaysia’s largest property summit PRISM 2014 was held at the Malaysia International Exhibition and Convention Centre (MIECC) following its huge success last year at The Palace of the Golden Horses where 1,400 participants in total attended the event. Mr KK Chua, Chief Executive Officer of Armani Media who organized the event said: “After the Budget 2015 reading in October, many among investors and developers alike have striven to understand the financial impact to their investments and businesses. We hope those who have attended PRISM 2014 have benefitted by getting great tips and tricks of the trade in order to forge ahead despite the predicted cooling climate.”

PRISM

The event’s 3,000 seminar participants enjoyed talks covering a wide array of topics ranging from investment strategies, solutions to better financing, investment hotspots to property market outlook. Also useful were the presentations laden with useful advice on the local and international property market as well as effects of the policies introduced, such as the most anticipated GST implementation next year. Other interesting topics included tips to make the banks say yes, how to qualify a deal, how to start investing when you’re short on cash and many others. There were more than 15 speakers from various backgrounds and expertise. And best of all, the talks were not product-centric – a value that sets PRISM 2014 apart from other summits. The star speaker of the summit was Dr. Dolf de Roos, who wrote New York Times best seller Real Estate Riches and 52 Homes in 52 Weeks. New Zealand-born de Rooswho is also Robert Kiyosaki’s Rich Dad series’ property advisor said, “The expo is the signature property event of the year. The participation of so many developers makes it a great opportunity for Malaysians and overseas investors to take an exclusive first look at newlylaunched and award-winning developments from all over Malaysia. We’re confident that there is something for everyone at this event.” According to Chua, “We were overwhelmed by the response of our first PRISM instalment in 2013 where we managed to help participating developers generate sales worth millions.This year, it was much better, and judging from the comments of our partners, PRISM 2014 proved a huge success for everyone.”

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This annual Expo presents a unique chance for Malaysian and International investorsalike to see the country’s best upcoming property developments all gathered under one roof. 60% of the expo features Malaysian residential, commercial, industrial and retail developments by some of the most prestigious developers like LBS Bina Group, Country Heights Holding Berhad, MCT Consortium Berhad, OSK Property, UMLand, YBK Group, Sunsuria Berhad, Ayala Land, DA Land, Tropicana Property, Bandaraya Development Berhad (BRDB), ProtascoBerhad, and Primarc Development just to name a few.

PRISM is poised to become the most exciting annual show in property industry, providing consumers and real estate professionals with a one-stop-shop opportunity to explore, invest and benefit from the best deals.

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/// International Property News

Cityscape Malaysia to Put the Malaysian Real Estate Market to Global Focus estate plays a significant role in the growth of the economy. Since its launch in 2002, Cityscape – which was incepted in Dubai – was catapulted to being world renowned for property development showcases, facilitation of business opportunities and investments, and networking for the real estate movers and shakers.

INTERNATIONAL

Its event editions have expanded to Abu Dhabi, Riyadh, Egypt, Qatar, Jeddah, Latin America, Kuwait, USA and Asia.

PROPERTY NEWS

For Cityscape Malaysia, exhibitors who have confirmed their participation are the country’s biggest developers, including UEM Sunrise Bhd, S P Setia Bhd and Eco World Development Sdn Bhd.

Catch up on the latest property and real estate news, views and analysis from across the globe featured Cooling Measures Cause Asian Residential Markets to Stumble in 2Q14 housing markets in much of the rest of the world are rising faster than before,” said the research firm. Prices in Singapore, Hong Kong, South Korea and Vietnam fell in 2Q from a year ago. Singapore’s residential property prices fell by 5.02% in 2Q following an annual decline of 1.68% in 1Q, 0.9% in 4Q13, and year-on-year (y-o-y) increases of 2.01% in 3Q and 2.47% in 2Q. Meanwhile, Hong Kong’s property prices dipped by 0.86% in 2Q in stark contrast to annual growth of 13.89% from a year ago.

Housing prices in Asian markets continue to be arrested in the second quarter of 2014 (2Q14) due to cooling measures even as housing prices around the world surge, according to an international residential market research firm. Global Property Guide said nominal housing statistics show that only 10 out of 44 countries have recorded declining prices on a yearly basis

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while inflation-adjusted figures show that over half of the countries surveyed recorded a housing price growth. However, most of the slowdown has happened in Asian markets. “Many housing markets are now considered overvalued. Asian governments in particular are imposing cooling measures to avoid a repeat of the past. However,

However, in South Korea and Vietnam, housing price drops decelerated. In South Korea, prices fell by 0.37% in 2Q, compared with a decline of 2.59% a year ago, while in Vietnam, prices slipped by a mere 0.03% compared with a 3.55% decline from a year earlier. Meanwhile, Taiwan’s housing prices rose by only 5.2% in 2Q in comparison with outstanding gains of 14.53% a year ago while in Tokyo, Japan, the growth of house prices was 2.63%, less than half the rate of 5.81% last year. Similarly, price growth continued to slow in some Southeast Asian

countries. In the Philippines, 3-bedroom condominium units in Makati’s central business district saw slower growth in average prices with 2.31% in 2Q compared with 8.6% a year ago. In Thailand, property prices rose by 2.28% in 2Q compared with 3.76% last year. In Indonesia, housing prices in 14 major cities inched up just 0.74%, in contrast with stronger gains of 6.06% a year ago.

Informa Exhibition, the organiser of Cityscape events, announced that the newest edition of the world’s largest portfolio of real estate investment and development events will be held in Malaysia. Supported by the Ministry of Tourism and Culture Malaysia and Malaysia Convention and Exhibition Bureau (MyCEB), the inaugural launch of Cityscape Malaysia 2015 is set to be

The Global Property Guide 2Q14 housing price survey is part of the research house’s coverage of residential market trends in 101 countries.

Notably, the event is expected to put the Malaysian real estate market into international attention and aid domestic investment as well as foreign direct investment. According to Deep Marwaha, Group Director of Informa Exhibitions, Informa has been organising Cityscape in countries where real

“Cityscape Malaysia will shine a spotlight on these developments. The event will serve as a platform for developers, real estate professionals, investors and property buyers to meet and evaluate business opportunities,” he added.

“We are very excited to be part of such a high profile property event,” said Anwar Syahrin Abdul Ajib, Managing Director/Chief Executive Officer of UEM Sunrise Bhd.

The positive economic growth locally and globally will bolster Malaysia’s property sector, which is also considered one of the region’s most promising economic activity due to its attractive property prices as compared to Hong Kong or Singapore and an assuring capital growth rate and rental yield.

Dato’ Chang Khim Wah, President and CEO of Eco World Development Group said, “Having an internationally recognised real estate event such as Cityscape take place in our country speaks volumes for the confidence and belief that the world has in our

Aside from the exhibition, Cityscape Malaysia 2015 will also play host to a plethora of knowledge-sharing and networking events including the Islamic Property Finance Forum, the Malaysia Real Estate Summit and a series of investor round tables.

Australia to Ease Immigration Rules for Millionaire Investors

“Likewise, China’s once booming property market is now on the verge of a slump, with the price index of second-hand residential buildings in Beijing rising just 2.31% during the year to 2Q, a sharp slowdown from the robust growth of 11.11% over the same period last year,” it said. In contrast, Dubai’s housing prices soared by 33.26% on a yearly basis, backed by strong demand. Construction activity is also increasing.

held on 4 to 6 February 2015 at the Kuala Lumpur Convention Centre.

local property market and economy.” Meanwhile, Marwaha noted that “Malaysia is home to a number of spawning developments, interesting concepts with trend setting architectural and landscaping designs as well as developments incorporating eco friendliness, lifestyle living, technological advances and security measures, whether in residential or commercial properties.”

than A$5 million (RM14.3 million) in Australia under a programme the government hopes will eventually raise A$6 billion (RM17.1 billion) a year.

Australian Prime Minister, Tony Abbott

Australia took steps to boost a visa scheme aimed at luring investment from wealthy Chinese, including speeding up approvals and expanding investment avenues, after complaints that disclosure requirements were too strict. The two-year old Significant Investor Visa scheme offers residency to overseas individuals who invest more

More than 90% of applicants since the scheme was introduced in 2012 have come from China. It announced another visa scheme on Tuesday offering residency to those who invest A$15 million (RM42.9 million) for one year. While the move ensures billions of dollars in investment for a country that is staring at a fading mining boom that powered its economy for more than a decade, immigration experts say the move is unlikely to attract large numbers of investors. Chinese investors have been blamed recently for driving up property prices in Australia forcing the government to set up an inquiry on

affordable housing in the country. It did not divulge detail on the reforms. Australia will maintain safeguards to ensure that the migration programme is not misused, Prime Minister Tony Abbott said in a statement on Tuesday, at a time when China has launched a crackdown on corruption that has among other things targeted officials who transfer ill-gotten gains offshore. Lawyers and agents have demanded the government clarify rules on source of the funding, a moot point for investors and one that has hurt the progress of visa approvals. Tuesday’s announcement makes no mention of that. “There’s a problem showing who the actual owner of the bank account

is. It’s very difficult to show for secrecy reasons or tax reasons,” said Rossana Gonzalez, immigration agent at Immigration Experts Australia. By the end of September, just 436 visas had been approved compared with 1,746 “expressions of interest”, according to data from the Immigration Department. “We’re competing with the rest of the world for migrant capital and it’s a positive sign to see the government noting an intention to streamline and speed up SIV visa processing,” Berrick Wilson, partner at investment firm KordaMentha Pty that offers advice and complying funds for SIV investors. The changes to the SIV will take effect during 2014/15 while the Premium Investor Visa will be introduced from July 1.

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/// International Property News

Battersea Signs RM7.12bil Syndicated Loan Kingdom, and for Phase 2, at least 75% of units were bought by locals in the UK. Battersea Power Station is embarking on a global tour to 13 cities in 11 countries that will be launched in London on Oct 31. The aim of the tour is to seek the most exciting UK and global brands, businesses and restaurants to bring alive London’s newest high street and the capital’s largest and most central development.

(L-R) Rob Tincknell, CEO, Battersea Power Station Development Company, Dato’ Johan Ariffin, Director Battersea Project Holding Company Limited, Tun Zaki Azmi, Chairman SPSetia Bhd, Datuk Rahman Dahlan, Minister of Urban Wellbeing, Housing and Local Government, Tan Sri Lieu, Chairman Battersea Project Holding Company Limited, Lord Marland of Odstock, Dato’ Ahmad Rasidi Hazizi, High Commissioner of Malaysia to the United Kingdom and Northern Ireland and Lord Strathclyde, Chairman, Advisory Board Battersea Power Station Development Company attend the Official Launch of Battersea Power Station’s Global Exhibitions at Battersea Power Station on October 31, 2014 in London, United Kingdom

Battersea Power Station yesterday signed a syndicated debt facility totalling £1.35 billion (RM7.12 billion) with a consortium of bankers that will fund the development of the second and third phase of the mammoth project. The financing, which is one of the largest real estate financing transactions in recent years, comprises a £750 million facility to fund the development of the power station building, and a £600 million facility to fund the development of London’s newest high street, Electric Boulevard, comprising buildings designed by Gehry Partners and Foster + Partners. CIMB Bank, Maybank and Standard Chartered Bank are acting as mandated lead arrangers, book runners and joint co-ordinators, while DBS Bank, National Bank of Abu Dhabi, OCBC Bank and RHB Bank are participating as primary syndicate members. “These latest financing agreements are a further significant step in the development of Battersea Power Station, in bringing the iconic building back into public use after 30 years and in constructing the extraordinary buildings in Phase 3 designed by world-leading architects. “Furthermore, these agreements will support the creation of jobs,

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affordable housing and enhanced transport within London,” said Battersea Power Station chairman Tan Sri Liew Kee Sin.

“It’s a fantastic opportunity, as 47% of retail brands around the world are not in London,” said Battersea Power Station chief executive officer Rob Tincknell at a media conference. As part of the tour, there will be an opportunity for people to purchase 539 of the 1,305 Gehry Partners and Foster + Partners-designed homes in Phase 3 of the development, which will be part of London’s newest pedestrianised high street.

Battersea Power Station in a statement said refurbishment work on the power station, including the replacement of the chimneys, is progressing well. “The main construction work on the power station will commence in the first quarter of 2015 at the same time as the start of the construction of the Northern Line Extension, including the Zone 1 station at Battersea Power Station,” said the statement. The signing of the agreement was held in the iconic Control Room A inside the power station with representatives from the mandated lead arrangers, book runners and joint co-ordinating banks, directors of Battersea Power Station and witnessed by the Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan.

“The agreements are also a demonstration of the strength of the relationship between the shareholders of Battersea Power Station and the lenders, and we thank them for their support.” At least two-thirds of the buyers for Phase 3 are expected to be locals, with Malaysians accounting for less than 5%. Phase 3 is divided into 3A and 3B. Liew said on the sidelines after the signing of the deal that he hopes Phase 3A, which will be launched on Friday, will see at least 60% sales within a week of its launch. He said that once 3A was fully sold, enough cashflow would be generated to pay up the £400mil loan taken to buy the land for the entire project.

These latest financing agreements are a further significant step in the development of Battersea Power Station, in bringing the iconic building back into public use after 30 years and in constructing the extraordinary buildings in Phase 3 designed by world-leading architects. Furthermore, these agreements will support the creation of jobs, affordable housing and enhanced transport within London

Liew had earlier said that the global launch of Phase 3 would enable Battersea Power Station to recoup its land cost of about £400mil. There is a possibility that the gross development value of the project will increase to £10bil from £8bil. In the first phase, at least 50% of buyers were from the United

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/// Hot Topic

Kinsabina Group /// HOT TOPIC

Looking forward to 2015

A New Year, A New Beginning

he property industry when through a series of changes in 2014, with new rules and regulations imposed to keep its trajectory in check, and the next year is gearing up to be an equally challenging one. Optimism in the industry is still high, albeit more cautious, and we are excited to report on more new developments in the coming months. Here is a quick look of what is on the horizon for Sabah in 2015.

Name of project Location Commencement date Completion date

Grand Merdeka Name of project Location Estimated commencement date Estimated completion date

: Grand Merdeka Corp : Menggatal, Off Tuaran Bypass : 2015 : 2016

With two rows of signature office suites, a showrooms and retail units, Grand Merdeka Corp is set to introduce a new lifestyle perk for residents in the immediate neighbourhood. Its impressive choice of bars and restaurants, and exclusive executive car park complete with a convenient GM buggy-transit to and from Grand Merdeka Mall, GM Home and Grand Merdeka Corp will add to the bustling energy of this new activity hub in Menggatal. Name of project Location Estimated commencement date Estimated completion date

:GM Home Retail Warehouse :Menggatal, Off Tuaran Bypass : 2015 : 2016

GM Home is a one-stop household and home furnishing hub for the Northern corridor residents of Kota Kinabalu. It is a retail warehouse concept that spreads across 70, 000 sq. ft., with ample car parks at basement and ground level. It is ideal for hypermarket, furniture outlets, specialty outlets and fast food drive-thru outlets which serve as integrated anchor tenants for Grand Merdeka Mall.

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: Riverside Residence @ Sodomon : Jalan Lintas, Kampong Sodomon : January 2015 : January 2018

A hidden gem nestles nonchalantly in a country setting of serenity yet within the cityâ&#x20AC;&#x2122;s prime location. Riverside Residence @ Sodomon offers low densitycondominiums situated along Sungai Petagas. Conveniently located just 10 minutes from Kota Kinabalu city and 5 minutes from Kota Kinabalu International Airport, these cozy condominiums start from a comfortable 955 sq. ft. to a generous1180 sq. ft. with luxurious facilities and amenities of style and comfort. A wholesale mart is located neaerby for easy access to everyday necessities.

Name of project Location Commencement date Completion date

: Unicorn Tower : Bundusan, Penampang : June 2015 : June 2018

An integrated living concept amidst natural settings surrounds a nucleus of vibrancy. Unicorn Tower prides itself on urban lifestyle living equipped with distinctive amenities. Adjacent to shops, offices, eateries and a lively nightlife, this upscale contemporary condominium is a perfect oasis for the family and loved ones. The luxurious high-rise living is enclosed within a gated community with 24-hour security for our peace of mind.

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/// Hot Topic

Hap Seng Properties Development Sdn Bhd Name of project Location Estimated Commencement Date Estimated Completion Date

: Kingfisher Inanam : Inanam : 2015 : 2018

A gated and guarded condominium located about 5 minutes from Inanamtown, Kingfisher Inanam offers a range of units measuring 865 sqft to 1160 sqft with facilities including swimming pool, children’s playground, gym room, and club house.

Glowbest Sdn Bhd Completion Date : February 2017 Name of project : Orchard Plaza Location : Tenom Town Centre Commencement Date : February 2015 As a part of Tenom’s New Township Extension Scheme, Orchard Plaza possesses all the qualities of a prime commercial hub. Located in the heart of Tenom, the property will feature 71 double-storey shop lots, complemented by a super market with a floor space of 40,000 sq ft. The visually appealing development will boast the latest in telecommunications infrastructure, as well as a modern and practical building, landscaping, and traffic design. A mini-bus station spanning 70 m will also be built to help improve the ever-growing public transportation system in Tenom.

Mah Sing Group Berhad Name of project : Kota Kinabalu Convention City (KKCC) Location : Jalan Tanjung Lipat, along the Coastal Highway Estimated start date : TBC Estimated end date : TBC

IJM Land Name of project Location Commencement date Completion date

: Riverine Diamond : Jalan Petanak, Kuching, Sarawak : January 2015 : December 2017

The Riverine Diamond, consisting of 2 blocks of 312 units, are the last 2 condominium towers in the Kuching Riverine Resort development and an opportunity to own an apartment here should not be missed. Soaring to 22 storeys high, these centrally located condominiums offer commanding viewsof the meandering Sarawak River, Waterfront Esplanade, the DUN building, the sprawling Kuching city, and the surrounding mountains, hills and plains. Besides having full condominium facilities andbeing located by the Sarawak River, the podium floors also offer the convenience of commercial outlets.

The Kota Kinabalu Convention City (KKCC) is designed to be a world class waterfront integrated development. KKCC aims to provide supporting facilities for SICC, which will be the main centre for convention activities and development of the MICE industry in Sabah.This integrated development is envisioned as a premier lifestyle residential, commercial and tourism centre to be designed by international consultants. The master plan will include hotels, corporate office tower, shop offices, lifestyle retail, F&B outlets and serviced residences. Sited on the waterfront, KKCC will be one of the best places in Kota Kinabalu to watch the sunset.

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Three Major Nations Absent as China Launches World Bank Rival in Asia learn from the World Bank and the Asian Development Bank and other existing multilateral development institutions in their good practices and useful experiences.”

Personal Lobbying The Australian Financial Review said Kerry had personally asked Australian Prime Minister Tony Abbott to keep Australia out of the AIIB.

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REHDA: GST Will Push Up Home Prices by 2.6% Ng said the association was in full support of the GST and concurred with Customs GST director Datuk Subromaniam Tholasy, who had said that land did not incur the 6% GST rate. However, he said land was by no means the largest cost component in property development.

On left: Datuk Ng Seing Liong

Home prices will rise by about 2.6% once the goods and services tax (GST) comes into play, said the Real Estate and Housing Developers’ Association Malaysia (REHDA). The chairman of the association’s task force on accounting and taxation, Datuk Ng Seing Liong, said that the calculation was based on its consultations with industry experts and member developers. REHDA’s 2.6% estimate differs from that of the Customs Department, which expects the GST to have an impact of between 0.5% and 2% on house prices, assuming there’s no change in supply and demand conditions.

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“As our calculation clearly spells out, the construction cost, which constitutes 46% of the total development, is not only the largest component but also the component which will attract the GST of 6%,” he said in a letter to StarBiz. He said the GST on this component would inevitably lead to an increase in house prices. Appending calculations for a housing unit originally priced at RM400,000, Ng said the price post-GST would be around RM410,560. Under the 46% construction component, costs were broken down into non-service taxable and service taxable segments, representing 44%, or RM176,000, and 2%, or RM8,000, respectively. Under the non-service taxable segment comes items such as cement/concrete, steel, bricks and sand, while the service taxable segment includes tiles and fittings/sanitary. Under the existing sales and service tax, no tax is imposed on the nonservice taxable category, while the service taxable

category has a tax of up to 10% imposed on it. Post-GST, REHDA’s calculations showed that the non-service taxable cost had gone up to RM186,560, while the service taxable cost remained at RM8,000. It maintained the same cost estimates for other items, including land (15% or RM60,000), infrastructure and pre-development works (10% or RM40,000), professional fees and marketing costs (6% or RM24,000), finance costs (6% or RM24,000) and profit (17% or RM68,000). Ng said REHDA also disagreed with Subromaniam, who had said that developers could easily absorb cost increases as their margins were around 30%. He said it was currently impossible for developers to earn up to a 30% profit, as most development costs were on the rise, along with various capital contributions and charges imposed on developers. “On average, as tabulated in the calculation, developers, most of which are public-listed companies, are only making around 17% at best,” he said. However, Ng said it was still too early to determine the actual house price increases post-GST, as REHDA was still in discussions with the Government and there appeared to be many more issues to be ironed out.

Australia, Indonesia and South Korea skipped the launch of a China-backed Asian infrastructure bank as the United States said it had concerns about the new rival to Westerndominated multilateral lenders.

Japan, China’s main rival in Asia and which dominates the $175 billion Asian Development Bank along with the United States, was also not present, but it was not expected to be.

China’s $50 billion Asian Infrastructure Investment Bank (AIIB) is seen as a challenge to the World Bank and Asian Development Bank, both of which count Washington and its allies as their biggest financial backers.

Media reports said U.S. Secretary of State John Kerry put pressure on Australia to stay out of the AIIB.

China, which is keen to extend its influence and soft power in the region, has limited voting rights in these existing banks despite being the world’s second-largest economy. The AIIB, launched in Beijing at a ceremony attended by Chinese finance minister Lou Jiwei and delegates from 21 countries including India, Thailand and Malaysia, aims to give project loans to developing nations. China is set to be its largest shareholder with a stake of up to 50 percent. Indonesia was not present and neither were South Korea and Australia, according to a pool report.

However, State Department spokeswoman Jen Psaki said: “Secretary Kerry has made clear directly to the Chinese as well as to other partners that we welcome the idea of an infrastructure bank for Asia but we strongly urge that it meet international standards of governance and transparency. “We have concerns about the ambiguous nature of the AIIB proposal as it currently stands, that we have also expressed publicly.” In a speech to delegates after the inauguration, Chinese President Xi Jinping said the new bank would use the best practices of the World Bank and the Asian Development Bank. “For the AIIB, its operation needs to follow multilateral rules and procedures,” Xi said. “We have also to

“Australia has been under pressure from the U.S. for some time to not become a founding member of the bank and it is understood Mr Kerry put the case directly to the prime minister when the pair met in Jakarta on Monday following the inauguration of Indonesian President Joko Widodo,” the paper said. South Korea, one of Washington’s strongest diplomatic allies in Asia, has yet to say it will formally participate in the bank. Its finance ministry said last week it has been speaking with China to request more consideration over details such as the AIIB’s governance and operational principles. “We have continued to demand rationality in areas such as governance and safeguard issues, and there’s no reason (for Korea) not to join it,” South Korean Finance Minister Choi Kyung-hwan said in Beijing on Thursday after attending a separate regional meeting. The Seoul-based JoongAng Daily quoted a South Korean diplomatic source as saying: “While Korea has been dropped from the list of founding members of the AIIB this time around, it is still in a deep dilemma on what sort of strategic choices it has to make as China challenges the U.S.-led international order.”

The AIIB is expected to begin operations in 2015 with senior Chinese banker Jin Liqun, exchairman of investment bank China International Capital Corp, expected to take a leading role. The memorandum of understanding signed on Friday said authorised capital of the bank would be $100 billion and that the AIIB would be formally established by the end of 2015 with its headquarters in Beijing, state news agency Xinhua said. Takehiko Nakao, the president of the Manila-based Asian Development Bank (ADB), said the AIIB should function in line with international governance, labor and environmental standards. “I hope the new bank will adhere to these standards,” Nakao told Reuters in a phone interview. He acknowledged there was an overlap of the AIIB’s role with that of the ADB. “But again, because of very big financing needs of the region it is understandable to have a new idea of establishing a bank,” Nakao said, adding: “We will consider the appropriate collaboration after it is really established.” The ADB, created in 1966, offers grants and below-market interest rates on loans to lower to middleincome countries. At the end of 2013, its lending amounted to $21.02 billion, including co-financing with other development partners. China has a 6.5 percent stake in the ADB, while the United States and Japan have about 15.6 percent each.

Singapore, 20 Other Countries Sign MOU for New Asian Bank Representatives signed a memorandum of understanding (MOU) today at the Great Hall of the People in the heart of Beijing to establish the Asian Infrastructure Investment Bank (AIIB). Singapore and 20 other Asian nations have signed on to a new international bank for Asia opposed by Washington as an unnecessary rival to established institutions such as the World Bank.

The bank aims to fund the construction of roads, railways, power plants and telecommunications networks that global finance officials say are needed to keep the region’s economies humming along.

Those taking part included regional economic powers India and Qatar. Absent were close US allies South Korea and Australia. China proposed the bank a year ago and has said it will provide most if not all of the initial US$50 billion (S$63.8 billion) in capital. In a statement, Singapore’s Deputy Prime Minister and Minster for Finance, Mr Tharman Shanmugaratnam, who represented

Singapore at the signing of the MOU, said: “The AIIB is a positive development which will help meet the immense infrastructure needs in Asia. Singapore looks forward to partnering other members to establish the AIIB as a resilient multilateral institution, complementing and drawing on best practices of existing players like the World Bank and Asian Development Bank, so as to promote sustained growth in Asia.”

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Hang Seng Bank Tops List of Strongest Lenders The strongest-bank ranking includes lenders with at least $100 billion in assets as of May 1. This year, private banks are included in the database, and two such institutions, Canada’s Desjardins Group and Tokyo-based Norinchukin Bank, are tied for the No. 2 slot. Both are cooperative banks: Desjardins is an alliance of credit unions, while Norinchukin serves 3,800 farm, fishing and forestry co-ops.

In June 1984, a three-man delegation of business leaders from Hong Kong made a pilgrimage to Beijing to meet with paramount leader Deng Xiaoping. One member of the group was Lee Quo-Wei, then executive chairman of Hang Seng Bank Ltd. (11), creator of the Hang Seng Index and one of the most prominent financial institutions in the territory. The group spent an hour with Deng in the Great Hall of the People, telling him that in the ongoing negotiations regarding the handover of Hong Kong to China, scheduled for 1997, the territory needed assurances that Beijing wouldn’t undermine its thriving free-market economy. The next year, Hang Seng began operations in China. It has since expanded rapidly, both in Hong Kong and on the mainland, under the “one country, two systems” policy. As of the end of 2013, assets had grown to HK$1.14 trillion ($147 billion), up 53 percent since 2007. The bank has also shored up its capital base in the aftermath of a disastrous 2008 -when the stock fell 37 percent -- and cut back on risky investments. The Hong Kong lender Hang Seng claims the No. 1 spot in Bloomberg Markets magazine’s. Partly as a result, Hang Seng is the world’s strongest bank, according to the annual ranking by Bloomberg Markets magazine. Hang Seng jumps to the top of the list after ranking No. 10 last year.

Risk Buffers The lender, which is majority owned by London-based HSBC Holdings Plc (HSBA), has been building up

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its risk buffers since 2009, in part by paring dividends, as it prepares for the more-stringent regulatory requirements being phased in by the Hong Kong Monetary Authority to comply with Basel III international guidelines. Hang Seng also benefits from being the second-biggest retail bank in Hong Kong (population: 7.2 million), with 220 branches. The HKMA has followed the U.S. Federal Reserve and kept its benchmark interest rate near zero. “With the deposit costs being so low, they can lend more safely on the asset side,” says Alexander Lee, a Hong Kong–based analyst at DBS Vickers Hong Kong Ltd. “They don’t need to take on as much risk to generate higher returns.” Hang Seng vaulted to the top in a ranking dominated for a third consecutive year by Asian lenders. Eight of the 21 banks in the list are Asian, with Hang Seng’s rival, BOC Hong Kong (2388) (Holdings) Ltd., ranked No. 10. The ranking covers the banks’ 2013 fiscal year. Singapore’s Oversea-Chinese Banking Corp. (OCBC), No. 1 for the years 2010 and 2011, falls to No. 4 from No. 2 in last year’s ranking. It’s one of three Singapore institutions on the list. Canada is also well represented, with three banks in the ranking. Qatar National Bank SAQ, No. 1 last year, drops to No. 5. It is the strongest bank in the Middle East and Africa, followed on the Bloomberg Markets list of regional leaders by Standard Bank of South Africa.

The ranking weights and combines five criteria, including Tier 1 capital compared with risk-weighted assets; nonperforming assets against total assets; and efficiency, a measure of costs against revenue. Only banks that provided data in all five categories were included. Desjardins’s No. 2 rank makes it the strongest bank in North America. The only U.S. bank to make the cut is Minneapolis-based U.S. Bancorp, at No. 19. Bayerische Landesbank of Germany is the strongest European bank, at No. 6, one of three German banks on the list. Hang Seng’s current strength conceals its humble origins. Hang Seng Ngan Ho started as a moneychanging shop in Hong Kong’s Sheung Wan district in 1933, posting a net profit of HK$10,389 in its first year, according to the bank’s website. The company ventured into commercial banking in 1952 as the city began transforming into a manufacturing hub. In April 1965, Hang Seng -- by then Hong Kong’s second-largest bank by deposits -- fell into crisis as plunging property prices led to the collapse of smaller lenders and sapped confidence in all banks. Customers withdrew HK$80 million in a single day.

HSBC to Rescue Hongkong & Shanghai Banking Corp., now HSBC, rescued Hang Seng, buying a 51 percent stake for HK$51 million. Its holding is now 62 percent and was worth HK$152 billion as of May 30, making Hang Seng “the jewel in the crown” of HSBC, says Jim Antos, an analyst at Mizuho Securities Asia Ltd.

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Hang Seng operates separately from HSBC, though its chief executive officer, Rose Lee, spent 35 years at HSBC before her appointment to head Hang Seng in 2012. Lee, 61, is one of only two women serving as a CEO of the 50 companies that make up the Hang Seng Index. (HSI)

Shunning an aggressive expansion policy and focusing on maintaining a high return on equity has paid off for Hang Seng, says Edmond Law, a Hong Kong–based analyst at UOB Kay Hian (Hong Kong) Ltd., who recommends that clients buy the shares.

The bank posted net income of 155.7 billion yen for the year ended on March 31, its highest amount since the crisis. Booming global markets helped the bank book a 1.8 trillion yen gain in the value of its securities for the same year.

Retail banking and wealth management in Hong Kong is Hang Seng’s biggest business, accounting for 31.4 percent of its HK$28.5 billion in pretax profit for 2013. Corporate banking generated a further 22 percent, while operations in China contributed 29.7 percent.

“Even during the financial crisis, their overall operation was still quite solid,” Law says. “That shows the culture of Hang Seng. The capital strength is sort of a norm in Hong Kong’s banking sector.”

China has become key to the bank’s growth, with mainland companies accounting for more than half of its new corporate customers in Hong Kong in 2013, Hang Seng said in its latest annual report.

Deceleration The bank has curbed expansion on the mainland as economic growth there decelerated to its slowest pace since 1999. Lee, who has a degree in business administration from the University of Hawaii, says the bank remains committed to its Chinese operations. “The slowdown in economic growth, intensifying market competition and changes in the regulatory environment have created challenging operating conditions on the mainland,” she wrote in an e-mailed response to questions. China’s banks have been seriously weakened by its slowing economy. The 10 largest lenders on the mainland reported that overdue loans reached $94 billion at the end of 2013, a 21 percent increase over the previous year. The banking industry’s nonperforming loans have increased for 10 straight quarters. While the China Banking Regulatory Commission contends bad loans accounted for just 1.04 percent of total loans as of the end of March, analysts are skeptical. The valuation of the 16 publicly traded Chinese banks implies that investors have priced in a nonperforming loan ratio as high as 5.8 percent, according to an April report from Guotai Junan Securities Co.

Hang Seng’s Tier 1 ratio, at 13.8 percent, is well above the 8.5 percent that Basel III requires. In a public company, Tier 1 capital consists of a bank’s cash reserves, common equity and some classes of preferred stock, all of which combine to act as a shock absorber against losses when the economy hits a rough patch. For Japan’s Norinchukin, its No. 2 slot in the Bloomberg Markets ranking represents a return from near collapse. In the year ended on March 31, 2009, it lost 572 billion yen ($5.7 billion) after it loaded up on U.S. mortgage-backed securities that proved to be toxic. The CEO resigned, and the cooperative bank was forced to raise 1.9 trillion yen from its members to boost capital. He was replaced by his deputy, Yoshio Kono.

Holding On “I became president in our worst time,” Kono, 65, said at a news conference on May 22. “Thanks to the capital injection from our members, we were able to hold on to investment securities that tumbled in value during the market rout.” Since 2009, Norinchukin, which was founded as a governmentowned cooperative 90 years ago and privatized in 1959, has become more conservative. The bank is mostly an investment vehicle for Japan’s struggling farm co-ops, which rely on its returns to supplement their declining income. In 2013, Norinchukin invested 67 percent of its assets in overseas and domestic bonds. During the five years ended on March 31, it reduced its holdings of structured securities by 12 percent to 5.4 trillion yen.

The bank has been hoarding those profits; it boasted a Tier 1 capital ratio of 16.1 percent as of March 31, 2013, up from 9.6 percent four years earlier, according to Norihiro Takahashi, senior managing director at the bank. The ratio increased to 17.6 for this year. “The crisis made us very sensitive to the market environment,” says Takahashi, who’s in charge of the company’s financial controls and planning. “I want to always keep our capital ratio slightly higher than those for top global banks.” Takahashi has a risk-averse soul mate 10,300 kilometers (6,400 miles) away in Quebec, where Desjardins Group CEO Monique Leroux presides over a network of 376 credit unions -- known as caisses -- mostly in the French-speaking province of Quebec and in Ontario. Desjardins serves more than 6 million members and clients and employs 45,000 workers. It had C$223 billion ($206 billion) in assets as of March 31.

‘Liquidity is Important’ Quebec-based Desjardins boasts a Tier 1 capital ratio of 15.7 percent. Because it’s not publicly listed, most of that capital is cash held as reserves or retained earnings. “Liquidity is important for us,” says Leroux, who turns 60 on Aug. 11. She is sitting in a meeting room adjacent to her 40th-floor office at Complexe Desjardins, which features a panoramic view of Old Montreal and the St. Lawrence River. “If you compare the situation of Desjardins to other banks, we’ve over the years been able to make sure we have a solid basis of liquidity.” Desjardins was founded in 1900 as Caisse Populaire de Levis -- Levis is a town on the southern shore of the St. Lawrence -- by Alphonse Desjardins, a French stenographer in Canada’s parliament. He was angered by the extortionate interest rates -- as high as 3,000 percent --

that prevailed at the time. Modeled on European cooperatives, the new financial institution offered loans at reasonable rates and provided Quebecois with a savings repository.

Bon Mots Leroux admires Alphonse Desjardins; in 2012, she published a collection of quotes and bons mots from the founder. “Behind Desjardins’s strength is the very strong retail-banking franchise they have,” says David Beattie, a senior credit officer at Moody’s Investors Service. “They’ve been at it for a long time, and they do it very well.” Desjardins’s status as a private institution means there’s no incentive to maximize short-term profits, Beattie says. “They’re not under the same kind of return-on-equity pressure that the other banks are,” he says, “so they can afford to run a little rich on capital and not get beaten up by their shareholders.” Desjardins offers personal and commercial banking, wealth management, insurance and brokerage services. Part of its strength, Leroux says, is rooted in how the cooperative is governed. Its executives develop high-level strategies that are discussed and approved by the elected directors of the caisses. Desjardins is not a risk taker.

Risk Management “Our profile in risk management is quite conservative compared to other large organizations,” says Leroux, who has been chairman and CEO of the group since 2008.

about capital, liquidity, performance and productivity.”

How We Crunched The Numbers To identify the world’s strongest banks, we used the Equity Screening (EQS) function on the Bloomberg Professional service to obtain a list of public and private banks with total assets of $100 billion or more as of May 1. The banks were evaluated in five categories. The ratio of a bank’s Tier 1 capital to its risk-weighted assets accounted for 40 percent of each bank’s overall score. The ratio of nonperforming assets to total assets got a weighting of 20 percent, as did the ratio of reserves for loan losses to nonperforming assets. The ratio of deposits to funding accounted for 15 percent of the score. And the efficiency ratio, which compares costs with revenue, received a 5 percent weighting. Banks were ranked on each criterion, and the ranking positions were weighted and combined to determine the banks’ overall scores. Lenders that reported a loss in net income for 2013 or that failed the U.S. Federal Reserve’s most recent stress test were excluded. All data are for the banks’ 2013 fiscal year, which in most cases ended on Dec. 31. (Japanese institutions, such as Norinchukin Bank, have a March fiscal year; their ranking was based on data for the year ended on March 31, 2013.) Banks that hadn’t reported data for fiscal year 2013 by May 1 were excluded. Only banks that provided Bloomberg with data in all five categories were considered. In total, 97 banks were ranked.

In her youth, Leroux hoped to be a concert pianist. Instead, she became a chartered accountant and worked for 17 years at Ernst & Young LLP, rising to managing partner. From 1995 to 2000, she was a senior vice president at Royal Bank of Canada. What she’s learned at Desjardins, she says, is the importance of fundamentals. “Like Alphonse Desjardins wrote many years ago,” Leroux says, “it’s all

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