Property Hunter Issue 50th - January 2014 by Sam Lee

/// HOT TOPIC

The New Lifestyle is to Go Vertical JAN

2014

ISSUE 50 RM5.90

/// MICHAEL YEOH Going Forward. Mortgage Financing after Budget 2014 Announcement /// HOT TOPIC Penang Property Market

2014 is the Time to Buy and PH Expo has the Platform • Smart Cities Should Go Vertical Budget 2014 – Property Speculators: Time for a New Strategy • Living Green with Bay 21 iInside this Issue: Over 470 Properties for Sale & 180 Properties for Rent

06  07 | Cover Story /// Contents

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

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Whatâ&#x20AC;&#x2122;s inside... 06

Cover Story Property Hunter Celebrates 50th Issue with Support of Developers from Asia Pacific Region

Feature Interview Datuk David Chu - Rising Above and Beyond

Feature Property Showcase Luxury Reaches New Heights in Kota Kinabalu

Feature Property Event 2014 Is The Time to Buy and PH Expo has the Platform

Feature Property Showcase The Royal Tour At The CAstle

Feature Property Showcase Living Green with Bay 21

Feature Property Launch Launching of Pacific Heights

Hot Topic The New Lifestyle Is To Go Vertical

Contributor: Dr. Daniele Gambero Smart Cities Should Go Vertical

Contributor: Michael Yeoh Going Forward. Mortgage Financing after Budget 2014 Announcement

Hot Topic Penang Property Market

Feature Property Launch Federal Housing Minister Graced the Launch of C-Park

Contributor: Richard Oon Budget 2014 Property Speculators: Time for a New Strategy

08 Datuk David Chu - Rising Above and Beyond

Executive Chairman of Jesselton Waterfront Holdings sat down with us to discuss his love for high rise buildings, his current projects and his big plans for the future.

12 Luxury Reaches New Heights in Kota Kinabalu Pacific Heights, the first residences to be launched at PacifiCity offers magnificent views over Likas Bay and the surrounding wetlands.

42 The New Lifestyle is to Go Vertical

High rise living in urban centers is a logical response to soaring land prices.

Sneak Peek of February Issue Feature Interview

Discover Iskandar Malaysia flagships and discover the PROs and CONs

Hot Topic

Residential Development Launches to Look Out For in Sabah in 2014

Hot Topic

Property Hunter Expo Returns to Kota Kinabalu

A Bright Future for Tourism and Leisure Properties in Sabah

/// Cover Story

/// COVER STORY

Property Hunter Celebrates 50th Issue with Support of Developers from Asia Pacific Region

Property Hunter magazine was first published in January 2012. After publishing 50 issues and with the support of local developers from across Malaysia, the monthly publication is now the leading property magazine in East Malaysia. The magazine is regarded by industry leaders as the go-to source for everything property.. Its contents includes the latest in-depth property industry news from across the globe, fresh perspectives, exclusive interviews, development progress, property events, development launches, marketing sentiments, property data, contributing articles by experts in the industry, and secondary market real estate listing. Property Hunter magazine has the widest coverage and highest subscription in East Malaysia. It is available in leading bookstores, newsstands, grocers and convenience stores in East Malaysia. The publication also reaches high profile and influential investors with over 3200 subscribed readers in East Malaysia. In August 2013, Property Hunter also launched their brand new web portal, www.propertyhunter.com.my. The comprehensive website is a trading platform for both property buyers and sellers. It offers easy-to-use search and view functions, and features an online television channel plus the latest in property (secondary market and new developments) in East Malaysia; news from across Malaysia and International news; expert analysis and comments; and property market sentiments and statistics reports. The website also features an Expert Says column, which provides useful articles from the leaders in the industry.

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Thank you for the continuous support from our readers, clients, partners, suppliers and associates.

Unique competitive highlights of www.propertyhunter.com.my include a higher take up rate in Sabah based real estate agent subscription, forecast of 25,000 monthly unique visitors regionally viewing property listings and new developments, real time property news and Property Hunter TV, featuring property events, launches and headlines. The inaugural Property Hunter Expo was held in Kota Kinabalu back in May 2012, followed by Sandakan and Tawau. The 2012 exhibitions collectively sparked great success with recorded event day transactions spilling over RM85million. The series continued into 2013 with the addition of Miri, Sarawak and Lahad Datu added into the event schedule fuelling the total recorded event day transactions reaching new heights at RM250million. This expo is now regarded as the largest property exhibition in East Malaysia.

Property Hunter magazine has the widest coverage and highest subscription in East Malaysia. It is available in leading bookstores, newsstands, grocers and convenience stores in East Malaysia. The publication also reaches high profile and influential investors with over 3200 subscribed readers in East Malaysia.

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28 ď ˝ 29

/// East Malaysia Property News /// Feature Interview

/// FEATURE INTERVIEW

Datuk David Chu Rising Above and Beyond

Photo by Louis Pang Studio

Executive Chairman of Jesselton Waterfront Holdings sat down with us to discuss his love for high rise buildings, his current projects and his big plans for the future.

24 08

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ack in the eighties, Datuk David Chu was a humble car salesperson trying to make ends meet. He started his career from the ground up and eventually decided to operate his own used car dealership. The business was short lived and he was trying to find a way to pursue his passion in property development.

built concurrently. With the system, four to five floors can be completed in a month compared to the conventional timber formwork which only allows the completion of two floors per month. Plus, it is almost maintenance free during the construction period and produces the best concrete surface quality.

Whenever Datuk David Chu travelled overseas to countries such as Australia and Singapore, he was always at awe of the city landscape with its high rise buildings and modern architecture. He saw the potential of development in Kota Kinabalu and made it his priority to become a part of that growth.

Jesselton Residences consists of 333 units waterfront condo and 80% of them sold out since it was first launched two years ago. Datuk David Chu believes that the reason it was a big hit was because of its prime location. He said, “Since the beginning, my priority was always in finding the best location available. Looking for ideal pieces of land is very time consuming and prices are experience, but I believe that it is essential.”

During the inception of his first property development, Jesselton Residences, Datuk Chu sought advice from friends who are in the industry. It took him two years to figure out the double-wall cofferdam system to address the ‘nosea-reclamation’ condition requested by the local authorities as part of the environment conservations. Double-wall cofferdam is famous in off-shore construction but is one of the first in building construction in Malaysia. This was the first attempt in Kota Kinabalu by a private developer. Jesselton Waterfront Holdings also insisted on using 3 sets of the aluminum formwork system in the main building tender so that the 3 towers can be

He added: “I always tell my customers to buy properties at good locations. Don’t put your money into a bank, you will only earn around 3% in interest, but if you buy property of value in a good location, you will gain so much more in return. Some landed properties have even doubled in price in the past five years.” Datuk David Chu has crafted a niche hi-end market that focuses on young professionals as customers. He believes in the importance of raising the

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25 09

Feature Interview /// East Malaysia Property News

standard of living in Kota Kinabalu and has managed to attract a lot of international investor especially from China, Korea, Hong Kong, Taiwan and Singapore. His latest venture, Jesselton Twin Towers is the first of its kind in Sabah. This 56-storey tall building will be the highest in Borneo. It consists more than 700 units with floor sizes ranging from 700 square feet to 2,600 square feet, plus four penthouses with over 8,000 square feet. The tower will also be the first in Sabah to be equipped with 11 lifts inclusive of private lifts which will take residents directly to their apartments. Other key features include six sky gardens, sky bar, fitness centre, yoga pavilion, spa & wellness centre, garden pavilion, gourmet dining suites and many more. According to Datuk David Chu, “The project has already been endorsed by the Central Board and state cabinet. The Development Plan is also approved by the Kota Kinabalu City Hall. We are now in the Building Plan stage and we are getting ready to launch next year. Our design is futuristic and we use only the best construction materials. I have traveled the entire world to find the best supplies to ensure that an international standard is maintained. I have also sought advice from experts who specialize in high rise buildings. Plus, I personally handpicked everything in the building, right down to the water taps in the bathrooms.” The project received encouraging response from home buyers at the recent SHAREDA PropeEx13 organized by the Sabah Housing and Real Estate Developers Association. He has big plans for the future and one day aims to venture into the property market in Kuala Lumpur and build a high rise building there. He said, “Great cities are defined by great buildings. Everyone wants to see the Empire State Building in New York and everyone who goes to KL wants to visit the Petronas Twin Towers. I like to build icons that make a statement and I hope that one day it will be of that magnitude.” As more East Malaysian developers are trying to break through to the Kuala Lumpur market, more developers from the Peninsular are also trying to tap the market in Sabah. This is apparent with household names developing new projects in the state. Datuk David Chu believes that Sabah is very popular with outside developers because of the rising interest from foreign investors. He explains, “In 2013, we have more than three million foreign tourist arrivals. We have the second busiest airport in Malaysia with direct flights from various international cities, like Hong Kong, Guangzhou, Shenzhen, Hangzhou (Shanghai), Seoul, Taipei, Manila, Singapore, Tokyo & Brunei . We are especially seeing an increase of interest from China real estate agents. And this is exciting for us as our property value will increase because of this.” When it comes to his success, Datuk David Chu said it all boils down to team effort. He added: “It’s not a one man show, everyone in the team counts. I am lucky to have my sons working with me and also a very reliable General Manager, Kevin Thong, who helps me oversee our entire operation.” According to him, the future of Kota Kinabalu and Sabah is big and bright. This is not only due to the state being a tourism hotspot, but also because of the rising oil palm and gas industry. There has been a lot of progress in the past 10 years and Datuk David Chu is convinced that this will ensure the stability of the property and real estate industry.

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Real Estate Negotiators Subject to Registration Exercise Malaysian real estate negotiators will now be subject to a nationwide registration exercise implemented by the Board of Valuers, Appraisers and Estate Agents. In a joint conference organised by the Malaysian Institute of Estate Agents (MIEA), the Royal Institution of Surveyors Malaysia (RISM) and Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, Malaysia (PEPS) , MIEA president Siva Shanker said that the rationale of the exercise, among others, was to enhance professionalism in the real estate industry. To date, only real estate agents are required to be registered with the Board of Valuers. Under this exercise, real estate negotiators need to attend a one-day training programme run by MIEA, RISM and PEPS to obtain a certificate of attendance which will then enable them to register via a registered real estate agent. The registration exercise, which began last month, is expected to end on 31 Jan 2014. Upon registration, negotiators will receive a tag, which they are required to display at all times

STOPS Calls for Adoption of Strata Management Act

during their conduct of business starting 1 Apr 2014. PEPS president Lim Lian Hong said that the exercise is to ensure good governance and regulation in the industry. “As the country progresses, we look towards a regulated profession, where people toe the line.” When asked about the exercise, Hartamas Real Estate Malaysia Sdn Bhd associate director Christopher Chan said that he was pleased with the move and that it was long overdue. “Up till this point, there are no qualifying exams to sit for. But with this one-day training programme, it is a good start to enhance professionalism,” said Chan. A real estate negotiator who declined to be named was also supportive of the move. “I think it’s a good move as it will weed out illegal real estate agents and negotiators,” she said. Real estate negotiators who have yet to register can contact : MIEA +603-7960 2577 RISM +603- 7954 8358 PEPS : +60-7960 1318

The Subsidiary Title Property Owners and Purchases Association of Sabah (STOPS) created history by being the first such organization in Sabah and Malaysia to launch and distribute their own printed informative handbook on strata property affairs. The non-governmental organization was established back in February 2013.. Its Chairman Ken Lo appealed to the Sabah state government to help the people of Sabah with regards to the subsidiary title issues by setting up a tribunal and adopting the good points of the Strata Management Act 757 (2013). “The ultimate goal of STOPS is to address what matters most to all subsidiary title owners, that is to preserve and enhance their property values and to make recommendations to developers or managing agents or local authorities on how to make subsidiary title properties a safe and conducive place to live.” “This is the first time, not just in Sabah but in Malaysia, that a subsidiary or strata title handbook is produced to benefit purchasers and owners.” Lo said that STOPS’s approach values are non-confrontational and collaborative in making representation and in being involved

with relevant authorities, professional bodies and developers on any matter, discussion, formation of new acts/regulations, by-laws and rules pertaining to subsidiary title properties, or properties pending subsidiary title issuance in Sabah. At the launch of the STOPS member’s handbook: A Guide for Subsidiary Tittle Owners, the State Attorney-General Datuk Mariati Robert said that it shows the commitment STOPS has in carrying out its objective of providing pertinent information to members in order to make smart decisions. She stressed: “With large increase in numbers of subsidiary titled properties being built in Sabah, I believe that it is timely for STOPS to take the lead in pushing for property management practice standards for the benefit of both owners/purchasers and developers/property managers. With the new guidebook, readers will know what to do and where to get help if confronted with certain issues. It enlightens proprietors of subsidiary title properties on their rights and obligations. Readers will also learn about important legal issues and how the Subsidiary Title Enactment 1972 can protect their interest.

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/// Feature Property Showcase

/// FEATURE PROPERTY SHOWCASE

Luxury Reaches New Heights in Kota Kinabalu

Towering 24 storeys high, Pacific Heights, the first residences to be launched at PacifiCity offers magnificent views over Likas Bay and the surrounding wetlands.

art of PacifiCity, the largest integrated development in Kota Kinabalu, Pacific Heights is a luxurious residence providing designer furnished homes in the most prime and scenic area of Kota Kinabalu. PacifiCity is a 25-acre development at the front of Likas Bay, located off three main roads and just outside the congested tourist strip, it is ideally placed for traffic-free access from Kota Kinabaluâ&#x20AC;&#x2122;s fashionable residential districts and is only a 15-minute drive from KK International Airport. CONCEPT: EVERY NEED IS JUST AN ELEVATOR RIDE AWAY In a world that demands fast, easy and convenient living, residents at Pacific Heights know they donâ&#x20AC;&#x2122;t have far to go for amenities and entertainment. Pacific Heights is set on top of Pacific Parade, a 550,000 sqft. premier lifestyle mall supplying all your daily necessities and offering the widest selection of entertainment and dining in KK. Accessed from signature lobbies with stringent security measures, residents can relax in the breezy serenity of luxury resort-standard facilities whilst knowing their every need is just an elevator ride away.

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LUXURIOUS DESIGNER FURNISHINGS Residents of PacifiCity will enjoy a luxurious quality of life in bespoke designer furnished homes that speak of distinction and affluence. Through a collaboration with Signature Kitchen, the developer Pacific Sanctuary Holdings Sdn Bhd, is selling all residences furnished and fitted with top quality designer branded appliances. Owners will also become members of Signature Privileges – the exclusive rewards program from Signature Kitchen. Members enjoy personal invitations to premium lifestyle experiences, celebrity-cooking demonstrations and discounts on selected ranges of complementary lifestyle products. An exclusive for the Sabah property market is the inclusion of the designer Ora-Ïto, Gorenje kitchen appliances, found only in the most sophisticated of developments around the world, Pacific Heights distinguishes itself from other developments in the Sabah. The Gorenje Ora-Ïto Collection An evocative series of designer appliances carefully created by Gorenje. One of the leading European home appliance manufactures and a specialist in energyefficient appliances Gorenje has a history spanning 60 years. Styled by Ora-Ïto the world famous young French designer whose provocative ideas are used by leading design houses around the world from Christofle to Cappellini.

CONCEPT: RESORT LIVING IN THE CITY Revitalise and rejuvenate at your own private members club, professionally managed and equipped to resort standards. Situated on level 5 is The PacifiCity Club, presenting Malaysia’s largest resort swimming pool beautifully styled with a beach, islands and water gardens, the Club also offers an additional 20,000 sqft of facilities ranging from a pool-side bistro, to a wine bar, cigar lounge, business centre, gym and sports studios. Operated by experienced hospitality staff, the PacifiCity Club brings the feeling of living in a Resort to the City ONE PRESTIGIOUS LOCATION WHERE ALL YOUR NEEDS ARE CATERED TO PacifiCity has a carefully planned mix of components, designed to ensure the right balance of social and commercial affluence. The RM 2.7 billion development contains over 320,000 sqft of grade A office space, over 600 hotel rooms as well as the retail, dining and entertainment elements of Pacific Parade. Positioned next to KK’s school hub and besides the largest office complex in Sabah, residences at PacifiCity will be in high demand from expatriate workers and local families. In tandem with nearby developments, like the Sabah Trade Centre, KK International Cruise Terminal and KK Convention Centre, PacifiCity is set to turn Likas Bay into the new commercial centre of Kota Kinabalu.

For more info visit www.pacificity.com or call 088-237-555.

Highlights •

Fully furnished units fitted with designer appliances from Signature Kitchen and bespoke custom-made furniture. Finished ready to rent or move in - no further investment required.

•

Facilities: Exclusive club membership worth RM50,000 at the on-site Pacificity Club - a professionally managed private members club hosting Malaysia’s largest resort swimming pool, a gymnasium, bistros as well as a wine bar & cigar lounge.

•

Ideal as a holiday home or buy-to-rent investment: integrated development provides a unique mix of opportunities never seen to this standard before in Sabah.

•

1,060 square feet two-bedroom apartments to 3,450 square feet two-story penthouse units are available priced from RM 700 psf including all furnishings and appliances.

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/// East Malaysia Property News

EAST MALAYSIA

PROPERTY NEWS

Keep track of the latest property and real estate news plus reviews in the property market in Sabah and Sarawak RM2 Billion Resort City to Boost Sarawak Tourism

Speculative Buying is Down

Chief Minister of Sarawak graces the project during the launch

CBRE Malaysia Executive Chairman Christopher Boyd

A RM2 billion premier integrated resort destination at the suburb of North Kuching is all geared to boost the tourism industry in Sarawak.

truly transformational entertainment and leisure experience,” said CMS group managing director Datuk Richard Curtis during the launch. “

Dubbed Bandar Samariang Resort City (BSRC), the resort will breathe new life to the landscape of the city as it features a safari park, water theme park, resort accommodations, facilities for extreme outdoor activities, meetings, incentives, conferences and exhibitions (MICE) facilities as well as residential and commercial development.

The pedigree of Sentoria makes them the best possible owner and operator of a project on this scale. Main Market listed, they have a track record of similar successful project in Kuantan’s Bukit Gambang Resort City.”

The removal of the Developer Interest Bearing Scheme (DIBS) for properties has already made a minimal impact since its implementation.

feature of DIBS that allows property buyers to put down a 5% deposit while paying nothing throughout the construction period.

CBRE Malaysia Executive Chairman Christopher Boyd said speculative buying appeared to have slowed down in the peninsula after banks withdrew DIBS shortly after the announcement of the 2014 National Budget.

Boyd said good financing facilities are still available as the removal has yet to hit high-demand properties like residences, He added banks may also move to introduce rebates as substitutes to the DIBS to keep the country’s property market bullish.

It will be jointly developed by Cahya Mata Sarawak Bhd (CMS) and Sentoria Group Bhd (Sentoria). “We welcome the project launch of a

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Curtis also revealed that BSRC facilities will centre on family and healthy outdoor recreational activities suitable to Kuching’s population. As a tourist attraction, BSRC will help boost tourist arrivals as well as provide more reasons for them to stay longer, he added.

DIBS developers marked up prices by around 5% to cover interest they paid when properties were under construction. Speculators were attracted to the “interest free”

He noted Singapore, which opted to remove DIBS in 2009, still enjoys a strong property market without stretching the finances of its buyers.

Maliau Basin Off Limits for Another 50 Years

Mayor Calls for More Green Buildings

Kota Kinabalu City Mayor Datuk Abidin Madingkir Green building is the way to go for Kota Kinabalu as it strides forward to become a developed eco-tourism resort city, said Mayor Datuk Abidin Madingkir.

Maliau Basin, photo credit: ww.thesabahsociety.com The Maliau Basin, Sabah’s Lost World that is described as a “Jurassic Park sans dinosaurs”, will not be touched for another 50 years. This commitment was renewed under a 10-year strategic conservation plan for the sprawling 20,000ha area in Tawau, in the south central part of Sabah, at a management plan stakeholders workshop for the basin here. Yayasan Sabah’s conservation and environmental management general manager Dr Waidi Simun said the ban would not be lifted under the second plan from 2014 to 2023. “This area will remain out of bounds to anyone – including our rangers – until the expiry of the 50-year commitment,” he said at the start of the workshop for the Maliau Basin Conservation Area on 14 November 2013.

The stakeholders meeting was opened by state assistant minister of Tourism, Culture and Environment, Datuk Pang Nyuk Ming.

Opening the meeting, Pang said efforts were still under way to place the Danum-MaliauImbak (DaMal) area as a World Heritage site.

“It is part of our commitment to allow future generations to study an area totally untouched by man,” Dr Waidi said, adding the first 10-year plan was from 2003 to this year. He said under the first plan, a Maliau Basin Studies Centre was set up at the southeast edge of the basin for research, conservation, education and ecotourism purposes.

“The nomination of DaMal was endorsed through the state cabinet and submitted to the National Heritage Department by my ministry.

Various international and local organisations have helped to build satellite camps, trail and bridge construction, observation towers, a Maliau Skybridge and a reception and information building. He said under the next plan, more intensive research in the area would be carried out, as the first plan had focused on auditing the area and placing basic infrastructure facilities.

“The final dossier is expected to be completed by the end of this year,” he said. The Maliau Basin contains an unusual assemblage of 12 forest types, comprising mainly lower montane forest dominated by majestic Agathis trees, rare montane heath forest and lowland, and hill diperocarp forest. There is also the seven-tier Maliau Falls. Keen visitors must obtain permission to enter the Maliau Basin in advance from Yayasan Sabah.

He said City Hall viewed green buildings as vital tools in supporting the State’s effort to strengthen its tourism sector and will continue to emphasis on sustainable development by adopting the Green Building Index as its only green building rating standard. “Sabah is proud to be bestowed with beautiful attractions and eco treasures, making every year a ‘Visit Sabah Year’… It is our focus to maintain and oversee sustainable development statewide, to safeguard Sabah’s rich floral and fauna heritage. “At Kota Kinabalu City Hall, we view green buildings as a complimentary part of this effort. For sure, we can’t do it alone. It requires collective effort and synergy from the private sector and the rakyat,” he said. Abidin stressed that much still needed to be done to spread awareness on sustainable development and lifestyle and the people should be convinced that going green is their inheritance for the present and and future generation.

Entrepreneurs too must be encouraged and assisted to go green in managing their businesses, to be convinced of the benefits of such approach so that it can translate into lower cost and enhanced reputation. “So far we only have one building accredited with GBI, which is the Sabah Art Gallery Conservation Centre. As such, I urge developers to take the initiative to stress more on green design in their projects,” said Abidin. He was speaking during his opening address at the ‘Green Construction and Green Building Investment and Tax Incentives’ Seminar held in conjunction with GBI Third Anniversary in Sabah here, yesterday. Meanwhile, GBI Accreditation Panel Chairman, Ar Boon Che Wee, announced that 75 million square feet of green buildings have been certified to date, involving 182 projects. He said these included 81 new non-residential buildings and 75 new residential buildings, as well as five existing buildings that will be green-retrofitted. As of November 15, GBI has recieved 492 applications for registrations and has certified 37 per cent of them, which translates to over 320,000 CO2 emmission reduction per year, based on electrical energy saving alone.

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/// East Malaysia Property News

Taman Laman Hijau @ Kepayan

Artist impression of Taman Laman Hijau Taman Laman Hijau is a low density residential development destined to become one of Kota Kinabaluâ&#x20AC;&#x2122;s most prestigious address. The residential development is sprawled across 6.21 acres of land with a total number of 36 units spacious semi-detached houses only, this averages about 6 units per acre, making it the most low density development in Kota Kinabalu, Sabah. Security is a high priority at Taman Laman Hijau , this low density development also features 7 feet high concrete perimeter fencing, 24 hours security surveillance, card access, CCTV surveillance cameras with burglar alarm system will be installed on top of the high perimeter fencing. Greeneries and Landscapes are another extra features of this unique development and residents will be able to have access to a Communal Building with gym and sauna facilities.

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Children on the other hand will be comfortable playing away from the direct sunlight under the canopy covered playground equipmentâ&#x20AC;&#x2122;s. Last but not least, the development will also feature extra wide road reserved lined with concrete pavers without the unsightly obstruction of overhead electricity and Telekom cables. Taman Laman Hijau is developed by Eco Greenland Sdn Bhd, a subsidiary of Supremin Sdn Bhd. The company is SHEREDA member, and a pioneer residential and commercial developer based in Tawau.

Artist impression of Club House

/// Feature Property Event

/// FEATURE PROPERTY EVENT

2014 is the Time to Buy and PH Expo has the Platform

Scan to View Video

2013 ended with a bang for Maxx Media (S) Sdn Bhd, organizers of the flagship exhibition Property Hunter Expo. Throughout the year, the expo was held in five cities and towns namely, Miri, Kota Kinabalu, Tawau, Sandakan and Lahad Datu.

Kota Kinabalu 2013

The expo kicked off in May 2013 in Kota Kinabalu with their biggest expo. Over 100 booths showcased vibrant property developments in Malaysia and multiple Property Investment Talks conducted by high calibre speakers from the industry were held. The Kota Kinabalu instalment managed to attract over 10,000 visitors who were treated to free portrait sessions by Award-winning photographer Louis Pang. Children also had the opportunity to participate in a colouring competition sponsored by Logistics Company, ABX Express Sdn Bhd.

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/// Feature Property Event

Sandakan 2013

The second instalment of the event was held in June 2013 in Sandakan. The smaller scale expo which featured various property projects including high end residential condominiums, commercial shop lots, commercial retail outlets, hotel residences and suites attracted over 3,000 visitors. This was Maxx Mediaâ&#x20AC;&#x2122;s second time back in Sandakan, and the organizers saw a three-fold increase in the overall sales compared to 2012. Investors in Sandakan were eager to invest in quality developments out of their home ground especially in Iskandar Johor which was one of the top sellers.

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Tawau 2013

In July 2013, the third edition of the expo was held in Tawau. The expo attracted over 1,500 visitors and earned more than twice the amount that they did in 2012. Top sellers included Hap Seng Properties and IOI Properties.

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/// Feature Property Event

Miri 2013

For the first time ever, Maxx Media ventured outside of Sabah and held the Property Hunter Expo in Miri in October 2013. This inaugural exhibition in Miri was successful and managed to attract over 1,000 visitors. The exhibitors were also happy with the response even though some visitors were concerned about the strict loan policy imposed by local banks. Miri folks got a chance to learn more about foreign investments in Australia and Singapore, plus those looking for apartments in the city had the chance to view Homelite Developmentâ&#x20AC;&#x2122;s Airport Avenue.

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Lahad Datu 2013

Lahad Datu was also another new venue which was graced by the Property Hunter Expo in November 2013. This particular event was organized in partnership with the Sabah Housing and Real Estate Developers Association (SHAREDA). The exhibition served as a platform for SHAREDA members to showcase their projects to the people of Lahad Datu, a town with significant economic contribution to the state. Other than properties at Lahad Datu, SHAREDA the expo also opened up investment opportunities in other parts of Sabah, West Malaysia and Australia.

Buyers who bought properties above RM100,000 at the expo were entitled a chance to win a brand new Volkswagen Polo Sedan sponsored by DKV Automobile Sdn Bhd. Out of over 100 hopeful buyers, Chum Keat Leong from Sandakan walked away with the vehicle worth RM102,888. The PH Awards was also held to promote creativity and maintain the high quality. The line of winners includes Mah Sing (Penang), Kimis Development), BCB Berhad (Penang), Low Yat Group, Far East Organization (Singapore), Bukit Kiara Properties, Australia Property and Development Pte Ltd, Hap Seng Properties Development and IOI Properties. Property Hunter visitors are promised another exciting line up of exhibitions in 2014 with greater attractions, programmes, activities, mixture of projects showcase and prizes. And dates have been confirmed for Kota Kinabalu on 7 to 9 March, Sandakan from 11 to 13 April, and Tawau 16 to 18 May. This year, Property Hunter will also be venturing into Kuching and other international venues which will be later confirmed. Keep an eye out on the latest development and news on the website www.propertyhunter.com. my

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The Royal Tour at the CAstle the box is interpreted literally as out of the frame. This set the tune of your visit with the first impression of what our CAlture is all about.

Before

After

The Destination Forgive yourself when you are in this busy neighbourhood for its natural claim as the original heart of the charming Old Klang Road, our very own “Silk Road” to the first commercial port of Malaysia from the point where the two great rivers met is now being revived from the decline of the last two decades as the lure of the green fields have outshined this early brown pioneer. Nestled within the moats of two of the oldest suburban shopping malls and the first ever big scale suburban hotel in the boundary of Kuala Lumpur, you will be surprised to find a hill standing tall in the name of United Garden. The CAstle Hugging the slope of this majestically united Sepakat peak, it’s the CAstle! The iconic building that greets you as you climb up to the peak is unmistaken as the unique CA glass bricks formation suggests. It’s the CAstle where the most formidable CAtizens of Chur Associates (or we passionately called it, CA) live. From the ground access through the metal corrugated gate of this semi detached building by the corner, you will find our royal court of the roman pillars keeping your arrival in check. Passing the doors that featured 12 panels of the uniquely done vinyl masterpieces, you will find the smiles of the ushering front line CAtizens.

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As you turned to your left, you will find the warmth of the sunshine through the sunroof of the only double volume space in the CAstle. You have now reached the Vogue as the featured hall of the CAStle that hold your presence intact.

Your vision will naturally be attracted by the mega golden crafted frame that is hanging before you with ropes and metal wheels as anchors. This set the stage for a perfect photo spot for your check-in on your favorite social media platform. The idea is that often the reason you come to CA is either you have been framed or you are in the midst of framing the next stage. Or even in the Chinese language, to be out of

Flanking the golden frame in The Vogue are two statues of great historical icons. On one hang, it’s the Crazy One, Albert Einstein and on the far left (and has to be on the left), it’s the revolutionist that liberalize Vietnam as one great country that defeated most of the super powers of the world to stand tall and equal with the rest, Ho Chi Minh. CAtizens are believers of Einstein’s philosophy of never do the same method to get different result to keep us sane while Uncle Ho reminds us that at the heart of communism is the commune that practiced equality with no cast, hierarchy and status as the CAtizens practice in CA since the first day we started the journey in 2003. From the double volume space, you will be served with a triple volume stairs chamber with the sunroof top that allow the ray of the almighty sun to touched the bottom of the CAstle at the basement level connecting through these trees that aim to grow as high as the CAstle top! This natural connection keeps CA united in one space in celebration of the

Before team that we are and always be. Moving further inward, you will find a brick wall on your right and behind this wall is the Brick Chamber that hold conference of eight comfortably. This meeting room have two different writing surfaces

from the glass panel on the wall to the table of white board, a glass chamber to enable sun light from the stairway and the brick wall of course. The brick wall is our anchor to a metaphor used by Dr Randy Pausch in his book, The Last Lecture. “The brick walls are there for a reason. The brick walls are not there to keep us out. The brick walls are there to give us a chance to show how badly we want something. Because the brick walls are there to stop the people who don’t want it badly enough. They’re there to stop the other people.” Walking out of the recycled door that we got from dismantling our client’s show room, you will step in effectively into the 6nature Bar. This is where we housed our library and where CAtizens hang out at the verge of the white long bar that take the center piece of this level. Naming after 6nature that we adopted in our 6th anniversary is only natural as it is the center piece of what our services is all about with 6 distinctly defined CA service hallmarks. The rooms of the founding partners are the back is the foundation of which the brand of CA is upheld in full passion and commitment.

After Moving Up Take the stairs at the Trees upward or externally through the longest stairs that hug the CAstle almost like the board game of the Snakes and Ladders, you shall arrive to to the top of the CAstle.

The jewel in the crown of the CAstle is an open space flat top with green

Before

After turf and a planter box of bamboos. It’s our Home Turf that allows us to host our royal guests at the highest point of the CAstle overseeing the neighbourhood of our kingdom. The great outdoor ala CAtizens starts here, the possibilities of this space are infinite as far as your imagination can go. Sitting at the back of the CAstle, this Club House is dedicated to an idea of our very own CA fan club! We called it the Hi5er Club! This is our biggest event room that can easily host 20pax conference style yet flexible enough to be reconfigured to host a maximum of 50pax standing. The huge full wall is specially treated as an erasable writing surface for all to express oneself with no hesitation. Bordered with a custom made Before frame that holds together 12 pieces of recycled tempered glass, it’s a testament of the resourcefulness of CAtizens. This is a space of possibilities and After we are dreaming of a movie night or even group yoga in this literally green house of glasses where life cultivates. This is another aquarium like chamber that we dedicated to show case the epic of the pop culture

in Star Wars. The black writing surface of the black board on the wall and the custom made table is set on the same mystical galaxy black that the power of the force is strong. Its natural companion in chalk signify the classic of this epic that crosses two millenniums and many more to come. The glass panel allows the daylight to flow in freely with no limitation is our commitment to ensure the force shall always be with you to strike a balance in a Star Wars like the universe. We believe immensely that we are the Chosen Ones and CAtizens are on a mission to keep the balance like the Jedi of this world! The green of Home Turf flows indoor and connects with the indoor space in the putting green like surface that covers most of this flow. The step down floor plate that connect to the centre core of the Trees as well as the upper volume of the Vogue is a place that we hosts our guests for informal discussion while waiting for an audience with the founding CAptain of the CAstle.

and everything CA of course. Continue the great tradition, the CAptain is still the closest to the main door by direct distance for the Accountability that we laud of and to which our clients continue to sing our praises. While leadership starts from the top, CAtizens believe that everyone in the TEAM is a leader in their respective role and leadership is preached by actions and never by just words. The Forbidden City Walking down the CAlture Steps downward through the Trees, you are now entering a restricted area forbidden to ordinary visitors of the CAstle.

Connecting to the front of the Green, we have the CAbin where the CAptain operates. This is where the grass bricks formation of our initial CA at its most prominent reminding the CAptain what makes the CAtizens thick in the first place

The landing point of the CAlture Stairs at this basement level, you will find an open working hot desk that we called the CApable.

Before

This is the open office area that sits 20 extraordinary CAtizens that keep the heart of CA pumping with great vibes and energy. After Square is the everything at the power of two in multiply and a place that gathers great power of the crowd like those of the Red Square or Tiananmen Square in the Socialist Left of the World. Anchoring at one yellow corner of the Forbidden City is the place of money and everything in figures. The CAshier is a chamber that work hard like the heart that keep CA pumping in the most healthy rhythm that ensure sustainability

Before

and enable growth, financially. Deep in this forbidden dungeon is the hidden CAve known only to few, this is where the history and archive are kept for future references at it utmost confidential.

This is where space is required to gather the big picture clearly and intellectual exchange can take place freely at the six stools at the side randomly. At the external wall of the CAtizen Square, it’s the CAfetaria that takes shelter under a wide panel of sun roof with lushes of creepers acting as the natural screen that is friendly enough to allow the sun light to come through generously. This is where CAtizens are its most relax and the Royal Feasting shall take place regularly under the breeze of natural air stirred by the electronic ceiling fans. The Journey At this point, give yourself a pat on your own shoulder and congratulate yourself for completing the Royal Tour of this uniquely special premises. It’s the CAstle that we live happily ever after! CAtizens, keep walking and long may our journey continues...

After

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Tg Aru Tourism Project Valued at RM7 billion visited and stepped foot on Tanjung Aru Beach, and definitely Prince Philip Park, the two names synonymous to Kota Kinabalu...Prince Philip Park actually has a great historic value to Sabah because it was a gift from the British Government to Sabah and it was graced by Prince Philip, the husband of Queen Elizabeth ll in 1972,” he said.

Proposed Tanjung Aru development A MCE (Meeting International Convention and Exhibition Hotel) hotel beach resort is among new facilities to be built under the Tanjung Aru.Eco Development project at the historic Prince Philip Park in Tanjung Aru, Kota Kinabalu. Sabah Chief Minister Datuk Seri Musa Haji Aman said the development will also consist of townhouses, condominium, villa, maritime square, golf course, yacht club, marina and so on which would be of international standard. He said Tanjung Aru Eco Development will become an integrated development project involving altogether 280 hectares and designed by international renowned architects to offer development catering for tourism, recreational, accommodation, community and commercial types of development to meet domestic and international market needs. The whole.project involves huge investment valued about RM7.1 billion, he said, adding such a huge investment definitely will have a positive impact and significant benefit to the people of Sabah, particularly in terms of job opportunities to locals. He said this high-impact project will boost the

growth of all economic sectors, including the services sector like tourism, accommodation, food and beverage, wholesale and sundry, agriculture, transportation and so on. “During the project construction phase later, all the supply chain related to the construction sector will get the benefit...all suppliers of construction materials as well as contractors, local sub-contractors and so on will definitely get great benefits from it,” he said. Responding to Kapayan Assemblyman Dr Edwin Bosi, Aman said the project would be implemented by Tanjung Aru Eco Development Sdn Bhd which is a wholly-owned State Government company under the Chief Minister’s Department. The project also received the full support of the federal government as it is in line with the Economic Transformation Programme (ETP), he said. Tanjung Aru Beach is a very well known place which holds a lot of history and sweet memories for many who have visited and spent time during the weekends with friends and relatives picnicking there, he said. “So I believe many of us, the people of this State have

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Because of this historical value, the state government planned to not only maintain it but to upgrade and develop a greater part of the Tanjung Aru beach area to become a major tourism centre. He is confident that Tanjung Aru Eco Development can be turned into another icon for the city that can make the people including the future generation proud. The Chief Minister also assured that modernisation works on the landscape and surrounding areas of the beach area concerned would be done without destroying its natural environmental feature. “The implementation of this large scale project will boost Tanjung Aru as not only an iconic tourism destination but a worldclass and high-value tourism centre,” he said, adding it is the state government’s aspiration to ensure this project is environmentally friendly by maintaining its aesthetic value and do the development using a Green Building Index standard technology.

KK Has Potential as WorldClass Yacht Destination

Sutera Harbour Marina Club The city has the potential to be a worldclass yacht destination, because of its strategic location for a marina along the South China Sea. Chairman of Hong Kong-based FintradeMercer Group Asia Pacific, Jari Vepsalainen, whose company is involved with world class marina development worldwide, said this to Mayor Abidin Madingkir. Vepsalinen was accompanying Matti Pullinen, Ambassador of Finland to Malaysia, the Philippines and

Brunei Darussalam, during a courtesy call to City Hall. Also present was Managing Director and Regional Director bf Singapore based Minetek Group. Pullinen thanked Madingkir for the meeting and said he was impressed with the development of Kota Kinabalu City since he first came here in 1995. The visit was his first official visit to Sabah. Earlier, Pullinen also paid a courtesy call on Chief Minister Datuk Seri Musa Aman at Seri Gaya.

Work on the RM140 million Flyovers Start This Year

Location of flyer over construction Two flyover projects to be developed at a cost of RM140 million in Kota Kinabalu will commence this year. Sabah Deputy Chief Minister Tan Sri Joseph Pairin Kitingan said the flyovers would be built at the junction of Mile5.5 Jalan Tuaran-Jalan

Lintas and the junction off Jalan Kolam Bukit Padang-Jalan Lintas. He said both projects were approved under the fourth rolling plan of the 10th Malaysia Plan (10MP) through funding from the federal government and will take about three years to complete.

New Law Overprotective, Bad for House Buyers “Sarawak has its own safeguards and checks by authorities such as State Planning Authority (SPA), which checks, controls and approves all development plans, unlike the rest of Malaysia, where road completion certification (Road Cert) are issued by local councils and occupation permit (OP) issued by local councils. SHEDA President Zaidi Ahmad on left The price of houses in Sarawak is expected to climb higher following the passing of the Housing Developers Bill 2013 by the State Legislative Assembly. This is because the new law causes unnecessary costs and this will be passed on to house buyers, said Sarawak Housing and Real Estate Developers Association (SHEDA) President Zaidi Ahmad. Using cars as an analogy, he said the new ordinance is akin to cars sold in Sarawak having to be fitted with 30 airbags whereas cars in the peninsula need to be fitted with six airbags only. The new ordinance will replace the existing Housing Developers (Control and Licensing) Ordinance 1993. Housing Minister Datuk Amar Abang Johari Tun Openg, 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. Among the new and amended provisions are power of the minister to determine housing accommodation, conditions of restriction for the grant of a licence, controller to forfeit deposit, refund of deposit, transfer or assignment of licence, licensed housing developer to open and maintain housing development account (HDA) and freezing of the HDA.

It also covers investigation and enforcement, specific persons in respect of whom powers of investigation may be exercised, protection of informers, controller to report the conduct of an architect or engineer, powers of minister and controller, jurisdiction of housing tribunal, offences relating to abandonment of housing development and release of money by a stakeholder. Zaidi said SHEDA had actively discussed with the ministry of housing 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. He said the HDA had being implemented in the peninsula for years and yet it had not effectively prevented abandonment of projects nor fraud of collecting proceeds from innocent house buyers. In addition, those who committed this fraud are usually not registered and unlicensed developers. “SHEDA is of the view that HDA does not necessarily prevent fraud or abandonment of project but will add additional procedures, time and cost to housing projects that will be passed on to the house buyers.

“With the various tiers of controls by the relevant authorities in Sarawak already in place and adequately regulating developers, SHEDA is of the view that HDA is not necessary for Sarawak as it will only increase the compliance cost, resulting in increase in house prices.” Other factors that could lead to house price increase include increase of consultant fees and the longer Defect Liability Period (DLP) due to amendments in the Ordinance, as well as increase of fuel price and the increase of Real Property Gain Tax in the Budget 2014. SHEDA is also not in favour of the Housing Tribunal being empowered to hear complaints up to RM150,000 because this is a very sizeable amount that is more than the construction cost of a single storey house, he added. “That defeats the purpose of the tribunal, where small claims can be heard and disposed of quickly. As in any tribunal hearing there is no legal representation nor expert witness to assist the court to give a fair and just ruling to both complainant and defendant.

PPR Project in Kepayan Ridge to Proceed

Kepayan, Sabah The State Government will not cancel the People’s Housing Project (PPR) in Kepayan Ridge due to the lower income group’s need to own homes. Local Government and Housing Minister Datuk Seri Hj Hajjii Hj Mohd Noor said the project, which was launched by the Deputy Prime Minister Tan Sri Muhyiddin Yassin a few months ago, will proceed despite protests from surrounding residents. “The government is very concerned and gives top priority to the needs of the lower income group to own homes. Actually we are aware that the status of the PPR project site is for recreational purposes but the government opined that it would be best to convert the status for housing so as to give opportunity for people to possess affordable houses,” he said. Kepayan Assemblyman Dr Edwin Bosi claimed the residents staying near the PPR site disagreed with the implementation of the PPR project as the status of the site is for recreational and sports activities. Earlier, Local Government and Housing Assistant Minister Datuk Zakaria Edris said successful applicants for the PPR homes should occupy the houses and that they cannot rent the premises to other people. “The ministry through the local authorities will always monitor activities of renting out PPR units and will take stern action when the owners are found committing the offence. The local authorities’will issue an eviction notice to vacate the concerned units and the owners will be blacklisted by the ministry” he said. Edris said applicants given priority to own the units are local squatters, lower income group of people who do not possess their own houses, special people and natural disaster victims.

“Moreover, when the complaint affects a row of 10 houses and at RM150,000 each, the award can be more than RM1 million, which is substantially too high for any tribunal hearing.”

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10,000 More Afforadle Homes to Be Built in Sabah

Sabah Ideally Located for Green Energy

Urban Well-being, Housing and Local Government Minister Datuk Abdul Rahman Dahlan The Federal government plans to build more than 10,000 low-cost houses and 1Malaysia People’s Housing (PR1MA) units in Sabah next year. Urban Well-being, Housing and Local Government Minister Datuk Abdul Rahman Dahlan said the main areas of focus would cover Kota Kinabalu, Tuaran, Sandakan, Kota Belud and Lahad Datu. “The government is committed to providing about 6,000 affordable houses in Inanam, Kota Kinabalu. The Public Private Partnership Unit has also committed to 3,000 houses under the 1Malaysia Civil Servants Housing project in Tuaran. “An additional 2,000 to 3,000 will be built by the National Housing Department under the ministry and the 10,000 units planned by the government doesn’t include those from the private sector,” he said. He added that the move was to alleviate the squatter problem which was still plaguing big towns in the state, especially Sandakan and Kota Kinabalu as well as other districts such as Lahad Datu. Meanwhile in Terengganu, 10 more participants will be selected to participate in Phase Two of the Suri@ home programme scheduled to begin next month, East Coast Economic Region Development Council (ECERDC) Chief Executive Officer Datuk Jebasingam Issace John said. He said participants for the programme, aimed at eradicating poverty among housewives, would be selected by the Terengganu Family Development Foundation (YPKT). “The programme which targets housewives and single mothers is aimed at encouraging them to carry out songket business from home , providing an income of between RM1,500 and RM2,000 a month, “ he said adding that the implementation of the programme provided opportunities for housewives and single mothers to increase their income, as well as employment for local residents.

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Kota Kinabalu, Sabah Most of the world’s energy demands have been met through the use of fossil fuels which are cheap, cost effective and used to be abundant in supply. However, the finite nature of fossil fuel resources that are depleting at an increasing rate coupled with the effects on the environment, global warming and climate change due to the extensive use of fossil fuels for energy have driven global economies to explore clean and sustainable energy resources or better known as renewable energy. The main appeal of renewable energy is that it does not cause pollution. For this reason, renewable energy is also often referred to as ‘green energy’, said Institute of Development Studies (IDS) Executive Director Datuk Mohd Hasnol Ayub. Hasnol said this in his welcome speech at a seminar on the ‘Greening of Sabah: Renewable energy options for the near future’ organised by Institute for Development Studies (IDS) in partnership with Konrad Adenaeur Stiftung (KAS) of Germany. “Nevertheless, only 16.4% of the current total global energy consumption comes from renewable energy with 10% of energy derived from biomass, 3.4% from hydroelectricity and 3% from energy produced from new renewable energies such as small hydro, modern biomass, wind, solar, geothermal and biofuels,” he said. Ayub said that in terms of electricity generation, the share of renewable energy is approximately 19% with 16% of electricity coming from hydroelectricity and 3% from new renewable energy sources.

He said that the Malaysian government has been fully committed in its efforts to promote and develop renewable energy technology in order to turn the country into a green economy and society. “This is evident from the nationwide green technology initiatives that have been undertaken since the launching of the National Green Technology Policy in 2009 by our Prime Minister. The government is also committed towards adopting green technology as the country’s economic driver in the future. “With this in mind, the growth potential of the renewable energy sector in Sabah especially from the new renewable is boundless with the strong prospects to contribute significantly to both the state and country’s transformation into a high valueadded economy,” he said. Ayub was of the opinion that Sabah’s equatorial location is excellent for solar and its widespread tropical forests can provide large quantities of biomass. In addition the waters surrounding much of Sabah as well as its tidal flow there is a prospect for the development of ocean renewable energy, he said. From a longer term perspective, renewable energy is in fact a practical option and one sector that could become a major source of regional energy supply as well as economic growth and job creation, he stressed. There are large untapped opportunities in the sector and the private sector should allocate its resources into this segment to carve a niche market for themselves, he added.

SHAREDA: GST Impact on Housing

The impact of Budget 2014 will be less in Sabah compared to Peninsular Malaysia, especially in comparison with Iskandar, Penang and Klang Valley according Chew Sang Hai, Deputy President of the Sabah Housing and Real Estate Developers Association (SHAREDA). He said the real estate industry contributed between 10% to 12% to the gross domestic product (GDP) and property development industry played a more significant role in less developed states compared to developed states. The real estate industry plays a more significant role as contributor to GDP in Sabah and Sarawak, compared to Kuala Lumpur where the service industry constituted a big chunk of the industry. “The impact of government legislation is higher in more speculative market and vice versa,’ Chew said. SHAREDA held a talk themed ‘What the Captains Say’ last month which focused on the impact of the Budget 2014 towards Sabah’s real estate industry.

Pacific Heights Sets New Standards for Sabah

The launching of Pacific Heights in Likas The team behind PacifiCity has upped the ante in Kota Kinabalu, redefining luxury and convenient living with the launch of Pacific Heights the first residential tower at the Likas Bay project.

Setting itself apart from other developments all units at Pacific Heights are sold fully furnished, presenting buyers with unrivaled value in the much sought after Likas Bay area.

Built and designed with discerning homebuyers in mind, Pacific Heights offers two, three and four bedroom apartments with built-up areas of between 1060 sq ft to 3450 sq ft.

The developers worked closely with their architects to create a functional living space and with interior designers to provide décor and furnishings that speak of distinction.

A Sad Time for Sabah Tourism: Masidi He said, “It is a sad time for Sabah and our tourism industry. We are devastated by the loss of of the life of victim and hope the authorities will be able to solve the case soon.”

The talk aimed to provide a better understanding of Budget 2014 and its impact towards the real state industry. It also highlighted the forthcoming implementation of the goods and services tax (GST) and real property gain tax (RPGT).

He was commenting on the incident involving a Taiwanese tourist, Li-Min Hsu, 57, who was shot dead and his wife, An-Wei Chang, 56, who was kidnapped.

Chew said the implementation of GST will impact affordable housing. But he assured that SHAREDA is still committed to build 10,000 units of affordable homes in the next five years, priced at RM250,000 for 850 sq ft per unit. Michael Tong, partner of Crowe Horwath Chartered Accountants and member of Crowe Horwarth International presented a paper on ‘Understanding Budget 2014’ followed by a session by Liew Kui Choi, President of the Association of Bankers Sabah and Liaw Lam Thy from the Royal Instituition of Surveyours Malaysia (Sabah Branch).

Datuk Seri Panglima Masidi Manjun Sabah Tourism, Culture and Environment Minister Datuk Seri Panglima Masidi Manjun express his sadness about the murderkidnap incident at the rest island last November at Pom Pom island, Semporna.

“This incident, as well as the loss of our security personnel in the previous Kampung Tanduo incident, are the challenges and surprises that we should be ready to face. it is a tragic incident but it would be more tragic if we do nothing to make the industry grow, he said. He added: “We have worked hard to achieve what we have today and we will continue to work harder, especially in making 2014 another successful year for our tourism industry.”

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Living Green with Bay 21

ocated at Likas Bay, along the South China Sea is a stateof-the-art residential building, Bay 21. This development by Remajaya Sdn Bhd is an investment opportunity not to be missed for its green lifestyle concept, strategic location as well as its luxurious spatial design committed towards a peaceful and harmonious state of living. According to the Chinese tradition, the secret to a prosperous life is determined by several factors, one of which is Fung Shui, the art of geomancy that dictates the wealth, wellness, happiness and prosperity in a household. The most auspicious homes are believed to be located between a body of water and a high hill, or mountain backdrop. With both these attributes to its advantage, Bay 21 is one of the most sought after residential locations in Kota Kinabalu. Why Bay 21? According to its creator, chartered Quantity Surveyorturned-Developer/Entrepenuer Chua Soon Ping, the word ‘Bay’ refers to the residence’s location at Likas Bay, known for its beautiful scenery as well as its strategic location. The number 21 is a multiplication of the number 7, which in many cultures around the world is referred to as a lucky or magical number. Hence, Bay 21 embodies the perfect combination of location meets fortuitous namesake that lends further prestige and sense of high-end sophistication desired by many of today’s up-and-coming modern homeowners in Malaysia.

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Apart from the elegant and impressive amenities offered by this upcoming development, there is a deeper philosophy that inspires the creation of this prime residential project. Designed by Sabah architect Lo Su Yin, Bay 21 was created on the principles of green living, with 21 storeys sans-airwell design that places an emphasis on natural sun-lit spaces that embody a sense of peace and harmony. The philosophy of green living goes beyond the spatial design and aesthetic outlook; it transcends into each home unit at Bay 21. This upcoming residential project in Kota Kinabalu will be one of the pioneers to adopt the FiT system as a response to the Malaysian government’s call for developers to be a catalyst for sustainable lifestyles. To date, the FiT system is currently being adopted by many upcoming high-rise residential projects in West Malaysia. At Bay 21 an even more innovative approach will be taken in its adoption of the FiT System. By harnessing Sabah’s natural sunlight using solar photovoltaic cells attached to its roof and external wall areas as an aesthetic feature, the building itself will generate electricity which will then be distributed back to power up the building’s electricity demands. As a renewable energy source, the abundant sunlight in Sabah will be harnessed as a key component of Bay 21’s commitment towards its green building ethos. The electricity generated will be used to light up rooms, re-climatize living spaces where needed and security systems at Bay 21. In the spirit of the green living philosophy, the construction of Bay 21 is undertaking all stages of design process that is environmentally responsible and resource-efficient throughout the building’s lifecycle; from the preparation of the building site, through the design stage, during construction, operation, maintenance, renovation, and demolition phases as well.

The philosophy of green living goes beyond the spatial design and aesthetic outlook; it transcends into each home unit at Bay 21. This upcoming residential project in Kota Kinabalu will be one of the pioneers to adopt the FiT system as a response to the Malaysian government’s call for developers to be a catalyst for sustainable lifestyles. To date, the FiT system is currently being adopted by many upcoming highrise residential projects in West Malaysia.

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Now midway through completion, this residential project is one of the pioneer developments in Sabah using S-form concrete technology, allowing formwork to be used repeatedly, producing uniform and consistent building components, but most importantly reducing dependence on traditional formwork using plywood – and thus, helping to reduce the demand for our rainforest timber for the local construction industry. Upon full completion, Bay 21 will offer investors several choices of impressive living unit designs that cater for individuals and families who desire comfort, efficiency of amenities, ample living areas and tranquil private spaces. Each unit type of Bay 21 has been designed to achieve a maximum efficiency reserved for high-end condominium living standards and at the same time, celebrates its natural surroundings and breathtaking views. Green Living is a life philosophy phenomenon that is currently spreading across the world. The concept of green living advocates that with the right approach and learning to live a sustainable lifestyle, one may not only maintain a full and happy existence but also adapt and enhance one’s state of well-being. The shift towards green living and sustainable lifestyle does not mean limiting one’s enjoyment of living. It is simply moving towards a better understanding of how Sabah’s natural and renewable resources can be effectively managed to its fullest potential. Thus it is only fitting that Bay 21 will soon be the trendsetter and model for the green living concept in Sabah.

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Hilton to Step Foot Into Kota Kinabalu to the rooftop pool and a lounge bar. Offering a total of 2,500 square meters of event space including a 1,000-square meter ballroom, the hotel will have an 8-story car park, which offers convenient parking for patrons. It will also have a business center, a health club and a spa.

Subject Hotel along Jalan Tunku Abdul Rahman Hilton Worldwide has signed an agreement with Pekah Hotels Sdn. Bhd. to manage Hilton Kota Kinabalu in Sabah, Malaysia. The ninth Hilton Worldwide property in Malaysia, the 313-room Hilton Kota Kinabalu will also be the fifth Hilton Hotels & Resorts branded hotel in the country, scheduled to open in 2015. “We are delighted to fly yet another Hilton Hotels & Resorts flag in Malaysia. With more than 550 hotels across six continents, we continue to build upon our legacy as the world’s leading hotel brand by developing products and services to meet the needs of tomorrow’s savvy global travellers while our team members shape experiences designed to make every guest feel cared for, valued and respected,” said Rob Palleschi, global head, Hilton Hotels & Resorts. “Given its prime location in the city center, Hilton Kota Kinabalu will welcome guests to this great city in Sabah with the worldclass hospitality synonymous with the brand.” The 12-story Hilton Kota Kinabalu is strategically located in the central business district of Kota Kinabalu along Jalan Tunku Abdul Rahman and boasts 313 spacious guest rooms, including 17 suites with

views overlooking lush greenery and city views of Kota Kinabalu. “We have been operating in Malaysia for more than 30 years, and Hilton Kota Kinabalu will be our ninth property in this great country. As the capital city of Sabah, Kota Kinabalu acts as the main industrial and commercial center for the state. With a strong partner like Pekah Hotels Sdn. Bhd., we are confident that Hilton Kota Kinabalu will set the benchmark for quality hospitality experiences catering to both domestic and international travelers,” said Andrew Clough, senior vice president, development, Middle East & Asia Pacific, Hilton Worldwide. “This signing marks our first partnership with Hilton Worldwide and combines the expertise of a truly global, awardwinning hospitality company with strong local market expertise. Kota Kinabalu is a key leisure destination in Malaysia and we are confident that Hilton Kota Kinabalu is in a great position to take advantage of this growing market,” said Dato’ Steven Tan, chief executive officer, Pekah Hotels Sdn. Bhd. Hilton Kota Kinabalu will offer an all-day dining restaurant, a specialty rooftop restaurant adjacent

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Kota Kinabalu is a popular getaway destination as it offers a number of tourism attractions and Kota Kinabalu International Airport welcomed 2.9 million passengers in 2012. Kinabalu National Park, Malaysia’s first World Heritage Site, is one of the main tourist attractions and is where the majestic Mount Kinabalu is located. One of the highest mountains in South East Asia standing at 4095.2 meters, it attracts thousands of climbers from around the world every year. Furthermore, the internationally famous island of Sipadan is in the world’s top five dive sites. Apart from the tourist attractions, Kota Kinabalu is a key industrial and commercial hub for East Malaysia.

Sarawak Proposes RM4.28bil for Development Under Budget 2014

Sarawak Chief Minister Tan Sri Abdul Taib Mahmud The Sarawak government plans to allocate about RM4.28 billion in 2014 to continue with the development programmes in the state. Chief Minister Tan Sri Abdul Taib Mahmud, who is also state Finance Minister, said the figure would be about 72% of the total budget proposed for the year with the remaining RM1.68 billion or 28% for operating expenditure. “This level of expenditure is expected to generate a fairly high level of economic activities in order to sustain the level of economic growth and employment,” he said. Out of the total allocation for development, RM1.98 billion would be for the implementation of industrial and commercial programmes and projects, RM689 million for general administration, RM511 million for social development and community services, RM486 million for public utilities, RM438 million for transport and communications, and RM169 million for agriculture, land and rural development programmes. Mahmud said on the basis of an estimated total revenue of RM4.94 billion against a total ordinary expenditure of RM4.68 billion, the proposed 2014 Budget was expected to have a surplus of RM258 million. He added that it was imperative for the state government to continue with a surplus budget policy to ensure that the state’s financial position remained strong and sustainable. “We need to spend within our means to ensure that we have sufficient financial reserves to meet future challenges,” he said. Sarawak had also been given ’a clean bill of health’ for its 2012 public accounts by the Auditor-General, hence receiving such recognition for the 11th consecutive year. “I wish to emphasise again that we must continue to maintain our (public accounts\’) clean bill of health into the future years,” he added.

Electricity Tariff Up by 17% From 1st of January in Sabah

Sarawak Property Prices to Increase in 2014

is maintained at 33.4 cent/ kWh. Hence, there is no tariff increase to 70.7% of the household consumers (4.6 million consumers). The domestic tariff band is reduced from current 8 bands to 5 bands for better understanding of tariff structure.

The electricity tariff will be increased by an average of about 14.89% for Peninsular Malaysia, and by about 17% for Sabah and Labuan from next year, said Energy, Green Technology and Water Minister Datuk Dr Maximus Johnity Ongkili. “The average electricity tariff in Peninsular Malaysia will be up 4.99 cent per kWh or 14.89% from the current average rate of 33.54 cent/ kWh to 38.53 cent/kWh. “For Sabah and Labuan, the average tariff will be up 5.0 cent per kWh or 16.9% from current average rate of 29.52 cent per kWh to 34.52 cent per kWh,” he told reporters at a press conference in Parliament. Rates in Sarawak will not be affected because the electricity supply in the state is operated by state-run company, Sarawak Energy. The new rates will take effect from Jan 1, 2014, he added. However, Dr Ongkili noted that 70.67% of consumers in Peninsular Malaysia and 62% of consumers in Sabah and Labuan will not be affected by the tariff hike. “There will be no tariff increase imposed on the consumers who use electricity at a rate of, or lower than, 300kWh a month.

“This amounts to 4.56 million consumers in the peninsula and 260,000 consumers in Sabah and Labuan,” he said. The group most likely to be affected are those whose electricity usage is between 301 to 400 kWh and 401 to 600 kWh. The table on implications of the revised rate on domestic users. The first group (about 720,000 consumers) will be billed between RM77.52 and RM128.60, an increase ranging from 12 cents to RM11.60 per month. (Not including 1.6% feed in tariff). The second group (about 670,000 consumers) will be billed between RM129.12 to RM231.80, an increase of between RM11.71 to RM33 per month. (not including 1.6% feed in tariff). Meanwhile in a statement to Bursa Malaysia, Tenaga Nasional said for domestic consumer (with a monthly consumption of up to 200kWh) the tariff would be maintained at a subsidised rate of 21.8 cent/kWh (i.e. no tariff increase). This rate has not been reviewed during several tariff reviews since 1997. Also consumers using 300kWh per month and below will not experience any tariff increase, the rate

Commercial consumers will experience an average increase of 16.85% (ranging from 1.2% to about 18%). Industrial consumers will experience an average increase of 16.85% (ranging from 0.9% to about 17%). Special Industrial Tariff (“SIT”) consumers will experience an increase of about 19%. This is in line with the Government’s effort to gradually reduce subsidies to industries. Even with this increase, SIT consumers will continue to enjoy discounted tariff rates, as compared to the rates for normal Industrial consumers. The 10% discount on electricity bills currently enjoyed by Government schools, Government institutions of higher learning, places of worship and welfare homes registered with the Government and educational institutions partly-funded by the Government is maintained. The 10% discount will also be extended to the Universities teaching hospital under Ministry of Education (USM, UKM, UM). Special Industrial Tariff (“SIT”) for water and sewerage operators will be given automatically and the electricity rebate by the Government for domestic consumers with a monthly bill of RM20 or lower will be maintained.

Centre; Sarawak Housing and Real Estate Development Association (SHEDA) vice president Datuk Joseph Ting King Sung Property prices in Sarawak are expected to go up by 50% to 10% this year. Sarawak Housing and Real Estate Development Association (SHEDA) vice president Datuk Joseph Ting King Sung said this was due to normal factors such as property appreciation and higher construction, materials, labour and land costs, rather than pure speculative activities. He said other contributory factors are the recent increase in fuel prices and the on-going crackdown on illegal immigrants. Although the sale and purchase of properties was not impacted by the Goods and Services Tax (GST), construction materials and other related services are, and as such, would have a hand in the increase. Ting who is a developer himself with projects in Sarawak and Sabah added, it was fortunate there were no additional measures or restriction on financing, which allows first/second time buyers accesses to high financing at a low interest rate and plenty of liquidity.

On the GST at 6% due to be implemented in April 2015, he believed it would be a “boom for businesses” as corporate tax will be reduced from 25% to 24% and 20% to 19% for the small and medium companies in 2016. “This is a positive for the economy as the GST, coupled with tax relief for the middle income group and the reduction in individual income tax rates by 1% to 3%, will increase disposable income and increase consumption expenditure and spending. “But overall, I believe the fundamental growth of the property market, will ultimately have to be supported by population expansion and increased business activities,” Ting said. He expressed the hope that more houses below RM380,000 could be built to meet affordability and growing demand from the medium income group.

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/// East Malaysia Property News /// Feature Property Launch

/// FEATURE PROPERTY LAUNCH

Launching of Pacific Heights

The team behind PacifiCity has upped the ante in Kota Kinabalu, redefining luxury and convenient living with the launch of Pacific Heights the first residential tower at the Likas Bay project.

uilt and designed with discerning homebuyers in mind, Pacific Heights offers two, three and four bedroom apartments with built-up areas of between 1060 sq ft to 3450 sq ft. Setting itself apart from other developments all units at Pacific Heights are sold fully furnished, presenting buyers with unrivaled value in the much sought after Likas Bay area. The developers worked closely with their architects to create a functional living space and with interior designers to provide dĂŠcor and furnishings that speak of distinction. One year on since the re-launch of PacifiCity in Likas Bay, and the rescued project is striding ahead under the new developers.

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Construction at the site, set to be the largest integrated hub in Kota Kinabalu, has progressed rapidly in just one year, with parts of the main shopping podium topping out already. Since the new owners took over we learnt there have been many positive steps for the project and critical milestones reached. A spokesman for the developer explained once the legal issues they inherited were resolved they were able to bring in experienced design consultants, project managers and engineers to accelerate the construction. Most critical to the success he explained, was the inflow of capital from the new owners as well as securing bridging financing from strong financiers such as Sabah Development Bank. Interest in the project from property buyers and analysts has also been positive. Since the re-launch, PacifiCity informed us they have sold majority of the ground floor retail units in Pacific Parade and released more for sale due to the high demand. The first residential block, called Pacific Heights

opens for public bookings in mid-November, we learnt that residence is already 60% sold from its soft launch. Pacific Heights offers apartments from 1060 to 3450 sf priced from RM 698 psf fully furnished presenting buyers with great value in a prime location.

Construction at the site, set to be the largest integrated hub in Kota Kinabalu, has progressed rapidly in just one year, with parts of the main shopping podium topping out already.

Pacific Parade, the 1.5 million sqft mall in PacifiCity will be the first component completed. “We are on track from construction completion in 2014 and are planning for the public opening of the mall in 2015”. The developer explained they are retaining all the retail space above the Lower Ground floor, citing their commitment to hold these floors strictly for leasing. “It’s important to our tenants that there is control over the mall, especially one of this size. We have invested a lot of time and funds to hire expert consultants, architects and property managers to create a mall with the right trade mix, internal design and accessibility. There is a real science to this, which we have paid careful attention to ensure we get it right.

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/// East Malaysia Property News

CM Tables RM4.622 Billion Budget

Sabah’s Chief Minister tabling his budget Chief Minister Datuk Seri Musa Aman tabled a deficit 2014 State Budget of RM4.622 billion, which is RM534 million more than the estimated provision in 2013. Describing the deficit budget as the ‘best gift ever for the people of Sabah’, Aman said, “From the 2014 supply allocation of RM4,621.5 million, I propose a distribution of RM702.51 million for emoluments, RM1,736.59 million for recurrent expenditures and RM2,182.4 million for special expenditures.” Emolument has increased by RM39.34 million or 5.93% compared to the total of RM663.17 million in 2013 due to salary adjustments for State civil servants under the Malaysian Remuneration System which was implemented in 2013. And, to ensure that the government’s machinery run smoothly at maximum capacity, effective and efficient in the effort to improve the government’s delivery system for our beloved people, the estimated recurrent

expenditures for the coming year is increased by RM648.66 million or 59.62% compared with the estimated recurrent expenditures of RM1,087.93 million for year 2013.

He stressed that the people’s wellbeing and state’s prosperity are the main agendas for them to always strive for, which he believes, are certainly achievable.

The increase in the allocation is also due to repayment of Government bonds maturing in 2014 amounting to RM568.9 million and repayment of Federal Government debts amounting to RM171 million. Special Expenditure shows a decrease of RM154.98 million or 6.63% compared to RM2,337.38 million for 2013.

“Blessed with strength and determination, Sabah Barisan Nasional Government is always able to perform with excellence and is highly capable to contribute and serve the people continuously.

This year, the government made numerous equity investments in government agencies and hence the reduction in 2014. Nonetheless, the state government will ensure that our development agenda and investment will continue to be intensified specifically on high impact projects that can further spur the state economic growth. Aman also said that with the biggest expenditure recorded in the financial history of the State budget. It will boost the economy of Sabah and enable it to grow to a higher scale and thus achieve a high income economy within a short span of time. The Finance Minister is also confident that people from all walks of life, regardless of religion, race, gender, rich or poor, old or young, physically fit or those who are physically challenged, wherever they may be on land or sea, will benefit from the just unveiled State Budget 2014.

“With a projected revenue of RM4.583 billion for the year 2014, which is the highest estimate in the history of State budget preparation, the 2014 Supply Expenditure, which is also the biggest budget in the State financial history, is estimated at RM4.622 billion, in order to meet the people’s expectations, to continue our development agenda and most importantly to fulfill our promises. “This shows that within a span of 50 years, the estimated revenue has increased remarkably by 74.52 times and the estimated expenses by 75.77 times. Words kept, promises fulfilled, this is why the Barisan Nasional should continue to hold the reins of the State Government,” said Musa. In order to accelerate the State’s economic growth momentum, Aman said, the 2014 Budget will focus on the six objectives and strategies, namely, to strengthen the state financial position; to improve basic infrastructure and public amenities; to expedite the achievement of Halatuju; to develop youth and human capital of high value and

quality; to eradicate poverty and improve the quality of life of the people; and to achieve balanced regional development. He said the Budget theme ‘Ensuring Continuity of the People’s Well-being’ was aptly chosen as it reflected the government’s continuous commitment and sincerity towards the people of the state. “Sabah played a major role in the formation of Malaysia since 50 years ago. During those five decades, the people of Sabah have gone through various experiences, through thick and thin in politics, economy, social, and education, to mention some. “Nevertheless, we are thankful that despite all these challenges, Sabah still continues to march forward and carves her own success story. For the next five decades and many more years to come, the BN Government has already laid a strong foundation in ensuring that Sabah will continue to flourish.” “Our aim is for the well-being of the people and the State’s prosperity, not merely for our own personal interests, but for our future generations as well. “I appeal to all parties, including the opposition, to work, and put our heads and minds together to embark on a transformation that will ensure continuity of the people’s well-being and the State’s prosperity for the sake of Sabah. Together, we can do it,” he said.

Exciting Activities for Kids to Be Held at the 2014 PH Expo in Kota Kinabalu! The 2014 Property Hunter Expo scheduled in Kota Kinabalu on 7 to 9 March will be a family affair for all the enjoy! While parents explore the different booths for investment opportunities, children can participate in a drawing and colouring competition which is sponsored by Logistics Company, ABX Express Sdn Bhd for the third year running during Property Hunter Expo. The contest will be held on 8 March (Saturday) from 2:00pm to 4:30pm, pre-registration is essential.

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Contestants will be divided into three groups namely, Group A: age 4 to 6 years old, Group B: age 7 to 9 years old, and Group C: age 10 to 12 years old. ABX Express will be sponsoring five prizes for each category: first prize worth RM 300, second prize worth RM200, third prize worth RM 100, fourth prize worth RM 80 and fifth prize worth RM 50. All winners also get a certificate each.

/// East Malaysia Property News

Sabah Government to Bridge Urban-Rural Development Gap that a total of 1,057 job opportunities will be created from this investment.

The official residence of Sabah Chief Minister Chief Minister Datuk Seri Musa Haji Aman said the state government will continue to focus on projects that could help achieve the objective of reducing the development gap between urban and rural areas. He said the state government would also strike a balance on development between regions and on efforts to uplift the quality of life of the people especially those in the rural areas. For that purpose, a sum of RM1,583.65 million is allocated for the provision of infrastructure and public amenities in Sabah. Aman, who is also the Finance Minister, said RM347 million has been set aside in 2014 for construction and maintenance of roads, slope stabilization, construction and replacement of old bridges, traffic as well as road safety management. He said RM627.92 million has been allocated in 2014 for the provision of clean and treated water supply, to implement programmes involving upgrading the quality of our water supply which includes replacement of old pipes, emergency works and reduction in nonrevenue water. “Other public amenities like sewerage system will also be upgraded where a sum of RM45.31 million is allocated. Providing safer sea lane

passages especially within the major ports of the state will be given due attention. “Construction of jetties will also be done in line with the public as well as the fishermen’s needs. A sum of RM24 million is set aside for that purpose. At the same time, work on improving the services and infrastructure facilities of the railway so as to make it more comfortable and safer will continue with an allocation of RM37.45 million,” he said, adding that RM45.75 million has been allocated for flood mitigation schemes. aRM88.38 million is allocated to the manufacturing sector in 2014 in providing conducive basic infrastructures to investors in Sabah’s existing industrial parks such as the Kota Kinabalu Industrial Park (KKIP), Lahad Datu and Sandakan Palm Oil Industrial Cluster (POIC) as well as the Sipitang Oil and Gas Industrial Park (SOGIP). According to the Malaysian Investment Development Authority (MIDA) Report, investment approved during the first seven months of this year by state indicated that Sabah is placed fourth behind the states of Johor, Sarawak and Malacca. From an investment totalling RM2.84 billion involving nine companies in the state of Sabah, a total of RM1 billion is in the form of foreign investment. It is estimated

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SOP Selling 30ha of Land for Residential, Commercial Development

Aman said RM223.99 million has been set aside next year to develop the tourism sector. Between January till September 2013, tourist arrivals to Sabah totaled 2,441,695, an increase of 16.4 percent compared to 2,098,509 tourists during the same period in 2012. He said this generated an income or tourism receipts amounting RM4.49 billion as at September 2013 compared to RM3.86 billion for the same period in 2012. With this encouraging growth, the Government is confident that our targeted 3 million tourist arrivals in 2013 will be achieved. He said in 2014, the State tourism sector targets tourist arrivals of 3.4 million people and an estimated tourism receipts totaling RM6.277 billion. This target is realistic considering efforts undertaken by the state government through the Ministry of Tourism, Culture and Environment coupled with the cooperation and support of the federal government through the Ministry of Tourism and Culture, Malaysia. To spur growth in the tourism sector, particularly on efforts to attract investment in providing tourism facilities, Aman said the state government has approved the Tourism Master Plan covering the coastal areas from Tuaran to Kota Belud. This master plan essentially is a comprehensive development plan that would help the state government to plan the utilization of the coastal areas from Tuaran to Kota Belud effectively and in a more coordinated manner.

Sarawak Oil Palms Bhd corporate office in Miri Sarawak Oil Palms Bhd (SOP) is selling nearly 30.7ha of land along Miri-Bintulu Road to wholly-owned unit, SOP Properties Sdn Bhd, to be developed into residential and commercial properties. The two parties entered into a sales and purchase agreement for the land, which is part of 121ha under Lot 120 Block 13 Bukit Kisi Land District owned by SOP, on Friday. SOP said an application had been made to the authorities to sub-divide the 30.7ha, which is made of 22.4ha in one plot and 8.3ha in two other adjoining plots, into housing and commercial lots. The purchase price for the 22.4ha is RM8.3 million, the company said in a filing with Bursa Malaysia. The price of the remaining 8.3ha will be calculated based on the actual area included in the application for sub-division (in acre) multiply by RM150,000. “The group is desirous to engage in property development business through SOP Proper–ties, being part of its corporate diversification strategies,” said SOP. Established in 2001, SOP Properties’ principal activity is construction and property development. SOP group owns more than 63,200ha of oil palm plantations, six palm oil mills with a combined capacity of 495 tonnes per hour as well as a palm oil refinery and kernel crushing plant in Bintulu. The state government, through the State Financial Secretary, increased its stake in SOP to 29.81 million shares or 6.8% with the acquisition of 23.14 million shares from Pelita Holdings Bhd last month. Pelita Holdings, a wholly-owned subsidiary of Land Custody and Development Authority, has thus reduced its holdings to 94.78 million shares or 21.6%. SOP’s largest shareholder is Shin Yang Plantation Sdn Bhd, which owns 126.3 million shares or 28.88%. Meanwhile, SOP share price has recovered significantly to its intra-week high of RM6.52, the highest level in more than 52 weeks, on improved outlook for crude palm oil (CPO) prices.

Chief Minister: Sabah Could Be the Next Dubai

Kimanis Power Plant on Track

He said that the strategic location of Sabah within the Brunei, Indonesia, Malaysia, Philippines East Asean Growth Area (BIMP-EAGA) is also a factor spurring investment and development growth in the State.

The vision of making Sabah the next “Dubai” is achievable through the continued close partnership between the State Government and the manufacturing and industrial sectors. Chief Minister Datuk Seri Musa Haji Aman said it is important for Sabah to evolve from relying on the export of commodities to sustain itself and turn to downstream activities to increase the production of higher value added products. He said the trade fair plays an important role towards achieving this vision and is the physical manifestation of “globalisation of trade” by providing the perfect stage for the State to promote its products and services at the international level. This is besides pushing local businesses to reach beyond their borders in terms of marketing their products and services or to be exposed to various opportunities that are not available locally. “I urge you to use this opportunity to exchange ideas, knowledge and information, as well as to take up potential business prospects that you may be interested in. All of these play a part in contributing to the development of Sabah as the main destination for trading, businesses and investment,” he said. He said this in his speech

delivered by Minister of Special Duties Datuk Teo Chee Kang at Hakka Hall, Tanjung Lipat. Lest it be said that the State only provides lip service to the proposed vision of Sabah being the next Dubai, he said the Sabah Development Corridor (SDC) which was launched in 2008 leveraging on key areas such as agriculture, tourism and manufacturing, worked out well under the driving force of the Sabah Economic Development and Investment Authority (SEDIA) which is tasked with the primary responsibility of planning, coordinating, promoting and accelerating the development of SDC. “Under the 10th Malaysia Plan, RM1.2 billion from the RM3.024 billion allocated to the State by the Federal Government has been used as of September; RM503.3 from the RM1.05 billion approved State funding has been spent; and RM1.313 billion from the RM1.541 billion funds allocated to SEDIA have been disbursed. Furthermore, the SDC has reached RM116 billion total committed investments since its launch almost six years ago,” he explained. “The theme for this year which is ‘Discover Sabah for Business, Culture & Nature’ fits its description,” he said, adding that Sabah is the second largest state in Malaysia and is blessed with many wonders of nature besides being a melting pot for 37 ethnic groups.

“The State Government is clear about Sabah’s potential as a thriving business and trading hub in the region, and has supported the latest effort carried out by the Federation of Sabah Industries (FSI) in promoting Sabah in the context of the manufacturing sector to turn the State into a hub for the Far East and make Sabah the next Dubai,” he said. He said Sabah has a composition of positive factors such as the availability of petroleum and gas, large oil palm plantations, sawn timber and plywood, and political stability that allows holistic development plans to be carried out besides having the qualities as one of the favourite tourist spots in the world. “As part of the venture in the implementation of SDC projects such as Palm Oil Industrial Clusters, the Sabah Agro-Industrial Precinct, Sandakan Education Hub, Keningau Integrated Livestock Centre, the Sabah Oil and Gas Terminal and other projects, it is clear that the State’s economic structure is moving towards one that is knowledge-intensive and service-based,” he said. Musa said due to this, local entrepreneurs will have the opportunity to collaborate with international parties by delving into technologyrelated businesses or to gain knowledge on key areas in the field of technology that could benefit the local economy.

Kimanis Power Plant Kimanis power plant, a 300-megawatt combined cycle gas turbine power plant in Papar, Sabah, is on course for commissioning by June next year, Petronas Gas Chief Executive Officer and Managing Director Yusa Hassan said. He said the pre-commissioning activities at the RM1.5 billion gas-fired power plant had started and is currently in the process of completing the testing stages after the transmission lines have been commissioned. “The testing will take about five to six months before we commercialise the power plant by May or June 2014, if everything goes well,” he said. Kimanis Power Sdn Bhd, the owner and operator of Kimanis power plant, is a 60:40 joint-venture between Petronas Gas and NRG Consortium (Sabah), the business arm of Yayasan Sabah Group, respectively. Yusa said the company would commission the plant, which consists of three generating blocks with each generating 100MW of power, block by block. He said the company should be able to generate all 300MW by the end of this year, but this would depend on the transmission lines. “At the moment the transmission line is only able to cater for about 100MW. Once the 300MW transmission lines are ready, then we are ready to basically commercialise all this 300MW of power to Sabah,” he said. Yusa also said that gas pipeline from Sabah to Sarawak would be commissioned in due course. Meanwhile, he said the gas industry outlook, to some extend, was similar to the demand for oil. “We are actually fortunate that Malaysia is one of the main exporters of natural gas. The main consumer of natural gas actually is North Asian countries due to lack of gas resources,” Yusa said.

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/// Hot Topic

/// HOT TOPIC

The New Lifestyle is to Go Vertical

Astaka @ Bukit Senyam, Johor Bahru

Jesselton Twin Towers, Kota Kinabalu High Rise Living Housing is a basic need and the increase in population and income has lead to the rise of housing demand. The 1991 Population Census Report showed that Malaysian population has increased with an average yearly rate of 2.7% per year, from 13.74 million people in 1980 to 19.35 million in 1991, followed by 20.69 million in 1995 and increase to 23.27 in year 2000. The rapid rate of urbanization, increase in demand for housing and the scarcity of land for development of landed residential properties in major urban areas such as Penang, Kuala Lumpur, Selangor, Johor Bahru and Kota Kinabalu, has resulted in the prompt development of high rise residential schemes in these high density areas. Viewed from the end of 2000, the property outlook suggests that with land prices experiencing an upward trend, strata properties, particularly

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Jesselton Twin Towers, Kota Kinabalu affordable schemes, continue to receive encouraging demand in the local housing market. High rise living in urban centers is a logical response to soaring land prices. This has been successfully implemented in Singapore and Hong Kong where the traditional lifestyle is high density, high rise living. According to statistics obtained from the National Property Information Centre (NAPIC), it is estimated that there were at least 780,176 units of strata properties inclusive of flats, condominiums and apartments already completed nationwide by the end of 2002 and the number is growing yearly. The concept of high rise or strata living in this country is not new. It was introduced in the seventies. The rate of construction of condominiums in Malaysia keeps increasing while the number of dilapidated and abandoned condominiums also increases.

Some are converted for other incompatible uses, which may hinder the prospect of the cityâ&#x20AC;&#x2122;s socio-economic development. According to Cathrine Anson, Assistant Sales and Marketing Manager of Bina Puri Properties, â&#x20AC;&#x153;Since the demand of condominiums and apartments has increased over the years, people have higher expectation especially when it comes to safety and quality issues, plus the facilities that are provided by the developer. In order to remain competitive in this industry, a developer has to be creative and take initiatives to improvise and make their products suit the market demand.â&#x20AC;? The Up Side Condominiums and high rise apartments are without doubt cheaper than landed houses. They are also very popular with foreigners and well to do young adults wanting

to make it on their own. Apartments and condominiums tend to have a much lower resale value than landed houses so it is better for buyers wanting to leverage on rental. Not many people would want to rent an entire landed house and those that do would be affluent enough to rent one in an upscale neighbourhood. A condominium attracts a larger group of interested parties, is easier to maintain and is certainly easier to market. As long as the unit is presentable, fairly priced and conveniently situated to amenities, buyers most often will be able to find a tenant, provided that is it marketed well. Condominiums are also great as long term investments and buyers can fetch a tidy sum in the long run, given how dense cities are becoming these days. High rise living is also becoming more attractive due to its exclusivity. Buyers these days are more

concerned about quality living and aspects such as better views and cleaner environments also attracts them. The amenities and facilities offered, like a gymnasium and swimming pool is also a lure. Security is also a factor. Many people find it safer to live in high rise buildings due to the 24-hour security that is provided. Plus, security systems such as CCTV cameras, key card access and other modern security systems are also a draw. Safety Issues Malaysia has to look into strengthening the safety measures for buildings and infrastructure to ensure they are able to withstand major phenomena such as earthquake. Science, Technology and Innovation Minister Datuk Dr Maximus Ongkili said, although Malaysia was spared from major calamities, it is necessary to prepare for any eventuality. “We cannot predict what will happen, more so with the change in the global climate. The time has therefore come for Malaysia to put in place measures to ensure safety of high rise buildings and infrastructure such as roads,” he said. According to structural engineering specialist Prof Dr Azlan Adnan of Universiti Teknologi Mara (UiTM), most of the buildings in the country are exposed to serious damage in the event of an earthquake. In 2009, a study carried out by the Science, Technology and Innovation Ministry and Ikram Assessment examined the risk of earthquake and tsunami in Malaysia, 30% of 65 public buildings inspected nationwide, including those in Kuala Lumpur, Putrajaya and Klang, were exposed to the risk of serious damage. For example, in Penang all high rise buildings more than 10 years old must undergo structural evaluation to detect any possible structural weaknesses and repair it before it is too late, the city’s local council building director said today. Since 2009, the Penang Island Municipal Council (MPPP) have issued 439 notices to the management and owners of 10-year-old high rise buildings on the island to submit full structural evaluation reports on the buildings.

“It is important to appoint a professional engineer to conduct a full structural evaluation on high rise buildings that are more than 10 years old so that they could detect any structural problems early on,” MPPP building director TS Yew said. He said only 55 building owners and management have submitted the evaluation reports to the council while the rest either ignored the notice or replied with various excuses including asking for more time to appoint engineers and a lack of funds. Yew said if the Umno building owner had conducted structural evaluation in 2011, maybe its lightning arrestor along with a section of its cement wall would not have crashed onto the road below and killed two people during a storm on 13 June 2013. “Maybe they would have detected some structural weaknesses and conducted repair works then,” he said. Using the incident as a wake-up call for other building owners and management corporations or joint management bodies of residential high rise buildings, Yew said this is the right time to spread awareness on the importance of appointing a professional engineer to conduct a structural evaluation and to come up with a report on it. It is compulsory for all building owners and management to conduct a full structural evaluation and submit the report to the local council according to Section 85A of the Road, Drainage and Building Act 1974. Under the Act, all buildings exceeding the height of five storeys must undergo evaluation by a professional engineer after a period of 10 years from the date of obtaining its occupation certificate (OC). However, Yew said that there was no provision under the law to punish building owners or management that failed to submit the compulsory evaluation report. “The law only states that if they fail to conduct the evaluation, the council may employ an independent professional engineer to do the evaluation for them and then to charge them for the costs,” he said. He added: “The council is too shorthanded to be appointing engineers to conduct structural evaluation for private buildings

when it is the building owner’s responsibility to do this so we prefer to educate and encourage them to do it on their own.” Yew. Price Hike Prices of high rise residential properties are set to see an increase in rentals this year, but are unlikely to reach levels that were achieved before the global financial crisis hit in 2008. After the global financial crisis hit in 2008, many companies in Europe and the United States started having financial difficulties and either pulled back their employees or reduced the quantum of their employees’ housing loans which had an adverse impact on the Malaysian condominium market. Because many companies were restructuring around the world, there was a drop in high-end rental market. Rents came down by between 30% and 35%. Plus, there was a huge oversupply. Developers were building but the expatriates were returning back to their home countries or moving to cheaper apartments. However, things are more stable now in Europe and the United States. Furthermore, various initiatives by the Malaysian government under the Economic Transformation Programme are helping to attract more foreign investment. This includes the growing oil and gas sector. In the luxurious condominium sector, CBRE estimates 6,484 units to be completed in Kuala Lumpur during the second half of 2013. Of the 42,979 units of high-rise development (condominiums and serviced residences) in Kuala Lumpur valued at or above RM500 per sq ft, about 35% are considered to be “luxury” (valued at RM800 psf and above). In the first half of 2012, the overall luxury condominium market during the period faced a competitive market environment. This could be due to the tightening lending guidelines introduced by Bank Negara as well as the reinstatement of Real Property Gains Tax (RPGT) as of January 2012. Bank Negara is also expected to introduce further measures to rein in household debts. Higher borrowing rates may also affect mortgage loan rates that may mean higher borrowing cost to housebuyers.

New Developments Malaysia is an attractive alternative investment destination due to its stable property market and relative housing affordability that offers reasonable returns in terms of capital appreciation/rental income. New launches featuring a good mix of unit sizing, particularly those located near high-level infrastructure projects, are expected to attract strong take-up as they appeal to a wider market of buyers and investors. With prices of high-end condominiums expected to remain flat, investors and purchasers will have the choice of opting for more bargain condominiums. According to the Knight Frank property report, the office market is expected to remain challenging as supply continues to outstrip demand. In Kuala Lumpur, demand for good grade dual-compliant office space is expected to remain resilient in the short term. Owners of old and dated office buildings are proactively seeking to upgrade and enhance their assets in a bid to remain competitive and retain tenants (and to attract new ones) amid a challenging leasing market. The decentralised office location of KL Sentral, however, is expected to face further pressure on its occupancy and rental rates due to the recent completion of some 1.9 million sq ft and impending completion of some 1.7 million sq ft by year-end. The short-term threat from these completions may, however, be mitigated as several buildings have secured anchor tenants. CBRE says some 6.27 million sq ft of new office space will be completed in the Greater KL region in 2014, although a considerable amount of this supply is located in strata-title or secondary buildings. Nevertheless, the market is set to remain poised in favour of tenants for the near future. The KL city that constitutes the capital city’s golden triangle and central business district’s office market showed encouraging signs of life during the review quarter as vacancy rates fell to 12.7% (13.2% as at 1Q), on the back of some notable leasing activities. As at the second quarter of 2013, the total supply of office space in Greater KL stood at about 91.1 million sq ft, 5% higher than the 89.2 million sq ft and up 5% year-on-year.

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/// West Malaysia Property News

WEST MALAYSIA PROPERTY NEWS

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

OSK Property Upbeat on Apartment vicinity of educational institutions and multinational companies, and are accessible to major cities,” she told StarBizWeek.

Developer Showcases New Residential Units in D’sara Sentral that is connected to the Kampung Baru Sungai Buloh MRT station, which is opposite the 2.6ha site, via a covered sky walkway.

As part of the 6.47ha mixed development called Pan’gaea with a gross development value (GDV) of RM1.2 billion in Cyberjaya, the Eclipse Residence is the third phase of the development.

Eclipse Residence @PANGAEA Serviced Apartments in Cyberjaya OSK Property Holdings Bhd says the Budget 2014 announcement on the increase in the real property gains tax and curbs on the developer interest-bearing scheme won’t affect sales of Eclipse Residence, its upcoming development. Sales and marketing assistant manager Candee Lee said the budget announcement would not impact sales, as the development was strategically located in Cyberjaya. “The apartments are located in the

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Phase 1, launched in 2011, comprised small office, flexible office and boutique retail shops, while the serviced apartments under phase 2 were launched in 2012. Eclipse Residence consists of two blocks of 668 freehold partially furnished apartments on a 1.17ha site. It has a GDV of about RM400 million. Priced from RM363,800, the one to three-bedroom units come in four different layouts and measure 450 to 990 sq ft. The project is slated for launch in January next year and is expected to be completed in the first quarter of 2018.

Artist’s impression of D’Sara Sentral Mah Sing Group Bhd officially opened the D’Sara Sentral Show Gallery@Star Avenue recently, with about 2,000 people present at the event. Mah Sing Executive Director of Operations Datuk Lim Kiu Hock and COO (Commercial Properties) Andy Chua were present at the event. The gallery features show units for D’SoVo Suites Type A with a built-up area of 504 sq ft and D’sara Residenz’ Type A and Type B. Type A is a two-bedroom unit with a built-up area of 809 sq ft, while Type B is a three-bedroom unit with a built-up area of 1,018 sq ft. The third type, Type C, has a built-up area of 1,136 sq ft. “D’Sara Sentral is a fullyintegrated commercial centre

“The synergy of D’SoVo Suites, which can be used as either offices or home-offices; D’Style Shops, which are located on the retail podium block and islands; and D’sara Residenz, which are the serviced apartments, allow occupants to live, work, play and relax in the same place,” said Lim. The public had their first glimpse of the D’sara Residenz serviced apartments during the weekend. There had been strong interest in the serviced apartments with more than 9,420 registering their interest by Oct 21. The preview of D’sara Residenz also marked the beginning of registration for balloting for this component. The launch of the show gallery kicked off with a lion dance followed by an opening dance and a lucky draw. There were three rounds of lucky draws which saw 25 winners walking away with household appliances.

Assemblyman Proposes RM2 Million Minimum Price for Foreign House Buyers in Johor

Developer Country Garden Makes Klang Valley Debut

Eager buyers at the launch

Dusk of Johor Bahru overlooking Singapore An assemblyman has proposed that the minimum price for foreign house buyers in Johor be increased to RM2 million to protect local house buyers. It was previously reported that the state was in the process of reviewing the current price for foreign buyers from RM500,000 to RM1 million. Ayub Jamil (BN–Rengit) said it did not make any sense as the prices of houses here had reached the million ringgit mark. “Do we not have enough land? Is our state so desperate for land to build houses like Singapore and Hong Kong resulting in these high prices?” he questioned during the Johor State Assembly sitting here yesterday. Ayub said the price of double-storey terrace houses and single-storey semi-detached houses had reached RM1 million in many places here. He said the state government should consult the Construction Development Industry Board (CIDB) to assess the actual costs of building houses and this should be the baseline for the minimum price. Meanwhile, State Housing and Local Government exco Datuk Abdul Latif Bandi said the state targeted to build at least 28,000 affordable homes between 2013 and 2018. “The homes will be built by government-link companies and private developers as we have a total of 34,987 applications for this type of homes,” he added.

He said the state had formed a task force at the state and district level to deal with issues related to the building of affordable housing, lowcost homes and squatter houses. Replying to a question, State Public Works, Rural and Regional Development exco Datuk Hasni Mohamed said the state government was not dependent on treated water from Singapore and has the capacity to supply the needed daily usage from the existing 44 water treatment plants here. He said Johor folk used up an average of about 330 million gallons of water a day in 2013 and the treatment plants could generate 436 million gallons daily. He said the state was also in the midst of reviewing the charges for raw water sold to Singapore under the Malaysia-Singapore Agreement 1961, as the state currently sells raw water three cents for every 1,000 gallons to Singapore and buy back treated water at 50 cents for every 1,000 gallons.

Country Garden has launched its newest project Country Garden Diamond City, a fivestar living concept covering about 100ha. This will be the first major project in the Klang Valley for the China-based developer which has been ranked as one of the country’s top 10 developers.

landscape garden for golf enthusiasts. At the same time, the golf course will have more than 300 species of plants. The development will be located opposite the University of Nottingham Malaysia campus and is an eight minute drive to the Kajang MRT Line 1 station.

It hopes to re-create the same success it had with its Country Garden Danga Bay in Johor where the developer achieved RM5 billion in sales on the first day of the launching. The new development will sit on freehold land boasting high-end, low-density luxurious homes inspired by Spanish style elements. These homes will comprise link houses, bungalows and mansions with handcrafted decorations and murals.

It is 30km from Putrajaya and 45km from the Kuala Lumpur city centre. The project will include a 50,000 sq ft clubhouse housing facilities like an infinity pool, badminton and squash court, snooker room, private cinema and gymnasium. Other facilities include a supermarket, commercial complex, and a library.

Country Garden Properties Sdn Bhd managing director Chai Keng Wai said the development will have a golf-themed

Chai said that the development caters to bigger families or senior executives who wish to upgrade their living standards.

Speaking to reporters later, Hasni said the state was still buying treated water from Singapore due to convenience. “Although we generate enough treated water supply for local usage, we still have to fork out millions of ringgit laying new pipes if we stop buying water from Singapore,” he said.

It hopes to re-create the same success it had with its Country Garden Danga Bay in Johor where the developer achieved RM5 billion in sales on the first day of the launching.

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/// West Malaysia Property News

Five Bidders for Pudu Jail Site Project

Mah Sing’s Q3 Earnings Rise 27.85% to RM70.618 Million

Pudu Jail site Five “big” developers, including one from Singapore, will submit their proposals for the redevelopment of the former Pudu Jail site to UDA Holdings Bhd next Friday. UDA Holdings group managing director Ahmad Abu Bakar said the bidders were earlier given two months to come up with proposals to develop the project known as Bukit Bintang City Centre (BBCC), with a gross development value (GDV) of between RM6 billion and RM6.5 billion. He was speaking to reporters after signing a memorandum of understanding (MoU) with Bank Muamalat to develop waqf land in Malaysia. Waqf is an inherent religious endowment, in the form of assets, dedicated by a Muslim to benefit others. To recap, the company held a concept briefing on Sept 23, after calling for a request for proposal to develop the BBCC. It was reported that 24 developers had attended the briefing. Ahmad declined to name the bidders. The site has received tremendous attention not only due to its strategic location but also the sentiments of the historical site. In a previous interview with StarBiz, newlyappointed chairman Datuk Johari Abdul Ghani said it would collaborate with one or more parties to develop the site. He added that UDA Holdings already had a concept but would welcome input from its partners to develop the 7.85ha site which consists of seven blocks of buildings for commercial and residential, office towers, a hotel and a shopping complex. Before this round of tender, China’s Everbright Construction Ltd was recommended to be its project partner,

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which was rejected by the Finance Ministry. Johari said any party with relevant expertise, track record and background, including bumiputra developers, could put in their bids. The project is part of the Economic Transformation Programme. Notably, another multi-billion project within the vicinity is the 118-storey Warisan Merdeka undertaken by Perbadanan Nasional Bhd. Analysts cautioned the possibility of an oversupply in commercial spaces if the developments were not well-coordinated. On the development of waqf land, Ahmad said the company would join hands withBank Muamalat to develop 40.47ha with a GDV in the excess of RM1 billion across the nation. It will start off by developing a 2ha mixed development with a GDV of RM125 million in Selangor under the MoU and was in talks to develop WAQF land in Kelantan, Sabah, Kedah, Perak and Penang. According to Deputy Finance Minister Datuk Ahmad Maslan who witnessed the signing ceremony, there are 11,091.82 ha of WAQF land worth RM1.177 billion in the country. The development of WAQF land in Malaysia is under the jurisdiction of the National Endowment Foundation and the Department of Awqaf, Zakat and Haji.

Mah Sing Group Berhad - Bursa Malaysia Top Malaysia property developer and plastic manufacturer Mah Sing Group Bhd’s earnings rose 27.85% year-on-year to RM70.618 million, from RM55.232mil, in the third quarter of the financial year ended Dec 31, 2013. This was achieved on the back of improved revenue of RM536.497 million, a 27.47% rise from the previous year’s RM420.843 million. Profit before tax was RM92.1 million, up 21% from the RM76.1 million previously. Basic earnings per share for the quarter was at 5.17 cents, as opposed to 4.98 cents in Q3 of 2012. Year-to-date earnings came in at RM209.9 million on a revenue of RM1.435 billion, an improvement of 19.8% compared to earnings for the corresponding three quarters of 2012

of RM175.2 million (on a revenue of RM1.333 billion). Earnings per share for the three quarters of 2013 was at 16.46 cents versus 15.84 cents previously. Mah Sing did not declare any dividend in its quarterly report filing with Bursa Malaysia. It said sales recorded up to Sept 30, 2013 was approximately RM2.25 billion, and it was confident of achieving the full year sales target of RM3 billion. The company’s plastics segment continued to contribute positively to its revenue and operating profit. Revenue grew by 16.1% to RM178.1 million (2012: RM153.5 million) as a result of higher pallet sales, with operating profit margin improving by 0.4% to 7.4% (2012: 7%).

Green Development Set to Grow Choong said that the demand for the company’s FSC-certified timber products for the first 10 months of the year had risen by 100%, compared to the corresponding period last year. “This year so far, we have sold six containers worth, compared to three 40-ft containers of Accoya timber products with a net value of RM600,000, imported from Holland, in the same period last year. “We expect to sell a total of eight containers with a net value of RM1.5 million this year, an increase of 200% over last year’s sales of RM600,000,” Choong added.

Bay 21 Too facade, a green development in Kota Kinabalu, Sabah The spending for green building materials in the country is expected to be between RM900 million and RM1.5 billion over the next couple of years with 300 projects applying for the Green Building Index (GBI) certification as of August 2013.

electricity. For example, the building can be designed to face away from the morning and afternoon sun. “The buildings can also be designed to have ventilation systems to reduce electricity consumption,” he said.

Penang Green Council director Lawrence Lim said that these 300 projects, with a total built-up area of 63 million square feet, are being built now and comprise nonresidential, residential, and industrial projects.

The green building materials include artificial timber made from biomass materials, Forest Steward Council (FSC) certified timber, low volatile organic compound paint, having energy-efficient lighting and appliances, water-saving plumbing fixtures, and alternative power sources such as solar power.

Lim is also president of the northern chapter of the Malaysian Institute of Architects. “The construction cost per square foot for a condominium is around RM120, of which 40% or RM48 can be spent on green building materials. “If you multiply 63million square feet by RM48, the potential spending on green building materials is about RM3billion,” he said. According to Lim, although developers could spend up to RM3billion on green building materials to obtain the GBI certification, the actual spending could be around a third or half the amount, which was RM900 million to RM1.5billion, as some may choose to qualify for the GBI certification via green architectural designs. “The design of the buildings can be aimed at reducing the usage of

As of August this year, there were some 624 projects in the country that have applied for GBI certification. According to Lim, these projects are expected to generate potential spending of more than RM7 billion for green building materials over the next couple of years. “We can expect a third or half of the RM7 billion or RM2.1 billion to RM3.5 billion to be for green building materials,” Lim said. Meanwhile, G-Solar, a local player in the solar panel installation business, has secured some 50 projects from residential and commercial premises in the northern region so far this year, more or less the same as a year ago. Business and project manager Regine Choo said the orders for

solar panels coming from the north had increased by about 20% from January to October this year, due to rising awareness of the feed-in-tariff (FIT) scheme. “Presently, the total wattage from solar power, which is 46MW, that households and commercial premises in the country are allowed to install is not sufficient, as the quota is taken up very quickly,” Choo said. The present quota of total solar power wattage for residential buildings is 18MW and 28MW for commercial premises. “An average size terrace house needs at least 6KW of solar power. “An 18MW quota means that only 3,000 households in the country can install solar panels,” she said. Choo said if the Federal Government removed the quota or set a higher quota, there would be more demand and sales of solar panels would improve.

Accoya timber products are in high demand in the construction industry worldwide currently because of it’s performance benefits such as its dimensional stability, durability, machinability, and ultra violet resistance. “The demand for FSC timber flooring products comes from individual home owners and high-end condominium projects who prefer the use of green building materials. “The growing awareness on the advantages of green flooring products is one of the reasons for the increase in demand. “Some of the advantages include sustainable foresting, which will not harm our eco system. “The timber is also treated in a non-toxic manner, protecting the environment from the harmful effects of poisons leaching out of typical wood treatments,” he said. FSC-certified timber is sourced from forest owners that adhere strictly to sustainable practices.

The present FIT rate for residential properties is RM1.30 per KW hour, while for commercial premises the rate is RM1.10 per KW hour. This means if you sell 1 KW hour of solar electricity to Tenaga Nasional Bhd, you get back RM1.30 / RM1.10 in payment. Signature Products Sdn Bhd managing director Datuk Finn

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/// Contributor

Dr. Daniele Gambero

CEO and co-founder of REI Group of Companies 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. 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.

Smart Cities Should Go Vertical “Vertical living”

ondominium is originally a Latin (ancient Italian) word, con-dominium meaning con=together and dominium=domination or in other more modern words, right of dominate/rule together with others. Living with other families or individuals each one having his/her property and privacy defined by stratified property but, at the same time, having some common areas to be shared, used and maintained with others. In Malaysia high-rise living became popular in the 90s when an important inflow of international corporations brought along an impressive increase of expats working in Malaysia. Western cultures have moved towards high-rise or vertical living since long and we have had very good example of this trend in the 60s and 70s with the boom of US megalopolis such as New York, Chicago and Los Angeles where residential skyscrapers were mushrooming in an impressive way those days. 70s and 80s have seen the vertical rise of eastern “state cities” with Singapore and Hong Kong leading the vertical rush followed by Seoul and Taipei. High-rise, meant to get as many people as possible living on a small plot of land, brought a number of advantages to them in terms of security, lesser headache in maintaining the property, shared facilities which are normally found only in multi-million bungalows (hard to have a gym, swimming pool, tennis and squash court in a link-house or even a semi-detached home). On the side of this the land use allows better efficiency and proximities to public transportation or improved connectivity with highway networks. The two pictures below are a very good representation of what I mean when I talk of land usage. Bothe the pics have been taken from the same height (100ml from earth).

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.

On the left we have Klang Valley with its 7.6 million habitants while on the right is Hong Kong and its 7.8 million people. The red color represents the constructed area and gives a good idea of “efficient land usage”. 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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Maybe even exasperated in Hong Kong as I really cannot say that I would like to open my window in the morning and have this type of view…. However the advantages are not simply the one listed above. High-rise brings along, at least from a theoretical point of view, a higher density which means “better subdivision” of the land costs. Nowadays thinking about having a landed property downtown KL or Penang or JB is business in number of millions. Land has become scarce and for this reason super expensive. It has only been early December that few acres of land have been transacted in Kuala Lumpur City Center at RM3,300 psf. Considering that for a semi-d you need at least 1,500 / 1,800 square feet at the price above this will make up a whopping RM5 million ….. only for a small plot of land with no building cost and no future facilities.

High-rise brings along, at least from a theoretical point of view, a higher density which means “better subdivision” of the land costs. We look at a more realistic calculation done on a lot of 5 acres or 217,800 square feet. If we consider an average ratio the results are as follow: Parameters LAND SIZE

217,800 SQ. FT.

LAND VALUE psf

150 RM/psf

TOTAL LAND VALUE

32,670,000

Comparison Table

Number of units

Nos

Total Net Sellable Area

Sq. Ft.

Land Cost Incidence per Unit

LANDED: LINK HOUSE 2 STOREY 2,000 SQ. FT. BUILT UP

CONDOMINIUM 3+1 ROOM 1,300 SQ. FT.

120

550

240,000

715,000

272,250

59,400

Again without considering the plus point of having a wide range of facilities always supplied in a condominium and normally no or minimal ones with a landed project. Advantages are even clearer if we look at high-rise in areas with large number of foreigners, above all westerns. The condominium life-style in Europe and US is highly demanded and in a foreigner country expats surely prefer to stay in the “safer” environment which is offered by a high rise strata property. Let’s now have a look at the “Return on Investment” side. In case of a long term investment a unit in a high-rise condominium will surely offer a higher return in terms of rental, affordability in terms of initial cost and easier future marketability. Why I’m saying that?

Covenant is not forbidding it, is to transform your house in a kind of “UK Bed & Breakfast” and rent room by room with all the mess that will come along with it. In conclusion we keep on talking about Smart Cities with Malaysia having already few of them on-going, Smart Cities are all about vertical as vertical allows a life-style less stressing and complicated and furthermore much safer compared to landed properties. You live not too far away from where you work and this will allow a longer time to be spent with the family and an easier connectivity/mobility in terms of proximity to your working place. Malaysia is one of the countries where “landed” is a kind of password as it has become a “status symbol” a “show off” of an “arrived” family. After reading carefully what I’ve done my best to explain I hope the readers will understand in a better way what and how the “High-rise life style” is actually much better under all possible points of view. By the way, I happily live in a high-rise building!

Have a look at Penang where high rise building have and are mushrooming, if someone looks for a landed property there the cost will be extremely high (see the calculation above for more clarity). With a high capital commitment the rental of the property in future will command an higher amount not allowable for everyone. The basket size for the future potential tenants will be very much reduced. In case of a condominium, instead, rentals will be more affordable and, another very important factor to be considered for future investment choices, the possibility to enter the market of “short term rentals” which is becoming very popular in KL will be easily accessible. The best that can be done with a landed property and providing your Deed of Mutual

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/// Contributor

Michael Yeoh The Mortgage Expert

With over 15 years of experience in the mortgage and investment industry and working with prominent companies such as Standard Chartered Bank, Hong Leong Bank, HSBC and Hwang DBS Unit Trust, Michael has helped thousands of loan borrowers by providing comprehensive mortgage advisory and solutions. Michael regularly conducts mortgage courses and has produced many graduates. He is also a regular columnist and also has being featured in New Straits Times Press, The Star, Property Guru and also Property Hunter magazine. He speaks regularly in Property Exhibitions, Seminars and also for developers. You can get in touch with him at Website: www.michaelyeoh.com.my

Going Forward.

Mortgage Financing after Budget 2014 Announcement

ow that the dust have settle and we have already know the outcome of The Budget 2014 what happens next?

During the Budget 2014 announcement I was glued to the TV looking for sign of any announcement with regards to Mortgage Financing. Waiting, waiting and waiting patiently for our Prime Minister to make an announcement and until the end, H’mm no announcement. It should be good news right. Well, I was scratching my head what shall I talk about during my Post Budget Seminar on November 9 & 10. I have to give 3 talks in 2 days. All arrangement has been made and the show must go on. That’s not all, on Saturday a day after the announcement I have an interview with the media at 10 am. Richard Oon, the Tax Expert who is also speaking together with me has lots to talk about on the hike in RPGT and implementation of GST. I will not be commenting on RPGT here as I believe most of the property gurus should have covered this. Suddenly, a few hours later something struck me. I should be thinking out of the box looking at a different perspective at a macro view. I ask myself, what will be the impact to our mortgage industry when While the author makes reasonable efforts to present information which he believes to be reliable, the author makes no representation that the information or opinions contained in this article is accurate and complete. Readers are advised to seek specific professional advice before acting on the views.

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a) Sugar subsidy of 34 cents is abolished b) Implementation of GST in the year 2015 Hold that taught first. Let’s rewind a little bit too a few months back before our general election. During my talks I always mention that there will not be any other new policies by the government but what happens after that is a big question mark. Everyone should be aware that after the election, what shakes the industry is the increase in Petrol Price to another 20 cents. When petrol price goes up what happen next.

My humble opinion, BLR will increase in the region of 25 to 40 basis point in the next 2 quarters. 25 basis point simply means BLR will adjust to 0.25%. BLR has been stagnant since May 2011.

Look at the chart below from The Department of Statistics.

Headline Inflation Increased in September

Don’t panic, let’s look at the damage when BLR increase in different scenarios.

Annual growth, (%) 8

Look at the table below.

Headline CPI Food and non-alcoholic beverages Transport

Mortgage Comparison Calculator Base Rate

40 Basis Points

100 Basis Points

200 Basis Points

Loan Amount

$ 200,000

Interest Rate

4.30%

4.70%

5.30%

6.30%

Loan Tenure

Monthly Payment

$ 989.74

$ 1,037.28

$ 1,110.61

$ 1,237.95

Total Monthly Payment

$ 989.74

$ 1,037.28

$ 1,110.61

$ 1,237.95

Number of Payments

360

Years to Payoff

Total Payments

$ 356,307

$ 373,419

$ 399,819

$ 445,660

4.6 3.9

2.6 2

Extra Monthly Payment

Sep 13

May 13

Jan 13

Sep 12

May 12

Jan 12

Sep 11

-2

Source: Department of Statistics Malaysia

My economics class during my university days seems very useful now. f you were to look at the chart above you will notice that inflation increase from less that 2% in August to 2.6% in September. Look at the blue line there is a sharp increase in Transportation due to rising Petrol Price which in turn contributes to the overall increase in inflation. Now let’s get back to our 2 scenarios earlier. If Sugar subsidy is reduced and GST forthcoming don’t you think when cost of goods increase, inflation will also increased and this in turn will result to cost push inflation and at the end the government will have to increased the Interest Rate to curb inflation. When I meant rise in interest rate it means Base Lending Rate (BLR) will also increase. To make matters worse, recently the announcement of hike in electricity tariff up to 15% again will course a ripple effect on other industries and in turn will contribute to the increase in inflation and subsequently the interest rate. Take a look at the chart below:-

Historical Base Lending Rate 12

10.5%

Inflation 5.293%

8 6

6.6% 5.55%

Jul-10

May-11

May-10

2009

Mar-10

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

When BLR hits the highest in 1998 at 10.5% inflation at that time is 5.293%. Now if we expect inflation to increase in which it has already started what do you think he BLR will be in the next quarter.

If you look at the table, base on a RM200,000 loan with a tenure of 30 years the impact of 100 basis point on the loan installment is around RM120 p/month. As a property investor, you must plan ahead and hedge against the increase by having reserve for every property invested. Don’t worry I have some good news for everyone. Based on my observation from the past years and referring to my BLR graph earlier when BLR reach the lowest at 5.55% you will notice that the spread is around negative 1.3 to 1.5% (BLR(5.55%)-1.3% = 4.25%). Now let’s look at our current BLR at 6.6%. The average spread by most banks is negative 2.4% (BLR(6.6%)-2.4%) which is pretty same during the 5.55% period. What does this mean? This shows us that due to competition among the Banks to make profit I which the cake is getting smaller will have no choice but to reduce the spread. Well, I hope that the banks will continue to adjust the spread will BLR goes up. Now, what happen if you have an existing loan with the Bank when BLR goes up. Well 2 things can happen. a) Maintain Installment increase loan tenure b) Increased installment maintain loan tenure. When BLR adjusted, the bank will immediately use option (a) as their computer system will automatically adjust the loan tenure. If you can afford it is better to take option (b) by increasing your installment. Option (b) will save you more interest. If you want to use option (b) you must go to the bank and inform them. Going forward in the year 2014, we might see more adjustment depending at the market situation. To summarize all this, as property investors looking to leverage on the banks to make more money proper planning should be executed to hedge against any eventualities. If you would like to read my past articles or join my upcoming seminars log on to www.michaelyeoh.com.my to find out more.

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/// Hot Topic

/// HOT TOPIC

Penang Property Market

Properties in Penang have historically commanded some of the highest prices in Malaysia. Relative scarcity of land on the island has always meant that Penang real estate is perceived as attractive investments. issue of Asia Pacific Business Traveller magazine listed George Town as the eight most liveable city in Asia, after Singapore, Kobe, Hong Kong, Tokyo, Yokohama, Taipei and Macau. This is impressive as George Town is compared to major cities with much larger populations and more sophisticated facilities and infrastructures. For the survey, consultancy firm ECA International determined

Penang light waterfront

arge new commercial projects planned for the island is a testament to long-term confidence in the future of Penang as a major destination. Since 2008, the state government’s call to action of establishing George Town as an ‘international and intelligent’ city has been answered by multinational developers and several large-scale commercial projects have recently been launched. These projects include the Penang Waterfront Convention Centre (PWCC) – a 102-acre commercial precinct comprising four hotels, a mall, a convention centre and a business district near the Penang Bridge, with a projected 2017 completion date, as well as the Subterranean Penang International Convention and Exhibition (SPICE) Centre, part of a ‘Penang People’s Park’ which will include a seven-acre public park on the rooftop

of the convention centre, scheduled for completion this year. These projects without a doubt will affect the real estate market in Penang, especially in residential properties as more and more people will move to the island with the increase of job opportunities. A substantial number of new residential developments have recently been launched by industry heavyweights. Some developers are even undertaking new projects as well as commercial ones on the island. Many of these projects are also marketed to foreign buyers from Hong Kong, Singapore, the United Kingdom and the Middle East. The Pull Factor One element which has always made Penang so attractive as a place to live and work in is the fact that it is an island resort. The residential suburbs in the northern coastal districts

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with their idyllic beaches, scenic sea views and lowdensity communities are thought as some of the best neighbourhoods to live in on the island. The idea of owning a home on a resort island is an intrinsically appealing one – it combines urban living with the agreeable setting of a holiday resort. According to Mortgage expert, Michael Yeoh, foreigners are attracted to Penang because of the nice beaches and sea front properties that are normally used as retirement homes, holiday homes or as investments. He added: “We have lots of attractions here especially our Heritage Trail which is gaining popularity all over the world. Plus, communication is easy we Penangnites, speaks multiple languages.” George Town has consistently been ranked as one of Asia’s most liveable cities. The February 2013

This area encompasses the former Millionaire’s Row of Northam Road (now Jalan Sultan Ahmad Shah), the heritage core zone of the inner city and inland towards Scotland Road. A major mixed residential and retail development is underway on the historic Weld Quay district, which aims to rehabilitate the magnificent 19th century waterfront buildings in the neighbourhood.

One element which has always made Penang so attractive as a place to live and work in is the fact that it is an island resort.

a city’s liveability by the following factors: climate and natural disasters, health risks and facilities, air pollution, goods and services, infrastructure, recreation, housing and utilities, education, personal security and socio-political tensions. The survey studied 400 cities around the world, of which 49 are located in the Asia-Pacific region. A Piece of Heritage ‘Heritage’ is the buzzword in George Town properties at the moment. The 19th and 20th century pre-war shophouses of George Town are currently being snapped up by investors and restored into private homes, boutique hotels and restaurants. Prices per square foot for these old terraces hit the RM2,000 mark in March 2012, making them some of the most expensive in Penang real estate.

Modern Face Lift The first high rise luxury apartment building was built in Penang in the late 1980s, but real estate options were limited to detached, semidetached or terrace houses, as well as a few no-frills apartment buildings. Now it has expanded to include condominiums with almost every imaginable facility (one of the latest projects, Quayside, even features a 4.5 acre private waterpark), town houses with traditional indoor courtyards, duplexes, triplexes, serviced apartments (in front of your yacht berth, if you wish, at The Suites at Waterside) and, for good measure, modern villas with private swimming pools. 1 Persiaran Gurney was one of the first high rise developments located on the eastern end of Gurney Drive, with a 29-storey tower. The topography

Panoramic view of Penang from Kek Lok Tzi Temple

Aerial view of Tanjong Tokong, Penang

of Gurney Drive has been soaring ever since with more than a dozen high-rise condominium complexes. High rise luxury condominiums are also becoming the trend in historic seaside neighbourhood, Tanjung Bungah and resort costline area, Batu Feringghi. Yeoh commented that high rise buildings are gaining popularity in Penang due to land scarcity. He said, “This has got to do with demand and supply. In Penang, most developments are concentrated along

the coastline as the central areas are hilly and expensive to build property on.” He continued: “Because of the scarcity of land, most developers launch high rise developments to maximize their profits. Landed properties are not cheap because supply is limited. In order to free more land space the state government has allowed developers to reclaim more land for development. This is the sign of a growing city.” Price Boom The real estate market is

booming in Penang with the average house price rising by almost 54% between 2005 and 2011. , the basic economic fundamentals of demand and supply are driving the buoyant property market here. However, there are still many affordable developments on the island, but in less-popular areas. In view of the high pricing of residential properties in Penang, the sub-sales market has now become important. More people are going after secondary property because of the pricing which ranged

Pinang Peranakan Mansion

between RM72,000 and RM350,000. Strategically located affordable apartments with built-up areas of 700 sq ft to over 800 sq ft have increased by twice the price since 2005. Yeoh said, “This is what happens when demand outweighs supply. One of the main reasons is property speculation. We have more

property investors today compared to couple of years ago. They do not only invest in one property. When there are good bargain price launches in Penang, you can see purchasers lining up to buy one night before. The increase in price also has to do with limited supply of land.”

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/// Hot Topic

Pinang Peranakan Mansion

Slowing Down Penang’s property market is expected to slow down in the short term as it experiences knee-jerk reaction to measures in the 2014 Budget. The market sentiment for upper-end properties is expected to consolidate. The upward revision of the real property gains tax (RPGT) and removal of the developer interest bearing scheme (DIBS) are measures already expected by home buyers,

around RM200,000 and below. The NAPIC report also says the planned supply (projects with approved building plans) comprises 46,610 units residential properties, of which 27,579 are two and three-storey terraced and semi-detached and detached properties, serviced apartments, and condominiums, while the remaining 19,031 are in the lower category.

Because of the scarcity of land, most developers launch high rise developments to maximize their profits. Landed properties are not cheap because supply is limited.

investors and developers to “cool off” the property market in Malaysia. The latest National Information Property Centre report (NAPIC) shows that more than half of the 48,076 units of incoming residential properties, 28,000 to be exact, comprise higherend properties of two and three-storey terraced and semi-detached and detached properties, serviced apartments, and condominiums, while the remaining 20,076 units are in the lower-end category, where the prices are

In 2012, total transactions of residential properties in Penang fell by 23% to 23,266 from 30,674 in 2011, while the total value of transactions was down 7.5% to RM7bil from RM7.7bil in 2011. The Future Despite all of that, the Penang’s property market is relatively strong, given that the state is underpinned by healthy fundamentals, such as its young population demographics, shrinking average household sizes, low unemployment rate,

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vibrant local and foreign investments, state income levels and bright job opportunities. The Penang government plans to impose a 3% levy on properties bought by foreigners from this month onwards in a bid to curb speculation. However, it is not a deal breaker, since the stamp duty imposed on foreign buyers of properties is still lower than neighbouring countries like Singapore and Hong Kong. The proposed levy is reported to apply to residential, commercial and agricultural units. As one of 31 emerging business process outsourcing locations in the world, Penang is likely to retain its appeal owing to its close proximity to the hills, beach, food and heritage attractions offered to those living on the island. The state and federal governments are planning some 40,000 units of affordable properties priced from RM75,000 to RM380,000, however these projects will be delivered only between 2015 and 2020.

Penang Clock Tower

Langkawi Can Be Like Monaco

Hassle-Free City Living in Sungai Besi by Yuk Tung provided with two parking bays. Three lifts service every floor. The serviced apartments come in two- and threebedroom layouts and are semi-furnished with air-conditioner, kitchen cabinets, hob and hood, water heater and intercom. The Centrina also provides security for all residents with its four-tier security system.

Prime Minister at the ground-breaking ceremony of the St Regis Hotel To add to its attractions, Langkawi can also be a top nautical tourism destination in the world. Datuk Seri Najib Tun Razak expressed his optimism here and outlined the prerequisites necessary. “We need a few anchor investments and topclass brand names to be the game-changers to bring Langkawi on par with the likes of Bali and Monaco,” the Prime Minister said at the ground-breaking ceremony for the St Regis Hotel and Langkawi International Convention Centre (LICC) in Kuah. With 84 suites, 11 villas and a convention centre, the hotel has been estimated to cost more than RM400mil. To be developed by the Rajawali Group and Starwood Hotels and Resorts Worldwide, the project is targeted for completion before the Asean Summit scheduled here in April 2015. Najib said the impact of turning Langkawi into a luxury nautical holiday spot would benefit many, particularly the local population. “Thousands of tourists come here to spend,

generating revenue not only for companies but also the Government. “If we have a large number of high-end tourists spending their money here, Langkawi can really be transformed,” he said. The Prime Minister said tourist arrivals in Langkawi had exceeded the target set under the Langkawi Tourism Blueprint 2011-2015 with 3.06 million people, which was the target set for 2015. He said the Government wanted to attract more high-end tourists to Langkawi and get them to spread the word “about Langkawi being among the very best in the world”. Najib said the St Regis Hotel project would be a race against time with 15 months left before the Asean Summit. He said the reward would be the Asean Summit also bringing the international spotlight on Langkawi. Also at the event were Datin Seri Rosmah Mansor, Rajawali Corp chairman Tan Sri Peter Sondakh and Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah.

Centrina, Central Residence, Service Apartment, Suria Sg Besi Yuk Tung Land Sdn Bhd has unveiled The Centrina, the final phase of three highrises in their Central Residence @Suria Sungai Besi development. According to Yuk Tung Group general manager Tan You Hock, the development takes the “nature versus architecture” theme and refines it to higher levels. Centrina’s sister development, The Court serviced apartments, was recently granted four awards at the Asia Pacific Property Awards and the company says it expects Centrina to receive similar recognition. “I am confident that The Centrina can also achieve the same success as The Court did,” Tan said. Tan says The Centrina emphasises space and presents layouts unlike others. Units are squarish with high ceilings, measuring 10 ft. It features a vista corridor, presenting a unique layout of apartments with all units facing the pool, amenities and greenery. This allows residents to have views of the pool and beautifully landscaped leisure and recreational amenities on one side of the tower and cityscape on the other side.

This is further emphasised through dual facade design which features a sleek silhouette clad in glass and aluminium facing the main thoroughfare while the style of a resort highrise complete with sky garden lounges and viewing terraces is featured on the inside facing. A dynamic and lively range of facilities has been incorporated to create an aura of warmth and style. On two levels, level six and the rooftop, facilities have been installed to complement every lifestyle choice. The podium on level six, called Pleasure, is where you will find facilities such as the swimming pool, barbecue deck, gymnasium, children’s playground, water features, yacht pavilion, reading room, corridor garden and amphitheater to relax and recharge. The rooftop features facilities such as a sky lounge, swimming pool, sky gymnasium, sauna, meeting rooms, and a roof garden. Priced at RM544,300 onwards, the freehold serviced apartment features 168 units with built up areas ranging from 782 sq ft to 1,132sq ft. The building is 27 stories high with eight units per floor and each unit is

Tan said that the project aims to attract locals from the age of 26 to 35, who value time management and want to live in the city. To provide more services for residents, the developer has decided to make travelling to KLCC easier. “We want to provide a hassle-free environment for residents and therefore we have decided to provide shuttle bus services for residents to KLCC,” he said. “It definitely fits city life. We have thought about the complete modern life, from furnishing to parking facilities and now the shuttle services,” Tan added. The introduction of the shuttle service is said to be the first of its kind for a developer. Aside from the shuttle service, residents are also in close proximity to public transportation like the Integrated Transport Terminal at Bandar Tasik Selatan which is five minutes away. The Centrina also has easy access to major highways such as Besraya, NPE and KL-Putrajaya and just 15 minutes to Kuala Lumpur central business district and KLCC. Construction for the project has already begun, with expected completion at the end of 2015.

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/// West Malaysia Property News

Reducing Speculation in the Property Market May Disrupt Healthy Property Market Growth

Real Estate and Housing Developers’ Association (REHDA) president, Datuk Seri Michael Yam Given the comprehensive and wide-ranging nature of the Budget 2014 measures to rein in excessive speculation in the property market, all the stakeholders, irrespective of whether one is looking to buy or sell or acting as market mediators, are bound to be impacted in one way or other by the measures come Jan 1, next year. The budget measures are among the most pervasive and some say “rather tough” on the market. Whether one is a potential house buyer, seller, developer or consultant, the multi-pronged measures have a good chance of influencing their decision making. Tailored to promote a more stable and sustainable property market, the reinstatement of the full real property gains tax (RPGT), removal of developer interest bearing scheme (DIBS), affordable housing initiatives by the Government, and higher price threshold for foreign buyers will undoubtedly bring forth some major changes in both the demand and supply sides of the equation. Market players, especially developers, will have to brace themselves for greater competition in terms of product offerings and pricing, targeting buyers and financing facilities. For starters, more affordable residential projects are expected to be launched in the coming months since an incentive of RM30,000 a unit will be granted to developers who build such houses.

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The profit on transaction within the first three years has been raised to 30%, 20% in the fourth year, 15% in the fifth year, while property held for more then five years will not be taxed.

“If the bulk of the market is controlled and subsidised to some extent in varying degree, should the Government be too aggressive in intervening in the free market spectrum of the housing market?

This time around, foreign buyers are also feeling the brunt of these measures. Profit from their transactions within the first five years will be taxed at 30%, while transaction from the sixth year onwards will be taxed at 5%. The price bracket for houses that foreigners can purchase has also been raised to RM1mil from RM500,000.

“The needs of the mass market is already taken care off, so shouldn’t those who wish to acquire a lifestyle and higher specification and prime location home be prepared to pay more? A one-size-fits-all measure applied universally may have drawbacks in that not only does it impact that which the Government aims to control, but it also affects negatively healthy market forces,” he concedes.

In terms of financing facilities, developers can no longer offer products for sale under the DIBS, which means property buyers will have to bear the bank interest rates themselves during the construction period. Buyers can no longer just pay the minimum 5% or 10% deposit downpayment and only start to service their loans after the delivery of vacant possession of their property. Top that up with the proposed 6% Goods and Services Tax come April 2015 and market players are practically staring at a slew of challenges ahead of them. CB Richard Ellis (Malaysia) group executive director, Paul Khong calls the Budget a relatively tough budget especially for the property sector in 2014. “The dismantling of DIBS will affect the new launches in the mid and mid-high end segments, especially in the high-rise residential market. RPGT, however, will cool off the entire market as it applies to all sectors and curb speculators looking for short-term gains,” he observes. Speaking up for the developers, Real Estate and Housing Developers’ Association (REHDA) president, Datuk Seri Michael Yam says the measures to curb speculative activities in the market may disrupt the healthy and orderly growth of the property market. Surmising the concerns of his fellow developers, Yam questions the necessity for the Government’s intervention.

Yam explains that the price increase of property was primarily driven by cost-push factors (input costs of construction, particularly material and labour, land bought at market price, and compliance costs) and in some urban areas, an imbalance of demand and supply. And in the longer term, inflationary pressure and lack of supply will continue to drive price, he contends. “Fundamentally, data points to the overall shortage of supply compared with demand attributable to a growing population and increase in the house buying group. This is more acute in the economic centres of Greater KL, Penang and to some extent Iskandar region,” Yam says. He points out the increase in RPGT would cause recent purchasers to retain ownership for a longer period beyond the five-year holding period, thus reducing supply into the sub-sale market. “As such, would-be purchasers of older properties would now turn their attention to the new supply market which could consequently tilt the demand and supply equilibrium and add to further price increase in high demand enclaves and landed housing,” he observes.. Giving the thumbs up for the budget initiatives, National House Buyers Association (HBA) honorary secretary-general, Chang Kim Loong says what Malaysia needs is a vibrant and sustainable housing market based on real demand, and hopefully, the anti-speculative measures will be effective in stabilising the market.

“We certainly hope the measures will stem the steep rise in property prices that has affected the lower and middle income groups that typically comprise property priced below RM200,000 for the lower income and up to RM500,000 for the middle income group. “The higher RPGT will hopefully slow down speculative effects which has resulted in higher property prices in recent years. It will not affect genuine house buyers who buy for own occupation or for longterm investment. Besides, buyers of residential property can seek a once-in-a-lifetime exemption from RPGT,” Chang says. Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, Malaysia (PEPS) president Lim Lian Hong voices his confidence that the measures should help the market to mature and market players will be responsible and considerate in their investments. “Property will remain as a major long-term investment instrument and buyers will get better value for the money they pay for in comparison to the yields they may get. Capital appreciation will not be as astronomical as before but increase there will be,” Lim observes. Concurring with Lim is Khong & Jaafar Sdn Bhd managing director, Elvin Fernandez who says the measures in the Budget are bold and needed, for the economy and the property market. “The Government hopes to make the taxation system more efficient and in line with international practices. The right set of messages is sent and this should be followed with good implementation and continued consistency as we move forward,” he notes. Calling for “taming the market until it is tamed”, Fernandez says if the measures do not bring prices closer to the underlying fundamentals, then further and additional measures should be taken. “Such an overall strategy is the clear message that should be transmitted to market players. Tame until it is tamed.”

He says in the past, monetary policy by way of interest rates was the main instrument used to tame asset markets. But after the global financial crisis, most countries use macroprudential measures directed at specific sectors, such as the property market.

Titijaya Plans Launches Worth RM730 Million GDV in H1 of 2014 concentrated in the Petaling and Klang districts in Selangor, which Lim said would be able to sustain the group until 2021.

On the proposed Goods and Services Tax (GST), REHDA’s Yam calls for greater clarity on its implementation. “Although it is rumoured that residential properties may be GST exempt, developers would still need to bear the increased cost of input, which would be subject to GST and (there will be the) need to pass (on) the incremental costs. Thus, subject to further clarification, selling prices would need to be adjusted to account for the increased costs.” Khong & Jaafar’s Fernandez says: “The GST, 17 months from now, has the potential of increasing the price of residential properties by 1% to 2%, but that too will depend on the state of the market at that time. If the residential market is buoyant at that time prices may go up, but if the residential market is not that buoyant and is in a steady state, it is likely that developers may just have to absorb the “input” costs.” “Some input costs (sales tax) for building materials at present are at 5% so that means a 1% increase in the future, whereas others are at 10% and this will result in savings when the 6% GST comes into play.”

Titijays’s Executive Director Charmaine Lim Titijaya Land Bhd is targeting new launches with a gross development value (GDV) of RM730 million in the first half of 2014. The new launches are its H2O mixed development project in Ara Damansara and phase two of its Embun@Kemensah project consisting of semi-detached houses. The property group, en route to a listing later this month, has completed projects with a GDV of RM1.14 billion since 2001 and has ongoing projects with a GDV of RM1.08 billion. Its chief operating officer Lim Poh Yit said Titijaya’s current land bank totalling190.2ha

“The valuable insights provided by our market research has helped us identify hotspots such as Penang and the Klang Valley, where we are confident our contemporary architectural designs will appeal to potential buyers,” he said at the prospectus launch. On expansion plans, he said that RM30 million from the initial public offering (IPO) was allocated to acquire additional land bank. Executive director Charmaine Lim added that the group was still focussing on prime locations in Klang Valley and its ongoing projects. Titijaya’s unbilled sales amounted to RM500 million as at June 30, 2013. The group set a dividend policy of up to 30%, which Lim noted meant about 4% to 5% yield. Post-listing, the group’s net gearing would be 0.22x while

gross gearing is 0.44x. Titijaya aims to raise some RM122.6 million from its IPO. Aside from the RM30 million allocated for land acquisitions, RM49.5 million will go into Titijaya’s working capital, RM15 million for repayment of bank borrowings, RM24.3 million for repayment of advances from previous shareholders of its subsidiary Epoch Property Sdn Bhd and RM3.8 million for the listing exercise. The group will issue 81.7 million new ordinary shares of 50 cents each, at an issue price of RM1.50. Of that, 17 million new issue shares are for the public, six million for eligible directors and employees, 34 million for bumiputra investors and 24.7 million as placement for selected investors. The listing also involves an offer for sale of 49.5 million existing shares at the same price. Upon listing, the group should have an enlarged share capital of 340 million ordinary shares of 50 cents each and 100 million redeemable convertible preference shares of 50 cents each.

Don’t Pay These Cheats, Minister Tells Buyers of PR1MA Homes to pick among those who have been registered into the system. “Those who have paid these cheaters are not very smart,” he said, while taking a dig at those who had paid these “agents”. “Don’t be influenced by anyone trying to coerce payment to get a home through PR1MA,” he said.

PR1MA official website Minister in the Prime Minister’s Department Datuk Seri Shahidan Kassim has cautioned potential homebuyers not to pay any booking deposit to “agents” for a home under the PR1MA scheme.

been approached by individuals who told them that they needed to pay a certain amount to secure a house.

He revealed that several of those who had registered under the affordable housing scheme had

“The application is only done online, and later we will have a transparent balloting system

“This is a total lie,” said Shahidan.

Shahidan told reporters at the Parliament lobby that PR1MA authorities were aware of the issue and will be lodging a police report soon. He also asked those who have been cheated to do the same. “We will collect all the information and then we will investigate,” he said, adding that more than 200,000 people have registered for PR1MA.

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/// Feature Property Launch

/// FEATURE PROPERTY LAUNCH

Federal Housing Minister Graced the Launch of C-Park

Semangat Global (a joint venture between Daya Materials Berhad and Chang Cheng Group) recently launched Cpark, a new mixed development which will be located on the Jalan Pintas Penampang Highway, near the Kota Kinabalu International Airport.

ith a total gross development value (GDV) of RM450 million, Cpark will be a fully integrated commercial development comprising leisure, medical, business, and education facilities. 48 blocks of lifted hybrid shoplexs are available at RM399 per sq ft with leasing options. The development will also consist of a four-star hotel which aims to be the tallest hotel in East Malaysia with the highest rooftop bar and pool. The hotel will be furnished with 288 luxurious suites. A wellness centre will also be located below the hotel to further boost the medical tourism industry in Sabah. Presidentâ&#x20AC;&#x2122;s College will also occupy a stand-alone building that will be big enough to house up to 3,000 students. 390 units of SOVO in Phase 2 are also in the plan. Cpark is estimated to be completed in the next three years.

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During the launching ceremony, guest of honour Dato’ Abdul Rahman Dahlan, the Federal Minister of Urban Wellbeing, Housing and Local Government said, “The property industry in Malaysia has witnessed notable development in recent years, and these are exciting times for industry players. I believe stakeholders who have been able to withstand the challenges of the global economic slowdown are now more experienced and resilient.” He added: “As Malaysia seeks to achieve developed and highincome nation status, the property sector is one of the catalysts to realise this. It is therefore important that the housing and property industry being one of the country’s key economic sector, undertakes development in a sustainable manner.” He urged Cpark to embrace sustainable building practices as green buildings consume less energy and water, generate less waste, and create a healthy and productive environment for employees. “The active adoption of green technology, in the building of quality houses compounded with the well designed sustainability of the housing sector, will definitely help owners of buildings or developers achieve higher sales values, fetch higher rentals and enjoy higher occupancy rates, when compared to non-green buildings,” he said. In the building sector, green builders boast a competitive advantage over traditional builders. Developers involved in the green building market are ahead of the masses. To drive the potential in the competitive global market, local developers such as Cpark are highly encouraged to adapt and embrace these technological advancements.

As Malaysia seeks to achieve developed and highincome nation status, the property sector is one of the catalysts to realise this. It is therefore important that the housing and property industry being one of the country’s key economic sector, undertakes development in a sustainable manner.

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/// Contributor

Richard Oon

Real Estate Taxation Expert Richard Oon is the National Tax Director of TY Teoh International, a member firm of the MSI Global Alliance, which is one of the world’s largest independent associations of accountancy and law firms. Richard is a member of the Malaysian Institute of Accountants (MIA), a fellow member of the Association of Chartered Certified Accountants (ACCA), a fellow member of the Chartered Tax Institute of Malaysia (CTIM) and also a Certified Financial Planner (CFP). He has more than 20 years experience in the taxation industry and holds a tax agent licence issued by the Ministry of Finance under Section 153 of the Income Tax Act 1967.

Budget 2014

Property Speculators: Time for a New Strategy

n 25 October 2013, our Prime Minister cum Finance Minister, Datuk Seri Najib Tun Razak, tabled the muchanticipated Budget 2014 proposals. Much-anticipated by many due to the expected changes to the Real Property Gains Tax (RPGT) laws to curb property speculation and the announcement of the introduction of Goods and Services Tax (GST) in Malaysia. Along that front, our PM didn’t disappoint us, as among other proposals, those changes were among the major highlights of revenue collection measures that became the talk of the town of late. The proposed changes to the RPGT rates announced during the Budget 2014, which are to take effect from 1 January 2014 for disposal of real properties and shares in real property companies, are as follows:

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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Until 21.12.13 (All categories of taxpayers)

Individuals (Citizens and Permanent Residents)

Individuals (Non-citizens)

Companies

Within 2 years

15%

30%

Disposal in the 3rd year

10%

30%

Disposal in the 4th year

10%

20%

30%

20%

Disposal in the 5th year

10%

15%

30%

15%

Disposal in the 6th year and thereafter

Many, especially property speculators,complained that the RPGT rates doubling from its current position is very high and will adversely affect their property investment decisions. There’s no need to press the panic button! In my humble opinion, RPGT is only part of the equation as far as any property investment decision is concerned. No matter how high the RPGT rate is, speculation in properties will still occur so long as the return on investment is attractive enough. After all, real estate investment, after deducting RPGT at its highest rate of 30%, can still give attractive returns compared to any other form of investments which are available in the market.

No matter how high the RPGT rate is, speculation in properties will still occur so long as the return on investment is attractive enough. Then again, are the proposed RPGT rates really that high?

17.10.97 to 31.03.07

01.01.14 onwards

Within 2 years

30%

Disposal in the 3rd year

20%

30%

Disposal in the 4th year

15%

20%

Disposal in the 5th year

15%

Disposal in the 6th year and thereafter

The proposed RPGT rates don’t even come close to the highest RPGT rates that the country, in the history of the Real Property Gains Tax Act 1976, (RPGT Act), has experienced. When the RPGT Act was first introduced, the disposal of a property which occurred within two years after the date of its acquisition was subject to RPGT at a hefty rate of 50%! So now that we are faced with the RPGT regime in 2014, property investors, especially the speculators, will have to better plan their taxation strategy in order to reduce their tax exposure on their property investments as best as they can, legally. It must be remembered that there are TWO laws that govern property transactions in Malaysia and they are: • The Income Tax Act 1967; and • The Real Property Gains Tax Act 1976. Under certain situations, where the badges of trade testisfulfilled (refer to my earlier article published in the [ month ] issue of Property Hunter titled, ‘Taxation of Property Transactions: Income Tax or Real Property Gains Tax?’*, a disposal of a property may be subject to Income Tax instead of RPGT. (*The article may also be viewed at http://propertyhunter.com.my/v1/expert.php?id=22) To have a better appreciation of how the RPGT and income tax rates relate to each other, let us look at the graph :

25%

Tax Rate

It is interesting to note that the proposedchanges to the RPGT rates are nothing more than, to a great extent, reverting the RPGT rates to its prior position in 1997. In 1997, the RPGT rate was 30% for disposal within two years after the date of acquisition of a property, which will now be extended to three years.A comparison of the RPGT rates for individuals (citizens and permanent residents) then and moving forward in 2014, is illustrated below:

Within 3 years (5 years for non-Citizens)

30%

20%

In the 4th year

15%

In the 5th year

10%

In the 6th and subsequent years (Company & non-Citizens)

0 0 0 0 0 0 00 000 000 000 000 000 000 000 50 ,00 ,00 ,00 ,00 ,00 ,0 , , , , , , , 5 10 20 35 50 70 100 150 200 200 500 700 000 1,

Chargeable Income

Income Tax Rates

RPGT Rates

Individual Company/LLP

Considering the fact that the RPGT rates would be higher than income tax rates in the case of disposal of properties within three years after their acquisition date, it may best for the property speculators, when fulfilling most of the badges of trade test to own up that they are in fact, speculating or trading in properties and consider putting such properties in a company or a limited liability partnership (LLP) where the tax is lower, when assessed as a trading activity under income tax. It is also worthy to note that with effect from the Year of Assessment 2016, it has also being proposed that the income tax rate of a company with a paid-up capital (or in the case of a LLP, capital contribution) of not exceeding RM2.5 million will be reduced by 1%, ie. to 19% on the first RM500,000 of its chargeable income while the balance taxed at 24%, thus making income tax rates lower than RPGT rates even for properties disposed within four years after their acquisition date. Moving ahead, it would be advisable to acquire such properties (intended to be held for periods of four years or less) in a separate entity, such as a property dealing company, in order to shield the other properties legitimately held for long-term investments, from being exposed to income tax implications as well. Tax planning therefore starts even before you buy your property and not only when you decide to sell your property as you stand to save the most taxes when you develop a tax plan that best suits your investment strategies.With proper planning, property investors and speculators, can save themselves a considerable amount of money in taxes.

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/// West Malaysia Property News

Guan Eng Wants New Airport in Penang

Penang Airport Penang needs a new airport or expansion of the existing one if the state is to receive more tourists. Chief Minister Lim Guan Eng said the Penang International airport in Bayan Lepas could use an additional runway and there was extra land available for the purpose, and hoped the ministry will consider the state\’s request. Arrivals, he said, are expected to hit between 5.2 million and 5.5 million by the end of this year. However, the airport has a capacity to support arrival of only five million. “Arrivals increased from 8-9% last year to 14% this October with 4.4 million tourists coming in. We expect the numbers to hit 5.5 million by year end.

Zambry: Beware of Syndicate That Uses Names of Authority Figures

Menteri Besar Datuk Seri Dr Zambry Abdul Kadir The public have been advised not to fall prey to a syndicate found to be using the names of the Perak Mentri Besar, senior officers, exco members and even the royal family to cheat people on land deals, projects and investments. Mentri Besar Datuk Seri

Dr Zambry Abdul Kadir said the state government had lodged a report when certain parties were found to have issued a false letter bearing his signature on an approval over an investment project a few days earlier.

the syndicate used these pictures to convince their victims that they know me well. Some even claim to be family members,” he told reporters after the state executive council meeting at his office in Ipoh.

Declining to divulge more information on the letter, Dr Zambry advised the people to verify with his office first if there were people requesting for money in approving projects.

Dr Zambry said if certain parties were offering lucrative deals involving the state government, the onus was on the person to check on the authenticity of the deal first.

“Some of them, even women, trick people easily as they show them letterheads of the state government, the necessary signatures, and some even show photographs taken with me.

“Prior to this, the state government had lodged several police reports over similar incidents.

“Many people have taken photographs with me, and

Move to Upgrade Safety of Genting Highlands Route and an upgrade of its safety aspects. “If they cannot cope or do whatever recommendations (to the road), we will try to find a solution,” he said.

“The state government is worried the airport will not be able to handle the tourist traffic when we see another 10% increase in tourist arrivals annually. This will bring congestion and discomfort to visitors and tarnish the international reputation of Penang and Malaysia” he said. Lim also complained about flooding at the airport after heavy downpours, and said a letter had been sent to the chairman of Malaysia Airports Holdings Berhad, Tan Sri Dr Wan Abdul Aziz Wan Abdullah. He said the airport car park was also flooded, which could be due to a flawed drainage system. ”I hope immediate action will be taken as failure to do so will attract negative reactions from the people, jeopardising Penang and the country\’s image,” he said. The airport underwent an extensive facelift that cost RM250 million in recent years. The expansion project, wrapped up a year ago, saw an increase in the airport\’s capacity from 3.5 million to 5 million, as well as additional parking bays for planes and cars. However, the airport was hit with minor floods in September and earlier this month heavy rain caused the airport driveway to be flooded.

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“For some cases, action have been taken, and we hope more culprits will be nabbed,” he added.

Roads of Genting Highlands The Works Ministry is doing an audit of the Genting Highlands route that may lead to a safety upgrade of the road in the near future, following a deadly bus crash there in August. Works Minister Datuk Fadillah Yusof told The Star the audit, being carried out by the Public Works Department, was expected to be tabled before the Cabinet soon. Declining to elaborate on the report’s findings, Fadillah said further action would depend on the Cabinet’s

recommendations. He said that though the route was privately-owned, the Government needed to take steps there as it was used by the public. “Depending on the recommendations, if construction on that road is taken up by the company (Genting Berhad), we will provide the technical support to oversee its implementation,” Fadillah said. He said works on the road may include redesigning

On Nov 8, acting Transport Minister Datuk Seri Hishammuddin Hussein cited a report by Malaysian Institute of Road Safety (MIROS) that the Aug 21 crash that claimed 37 lives was due to speeding, bad brakes, poor road design and the operator’s unsatisfactory policies. The Land Public Transport Commission (SPAD) has since announced it was suspending the operator of the doomed bus and was mulling further action. An audit of a facility usually involves inspection or examination to evaluate or improve its appropriateness, safety, efficiency, or the like.

Hike in Assessment Rate Myth Busted by Chur Associates

Bandar Tun Razak MCA Division Against Assessment Rate Hike

The concept behind this definition is of a hypothetical landlord renting out the land and buildings to a hypothetical tenant who makes use of the land and buildings.

abolishment and reduction of several subsidies as well as the implementation of Goods and Services Tax by 2015, the public will be greatly burdened,” he told reporters at his office in Wisma Mirama, Jalan Wisma Putra.

In fact, the amount of assessment payable per annum is based on the formula below:-

Chew said the valuation amount in the notice was also not clearly explained.

Proposed Annual Value X Rate of Assessment = Assessment payable per annum Pursuant to section 142(1) of LGA, whoever disagrees with the Proposed Annual Value may lodge an objection in writing to the Property Management and Valuation Department of DBKL on or before 17.12.2013 on the ground that any land or building which is rateable is valued beyond its rateable value.

In a scenario; Mr Lim and Ms Teresa are the owners of a bungalow house in Taman Seputeh, Kuala Lumpur. Recently, they received a letter from Kuala Lumpur Town City Hall (“DBKL”) namely, Notice of Revision of the Valuation List. When they received the notice, they are flabbergasted, thinking they are required to pay up to a “proposed annual value” of RM36,000.00 (as shown in the sample letter above). Is it true? What can they do? MYTHBUSTED False. The amount stated in the Notice of Revision of the Valuation List is the Proposed Annual Value. “Annual value” is defined in Local Government Act 1971 (“LGA”) as “the estimated gross annual rent at which the holding might reasonably be expected to let from year to year the landlord paying the expenses of repair, insurance, maintenance or upkeep and all public rates and taxes”, excluding from the value of the holding, among other matters, “the enhanced value given to the holding from the presence of” “machinery used for the making of any article or part of an article, the altering, repairing, ornamenting or finishing of any article or adapting for sale of any article” and “Holding” here means any lands with or without the buildings thereon.

However, the Rate of Assessment shall be determined and announced annually by the mayor of DBKL vide Consolidated Annual Rates for Federal Territory of Kuala Lumpur. Currently, the Rate of Assessment is determined based on the types of buildings and its identified usage. It has been the rule of thumbs that the Rate of Assessment for residential property is at approximately 6%. In other words, don’t worry if you receive such a letter from DBKL. You are not required to pay the Proposed Annual Value but rather a percentage of the Proposed Annual Value of which the rate shall be determined by the DBKL from time to time. BEWARE!

“Even if they wanted to increase the rates, it should have been very gradual and not a shocking sum,” he said. Kuala Lumpur City Hall Bandar Tun Razak MCA is against City Hall’s move to increase the assessment rates for house owners since it has recently announced a surplus budget. Its chairman Datuk Chew Yin Keen said with the city’s continued rapid development, City Hall was also expected to generate more income from commercial properties. “In its Budget 2013, City Hall has an excess of RM217.7mil in operations cost and income. We are fully against the valuation notice sent to residents and we are also against the proposal to reevaluate the annual valuation fee. “Yes, I understand that the rate has not been increased since 1992 but with the

His division, he said, had started a campaign lasting until Dec 16 to collect 10,000 signatures to protest against the increase, adding that they would be visiting markets, resident associations and other areas. The petition will be submitted to both City Hall and Federal Territories Minister Datuk Seri Tengku Adnan Tengku Mansor on Dec 17. Chew also urged City Hall to hold a public hearing with the residents and other stakeholders before considering any move that could affect those living in Kuala Lumpur. He also refuted claims that the increase was because the Government wanted to punish city folks for voting against Barisan Nasional in the last general election.

In its Budget 2013, City Hall has an excess of RM217.7mil in operations cost and income. We are fully against the valuation notice sent to residents and we are also against the proposal to re-evaluate the annual valuation fee.

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/// International Property News

INTERNATIONAL PROPERTY NEWS

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

The World’s Tallest Vertical Garden waterfall of flowering vegetation running down the facade of One Central Park, a major mixed-use development in Sydney. The One Central Park building facade is 50% covered in green living plants. The leaf-sprouting skyrise features hundreds of species of native and exotic plants overflowing from planters lodged between 14 floors. It is the highest vertical garden in the world.

One Central Park Vertical Gardens, Sydney, Australia Patrick Blanc is a French botanist who has pursued his life passion of building vertical gardens since the late 1960s. The plantman has worked with many architects over

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the decades to grow sustainable green walls. His latest project is his career’s masterwork: a 545-foot-tall

The development’s primary architect, Jean Nouvel, is a Pritzker winner who has designed many striking buildings – the Technicolor tusk that is Barcelona’s Torre Agbar, for instance, and the block-stuffed Musée du quai Branly in Paris. The sprawling green wall will suck up sunlight during the afternoons and artificial light at night, thanks to

a tremendous contraption mounted high above. A heliostat, an assemblage of motorized mirrors captures sunlight and directs its rays down onto Central Park’s gardens year round. After dark, the structure becomes a canvas for leading light artist Yann Kersalé’s LED art installation of firework movements. It is an exciting time for Sydney in terms of ambitious architectural projects.One Central Park apartments start at $750,000 and it contains some luxurious penthouses that is attracting a lot of people with green fingers and deep pockets.

Battersea Project Financing Secured “If we do it faster, we would recoup our money faster. From our experience, after paying off the infrastructure and land cost, we should slow down (the development pace) as it determines the profit, which will be up to the shareholders,” he said.

Liew (third from right) briefing Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan (third from left) The Malaysian consortium of S P Setia Bhd, Sime Darby Property and the Employees Provident Fund (EPF) which is undertaking the Battersea Power Station redevelopment project in London has secured £790.2 million (RM4 billion) in financing.

refurbishment of the power station project over the next three-and-a-half years. It also includes a £258.2 million land facility to refinance the initial loan used to fund the acquisition of the site over a longer period from two years to five years.

CIMB Group Holdings Bhd is the coordinating lead arranger and book runner, with OCBC, Standard Chartered, HSBC and Malayan Banking Bhd as joint mandated arrangers.

Foreseeing a higher gross development value (GDV), Liew said the current strategy was to lock in all the sales in order to pay off the infrastructure and land cost.

“With the bankers support, we may move from the single largest project in London to the largest property development company in London one day,” said Battersea Project Holdings Co Ltd chairman Tan Sri Liew Kee Sin during the signing ceremony yesterday according to Star News. The ceremony was witnessed by Urban Wellbeing, Housing and Local Government Minister Datuk Abdul Rahman Dahlan. One of the largest real estate financing transaction this year, it comprised a £532 million five-year development facility to support phase 1 of the development and the

Liew said the GDV may go up later to at least £12 billion from the expected GDV of £8 billion for the 16.19ha development.

The refurbishment of the power station includes the reconstruction of the chimneys to the original designs. It is part of Phase 2 of the project, which consist of the development of 250 apartments. It is expected to be launched next year and is due for completion by 2018. Gehry Partners and Foster+Partners was chosen to design Phase 3, known as the High Street. Liew said he had high hopes for the architectural firms to raise the value of the development. CIMB Group chief executive Datuk Seri Nazir Razak reiterated its support for the consoritum and said: “We will be there for the following phases.”

Bina Puri in JV to Develop RM200 Million GDV Bangkok Resort

Bina Puri Holdings Bhd has entered into a joint venture with a Thailand-based developer and a Chinese businessman to develop the Bangkok Marina Resort and Spa, a project with a gross development value of RM200 million. At the press conference, Bina Puri Properties Sdn Bhd chairman Tan Sri James Foong Cheng Yuen said the development would be undertaken by a special purpose vehicle in which Bina Puri holds 56%, Thailand-based UFUN Group Ltd 29%, and businessman Tang Cong Shun 15%. “We expect the construction to start in the first quarter next year and completion in end-2016,” he said. The project involves an area of 7.14ha and will comprise 817 units of various property types.

“We are selling at (about) £1,000 per sq ft. We are targeting £2,500 per sq ft for our phase 2 and phase 3 at £1,800 per sq ft,” he said. Phase 1, which has a 99% take up rate was launched in January this year with sales of about RM3.8 billion to date. Depending on view of shareholders, Liew, who is also S P Setia president and CEO, said they must first ensure that all infrastructure was ready and that when all the loans were fully paid off, they would decide on how fast the development would go.

The Malaysian consortium of S P Setia Bhd, Sime Darby Property and the Employees Provident Fund (EPF) which is undertaking the Battersea Power Station redevelopment project in London has secured £790.2 million (RM4 billion) in financing.

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/// International Property News

E&O Sets Up Sales Gallery in Singapore He did not rule out the possibility of partnering with some of its existing partners again but noted that Avira Wellness City – a joint venture between Khazanah Nasional Bhd,Temasek Holdings Pte Ltd and E&O – for instance, will last the developer for five to seven years. He will be launching Avira next month. Grand opening: (from left) Chan, group corporate strategy director Lyn Chai and group hospitality and lifestyle director Michael Saxon at the official launch of E&O’s sales gallery in Singapore. Eastern and Oriental Bhd (E&O) has established a new sales gallery in Singapore at One Raffles Link. Deputy managing director Eric Chan says the 4,118 sq ft sales gallery is an important platform in the international arena. Its neighbours include iconic landmarks, multinational companies, foreign banks and upscale commercial buildings. “Once we identified the right location and size, we then envisioned a space that catered to discerning clients. (We want to ensure) our clients could immediately relate and be inspired by E&O values the moment they step into our gallery,” Chan told StarBiz. Brandishing the line “Expect nothing ordinary”, the showroom welcomes its guests with its signature marble columns, known as Palissandro Blue, a natural stone sourced from Italy. He says the gallery is a significant investment and the developer took almost two years to identify the location. “The opening of the E&O Property Gallery is vital in our efforts to extend our reach overseas. Singapore is a gateway to the rest of Asia, which enables us to reach a wider regional and global audience,” he says,

adding that the Lion City has a growing number of affluent and high net worth individuals. “Singapore has naturally been a key anchor market in our foreign buyer segment. This is understandable given the proximity of our two countries, cultural ties and the pull of Malaysia’s relatively more affordable properties.” He says international homeowners are exploring new frontiers and have become more open in investing in properties overseas. They will be looking for a trustworthy brand. “Based on our clientele profile of more than 20 nationalities, there is a growing recognition of our brand and acceptance outside Malaysia,” he says. E&O’s international home buyers represents about a third of its total buyers for its St Mary Residences project in Kuala Lumpur. They come from Singapore, Japan, Hong Kong, Indonesia, China and Britain. Singaporeans made up 36% and 34% for the overall foreign buyers for St Mary Residences and Quayside, Penang respectively. Its ties with international establishments has also helped open doors to an international audience.

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“We have invested a lot of time and effort with (Japanese developer) Mitsui Fudosan and we hope this will continue after The Mews,” he says. It has proposed to acquire a 135 acres, part of the larger 5,000-acre City of Elmina, from major shareholder Sime Darby Bhd in September. This will be its second wellness-themed project. “People are getting affluent at a younger age. They are taking preventive measures such as maintaining a more balanced lifestyle in order to prolong their quality active days. So why not translate this trend into a living environment?” he asks. The process will take time as the master developer has to take into consideration land and infrastructure costs. As for Avira, E&O will be working with Destination Spa Management which manages spas, health resorts and wellness centres to come up with Avira’s concept. “It’s not (just) about retirement homes. It’s about empowering you, to take wellness to your hands,” he says.

Record Amazing Sales at the Lion City’s Dou Resdiences

Crowd at Dou Residences preview Despite multiple cooling measures and curbs, there was much to roar about as the unprecedented demand for the Lion City’s apartments at DUO Residences, the first of two integrated developments by M+S Pte Ltd peaked over the weekend, bringing the total sales of the units in the entire inventory of 660 units to 87 %. The preview, which started on Wednesday (13 Nov) attracted over 2,000 prospective purchasers who had expressed early interest in the 49-storey residential tower. By the close of the weekend on Sunday (17 Nov), a total of 574 units of the 660unit development had been sold at an average price per square foot of around $2,000 (RM5,120). Overall, the vibrant uptake reflects the intrinsic long-term potential in which the purchaser profile saw Singaporeans accounting for around 70 % of the buyers, Malaysians 14 % and other nationalities 16 % respectively.

“This reflects the strong demand for integrated work-live-play projects, the opportunity to buy into a premium residential development that also offers Grade A commercial space and a retail component, providing an enviable lifestyle environment for home owners and good rental returns for the investor,” said M+S’ chief operating officer Kemmy Tan. “The interest in DUO augurs well for our upcoming Marina One development in the heart of Marina South, Singapore’s new financial district. Marina One will also offer excellent connectivity being connected to four out of Singapore’s six MRT lines” she added. M+S Pte Ltd which was set up on 27 June 2011 to develop four land parcels in Marina South and two land parcels in Ophir-Rochor within Singapore as the integrated developments Marina One and DUO respectively is owned by Khazanah and Temasek respectively, according to a ratio of 60:40.

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Contributor

/// Banking and Investment News

$₤ € BANKING & $ INVESTMENT

NEWS

The banking and investment industry has a crucial role to play when it comes to property. Read about the most recent news and trends in this trade Banks Mum on New Housing Loan Structure a marked-up agreement, a qualified buyer is able to get a much higher loan than what the property is really worth. Walk into any bank today to ask about these new regulations, particularly with regards to the transparency of developers when launching new projects and how it is going to affect your housing loan if you are a purchaser, and you are unlikely to get clarity because the details are still unclear. Property investors, speculators and home buyers have all been wondering about the new guidelines on property and if there is going to be any change in how banks give out housing loans. Under the new guidelines announced in Budget 2014, developers are going to have to be transparent in the way they price their property by laying bare the details of the house, how much the house, legal fees, rebates, “free” gifts like the air-conditioning, washing machine, fridge, kitchen cabinets put in by them, cost. This then raises questions about the way banks have been disbursing loans in the past based on the developers’ price which of course includes the renovation and add-ons

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put in and factored into the pricing by the developer . Because without a valuer to assess if the price quoted by the developer is indeed the real market value of the property, the banks are essentially accepting the developer’s price (which includes all the extras) as the value. In some cases, developers have even been “creative” in marking up a higher price in their sales and purchase agreements than what the buyer is actually paying. That way, they hope to get higher prices for the other units in the project that have yet to be sold. But it has other ramifications for the individual and banks because with

Association of Banks Malaysia executive director Chuah Mei Lin says in a brief e-mail that the announcements made in Budget 2014 would now have to be supplanted by guidelines and regulations. “Work is in progress and announcements will be made in due course,” she adds. “In our opinion, the revision in the real property gains tax and the curb on Developer Interest Bearing Scheme (DIBS) may help to avert unhealthy speculative activities to a certain extent,” she says. She adds that ABM would need to survey the industry on the potential impact of these announcements. As it would probably take a bit of time,

she suggests that it would be easier to approach member banks directly for their comments. However, three of the big banks were mum when approached on how they are going to structure their housing loan after this transparency ruling for developers is in place and whether buyers will now be eligible for only 90% of the real value of the house or be allowed to continue to get 90% of the loan (like the current practice) which is based on the price of the house which includes all the add-ons and renovations put in by the developer. Chuah says ABM wishes to reiterate that its member banks have strict criteria in evaluating loan applications. “The decision whether or not to lend and/or to approve a loan application is made on a case-to-case basis after a thorough credit appraisal. “Consumers who can afford to borrow will continue to be able to do so. “What is important is for home buyers to recognise the need to make sound decisions of their own affordability appropriate to their financial circumstances.”

More Measures to Boost Transparency in Property Sector The National Housing Department (NHD), which comes under the purview of the ministry, implemented a new condition effective Nov 15. It will not grant developers a housing development licence or an advertisement and sales permit if a project has ICS elements. Incidentally, a developer must apply for an advertisement and sales permit in order to sell a project. Because of this statement, Bank Negara issued that circular to ensure co-ordination between the different authorities. Bank Negara Malaysia When the measures with regards the property sector were unveiled in the Oct 25 budget, developers and house buyers viewed them with confusion. There were essentially three issues – a more stringent real property gains tax (RPGT) compared with previous years, the banning of Developers Interest-Bearing Scheme (DIBS) and increased transparency imposed on developers who now have to display detailed sales price including benefits and incentives such as legal fees exemption, cash rebates and free gifts. In short, the net price minus the freebies. While the RPGT is a straightforward tax on gains upon disposal, property professionals and developers felt the ban on DIBS would result in other forms of marketing strategies. A check with a couple of developers reveal they have replaced DIBS with other schemes. The new schemes – developers interest subsidisation schemes and developers interest rebate schemes, to name two – requires buyers to pay the interest first. The developer reimburses the buyer for the interest paid on submission of receipts on a periodical basis; every quarter, for example. By whatever name it is known, interest is still factored into the house price. Last week, a circular by Bank

Negara to financial institutions may have put paid to such marketing strategies. The circular Measures to Promote Sustainability of the Property Market tackles the issue of lending on two fronts. It targets both house buyers and developers. It prohibits financial institutions from lending to individuals and nonindividuals buying a property offered under an interest capitalisation scheme (ICS), or any permutations thereof. Second, it prohibits financial institutions from granting bridging facilities to finance a development that offers ICS. ICS is a generic term which covers any schemes in which interest is capitalised, or imputed into the price of the property. This measure by Bank Negara can be viewed from different fronts. First, it is part of the mechanics of putting the budget measures into operative mode. Second, it is an outcome of the government, the central bank and the various agencies coming together to ensure compliance. Its single aim: to ensure sustainable prices. That circular came about as a result of a statement by the Urban Wellbeing, Housing and Local Government Ministry dated Nov 15.

“This measure is taken to enhance the ability of the people to buy a house and to ensure stable home prices and also to curb speculation. In addition, speculative activities also have an impact on house prices. This situation may adversely affect the property market in the long run,” the NHD statement said. To comprehend how ICS rises prices, one must view the workings of this mechanism from a big picture perspective. Properties, whether landed or highrise condominiums, are launched in phases. There is generally a 10%-15% price increase with each subsequent launch. If there are 100 units to be launched, a developer may launch 50. If the demand is good, it may launch the remaining 50 the same weekend, with a price increase of 10% to 15%.

At around that time, developers also gave freebies in the form of price discounts or rebates, free air conditioners, free first year maintenance and legal fee exemptions. Developers did not display the net value of the property. As we all know, there is no free lunch. T he cost of these freebies have already been factored into the house price. Over the years, this gross value was used in the sales and purchase agreement and in determining the LTV ratio. This practice of using the gross value tends to inflate prices over the longer run. These gross numbers are recorded by the National Property Information Centre (NAPIC). This result is a distortion of property values over time, This call for transparency ensures that NAPIC has access to the net and true value of the properties. This is important for valuation of the property sector on a longer term. In the event of a foreclosure, complications arise because the price includes freebies. Therefore, this ruling by Bank Negara must be viewed positively. It will help to bring down household borrowings, bring about banking stability and transparency when it comes to record-keeping purposes.

Factoring interest into the cost of the house raises prices within a short span of time, especially if demand is strong. Initial buyers will be happy because they perceive their property has “increased in value” in a span of a weekend. Further to this, the Bank Negara circular also raised the subject of the loan-to-value ratio. In 2010, those who buy a third and subsequent property have to pay a 30% down payment, what is known as a loan-to-value (LTV) ratio of 70%. This 30% was supposed to be calculated on the net value.

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/// Banking and Investment News

Bank Negara’s New Circular Meant to Be a “Property Financing Guide”

More Measures to Curb Speculations on the Way

developers as a result of the measures proposed in Budget 2014,” he said.

Bank Negara’s new circular is meant to serve as a “guide for banks” while financing house buyers’ purchases. Property sources said Bank Negara’s new circular which bans interest capitalisation schemes (ICS) is not an attempt to fine-tune the measures proposed for the property sector under Budget 2014 but is merely “a guide for banks” when they finance house purchases. The new circular, effective Nov 15, which strikes at the core of Developers Interest-Bearing Scheme (DIBS) also includes all other schemes in which interests are factored into the cost of the house. Said a source who declined to be quoted: “Interest Capitalisation Schemes (ICS) is a generic term in which the interest is capitalised, or factored in as part of the cost of a property. When developers do this, it invariably and inevitably, rises the cost of the property price.” ICS covers a range of interest payments which may be not necessarily fall under DIBS, the source said. How this is done, or the mechanics of it, is not the issue, the source said. What is of greater importance is the outcome, and in this case, the outcome is the increased price of the property, he said.

A check with developers reveal that most of them have already removed DIBS as a selling strategy. However, they will honour past agreements signed before the Budget 2014 measures were introduced. A developer offering three property projects for sale in Petaling Jaya says they will continue to offer DIBS in one of their three projects “because that project is almost all sold and will be completed in June next year. So we will continue with the old scheme. “As for the second project, we are offering Developers Interest Subsidisation Scheme (DISS). The buyer will pay the interest and we will reimburse him every quarter if he comes with the statements or receipts,” a staff of the developer said. The third project has been given to marketing agents, she said. A prominent developer developing a gated and guarded project north of Kuala Lumpur said they have removed DIBS from their sales including the giving of rebates. They have also outlined the cost of freebies provided and in the process, made the marketing process more transparent. “The net price of the house is provided to our

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A property consultant who declined to be quoted said the Bank Negara circular to banks and lending institutions may have resulted from a statement by Urban Wellbeing, Housing and Local Government Ministry. The statement, signed by National Housing Department director general, said following the announcement of Budget 2014, the ministry is implementing a new condition in approving housing development licence and advertisement and sales permit. The new ruling will not allow the use of ICS, or any other permutations, including DIBS effective Nov 15 in advertisements. The statement said the measure is being taken “to enhance the ability of the people to buy a house and to ensure stable home prices and also to curb speculation. “In addition, speculative activities have an impact on house prices as well. This situation may adversely affect the property market in the long run,” the statement said. The statement also called on the public to report to the department if they come across any dubious schemes related to ICS or any other forms of permutations.

central bank that took effect last Friday will pile more pressure on an already hard-hit property sector, even if its merits are likely to be felt in the long-term, analysts and industry executives said.

Dr. Daniele Gambero Bank Negara issues circular to banks that virtually eliminates the possibility of any circumvention of the banned Developer Interest Bearing Scheme (DIBS). According to property expert Dr. Daniele Gambero, this will be a tsunami in the residential property sector as DIBS has been removed and no forms of replacing scheme such as rebate or cash reward scheme are permitted. Dr. Daniele Gambero told Property Hunter, “on top the LTV (Loan to Value) will be calculated after deduction of all the free-free-not-so-free things that developers are currently adding into the selling price such as; • •

•

Loan Agreement Legal Fees and Stamp Duty Renovations such as Kitchen, Airconditioners, Furniture, Water Heater and so on Cash Back, Guaranteed Return, Lucky Draw for trips

Everything might be deducted bringing the “Net Value” of the property down to the bricks. The purchasers at the end will probably get 80% the lucky ones even less the unlucky ones”. Gambero also Property Hunter, he predicts property values to drop a 7% - 10% in the next 4 to 6 months in recovery to a healthier and sustainable market. A new circular from the

In a bid to make the property market sustainable, the new rules have put the brakes on interest capitalisation schemes (ICS) and the developer interestbearing scheme (DIBS). It also calls for the use of the net selling price of a property as the benchmark for obtaining bank loans, which raises the amount to be paid upfront. Alliance Research’s banking analyst Cheah King Yoong said the measures were “more onerous” than anticipated and posed downside risks to his 9% loan growth estimate for the banking sector next year. “Although the guidelines on the prohibition of the DIBS was not a surprise, the new rule on using the net selling price to determine the loan-to-value (LTV) ratio is a negative surprise to us. “While it is difficult to gauge the impact on banks, 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 loan growth,” Cheah said in a report yesterday. “We believe the latest policies illustrate the sheer determination of the authorities to contain the growth of household debt. “These measures, together with potential rate hikes in 2014, fiscal tightening by the federal government and subsidy rationalisation next year, could further drag on loan growth in the retail segment, temporarily

leading to a rise in credit costs, and dampen investor sentiment on the banking sector,” he added. The circular prohibits financial institutions from granting end-financing facilities to individuals or nonindividuals for the purchase of property offered under an ICS, including the DIBS. Financial institutions are also barred from granting a bridging facility to finance a property development that offers ICS. According to Alliance Research’s Cheah, this effectively removes any alternative incentives that developers might concoct to replace the DIBS. “Nonetheless, our channel checks show that for the banking groups under our coverage, property loans with the DIBS only made up 1% to 3% of their outstanding mortgages,” he said. Affin Bank is the exception, with some 7% of its mortgage loanbook comprising loans tied to the DIBS. “Given that property loans with the DIBS are immaterial to overall outstanding mortgage loans as well as new mortgage loans approved, we do not expect the restrictions to have a significant impact on the banking sector,” Cheah said. Public Bank has the highest exposure to housing loans at 56% of its gross loans, followed by Alliance Bank with 55% and Hong Leong Bank, 46%, company data showed. Another key item on the circular requires banks to calculate the LTV ratio based on the net price of a property instead of its gross price. To illustrate, a property with a list price of RM1 million, rebate of 5% and 90% financing would

incur a down payment of RM50,000 after discount. Under the new regime, the down payment increases to RM95,000 because the 90% loan will be computed using the discounted price tag of RM950,000. While property executives expect a slowdown in sales, they believe that genuine buyers will remain undeterred. Mah Sing Group Bhd group managing director and CEO Tan Sri Leong Hoy Kum told StarBiz via email that demand for properties would continue to be robust, especially among those buying to own or for longterm rental income. “There is still a large supply-demand gap as supply growth for properties has been on a decreasing trend since 2003, with Malaysia’s supply growth in the second quarter of this year at only 0.8%. “The fundamentals driving the property market’s growth in recent years have not changed, for example a younger population leading to new household formation, a rising middle-income group, the supplydemand gap and stable employment. “Initiatives in Budget 2014 may remove the speculative element, but not the fundamentals,” he said. Leong noted that the lending environment was still conducive, with low interest rates and banks offering BLR minus 2.4%, from BLR minus 2.1%2.2% a year ago. Mah Sing had stopped offering the DIBS for most of its launches since the start of the year. None of its projects in Iskandar Malaysia feature the DIBS.

More Meaures to Curb Speculation Puts Pressure on Property price has already been practised by some banks, but what the latest ruling by the central bank does is now make it a standard procedure for all banks. “BNM effectively wants to deter the practice of giving 100% housing loans,” he said.

New Bank Negara ruling likely to impact housing loan growth A 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, Alliance Research Sdn Bhd said. Its analyst Cheah King Yoong said a BNM circular sent out to banks last Friday announced not only the expected ban on the developers interest bearing scheme (DIBS) and the interest capitalisation 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. Banks can no longer provide financing for projects approved by authorities with DIBS on or after Nov 15, 2013 effective immediately. While those projects approved before Nov 15 have until Jan 1, 2014 before the prohibition is effected. “We currently project 2014 loan growth target of 9%, supported by stronger growth of business loans stemming from the ongoing implementation of Entry Point Projects under the government’s Economic Transformation Plan, which is expected to fill up the vacuum left by the moderation in household loans.

However, in light of the more onerous property lending curb, we will be reviewing this target,” Cheah said in a note to clients. The research firm will review its “overweight” recommendation on the banking sector post third quarter 2013 reporting season, after it gets further clarity from management of banking groups under its coverage with regards to the impact of such policies on the banks’ growth prospects. “We believe that the latest policies implemented by BNM illustrate the sheer determination of the authorities to contain the growth of household debt. These measures, together with potential rate hikes by the central bank, fiscal tightening by the federal government and subsidy rationalisation programme next year, could further drag loan growth momentum in the retail segments, temporarily lead to rising credit cost, and dampen investor sentiments on the banking sector,” Cheah said. The circular represents the third attempt by the authorities to contain the growth in household debt since the second half of this year. Household debt to gross domestic product currently stands at 83%, one of the highest in the region. A housing loan agent who declined to be named told SunBiz yesterday that determining LTV based on net selling

In the past, banks rely on the sale and purchase value (SPA) in calculating the LTV. Post Budget 2014 however, developers are compelled to disclose the all-in price of properties. As such, banks will determine the LTV using this all-in price. The new circular also places the onus on banks to have in place sound policies and procedures to ensure valuation of property is reasonable. “Although the guidelines on prohibition of DIBS is not a surprise following its announcement during Budget 2014, the new rule on “net selling price “ basis for determining LTV ratio is a negative surprise to us. “While it is 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,” Cheah said in the note. He added that the measure by BNM effectively negates developers’ effort to provide other forms of incentives to replace DIBS. Cheah opines that it also neutralises the widespread practice by developers of providing rebates to lower upfront cash outlay by property buyers.

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

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

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

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

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