Property Hunter Magazine by Property Hunter Magazine

INNOVATIVE REAL ESTATE

Implementation of Goods & Services Tax (GST) in April 2015 marks the birth of a new tax regime in Malaysia

Contributor

Malaysia’s Household Debt Is Going Up,Up and

ISSUE

65 RM9.50 (inc.GST)

HOT TOPIC

RENT FIRST, THEN BUY Coffee Talk

Does it work in Malaysia?

Once You Rent High, You May Never Buy

Busting 5 GST Myths Imago Mall Makes A Fashionable Entry Into Kota Kinabalu’s Retail Market KK Times Square Bridge Unlocks Connectivity to Kota Kinabalu Metropolis

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Photography Contributors

Cover Story • Are You GST Registered? • Busting 5 GST Myths

Feature Property Event Harbour City To Attract More Sabah Investors To Melaka

Sabah Property News

Feature Property Event Imago Mall Makes A Fashionable Entry Into Kota Kinabalu’s Retail Market

Feature Property Event Year Of The Goat Celebrations Roundup

Hot Topic Rent First, Then Buy - Does It Work In Malaysia?

Sarawak Property News

Editorial Enquiries

Contributor: Dr. Daniele Gambero Innovative Real Estate

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West Malaysia Property News

Contributor: Chris Tan Freehold Vs Leasehold In Peninsular Malaysia

Feature Construction Progress • Sutera Avenue Is Shaping Up • Jesselton Point Hotel

International Property News

Contributor: Michael Yeoh Malaysia’s Household Debt Is Going Up, Up And Up

Banking and Investment News

Coffee Talk: kopiandproperty.com • Once You Rent High, You May Never Buy • You Make It Faster, I Make It Cheaper • GST Vs The Supply And Demand?

Property Lisiting

Contributing Writers Ahyat Ishak Charles Tan Chris Tan Dr. Daniele Gambero Enoch Khoo Ishmael Ho Michael Yeoh Richard Oon

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Feature Property Event KK Times Square Bridge Unlocks Connectivity to Kota Kinabalu Metropolis

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ISSUE 65

All 4 One Productions Louis Pang Studio

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

Available monthly at leading bookstores and newsstands

CONTENT

Sneak Peek of May 2015 Issue HOT TOPIC Property Development Line-Up Featuring developers participating in the PH Kuching/ Miri Expo in May 2015. Free editorial in feature article will be offered to Property Hunter magazine advertisers.

The GST Factor- Life After GST: News and Views on Its Impact So Far The much anticipated - and much debated GST - has gone into effect. Our expert panel of contributors share their thought on its impact on the property industry so far.

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Cover Story | Are You GST Registered?

PRE AND POST GST IMPLEMENTATION Pre GST

ARE YOU REGISTERED?

GST IMPACT ON PROPERTY SECTOR, WHAT TO EXPECT?

GST implementation has raised so much speculation, which draws many property experts and analysts to put together information as to how GST would impact the property sector. While most of the questions are best left unanswered until the result from the postimplementation of GST speaks by itself, let’s have a look at what should be expected to happen in the industry through the perspective of property buyers, investors and tenants.

PROPERTY PRICES Residential Much to everyone’s relief, residential properties are not subjected to GST, including residential homes that are built on a commercial land title. However, house prices are still expected to increase. It is due to the construction cost of new properties that is definite to go up. Developers are said to be unable to claim the input tax incurred, thus, the cost would be passed on to the buyers. The price hike is initially speculated to be from 0.5 to 2.2 percent by various experts such as customs department and property analysts. However, the Real Estate and Housing Developers’ Association Malaysia (REHDA) recently reported that they expect the property prices to show a 2.6 percent increase after GST kicks in.

The GST-cost element may not have been factored in yet by some developers in the projects which had been launched during the preimplementation era.

Companies must fulfill all these 4 criteria in order to impose GST on products and services

Post GST

During the transition period, progress payment on the purchase of commercial building upon April 1, 2015 will be subjected to GST.

PROPERTY FINANCING

GST will not be financed by property loan. In easy words, buyer will have to cough up additional cash for GST payment. In which, the effective cash outlay will be: % of downpayment + GST on total value of property

Commercial Commercial property buyer would have an additional 6 percent GST to reckon with, if they are buying from GST-registered supplier. If buyer is also GST-registered, the tax is claimable from Royal Malaysian Custom (RMC). Otherwise, the GST incurred would be considered as the cost of their business investment.

Taxable Supply Taxable Person For The Purpose Of Business In Malaysia

Secondary Property On secondary properties, there will be no GST implication in whether buying or selling a residential property from, or to the secondary market as it is an exempt supply. Nonetheless, as for commercial properties, it would depend on whether the buyer is purchasing the property from GST-registered person, or, when they sell, they are likewise, GST-registered or not.

Therefore, the BIG question to ask your vendor when paying for GST is “Are you GST registered?”

However, according to analyst, this additional cash requirement would encourage the non GST-registered buyers to opt buying from non GST-registered supplier, as to avoid the additional cash payment for the GST charges. As a consequence, it would actually cause a detriment to GST-registered supplier.

On the post-implementation, when the subsidy rationalization measures combined with inflationary pressures, GST will cause property price to increase.

PROPERTY EXPENSES

GST charges on property expenses such as legal fees (SPA/Loan/Tenancy), renovation, repair, furnishing, professional service such architect or valuer, agents’ commission will be imposed only if the service provider is a GST-registered party. Nonetheless, do expect GST to be charged for insurance and advertisement expenses, but remember, there should be no GST charge for bank interest and maintenance charge for stratified residential.

COMMERCIAL PROPERTY RENTAL/ RENTAL DEPOSIT

GST does apply on commercial property rental, if the landlords are GTS-registered. However, the tenants are liable to claim the 6 percent GST from RMC if they are also GST-registered. If they are non GST-registered, the tax should be absorbed as their cost of rental expense. GST would not apply on commercial property leased by non GST-registered landlord, although the tenants are GST-registered. On the other hand, residential properties if used for commercial purpose, is subjected to GST charges. Prospect tenants should also expect GST to be included in the rental deposit, as the landlord might have to engage with GST-registered provider for the retail upkeep at the end of the tenancy.

Nonetheless, it is important to know that, house price is also determined from other factors, such as the equilibrium of property demand and supply.

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Cover Story | Are You GST Registered?

BUY NOW OR WAIT? “GST is here to stay. Homebuyers or investors shall adopt a “BUY TO WAIT” strategy instead of “WAIT TO BUY” as it is almost certain that the prices of property will go up due to increase in operation, construction and material cost. After all, property investment is a long term game, not meant for short term speculation ”

BUSTING

GST Implementation

MYTHS

Chris Tan, the Founder and Managing Partner of Chur Associates has debunked 5 most popular myths about GST on property sector, as to assist us to be better prepared and armed with GST knowledge, thus, advantages can be taken from the knowledge in order to maximize the returns on our property investment in the future.

from left: Enoch Khoo, Chris Tan & Richard Oon Photo credit: Dr Joseph Ngui

Myth #1

For more information on GST implication on property and tax issues, you may refer to the following publications

INVOICE GST Reg no:...

GST Implementation

Encik Cerdik is a non-registered kitchenware merchant. He was informed that kitchenware is a taxable supply thus he is liable to charge GST on his products to his customer upon April 1 2015. Is that true?

Myth busted: FALSE! Encik Cerdik has to be GST-registered in order to charge GST. Upon being GST-registered, Encik Cerdik will be furnished with a GST identification number and the same has to be inserted in his tax invoice.

Info credit: Prodigy Master Series (GST Impact on Your Property Investment) Presentation, Speaker: Richard Oon & Chris Tan

Myth #2

On April 1, 2015, Mr. Pandai saw a billboard advertisement on SOVO development selling from RM500 000; since SOVO is a commercial property, he took RM1500 out his calculator to calculate the (Inclusive of 6% GST) minimum selling price inclusive GST will be RM530 000. Is that true?

SALE

GST Implementation

Myth busted: FALSE! Pursuant to Section 9 (5) Goods and Service Tax Act 2014, DISPLAY PRICES ARE GST INCLUSIVE, unless the supplier obtains exemption from the Directorate-General of Royal Malaysian Customs. Keep this in mind; you will only have to pay the amount you see.

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Myth #3

Mrs. Pintar intends to purchase a retail shop with a price tag of RM1,060,000 (price is inclusive of GST) and applied for a loan facility from Bank Easy finance. As she is obtaining 80 percent of finance margin, she will only need to pay the vendor RM212 000. Is that true? Myth busted: FALSE! The financier or bank will only offer loan facility based on the net purchase price (GST exclusive) of the standard rated property. GST will not be financed by the bank. Thus, Mrs. Pintar’s loan facility will be RM800 000 (excluding GST) and she is required to pay RM260,000 to the vendor. (which is 20% of the value of property excluding GST + 6% GST being imposed by the seller)

Myth #5

Encik Cekap wishes to rent his retail to Cik Bijak. Encik Cekap has collected two and half months of securities deposit from the previous tenancy and wishes to collect the same from Cik Bijak. Is that true? Myth busted: FALSE! At the end of the tenancy, Encik Cekap may need to incur GST to engage repair or refurbish or replacement service from GSTregistered provider. Thus, deposit that was sufficient previously may no longer be sufficient after implementation of GST.

Myth #4

Mr. Hebat wishes to sell one unit of SOHO worth RM650 000. He was informed that since his SOHO property is commercial and above the taxable turnover rate (RM500 000), he has to register for GST in order to sell and required to pay 6 percent GST to RMC. Is that true? Myth busted: FALSE! As listed in Royal Malaysian Custom’s Directorate-General, an individual who makes a supply of two commercial properties or commercial land not exceeding one acre would be treated as not carrying business even if the sale is more than RM500 000 in a 12-month period. Thus, Hebat does not have to register for GST and is not liable to charge GST when selling his SOHO unit.

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Feature Property Event | Harbour City

Harbour City To Attract More Sabah Investors to Melaka

he recent exclusive showcase in Kota Kinabalu by the Hatten Group featuring its latest mega project, Harbour City, has helped familiarise Sabah investors to Melaka’s vast potential as a tourism and business destination of the future. The showcase was held from 7 – 9 March at the Magellan Sutera Harbour Resort. Cassandra Tio, head of marketing and sales of the Hatten Group, pointed out that Harbour City is just one of the products that are driving Melaka’s mission to position itself as the latest and hottest property investment hub in Malaysia. According to Tio, the similarity between Melaka and Kota Kinabalu which are both waterfront cities makes it easier for Sabahan to identify with the environment and feel more at ease investing in Melaka. Teoh however noted that Sabah investors are still a bit reserved and want to do more research on the project before committing themselves. “The main question they often ask themselves is “why invest in Melaka?” as there are more matured property markets in Peninsular Malaysia such as Kuala Lumpur and Johor Bahru, “she adds.

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Tio explained that Melaka is going through a development growth that started in 2008 when it was declared a UNESCO World Heritage, resulting in a tourism industry boom that continues to rank among the top revenue generator for the state today. The formation of Invest Melaka Berhad, a government initiative to encourage investment in the industrial and manufacturing sectors, began to show results soon after with billions of ringgit in local and foreign investment coming in to date. A clear indication of this success is the setup of international banking services such as Citibank to cater to the growing number of expatriate businesses and personnel in Melaka. Familiar names such as the Boon Siew Group that assembles Honda cars in Malaysia, Hard Rock Café, YTL and retail brands such as Uniglo and H&M entered the market after 2010, effectively raising Melaka’s profile as an emerging commercial and tourism hub in Malaysia. In 2012, Melaka was rated the number one fastest growing economy in the country in terms of gross development value (GDV) which rose from 4% the year before to 7%. This is a significant number as compared to other state where there was an increment of only 1% - 2%.

Tio is enthusiastic about the prospects of Melaka developing into a preferred investment destination as it is starting from a very basic level. “Unlike Penang or even Kota Kinabalu where there is a very defined central business district (CBD), Melaka is loosely made up of shoplots surrounding the central padang. Banks that opened up offices here would rent out the shoplots and not construct their own building like in Kota Kinabalu. It is still raw in Melaka in terms of a city and financial centre which doesn’t truly exist yet,” says Teoh. This gives Melaka the advantage of pulling in interest and investment from developers to engage themselves in executing the state’s development blueprint which focuses on finance, hospitality, hospitals and international schools. Melaka Gateway is a government initiative setup to spearhead the development and construction of these infrastructures. Its development site is located next to Harbour City on Pulau Melaka. “Medial tourism is a big draw in Melaka particularly among Indonesian and Singaporean tourists. The Singaporeans also find Melaka an ideal holiday destination during school and long breaks as they feel it has a safe environment. The

Chinese come here mainly for the heritage site and business opportunities,” says Teoh. On average, foreign tourists make up 60% of tourist arrivals in Melaka. Harbour City will play a crucial role in supporting the Melaka Gateway initiative which in itself will offer a theme park development, marina and jetty to cater to the expected increase of tourist arrivals in the next few years. Harbour City will be the only retail mall on Pulau Melaka and its hotel suites will greatly benefit from this and the two theme parks in the vicinity. “Property prices have gone up so capital appreciation is not as high as it used to be,” opines Tio about the current property market. “Investors who are used to enjoying huge capital appreciation rates now have to be content with a smaller percentage. Alternatively, they can look for new opportunities to improve their investment returns. “The entry level for a hotel unit in Harbour City is just over RM200,000 or about RM800 per sqft which is very reasonable. Sabah investors are

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Feature Property Event | Harbour City

quite savvy when it comes to tourism properties especially since they live in a waterfront city like Melaka. They can easily appreciate the value and attraction of a waterfront city to investors,” adds Tio. “Response from visitors during the showcase has been positive and we look forward to bringing Harbour City to other parts of Malaysia soon.” Harbour City is conceptualised as a selfsustaining, fully incorporated “city of amusement which infuses three vibrant elements – Retail, Theme Park and Hotel, to cater to every element of leisure, entertainment and relaxation. The leisure component is a 6-storeythemed shopping mall which is topped by five floors dedicated to a vast indoor and outdoor water theme park for absolute entertainment.

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Completing the project is three hotel blocks for premier relaxation – a thematic hotel, Hatten Resort Hotel and the International chain Hotel.

alone is expected to attract more than 1.5 million additional tourists annually to the island of Pulau Melaka.

Each shopping floor is designed to reflect the life on different oceanic levels rising from “The Trenches” (Lower Ground Floor) up to the “Coastal Layer” (Level 4). The mid-section of Harbour City consists of a 780-room “cruise ship” themed hotel. Each room is designed to look like a ship’s cabin complete with bunk beds and nautical-inspired interiors. With 14 suite layouts ranging in size from 365 sq. ft. to 1,267 sq. ft., the thematic hotel is an extension of the fun and adventure of the island setting.

Elevating the tourism viability of the Harbour City development is the two premium hotel towers - the 500-room Resort & Spa Hotel and the 250-room, International tower which will feature a hotel built and managed in collaboration with Hyatt Group of Hospitality. The entry of the international hotel will create a higher placing for all hospitality ventures in the vicinity while offering top world-class accommodation for guests.

The highlight feature of this development opens out onto a massive 500,000 sq. ft theme park podium which rises over five floors. This element

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SABAH PROPERTY NEWS

Quantity Surveyors Should Provide Professional Consultation To Cushion GST Impact

SABAH

PROPERTY NEWS

Sabah’s local government and housing minister Datuk Seri Hajiji Noor

uantity surveyors in Sabah should provide professional consultation and valuefor-money services to their clients to cushion the impact of the Goods and Services Tax (GST).

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

State local government and housing minister Datuk Seri Hajiji Noor said this included giving recommendations or even insisting on better materials to clients to improve the quality of buildings.

Delay In Project Approval Caused Higher Home Prices of Sabah Housing and Real Estate Developers Association (SHAREDA). He said that the prices of properties in Sabah could be easily reduced by 10 percent provided the state government expedites the development approval orders in the housing industry.

Datuk Francis Goh, President of SHAREDA

elay in project development approval is among the contributors to the notably high prices of properties in this state, according to Datuk Francis Goh, the President

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In his statement, Goh revealed that the developers usually have to wait two and a half years to get their development plans approved. The delay, of course is affecting the cost of their property developments. He said that, after purchasing a land, they will have to bear

unnecessary cost of about a million ringgit per month while waiting for the approval to kick start their project. Whereas, the ‘waiting’ cost is absorbed into their selling price.

The approval of development plans, if it can be shortened to between six and 12 months, would enable the developers to sell their properties 5 percent cheaper. The price also could be reduced by another 3 percent if Sabah Electricity Sdn Bhd (SESB) gives the

developers a waiver in the capital contribution. Meanwhile, another 2 percent could be deducted from relieve of overhead cost when the development plan is expedited, explained Goh on how the 10 percent price cut could be achieved. SHAREDA along with Pertubuhan Akitek Malaysia (PAM), Association of Consulting Engineers Malaysia (ACEM) and the Institution of Engineers Malaysia (IEM) have submitted a joint memorandum to the Ministry of Local Government and Housing to look into the matter urgently.

He said the professionals involved in the built-up environment or construction industry can also think of more environment-friendly materials so that consumers could reap the value-for-money benefits from their purchases. “If purchasers can have a better quality house with materials that last longer, this can off-set the marginal increase in the price,” he said when opening the 3rd Sabah International Surveyors Congress 2015 recently. Themed, ‘Beyond GST in the Property and Construction Industry’, the congress was organised by the Royal Institution of Surveyors Malaysia (RISM) Sabah

to coincide with the imminent implementation of GST on April 1. In another development, Hajiji said Sabah RISM has been requested to make another study to formulate a sustainable housing policy, as its ministry wanted to reexamine the policy to enable more affordable housing.

“It will be a more comprehensive study so that the government can implement a more efficient and effective housing policy looking after the needs of the people in Sabah,” he added. “The first research related to the causes of the rapid increase in property prices over the past few year was submitted last week and the ministry would study all findings before presentation to the state government, he said.

SHAREDA Forms Corporation To Address Affordable Housing Supply

ne of the three motions passed during the recent Sabah Housing and Real Estate Developers Association (SHAREDA) AGM was the call for members to subscribe shares in SHAREDA Berhad in order to garner a paid up capital of RM30 million. This motion was unanimously agreed on and supported by SHAREDA members to act as a vehicle to support the Sabah government’s call to build more affordable housing projects. Once all the subscription shares have been obtained, SHAREDA will be ready to invest in three projects in Penampang where it is difficult to find an affordable home below RM250,000. According to Goh, if all the projects are successfully launched, it will supply an additional 2,500 units of affordable homes to meet the needs of the community. The selection of Penampang for the first projects by SHAREDA Berhad can be seen as a response to buyers’ grouses that affordable housing projects are often located far away from the city. The suburban area of Penampang is within convenient distance to the city centre and focusing its affordable housing projects here is an indication

of SHAREDA’s sincerity towards helping the government in achieving its housing objective. “We will focus only on building affordable homes and not luxurious homes or shops,” assures Goh. “If any SHAREDA member is not able to be involved in building affordable homes due to the small profit margin, they can still contribute their share towards the corporation to help the corporation achieve its goal.” Goh reiterated his tough stand on dealing with SESB on the current capital contribution issue as the high electricity rates charged by SESB is making it difficult for developers in Sabah to build homes for those in the lower income group. Affordable housing projects are not exempted from the high SESB rates which is a huge factor in the higher prices in Sabah compared to Peninsular Malaysia. “Affordable apartments in Peninsular Malaysia are charged RM250 per unit by TNB. But in Sabah, SESB charges from RM3,500 to RM8,500 per unit depending on project location. This means that buyers will eventually have to absorb the cost,” says Goh.

From left; Ben Kong Chung Vui (Vice-President of SHAREDA), Chew Sang Hai (Deputy President of SHAREDA, Datuk Francis Goh (President of SHAREDA), Dato’ Ir. John Chee (Vice-President of SHAREDA)

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Feature Property Event | Imago Mall

IMAGO MALL Makes A Fashionable Entry Into Kota Kinabalu’s Retail Market

mago Mall officially opened its doors on 28 March to the delight and excited anticipation of Kota Kinabalu’s residents and visitors, emerging as the epitome of an all-in-one world-class shopping in the city. The mall has more than 300 retail outlets sprawled over an impressive 800,000 square feet of podium retail spacethat is tastefully and luxuriously furnished with high style reminiscent of exclusive global shopping destinations. Nestled in the heart of KK Times Square, the new central business district of Kota Kinabalu, Imago Mall is the one and only non-strata fully-leased shopping mall in the city. It also boasts an alfresco street walk populated by specialty cafes, bars and

restaurants overlooking the scenic South China Sea, dotted with islands silhouetted by gorgeous sunsets. This lends to an unmistakably sophisticated ambience and setting the unique stage for a shoppers’ paradise which marries the natural ecobeauty of Kota Kinabalu with its vibrant lifestyle.

2 1

The opening of Imago Mall was graced by the presence of the Deputy Chief Minister of Sabah, Yang Berhormat Datuk Raymond Tan Shu Kiah. In his speech, he said, “Sabah is facing rapid economic development with an expected 4.5 to 5% growth in 2015, setting the stage for Kota Kinabalu as an economic powerhouse and this is seen particularly within the retail market. The retail market in Kota Kinabalu is currently ranked

1. 2. 3.

at third in Malaysia after Klang Valley and Penang, making its mark as an increasingly popular hotspot for retail. This strong retail environment is a result of increasing household income combined with a booming tourism sector in Kota Kinabalu. Retail trade connects communities and cities across the globe, as evident through Imago Mall bringing in some 33 international brands into Kota Kinabalu for the first time.” “We envision Imago Mall to be so much more than just a place to indulge in retail therapy, be entertained and to dine; but rather a focal point to connect people and build a community moving up the lifecycle chain of experience and elegance. Imago Mall is a space for inspired living, interaction and cultivation of relationships and refinement, offering fulfillment of whatever your soul craves, hence the tagline we have adopted for the mall,” said Yang BerbahagiaDato’ Mustapha Buang, Group Managing Director of Asian Pac Holdings Berhad, at the opening of Imago Mall.

Aerial View

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Dato’ Mustapha continued to explain the tagline for Imago Mall, “Luxury means different things to different people. Luxury could be spending quality time with family and friends,

Boulevard Block A & Block B Block C

savouring an indulgent meal whilst taking in the breathtaking sunsets of a beautiful coastline. Luxury might be pampering yourself or a loved with that new trinket, thrilling entertainment or deep relaxation after the hustle and bustle of the day. Luxury may be taking home an extravagant keepsake souvenir to remind you of a dream holiday come true. Or perhaps luxury is rewarding yourself with that new outfit or gadget for reaching your aspirations and goals. Whatever your definition of luxury, Imago Mall fulfils it by catering to your every desire.” Imago Mall offers convenience, fashion, food and beverages, lifestyle and entertainment. Mercato on the Basement Level will feature retail space that integrates essential daily needs, while Couture on the Ground Floor will satisfy the passion for fashion. On the First Floor, Fashionista will merge high street fashion with chic, and the Playground on the Second Floor will be the play area for the young and the young at heart. And finally, Aramaiti on the Alfresco will tantalize the taste buds of any connoisseur. Highly secured parking areas at various levels offer some 2,500 dedicated shopper parking spaces to allow multi-point shopper inflow.

Imago Mall will cater to the residents of the lavish The Loft Residences and senior white-collar executives from Signature Office, highly successful developments within the KK Times Square. Going the extra mile to ensure connectivity and accessibility, Asian Pac has also built the new 6-lane KK Times Square Bridge across Sungai Sembulan that links the mall directly to the city centre. Given its proximity to Shangri-La Tanjung Aru Resorts and Spa, Sutera Harbour Magellan, Sutera Harbour Pacific and other hotels, it is positioned to benefit from a large catchment of tourists and business travellers. Located at one of the most sought-after pieces of prime retail real estate, Imago Mall has been professionally designed to be market-driven, with an exciting trade mix and rich tenant composition to cater to the needs of the most discerning shopper. The 4-storey mall will be professionally managed to allow complete control over the tenancy mix, facilities and amenities of the Mall. Its unique proposition as a world-class mall has duly attracted the attention of world-class brands, some of which are being introduced for the first time in Kota Kinabalu and in Sabah.

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Feature Property Event | KK Times Square Bridge

Bridge is poised to be a focal point for commute, recreation and tourism given the cityscape and coastline views it offers. Datuk Abidin elaborated in his speech that the government is investing heavily into improving mobility and travel experiences in Kota Kinabalu with the implementation of the Bus Rapid Transit and various bus terminal and LRT/Monorail projects. He said,” We are in the midst of implementing a one-way traffic system in some parts of the city under the Kota Kinabalu CBD Traffic Management Plan, as part of our efforts to improve the traffic flow and transport system in the city. This KK Times Square Link Bridge is also incorporated in our Kota Kinabalu CBD Traffic Management Plan.”

KK TIMES SQUARE BRIDGE

Unlocks Connectivity to Kota Kinabalu Metropolis

he KK Times Square Bridge was officially opened on 20 March by Mayor Datuk Abidin Madingkir, signalling greater connectivity in the Kota Kinabalu metropolitan area and benefitting hundreds of thousands of city dwellers who will enjoy increased accessibility from the city centre and the much-touted new central business district of Kota Kinabalu. The 6-lane Bridge was built by Asian Pac Holdings Berhad with the cooperation of Unit Kerjasama Awam Swasta (UKAS) from the Prime Minister’s Office, to improve traffic moving through the area and elevate connectivity and livability in Kota Kinabalu. Construction cost for the bridge and

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access roads to KK Times Square was quoted at RM31 million. In his officiating speech, Datuk Abidin said, “The pursuit of sustainable and liveable communities and cities thrives on the involvement of the community in its design. This is why the KK Times Square Bridge is a significant investment which will go a long way in alleviating traffic in the city and towards building cohesive communities. It is a representation of the importance of a shared vision and public-private partnerships to address the pressing question of a sustainable and liveable city. Therefore, Asian Pac’s forefront role in being one of the stakeholders and strategic partners in improving

Kota Kinabalu’s infrastructure is commendable to enhance accessibility into and within the connecting cities.” The KK Times Square Bridge is designed with a three-lane dual carriageway skewed at 18 degrees, spanning 65 metres over the scenic Sungai Sembulan. It will directly link the KK Times Square development with Jalan Coastal to join Jalan Tun Fuad Stephens towards the northern part of the city, as well as Jalan Kemajuan via the existing roundabout. It features a pedestrian walkway and bicycle track, which is a part of the Tanjung Aru to Universiti Malaysia Sabah (UMS) Cycleway Project. Given its design and location, the KK Times Square

“The one-way traffic implementation involves restructuring of all road reserves along Jalan Tun Fuad Stephens, starting from the roundabout at Wawasan Plaza until Wisma Merdeka at Jalan Tun Razak. The one-way traffic system will also include connecting roads at Api-Api Centre, Kg. Air and Sinsuran Complex. The restructuring of the one-way traffic system will involve providing a special lane or route for public transport, and conducive linked pedestrian walkways throughout the city. Once implemented, this will greatly reduce traffic congestion in the city. The project is estimated to cost RM120 million and applications for funds to the State Government and Federal Government have been made,” adds Datuk Abidin.

Parcel 2 (Tanjung Aru and Sembulan), Parcel 3 (Central Business District) and Parcel 4 (Tun Mustapha Building/ UMS). It is one of three tourism projects identified and implemented under the Sabah Development Corridor (SDC) programme. Components of the project include a bicycle shared path, bridges, decking, covered bicycle parking, LED lighting, children’s playground and others. In his welcoming remarks, Yang Berbahagia Dato’ Mustapha bin Buang, Group Managing Director of Asian Pac Holdings Berhad said,” Asian Pac is committed to enhance the lives of the citizens of Kota Kinabalu as a city of the future; yet we also know that for a city to be liveable, it begins with the connectivity and accessibility between people and places. The KK Times Square Bridge was always an integral part of our master plan, not only to provide connectivity and accessibility to the people who live, work, play and will soon shop here at Imago Mall, but as a part of our deep commitment towards our role in elevating the development of Greater Kota Kinabalu, and connecting people and places in a city of the future. This only serves to underscore the importance of what we are doing to support the infrastructure and economic development in the city by helping create a thriving, connected city.” Datuk Abidin later led a convoy across KK Times Square Bridge to officially declare its opening.

The completion of the link bridge is also seen as a complement to the cycling track and pedestrian walkway projects undertaken by City Hall. It will be part of the route stretching 5.3km from Tanjung Aru to Sembulan and Wawasan Plaza. The pedestrian walkway and cycling track project costing some RM38 million is divided into four phases namely Parcel 1 (Port and Likas Bay),

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Feature Property Events | Chinese New Year Event

Wah Mie Thanks Customers For Continued Support

PacifiCity Shares Progress Update During Chinese New Year Event

acifiCity was praised by Datuk Raymond Tan, Deputy Chief Minister cum Minister of Industrial Development for its concept of “A city within the City” by bringing together the convenience of integrated workplaces, hotels, residences, restaurants and retail outlets. Datuk Raymond was guest of honour at the PacifiCity Lunar New Year Open House held on 7 March to celebrate the auspicious occasion and to get a firsthand view of the on-going progress of the integrated development project. He said that the bold new vision set out by the team behind PacifiCity in Likas when it was relaunched in 2012 would help decongest the city and that more decentralization of inner city commercial units and residential developments would be required to resolve congestion issues. PacifiCity’s super prime location with multiple entrance and exit points, easy access, ample parking, and rich catchment areas make the development a logical choice for the multinational oil and gas corporations that will soon flood into Kota Kinabalu together with a host of other companies providing them support services.

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The development boasts of Grade A offices with floor plates up to 30,000 sqft which puts it in a good position to attract many of the 20 plus large multinationals which will be moving to Kota Kinabalu in the next 3 years. Jeff Lu, general manager of sales and marketing for PacifiCity said, “Being able to live, work, play, eat and learn in a single commercial hub spread over 25 acres makes for efficient and stress free living and work. The development will house Sabah’s only IMAX cinema with 8 cineplex screens, a large medical cum wellness centre, two hotels, small office suites, two food courts and over 30 food outlets.” “We will be bringing in many new restaurants from KL and Singapore to allow Sabah to experience exciting new cuisines and to upgrade the Kota Kinabalu food scene as we want to establish PacifiCity as the leading mall for F&B and entertainment,” adds Lu. Lu also said that because of the structural obstacle confronting Kota Kinabalu, being constrained by the sea on one side and the hill range on the other, no matter how much is invested by the city in infrastructure and public transport, traffic congestion and car parking

issues would continue to plague the city. He reemphasized the point make by Datuk Raymond that the most effective solution would be the establishment of more suburban commercial and residential hubs like PacifiCity as a means of decentralizing and traffic dispersal. PacifiCity officials conducted a site tour for their distinguished guests to see firsthand the construction progress and to learn more about the key shopping mall tenants that would be located in the mall. Jonathan Wheeler, who is the managing director of Pacific Sanctuary Holdings Sdn Bhd, developers of PacifiCity, said that they were very excited to be involved in a project that will play a large role in developing Kota Kinabalu as a business and lifestyle destination. “Together with the Sabah Trade Centre and Wisma Perindustrian across the road from us, as well as the future Sabah International Convention Centre just around the headland, Likas is now becoming known as the business centre of Kota Kinabalu and PacifiCity will constitute the very heart of it.”

here was much to celebrate at the Chinese New Year event organized by Wah Mie for invited guests and buyers of Taman Rimba Phase 1 & 2. It was announced during the casual gettogether held at the company’s office premises in Asia City that Taman Rimba Phase 1 & 2 has been completed three months ahead of schedule and OC has been successfully obtained. Sale for the third and final phase of Taman Rimba called Imperial is ongoing and has so far achieved more than 50% in sales.

management and staff of the company. This has made the Chinese New Year celebration hosted by Wah Mie this year even more meaningful and has built a stronger bond of trust and support between Wah Mie and its customers.

A management representative of Wah Mie expressed his thanks for the trust placed in them by their customers to deliver on the project. Completing a project ahead of time is a challenging task and to accomplish it requires a lot of dedication and commitment by the

The highlight of the day was a rousing lion dance performance with daring acrobatic displays. As this year is the Year of the Goat, there was even a ‘goat’ performing among the lions and dragons for a truly entertaining show enjoyed by all.

Guests toured the sales gallery to update themselves on the latest offerings by the developer and mingled with other guests and staff. This friendly atmosphere is a signature of Wah Mie’s attention to cordial relationships that have built up a base of loyal customers over the years.

Chang Cheng Group Shares Chinese New Year Joy At Open House

t has been a busy year for local developer Chang Cheng Group with several on-going and upcoming projects that have established it as a mover in the local property development industry. The successful launches of Puncak Menggatal along Jalan Tuaran, Eco Park at Bukit Sepanggar and C-Park in Penampang has set the standard for modern, functional and environmentally-friendly designs.

delivery of what buyers and investors are looking for in the property market. The Year of the Goat was welcomed in grand style by Chang Cheng Group at its KK Times Square Sales Gallery. Guests at the open house were entertained with a lively lion and dragon dance performance, lots of food and a chance to review Chang Cheng Group’s on-going projects.

From affordable space-saving concepts to ultra-chic structures, Chang Cheng Group has been consistent in its

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Feature Property Events | Chinese New Year Event

Launch of Benoni Commercial Centre Pays Tribute to Early Settlers

he launch of Benoni Commercial Centre held during the Chinese New Year celebration was a rewarding and meaningful event for Datuk Susan Wong, managing director of WSG. She recounted her close relationship with Papar with memories of her early childhood and Kapitan Chan Chee On who helped her family through the bad times of World War II. Kapitan Chan was the biggest landowner of that time and is the former land owner where Benoni Commercial Centre stands today. It was a poignant moment for Datuk Susan’s mother, Datin Seri Panglima Wong Chen Si Mui to be present to officiate at the launching ceremony and to pay tribute to the man and his successors for making the project a reality. Benoni Commercial Centre has a total development area of 45 acres which consists of shoplots, a residential apartment block, a 10-storey hotel, a 3-storey shopping mall, a college, petrol station and fast food drive-thru. Of the 129 units of 2-storey shoplots, 65 units have already been completed in Phase

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1 and sold out since last year. Phase 2 with the remaining 64 units will now be on sale. The final phase which consists of 56 units of 3-storey shoplots will be launched next year. Benoni Residence, a 13-storey residential apartment block with 208 units priced between RM250,000 and RM300,000 is scheduled to be launched in July 2015. Benoni Commercial Centre is located in a very strategic area with easy access to major highways and link roads including the new Pan Borneo Highway, Papar Spur Road, Papar-Keningau and Papar-Beaufort roads. Its connectivity to major cities and towns on the west coast of Sabah all the way down to Labuan, Brunei and Sarawak makes it a major transit hub for the business and tourism activities. A RM50,000 discount was offered to buyers who booked a 2-storey shoplot unit during the launch while donations of RM20,000 and RM10,000 were given to Papar Middle School and Thin Nam Tong Temple respectively.

S P Setia Reveals New Dual Key SOVO Concept

P Setia ushered in the Year of the Goat with a first-hand look at its new dual key Small Office Versatile Office (SOVO) exchange concept for Aeropod. The hybrid show unit was launched for public viewing on February 28 at S P Setia’s KK Times Square premises in conjunction with the Chinese New Year celebration. The event also saw the launch of its Block K2 after the success of its Block K1 with early bird incentives. The corner units which are 964 sq ft in size are perfect for today’s savvy professionals looking to set up their own business. In this age of global connectivity, a start-up company does not need to be huge but just enough for work to be done in a conducive, peaceful and secure environment. The SOVO units will be installed with top fibre optic internet speed connectivity to ensure that business can be taken care of quickly and you can enjoy the leisure and recreational activities offered at Aeropod.

Three other types of SOVO units are available in 330 sq ft, 438 sq ft and 1,202 sq ft (dual key option possible) in floor size and the whole project has more than 2,500 vehicle parking lots. Parents will also find these SOVOs a good investment for their children as a place for them to live and work once they have graduated. With monthly payments from RM1, 800 for 25 years, the rental yield is expected to be good or at least better than the old shop house offices. The dual key concept entails having two parcels of a single unit with two doors. One parcel could be rented out while the other utilized for business. When more space is needed for expansion, the owner can then use the other parcel. A linked Garden Deck is provided at Level 5 for relaxation with a gym on Level 7. If you need more spacious meeting rooms for business, these are available for rent on Level 8.

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Feature Property Events

Sri Kahazanah Residences Offers Chance To Own Dream Home

iving in the suburbs is now getting more fashionable with stylish housing developments giving home buyers more choice to enjoy a modern lifestyle wherever they are.

Sri Khazanah Residence which is being developed by Hasrat Realiti Sdn Bhd was officially launched at KK Times Square on 6 March. The houses with a built up area of 1,753 sqft are divided into four phases – 1A, 1B, 2A and 2B – with the exclusive marketing agent being Metro Homes Sdn Bhd. According to Metro Homes Sdn Bhd Director Richard Tokuzip, the project which has already started work will consist of 276 units of double-storey terrace homes which are expected to be completed in two years with the handing over expected to be in the first quarter of 2017.

two cars and the backyard area is 15ft. The units are priced from RM556, 800 upwards. Bumiputra lots are also eligible at 5 per cent discount.” Sri Khazanah Residences is a guarded community with security features that include parameter fencing and also a guard house. Located in the Petagas - Lok Kawi area, Sri Khazanah Residences is conveniently connected to the soon to be upgraded Pan Borneo Highway. The Petagas - Lok Kawi carriageway will also be upgraded to a triple carriageway to provide more convenience to residents in the area. With the excitement of Chinese New Year still in the air, the grand launching of Sri Khazanah Residences was made merrier with lion dances and the tossing of lou sang for good luck and prosperity.

“With the launch of Phase 1A of the project comprising 71 units, around 30 per cent of the units have already been snapped up. “The units feature four rooms and three bathroom units with three spacious bedrooms. All the bedrooms can fit a queen sized bed. The car porch is also longer at 25ft which can fit more than

Jesselton Waterfront Holdings Ushers In The Lunar New Year With Renewed Energy

he Year of the Goat signaled renewed energy for Jesselton Waterfront Holdings Sdn Bhd as it continues to move forward with the construction of its iconic 28-storey Jesselton Residences project in the CBD. The appointment of a new contractor, France-based construction giant Vinci in December last year to expedite completion of the project,has injected a new confidence to achieve the desired results which can clearly be seen with the accelerated progress of the project. Jesselton Waterfront Holdings Sdn Bhd hosted a Chinese New celebration at its sales gallery premises to usher in good luck and prosperity for the year. Invited guests were treated to

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traditional lion and dragon dances punctuated with a healthy dose of acrobatic displays to wow the crowd. Datuk David Chu, executive chairman of Jesselton Waterfront Holdings Sdn Bhd was present to meet and greet the attendees who also had the opportunity to view the project and get the latest updates on its progress. Key officials from Vinci were also there to take part in the celebrations. Jesselton Residences, located at the waterfront overlooking the South China Sea, offers 333 units of high end condominiums, and shops for retail, healthcare and boutiques. The project is due for completion in July 2016.

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SABAH PROPERTY NEWS

SESB to Mull Various Approaches For Better Services

abah Electricity Sdn Bhd (SESB) in its released statement said that the body will continue to review as well as to improve the connection charges together with the authorities as its financial condition improves. It will study various approaches and methodologies to increase the transparency and predictability of the charges together with the authorities to come to a win-win situation for all parties. It was in response to media reports recently in which Datuk Francis Goh, President of Sabah Housing and Real Estate Developers Association (SHAREDA) was quoted saying that the Capital Contribution Charges (CCC) was too costly and that the current method of calculating the CCC made the charges unpredictable for property developers. According to the statement, SESB is regulated by the authorities, where tariff and Consumer Connection Charge (CCC) are approved by the Energy Commission of Malaysia (ST) and the Energy, Green Technology and Water Ministry (KeTTHA). Ideally, for a well-structured utility company, the tariff level should give a return which is close to the Working Average Cost of Capital (WACC) in order for it to be able to finance the capital costs on its own.

However, as the tariff was not reviewed for over 25 years until July 2011, it was not the case for SESB. The government had again approved the tariff review in January 2014 but despite these two reviews, SESB is still far from being financially independent especially to support the capital costs. As so, at the end of Financial Year 2014, SESB’s return on assets (RoA) stands at 1.32 percent, as reported. The statement said that since the latest approved tariff increase in January 2014, the government has been supporting the operations of SESB in the form of fuel subsidy and gas price cap. This is the very reason why the government is still funding major electricity infrastructure development projects to the tune of RM2.3 billion for the next five years in the form of grants. The statement also clarified that the consumer contribution for connection of supply received by SESB for Financial Year 2014 amounted to RM72 million, which included ordinary consumers and not RM180 million as claimed to have been paid by SHAREDA members. It also said the charge for connecting 33kV supply to the Riverson project was only RM5.75 million, and not RM20 million as claimed.

Liew Backs SHAREDA On SESB Issue However, she said, things didn’t turn out as what was expected. The problem yet has become even worse over the years after the Federal Government handed over SESB to Tenaga Nasional.

Api Api assemblywoman, YB Christina Liew

pi Api assemblywoman, Christina Liew in her statement said that she isn’t surprised that the Sabah Housing and Real Estate Developers Association (SHAREDA) has offered to buy over the Sabah Electricity Sdn. Bhd. (SESB). The offer was initially based on the grounds that the latter keeps saying that the company is not generating any profit. Liew in her point of view said that the SHAREDA’s situation is understandable, the current tariffs are too high, yet power supply is not stable. In principle, Liew added that she agrees with SHAREDA taking over SESB if they can help solve the longstanding power woes in Sabah, as reported in Free Malaysia Today. Liew also recalled that unlike the Sarawak Government, it was the Sabah Government that handed over SESB to the Federal Government in the hope that the power woes in Sabah would be a thing of the past.

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Therefore, the logical thing to do is for Sabah Government to take back SESB in the same manner it was handed over to the Federal Government, according to Liew. She urged that at the same time, due diligence must be undertaken so that Sabah Government won’t be saddled with unnecasary debts incurred at SESB by Tenaga Nasional. Revisiting SHAREDA’s offer for SESB, Liew noted that the association has declared that its 180 members had paid the power utility company 180 million ringgit in capital contribution. She agreed that there’s merit and logic in the suggestion that SHAREDA can afford to repay the banks over a ten-year period for the acquisition of SESB. The ball, said Liew, can be in the Sabah Government’s court but only if SHAREDA approaches it officially on their proposed acquisition of SESB. The Sabah Government, sometime after the handover, took a 20 percent interest in SESB.

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SABAH PROPERTY NEWS

Ironfish Conducts Property Exhibitons And Seminars In KK And Tawau

ustralia’s leading property investment service company, Ironfish conducted several exhibitions and seminars on Australian properties in Kota Kinabalu and Tawau in March. Seulyn Wong, a licensed real estate agent and Ironfish Property Strategist who hails from Sabah said that Australian properties has undeniably strong appeal to international buyers. Seulyn herself has personally helped many Malaysians to invest in Australia. She also commented that Australia’s solid performance, high rental yield, efficient and transparent property management system are some of the factors drawing the increased number of international home purchasers.

Guest speaker Paul Rados, who is also a licensed property manager, spoke on the meticulous system on property management in Australia. Paul revealed that prospective tenants are thoroughly screened before properties are rented to them, adding that the property would be inspected periodically to ensure damage was identified immediately. Owners can also purchase landlord insurance to protect their interests in the investment property. The latest round of interest rate cuts and weaker Australian currency exchange have spurred a new wave of investors looking at Australia for investment properties. It is said that a Malaysian buyer can save about 150 000 ringgit in buying an half a

million Australian Dollar property based on the current exchange rate. Property investment is a costly decision. Views must be sought from qualified and professional sources. According to Seulyn, all Ironfish properties are vigorously analyzed before being selected and recommended to its clients. She explained that the steps are taken to reduce investors’ risks and maximize the potential gain.

SHAREDA Promises To Reduce Electricity Tariff By 15% With SESB Takeover

Designed by renowned architect Elenberg Fraser, Stirling Cross Apartment is in the heart of Stirling City structural plan and a transport-oriented development. Meanwhile, the Bohem Apartment lies within a desired location in the Adelaide CBD and is directly opposite to a park. It provides comprehensive amenities and convenience to residents.

The event featured two major projects promoted by Ironfish, namely Stirling Cross Apartment in Perth, and Bohem Apartment in Adelaide.

abah Electricity Sdn Bhd (SESB) has refuted claims by SHAREDA that it practices unfair imposition of rates for the provision of power supply and defaulting on its responsibility to provide adequate service to its consumers in Sabah. These rebuttals were dismissed by SHAREDA president Datuk Francis Goh as an excuse by SESB to mask its incompetent management of the utility company, and confirms SHAREDA’s offer to buy over the company to prevent Sabahans from being continually subjected to unreasonable electricity charges in the future. Goh took to task a statement made by SESB to the press that it is far from being financially dependent especially to support the capital costs and at the end of Financial Year 2014, its return on assets (RoA) stood at 1.32%. Goh explained that the RoA is a scale to

measure efficiency and with such a low percentage, it is prove that SESB is really an inefficient and incompetent company. “Since SESB was surrendered to TNB by the Sabah state government for RM1, TNB should be injecting whatever amount of money that is not sufficient as a capital investment. We can prove that TNB earned RM6.5 billion in 2014 and since TNB has given the promise to Sabahans that if SESB is running at a loss, it will be the one to inject capital into the company,” says Goh. Goh concurs that SESB was running at a loss in the past but even with the increase in power tariff last year, funds from the Federal Government amounting to RM2.3 billion and support from government in the form of fuel subsidy and gas price cap, SESB is still claiming that it is not financially independent. Goh however questioned if the

increase of 17% in tariff is a true reflection of what is actually being charged to consumers. SHAREDA challenged SESB to not hide behind the curtain of a sendirian berhad or private limited status and be transparent with its accounts. “At this moment, SESB is not a public company. It is called Sabah Electricity Sendirian Berhad. Why do they want to hide behind this curtain and give us the excuse that they are always running at a loss? It’s because they want the government to help them by allowing them to increase the tariff.”

government and SHAREDA will look for the RM2 billion to inject into the new ‘Sabah Electricity Berhad’. He added, “After I announced the buy over, a lot of people had approached me because they are ready to inject money in the investment. This is a monopoly business and we don’t see any reason why you cannot earn money. And if it is true that we manage to come in and inject the RM2 billion and TNB relinquishes their share and return it to the Sabah government, we will announce that the electricity tariff will be reduced by 15%. That is our call to SESB.”

Goh reiterated his challenge that if TNB is not willing to inject any capital into SESB, SHAREDA is willing to buy over SESB with RM2 billion in order to upgrade its services, delivery system and infrastructure. “TNB should return the 80% share in SESB for free to the state

Datuk Francis Goh, president of SHAREDA

Both Sabah State Government And SESB Urged To Respond To SHAREDA Claims

ikas Assemblyman Junz Wong has urged the State Government to make a stand on SHAREDA claims against SESB.

“What is taking so long for the Sabah State Government to respond to such an offer to buy over SESB?” Junz wondered. The SHAREDA OFFER was clear: 1) Injection of RM2 billion as fresh capital to upgrade SESB services and delivery structure; 2) Offer State Government 30% share instead of the current 20%; 3) Reduce electricity tariff by 15%.

Ironfish website

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Junz who is also DAP Sabah Organizing Secretary has urged the Sabah Government to demand TNB to return 80% of the shares back to the state at RM1.00 and let SHAREDA or other interested private sector entity to spearhead capital injection of RM2 billion to hold 70% stake of SESB,reduce electricity tariff by 15%, upgrade the infrastructures and improve the delivery services.

“SESB’s bad services yet charging Sabahans high electricity tariffs has been a perennial woe and Sabahans can’t wait any longer for this issue to be resolved,” says Junz. Junz also demanded SESB to show the public its financial accounts to respond to SHAREDA’s claim that 34 members alone have paid a staggering capital contribution of RM121 million contrary to SESB’s statement that it had only received RM72 million.

The last issue Junz wants SESB to respond to is the claim by SHAREDA that though the last approved tariff increment was 17%, it was actually about 30%. “Now who’s lying? SESB owes the Sabah State Government and all Sabahans clear explanations on these two claims,” Junz concluded.

Aerial view of Sabah Electricity Sdn Bhd building in Karamunsing, Kota Kinabalu

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SABAH PROPERTY NEWS

Gabungan AQRS Berhad Joint Venture With Suria Capital Group For Kota Kinabalu Seafront Development With GDV Of RM1.8 Billion All the projects earmarked for development at the waterfront area do not only pave the way for the regeneration of Kota Kinabalu port but they are also expected to contribute significantly to the tourism industry. It is noteworthy that these developments will certainly bring about economic development to the State of Sabah with an important spin-off employment creation for the local community. The Knight Frank Malaysia Real Estate Highlights 2H 2014 report launched on 22 January 2015 stated that the recent plunge in crude oil prices and lower trade surplus could undermine Malaysia’s economy and its property market.

alaysian constructionto-property developers Gabungan AQRS Berhad and Suria Capital Holdings Berhad have signed a deal for the purpose to develop a seven-acre plot of prime land forming part of a 23.25 acres piece of land held under the Title No. 017561689 situated in Tanjung Lipat, Kota Kinabalu, Sabah. This was announced in a joint release by both companies on 16 March. The site, One Jesselton Waterfront, with a net sale value of 1.8 billion ringgit , is 82 percent owned by Gabungan AQRS and the remainder by Suria. Suria Capital and GBG AQRS are desirous of developing the Development Land into a mixed development currently provisionally known as “One Jesselton Waterfront” comprising

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Tanjung Lipat, Kota Kinabalu, Sabah of residential units, retail units/ shopping mall, office towers, the Retail Mall, Suria Corporate Office, service suites, service apartments and car parks. Suria Capital and GBG AQRS have agreed to co-operate exclusively with each other to undertake the One Jesselton Waterfront Project as a joint venture whereby GBG AQRS shall be responsible for all matters relating to the Project whereas Suria Capital shall assist and facilitate in the implementation of the Project. The 7 acres of Development Land forms part of the 23.25 acres of land alienated to Suria Capital as part of the concession granted by the State Government of Sabah for the privatisation of seven major ports in Sabah in 2003. The land lease is for a period of 99 years, commencing 1 January 2010 until 31 December 2108. The 7 acres

of Development land is currently unencumbered. Given the strategic location of the Development Land being at the waterfront of Kota Kinabalu city centre area, One Jesselton Waterfront Project would be able to cater to the anticipated demand for commercial and residential properties within the prime area. Once completed, the One Jesselton Waterfront Project is expected to complement developments in the vicinity such as Sabah International Convention Centre, Kota Kinabalu Convention City and Jesselton Quay. Further, with the upcoming development of the proposed international cruise terminal, the entire waterfront area is poised to become an iconic landscape as the city’s premier tourism frontier, catering to both local and foreign patrons.

It suggested that buyers’ and investors’ sentiments have turned cautious, impacted by negative factors such as tightening of mortgage lending, anticipated hike in interest rates, uncertainties surrounding the impending implementation of goods and services tax (GST) come April 2015, and a slowdown in the oil and gas sector and its related industries. Nevertheless, the medium to long term outlook for Kota Kinabalu real estate is still optimistic. The development pace in Kota Kinabalu is expected to continue to uptrend as the state capital transforms itself into a modern coastal city. Knight Frank forecast investor sentiment to be strong across the Jesselton Quay and Kota Kinabalu Convention City development projects.

SHAREDA Dared SESB To Be Transparent bringing SESB to court if SHAREDA has exhausted all their avenues. Francis went on to describe the dilemmas that have been caused by SESB to Shareda members. “SESB give us the bills and we pay immediately but SESB is always late in delivering. Developers have to suffer due to their inconsistencies and non-transparency,” he said.

Centre; SHAREDA President, Datuk Francis Goh

abah Electricity Sdn Bhd (SESB) is dared to stop hiding behind its Sdn Bhd status.

The President of Sabah Housing and Real Estate Developers Association (SHAREDA), Datuk Francis Goh said that SESB should adopt the Berhad status so that any information concerning it, including their financial accounts, will be transparent and readily available to the public. In respond to SESB’s statement recently, Francis commented that SESB is hiding behind the Sdn Bhd status while saying they are running at a loss, so that they would be allowed by the government to hike up the tariff. He said that SESB has disclosed that in the financial year 2014, the SESB’s return on assets (RoA) stood at 1.32 percent, in which showed that SESB is an inefficient and incompetent company as RoA is a scale to measure efficiency. Francis on the other hand disagreed with SESB’s statement that the consumer contribution for connection of supply received by SESB for the financial year 2014 amounted to only 72 million ringgit. He said that the 180 million ringgit amount claimed by SHAREDA was not over claimed since the

capital contribution to SESB for development projects by only 34 out of its more than 180 members between 2012 and 2014 amounted to 121,311,164 ringgit. “But it is difficult to argue with SESB on the figure unless SESB turns into a Berhad,” he said, adding that Shareda was maintaining its stance and claims. “Why does SESB continue to charge us higher rate as compared to West Malaysia? Why there are two to three rates for Sabah even with the 1Malaysia concept?” he asked. Francis said that SHAREDA does not want to resort to negotiating with SESB and added that they are writing to the Energy, Green Technology and Water Minister, Datuk Seri Panglima Dr Maximus Ongkili. As SHAREDA is hoping to see him next month for a meeting, the association also urged him to not to be fooled by TNB (Tenaga Nasional Berhad) and SESB, and as chairman the ball is in his hand to help Sabahans. He further added that Shareda doesn’t want to play SESB’s game of calculations. “We don’t want their nontransparent calculations,” he said, adding that they do not mind

The delay by SESB has often resulted in the delays of developers getting the occupational certificate.

“Because of this, developers seldom deliver their units on time, we are asked to pay this and that but there is no penalty imposed on SESB. They charge you as they wish and it is difficult for developers to come up with an estimate (to the price of properties). This is one of the factors that has caused house prices (in Sabah) to go up,” he continued.

He added that once this happened, Sabahans will be able to see a 15 percent reduction in electricity tariff In the end, Francis urged SESB not to argue with SHAREDA. “Show us your competency. Give us the fixed rate,” he asked instead. During the press conference, Francis also showed members of the media a copy of the alleged SESB financial information from the Companies Commission of Malaysia for the financial year ending of 31 August 2013. In the summary of the financial information, the SESB noncurrent assets was 4,313,666,000 ringgit and their current assets was 1,311,387,000 ringgit while their non-current liabilities was 4,377,884,000 ringgit and current liabilities was 1,430,529,000 ringgit. Also provided in the financial information was SESB’s revenue for that period which was 1,427,693,000 ringgit and that its profit before and after tax was 13,861,000 ringgit.

He said that if SESB charged a standard rate, the housing rate in Sabah will go down because there will be no more uncertainty in the costs involved. “If adopted, everyone will be happy,” he said. He re-iterated his earlier offer to buy SESB but not for RM2 billion as was earlier offered. “After analysing, SESB is not worth RM2 million. But if TNB refuses to inject money into SESB then return SESB to the State Government. We will come in to look for RM2 billion to inject fresh capital to SESB to upgrade its service and delivery structure. Developers want to inject into SESB. We don’t see any reason why it cannot make money,” he said.

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SABAH PROPERTY NEWS

New Measures For Faster Development Plan Approval

he state government has a new standard process chart to be used by all local authorities when approving development plans in Sabah. Assistant Local Government and Housing Minister Datuk Zakaria Idris said the new measures is aimed at improving and shortening the time for considering and approving development plans in the state. He said based on this process chart, the time frame for considering and approving straightforward development plans, that is, development plans that complied with the zoning and standards, was between three to six months. “Complicated development plans which involve preparation of detailed studies such as Environmental Impact Assessment reports, shall require six to 12 months. However, this will further depend on the length of time needed for the preparation and approval of the reports,” he said in a statement. He said the Local Government and Housing Ministry was striving to shorten the process of approving required documents for physical developments by reducing red tape. Zakaria said this was adopted from resolutions concluded in a convention of local authorities held last year to be implemented this year. “During the local authorities’ convention, several resolutions were drawn up that look practical and could be considered for implementation for the benefit of development projects and the people’s well-being.

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He said one of them was to streamline the process of approving development plans, building plans and issuance of Occupational Certificates (OC) whereby a one-stop centre that would process and look into all the development projects applied by the developers would be activated. He added that this would be done before the documents were sent to the central board in the ministry to be approved. By adopting this approach, he hoped the Standard Operating Procedure (SOP) in all local authorities could cut down bureaucracy when handling the development plans, building plans and issuance of OCs.

open spaces, let alone landscaping. At the end of the day, does it give true customer satisfaction to the buyers and added value to the property market in Sabah?” he asked. Zakaria said nonetheless the government collectively always listened and responded to the requests of housing developers and had come a long way in regulating the industry without unnecessarily burdening the developers while also not compromising the interest of the end-users or the people.

He said the authority must also ensure that no property development should be allowed near environmentally sensitive areas such as water catchment areas and wetlands.

“Some developers are simply guided by the bottom line. It is easier to build rows and rows of shop houses, with no proper drainage, with no

“The real estate and housing development has a vital role in the development of Sabah. It is therefore very important that all stakeholders work together in pushing for progress in Sabah. As developers, please don’t allow yourself to be manipulated by parties whose primary interest is pushing for a political agenda,” he said.

Junz Wong Backs Move For Faster Plan Approval In Sabah submissions and application system to process housing development. He said the State Government has to be ready to implement e-submissions for housing development applications in order to achieve the 2020’s vision of making Malaysia as a high

“While real estate and property development is a vital economic activity, please remember that there are laws, rules and government regulations that must be adhered to. “Please also remember that previously when the government was lax on the approval of development plans, all kinds of poorly planned real estate and housing developments with equally poor form, function and aesthetic value sprouted throughout Sabah, creating ‘Rojak Towns’,” he said.

He said in addition, delays were caused by non-compliance to technical requirements and planning standards which resulted in revision and resubmission of plans.

income nation.

Likas Assemblyman YB Junz Wong

he implementation of the new standard process chart system to improve and shorten time for plan approvals in Sabah by the State Government is welcomed by the Likas Assemblyman, Junz Wong. Adopting SHAREDA’s proposal to increase efficiency by reducing approval period can help reduce costs for developers, which in return will result cheaper housing cost and of course the selling price, said Junz. On the other hand, he also reckoned that the related ministry should implement online

He also suggested that a mapbased register of planning decision for approvals and refusals to be uploaded online by Central Board and all local authorities for public consultation.

He added that that particular system could help to promote better transparency as well as to fight corruption. Junz also suggested that housing policy and standards should be developed to address housing choice, design, affordability, tenure mix and future needs including the aging population and people with disability.

DAP Sabah To Push For Housing Control Enactment Amendment

AP Sabah will file a motion in the Sabah State Assembly sitting to amend the Housing Control Enactment 1978 on the grounds that it is outdated and favours developers more that it protects the buyers. The party Organizing Secretary, Junz Wong said that there had been too many complaints pertaining to management issue received from various apartment and condominium residents, that brings to light the need to push for such amendment. The proposed amendment, he added, is also needed considering the increase number of apartment and condominium housing estates in the state since the enactment was established in 1978. The existing law appears to favour developers more, leaving the buyers at a disadvantage of having the only option to seek recourse from the housing controllers when management issues arise. Junz said the current enactment lack specification of time period for developers to apply for subdivision to get strata titles out successfully. He added that merely applying for subdivision is not good enough as there must be a law to ensure that developers do within a specific period of time, failing which, action must be taken. The enactment also lack specification of penalty for developers who fail to get strata titles out within a certain period of time. Junz has also proposed to make it compulsory for developers to apply for subdivision and obtain strata or subsidiary titles within seven years, failing which their developers

licenses will be suspended. He also added that in view of the complaints received, which mostly consist of management problems, including deliberate or unexplained hike of management or maintenance fees and the management’s authority to cut of utility supplies such as water and electricity, the law should also make it mandatory that audited accounts for management expenses are to be made known to buyers.

Owners of apartment and condominiums have been given a rough deal by some developers who would force owners to pay the increased management fee without justifying the hike with an audited account, which failing, the developers will cut off the utility supply. He said that, the problem as it is, is that the law permits and encourages such action. “It should be that for developers or appointed management corporations to propose increment in fee at any time or any amount, they must be made to comply with certain requirements, such as submitting an audited account to every house owner to justify that the proposed increased charges are actually used for management expenses or purposes, he said.

Sabah Emerged As One Of Asia’s Investment Hotspot

abah has been named as Asia’s top emerging investment spot in 2015 by Asia Property Report, a leading magazine for luxury real estate, architecture and design in Asia. Sabah is described as sandwiched between the imposing bulk of Mount Kinabalu and the crystalline waters of the South China Sea by the author, Duncan Forgan. He also wrote that the price of the land here is affordable which has contributed to the investment attraction. Adding to its lustre is a solid transport infrastructure and an international airport that is second only to Kuala Lumpur airport in terms of the number of routes in and out, he wrote. Sabah’s leisure options, meanwhile, are formidable, with some of Malaysia’s best golf courses on its doorstep and some of its most awe-inspiring diving and nature spotting to be found along its coastline and in its fabled virgin rainforests. With tourist numbers booming and KK poised to become the main hub for Malaysia’s oil and gas industry due to Sabah’s substantial offshore reserves, demand is almost guaranteed to grow. This will necessitate the construction of new grade A offices, quality housing, infrastructure such as high end medical centres, F&B outlets and other retail facilities such as quality shopping malls and supermarkets.

Set to be completed by August 2015, the luxurious 333 housing units with comprises 3 blocks will become the tallest tower in the city. The 28-storey Jesselton Residences will remind the world why Sabah’s capital city, rich in nature and culture, remains to be one of the most popular tourist and investment destinations on Borneo Island.

Peak Soho Designer Suites, the latest addition to Kota Kinabalu’s majestic skyline is also said to attract investors as it offers the stylish mixeduse residence and office space development, yet, surrounded by greenery. On the other hand, the happening scene during weekend fair at Gaya Street, where one can get a taste of contemporary local culture, Sabah State Museum that houses a botanical garden and a heritage village in its 17-hactre complex, the iconic Sutera Harbour five star hotel and the Le Meridien’s Flames Steak Restaurant, the sole international steak restaurant in KK are also listed as the investment key in KK.

Meanwhile, in a separate article, the attractions which enlist Kota Kinabalu as one of Asia’s hottest investment spot in 2015 is the high end housing development namely the Jeselton Residences, a project by Palikota Sdn Bhd.

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HOT TOPIC | Rent First, Then Buy - Does it work in Malaysia?

RENT FIRST, THEN BUY Does it work in Malaysia?

by Charles Tan

he answer varies. I asked a few people, especially those who have yet to buy. Some say it will work as they are really saving for it. Some of them said that at first they thought it would work but after a while, they could see the property prices running faster than they thought. A few people I spoke to in a property workshop I conducted said they are staying with their parents, thus there is no real urgency to buy even if they get married. Of course, if they do get married, they would love to own their own home. The majority agreed though that if they got married but do not own a home, they would not feel comfortable about it. What about my personal opinion? I think that if you want to rent first and then buy later, you should take the following seriously.

Save. Not just save. Save a lot. Save everyday. Save whenever you receive your pay. Save in everything and always remind yourself to save. Actually, to be honest, saving money is not very easy to do because there are lots of temptations. A nice dinner would set you back many days of lunch savings. An iPhone 6s would have set you back 10% of your total savings for one whole year if you are earning RM4,000 per month. However, if you fail in this first mission, I think there is no need to think about buying property at all. It will not happen. Invest. Note: it’s invest. Not gamble. If your friend comes and tells you about a scheme which promises you 20% return every month and you decide that you will ‘invest’ your money, I wish you luck. That’s gambling, by the way. Invest in blue chip stocks if you do not know how to evaluate a company correctly by yourself. Better still, buy a good book on stock investing and really finish reading it. My first preference would be stocks but if you do not like it, then unit trust would be a good second option. Actually, it is not hard to imagine prices going up. The reason is because urbanization would continue to happen. More people from smaller towns would settle down in Kota Kinabalu to work, maybe have a family there too. Thus, demand will always be continuing. Building a new high-rise development may take 5 years, from buying land, to approvals to building and handover of keys. Evaluate. Yes, non-stop evaluating through the viewing of primary and secondary properties. This should be a continuous process even before you think you are ready to buy. Yes, buying does take some serious evaluations because this would represent the single largest purchase ever in your life. You should know the market price well enough so that if you come across a property which is really underpriced, you can decide to buy quickly before anyone else. Besides once you view a lot, you would no longer need to view too many in the future. For example, if everytime you go to area A and it is jammed all the time, you can now skip area A totally and focus on others. If you do these three things continuously, I think within 5 years you should have enough capital to at least buy something affordable enough for you. You would also be able to do it effortlessly too because by then you would possess good knowledge about the prices and the areas that you want to concentrate upon. These three steps assume however that you are willing to buy a property which you can afford. Not a property that you cannot afford but want to buy anyway. While majority of all the media is printing news about ‘I could not afford to buy’, ‘properties are way too expensive’ or even ‘middle income group squeezed out of the property market’, the

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truth is, when you look at the secondary market, there are still choices. RM300,000 for a landed property in KL? Search online, there are still choices but of course they may not be your top choice. My friend who could not accept high-rise developments but has limited budget has just bought a double storey terrace in Shah Alam for RM620,000. It would take her at least one hour to reach her office everyday but she said she is prepared because she wants size with affordability and not high-rise for huge money. Another friend bought a condo with 1,100sf for RM560,000in Bukit Jalilwhich she said is value for money as it is in a popular area. She does not want places that are too far away. Which is better? No such thing as better. Buy what you think you need. Both of my friends in the earlier paragraph have saved for a few years before buying the property. The one who bought in Shah Alam wanted to buy somewhere nearer but must be landed. She had looked for two years before deciding not to wait any further because she came to the realization that house prices do not come down, especially landed ones. The one who bought in Bukit Jalil wanted Bangsar South as it is so much nearer to her working place instead but there were none which is the same size and cheaper compared to the one she bought. Actually, it is not hard to imagine prices going up. The reason is because urbanization would continue to happen. More people from smaller towns would settle down in Kota Kinabalu to work, maybe have a family there too. Thus, demand will always be continuing. Building a new high-rise development may take 5 years, from buying land, to approvals to building and handover of keys. Moving to Kota Kinabalu to work takes just weeks of decision making and finding a place to stay. Can we see the demand and supply equation at work here? Supply of housing may have to take many years to build but demand for properties can suddenly increase IF there are sudden increases in the jobs available. When we look at Klang Valley and Penang, the same situation continues to happen today. In conclusion, rent first and buy later can work only if we are really objective in what we “need” instead of aiming at what we truly want which may never happen no matter how hard or how long we save. During the time of renting first, we should also be willing to rent the cheapest place possible and not splurge on a place which we would never be able to afford. The reason is because once you rent high, you may never buy. Perhaps your strategy is always to rent and never to buy? This is still okay but remember to still invest your savings so that by the time you retire, even if you do not own a property which you can sell off, you still have enough to last at least 25 years. Personally though, I believe property investment is key to how we intend to live when we retire. Happy investing – or renting!

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SABAH PROPERTY NEWS

Wah Mie Launches Final Phase Of Taman Rimba After Early Completion Of Phase 1 & 2

ah Mie Group’s Taman Rimba Phase 1 & 2 (double storey terrace houses) is now completed with OC duly obtained. Taman Rimba is located at Mile 13, Jalan Tuaran, between Menggatal and Telipok town, near to the junction of Inanam by-pass and Jalan Sulaman. Adjacent developments that are soon to be completed include Grand Merdeka Shopping Mall and Sierra Biz Hub Industrial Park.

Taman Rimba Taman Rimba Phase 1 & 2, comprising of a total of 254 units, was very well received since the start. The overwhelming response resulted in the units being fully sold within a year from launching in 2012.

In addition, within this short period of time, the market value of Taman Rimba Phase 1 & Phase 2 has appreciated by about 15%.

Mr Fong Kin Wui, the Group’s Deputy Managing Director, says, “We are glad to announce that our Taman Rimba Phase 1 & 2 was completed ahead of schedule by three months and OC duly obtained. The management and staff of Wah Mie Group would like to express our appreciation to our customers for their trust and support towards our company.”

sliding glass door and balcony area, hence allowing the house owner to enjoy a more spacious and comfortable room environment with usable floor area. In addition, better quality finishing has been selected for this phase and the shingles roofing system will continue to be adopted. This system aims to reduce heat, noise and leakage problems.

With the success of its earlier phases, the Group has launched the final phase of Taman Rimba called Imperial which is considered the crowning glory of the entire project. It comprises of a total of 171 units and is perched on higher ground with commanding views of the surrounding greenery. The design for this final phase is more spacious with the master bedroom covering 207 sqft of floor area, and the other two bedrooms at 144 sqft and 122 sqft respectively.

Fong added,”Since the launch of Taman Rimba Imperial in mid2014, it has achieved more than 50% sales. The selling price is from RM530,100 onwards, averaging about RM266 per sqft. Compared with condominiums in town, Imperial is more affordable and worthwhile to purchase”.

Datuk Francis Goh Fah Shun, who had retained his presidency uncontested for the new 20152017 term during nomination in February, announced that three new council members have been added to the existing lineup to bring the number of council members to 18 in total.

Apart from larger space, the master bedroom also comes with a high

All the incumbent SHAREDA office bearers had also retained

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their posts uncontested during nomination except for the two posts of vice president which was decided by vote during the AGM. It was a three-way friendly match-up between incumbents Dato’ John Chee and John Tan, and also Ben Kong. After the votes were tallied, Dato’ John Chee and Ben Kong were announced as the new vice presidents for the new term. The first council meeting will be held soon whereby the president will appoint five more members to the council for the post of assistant secretary general, SHAREDA Youth chairperson and three ordinary council members.

From left: Chew Sang Hai (Deputy President of SHAREDA, Datuk Francis Goh (President of SHAREDA), Dato’ Ir. John Chee (Vice-President of SHAREDA)

abah Housing and Real Estate Association (SHAREDA) has challenged Sabah Electricity Sdn Bhd (SESB) to send a letter of offer to SHAREDA if it is unable to manage its operational cost and continue to impose unfair capital contribution rates on developers in Sabah. Datuk Francis Goh, president of SHAREDA, said this during a press conference at the 22nd Annual General Meeting on 7 March, 2015. Goh did not mince words in criticizing SESB for its failure to resolve its financial problems despite assurance that this would happen once TNB had taken over SESB and they will provide better services to the people in the state.

Only Minor Changes To New SHAREDA Council Line-Up

he 22nd Sabah Housing and Real Estate Developers Association (SHAREDA) AGM ended successfully on 7 March with little change to the new lineup.

SHAREDA Offers To Buy Out SESB

According to Goh, TNB raked in a profit of RM6.7 billion last year where for SESB, TNB is the major shareholder with 80 per cent and the remaining 20 per cent goes to the Sabah state government. He added that a check with the Registrar of Companies (ROC) also revealed that SESB had actually reaped RM6 million in profits last year.

The refreshed line-up of SHAREDA Council

And yet SESB is still claiming that is not able to get enough capital to finance infrastructure development to provide the connection services required to developers or the developers’ products.

“From SHAREDA’s survey last year, the 180 members of the association paid SESB RM180 million in capital contribution,” said Goh. “So you feel we can’t afford to buy over SESB with RM2 billion with repayment to the bank in 10 years? If it’s true that SESB cannot manage its operations properly and help the people of Sabah, I challenge them to come up with a letter of offer.” The justification for this bold challenge comes from the fact that the current capital contribution (CCC) imposed by SESB is 10 times higher as compared to Peninsular Malaysia. There TNB only charges RM45 per kilowatt per hour whereas in Sabah, SESB calculates its CCC according to zones which is very unpredictable. “Retail malls and mixed development are the ones to feel the heat from SESB because they charge a high amount on them. For example, the Riverson project in the city centre is charged about RM20 million. That is about 20 per cent of the overall gross development cost. It is unfair for developers to absorb this kind of costs which is transferred to our buyers.” Goh confirmed that the implementation of the CCC by SESB had directly caused home prices in Sabah to increase by some 3

per cent. This has caused hardship for Sabahans to purchase homes as the prices have gone beyond the reach of many especially in the lower income group.

a fixed rate charges and not the CCC formula set by SESB which has created a lot of uncertainty to developers in terms of budgeting for development cost.

On top of that, once a unit is occupied, SESB will charge buyers for the installation of electricity meter and electricity use. “Developers only profit one time after selling the homes but SESB will reap a profit for 99 years whereby each month, the homeowner will pay electricity bills,” stressed Goh.

The proposal is for a charge of RM1,000per unit for affordable apartments (priced not more than RM250,000), and for medium cost apartments or condominiums (priced between RM250,000 and RM500,000) to be set at RM2,000 per unit. For shop, terrace, semidetached or bungalows, the charge is proposed at RM2,500 per unit.

“In this respect, SESB should be thankful to developers because without homes being built, they wouldn’t have a place to set up their meters and earn revenue.” SHAREDA members have unanimously resolved to urge SESB to accept its proposal for

If all avenues have been exhausted, and negotiations fail to produce results that are fair and equitable to developers in Sabah, SHAREDA will look into taking the issue to court for judiciary review in order to resolve it for the benefit of home buyers in Sabah.

Junz Told LPPB To Learn From SHAREDA

ikas assemblyman, Junz Wong hailed the initiative by Housing and Real Estates Developers Association (SHAREDA) to form SHAREDA Berhad as a vehicle to build affordable housing projects in the state. It is reported that SHAREDA Berhad would focus only on building affordable homes and not luxurious homes or shops and the first few projects built will be 2500 units of affordable homes. Junz who is also DAP Sabah Organizing Secretary urged Sabah Housing and Town Development Board (LPPB) to learn from SHAREDA and focus on building low cost housing rather that luxurious high end housing properties. “Do not forget that SHAREDA is a private entity and has no obligation

Likas assemblyman YB Junz Wong to do this. LPPB on the other hand, is a government agency which was established with a sole purpose to build low cost housing,” he said. “If private sector can do it, I see no the reason why LPPB cannot do it,” added Junz. Junz also urged the Local Housing Ministry to ensure LPPB achieves its purpose of building low cost at suitable area, he concluded at a press conference recently.

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SABAH PROPERTY NEWS

SESB to Remove Capital Contribution Or Let Others Take Over, Says YB Junz explained that (that) revelation actually meant the total amount of extra charges that all Sabah house buyers have paid on properties developed last year was equivalent at RM180million.

YB Junz Wong

ikas Assemblymen, YB Junz Wong once again claimed that SESB capital contribution is one major factor causing high prices of housing property in Sabah. “With SHAREDA’s latest revelation that last year alone SHAREDA members have paid SESB capital contribution totaling a staggering figure of RM180 million. This has proven that my claim was indeed true,” Junz said

Junz further explained that this policy was extremely unjust and unfair to buyers for two precise reasons :1.

Estimated one buyer would pay between RM3500 to RM8500 for each unit of house depending on which development, as compared to West Malaysia from RM250 to RM2000 only, as reported many times. Why should house buyers or developers in Sabah be bullied by SESB by paying SESB capital contribution for their basic infrastructures to provide electricity to the developments

when SESB will be the one profiteering from the utility business thereafter ? Junz who is also DAP Sabah Organizing Secretary urged Energy Minister Datuk Seri Dr. Maximus Johnity Ongkili not to be fooled by TNB or SESB anymore. SESB always gave excuses that they were unable get enough capital to finance infrastructure development for electricity connections and that this utility business could hardly earn profits. SHAREDA’s revelation told us otherwise. Junz recalled that even the Housing Minister Datuk Seri Haji Hajiji Haji Noor has agreed that SESB capital contribution policy has been unfair to both Sabah property builders and buyers. Junz demanded SESB to come clean or let SHAREDA buy over SESB and

help Sabahans to end the electricity woes in Sabah.

Mahkamah Perbandaran Sandakan

ribunal for Housing Purchaser Claims has rejected the claim for liquidated damages of 60 unsatisfied home buyers over a local developer. The case was initiated when a group of house buyers became unhappy when they were informed that the developer of the houses that

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They then brought the case against the developer to the tribunal on August 19 last year, claiming from 3,000 to 7,000 ringgit per buyer for liquidated ascertained damages (LAD) or damage fee for the late handing over of vacant possession. The delivery of judgment for the case was held at Mahkamah Perbandaran Sandakan recently, in front of the Tribunal President, Datuk Ahmad Sedik. Both parties presented their arguments, and the Tribunal President decided that the

respondent was relieved from liability to pay liquidated damages to the claimants as the developer had lawfully applied for extension of time from the Controller of Housing. Ahmad explained his decision by pointing out that it was stated in Sections 12 (1) and 12 (4) under Housing Development (Control and Licensing) Rules 2008 that the Controller of Housing was the only party that had the right to approve or reject a developer’s application for extension of time of a project.

“The sections also explain that a developer that has acquired approval from the Controller of Housing for extension of time for

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Junz reminded Dr Maximus that he was elected in Sabah and made the the chairman of Energy Commission thus he has both social and political responsibility to fight for Sabahans.

Property Hunter - Sabah’s leading property magazine is packed with indepth property industry news, fresh perspectives, exclusive interviews, development progress, contribution from leaders of the industry, property launches, events and more from Sabah, Malaysia and around the region.

“Make SESB or TNB give Sabah a better deal. Tell them not to charge Sabah house buyers or overcharge developers under this given monopolized utility business environment or let others take over.” Junz demanded.

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“I will be tabling a motion in the next state assembly sitting to debate on SESB capital contribution and that Sabah State Government must have an official stand on this pertaining matter,” Junz concluded.

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Local Developer Relieved From Liability To Pay LAD To Homebuyers they had purchased would only be handing over to them the houses three months after the date that had been agreed upon.

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a project will not be liable to pay LAD to housing purchasers. “The Tribunal has no authority to overrule the decision made by the Controller of Housing. Therefore, if the claimants still want to proceed with their case, they could take the case to the civil court,” he explained. In the Sales and Purchase Agreement between the developer and the housing buyers, the date of vacant possession delivery as stated was September 16, 2013. The developer had then applied for an extension of time for 90 days, in which the houses would be handed to the buyers by December 16, 2013.

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SARAWAK PROPERTY NEWS

University College Of Technology Sarawak Won Green Building Index Award 1, 2013, had scored 87 points, one more than the minimum 86 which is required for the award. The GBI rating system is regulated by the GBI Accreditation Panel which is an independent committee consisting of PAM (Malaysian Architect Organisation) and Association of Consulting Engineers Malaysian professionals.

SARAWAK

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

Its Vice-Chancellor Prof Datuk Dr Abdul Hakim Juri said the university which started operations on April

Hence, he commenetd, green technologies had been incorporated into the buildings to preserve

University College of Technology Sarawak official website

niversity College of Technology Sarawak (UCTS) has become the first university in the world to be platinum-rated for the

PROPERTY NEWS

Green Building Index (GBI) award.

Dr Abdul Hakim also said that UCTS fulfilled a lot of conditions, mainly on energy conservation, that needed to be met to achieve the rating.

Permy Street Mall Launched In Miri

energy and the environment. The university is now using 50 percent less energy than any normal building as the buildings is installed with double glazing glass to conserve energy. It is also fitted with Light Emitting Diodes (LEDs) to reduce energy consumption, in which the lights only works in the presence of a person. The university is also harvesting rain water and storing them in the pond in front of the university. The water collected will be recycled for air conditioning and flushing of toilets while the water from the toilets will again be recycled for gardening use.

Bintulu Paragon Is Sarawak First Integrated Complex With UniFi

3000 PR1MA Housing Units To Be Constructed In Sarawak

round 3,000 housing units will be constructed throughout Sarawak under the 1Malaysia People’s Housing (PR1MA) programme. According to PR1MA Chairman Tan Sri Dr Jamaludin Jarjis, two locations in Kuching have been identified, namely at Vista Tunku in Petra Jaya and Taman Lee Ling in Matang. “However, we are still in discussion with the state government in regards to the types of housing units to be constructed as we have to look into factors such as the construction cost, land cost as well as whether prospective buyers can afford the houses,” he told a press conference recently. Jamaludin led a delegation which also included PR1MA chief executive officer Datuk Abdul Mutalib Alias to brief Adenan on the implementation of PR1MA projects in Sarawak.

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“The chief minister has given his blessings on implementing PR1MA projects here and during our discussion he also suggested that we look at other districts in Sarawak such as Miri, Sibu and so on.

“In addition, he also proposed that the housing units under PR1MA be of single-storey or doublestorey terraced houses rather than apartment units,” he disclosed.

also depends on the cost of land and infrastructure here,” he said.

and hopefully more units will be approved by the year-end.”

On when construction for the approved housing units would commence, Jamaludin said the project was expected to begin within this year.

He also pointed out that thus far, there were 24,406 PR1MA applications from Sarawak out of some 940,000 applications throughout the country.

“At present, we have around 3,000 units approved by the board

aim Land Sdn Bhd, one of Malaysia’s leading developers has recently launched its newest product, Permy Street Mall at Bandar Baru Permyjaya Township, located at Miri, Sarawak.

Jamaludin also assured that upon completion, the price of the units would be different from what is offered in West Malaysia. “The cost of houses in Kuala Lumpur or Penang can be quite high with prices around RM300,000. We will try to lower the price of PR1MA houses in Sarawak but this

Permy Street Mall - Permy Avenue Interior

The mall, which is also the first in the township is set to offer a different retail and shopping experience to both business owner and shoppers.

Kuching, Sarawak

Naim’s Senior General Manager for Sales and Marketing, Alice Ting said that the street mall is something similar to a shopping mall but with a cheaper entry cost for investment, which something worth to be looked into.

Conceptually as well as architecturally, Permy Street Mall has a few interesting attributes. The colourful and unique ‘zig zag’ window façade exudes a cheerfulness which is beckoning. Besides offering generous spaces, its design allows good visibility of the retail units. The street mall is complemented by a large atrium, suitable for holding events or expos, further boosting customer patronage to the mall. As Permy Street Mall is also linked to the Permy Mall, the entire concept is appealing to the customers as it provides an integrated shopping experience for all.

Bintulu Paragon artist’s impression

intulu Paragon development was declared the first integrated complex in Sarawak to feature high speed broadband connectivity following the inked memorandum between Naim Land Sdn Bhd and Telekom Malaysia recently.

referred to as an iconic development as it introduces new development components designed by awardwinning architects, such as the Street Mall and Small Office Versatile Office (SOVO) to the Sarawak property scene. These components could only be found in Peninsular Malaysia and Sabah previously.

According to Christina Wong, Deputy Managing Director of Naim, the collaboration would add value in making Bintulu Paragon a vibrant, contemporary and well-connected new metropolis of the city.

Meanwhile, General Manager of Bintulu Development Authority (BDA), Datu Haji MohidinIshak stated that the contemporary development concept did not only attract local, but foreign investors which will enhance Bintulu’s visibility not only in the eyes of regional investors, but also globally, boosting further opportunities for injection of funds into the local economy.

She added that besides its shopping complex, the largest in Bintulu, the development also features an integrated condominium known as The Peak. The complex is also

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SARAWAK PROPERTY NEWS

SHEDA Held Its First Property Roadshow Meanwhile, Assistant Minister of Housing Sarawak, Datuk Haji Abdul Karim Rahman Hamzah said that the economy in Sarawak is quite good, and that many housing estates were being developed throughout the State.

SHEDA Council members led by SHEDA President, Joseph Wong and officiated by Sarawak’s Assistant Minister of Housing Sarawak, Datuk Haji Abdul Karim Rahman Hamzah

uching Branch of Sarawak Housing and Real Estate Developers Association (SHEDA) held its first Home & Property Roadshow at Boulevard Shopping Mall recently.

The roadshow received participation from 50 exhibitors from Sarawak, Peninsular Malaysia, and overseas, showcasing various developers, oil palm land investment schemes and building related trades.

He also referred the implication of the GST to property market forces as subjective but admit that there might be a slight price hike of 3 to 4 percent. “The developers seem to be aggressively opening new housing estates. This shows confidence

towards the purchasing of these houses,” Karim pointed out. Meanwhile, SHEDA President, Joseph Wong expressed hope that the manufacturers did not suddenly increase the prices of building materials, in view of the implementation of GST come April. The SHEDA Home & Property Roadshow brings together both exhibitors and potential house buyers under one roof. Buyers have plenty of choices when it comes to selecting their dream home. The second SHEDA Home & Property Roadshow 2015 Kuching is scheduled for November 27 to 29, at the same venue.

MOH-SHEDA To Hold HDO, HDR Awareness Seminars In Sarawak

hree bodies including the Ministry of Housing Sarawak, Sarawak Housing and Real Estate Developers Association (SHEDA) will be jointly organising a series of seminars across Sarawak to raise awareness and understanding of the new Housing Development (Control and Licensing) Ordinance 2013 (HDO) and Housing Development (Control and Licensing) Regulations 2015(HDR).

The new HDO and HDR aim to spur orderly and robust growth of the housing industry whilst ensuring an equitable balance between the interests of the housing developers and the rights of house buyers. The HDO and HDR have been enforced since 1st November 2014.

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As such, it is timely for developers, consultants, bankers, lawyers and other stakeholders to obtain firsthand knowledge and comprehend the requirements and enforcement of the new laws to ensure compliance. The series of seminars will also provide an excellent and unparalleled opportunity for affected stakeholders to seek clarification on the Ordinance and Regulations as well as equip themselves with the necessary knowledge and understanding in complying with these laws. The seminar participants will be presented with five topics during the one-day seminar. They are including “Housing Development (Control and Licensing) Ordinance 2013 and Housing Development (Control and Licensing) (Amendments) Regulations 2015: Rationales and Scope, “Housing

Development License Application Requirements and Administration of Housing Development Account (HDA), “Offences and Enforcement of Housing Development (Control and Licensing) Ordinance 2013 and Housing Development (Control and Licensing)(Amendments) Regulations 2015”, “Housing Purchaser Claim Tribunal

Procedures and Jurisdiction “ and “Proposed Housing Online Application System”. The first seminar was held in Kuching at March 25, in Miri on March 31, Bintulu on April 2 and finally in Sibu on April 7.

SHEDA website

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CONTRIBUTOR| Dr. Daniele Gambero

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. 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.

INNOVATIVE REAL ESTATE THE MISSING PRODUCTIN THE MALAYSIAN PROPERTY MARKET Several times in the last few months I’ve been asked, by followers and friends, this question: “What is so good about Malaysia, why did you choose to come here?” For the ones who know me the reply is well known: growing economy, good planning, decent execution of the plans, good and wise centralized controls (i.e.BNM). What we need to look in further is where Malaysia is now and how should move further. Indexes

Vietnam

Indonesia

Malaysia

Australia

Singapore

GDP Growth

6.19%

2.96%

0.60%

5.60%

2.70%

1.50%

Gov.Debt as % of GDP

54.98%

26.11%

45.70%

54.80%

20.48%

106%

Gov. Deficit as % of GDP

-7.10%

-2.30%

-2.50%

-4.50%

-3.10%

1.10%

Balance of Current Acc in USD Billion

-1.17

-0.43

-0.078

8.9

0.6

1.2

Per Capita Income at Constant Price- USD

5,124

1,810

3,438

6,990

37,493

36,898

Inflation

1.20%

8.36%

1.22%

3.2%

2.30%

0.30%

Unemployment

2.14%

5.95%

0.55%

2.70%

6.10%

Population (Million)

89.71

249.9

67.01

23.13

5.47

Global Competitiveness index (WEF 2014 -2015)

68 (70)

34 (38)

31 (37)

20 (24)

22 (21)

2 (2)

Stage of development (WEF 2014 - 2015)

Stage 1 Factor Driven

Stage 2 Efficiency Driven

Stage 2 to 3 Efficiency to Innovation

Stage 3 Innovation Driven

Some property experts are nowadays saying that even though we are entering a challenging period of

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Recently I’ve updated the economic performance indexes for our regional neighbors, see the table below, and it looks like Malaysia is really overperforming all of them. Interesting to see the World Economic Forum’s 2015 Competitiveness Report ranks Malaysia as #20 with our economic growth driven by both efficiency and innovation (the country is stepping from stage 2 which is efficiency driven to stage 3 which is innovation driven).

Thailand

We all must recognize the efforts of the government in spurring the growth of innovation and in stimulating the growth of a creative generation but, analyzing our real estate industry, it looks like we need to do more. Siva Shanker, president of MIEA (Malaysia Institute of Estate Agents), has recently stated that Malaysia totally lacks of “Investment Grade Products” as far as real estate is concerned. He couldn’t have been clearer and I fully agree with him.

“ I partially disagree with this “simplistic” statement as a weak currency is not enough! There must be something else in the bag to make Malaysia more appealing than others and well we are still missing this point. ”

our economic development and the outlooks for all industries are more gery than pinky colored, a weaker Ringgit should attract foreigner investors to Malaysia and the property sector should see a raise of demand and hold still even during the forthcoming tough times. I partially disagree with this “simplistic” statement as a weak currency is not enough! There must be something else in the bag to make Malaysia more appealing than others and well we are still missing this point.

APPEALING VALUES, DEMAND/SUPPLY FORMULA AND FAVORABLE “LAW OF PROBABILITY” Attractive property values are surely a very good driver which should to bring in the zooming interest of international investors, I’m not talking about the institutional ones but the wealthy foreigners who might decide to invest in few properties in Malaysia.

When we compare the Malaysian standing to the region in terms of a ration between the average value of a residential property and the average per capita income for sure we can draw international attention, the table below is self-explanatory (source: numbeo, ministerial websites, government agencies websites).

SOUTH EAST ASIA MARKETS PROPERTY VALUE to PER CAPITA INCOME RATIO Ranking

Country

RM /psf

House of 900 sf

GDP per Capita Av. PPP - USD

GDP per Capita Av. PPP -RM (USD / RM 3.57)

Property Value to Income RATIO

Hong Kong

6,170

5,553,000

37,689

134,551

41.27

Singapore

5,238

4,714,200

54,553

194,753

24.21

Thailand

850

765,000

9,062

32,353

23.55

Myanmar

660

594,000

1,766

6,303

94.24

Malaysia

418

376,200

17,760

63,403

5.93

Philippines

540

486,000

4,336

15,479

31.40

Vietnam

680

612,000

3,017

10,772

56.81

Cambodia

323

290,700

1,579

5,637

51.57

Indonesia

540

486,000

4,635

16,547

29.37

Being Malaysia so far behind all the neighbors and considering that within the next 5 to 6 years it should become a fully developed country (higher-income) property values should be pushed up much more here than elsewhere in the region. Another consideration

deemed to be done is the application of the basic rule of demand and supply which sees an incoming quantity of dwellings far below the current need. Using conservative parameters it is possible to foresee an unsatisfied demand of more than 3 million units by 2020.

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

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CONTRIBUTOR| Dr. Daniele Gambero

“Collection of rentals, maintenance of the unit and yearly refurbishing will become the recurring nightmare of those investors and the general status of the overall property market will be definitely spoiled. “

EXISTING STOCK 2013 AND HOUSE SUPPLY TILL 2020 State

Supply Of Landed Till 2020

Supply Of Low Cost Till 2020

Supply Of High Rise Till 2020

Total Houses Supply By 2020

Population By 2020

Need Of Houses By 2020

Kuala Lumpur

113,318

156,915

247,843

518,076

1,870,000

105,257

Selangor

859,609

493,772

347,133

1,700,514

6,279,686

392,715

Johor

686,277

262,283

129,310

1,077,870

4,499,432

421,941

Penang

222,425

179,474

96,451

498,350

1,633,703

46,218

Malacca

149,295

50,516

17, 828

217,639

914,506

87,196

Negeri Sembilan

262,639

82,018

44,486

389,143

1,276,244

36,272

Pahang

238,572

67,669

16,302

322,543

1,674,660

235,677

Perak

394,091

95,430

14,073

503,594

2,494,237

327,818

Perlis

19,619

9,303

1,242

30,164

243,400

30,686

Kelantan

69,622

15,644

4,790

90,056

1,533,613

421,148

Terangganu

94,969

39,193

1,026

135,188

1,045,864

213,433

Kedah

249,768

113,925

3,057

366,750

1,947,472

282,407

Sabah

101,155

63,110

50,645

214,910

3,443,107

473,711

Sarawak

196,291

52,320

18,581

267,192

2,543,759

241,560

Malaysia

3,657,650

1,681,572

992,767

6,331,989

31,399,685

3,316,040

Everybody should agree on the principle that such a high unsatisfied demand will generate a continuous uptrend of values as we have seen it during the last year when a big bunch of new “price cooling measures” newly introduced have actually produced only minor price adjustments.

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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ZOOMING-IN ISKANDAR MALAYSIA Iskandar Malaysia has been identified during the recent years as a prime area for property investment and has seen a progressively fast growing offer of residential, commercial and industrial real estate products. All the right drivers are there as the CDP (Comprehensive development plan) has drawn the growth direction for a healthy economic development of the region which should attract by 2025 more than 1.2 million new residents. However, at least till today, developers have mostly offered only normal residential, commercial and industrial products that have left property investors with the bitter taste of a forced choice to “bet” their money more than invest it! As an example we have all heard and read about Educity in the Flagship B of Iskandar Malaysia, the future educational hub of Southern Malaysia which should attract more than 30 higher education institutions (universities). The “side investment” product proposed in the neighboring areas of Educity has been a mushrooming growth of high-rise “showboxes” condominiums with plenty of creative names such as SOVO, SOFO, SOVO Suites, SOHO Residence and so on without the “must be in” software which would have made all these products becoming more attractive. Within the next two to three years we will see thousands units being delivered in this area and

offered simultaneously with extremely high and tough competition in the market. The market at that point will be driven by buyers and tenants who will dictate their conditions to desperate vendors and landlords eager to find interested parties for their properties. The alluring dream of “get the keys – find the tenant/buyer” might become a carnage of values at one end while at the opposite might generate situation where a studio units will be filled with 6, 8 or even more students to generate enough return. Collection of rentals, maintenance of the unit and yearly refurbishing will become the recurring nightmare of those investors and the general status of the overall property market will be definitely spoiled. AN IDEAL SOLUTION As I was saying at the beginning of this column Malaysia is moving towards innovation and creativity. We need to understand how to apply it to property investment being sure that by properly doing it the whole market will gain traction and attract more and more foreigner investors eager to buy hardware and software in a sparkling market with very good outlooks for both returns on investment and capital gain. My next column will explain how by bringing up several example of successfully developed and managed “Investment Grade Real Estate Products”.

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WEST MALAYSIA PROPERTY NEWS

Forest City GDV May Be Reduced Up To 30% After A Second Downsize

YTL Land’s Shorefront Project Sees Encouraging Sales

he 330 million ringgit Shorefront project by YTL Land and Development sees encouraging sales as 67 units of low-rise condominiums in two blocks snapped up during the preview held recently.

WEST MALAYSIA PROPERTY NEWS

he controversial Forest City project, which has been scaled down twice, is expected to face a reduction of between 20 and 30 percent in gross development value (GDV) from the initial estimated amount of 600 billion ringgit.

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

However, the new figures will only be announced after the calculation is worked out, said the Executive Director of Country Garden Pacificview Sdn Bhd, Datuk Md Othman Yusof.

The Effects of GST Implementation In Property Industry

ake notice property players, there are a number of effects of the Goods and Services Tax (GST) on various types of properties when it comes into implementation in April. Thus, read through to get yourself better prepared for your future transaction involving properties.

First, there shouldn’t be any GST charges on residential properties. Therefore bear in mind that residential property seller is not allowed to charge GST on the sale, lease and rental of residential properties in any kind, which have been approved for dwelling purposes.

Meanwhile, GST does apply on commercial properties. The GST registered seller is allowed to charge GST on the sale, lease and rental of commercial properties. This means that the commercial property buyers or investors will pay GST to the GST-registered seller on the purchase of commercial properties such as shops or retail lots, factories, warehouses, hotels and offices.

Also remember that only a GST-registered company that sells you the commercial property, such as in the case of a property developer, is allowed to charge you GST. However, a private seller who is not GST-registered is not allowed

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Scaled model of Country Garden’s project in Danga Bay

to charge GST on the commercial properties they are selling. If you are a GST-registered buyer and buy a commercial property for the purpose of running a business selling GST taxable supplies, you are actually allowed to claim back on the GST incurred. The GST payable on commercial properties does not become part of his cost of doing business. On the other hand, if you an unregistered GST buyer, you will not be able to claim back GST for the purchase of the commercial property. Thus, the GST should become your cost of investment. And when you decided to sell the property later on, the incurred GST which you cannot claim back will likely be included in the subsequent selling price.

The project had been scaled down by 592ha from the original planned 1,978ha to the current 1,386ha. Previously, the project was scaled down from the initial 1,978ha to 1,624ha and would take about 20 years to be completed. The company voluntarily ceased construction on June 16 last year because the Department of Environment (DOE) had requested a detailed environmental impact assessment (DEIA) to accompany the project’s viability assessment and the state government’s approvals. The project received approval from the DOE for its DEIA on January 9. Md Othman added that the company would resume its land reclamation work after the Chinese New Year celebrations after getting the green light.

He said that the multi-billion mixed development project would be carried out in stages with the first phase spanning across 80ha. He added that he was optimistic about completing the project’s first show village in a year’s time after they managed to complete a similar one in Country Garden Danga Bay in only six months. The project was slated to have four man-made islands in a joint-venture between the state government’s subsidiary company, Kumpulan Prasarana Rakyat Johor and China real estate developer Country Garden Holdings Ltd.

Shorefront comprises three blocks with a total of 115 units, with size ranging from 1,400 to 3,400 sq ft. Each unit is sold at the average price of RM1,200 per sq ft. The Executive Director, Datuk Victor Yeoh Seok Kian in his statement said that the success of the development as well as its encouraging sale is largely driven by the company’s well-articulated product, in terms of concept and design to complement the landmark address.

“Our decision to preview the first release in Penang is to give Penangites and the Penang diaspora working abroad this special privilege to own an exclusive seafronting property in their home state.We are humbled by the overwhelmingly positive response, and would like to thank and congratulate our homebuyers for sharing our vision of Shorefront,” Yeoh said, as reported in The Edge Market.

The project is located in George Town city adjacent to the Eastern and Oriental (E&O) Hotel. The amenities surrounding the project include Penang’s local food havens, hotels, restaurants, entertainment outlets, schools, shops, bazaars, and historical and cultural sites.

Many quarters had in the past voiced concerns, mainly local fishermen and residents, over their livelihood and danger to marine life in Gelang Patah. Md Othman added that they have already set up a fund of 3.5 million ringgit as initial steps towards preserving the area near the Merambong seagrass bed, which is located within the project.

Satellite positioning of Eastern and Oriental Hotel with YTL’s shorefront project

The project is located in the waters of Tanjung Kupang between southwest Johor and northwest Singapore.

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WEST MALAYSIA PROPERTY NEWS

PIPDA Award Is Around The Corner, Vote Your Favourite Development And Developer There will be twenty-three awards which fall under three different categories, namely Development (16 awards), Developer (6 awards) and Finance 9 (1 award).

roperty Insight Malaysia’s Prestigious Developer Awards (PIPDA) 2015 is just around the corner.

Meanwhile, judging will be decided from scores aggregated from votes tallied from three sources namely, MPIA- Malaysia Property Investor Association, The Property Insight Editorial Team and vote from Property Insight readers and the public.

The awards acknowledge and highlight the quality development of some of Malaysia’s best and their landmark projects that shape the landscape of Malaysia’s nation building and development progress which will push Malaysia towards our vision of becoming a First World Nation by 2020.

Customs To Release Guidelines For High Rise Properties

he Royal Malaysian Customs Department is finally issuing the guidelines on goods and services tax (GST) for stratified properties.

The action was taken following its meeting in February with the Ministry of Finance as well as property related professional bodies. However, the National Home Buyers Association (HBA) Secretary-General, Chang Kim Loong said that the guidelines are still undergoing a finalization process by the department, thus urging the related bodies to fast track the process at least before the implementation. He revealed that the meeting in February aimed to discuss GST’s impact on stratified developments, following a petition sent by The Royal Institution of Surveyors Malaysia, HBA, the Malaysian Institute of Professional Property

Managers, as well as the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia. The petition, which represent around six million parcel occupiers and owners of about 15,000 stratified development areas within West Malaysia, proposes for the amendment of the GST Act 2014. Meanwhile, the enforcement of the Strata Management Act (Act 757), which replaced the Building and Common Property (Maintenance and Management) Act 2007, will likely be announced in June. The Strata Management Act has already been passed in 2013, explained Chang. There were some teething problems over the regulation as reported, however, the strata management regulation has already been finalized by the Attorney-General’s chamber.

The Royal Malaysian Customs Department official website

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In a statement, the Urban Well-being, Housing and Local Government Minister said the implementation of Act 757 will have a significant and positive impact for millions of residents of strata-title buildings

The award also is bringing together the best minds and people behind the property development industry of Malaysia. It create a precious opportunity to build up network with the giant and crème de la crème of the field over an Awards Presentation Gala Dinner in Kuala Lumpur while celebrating the nation’s finest developers in appreciation of their outstanding achievements.

MIEA Wants GST Clarification For Secondary Property Market

he Malaysian Institute of Estate Agents (MIEA) is urging the Royal Malaysian Customs Department to clarify Goods and Services Tax (GST) requirements and issues within the secondary property market and how it will affect the investment community. During the press briefing, MIEA President, Siva Shanker pressed that he has received complaints from the association’s members on how they didn’t get much related information about GST. He said that the focus is pointing only to property development sector, while the issue on how property prices are going to be affected in the secondary market is seemed to be neglected. Siva also stressed that there are still so much unanswered questions especially among small time property players who only own one or two properties to sell.

Meanwhile, Bose Dasan, a tax consultant said the guidelines from customs has not taken into account the investment community and does not provide a clear guideline for them. He added that all countries that have implemented GST have made it very clear, with four elements that have to be met before one is subjected to GST namely, the goods or service has to be a taxable supply, it must be made in the country, it must be in the course of business and the business or owner must be registered for GST in order to collect GST. It is also reported that a lot of sales have been aborted because buyers are holding back while investors are unsure on whether to collect GST or not. Therefore, the Customs is urged to clarify the ambiguity to avoid damaging the property market.

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WEST MALAYSIA PROPERTY NEWS

Mah Sing Still A Top Pick

(Left) Mah Sing’s group managing director cum group chief executive Tan Sri Leong Hoy Kum, (Right) Datuk Abdul Rahaman Dahlan, Minister of Urban Wellbeing, Housing and Local Government

ah Sing Group Bhd is reported to be among the top pick after its year ended financial report sees a chalked up sales amounting to 3.43 billion ringgit, whereas the group’s on-going

projects are definitely able to put the company on a comfortable situation for at least another decade. According to Hong Leong Investment Bank (HLIB) Research,

the group has projects with a gross development value (GDV) of almost 60 billion ringgit.

RM300 million going forward, before hitting the 0.5 times net gearing theoretical benchmark.

Mah Sing’s unbilled sales as at December 31, 2014 stood at 5.26 billion ringgit, representing two times the group’s 2014 property revenue. Coupled with the remaining GDV of 59.8 billion, the total 65.1 billion ringgit is sufficient to sustain the group for the next eight to 10 years, according to the research.

Mah Sing also registered a net profit of 84.55 million ringgit for its fourth quarter ended December 31, 2014, a 20 percent increase from the 70.70 million ringgit it had registered in the previous corresponding period.

The group’s balance sheet continues to remain strong with net gearing at 0.36 times, allowing the group good land acquisition room of another

Revenue surged to 843.95 million ringgit from 5570.21 million in the previous corresponding period. Profit for the full year increased 21 percent to 339.25 million from 280.62 million in the previous corresponding period, while revenue increased to 2.90 billion from 2 billion ringgit a year earlier. Analysts said the earnings were within expectations.

GST Exemption For Condominiums Maintenance Fees condominium, flat, low or lowmedium-cost apartment. All will be exempted from GST.” “Whether it is luxury or not… medium or low… the maintenance fees will not be charged with GST,” he told a press conference after a briefing on the 6% tax in Kuala Lumpur recently.

Puteri Damai Condominium in Luyang, Kota Kinabalu

he maintenance fees for residential stratified properties, namely people housing projects, apartments and condominiums will be exempted from the Goods and Services Tax (GST), as announced by the Deputy Finance Minister Datuk Ahmad Maslan. He said the GST was supposed to be imposed on maintenance fees for residential stratified properties,

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but after deliberations, the government had decided that the charges should be exempted. He added that this was a shift in the government’s policy on the consumption tax which residents of low and low-medium cost apartments had feared would still be passed to them as consumers. “I want to confirm the change of policy. All of it.Whether it is a

He said the decision was made after the government listened to the views of residents and the leaders of high-rise management bodies. The reason for the exemption, he added, was because the government felt that building maintenance would not be a business that would make large profits. “It is more a service that is operated by a residents’ committee, in relation to maintenance, repair, or paying security guards. It is not a business that focuses on big profits,” Ahmad Maslan said. He said

another factor was because building maintenance was a service that affected a lot of people, and similar to public transport services, it would be exempted from GST on that basis. Last year, property groups and house buyers’ associations had claimed that GST would burden residents of low and low-medium cost apartments with higher maintenance cost. The Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector, Malaysia (PEPS), National House Buyers Association (HBA), Royal Institution of Surveyors Malaysia (RISM) and Malaysian Institute of Professional Property Managers (MIPPM)had sent a petition in early December last year to the Prime Minister and Finance Minister, Datuk Seri NajibRazak, pointing out the problems with the low and low-medium cost stratified apartments.

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CONTRIBUTOR| Chris Tan

Chris Tan

Lawyer Specialising in Real Estate

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

FREEHOLD VS LEASEHOLD

IN PENINSULAR MALAYSIA

reehold or leasehold? This is almost the first question when one decides to buy or invest into property whether it is from the developer or from the sub-sale market. Hence, the developers tend to highlight the freehold tenure to attract the public’s attention. Does it really matter? Freehold and leasehold are actually two fundamentally different forms of legal ownership where in the former, the owner will have the perpetual ownership on the land for succession while in the latter situation the ownership tenure is granted by the government which is usually 30, 60 or 99 years. In fact in East Malaysia, the freehold title is virtually non-existence.

EXTENSION OF LEASE The ownership of the leasehold property will be revert back to the state government upon the expiry of the lease. Thus, the owners of the leasehold property will have to make an application to the relevant state government authorities for an extension or renewal of the lease before its expiry of which subject to their approval. Once the approval is granted, the owner will be required to pay a certain amount of premium for the extended tenure. Nevertheless, the Land Acquisition Act 1960 empowers the state government to acquire the usage of the land notwithstanding that it

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is the freehold land. Generally, the mandatory acquisition of land only took place in the event the land is needed for the national development purposes and it can only be done with reasonable compensation to the owner.

TRANSACTION OF THE PROPERTY The transaction of the freehold property is often easier and straight forward than the leasehold property as the sale and purchase transaction of the leasehold property would most probably require the consent from the state authority which usually took a few months time to process depends on the state authority. To the contrary, for the freehold property without any restriction (where consent of the state authority is not required), the transaction of the property will takes 3+1 months to complete which is the standard timeframe as stated in a Sale and Purchase Agreement for a sub-sale purchase. Sometimes, in certain locations, even though the land is termed as “freehold land”, any dealings on such land still require the consent from the local authority.

PRICE AND VALUE Generally, the values of the freehold and leasehold property will go up at a similar rate in the first 20 to 30 years. Nevertheless, freehold property would have the advantage in terms of appreciation of value if compare to the leasehold property in the long run. The reason behind this is that the value

of the leasehold property tends to depreciate over the years when their lease period is coming to an end. The fact that the complications arise in the process of obtaining extension or renewal of the lease from the state authority reduces the marketability of the leasehold property. Not many potential buyers willing to bear the risk of the rejection of the said extension application while they still have other choices in the property market. The difficulties in getting the loan approval from the financial institution might also be one of the factors that demotivates the potential buyers. The financial institutions are more reluctant in approving the loan for the leasehold property with the lease tenure less than 60 years. Even they do approve the loan, the margin of financing might not as favorable as those approved for the freehold properties. Having said the above, the leasehold property still has their own exclusive advantage as the leasehold properties are generally located at the strategic area if compared to the freehold properties which predominately based at more undesired location. Therefore, the leasehold property still has better bargaining power against the freehold property in terms of the location.

OBJECTIVE OF THE PURCHASE Given the fact that the government will be able to take back either leasehold or freehold land in order to develop or redevelop for the public purposes or economic development, this made both freehold and leasehold equal. Potential buyers shall consider the main purpose of their purchase. If it is for the investment purposes, buyers can discount the tenure of the leasehold property and gaining the maximum passive income from rents thanks to the better location of the leasehold property. On the other hand, since the youngsters nowadays are keen in moving out from their parents to live and work independently, the parents shall have no burden in passing down the house to the next generation. Due to the limited availability of the freehold property and the increasing standard of living, the quality and brand name of the Developers also play an important role when it comes to the property purchase rather than the tenure itself. In short, as long as the purchase of the property serves the main purpose of the buyers, the type of ownership of the property is of minimal concern. Given the fact of changes today, you could easily outlived the property for the purpose that you initially bought it for.

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FEATURE CONSTRUCTION PROGRESS

SUTERA AVENUE IS SHAPING UP “ The Sutera Avenue work site is bustling with activity as the project slowly emerges into view. Residents of Kota Kinabalu will soon get a glimpse of one of the most anticipated projects in the CBD that will add a touch of sophisticated luxury to the city’s skyline.”

he substructure works for piling, earthworks, diaphragm wall and the lowest basement is fully completed. Work on the basement car park Level 1 is now 80% complete.

Overall work progress for the superstructure or main building works is at 8% completion for the period ending February 2015. Ground floor works has progressed to 35% for shoplots at Block A and 40% for retail lots at Block

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B. Work on the superstructure is currently being expedited for the main tower of Block A and Block B which houses The Residences serviced apartments. The Residences sits atop the twostorey Festive Avenue Retail which offers a oneof-its-kind retail street concept with a 50-feet wide pedestrian boulevard. As one of the biggest names in the Malaysian property industry, Mah Sing places a high priority on the quality of its products. Sutera Avenue

has adopted CONQUAS (Construction Quality Assessment System), which is a standardized method of quality assessment where the developer is able to set targets for contractors to achieve and also assess the quality of the finished building. Each stage of Sutera Avenue’s progress will be assessed using this system to ensure that it meets the highest standard of quality and discerning taste of its premium clientele.

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FEATURE CONSTRUCTION PROGRESS

JESSELTON POINT HOTEL Strategically located in the heart of Kota Kinabalu CBD, Jesselton Point Hotel is right in the middle of the tourist district, business high streets and financial Centre. It is set to be the premier address for business and leisure travelers, expatriates, entrepreneurs and top executives.

t is a comfortable 3 minutes’ walk to Jesselton Point jetty located at the rear of the hotel, where you can hop in a speed boat to enjoy beautiful beaches at any of the 5 islands of the Tunku Abdul Rahman Park. You can also take a daily ferry from here to Labuan, a tax free heaven. The “must go” Sunday Gaya Street Fair is just a 10 minutes’ walk down the road.

PA return (based on purchase price) that comes withfree 12 days stay in a year for its hotel suite buyers. Jesselton Point Hotel is currently making good progress with the expected completion date slated for end of this year.The hotel management team from ACCOR group has been here since November 2014 to monitor the interior finishing works.

Jesselton Point Hotel is offering a GRR scheme for its hotel suites, with a 7%

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WEST MALAYSIA PROPERTY NEWS

Politics Has Least Impact On Property Sales, Survey Shows

evelopers, fund managers and lenders consider Malaysian politics as having the least impact on commercial real estate investment sentiment this year, a survey by property consultancy Knight Frank Malaysia has revealed. The global firm’s Malaysia Commercial Real Estate Investment Sentiment Survey 2015 revealed that rising interest rates and capital costs, as well as the implementation of the Goods and Services Tax (GST) next month, were deemed instead to have the most impact on commercial property investment. “Contrary to popular belief, the Malaysian political scene is considered to be the least important factor in having an impact on the commercial investment sentiment in 2015,”

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Kuala Lumpur’s Golden Triangle was considered the most attractive place in Malaysia for commercial property investment this year at 57 percent, followed by the Klang Valley at 30 percent. A total of 57 percent ranked Penang as the third most attractive region for investing in commercial real estate, while 87 percent and 61 percent marked Kota Kinabalu, Sabah, and Johor or the Iskandar region as their fourth and fifth preference respectively.

Bandar Utama booth at PH Expo 2014 Kota Kinabalu Edition

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Harbour City: RM800 Million Oceanic Theme Park Mixed Development In Melaka placing for all hospitality ventures in the vicinity while offering top worldclass accommodation for guests.

Knight Frank said in a statement. The Knight Frank survey showed that just four percent of those polled believe that Malaysian politics affect commercial real estate investment sentiment, compared to 30 percent and 26 percent respectively that cited increasing interest rates and the scheduled implementation of the consumption tax.

Malaysian Property Market Still Manageable

alaysian property developers and banks are resilient to possible shifts in sentiment as well as falling property prices, revealed Moody’s Investor Service.

Nearly 120 000 PR1MA House Approved For Construction Nationwide

In a report titled “Malaysia’s Property Sector Risks Are Manageable for Banks and Developers”, Moody’s said developers focused on residential projects in Kuala Lumpur, Johor, Penang and Selangor will be

total of 119,933 houses under the 1Malaysia Housing Project (PR1MA) have been approved for construction nationwide to date, said Minister in the Prime Minister’s Department Datuk Seri Shahidan Kassim. This included 8,547 PR1MA houses approved for Sarawak, he said when replying to a question by Wong Ling Biu (DAP-Sarikei) on whether the PR1MA project would be implemented in the Sarikei parliamentary constituency.

PR1MA website “At the moment, there is no PR1MA programme for Sarikei but we are prepared to start a project if there is an application or new land provided by the state government,” he said at the Dewan Rakyat recently. PR1MA is aimed at assisting middle income people within the RM2,500 to RM10,000 monthly income bracket, as well as factors on age level and total liabilities to own houses.

more challenged, while banks are well-positioned to withstand a soft landing in property prices.

to over-leveraged developers and households since they have higher risk of payment slippage.

According to Stephen Schwartz, Senior Vice President of Moody’s, the agency expects property prices in Malaysia to have a soft landing, on the back of robust, albeit decelerating gross domestic product growth as well as stable housing demand from midincome households.

Notably, Malaysia saw residential property prices rapidly increase to more than 40 percent in real terms since early 2009.

With this, Malaysian banks and developers should be resilient to falling property prices, said Schwartz. However, Moody’s vice president Senior Credit Officer, Eugene Tarzimanov, who is also one of the authors of the report, was cautious of mortgages with high loan-to-value ratios as well as loans

Previous regulatory measures aimed at cooling the property market, tighter lending conditions and goods and services tax will add downward pressure on home prices, said Moody’s.

The report noted that said price increase outpaced that witnessed by Malaysia’s neighbours.

ulti-award winning developer Hatten Group is kick starting 2015 with a colossal venture with the launch of Harbour City, a 6-acre mixed-used marine-themed development located on the Eastern shores of Pulau Melaka. This new hallmark of innovation stays true to Hatten Group’s vision of growing bigger, bolder and better each year, surpassing expectations and challenging industry standards yet again with a brilliant new model that will completely transform the island. Bringing a whole new level of excitement to the region, Harbour City is conceptualised as a selfsustaining, fully incorporated “city of amusement which infuses three vibrant elements – Retail, Theme Park and Hotel, to cater to every element of leisure, entertainment and relaxation. The leisure component is accommodated by 6-storeys of themed shopping mall which is topped by five floors dedicated to a vast indoor and outdoor water theme park for absolute entertainment. Completing the project is three hotel blocks for

Harbour City in Pulau Melaka by Hatten Group premier relaxation – a thematic hotel, Hatten Resort Hotel and the International chain Hotel.

The most outstanding feature of the project is its marine design element and interior concept. Inspired by Melaka’s renowned heritage as a major maritime port, the external view is shaped like a cruise ship with the bottom deck formed by the retail platforms of Harbour City Mall. Each shopping floor is designed to reflect the life on different oceanic levels rising from “The Trenches” (Lower Ground Floor) up to the “Coastal Layer” (Level 4). With over 800 stores, the Harbour City Mall offers infinite enjoyment and a unique underwater ambience to entice all shoppers. The mid-section of Harbour City consists of a 780-room “cruise ship themed hotel. Each room is designed to look like a ship’s cabin complete with bunk beds and nautical-inspired

interiors. With 14 suite layouts ranging in size from 365 sq. ft. to 1,267 sq. ft., the thematic hotel is an extension of the fun and adventure of the island setting. The highlight feature of this development opens out onto a massive 500,000 sq. ft theme park podium which rises over five floors. Investing over RM200 million for this part of the development alone, the indoor and outdoor Ocean Kingdom Water Theme Park will be designed and built by the Sanderson Group, acclaimed thematic developers who were specially commissioned to work on the “Warner Brothers’ Movie World” theme park in Australia. This element alone is expected to attract more than 1.5 million additional tourists annually to the island of Pulau Melaka. Elevating the tourism viability of the Harbour City development is the two premium hotel towers - the 500-room Resort & Spa Hotel and the 250-room, International tower which will feature a hotel built and managed in collaboration with Hyatt Group of Hospitality. The entry of the international hotel will create a higher

Harbour City is a secure, high return investment, conceptualized and developed by Hatten Group, a trusted name in property development. The megacorporation is renowned for its successful projects such as Dataran Pahlawan Melaka Megamall the largest mall in Melaka, Hatten Hotel Melaka with 704 deluxe suites well as the multi-award-winning Hatten City, a 3-phase, 25-acre luxury mixed development valued at over RM2 billion. The Group also recently launched large-scale mixed development projects in Negeri Sembilan and Iskandar Johor. Harbour City, strategically located on Pulau Melaka, just 5 minutes’ drive to mainland Melaka, will capitalize on the booming local tourism sector which saw over 14.2 million foreign arrivals to the state in 2014 alone. Adding to the highpotential investment landscape, Harbour City is ahead of the trend of luxury developments flocking to the coast. Among the most prominent upcoming developments in the vicinity is the RM40 billion Melaka Gateway project which will transform the area into an international marina and jetty terminal. “With over RM800 million invested in this project, Harbour City will open up a wealth of asset opportunities for investors. It is already earmarked as one of the most eagerly awaited and highly valued global holiday destinations in the South East Asia region,” said Mr. Colin Tan, Group Managing Director of Hatten Group of Companies. Since its official launch in Melaka on 17 January, Harbour City has recorded unit sales of more than 60% to date.

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Property Sector To See Slower Growth occupancy ranging from 60 to 65 percent, down from Singapore and Thailand’s 80 and 85 percent respectively.

A Chance To Own A Home At Half Price by Tropicana This will be Tropicana’s first campaign for the year to be launched through digital and online platforms.

Over in the residential sector, the number of serviced residences has surpassed that of condo units in the Klang Valley, said Foo Gee Jen from C H Williams, Talhar & Wong. The monthly service charges and utilities of serviced residences, which are residentials built on commercial land, are 25 to 30 percent higher compared to a condo project, which is built on residential land.

roperty consultants and a taxman highlighted at the recently held 8th Malaysian Property Summit how prices will move post-goods and services tax (GST), on the back of a supply glut in most sub-segments, reported the media. The main take-away was the over supply in hotel rooms, residentials, retail and office space. The shortage is in shop houses, affordable housing, landed units and industrial land. Notably, the summit was organised by the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) . PEPs president Datuk Siders Sittampalam does not expect the impending GST to have a significant impact on pricing. “The fundamentals of the market will affect pricing. But the GST will affect developers’ cost,” he said. Unlike Singapore, Thailand, Hong Kong and Australia, when the GST of its equivalent was introduced, these countries were experiencing a

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Scene of a property exhibition in Kuala Lumpur recently mild property boom. This is not the case here in Malaysia. Real estate personnel and buyers are waiting in the sidelines to see how prices will move after the implementation of GST in April. During his presentation on office space, CBRE’s Christopher Boyd said total office supply stands at 96.6 million sq ft, excluding those in Cyberjaya and Putrajaya, as at end-2014. “We have more office space than Singapore, same level as Manila and Bangkok,” he said. In 2014, the market absorbed only 300,000 sq ft of office space, or six times less than what was absorbed in 2013. Boyd expects occupancy, which currently stands at about 80 percent, to deteriorate in 2015 and beyond. This is also true with rental rates. Although the market witnessed a flight to quality, tenancies tend to be “sticky” since contracts have already been signed and moving would be costly.

Meanwhile, Adzman Shah Mohd Ariffin, ExaStrata Solutions chief real estate consultant, said the retail sector tend to work in tandem with the hospitality sector. He noted that the growing number of malls and integrated developments will further weaken sentiment.

For this year, 10 malls are set to enter the market, offering 5.25 million sq ft of net lettable area within the Klang Valley while five million sq ft more are expected to enter the market in 2016/2017. To lure shoppers, mall owners are doing all sorts of shows and promotions since when they peg rental to sales, the burden falls on them to ensure that tenants do well. Occupancy stood at 85 percent from 2009 to 1H 2014. James Wong of VPC noted an over supply of rooms in the hotel sector. Notably, there are around 200,000 hotel rooms within Malaysia, with

The ratio between the two stood at 60 percent condominiums and 40 percent serviced residences in 2010. Now, the ratio is 54 percent serviced residences and 46 percent condominium. He also highlighted the dire shortage of affordable housing as well as the two million families earning RM3,000 or less per month. With an affordable level of RM200,000, this group accounts for a third of Malaysia’s household. Their needs are yet to be met even as the government goes on talking about affordable homes priced at RM400,000 per unit. Overall, Jones Lang Wootton senior vice-president David Jarnell believes that 2015 will be an “extremely challenging year” for property developers who will have to be less greedy. “The sector is definitely moving into slower growth,” he said.

To participate in the contest, simply log on to http://dreaminvestment. tropicanacorp.com.my, fill up your details and tell Tropicana why you deserve to win in 50 words or less. Tropicana will also be hosting a contest on its Facebook page to generate more awareness of the Tropicana’s Facebook page post “Dream Investment” campaign. ou could be the lucky

one and be among the six winners of Tropicana Corporation Bhd’s ‘Dream Investment’ lucky draw contest. The campaign, which will run until April 16 is offering a mouth dropping prize to its winners; whereas they will have the opportunity to purchase one of its prime properties at a hefty 50 percent discount.

The properties include Tropicana Gardens in Kota Damansara,Tropicana Heights in Kajang, Tropicana Metropark in Subang Jaya, Tropicana Avenue in Petaling Jaya, Tropicana Cheras in Cheras and Arena Mentari in Bandar Sunway.

During the campaign, Facebook fans of Tropicana Corporation will also be encouraged to share the ‘Dream Investment’ campaign posts. Those who achieve the highest social media shares will win prizes such as Samsung Galaxy Note Edge, tablets and Apple products such as iMac and MacBook on a weekly basis. Fans will also be able to get an insight into Tropicana’s DNA consisting of accessibility, connectivity, innovative concepts and designs, generous open spaces, amenities, facilities, multi-tiered security and quality.

House Prices In Malaysia Have Dropped

ouse prices have dropped after measures were put in place to check rising property prices due to speculation, says Datuk Chua Tee Yong. The Deputy Finance Minister said data from the National Property Information Centre (NAPIC) showed that there was a drop in house prices with the market slowing down from 12.2% in the third quarter of 2013 to 4.6% in the same period last year. “The drop is a result of various measures taken by the Government,” he told reporters at the Malaysian Real Estate Convention 2015. “This is important. While all markets have speculators, excessive speculating will result in extreme price increases.” Among measures taken to curb speculative activity included raising the real property gains tax, imposing 70% loan-to-value on housing facilities for the third property and abolishing the developer interest bearing scheme. “The Government has also raised the ceiling price of properties that can be purchased by non-residents – from RM500,000 to RM1 million and this has helped as well,” he said.

Chua said the other significant move was the supply of low-cost and affordable housing through various schemes and initiatives. Malaysian Institute of Estate Agents president Siva Shanker said that while affordable housing was good, more focus should be given to properties priced between RM150,000 and RM250,000. “Currently, affordable housing is priced between RM350,000 and RM450,000, and perhaps this is inaccurate,” he said.

“To me, it is impossible for someone who earns RM3,000 to afford a property worth RM400,000. Even if his wife earns an additional RM3,000, he would still only be able to afford a house worth RM150,000,” Siva said. He said more focus should be given to building houses worth between RM150,000 and RM250,000. “There is a large group waiting to buy properties in this price range.”

Malaysian Institute of Estate Agents president Siva Shanker

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INTERNATIONAL PROPERTY NEWS

Sydney Mansion Illegally Bought By Foreign Investor

ustralia’s government ordered a company owned by China’s Evergrande Real Estate Group Ltd. to sell a A$39 million ($31 million) Sydney mansion as it cracks down on illegal homebuying by foreigners. According to a statement by Treasurer Joe Hockey, Golden Fast Foods Pty has 90 days to sell Villa del Mare in the harbourfront suburb of Point Piper.

INTERNATIONAL PROPERTY NEWS

Hockey said that the luxury villa was purchased in November 2014 via a string of shelf companies in Australia, Hong Kong and the British Virgin Islands. “We are very serious about integrity in our foreign investment sector,” Hockey told parliament.

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

Overseas Property Buyers To Pay Fees Before Purchasing Home In Australia A$10,000 fee for every extra million dollars. Abbott said the measures were not aimed at any one country, but anger has been growing at Chinese involvement in the country’s housing market, especially in Sydney. Transactions involving Chinese buyers rose 60 percent last year.

s reported in Global Construction Review, Australia has announced plans to make foreign property buyers pay a fee before they can transact business. The plans are announced after complaints regarding foreign homebuyers in general, and Chinese buyers in particular, are pricing Australians out of their own property market have surfaced. It also reported that Chinese buyers were blamed for a

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Foreign Investment Review Board website 14 percent of property price hike in Sydney last year. The prime minister of Australia, Tony Abbott said the government was proposing a range of fees and civil penalties to deter foreign buyers. One possibility is that a foreign investor who wanted to buy property worth less than A$1 million would have to pay a A$5,000 application fee. Investments worth more than A$1 million would incur a

The investment surge is part of a general overflow of capital from China’s domestic construction and property market: by some reports the Chinese have built 3.4 billion homes for its 1.3 billion people, and these is continuing concern about the future value of all this property. As a result, investors from mainland China have become big overseas property buyers in many parts of the world, including the UK and the US, where they accounted for sales worth $22 billion last year, a quarter of all foreign purchases.

The process has been accelerated by the fall in property prices brought on by the housing crash of 2008: prime real estate in Los Angeles is about 25 percent cheaper than a roughly equivalent lot in Shanghai. The move follows the introduction of similar taxes in Hong Kong and Singapore aimed primarily at discouraging the flood of mainland Chinese money into those markets. Singapore increased its surcharge on foreign buyers from 10 percent to 15 percent last year – although American citizens are exempt under the terms of a bilateral trade treaty. Hong Kong also charges a 15 percent stamp duty on transactions involving foreign buyers, including mainland Chinese. So far, the UK has not followed suit, despite the fact that 70 percent of all new-build homes in London are bought by overseas investors.

The forced sale of the six-bedroom mansion is the first strike by Prime Minister Tony Abbott’s government, which last month pledged to crack down on illegal property purchases, amid concern that overseas buyers are pricing Australians out of the property market. “The company entrusted professional lawyers in Australia to take full charge of the purchase,” said Ke Peng, vice president at Evergrande, in an emailed reply to questions. “The company will do its best to aid the Australian

City of Perth Outline a One-in-100Year Reformation

authorities to ensure its compliance with the law.” Evergrande is the Guangzhou, China-based developer of billionaire Hui Ka Yan. Overseas buyers are only allowed to purchase newly built properties in Australia with permission from the Foreign Investment Review Board. A parliamentary committee in November found there had been no prosecutions for breaches of the rules since 2006, and said the current A$85,000 fine was “seen by many as simply the cost of doing business.” The government last month proposed a tougher stance and said foreigners would have to pay a civil penalty of as much as 25 percent of the value of the property and be forced to sell it. Overseas investors wanting to buy homes would also have to pay application fees, starting at A$5,000 to help fund stronger enforcement of the rules, which have gone out for public consultation. The proposed free were however described as excessive by real estate lobby group Property Council of Australia, which said they would deter foreign investment.

erth State Government has been urged by Lord Mayor Lisa Scaffidi to be bold in its proposed legislative changes to expand its boundaries as the reforms represent a onein-100-year opportunity to build a stronger capital city and the government should getting it right. Scaffidi is urging the State Government to take this bold step in implementing the new legislative to indicate that they share a dedicated vision which will put Perth front and center, as well as help the greater metropolitan area and the state of Western Australia. In a report byIronfish (Australia’s leading property investment company), the Lord Mayor also said that the council will advocate strongly to represent the interests of its stakeholders to achieve the vision of a stronger capital city in electoral and other aspects of the City of Perth Act, which is expected to be introduced to State Parliament this year. Scaffidi said that rushed time frames and a narrow scope would unacceptably compromise the whole potential and purpose of the City of Perth Act. The council has outlined a list of aims for the new City of Perth Act to achieve which should include,among others, the following:

Perth, Western Australia • Create a new framework for a stronger Capital City to be able to operate locally and globally, securing economic benefits for Perth and Western Australia; • Define the purpose of the Capital City; • Establish a framework for an open and collaborative relationship between the State Government and the City of Perth; • Accompany a bolder more holistic approach to enhancing the broader legislative framework; • Integrate the various influences on the planning and development of the City; • Establish a stronger platform for economic development; • Form a strong constitutional governance lead by the Lord Mayor whose regally decreed title is duly recognised; • Establish the basis for the City of Perth to operate in a more commercial manner that properly recognises the business environment in which it operates; and • Modernise legislative provisions that have no place in new and bold legislation.

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INTERNATIONAL PROPERTY NEWS

Perth’s Elizabeth Quay Precint To Open In Spring 2015

he most awaited central business district (CBD) development in Perth, Elizabeth Quay is set to open by spring this year. West Australian Premier, Colin Barnett during his announcement stated that the interaction between west Australians and visitors with the CBD will dramatically change upon the opening of Elizabeth Quay. Reported by Australia’s leading property investment company, Ironfish, Barnett also commented that the underground foundation of the project was already completed as well as the construction above-ground is becoming more visible. “It’s easier now to see the individual components coming out of the ground, including the public spaces, amenities and food and beverage outlets. Before we know it, Perth’s riverfront will be turned into the vibrant destination it was always meant to be,” he said. The inlet walls are complete and excavation is expected to begin early 2015, ready for water to fill the inlet. The footings for the new pedestrian bridge are being constructed and pilings are being installed for the food and beverage outlets, jetties and moorings.

Elizabeth Quay is expected to deliver about 1,600 jobs during construction, with 146 contracts awarded to businesses for earthmoving, fabrication, surveying, construction, landscaping and architectural services.

“Elizabeth Quay will return a significant portion of the state’s initial investment with more than $90 million already secured from the sale of the first four development sites,” the Premier said. The Elizabeth Quay project aims to reconnect the Swan River with the CBD through the mixed-use redevelopment of 10 hectares of riverfront land between Barrack and William streets. The State Government is reported spending $440 million on the construction of the inlet, roads and services, public domain and the creation of development sites. In the longer term, it is anticipated that the precinct will attract more than $2 billion of private sector investment and feature around 800 apartments, 400 hotel rooms, 200,000 square metres of commercial space and 25,000 square metres of retail space.

Computer generated image of Elizabeth Quay in Perth CBD

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Western Austalia to Generate $250 Million From Assets Sales

estern Australia Government has taken a further step in its effort to reduce the state’s debt by identifying some prospective sites as part of property assets sales, as reported by Autsralia’s Ironfish. Premier Colin Barnett in a statement announced that the government has already identified 20 sites including Kaleeya and Shenton Park hospital sites, East Perth Power Station and Fremantle Police Station, Princess Margaret, Swan District and Woodside Maternity hospitals, as well as the Cottesloe School for the Deaf and large parcels of land held by the Department of Agriculture and Food and the Public Transport Authority.

He also said that the pieces referred site, which located in the urban area and from a range of portfolios, would be better transferred to private ownership to be redeveloped or restored, adding that the land sales are expected to generate approximately $250 million. “The sale process will vary from one piece of land to another with some sites ready to go to market

Perth, Western Australia now, and others that will take more work to get ready for sale,” he commented. Meanwhile, Shenton Park Hospital will be decommissioned next month with the majority of services being transferred to the new stateof-the-art Fiona Stanley Hospital. The transfer of Kaleeya Hospital’s services will also see all obstetrics, gynaecology and neonatal services moving to Fiona Stanley Hospital; sub-acute services, such as aged care, to Fremantle Hospital; and elective surgery distributed between both hospitals. On the other hand, Lands Minister Terry Redman said the potential sale of under-utilised land assets could generate high levels of revenue and contribute to reducing the State’s debt levels.

Eight Questions That Australian Property Investors Are Asking

ustralia’s leading property investment company, Ironfish has recently published an interesting topic of ‘Eight Questions Property Investors Are Asking’ on its web portal. Thus, let’s have a look on what the Australian expert has in mind regarding property investment and learn a thing or two from them. 1. SHOULD I BUY AN INVESTMENT PROPERTY NOW? This is the most common question for the first time buyers or those who want to buy additional property. The answer is, professional property investors – those who actually make a real living from property – don’t have to ask the question, as they already know that any time is the right time to buy into the market. If you are taking a long-term approach of 10 to 15 years of period and are financially capable of servicing the loan and the ongoing maintenance costs, just go for it, like today, because waiting for the “right” time to enter the market might mean you end up missing amazing opportunities. 2. WHAT ARE THE BEST AREAS TO BUY AN INVESTMENT PROPERTY? This question is a little like the last in that no area or suburb is “ideal” for investment property. However, there are certainly factors that will help make your property

more successful than others. For example, you can choose an apartment in an inner city location that is close to all amenities and transport. That will mean you are more likely to find high value tenants and more likely to benefit from capital gains over the longterm. 3. SHOULD I CONSIDER AN OFF THE PLAN PROPERTY? Off the plan properties have gained a lot of publicity recently thanks to an influx of investment capital and interest, especially in the main capital cities. There are many reasons why off the plan developments have become the darlings of investment property, including substantial discounts and deductions in stamp or transfer duties. The increase in capital gains for off the plan properties has also been well documented. If you are considering ways to maximise your investment money, then talk to an expert to see how you can benefit from off the plan property. 4. I WANT TO BUY MORE THAN ONE PROPERTY. IS THIS POSSIBLE? Most people who get into investment property have an ultimate goal of owning multiple properties, with the equity in one helping to finance new investments. Most professional property investors suggest that the best

He noted that the sites identified under the first round of land asset sales were all determined to be of surplus use to the State which is believed to be of great interest to the private sector. Previously in August, the Western Australia Government announced the sale of the Utah Point Bulk Handling Facility, Kwinana Bulk Terminal and the Perth Market Authority. The three assets are expected to generate between $1 billion and $2 billion.

Real estate agents Enoch Khoo and Alex Lee site visiting during a property study tour in Perth, Western Australia

way to begin is to purchase one property, pay down the mortgage for a few years (and benefit from negative gearing and other tax deductions) and then use the equity to buy new property. It is possible, however having a sensible long term strategic plan can make all the difference to getting you started and keeping you on track.

issues including finding tenants, collecting rent, sorting out bills and being the contact point for all correspondence. You just have to think of it this way – should you be spending your time dealing with property management or would it be better spent doing research and focusing on new investment opportunities?

5. CAN I AFFORD AN INVESTMENT PROPERTY? The short answer to this is generally yes, most people can afford an investment property as long as they plan carefully, get the right help and can manage their money. The long answer is that everyone’s personal circumstances are different, with different assets, earning power and property goals. If you are really interested in becoming a property investor then you should do as much research as possible, get assistance from experts in the field as well as professionals such as accountants or financial planners to ensure that it is the right move for you.

8. WHAT ARE THE COSTS OF BUYING A PROPERTY? Apart from the deposit and mortgage, general property costs include things like stamp or transfer duties, and bank, broker and conveyancer fees. These will vary according to the state or territory you are purchasing the property in and your individual circumstances.

6. DO I REALLY NEED A LONG TERM PROPERTY STRATEGY? Taking a long term approach to investment property – over a 10 to 15 year period – is the right way to ensuring that you can ride out any short term fluctuations in the market, benefit from stable rental returns and capitalise on market growth. When it comes to building wealth through an investment property, the best people to contact are those who are experienced in helping people create long term plans for their future.

The type of fees will also depend on the kind of property you buy – for example, the fees for off the plan apartments are often offered at a discount, and there may be substantial stamp or transfer duty deductions for brand new properties. It is always a good idea to have a small fund put aside for such expenses before considering buying an investment property.

7. SHOULD I MANAGE THE PROPERTY MYSELF OR GET A PROFESSIONAL COMPANY TO DO IT? You can manage your property or even multiple properties yourself, however there is a reason why professional investors tend to hire property management companies to sort out all the day to day

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INTERNATIONAL PROPERTY NEWS

Housing Approval In New South Wales On A High

ousing approvals in New South Wales are at their highest level since the 12 months period ending in May 2000, according to the latest Australian Bureau of Statistics figures. Minister for Planning, Pru Goward said that more than 52,000 housing approvals were made in the 12 months prior to August 2014, which meant that around 1,000 new homes a week had been approved.

“We know there will be two million extra people living in NSW by 2031, which means we’ll need about a million more homes,” said the minister. She added that the New South Wales Government has already started work on delivering the homes needed for the future, with more than 4,200 dwelling approvals provided in just the month of August.

Hong Kong Steps Up To Cool Down Red-Hot Property Market

She said that it is a smart planning for a growing New South Wales – making sure that the number of homes available keeps up with the number of homes needed will help put downward pressure on house prices.

•

Paved the way for the construction of more than 100,000 homes in less than three years.

•

Announced the release of land for an additional 8,100 homes in Western Sydney.

•

Increased the threshold for the First Homebuyers Grant to $750,000.

•

Announced three Urban Activation Precincts along the North West Rail Line aimed at creating 19,000 jobs and 12,000 new homes.

According to Minister Goward, boosting the supply of homes

euters has reported that Hong Kong is imposing few fresh measures in its latest effort to cool one of the world’s most expensive real estate markets. The said measured are including the step to reduce the amount of money home buyers can borrow as well as capping the amount of debt they can take. Last year, the home prices in Hong Kong was reported to be skyrocketing to a record high as tightening measures failed to curb the price hike, supported by strong local demand and tight supply. Home prices have risen nearly 35 percent since 2012, when the city’s leader, Leung Chun-ying, took power with a pledge to make housing more affordable. Frustration over the city’s widening wealth gap and soaring home prices have sparked widespread protests in Hong Kong.

Darling Harbour, Sydney, Australia

Fuelled by record high property prices and ultra-low interest rates, borrowers have taken on more debt, pushing the household debt to GDP ratio to a high of 64 percent. Norman Chan, Chief Executive of the Hong Kong Monetary Authority (HKMA), the city’s de facto central

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enderson-based Civmec has won a $73 million contract to supply and install 14,000 tonnes of steel for the new Perth Stadium, as reported in the West Australian web portal.

to help meet demand will help improve housing affordability.

Meanwhile, the New South Wales Government has already:

Civmec Wins $73 Million Perth Stadium Contract

Hong Kong bank, cut the amount of money home buyers can borrow to 60 percent of the property’s value, from 70 percent. The debt-servicing ratio for second-home buyers would be lowered to 40 percent for second-home buyers, from 50 percent, he added.

“The price for small and medium size residential apartments has risen by 12 percent in the second half of 2014, and the average monthly transaction volumes have increased to more than 6,000 apartments in the second half from 4,400 apartments in the first half,” Chan told a news conference.

The steel will be used for the fivelevel stadium structure plus the roof trusses that will support the lightweight fabric covering 85 per cent of seats.

2 In 3 Singaporean Worry They Can’t Afford Housing In Old Age

formwork and concrete for the stadium. “More than 100 tenders will be awarded during the stadium’s three-year construction phase and 5700 workers will help build the facility,” Mischin said. “This will not only change the way we watch sport, it is also generating huge economic and employment benefits for the WA economy.”

Announcing the contract, Commerce Minister Michael Mischin said it was one of the largest contracts for the three-year construction phase of the project. He added that about 120 people would be working on the contract.

Civmec which also involved in the State Government’s Elizabeth Quay project is scheduled to start work on the new stadium this month.

It is the second multi-million dollar contract awarded in less than a month to a Western Australian company to deliver the new Perth Stadium.

Brookfield Multiplex is part of the Westadium consortium appointed last year to design, build, partially finance and maintain the new stadium.

Three weeks ago, Perth-based construction company CASC won a $30 million contract to supply

It is responsible for sourcing and securing the procurement packages for the construction phase.

Construction of the stadium started in December and will take three years to complete, in which the 42-metre high, five-level structure will be open in time for the start of the 2018 AFL season.

The HKMA also reduced the amount of debt that borrowers can service to 40 percent from 50 percent for all mortgage loans taken for non self-use properties.

wo in three Singaporeans are worried about their living situation in their old age, according to results of PropertyGuru’s latest Property Affordability Sentiment Index. Their top three biggest fears are the inability to pay for adequate housing, being forced to downgrade to a smaller property, and relocating to cheaper properties overseas. The findings correspond with the recent Budget 2015 which aims to address the needs of the elderly and middle-income families in coping with Singapore’s rising living costs. Separately, 56 percent of those polled are still dissatisfied with current real estate conditions due to perceived expensiveness and overly restrictive government policies. Despite this, respondents rated the property market as becoming less expensive, with an affordability score of 168 in the second half of 2014 well below the base level of 100.

Hong Kong’s latest measures are an indication of growing concerns among the region’s policymakers ahead of an expected US central bank interest rate hike later this year. The New Perth Stadium, Burswood

The scores are calculated on four factors such as consumer satisfaction with the property market, property purchase intent of the respondent, perception of property price change, as well as sentiments on government efforts.

A mall in Singapore Meanwhile, 76 percent of respondents expect condominium prices to fall over the next six months. Commenting, Steve Melhuish, cofounder and CEO of PropertyGuru said: “43 percent of respondents intend to purchase a property within the first half of 2015 despite a bearish real estate climate. This figure represents a great improvement in consumer sentiment against previous years.”

“With the higher purchase intent, this might lead to an increase in transaction volumes in the latter half of 2015. This is derived from insights that there is a strong correlation between property enquiries and transaction volumes, according to our PropertyGuru analytics,” he added. Almost a thousand respondents took part in the survey, which included Singaporeans and permanent residents.

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INTERNATIONAL PROPERTY NEWS

Sentosa Cove Unit Sold At A Loss of $1.2 Million

he high end property market in Singapore remains gloomy with recent reports of a Sentosa apartment owner who booked a huge loss after buying the property at luxury home prices and later selling it for around the rate of a mass-market property. The property was initially bought for $4.34 million on March 8, 2007, according to caveats lodged with the Singapore Land Authority. However, the owner only managed to sell the unit for just $3.125 million, which translates to a loss of $1.215 million. Online property portal, Square Foot Researchalso stated that it is likely to be the cheapest transaction on the island in recent years and the steepest loss among the other 18 unprofitable transactions racked up at the Ho Bee Group condominium so far. The price might seem like a “bargain basement price” in psf terms, according Mr Donald Han, Managing Director of Chestertons, but it still works out to a sizeable quantum. He said that as not many people can afford a $3 million property, hence the dearth of buyers in the market and perhaps the speed that the seller required to transact could have led to such a low price. Forced sales of two units in Turquoise, another Sentosa Cove condo, at almost half their original

China Built A 57-Storey Building In Just 19 Days

value last year also surprised the market and indicated that banks were forcing more cash-strapped owners to offload property to meet loan shortfalls.

Luxury homes sold at large losses have been sporadic and isolated to selected projects, primarily in Sentosa, but signs are emerging that development in the prime districts of nine, 10 and 11 are being hit as well. Cushman & Wakefield Research Head, Christine Li noted that average psf prices of a typical high-end condo unit were 2.4 times that of those in the mass market in 2007. That multiple has since shrunk to 1.7 times. However, Han reckons that the luxury market could be hitting the bottom soon. Freehold land in prime districts is worth between $1,800 psf per plot ratio and $2,000 psf per plot ratio, and units priced below $2,000 psf on strata area are effectively sold at land value. He commented that pricepoint wise, it is hard to see luxury prices getting even lower than what they are today.

jaw dropping news has emerged as a developer in China has successfully showed the world how to build an entire 57-storey skyscraper in just 19 days, as reported in Gizmodo.com. Located in Changsha, the capital of Hunan Province in south-central China, the Mini Sky City building was put up brick by brick at a rate of three-storey a day, as workers worked around the clock to finish the job. The building is mixed-use, with 800 apartments and enough office space for 4,000 people. It was originally planned to be built up to a height of 220 stories, but was cut down due to concern of being too close to a nearby airport. The prefab construction is said to be environmentally friendly, reducing the use of concrete trucks by about 15,000, in which much of the building was pre-built off site to speed up the construction process and reduce pollution from delivery trucks

The construction of a 57 storey building in 19 days located in Changsha, China The developer, has also claimed that the new tower’s interiors will feature 99.9 percent pure air because of the tight construction method used and its built-in airconditioning system, as to adress China’s worsening air pollution problem.

The company behind the construction, Broad Sustainable Building, previously built a 30-storey building in Changsha in just 15 days. The developer on the other hand claims that its technology is ‘the most profound innovation in human history’. While the rapid construction is ecoconscious, some online users have raised concern over safety.

The Future Of Gold Coast In 25 Years

he most popular and fun city in Australia, Gold Coast is going to have its look and livability altered through the new vision of the city’s current leader.

expansion of the beach side part of the city with the development of a cruise ship terminal. The current population of 600,000 residing in Gold Coast is also expected to double in the next half a century.

In a broadcasted 7 News report by Josh Adsett, Gold Coast’s development plan for the upcoming 25 years has been laid out by the city council development. The atmosphere of the city will have a new twist with more skyscrapers rising from the ground and the streets will have a different look once thepublic transport system installs a tram railway from Broadbeach to Robinaas part of the grand plan.

According to a population analyst, the city which is famous for fun with income generated from welcoming tourists, needs to swap the tag for investment in health and education to cater to the growing population.

Mayor Tom Tate has a very clear vision of how the city would appear in the next quarter century. He stated that the citizens of Gold Coast are keen on protecting their lifestyle and with the fact that more people are migrating into the city, the most ideal way is by going up (as to fulfill residential demands) rather than spreading too much. There have been some significant changes in the city in the past 25 years, namely the existence of residency in Robina and the now blooming Pacific Pines and Upper Coomera which initially were only ideas. There are also plans for the

Laird Marshall of Southport Chamber and Industry noted that they are hoping for people who visit Gold Coast would not only be those who are interested in swimming and surfing, but also those with the intention to move there for business establishment purposes. Adsett also reported that the property development at South Port is expected to boom after the completion of the new stadium and athletes village which can house 6,500 people for the 2018 Commonwealth Games. After the closing ceremony of the games, there will be 1,200 units of apartments available to be purchased thus creating a new residential that is also a stepping stone for a greater Gold Coast future as planned in the next 25 years.

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The red light district of Singapore

uperstition, safety and peacefulness were listed as the top reasons for consumers not to buy a Singapore residential property, revealed PropertyGuru’s latest quarterly sentiment survey conducted between October to December 2014.

Nearly 1,000 Singaporeans and permanent residents took part in the entire survey, but only 761 respondents answered this section.

Built on or near to cemetery grounds

Most of the respondents polled said they would definitely not purchase a property close to cemetery grounds, followed by properties within proximity to red light districts, pubs or KTV lounges.

Proximity to red light districts, pubs or KTVs

Facing a highway or major road

History of death in the vicinity

Noisy neighbourhood

Proximity to garbage collection points

Facing MRT tracks

Awkward unit layout

Dimly lit or secluded surroundings

The findings come just two months after several future residents of the Fernvale Lea BTO in Sengkang made noise over plans to build a commercial columbarium nearby. The columbarium project was subsequently scrapped after the government intervened. Rounding up the top five list in descending order are: Never buying a home facing a highway or major road, living in a unit where somebody died, and a noisy neighbourhood.

The building was constructed with China’s pollution problem in mind, using quadruple thick glass and tight construction. Aerial view of Sentosa Cove, Singapore

Top Ten Reasons Where Singaporean Will Not Buy A Residential Property

TOP 10 REASONS NOT TO BUY:

10. Built next to a hospital

Artist’s impression of Gold Goast, Australia

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CONTRIBUTOR| Michael Yeoh

If we were to look at the current household debt in Malaysia, we are one of the highest in the world at a staggering 146% according to McKinsey Global Institute report. The problem is most Malaysians are laden with debts today. Based on my experience, credit cards and personal loan are the main culprits in loan rejection. To proof my point here’s an extract email I received not long ago.

MALAYSIA’S HOUSEHOLD DEBT Is Going UP, UP AND UP

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

ne of the biggest issues in property purchase today is loan rejection. Even first home purchasers are not spared. The question is who should we blame? Should we blame the banks, Bank Negara or the loan borrowers? In the many talks and forums I attended, many put the blame on the banks and Bank Negara for not being lenient in loan approval especially to first time home buyers. If you were to ask me, the banks and Bank Negara are doing the right thing else our country will be facing the subprime crisis like the United States.

HOUSEHOLD DEBT-TO-INCOME RATIOS HAVE GROWN SIGNIFICANTLY IN DEVELOPING ECONOMIES- THAILAND AND MALAYSIA ARE NOW ABOVE THE US LEVEL Household debt-to-income ratio %

2007

139 146 93 44

Czech Republic 37

Poland

Brazil

Indonesia Turkey

Mexico

22 14

14 9

25 13

10 12

2 United States 2Q14= 99

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Vietnam

Russia

Argentina

121

China

It is sad to see this guy who has been renting for the past 20 years not being able to buy his first house as his loan is rejected by many banks because of his credit card debts.

One of the best ways to make sure your property loan will be approved by the banks is to start mortgage planning. If you know that you are going to buy a property in the coming months you must start immediately. Mortgage Planning also involves reducing your debts. Learn what the banks look at before approving a loan and plan towards that.

2Q14 or latest available

Malaysia Thailand

“For a long time I had problems getting a house. This is due to my credit card debt has prevented to allow me to make any loan bank institutions. Although I was desperate to have a home for my family who is renting a house for almost 20 years, in addition to my age is growing very worrying me in order to get home. How can I overcome this problem?”

Put yourself in a lender’s shoes and you’re lending out your own money. This guy earns RM4,000 a month but has a total debt of RM3,000 excluding monthly expenses and new loan installment. Will you lend to him? If you won’t, do you think the bank will. The banks have to practice prudent lending policies or else Malaysia will be like the US which was badly hit by the subprime crisis.

United Kingdom 2Q14= 133

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BANKING AND INVESTMENT NEWS

$₤

HSBC Survey Reveals Many Malaysians RHB Chief Steps Down Buy Second Home for Retirement Fund

HSBC’s recent survey revealed that the working class people in Malaysia have foreseen that their retirement funding would be better secured if they invested in a second property.

€ BANKING & $ INVESTMENT

In the The Future of Retirement: A Balancing Act titled survey, it is reported that 83 percent of working age people in Malaysia either already own or are planning to own a second property. The percentage figure is double that of 43 percent in other countries.

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

Knight Frank Launches Inaugural Malaysia Commercial Real Estate Investment Sentiment Survey 2015 invest/lend or develop commercial real estate in 2014 cited poor yield/ return as the main reason. • More than 80% of the respondents feel less optimistic about the overall economic scenario in 2015, while the rest believe that the market will remain unchanged from 2014.

Sarkunan Subramaniam, Managing Director, Knight Frank Malaysia

night Frank Malaysia, the global property consultancy, has launched its inaugural Malaysia Commercial Real Estate Investment Sentiment Survey 2015. The survey takes a litmus test of insights and preferences of key players, namely fund managers, developers and lenders in the commercial sector for the year 2015.

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SURVEY RESPONDENTS The survey was conducted using an e-survey mechanism distributed throughout Knight Frank’s vast database as well as in-depth interviews with key players in the local commercial sector. HERE’S A SNAPSHOT OF THE RESULTS: • More than 40% opted not to

• The healthcare/institutional sector is expected to show the most growth in 2015 followed by the hotel/leisure sector. • Contrary to popular belief, the Malaysian political scene is considered to be the least important factor in having an impact on the commercial investment sentiment in 2015. Sarkunan Subramaniam, Managing Director, Knight Frank Malaysia, says, “It is predicted that at least

for the first ten months of this year, the commercial investment market will see a softer subdued climate, as it will be grappling with rising cost of capital, selective lending and the implementation of the Goods & Services Tax. Opportunities will abound towards the end of the year when we are likely to see some pressured sales where prices become more realistic, driving yields to be attractive. The healthcare/institutional and hotel/leisure sectors are likely to be more resilient whilst the office sector seems likely to see some strain. The retail sector will have a slightly poorer year but certainly better than offices. The logistics/ industrial sector may actually turn up a good surprise to investors. But do remember whilst sentiments do drive the market, hard facts determine said sentiments.”

It is also revealed that unconventional forms of supplementary retirement funding sources are gaining popularity, with 76 percent of working age people in Malaysia planning to rely on returns from gold, jewellery or diamonds, 32 percent on antiques, 25 percent on paintings or works of art and 28 percent on classic cars. The shift to alternative sources of retirement fund with unconventional methods is caused by the fear of having to live with very little or no money at all after retiring, as it is also revealed that there is an eight year saving gap post retirement.

In an average of 19 year retirement, the pensioners in Malaysia are expected to run out of their savings and investments after 11 years as reported in The Edge Market. The premonition heightens fear among the working age people where 88 percent of them are already concerned they will have insufficient money in retirement to live on day-to-day and 81 percent fear they will run out of money altogether.

On the other hand, 70 percent of working age people remains confident in the potential for personal pension schemes and 69 percent of them still believe that employer pension schemes to generate income during retirement. The only concerns are those money may not provide enough for a comfortable retirement as it would prompt many to turn to extra sources of support.

he Group Managing Director of RHB Capital Bhd. (RHB Cap), Kellee Kam Chee Khiong has announced tendering his resignation after holding the position for more than three years. In a statement released by the banking group, it was said that Kam will remain in his current position until the end of the transition period. The exact date however, to be announced later.

The fourth-largest Malaysian bank by assets said that it already had a succession plan in place and “will execute a transition plan for a smooth handover of responsibilities to his potential successor”.

Kellee Kam Chee Khiong Khairussaleh, who had previously headed Malayan Banking Bhd’s Indonesian unit PT Bank International Indonesia TBK, joined RHB in December 2013. Kam, who has been with RHB Cap for over a decade, ascended to the helm of RHB Cap four years ago in 2011. He had previously held the position of Group Chief Financial officer at the country’s fourth-largest banking group by assets. Reported in Bloomberg recently, Kam was said would serve out a three-month notice period, and had indicated his intention to leave prior to the merger proposal that was mooted in July last year, but stayed on to help oversee the process.

Meanwhile, the person likely to succeed Kam, said industry players, is Datuk Khairussaleh Ramli, who is the group’s Deputy Group Managing Director as well as Managing Director of RHB Bank Bhd.

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COFFEE TALK | kopiandproperty.com

YOU MAKE IT FASTER, I MAKE IT CHEAPER.

his is a good challenge and it should be reported by all media. Datuk Francis Goh, the President of the Sabah Housing and Real Estate Developers (SHAREDA) said that one major contributor to housing price increase is because of the delay in development approval. In fact, he outlined clearly why if the development approval is fast-tracked, it can possibly reduce housing prices by 10 percent. Currently, developers have to wait for two and a half years for their development plans to be approved. This increases the cost for the developers. For example, the

ONCE YOU RENT HIGH,

holding land cost. Of course, these costs would be priced into the final selling price. He suggested that the approval should be shortened to between six and 12 months and this would translate into a five percent cheaper price. Another 3 percent would be reduced if Sabah Electricity Sdn Bhd (SESB) can give developers a waiver in capital contribution. Another 2 percent comes from the overheads which could be saved. Personally, I do not doubt that prices can be reduced but by what percentage, I think it would still very much depends on the demand and supply situation and not just due to these approvals.

However, faster approvals definitely have many other benefits too. The development can be faster. Thus, supply can also be increased and competition too which meant developers would have to think harder when they price their products. Faster approvals also meant that the developers do not need to try any ‘under table’ tricks to fasten it. Last but not least I think the current two and a half year is way too long. If we are really aiming to be a developed nation, all these unnecessary delays and processes should be streamlined. Of course, this applies to ALL states in Malaysia and not just Sabah.

Happy ‘GST’ thinking if you still think GST is the main reason for buying or not buying.

You May Never Buy

roperty Insight Malaysia asked an interesting question. Should you rent or buy? To be honest, I would buy anytime. If I could not afford the places I want, then I buy 5 minutes away from the places I like. If I still could not find, then I would buy 15 minutes away. The question today is not on whether I’d rent or buy. Today, we will talk about, if we are renting and we would like to rent at places nearby, live very comfortably; fully renovated, fully furnished, the truth is, we may never buy. Haha. Yes, it is true. Let’s see my three reasons for saying so. Just too used to it. You come home, the guard salutes you and smiles. He knows you by name as you have been staying there for the past 6 months. You parked your car, which happened to be just 15-20 steps away from your doorstep. You unlock the door, switched on the light and your smartphone starts using the broadband connection in your home. The remote was where you left it, you switched

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the tv on, grab a can of kickapoo from the fridge, sat down to watch the live football match from ASTRO. All these were included into your rental of RM2,600. You think it’s worth it, because ASTRO would already be Rm150, broadband is another RM150, all the furnitures, the electrical goods etc, surely, Rm2,600 is worth every cent! Just can’t and could not. Buying a property of your own is not something easy. The great ones may not be at places you want. The expensive ones may just be above your current rental that you are paying. The cheap ones may not offer you the same comfort, convenience and quality you expect to have. In case you are still wondering why the rental that you pay can still be lower than your mortgage payment, do note that many years ago, the price that your current landlord paid for his condo was much lower, thus he is able to cover his mortgage even with your rental today.

Why bother. Within past 16 years of my working life, I have moved house 8 times. Yes, it’s crazy. The first half was all due to rental. The second half was because I was upgrading which is a good thing. However, even after having so many experience, let me tell you that it remains tough and if you are really thinking of moving, if you have been renting and accumulating so many things in your rented property for many years, you will faint. If you do not believe in property investment and is doing very well on other types on investments, why bother. Just stick to what you feel good about. The above is applicable only to those who are renting at a premium and have everything included. This is not aimed at those who are renting a bare unit and have to make do with the least requirements that you would expect. So, it’s easy to see clearly, why after you have been renting for a while, it will be tough for you to buy.

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COFFEE TALK | kopiandproperty.com

GST vs

the supply and demand?

here’s one question that I would always pose to any analyst. Can GST beat the demand vs supply equation for the property market. To those who answer, maybe not in total but it can distort the market, my next question would be for how long. If the answer is 6 months, then I think the answer is clear, it may be best to buy now instead of waiting for that 6 months to come because by then, you may have lost that few percentage point of potential profits. If the answer is one year, that’s even better, you have time to accumulate a little bit more before buying. Note though that whatever answers that are given, it does not change the demand vs supply equation. Those who need a home would still need to buy a home. They

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just need that right one to come along. Perhaps price is that final frontier. Can supply increase? Well, of course it can increase but the question would how fast can it increase? Does everyone understand that if the total number of projects starting in 2015 is reduced by 50%, it would meant that property prices would most probably go up by 2018 when the market realised far too few properties were being completed by then? Thus, slowdown may be a better time to buy than a ‘HOT’ time. Reason is because many of the usually rational thoughts are out of the window when everyone you know is buying. If everyone is buying, surely they are right? For a democracy, perhaps. For property buying, please go back to why are you buying in the first place. The rest of reasons just do not count.

Are demand reducing? Well, look at the numbers who are getting married. Read here: Why Malaysia need 8 Million homes based on current population? Demand is definitely not reducing when you look at the baby product departments in all departmental stores. Look at the new baby rooms being built for mothers to change diapers or breastfeed their babies. They are not just new, they are well equipped. Kids eats free. Buy property. Seriously, stop talking as if GST will bring down the whole property ‘industry’. GST is in fact no match for demand and supply. The only thing that will affect demand and supply tremendously remain the same. Only if another financial crisis happens. I am not sure if anyone wants that though. Cheers!

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PROPERTY LISTING |SABAH

BUNGALOW / VILLA FOR SALE