Property Insight February 2016

FEBRUARY 2016

COVER STORY

OCR LAND HOLDINGS

AREA FOCUS

CHERAS SOUTH

MAIN FEATURE

YEAR OF THE FIRE MONKEY February 2016 RM7.50(WM) RM9.00(EM)

KDN PP 18181/04/2013 (033492)

EDITOR’S MESSAGE

EDITORIAL

No more monkey see, monkey do!

NADIA GIDEON, Editor-In-Chief

W

hen the lunar calendar changes this year, we will usher in the year of the fire monkey. For some this is great news, for others, not so. The monkey year begins on the 8th of February 2016. It is time for us to take off on a new and exciting journey.

No more monkey see, monkey do for us here at Property Insight. Read what two Feng Shui experts have to say about the coming year.

Dato’ Joey Yap and Prof. Joe Choo, may help you turn things around. There are similar challenges to putting together a magazine like Property Insight. Reporting, editing, and factchecking a story for a publication takes time; to tackle subjects like BRT – The Sunway Line or the information overload in our Identifying Property Hotspots article during PRISM from experts in the industry. You have to attend events, see if they are newsworthy enough, predict what the news will look like days and weeks from today, then you tilt and zoom half blind and hope you get the shot you want.

Fortunately for us, the BRT – Sunway Line story was a really interesting piece of journalism. Our writer Fara, woke up early, took the line and rode all the way to the last terminal and then took the bus back again. The whole experience, was genuinely surprising and extremely interesting. Read about it and write to us. Tell us what you think.

The February issue also contains a story

about Billy Ong who graces our Cover. Read about OCR and how they have managed to stay on top after so many years. Our writer Natasha, tells us she’s in love with their properties, she can’t stop talking about OCR. In fact, she seems to have OD’d on OCR. We also have another interesting story for you. We will tell you about IOI’s best kept secret. Shhh……don’t tell anyone, just read about The Clio in our Developer of the Month section and tell me it isn’t a beautiful development. Bet you can’t.

Speaking of new ideas. Ok, we weren’t speaking of good ideas…but we did have a good one. We have a new section in the magazine called Destinations. Avi, our writer went down to Puteri Harbour and came back with an interesting story. And so we decided that we would travel and experience as many destinations out there that are fun and exciting and then we are going to tell you all about them. If you have a destination, which includes a theme park, a hotel property, a café, a restaurant, a mall, a yacht, anything at all that is worthy of a good story and that you would like to share with us, give us a call. We’d love to talk to you.

In the meantime, we at Property Insight wish those of you celebrating Chinese New Year Gong Xi Fa Cai and happy holidays to those of you on holiday.

www.propertyinsight.com.my

www.youtube.com/Property Insight Malaysia

Property Insight Malaysia

www.twitter.com/propinsightmy

PropertyInsight

Editor-In-Chief Nadia Gideon editor@propertyinsight.com.my Writers Fara Aisyah Firdaus Petial Natasha Gideon Avinash Sagran CREATIVE Art Director Sarah Tan sarah@propertyinsight.com.my Designer Irman Hakim BUSINESS DEVELOPMENT General Manager Janet Loh 012-205 0911 janet@propertyinsight.com.my PUBLISHER Strategic Advisor & Managing Director KK Chua kkchua@propertyinsight.com.my

Armani Media Sdn Bhd (1032085-H) No. 32-3, Jalan Pekaka 8/4 Seksyen 8, Kota Damansara 47810 Petaling Jaya, Selangor Tel : +603 6156 3366 Fax : +603 6156 3399 PRINTER Percetakan Osacar Sdn Bhd Lot 37659, No. 11, jalan 4/37A Taman Bukit Maluri Industrial Area Kepong, 52100 Kuala Lumpur, Malaysia ENQUIRIES enquiries@propertyinsight.com.my

Although every reasonable care has been taken to ensure the accuracy of the information contained in this publication, neither the publisher, editors, writers nor employees or agents can be held liable for any errors, inaccuracies and/or omissions. The contents of this publication do not constitute investment advice. It is intended only to inform and illustrate. No reader should act on any information contained in this publication without first seeking appropriate professional advice that takes into account their personal circumstances. We shall not be responsible for any loss or damage, whether directly or indirectly, incidentally or consequently arising from or in connection with the contents of this publication and shall not accept any liability in relation thereto. The views by our contributors expressed here are their personal opinions and do not necessarily reflect Property Insight’s views. The publisher does not endorse any company, organisation, person, investment strategy or technique mentioned in this publication unless expressedly stated otherwise. The publisher does not endorse any advertisements or special advertising features in this publication, nor does the publisher endorse any advertiser(s) or their products/services unless expressedly stated to the contrary. All rights reserved. No part of this publication may be reproduced in any form or by any means, including photocopying and imaging without the prior written permission of the publisher.

CONTENTS

10

40

COVER STORY

PERSONALITY OF THE MONTH

10

56

OCR LAND HOLDINGS

They say the early bird gets the worm, so when you say OCR Land Holdings who has been around since 1989, you will be reminded of one word – location!

MAIN FEATURE

16

Ushering in the year of the monkey

Tati Hamzah - A cili padi in property

Big things come in small packages, and sometimes, so do big personalities

INVESTOR NEXT DOOR

60 Be patient, do your research and take action Invest in property wisely

Forecasting the global and property outlook in Malaysia using Chinese Metaphysics and Astrology

INDUSTRY INSIGHT

FEATURE

62 Vigorous valuers

A local valuation firm with a global reach

24

BRT – SUNWAY Line : The winds of change

Is it the time to embrace change yet?

DESTINATION - Puteri Harbour

30

Sepang : Developing faster than an F1 race

64 What’s up Johor?

Sepang is central to many mega projects like KLIA, KLIA2, Putrajaya, Cyberjaya and Sepang F1 – It has a good supply of land for future investments

36

New places to invest: Understanding property hotspots

Head south for a little time together

STRATEGY

68 Property outlook 2016

Transport hubs and links uncovering hidden corners of the city

Challenge the status quo & have an independent mind

DEVELOPER OF THE MONTH

72 With limited wealth, stay focused on building it up

40

DOTM: IOI’s Best kept secret – The Clio

Strategically located, fabulous facilities

FINANCE

AREA FOCUS

74

44

STRATEGY

Cheras south, Home to all generations

Fall in love all over again

FEATURED PROPERTY

52

Bandar Ainsdale

The new gateway to Seremban

2016 Property financing outlook

76 More guaranteed rental return schemes in the market?

79 Making money from ‘What if’ Sometimes the potential is in what you can’t see.

2016

PROPERTY SHOWCASE

EVENTS CALENDAR

A place where the right people meet to achieve their dream homes & investments PROPERTY SHOWCASE

3 days

7

3

days

PIPDA GALA DINNER 2016

PUBLIKA

MESRA MALL

SHANGRI-LA

Solaris Dutamas

Kemasek, Terengganu

Kuala Lumpur

4 – 6 MARCH 2016

24 – 26 MARCH 2016

3 days

1 night

1 APRIL 2016

PROPERTY SHOWCASE

PROPERTY SHOWCASE

PROPERTY SHOWCASE

NU SENTRAL

AEON CHERAS SELATAN

QUEENSBAY MALL

KL Sentral, KL

Balakong

13 – 19 APRIL 2016

2 – 8 MAY 2016

Penang 12 - 15 MAY 2016

days

3 days

BUMIPUTERA SHOWCASE

7

days

4

days

PROPERTY SHOWCASE

INVESTORS’ HOT PICKS PROPERTY SHOWCASE

HOME+ & PROPERTY SHOWCASE

KOMTAR JBCC

MID VALLEY EXHIBITION CENTRE

IPC SHOPPING CENTRE

Johor Bahru

Mid Valley Megamall, KL

Mutiara Damansara

3 – 5 JUNE 2016

15 – 17 JULY 2016

3 days

7 days

25 – 31 JULY 2016

PROPERTY SHOWCASE

PROPERTY SHOWCASE

PRISM 2016

PARADIGM MALL

GURNEY PLAZA

SETIA CITY CONVENTION CENTRE

Kelana Jaya

Penang

Shah Alam

12 – 14 AUGUST 2016

27 – 30 OCTOBER 2016

5 – 6 NOVEMBER 2016

4

days

2

days

We look forward to collaborating and partnering with you Enquiries: +6012-2050 911 / janet@propertyinsight.com.my

NEWS & EVENTS

PRIME CITIES FORECAST REPORT

BY KNIGHT FRANK

11

January 2016, Malaysia - Knight Frank an independent global property consultancy launched Prime Cities Forecast Report which assesses the performance of ten prime residential city markets in 2016. According to Kate EverettAllen, Partner, International Residential Research, Knight Frank, who all say the same thing. “Prime prices across all ten cities are, on average, expected to have increased by approximately 3% in 2015, but average annual growth is forecast to slip to 1.7% in 2016.

This confirms Knight Frank’s view that lower returns will become the norm in the short to medium term. Events in the world’s two largest economies look set to dominate proceedings in 2016”. Several highlights from the report include Hong Kong forecasted to overtake Singapore as the weakest performer in luxury residential market. Sydney would witness the strongest prime residential price growth. Lastly, the Risk Monitor indicated the US interest rate rise would pose the greatest risk to global prime residential markets based on its risk assessments

INSIGHT ON CORPORATE REAL ESTATE – ASIA GLOBAL SUMMIT 2016

O

pportunistic landscape for ASEAN has sparked interest among foreign investors. With the establishment of ASEAN Economic Community (AEC), a single market and production base eliminates trade barriers and allows free flow of goods, services, labor and capital making the bloc an attractive destination

for investments and expanding businesses.

Surpassing China, ASEAN region attracted a total of $111.8 billion in foreign direct investment (FDI) in 2014 from countries outside of the region.On the 22-24 March 2016, The Ritz-Carlton, Millenia Singapore will host 2016 Asia Global Summit in Singapore hosted by CoreNet Global. With

the theme for this year’s summit being “The Big Picture: Geopolitics, Economics and the Environment’, the event is set to reveal trends on corporate real estate in APAC, key opportunities’ and challenges facing the industry with an emphasis on the growing importance of real estate strategies for companies in APAC

LBS CONFIDENT IN MAINTAINING SALES MOMENTUM FOR 2016

L

BS Bina Group Berhad (LBS) achieved a total of RM1.029 billion in sales for the year 2015, an increase of 60% in comparison to the year 2014.

LBS future launches include a mix of highrise and landed residences, spanning from affordable to premium range homes as well as commercial developments. Those anticipated launches would definitely see more Malaysian home buyers rejoicing as the group continues to play a proactive role in providing affordable home options.

LBS Managing Director, Tan Sri Lim Hock San believes a strong portfolio of properties would definitely carry forth the groups’ sales momentum for 2016

6 | FEBRUARY

2016 www.propertyinsight.com.my

RUMAH MAMPU MILIK JOHOR: AFFORDABLE HOUSES COURTESY OF MB GROUP

D

esaru Utama Carnival was held from 2- 10 January 2016. The event saw potential homebuyers and visitors from all over Malaysia to explore the potential to own a piece of property at Desaru Utama. Visitors definitely were not disappointed as MB Group launched Affordable Homes (‘Rumah Mampu Milik Johor’, RMMJ) and the new Clubhouse which was launched by YAB Datuk Seri Mohamed Khaled bin Nordin, Menteri Besar Johor officiating the launch. He said during the launch “like any other project concerning property, the RMMJ requires proper planning and execution. “In view of the economic uncertainty, such project is crucial to ensure the people of Johor gain benefit from it. The state government will continue to ensure the best solution for our Rakyat”. Of the 7000 residential and commercial units, approximately 740 units will be affordable homes and 2,000 units are single storey terrace houses. As the Johor Government is aiming to reach 60,000 units of affordable homes by 2019, this initiative

by MB Group is a stepping stone to making it a reality

A 10 ACRE RESIDENTIAL OASIS IN THE HEART OF MONT KIARA

9

January 2016, Kuala Lumpur – Agile Real Estate Development Sdn Bhd launched its maiden project in Malaysia, ‘Agile Mont Kiara’, a 10 acre residential development in the heart of Mont Kiara. In the speech delivered by Datuk Hj Mohd Najib, the Lord Mayor said, the city welcomed reputable international investors and developers such as Agile Property Holdings Limited.

Agile Mont Kiara consist of 11 towers with 7 types of units ranging from 1,162

square feet to 5,037 square feet. The project is scheduled to be completed by the fourth quarter of 2019.The Property is within walking distance to Solaris Mont Kiara and Publika, with easy access to three international schools within a 3km radius.Chief Executive Officer of Agile Real Estate Development Sdn Bhd, Wilson Ren said that Agile is committed to building a harmonious community. He added further the development exuberates tranquillity and nature, making Agile an oasis in the heart of Mont Kiarahave a total GDV (gross

development value) of RM600 million are expected to be completed in 2017.

“The idea of building an integrated metropolitan is to centralize various city conveniences combining properties like hotels, commercial units, retail outlets, entertainment features for consumers to form a prolonged interaction with each service and facility. This diversifies consumption and increases spending,” quips Datuk Chua Eng Pu, Executive Director of M101 Holdings Sdn Bhd.

www.propertyinsight.com.my FEBRUARY 2016 I 7

NEWS & EVENTS

BOVAEA : SIX-MONTH AWARENESS CAMPAIGN UNRAVELS NEW METHODS OF BREAKING THE LAW

N

ew threats have emerged in the property market as individuals, investors, business entities and companies have become illegal brokers in the country to cash in on new project development opportunities. In fact, it was discovered even a highly recognisable public listed company had started a property portal to promote developer’s products.

The Board of Valuers, Appraisers and estate Agents (BOVAEA), the governing

body for registered estate agents in the country said they are concerned at the apathy of these groups that disregard the law.

During this campaign, BOVAEA also discovered individuals and companies using new age media to market properties illegally. An example is where web page applications (app) that urged landlords to refrain from using their services of Real Estate Agents, undermining the legal authority that encompasses the practise

through an Act of parliament. Their action may cause problems and legal challenges to landlords who use their services as neither the law nor the web-based company will protect them.

President of the Board of Valuers, Appraisers & Estate Agents, Tuan Haji Faizan Bin Abdul Rahman said such incidents have increased in view of the constant demand for properties and the current challenging market.

th

WHY YOU CANNOT MISS THIS EVENT Asia’s property markets face significant changes over the next coming years due to economic volatility and consumer preference. Do you have the right strategy to face the current property headwinds in the real estate sector? Are you fully equipped with the comprehensive strategy in staying ahead in this industry? Be part of Asia’s 4th Annual Township Development, a unique platform gathering all major industry players breaking down barriers to the real challenges encountered in developing a vibrant township.

Key issues on marketability, infrastructure, connectivity, market sentiment, partnership as well as fine tuning your development at the right time with the right product will be highlighted in this event Join Trueventus on its 4th year journey in discovering the full potential of your township!

THIS UNIQUE CONFERENCE WILL BRING DELEGATES THE BENEFITS OF: • Understanding market preference for sustainable marketability • Enhancing infrastructure facilities in driving the success of your development • Providing seamless connectivity and accessibility to your township • Delivering the right development with right strategy • Profiting from affordable housing projects within your development

8 | FEBRUARY

2016 www.propertyinsight.com.my

COVER STORY

OCR LAND HOLDINGS, A DEVELOPER ALWAYS IN THEIR PRIME They say the early bird gets the worm, so when you say OCR Land Holdings who has been around since 1989, you will be reminded of one word – location!

BY: NATASHA GIDEON

10 | FEBRUARY 2016 www.propertyinsight.com.my

www.propertyinsight.com.my FEBRUARY 2016 I 11

COVER STORY

12 | FEBRUARY 2016 www.propertyinsight.com.my

We deliver what we promise” -Billy Ong

T

his is the kind of story you want to tell, but do not know where to start, or how to put it succinctly so that you do not miss anything out, but encompasses everything the subject is. You see, being a property journalist means at the ‘mamak’ I get excited talking about developers and new properties sprouting whilst my friends rave about the thrashing Manchester United got last week. Grab your ‘teh tarik’ and have a seat, you will want to hear this story.

I interviewed Billy Ong, the Managing Director of OCR Land Holdings Sdn Bhd (OCR) and was warmly greeted with a smile. After a few minutes of looking at all the developments done by OCR, I realised that they incorporate that warm feeling in the homes they sell. OCR is a family owned business, with a powerful chairman heading the company who is also a father to his tight knit family, the company is in good hands as his son, Billy spearheads it entirely.

OCR has been around for a while, even before unleaded petrol was introduced into Malaysia! They have since been known for niche residential and commercial development projects. They say the early bird gets the worm, so when you say OCR Land Holdings who has been around since 1989, you will be reminded of one word – location! They focus mainly on prime land in areas like Klang Valley, namely Jalan Ipoh and Jalan Kuching. Secondly, you will find that the homes and units sold are boutique sized with an emphasis on design and an eye for detail. As a consumer, I would be comfortable buying a home by developers who build units based on places they themselves feel comfortable resinding in.

Like any other developer, in this day and

www.propertyinsight.com.my FEBRUARY 2016 I 13

COVER STORY economical climate, OCR have also had their fair share of hardship, mainly on acquiring prime land of their liking. When asked how they managed to overcome these challenges, Billy just smiled, portraying a great deal of work had gone into the process of emerging victorious.

“The challenge was collecting good prime land, acquiring the land bank was difficult but we did what we had to in order to get the prime land we wanted, through joint ventures or by buying outright.”

Those deals ended up being worth more than imagined as they are coping well, mainly because the developments are all in high end, accessible areas. This indirectly helps with sales in the current market, as they are not affected, but in fact doing well even in these trying times. It was also fairly difficult moving from landed developments like their first development Villa Dahlia located in the middle of Bandar Utama and Damansara Jaya, to the many high rise developments they have now. Among those are Pano @ Jalan Ipoh, Condominium Residence @ Cheras South and Stellar in Petaling Jaya.

Too many times, we have heard that Klang Valley is the prime location for these coming years, and surely developers are all rushing to build. OCR already have a few here, and plan to branch out further. So far, developments are being constructed in other upcoming locations outside of Klang valley such as Kuantan, Melaka, Johor Bahru and Selayang among the many.

OCR Land Holdings is responsible for the Service Residence @ Kuantan, Eco Strait @ Melaka, Tampoi Factory in Johor Bahru and a proposed mixed development in 12.3 acres of land.

So what is so great about that? Every developer does the same, right? Wrong.

OCR currently has a development called The Resident @ Ampang South. It is in a matured area, a few minutes away from KLCC with a breath taking view. An exclusive residence, for the classy KL-ite.

“It is basically a Semi-D unit in the air. The build-up, design, and comfort emulates the feel and vibe of a landed property, but with a city centre hotel suite view. To prove the exclusivity of these units, you will find that there are no other similar developments within the vicinity. The sizes range from 1171 sq ft to 1271 sq ft, and there are only 180 units.”

14 | FEBRUARY 2016 www.propertyinsight.com.my

You basically get the best of both worlds from this low density development with 6 units per floor, from what used to be a hostel. Yes, you heard that right. These exclusive units are a paradox of what they used to be, located in a quiet but accessible part of the city. This development hails from what used to be a boys hostel for a local college, which has been transformed into a luxurious condo. The said hostel was vacant for more than 10 years and nothing had been done. OCR saw this as an opportunity and grabbed it. The refurbishment of this development took less than a year to complete, and Billy seemed very proud of that fact. For a 3 bedroom 2 bath home like this, the size you get is a bargain from other developments. In the future you can expect more of these developments by OCR, such as Menara PMI, Lorong Ceylon smack in the middle of busy Kuala Lumpur.

The proposed refurbishment will see the transformation of 14 levels of offices into another masterpiece, following suit of The Resident.

Billy also added that OCR is following the current trends of having mixed developments, for example in SS2 PJ, Bandar Sunway and the Service Residence in Kuantan. “The trend shows that people want mixed developments, shopping facilities and properties that are

nearby public transportation, so we follow and deliver what the end user wants.”

It also works both ways, commercial developments also need to be built within good demographics of residential areas, like the upcoming commercial project in Bandar Sunway comprising of one block specifically for signature suites. Among the things that intrigued me besides the classy and sophisticated designs of these developments, were their prices. Among the many aims and goals of OCR, one of which is to build better and more affordable homes, and this motto is seen through the Condominium Residence in Cheras South which is made up of 2 blocks of residential developments, and one block of 143 units under Rumah Selangorku.

Billy does not look like a person to slow down during rough times. OCR looks like it is headed onwards and upwards even during critical times in the market. Persevering with their company philosophy, “We deliver what we promise” they have proven to have captured the hearts of end users and investors alike. The above has proven to be true with all their developments being in prime locations, at affordable prices. With more than 10 upcoming developments, and many others doing well under their belt, OCR plans to spread its wings overseas, for a more global reach. www.propertyinsight.com.my FEBRUARY 2016 I 15

MAIN FEATURE

USHERING IN THE YEAR OF THE FIRE MONKEY Forecasting the global and property outlook in Malaysia using Chinese Metaphysics and Astrology BY: FARA AISYAH FIRDAUS PETIAL

16 | FEBRUARY

2016 www.propertyinsight.com.my

I

t’s now the turn of the Fire Monkey! In forecasting how the year will be, people usually use Chinese Metaphysics and Astrology such as BaZi, Feng Shui and Qi Men Dun Jia to give a careful outlook on someone’s direction in life. That is according to Dato’ Joey Yap, founder of the Mastery Academy of Chinese Metaphysics.

There are a few key differences between 2015 and 2016 BaZi Charts, which are: 2015 Chart: Water element appears in the Chart. This represents wisdom and things improve as a result due to people beginning to have more clarity and reasoning. Bear in mind that the Jia Wu pillar continues to exist and this means that the arrogance in people will carry over to 2016.

2016 Chart: There is a lack of Water element in the Chart. Water represents wisdom, intelligence and influence. As a result, we can see people behaving aggressively in their effort to gain wealth without prior knowledge and planning.

People with no idea of how to gain wealth will have to learn to manage and sustain their wealth in the long run.

2016 BAZI CHART ANALYSIS & KEY OBSERVATIONS On the 10th of January, I attended the Feng Shui & Astrology 2016 - A Live Seminar with Dato’ Joey Yap. It was engaging! He mentioned that 2016 will be a better year for those born in the year of the Ox, Rat and Snake. He also indicated that there would be financial opportunities coming from real estate and property investments and encouraged the crowd to opt for longer term investments for better returns.

In this regard, he had also noted that the Qi flow of 2016 favours properties located in the areas of East, South, Southeast and Southwest in relation to the city of Kuala Lumpur.

Here are some of the key observations on the outlook for 2016: The Bing Chen Day Pillar is associated with a rising sun. This Day Pillar represents a lot of new business venture opportunities particularly in the Fire industry such as energy, oil and gas, telecommunications, food and hospitality, pharmaceutical and aviation.

The Shen (Monkey) in the Year Pillar forms a half combination with the Chen (Dragon) in the Day Pillar. This combination belongs to the Water element which represents

The Qi flow of 2016 favours properties located in the areas of East, South, Southeast and Southwest in relation to the city of Kuala Lumpur” -Joey Yap

(Source: Joey Yap Research International) www.propertyinsight.com.my FEBRUARY 2016 I 17

MAIN FEATURE

influence. This denotes a stronger impact in regards to economic influence.

Another half combination is also formed between the Shen (Monkey) and You (Rooster) in the Hour Pillar which belong to the Metal element. This represents an increase in wealth, power and influence.

Likewise, another combination is formed between the Yin (Tiger) in the Month Pillar and the Chen (Dragon) in the Day Pillar.

This combination belongs to the Wood element which represents growth and resources. A high number of combinations in the Chart denotes that there will be a lot 18 | FEBRUARY

2016 www.propertyinsight.com.my

of merges and acquisitions particularly in the financial sector happening this year.

Aside from that, it also usually denotes that there will be a lot of people getting married.

INDUSTRIES THAT WILL PROSPER IN 2016 Dato’ Joey stated that “The property, insurance and construction sectors which consists of Earth industries have a strong wealth element. This would indicate that these sectors may have robust earnings but are not able to fully take advantage of its annual financial prospects. This could be a result of the lack of the right products

or opportunities to tap into.”

“The logistics and transportation, beverages, aquatics, service-based and tourism businesses which make up the Water industries will face strong competition from their counterparts. This would most likely be a healthy competition driven by financial opportunities. The challenge lies in coming up with a practical business model,” he added.

The Metal industries such as finance and banking, automobiles and manufacturing sectors will gain opportunities in the midst of competition or collaborations. Larger

corporations will be acquiring better deals despite the tough competition whilst agile players aim for long term or fixed margin deals.

The Fire-related sectors such as aviation, energy, food and hospitality, oil and gas, pharmaceuticals and telecommunications will overcome a competitive environment.

Due to the clash of the Wood (Resource element) and Wealth elements, these sectors will potentially have difficulties in raising funds and maintaining their share value. This is a result of cash flow issues.

The strong Water element in 2016 also implies regulatory threats or governmental pressure. Therefore, the outlooks for these sectors are deemed bearish.

The Wood industries which represent the agriculture, commodities, timber and educational sectors will come under regulatory and legal pressure from lawsuits.

The wealth outlook for Wood industries is deemed bearish. This is due to the poor performances and water-related issues in these sectors.

INVESTMENT OUTLOOK FOR 2016 Ding You in the Hour Pillar signifies

investment opportunities. The property sector which is represented by the Earth element has a strong wealth element. This would indicate that this sector may have the prospect of robust earnings.

Dato’ Joey justified that “Investors would most likely invest in properties with strong brand names or have a flawless reputation, which will allow them to prosper this year. Additionally, we can foresee many companies diversifying or seeking for opportunities to invest in Watercentric businesses. An example of such businesses would be vape liquids.”

NATURAL EVENTS AND OTHER ISSUES Other than those issues, there will also be a few natural events occuring. For example, according to Dato’ Joey, “Robberies will be on the rise this year. This is because in the Chart, the Ding Fire (candle light) robs the wealth of Xin Metal (jewellery) and gives rise to the many robberies that will occur after dark. Global warming which will lead to floods will be a major concern. Volcanic eruptions can also be expected this year.”

Based on the 2016 Chart analysis, there will be a rise in travel-related mishaps.

This is due to the clash of the Yin (Tiger) and Shen (Monkey) which is known in Metaphysics as the ‘Horse-Carriage Disaster’. This also denotes land-based accidents.

“Logistics and transportation companies which use a lot of land-bound vehicles must take extra precautions. On the individual level, those who are involved in a lot of work-related ground travel must be extra careful,” he said.

GLOBAL ECONOMIC OUTLOOK 2016 USA: Emerging market currencies can expect continued pressure as a result of multiple monetary authorities responding to the Fed’s actions. This is a result of Xin Metal (which represents emerging currencies) sitting under its Seven Killings Star represented by Ding Fire in 2016 and an additional two Fire elements to contend with.

China: In the Luo Shu Chart of 2015, China is represented in the Center Palace where Star #3 resides (China is the Middle Kingdom, hence the Center Palace). Star #3 however is located in the Northwest in 2016 and resides in the Qian Palace. As a

www.propertyinsight.com.my FEBRUARY 2016 I 19

MAIN FEATURE

“This year, the economy focuses more on Sabah and Sarawak. The property industry in these areas will start to improve, to a lot better than before. When the economy gets better in these areas, a lot more people will come there – be it foreigners or investors” -Joe Choo

result, this indicates financial opportunities in the forms of real estate and property. This also suggests that profitable opportunities will emerge as a result of asset fire sales or distressed properties and assets.

South East Asia: The Asian economic market experience a currency-hedge windfall as a result of the US dollar’s fluctuations. The clash of Metal and Wood means that there will be challenges in determining how best to unlock or deploy US dollar hedge or windfall gains.

2016 PROPERTY OUTLOOK FOR MALAYSIA The President of Malaysian Institute of Geomancy Sciences, Prof. Joe Choo Sook Lin said “This year, the economy focuses more on Sabah and Sarawak. As you know, China is having a dispute with Japan, Vietnam and Philippines on a certain island which is sitting the South China Sea. The problem occurred because it is confirmed that there is oil around South China Sea. They are waiting for the international court to make the judgment that the islands should belong to which country. While waiting for the judgment, the countries around it are legally allowed to dig for oil.

So if you look at the whole area, which are the countries that are very near to the islands? Malaysia’s Sabah and Sarawak!”

“The property industry in these areas will start to improve, to a lot better than before. When the economy gets better in these areas, a lot more people will come there – be it foreigners or investors.

What will happen when there are more people? These people need a home, tourists need accommodation. They also need entertainment and food. So 20 | FEBRUARY

2016 www.propertyinsight.com.my

the F&B outlets, the retail property will simultaneously improve. When those people assist in stimulating the economy, the local’s well-being will start to develop as well. Anyone who is doing business will earn their profits and everyone wins in this kind of situation,” Prof. Joe added.

“So how do we derive these theories from our maps?” asked Prof. Joe. She then explain that she and her team squared up the maps then drew a centre point. “From the point, we divided the maps into North, East, West and South. You must remember,

the element of 2016 is Fire and Fire is a South East sector.”

There are five elements in the cycle; Fire produces Earth, Earth produces Metal, Metal produces Water, Water produces Wood, and Wood produces Fire. The element that produces Fire, and the element that Fire produces are the good ones – which are Earth and Wood.

Prof. Joe further explained her point by saying, “The Earth sectors are North East and South West, while the Wood sectors are East and South East. According to

the maps, we can see that South East is a good area. There is nothing much on the North East because of the South China Sea, but the East and South East are the good sectors – which are located in Sabah and Sarawak. On the other hand, Johor is located in the South West. So generally, the economy in Johor is relatively good as well.”

“After talking about the whole of Malaysia, now we focus on Peninsular Malaysia. From the maps, you square it up and find where the North East, East, South East and South West are. Then, you can plot the areas which property sectors are going to do well, such as Terengganu, Pahang, Johor, Negeri Sembilan, Melaka and Selangor. But the thing that limits the Kuantan and Terengganu property area is the land code.”

“This is the general property outlook for Malaysia and surprisingly, you’ll find that secondary markets will be very active. In general, Malaysia’s economy is still in good condition,” Prof. Joe concluded.

So here’s what I think - every cloud has its silver lining. People are sceptical and cautious since the current market is challenging. However, nothing is actually impossible. You only have to find the right opportunities and this is the right time to get it. How would you know the right time to tap the right chance? By applying Chinese Metaphysics and Astrology in your planning.

NW

N NW

NE

W

E

SW

SE S N

NE

MALAYSIA W

SW

E

S

SE www.propertyinsight.com.my FEBRUARY 2016 I 21

FEATURE

BRT – SUNWAY LINE: THE WINDS OF CHANGE Is it the time to embrace change yet?

BY: FARA AISYAH FIRDAUS PETIAL & PRITHIVI RAJ

24 | FEBRUARY 2016 www.propertyinsight.com.my

W

ho’s up for a change? I definitely am! A few days ago, I tried and experienced the latest infrastructure in Klang Valley; the Bus Rapid Transit (BRT) – Sunway Line. The BRT Sunway Line is a public-private partnership project between Prasarana and Sunway Group to provide a better and integrated transit service to residents and commuters of Bandar Sunway and USJ. I allocated my whole day to try the BRT – going back and forth from one end to the other because I thought, I would be facing a hard time queuing up and looking for space on the bus. But guess

STATIONS

SETIA JAYA

SETIA JAYA

what? I thought wrong! BRT is not like other public transportation systems and it is very efficient. The bus comes in every four minutes during peak-hours! I was so impressed.

According to the Managing Director, Property Development Division of Sunway Berhad, Sarena Cheah, “The BRTSunway Line connects our communities to the rest of the nation, providing convenient, eco-friendly travel that is accessible, and affordable for everyone within Sunway Resort City.”

Implemented under the innovative Public-Private Partnership (PPP) programme via the collaboration of

Prasarana Malaysia Berhad and Sunway Berhad, the landmark project was also officially penned as the first BRT project in Malaysia in the Malaysian Book of Records (MBOR) – the official keepers of Malaysia’s outstanding records and achievements.

The BRT service was officially launched on 2 June 2015 and opened its doors to the public on the same day. Rides on the BRT were free for the first two months beginning 2 June 2015. A flat rate of RM4.00 was charged at the SunUMonash station park and ride facility from 2 June to 1 August 2015. The latest fares announced on 1st Aug 2015 are as

MENTARI

SUNWAY LAGOON

SUNMED

SUNU MONASH

SOUTH QUAY

USJ7

RM 1.60

RM 2.30

RM 3.00

RM 3.60

RM 4.50

RM 5.40

RM 1.60

RM 2.30

RM 3.00

RM 3.90

RM 4.70

RM 1.70

RM 2.30

RM 3.20

RM 4.00

RM 1.60

RM 2.50

RM 3.30

RM 1.80

RM 2.70

MENTARI

RM 1.60

SUNWAY LAGOON

RM 2.30

RM 1.60

SUNMED

RM 3.00

RM 2.30

RM 1.70

SUNU - MONASH

RM 3.60

RM 3.00

RM 2.30

RM 1.60

SOUTH QUAY

RM 4.50

RM 3.90

RM 3.20

RM 2.50

RM 1.80

USJ7

RM 5.40

RM 4.70

RM 4.00

RM 3.30

RM 2.70

RM 1.80 RM 1.80

www.propertyinsight.com.my FEBRUARY 2016 I 25

FEATURE

follows: The dedicated elevated busway runs isolated from traffic congestion, from the Sunway-Setia Jaya Station, which is located near the KTM Setia Jaya Komuter station (linked by covered pedestrian walkways), and ends at the USJ 7 Station of the Kelana Jaya Line extension. There is ‘paid area to paid area’ integration between the LRT and BRT service by virtue of the BRT platform sharing the paid area of the concourse at the LRT station.

The bus will complement both lines by providing the linkage to various forms of public transport. There will be 15 environmentally-friendly buses that are electrically-powered and travel on a speed of 30 km and 40 km per hour on average.

These electric buses will not have gas emissions and can operate for 12 hours before the next charging cycle with a range of 250 km or 23 trips per day. The electric buses are designed to look almost like trains.

THE STATIONS & FEATURES There are a lot of payment modes you can use when you buy BRT tickets from the machine, and you can even use debit and credit cards as well. How convenient is that? One doesn’t have to worry about having enough small change anymore.

Other than that, you can also use the 26 | FEBRUARY 2016 www.propertyinsight.com.my

RapidKL card or a Touch N’ Go card.

It is also convenient for people with disabilities. BRT’s station is designed with prioritising the disabled. The elevator is set up to be used by those who are elderly or disabled, while the rest of us can use the staircase or escalator.

These BRT stations are built with a modern and contemporary design, which include universal access facilities for the disabled community such as tactiles for the blind, ramps as well as low ticket counters. Safety features at the stations consist of closed-circuit TV cameras as well as pedestrian bridges so that

commuters can cross from one platform to another with ease.

The Sunway-Setia Jaya station is linked to the Setia Jaya KTM station which improves the connectivity of the township to other cities, especially to the city centre – Kuala Lumpur. At the first BRT station, I found a lot of parking lots nearby the Sunway-Setia Jaya station, so people can park their cars at that area and go anywhere they want to for a short span of time. This is the station that KTM users usually get down and walk towards to get to the BRT station to take the bus to work.

The next station was Mentari which

is located in front of Sunway Mentari Business Park and is walking distance to Makmur Apartments on Jalan PJS 8/9. I had to pay RM1.60 for a less than five minutes trip, which I think is not really affordable. If someone uses the BRT from Sunway-Setia Jaya to Mentari twice daily, that will cost them RM3.60 in one day just for a very short trip. If I were a student who was on a tight budget, I would rather walk and save around RM96 per month.

However, it is a different case if you use the BRT from Sunway-Setia Jaya to other stations such as to Sunway Lagoon.

Nonetheless, if you are planning to go to Sunway Lagoon theme park and Sunway Pyramid shopping centre from that station, you still have to walk 300 meters.

It is quite a long walk especially if you are walking alone at night.

Then, after the Sunway Lagoon station, I came to the SunMed station which is located close to Sunway Medical Centre.

From SunMed station, I went to observe the SunU-Monash station. It is the station closest to Sunway University and adjacent to Monash University. This station has park-and-ride facilities with a total of 1,153 car park bays, which includes 102 special bays for lady drivers and 23 for handicapped drivers, and another 121 bays for motorcycles.

According to Prasarana, “SunU-Monash station was chosen as the ideal location for the multi-level car park and its strategic pick up point. “ The BRT Depot is also located beside this station. From my observation, this station is the most frequently used one compared to the rest.

It is where I interviewed a few users and asked them their opinions and what they thought of the BRT service.

The sixth station would be the South Quay station which is located behind Mydin USJ 1. It is close to Casa Subang Apartments and Impian Meridian, and there is a large population there with nearby amenities and facilities.

The last station is the USJ7 station which is the interchange to RapidKL’s Kelana Jaya Line. Prasarana stated that, “At the moment, there are no plans as yet to extend the existing line. It should be noted that the BRT line is connected to the LRT Line Extension Project for Kelana Jaya, which is scheduled to be

opened June 30th, this year. The opening of the extended Kelana Jaya line will translate into an additional 170,000 passengers daily. At present, Kelana Jaya Line manages some 280,000 passengers daily.”

Another feature that I need to mention - the buses use a lithium iron phosphate battery which is fire-safe and non-toxic, in-wheel hub motors and regenerative braking. There are no caustic materials contained in the battery and no toxic electrolytes or heavy metals and the battery can be completely recycled. The buses are extremely quiet which ensures a comfortable ride without much vibration or noise that is usually associated with conventional buses and combustion engines.

INVESTMENTS The BRT – Sunway Line benefits home buyers and investors by amplifying accessibility to and from the area.

Besides enhancing accessibility to other parts of Klang Valley for residents and homebuyers, businesses will gain more foot traffic to the area - thus ensuring the sustained growth and vibrancy of Sunway Resort City. In the long run, this sustained vibrancy also ensures capital gains for both buyers and investors.

Even the Managing Director of Knight Frank Malaysia, Sarkunan Subramaniam mentioned at a recent event ‘Office Market Performance and Outlook’ at the 9th Malaysian Property Summit 2016 (9MPS), “I really admire Sunway for building their BRT – Sunway Line, it enhances accessibility that really contributes to the demands of office buildings within their developments.”

BRT – Sunway Line has really became one of the unique selling points around Sunway and it could increase the value of developments in the area. When talking to Prasarana they did say this, “We hope that this project will be a breakthrough and inspire similar projects. Using ecofriendly electric buses is indeed in the interest of environment preservation.”

I personally think that the BRT – Sunway Line is a great idea and it will further enhance our public transportation system, to be more like developed countries such as Singapore or Hong Kong. As the saying goes, ‘A developed country is not a place where the poor have cars. It’s where the rich use public transportation’. However, there are still a lot of people who are not utilising this facility when it should make their lives a lot easier. Why do you think this is?

www.propertyinsight.com.my FEBRUARY 2016 I 27

FEATURE

BRT Commuters Comments :

ANDY BRT is a very convenient development because it is even connected to KTM stations. It is really timely for Petaling Jaya’s population, especially those who stay and work around the Sunway area. However, the price is a bit expensive, while I think the population around the area are mostly from the medium class. If the price is decreased a bit, then I think it will be used more.

RUSSELL This bus rapid transit goes back and forth to seven stations. I normally use it to avoid the bad traffic congestion and to save time.

Some of my friends tell me that the fee is quite expensive but I think it’s good and convenient enough, especially for students.

ZAWARA I use BRT to go to my college but I think workers use BRT more than students as the fee is quite expensive. I have also tried using BRT at night, and so far, I feel secure because there will be people in the bus or even at the stations. Even the walkway is safe.

CELINE BRT’s service to me is a very good thing. However, I’m not really into using it because the fee is so expensive even though the distance is very short. When I’m late for class, or I have to go to one particular destination, I’ll definitely use BRT. At night, BRT is the only choice that I have.

LIZZAM ABDUL LATIFF I truly like the idea of this elevated bus route ever since I saw it several years back in a documentary. Our road-based public transport (especially in KL) is in a catch-22 situation. To reduce jams, you need to reduce cars. To reduce cars, the public transportation system needs to be punctual. But they cannot be punctual if they're stuck in a traffic jam. BRT literally takes it to another level and skips the jam altogether, and it's supposed to be cheaper than rail-based public transport. However, the current BRT route is just a pilot test. Hopefully this will spread to KL and even longer routes like the PLUS highway, there may be less cars to drive, since the bus is probably a faster choice.

SYUHADA TARMIZI From my personal experience, BRT can save the duration of my journey which is what is important to me. And the line is in Sunway! It makes it easier for people to go around the ‘hot’ area with less traffic and more busses. But, the fee is a bit unreasonable to me.

28 | FEBRUARY 2016 www.propertyinsight.com.my

FACT SHEET BUS RAPID TRANSIT– SUNWAY LINE

KEY FACTS

BRT System in Malaysia BRT System to use electric bus in Malaysia BRT System to use elevated guideway

Project launched by Prime Minister on 9 June 2012 To serve a population of 500,000 people in Bandar Sunway and Subang Jaya Ridership is forecasted at 2,400 pax/hour in 2015 Ridership forecasted to reach 5,200 pax/hour in 2035.

BRT combines the convenient features of a LRT system with the usage of dedicated lanes, environmentally-friendly buses and customer-friendly infrastructure.

7 stations with 1 ‘Park ‘n Ride’ facilities (at Station 5 – SunU-Monash Station) Environmentally-friendly buses and equipped with universal access features for the disabled

BASIC FEATURES

BUS DETAILS

DEPOT FEATURES

• • • • • •

• • • • •

• • • • •

Dedicated bus lanes Customer-friendly bus stops Fast and cost-effective rapid transit Intelligent Transport System (ITS) Automated fare collection Integrated transport solution

STATION FEATURES • • • • • • • • • • • • •

Universal access facilities Lifts Escalators AFC & TVM CCTV PA system Pedestrian bridge CSO Counter Kiosk Bicycle racks Platform seatings Passenger Information System Passenger Awareness Monitoring

Total number of buses - 15 Environmentally-friendly Total capacity seated only: 25 Total capacity with standing: 67 Top Speed: 80km/hour

PROJECT DETAILS • • • • • • •

Total project cost - RM634 million Duration of project - 27 months Route length: 5.4km No. of stations: 7 No. of station integration: 2 (KTM Komuter Setia Jaya & LRT USJ7) Total number of pillars: 203 Width of guideways: 8.9 metres

Bus maintenance Bus charging facilities Operation Office Operation Control Centre (OCC) Security Control Centre (SCC)

BRT-SUNWAY LINE STATIONS • • • • • • • •

Station 1 Station 2 Station 3 Station 4 Station 5 Station 6 Station 7 Depot

Sunway – Setia Jaya Mentari Sunway Lagoon SunMed SunU-Monash South Quay USJ7 Kompleks BRT Sunway

PARK & RIDE FACILITIES: Parking bays: Cars = 1,153 (Ladies = 102, OKU = 23)

Motorcycles = 121

www.propertyinsight.com.my FEBRUARY 2016 I 29

FEATURE

SEPANG : DEVELOPING FASTER THAN AN F1 RACE

Sepang is central to many mega projects like KLIA, KLIA2, Putrajaya, Cyberjaya and Sepang F1 – It has a good supply of land for future investments BY: NATASHA GIDEON

30 | FEBRUARY

2016 www.propertyinsight.com.my

H

ow many times have you been to Sepang? The few times that you will ever go to Sepang would probably be to watch the F1 yearly races, to go to KLIA or a distant relative who lives in Kanchong Darat gave you directions through the old inside road to come to her house for her daughter’s wedding. But times are changing and places like Sepang are more accessible. Many highways connect the outside world to the 61,900 hectares Sepang has to offer.

We spoke to Dato’ Puasa Bin Md Taib, President of the Sepang Municipal Council to discuss the up and coming area. The focus of development in Sepang District is currently divided into three major development zones. Development in zone 1 is more focused on a planned housing development. The region includes Cyberjaya, the nucleus of the national ICT. The city is also equipped with the latest infrastructure and utilities which will also be a model for smart cities, giving emphasis to the use of ICT technology in a more efficient urban management. Zone 2 is focused on the planned residential area which will be equipped with modern commercial facilities integrated with public transport, particularly the ERL. The existence of KLIA will also serve as a reason for commercial and industrial support to aeronautical development. The concept of development in Zone 3 is more focused on conservation and preservation of existing natural resources such as beaches and

rivers. This area will be designed especially for tourists, local and international.

Majlis Perbandaran Sepang (Sepang City Council) also faces the same challenges as any other area of urban development, especially for Cyberjaya. For this reason, the Cyberjaya Development Master Plan was prepared in 1998 comprising of the defined components, the development of plot ratio and density as well as planning guidelines.

Other than Cyberjaya, another diamond in the rough is Salak Tinggi, a key focus area in this district with a planned residential area, business areas and hotels, industrial areas and public facilities for local use.

There are also large-scale developments committed for Salak Tinggi in the corridor.

The Express Rail Link (ERL) has become a catalyst for rapid development, so you can keep a look out for more Transit Oriented Development (TOD). Other catalysts for development here are Universiti Malaysia and the Kuala Lumpur Xiamen International Outlet (KLIO).

Moving towards a greener Malaysia, with Cyberjaya being dubbed our very own “Silicon Valley”, the Municipal Council goes for sustainable development with gradual steps to provide better impact for the surrounding urban environment.

Amongst the steps taken to ensure this, is implementing green initiatives in granting planning permission and approval of building plans. In Cyberjaya, there are 11 buildings that have submitted proposals www.propertyinsight.com.my FEBRUARY 2016 I 31

FEATURE to the green building rating status (Green Building). The Recycling Program in collaboration with Alam Flora Sdn Bhd collects a monthly 250 kg and yearly 4,413 kg in its efforts to going green. Another initiative is the preservation of the trees with Forest City Cyberjaya launched on 8th November 2009 with a total of 1,500 trees planted during said program and all the 99 principal contributors were from private companies in Cyberjaya, government agencies and individuals.

All sounds good for Sepang, but there still are areas to be developed according to the record of Planning Permission since 2010 and the performance of the property market in 2016 will continue to rise. The residential property prices continue to strengthen and continue to show price increases, especially for terrace houses, semi-detached and detached houses.

Lotus garden, Dengkil recorded an increase of 12% for single-storey house s since partly because of the proximity to Eastern College of Technology and industrial areas within Bandar Baru Salak Tinggi.

32 | FEBRUARY

2016 www.propertyinsight.com.my

For the property market, especially for detached houses in Kota Warisan, prices are targeted between RM1 million and RM3 million by the entry of foreign investors working in the Cyberjaya and KLIA vicinity. Heritage City with an area of 242.76 hectares will introduce the Smart house concept since they have the advantage from implementing projects in Newfoundland and Labrador (Canada). We need to take into account the quality and performance for the proposed mixed-use development as there is a need to take into account affordable housing (Affordable Homes). We need to be aware of the purchasing power of the local population and this should be examined, especially so in view of the growing residential segment, as is the strategy for most developers in the current market according to the Ministry of Finance.

So why should you buy a property or invest in Sepang? Amongst others, it is central to many mega projects like KLIA, KLIA2, Putrajaya, Cyberjaya and Sepang F1. Sepang has a good supply of land for

Moving towards a greener Malaysia, with Cyberjaya being dubbed our very own “Silicon Valley�, the Municipal Council works towards a sustainable development taking gradual steps to provide a better impact for the surrounding urban environment�

- Puasa Bin Md Taib

CURRENT PERFORMANCE OF THE PROPERTY MARKET IN SEPANG NUMBER OF APPLICATIONS

0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

100

200

300

400

500

600

255 268 290 323 355 400 430 450 470 490 510

future investments. As mentioned, it is now more easily accessible with improved connectivity and many highways.

Besides that, one should also remember that Sepang has more green developments and maintained natural resources namely Bagan Lalang and mangrove areas.

How much more accessible has Sepang become throughout these few years? The road network in this area is complemented by four (4) main hierarchy of highways, federal roads, state roads and local roads which will directly support the development of existing mega projects. The main highways of the region consists of North-South Highway, the Middle Ring Road (ELITE), South Klang Valley Expressway (SKVE), Circle Round-link and the Kuala Lumpur-Putrajaya which continues to KLIA, LDP and ERL. Based on trends in applications for development in the Sepang District, the Municipal Council has prepared an outlook on Sepang (2015 - 2020) where there are 18 projects that are expected to have a dominant impact on land use changes in Sepang District. This development will give a multiplier effect to the economy as a whole. www.propertyinsight.com.my FEBRUARY 2016 I 33

FEATURE

PROSPECTIVE DEVELOPMENTS IN SEPANG (2015-2020)

DEVELOPMENT / DEVELOPER @ LAND OWNER & LAND ACRE 1

SELANGOR SCIENCE PARK 2 (SSP2) / PKNS 1,299.00 ACRE

2

CYBERJAYA/CYBERVIEW S/B & SETIA HARUMAN S/B 6,960.66 ACRE

3

IOI RESORT / IOI GROUP 1,500.00 ACRE

4

BANDAR BARU LEMBAH SELATAN / TRISTAR ACRES S/B @MAHING BERHAD 410.53 ACRE

5

KAMPUS UNIVERSITI TEKNOLOGI MARA / SOLID BENEFIT S/B 197.00 ACRE

6

MCT DEVELOPMENT / UNDERSEA CITY SDN BHD / ECOGREEN CITY SDN BHD 128.34 ACRE

7

KAMPUS UNIVERSITI XIAMEN / SIME DARBY S/B 150.48 ACRE

8

PEMBANGUNAN BERCAMPUR / SIME DARBY S/B 2,206.54 ACRE

9

BANDAR SAUJANA KLIA / GLOMAC S/B 233.00 ACRE

10

ONTIME PRIVILIGE SDN. BHD 12.09 ACRE

11

PERBANGUNAN BERCAMPUR / PETALING GARDEN SDN BHD, DELI SPRING SDN BHD & JATI MENAWAN SDN BHD 289.00 ACRE

12

SALAK PERDANA / NCT UNITED S/B 315.00 ACRE

13

TAMAN PERINDUSTRIAN TANJUNG BALAI / KUMPULAN TANJUNG BALAI 298.00 ACRE

14

Source: Sepang Municipal Council

34 | FEBRUARY

2016 www.propertyinsight.com.my

KUALA LUMUR INTERNATIONAL AIRPORT (KLIA) / MALAYSIA AIRPORT HOLDINGS BERHAD (MAHB) 24,324.96 ACRE

15

BANDAR AERONAUTIKAL / SIME DARBY SDN BHD 6,145.00 ACRE

16

SEPANG INTERNATIONAL CITY / VINTAGE HEIGHTS S/B 4,071.00 ACRE

17

SEPANG GOLD COAST / PNSB 247.23 ACRE

18

RETIREMENT RESORT / GRACIOUS HOME S/B 140.00 ACRE

TOTAL ACRES :

48,927.83

FEATURE

NEW PLACES TO INVEST:

UNDERSTANDING PROPERTY HOTSPOTS Transport hubs and links uncovering hidden corners of the city BY: AVINASH SAGRAN

I

dentifying an area that you believe will become the next property hotspot is quite difficult task. A plethora of elements have to be taken into consideration when scouting for prospective property growth areas, and while constructing these categories of predictions is not exactly rocket science, potential home buyers and investors can certainly be in pole position

36 | FEBRUARY

2016 www.propertyinsight.com.my

ahead of the rest by arming themselves with practical knowledge of development spur within the area.

One of the most anticipated projects within the Klang Valley is the construction and extension of the current public transportation system. Infrastructure and public transportation system upgrades can bring highly valuable effects upon property

values. Appetite for property in BRT, MRT and LRT construction vicinities are stronger than ever, especially since it opens up an area to attract investment.

Fastest growing areas will be those with transport links. As new infrastructures are being built, it begins to open up less desirable parts of the city. Buyers who are willing to act quickly and wait a few years

until all the connections begin operating, will have an edge. The market moves swiftly to absorb development in these newly linked areas thus increasing housing prices.

Identifying Property Hotspots was one of the main points of discussion during PRISM 2015, Malaysia’s Largest Property Investment Summit. The discussion featured key personnel such as Rudyanto Azhar, Nick Charlton, Adzman Shah, Sheldon Fernandez and Dr. Daniele Gambero, each whom gave their outlook on future property hotspot areas.

Following the trends of developed countries such as United Kingdom, United States and Japan, there was a huge flow of people moving from rural areas to downtown areas within the city during the 50’s and 60’s. Those patterns soon changed during the 70’s and 80’s when cities were well connected to suburbs through public transport; which led to the regeneration of property areas outside the city centre. Such improvements were also an important factor in boosting the value of homes surrounding the suburbs.

The trend is likely to follow through in Asia as well. Given that the Asian community have always had strong familial ties; homebuyers have always preferred bigger spaces for their children to grow up in and they maintain community ties with

their neighbours. Malaysians have always preferred suburbs when it comes to settling down and raising their families. Prasarana MRT construction and LRT extension will definitely benefit the suburbs as these services will be going through residential areas. Furthermore these lines spur further infrastructure development such as, feeder busses and park and ride facilities.

The Malaysian public are beginning to familiarize with the transportation network; with nearly 4 million commuters daily, improved public infrastructure can ease the commuting for the Klang Valley population.

Adzman also heavily emphasized on trying to change the outlook of how Malaysians perceived public transportation; as most of them are accustomed to driving nearly one hour to work, however, with the upcoming LRT and MRT construction, it will shorten the time travelling to a particular destination. Therefore property locations that are in the outskirts from the city will receive a boost upon completion of the transit projects.

Within the Klang Valley the three most searched property areas are Cheras, Puchong and Shah Alam. According to Sheldon Fernandez “The driving force being, once the MRT and LRT projects are completed, the momentum catches on. More and more people are going to

More and more people are going to start taking public transport more.

This will turn certain destinations into very good hot spots. As the prices right now are still affordable, I think by 2020 we will see some good capital appreciation in these areas” -Sheldon Fernandez

www.propertyinsight.com.my FEBRUARY 2016 I 37

FEATURE

start taking public transport more. This will turn certain destinations into very good hot spots. As the prices right now are still affordable, I think by 2020 we will see some good capital appreciation in these areas”.

He further added that “we are prepared to spread out concentrated business districts which subsequently would bode well with areas further away from the city”.

The increasing numbers of offices situated in Puchong, Setia Alam and Damansara, does help the public make decisions regarding purchasing properties on areas slightly away from the city.

Another method of looking for property hotspots is by dividing the development of projects via corridors; understanding the development within each region.

One silent but increasingly growing area, is from Puchong South all the way down to Nilai. This area has been picking up quite a lot of momentum in the property market especially Nilai as it is bordering the southern part of Selangor yet the prices are still very much cheaper. The next 38 | FEBRUARY

2016 www.propertyinsight.com.my

section would basically be the corridor between Shah Alam and Klang; major developments have been taking place in Klang over the past few years from Bandar Bukit Tinggi right up to Banting. Major developers are primed to take advantage once BRT construction commences.

Properties in Klang come in all kinds of price ranges which certainly attracts a broader buyers market. The last corridor to consider would be between Sungai Buloh all the way to Tanjung Malim; these areas are beginning to open up to development.

As Prasarana is going to start the ball rolling there are certainly big things ahead within those areas. Furthermore the cost of the the entire land area would be cheaper thus developers are able to come up with developments that are affordable as well as high end because of the fact that they have got a lot of land to play with.

The buzz on property hotspot does not revolve around Klang Valley alone.

Iskandar Malaysia has garnered quite a name for itself with rising numbers of

foreign investors laying down their roots in the region. The Iskandar project itself is an attempt to upmarket the southern city of Johor Bahru which neighbours Singapore. The Iskandar Malaysia master plan consists of five flagship zones ranging from property, commercial and industrial; in short homebuyers or investors can stake claim in whichever area they want, considering the vast amount of land area Johor Bahru offers. Experts from PRISM believe that in the long term, once mobility between Johor Bahru and Singapore is far more outreaching through the proposed high-speed railway; Johor Bahru would rise as one the main hotspots nationwide.

The key take away to homebuyers and investors when dealing with hotspots is the capital appreciation not just in the midterm but also in the long term. In Johor Bahru’s case, it may take 15 to 20 years to fully establish with all the necessary integration of infrastructure but the future is an outlook which has to be foresighted by the brave.

BLOCK B SOLD OUT!

NOW!

BLOCK A OPEN FOR BOOKING

SINCE 2005

BOOK NOW!

CALL

KENT: YAP :

010-291 6766 016-321 9033

DEVELOPMENT OF THE MONTH

DOTM:

IOI’S BEST KEPT SECRET – THE CLIO Strategically located, fabulous facilities 40 | FEBRUARY 2016 www.propertyinsight.com.my

BY: NADIA GIDEON

A

sk anyone in Puchong if they have heard of the IOI Group and you’ll probably get an answer like, ‘What do you mean know them, this is Puchong, IOI is everywhere!’

IOI Properties have consistently been recognised as one of Malaysia’s top ten developers; being known for creating sustainable and close-knit modern communities such as IOI Resort City, Bandar Puteri Puchong, Bandar Puchong

Jaya and 16 Sierra.

IOI & DACIN CONSTRUCTION In recent years IOI have had several projects that have seen them partnering with world reknown developers, construction companies and architects. This unique development is jointly developed by IOI Properties Group Berhad and Dacin Construction Ltd. Dacin Construction, is one of the top 3 construction companies in

Taiwan and one of its signature construction works is its participation in the construction of the Taipei 101 building, which was the worlds tallest building in 2004.

THE CLIO Designed by a renowned Taiwanese architect and a joint-venture development with Dacin Construction Co. Ltd - The Clio Residences are the second and latest addition of homes to the upcoming township of IOI Resort www.propertyinsight.com.my FEBRUARY 2016 I 41

DEVELOPMENT OF THE MONTH

City. The Clio Residences is more than just an architectural highlight. Inspired by the flow of a ribbon, the façade is defined by streamlines curving skywards. Every effort is made to maximise natural ventilation and natural lighting with unobstructed views. ln short, The Clio Residences is designed to breathe naturally.

Located in IOI Resort City and only 2 minutes away from the upcoming IOI City Mall, The Clio’s buyers are clearly taken in by a host of impressive features especially the freehold status that it has to offer. However, the attraction could be the lifestyle facilities, such as, golf course views, energy-efficient designs for better natural ventilation and lighting 42 | FEBRUARY 2016 www.propertyinsight.com.my

and enhanced spaciousness. We talked to a few buyers who commented that the strategic location of The Clio helped sway their decision to sign up on the spot. Other than the IOI City Mall, other amenities in the vicinity of The Clio include IOI City Towers, Le Meridien Putrajaya, Putrajaya Marriott Hotel and Spa, and 7 international schools and hospitals. The excellent accessibility via major highways together with the close proximity to Putrajaya, Cyberjaya and KLIA, were also major influencers that they thought would impact the long-term property value of the development.

The Clio offers a choice of 2-bedroom or 3-bedroom units ranging from 872 sq ft to 1,410 sq ft, with every unit having 2

car parks. Residents could spend time with their families enjoying clubhouse facilities such as the barbeque deck, library, gymnasium, infinity pool, wading pool and multipurpose hall. There is also a children’s fun park, gazebo, and center courtyard. More importantly, their peace of mind is also assured 24/7, thanks to the 4-tier security system that features a digital entrance lock, single entry/exit point with intercom and card access system, card access at the lift lobby, and CCTV in the lift/lift lobby.

With a single tower, The Clio Residences consists of 234 units within 35 storeys.

There will be 5 choices of layouts with sizes ranging from 872sq.ft. to 2,594sq.ft.

The units are priced at RM650psf with its starting price start from RM555,800.00.

LOCATION, LOCATION, LOCATION Located at the border of Putrajaya and beside South Klang Valley Expressway (SKVE), The Clio is easily connected to PLUS, MEX, LDP, ELITE, SILK and LEKAS expressways. It is also located 15 minutes away from Kuala Lumpur, Puchong and Subang Jaya. Besides the amenities and facilities located within IOI Resort City itself, other conveniences are also aplenty with its close proximity to other established areas such as Putrajaya, Cyberjaya, Serdang and Kajang.

AN EXPERIENTIAL JOURNEY IOI Resort City offers an “Experience� philosophy to ensure each visit leaves you with a feel good factor. This philosophy is in line with their retail-driven and community-focused strategy to ensure complete satisfaction and delivery of the brand promise. This new component sits on 36.5 acres of land with over 8 million

www.propertyinsight.com.my FEBRUARY 2016 I 43

DEVELOPMENT OF THE MONTH

The vision for this city is to have a resort living feel with city conveniences” - Teh Chin Guan

sq. ft. of built-up and more than 7,000 car parks. The development’s architecture for this phase is inspired by the interpretation of “a City in Garden Concept”, where architecture will blend with the landscape and yet still leave you excited about the retail and entertainment activities it has to

44 | FEBRUARY 2016 www.propertyinsight.com.my

offer.

Mr Teh Chin Guan, Chief Operating Officer (Property Development) of IOI Properties Group Berhad had this to say, ‘The vision for this city is to have a resort living with city conveniences.’ This new landmark is aimed at becoming the most

exciting new destination in Klang Valley.

The development has a GDC of RM1.5 billion.

So, it is true then. First impressions do count. The Clio has made a very good impression on us in more ways than one.

Let’s see what you think.

TITIWANGSA TITIWANGSA

(Proposed (Proposed MRT MRT Station) Station)

KLCC EAST

(Proposed (Proposed MRT MRT Station) Station)

TUN RAZAK EXCHANGE

(Proposed (Proposed MRT MRT Station) Station)

SERDANG RAYA SOUTH

(Proposed (Proposed MRT MRT Station) Station)

SERI KEMBANGAN

(Proposed (Proposed MRT MRT Station) Station)

UPM

(Proposed (Proposed MRT MRT Station) Station)

1800 888 299

TITIWANGSA TITIWANGSA TITIWANGSA TITIWANGSA KLCC KLCC KLCC EAST EAST EAST TUN TUN RAZAK RAZAK RAZAK SERDANG SERDANG RAYA RAYA RAYA SERI SERI SERI KEMBANGAN KEMBANGAN KEMBANGAN UPM UPM UPM KLCC EASTEAST TUN TUN RAZAK SERDANG RAYA SERI KEMBANGAN UPMUPM TITIWANGSA KLCC TUN RAZAKSERDANG SERDANG RAYA SERI KEMBANGAN

(Proposed (Proposed (Proposed (Proposed MRTMRT Station) MRT Station) MRT Station) Station) (Proposed (Proposed (Proposed (Proposed MRTMRT Station) MRT Station) MRT Station) Station) EXCHANGE EXCHANGE SOUTH SOUTH (Proposed (Proposed (Proposed (Proposed MRTMRT Station) MRT Station) MRT Station) Station) (Proposed (Proposed (Proposed MRTMRT Station) MRT Station) MRT Station) Station) EXCHANGE SOUTH (Proposed MRT Station) (Proposed MRTEXCHANGE Station) EXCHANGE SOUTH SOUTH (Proposed MRT(Proposed Station) (Proposed MRT Station) (Proposed (Proposed (Proposed MRTMRT Station) MRT Station) Station) (Proposed (Proposed MRTMRT Station) MRT Station) Station) (Proposed MRT Station) (Proposed MRT Station) (Proposed MRT(Proposed Station) (Proposed MRT Station)

CYBERJAYA NORTH (Proposed (Proposed MRT MRT Station) Station)

www.decentrum.com.my CYBERJAYA CYBERJAYA CYBERJAYA CYBERJAYA NORTH NORTH NORTH NORTH CYBERJAYA NORTH (Proposed (Proposed (Proposed (Proposed MRTMRT Station) MRT Station) MRT Station) Station) (Proposed MRT Station)

1800 1800 1800 1800 888 888 888 888 299 299 299 299 www.decentrum.com.my www.decentrum.com.my www.decentrum.com.my www.decentrum.com.my 1800 888 299 www.decentrum.com.my

AREA FOCUS

CHERAS SOUTH, HOME TO ALL GENERATIONS Fall in love all over again BY: AVINASH SAGRAN

46 | FEBRUARY

2016 www.propertyinsight.com.my

www.propertyinsight.com.my FEBRUARY 2016 I 47

AREA FOCUS

C

heras is an established suburb located in Kuala Lumpur. Uniquely, Cheras stretches between Kuala Lumpur and Kajang hence sharing both state lines; 9th Mile Town marks the Selangor region of Cheras. The suburb is home to several major townships such as

Taman Connaught, Taman Cheras, Bandar Sri Permaisuri and Maluri. The township is well connected with numerous public transportation hubs, LRT train stations and bus services. Furthermore the suburbs close proximity to the city centre has a plethora of infrastructure developments

TRANSACTION SALES PRICE OF LANDED RESIDENTIAL PROPERTY (SINGLE (1) STOREY TERRACE HOUSE) NOS.

SCHEME

LAND AREA (SQ. FT)

BUILT UP AREA (SQ.FT)

2014

2015

% CHANGE

TENURE

STOREY

1.

Taynton View

1,647

1,210

RM550,000.00

RM600,000.00

9

Freehold

1

2.

Taman Pandan Perdana

1,302

771

RM480,000.00

RM560,000.00

16.7

Freehold

1

3.

Taman Maluri

1,540

840

RM430,000.00

RM430,000.00

ND

Leasehold

1

and an array of sports complexes, shopping centres, higher learning institutions and beautifully landscaped recreational parks; striking the perfect balance between the need of modern living necessity whilst providing a suburban environment. Cheras has been a popular residential choice for all generations especially as it is home to one of the most famous night markets in Malaysia ‘Taman Connaught Pasar Malam’; there is always something for everyone in this suburb that is nestled in the corner of Kuala Lumpur.

FUTURE DEVELOPMENT According to the Director of VPC James Wong “With the upcoming MRT Line 1 (MRT Sungai Buloh-Kajang Line) that is scheduled for completion in the second half of 2017 and few MRT stations on the pipelines; among the stations proposed are Cochrane and Maluri stations which will be located close to each other, to

Source : Firdaus & Associates Property Professionals Research

TRANSACTION SALES PRICE OF TWO (2) STOREY TERRACE HOUSE IN CHERAS, KL NOS.

SCHEME

TENURE

LAND AREA

BUA (sq. f.)

TRANSACTED PRICE 2014

TRANSACTED PRICE 2015

PERCENTAGE CHANGE

1.

Taman Dahlia

Freehold

1,647

1,656

RM620,000.00

RM695,000.00

12.10%

2.

Taman Delima

Freehold

797

864

RM310,000.00

RM410,000.00

32.26%

3.

Taman Bukit Anggerik

Leasehold

1,647

1,439

RM470,000.00

RM560,000.00

19.15%

Source : VPC Alliance

TRANSACTION SALES PRICE OF CONDOMINIUM IN CHERAS, KL NOS.

SCHEME

TENURE

LAND AREA

BUA (sq. f.)

TRANSACTED PRICE 2014

TRANSACTED PRICE 2015

PERCENTAGE CHANGE

1.

Cheras Heights

Freehold

-

1,464

RM570,000.00

RM648,000.00

13.68%

2.

Vista Harmoni

Freehold

-

883

RM325,000.00

RM350,000.00

7.69%

PERCENTAGE CHANGE

Source : VPC Alliance

TRANSACTION SALES PRICE OF LOW AND MEDIUM COST APARTMENT IN CHERAS, KL NOS.

SCHEME

TENURE

LAND AREA

BUA (sq. f.)

TRANSACTED PRICE 2014

TRANSACTED PRICE 2015

1.

Taman Bukit Cheras

Freehold

-

1,656

RM110,000.00

RM130,000.00

18.18%

2.

Taman Bukit Cheras (low cost)

Freehold

-

864

RM73,000.00

RM83,000.00

13.70%

3.

Taman Bukit Anggerik (low cost)

Leasehold

-

1,439

RM75,000.00

RM90,000.00

20.00%

Source : VPC Alliance

TRANSACTION SALES PRICE OF COMMERCIAL PROPERTY IN CHERAS, KL NOS.

SCHEME

STOREY

TENURE

LAND AREA

BUA (sq. f.)

TRANSACTED PRICE 2014

TRANSACTED PRICE 2015

PERCENTAGE CHANGE

1.

Taman Bukit Anggerik

2

Leasehold

1647

2831

RM1,200,000.00

RM130,000.00

8.33%

2.

Taman Delima

2

Freehold

1647

2831

RM1,750,000.00

N/A

N/A

3.

Taman Dahlia

2

Freehold

1647

2784

N/A

RM1,730,000.00

N/A

Source : VPC Alliance

48 | FEBRUARY

2016 www.propertyinsight.com.my

serve the Sunway Velocity area as well as Taman Maluri. Other proposed MRT stations serving Cheras include Taman Pertama, Taman Midah, Taman Mutiara and Taman Connaught. After the MRT Line 1 is completed, this will definitely boost the connectivity within Cheras in the future”.

EKOCHERAS Strategically located within the heart of Cheras’ booming hub; with 400m frontage along Jalan Cheras and only 9 km from KLCC is EkoCheras, which will be the pioneer mixed development that embarks on the concept of sustainable designs in Malaysia. The 12 acre mixed 40% commercial land 60% residential development has a total combined gross floor area of approximately 4.9 mil sf. The development will encompass a lifestyle shopping mall with 620,000 sf of lettable space, an office tower, a hotel tower with 260 hotel suites and 3 residential towers comprising 1,516 units of service apartments as well a total of 4,300 carparks. The development will be linked to the Taman Mutiara MRT station by a paved footpath at grade and by a dedicated link bridge overhead.

The residential component was launched back in 2013 and mostly sold. The office & hotel suites were launched early 2015 and were well received. The shopping mall is to be retained as an asset for rental purposes. The planned construction for the EkoCheras mixed development is progressing smoothly and expected to be completed by end 2017.

The EkoCheras development will set the

trend for sustainable design for mixed development with due consideration for energy and environmental conservation in the architectural design, the use of building materials and construction methodology.

The EkoCheras mixed development model is a sustainable business model as the shopping mall will derive economic benefits from a readily available catchment within EkoCheras itself including the residential population, office workers and hotel visitors, apart from the Cheras catchment area.

As the developments have been uniquely planned for the respective sites, their

launches will have to be planned and timed to take into account the prevailing investment climate. The company itself thrives upon incorporating fully connected and integrated developments to major transportation hubs with the transportation nodes interfacing with residential, commercial and recreational facilities – reducing travelling time, improving quality of life and enhancing productivity, in short, Transit Oriented Developments (TODs).

This would a be key quality to enhancing quality of life of individuals without having to brave the hustle and bustle of Kuala Lumpur traffic.

TRANSACTION SALES PRICE OF LANDED RESIDENTIAL PROPERTY (DOUBLE (2) STOREY TERRACE HOUSES) NOS.

SCHEME

LAND AREA (SQ.FT)

BUILT UP AREA (SQ.FT)

2014

2015

% CHANGE

TENURE

STOREY

1.

Taman Connaught

1,650

1,685

RM610,000.00

RM750,000.00

23

Leasehold

2

2.

Taynton View

1,647

1,648

RM760,000.00

RM800,000.00

5.2

Freehold

2

3.

Taman Mutiara

1,657

1,584

RM760,000.00

RM790,000.00

3.9

Freehold

2

4.

Taman Segar

1,873

1,920

RM610,000.00

RM670,000.00

9.8

Leasehold

2

5.

Taman Midah

1,540

1,622

RM750,000.00

RM800,000.00

6.7

Freehold

2 2

6.

Taman Sri Bahtera

1,539 – 1,991

1,675

RM650,000.00

RM700,000.00

7.6

Leasehold

7.

Taman Pandan Perdana

1,080

978

RM520,000.00

RM620,000.00

19.2

Leasehold

2

8.

Taman Pandan Perdana

1,470

1,277

RM700,000.00

RM760,000.00

8.5

Leasehold

2

Taman Maluri

1,650

1,735

RM750,000.00

RM800,000.00

6.6

Leasehold

2

10.

9.

Taman Cheras Indah

900

900

RM320,000.00

RM320,000.00

Stable

Leasehold

2

11.

Taman Cheras Indah

1,300

1467

RM530,000.00

RM550,000.00

3.7

Leasehold

2

Source : Firdaus & Associates Property Professionals Research

www.propertyinsight.com.my FEBRUARY 2016 I 49

AREA FOCUS TRANSACTION SALES PRICE OF HIGH-RISE RESIDENTIAL PROPERTY NOS

SCHEME

2014

2015

% CHANGE

TENURE

RM (PSF)

RM (PSF)

732 - 743

350.00 – 440.00

350.00 – 450.00

Stable

Leasehold

797

440.00 – 500.00

540.00 – 560.00

17

Freehold

818 – 840

360.00 – 420.00

360.00 – 440.00

2.5

Freehold

710 – 1,238

350.00 – 430.00

420.00 – 520.00

20

Freehold

BUILT-UP (SQ. FT.)

1.

Cemara Apartment

2.

Laman Midah

3.

Prisma Perdana

4.

Prisma Cheras

5.

Pandan Lake View

6.

Pandan Height

7.

8.

828 - 861

220.00 – 340.00

280.00 -370.00

16

Leasehold

1,076 -1,130

330.00 -370.00

330.00 – 370.00

Stable

Freehold

Lestari Apartment

818

340.00 – 390.00

350.00 – 400.00

2.7

Leasehold

Cendana Apartment

624

240.00 – 320.00

260.00 – 320.00

Stable

Leasehold

Source : Firdaus & Associates Property Professionals Research

BUKIT MANDA’RINA At Bukit Manda’rina, be enfolded in nature’s tender embrace and bask in the best of KL’s lifestyle. Set against the backdrop of the Sungai Besi Forest Reserve, resident of this elevated locale also enjoys spectacular city skyline vistas, two sparkling facets of this unassuming gem of a neighbourhood, cut and polished by IJM Land. The wholly residential, 66-acre estate in Cheras has been earning accolades and registering stellar value appreciation. The masterplanned boutique development focuses on a tranquil and modern living experience at an elevated location, lavishly landscaped and incorporated with state-of-the-art security systems. Its low-density mix comprises opulent and invigoratingly functional two and three-storey terraced homes, semi-Ds, bungalows and condominium. Sales have been extremely positive with 90% property sold thus far. IJM Land capitalized Cheras prime location due to the proximity Kuala Lumpur city centre and the new MRT Line is only 8 minutes away.

OUTLOOK Though there are sceptics such as Eric Yap who seems to think despite Cheras being a great location, it is difficult to sell

TRANSACTION SALES PRICE OF COMMERCIAL PROPERTY (DOUBLE (2) STOREY SHOP OFFICE) NOS.

SCHEME

1.

Connaught Avenue

2.

Taynton View

3.

Taman Midah

LAND AREA (SQ. FT.)

BUILT-UP (SQ. FT.)

2014

2015

% CHANGE

TENURE

STOREY

2,521

-

RM1,490,000.00

ND

Leasehold

2

1,658

2,794

RM1,500,000.00 to RM1,600,000.00

-

ND

Freehold

2

1,604

3,060

RM2,000,000.00.

RM2,190,000.00

9.5

Freehold

2

NEWLY LAUNCHED, NEWLY COMPLETED AND FUTURE DEVELOPMENT NOS.

SCHEME

@

BUILT-UP (SQ. FT.)

RM (PER SQ.FT)

DEVELOPER PRICE

TENURE

1,576 – 2,059

469.04 – 920.86

RM739,200.00 – RM1,896,050.00

Leasehold

628.00 – 665.00

RM350,000.00 – RM550,000.00

Leasehold

1.

Vila Vista Condominium Taman Pertama

2.

Queensville, Q Suite @ Bandar Sri Permaisuri

526 – 875

3.

You City, Batu 9 Cheras

761 – 1,744

650.00 – 700.00

above RM577,800.00

Freehold

4.

Sunway Velocity, V Residence 2

850 – 1,114

1,138.00 – 1,863.00

RM967,000.00 – RM2,076,000.00

Freehold

5.

Lido Residency, Permaisuri

897 – 1,190

840.00

RM756,960.00 – RM1,376,160.00

Leasehold

6.

J.Dupion Service Apartment

800 – 1,556

650.00 – 850.00

above RM680,000.00

Leasehold

7.

Sky Vista Residensi

380.00

RM449,500.00 – RM609,200.00

Freehold

8.

Eko Cheras

633.00 – 865.00

from RM550,000,00

Freehold

Bandar

Sri

1,450 – 1,700 596 – 1,328

Source : Firdaus & Associates Property Professionals Research

50 | FEBRUARY

2016 www.propertyinsight.com.my

houses within the area since the price is not compatible with the current market value. But if you were thinking there is nothing new to look forward to at Cheras besides the MRT Project and the newly opened IKEA Cheras think again because the suburb is reaching new heights with some of the newer projects within the

existing neighbourhood. Developments such as Sunway Velocity, a 23-acre mixed used development developed by Sunway Group which comprises of V Residence 1 & 2, Sunway Velocity Signature office towers and shops, Sunway Medical Centre, Sunway Hotel and Sunway Shopping Mall. To date, V Residence 2 is under

construction, while Sunway V Residence 1 and Sunway Velocity Signature Office towers have just newly completed. This is exactly what is needed for an established suburb, a little buzz to make everyone fall in love with this vibrant suburb.

AGENTS SPEAK MOHD FAIZ ALI MIP Properties People are now looking for properties with high potential capital appreciation and rental yield. In 2016, Cheras is the place to invest. As a matured, exciting township surrounded by few major highways with plenty of amenities and facilities, including the ongoing completion of MRT stations, more people are settling down here.

As for 2016, lands for properties are getting scarce and this creates a huge demand for high rise residential to enter the market, resulting in new developments preferably within the vicinity of public transport.

Subsale market in Cheras will continue to be under Buyer’s Market for 2016, giving the buyer an advantage over price negotiation. As an investor, this is a slam dunk investment opportunity that can’t be missed out on.

PATRICK FUNG Huttons OneWorld Cheras is one of the oldest suburbs; residents here have been staying, generation after generation. Trends show that once the children grow up and start a family of their own they want to stay within the vicinity. My take is that as long there are good properties in Cheras, you would see the continuous trend of extended families choosing to reside in Cheras.

www.propertyinsight.com.my FEBRUARY 2016 I 51

FEATURED PROPERTY

BANDAR AINSDALE The new gateway to Seremban BY: FARA AISYAH FIRDAUS PETIAL

52 | FEBRUARY

2016 www.propertyinsight.com.my

Abadi, 22’ x 75’ Double-Storey Link Homes

A

re you looking for a home that is designed for a close-knit community of family and friends, green living the way nature intended it with plenty of parks, lakes and wide open spaces?

Bandar Ainsdale is the answer!

It’s a home with all the urban conveniences and a balanced lifestyle.

Home buyers are going to be blown away by the natural surrounding and the green splendour because the developer, Sime Darby Property, plants a Dipterocarpus Costulatus tree in place of any and every tree that they cut down. This is done to ensure the continued sustainability of Bandar Ainsdale.

THE NEW GATEWAY Bandar Ainsdale’s name was derived from the oil palm plantation it sits on – Ladang Ainsdale. It is a freehold 562 acre township focused on providing modern development and lifestyle in Seremban consisting of integrated transportation services such as Transit Oriented Development with commercial and residential property offerings.

The development is situated on both sides of the North-South Expressway, with a direct interchange straight into the township. It definitely has excellent accessibility and the business precincts enjoy direct frontage to main thoroughfares.

Bandar Ainsdale is positioned as the ‘New Gateway’ to Seremban as its toll is located 5km before the Seremban/Labu toll interchange.

The connectivity for the township is enhanced on the communication side as well, especially since Sime Darby Property offers High Speed Broadband service to all homes in the development at the fastest speed ever offered by a developer in Malaysia i.e. starting from 22Mbps which will be installed from the day you move in.

This service is free for the first two years for all Bandar Ainsdale’s home buyers.

They can enjoy movie streaming, music downloads, and multiplayer gaming or

even video chat with loved ones. This can all be done indoors or outside of your home as there are free Wi-Fi hotspots available for residents in selected public areas.

FOR INVESTORS AND HOME BUYERS It is located just 5km from Seremban, 15km from Nilai, 35km from KLIA, and 70km from Kuala Lumpur, making Bandar Ainsdale a perfect township to live-in or even as an investment. There is also the Bandar Ainsdale Interchange that was

Tenang & Abadi Entrance www.propertyinsight.com.my FEBRUARY 2016 I 53

FEATURED PROPERTY completed and opened to public in July 2015 to ensure its residents enjoy direct access to the North-South Expressway.

Other than that, the newly proposed Bandar Ainsdale KTM Komuter station is 1km away from its town centre, while the Seremban Bus Terminal is 7km away. The township has excellent accessibility, even in terms of public transportation.

It is a guarded community development ensuring exclusivity and security. This modern development is spaciously designed with an open plan layout on the ground floor which can maximise living space. It has quality finishes, for example, 2’ x 2’ porcelain tiles and laminated timber flooring. En-suite bathrooms are also installed in all bedrooms on the first floor!

The current appreciation value for the initial phase launched and its surrounding houses is 23%, and the current selling (asking) price is between RM 410,000 to RM 450,000. A slight increase if you consider the initial developer selling price of RM 348,888 for an intermediate unit in Murni (20’ x 60’ double storey terrace).

Bandar Ainsdale’s Tenang and Abadi are now available for sale! For further details, please visit www.simedarbyproperty.com or call 06 - 765 2888.

Nurani Apartment - Open for Registration

Tenang, 24’ x 75’ Double-Storey Link Homes

Location: Bandar Ainsdale, Negeri Sembilan Property type: Residential and commercial Concept: Wholesome living Tenure: Freehold Total units/lots: 3,376 Total GDV: RM 2.28 billion Estimated year of completion: 2020 Public Amenities: • Mosque • Commercial shop lots • Shopping centres at Seremban and Seremban 2 Educational Institutions: • SK King George • SK Taman Rasah Jaya • SK Dato’ Bandar Rasah • SM (A) Persekutuan Labu • SMK Dato’ Shahardin • SM (A) Persekutuan (Sekolah Menengah

Berasrama Penuh) • SMK Taman Tuanku Jaafar • OUM, Seremban • Kolej Mara, Seremban • UiTM, Seremban 3 • IMU, Seremban Retail, Entertainment & Leisure: • TESCO Nilai • TESCO Seremban 2 • TESCO Seremban Jaya • Giant Terminal One • Giant Senawang • Giant Ampangan • Jusco @ Seremban 2 • Carrefour @ Rahang • Wholesale Centre in Nilai 3 • Mydin @ Seremban 2 Food & Beverages • McDonalds @ Jalan Sungai Ujong • KFC @ S2 • Oldtown @ S2 CONTACT DETAILS Address: Bandar Ainsdale Gallery, No.1, Jalan Ainsdale 1/1, Bandar Ainsdale GPS Coordinate: 2.726300, 101.89000 Telephone: 06-765 2888 / 1800 88 1118 Email: lau.kit.yue@simedarby.com (Sales Manager of Bandar Ainsdale) Website: www.simedarbyproperty.com

Bandar Ainsdale Township - Aerial view

54 | FEBRUARY

2016 www.propertyinsight.com.my

All illustrations are artist’s impressions only

PERSONALITY OF THE MONTH

TATI HAMZAH -

A CILI PADI IN PROPERTY Big things come in small packages, and sometimes, so do big personalities BY: NATASHA GIDEON

B

ig things come in small packages, and sometimes, so do big personalities.

This month we speak to the petite but powerful Tati Hamzah, a branding and marketing strategist, with expertise in strategic planning and positioning of 56 I FEBRUARY 2016 www.propertyinsight.com.my

brands but property investor by night. Her day job includes branding, marketing, PR and research, across a multitude of sectors – property development, banking & finance, telcos, fast-moving-consumergoods and non-profit development. Tati is

a passionate and fiery character, the kind of person who will not lose eye contact with you when speaking, whom you know is paying 150% attention when you speak to her. I can only imagine the precision and attention to detail Tati uses when

dealing with her passions and the work she does. At one point, Tati was Head of Group marketing for the EMKAY Group, an established property developer, overseeing its brand strategic planning and marketing activities as well as PR, across various projects in the Group’s portfolio. Working in EMKAY group must have ignited a spark of interest for Tati. But she says, like any other investor, “It was because of the continuous, reasonable and stable returns like rental income over the long term. It is also relative to other forms of investments for example equities. Besides that it is also for the capital growth over the long term. And it is something tangible – brick and mortar investments and physical assets.” Tati says she prefers property investing also because it creates a sense of security as it gives the investor peace of mind as opposed to other intangible investments like unit trusts and equities.

Tati started young in property investing, in her final year of university her parents helped her with the down payment of her first property, which she eventually paid

“I was extremely blessed with parents who realised the importance of having a strong start and good foundation, young in life”

- Tati Hamzah

them back for. “I was extremely blessed with parents who realised the importance of having a strong start and good foundation, young in life.”

The humble investor says her strategy with property investing is to hold properties for over the long term and earn rental income, especially for her twilight years, where it will be her main source of income. “I prefer residential properties due to its affordability as opposed to commercial properties solely because of the certainty of demand for such properties. I also believe that the demand

for residential properties are less volatile compared to commercial properties which tend to be cyclical thus more risky.” She adds. She focuses on the bigger picture like any other smart investor. “You have to think about the state of the economy, policies related to the property sector such as Bank Negara Malaysia’s (BNM) regulations on secured loans, government initiatives on affordable housing and such as these have direct implications on the demand and supply of property, which dictates the appreciation or stagnation of property

www.propertyinsight.com.my FEBRUARY 2016 I 57

PERSONALITY OF THE MONTH values. Understanding these issues give me a sense of the property market’s direction, where I can then adjust my investment approach – for example, if I foresee that the rental income will dip and tenants will be hard to secure I will buff-up my cash reserve or re-negotiate my loan terms with the banks.” She adds that in the end it comes down to how much you can really afford and whether or not you can afford to service your loans.

Different locations and different properties are used for different purposes for Tati. “This very much depends on the location of the property and the population make-up of that area. For example, there is a huge population of university students in Cyberjaya, so I bought a small unit at a price that I can afford, with the intent of renting it to students. I also have another property located in Subang which has a mixed population of young singles and young families, so I reach out to these segments as potential tenants for that property.”

It can get difficult managing property, especially so with tardy tenants, but like I said, Tati is in it to win it. “A mix of managing it myself and engaging the help of realtors or other third parties is necessary to ensure everything is in order. I seek the expertise of realtors to find tenants because I believe they complement me – they have the expertise, resources and time to focus on securing tenants, whilst I can focus on managing my investment portfolio.

I also used to engage third parties for my property maintenance.” Engaging realtors has helped her with a lot of issues, including managing tenants.

Tati is a firm believer in investing in hotspots and currently owns a few properties namely in areas like Cyberjaya and Subang, areas that are scorching hotspots.

How does the market fare for Tati? “I think in the short term there will be a dip in demand, due to the global and thus domestic economic uncertainties. However, this does not worry me too much, as I am a long term investor where my risks are averaged-out over the long term.”

I once read a quote, that the best time to buy property is five years ago. Tati probably uses that as her life motto, getting herself good investments, with good rental yields and with a retirement plan all ready to go. You see, it is not the big developers, or wealthy investors that inspire people like me to start investing, it is people like Tati who look, eat and spend like you and me, whom inspire me and hopefully Gen Y to start flooding the market with our investments.

58 I FEBRUARY 2016 www.propertyinsight.com.my

INVESTOR NEXT DOOR

BE PATIENT, DO YOUR RESEARCH AND TAKE ACTION Invest in property wisely

S

elf described as someone who is ‘gung ho’ and not afraid of confronting his bosses, Ng Chee Yong’s journey began as a mechanical engineer graduate from Tar College back in 1994; a hard worker who spends most of his time working from Mondays to Sundays he knows that working under others was not something he wanted to do for the rest of his life. He is now the CEO Cheng & Co Wealth Management Sdn Bhd, which is a One-stop Fee-Based Financial Planning Centre and also Practice Director of Standard Financial Adviser (SFA).

You will be surprised to uncover his first property venture was through a paper 60 I FEBRUARY 2016 www.propertyinsight.com.my

BY: AVINASH SAGRAN

cutting which he got from his office colleague. It was an auction notice for a property at Bukit Mertajam; his colleague explained how the technicalities of an auction worked. Soon after, Ng bought his first two properties below market price at Bukit Mertajam from a motivated seller. His curiosity and interest led him to find a property guru in the form of the book series called Real Estate Riches by author Dr. Dolf de Roos, Ph.D., and with Dr. Dolf’s methodology he was able to buy four properties in three years. He was such a fan that he queued up to take a photo with Dr. Dolf when the author was down for a national congress. Ng had an epiphany realising he still had a long way

to go to reach the benchmark set by Dr. Dolf thus he made the decision to move to Kuala Lumpur. With a burning desire for property investment, he began to immerse himself in the industry.

According to him, “Investing in property is very profitable. From being an engineer to a financial planner I have been giving a lot of talks especially 2010 and 2011 when I was a guest speaker for star property talk in Penang so I shared how you can actually invest and at the same time manage your cash flow”.

THE INTEREST “You have to have a habit of investing first when you have a strong income; invest

in a property and you will receive passive income”. By reading Dr. Dolf books he realized that the property market was one of the best forms of investment “stock investment can never compete with property investment due to the leveraging factor that is also one of the reasons why I am so interested” He further added “You can further increase property value by renovations but with the stock market you can’t increase the share price”.

FIRST TIMERS “Loan approval is connected to your CCRIS report, the challenging part is for those who just started and have no credit card then banks cannot access your credit rating so that is where you need a guarantor, but I did not need a guarantor due to the fact that I had a credit card”.

“What is interesting about it was how I forked out the money, technically I needed 10% down payment and another RM4,000 as legal fees, during that time I did not have RM14,000 so what I did was I used two of my credit cards to get cash advances, unfortunately I was still short so I borrowed the remainder from my girlfriend who is now my wife, so that is how I started buying my first property.”

He added “Property has taught me one thing which I think a lot of youngsters take for granted these days and that is the importance of keeping their names clean, as far as the creditor is concerned. A lot of youngsters nowadays go bankrupt due to personal loans or car loans”.

STRATEGY 101 “You need to buy a house that has cash flow potential which means the property must be tenable and provides you monthly rental, you need to do this for at least your first property”.

“By attending auctions or and meeting motivated sellers I can easily get 30% below the market price which gives me the buffer in case the property market crashes. I also make sure the places have rental yields of at least 6 to 7%.”

“I always go for secondary markets, I never buy from primary markets because I feel that I can get a fair price from secondary markets, the prices from primary markets are inflated. I visited a housing project in Kajang to survey surrounding market prices of double

Be a marathoner instead of a sprinter, keep buying and keep refinancing” - Ng Chee Yong

storey houses in the surrounding area, and these were only going for RM500,000 but the property developer wanted to sell at RM800,000.”

“Your first property should not be commercial; because your first property needs to be as low risk as possible, residential tends to have lower risk and most of the time you tend to make mistakes on your first property.”

“By buying below 30% of market price it is almost a guarantee that you will never lose any money.” He explained, many people lose out when investing in property “because these people do not have any patience, they tend to buy properties that they like meanwhile in property investing one can only rely on the figures.

Ng explained, Dr. Dolf has this 10-3-1 rule “you have to look at 100 listings, find 10 that you can analyse, offer 3 units, and at the end of the day only purchase 1; the process could take up to 1 year but it is not a process people are willing to go through. Unfortunately achieving financial freedom is about having strong discipline to maintain stability”.

SENSE AND SENSIBILITY “It is important not to use your senses, let the figures do the talking. This is to avoid buying a house that you like instead of buying a house that can increase your assets, hence building your confidence and stamina to move on to the next house.” He advised “be a marathoner instead of a sprinter, keep buying and keep refinancing”.

UNDERSTANDING THE MARKET “I think it is still hanging in there, if you follow the methodology; do proper research and be patient I think there are areas with strong value that you can invest in. Look at the market wisely, places such

as Kuala Lumpur, Penang and Johor can never go wrong but that is on a macro analysis; on a micro level do a study on the surroundings for example is there construction of new public infrastructure going on etc”.

“I feel that if you want to find a space you have to find value, just like investing in stock you have to find a value stock, value in property can be found through motivated sellers, you really have to go to the secondary market to look for good value deals.”

PROPERTY INVESTMENT PROPERTY 1 Location

PJ Sek 17, Jalan 72, Tiara Damansara

Property type

Condo

Purchase value (2005)

RM260,000

Market value (2015) RM700,000 Price psf

RM529

Price Increase since 2005

169%

Rental yield

Own Stay

Loan margin

80%

Loan tenure

30 Years

PROPERTY 2 Location

BRP Sunway Semenyih

Property type

Double Storey Terrace Corner

Purchase value (2012)

RM370,000

Market value (2015)

RM600,000

Price psf

RM333

Prince Increase since 2012

62%

Rental per month

RM1,000

Rental yield

2%

Loan margin

No Loan

Loan tenure

No Loan

www.propertyinsight.com.my FEBRUARY 2016 I 61

INDUSTRY INSIGHT

VIGOROUS VALUERS A local valuation firm with a global reach BY: FARA AISYAH FIRDAUS PETIAL

A

rriving at one goal is the starting point to another. Well, the starting point for VPC Alliance is when the Director of the company, James Wong Kwong Onn and his partner in Johor Bahru, Tan Beng Sooi were invited by an international valuation firm from Hong Kong, Vigers Property Consultants to set up Vigers Property Consultants branches in Malaysia in 1990.

“I set up the KL branch while Tan set up the one in Johor Bahru,” said James. It was in 2004 when James and the team decided to change the name to VPC Alliance Sdn Bhd to reflect it being a local entity. Over the years, VPC has expanded throughout Malaysia and now has nine branches, three in Klang Valley, Penang, Alor Setar, Johor Bahru, Mentakab and offices in Kuching and Kota Kinabalu to cover East Malaysia . In 2016, we are going to open 62 | FEBRUARY

2016 www.propertyinsight.com.my

another branch in Sandakan, making it a total of 10 branches.”

The firm is also a member of VPC Asia Pacific Pte Ltd which is a regional grouping of international property consultants and advisers with more than 35 offices and staff strength of over 450 people spread in seven major countries in Asia Pacific namely India, Indonesia, Japan, Malaysia, Singapore, Thailand and Cambodia.

In early July 2010, VPC Asia Pacific entered into a strategic alliance and business partnership with Cluttons LLP, a leading UK Chartered Surveyors and Property Consultants firm to promote cross border investments between Europe and Asia on behalf of their clients.

The alliance between Cluttons and VPC Asia Pacific will enable its clients in Asia to benefit from the expertise and local property market knowledge of Cluttons in

United Kingdom and Middle East. With this collaboration, VPC will be able to serve its clients at an international level, with access to Clutton’s vast experience and expertise as well as it’s huge client base.

STEPPING STONE Although Vigers Property Consultants was an established firm in Hong Kong, it was relatively new in Malaysia during 1990, therefore the firm faced a hard time in establishing the company here. “During that time, we were new so we actually had to utilise all of our resources and our relations with banks, with our clients from our previous companies and the biggest challenge was actually to get into the banks panel of valuers. But with perseverance, today we managed to be in the panel of valuers for most of the commercial banks in Malaysia. The other challenge was

recruiting good staff and good valuers!” said James.

James is of the opinion that accuracy of the valuation is the best service to clients, so in our firm, each valuer is assigned to a certain area. “Each of our valuers specialises in an area. Over the years, that valuer will have intimate knowledge of the area, and he will know the property players, the trends and values, and if the bank asks him for a value he is able to answer immediately. To us this is a good policy. Area specialisation is very useful because valuation is all about providing an accurate assessment on the specific market value. Other than that, if you specialise in that location, the chances of you making a mistake is more remote compared to a valuer who doesn’t have in depth knowledge of the area.”

“The property market is imperfect”, said James and that is why there could be some disparity in the price between the valuation and what the purchaser is paying for. “A lot of people are buying properties without consulting a valuer and as they do not have the recent sales data from NAPIC (National Property Information Centre), they are not aware of the recent transactions, the trends, and other important aspects to look at before buying a property. These buyers are not aware and normally they are guided by negotiators who act for the registered agents and these negotiators are not well versed with the recent transactions.

Sometimes they may try to inflate the value because the higher value that they can sell at, the more commission they will receive. That is why we have received many requests from banks - from their customers who want to buy a property and they ask us to value it and we cannot match the proposed selling price. We will normally advise the customers that they are paying above market value. The customers will either accept the valuation and go back to the seller to renegotiate the price.”

DOCTRINE AND WISDOM James is one of those leaders who believes in teamwork rather than dictatorship. “I’d like to treat my staff as team players and colleagues, instead of my employees. When the company does well in the year, I’d also reward them with an annual bonus.”

“The valuation profession is actually part of the surveying profession which

is actually one of the oldest yet the least recognised professions in the world.”

It is still a very young profession, and I hope to see this profession grow and become widely recognised by the industry.

Through my affiliation in the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia (PEPS) as a two term Past President and currently the Head for Strategic Planning, I hope to create more awareness to the profile of the valuation profession so that valuation firms like ours as well as other valuation firms are able to grow.” James stressed that valuers play an important role as the custodian of the property wealth of the nation.

In addition to that, James said, “Valuation is neither science nor art. The interesting thing about valuation is that most of what you do is based on sound valuation principles and common sense. As a valuer, we are guided by the ‘Red Book’, the Manual of Valuation Standards by the The Board of Valuers, Appraisers and Estate Agents Malaysia. It contains mandatory rules and best practices guidelines for all registered valuers to undertake valuations. As long as we follow the guidelines in the ‘Red Book’, nothing will go wrong as far as valuation of property is concerned. Also, you must remember than in any profession, it is not just your professional skills that matter, but the soft skills as well.”

2016 PROPERTY OUTLOOK “Generally, 2016 will be a challenging year for the property market for various reasons.

Firstly, the world economy has not recovered and there are signs that even the world economy may take a step backward. There is also the economic problem in China, so there may be a hard landing in the economy of China and if it happens, our economy in Malaysia will be effected. With our oil price at an all-time low, oil palm and rubber price falling, and Malaysian ringgit depreciating, 2016 will be a quiet year for the property market. There is over building in many of the property sub-sectors and getting loans from the banks is becoming difficult. 2016 will see less property transactions and property prices are expected to drop. But because of the prudence of Bank Negara with its cooling measures, we will only see the gradual decline in property prices and the price fall will not be double digits,” James concluded.

James Wong was awarded the Valuer of the Year 2014 by The Board of Valuers, Appraisers and Estate Agents Malaysia www.propertyinsight.com.my FEBRUARY 2016 I 63

DESTINATION - PUTERI HARBOUR

WHAT’S UP JOHOR? Head south for a little time together BY: AVINASH SAGRAN

T

he stress of being in a continuous hurry, the hustle and bustle of the city definitely takes its toll on a person. With the current economic climate taking a vacation abroad does not seem like a financially wise decision. Yet we all need to unwind at a leisurely pace as that is one of life’s beautiful gifts. The mind and body gets to wind down from the rush for deadlines it usually is accustomed to. Most Malaysians choose Melaka or Penang as their choice for a weekend gateway; they do not usually associate Johor as place for a weekend gateway unless it is a stopover to Singapore but numerous changes have taken place as result of the Iskandar Malaysia development. One of the most prominent changes which has taken place is the transformation of the Straits of Johor.

It has quickly transformed into a southern gem, intending to create world-class waterfront living in Malaysia.

Tucked away at the most narrow point along The Straits of Johor, lies hidden, Puteri Harbour, a 688-acre integrated urban waterfront development featuring waterfront properties. Puteri Harbour can be reached by various modes of transportation whether by land, air or sea. The idea of Johor as a staycation destination would never have crossed the minds of many Malaysians. I’m no different despite being a Johorean myself. But upon arriving at Puteri Harbour Marina the setting of the beautiful boulevard garden coupled with the marina in the background certainly shed a new light to a perception

64 | FEBRUARY

2016 www.propertyinsight.com.my

that I have had about Johor. The setting seemed unique and different compared to other staycation destinations one would take in Malaysia.

On the 18th of January 2016 Puteri Harbour launched “time.together”, an initiative aimed at encouraging the public to come to Puteri Harbour. It offers familyfriendly activities such as Sanrio Hello Kitty Town and Thomas Town which, as we know, are adored by many here. Yang Berbahagia Dato’ Mirza Mohammad Taiyab, Director General of Tourism Malaysia graced the launch event together with Yang Mulia Tunku Dato’ Ahmad Burhanuddin, Group Managing Director and Chief Executive Officer of Themed Attractions Resorts & Hotels Sdn. Bhd. It was announced that Themed Attractions Resorts and Hotels would produce exclusively designed Hello Kitty themed hotel rooms for families and fans of the beloved icon. The rooms will be open to public later this year.

Staycationers and vacationers are able to pamper themselves at the four star Hotel Jen Puteri Harbour which offers numerous amenities such as an all day dining restaurant, a lobby lounge, a sky lounge and a bar. I was instantly attracted to the sky gym, rooftop infinity swimming pool and garden. The tranquil ambience allows one to be more grounded, reflective, and aware. Catching the sunrise by the rooftop infinity pool was a moment in time where I honestly felt time stood still. One can take the time to think clearly about life, a little self reflection can go a long way in rediscovering passion and igniting the spirit within to take that leap of faith.

There is something for everyone of all ages, families can share good times and grow closer by enjoying the themed attraction parks, couples can enjoy a romantic candle lit dinner by the marina and youngsters can take the opportunity to rent the available yachts and watch

Our activities are divided to sports, lifestyle-fashion and arts-culture” - Philip Whittaker

the sunset. For fitness enthusiasts, you could choose to cycle and jog around the beautiful landscape surrounding Puteri Harbour. There are a wide range of dining options from Japanese, local Chinese, exotic Indian and Western food; overlooking the marina with the nightlight reflection on the bay. What a bonus! Though a

www.propertyinsight.com.my FEBRUARY 2016 I 65

DESTINATION - PUTERI HARBOUR word of caution, during weekdays most dining outlets are closed by 9pm and the nearest restaurants are 10-15minutes away from Iskandar Puteri. This is likely to change once residential and commercial development takes place within the region.

Furthermore Puteri Harbour Marina is one of the few marinas in Malaysia; due to its proximity with Singapore, their clientele is proven to be diverse. Boats and yachts can be rented for any special functions; so if you are feeling the need to have a celebrity styled party overlooking a beautiful sunset and party through the night, this is your perfect choice. Puteri Harbour Marina, is recognised within the global sailing community as one of the “must sail destinations” in the world. It is the first in Malaysia to be recognised and awarded with the 5 Gold Anchor Award by The Yacht Harbour Association (“TYHA”), United Kingdom in February 2014. It also houses The Puteri Harbour International Ferry Terminal, but currently it only offers ferry services to Tanjung Balai and Batam, Indonesia. If you ask me, once consensus is reached by both the governments of Singapore and Malaysia on providing services to and from Singapore to Puteri Harbour, more international tourists would be interested to visit.

The Group Chief Marketing Officer for Themed Attractions Resort and Hotels Philip Whittaker revealed that there are 16 events lined up at Puteri Harbour this year.

For the second consecutive year Johor will host the Monsoon Cup; the event takes place from the 26th to 30th January. He further added “our activities are divided to sports, lifestyle-fashion and artsculture; it appeals to everyone who has a different agenda or interest”. He advised Malaysians to capitalize their off time by taking a staycation at Puteri Harbour, he said “Legoland is 15 minutes away; visitors should pace their travels by stopping and staying over at Puteri Harbour”.

Holidays are meant to be spent doing whatever you want without a fixed itinerary.

With an array of activities available; Puteri Harbour promises a good time for anyone looking for a quick getaway over the weekend. Immerse yourself in a Miami styled vacation down south in Johor. In tough economic times, we have got to be a little more creative with how we spend our vacation time.

66 | FEBRUARY

2016 www.propertyinsight.com.my

STRATEGY

PROPERTY OUTLOOK 2016 Challenge the Status Quo & Have an Independent Mind

H

appy New Year everyone! 2016 is now upon us, and I’m sure we may feel a little apprehensive given the rather precarious economic and political climate right now.

I’ve heard many so-called “experts” give their views about the Economic outlook & Property market. I’ve always listened to these experts with a pinch of salt. However, I do find it a little disconcerting that some people seem to absorb and parrot these expert’s views like the gospel truth.

I’m just a regular employee and investor. A common man, if you like. So why should I listen and take these “experts’” views lock, stock and barrel? Let’s be humble and listen to the views around us. But let’s not forget that it’s also important to challenge the status quo and to have an independent mind.

I’d like to share my view on the Property Market in these next couple of years. I am a layman and do not claim to be an expert.

Please do forgive me if my views appear sweeping.

EMERGING TRENDS IN THE PROPERTY MARKET Key Facts to Ponder We are not exactly a high-income nation. 74% of Malaysian Households or 9.6 mil Malaysians earn less than RM 6,000 per month. The average Household Income in Klang Valley is RM 8,000 per month.

Income inequality is on the rise. Only 4% of Households are earning > RM 10,000 per month. The top 17,000 members or 0.25% of EPF contributors have the same EPF savings as the bottom 2.95 mil members or bottom 44%.

68 |

FEBRUARY 2016 www.propertyinsight.com.my

Interest rates looks like it will be flattish in the next year or so.

I don’t see it coming down because Household debts are just too high at circa 88% of GDP, and we can’t afford to stimulate credit now. Similarly, an increase in rates would probably foil any chance of a growth rate momentum we may have.

So What Emerging Trends Do I See? RM 600K Residential Units a Safe Bet Residential units priced at RM 600K and below would be the bedrock of the nation; the highest in demand, so to speak. Why? 74% of us earn less than RM 6,000 per month. I see steady growth for this segment, because we need homes that cater for the 74% of us. Generally speaking, an investment into a RM 600K unit in a suburban area should be a fairly safe bet, without any remote signs of prices crashing. (And yes, there are even some decent RM 600K non shoe-box condo’s that one can still find in more affluent suburbs like Petaling Jaya)

Assess RUMWIP, Selangorku & PRIMA Projects & Their Impact to Developments RUMAWIP, Selangorku & PRIMA are good initiatives by the government that enable the Rakyat to have a higher percentage of home ownership, due to the affordable price of such projects.

Whether the implementation of such projects are going according to plan, is grounds for a separate discussion altogether.

Nevertheless, I see an emerging trend where some Developers create mixed developments of say, One Block of “High-end” residence, and One Block of RUMAWIP. This is mainly due to developers receiving incentives from doing mixed developments like this, in the form of getting a better plot ratio or better building density.

As an investor, be wary of such mixed developments, and please think through if these developments make sense to us as investors. If you bought a unit in the “High-end” block, would you want a RUMAWIP neighbour next to you? Does this decision bode well to you as an investor? Let’s ponder upon it, and I suggest we use this sanity check as a basic guide.

SOFO, SOVO, SOXX – Buyer Beware, Do Proper Due Diligence I also see a trend where “Signature Office Suites” like SOFO, SOVO or SOXX projects are getting more rampant, and some experts have advocated their viability. In general, these projects are being built at attractive nominal prices of approximately RM 350K, but with a smaller build-up of say, 400 square feet. Please do your due diligence, and consider the tenant profile, location, supply of units and the projected rental yields of such projects.

For instance, if such a project was based in a suburban area, would that 400 square feet unit be able to fetch a rental of RM 1,600 per month to cover your instalment? (Assuming 90% margin of financing for the RM 350K property). Do you have a tenant market readily available in the suburbs that’s willing to part with RM 1,600 per month for a 400 sqft unit? What if you had an older development next to you, offering the same RM 1,600 rental, but it’s for a 1,000 sqft size unit. Would your investment still be viable?

Gated & Guarded Landed Developments – A Necessity or Overrated?

There is also talk that Gated & Guarded (G&G) landed homes are getting more prominent & one should invest in those. They also say that the older non G&G areas are extinct and one shouldn’t invest there. Really? Well, the answer depends on your Target Areas. Let’s talk about one of my target areas - Petaling Jaya (PJ) & Damansara, which is the home of 650,000 people in the great state of Selangor. They mostly comprise of older, matured and non G&G areas. The only G&G areas within the Damansara proximity would probably be Desa Park City & Aman Suria.

Bear in mind, areas like Damansara don’t really constitute as low cost housing. The affluent stay there, they have very strong Resident associations (RA’s), that form good & proper security schemes. The upkeep of the properties there are also good with frequent renovations & upgrades. It’s also important to realize that there’s a scarcity of land within the Damansara area, and places like DPC are priced at a premium, catering towards the upper echelons of society.

As such, it is only logical that non G&G areas tend to cater

www.propertyinsight.com.my FEBRUARY 2016 I 69

STRATEGY no heed to them. For instance, One Utama, Mid Valley, Cheras Leisure Mall, the existing Kelana Jaya LRT line, the Damansara Uptown commercial hub, are old and completed boosters.

Boosters & Infrastructure – Validate Pricing Disparities to Determine Opportunities Form a sanity check and question pricing disparities across the Klang Valley spectrum. Let’s determine if pricing premiums due to new boosters are justified, especially if it’s priced at a premium to older areas with existing boosters. This may present opportunities to a layman investor. Some examples that we can ponder upon as follows: (a) An under Con project with “boosters” in Sri Kembangan is going for RM 650 psf vs the Old Klang Road Area of circa RM 400 psf, and is priced the same as Taman Desa. (b) Does a Condominium near a so called “integrated MRT station & mall” @ Kota Damansara deserve to be priced at RM 1,000 psf? Especially when older subsale condos a few kilometers away are going for circa RM 400 to 500 psf? (c) A new Integrated Project – with residential & commercial elements, coupled with a College, has studio units priced rom RM 850 psf onwards. Is this justified if one compares these to some existing studios in USJ, PJ or Bangsar South, which are priced at RM 650 to 700 psf? (d) A new project – in Jalan Cochrane Cheras, complete with a Shopping Mall is going for RM 1K psf, versus the surrounding area of RM 500 psf

for the financial needs of the 650,000 PJ residents, where a Damansara link house would cost RM 1.3 mil vs DPC of 2.2 mil.

Finally, it’s my humble view that pragmatism will prevail in the sense that most PJ folk wouldn’t want to move 30km away or so towards the newer G&G areas Boosters & Infrastructure – Over rated?

Boosters are catalysts that help improve the desirability & potential appreciation of a project or area. Essentially, boosters could be shopping malls, private colleges, schools, commercial hubs or infrastructure plays like Public Transportation like MRT / LRT, etc.

Again, many “experts” have advocated that we should consider investing in areas within the proximity of Infrastructure or Booster Plays, because these are the so called Hotspots.

I have nothing against boosters per se. However, presently, there could be a number of projects that may be overpriced due to the over hyping of Boosters. There’s a popular adage that goes something like this “Follow the Infrastructure”. Respectfully, I beg to differ. It should be “Follow the Affordable Infrastructure – New or Old” Many seem to equate Boosters as affiliated to something that is “New” in an Under Con Project. However, let’s not forget – we walk past many completed or existing boosters today, and pay 70 |

FEBRUARY 2016 www.propertyinsight.com.my

High Speed Rail, MRT Line 2 , MRT Line 3 etc etc Regarding Infrastructure, so many “experts” have spoken about this topic that it’s simply mind boggling to a mere mortal like me. These “experts” also talk about how Stations across the High Speed Railway (HSR) and MRT2 Lines will create Hotspots.

To be fair, they could have some valid points. But remember, it’s always prudent to challenge any pricing premiums that are placed on these Infrastructure Plays. By all means, do a station by station analysis if you have to. Study the hotspots that exist across these lines. But do not get caught up in Infrastructure plays that are overhyped, that in turn, may drive prices up as well.

I am not adverse to change. I do acknowledge that the HSR, if well executed could change lives and how people travel. The commuting time from KL to Air Keroh is expected to shorten from 2 hours to 45 minutes! The main hubs of Sungai Besi, Seremban, Ayer Keroh, Muar & Batu Pahat may stand to benefit.

Well, I have about 8 target areas in PJ and KL that I know really well. I focus on these target areas with precision. Other than that, I am more or less “half past six” with other areas in the Klang Valley. I am a father & husband, a senior employee and an Investor. I know my own limitations & time constraints, and am being pragmatic. Given my limitations, how can a mere mortal like me possibly be familiar with towns like Muar or Batu Pahat?

I’m sorry, but going there and touring the place say 4 times or so doesn’t make me familiar or an expert. In all humility - I do not have a history or connection with that place, and it is not within my risk appetite. If you know your own capabilities, and you are also

familiar with all these hotspots across the infrastructure lines – by all means, invest with prudence. If not, I suggest one threads carefully with caution.

Developer Interest Bearing Schemes (DIBS) – The Skeleton in the Closet?

In November 2013, the Government finally banned Developer Interest Bearing Schemes (DIBS). There are a few major reasons for this, namely - DIBS encourages speculative behavior because buyers are not required to make any cash outlays in the form of progressive interest payments during the construction period.

Developers would “absorb” the progressive interest payments and pay the interest due to the financier or bank, on behalf of the purchaser. Unfortunately, there’s no such thing as a free lunch, and the interest payments have been “factored” into the Sales price. In turn, this may introduce an inflationary element which artificially boosts the price of such under con projects. In fact, some parties view DIBS as one of the main culprits that has pushed Primary Market prices up, and this has resulted in a spillover effect to the Secondary or subsale market as well.

There will be a number of DIBS Projects that will be completed and going through Vacant Possession (VP) in 2016 and 2017. Due to the nature of DIBS projects, they may attract some speculators that bought multiple DIBS projects. These folks may have minimal holding power, high gearing and whose modus operandi was flipping their units for a quick & easy gain.

Given the rather anemic property market, they may have problems flipping their newly completed units. Some of these buyers may then default on their loans, or reduce prices significantly to offload their units. This may present opportunities for value

investors that take advantage of any downward movements in prices, especially if it’s aligned with our risk appetite and investment objectives.

Moral of the Story?

Experts have their views. So do layman employees like me. I have just shared a layman’s perspective of the 2016 Property Outlook; namely on the Mass Market Segment, RUMAWIP & PRIMA, SOVO & SOXX, Gated & Guarded developments, Boosters and Infrastructure plays. I could be wrong in my views; God knows I have been wrong countless of times.

But I encourage all of us to develop a stand, and to have an independent mind which challenges the status quo. More often than not, following the herd may give us fatal or mediocre results.

But having an independent mind backed with logical & factual analysis may put us ahead of the game, and perhaps that would give us a pretty decent 2016. Cheers.

Sources *Khazanah Research Institute: State of the Households report *BNM Monthly Statistical Bulletin *Department of Statistics, Malaysia

ABOUT THE CONTRIBUTOR Mark Chua is a Senior Vice President (SVP) in a Financial Institution, who has achieved financial freedom through property investments. Mark is living proof that one can be successful in both our Careers & Property Investments.

www.propertyinsight.com.my FEBRUARY 2016 I 71

STRATEGY

WITH LIMITED WEALTH, STAY FOCUSED ON BUILDING IT UP

T

he prices of condos in certain areas have reached RM1 million even for just a slightly over 1,000 sq ft unit. There’s already no way for me to buy these units anymore even if I worked harder. It’s too late. I might as well just keep renting.

Everyone my age is doing the same anyway. How many of us have this thought in our mind today? First of all, it’s very real. There are already condos which are above RM1 million and the size is just slightly above 1,000 sq ft. It’s also true that it might be too late to buy such condos in such areas. It may well be very real that all your friends are renting and you think since they are renting, then you can also continue renting, right? Wrong.

There are still condos available that are cheaper. You would still have to work harder not just to climb up the corporate ladder but also to keep your job. Maybe not even from fellow Malaysians but keeping your job from being ‘stolen’ by other better people in other countries. If everyone is renting today, then tell me why are the transaction numbers still showing such a huge gap, even if it’s on a downtrend. Who are these buyers? Are they only the super-rich who are now buying so that they can rent to all those who think renting is better?

I hope we are now suddenly awake? Yes, while we are thinking that renting is the best, there are people who are buying more units so that they can continue to rent to us! Life’s not a fair one, like many people have commented. That’s the reason why blamers blame everyone while successful ones focus on opportunities all the time and take action. We WANT great areas, no wonder those areas are selling at prices higher than the moon. We actually just NEED some properties within those areas that we want. If we want 72 I FEBRUARY 2016 www.propertyinsight.com.my

a place next to LRT or MRT, take a look at the stations again. Many are in areas which are much more affordable than you thought.

If we want international schools, so understand that staying just an additional 10 minutes away from these schools would mean a much lower price. If we want the place to be nearby expressways, do note that there are LOTS of expressways and not just the few that we normally use.

Unfortunately, many of us do not have unlimited wealth. That’s ok because majority are like us. This is why we still have the opportunity to stay ahead. Imagine everyone having more wealth than us today.

If this happened, we would always be poor until the day we said goodbye. A long time ago, these potential opportunities did not exist. Today, it’s even bigger due to the continuous urbanisation which means more housing is needed.

What we do from today onwards may determine if we continue to be just the majority or start moving towards the above average and later the top 10 percent. Think again, there’s lots to learn and do. If the majority loves to rent, then why not make them happy by buying a unit and renting to them?

Happy investing or renting.

CONTRIBUTED BY Charles Tan is the founder and principal writer of kopiandproperty.com, where he blogs about his personal views on the property market. He is also a regular contributor to some property related publications in Malaysia.

STRATEGY

74 I SEPTEMBER 2015 www.propertyinsight.com.my

www.propertyinsight.com.my JANUARY 2016 I 73

FINANCE

2016 PROPERTY FINANCING OUTLOOK

T

he property market in 2016 will continue to be soft especially with the challenges we are facing externally (possible continuous rate hikes in the U.S., Slower GDP growth in China, political unrest in Syria which has badly impacted oil and commodity prices) and internally ( the 1MDB issue, the weakening Ringgit, high inflation etc). 2016 is going to be a year with a high volume of completed new properties, both residential and commercial. Hence the market will be soft in view that the impending supply in the year will need some time for the demand to catch up.

2016 will also be a year of testing speculators who have invested in projects back in 2013, which will be completing 74 | FEBRUARY

2016 www.propertyinsight.com.my

soon, especially those projects with Developer Interest Bearing Schemes (DIBS). This is because they would need to start servicing their installments and compete with the competitive secondary market and rental environment.

The most challenging aspect for 2016 is, in fact, securing a mortgage from banks.

Financing will only get tougher, be it for first time homebuyers or property investors.

This is because banks are currently facing high asset to deposit (AD) ratio, meaning, lower funding available, the weakening Ringgit and higher banking costs. Average AD ratio in all banks have breached the 90% level, this means banks have lent out more than 90% of their available funds to consumers. All in all, these have pushed

banks to invest wisely or become pickier with customers’ profiles and this is to ensure the best and safest return on investment for the banks. In view of this, we strongly hope Bank Negara Malaysia (BNM) steps in to help increase the liquidity in the market by lowering the Statutory Reserve Requirement (SRR), which is now at 4%, to be improved to 3% or 3.5%, in order to improve the liquidity of banks and their ability to give out loans.

Another critical issue that we are facing today is banks are not lending to first time homebuyers primarily due to the affordability issue. After the introduction of Responsible Lending Guidelines in 2012, another new segment has been classified in 2013, under this guideline, which is called

FINANCE

the vulnerable segment. This refers to Malaysians with monthly incomes below RM5,000 as defined by most banks. Banks are applying more stringent Debt Service Ratio (DSR) cut offs at below 60% on net income for those who fall under this category whereas others can be as high as 80% to 90%. This has further dampened the chances of securing a financing from the bank to purchase the first house for younger buyers who generally earn less than RM5k per month.

The property market dynamic will continue the revolution of more and more Malaysians favouring value added properties, especially, lifestyle properties. These properties are equipped with facilities that allow people to have better lifestyles without having to compromise. Younger urban Malaysians are searching for a work life balance hence, the lifestyle living concept is a more preferred choice.

Before this, the lifestyle concept was not really introduced and as such there may have been a lack of such supply. We foresee the demand of more lifestyle concept properties and we think this will continue to increase in the near future. Gen Y is the biggest population group in Malaysia, comprising 10.8mil or 38.2% of Malaysia’s population. 2016 will also be the year that Gen-Y’s hit their early thirties and this will probably be the time for them to settle down - to purchase a home and build a family.

Even though the market seems weak in 2016, it is indeed an interesting year for some as it comes with such uncertainty that good deals are not impossible to find and secure. It might be challenging to secure financing from banks but knowing and preparing ahead keeps you ahead of the game, and this may allow you to accumulate great wealth in a weak market.

In short, the demand is there, but it’s no longer easy to invest especially when finding and financing your dream home, however, it’s not impossible.

CONTRIBUTED BY Gary Chua runs workshops to educate people on latest winning formulas to stay ahead in these trying times! Please go to www.smartfinancingco.com to get the latest updates on upcoming events. He always welcomes feedback and valuable sharings. Please feel free to drop him an email at general@smartfinancingco.com or connect via social media at Facebook.com/Garychualw.

75 | FEBRUARY

2016 www.propertyinsight.com.my

FINANCE

MORE GUARANTEED RENTAL RETURN SCHEMES IN THE MARKET?

I

nvestors are always being reminded to be wary of “guaranteed rental return” (GRR) schemes in the Malaysian property market. It will not be surprising to see more and more guaranteed rental return (GRR) schemes in the next few years. As developers seek creative ways to increase the appeal of their property in a more challenging market to come, more hybrid variations will eventually surface. Over the past two years many GRR schemes were offered. The concern here is, however, whether the developer will be financially capable of honouring it.

WHAT IS GRR? WHY IS IT POPULAR? GRR, also known as leaseback, buy-tolet or cash back, is a result of developers’ creatively wooing investors with a GRR scheme on yet-to-be-built properties like condominiums, hotels, retail malls, shop houses, vacation properties, etc. According to the plan, developers agree to pay buyers guaranteed rentals in a percentage of the purchase price for a stipulated period of time.

A guaranteed rental scheme can provide buyers with peace of mind, safe in the knowledge that buyers will receive a fixed income for an agreed time period. Many buyers like to use the guaranteed rental income to pay associated mortgage and maintenance costs. Additionally, the management of the property is hassle-free

76 | FEBRUARY

2016 www.propertyinsight.com.my

as the property developer or management company is responsible for this aspect over the agreed time of period.

Many investors like guaranteed rental schemes because they do not want to get involved with the management of the property. Generally, GRR are best suited for the laidback investors. It has proven to be extremely popular especially among overseas investors who like to know their property is looked after throughout the year while they receive a return on their investment straight away.

Some people will value the ‘simplicity’ of the deal. However, there are issues that buyers have to be aware of and comfortable

with before entering into such agreements.

What is behind the scene?

The “guaranteed return” is indeed included in the purchase price already.

Developers are pricing the property higher than the market price with additional sums equivalent, if not higher, to the guaranteed return. For example, a condominium project with guaranteed 5% annual rental for 9 years may imply that the final price from developer is at least 45% (9 x 5%) higher than the market price.

A quick check to see if the final price is justified under such schemes is to ask: after deducting this 45% from the price, is the property still attractive enough

www.propertyinsight.com.my FEBRUARY 2016 I 77

FINANCE compared to similar properties in the same area at current market prices? You may probably use the same amount of money to buy 2 similar units in the same area without the scheme!

In the above example, the total amount of “rental return” for the 9 years is in fact an amount of cash you pay upfront to the developer, borrowed by you from the bank, if you finance the investment. The developer then returns it piecemeal to you without any interest while you bear all the interest charged by the bank. Meanwhile they still “temporarily own” your property to do whatever they want to do for the whole 9 years since you signed a leaseback agreement with them!!! Either they use your property to generate more money for their own pocket or just leave it vacant, they have nothing to lose because they have already got all this money from you, in the selling price! Think twice and calculate thrice before

you invest in such scheme because most projects marketed with such marketing arsenal are implying a weak financial situation (insufficient cash) of developers. Such developers are considered as high risk builders who might not even be able to complete and deliver their projects in the first place.

The Boss, one of Klang’s hottest development projects, has come to a halt victimising 300 confused investors who were promised attractive returns. Most of the buyers were attracted to the guaranteed high returns of 7.5 – 8% a year by the developer.

Being launched in 2012, most of the buyers received information in February 2015 that the development has fallen to the hands of a liquidator. Rental guarantee could be important for some investors who need reassurance. However, the guarantee is only as good as the strength of the company offering it.

WHAT NEEDS TO BE CHECKED UP FRONT! Six points to check before you buy property with rental guarantees

1

If the GRR is not part of the deal, would you still buy this property?

Is the rental income figure realistic and achievable in the current market where the property is located? If not, the investor will see a dip in returns once the rental guarantee period ends, which indicates a potential drop in the value of

4

the property. Many unscrupulous developers will inflate the

2

Is the property selling price justified in comparison to other similar properties within the same vicinity?

rental guarantee figures to create a good impression.

What is actually underwriting the guarantee? Is there an actual contract in place where there is a legal recourse should the income not be generated? If not, then this should

Does the developer have the capacity to build and

3

manage the property, and ensure the income is generated? Assessment of developer’s background, style and planning of asset management must be included in the due diligence.

EXAMPLE OF SUCH CLAUSES: “Provided always and it is hereby agreed between the contracting parties hereto that the Developer reserves its right to terminate the GRR agreement for any reason whatsoever by giving TWO (2) MONTHS written notice to the Purchaser wherein such a case the Developer’s obligation to pay the guaranteed return to the Purchaser shall cease from the date of such termination. Such notice is deemed to have been received within three (3) days from the date of the letter”.

A wise investor should check the fine print for any hidden clause that allows the developer to avoid paying the guaranteed rent and it is always a must to seek expert advice.

be a cause for concern.

Do you understand all the terms and conditions in the GRR agreement? Inexperienced investors may not understand that the fine prints is often written in the guarantors’ favour.

KCLau is a financial educator who has published 6 books and co-created more than a dozen online financial courses. His popular personal finance blog is one of the most visited websites in the financial blogosphere. (www.KCLau.com) Dr. Ong Kian Leong (commonly addressed as Dr. OngKL), is the creator of GoFinanceTM, a tool that allows investors to accurately evaluate if an investment is worth investing as well as worth financing for maximum returns. (www.REIJB.com)

2016 www.propertyinsight.com.my

6

There are some good deals out there and some good properties with potentially very good returns. But even in such cases, part of the essential due diligence is to research whether the investment property represents good value and ascertain what the rental market situation is. The rental market is volatile, depending on current competition and market conditions. It is a cyclical market, and is subject to the laws of supply and demand as in any other sector of the economy. There must be real rental demand to substantiate GRR scheme or it will not be able to last through the entire term, especially if the units remain vacant. The scheme could eventually become disastrous when developers face difficulty filling up the units to fulfil their promised rental returns

CONTRIBUTED BY

78 | FEBRUARY

5

STRATEGY

MAKING MONEY FROM ‘WHAT IF’ Sometimes the potential is in what you can’t see.

P

eople often get fixated with buying property at a discount.

Below Market Value (BMV) is a favoured term. Trying to get money off and buying at a rock-bottom price is seen as the way to make money. How to source and buy property at a discount has spawned an entire industry with books, courses, websites and a myriad of different tools on offer that claim to teach you how to spot and buy bargains. But buying cheap is just one strategy.

Another strategy for making money is to find property that has potential. It may not be priced at a discount or have a motivated vendor, and it may not even need work, but it could still have potential. Potential is not always obvious to spot. It may be a typical terrace house that could be converted to student housing or a hostel. It may be a top-floor flat that has the potential to be extended into a loft. It may be a 15ft garden by the side of the house with the potential for extensions. The truth is, potential and opportunity is all around. And I bet, if you sat for just a few minutes and thought about your local area, you would soon remember a building, a piece of land or something you have had your eye on and pondered: ‘What if?’

The problem is, most people ignore the ‘What if?’ moments of their lives. They walk by opportunities every day but don’t pay attention or take the necessary action. If a property is not being advertised ‘For Sale’, being sold cheap or in need of work, it’s classified as a ‘non-opportunity’. And that is where they are wrong. Just because you are prepared to pay a fair market value does not mean you are overpaying; it means you are paying for the opportunity to unlock the potential. Now, when you put it like that, it sounds different, doesn’t it?

Making money doesn’t necessarily mean buying property for as low a price as you can and selling it for as high as you can.

That’s great if you can manage it every time, but investment is also about understanding the opportunity and potential on offer and paying to have access to that. Deals need to stack, but it is not a one-way street. Vendors need to feel that they have also gotten a deal – if they haven’t, they won’t sell, and then you will not have any potential to unlock. ‘Potential’ can come in many forms. It may not be specific to the property – it could even be knowledge you have gained about the local area, perhaps a new tube line or redevelopment plan is in the offing.

Making money in a property means you need to calculate your upside (the potential) against your down side (the risk). Weighing up the upside with the downside (the risk-to-reward ratio) is how you decide if a property can make you money, and potentially what risks it may involve. It is only when you have calculated and assessed these figures that you will know if there is any money to be made. Remember: great returns don’t just pop up, you need to work on it and make it happen. A friend of mine who manages a condo in KLCC is getting double the asking rental when more than half of the owners can’t even rent their units out. How? Cause she ‘manufactured’ the result with the help of OTA. We will be covering this topic in our coming issue. Stay tuned!

CONTRIBUTED BY KK Chua is the strategic advisor & managing director of Armani Media. He is also a registered real estate agent and an investor with more than 10 years of experience in the industry. He can be contacted at kkchua@propertyinsight.com.my

www.propertyinsight.com.my JANUARY 2016 I 79

MISSED AN ISSUE? Call (03) 6156 3366 to order

SUBSCRIBE NOW

PERSONAL PARTICULARS Name: ________________________________________ Mr / Mrs / Ms / Dr: _____________________________ Occupation: ___________________________________ Mailing Address: _______________________________ ______________________________________________ Postcode: ______________ State: _________________ Email: ________________________________________ Tel (HP): ______________ (Office): _______________ Start my subscription from: _______________(mth/yr) I wish to subscribe for 12 issues at RM75 (West Malaysia) I wish to subscribe for 12 issues at RM94 (East Malaysia) I wish to subscribe for 12 issues at RM240 (Singapore) PAYMENT METHOD: I enclose a cheque No. ________________________ made to the name of Armani Media Sdn Bhd. Direct transfer to Maybank Account No: 5127 5451 2282 (Armani Media Sdn Bhd) (Fax or email transfer slip to admin@propertyinsight.com.my) MAIL THE SUBSCRIPTION FORM TO: Armani Media Sdn Bhd (1032085-H)

No 32-3, Jalan Pekaka 8/4 Sec 8, Kota Damansara 47810 Petaling Jaya, Selangor, Malaysia Tel : +603-6156 3366 Fax : +603-6156 3399 or Email : admin@propertyinsight.com.my

NOTE: Please allow 3 to 4 weeks for delivery of your first issue.

Receipt will be sent upon request only.

Suspension and cancellation of subscription is not allowed.

Price includes GST

Knowledge & Information

Events

Freebies

SCAN ME

Videos

Property news

Hot deals

S t ay n e t e n c d o C

WWW.PROPERTYINSIGHT .COM.MY

AWARDS ARE MEANT TO INSPIRE THIS TIME, IT IS THE OTHER WAY AROUND​ Officiated by:

YAB Dato’ Sri Najib Tun Razak Prime Minister of Malaysia Submit your entries on www.pipda.com.my or email support@propertyinsight.com.my