Property Insight August 2018

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AUGUST 2018

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AUGUST 2018

DATO’ SRI DAVID YEAT ON CREATING VALUE & JOYFULNESS

GST, SST AND THE POTENTIAL PROPERTY BUBBLE BURST

TRANSIT-ORIENTED DEVELOPMENT TRENDS FOR INTERNATIONAL & LOCAL SETTINGS

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contents

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On Creating Value & Joyfulness

WAH! Why Singapore So “Ganas” When It Relates To Their Property Market?

Here Are Some Juicy Facts You Never Knew About UMLand At Seri Austin, Johor Bahru

GST, SST & The Potential Property Bubble Burst

Transit-Oriented Development Trends for International & Local Settings

Experience Great Value With UEM Sunrise Homes

Banking In On The Billboard Business

Wallich Residence – Luxury Condominium in Singapore’s Tallest Building

What Matters In New Land Acquisition

Dreaming of Easy Money?

AUGUST 2018

EDITORIAL

Dreaming and Earning

Publisher/Editor-In-Chief Dato’ KK Chua kkchua@propertyinsight.com.my

Landlords go rich in their sleep without working, risking or economising

– John Stuart Mill

Editor Yvonne Yoong yvonneyoong@propertyinsight.com.my

CREATIVE

Creative Director James Kua Designer Nasrul Nasri

BUSINESS DEVELOPMENT Sales & marketing enquiries support@propertyinsight.com.my +6012 3788 683

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On The Cover

DATO’ SRI DAVID YEAT

Credited as one of the most influential thinkers in the history of liberalism, John Stuart Mill (1806 – 1873) – is esteemed as one having contributed widely to social theory, political theory and political economy - who also came up with the above quote.

The saying may have been true years ago – when the property market was at its euphoric high but today, many investors would agree that a dip in rental income and slow capital appreciation amid a lacklustre property market – given that the real estate market hasn’t taken off as before - has rendered some investors many sleepless nights.

Property has been hailed as the nucleus of real wealth creation as people everywhere need a roof over their heads but then, the imbalance of demand and supply of late have cause some serious lack of sleep problems in terms of getting the desired rental rates or returns in capital appreciation.

The current oversupply of office space in the Klang Valley also doesn’t help the situation – even as more trendy coworking spaces crop up as another unexpected competition to a market already oversaturated with supply.

And developers, faced with an onslaught of issues, are finding their profit margins being squeezed even further while issues of affordable housing continue to plague the nation. The Real Estate and Housing Developers’ Association Malaysia (REHDA) Institute – faced with challenges on the property front – invited members of the media on a Saturday morning to hear out its proposed solutions outlined in a list of detailed suggestions for the government to work hand in hand to address this problem of affordable housing.

Suffice to say, the hey days of soaring capital appreciation remain a distant dream.

From these situations, sleepless nights it would seem - are not altogether the exception but rather- may be the norm for the time being until the market recovers for sure.

Ultimately, price and value go hand in hand in the real estate game. As it is – property remains a long term game and so ultimately - holding power is certainly needed to weather the storms of adversity.

Till the property market - being cyclical in nature picks up again – the days of landlords sleeping and waking up to gain may be a dream in the making for now.

Speaking of dreams – the nation has realised its dream of being great again. With that – here’s wishing everyone a Happy Merdeka!

DATO’ KK CHUA PUBLISHER/EDITOR-IN-CHIEF

GD Holdings Founder and Executive Chairman

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Property Insight Malaysia

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PropertyInsight

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.

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news & events

Uem Sunrise Revels In “Begonia Handover Celebration” At Serene Heights Bangi UEM Sunrise Berhad recently held its “Begonia Handover Celebration” for the purchasers of its Begonia homes representing the first handover of vacant possession for the Serene Heights Bangi development. The ceremony, held at the Serene Heights sales gallery was followed by an exciting line up in line with the Hari Raya festivities that witnessed more than 1,000 guests including the company’s Loyalty cardmembers Trésorians, guests and the public joining in the celebrations.

OSK Lights Up Orang Asli Village in Pahang The Orang Asli village at Kampung Ulu Tual B in Pahang which has over 350 villagers residing there was the recipient of OSK’s “Liter of Light” initiative. This follows a global movement by Incitement which aims to provide cost-effective and sustainable illumination to the homes of underprivileged communities.

In an effort to improve their living environment - the initiaitve, funded by OSK Foundation witnessed 35 staff from its property and construction arm installing 60 solar-powered lights within two days at Kampung Ulu Tual B.

Affirm+ Properties Celebrates Its 15th Gala Dinner Affirm+ Properties recently held its 15th gala dinner in honour of its clients, employees and special guests. It recognised top sales agents in a masquerade themed dinner celebration. Lady Luck smiled upon lucky guests at the dinner night as they walked away with prizes including a laptop and 43-inch curved television.

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Handing Over The Mantle of REHDA Malaysia’s Presidency During the Annual Delegates’ Conference held on the Saturday of 14 July, the Real Estate and Housing Developers’ Association (REHDA) Malaysia held its biennial election to vote in the new National Council members for the 2018/2020 term.

The conference witnessed Datuk Seri FD Iskandar Mohamed Mansor handing over his Presidency to Dato’ Ir Soam Heng Choon. This is following the completion of FD Iskandar’s two terms comprising four years’ presidency at REHDA.

Unveiling Paragon Developers behind Paragon – Beulah International, Fajarbaru Builder Group Berhad and KHK Group of Companies jointly announced that the development project Paragon has obtained funding facility from Maybank amounting close to AUD100 million (around RM300 million).In conjunction with the financing initiative, a facility agreement was signed between development SPV 320 Queen Street Pty Ltd and Malayan Banking Berhad. Led

by Melbourne-based developer Beulah International, Paragon, home to Australia’s first elevated indoor forest, has secured close to 90% sales. Backed by AUD200 million Gross Development Value (GDV), the property development will feature 227 luxury apartments across 48 levels in Melbourne, Australia.

Colony @ Eco City Opens Its Doors

Red By Sirocco Celebrates Opening

Colony, a serviced office and co-working space provider opened its doors to the media in a special preview of their second stateof-the-art division of services office space at KL Eco City. To date, 60 per cent occupancy has been recorded for its second luxury coworking space following the success of their first coworking space in Kuala Lumpur city centre. The Embassy restaurant will be opening an outlet at the new Colony. Spanning 20,000 sq ft spread across five floors with one entire level dedicated as a designated events space, Colony @ Eco City can accommodate over 30,000 guests and cost RM4.6 million to set up.

RED by Sirocco, Kuala Lumpur hotel, a 4-star boutique hotel celebrated its grand opening with guests, clients, the media and industry partners. The celebration kicked off with a luminous LED lion dance performance.

“RED by Sirocco, Kuala Lumpur is the new kid on the block with the commitment to never stop providing the best hotel experience to all our guests. Here, we want to make sure that everyone has 101 reasons to stay with us, and only one reason – if at all- to leave when it is time to check out”, says Datin Lea Chan, CEO of Sirocco Hospitality Group.

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news & events Lumi Tropicana’s Luminous White Party Lights Up The Night Lumi Tropicana held its private Luminous White Party at its sales gallery yesterday in partnership with Entrepreneur Insight. Guests dressed all in white were a sight to behold at the private party.

Entrepreneurs and guests were seen mingling throughout the night as they were entertained by DJ J Dougie and The Raw Note band.

Guests also got to view the tastefully designed Lumi showroom unit and learned some helpful tips on investing in properties presented

by Tan Justin, Managing Director of Brownland Properties.

An air of camaraderie enveloped the swanky showroom gallery as guests all dressed in white were served a delightful concoction of free flow beverages and hors d’oeuvre ranging from creative scallop, tuna and prawn renditions as well as white chocolate tarts topped with gold flecks, among others.

Founder of Armani Media and Managing Director of Entrepreneur Insight thanked the guests comprising successful entrepreneurs some who came all the way from Penang and Malacca for coming to the event.

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REHDA Institute’s Executive Masterclass: New Land Acquisition Held In Colony @ EcoCity REHDA Institute held its graduation party cum networking session for its Executive Masterclass: New Land Acquisition in conjunction with Property Insight at the newly opened Colony @ EcoCity coworking space yesterday. The event sponsored by Property Insight ended the three-day REHDA Institute Executive Masterclass: New Land Acquisition series on a high note followed by the Executive Masterclass graduation ceremony. The dinner and networking session witnessed guest mingling into the night.

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cover story

On Creating Value & Joyfulness

BY JEFF TAN

GD Holdings Founder and Executive Chairman, Dato’ Sri David Yeat started his venture into property development in 2009 as he realizes that the industry is very challenging yet rewarding.

He also believes strongly on the principles of creating value and joyfulness for all his home buyers by developing innovative, quality and comfortable homes at affordable prices.

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As an innovative, caring and responsible property developer, he strongly believes in delivering the best quality homes yet with high potential value appreciation to his buyers.

“It is always important to have a strong sense of accomplishment out of everything we do,” he tells Property Insight.

Although Yeat is a seasoned entrepreneur, he has gone through the same challenging situation as all the other businessmen do when stepping into this new industry. There are bound to be challenges ahead for anyone who chooses to venture into a new industry, he says.

“The first three years was the toughest period for us. Prior to GD Holdings, we were in the business of biotech. Switching from biotech to property development, we were looking at a completely different business model and operations,” he adds.

“We paid a price as we were new and unfamiliar with cost management and operations of development projects. However, we managed to overcome these hurdles by facing up directly with all the challenges and resolved them immediately and amicably.”

In order to address the over estimation of project development cost as the best way to improve the profit margin, he has taken a lot of pain and hard work to learn and accumulate all the necessary market information and technical knowledges on the prices and supplies of the raw materials and labours.

Besides, he started to form a strategic and professional team to deal and source all the pertinent raw materials and contractors directly without going through the agents or middlemen to improve the cost structure without compromising on the quality.

He has to personally roll up his sleeves and work closely with his team members including his top management to relook at every project detail and recalculate the entire project development costs holistically.

“By adopting the above cautious approach and the full dedication from his team, the whole cost structure was re-established and well managed until a significant reduction was achieved upon completion of the project. It has proven to be a right and crucial decision made during that difficult period as the end result was a huge difference as compared to the original projected cost.” he says.

After this experience, GD Holdings continues to spend laborious hours to manage the project costing and ensure that the savings and high-quality products are achieved and delivered to the home buyers. “This is important because it is the responsibility entrusted upon us by the home buyers.

“It is our corporate mission as an innovative, caring and responsible property developer to deliver quality completed properties at affordable prices on time.” Asked on how he positioned GD Holdings to stand out among its competitors, Yeat says, “Competition exists across all industries. For the past 30 years of being an entrepreneur, I have never wasted any time thinking of how to defeat my competitors but strongly believe in differentiation for any new undertakings.

“In contrast, as outlined in our corporate motto, ‘Dare To Be Different’, I have always focussed on encouraging my team in all my businesses to carve out their own paths. That was one of the main reasons I chose Nilai as the first location to start my property development business.

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cover story “It was only prudent for me to stay away from the rife competition in Kuala Lumpur, while there is ample opportunities and underdevelopment in Nilai for the company to explore and excel instead of burning away good money for bad money in KL and also sucked up a lot of resources, time and energy unnecessarily,” he recalls.

includes a 4-tower serviced apartments with 3,213 units known as Youth City, a first and last destination tourist mall and hotel, a world class exhibition and convention centre with the largest building material mall attached, the first Valley styled Vision Theme Park and an International Education Hub.

Developing a Mega and Integrated Township

Currently, the mega project is in its first phase of developing Youth City, a huge clubhouse of 150,000 sq ft, 4 roof-top facilities with different themes and a retail component on 7.88 acres of land.

GD Holdings differentiates itself from other property developers by developing the type of projects which are distinctive and unique in the market, he states.

“We do not just focus too much on competing with design, price and renovation. Our developments come with the unique concept of multifaceted and vibrant township planning,” he adds.

Speaking on the short-term goals of GD Holdings, Yeat says that at the moment, it is best for the company to manage an average project gross development value (GDV) of approximately RM2 billion annually.

“Based on our own projection, we will start achieving this value by end of this year and hit a sales revenue of over RM1 billion.”

He has also laid down a long-term goal for the company, which is to maintain a steady GDV growth and break into the list of top-five ranked property developers in Malaysia within the next 10 years.

Yeat has a vision on the value he intends to create for the home buyers. “At GD, we always strive to build homes with ‘life’, which must not only offer homes with great quality and various 5-star facilities, but will also generate huge value appreciation in the near future due to the development of other GD supporting and complementing projects surround it.

“As part of our thoughtful product development plan, for serviced apartment units in Youth City, we are bringing in the latest Japanese technology known as the Syswo Modular Bathroom System which acts as a permanent solution to water leakage and bathroom bacteria, which are common problems for residents in high-rise buildings,” he highlights.

According to Yeat, the modular toilets come in sets, each of which includes bathroom walls, roof, floor, all internal fittings, external water fittings and electricity circuits.

The toilets are built with airplane wall fibre material which is near unbreakable and the special floor tile coated with a layer of Nano chemical, which does not retain moisture, ensuring that the bathroom surface and flooring are dry most of the time.

“This modular bathroom is one of our main differentiating factors which will not only solve the water leakage issue but also ensure that the bathroom is bacteria free for life.”

Vision City is a 50-acre freehold mega project in Nilai, Negeri Sembilan. It comprises a multifaceted development project which

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The name of Youth City was chosen as the main purpose of the project is to inject vibrancy into Nilai by retaining young people and attracting first time house owners to Nilai. Towards this aim, the units are affordably priced, starting at RM230, 000, and come with various 5-star facilities and amenities to cater for the younger generation’s lifestyles.

These surrounding facilities and amenities include a shopping mall, gym, and co-working spaces, says Yeat. This arrangement caters to the needs of younger home buyers that fall into the age group of between 20 and 45 years old.

Yeat says that one of the main attractions in Vision City is the 150,000 square feet private clubhouse which provides an Olympic swimming pool and all types of sports facilities, where the residents can utilise as a privileged club-member and enjoy them as a reception area for their visiting friends.

“With a full range of amenities within Vision City, home buyers will be able to access food and beverage outlets, entertainment and

work, other than having a comfortable place to stay. This is like a self-contained community and driving will not really be necessary as most amenities are within walking distance,” he adds.

He says Mont' Kiara became an affluent township with high population density simply because of its continuous development, where schools, shopping malls and other amenities were built.

The township development is located right in the Golden Triangle of Nilai, surrounded by many significant developments. These developments include the second largest AEON Jusco Mall in Malaysia with built-up space of 1.2 Million sq ft, Sime Darby Trading Hub, Giant and Tesco Hypermarket, as well as the dutyfree outlets nearby.

“However, if there are too many developments in the area, the township could become very congested. This is a serious matter to be taken note by both the authorities and the developers,” he cautions.

Vision City is also easily accessible via six highways namely the North-South Expressway (PLUS), North Klang Valley Expressway (NKVE), Maju Expressway (MEX), Lebuhraya Damansara-Puchong (LDP), South Klang Valley Expressway (SKVE), and Lebuhraya Kajang-Seremban (LEKAS).

It is also strategically located near the Kuala Lumpur International Airport (KLIA) and KLIA 2, which are just a 15-minute drive away.

“The property industry has always been supported by the same theory of Supply and Demand, that is high population demand with low number of units supplied will increase the value of the property, whereas low population demand with high number of units supplied will certainly decrease the value,” says Yeat.

The keys to attracting home buyers to any development project are ensuring a comfortable and convenient living environment, and its potential value appreciation, he states.

Drawing back to Nilai, he is confident that the town’s population will increase tremendously. Nilai is already an important education hub which houses 28 major education institutions, such as Nilai University, Inti International University, International Islamic University, Manipal International University, and Epsom International School.

The town is also strategically located within the development of the Malaysia Vision Valley (MVV) that plans to draw a huge RM290 billion in investments.

Due to MVV’s five strategic clusters namely the Central Business District, Nature City, Edu-Tech Valley, Tourism and Wellness and New Liveable Township with a potential creation of 1.38 million job opportunities, Nilai stands to benefit greatly therefrom.

As Negeri Sembilan continues to urbanise rapidly, the state will need to diversify its housing supply to include higher percentage of high-rise properties. This is apparent as we can see the demand for smaller units of housing from a large student population in Nilai, placing the town as an obvious and strategic location to invest for high rental yield.

An Entrepreneur from a Humble Beginning Yeat became an entrepreneur more out of necessity as he grew up in a hard and tough environment. “My family was relatively poor, and I wasn’t performing well academically in school. Left with limited options, I decided to step into the society in search of opportunities to earn a living at the age of 16,” he explains.

He denies the claims by certain individuals that luck was on his side at the beginning of his entrepreneurial journey. It is mere hard work and perseverance.

“When I first tried to build a business, the challenges I faced was much bigger than expected and imagined. I was on my own without any financial backing whatsoever. However, I acknowledged the various problems and strived to look for solutions to help my business to progress.

“Once a problem is spotted or surfaced, we should immediately have a discussion with parties involved to resolve and formulate an amicable solution,” he says.

Yeat says that there are always indicative signs before a challenge arises. Throughout his 30 years as an entrepreneur, the biggest challenges he had encountered are currency exchange rate during AUGUST 2018

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cover story

the 1997 Asian Financial Crisis, conflict of values with business partners, and negligence in business management.

“Neglecting management particularly the overseas investment had caused me to incur huge losses in capital and equity,” he adds.

He opines that for an enterprise to have steady growth in Malaysia, it must take things one step at a time. “Business development, talent and staff management and funding capability must be performed effectively and concurrently, as well as avoid taking up too much financing or gearing with financial institutions.

“Learning from my previous failures, none of the abovementioned three should grow at a different pace and direction as it will adversely affect the balance within the enterprise which will eventually lead to various business and systemic risks.”

Asked on what he will do differently if given the chance to start his career all over again, Yeat says, “Having gained valuable experience now, many of my previous decisions will be made differently now. This is to ensure that my businesses will grow steadily and more sustainable.”

An entrepreneur who is reaping result from his persistent hard work, Yeat has been working more than 12 hours daily since the age of 16. “Compared to some other entrepreneurs, I lead a simple lifestyle where there is minimal entertainment involved.”

Most of his working hours are well spent on maintaining the balance within GD Group of companies, including critical matters relating to human resources, business development, cash flow management, and network expansion.

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“This is vital to our group’s sustainable development and I am also glad to be supported by an excellent management team,” he says.

Establishing the Malaysia-Foshan Chamber of Commerce Although he has a busy daily schedule, Yeat still managed to find time to contribute to the establishment of a business association known as The Malaysia-Foshan Chamber of Commerce (MFCC).

In fact, he was instrumental in the planning and setting up of the chamber of commerce until it was officially registered with the Registry of Societies Malaysia in 2016.

He invited his close business associates such as Malaysia Entrepreneurs’ Development Association President, Dato’ Tony Looi, SME Association President, Datuk Michael Kang, and Branding Association of Malaysia President, Datuk Eric Chong to jointly manage and operate the MFCC together.

Playing the role of the President, Yeat says that MFCC encourages bilateral trade and networking activities on building materials between Malaysia and Foshan City. It also promotes cross border collaboration on trade and investment between Malaysian and Chinese small and medium enterprises (SMEs).

“Foshan is a leading city in Guangdong Province, China with a population of around 8 million. It is well known for its furniture and building material industries, which have huge production capacities.”

He says that currently Chinese manufacturers have the latest technologies equipped in their factories. “Gone are the days where 20 years ago we have the common perception of products which

were made in China were of low quality.

“Now, China is capable of producing high-quality goods. It is only a matter of whether the buyers can afford the high-quality goods.”

He says that many factories in China are engaging high level of automation, hence minimising the human errors from happening in the production line. Their quality control has also reached a very high standard, he adds.

“In line with the Chinese government’s Belt and Road initiatives and in order to ensure sustainable growth in the industry, many of these sizeable manufacturers are planning to go abroad to tap the global markets for their quality products.” He added.

He says Malaysian businesses can play a vital role in helping these Chinese manufacturers trade their products, because Malaysians have an edge in cross-border and regional trades as we can speak fluently in few languages particularly English and Mandarin.

“Through MFCC, we have plans to bring over 300 building material manufacturers from China to Malaysia, with the purpose of exploring business matching opportunities and strategic alliances with the local players as a formidable force to be reckoned with in the international arena,” he highlights.

“On a voluntary basis, our chamber of commerce will assist them to obtain all the necessary licenses, as well as documents for import and export purposes. Other than the licensing and

application fees for documents, we do not levy any additional fees on the Chinese manufacturers.”

Yeat points out that it is important to establish a bridge between the building material manufacturers in China and Malaysian property developers initially so that there will be ample low hanging fruits to be tapped by both parties.

“For any business deals done here in Malaysia, we will encourage them to trade and settle in ringgit in order to enhance our currency internationally.” he adds.

As a seasoned entrepreneur, Yeat opines that success is achieved progressively through continuous efforts and there are two major requirements for such achievement.

“Firstly, you need to be a good and sensible human being. The second requirement is to ensure you deliver on what has been promised.”

The value of integrity is very key to be a successful entrepreneur, he says. “Build your integrity by delivering what you have promised to company’s shareholders, partners and clients.”

Giving his advice to budding entrepreneurs, he states, “Anyone who plans to become an entrepreneur must conduct in-depth research on the industry which they plan to step in. Following that, they will need to possess all the courage to face the various challenges to start their own businesses,” he concludes.

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feature

HERE ARE SOME JUICY FACTS YOU NEVER KNEW ABOUT UMLAND AT SERI AUSTIN, JOHOR BAHRU One of The Main Sponsors For The Apartment Season 6!

As The Apartment Season 6 series comes to its final leg of its 10-week series, we draw closer to finding out who will be crowned as the Champion and walk away with the biggest prize in the history sponsored by UMLand – D’Lagoon Luxury Apartment Unit!

In case you have missed the interior design reality series, here are six interesting facts about UMLand and The Apartment Season 6!

# Fact 1 Did you know that The Apartment Series has been running for 6 seasons now and guess what? Both Season 5 and Season 6 series were filmed in Johor Bahru itself where the first season featured UMLand Seri Alam - another one of UMLand’s many beautiful Townships. This season, the filming took place at UMLand Seri Austin where contestants and judges alike got the opportunity to experience the eco-friendly township first-hand!

# Fact 2 Have you ever wondered how they actually filmed The Apartment Series in a township filled with residents? During the series, you have may notice the contestants working day in and day out, hammering wood panels and moving furniture. However, did you ever wonder how they got away with their round the clock work schedule? Well, that is a mystery which we are still trying to solve but we were told by a credible source that KK Wong, Chief Executive Office of UMLand Seri Austin and also father figure of the award winning Township was there to save the day when things got a little bit tricky!

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#Fact 3

# Fact 5

When you watch reality TV shows, have you ever wondered how certain locations get selected to be featured on a programme?

Does the crew just randomly pick a location out of nowhere and start filming? Well, we do not have an answer for that but one thing we can tell you for sure is that UMLand Seri Austin was chosen as the filming location due to its eco-friendly and aesthetically beautiful design. Not to mention it being the FIRST smoke-free township in Iskandar - highly recommended for those who prefer a nicotine-free area to reside!

For every competition, there is bound to be a grand prize of which everyone is aiming for, but how huge really is the grand prize for The Apartment Season 6’s champion? Imagine owning a luxury apartment unit within the township. That’s right; we are talking about the largest prize in the history of the series – a unit of UMLand’s D’Lagoon luxury apartment worth approximately USD140,000 (around RM568,400)!

#Fact 4 Also, UMLand Seri Austin Aster 2, the unit in which we see being highlighted on the much celebrated series whereby the contestants can work their magic, is carefully built and designed to not only look fabulously eye-catching but also to channel “Chi” to its occupants. That’s right, it is “feng shui” approved and touted to be able to improve one’s luck. Fancy improving your personal luck while you stay in this environmental friendly township? Maybe you can drop by UMLand’s showroom to find out more.

#Fact 6 There is a saying that goes like this:- “Work is going to take up a big part of your life, so do what you love and you would not need to work a day in your life”! Wise words indeed! Well, it seems like the Chief Executive Officer of UMLand Seri Austin KK Wong has taken this quote so seriously so much so he has fallen so in love with his work and township that he actually lives within UMLand Seri Austin itself!

BONUS FACT Did you know that Mr. KK Wong, Chief Executive Officer of UMLand Seri Austin and Group Director of Townships, UMLand made a guest appearance on the final episode of The Apartment Season 6? As the sixth installment of the celebrated series came to an end, KK Wong presented Stephanie Dods from the Philippines with the key to the luxurious UMLand D’Lagoon apartment worth USD140,000.

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international insight

Transit-Oriented Development Trends for International & Local Settings Transit-Oriented Developments (TODs) are urban projects that seek to create healthy, attractive and vibrant communities by using multi-model public transport solutions as alternatives to car dependency.

As an example, here is an overview of some of Malaysia’s congestion statistics:-

When looking at a map of the fastest growing cities in the world, it is easy to assess the density of fast growing cities in Asia and the diversity of countries as well as cultures and the economic besides the political realities these cities belong to.

- Approximately 93% of households have at least one car while 54% have at least two cars

In the specific case of Malaysia, the rate of growth of its population has almost met the wildest prognostics of the 90’s.

And by the year 2020, projections show that more than 70% of Malaysia’s population will be located in urban settlements.

Rapidly expanding cities face a myriad or problems with one of the most recognisable challenges being the bad traffic jams.

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- Malaysia has the third highest car ownership in the world

- Residents of Kuala Lumpur spend million of hours a year in traffic jams - The impact of traffic on the economy accounts to almost 2% of Gross Domestic Product (GDP) annually - Only 17% of Kuala Lumpur residents use public transport in contrast to 69% in Singapore and 82% in Hong Kong

Under these conditions, how can Kuala Lumpur and other expanding cities like it plan for the future to be more efficient and liveable?

Malaysia’s young population recently showed the world how they are willing to have their voices heard even as the new expanding middle-class demands better standards of living and amenities all away from the car-centric model we current live under.

Grimshaw Architects have helped developers around the world by providing designs which add value to their developments while reducing building time and other cosst. The firm’s effective solutions create incredibly attractive precincts that are efficient which respond to the aspirations buyers and developers are looking for.

One example of this is the Southern Cross Station in Melbourne in Australia. Not only does the design of the station create an open public space that draws footfall and provides shelter to its users (becoming more of a destination rather than just a piece of transport infrastructure), but the firm also managed to create a whole new revenue-producing address which didn’t exist before.

This was achieved by creating a 200-metre long deck that utilises the air space above platforms 13 to 16 of the station where two brand-new developments with more than 500,000 sq ft of combined leasable space: 664 Collins Street and 699 Bourke Street were built.

Another example of the firm’s TOD masterplanning expertise will be showcased inits ongoing work at Euston Station in London where it is part of the master developer’s team. The ambitions for Euston Station masterplan’s 54 hectare redevelopment include the creation of 1.700 new homes and 19.000 new jobs as wekk as enhancing the value and revenue of its surroundings.

The group’s just completed London Bridge Station Redevelopment recently won the “Greatest Infrastructure Project in London” award by the Institution of Civil Engineers.

This is yet another example of how well-planned, 21st Century Transport infrastructure projects are more than just a utilitarian endeavour:- These are public buildings that create new valueadded opportunities that increase the demand and attractiveness of a district.

These and other lessons from the firm’s offices in New York, Melbourne, Sydney, London and Dubai have been used as cross reference material for Malaysia and the Asean Region.

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international insight

Grimshaw Architectst has extensively been working for the last three years as precinct architects on theTun Razak Exchange (TRX) project in Kuala Lumpur whereby it has taken every step to maximise value for the developer while making sure all the assets in the precinct are coherent and highly attractive as destinations for the general public and clients.

The firm’s work at TRX has been a highly rewarding journey whereby it has collaborated well with highly qualified Malaysian architects - thanks to its commitment to ideas exchange. This philosophy and the firm’s pool of distinguished local architectural staff has allowed the group to create designs that benefit both from international lessons and local reality.

EDUARDO MCINTOSH

is a Design Director for Grimshaw Architects who has been based in Kuala Lumpur for the last three years working for Lendlease as a Precinct Architect

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industry insight

BY YVONNE YOONG

The mantra location, location, location is very keenly related to real estate. But, when it comes to the subject of billboard advertising, the mantra is equally as important. And, just as property developers vie for strategic locations in order to put their best foot forward to attract potential buyers, the same can be said for the billboard advertising business which aims to capture top of mind recall.

another angle - it certainly boosts the capital appreciation of the Bangsaria building in more ways than one.

“Like many other businesses, the billboard advertising industry is saturated at the moment. Driving in Klang Valley, you would be hard-pressed to drive from point A to point B without passing an outdoor billboard,” shares Geoffrey Yeow, Marketing Director of Leo Myer Sdn Bhd which owns the Bangsaria building whose prominent side wall features the company’s Light-Emitting Diode (LED) billboard .

The Bangsaria building, owned by Leo Myer Sdn Bhd and founded by Shaun is a seven-storey commercial building within which is a bank, upmarket showrooms and offices.

Incidentally, Leo Myer is the developer of two key projects:Villa Aman which is a low-density condominium at The Embassy Row and Villa Bukit Tunku in the lush Kenny Hills vicinity of Kuala Lumpur.

Operating behind the scene is the father-and-son team comprising Shaun and Geoffrey who form a formidable team in promoting this Bangsaria Digital LED advertisement billboard dubbed as Bangsar’s biggest.

“With such an abundance of supply, it is crucial to maintain a close working relationship with advertising agencies as well as with direct clients to ensure that they keep our Bangsaria billboard at the top of their minds,” he adds.

As rightfully pointed out by Shaun, Bangsaria has been a recognisable landmark along Jalan Maarof, Kuala Lumpur for close to two decades. And this feat will likely no doubt, continue in years to come.

On the flip side of the coin however, beyond design aesthetics and other value added propositions, billboard advertising is one of the unique creative strategies that exist which can boost the value of building.

Speaking to Geoffrey, 29, at the Penthouse of Bangunan Bangsaria of which he is the Marketing Director, he says that as a fact, Bangsaria has the biggest LED billboard in Bangsar measuring 67’ in height and 50’ in width.

Strategically commanding instant eyeball reach and mindshare retention along Jalan Maarof in Bangsar, the LED billboard hoisted on a side section of the Bangsaria building makes no apologies in taking up pride of place on the stretch of road where daily traffic witnesses endless bustle of activity.

Operating from 7am to 1am or 18 hours daily, the 10-second advertisement billboard rotation for each advertiser is eye candy for drivers and pedestrians in this area. And, to view it from

“Our LED advertising billboard is the largest

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industry insight in Bangsar and has a visibility of 150,000 vehicles per day according to a traffic survey conducted by the Land Transport Commission (SPAD),” he says.

Being the proud media owner of the Bangsaria LED billboard has its share of rewards, relates Geoffrey including stating that one of the best parts of the job is when the confirmation video is sent to clients adding that their satisfied response keeps them going.

“I’ve always been part of the communications sphere – delving into advertising, public relations, events management, video production and journalism before. Now, I use my skills and knowledge to help clients to achieve their marketing objectives – be it through brand awareness or getting enquiries on their products and services,” he enthuses with a smile.

“I like the billboard advertising business because it makes an impact in a visible manner. Our previous clients include Netflix, iFlix, H&M, DiGi, EcoWorld, BMW, AirAsia, Starbucks and many others,” adds Geoffrey.

Constantly on the lookout to up the level of his game, Geoffrey, who is traveller at heart and has backpacked to different countries every year since he was 17, feels that learning about the different cultures of the world has opened up his mind to creative ideas and concepts which he passes on to the clients to help them in their marketing campaigns.

“I take notice of outdoor advertisements in other countries.

Sometimes, it is the creative campaigns, attractive visuals or anything that captures the attention of passerbys that work the

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magic,” he relates, drawing a parallel with his brand of LED billboard to capture attention.

Stating that he deals with many agencies and clients on a daily basis, his role as Marketing Director involved in preparing presentations and meeting prospective clients is a rewarding one.

Once these processes are executed properly, top of mind recall is just a matter of capturing the right audience via the attractive video clips afforded by the LED billboard.

Quick Takes with Geoffrey Yeow, Marketing Director of Leo Myer Sdn Bhd Describe your businesses Leo Myer is primarily a property development company. We have developed luxury condominiums in Kenny Hills (Bukit Tunku) and The Embassy Row (Ampang Hilir) in Kuala Lumpur. In 2001, we completed the development of the seven-storey Bangsaria commercial building on Jalan Maarof, Bangsar in Kuala Lumpur.

Who are your list of current tenants at Bangsaria?

Currently, Bangsaria houses tenants such as Chili’s, Shinju Pearls, Dynaforce, Autism Behavioural Centre as well as UOB Bank, which run their privilege and wealth banking services at our building.

How did the idea of constructing the LED Billboard on your Bangsaria building come about?

Eight years ago, someone in the outdoor advertising industry approached us and advised us to construct billboards on the facade of our building. The strategic location of the building on Jalan Maarof with the billboards facing incoming traffic from Midvalley/Jalan Bangsar and Damansara/Petaling Jaya was a major deciding factor for us to proceed with their proposal. At the time, two static billboards were constructed with clients such as Lexus, AirAsia, Apple and Celcom being some of the many clients. Three years ago, we decided to embark on the exciting journey to transition from a static billboard to an LED billboard.

Currently, we own, manage and market the billboard ourselves.

What is the value added proposition the LED billboard has brought to Bangsaria?

It has increased the visibility of the building amongst those in the property industry as well as normal consumers. Bangsaria is now a recognisable landmark in Bangsar, with many people recalling the billboard instantly. The billboard is also value-added platform for the tenants in our building. For example, UOB Bank has been advertising with us since they moved into our building at the beginning of the year.

Describe the process of getting one’s advertisement on the LED billboard Once the client or agency has confirmed their date and duration of their booking, we will prepare the media contract to be signed (which is similar to a tenancy agreement). Then, the client or agency will send us their visuals, be it in static image or video format, for us to upload into the system. Our Navori software from Switzerland has the capabilities to set the content to appear on different loops or at different times of the day. This allows the client the flexibility to showcase multiple products and services at no extra cost within their advertising duration. Currently, we are running a promotional rate of RM45,000 per month.

This rate, we feel, is justifiable because we are the largest LED billboard in the Bangsar area (67 ft in height) and also we garner a visibility of 150,000 vehicles per day according to a traffic survey conducted by the Land Transport Commission (SPAD) on the Jalan Maarof stretch.

What are some of the benefits of billboard advertising?

Billboard advertising targets a large and diverse market, casting a large net over the many consumers who pass by the billboard on a daily basis. The easily registered information and eye-catching visuals with certain important information is all that is needed to capture the attention of passers-by. Besides building on company reputation and product image, the flexibility of the LED billboard allows for instant changing of visuals and content at no extra cost.

Advertisements on billboards are free to people who see them as they do not have to buy a newspaper or a cinema ticket to view the message

What are the trends in billboard advertising?

A strong digital transformation is already happening, allowing brands to run more customised marketing campaigns for customers in the offline world. Data utilisation is now used for targeting and measurement precision. Some of our clients display special offer codes which they are able to track on enquiries that have been generated from the Bangsaria billboard. Integration of mobile ads with out-of-home media also allows for more interactive connection with consumers especially in terms of localisation and contextual messages. Certain messages tailored to specific weather or current happenings in the country can be displayed immediately to show the “currentness” of the billboard.

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main feature

What Matters In New Land Acquisition

BY YVONNE YOONG The Real Estate and Housing Developers’ Association Malaysia (REHDA) Institute recently held its maiden three-day Executive Masterclass: New Land Acquisition with input from industry experts that ended on a high note in Colony @ EcoCity in Kuala Lumpur at an event sponsored by Property Insight.

A prolific panel of speakers took to stage to address this topic.

Eduardo McIntosh of Grimshaw got the ball rolling with a comprehensive presentation on architectural trends concerning transport oriented developments (TOD) touching on the Tun

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Razak Exchange (TRX) of which the firm is designing its lifestyle quarters.

real estate market is “becoming more and more challenging every year”.

“As new land acquisition is a key component to property development, the Executive Masterclass covered many perspectives including feasibility studies, tax planning, master planning, valuation, financing, land laws and structuring joint venture agreements, amongst others,” says David Shieh Chong, General Manager of REHDA Institute.

“However, from the challenges, we can find a way out. One of the ways is through exploring new land acquisition,” he says as he expounded on the topic of “Experience sharing: Property Development in Malaysia - Past, Present, Future”.

During the third-day sharing session moderated by Dato’ KK Chua, Founder of Armani Media and Managing Director of Property Insight he acknowleged that the

Dato’ Wan Hashimi Albakri, Chief Operating Officer - Township Development of Sime Darby Property Berhad who is also Chairman of REHDA Wilayah Persekutuan shared on his vast experience in real estate and new land acquisition.

“In the process of buying land, one has to conduct technical viability and financial feasibility on an overall basis. This is because in buying land, there is financial commitment.

“A developer has to take into account many considerations and not just develop and convert the land and come out with a prtoduct that the market will be able to take and can sell,” he opines.

“There is no point in simply buying the land because developers could get in trouble in this instance. Developers cannot just borrow money but can’t get the money back in time and turn the land around,” he adds.

Joining in the lively session was Dato’ Neoh Soo Keat, Founder and Managing Director of Trinity Group Sdn Bhd who agreed saying that in the event things

don’t go as they wish - there are other criteria and costs to cover.

“We are looking at building townships on a long run - for at least five years . The reason is to pull through,” he states.

Zulkifly Garib, Vice President of REHDA Malaysia, Chairman of REHDA Selangor, Project Director UEM Sunrise expounded on the importance of location and feasibility plus the products being sold.

“Saleability is importnant as you can find prime areas so you have to sell for so much,” he says.

For some developments that you know the potential is there - it is all about the assumption and when the market drops, you can’t sustain the land but then again, it depends on the type of (risk) appetite your company has,” adds Zulkifly.

The event sponsored by Property Insight ended the three-day REHDA Institute Executive Masterclass: New Land Acquisition series followed by the Executive Masterclass graduation ceremony.

The dinner and networking session witnessed guest mingling into the night.

Participants of the forum benefited from a practitioner’s perspective of how the industry has changed over the last two decades while profiling a future snapshot of the property development industry in the near future.

Here are excerpts from the discussion that was witnessed by a crowd of industry practitioners and other relevant guests from the discussion form on the third day that was sponsored by Property Insight entitled “Experience sharing: Property Development in Malaysia – Past, Present, Future”.

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main feature

As new land acquisition is a key component to property development, the Executive Masterclass covered many perspectives including feasibility studies, tax planning, master planning, valuation, financing, land laws and structuring joint venture agreements, amongst others,

David Shieh Chong, General Manager of REHDA Institute

Developers need to conduct their business planning first before talking to planners to produce the physical plan. They must therefore visualise what they want to do with the land.

Is the visualisation in line with one’s own aspirations? A study that tells you what the “go to markets” for products and their price points. In terms of technical feasibility, do a title search to ascertain the status and genuinity of the land ownership. Is it freehold or leasehold? How many years are left on the leasehold title and is it free of any encumbrances?

Is any restriction in interest? Is the earthworks and infrastructure cost going to kill the project? What about the allowable densities or plot ratios? Have the Federal State or local Government any plans for the land or the surrounding vicinity especially in terms of new expressways, rails or air links? The fastest timeline to execute the project so that revenue is generated as soon as possible.

Dato’ Wan Hashimi Albakri Chief Operating Officer Township Development of Sime Darby Property Berhad and Chairman of REHDA Wilayah Persekutuan

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This is primarily to alleviate your financial burden of paying back the banks for example watching the cash flow. Other considerations include available funding and cost of funding and shopping around for banks with the best deals.

Location is key and accessibility, existing or planned, is crucial.

Developers have to do their homework with regards to what they can sell in that vicinity and how much people are willing to pay for the intended products.

If you are buying land to develop, then be very sure of the market and all the risks involved. This is very capital-intensive, overregulated and very challenging business with low margins and relatively long gestation periods depending on the efficiency of the governing entity and system. So think very deeply before you leap as chance favours the prepared mind.

From my time and experiences as a town planner up until today, the construction and property development in the last 20 years has changed. And, looking into the future, these are the changes:-

a) Technology and data Cities are using data and technology to make themselves smarter, more effective and enhance service delivery. Cities are leveraging technology to become better connected and more productive.

www.propertyinsight.com.my

b) Transportation infrastructure Integrating land-use and transportation infrastructure planning to create vibrant, safe and sustainable cities. c) Retirement Villages Because of Malaysia’s growing aging population, I believe that the property industry also needs to start prioritising the needs and demands of senior citizens when it comes to developing new properties. ‘Retirement villages’ which are common in more developed countries, is still a relatively new concept in Malaysia, and a trend that I foresee growing in the coming years. Unlike nursing homes, retirement villages cater for independent senior citizens, with the necessary facilities and amenities conveniently available to cater to their needs.

A successful property developer must have the vision and foresight to predict what the next generation needs and wants in a property. Property development is a dynamic industry and we have to ride the wave or else we would be left out. It is also equally important to assemble a team of highly talented, creative and skilful individuals to help drive the team to success.

My management style is to provide guidance, direction, leadership, and finally set an example to subordinates. My management philosophy is to provide an environment that leads

Dato’ Neoh Soo Keat Founder and Managing Director of Trinity Group Sdn Bhd

to productive employees so that the Trinity team can stay true to our long-held commitment to building communities and enriching lives.

“The acquiring of land for the purpose of property development in most cases would require a Feasibility Study to be carried out. The decision to proceed with the acquisition usually would depend on the saleability of the products to be built & sold asxwell the appetite of the developers wrt the returns expected.

Financing means and the abilitity to sustain holding costs for the project are considered too.”

“Market study and Focus Groups are becoming emerging trends carried out by developers prior to decisions whether to proceed with the land purchase. With the rising costs of land and development, developers nowadays tend to be more certain in assessing the potential of land to be acquired” “A factor that potential developer needs to be aware of before acquiring land are the gazetted landuse of the land as transparency and certainty of gazetted local plans become more apparent” Zulkifly Garib Vice President of REHDA Malaysia, Chairman of REHDA Selangor, Project Director UEM Sunrise

“It must also be noted nowadays that compliance to landuse planning can, in cases of township developments, reduce the saleable land to under 50% of the gross land acquired or available. Infrastructure costs too are usually major components in feasibility studies”.

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feature

WAH!

WHY SINGAPORE SO “GANAS” WHEN IT RELATES TO THEIR PROPERTY MARKET? HOW ABOUT MALAYSIA? Many people tend to complain about the “tight” property measures in Malaysia. However, in comparison, one should just look at the “ganas” situation concernig the property market in Singapore, and perhaps one would feel better.

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• From mid-2009 to the year 2013, property prices surged by about 60% in Singapore. The government finally stepped in by introducing tons of tightening measures - including banning the Developer Interest Bearing Scheme (DIBS), ensuring higher down payments as well as imposing additional stamp duties.

• The measures were successful, and prices declined for 15 quarters in a row. However, prices increased by 7.3% in 2018, largely due to hankypanky enbloc sales which saw groups of sellers collectively selling their units to developers. (Source: Bloomberg) • The Singaporean government acted swiftly on July 6, 2018. Additional buyer stamp duties were raised up to a mind-boggling 30%. At the same time, Loan to Value (LTV) borrowing limits were tightened by a further 5%.

If you are a first-time home borrower in Singapore, you are only allowed a maximum 75% margin of financing.

Damn “ganas”, hor?

• Many people hold the view that the measures above are like killing a fly with a bazooka. Overkill, apparently.

I respectfully disagree. I think that hanky-panky measures like DIBS and irrational enbloc sales should be killed right at the onset. Speculative behaviour should be nipped in the bud.

HOW ABOUT MALAYSIA? • Again, property prices are deemed “unaffordable” by entities like Khazanah Research, whereby Klang Valley property prices are out of reach of the average Malaysian.

• Our property market may have “slowed” down as compared to the 2009 to 2012 golden age, but prices still registered a 6.5% increase in 2017 (Source: NAPIC) • To be fair, our tightening measures such as LTV of 70% for the third property and above are only aimed at speculators or investors. And, don’t you think measures like Debt Service Ratio (DSR) also make sense in order to gauge a person’s repayment capability?

• In all humility, proposing housing guidelines for first-time homebuyers to be relaxed may not be altogether feasible. In fact, there was even “science fiction” and fantasy talk about recognising future income.

POSSIBLE SOLUTIONS & WHAT IT MEANS TO US • Here are some of my suggestions of what could possibly be solutions that could yield some positive results:1 Firstly, the answer to expensive housing is not to make it easier for people to borrow. You do not break a drug addict’s problem by making it easier for him to buy drugs, do you?

2 We’ve got to be strategic about things.

What can be done concerning the issue of oversupply of residential units? Why are there still som 34,000 units of unsold SoHos (Small office Home offices) in the market? And, why isn’t there any regulation to curb the supply of these expensive shoe boxes?

(Source: The Star) 3 What are your revolutionary plans in terms of introducing affordable housing that works? Have you made any progress in terms of symbiotic private sector partnerships?

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feature

4 As mentioned, the bottom 40% of Malaysian households earn RM3,800 per month. So, what is the government going to do about increasing their quality of life? The answer lies in not just about giving people easier loans.

5 What can be done concerning Government-Linked Companies’ (GLC) banks like AgroBank, Bank Simpanan and Bank Rakyat? About 80% of Bank Rakyat’s balance sheet consists of ridiculously high profit personal loans.

(Source: Bank Rakyat 2017 annual report). Why are useless consumption debts being allowed to fester like a contagious plague? And, shouldn’t development banks play a critical role in lending to first-time home borrowers?

THE MORAL OF THE STORY? • Someone shared these words of wisdom to me many years ago. I think it holds especially true today. “If you don’t have 20% as deposit, then don’t buy the property. You can’t afford it.

Make it a point to earn more and boost your cash reserves first”.

• If not carefully thought out, relaxation measures could promote a speculative market and prolong a property bubble. After all, implementing favourable credit policies for the sake of doing so only delays a potential property crisis. With due respect, this doesn’t solve the problem.

• Don’t be too happy when you hear about “lending guideline relaxations”.

Here’s my two cents worth:- making it easier for people to borrow isn’t the answer to a sustainable and healthy property market. Instead, there has to be a holistic approach – whereby factors like affordable housing, progressive incomes, curbing expensive supply and the role of development banks have to be tackled.

MARK CHUA

is the bestselling author of the book “WHO SAYS”. He is a Senior Vice President of a foreign bank and avid lover of properties. Email him at hello.markchua@gmail.com or www.facebook.com/MarkChuaMY

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SST GST, SST & THE POTENTIAL PROPERTY BUBBLE BURST I remember when the Goods and Services Tax (GST) was first about to be introduced here. A good friend told me that he was rushing to buy a property because his real estate negotiator friend told him that property prices would jump up by six per cent following the GST. I then asked him if he liked the property that he was about to buy and he said “Yes”. I responded by telling him to proceed as my advice was for him to stop the purchase if he did not like the property enough and was buying just because he was worried about the potential price increase due to the GST. And now, we have the upcoming Sales and Service Tax (SST).

Should we start to worry and quickly buy items first since the SST is likely to be 10 per cent? Would property prices go up by 10 per cent then? If we google for information on this, the general consensus is that property prices will not be rising by the same percentage or even at all.

However, let’s not debate about this because it is not the main issue, really. Assuming we are buying a home for our own stay, then we will usually be staying in it at least for the next 10 years.

Hence, the SST would only be one per cent per year when averaged out. This is assuming it is a full 10 per cent impact on the property price. Then, should one be buying for investment purposes and taking into account the Real Properties Gains Tax (RPGT), the 10 per cent SST will be spread over six years which would only amount to 1.5 per cent or so per year. Looking at the usual price increase on a yearly basis would tell us that the SST is really a non-issue.

Therefore, only buy the property once you have considered all the pros and cons. My advice is not to buy or not buy a property because of the SST as property investment is for the long term.

Beyond just the GST and the SST, we recently also saw a frenzied sharing of news prediction concerning the potential property market bubble bursting.

However, is this really happening? The main reason stated was that property prices for luxury properties were already too high and thus, a readjustment is necessary. The government should thus allow it to happen and take steps to prepare for this “crisis”.

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feature Allow me to share a few key reasons why the property market may burst and, this is not just about one segment of real estate.

The first assumption is that we are not overstretched currently due to property mortgage payments. Now, let’s look at the three main signs before a property market would burst.

#1 – Sharp & Continuous House Price Increase Property prices must be rising at a much faster pace than our salary growth and for many years. Remember the periods of 2009 – 2013 here in Malaysia? Yeah, prices were generally going higher every few months! Then, the cooling measures from Bank Negara Malaysia came. The speculative activities were then minimised instead of being the norm. Speculators were pushed out of the market as they would then need to put down a 30 per cent down payments with banks only lending to qualified borrowers. The double digit house price growth was stopped in its tracks. When we ask our real estate negotiator friends these days, they will usually tell us of certain potential buys which are now “Below-Market-Value (BMV).” Of course, we should still be aware that BMV here does not necessarily mean a good buy unless the BMV was not due to the BMV-level price previously.

#2 – Affordable Choices Have All Disappeared This is an extremely important factor. The B40 and the M40 households in Malaysia comprise 80 per cent of total households.

They need affordably priced homes and not the RM500,000 or higher priced homes. This is the reason for the PR1MA, Rumah Selangorku and even RUMAWIP affordable housing projects with more affordable homes on its way. The government states that it intends to build one million new affordable homes within 10 years. Of course, we hope these affordable homes will be in well-connected areas, are comfortable to stay in and built as per the announced timelines. Once these happens, the pressure on the housing market will be lessened because property transactions would continue to happen instead of only the rich having the money to buy and the poor struggling to get a place or having to rent forever. The property bubble will burst when there

Malaysian House Price Index (MHPI)

Source: National Property information Centre (NAPIC) Preliminary

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are too few affordable choices in the market. Currently, there is also the secondary market which will provide choices under the sub-RM400,000 category.

#3 – Healthy Banks with Low Non-Performing Loan

(NPL) Numbers

Banks in Malaysia are listed on Bursa Malaysia. They publish their quarterly results without fail so take a look at their NonPerforming Loan (NPL) numbers. If we see a spike in the numbers, we know that the borrowers of the banks are no longer able to serve their debts. What this tells us is that the potential for the properties to be auctioned off is high and this is usually the start of a loss of confidence when the herd mentality kicks in.

More people will be looking to sell their properties at lower prices and then, a crisis starts. The image shows the NPL numbers by CEIC.com.

In brief, the only reason why people start to miss their payments may be because they have lost their jobs. This is why this number is extremely important to take note of and everyone should!

View Malaysia’s Non Performing Loans Ration from Dec 2005 to Mar 2018 in the chart below:-

By the way, there will be no such thing as an impending property bubble burst should all these three signs remain healthy. Who knows if another global financial crisis would unfold in the near future which will pull all the rest of the world into a recession?

Based on the current numbers, Malaysia is unlikely to be the starting point for the crisis. This is what Finance Minister Lim Guan Eng said not too long ago:- “Economy remains strong, fundamentals solid.” I do not think his assessment could suddenly change for the worse.

Beyond these three major signs, we can also look at the unemployment rate in Malaysia. Any sudden spike would indicate problems ahead. Also, usually, when car sales numbers are lacklustre, one can envision that something bad is about to happen. Shoppers go to popular malls so when people have lack of money, they do not go to places where they are tempted to buy.

One should also note that when a crisis does happen - like the few times before this, property prices will drop because of negative sentiments. However, once the economic recovery starts and negative sentiments turn positive, property prices would recover and will usually be higher than before. Five years ago, we could afford a RM400,000 property. If property prices did not increase crazily and had stayed almost at the same level, then after five years of salary increments, the property price we could afford could be RM500,000. This is the real reason why property prices could go up. If we could not afford to pay any higher, it will stop going up. Developers will just adjust what they build accordingly too. Happy understanding and investing.

Source: www.ceicdata.com

CHARLES TAN

is the Founder of kopiandproperty.com whereby he shares on real estate. Since buying his first home at the age of 25, he now has properties in Penang, the Klang Valley and Kota Kinabalu

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featured projects

EXPERIENCE GREAT VALUE WITH UEM SUNRISE HOMES UEM Sunrise Berhad - one of Malaysia’s leading developers takes an initial step to extend attractive savings to make homes more affordable

BY YVONNE YOONG

UEM Sunrise Berhad one of Malaysia’s leading developers, will be offering great savings to the public and smart investors in conjunction with UEM Sunrise celebrating 50 years of community building and delivering the next decade of excellence. To top off the icing on the cake, buyers will now be able to own their dream homes at very affordable prices, with a down payment from as low as RM1,000.

Anwar Syahrin Abdul Ajib, UEM Sunrise’s Managing Director/ Chief Executive Officer expounded on the group’s commitment towards building communities of the future by developing homes for families as well as with the aim of promoting the well-being of communities.

“We also take pride in making our homes more affordable. We believe that it is important for every citizen to own their home,” he shares adding that the group is also rewarding its loyal buyers.

“Our loyal card members, the Tresorians, who are also our repeat customers have been given a head start with a preview of these packages in appreciation of their continuous and invaluable support over the years. We strongly encourage the Tresorians to take this opportunity as they will enjoy special extra privileges exclusive for them only,” he enthuses further.

Elaborating on the initiative further, he says that this is in tandem with the government’s initiatives aimed at advocating affordable housing to improve people’s lives by providing a good housing environment. Already, about 300 units of landed and high-rise, which are strategically located in prime areas - in Cyberjaya and Johor Bahru - are entitled to this initiative. These properties, offered at great savings with prices starting from RM293,000 also enable potential customers to also enjoy social and living spaces with good connectivity created with holistic lifestyle experiences.

In celebrating 50 years of community building and delivering the next decade of excellence, he says that the group - realising the importance of giving back to society - at this juncture, wants to offer easier ownership. This is exemplified in its goal to enable Malaysians to have the “opportunity to live in an integrated and community living homes of high quality with good connectivity and accessibility.

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Teega Puteri Harbour ”Customers can also enjoy great savings as they are able to purchase properties that are located in prime areas of high growth value,” he says identifying the group’s developments in the southern region namely in Iskandar Puteri such as Teega Puteri Harbour, Almãs Puteri Harbour, Estuari Gardens and Bayu Angkasa.

Potential customers will also be able to enjoy attractive freebies and own their dream homes with a down payment ranging from as low as RM1,000 for Bayu Angkasa, RM5,000 for Verdi Eco-dominiums and Symphony Hills; and RM10,000 for Estuari Gardens, Residensi Ledang, Teega Puteri Harbour and Almãs Puteri Harbour.

Teega Puteri Harbour comprise a modern, contemporary and holiday resort like environment with pristine views surrounding marinas and park. The development encompasses condominium units comprising three 35 storey towers and 3-storey cabana units. Teega Puteri Harbour is also set to be the preferred contemporary waterfront living in Iskandar Puteri.

Almãs Puteri Harbour is another development that is designed to provide residential and commercial components throughout its four features namely residences, suites, modern offices and a retail boulevard link. They are well-connected to the marina promenade and a 15-acre linear park. Almãs is a 34-storey residential block towering atop seven stories of car park and a

Almãs Puteri Harbour

(From left) UEM Sunrise Managing Director/Chief Executive Officer Anwar Syahrin Abdul Ajib; Chief Operating Officer (Development) Dato’ Roslan Ibrahim and Chief Marketing Officer Kenny Wong at the UEM Sunrise showcase in Mont’Kiara, Kuala Lumpur

Estuari Gardens facility podium that offers a stunning skyline view.

Estuari Gardens spans across 394 acres in Iskandar Puteri and is designed to provide a wholesome resort living experience within nature’s embrace.

Bayu Angkasa comprises a medium-cost property development that aspires to provide a modern suburban lifestyle offering residents high quality yet affordable homes where they can work, live and play in Puteri Iskandar. In short, an ideal choice for first time buyers because of its affordable ownership plan.

Residensi Ledang

Residensi Ledang is another development that boasts excellent connectivity in Iskandar Puteri - offering communities integrated living within a wholesome lifestyle experience.

For discerning home buyers who want a property in Cyberjaya, there are two developments. There are the Verdi Eco-dominiums - a high-rise boutique that encompasses smart living and Symphony Hills - a low density mixed residential development.

Symphony Hills is adorned with its signature garden equipped with high-speed fibre optic infrastructure and smart home amenities.

“We believe smart buyers will benefit from these purchases as they are able to enjoy the great value and savings as these properties are strategically located and are well connected.

Symphony Hills

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featured project

Wallich Residence –

Luxury Condominium in Singapore’s Tallest Building If the panoramic views from their apartments are not enough, residents can choose to admire the surroundings from the Sky Garden (220m) or the Sky Observatory on Level 62 (270m).

Units at Wallich Residence are oriented in the North-South direction, minimising solar heat gain and optimising shade.

Exceptional design, impeccable detailing, and four levels of stunning amenities elevate the luxury lifestyle to breath-taking new heights. Amenities for the residents are spread over Level 1, 39, 52 and 62. These include pools, a gym, library, theatrette, sky gardens and an observation deck at a cantilevered balcony on Level 62.

Life at Wallich Residence blends the buzz of the CBD with Tanjong Pagar’s thriving residential community, where residents can experience the heritage sights of Chinatown alongside the lively dining and entertainment scene at Ann Siang Hill, Club Street, Tras Street and Duxton Hill.

Being part of an integrated project means that company chiefs could potentially set up residence in the same development as their businesses. Guoco Tower has 890,000 sq ft of Grade A office space spread over 31 storeys, while a retail podium offers 100,000 sq ft of leasable space.

Towering at a height of 290m, the tallest building in Singapore, Tanjong Pagar Centre offers first class commercial, hotel and luxury residential units and leisure facilities.

The mixed development by GuocoLand which comprises the Guoco Tower, Sofitel Singapore City Centre and Wallich Residence rises at the coveted Tanjong Pagar Central Business District (CBD) area and is integrated together with Tanjong Pagar MRT. The Pinnacle of Luxury Living Located from Level 39 to 64, 180m to 290m above sea level, Wallich Residence is home to a limited collection of 181 exclusive luxury residences, comprising one- to four-bedroom units, four penthouses and one exclusive super penthouse.

Wallich Residence made headlines in July last year when its 21,108 sq ft three-storey super penthouse came with an asking price of S$108 million.

The top level of the super penthouse has a private pool, pool deck area, cabana, jacuzzi room, entertainment area and a cantilevered balcony with panoramic views including that of the CBD, Marina Bay and Southern Islands.

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They could also entertain visiting clients in the adjoining 223room Sofitel Singapore City Centre – which provides residents with concierge services, in partnership with GuocoLand’s concierge team.

Tanjong Pagar Centre is an ambitious vertical city that comprises a dynamic mix of commercial, residential, retail, hotel and urban park components. This new global icon has positioned Tanjong Pagar as the premier business and lifestyle district in the CBD. Tanjong Pagar is leading the transformation of one of the most exciting government land redevelopment projects in Singapore to date. It will see a seamless extension of the existing CBD to form a new waterfront city.

At its prime location in the district, Tanjong Pagar Centre is poised to become the gateway to this waterfront city and the exhilarating new live-work-play opportunities to come.

The Tanjong Pagar Centre mixed development is conceptualised by world-renowned architect firm Skidmore, Owings & Merrill.

The firm is also the lead architect for this iconic masterpiece.

strategy

Dreaming of Easy Good times bring great tidings. This was the case years ago when the property market was booming and prices of properties continued to chart steady growth. In today’s market scenario though – albeit the euphoria of the General Election (GE) paving the way for the forming of a new Government – things are hanging in the balance with many issues having to be rectified before they get better.

To quote John Stuart Mill – one of the most influential thinkers in the history of liberalism – while his notion of “Landlords go rich in their sleep without working, risking or economising” may hold water in better times – during periods of consolidation of the economy – this may not altogether be true.

This is because – as witnessed of late – not all investors have had easy sleep – worrying about the lacklustre state of the property market where oversupply seems to be the order of the day. This is also true of the office market that is literally swamped with an oversupply of space – with coworking spaces also upping the ante in terms of added and unwanted competition to an already saturated market space.

Even though property has been traditionally hailed as the nucleus of real wealth creation as people everywhere need a roof over their heads - the imbalance of demand and supply of late have cause some serious lack of sleep problems in terms of getting the desired rental rates or returns in capital appreciation.

This issue is not only faced by consumers but also developers who - faced with an onslaught of issues, are finding their profit margins being squeezed even further while issues of affordable housing continue to plague the nation.

DATO’ KK CHUA

Publisher/Editor-In-Chief for Property Insight Email him at kkchua@propertyinsight.com.my

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Money?

The Real Estate and Housing Developers’ Association Malaysia (REHDA) Institute – faced with challenges on the property front – invited members of the media on a Saturday morning to hear out its proposed solutions outlined in a list of detailed suggestions and outlines for the government to work hand in hand to address this problem of affordable housing.

Suffice to say, the hey day of soaring capital appreciation remains a distant dream for now – optimists would say. And, from these situations, sleepless nights it would seem - are not altogether the exception but rather- may be the norm for the time being until the market recovers for sure.

Ultimately, price and value go hand in hand in the real estate game. And, as seasoned players can testify – property indeed remains a long term game plan, and so ultimately - holding power is certainly needed to weather the storms before the good times roll back in.

The property market – touted as being cyclical in nature has already undergone the uncertain momentum. As the saying goes – what goes down can only come up so it may just be a matter of time for the property market to pick up again.

So, although the days of landlords sleeping and waking up to gain may be a dream in the making for now – it is time to continue to plough until the harvest makes its bountiful way around.

Only then, can one sleep and dream one’s way into capital appreciation and increased rental income. Happy investing and waiting for the turnaround till then!

From FREEHOLD

GREENERY WITHIN THE CITY

SPNB ASPIRASI SDN BHD

(490479-v) MILIK PENUH SYARIKAT PERUMAHAN NEGARA BERHAD _SPNB)

Marketing agency: For enquiries:

For enquiries:

03 8318 0417

016 321 9033 017 779 1688

NO. Lesen Pemajuan Perumahan: 14153-1/11/2017/ (0934(L) | No Permit Iklan dan Jualan: 14153-1/11/2017/0984(P) | Tempoh Sah: 05/11/2015-04/11/2017 | Tarikh Dijangka Siap: Mei 2019 | Hak Milik Tanah: Pegangan Bebas | Gadaian Tanah: Tiada | Pelan Bangunan Diluluskan Oleh: Majlis Perbandaran Sepang | No. Rujukan Pelan Bangunan: MP Sepang 600-34/2/71(12) | Jumlah Unit dan Harga: Pangsapuri (1,168 Unit) MIN: RM395,460.00 MAKS: RM958,247.00

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Intersection of 4 highways: SKVE, SILK, North-South Hwy & Sg Besi Hwy Ready student population of more than 20,000 within 2-3km radius Total population of 70,000 within 10 minutes An MRT station (Uniten Station) to be built on Line 2 nearby Major hotels, 14 universities/colleges and 5 hospitals within 20 minutes Lifestyle mall at De Centrum Located in De Centrum city (100 acres of freehold development)

Your neo-urban lifestyle comes with a truly self-contained neighbourhood, where if you so choose to, you won’t need to drive out for almost anything.

Daily shopping couldn’t get more convenient at the De Centrum Mall & Retail Shops. With lifestyle stores spread over more than 160,000 sq. ft. catering to your needs, you couldn’t be more spoilt for choice, with all literally beneath your feet.