Property Insight November 2015 by PropertyInsight

NOVEMBER 2015

COVER STORY

HIGH FLYING FALLON

AREA FOCUS

SEMENYIH THE GREEN HEARTLAND

MAIN FEATURE

AN M40 BUDGET

November 2015 RM7.50(WM) RM9.00(EM)

KDN PP 18181/04/2013 (033492)

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EDITOR’S MESSAGE

EDITORIAL

NADIA GIDEON, Editor-In-Chief

ne of the most enjoyable aspects of putting this magazine together each month, is coming up with the cover and the concept. For the first time in the history of Property Insight, we have a woman gracing our cover. No we are not chauvinistic. These things do happen sometimes. Fallon Loo is as dynamic as she sounds. I have not met with her personally, but like a force of nature, one can feel her strength from afar. This month’s cover story talks about Fallon and her dynamic FLP team. Her story is inspiring and she has generously shared with us her ideas and practices on team leadership. It is that time of year again when calculators go crashing and personal budgets fly out the window. We have a special feature on Budget 2016 with infographics detailing areas within the industry that will benefit from the ‘M40’ Budget.

The 2016 Budget seems to be a budget for the middle income Malaysian who has, in previous years, been neglected. We hope the infographics provided will assist you in studying the effects the budget will have on the market next year. PRISM, one of Malaysia’s most significant events in the property investment game, will be held on the 14th and 15th of November 2015. This is our third year and we are excited to have a full agenda of excellent talks lined up, while playing host to such a great selection of speakers. Let’s be honest, it really is because of you! We wouldn’t have come this far if it weren’t for you, so, a huge thank you for your continued support and see you at PRISM 2015.

Editor-In-Chief Nadia Gideon editor@propertyinsight.com.my Writers Fara Aisyah Firdaus Petial Daniel Sim CREATIVE Art Director Sarah Tan sarah@propertyinsight.com.my Designer Aina Mardia Zakaria 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 Sec 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

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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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CONTENTS

14 COVER STORY

High flying Fallon

Fallon Loo and her team from Forefront Legacy Partners, talk to Property Insight about their success as a team

MAIN FEATURE

Budget 2016

‘Prospering the Rakyat’ - An M40 Budget

FEATURE Impact of the coming into force of the Housing Development Regulations 2015

PERSONALITY OF THE MONTH

32 Transforming the rail industry in Malaysia with Prasarana

Zerin Properties’s CEO Previndran Singhe tells Property Insight what it takes to succeed in the real estate industry

“Good public transportation services is not the only catalyst that ensures the success of major cities”

60 Inspiration matters INVESTOR NEXT DOOR

DEVELOPER OF THE MONTH

Tan Yok Koon hits a home run with her investments

Building a close knit community at Agile Mont Kiara

As safe as houses

PI met up with Wilson Ren of Agile Real Estate to talk about their first signature development outside of their home country

INDUSTRY INSIGHT

FEATURED PROPERTY

Oregeon Property Consultancy’s small ideas work out big

42 Murfree @ Alam Damai

FINANCE

The Hidden Gem in Cheras

46 Bennington Residences @ SkyArena Wellness and wealth by choice

Young blood

What you need to know when planning for your first home purchase

48 Elymus @ Resort Homes

STRATEGY

Space and feel of a bungalow

72 75 77 78

AREA FOCUS

Semenyih, the green heartland

A small town no more

Renting out your unit? Here are a few tips! Dealing with high inflation rate Beware false assumptions Adding value where it matter

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PROPERTY SHOWCASE

EVENTS CALENDAR

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

2016

PROPERTY SHOWCASE

BUMIPUTERA SHOWCASE

PUBLIKA

MESRA MALL

Terengganu 24 – 26 MARCH 2016

Solaris Dutamas 4 – 6 MARCH 2016

PROPERTY SHOWCASE

INVESTORS’ HOT PICK PROPERTY SHOWCASE

NU SENTRAL

MID VALLEY EXHIBITION CENTRE Mid Valley Megamall, KL 15 – 17 JULY 2016

Kuala Lumpur 11 – 17 APRIL 2016

days

PRISM Malaysia’s Largest Property Investment Summit

SETIA CITY CONVENTION CENTRE

days

5 – 6 NOVEMBER 2016

days

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

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NEWS & EVENTS

PROPERTY INSIGHT PROPERTY SHOWCASE AT CHERAS LEISURE MALL

rom 6th to 11th October 2015, Property Insight Property Showcase event was held at Cheras Leisure mall, featuring the very best in our industry including developers and property speakers. The seven day event showcased exclusive properties from around Malaysia which included two days of property talks that featured powerful speakers such as Dr. Daniele Gambero, Looi Mun Goon, Shamir Rajadurai, Gary Chua and Strategic Advisor,

KK Chua who spiced up the event with tips and tricks on how to invest in properties. Apart from investment strategies, the talks also covered finance and security issues. Developers that participated were – Central Equity, Gamuda Land, Glomac Berhad, IJM Land, Landmark Zone Sdn Bhd, MKH Berhad, Protasco Berhad, Setia EcoHill, Smart Niche Group, Tanming Berhad and UM Land, showcasing their exclusive projects. The event also drew in a

large crowd, particularly home buyers and investors. The event was successfully carried out with the help of partners, Property Guru and Sharp. PI would like to thank our partners for their support and we look forward to seeing you at the one of the most significant and upcoming property fairs, PRISM 2015 – Malaysia’s largest property investment summit! Visit www.prism.my for more details.

IJM LAND’S BANDAR RIMBAYU

– A FRESH IMPETUS 2015/2016

roperty Insight attended “Yesterday Once More” which was organised by IJM LAND, Ciao Ristorante at Jalan Kampung Pandan, Kuala Lumpur. The event was held to show how quickly IJM Land had been gaining momentum as a leading developer in Klang Valley. The Bandar Rimbayu Township is connected to five major highways that take you to, well, almost anywhere KESAS, LKSA, SKVE, ELITE and WCE – and as a result of its centrally located address it also boasts both accessibility and seclusion from the hustle-and-bustle of the city. 10 I NOVEMBER 2015 www.propertyinsight.com.my

IJM LAND has entered into a partnership with Northstar Associates Sdn Bhd to develop an international school campus, Oasis International School KL

IJM managing director Mr. Edward Chong announced IJM LAND’s partnership with Northstar Associates Sdn Bhd to develop an international school campus in the 1,879-acre green township. The Oasis International School will mark another milestone in its continuous expansion of the township development, bringing high quality education closer to many children within Bandar Rimbayu and its surrounding area. In active support of innovation in the

industry, IJM LAND also launched its first ever IJM LAND Designer Award (iLDA) 2016 at its Bandar Rimbayu township. The aim is to provide graduate designers the opportunity to turn their designs into reality. The aim of iLDA 2016 is to encourage new ideas and techniques in the design and furnishing of interior spaces for multi-family living, taking into consideration efficient layouts, privacy and the space for leisurely pursuits.

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NEWS & EVENTS

PROPERTY INSIGHT PRIVATE EVENT

@ SKYWORLD PROPERTY GALLERY

hy you must invest when RM depreciates? An exclusive talk took place on Sunday, 25th October 2015 at the SkyWorld Property Gallery with an array of engaging speakers. KK Chua, strategist and advisor on property investing gave us ‘7 tips for investing in challenging times’, while Gary Chua and Faizul Ridzuan shared their expertise accordingly. The event which targeted 100 participants exceeded expectations in terms of numbers. The crowd was wowed with the simplicity of the information they received which was easy to digest yet thought provoking, as they were seen taking down notes and listening intently. We are always glad to be of assistants! Property Insight thanks you for joining us and we hope you had a few good take aways from the event. Keep an eye out for our next talk on ‘Seremban, The Next Hotspot’!

DEPUTY FINANCE MINISTER II YB DATUK JOHARI

OFFICIATED UDA’S ANGGUN RESIDENCES

DA Holdings Berhad is taking a bold move to develop an upmarket property amidst the current economic situation. The new project, Anggun Residences is situated at the heart of Kuala Lumpur City Centre with a GDV of RM400 million. The launch was officiated by Deputy Finance Minister II, YB Datuk Johari Abdul Ghani on Saturday 3rd October 2015. 12 I NOVEMBER 2015 www.propertyinsight.com.my

The group Managing Director Datuk Ahmad Abu Bakar said the launch marked a milestone for UDA in its pursuit to be the country’s leading sustainable property developer and asset management organisation. “In comparison with other high-end properties within the area, UDA’s Anggun Residences is priced between RM1,300 and RM1,400 psf, which is competitive

considering the development’s prime location,” Datuk Ahmad added. Datuk Johari Abdul Ghani on the other hand said “The project is within the Greater KL/Klang Valley development which represents a crucial component of the Economic Transformation Plan to transform Malaysia into a high-income nation by 2020.”

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COVER STORY

14 | NOVEMBER 2015 www.propertyinsight.com.my

HIGH FLYING FALLON

Fallon Loo and her team from Forefront Legacy Partners, talk to Property Insight about their success as a team

BY: FARA AISYAH FIRDAUS PETIAL & DANIEL SIM

he saying that “Teamwork is so important that it is virtually impossible for you to reach the heights of your capabilities or make the money that you want without becoming very good at it” by Brian Tracy, seems to ring true with Fallon Loo. Fallon Loo, a dynamic leader with Forefront Legacy Partners (FLP) has been emphasizing to her team what teamwork and staying together truly means. The FLP team have been making waves, achieving sales targets that sound impossible to most in today’s current property market. How does one do this? With great effort and an incredible team is how she does this. Fallon brings the best out in her teammates and has instilled a sense of purpose which enables them to understand that the strength needed to fly high in today’s challenging market climate is indeed within themselves. Property Insight: What inspired you to start Forefront Legacy Partners (FLP)? Fallon: Well, I’d say the people I work with

everyday really inspire me. They are a group of extremely passionate and determined individuals with the desire to succeed in this industry. And I came to the conclusion that there was no better way to help them realise their potential than by aligning them to a conducive environment that would foster learning, sharing and growth, and one that gives them, in addition to monetary rewards, a true sense of meaning in their professional lives. I’ve been fortunate and privileged to have had good learning and growth opportunities over the years. These experiences have given me invaluable insight on the kinds of change and enhancement in execution and efficiencies needed for success at each inflection point in the industry. And these are things I want to share with the team, while I look forward to learning new things from them. I strongly believe that doing and sharing what you know is a lot more important than just having a deep understanding of something.

PI: Why the name “Forefront Legacy Partners”? F: I personally believe that Legacy is about life and living. It’s about learning from the past, living in the present, and building for the future. Although money is essential, it is fundamental in creating a sense of accomplishment, we can very easily lose meaning in life, professionally and personally. Thus, a true legacy helps us decide the kind of life we want to live, as in our motto “turning dreams into reality”. PI: What is your secret of retaining high performers? F: Well, it’s no secret, the golden rule is rule No.1, ultimately, high performers must be rewarded in order for them to stay. However, this is the key ingredient in a mix of many ingredients, because while money is important, once it is neutralized, other factors become more important. Providing people with a strong sense of purpose, a mission with a larger meaning, is a cause www.propertyinsight.com.my NOVEMBER 2015 I 15

COVER STORY that removes the dullness from their everyday duties. Give them a dream they can identify with, and you will see how committed they become. It is also paramount that we engineer and honor achievements, while reminding them that there is no such thing as a small achievement. This will help them to grow in their jobs and applies to both highperformers as well, because we usually make the common mistake of focusing only on underperforming employees. To make sure they don’t need to seek growth elsewhere, work with them to set goals that will move them out of their comfort zones. Then, when they are ready, add new responsibilities to their plate. PI: How do you train and develop you team? F: Everything begins with clear and concise communications. Like laying bricks when building a sky-scrapper, each and every brick must be in its precise place. Conversely, in a team everyone must be absolutely clear about the vision, targets, and the role each person needs to play. In short, we need to ask ourselves, why are we here, where do we need to go, and how do we get there. Once that is carved in stone, we then address the how, and fill the gaps in order to get us there. This involves addressing skills and the need to develop them. For instance, rather than trying to change the personality of the individual, focus on training skills that can be taught and learned. If someone is naturally introverted don’t try to convince that person to be more extroverted in order to help close sales. Instead, focus on actively listening and using terminology customers understand. Lastly, the notion of “What gets measured gets done” must be inherent and integral within every component of execution. If you really want employees to integrate a skill into their day-to-day performance, you must, must, must measure the results of the application of that skill. If you’re providing training on some aspect of your sales process, you should measure the conversion rate at that stage of the sales process, rather than just measuring the total revenue that’s booked at the end of the quarter. PI: What is the secret of making RM300 million worth of sales for 2 consecutive months in this challenging time? F: I wish I had a magic wand that would make

16 | NOVEMBER 2015 www.propertyinsight.com.my

“

If you really want employees to integrate a skill into their day-to-day performance, you must, must, must measure the results of the application of that skill.”

things simple. But the reality is indeed a lot more intricate. Nonetheless, it’s also nothing overly strategic or complicated. The key here is discipline, consistency and determination. Everyone needs to be marching to the same drum beat. And as a leader you need to give your people clear marching orders, and this is where high quality communication plays a key role in eliminating any ambiguities before they exist. You have to invest heavily in the now, where short and mid- term objectives are paramount. Establishing clear priorities, matrixes, targets, and nailing each person’s job down are critical in ensuring we hit the ground running and cross the finish line strongly as a team. In addition to these intangibles, the tangibles are just as essential. Price is what is essential to a customer, but we want to ensure they feel the value they received exceeds the monetary value. In this regard, we are extremely fortunate to partner with top developers in Malaysia, and fortuitously too, our vision, priorities, and commitments are aligned. For instance, we work very closely with Mah Sing Group, and are locked with them at every point. Their chairman, Tan Sri Leong and the entire senior management have been tremendously supportive of our team. Their priorities revolve around creating favorable conditions for the agents, while at the same time minimizing obstacles in the process. More importantly, the projects we partnered on have been extremely enticing and absolutely well-received in the segment we operate. Hence, while we attained record sales, Mah Sing has also been recognized as one of the top developers, and that is indeed a testament of their achievements in these trying times.

PI: What value do you as a team bring to your partners? F: I have talked a lot about why FLP is the platform of choice for those who want to be the very best in this industry. Our track record attests to that and we have put some very capable people together with a common direction, and we have done this purposefully. Through training and development, we now have the industry’s top performers and earners within the team. Our diligence and innovations around the streamlining of processes has enabled what is probably the swiftest remuneration method in the industry, whereby the average disbursement period is only 30 days; this is almost unheard of in real-estate. Our decision to work with only certain developers is a catalyst to our growth. We are extremely selective for a reason; once a decision is made, we do everything it takes to achieve that success factor. This can only work if the developer and FLP are directionally on the same page. We are very fortunate to partner with developers like the Mah Sing Group as they are relentless, creative, resolute, and determined to be on top, whilst we have a team of people who hunger and long to be the very best. PI: What were some of your biggest challenges in setting up and leading FLP to greater heights? How did you overcome these challenges? F: To be an effective leader, I believe there are a few essential things you need to do. The first of these is being flexible. Not everything goes as planned. Competitors change tactics, governments have new regulations on business, and, occasionally, natural disasters occur. And at times like these, leaders have to be able to change course; that is, to ensure that their businesses survive, and then find ways to reach their goals. At the same time you also need to have the courage, tenacity, and patience. Having the courage to stand alone, the tenacity to not succumb under pressure, and the patience to keep fighting until you win the day. And being responsible and accountable for the good as well as the unpleasant things that happen at work and in life. PI: What are your plans and goals for FLP in next 3 years? F: You need to have a clear vision on where

your short, intermediate, and long-terms plan will take you. Anything less than that will land you in areas of vagueness that would indefinitely be detrimental to your overall goals. There is an old adage that goes something like this, ‘We need to grow towards the sun’. Hence, in the real-estate industry it’s crucial to align with what the industry calls for, and what the buyers are seeking out. If monetization is the end result, and it should always be, then results will come easier and count for more when we align ourselves with market conditions. At this juncture, our team has achieved an incredible closure rate of 30% across the board throughout all our projects; this translates to 30 sales for every 100 customers we connect with on a daily basis. My goal is to enable the team to hit a closure rate of 65% over the course of the next 36 months. PI: What do you foresee in Q4 for the property market? F: Well we have just completed Q3 and Q4 is already here. All signs point toward a continuing momentum in the real estate market. This is despite the softer stock market and the ringgit. In fact, we see relentless investments from foreign buyers who have been continuously taking advantage of their stronger currencies. Currently around 30% of our buyers are foreigners, and the percentage does not seem to retract, which is very encouraging. These days foreign investors are usually well-informed and not many are deterred or discouraged by otherwise negative reports and or perception

of the current local economic or political scenarios. Everything we have seen and experienced so far, point to a trend that should continue in the foreseeable future.

“

The key here is discipline, consistency and determination.”

PI: What are your predictions for 2016 in the property market? What challenges do you think we might be faced with? F: This is obviously not an easy thing to predict. It is a challenging and testing time for this industry as a whole. Nonetheless, if historical data is any indication, then we can expect the real-estate market to continue its current momentum. The last 20 years, even during the Asian financial crisis in the late 90s, real-estate has done relatively well in comparison to other sectors. Quite simply, it’s hard to even recall a period over the last few decades whereby property prices had depreciated or fallen even against a background of lackluster economic conditions. Challenges are a constant. Without them, I think life would not only be dull, but would resemble one big void. There are bound to be challenges ahead, some existing and some newer ones. Still, I am pretty optimistic about the future. Fallon is a mentor and she sees how the lives of her team have changed after joining FLP, and this gives her a sense of encouragement to keep motivating more and more people. Fallon is an inspirational leader that is passionate about what she does. There are a few such individuals that stand out in this business from time to time, Fallon is one very good example of this. www.propertyinsight.com.my NOVEMBER 2015 I 17

THE DYNAMIC FLP LEADERS

COVER STORY

ALAN NG

ANDY TAN

WAYSON LIM

I want to thank Fallon because she is someone who uses her heart to guide you. She shares with you every detail and strategy to succeed in this industry. I have been in the property line for five years now and joining FLP has helped me build my own team while growing the business. I have more than 60 agents in my team and personally I am learning to inspire my agents to do more. To date, we have been champion 8 times, all with Fallonâ&#x20AC;&#x2122;s help.

I only joined FLP about 6 months ago, now I have 60 negotiators in my own team achieving an average sales of RM50 million monthly. Joining FLP was the best thing for me and Fallon is always there to lend her support and to motivate us.

I used to focus on achieving my own sales and I was successful at doing just that, but after joining FLP, my focus shifted more towards building a successful team. I learned to share my thoughts and my concerns with my team members and I look at things differently to achieve better results. We have prepared a syllabus to help our agents improve on their selling skills. I would like to have 300 negotiators recruited into my team in three years.

18 | NOVEMBER 2015 www.propertyinsight.com.my

WAYNE LEONG

JASON GAN

MARCUS LEE

CHESTER LIM

I joined FLP about a year ago and I realise now that FLP is a good platform for one to grow, if you were to compare it with other groups or agencies. With Fallon and FLP, I have not only learned to grow in my personal capacity, but I have also learned to maintain new recruits. I achieve this by identifying each team memberâ&#x20AC;&#x2122;s capabilities, their drive and their tenacity. Currently I have 2 leaders with about 20 team members under each leader, and they all answer to me. My future goal is to recruit 100 members.

The biggest benefit of joining FLP was the change within my mind set. We now produce a sales volume of between RM5 to RM7 million despite having only 20 members in my team. Our goal for the future is to hit the RM10 million mark each month.

I was a fashion designer with five children before I decided to join the property line. Joining FLP helped me to learn certain skills required in this business such as being more convincing. I started off selling properties in the Damansara area and managed to sell five to six units on my own. Back then my personal average sales per month was RM 100,000. Now I have a team of 20 negotiators and my wife will be joining the property line soon.

FLP is a unique group and different from the rest within the industry in the sense that we do not limit ourselves to many conventional ways. We go to the extent of having our appreciation dinner at Soju to encourage our younger colleagues to achieve their desired goals. I have about 40 people in my own team with an average sales volume of between 10 to 20 million per month. Fallon instils confidence in me and my team, and one such example was during the Mah Sing project where Fallon was able to deliver her promise for early commission pay-outs to agents.

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COVER STORY

VINCENT HIEW

MANDY TAN

ALVIN TAN

MEOON KOR

I learned a lot from joining the FLP team, and remembered this saying ‘I do the right things when I join the right leaders’. I found my niche when I joined this team of successful people, besides growing my income level, it has helped raise my standard of living. I want to thank Fallon for allowing me to achieve my desired income. To anyone who is looking for a job with a much better income, I have this to say: “No matter who or where you are, if you are willing to learn, I will do everything in my power to help you succeed.”

I used to be a singer in the entertainment industry and I earned all my income by winning competitions. Later I set up a performing arts company but found out that it was very difficult to collect from clients. I was inspired to join FLP about a year ago because Fallon delivered what she promised, this has become my inspiration to grow my own team and now I have two leaders in my team who lead their own teams.

My brother introduced me to the property line at the age of 18. I am now 22 years old and since joining FLP, I have been earning a 6-figure salary each month. My team has 20 members and we achieved a sales volume of RM15 million. Besides the income growth, FLP also helps me to harness the right skills and that is why I am happy to be part of FLP.

FLP is a united team. Each of us share a common goal and we look forward to growing together on this journey. I always tell my team members to just do it. I will make every effort to fight for them and nurture them so they can achieve their desired goals and be successful, just like me, perhaps even more so than me. That is what I wish for them.

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SIMON YIN

DENNIS LIM

ELYNNE LIM

DAVID LIEW

I was an entrepreneur selling hand phones before I entered the property market. To me FLP is a legendary team within the industry as a whole. I have 20 negotiators in my current team with an average group sales of more than RM10 million. With FLP, I learned that discipline is very important, we have weekly meetings every Monday to help team members plan ahead efficiently and we, as team leaders, provide the necessary support whenever it is needed.

I didnâ&#x20AC;&#x2122;t want to do project marketing initially because I heard a lot of negative news about this business. Fallon helped to change that perception and gave me the confidence to move into project marketing. Our team of 16 members emphasise on teamwork and joining FLP has certainly raised our expectations. We are more focused as a team rather than as individuals. Our goal is to empower more people to be successful.

It is important to be a good leader, as this helps move the team forward. As a leader you need to be honest, transparent and trustworthy, firm but compassionate at the same time. Any decision you make for your team, you should always consider their thoughts and feelings. Yes, you need to acquire the knowledge and experience and this may take time but rest assured it will give you the confidence to be a good leader.

I completed my SPM and didnâ&#x20AC;&#x2122;t go further than that but I wanted to earn more than a university graduate hence I joined the property industry. I finally found out how to earn an income that most graduates would be envious of, and that is within a span of two years. Now I have about 20 members in my team and the team spirit is very strong. My goal is to ensure that each of my team members become high achievers and earn a minimum commission of RM30,000 each month.

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MAIN FEATURE

‘PROSPERING THE RAKYAT’

- AN M40 BUDGET BY: NADIA GIDEON

he government has adopted an across the board, forwardlooking balanced budget proposal rooted in the belief that every hardworking person deserves the chance to make it in Malaysia. Prime Minister and Finance Minister, Datuk Seri Najib Tun Razak, tabled Budget 2016 in the Dewan Rakyat on Friday 23rd October 2015 with the theme “Prospering the Rakyat”. With government revenue falling by almost US$1 billion in 2015 after a 40 percent drop in commodity prices, 22 I NOVEMBER 2015 www.propertyinsight.com.my

most analysts were of the opinion that it would be a difficult one for Prime Minister Najib, given the weakened ringgit and a challenging economic climate of low oil prices. However Prime Minister Najib Tun Razak said he was committed to fiscal consolidation to further shrink the budget deficit targeted at 3.2 per cent this year. “We are confident of reaching a balanced budget or as close to that as possible by 2020,” he said. “To do this, some hard decisions had to be made.” said Prime Minister Najib.

“

“We are confident of reaching a balanced budget or as close to that as possible by 2020. To do this, some hard decisions had to be made.” - Prime Minister Najib Tun Razak

HIGHLIGHTS OF THE SPEECH

BUDGET VALUE 2016 RM267.2bil

increase

PRIVATE INVESTMENT to

PUBLIC INVESTMENT to

RM218.6bil

1.6

bil

RM112.2mil 175,000 units of PR1MA homes

10,000 units are

expected to be completed next year

expected to benefit

electricity

700km of road

bus operation

RM2,000

child below 18 years

mil

to improve

supply in Sabah

all around the country

The Pan-Borneo Sarawak Highway set to be completed in 2021

toll-free 1.2

bil

from July 2016

PERSONAL INCOME TAX disabled children above 18 years studying in tertiary institutions

allocated for affordable housing projects be spent building 175,000 bil tohouses

1.4

mil

to improve

60,000 civil servants

RM8,000

bil

515

Minimum starting salary in the civil service is set at

RM1,200 a month

6.7

1.6

2015 RM260.7bil increase

high-impact domestic projects worth

RM1,500 each parent

mil

allocated for

routes outside the city

bil

is allocated for

new MRT projects

Telecommunications infrastructure

Tax exemptions for middle class households earning

RM3,680 RM8,320 RM4,000

non-working spouse

a month

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HOUSING SECTOR

MAIN FEATURE

1.6

bil 175,000 PR1MA houses

at 20% below market prices

200 mil 10,000 units

200 mil First House Deposit Financing Scheme to assist first-time house buyers

100,000 houses priced from

Rumah Mesra Rakyat with a subsidy of RM20,000 for each house

863 mil 22,300

units of apartments & 9,800 units of terrace houses under

PPR

24 I NOVEMBER 2015 www.propertyinsight.com.my

RM90,000 – RM300,000 under PPA1M by 2018

20,000 units

by FELDA (max price RM70,000), • 2,000 units by FELCRA • 2,000 units by RISDA

40mil

to revive abandoned low and medium cost private housing projects by KPKT

5,000 units

PR1MA & PPA1M

houses in 10 locations in the vicinity of LRT & monorail stations

800 units

by EPF and 4,600 units by Sime Darby Property for affordable houses near the MRT station in Bandar Kwasa Damansara

stamp duty exemption on Shariah compliant home loans

“

The RM42 million allocated for Mukah Airport (Sarawak) and the upgrading of Kuantan and Kota Bharu will also stimulate further property development in these cities.” - Foo

Arcadis’ Global Built Asset Wealth Index 2015 which includes property, infrastructure, transportation facilities and utilities shows that Malaysia is ranked No. 22 globally, up 3 rankings from 2013. Ian Kennedy, Head of Business Advisory, Malaysia from Arcadis’ had this to say, “Infrastructure investment and development will play a key role in the final stage of Malaysia’s transformation into a fully developed country by 2020. With the 2016 budget, we expect infrastructure will continue to be a large share of built asset investments in Malaysia, especially with highway and railway construction, energy and water utilities and other public infrastructure.” Tan Sri Dato’ Sri Leong Hoy Kum, Group Managing Director, Mah Sing Group Berhad had this to say, “Mah Sing lauds the various initiatives in Budget 2016, of which has several initiatives including reiteration of commitments to major infrastructure projects and various measures to create more affordable housing”. “We

are heartened to see the Government’s continuous commitment towards improving the nation’s public transport network”, he went on to say. IBS RM500M FUND VIA SME BANK Tan Sri Dato’ Sri Leong added that the IBS RM500million fund via SME Bank would definitely benefit the housing and construction industry, and would allow market players to explore further usage of this technology for time savings as well as reduction of material wastage during construction. According to Foo Gee Jen, Managing Director of C H William Tahar and Wong Sdn Bhd, the RM900 million that has been allocated for a dispersal road off Jalan Tun Razak from KLCC to Tun Razak Exchange, could ease traffic congestion not only in the KLCC area and Tun Razak Exchange but also in the Bukit Bintang shopping area. “The RM42 million allocated for Mukah Airport (Sarawak) and the upgrading of Kuantan and Kota Bharu will also stimulate further property development in these cities.” said Foo.

PR1MA, RUMAH MESRA RAKYAT, PPA1M Under PR1Ma, Rumah Mesra Rakyat, Perumahan Penjawat Awam 1Malaysia (PPA1M) and Program Perumahan Rakyat, a total of 317,000 units affordable homes have been planned. The shortage of affordable housing for the rakyat appears to still remain an elusive problem to resolve. Foo goes on to say that continuing to improve the affordable housing program, RM200 million will be allocated to assist first time buyers. It is estimated that between 20,000 and 30,000 will benefit this scheme compared to the estimated 330,000 potential buyers for affordable houses. In conclusion, the government’s approach to strengthen infrastructure and to support economic expansion in providing equal emphasis on both economic growth and the wellbeing of Malaysians, seems to be well thought through and tailored to assist middle class households who have previously been left out in the cold. www.propertyinsight.com.my NOVEMBER 2015 I 25

FEATURE

IMPACT OF THE COMING INTO FORCE

of the Housing Development (Control & Licensing) (Amendment) Act 2012, Housing Development (Control & Licensing) (Amendment) Regulations 2015, Housing Development (Housing Development Account) (Amendment) Regulations 2015, Strata Titles (Amendment) Act 2013, Strata Management Act 2013, Strata Management (Maintenance & Management) Regulations 2015 and Strata Management (Strata Management Tribunal) Regulations 2015. THE AMENDMENTS TO RESIDENTIAL/HOUSING DEVELOPMENT

June and 1st July 2015 were 2 special dates that marked major changes in the landscape of the housing development and stratafied properties development in Malaysia. A total of 7 enactments and regulations all came into force within the span of two months. This article serves to take a brief look at some major and impactful provisions contained in these enactments and regulations. st

INTRODUCTION In Malaysia, residential properties development are governed and regulated mainly by Housing Development (Control & Licensing) Act 1966 and Housing Development (Control & Licensing) Regulations 1989. It governs development of anything 26 I NOVEMBER 2015 www.propertyinsight.com.my

above 4 units of properties owned meant for human habitation (terrace, semi-detached, bungalow, gated & guarded strata landed development, apartment, or condominium dwellings) or partly human habitation partly commercial (SOHO or serviced apartments). The development of stratified properties, which comprise of both residential developments as mentioned in the above para as well as non-residential developments (commercial stratified shops, retail lots, offices, SOVO, SOFO or hotel suites) are governed and regulated by the Strata Titles Act 1985 and now for the first time in the history of Malaysia, Strata Management Act 2013.

The Housing Development (Control & Licensing) (Amendment) Act 2012 (“HDAA 2012”) came into effect on 1st June 2015 which amended the Housing Development Act 1966 (“HDA 1966”); Housing Development (Control & Licensing)(Amendment) Regulations 2015 came into effect on 1st July 2015; while Housing Development (Housing Development Account)(Amendment) Regulations 2015 came into effect on 2nd June 2015 Here are some salient aspects of the above Acts and Regulations :A. DEPOSIT FOR DEVELOPER’S LICENSE 1. Prior to the amendment, in order to obtain Developer’s Licence, developers were bound to place a deposit amount of RM200,000.00 to the Controller prior to the issuance of the Developer’s License by the Ministry of Housing. NOW under the revised s.6 (1) HDA 1966, developers are to make a deposit sum equivalent to 3% of the estimated cost of a housing development construction within their respective projects. The

deposit sum could be in RM millions. 2. The 3% of the estimated costs shall be deposited by the Developer by way of cash, bank guarantee or having a balance of the 3% estimated costs in the Housing Development Account – Regulation 3A of HDR 1989. 3. Withdrawal of the said deposit will require approval of the Housing Controller, which typically will be granted after completion of the Housing Development and defect liability period. The period where the deposit sum is ‘stuck’ could range between 4 to 6 years. B. ADVERTISEMENTS BY HOUSING DEVELOPERS The contents allowed in “any advertisement made by any licensed housing developer” is further restricted with the insertion of Regulation 8(1A) in HDR 1989, which prohibits the following to appear on the Developer’s advertisement or marketing brochures: 1. offer of free legal fees; 2. projected monetary gains and rental income; 3. claim of panoramic view 4. travelling time from housing projects to popular destinations 5. any particulars to which a housing developer cannot genuinely lay proper claim

agreements (or more commonly known as Schedule G and Schedule H). Housing Developers who obtain their Developer’s Licence on/after 1st July 2015 must adopt the amended Schedule G and Schedule. Some key clauses in the new Schedule H are :1. Clause 6 – Financial Facility Purchaser must obtain facility within 30 days after receipt of stamped sale and purchase agreement. If the facility is not approved, Developer must refund the balance of amount payable to Purchaser within 30 days. 2. Clause 10 - Interest on late payment Purchasers have 30 calendar days to settle progressive payments to developers as stipulated in the Third Schedule whereby previously it was 21 working days. Interest on late payment cannot be charged for a period of 6 months to purchasers who have obtained financial facilities from Government. If a Purchaser cannot obtain a loan due to ineligibility of income and can produce such proof, Purchaser shall pay to the Developer 1% of the purchase price. 3. Clause 12 – Separate Strata title and transfer of title Developer shall apply for subdivision of title and execute memorandum of transfer in favour of the purchaser before delivery of vacant possession. Please

cross refer to Strata Title (Amendment) Act 2013 below. E. STATUTORY TERMINATION OF SALE AND PURCHASE AGREEMENT In relation to the new prescribed sale and purchase agreement, Section 8A HDA 1966 provides purchasers with the unilateral right to terminate said agreement, at any time, provided: 1. It is certified by the Controller of Housing that the developer has refused, delayed, suspended or ceased work for a continuous period of 6 months after execution of the agreement; and 2. Purchaser has obtained a written consent from financier. F. OFFENCES RELATING TO ABANDONMENT OF HOUSING DEVELOPMENT To address the issue of abandoned housing developments, a new section s.18A is inserted in the HDA 1966. Scope of this section is rather wide in that a development will be considered as abandoned the moment a developer “refuses to carry out or delays, suspends or ceases work continuously for a period of six months or more or beyond the stipulated period of completion as agreed under the sale and purchase agreement.” A developer convicted under the new s.18A shall face punitive punishment of fine between the range of RM250,000.00 and RM500,000 or imprisonment for a term not exceeding 3 years or both.

C. COLLECTION OF PAYMENT OUTSIDE OF A SALE AND PURCHASE AGREEMENT Previously only developers were prohibited to collect any payment such as ‘booking fees’ or ‘earnest deposit’ before signing of a sale and purchase agreement. To further protect purchasers, the amended Regulation 11(2), HDR 1989 extended this prohibition to stakeholders appointed by the Developer : “No person including parties acting as stakeholders shall collect any payment whatsoever except as prescribed by the contract of sale” D. PRESCRIBED SALE AND PURCHASE AGREEMENTS HDR 2015 also provides substituted versions of the prescribed sale and purchase www.propertyinsight.com.my NOVEMBER 2015 I 27

FEATURE

THE AMENDMENTS TO STRATAFIED PROPERTIES DEVELOPMENT AND MANAGEMENT The Strata Titles (Amendment) Act 2013 (STAA 2013) came in force 1st June 2015, amended the Strata Title Act 1985. Under the new law, developers must now fulfil certain pre-requisites before proceeding with any sales of parcel :Certificate of Share Unit Formula (Sijil Formula Unit Syer “SiFUS”) Developers must obtain a Certificate of Share Unit Formula (or SiFUS) to be issued by the Land Office (PTG). This new insertion is in line with the spirit of the Strata Titles Acts i.e. to ensure the availability of strata title runs concurrently with the delivery of the vacant possession to its owners. In order to obtain SiFUS, developers must ensure the following matters and documents are in place:• Receipt of payment for Land Premium (if any); • Letter of Application for Qualified Title as endorsed by Land Office (if there is no Final Title); • Receipt of Quit Rent for the current year; • Letter of appointment of Licensed Land Surveyor; • Receipt of Surveying Fees by Land Surveyor Board; • Share Unit Formula; • Schedule of Parcels signed by Licensed Land Surveyor and Architect/Engineer; • Approved Building Plans DO with Approved Sijil Schedule condi- Building Formula of tions Plans Unit Syer Parcels (SIFUS)

PTG

Sales of Parcels

COB

KEY AREAS ON STAA 2013 :- A. Section 8 – Circumstances in which it is compulsory to apply for subdivision of a building or land 1. The original proprietor (OP) must apply for sub division at the super structure stage (upon completion of building works as certified by the Street, Drainage and Building Act 1974 - structural 28 I NOVEMBER 2015 www.propertyinsight.com.my

framework – necessary for measurements of parcels accessory parcels and common property). Stage 2(c) of the payment schedule of purchase price for residential development 2. OP to apply for certificate of proposed strata plan (CPSP) within 3 months (subject to extension not exceeding 1 month) from date of super structure certificate Proposed strata plan shall show the following • Location plan, storey plan, delineation plan • all parcels, all common property, all accessory parcels 3. Within 1 month from issuance of CPSP, OP shall apply for subdivision of strata titles for the Development. The Implementation of the new timeline above represent a significant step in expediting the application of sub dividing the strata titles and facilitating the availability of strata titles upon vacant possession being delivered to property owners. B. Section 9A - Application for subdivision in the case of phased developments • The issuance of a provisional block comprising of land parcels is now allowed C. Section 10 – Conditions for approval for sub division • Issuance of CPSP; • Use of land not contrary to the land category and conditions; • Land is not subject to any charge or lien; • Land is held under final title; and • Leasehold land – terms of years must not be less than 21 years D. Section 17A – Limited Common Property (LCP) and Subsidiary Management Corporations allowed 1. LCP are common features in mixed development, for example :• mix residential parcels and non-residential parcels such as apartments

mixed with retail shops • non-residential parcels used for significantly different purposes such as office and retail shops • non-residential parcels used for the same purpose but are comprised in a building that is physically detached from other parcels in the development area such as two office blocks • different types of residential parcels such as apartment blocks with lifts and apartment blocks without lifts. 2. Limited common property – designated for the exclusive benefit of proprietors of two or more parcels. 3. Steps to be taken to designate LCP :• MC to prepare the special plan • MC to convene a general meeting to pass a comprehensive resolution • MC to make application in Form 9 • Director must refer the application to the Director of Survey • Director will issue a certificate (certify) that the subsidiary mc has been constituted under the STA Super structure stage Within 3 mths - 1mth JUPEM*

Proposed Strata Plan Within 1mth

JUPEM

Cert. of Proposed Strata Plan

PTG

Application for Strata Titles

Within 1 mth - 1mth

Within 2 mths

Strata Titles & VIP Reg. of Strata Titles (purchases)

Source: Jabatan Ukur & Pemetaan Malaysia

The implementation of the above system:• will improve efficiency in the management of various common properties and common facilities within a single Development; • funds collected will be properly channelled towards the maintenance of specified areas and facilities; • better representation for different owners from different sections within a Development; • resolve overlap issues in management; after which • sub MCs will be cleared The STAA 2013 also carved out provisions with regard to the management of subdivided buildings which is now purely governed by the Strata Management Act

2013 (SMA 2013) that was passed on 1st June 2015. The regulations on SMA 2013 are as follows:• Strata Management (Maintenance & Management Regulations 2015 – in effect 2nd June 2015 • Strata Management (Strata Management Tribunal) Regulations 2015 – in effect 1st July 2015 The SMA 2013 has repealed the Building and Common Property (Maintenance and Management) Act 2007 (BCPA 2007). For new developments approved after the implementation of the STAA 2013 and the SMA 2013, there is no need to establish JMB since it will be replaced with issuance of strata titles upon delivery of a vacant possessions to its owners. Management Corporation is presumed to be formed soon after delivery of vacant possessions. The Developer will take responsibility in maintaining and managing the common property for a period commencing from VP until 1 month after the first Annual General Meeting of the MC (preliminary management period). The developer shall not hand over said property to MC later than the expiry of the preliminary management period. Before MC comes into existence, the developer will assume responsibility in maintaining and managing said property within the developer’s management period which expires one month after the establishment of the JMB; and management by JMB until not more than 1 month after the first Annual General Meeting. KEY AREAS ON SMA 2013:A. Section 6 – Schedule of Parcels to be filed before any sales of parcel 1. A developer shall not sell any parcels within the development area unless a schedule of parcel showing the proposed share units of each parcel and the total share units is filed by the Building Commissioner; 2. For phased development, the schedule for the parcel shall show the quantum of provisional share units for each provisional block. 3. The Schedule of parcel comprises of:• Location plan, storey plan and delineation plan

• Parcels of common properties and all accessory parcels • Certificate by developer land surveyor, architect, engineer and that the building is capable of being subdivided 4. If the developer fails to comply the above, the penalties are as such :• Fine not exceeding RM500,000.00; or • Imprisonment not exceeding 5 years; or • Both the above B. Section 8 - Allocation of share units 1. If sale of parcel was made before SMA 2013 and no share units are assigned to each parcel then the share units of each parcel shall be assigned by any person or body who has duty (the authority) to do so 2. Allocation based on the formula set out in the First schedule – Table 1 – specify weightage factors for different types of parcels, whole floor parcels and accessory parcels C. Section 10 – The Developer establishes the maintenance account 1. Under BCPA 2007 – purchasers shall pay maintenance charges to maintain and manage the building and common property 2. Under SMA 2013 – the sum is called “Charges” to be deposited into the maintenance account 3. Apart from the Charges, each parcels owner shall pay contribution to the sinking fund of an amount equivalent to 10% of the Charges

1. Address management disputes such as claims, recovery of charges or contributions to the sinking fund 2. Consist of members of Judicial and Legal Services not less than 7 years standing 3. Not less than 21 members CONCLUSION Viewed in totality, it is undeniable that the recent amendments on HDA 1966 are impactful when dealing with developers. The Government has time and again emphasised the importance and need for transparency and accountability amongst housing developers. This is crucial as majority of buyers of houses in Malaysia are first time purchasers who use their lifetime savings to secure a home for themselves. Such purchasers are usually not aware of or do not understand the procedures and intricacies involved in a typical sale and purchase transaction and do not usually have equal bargaining power against housing developers who are normally ‘repeatplayers’ in this field. As such, it is only the law that can be the protective shield for purchasers against potential risks involved in purchasing a property, especially, those under construction from housing developers. Purchasers are afforded greater protection whereby housing developers are now required to adopt the new Schedule H and/ or G agreements, be transparent in exhibiting details of important elements of a sale as well as to hand over the strata title upon delivery of a vacant possession.

D. Section 92 – The Developer is to pay a deposit to rectify defects on common property 1. The developer must pay in cash or bank guarantee with the approval of the Building Commissioner such sum as may be determined by the Building Commissioner for the purpose of carrying out rectification of defects on the common property E. Section 101 - Disputes and strata management tribunal – Part 1 of the Fourth Schedule

Written by Sharonjit Kaur, Advocate & Solicitor of the High Court of Malaya. The writer can be reached at sharon@ihsvsel.com.my www.propertyinsight.com.my NOVEMBER 2015 I 29

FEATURE

SALIENT ACTS & REGULATION FOR PROPERTY INDUSTRY S10 Conditions For Subvisions

Certificate Of ShareFormula (Sijil Formula Unit Syer “SiFUS”)

STRATA TITLE ACT 85

i) Insuance of CPSP ii) Use Of Land Not Contrary To The Land Category And Conditions

Strata Title (Amendment)

Act 2013

S8 Subdivision

S171A limited Common Property Mixed Development

i) Super Structure (SS) Stage. Stage 2(c) Of Payment Of Shcedule Of PP

ii) Apply For Certificate Of Proposed Strata Plan (CPSP)

Structural Framework

Within 3 Month From SS Certificate

iii) Land Is Not Subject To Any Charge OR Lien iii) Apply for Subvision Within 1 Month From CPSP

Sub MC

1 Month Extension

STRATA MANAGEMENT

ACT 2013

(Effective Date :1/6/2015) S6 Schedule Of Parcel To Be Filled Before Sale

S8 Allocation Of Share Units

S10 Developer Establish Maintenance Account For Collection Of Chargers And Contribution To The Sinking Fund

Fine Up to 500K If Developer Fails

Imprisonment Less Than 5 Years

Strata Management (Maintenance & Management Regulation 2015) (Effective Date : 2/6/2015) S101 Disputes & Tribunal

Strata Management (Strata Management Tribunal Regulation 2015) (Effective Date : 1/7/2015)

Part 1 Of The Forth Schedule

S92 Develepor To Pay DepositTo Recifity Defects on CommonProperty

Or Both Above

Landed

Housing Development (Housing Development Account) (Amendment) Regulation 2015 (Effective Date : 2/6/2015) Housing Development ( Control and Licensing ) (Amendment) Regulation 2015 (Effective Date : 1/7/2015)

Apartment Residential

Govern Development of

Act 1966

Condominium Strata Landed Stratified

S6(1) 3% Deposit For Developer license R11 (2) Collection Of Payment Outside A SPA

Housing Development (Control and Licensing ) (Amendement) Act 2012 (Effective Date : 1/6/2015

Highrise

Stratified

Partly Residence/ Partly Commercial

R8 (1A) Advertisement For Housing Developer

HOUSING DEVELOPMENT (CONTROL AND LICENSING)

Schedule G

SOCH/Serviced Apartment

R13 Adopt Amended Schedule H & G C1 6 Financial Facility - 30 Days

C1 10 Interest On Late Payment - 30 Days

C1 12 Separate Strata Title upon VP 30 Days To Apply Loan

Prescribed SPA Under R13

Purchaser / Investor Will Have To Pay Stamp Duty

Get Strata Title Upon VP 30 Days To Pay Progressive Claims

30 I NOVEMBER 2015 www.propertyinsight.com.my

SDA_14_abadi_phase 3A launch campaign_MAG.pdf

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CMY

Sime Darby.indd 1

10/19/15 4:39 PM

FEATURE

TRANSFORMING THE RAIL INDUSTRY IN MALAYSIA WITH PRASARANA “Good public transportation services is not the only catalyst that ensures the success of major cities; the other elements and characteristics that make a major city unique to the world and its own environment are just as important.” BY: DANIEL SIM

32 I NOVEMBER 2015 www.propertyinsight.com.my

ow many of you recall how difficult public transportation was in urban areas such as the Klang Valley? And this would have rung especially true for working professionals in the mid 90’s. Well, all that has changed with Prasarana. Prasarana is a fully owned subsidiary of the Ministry of Finance (MOF) incorporated, functioning like any other organisation in a private entity. Possessing a full mandate to improve and enhance public transportation services for both rail and buses, the company also aims to contribute 40% towards the public transportation model share versus private transportation by the year 2030. With such ambitions, the company has to continually find strategic ways to improve the usage of public transportations. Many assume it to be strongly associated with capital’s Rapid KL bus services, when in fact Prasarana is the umbrella body that encompasses both the Rapid rail and bus lines, as well as holds a new subsidiary known as Prasarana Rail and Infrastructure Projects Sdn Bhd (PRAISE). Although this arm of the company places more emphasis on major public transportation infrastructure (previously managed by the Prasarana’s project development division), PRAISE is more than that. In fact, its scope of duties and functions include initiating collaborations with external parties on new projects, such as the success of the Bus Rapid Transit involving the Sunway Line project under a public private partnership formula. TRANSIT ORIENTED DEVELOPMENT (TOD) “Good public transportation services is not the only catalyst that ensures the success of major cities; the other elements and characteristics that make a major city unique to the world and its own environment are very important, too,” said Azmi. He said that the success of each city in the world relates well to its own uniqueness and to their environment. For example we have the underground tube for London, the system spanned 402 kilometres of track and it serves 270 stations. In fact, he does not think that emulating the success of other cities is a good idea if we simply try to assimilate their characteristics into our own country. Instead, Azmi is keen

on identifying the key factors of success of each city in order to localise it and suit Malaysia’s environment. “Prasarana is not into property development per se — we promote public transportation and anything that will help improve, increase and enhance public transportation in this country,” shared Azmi. He mentioned that the company’s management has been looking into ideas on how to improve or provide more activities in LRT rail stations for a more vibrant environment, either by the end of this year or next year. Today, LRT rail stations are designed and mostly patroned by people ‘on-the-go’, where all one needs is a ticket and to board the train. But Prasarana is exploring the possibility of changing that — it plans to transform some of the LRT rail stations into more than just a stopover for its commuters. Their ideal LRT rail station would be a place where commuters purchase personal items, or even meet friends for a teh tarik session. “We are looking to expand the space of rail stations and that will relate to optimising our land bank. So it is not about generating profit on the property side, rather it is about working on developing property for the public’s benefit,” shared Azmi. Currently, Prasarana is enhancing the development of all new lines such as LRT 3, as the company is planning to go big and early in certain areas identified for Transit Oriented Development (TOD) by replicating the city’s iconic KL Sentral Station. “Although the success of this particular LRT station was just by chance and not a planned TOD, we wanted to put our experience to good use for so the public can benefit from.” With the public eye on the new LRT lines’ construction and high-riding expectations for the convenience that it will bring them in near future, Prasarana is working with various business partners to create and build the TOD effectively and efficiently. “As we move into building TOD, the Government has set certain guidelines on how to recognise such areas, as well as how incentives can be formulated to reward private entities for participating in these

“

Good public transportation services is not the only catalyst that ensures the success of major cities; the other elements and characteristics that make a major city unique to the world and its own environment are very important, too.”

collaborations,” shared Azmi. “With the help of these guidelines, we hope to assist developers in quickly understanding what benefits they can obtain if they participate in TOD programmes, and that includes plot ratio.” he explained. “Prasarana wants to work with private developers who are equally passionate about the Government’s commitment to public transport. It is not just about the Government putting in the money and private developers making money out of it — private developers should also contribute through corporate social responsibility (CSR) efforts and this is the opportunity.” he said. Currently in the pipeline are four TODs that are being planned along the LRT line extension at four fast-developing locations with large and available brown fields – an urban planning term used to describe land previously for industry or commercial use. They include Ara Damansara which is near their depot, Glenmarie which is the www.propertyinsight.com.my NOVEMBER 2015 I 33

FEATURE

road next to the Subang airport, IOI as well as Awam Besar. As a matter of fact, Prasarana did not have to acquire any private properties. CHALLENGES As TOD is a new concept in Malaysia, challenges in and out of Prasarana are not unusual. “The programmes and the developments for public transportation that were under PEMANDU’s charge through the NKRA (National Key Results Areas) 1.0 initiative are meeting target numbers, even though it experienced a quiet season after the first line of monorail and LRT was completed,” said Azmi. The GTP 1.0 addressed the problem of congestion by introducing 35 four-car sets for the Kelana Jaya LRT line in 2011, increasing the daily passenger capacity to 258,156 passengers from 254,745 in 2010. As a result, 10.4 million or 18% more commuters travelled on the line, which has been the most congested for many years, compared to 2010. This translated into a ridership of about 44,170 passengers during peak periods. In terms of the KTM Komuter service, four six-car sets started operations in March 2012, helping to ease the morning rush by increasing the ridership an additional 32,000 persons. 34 I NOVEMBER 2015 www.propertyinsight.com.my

Rail usage presently contributes to about 40% of the daily public transport ridership. “Prasarana, SPAD and PEMANDU are looking at ways to ensure that when they invest in certain transport infrastructures, these projects will continue to advance in future. Because apart from building these infrastructures, developing resources is one of the expertise that the industry shares and is part of our responsibility.” Unfortunately like any other industry, Prasarana is experiencing the lack of talents as previously trained workers with the right skills have ventured into other fields, resulting not only in the Company losing valuable expertise, but also manpower to accomplish projects in the railway industry. “If we do not promote these initiatives at all, neither of it will continue in future if this group of experts – who are Malaysians – are no longer with us to help us expand and improve the country’s infrastructure” highlighted Azmi.

Prasarana needs to be convinced that the proposal will improve the lives of average Malaysians.” Besides TOD, Prasarana is also open to forming joint-venture developments in seven sites that have been identified. One of the many good examples would be the Dang Wangi Station, where an area is being prepped for a 40-storey building above the existing structure of the station. “Right now we are working with a partner on this joint venture, where they are going to provide all the finances for the construction whilst Prasarana provides the site to them,” explained Azmi. At the same time, Prasarana is set to roll out other Bus Rapid Transit (BRT) services and currently, once the details are confirmed by government agencies like SPAD and PEMANDU. This project will be for the upcoming KL-Klang BRT line over the Federal Highway, where it will curb all its congestion points along that highway.

UPCOMING DEVELOPMENTS FROM PRASARANA For interested parties or developers who are wanting to explore opportunities in Prasarana’s TOD projects, Azmi advises to first do their homework, “It is best to know your stuff in order to put up a unique and attractive proposal. We are personally excited to partner up with others but

CONCLUSION “Prasarana would very much like to receive feedback as well as constructive criticism from the public via its online and offline channels. This is to help the Company look beyond its vision while continuously enhancing the public transport experience for all Malaysians.” said Azmi.

R2_SHC_Nov.pdf

10/12/15

11:52 AM

DEVELOPER OF THE MONTH

BUILDING A CLOSE KNIT COMMUNITY AT AGILE MONT KIARA 36 I NOVEMBER 2015 www.propertyinsight.com.my

gile literally means speed and this word augurs well with Agile Property Holdings limited, formerly a furniture manufacturer. The company is now headquartered in Guangzhou International Finance Centre in China, a core business district of Zhujiang New Town. Agile has successfully transformed into an award winning property developer and among the notable awards won by the company in China is the ‘Outstanding Chinese Property Developer Award’ by Economic Digest Magazine, the ‘Best Investor Relations Company (China) and Best Investor Relations Website/Promotion’ by Asian Excellence Recognition Awards, the Forbes Top 2000 Global Enterprises List, China’s ‘Real Estate 20 years of Business Excellence’ by Southern Weekend and mind you, the list goes on. With over 90 projects being developed at various stages in China, it is now venturing outside of its home country to further explore and develop its first signature development in Malaysia through its fully-owned subsidiary, Agile Malaysia Real Estate Development (M) Sdn Bhd. Agile started investing in property development in Zhongshan, China in 1992, it is now dubbed as the leading integrated property developer in China where the company’s business diversified into commercial property investment, hotel development and operations, property management services and its

core business of building integrated residential community development and operations. Agile’s development can been seen in cities and districts across Guangzhou, Zhongshan, Foshan, Heyuan, Huizhou, Shanghai, Nanjing, Changzhou, Yangzhou, Wuxi, Zhenjiang, Hangzhou, Ningbo, Chuzhou, Chengdu, Xi’an, Chongqing, Zhengzhou, Hainan, Yunnan, Shenyang and Tianjin and constructing homes with a concept of ‘from heart, beyond living’ that is a dynamic modern living approach, for hundreds of thousands of families in China. Agile as a company that is committed to the pursuit of a global approach focusing on quality and excellence in all of its products. This starts from master planning and design to ancillary facilities and they take pride in every single detail to ensure that it meets the needs of all its residents. THE OASIS OF MONT KIARA Home buyers and property investors in Malaysia will now be able to experience premium and luxurious living with Agile Mont Kiara, a 70:30 joint venture with PJ Development Holdings Berhad, a listed company on the Main Board of Bursa Malaysia (Malaysian Stock Exchange). This will be Agile’s first signature development outside of China in a sought after premium location dubbed the French colony of Malaysia.

Property Insight met up with Wilson Ren, chief executive officer of Agile Real Estate (M) Sdn Bhd, about their first signature development outside of their home country

www.propertyinsight.com.my NOVEMBER 2015 I 37

DEVELOPER OF THE MONTH AN EXCITING LOCATION Agile Mont Kiara is also located strategically close to Publika, an upscale creative retail mall in the area, offering high-end clothing boutiques, novelty stores and F&B outlets. Besides Publika, residents can also spend their weekends shopping at Hartamas Shopping Centre or 1 Mont Kiara, that boasts a 6,000 square feet piazza at the entrance with its natural light through a special ETFE roofing. Residents can also savour Korean food or visit the popular weekly flea market at Plaza Mont Kiara. The Agile Mont Kiara is also close to renowned international schools such as Mont Kiara International School,

38 I NOVEMBER 2015 www.propertyinsight.com.my

Garden International School, Park City International School as well as a French International School. Home owners will have no problem travelling to different parts of greater Kuala Lumpur because of the easily accessible highways that lead to Agile Mont Kiara such as the Penchala Link, North - South Expressway, Jalan Duta –Sungai Buloh Expressway, the Damansara - Puchong Expressway or the LDP and the SPRINT highway. It takes about 10 minutes to drive to the central business district of Kuala Lumpur and it is close to mature neighbourhoods such as Damansara Heights, Bangsar, and Petaling Jaya.

Spread across 10 acres of prime land, Agile Mont Kiara contains 813 partially furnished condominium units comprising of a total of four 44-storey blocks, two 18-storey blocks and five 8-storey blocks with a total GDV of RM1.4 billion, these units range from a 1,162 sq.ft. to 5,037 sq.ft. “Despite having 11 towers of mix low, medium and high rise towers, it is considered the lowest density in the vicinity,” said Agile Real Estate (M) Sdn Bhd chief executive officer Wilson Ren. Home owners are given a wide variety of options as these partially furnished units that come with either 2+1 bedroom, 3 bedroom, 3+1 bedroom or

“

Malaysia has a good infrastructure and the government has implemented a lot of initiatives and plans for Kuala Lumpur and the greater Kuala Lumpur area. This in itself will attract a lot of interest from foreign investors.”

2 dual key units. The partially furnished elements include air-conditioning, water heaters, kitchen cabinets, built-in wardrobes, video intercom systems and centralised water heating. Security at the development will be state-of-the-art as the development implements a 24 hour surveillance system. The development is said to be completed in September 2018. “We want to build a community not just homes, a safe environment where residents can walk around and get to know their neighbours,” mentioned Ren, which is also one of the many key differentiation points of this development. This is because other premier developments might not be able to provide the right atmosphere in

achieving a ‘caring-community living’ experience.” Surrounding the residential towers and located at the centre of the development is a six-acre environmental deck which is a large recreational space for residents to relax and unwind. There will also be a sky deck as well as five units of retail space. Agile Mont Kiara is dubbed as the oasis of Mont Kiara because the moment you take a step into any of it’s units, you will discover an elegant design that is practical yet aesthetically pleasing. Large glass windows not only provide home owners with a breath taking panoramic view of Mont Kiara and the skyline of Kuala Lumpur, it also allows plenty of natural sunlight and www.propertyinsight.com.my NOVEMBER 2015 I 39

DEVELOPER OF THE MONTH

excellent cross ventilation especially for larger units that have double balconies, establishing that this development was well thought out and planned for a tropical climate country like Malaysia. The developer incorporates quality materials into each unit. To begin with, the doors leading to the main entrance door is made up of approved fire-rated timber panels, while quality timber doors will be used for the bedroom, bathroom, and study. Aluminium framed sliding glass doors will be installed for the balcony and it’s terrace areas. The ceilings of these units are going to be plaster boards with emulsion paint while bathrooms, balcony/s, terrace areas and the yard will be floor tiled. PROPERTY MARKET SENTIMENT Responding to the question on the weakening of the local currency, Ren has this to say, “It is now even more attractive for investors to own properties in Malaysia as it is cheaper and it is a known fact that owning healthy assets is a good hedge against inflation.” Ren opines that perhaps the most pressing issue surrounding the current 40 I NOVEMBER 2015 www.propertyinsight.com.my

local property market is affordability, especially for the larger units but he doesn’t agree that Mont Kiara is experiencing a market oversupply. As a matter of fact, Ren believes that there will be perpetual demand for this type of development more so because it is in a good location. Malaysia was the first country the company chose to expand abroad as it boasted a steady demand for residential properties and a stable and growing economy. “Malaysia has a good infrastructure and the government has implemented a lot of initiatives and plans for Kuala Lumpur and the greater Kuala Lumpur area. This in itself will attract a lot of interest from foreign investors. The take up rate when Agile Mont Kiara was launched was good even though Malaysians are being very careful and selective about their purchases now,” shared Ren. FUTURE PLANS Although Agile invests in developments within Kuala Lumpur, it is also on the lookout for big parcels of land in greater Kuala Lumpur to develop townships.

Agile joint ventured with Tropicana Corporation Berhad to develop a 3.7acre land parcel at the heart of the golden triangle, with a GDV of RM2.5 billion, this will be an integrated development incorporating three towers of high-end serviced residences located in Bukit Bintang, Kuala Lumpur that Agile hopes to launch by September of next year. Visit their official website at w w w.a g i l e m a l a y s i a . c o m . m y or call +603-2630 8880 to find out more about one of these elegant and luxurious units.

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MURFREE

@ ALAM DAMAI The Hidden Gem in Cheras BY: FARA AISYAH FIRDAUS PETIAL

Amongst the pristine greenery by the city, nestles a gem many yearn to own

ithin the hustle and bustle of Cheras, there is a gem waiting to be explored! GuocoLand Malaysia, a leading property developer in the property industry is now setting foot in Alam Damai, Cheras. The gem, that is in the form of a township called Murfree, is inspired from historical stories of Murfreesboro, a city that has been the talk of many because of the mysteries and wonders about diamonds that surround it. According to General Manager, Marketing & Sales of GuocoLand, Kenny Wong, “We believe that our Murfree township is a hidden gem within Cheras that will create value for the district as we aspire it to be the best place to live in,” he added. Murfree stands out from other developments especially in terms of its location where it is at the highest peak of the dense Cheras neighbourhood and is adjoined by 104 acres of forest reserve. The township and its homes will adopt the latest in technology with features that will not compromise its surroundings. In essence, Murfree is Nature and Technology side by side, the best of both worlds. Murfree homes are designed to be lifestyle oriented with a focus on high degree of environmental features taken into 42 | NOVEMBER 2015 www.propertyinsight.com.my

consideration. It will be self-sustainable (in the context of its location within the Cheras vicinity), flexible in terms of expansion and changes, timeless in design with features that are in tune with the needs of today’s buyers, positioning Murfree as a shining example of how a well-planned township should be. ABOUT MURFREE Murfree is one of GuocoLand’s newest and most exciting projects within the Klang Valley. Located just 18km from the KL City Centre, it is accessible to various major highways and public transportation amenities. Residents are in for a treat as this gem of a township, neighbours a 104 acre green forest reserve. Murfree alone is a 47-acre luxury development comprising 236 units (when fully completed) of three and threeand-a-half storey homes with a central wetlands park perched at one of the highest points in KL Peak (Alam Damai), Cheras. 220 units of which will be semidetached homes while the remaining 16 units will be bungalows. According to Kenny, this freehold development boasts luxurious city dwelling by the lakeside, and will be a secure and

guarded neighbourhood with multi-tiered and smart security systems, perimeter fencing, multiple CCTVs and guardhouses with round-the-clock security monitoring. In addition, Murfree’s dual-key concept, which provides for multi-generational living under one roof, will appeal to today’s modern lifestyle. Why Alam Damai, you might ask. “Well, given the concept of Murfree, its location makes it attractive where one can get from place to place almost anywhere in no time since it is only an 18km (via the SMART tunnel) drive to the KL City Centre, 24km drive to Petaling Jaya, and 33km drive to KLIA.” “Murfree has easy access to major expressways such as the KESAS Highway, Kuala Lumpur - Seremban Highway, BESRAYA highway, Cheras-Kajang highway and also the East-West Link or Middle Ring Road 2, which makes it a strategic location as well”, says Kenny. The project is close to various amenities such as the Cheras Pantai Medical Centre, the Columbia Asia Hospital, the Taman Connaught MRT Station, Sri Petaling LRT Station, SMK Alam Damai, Sri Cempaka International School, Aeon Cheras Selatan, Leisure Mall and the Alam Damai

3 storey semi-D designed for multi-generational living

of Murfree, Kenny described it as “Starting from RM2.3mil per home, we believe that this project will provide all-round investment values given that Murfree is a freehold landed property in a strategic location; and majority of other similar properties around that area are leasehold. There is definitely a potential for capital appreciation as Cheras is still a gem in terms of development value given the upcoming MRT infrastructures in the area, coupled with several upcoming malls and commercial centres. Located strategically close to several educational institutes, as well as transportation hubs, this project is expected to have good capital appreciation over time.” The living environment and lifestyle provided by Murfree is invaluable. Buyers can look forward to a modern lifestyle within a lush green and water featured setting, as well as various technological driven features that will make things increasingly comfortable and convenient without compromising the environment.

Murfree surrounds a 3-acre wetlands park

Recreational Park. In addition to that, the freehold land will also be attractive to home owners as most of the developments near Murfree are on leasehold basis. “The site is also perched on top of one of KL’s highest points, providing cool, highland air and natural surroundings courtesy of the neighbouring forest reserve; all these will deliver tranquil living in the midst of the city” added Kenny. HOME BUYERS & INVESTORS Imagine being at an elevated hilltop land area that is tranquil and serene, adjoined by a forest reserve with exceptional views that invokes a Zen-like atmosphere for its residents. Imagine yourself taking long walks in the early mornings or late evenings. “The nature and rainforest inspired environment and the wetlands park, together with a host of other amenities like sporting facilities (e.g. mini basketball court), workout stations, linear parks and a proposed nature themed community clubhouse will make Murfree an escape

from city life similar to a hidden utopia.” Says Kenny, beaming with pride. Murfree offers a dual-key concept for some of its homes – i.e. the house will comprise of two sub-sections, which share a common main entrance or foyer. “The intention is to accommodate the needs of multi-generational households,” explained Kenny. This is achieved through allowing three generations (or extended families) to live together under one roof while offering privacy and peace of mind with smart security features for all. The concept is extremely versatile and caters to various needs. Other allowances include: • A family could live here and rent out the sub/smaller section, or it could be for adult children who want their privacy and independence. Or if the children leave, the husband and wife can move into the sub/smaller section, and rent out the main section. • Investment with increased rental yield (rent out entire home or only sub section). When asked about the investment values

To experience more about Murfree @ Alam Damai, call 1300-1300-33 or visit www.murfree.my

Location: Situated on the hill slopes of Alam Damai, Cheras. (Exact: Project is located in front of Jalan 3/154d) Property type: 3-storey semi-detached homes and 3 storey bungalows Land title: Individual Lot Tenure: Freehold Total units/lots: 236 units (when fully completed) Total GDV: RM630 million Estimated date of completion: July 2018 Public Amenities: 1. Cheras Pantai Medical Centre 2. Columbia Asia Hospital Cheras 3. Taman Connaught Station (Approved MRT Blue Line) 4. Proposed BRT Corridors (Along Alam Damai) 5. LRT Station Sri Petaling Educational Institutions: 1. UCSI University 2. Sri Cempaka International School 3. SMK Alam Damai 4. SK Alam Damai 5. SK Desa Baiduri Retail, Entertainment & Leisure: 1. Jusco, Aeon Cheras Selatan 2. Cheras Sentral 3. Leisure Mall 4. Tesco Extra 5. Giant Taman Connaught 6. Alam Damai Recreation Park

www.propertyinsight.com.my NOVEMBER I 43

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kyWorld, “The designer of urban sky living” has designed a sky living experience for those looking for a bit of peace and tranquillity in the heart of Setapak. Spanning 28 acres of prime inner city real estate, SkyArena promotes a truly Utopian lifestyle where five unique components - Residences, SoHo, Retail, Hotel and a Sports Complex – seamlessly integrated to create an exciting, safe, and multifaceted community. The entire development revolves around an ambitious Sports Complex that aims to make wellness an everyday affair. The residential plan for the development consists of three phases, the first one is the Ascenda Residences while the second and most recent project is Bennington Residences.

Bennington Residences @ SkyArena

SKYARENA’S CLIMATE The project is a first-of-its-kind with a 9.4acre multi-facility sports complex dedicated to the pursuit of wellness. SkyArena has five inter-connected communities that support a work-life balance. The unifying catalyst between the various components make SkyArena the city’s largest, multi-level and multi-functional Sports Complex. Four floors of this 10-storey building will be dedicated solely to physical wellbeing, the Complex boasts an Olympic-sized swimming pool, a diving board and pool, a fitness and dance center, badminton courts, squash courts, a tennis court, indoor rock climbing, an indoor futsal court, a football field, a basketball court, track & field facilities, along with complementary facilities such as a sports medical center, child care center, a pro shop and cafés. The Sports Complex puts wellness within reach of every resident, occupant, guest or businessperson. SkyWorld has designed the project with a truly innovative and contemporary community in mind. The marrying of urban lifestyle niceties with features that celebrate the home buyer’s inner and

BENNINGTON RESIDENCES @ SKYARENA Wellness and wealth by choice BY: FARA AISYAH FIRDAUS PETIAL

46 |

NOVEMBER 2015 www.propertyinsight.com.my

Active Living goes beyond that. It means going out and enjoying the world; it means you are one of those people who are active, knowing when to have fun and when to celebrate life!” Sky Hub

outer wellbeing. The developer has gone to great lengths in utilising space by turning rooftops into green areas that encourage social interactions, while creating multifunctional areas where people have access to numerous activities within reach. In fact, every facet of its design has been conceived to shape a positive human experience, reducing stress while at the same time providing numerous facilities for health and athletic purposes. Here at SkyArena, “Active Living goes beyond going out and enjoying the world; it means you have a sense of knowing when to have fun and when to celebrate life! Being active doesn’t mean you have to traverse a rock face or run a marathon. Being active embodies a whole host of activities that can be as simple as walking each day or riding a bike with friends and family, and this is the value SkyWorld offers. BENNINGTON RESIDENCES Bennington Residences @ SkyArena presents two residential towers blocks with 580 luxuriously appointed homes ranging from 1,092 to 1,700 per sq. ft. that is set upon 2.69 acres of prime, leasehold land with a residential title. The project offers five different interior layouts to suit various needs with generous-sized living spaces that are specifically designed to maximize views while bringing in natural light. Every home at Bennington features a generous lanai space that allows the living area to look out at spectacular views of landscaped greenery within the SkyArena development. Bennington’s dual key concept for selected units allow owners to rent out two units for double the rental yield or, alternatively, provide privacy in a multi-

generation family environment. The project is located along Jalan Ayer Jerneh, surrounded by established townships such as Wangsa Maju, Taman Danau Kota and Taman Sri Rampai. It is easily accessible from the DUKE highway and Jalan Genting Klang, making it perfectly poised to take advantage of Setapak’s current investment appeal, while being only 7km away from Mont Kiara and KL’s Golden Triangle. As claimed by SkyWorld, “For the convenience of our residents, there are future plans to widen the existing road along Jalan Ayer Jerneh to about a 100ft in width as well as direct access (proposed) from Jalan Genting Klang into Jalan Ayer Jerneh.” Bennington Residences is also built to a few established malls, namely Setapak Sentral Mall, Wangsa Walk Mall, AEON Big, Suria KLCC and Great Eastern Mall. Other than retail, it is also a few minutes away from educational institutions such a Fairview International School, Sri Utama International School and Universiti Tun Abdul Razak (UNITAR). According to market research, Setapak was voted best investment hotspot in KL with an average rental yield of 5% - 6% per annum. From an investment stand point, Bennington Residences @ SkyArena is located in the only integrated development in Setapak that consists of residential, commercial and a multi-storey sports complex. It really doesn’t get much better than this. For more details on Bennington Residences @ SkyArena, call 03-40312999 or visit www.skyarena.com.my

Developer: Bennington Development Sdn Bhd (a wholly owned subsidiary of SkyWorld Group) Development: Bennington Residences @ SkyArena PROJECT DEVELOPMENT DETAILS Location: SkyArena, Jalan Ayer Jerneh Property type: Condominium Concept: 5 Interconnected communities - Sports - SoHo - Retail - Hotel - Residences Land title: Residential Tenure: Leasehold 99 years Total units/lots: 580 units (2 Towers) Tower A: 296 units Tower B: 284 units Total GDV: RM437 mil Estimated date of completion: 2019 Hospitals: 1. Tawakal Hospital – 4km 2. General Hospital – 4km 3. Ampang Puteri Specialist Hospital – 7km Educational Institutions: 1. SK Marian Convent – 500m 2. SMK Ayer Panas – 900m 3. Sri Utama Internation School – 2km 4. UNITAR – 4km 5. Fairview International School – 7km Retail, Entertainment & Leisure: 1. Setapak Sentral Mall – 2km 2. Wangsa Walk Mall – 5km 3. AEON Big – 5km 4. Giant – 6km 5. Surian KLCC – 7km 6. Great Eastern Mall – 9km Connectivity: 1. Wangsa Maju LRT Station – 3km 2. Dato Keramat LRT Station – 4km 3. Sri Rampai LRT Station – 5km 4. Setiawangsa LRT Station – 5km 5. Jelatek LRT Station – 5km 6. Ampang Park LRT Station -6km 7. KLCC LRT Station – 7km ENQUIRIES Address: SkyWorld Property Gallery, Lot 17899 SkyArena, Jalan Ayer Jerneh, Setapak. 53200 KL. Telephone: 03- 4031 2999 Fax: 03- 4031 1299 Email: enquiries@skyworld.my Website: www.skyarena.com.my

www.propertyinsight.com.my NOVEMBER 2015 I 47

FEATURED PROPERTY

Actual photo: Type Elymus 1

ELYMUS @ RESORT HOMES Space and feel of a bungalow BY: DANIEL SIM

hese days, it is not easy to find developments with a modern concept and all its conveniences weaved into a spacious living area. One of the many developments that give you this is the Resort Homes, a premier precinct and an icon within Bandar Sri Sendayan. Located in Seremban which is the booming state capital of Negeri Sembilan, Resort Homes will be developed by Matrix Concepts Holdings Berhad, an established developer listed in FORBES Asia’s 200 “Best under a Billion” companies. If it is space you desire, then staying at any one of these 64 unit, 2-storey Semi D’s type Elymus homes, is a dream come true. Home owners are able to choose freehold units ranging from 4,415 sq.ft. to 48 |

NOVEMBER 2015 www.propertyinsight.com.my

5,383 sq.ft. with lot sizes of 50’ x 100’ and 70’ x 100’. Elymus boasts of linear parks, a BBQ plaza, pocket gardens, lake and water spouts and is expected to be fully completed by May 2017. Minimalist lovers will find Elymus the perfect home architecturally as it was designed with them in mind. According to the unit size range, there are 4+2 bedrooms and 6+1 bathroom units available, excluding bathrooms, with solid Merbau timber used for the staircase and the 1st floor in each of the units, an element incorporated by the developer to emphasise sophistication. The developers have added built-in thermal reflective insulation features, the

usage of clay bricks, and high thermal materials for its walls to help regulate internal temperatures for each of the units. Homeowners who return home after a long day of work will be able to soak comfortably in a massage bathtub provided in the master bedroom’s bathroom, a perfect time to de-stress within the comforts of their home. Home owners no longer have to worry about termite infestations, or bug problems; the developers have ensured that each unit undergoes anti-termite soil treatment. Security is another element reflecting Elymus as a premium place to stay, home owners can be assured that their units are being monitored using CCTV through a high definition video intercom that is

Actual photo: Wide-open layout for more creative furnishing arrangement

connected to the guard house every hour of every day. This two tier security system will also have CCTVs installed at the perimeter fencing surrounding Elymus. Another interesting feature is the rain water harvesting tank, an eco-friendly element that will help conserve water. These units will be equipped with a solar water heater system, and home owners never have to worry about low water pressure as it is fitted with a pressure booster pump. There will be timber decking flooring at the foyer, while tiles will be used as the floor finishing for the car porch, the bedrooms

at ground floor level, bathrooms, kitchen, yard, drying area and foyer area at ground floor level. FACILITIES AND AMENITIES Home buyers who eventually become residents of this development will be able to enjoy various facilities at d’Tempat Country Club not just for leisure purposes but also to enjoy a healthy living. Some of the facilities include an Olympic sized swimming pool, a paddle pool for kids that includes a play station, however if your children prefer to stay indoors, they can utilise a fully equipped play room.

For those who prefer to workout, they can drop by the gym or try out the aqua gym, perhaps even relax by the sauna and steam bath after work. Residents can also have some fun at the 10-lane bowling alley or just hang out at the bar lounge and SPA. You can hold events at the clubhouse and should you have important guests, there will be a banquet hall with a VIP holding room. Home owners who are moving in with their children do not have to worry about where to send their children to school because there are private national and international schools such as the Matrix Global Schools, within the township of Bandar Sri Sendayan. These schools are equipped with facilities such as kayaking, rugby and football, with a multipurpose hall, a performing arts centre, auditoriums, lecture theatres, a sports complex, wall climbing facilities, and a recording studio that will help students develop intellectually, physically and psychologically. Home owners would also be interested to know that it takes about 15 minutes to reach Elymus @ Resort Homes from the PLUS highway exit, while upcoming accessibility to Elymus includes the proposed KLIA interlink. Imagine the time you can save getting from place to place. The intermediate unit start from RM1,338,888 onwards, a bargain, when one considers the space and given its exclusive location. But wait, it doesn’t end there. The developer is offering its home owners exclusive memberships to d’Tempat Country Club, the premier country club within the greater Kuala Lumpur area. Find out more about owning a home in Elymus by calling 1-800-88-2688

PROJECT DEVELOPMENT DETAILS Property type: 2-storey Semi Detached Units: 64 Acres of development: 18.16 acre Tenure: Freehold Lot size/land size: 50’ x 100’ / 70’ x 100’ Gross development value (gdv): 90 million Completion date: May 2017 Developer name: BSS Development Sdn Bhd (a member of Matrix Concepts Holdings Berhad) Website: www.1sendayan.com Phone no: 1800-88-2688

Actual photo: Spaciously fashioned floor to ceiling windows for optimal light www.propertyinsight.com.my NOVEMBER 2015 I 49

AREA FOCUS

SEMENYIH,

THE GREEN HEARTLAND A small town no more BY: DANIEL SIM

50 | NOVEMBER 2015 www.propertyinsight.com.my

emenyih is located at the southeastern edge of Klang Valley and falls within the jurisdiction of the Kajang Municipal council of the Hulu Langat district. This is an upcoming township that will be the next hot spot for property development growth in the southern corridor of Klang Valley. According the Kajang municipal council, Semenyih is 23,616 per square kilometres in size, the council’s data also show that Semenyih has a healthy population of 92,491 people. Currently Semenyih is known as a hotspot for eco-tourism as is surrounded by numerous scenic waterfalls such as the Sungai Gabai Waterfalls, the Semenyih

Water Reservoir, the Congkak River Forest Recreational Centre and Broga Hills. Semenyih has seen rapid growth in terms of the developments of new amenities in the last 10 years and these days one might be able to find the Tesco Hypermarket, The Store Supermarket, Econsave Supermarket and fast food outlets such as Pizza Hut/ Kentucky Fried Chicken & McDonalds , all within the township. Residential, commercial and industrial elements are what form the Semenyih township, which consists mostly of landed properties, but more high rise developments can be seen in newly completed and on-going projects. “The newly opened LEKAS Highway has very much benefitted the township. Then there is the SILK Highway and the Pintasan Kajang-Semenyih Bypass which connects the township to all major roads heading towards Kajang, Cheras, Seri Kembangan, Bangi, and Putrajaya,” said Oregeon Property Consultancy Director Sr. Kok Chin Yee. Currently there are no train stations located within the township, the nearest train service available will be the KTM train station located in Kajang, however, there is a plan to allocate several MRT stations in Kajang in the near future and residents from Semenyih will have access to train services travelling to any part of Klang Valley. Semenyih is no doubt emerging as a key area with plenty of potential for

development. This is due to relatively reasonable land prices compared to Kuala Lumpur City Centre, giving developers an option to plan, manipulate or even inject new ideas into their development strategies as there is an adequate supply of land. Kok is of the opinion that at the moment, connectivity and affordability are key factors to the success of this township especially with the presence of big property developers such as EcoWorld and SP Setia, who in turn, will influence other parties to invest in Semenyih. REI Group of Companies chief executive officer Dr. Daniele Gambero did a comparison between Semenyih to what Puchong was 10 years ago. He said that Puchong properties boomed in a substantial way and has continued growing after 2007. In less than 10 years, the property prices in Puchong have been seen to progressively increase, from the original RM180 per square feet, to the current RM650 per square feet. The same phenomenon is happening again in Semenyih. Gambero is of the view that the main drive leading to such phenomenon is the supply of land availability where developers can obtain land for their development at much lower cost. Demand wise there are plenty of choices but Gambero recommends buyers or investors to look into the issue of product scarcity. For example there are two products that are not so common in Semenyih

Artist impression www.propertyinsight.com.my NOVEMBER 2015 I 51

AREA FOCUS

Artist impression

South, they are the condominium and landed properties that have ‘liveable’ space with a built-up of less than 2,000 sq.ft. Investors or buyers should choose these products because there will be lesser competition when they want to sell or rent upon delivery, one good example would be the Albury project by UM Land. Semenyih is poised to follow the same “up-grading” process that Puchong went through except that it might be happening at a faster pace,” expressed Gambero. Gambero says that when you buy from developers you have to be able to ‘visualise’ what the area/accessibility/ public transportation/infrastructure will be in the next few years. The strategic location of Semenyih at the eastern side of the Southern Corridor of Klang Valley, is easily accessible from North and West through a completed network of highways. “LEKAS and SILK allow residents to commute within the 45 minutes’ tag. The terminal station of MRT Line 1 is also reachable within a short distance and will allow easy movement for its residents throughout Klang Valley and KL,” mentioned Gambero. “Developers and authorities are in close cooperation to even increase the accessibility to the main roads and 52 | NOVEMBER 2015 www.propertyinsight.com.my

Artist impression

highways and soon we will see a new link road from Jalan Semenyih to LEKAS which will shorten the daily trip to KL from Semenyih South benefitting UMLand with Albury@Mahkota Hills, Eco World with Eco Majestic and SP Setia with it’s Eco Hill 2 township.” enthuses Gambero. ALBURY MAHKOTA HILLS Semenyih and the whole Southern Corridor has been quite a hot spot since 2014 when launches of new townships started flocking the market. Semenyih has been on the radar of almost all top Malaysian developers mostly because of the “affordable” value

of land which has been a big factor in the designing and delivering of affordable homes. When UMLand decided to confirm the purchase of a roughly 300 acre of freehold land in the existing Mahkota Hills township, they knew who would most likely be their purchasers. “Everything has been thoroughly and carefully considered starting from the inception of the project to the finishing and even the costing in order to ensure the delivery of a good product that is affordable for the middle class as well as investors,” said director of Kia Ace Development, Mr. Benjamin Lee. Kia Ace Development is a

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AREA FOCUS RRECENT TRANSACTED PRICE OF COMMERCIAL PROPERTIES

RECENT TRANSACTED PRICE OF LANDED RESIDENTIAL PROPERTIES TYPE

STOREY

SCHEME

Taman Hiew Thai

Taman Paling Jaya

Taman Semenyih Impian

Taman Semenyih Jaya Taman Semenyih Permata Taman Sri Tanjung

Bandar Sunway Semenyih Terraced

Semenyih Impiana

LAND AREA 1,650 sf

1,400 sf

1,195 sf

1,500 sf

1,076 sf 1,400 sf

1,300 sf

1,400 sf

House Taman Bkt Semenyih

Taman Dalma Taman Desa Kenanga 2 2

Taman Desa Mewah

1,300 sf

800 sf

1,400 sf 1,400 sf

Taman Harmoni (Semenyih)

1,400 sf

Taman Pelangi Semenyih 2

1,400 sf

Taman Semenyih Heights Taman Semenyih Mewah Taman Sri Haneco

1,300 sf

1,540 sf

990 sf

YEAR

MIN (RM)

TYPE MAX (RM)

2011

125,000

157,000

2012

110,000

200,000

2013

110,000

170,000

2014

170,000

295,000

2010

60,000

128,000

2011

105,000

175,000

2012

150,000

160,000

2013

170,000

208,000

2010

110,000

150,000

2011

110,000

160,000

2012

118,000

140,000

2013

135,000

235,000

2014

125,000

220,000

2010

80,000

156,000

2011

80,000

155,000

2012

85,000

170,000

2013

100,000

217,000

2014

80,000

240,000

2012

148,000

220,000

2013

185,000

250,000

2014

230,000

2012

150,000

185,000

2013

100,000

240,000

2014

108,000

260,000

2010

206,000

250,000

2011

265,000

320,000

2012

300,000

460,000

2013

290,000

590,000

2014

300,000

490,000

2015

539,000

2013

375,000

410,000

2014

490,000

570,000

2010

150,000

230,000

2011

180,000

220,000

2012

198,000

280,000

2013

175,000

496,013

2014

250,000

428,000

2011

75,000

80,000

2013

25,000

90,000

2014

100,000

170,000

2012

208,700

360,800

2013

283,000

699,000

2014

450,000

2012

200,000

495,000

2013

220,000

510,000

2014

430,000

500,000

2013

145,000

528,800

2014

210,000

765,000

2015

350,000

460,000

2014

390,000

480,000

2015

470,000

510,000

2010

167,000

310,000

2011

163,000

310,000

2012

220,000

2013

218,000

435,000

2014

345,000

638,000

2012

350,000

440,000

2013

290,000

650,000

2014

340,000

530,000

2012

120,000

255,000

2013

110,000

260,000

2014

125,000

265,000

Source: Oregeon Property Consultancy

54 | NOVEMBER 2015 www.propertyinsight.com.my

STOREY

SCHEME

LAND AREA

Bandar Sunway Semenyih

1,400 sf

Taman Pelangi Semenyih

1,650 sf

2 Taman 1,540 Pelangi sf Semenyih 2

ShopOffice

Taman Tasik 1,540 Semenyih sf

Kawasan Perniagaan Kiara (Semenyih)

1,800 sf

Pekan Semenyih

2,400 sf

Taman Semenyih Sentral

1,650 sf

YEAR

MIN (RM)

MAX (RM)

2010 2011 2012 2015 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015

301,888 650,000 633,888 560,000 550,000 590,000 750,000 785,000 950,000 1,000,000 638,000 638,000 619,200 945,000 867,000 895,000 180,000 175,000 200,000 160,000 290,000 430,000

409,888 650,000 633,888 700,000 800,000 980,000 930,000 1,300,000 1,450,000 1,220,000 968,492 1,178,388 693,504 945,000 998,000 1,026,000 330,000 200,000 300,000 385,000 305,000 430,000

2012

2,528,000

2014

1,700,000

2,888,000

2010 2011 2012 2013 2014 2010 2012 2013 2014 2015

740,000 850,000 1,100,000 880,000 1,300,000 500,000 800,000 1,000,000 1,223,000 1,000,000

775,000 900,000 1,480,000 1,350,000 1,400,000 838,000 1,225,000 1,000,000 1,450,000 1,000,000

Source: Oregeon Property Consultancy

RECENT TRANSACTED PRICE OF HIGH-RISE RESIDENTIAL PROPERTIES TYPE Apartment

SCHEME Anggerik Villa

BUILT-UP AREA 700 - 1,488 sf

Source: Oregeon Property Consultancy

LANDED SEMENYIH

NONLANDED SEMENYIH

Source: Bricks

YEAR

AVERAGE (RM PSF)

2013

135

2014

173

2015

175

Fascinating mountain view at Setia EcoHill

Overviewing Setia EcoHill from the peak of Setia EcoHill Park

subsidiary of United Malayan Land Berhad. “I’m not looking at six or twelve months but a much longer time frame of two to four years. We can expect a doubling of property values within the next five to six years,” said Gambero who is also the exclusive marketing partner of UMLand. He adds that once the population growth reaches

‘critical mass’, authorities will definitely look into having a proper extension of existing infrastructures via either rail or bus lines. SETIA ECO HILL Setia EcoHill is a 673 acre township development which has incorporated the

SP Setia philosophy of ‘Live, Learn, Work and Play’. This will further expand by 1,010 acres of sprawling greenery when it introduces its sister project, Setia EcoHill 2. The original initiative of Setia EcoHill is to become a self-sustainable township which is identical to SP Setia’s flagship project in Setia Alam. “The response from our recent launches have been very good with a 90% take up rate. To begin with, Semenyih is doing well in terms of development and we should know because we have been here for past two years now. There is still a demand for affordable housing especially for landed properties below RM 1 million even though the property market has somewhat softened due to property cooling measures implemented since 2009,” shared SP Setia sales and marketing manager Chris Choy. Residents can find almost all their requirements met within Setia EcoHill because of its good infrastructure and

RECENTLY LAUNCHED DEVELOPMENT PROJECT

DEVELOPER

TYPE

Tiara East

Kueen Lai Properties Sdn Bhd

11-storey of ‘Rumah Selangorku’ (90 units)

Country Garden Diamond City

Mayland

Spanish Villa Township consist of 3-storey link houses, 3-storey bungalows and 3-storey mansion

Univillage

Proficient Housing Development Sdn Bhd

4 blocks of apartments (482 units)

L’Marq

TYL Land & Development Sdn Bhd

1 block of 26-storey SOHO (248 units) and 1 block of 15-storey SOHO (224 units)

Semenyih Parklands

Amalan Setar (M) Sdn Bhd

417 units of 2-storey terraced house

Ascotte Boulevard

Top Home Builder Development Sdn Bhd

2 blocks of serviced apartment (720 units)

Setia Ecohill

SP Setia Bhd Group

191 units of double storey terrace house and 286 units of superlink homes

Tiara South

Kueen Lai Properties Sdn Bhd

106 units of low cost apartment, 106 units of medium low cost apartment, 54 units of medium cost apartment and 271 units of 3-storey terraced house

Kiara Plaza @ Semenyih

Astana Baru Sdn Bhd

5 blocks of stratified commercial building consist of 3-storey shop-office, 15-storey hotel, 30-storey SoHo / Serviced Apartment and 4-storey restaurant

Kaseh Heights @ Semenyih

HYK Land & Development Sdn Bhd

79 units of 3-storey terraced house

Albury at Mahkota Hills

Kia Ace Development Sdn Bhd

331 units of single storey terrace house

Gallery Homes @ Bandar Gallery Development Sdn Bhd Tasik Kesuma Source: Oregeon Property Consultancy

760 units of townhouse (Villa Kesuma), 2-storey semi-D and bungalow (Ferona & Azara), 28 units of 2-storey semi-D (Aronia)

www.propertyinsight.com.my NOVEMBER 2015 I 55

AREA FOCUS

Horizon Residence, the exclusive superlink homes precinct in Setia EcoHill

township planning, coupled with its green and fascinating landscape. More than 10 percent of the total site area, has been designated as park lands and green lungs. Setia EcoHill will feature 13 extraordinary themed gardens within its development. Some of it will be made available to public while most of them are Private Parks solely for residents, such as the breath taking ‘Rainbow Creek’ and ‘Oriental Garden’. In terms of education, the Tenby International School and Community Club House which are both in the pipeline will be ready to serve the community by the end of 2016 and the end of 2017 respectively. Choy advises home buyers who are planning to purchase a home to first look at the developer’s portfolio on whether the developer has significant township projects that could be used as references, secondly you should look at the masterplan on what are the potential infrastructures that can boost your property price. You would also need to study the value added features of a township, because a well landscaped township with good security usually ensures a lucrative return on your investments.

AGENTS SPEAK Semenyih is an upcoming town with a nice environment and the property price is relatively cheaper compared to other parts of Klang Valley, as many more townships are coming up, there is enough supply of properties for buyers which will in turn provide job opportunities. One

CK YAP Chester Properties Real Estate Negotiator

56 | NOVEMBER 2015 www.propertyinsight.com.my

of Semenyih’s amenities include the largest Mydin shopping mall which is a popular shopping spot for many. Among the popular developments of Semenyih there is Eco Hill and Eco World, and Diamond city which will be developed by a developer from China.

I believe that Semenyih is a vastly growing metropolitan and has become the next “Puchong”. Semenyih is an easily accessible area that can be reached easily via Cheras Kajang Highway, LEKAS Highway, SILK Highway and more. The government has also announced it will be one of the many tourist attractions due to its tourist spots such as Broga Hill and Broga Sak Dato Temple that have cultivated interest not only in

CY SIK

Venture Properties Real Estate Negotiator

foreigners but also with the locals. It also has the makings of a metropolitan city with a good infrastructure including the prestigious Nottingham University. The pricing of the property is ideal as well as it does not leave a dent in your wallet compared to other properties in the Kuala Lumpur area. It will be an ideal ground for investors as the market is coming up nicely and the pricing is reasonable.

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PERSONALITY OF THE MONTH

INSPIRATION MATTERS

Zerin Propertiesâ&#x20AC;&#x2122;s CEO Previndran Singhe tells Property Insight what it takes to succeed in the real estate industry

BY: DANIEL SIM

60 | NOVEMBER 2015 www.propertyinsight.com.my

esides passion, inspiration matters because it motivates you to succeed in life. Some are inspired to be just like their idols, who could be legends in the industry. But unlike the rest in the industry, Previndran Singhe was inspired by family and this drove him to establish a boutique real estate firm aptly named Zerin Properties. “Zerin means gold in Sanskrit and this is also the name of my daughter” Previndran smiles and shares. Presently there are 22 negotiators based in our head office in Damansara Heights, Kuala Lumpur, 10 more negotiators in Shah Alam and another 10 negotiators in Penang and I might start a new branch in Medini, Johor in the near future.” Although he was born in Kuantan, Pahang, Previndran spent his childhood in Kota Kinabalu, the state capital of the ‘land below the wind’ Sabah. He speaks of some memorable times in his life, especially what he regards as the highlight of his career when he closed the deal for the Four Seasons Hotels and Resort in Langkawi to prince Al-Waleed Bin Talal bin Abdulaziz al Saud, a Saudi business magnate and investor. Prince Al-Waleed is a member of the Saudi royal family with a personal net worth of USD $24.5 Billion, the 34th richest person in the world (Forbes, 2014). The deal was transacted at USD$110million. “Singaporeans are seen as the biggest property investors in Malaysia, however that is just an impression. Investors from the Middle East have the largest property assets in this country,” Previndran pointed out. “I have always admired the beauty of architecture, but I don’t have a flair for art, to me the architecture of buildings seem beautiful and artistic, and I fall in love with

“

Singaporeans are seen as the biggest property investors in Malaysia, however that is just an impression. Investors from the Middle East have the largest property assets in this country”

the aesthetics” said Previndran, who opted to pursue a degree in Bachelor of Surveying in Property Management (Hons), Universiti Teknologi Malaysia He was winner of the dean’s list and received awards as top and exemplary student of the university. “I was very fortunate to have started working for Jones Lang Wotton, an international property consultancy firm while I was studying and I spent all my holidays working at this firm,” shared Previndran. He later went on to doing property research for the firm, where he prepared market research for three to four years after which he learned the ropes in the valuation business or another three years which gave him insight into valuating office buildings such as hotels and malls at a very early age before moving on to Burgess Rawson to do residential real estate which he thinks is his true calling. He was headhunted a few times to join several property firms before he was offered a position to start up a hotel management

company called Signforce sdn bhd, where he was the chief marketing officer managing about seven hotels, and this is when his love for the hotel industry grew. He worked 14 to 16 hour days and travelled frequently. “I resigned as chief marketing officer of the company in 2002 after I travelled to Seoul and came back to Malaysia and realised that my son couldn’t recognise me. I started this firm because I wanted to have quality time with my family. If you are happy at home, you will be happy at work. This is what I believe.” shared Previndran. Previndran explained that the benefits and the perks of working for big companies were fantastic, but personally it is nothing like starting your own business. “The late architect Geoffrey Bawa’s architecture inspired me to want to know more about buildings and architecture, personally, I feel that he is a master of not just architecture but also landscape. I have been fortunate enough to stay in a lot of his hotels,” said Previndran, adding that his favourite is the Light House in Goa, Sri Lanka. Size is not an issue for Zerin Properties. Previndran said that he wants to train and mentor Malaysians in the field, therefore he insists on the proper training and the necessary education and qualifications for all his negotiators. Previndran walks the talk. He is also a certified chartered surveyor with RICS in the United Kingdom and a certified International property and residential specialist accredited by National Association of Realtors in the United States of America. Property market trends According to Previndran, the Malaysian www.propertyinsight.com.my NOVEMBER 2015 I 61

PERSONALITY OF THE MONTH property market is heavily domestically driven and foreigners only make up five to seven percent of the total market. There is actually not enough housing supply in the market even though the government targets to have 100,000 houses built each year. The implementation and execution of the plans to achieve the projected housing target is also vital as according to the NAPIC data, only 20,000 houses were built so far this year. He shared that what is happening in the property market right now is a sentiment issue. “Despite the introduction of the Economic Transformation Plan (ETP), the present political situation does not lend enough confidence for investors to invest hugely in the country,” said Previndran. This has resulted in investors both foreigners and locals being very selective when they invest in Malaysian properties. The trend is that the rich are still holding back. There is actually a lot of liquidity in the market and transactions for properties below RM4 million are still very much active. Previndran feels that at the end of the day, investing in properties generates wealth. Real estate is a long term investment and not a short term game, this is the best time to go into the market as asking prices have dropped, loans are easily available with a better interest rate and people are willing to sell. “Malaysians are spoiled and everyone wants to live in a good location. Did you know that there are still properties in Kepong below RM500,000? I still think the northern part of greater Kuala Lumpur such as Rawang, Selayang and Kepong are very under-rated. There is the MRT 2 extension to Selayang and the KTM commuter station in Rawang.” pointed Previndran. Property prices have not gone up as much in the southern part of greater Kuala Lumpur, but it will always be a hotspot for investors because government assets are located there, such as the KLIA in Nilai, F1 Circuit in Sepang, government buildings in Putrajaya and the six universities in Cyberjaya. We already have the infrastructure as it takes only 35 minutes via the MEX highway to reach Kuala Lumpur city centre from Cyberjaya. “Obviously there are a lot of benefits when one delves into property investment as it is a hedge against inflation and people 62 | NOVEMBER 2015 www.propertyinsight.com.my

will make money in the long term,” opined Previndran. He illustrates that if one looks at the top 10 richest people in the world such as Carlos Slim, one will realise that while his core business in telecommunications. about 40% to 50% of his wealth base is actually in real estate. Another example is Malaysia’s, sugar tycoon Robert Kuok who built the first Shangri-La hotel in Singapore in 1971. After being in the industry for more than 10 years, one obvious misconception he noticed was the need to have a lot of contacts before you join the industry. He added that the real challenge was in the marketing where one has to target the right product to the right consumer.

FUTURE GOALS Previndran is looking at investing in Shamma Medini, his first investment in commercial property. He sees the opportunity within the hospitality sector although it may be challenging as this depends very much on who the developer and the operator of the hotel developments are. I will take a deal that provides a Guarantee Rates of Return scheme,” shared Previndren. “I own four properties all in Damansara Heights KL and I choose to invest in this area because it is the best residential address in Malaysia. Most of Malaysia’s rich and famous reside here with homes ranging anywhere from RM25 to RM30 million,” said Previndran.

INVESTOR NEXT DOOR

AS SAFE AS HOUSES Tan Yok Koon hits a home run with her investments BY: FARA AISYAH FIRDAUS PETIAL

an Yok Koon, a lady who has been spending all her younger days looking for money just to foot her bills, admits that her life has totally changed since she started investing in property. Property is a risky game to some, however, Koon feels that property investment is the right way to go. This is because her investment in unit trust previously went wrong, and she lost 40% of her investments there. With the remaining 60%, she decided to start looking for properties to invest in. She said “I feel like property is something that I can control and manage in a certain way.”

FIRST TWIN BABIES Koon remembers her experience of buying her first property like it was only yesterday. It was two identical units on the same floor. “The first property I bought on 17th March 2009 is a walk-up apartment in Subang. I was looking for something below market price because it was my first time investing so I was being a bit cautious. I bought the units at RM58,000 each, while the bank valuation and market price around that 64 I NOVEMBER 2015 www.propertyinsight.com.my

time was about RM80,000.” She mentioned that her target was below RM60,000 for each property, which was the budget she was willing to invest at the time. “I called a lot of agents and told them that I was looking for a property below RM60,000 and most of them said ‘Such a low price? If there were any we would have bought for ourselves already.’ I received rejection after rejection, but I didn’t give up because I had already made up my mind. I even subscribed to a newspaper that allowed me to trace back all the previous publications.” “Until one day, while I was flipping through a past issue of a certain magazine, I saw an advertisement that was about six months old. I found an

advertisement of a property that was priced around RM65,000. Although I know the advertisement had long expired, I still wanted to call and ask.” Said Koon. “So I asked if the unit was still available and mentioned that I was interested to take a look since the owner fixed the price at RM65,000. He said ‘Oh yes, it’s still available. In fact, I have two units for sale.’ Without a second thought, I made the decision to meet up and to take a look at the property. The units were not in good condition.” Being curious, Koon asked the real estate agent the reason why the owner wanted to sell such a good property when it was obviously a good investment. It turned out that the owner was a pilot and he lived somewhere far away. The tenant

never paid him the rental and he only realised it after a year. To Koon, “If you ask then it will be given to you. If you don’t ask, you won’t get. I told the agent that I wanted to take both units, and asked if he could get the owner to give it to me for around RM55,000 per unit? I mentioned that this was because the properties needed some renovation and repairing.” A few days later, the agent called Koon and told her the good news and that episode brought her to where she is today. “‘He called me and said, ‘Ms Tan, I’m really sorry but the owner can only go as low as RM58,000 for each unit.’ My heart was already jumping with joy! I’m buying two properties at a location where the occupancy is very high. I still keep them and rent each at around RM800 per month. The current market now for the property is around RM160,000 each.” INVESTMENT TRICKS Decisions are very important, according to Koon. “I try to make informed decisions. For example, I call agents and ask for the best prices, however, it would make no sense to call the agents without first being sure of my decision.” “There is no such things as a best time to buy. Instead you have to do your research, know what the current market prices and market conditions are. When you have found a property that is below market price, negotiate. Learn from my experience – no matter how many agents reject me, there will always be one good agent that serves me well. Therefore, it is actually not about the agents, neither is it about how high the market price is, nor is it about the timing. If I let that stop me from investing, I would not be where I am today.” “Money doesn’t come by easy for me. Even when investing. I work really hard to make sure things turn out okay. So I put in a lot of effort and I do my homework to check the prices in surrounding areas and I do an apple to apple comparison.” Expressed Koon. PROPERTY KEEPER Koon is one of those investors who prefers keeping her properties more than flipping. “I like keeping my properties. When I buy a property, I’m already planning on

the rental. In my mind, I am calculating if the rental can support the property or not. I am very conservative and I do not speculate when it comes to investing. I don’t relish the thought of buying a property priced at RM150,000 expecting it to go to RM200,000 without any basis but through speculation. I buy properties when the surrounding neighbourhood is priced higher than mine, then I will feel safe.” She buys properties with an exit strategy in mind. “Everytime I buy a property, I have a certain plan for it and I have expectations on its performance, and the desired result. Therefore, if it suddenly goes below my expectations, then I would know what to do with it. That is why an exit strategy is important. It is necessary for investors to be flexible in their businesses, and try to cut losses if necessary.” “I do buy properties for short term flipping, this will increase my cash reserve for capital and enable me to roll over to the next investment. A good investment portfolio must have mixture of both types of properties. I flip to increase my holding power for the properties I keep for rental.” I don’t invest alone, that’s boring. I have my core partners and investment community. that makes attaining my financial freedom through property investment so much more fun! We go beyond properties.” Her portfolio in investment is mostly around Klang Valley, Nilai, Johor and Penang areas. She only buys properties that fit into her fundamental strategy and provides her with good cash flow. SALE PERIOD Koon stated that she sees fear in every industry with the current market conditions. “Property market? Of course people are scared of entering the market. But me, working as a real estate agent, I look at the property market in a wholesome way. In my line of work, I don’t feel like I’m selling property, I’m selling them a service instead. Property is very tangible, everyone needs a shelter, and everyone has a business to run.” “It’s simple. If you have a lot of money, you can stay in a luxurious property. Even if you have only a little, you still need a shelter.”

Koon thinks that the current market conditions should be considered as the sales period, that everyone can now start negotiating. “Previously if you ask a seller, can we please negotiate on the price? They will definitely say no. But now people are willing to talk and negotiate. So why not take this opportunity to get yourself a good deal? In fact, it’s a better time now just be a little bit cautious and do your homework. If you do not know about investments, educate yourself first. It’s not impossible even in this challenging time.” Concluded Koon.

PROPERTY INVESTMENT GOODYEAR COURT 4, SUBANG JAYA Property type

Walk-Up 5 Storey Apartment

Purchase value(2009) RM58,000 Market value (2015)

RM160,000

Price per sq. ft.

RM90 (2009) RM234 (2015)

Rental per month

RM800

Rental yield

16.5%

Loan margin

100%

Loan tenure

30 Years

SUMMER SUITES, KUALA LUMPUR Property type

Versatile Office Suites

Purchase value (2012) RM414,000 Market value (2015)

RM576,000

Price per sq. ft.

RM863 (2011) RM1100 (2015)

Rental per month

RM2,300

Rental yield

6.7%

Loan margin

85%

Loan tenure

20 Years

www.propertyinsight.com.my NOVEMBER 2015 I 65

INDUSTRY INSIGHT

YOUNG BLOOD

Oregeon Property Consultancy’s small ideas work out big BY: FARA AISYAH FIRDAUS PETIAL

ave you ever thought about how valuers carry out their responsibilities? It is not as easy as it sounds. To have an idea of what it takes, Property Insight met with Oregeon Property Consultancy’s management. Managing Director Sr. Wong Wen Chet and Director Sr. Kok Chin Yee have been practicing property valuation since their early days at one of the top valuation companies in our country. Oregeon began with the same passion and with bold ideas of it’s young valuers. They decided to establish their own company because they wanted to practice their skills in total. According to Wong, “In

our firm we practice many skills required by a valuer, from agencies, valuation, research, investment consultation, development consultation etc. Besides that we also practice management skills, communication skills, soft skills, observation skills, decision making and many other, which a valuation executive might have lesser chance to deal with. However, by starting our own firm, we can use our skills in full, we can do more work – more valuation, estate proprietary, as well as research studies.” Apart from property valuation, the company also provides services in real estate agency, research and consultancy,

Getting the data is only 20 percent of the job and the rest is used to ensure the accuracy of the data.” - Kok

investment, project marketing, and corporate real estate. Kok on the other hand thinks that their firm is unique in a sense that they do everything on their own, from research to public relations. “We’re friends and we’re like family. We have our own research team, our own agency team, but above all we work together. The good thing about being young in a young company is that we think a bit differently from our seniors that have been in the industry for quite some time.” YOUTHFUL SPIRIT In managing Oregeon, Wong and Kok are taking on challenges and turning them into learning curves. “Actually the first and biggest challenge are the people. It’s about knowing the right people, getting the right people to do the right thing. If you know the right people, 66 | NOVEMBER 2015 www.propertyinsight.com.my

GOOD VALUER There is no such thing as a bad valuer, said Wong. “Every valuer that is certified by LPPEH (The Board of Valuers, Appraisers and Estate Agents Malaysia) have strong skillsets. They know the valuation skills, they know how to interpret the data and they know how to write a proper report. There’s very little doubt about this.” “But I would differentiate each valuer based on their proactivity. I would say proactive valuers are good at what they do. These are the valuers who are on the ground, they study the data and the trends

RIGHT VALUER FOR RIGHT INVESTMENT “If you actually have valuers that can advise you before you buy the assets that you want, you will have better negotiating power because you will know the market well and this gives better negotiating influence over the seller. You can get a reasonable price and probably a more accessible product. Most buyers wouldn’t have the time to go around the area, so they wouldn’t know exactly what they are buying. For example, even in the same condominium, you won’t have the same valuation, you won’t know which property is better. The valuer would know better because they have done the valuation at that property area a few times already.” Pointed Wong. It is important for home buyers or investors to study more before making a decision. Wong advised that “Before you jump into an asset that you might be serving a loan for, for the rest of your life – let’s say 30 years, you need to consult a few more people, even friends. Or, you could go and see more products in the

on g dW

n ka

l ef

with the developer so they know what the actual market conditions are. The data that we receive is historical data, so we align this data into actual data that is consistent with the current market value for the product, and this is what it takes for these valuers to stand out.” Explained Wong. “You need to keep track with updated current market conditions. A good valuer cannot just sit in the office, looking at a computer all the time and assume whatever you are reading is accurate.” Kok complied with what Wong said. As a matter of fact, verifying the data’s accuracy is the most difficult part of data analysis. Kok stated “Getting the data is only 20 percent of the job and the rest is used to ensure the accuracy of the data. This is when an actual site inspection is most crucial. So what we do is we go to the site. That’s the most accurate information that we can get.” Kok claimed that “Getting the information is the easy part. The internet is so convenient, you can get lots of information from different sources. But how do you ensure accuracy? We go to the most reliable sources like the government’s website or the developer’s site itself.

Fr o m

everything becomes easier. Then, it’s about how you build your relationship with other parties for example the media and clients.” Said Kok. “When we were working as executives, it was a totally different work scope and working atmosphere compared to setting up your own company. But when we came out of our comfort zones and handled our own company, we had to learn how to do things we had never done before.” Kok added. However, Kok expressed that challenges became wonderful experiences, especially when working together as a team, this is priceless. It is common for people to question the data provided by a valuer. Having some experience in this matter, Kok exclaimed that there is no reason to argue the data provided by them as it is all the actual transacted data. He said “What we do is we put the data onto the table and show them the trends, whether it is up or down. We see a lot of inconsistency in the prices nowadays especially from 2014 till 2015. Transaction activities are down and prices are still inconsistent. So if you’re asking why the drop, it is based on many factors. For example, in the Cyberjaya area, one of the reasons would be the competition from new development projects that are coming up – there are just too many of them.” Wong agreed to what Kok said, and added that, “When new competitors come into the picture in an area, they offer better packages to the market such as better flooring, green building technology, built-in cabinets, and many more features.”

“

Talent is what is sought after today, it is how a good firm is valued from a buyers perspective. Without the expertise and skilful people we have who are also knowledgeable valuers, Oregeon wouldn’t be the company it is today.” - Wong

area. If you have friends living there, you can actually get that friend to assist you. It is true, a sales person may be the right person to introduce you to a product, or to the units available. But to understand the product and it’s location, it has to be a friend or people who live in the area as they will have good insight on the issues that may have been worrying you. Don’t rush into a product that you don’t understand. You must study more, understand the place, only then make an informed decision to buy the product. If you do the homework, 90% of the time, this will work,” said Wong. Wong wishes for his team to double and continue growing for the next five years. “I want to employ more talent and make it known that we have the right people with the right skillset and then expand to the other states. Talent is what is sought after today, it is how a good firm is valued from a buyers perspective. Without the expertise and skilful people we have who are also knowledgeable valuers, Oregeon wouldn’t be the company it is today.” www.propertyinsight.com.my NOVEMBER 2015 I 67

FINANCE

RISING COST

OF LIVING IN MALAYSIA Survey shows rakyat’s main concerns

Source: IMoney Malaysia

ll is not well amongst the pockets of the rakyat with main concerns centered on the rising cost of living and its domino effect on other areas such as housing affordability, as found by the iMoney National Budget 2016 Sentiment survey. The cancellation of subsidy for fuel, weakening global economy, tumbling currency and political instability have further exacerbated the rising cost of living, which is found to be the biggest concern among Malaysians. “The survey results speak volumes. The cost of getting by in Malaysia is steadily increasing, and has become a huge deterrent in first property ownership, especially in urban cities. Perhaps the authorities should look at the bigger picture in helping Malaysians manage their money better and achieve their goal of buying their first home. Part of improving money management includes maintaining a healthy credit report, which can easily be done with good credit card record,” said Lee Ching Wei, Co-founder and Group CEO of iMoney. CRACKING UNDER THE WEIGHT OF RISING COST The implementation of GST combined with the recent abolishment and reduction of both the fuel and road toll subsidies had many 68 |

NOVEMBER 2015 www.propertyinsight.com.my

Malaysians reeling from the sudden increase in their expenses. 65% of the survey respondents believe that GST has severely affected their finances, and blames GST and the lack of proper execution for the escalating cost of living. 80% of respondents want the government to reduce the GST rate, while 68% want authorities to improve price regulation to deter errant businesses from rampantly increasing their prices.

Source: IMoney Malaysia

In 2013, the Government introduced the Bantuan Rakyat 1 Malaysia (BR1M) in an effort to ease the burden of the lowerincome group in Malaysia. In the first year, RM2.6 billion has been disbursed to around 5.2 million households, which represents the majority of the Malaysian households. A resounding 93% of respondents who were eligible for BR1M said that the Government handouts were not sufficient to assist them in coping with the rising cost of living. The survey shows that more than half want more subsidies from the government, rather than BR1M handouts. â&#x20AC;&#x153;The overwhelming responses that we have received all point to one main theme: Malaysians are seriously struggling with the rising cost of living, and they are of the opinion that the main driver for the skyrocketing cost is the Goods and Services Tax (GST),â&#x20AC;? said Lee Ching Wei, Co-founder and Group CEO of iMoney.

Although Malaysian property prices are rising at a slower pace following some cooling measures introduced by the Government and Bank Negara Malaysia (BNM), a whopping 92% of the respondents say they are still unable to own a home. The survey saw that 39% of Malaysians are still apprehensive over high property prices. To draw a picture, the survey found that 42% of Malaysians are only able to afford properties that cost about RM160,000, which translates to RM850 in repayment a month. With PR1MA homes in the Klang Valley costing more than RM200,000, the majority of respondents do not feel that government and central bank initiatives are fully addressing the issue of housing affordability. The rakyat believe that more aid is required to help them finally own a home. The most popular suggestions are to lower the interest rates (38%), criteria (20%) of home financing, and tax relief (18%) on home loan interest rates.

THE ELUSIVE HOUSING DREAM

Source: IMoney Malaysia

initiatives are fully addressing the issue of housing affordability. Source: IMoney Malaysia 1

CONTRIBUTED BY The information on Budget 2016 Sentiment Survey may be found on the iMoney Malaysia website.

65% of survey respondents currently reside in Selangor and Kuala Lumpur

www.propertyinsight.com.my NOVEMBER 2015 I 69

FINANCE

WHAT YOU NEED TO KNOW WHEN PLANNING FOR YOUR FIRST HOME PURCHASE Buying one’s first home based on one’s own effort and starting from scratch is the most challenging, yet fulfilling goal when it is achieved.

he luckier individuals are those whose parents either help out with the down payment, present it as a gift or those who get preferential rates from the organisations they work for. And then there are those who inherit the property or properties, most of which are already paid up. This article is focused on first time house buyers who are going it out on their own or as a joint effort with their spouse. Here is a quick process to get started:

CONSIDERATIONS These are key areas to plan for: 1. Type of house 2. Location, distance will determine your monthly travelling costs 3. How much installment you can afford to pay, banks look at your DSR (see point 10 below) 4. Your age now, preferably paid up before you retire unless you want your children to bear the burden with you (source: https://

Diagram 1: Process for Buying a Home

ringgitplus.com/en/home-loan/BSN-GIRO-Home.html)

5. PLAN

SELECT & NEGOTIATE

SHORTLIST

PURCHASE

70 |

• Considerations to prepare for • Talk through with spouse whether you are paying for it solely or jointly • Have several options • Keep to our budget • Trust your intuition when viewing prospective properties • Negotiate price • Downpayment & sign Sales and Purchase Agreement • Take up a housing loan & insurance

NOVEMBER 2015 www.propertyinsight.com.my

6. 7.

Buffer financial reserves for house rental whilst your new home is under renovation House structure insurance premium which is based on value of house and types of coverage required. House content insurance premium which is based on value of content and built-up of house. Take note of other cost besides down payment and installment as shown in Table 1: Quick Calculation. If you allow your total insurance premium to be built into your loan, you are paying interest on your insurance premium. It may be better to pay annually and avoid interest. Debt Servicing Ratio (DSR) 60% to 80%, depending on income and the bank loan taken. The higher your income bracket, the higher percentage of loan you will be entitled.

Many banks take into consideration your other debts; e.g. car loan, personal loan, credit card loans and these may form part of our DSR. Debt Servicing Ratio (DSR) 60% to 80%, depending on income and the bank loan taken. The higher your income bracket, the higher percentage of loan you will be entitled. Many banks take into consideration your other debts; e.g. car loan, personal loan, credit card loans and these may form part of our DSR.

Table 1: Quick Calculation NO 1

DESCRIPTION House price

Current saving

Loan amount @ 4.6% pa for 30 years

monthly installment

Lawyer transfer fees:

CALCULATION 500,000.00

COST

20,000.00

480,000.00 2,460.29

1st RM

150,000.00

1.0%

3,300.00

Bal

330,000.00

0.7%

2,310.00

5,610.00

Loan sales & purchase agreement+valuation

1st RM

150,000.00

1.0%

3,300.00

Bal

850,000.00

0.7%

5,950.00

9,250.00

Loan charge document

1st RM

150,000.00

1.0%

3,300.00

Bal

850,000.00

0.7%

5,950.00

9,250.00

Stamp duty 1st RM

100,000.00

1.0%

3,800.00

Bal

850,000.00

0.7%

7,600.00

Sub-Total compulsory charges (excludes disbursements & GST)

11,400.00 35,510.00

Renovation

30,000.00

Furnishings

30,000.00

*11

House owner insurance (structure of house) per year all inclusive House holder insurance (house content, fixtures & fittings) per year Total initial financial outlay required

*12

1,300.00 364.00 97,174.00

*11 calculation is based on 1,000 to 2,500 sq.ft. *12 calculation is based on furnishings as indicated in (10)

The above table gives you an idea of the other costs incurred for a house priced at RM500,000. A savings of RM20,000 would be insufficient to cover said costs. Furthermore, if your DSR is lower, you may need to consider a lower cost home or come up with more downpayment. Young adults can check out the Skim Perumahan Rakyat 1 Malaysia for more affordable homes or take a look at websites in Table 2 to check out available housing loans and calculate your installments and how much premium you need to pay for your insurances.

It is very important to remember to live within your means. Start with a modest property if you need to, once you have paid your installments for 5 years or more, you would have a small portion of the home paid up, this is called equity on your home. Try to pay up a bit more when you get your bonus at year end as every bit helps you to save on interest. Be sure to inform the bank that you want to reduce the principal amount or else the extra will be sitting in a suspense account and your principal amount will not be reduced. If you have moved up the salary scale, you can consider a bigger home using the equity on your home (the paid up portion), together with a higher DSR. It may interest you that Warren Buffett stayed in the same house since 1958. He invested well and lived frugally. (www.investopedia.com/articles/financialcareers/10/buffett-frugal.asp)

You would be better off upgrading your home once you have decided on with your dream home (not necessarily your first). Put aside a sinking fund and every 5 years, repaint, repair and renovate. Your home will feel new and rejuvenated, plus it will cost less than buying another home. If you have not even started saving for a new home and donâ&#x20AC;&#x2122;t know how to work out a plan, talk to a Licensed Financial Planner. Financial Planning Association of Malaysia (FPAM) can connect you with them. Speak to a few before deciding on one. Ask them about their fees and scope of service before engaging one. They should look at your income, expenses and debts before helping to formulate a suitable savings plan. With this, I wish all first home buyers the very best in their quest for the right property. Do your homework before you sign the Sales & Purchase Agreement.

Table 2: Useful Information Links: NO

AREA

WEBSITES

Skim Perumahan Rakyat 1 Malaysia (PR1MA)

http://pr1ma.net/

Housing loan comparison

http://www.loanstreet.com.my/ home-loan

Housing loan calculator

http://www.calculator.com.my/

House insurance premium calculator

http://www.einsuran.com/

CONTRIBUTED BY Linnet Lee is the CEO of Financial Planning Association of Malaysia.

www.propertyinsight.com.my NOVEMBER 2015 I 71

STRATEGY

RENTING OUT YOUR UNIT? S

ome of us may have just upgraded to a bigger place and instead of selling our current place we decide to rent it out. I did the same thing slightly over 10 years ago. At the time, I had lots of doubts. What if the tenant refused to pay rent and refuses to move out? As usual it was my first time moving into uncharted territory. After renting out my fully furnished properties for the past 10 years, here are some of my personal tips for your

72 |

NOVEMBER 2015 www.propertyinsight.com.my

reference. I feel that by renting out fully furnished, I would get a better premium. The market is smaller but thatâ&#x20AC;&#x2122;s okay because the supply is also lower. We all have our own way of choosing the right tenants. As long as it works, we can keep doing it. I think itâ&#x20AC;&#x2122;s a continuous learning process for me even today. Here are a few tips from my experience:

HERE ARE A FEW TIPS!

YOU DO NOT HAVE A GOOD FEELING ABOUT THE POTENTIAL TENANT Note, this is not like meeting up with your potential husband. This is JUST a tenant. If you don’t like the person, don’t rent. There is NO need to try to ‘give chance’ and then evaluate for a few months.

NON-STOP NEGOTIATING After the viewing, they try their best to negotiate for a lower price by commenting that your home is not up to their expectations. To me these people are just being calculative. Since I am not calculative, I would not rent out my unit to someone who is.

THEY SMELL FUNNY Sorry, but I really mind people who don’t take care of their hygiene. Messy, perhaps. Drunk the night before, perhaps. Did not wash their clothes? Perhaps. But it does matter to me if you smell funny.

THEY ARE SECRETIVE Come on, questions such as “where do you work” SHOULD be answered easily and directly. As the homeowner, I have no issues telling you what I do but if you cannot do the same, I think there’s something wrong with you.

THEY REFUSE TO VIEW UNLESS YOU AGREE WITH A LOWER RENTAL IN ADVANCE Great news for them, they can now call someone else. Can you imagine someone bargaining with you without even seeing the property?

HARD TO MEET THEM OR THEY ASK THEIR AGENT TO BE THE MIDDLEMAN Sorry, but if I don’t meet them, I wouldn’t rent to them. If it’s already hard to meet the first time, meeting them in the future would be even more difficult.

THEY COMPLAIN ABOUT THEIR PREVIOUS LANDLORD They are looking for a new home because their previous landlord was VERY BAD. Asking them a few more questions may reveal whether you should say bye-bye. There are not many landlords who want to treat their tenants badly, that’s for sure.

YOU HAVE STATED THAT IT IS FURNISHED When they arrive, they ask if they can rent without the furniture. If you say no, they will most probably negotiate for lower rental. I would not negotiate at all. They deserve a better landlord, perhaps not me.

ASKING THEM HOW MANY PEOPLE STAYING AND THEY HAVE TO THINK FOR A WHILE BEFORE ANSWERING I would be worried if they were going to sub-let my place and turn it into some crisis relief centre or a student ‘megamall’. They can definitely lie but if they have informed you, in front of their agent, it’s easier to talk to them in the future.

ALWAYS SIGN A RENTAL AGREEMENT If they refuse, don’t rent to them. A few hundred thousands worth of property from me versus just over a thousand ringgit rental from them each month, I think I stand to lose more. Get your agent to do this for you.

THEY ASK IF IT’S POSSIBLE TO PAY JUST ONE MONTH ADVANCE AND ONE MONTH RENTAL They want to pay the other month deposit later. This was a real issue for me and fortunately it was settled after a few months. I would not want to rent to these people ever again! 3 months is minimum!

Always remember, renting out to the wrong tenant is going to cost us lots of time, effort and money to move them out. A good relationship with our real estate agent helps tremendously . There are certainly no guarantees of never getting a bad tenant but we should try our best to reduce the possibilities. Thus far, I have rented out mostly to working adults and once, three engineering students on industrial training. For students, get their parents to be the one signing the agreement. It has been smooth sailing except for one case based on reason no. 11 above. I hope this has helped you somehow. Happy renting out fully furnished properties.

ABOUT THE CONTRIBUTOR 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.

www.propertyinsight.com.my NOVEMBER 2015 I 73

Property King_July.pdf

6/17/15

11:44 AM

STRATEGY

DEALING WITH HIGH INFLATION RATE

he economy has been suffering from the impact of a high inflation rate for the past two years. A high inflation rate is a reality that investors have to cope with in a developing economy. Inflation is a slow, silent killer, which gradually erodes the value of money, and in turn the value of accumulated savings. Inflation can erode wealth over the years. To accumulate wealth, it is necessary for the year on year growth in accumulated savings to be higher than the inflation rate. If your accumulated savings are growing at a rate lower than the inflation rate, your savings corpus is actually shrinking, as the ringgit today will be lower than what it was at the beginning of the year. The ringgit today will fetch lesser goods and services than what it did a year ago due to inflation. Hence, beating inflation is very important for any investor. EVALUATE REAL RETURNS Adjusting your portfolio to combat inflation earlier rather than later can make a big difference. Today, the interest rates of savings accounts and fixed deposits are paying interest rates lower than the inflation rate. Fixed deposit returns do not compensate for even food price inflation, let alone the total inflation. Money in a fixed deposit account that matures today will buy lesser goods and services than it did a few years ago, when the fixed deposit was initiated. So, despite earning nominal returns of say eight percent per annum, in reality, fixed deposits give negative returns in ‘real terms’ and reduce the value of investments in terms of ‘real value’. INVEST IN REAL ASSETS For this reason, investors must see to it that real returns on investments beat inflation. Gold is usually a very popular

investment to combat inflation as it appreciates in value against a currency during inflationary times. Apart from gold and real estate, commodities, and stocks in the consumer goods sector are usually a good hedge against inflation in any portfolio. Real estate is a great investment at any time, and it is even better during times of rising inflation. Limited availability of land and rising population growth will increase housing demand and hence real estate in general has the potential to beat inflation easily. THE IMPACT OF INFLATION ON HOUSING LOANS Having said that real estate or property is a good hedge against inflation, it is important to understand the impact of inflation on housing loans. In Malaysia, a majority of property purchases is done through a mortgage loan. Actually, inflation has a positive impact on a loan borrowed. The ‘real value’ of the ringgit at the time of borrowing, much higher than its ‘real value’ when the loan is repaid. As the loan amount is not adjusted for inflation, the borrower is the beneficiary. However, the impact of inflation is felt through a rise in interest rates. As inflation goes up the interest rates rise to combat it. Consequently, the cost of borrowing goes up as well.

CONTRIBUTED BY Dato’ Edwin Khoo is the Chief Operating Officer of Ninety One Real Estate, as well as a member of the International Real Estate Federation (FIABCI), National Association of Realtors (NAR) and Malaysian Institute of Estate Agents (MIEA).

www.propertyinsight.com.my NOVEMBER 2015 I 75

STRATEGY

74 I SEPTEMBER 2015 www.propertyinsight.com.my

Micheal Yeoh.indd 74

8/14/15 8:59 PM

STRATEGY

BEWARE FALSE

ASSUMPTIONS

here are two big assumptions every investor seeking capital appreciation makes: 1. When it comes time to sell there will be a purchaser who wants to buy the property and 2. That purchaser will be willing to pay more than you did when you bought. While these assumptions appear common sense, they’re often overlooked or readily dismissed because of the misconception that property prices only ever increase. Time and time again this is proven not to be the case when markets rise sharply, then deflate. Recent examples in Australia include regional mining towns in Australia where quite spectacular price corrections of up to 50%, or more, have wiped out profits and in some cases resulted in investors owing more than the property is worth. While those who can hold through the downturn might be able to ride the market to a future recovery, those forced to sell can suffer devastating financial consequences, even bankruptcy. Can such dramatic price corrections occur in city markets? The answer is – yes. Investors only need to look at what happened in the US (2007 – 2012), and in Vietnam in (2012 - 2013) and many other locations around the globe, to appreciate that no country, state or postcode is immune from falling prices. The pre-cursor to a crash is the emergence of substantially more sellers than buyers. If this occurs gradually then the change could take several months to unfold. If it occurs suddenly, perhaps because of en masse unemployment or an interest rate shock, then the shift can be quite sudden. Clearly you never want to be on the wrong end of a property correction, and one of the ways you can protect yourself is to learn to identify and read the signs of a changing market, keeping a careful watch for instances of irrational behaviour. Investors acting irrationally evidence a departure from the proven and necessary economic fundamentals that underpin sustainable markets. It stands to reason that the greater the incidence of irrational behaviour, the more erratic the price reaction – up or down. For instance, Melbourne is one of the

hottest property markets in Australia, evidenced by the strange happenings at 2 – 5 Charles Street, Mount Waverley. By way of background, the 5 bedroom 4 bathroom home previously changed hands on 4 December 2014 for an impressive $2.05m (median price for the suburb is $1.215m). Apparently it was bought by an investor who was going to redevelop the site and build two new high end townhouses. They must have changed their minds though, as eight months later the property was sold in the same condition via auction to a home owner for $2.89m! That’s an $800,000 gain in 8 months, even after deducting entry and exit costs. While we should be happy for our fellow investors, we should also be a little worried as such a big gain is surely an indication of irrational market behaviour (such as rapid and unjustified price growth), and a strong warning of unsustainable price behaviour. Of course, this could just be an out of the box result, with the buyer willing to pay any price for the property regardless of concepts of reasonable market value. You’ll need to make up your own mind. Just remember that when you assume you risk making an ass out of you and me (ass-u-me). What assumptions have you made about your ability to exit your market position at a time and price you hope? How would you cope if those assumptions were wrong? Make good choices.

CONTRIBUTED BY Steve McKnight is a best selling author and has bought over 500 income-producing dwellings. He will be the keynote speaker at the upcoming Property Investment Summit & Expo (PRISM) in November 2015.

www.propertyinsight.com.my NOVEMBER 2015 I 77

STRATEGY

ADDING VALUE WHERE IT MATTERS

hen a property needs work, it’s very easy to get carried away and try to do everything. And some properties do need everything done to get them back into a ‘livable’ state. However, before you pile in and start spending most of your savings, you need to ask yourself: ‘Am I adding value?’ In the world of property only certain things add value, and some areas add more value than others. The trick to successful property investment is in understanding where to add value. What is it about your property that people value - or will value? Properties are not built equally and what is important in one property may not be as important in another. You need to take the time to understand how your target market, property and location fit together to ensure you get the most out of your investment. So how best to add value? You need to start by identifying those areas that people value, and work out a priority order for them. Every property requires a modern, functioning kitchen and bathroom, but which of these adds more value? What is more important to your audience? Which area takes priority? The same goes for finishes and the quality of the fixtures and fittings and the type of wall and floor coverings. For me, a fresh coat of paint will do wonders. It gives a fresh and new outlook on the property. By analyzing the priority aspects of a property that people are attracted to, you can enhance areas that are valued. I am a pragmatic person, between solid wood and chip board, I always go for the cheaper ones. Whether your wardrobe is of solid wood or chip board how much difference does it make to your rented property? Even if the property is intended as a re-sale, you have to calculate how much it will cost you to undertake the work versus how much value will be added to the end product. What other 78 I NOVEMBER 2015 www.propertyinsight.com.my

areas of the property are a value added feature - is it really the wallpaper in the lounge that people will be prioritizing or can you spend that money in other areas such as upgrading the kitchen to achieve more value? When faced with a refurbishment project it’s easy to convince yourself you can do everything - and, given unlimited time and money, everything and anything is possible. However, you need to remember that property investment is a business - and it needs to make money if you are to remain in business. This means you need to focus on those areas that are of value and spend the most in those areas. A good rule of thumb to follow is that the value added should be at least double the cost of the works. That means if it costs RM4000.00 to install a kitchen cabinet, you should anticipate the new kitchen cabinet to add at least RM8000 to the end value of the property. Of course you may argue that’s more to do with sale ability; however, you need to be clear that you’re investing money to make more money, rather than spending money for the sake of it. For rental, a good rule of thumb will be whatever improvement that we’ve done it must be amortized within 3 years from the additional rental that you collected.

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.

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● Property Type : Serviced Residences ● Developer’s License : 12436-1/03-2018/383 ● Validity Period : 28/03/2013 – 27/03/2018 ● Advertising & Sales Permit : 12436-1/05-2016/01830 ● Validity Period : 24/05/2015 – 23/05/2016 ● Land Tenure : Leasehold (Valid until 22 May 2111) ● Land Encumbrance : MBSB ● Approving Authority : Dewan Bandaraya Kuala Lumpur ● Approved Building Plan No : BP S2 OSC 2012 3156 ● Expected Completion Date : December 2016 ● Total No of Units : 630 units ● Balance Units : 156 units ● Unit Price : RM665,760 (min) – RM1,153,800 (max) ● Type A : 39 units ; RM1,133,800(min) – RM1,153,800(max) ● Type B : 15 units ; RM947,800(min) – RM959,800(max) ● Type C : 52 units ; RM804,800(min) – RM849,800(max) ● Type D : 50 units ; RM665,760(min) – RM719,800(max) ● Bumiputra Discount : 5% ● The information contained in this printed material is subject to change and cannot form part of an offer or contract. All renderings are artist’s impressions only. All measurements are approximate. While every reasonable care has been taken in preparing this printed material, the developer cannot be held responsible for any inaccuracy. All the above items are subject to variations, modifications & substitutions as may be required by the Authorities or recommended by the Architect or Engineer.

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