www.propertyinsight.com.my
COVER STORY
YOUR KEY TO GARDEN LIFESTYLE
DECEMBER 2016
AREA FOCUS
BANGSAR SOUTH
MAIN FEATURE
HOW ARE GOOD TENANTS DISCERNED? KDN PP 18181/04/2013 (033492)
DEC 2016 RM7.50(WM) RM9.00(EM)
EDITOR’S NOTE
EDITORIAL
Marching ahead gloriously
Dato’ KK Chua, Editor-in-Chief
I
t was indeed a pleasant year for Property Insight. We are thinking forward with exciting plans lined up ahead. I would like to take this opportunity to extend to all our enterprising readers a ‘Happy New Year 2017’ and a ‘Merry Xmas’. Despite a few crucial challenges we faced this year, my sincerest thoughts are, that we should stay focused and intact in our mission to sail through towards a prosperous 2017. Whether rain or shine, we will grow together confidently to create a positive impact in our lives. I am proud to say that our recent ‘The 100 Most Influential Young Entrepreneur 2016 Gala Night’ was a successful ceremony, with deserving talents receiving accolades for the success of where they stand today. The event was graced by YB Tan Sri Datuk Seri Panglima Joseph Kurup and YB Datuk Joseph Entulu Anak Belaun, Ministers in the Prime Minister’s Department, and was attended by 800 entrepreneurs’ representatives on 11 November, at St Regis Hotel, KL. Our cover story was penned by Felicia Soon, on the prestigious Kenwingston Square Garden development located in Cyberjaya’s Flagship Zone. Dato’ Lovis Lam spoke on the humble beginnings of Kenwingston Sdn Bhd, to making it a trendy lifestyle living for the community.
Developer of the Month story titled ‘Pursuit of a Better Tomorrow’ focused on SP Setia’s recent developments, shedding light on their corporate social responsibility campaigns. This month’s issue opens to two exciting featured properties, namely KM Land, written by senior writer Mages PV Lingam and Marvelane Homes by Felicia Soon. Under Rookie Investor, Divya Prembaj has penned the heartfelt account of Ong Chyuan, a young man’s journey in achieving his real estate goals, despite constant barriers standing in his way. Entrepreneur Insight’s column denotes further input on the recent budget, as expanded in the article ‘Post Budget Economic Outlook 2017’ to assist hopeful future entrepreneurs in manoeuvring the current market climate that we are under. A lot of thoughtful information can be obtained from this month’s issue, from key opinion leaders within industries that dictate the wheels of our turning markets. I hope that you will gain additional knowledge, and lots of food for thought, pertaining to property and the industry at a large in the months to come. Again, I would like to share a quote before I sign off for the year, “Though no one can go back and make a brand new start, anyone can start from now and make a brand new ending.” – Carl Bard. Happy New Year 2017 & Merry Xmas!
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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.
Editor-in-Chief Dato’ KK Chua kkchua@propertyinsight.com.my Sub Editor Divya Prembaj Writers Mages PV Lingam Felicia Soon CREATIVE Creative Director Sarah Tan sarah@propertyinsight.com.my Designer Megat Khuzamir BUSINESS DEVELOPMENT General Manager Janet Loh +6012 205 0911 janet@propertyinsight.com.my Andy Fam +6012 601 9938 andy.fam@propertyinsight.com Hagenz Choo +6012 371 8831 choo@propertyinsight.com.my Iris Gan +6012 799 6685 iris@propertyinsight.com.my Wei Yeen, Chong +6012 927 2863 weiyeen@propertyinsight.com.my
ARMANI MEDIA
Armani Media Sdn Bhd (1032085-H) No. 32-3, Jalan Pekaka 8/4 Seksyen 8, Kota Damansara 47810 Petaling Jaya, Selangor Tel : +603 6156 3366 Fax : +603 6156 3399 PRINTER Percetakan Osacar Sdn Bhd Lot 37659, No. 11, jalan 4/37A Taman Bukit Maluri Industrial Area Kepong, 52100 Kuala Lumpur, Malaysia ENQUIRIES enquiries@propertyinsight.com.my On the cover : Dato’ Lovis Lam Kong Tang Group MD Kenwingston Sdn Bhd
Special Thanks to YB DATUK JOSEPH ENTULU ANAK BELAUN DATO’ KK CHUA Organising Chairman
& YB TAN SRI DATUK SERI PANGLIMA JOSEPH KURUP Minister in Prime Minister’s Department
for officiating the event
CONGRATULATIONS TO THE RECIPIENTS OF
THE 100 MOST INFLUENTIAL YOUNG ENTREPRENEURS 2016 www.e-i.my/100miye
by
DATO’ SRI ALEX SIAW
CHRISTOPHER LIANG
DATO’ SRI EDWIN TAN
CHUI LING, WONG
DATO’ SERI DAVID KH SEW
CHUN CHIEH, KEONG
DATUK NG THIEN PHING
CLEMENT TAN
DATO’ ALIFF SYUKRI
CLIFFORD HII
DATO’ ANTHONY LIM
DAMON CHAN
DATO’ BK CHOO
DANNY ONG
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DAVID LAI
DATO’ DR EDMUND LEE
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DERICK YAP
RAECHEL CHONG LP
DATO’ JOE YEW SIN YOO
DR JENNY LIOW
SEAN CHIA
DATO’ JONATHAN LIM
DR TRISTAN MG TAN
SEAN TAN
DATO’ LEE CHONG WEI
DREAMS HOOH
SEAN TEOH
DATO’ MARCO SEOW
EBLE LAI
STEVE WEE
DATO’ PAUL LIM
ERNEST KOK
SWEE PHIN, TEO
DATO’ SEASON CHAN
FALLON LOO
SYLVIA TAN
DATO’ SIMON DAVID LEONG
JACK CHAN
TERRY LEE
DATO’ STEVE WAN
JACKLYN TAN
VINCE TAN
DATO’ TAN BENG KUANG
JACKQUIN LOW
WAI HOONG, LEW
DATO’ TEH TAI YONG
JASON TAN CHUN SIONG
WAI YOKE, LOW
DATO’ TONY LOOI
JEEVAN SAHADEVAN
YEN CHEW
DATO’ VINCENT LOH
JEFF LIOW
ZACK HONG
DATO’ WESLIE LIM
JESSON LIM
DATO’ WILLY LIM
JOANNE KAY
DATO’ YK YAP
JOHN CHAN
ADRIAN TEH
JOHNSON WEE
AWI RAFAEL
ALDRED YAW
JONATHAN QUEK
CAPRICE
AMBER CHIA
JUN TONG, CHEONG
CRYSTAL LEE
ANDREW TAN
K. ANANDRAJ
DATO’ FAZLEY YAAKOB
ANN CHUAH
KEITH TAN
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ANNE LEE
KENNETH ANG
DIANA DANIELLE
ANNIE LOW
KENT CHUA
DYNAS MOKHTAR
ASHLEY LAM
KEVIN WONG
FIZO OMAR
BENJAMIN YONG
LEE KIAU, LAW
JACK LIM
BERNARD TEO
MARION CAUNTER
JOE FLIZZOW
BOON BENG, OOH
MARTIN FOONG
LENG SEAN
BRIAN LEE
MELVIS WONG
LENG YEIN
BRUCE TEE
MICHAEL TAN YEE HOU
LIYANA JASMAY
CARRIE LAM
MOHD IMRAN TAN SRI SALIM
MILA JIRIN
CHARMAINE LIM
MOHD IZZAIRI YAMIN
MIRA FILZAH
CY CHONG
MOON CHIENG, LOKE
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CHRIS TAN
NORA DANISH
SAZZY FALAK
SPECIAL COMMENDATION:
ARTS & CULTURE
CONTENTS
31 CELEBRITY INSIGHT
12 COVER STORY
12 Your Key to Garden Lifestyle
Kenwingston makes its first foray into garden lifestyle development
MAIN FEATURE
18 How Are Good Tenants Discerned
Finding genuine tenants to fit the climate of today’s property market
FEATURE
22 What Lies Ahead
Impact of the budget 2017 on the market
24 First Impression Counts
Improving your financial record to buy more properties
26 Pristine Address by the Lake
A high-end landmark by a prestigious developer
28 Premier Social Landmark in Klang by Trendsetter KM Land Group
DEVELOPER OF THE MONTH
31 Pursuit of a Better Tomorrow
True to its tagline ‘LiveLearnWorkPlay’, SP Setia continues to thrive thanks to sheer commitment in promoting a sustainable lifestyle for the people.
AREA FOCUS
36 Bangsar South – Dominant Township A class of its own
42 Dynas Mokhtar- Motherhood Matters with Entrepreneurial Skills Passionate about motherhood and lifestyle
ENTREPRENEUR INSIGHT
46 Post Budget Economic Outlook 2017
SME’s are the backbone of business entities in Malaysia, with about 95% active involvement in this field
INVESTOR NEXT DOOR
48 Taking the Smart Journey
Strategizing each purchase while capitalizing on opportunities
INDUSTRY INSIGHT
52 Virtual Office on Demand
A virtual office will allow more free time to work on your business while lowering costs
ROOKIE INVESTOR
56 Ong Chyuan: Owning His Dreams in the Face of Adversity, One Step at a Time The young daredevil rubs his two cents together on earning 30 properties, before the age of 30
DESTINATION
58 Philippines – Asia’s Fastest Growing Economy FINANCE
64 Comments by a Property Expert 66 Winds of change, for first time homebuyers STRATEGY
68 Implications of a Developer Being a Loan Provider 71 Buy Local
COVER STORY
YOUR KEY TO GARDEN LIFESTYLE Kenwingston makes its first foray into garden lifestyle development BY: FELICIA SOON
12 | DECEMBER 2016 www.propertyinsight.com.my
K
enwingston Square Garden is a 6.85-acre ultra-modern mixed development comprising of a business centre, retail boulevard and residences within a finely integrated landscape. Based on an impressive design theme, the business and retail centre fronts the entire development, leading to the centerpiece of twin residential towers which houses a mixture of SoHo. Located amidst the well-established and booming neighborhood of Cyberjaya Flagship Zone (CFZ), Kenwingston Square Garden offers accessibility through connecting highways and an upcoming MRT station in the vicinity, as well as visibility for both homes and businesses with top-notch facilities. It features stateof-the-art infrastructure and architecture, magnificent landscaping for commercial and residential platforms, comprehensive amenities and various educational institutions. GARDEN LIFESTYLE Described as a ‘garden city living in the sky’ with architectural inspirations from contemporary work-life ideals, Kenwingston Square Garden SoHo offers breathtaking panoramic views of Cyberjaya’s urban scape. The residential towers, comprising of two 35-storey blocks housing 912 SoHo units, encircle the sports and recreational outdoor facilities on the 7th floor, above six levels of car parks with ample 1,661 car parking bays for residents as well as visitors. Indoor facilities are available as well, including business lounges, reading rooms, nursery, prayer rooms and so on. The SoHos come in four sizes, and range in built-ups from 450 sq ft to 815 sq ft. The largest SoHo of 815 sq ft has 3 rooms and 2 bathrooms suitable for running a business or working from home. Kenwingston group managing director Dato’ Lovis Lam says the units, with a starting price of RM296,000 or RM550 psf, are targeted at young couples and investors, as well as buyers that can move in when the project is completed as the units are fully furnished,” he adds. There will be a five-tier security system — card access at the guardhouse, lobby, lift, inside lift car, floor lobby and individual units. Kenwingston Residences will boast a miniature golf course on its facility floor at Level 7 — the first of its kind in a residential block. Other facilities include a
www.propertyinsight.com.my DECEMBER 2016 I 13
COVER STORY
14 | DECEMBER 2016 www.propertyinsight.com.my
sky jogging track at Level 7, as well as sky view decks at Level 32 for each residential tower and 3 indoor badminton courts cum multipurpose hall which can put in 40 tables function. HUMBLE BEGINNINGS Kenwingston Sdn Bhd was established in 2010 and started with smaller project constructions, with its first contract valued at 5.7 million. From then on, they grew their business within the next few years, from 5.7 million to 3.1 billion. They are currently undertaking eight projects, namely at Season Garden, KL Traders Square, CONEXION IOI RESORT CITY, Almyra, Bandar Puteri Bangi, IOI at Bangi, Parkhill at Bukit Jalil, The Henge at Kepong and Societe at Sri Hartamas. At the same time, they are also working on PPA1M, a Government project at Precinct 6, Putrajaya. As a main contractor and developer, Kenwingston Sdn Bhd have five divisions that make up their group’s revenue. The major contributor to their company’s profit is their construction division, followed by their development division. Three projects are currently ongoing under their development division - one at Pulau Indah, where 27 units of terrace houses were fully sold, and another at Salak Tinggi with 30 units of terrace houses also fully sold, and lastly their Kenwingston Square Garden, a mixed development with a GDV of 475
million. Their third division is the machinery division where they have invested almost 50 million for tower cranes, lorries and so forth. As for their fourth division, it pertains to the hospitality industry with their new budget hotel called Kenwingston Hotel. They are expecting to open their second hotel in Gombak and a third one in Cyberjaya in 2019. Their last division is the investment division, comprising of their security and property. RELEVANCE AND EFFICIENCY Kenwingston positions itself apart from other developers by being not only a developer but also the main contractor. It
also receives support from other divisions for picking up momentum, following the demand for quality housing developments in Malaysia that are also affordable. The group’s machinery division takes great care to ensure the developments are built according to its market needs. While the company mainly focuses on development, it is teamwork and prudent management that are also notable contributing factors to their success. In total, there are seven directors upon which Dato’ Lovis Lam is the principal, being an engineer himself within the civil engineering and construction sector for 17 years. A Bachelor of Science (Civil Engineering) graduate from Universiti www.propertyinsight.com.my DECEMBER 2016 I 15
COVER STORY
Teknologi Malaysia, he was previously a project director at construction and property development company Prinsiptek Corp Bhd. Other key personnel at Kenwingston include executive director Eddie Lim Kim Eng and directors Edward Lim Wei Chuan, Ryan Tang Seng Wai, Jimmy Chia Hue Chian, Lew Kok Sin and Yeoh Boon Lim. Each project will be under the management of an appointed director to make work progress more efficient. TRYING TIMES AHEAD The present economic uncertainty also translates into challenges for Kenwingston. Banks are stricter with loans being issued, making it harder for purchasers to get a loan. Needless to say, they have managed to overcome these challenges with prudent management. “Having a good cash flow, solid finance and strong team,” Dato’ Lovis Lam says, are high on the management’s list of duties. 16 | DECEMBER 2016 www.propertyinsight.com.my
PASSION AND DEDICATION From an outside viewpoint, the role of the principal might seem to be a position of glamour and allure. Dato’ Lovis Lam thinks further that he needs to “ensure Kenwingston is constantly fully aware of the market needs, by conducting market surveys on ground to understand the customer needs.” With good knowledge and strong awareness of customer needs, the developer will then be able to offer the right product at the right price. EXCEPTIONAL QUALITY Dato’ Lovis Lam says his company is well prepared, as they are the only main contractor in Malaysia with eight projects in development that are ahead of schedule. He further explains, “We are ahead for more than one month for each project as we aim to provide excellent quality of service for customers who have purchased their homes with us.” He also stated that
besides providing good workmanship, Kenwingston also aims to introduce Kenwingston Square Garden into Cyberjaya as a lifestyle development at an affordable price. THE BOOMING FACTOR In choosing the location for developing projects, Kenwingston considers populated areas, as well as its return on investment. With infrastructure and upcoming amenities such as MRT connectivity, private hospitals and private colleges, Cyberjaya is a conducive place for development. FUTURE PROJECTS Kenwingston Square Garden is set to be completed in 2019 and meanwhile Dato’ Lovis Lam says the group is looking to launch a five-star hotel suite development on a 10-acre parcel in Port Dickson. The development will be located next to Corus Paradise Resort, and they will offer a 15-
The name ‘Kenwingston’, sounds similar to the group’s Chinese name, which means ‘sure win’” - Dato’ Lovis Lam
year sell-and-lease-back option to the buyers and bring in an established hotel operator. The project, which is in the design stage, is scheduled to be launched by the third quarter of 2017. PRESTIGIOUS CONNECTIONS Dato’ Lovis Lam has a list of achievements lined up for the next five years. He aims at being the most profitable company in terms of construction, maintaining their track record of delivering their projects within
its scheduled time, and diversifying the business to allow for equal contributions from each division. Currently the group’s main revenue comes from the construction and development segment, therefore the five-year plan is to balance the revenue contribution ratio so that the other divisions will contribute more equally. “Currently, we have a land bank of 20 acres and are looking to acquire more land, not only in the Klang Valley but also in other parts of the country. We are also open
to joint ventures,” says Dato’ Lovis Lam. He also wants to emphasize on the importance for investors to look for the right location when it comes to buying property for an investment. The surrounding amenities such as private hospitals and private colleges will play a vital role in ensuring the investors will get back a positive return on their property investments. In fact, Kenwingston chose Cyberjaya to develop Kenwingston Square Gardens as they see a high potential return from the location and are daring enough to use the name Kenwingston in the naming of this project because they are confident in the design, quality, maintenance and second value of Kenwingston Square Gardens for years to come.
WISMA KENWINGSTON No. 82, Jalan Wangsa Delima 6, Pusat Bandar Wangsa Maju (KLSC), Seksyen 5, Wangsa Maju, 53300 Kuala Lumpur Tel: 011 2200 8000 & 011 2220 1111 www.kenwingstonsquaregarden.com www.propertyinsight.com.my DECEMBER 2016 I 17
MAIN FEATURE
HOW ARE GOOD TENANTS DISCERNED? Finding genuine tenants to fit the climate of today’s property market BY: MAGES PV LINGAM
Dato’ KK Chua Managing Director Armani Media
Dexter Lim Founder Property Fast Track Sdn Bhd
A
n interesting topic from the recent property investment summit (PRISM) on “How to find good tenants?” brought out some pearls of wisdom from the wise within the property industry. Multifarious inquiries were posed to each panellist to hear their elaborate thoughts and valuable lessons. There were some questions directed by the moderator, Armani Media managing director Dato’ KK Chua (KK), towards fellow panellists Dexter Lim, Andrew Tan, Adrian Un and Chris Tan. Let’s see a little on the line of speakers for the session. Dexter Lim (DL) is the founder of Property Fast Track Sdn Bhd. The company was set up to introduce a system for young and aspiring investors. Andrew Tan (AT) is the founder of Luxury Boutique Accommodation, a company that manages Airbnb listings. He is also the co-founder of AppShack Asia. Adrian Un (AU) is the chief executive officer of Skybridge International Sdn Bhd. He has over 20 years of experience in property investments.
18 | DECEMBER 2016 www.propertyinsight.com.my
Andrew Tan Founder Luxury Boutique Accommodation
Adrian Un CEO Skybridge International Sdn Bhd
Chris Tan (CT) is the founder of Chur Associate. He is a boutique legal service provider. KK: Can you explain in your own terms, the definition of ‘a good tenant’? DL: A good tenant is a person who pays on time, and does not need to be reminded constantly, without issues with other tenants or neighbours, and keeps the unit well maintained. AT: As I run a short time vacation rental, I usually use the reverse methodology. I would conduct a pre-emptive check on the tenants first. We deal with lots of business travellers. So we try to tackle any problems which bring any nuisance to neighbours. AD: As for me, if the tenants pay on time and pose no issues to other neighbours, I will count them as good tenants. CT: Good tenants are those willing to sign the tenancy agreement. This includes tenants who are good partners, and love your property more than you do. KK: This is easier said than done in certain cases. Can you define the process to
Chris Tan Founder Chur Associate
assess a quality tenant? CT: I felt that even before you invest in any property, you need to define the qualities of the tenant for that property first. We need to be constructive, especially on fact-finding during the property marketing period. Obtain information from the agency or advertisements and talk to the community at the compound. There were instances where the best paying tenants were really the bad hats. They might not love your property at all, be it long or short terms tenants. KK: I had an instance when an investor friend of mine said each time a potential tenant stops by to view the house, he would quickly check the interior of the person’s car. This is to see if the car was well maintained, looks dirty and messy or otherwise. From there, he would judge the type of tenant and be wary of tenants that settled for rent. KK: Can you please state some ways of determining genuine tenants for your
properties? AU: A good tenant should be responsible. Nowadays, times are challenging. There were times where it was difficult to get tenants. If it is for residential units, they must match my demands for rental. And for commercial properties, I would impose a strict payment scheme. Usually, for businesses like food and beverage outlets, I would request for a six month to a year of post-dated cheques to secure the payment agreement. Everything will surely look rosy for new businesses but down the road, the company might face dreadful financial situations. This is something I’ve learned directly from my own experiences. If the location was perfect and the properties were in high demand, then it will be faster to secure rents. KK: Can you elaborate on short term tenancy? AT: Short term turnovers are larger for our market. We must attract the guests to come over to our establishment. We will provide the amenities which are needed
for our guests. For example, if a business traveller was our guest, therefore a printer would be provided. If it is a family crowd, we would provide snacks or dvds to make them feel at home and comfortable. Generally, we conduct a pre-qualification with a set of questions for the new guests. We need to gauge the objectives, such as how many people are occupying the units, and more. A set of house rules will be forwarded, such as cleanliness or safety rules, and usage of things in the units. A validation check would also be done via social media by looking for a link to a Facebook profile, or other platforms. We had rejected some tenants in the past, even after confirmation was given. These sanctions were placed should tenants seemed to portray impertinent behaviour from first impressions, like party goers or people that show irresponsible attitudes by creating nuisances to other neighbours and more. Pre-qualifying was necessary to determine the target market which were achieved through agents and application forms. When a tenant walks in, we will
notice the first impression created by the target. If you are feeling uncomfortable, then the candidate can be rejected, some initially will look appropriate, but later will turn out be non-compliant tenants. KK: Can you share on a few tips and how you manage your properties like rental collection, upkeep of furniture, and maintenance? DL: I managed my own properties on a full-time basis. Normally, I would set a benchmark if rental payments were delayed, with gentle reminders sent for due payments. Then, a follow up call would be done. Basically, we have to be nice and let them have an idea of being monitored for the dues. AU: My rent collection was clear-cut because we collected it when a person checked-in. I have a team of experienced handy-men. They have their in-house treatment, which is a standard practice. As for our furnishings, we use the homogenous method. This is a norm in the hotel industry. Our basic upkeeps were modular, if any www.propertyinsight.com.my DECEMBER 2016 I 19
MAIN FEATURE furniture or fixtures were spoilt, it will be easy to be replaced or repaired. We always have extra in case any untoward incidences occur in the units. The challenges faced usually were stolen or damaged goods which are a cost to me. We usually collect advance deposits from the new guests and for the recurring ones, and the guest would be given a check-out access card with an upfront payment. AT: I run a one-man show! As I managed my properties myself, I prefer to meet and chat with my tenants. As for the shop lots tenants, I buy from their shops to encourage them. We must appreciate and build a healthy relationship with the tenants. If there are any delays or default in payments, a due message will be forwarded to the tenants. CT: I have a retired dad. He helps me to manage my rental collection and upkeeps too. I trained my dad to oversee the lots as he’s staying close by as well. I developed a business module for him and taught him the collection methods. Therefore, it’s important to pre-qualify before any investment. I use a personal touch by accepting them as our business partners. KK: How do you deal with bad tenants? People who refuse to comply or rent defaulters? AU: I had a bad experience once when I rented to a license reflexology centre, and the police raided the place as it was an illicit vice centre. I just stopped the rental as it was useless to pursue it. AT: The tenants initially looked normal, spoke good English, paid up deposits in full and so on. However, they later turned out to be the opposite. There was an incident, where a guest rented our property for three months, and turned it into a cannabis farm. We kept close contact with the security guards, joint management body (JMB) and the police. We leveraged our liabilities with the insurance firms too, for handling damages of property. Apart from that, we faced a few credit card fraudsters, whereby our goods were stolen from the unit. DL: My first deal was a tenant from hell. It happened in early 2009. The person brought his pregnant wife and moved in. I checked with the bank, and the deposit wasn’t paid. When asked of it, they said it was paid to the agent. The agent also 20 | DECEMBER 2016 www.propertyinsight.com.my
denied it and was nowhere to be seen. We asked the tenant to move out immediately and locked the premise. The case dragged on for a few months, as it involved the police. CT: Communication is a very vital link between tenant and landlord, though it can be challenging at times. Before a tenant moves out, a proper hand-over is needed. You can give a discount after the premise inspection, or even give a letter of recommendation for the stay. AU: I had a unit with neighbours from hell. I had an experience when the neighbour invited me into her house, and I practically saw a tree stump in the middle of the living room. She also had recycled cartons all over. CT: A distress order in regards to your rights can be used in certain cases. However, there are no guarantees that they will pay, as self-help is not encouraged. Even if you are found tress-passing in your own property or changing of locks, it is not
advised. KK: Can you share your advices to people on the propositions? DL: Overall we had good tenants. Property will appreciate in the long run and so will the rental yield. Therefore, we can expect a positive outlook. AT: As mine was a short-term vacation and hospitality business, and not real estate, it was more maintenance related with marketing strategies. We must be prepared to face problems or challenges. We run with technology. AD: When you happen to buy a highrise unit, make sure you fully furnish or renovate your unit. This is to create differences from the other landlords. CT: Move forward with higher number of rentals in the future. Manage your work properly as these are your investments. Take it as a full time job, and all jobs come with risks.
FEATURE
WHAT LIES
AHEAD
Impact of the budget 2017 on the market BY: FELICIA SOON
22 | DECEMBER 2016 www.propertyinsight.com.my
With the economic letdown, the real estate market will be subdued for the rest of 2017.” - Sarkunan Subramaniam
S
ince the announcement of the Budget 2017 on 21 October 2016, it has been lauded as “a big letdown for most people”, especially for real estate investors. Veena Loh, associate director of JLL Property Services, shared her concern at PRISM 2016 that there could be an inflation in the coming year of 2017 due to the government rolling back their subsidies. It seems that food and beverages are seeing a higher inflation while the rest were pretty much submerged. Managing director of Knight Frank, Sarkunan Subramaniam, talked more in detail about Budget 2017, to give us closure on how the budget post 2017 will affects us. Tabled by Prime Minister Datuk Seri Najib Tun Razak in Parliament, Budget 2017 looked to tackle pressing issues faced by Malaysians, such as the issue of rising personal income, higher costs of living and affordable housing, as well as the means to encourage the growth of local small and medium sized enterprises. Sarkunan mentioned that under the New National Blue Ocean Strategy (NBOS), there are plans to build affordable homes from RM40K – RM50K each, for nearly over 5000 units. NBOS serves as the basis for the Malaysian National Development Strategy (MyNDS) which will guide the 11th Malaysia Plan from 2016 until 2020.
MyNDS focuses on rapidly delivering high impact on both the capital and people economies at low costs to the government. The capital economy is about GDP growth, big businesses, large investment projects and financial markets; whilst the people economy focuses on jobs, small businesses, the cost of living, family wellbeing and social inclusion. He also highlighted that under the Program Perumahan Rakyat (PPR), 134 million Ringgit Malaysia will be allocated to build 11,250 houses. The construction costs for these affordable homes will be between RM120K to RM160K but the houses will be selling at RM35K to RM42K. Sarkunan also addressed the government’s initiative to build 10K houses to be rented out to youths, and for them to buy at a later stage. He also stated that the government was trying to improve house buyers’ affordability by allocating lands to build 30 unit houses selling between RM100K to RM300K. There is also a stepping up in end financing for Perbadanan PR1MA Malaysia where with the collaboration of EPF, Maybank, CIMB, RHB and AMBANK, home buyers will be entitled to get nearly 100% financing but only for the purchase of a PR1MA home. Dr. Daniele Gambero, the chief executive officer of REI International Holding Sdn Bhd, the strategic marketing consultant
for property developers also shared Sarkunan’s sentiments about Budget 2017. According to him, the government is having more advantages in comparison to developers from the private sector. He stated that Sarawak Housing And Real Estate Developer Association (SHEDA) shared that if their members were given the same advantages as the government, they would then be able to build 24K homes within the next two years in the centre of Kuching, Sarawak. While a lot more could be done for the property market, Budget 2017 is still addressing the needs of the people and economy without compromising the country’s financial stability. Malaysia is still ahead of all neighboring countries and the Eleventh Malaysian Plan looks set to strengthen infrastructure to support economic expansion. Therefore it is not all doom and gloom for the property sector as Sarkunan further explained that more people will be motivated to sell their homes following the market price next year. Hence property buyers are advised to wait to see the housing bargains in the year 2017 because developers are already issuing a lot more incentives, and with more auction pages being published at present, there might be a number of properties that will be auctioned off next year. He also advised those who are looking to buy a property over RM1Million that it will be a good decision to buy in the year 2017 as the stamp duty on the transfer of real estate worth more than RM1mil will be increased by 3% to 4% effective Jan 1, 2018. According to property consultants, the one-year grace period gives the high-end domestic housing sector some breathing space. www.propertyinsight.com.my DECEMBER 2016 I 23
FEATURE
FIRST IMPRESSION COUNTS Improving your financial record to buy more properties BY: FELICIA SOON
24 | DECEMBER 2016 www.propertyinsight.com.my
W
eak economic conditions, higher interest rates and the global credit crisis have forced banks to be stricter about money lending and less generous with their lending rates. Gary Chua, CEO of Smart Financing, said at PRISM 2016 that before you apply for a home loan, there are steps you can take to improve your financial record to buy more properties and encourage lenders to look more favourably on your application. “Know yourself first. If you don’t know yourself, how can you borrow?” says Chua. “How you make the bank feel comfortable
with you is your ability to pay. If the bank does not feel secured with you, they will not lend to you”, he added. A good credit rating can’t be achieved overnight, so if you are considering to buy a house in the next few years, you should do what you can to score well right away. The golden rule of credit is that you should start small to prove that you are responsible so that your bank will look favourably on your home loan application when the time comes. While it may seem financially responsible not to get into debt, the banks have no other way of assessing what you will do with credit. Therefore store credit, cell phone accounts and bank loans for other assets like cars, are a good way to start. However be wary that each time your credit record is accessed; it affects your overall credit score at the bank. Hence don’t allow everyone and anyone to access your credit record. Many people switch credit cards frequently but fail to cancel old credit cards that they no longer use. These lines of credit will still appear on your record, making lenders wary about the potential size of your total debt. Some may even fear that you will “max out” these cards and then struggle to meet repayments. If you do not need the full credit limit given on a card, ask your lender to reduce it. The same applies to retail credit. This will help you to build a good track record as banks will want to see that you can manage credit sensibly. So if you are a first-time buyer consider taking out a credit card six months before submitting your loan application, make sure that you pay off the balance in full each month and on time, to
avoid interest payments. Also, make sure your income is deposited monthly into a bank account as the banks will need proof of income via your bank statements. Another speaker, Chris Tan, Founder of Chur Associates had this to share, “While building a relationship with the bank was important, we also need to build relations with our lawyers as they are the ones who are going to help you in signing a deal. In other words, they are the ones who are going to protect you.” The other important person who is going to protect you is the valuer. If you want to get a good price for selling a property, you need to first build a strong relation with your valuer, so you will have a better chance of getting a higher value. Thus relationship building with relevant parties is very important as well. Cherie Chong, Group Manager of De Bancco Group stated that most of the investors who came to her were having problems with their debt service ratio (DSR) that were not within the guidelines. As a financial adviser, Chong will advise her clients that if they still want to keep buying properties, then it will be better for them to show their net worth. There is a guideline on RM1Million net worth and above. For example, the cash in your fixed deposit and in your savings account will probably amount to 60% or 70% liquid asset while the other 30% or 40% will come from the property value. Added up in total and the sum will be over RM1Million which you can henceforth show the bank that you have such a net asset, so that they might be able to offer you a high DSR, maybe up to 120%.
Building a good relationship with the bank is very important especially for investors like me.” - Chris Tan www.propertyinsight.com.my DECEMBER 2016 I 25
FEATURED PROPERTY
PRISTINE ADDRESS BY THE LAKE
A high-end landmark by a prestigious developer
L
ocated on the last piece of land available for development in Putra Heights, Marvelane Homes By The Lake is poised to become the most affluent residential development in Putra Heights, thanks to its conducive location that is situated next to the prestigious Glades by Sime Darby, Putra Palms and Kingsley Hill; all neighborhoods with a high property value. This piece of haven is connected to four major highways – New Klang Valley Expressway (NKVE), DamansaraPuchong Expressway (LDP), Konsortium Expressway Shah Alam Selangor (KESAS) and New Pantai Expressway (NPE), within close proximity to two LRT stations – Station 11 & Station 12, with amenities such as Chinese primary schools, Kingsley International School, colleges, universities, shopping centers and hospitals fringing its perimeters.
26 | DECEMBER 2016 www.propertyinsight.com.my
The uniqueness of Marvelane Homes By The Lake is that it comprises of a development that is surrounded by 16 acres of lake, with Class 1 water quality. Following the concept of creating a lowdensity resort style living development, the developers seek to obtain approval from relevant authorities to build these luxurious houses over the water – the sole one for residential development. UNIQUE AND HOLISTIC APPROACH Armed with the knowledge of what is required of the purchasers and with the help of planners, architects and engineers, Marvelane Homes By The Lake also developed the concept of M360, taking into consideration all micro factors that inherently will affect the value of the development’s living environment.
BY: FELICIA SOON
LOCATION, AMENITIES AND FACILITIES Many investors believe that location plays a major role in boosting the intrinsic value of properties, while affluence and maturity of the neighborhood is another important factor. Besides that, the connectivity to major highways, the availability of transit systems and the proximity of amenities in this neighborhood also plays a vital role in determining the present and future value of the property. PEACEFULNESS AND SUSTAINABILITY In the process of emulating a healthy peace of mind while living in a secured environment, Marvelane Homes By The Lake provides the following: (i) Security • 3-tiered gated and guarded security • Single point guard house • CCTV at fencing
5. PROVISION OF SHUTTLE BUS Private shuttle bus services to popular and frequented destinations are provided to residents as a daily transportation alternative, while inherently reducing carbon emissions. 6. LAKE REHABILITATION The lake water surrounding the development is under a Class I category of water quality, and a lake rehabilitation plan will be implemented to maintain and further enhance the aquatic life and quality of the lake. POSITIONING FOR HIGHER GROWTH The below selling price / sqft is reasonable when compared to other similar developments at different areas in the Klang Valley. Therefore, there is a good potential for future capital appreciation due to the site as it is located in a matured and affluent neighborhood with facilities and amenities provided that are far better than most of the condominiums within the Subang Jaya and Putra Heights area. Lastly, the selling price for existing superlink homes within the development ranges from 1.8 - 2.0 million, with the semi-D at The Glade selling at 3.0 million and above. However, bearing in mind that the selling price for the landed development is RM 500/sqft in comparison to RM 600700/sqft for the condominium, the future price of this exclusive landed development should have a higher rate of appreciation. • 24 hours patrol • Home security alarm systems (ii) Community • To encourage community integration, free broadband service will be provided for 1 year Marvelane Homes By The Lake has also obtained a Green Building Index (GBI) Gold standard for its township development, and a GBI Silver standard for its construction endeavors. 1. HEAT ISLAND DESIGN The open spaces and footpaths are wholly shaded and covered by waterscape, which incorporates a man-made lake. This substantially lowers the ambient temperatures to the surrounding environment of the development, giving it a naturally cool and soothing climate for its potential residents.
2. DESIGN OF EFFICIENT STREETLIGHTING Energy is conserved by using energy saving lightings and lamp life of more than 15,000 hours. This conserves energy to the point that energy wastage is not rampant within the development. 3. GREENSPACES Sufficient open green spaces for various activities of the communities with a playground, lake viewing deck and floating pontoon. It caters to residents of all ages, and provides a healthy green environment for families to prosper within. 4. PEDESTRIAN AND CYCLING NETWORKS A strong linkage of pedestrian and cycling network inter-connects all the residential units in the development area, and is also linked to surrounding amenities and eventual transit stations.
Marvelane Homes By The Lake Tenure
Leasehold
Developer
Marvelane Home Sdn Bhd
Type of development
Mixed Residential
Overall GDV
RM 450 Million
Size of development
23 acres
Year of Completion
Dec 2019
Address
No.19, Jalan Opera F U2/F, Seksyen U2, Taman TTDI Jaya, 40150 Shah Alam, Selangor.
Telephone
03-78327166 / 03-78318166 / 03-78319166
Fax
03-78423166
inquiry@marvelane.com
Website
www.marvelane.com
www.propertyinsight.com.my DECEMBER 2016 I 27
FEATURED PROPERTY
PREMIER SOCIAL LANDMARK IN KLANG BY TRENDSETTER KM LAND GROUP BY: MAGES PV LINGAM
28 | DECEMBER 2016 www.propertyinsight.com.my
I can safely reiterate that One Kesas is a piece of essential development. It has a unique one-stop project that minimises movement and secures the outflow of potential economic business entities.” - Dato’ Kee Lian Yong
T
he man committed to create transformation to communities is Dato’ Kee Lian Yong. He carries a high philosophy in life by being conscientious as he permeates good intention through positive commitment for the society, since indulging in property development six years ago. Kee, a qualified chartered accountant, is proud of his achievements, having said that most of his projects have been completed. Group managing director Kee is a modest philanthropist, with his responsibilities towards his men and nation at large. He spear-headed his group of companies, KM Land Group, established in 2010, as it escalated to a higher cause with few more development projects in the frontline within the coming years. In total, its gross development value (GDV) has exceeded RM700million with a few more project developments in the pipeline with a projected GDV of RM5billion. His strategies in creating an uplifted lifestyle and being a trendsetter, has given a lot of exposure in areas of project concept,
value, sustainability and amenities for the buyers. KM Land’s area of concentration lie within bringing the city lifestyle to small towns. He has create substantial value to untapped lands and given a metropolitan rebound towards rural development in areas like Sabak Bernam, Sekinchan and Kuala Selangor, with a modern twist. Among his completed projects include phase 1 of One Kesas that is located in Klang, fully sold. It is a 6.7ha integrated commercial project with a hotel, educational centre, retail and wholesale shop lots, a food haven with F&B dining in an al fresco style, along with the largest premier banquet hall in Klang that accommodates up to 1,600 pax. One Kesas being a social landmark, is currently underway with phase 2, particularly concentrating on lifestyle concepts, with around 75% of its units already sold. Even though Klang is a matured township, there are no prevailing lifestyle or monumental hubs for the residents to relate or fall back on. A lack of vibrant and exuberating lifestyle can elude the younger
generation to move to other exciting and lively cities. Nonetheless, Kee has spotted this as an economic and social exodus for Klang, and decided a change is needed to sustain this gateway. Kee commented “I spotted that this project land in Klang South with nearby matured neighbourhood such as Bukit Tinggi and Bandar Botanics, One Kesas has a main road frontage and direct access from KESAS highway, and convenient accessibility via Federal Elite highway, South Klang Valley Expressway (SKVE) and Pulau Indah highway,” “I can safely reiterate that One Kesas is a piece of essential development. It has a unique one-stop project that minimises movement and secures the outflow of potential economic business entities,” Kee said. He added that One Kesas housed commercial outlets, an alfresco square, education centre, a boutique hotel to accommodate business travellers especially from the logistics sector with its close proximity to Port Klang. General manager, marketing and strategic www.propertyinsight.com.my DECEMBER 2016 I 29
FEATURED PROPERTY planning Katherine Chu added “First time property buyers are attracted to the key features for this commercial property such as 3-tiered security, 1,200 parking bays, open courtyard, educational centre and banquet facilities,” She further reiterated that despite the current economic slowdown and lending restriction from the banks which caused challenging time for investors, KM Land has been right on the mark to complete and hand over in time to create value and trust for the investors. “I am proud to say
that our past projects like One Residence in Sekinchan, SB Perdana at Sabak Bernam and Sungkai Perdana had a great take up rate and helped the town to set a trendy lifestyle amidst its rural appearances,” “Our upcoming residential and commercial projects in hand include a first of its kind trendsetting lifestyle development with innovative concept located in Kuala Selangor, Sekinchan and an integrated highland eco-tourism project with a land area of 420ha in Cameron Highlands,”said Chu.
Kee firmly believes that a forward looking organisation is committed to projects, developed with quality and value creation and sustainable development. With conscientious and commitment, one can truly contribute to society, and this is what gives him a broader overview to sail through in the future. Project Development Details Address: Klang, Selangor Land Title: Commercial Tenure: Leasehold Site GPS Coordinates: 2°58’56”N 101°25’41”E Website: http://www.onekesas.com/ Expected Date of Completion: Phase 1 is completed and Phase 2 expected completion on 2017
Property Details Property Type: Integrated Commercial Development Built Up in Sq. Ft.: 215 – 1771 Price: From RM316,100 – RM2,246,800 Price per Sq. Ft.: Starting from RM442 onwards Special Features:
30 | DECEMBER 2016 www.propertyinsight.com.my
•
Strategic Location
•
Vibrant Integrated Commercial Development
•
First alfresco dining in Klang
•
Largest banquet to fit 1600 seats in Klang
•
Maturing neighbourhoods
•
24hr Security
•
1200 carparks (include sub-basement)
•
Direct access from Kesas Highway
DEVELOPER OF THE MONTH
PURSUIT OF A BETTER
TOMORROW
True to its tagline ‘LiveLearnWorkPlay’, SP Setia continues to thrive thanks to sheer commitment in promoting a sustainable lifestyle for the people BY: MAGES PV LINGAM
Setia Eco Templer www.propertyinsight.com.my DECEMBER 2016 I 31
DEVELOPER OF THE MONTH
Consumer behaviour changes from time to time, therefore SP Setia tries to innovate and cater to the market.” - Datuk Koe Peng Kang
O
ne of the country’s property giants, SP Setia, has embarked on a journey to be mindful of its social responsibilities and building lasting relationships with its customers. The group has anchored a pledge to contribute its best to build communities under its townships. Citizen Setia provides customers with exclusive lifestyle experiences and privileges. The man behind the scene to create an outbound of resources and joy to the masses is the company’s executive vice president, Datuk Koe Peng Kang. ONE REWARD FOR ALL Koe states that SP Setia has been rigorously running campaigns for years, steering its outlook to unite all under one platform -Citizen Setia. 32 | DECEMBER 2016 www.propertyinsight.com.my
Officially launched on September 5, the rewards and appreciation programme caters to all SP Setia’s purchasers. Koe said the communities under their flagship projects need to feel a sense of belonging as a resident and family under a roof. Koe added this will be a new experience whereby a wholesome identity has been created to enjoy an elite lifestyle. He believes every one of their purchasers located in Malaysia or even abroad have a chance to experience what a Malaysian developer like SP Setia has achieved over the decades. In conjunction with its 40th anniversary celebration last year, lucky customers were rewarded with all-expense-paid business class trips to project cities like London, Ho Chi Minh and Melbourne, as
well as a camera and a year’s subscription to a business weekly, each. An array of cultural and lifestyle events including “Shrek The Musical” or “Yours Musically: The Dama Favourites”, amongst others were organised exclusively for Citizen Setia this year. SP Setia has also collaborated with Tanjung Golden Village and Golden Screen Cinemas to provide Citizen Setia with an exclusive first screening to watch the latest silver screen offerings. Koe said since not everyone has had the luxury of travelling abroad, a contest or lucky draw balloting will be attested to determine each of the qualifier’s times. He believes that a long term, strong enrichment reward such as Citizen Setia will create a special bond between the developer, and the purchasers and their
Elizabeth Falls at Setia Eco Park
families and friends. “Some of the community engagements have attracted a string of new buyers due to the proper social campaigning structure,” says Koe, referring to SP Setia’s many social campaigns which include gardening and landscaping workshop. During the workshop, all participants received plant seedlings to encourage them to “colour their gardens”. They were given ten types of seeds which were planted to inculcate sustainable planting. The workshop successfully encouraged the younger generation to get together and appreciate the importance of preserving the environment. As for other efforts to boost community strength, Koe gave an instance for those who have purchased selected Setia properties this year, as they will stand
a chance to win a trip to the prestigious and celebrated Royal Horticultural Society (RHS) Chelsea Flower Show 2017 in London, saying the move saw “residents consciously beautifying their front yards”. Citizen Setia is an appreciation programme aimed to recognize and acknowledge its valued and loyal purchasers. It has been carefully crafted to differentiate and give a branded identity to the Setia community. By being a part of this, they will belong to a privileged class of community who will enjoy many of its perks. Asked about the differences between Setia Privilege Programme (SPP) and Citizen Setia, Koe said the former, launched in 2004, was a buy-a-product programme whereby buyers can accumulate points to qualify for free holiday trips, among others.
“As the market changes, the programmes will be merged via the virtual application,” he said. GOLD ENRICHED According to general manager Dianne Chan, the company’s Triple A Gold reward programme launched in September is an extended version of its Triple A (Affordable, Appreciative and Attractive) programme, where successful referrals stand to receive a 99.99% gold coin. The Triple A Gold promotion campaign, where Setia property purchasers who purchase selected Setia properties this year, can now double up on their existing Loyal Customer Rebate (LCR) and enjoy up to 5% rebates. Purchasers who buy properties worth RM500,000 and above, are also being www.propertyinsight.com.my DECEMBER 2016 I 33
DEVELOPER OF THE MONTH
Citizen Setia Enjoys Shrek the Musical, a Broadway Musical brought exclusively to them by S P Setia rewarded a 99.99% gold coin, worth up to almost RM30,000 (price per the current gold price) which will be given out in accordance to various ranged prices, if the property purchased is RM500,000 and above. It is an “expression of appreciation” where Setia has put in a great deal of thought and effort, in appreciation of its purchasers.
‘Triple A Gold’ Campaign by SP Setia
A 50m salt water pool at the Water Garden in Setia Sky Ville 34 | DECEMBER 2016 www.propertyinsight.com.my
SIGNIFICANT SWITCH OVER SP Setia was one developer to leverage on the steep economic statistics by introducing the ‘Setia 10:90’ programme. It was first incorporated in developed countries like Australia and the United Kingdom, in which only strong developers with confidence in their products can indulge in that programme. The Setia 10:90 package is a build-thensell package. In this scheme, apart from the first 10% being billed at the point of signing SPA, there are no other progressive billings until the property’s completion. The remaining 90% of purchase price is invoiced upon delivery of vacant possession, supported by the certificate of completion and compliance. In this soft market, where bank loan applications are more stringent, this package would be attractive as it helps to free up financial burden for purchasers.
This is because banks will not disburse the loan until the building is certified completed, and the developer issues the invoice for 90% of the balance of purchase price. As such, purchasers need not service any progressive loan interest during construction period. Purchasers who wish to apply for end financing shall do so within 30 days after receiving the stamped SPA. Purchasers do have the flexibility to plan their financing and manage their funding with this scheme. Elizabeth Falls at Setia Eco Park was the first Setia project to be sold under the Setia 10:90 plan in 2015, with all units launched under the Setia 10:90 plan fully sold. Encouraged by this, Setia decided to selectively launch projects under its Setia 10:90 banner to help more genuine buyers to own their dream homes. FRESH DEVELOPMENTS IN PENANG SP Setia’s 2.8 acres’ development project in Penang known as Isle of Palm in Setia Pearl Island has been launched recently with some 30 residential units of semidetached homes with selling price starting from RM1.73 million. Meanwhile, Koe also shared that its recently launched Setia Sky Ville, located in the strategic and central location of Jelutong is spread across 5.3 acres and comprises of two towers of high-rise condominiums. Phase 1 comprises of 550 units of condominium surrounded by lush, verdant landscape, thematic gardens and water cascades - the signature of every Setia development. The twin gardens are a harmonious balance of wind and water, while the 1-acre water garden which is located at the ground level offers a 50m salt water resort styled pool, children’s pool, bio pond, water cascades and jacuzzi. The 1.8-acre of Wind Garden, which is located at Level 7 offers thematic garden spaces where one can relax and enjoy the soothing breeze in the morning, and cool wind from the hills in the evening. Besides that, it also encompasses an 18,000sq. ft. green roof residents’ clubhouse which offers a well-equipped gymnasium, multi-purpose hall and more. Each unit is spacious, featuring well-designed open plan layouts that ensure maximum living space and privacy. The amenities include two gardens with
an oasis effect for the community. Koe further touched upon the Legend of the Nine Creeks concept at Setia Eco Templer in Rawang, a development which included the conservation of the flora, fauna, creeks and lakes. It is a 49.22 acres’ plot which comprised high-end link villas, semi-detached homes and bungalows with prices starting from RM850,000. Its maiden phase launch at Setia Eco Templer received an overwhelming response. All 234 units launched were fully sold. Purchasers, especially those currently staying in the surrounding area of Rawang and Selayang, were attracted by the naturally scenic beauty of Setia Eco Templer that is backed by the majestic natural tropical rainforest of Templer Rainforest Reserve, and Kanching Rainforest Reserve which also provides a cool and breezy ambiance for residents of this green township. With a low overall average, residential density of about 9.5 units per acre, clubhouse facilities, ample green spaces for leisure and community activities as well as dedicated interchange for convenience, residents of Setia Eco Templer are sure to enjoy a true balanced lifestyle in every sense of the word. It has nine streams of water paved into the development serving as a cooling effect to the development and watering the flora too. The recent launch of its new project Setia
Sky Seputeh in September, is situated on a freehold 4.8 acres plot with RM930 million as its gross development value. It was built for a niche market in mind, with excellent amenities and access to public transport facilities. Conveniently, it is located only 500 metres away from Mid Valley Shopping Mall. A host of 5-star leisure and recreational activities have also been planned for this luxurious development with the primary attraction being a unique 1.5 acres’ resort-themed podium, featuring one of Malaysia’s longest man-made sandy beaches in a high-rise development. Other facilities available include a swimming pool, reflection pool, jacuzzi, heated aqua gym, sky gym, gourmet kitchen, study room, game room and many more. RECIPE FOR TOMORROW’S SUCCESS On the international stage, SP Setia launched its third Australian residential project called MAISON Carnegie in Melbourne. It boasts 48 low density units that are near to the central business district (CBD). This provides access to one of the largest malls in Australia, the Chadstone Shopping Mall, as well as Monash University and retail shop lots. The developer has an intuition to make use of the population growth in Melbourne, to capture foreign investors and young elite groups.
Datuk Koe and his team at the Setia Eco Park Sales Gallery www.propertyinsight.com.my DECEMBER 2016 I 35
AREA FOCUS
BANGSAR SOUTH – DOMINANT TOWNSHIP A class of its own
BY: MAGES PV LINGAM
36 | DECEMBER 2016 www.propertyinsight.com.my
B
angsar South or Kerinchi (Kampung Kerinchi) as it was known in the past, boasts several developments, namely Bangsar South City and KL Gateway. The latter is located five minutes away from Petaling Jaya and 15 minutes away from Kuala Lumpur via the Federal Highway. Bangsar South sits on a 25ha fully integrated residential and commercial township. Residents of Bangsar South were given ease of public transportation via Universiti and Kerinchi LRT lines and stations, and a new phase of LRT lines will be constructed for Pantai Sentral Park, too. At the other end, it also gives Bangsar South access via roads like Federal Highway and the New Pantai Expressway(NPE). Other accesses are also via roads from Mont Kiara, Taman Tun Dr Ismail, Kelana Jaya and Brickfields. Tang Chee Meng of Henry Butcher Real Estate said Bangsar South is also accessible via highways and roads to and from Federal Highway, Sprint Highway (Kerinchi Link) and NPE. Additionally, it can also be reached via Keretapi Tanah Melayu (KTM) commuter lines from Batu Caves to Klang via Angkasapuri, Pantai Dalam and Petaling lines. Tang said Bangsar South is planted within the golden triangle of Kuala Lumpur, Petaling Jaya and Bangsar, making it less tedious for residents undergoing the morning and evening rush, when a strategic transportation plan is in line with the Greater KL blueprint. A LITTLE HISTORY Kampung Kerinchi took its name from
Kerinchi in the Jambi District of Sumatra, where Haji Abdullah Hukum lived in the 1890s. He arrived in Malaya with his wife and children during hard times. Abdullah was a village chief who was responsible in uniting the Malay, Chinese and Indian races; subsequently uniting the races or ‘bangsa’ in Malay, earning the town its current name “Bangsar”. He was the pioneer of early settlement in Kerinchi, now being redeveloped by the Urban Development Authority of Malaysia (UDA). Dwellers of Kampung Kerinchi or Bangsar South in modern days were early settlers who gradually brought development to Kuala Lumpur, especially in Pudu, Petaling Jaya and Kg Hj Abdullah Hukum (historical name White River). The people of Kerinchi also cultivated pineapple plantations in the surrounding hilly areas,with one of the plantations popularly known as Bukit Nanas today. There are a few notable landmarks that fill up the Bangsar South skyline like the intricately designed Menara Telekom and Mid Valley Megamall, not forgetting the Angkasapuri building and the prestigious education hub Universiti Malaya. Initially, Bangsar South was developed with an existing residential plot which comprised of Kampung Kerinchi and Seri Angkasa leasehold flats, and Vista Angkasa apartments. ACCESSIBILITIES AND AMENITIES Bangsar South is lauded by developers for its strategic location and accessible amenities. It also has advocated its status as Multimedia Super Corridor (MSC), www.propertyinsight.com.my DECEMBER 2016 I 37
AREA FOCUS recognised by the government so that companies located here qualify for certain privileges or perks granted for statuses like tax free, high-speed Internet access or grants. It also incorporates ICT-facilitated businesses that develop or use multimedia technologies to produce and enhance their products and services. Today, Bangsar South is popularly known as Malaysia Media City. Bangsar South creates a lively and vibrant lifestyle for the community, with the modern Nexus Shopping Mall in Jalan Kerichi. The Connexion@Nexus also places a fully integrated food and beverages section, along with a floor for banquet facilities. It can be accessed via the Federal Highway, NPE and Sprint Highway. As for commuters utilising public transport, a shuttle bus is provided at the Universiti LRT station. The high-end residential parts of Bangsar, consisting of Jalan Maarof and Bukit Bandaraya, have influenced the influx of property buyers to bet on the appreciation values on the developments in Bangsar South. There are currently 22 multi-national corporations operating in Bangsar South, with about 1,500 expatriate workforces. In addition, to support the welfare of the surrounding community, the private hospital Life Care Diagnostic Medical Centre has been in operation since 2012. It is a one-stop medical hub which houses a wide range of medical and professional consultants and services at Wisma Life Care in Jalan Kerinchi. It has a viable connection for major roads and highways like Federal Highway, NPE, Sprint Highway and the Damansara Puchong Expressway (LDP). ONGOING PROJECTS The Bangsar South township has been developed by property giant IJM Land Berhad to create a positive outlook for community integration. A growth of projection based on percentage levels, has appreciated at a 20 per cent average since Pantai Sentral Park was launched in the third quarter of 2014. It is known as the capital city’s only urban forest city; whereby eco-centric philosophy is a priority for conceptualising the surrounding land. The visionary township of Pantai Sentral Park will be Kuala Lumpur’s vibrant 38 | DECEMBER 2016 www.propertyinsight.com.my
jewel by the time the new Pantai Sentral Park Interchange at NPE is completed, by February 2018. The 2.8km-long interchange connects the Pantai Sentral Park to the major commercial and residential hubs of Petaling Jaya, Kuala Lumpur, Subang, Bangsar and Mid Valley. Additionally, another key factor that makes the interchange project vital for Kuala Lumpur is the fact that it will reduce the current traffic congestion affecting road users heading to Jalan Bukit Angkasa, Jalan Pantai Murni, Jalan Pantai Permai 1, and alongside Bangsar South commercial areas. Pantai Sentral Park sales and marketing manager Grace Foo said: “The Pantai Sentral Park Interchange @ New Pantai Expressway will ensure quicker and easier access to and from the existing and proposed Pantai Sentral Park development. Upon completion, Pantai Sentral Park will be directly connected to Kuala Lumpur’s hotspots. It is also located adjacent to Kuala Lumpur to the northeast, Bangsar/Damansara to the north, Petaling Jaya/Subang/Sunway to the west and Cheras/OUG/Sungai Besi to the south-eastern side. The current residential component is known as Secoya Residences with expected completion in 2019. “The Pantai Sentral Park interchange will create a direct access to the NPE, while road users from Federal Highway will be
connected via Jalan Kerinchi. Motorists from Bukit Gasing, meanwhile, are connected via Jalan Pantai Dalam,”. “We are positive about sales in these areas, with additional developments in the fringes of Bangsar South. These include Kuchai Lama, Old Klang Road and Bukit Jalil,” Foo said. Bangsar South skyline has changed over a decade ago and Pantai Sentral Park is a pedestrian-centred development that boasts nature-inspired facilities that link residential and commercial parcels, while linear forest walkways on the fringe of the project connects to the township. Furthermore, there will be a soothing lake area for residents who love a waterfront lifestyle, and allow the community to spend their time outdoors. A major city perk of the township is its close distance to nature hotspots like Taman Rimba Bukit Kerinchi and Hutan Pendidikan Bukit Gasing. The gazetted Taman Rimba Bukit Kerinchi acts as the green lung of the development, providing natural air not only to the community of Pantai Sentral Park, but also the surrounding neighbourhoods. Oregeon Property Consultancy director SR Joean Lee Sheau Huey said: “There are several active projects mushrooming in Bangsar South like Eupe Bangsar South Development (JV) Sdn Bhd with Novum project, UOA Group with South View Service Apartments and YNH Property Berhad with YNH’s Bangsar South. In line
with upcoming developments are projects by Paramount Properties SdnBhd,” “Still under development is Novum with 729 units of serviced apartments, expected to complete in 2019,” Lee said. RealProperty.my principal Amanda Goh said: “I worked on some properties with good value in returns. The transacted price on the residential for sale was Camelia Suite at 1421sqft at RM816psf as of June,
and the commercial one was Vertical Office Tower A with RM950psf as of March. As for the rental yield for Camelia Suite’s fully furnished unit, it is going at a rate of RM3.17psf.” She also commented that the percentage of expatriates living in the vicinity Bangsar South are lower compared to other suburbs like Mont Kiara or KLCC. Despite that, some relevant information pertaining
to the future development in the township with recently completed Vertical Corporate Towers by UOA Development Berhad with its double corporate office 40-storey high towers, have attracted tremendous investment growth. Another project that will be completed soon is the 1,204-unit South View Serviced Apartments and KL Gateway by Suez Domain, a mixed development comprising
SUBSALE (TRANSACTED) Project
Camellia Service Suites
The Park Residences
The Vertical
The Horizon
Type
Service Apartment
Service Apartment
Offices
Offices
Built Up (S.F)
Price (RM)
PSF (RM)
1,420.83
1,160,000.00
816.42
861.11
750,000.00
870.97
635.07
645,000.00
1,015.64
637.88
620,000.00
971.97
2,068.82
1,450,000.00
700.88
1,485.42
1,200,000.00
807.85
1,911.67
1,198,800.00
627.10
1,379.39
1,317,900.00
955.42
1,060.24
1,000,000.00
943.18
811.92
799,820.00
985.10
734.96
883,710.00
1,202.39
60,555.01
64,000,000.00
1,056.89
100,603.71
102,200,000.00
1,015.87
37,131.58
37,500,000.00
1,009.92
104,654.06
93,800,000.00
896.29
PSF (RM)
SUBSALE (ASKING) Built Up (S.F)
Price (RM)
Acacia
Project
Condominium
Type
2,095.00
1,800,000.00
859.19
Begonia
Condominium
1,485.00
1,280,000.00
861.95
www.propertyinsight.com.my DECEMBER 2016 I 39
AREA FOCUS of service apartments, office and a shopping mall to cater to the communities. Goh said other projects include Pantai Sentral Park by IJM Land which has a joint venture with Amona Development Sdn Bhd, Inwood Residences with 211 units of condominiums and Secoya Residences with 243 condominiums are priced between RM780psf and RM800psf. IJM Land has a project soon to be launched which comprises of 30-storeyed offices and 36-storeyed serviced apartments. This location is at Bukit Kerinchi which is just a stone’s throw away from Bangsar South. Recognised as a multimedia corridor (MSC),Bangsar South is greatly sought after by property buyers and investors. “This area will not stop flourishing as future developments are on the way, for instance the redevelopment of Angkasapuri is primed to be the Media City national entertainment and news hub,” Goh said. “Other future developments in the pipeline are also 0.97ha of service apartments by PANTAI SENTRAL PARK FACT SHEETS
40 | DECEMBER 2016 www.propertyinsight.com.my
YNH Property Berhad and presumably a 3.24ha hotel and office project by IGB Corporation Berhad.” Bangsar South is a preferred iconic township built to better the livelihood of communities living, working, and leisure living, towards a developed status. Boutique developer Bon Estates, founded in 2009 by managing director Mr Goh Soo Sing and project director Mr Liew Kok Earn, have disclosed their latest flagship project called The Estate, built on 3.68 acres of land nestled in Bangsar South. These freehold energy efficient homes with larger built will be officially launched in February 2017. The Estate, uniquely built of 2346sq.ft. consists of 4+1 bedrooms are expected to be launched at RM750psf. BÖN Estates Sdn Bhd (formerly known as PPM Realty Sdn Bhd) wants to encourage multi generation living under a roof with a dual key concept units. It allows a family to upgrade or downsize over their course of lifetime. The 100-year home concept also relates
back to the durability of the building materials which have been incorporated in these projects. The high usage of selected materials such as grey marble floorings, engineered wood flooring and low emission laminated glasses eventually boasts an energy efficient concept which allows the residents to stay green using passive cool home technology. The developer has collaborated with public works department (JKR) and The Building Sector Energy Efficiency Project (BSEEP) to develop a passively cool home. All the east and west facing windows, we have included low emission laminated windows to cut out the glare while maintaining the natural daylight, air-conditioning at The Estate comes with invertors piping, where the architects have also included additional shadings. We have also allocated car parks for hybrid car charging stations in our development. Their completed projects were Minden Gardens and White Lily in Penang.
AGENTS SPEAK AMANDA GOH, Principal, RealProperty.my In my opinion, given that the supply of office space has increased recently with the completion of Vertical Corporate Tower, there may seem to be a glut of office space in Bangsar South when the KL Gateway completes. However, due to its excellent connectivity, the oversupply will be absorbed eventually. Perhaps in the future, when the High-Speed Rail and Mass Rapid Transit projects are completed, one may travel from Bangsar South to Singapore within three hours. It is exciting to see how a land previously named as Kerinchi Village has been transformed into a modern, vibrant, well-integrated township named Bangsar South, and more exclusive developments are expected to happen here soon. This is a model example of successful urban regeneration where the area has been rejuvenated and the value of real estate here has increased.
TANG CHEE MENG, chief operating officer, Henry Butcher Real Estate Today, Bangsar South has gone through a positive transformation from what was previously a low-income area into a popular area to stay, work and entertain.We understand that future phases of Bangsar South would include four more blocks of apartments and two blocks of corporate office towers.
www.propertyinsight.com.my DECEMBER 2016 I 41
CELEBRITY INSIGHT
DYNAS MOKHTAR MOTHERHOOD MATTERS WITH ENTREPRENEURIAL SKILLS Passionate about motherhood and lifestyle BY: MAGES PV LINGAM
42 I DECEMBER 2016 www.propertyinsight.com.my
PERSONALITY OF THE MONTH
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elebrity cum entrepreneur Wan Intan Edrinas binti Wan Mokhtar or popularly known as Dynas Mokhtar, is a well-known model, actress, TV host, fashion designer, café co-founder and entrepreneur at large. She is also a doting mother of two young children, based in Kuala Lumpur. Standing tall and prolific at 5’11”, the young innovator has an innate beauty and skills that is brought out from within the actress, transforming her into a budding young entrepreneur. STAR OF THE DAY Dynas Mokhtar’s responsibilities towards balancing her family life and being a successful entrepreneur depends on routine planning, and executing her duties diligently. She also maintains keeping business promises, delivering and refuting cover ups for mistakes. She has instilled an aura of working with passion, and has trained her staff to comply to their customers and their concerns regarding her products. Dynas completed her studies at Universiti Institute Teknologi Mara (UITM) and has won an astounding string of awards. She also has her hands in advertisements, and acted in numerous dramas and movies. Apart from that, her advent into motherhood has propelled Dynas to hosting a show for mothers and moms-to-be in year 2010. HOME OWNERSHIP INTERESTS Significantly, Dynas did not pay much attention in obtaining properties until her mother encouraged her to purchase a residential property for investment purposes. It was one of her close friends who finally pushed her to purchase a SOHO unit located at Old Klang Road, KL, which she is occupying currently with her precious little family, of a son and daughter. Her 734sq.ft. freehold unit gradually won her heart, and she decided to stay until the prospects of another bigger landed property for her family would be attainable. She found the chic unit very convenient for shopping as it is located just above a 5-storey Tesco hypermarket. Shopping malls located close by include Mid Valley Megamall, The Gardens Bangsar, Citrus Plaza, and Bangsar Village. Initially, she intended it to be a source of investment via rent for short term staying expatriates, due to easy road highway links
and with a convenient location situated in mid-KL, a popular hub among business travellers and short stay revellers. In terms of connectivity, the property is also eased with accessibilities available via Bukit Jalil Highway, KL-Seremban Highway, New Pantai Expressway (NPE), Smart Tunnel, and the KL-Putrajaya Link. However, an analysis of the sub-sale price of the condo can reach more than RM600,000, albeit the build-up of certain units which barely reach 1,200sq.ft. It has inculcated her to survey further on landed residential properties to add on her personal investments. Dynas’s boutique is located at Seksyen 8, Bukit Jelutong, Shah Alam. She maintains it is an advantage for her business due to its convenient location, providing accessibility for her clients to reach her shop, Wan-ra Revolusi. It sits at the major intersections of North-South Highway, Federal, Guthrie Corridor and Kesas Highway, making it easily accessible to the Kuala Lumpur International Airport (KLIA), Kuala Lumpur, Petaling Jaya and Port Klang. The factory which belongs to her father, is a 3 storey unit, encompassing 4,073 sq.ft. and a warehouse of 2,280sq.ft. CREATION AND CREATIVITY Dynas decided to venture into business as its scope is vast, and always been an inspiration to her, besides the entertainment industry. Any industry needs due diligences and high spirited commitment to achieve the goals lined up. As for Dynas, her mother has been her motivator, encouraging her to venture into something close to her heart, after which DNA @ Dynas Nursing Attire was conceptualized in year 2011. Her ideas mushroomed after having her first child, initiating the venture as it was awkward for her to nurse her child while attending meetings and acting rehearsals. Therefore, the DNA brainchild was born, making her to work hard to make the nursing attire trend to be well known to young mothers, with the trend to flourish promptly on local and international platforms. Even though her mother did question her on the trend being widely accepted, especially since working mothers are opting for formula milk to their offspring compared to two decades ago when mother’s milk was being hailed as www.propertyinsight.com.my DECEMBER 2016 I 43
CELEBRITY INSIGHT the ‘holy milk’ for new-borns. As for DNA, Dynas wants it to be a wonderful journey of motherhood, and breastfeeding for all mothers. Her DNA collection has a variety of motherhood attires and casual quality outfits. The technicality of her designs are easy to wear, with a strong purpose too. A pregnant mother can opt to fashion it casually after she has given birth to her offspring, to suit her fashion desires. BUSINESS ACUMEN Subsequently, as the managing director of Wanra Revolusi, Dynas’s office is located at Bukit Jelutong, Shah Alam, housing her creations and escalating her business ventures from an easier platform. Dynas was encouraged by her mother’s passion for business and decided to register her business with MATRADE. This will help her to venture into larger market groups in London, and encourage her to perform fashion trails on exclusive catwalks around the world. Besides DNA, Dynas has also introduced two other collections, Syampom and One-Ra Ready to Wear. Its materials are from Korea but the print designs are her personal selections. Syampom is a toddlers and kids brand wear, which poses simple designs and comfort wear, namely Sofea Baby dress and Meloni Matching Mom and Baby Dress. FAMILY SET UP Initially, establishing Wanra Revolusi as a family set up, Dynas had her management team to work on sales in the business, as she was concentrating on the marketing and creative aspects of the business. She is constantly looking out for people who are trust worthy, committed and willing to work the business over time to see that the vision and mission are always met. Her online platform has greatly escalated her products as a very profitable marketing tool. Dynas being an avid entrepreneur is also a co-founder of healthy food restaurant, Eat with Mune, focussed on home delivery and for events. She quipped that being a well-known celebrity didn’t stop her from facing any challenges but it has somehow created awareness for the public to pay more attention for championing maternity and nursing attires. 44 I DECEMBER 2016 www.propertyinsight.com.my
Therefore, she has managed to integrate the media support, and to enhance her outbound marketing. Several hospitals have invited her to give talks and demonstrations in the past and purported for young mothers to conduct nursing in public, but in a more moderate way. She
is convinced that women will feel that the nursing attires are very practical and comfortable, as the quality of the materials used for the pregnant mothers and even the children’ collection, are best suited for activity and familial bonding.
ENTREPRENEUR INSIGHT
POST BUDGET ECONOMIC OUTLOOK 2017 SMEs are the backbone of business entities in Malaysia, with about 95% active involvement in this field. BY: MAGES PV LINGAM
I
n the forefront, the overall economy might look gloomy, however the wider outlook is brighter and promising indeed. These are the notions propelled by key opinion leaders at the recent Entrepreneur’s Insight (EI) summit held at the Setia City Convention Centre in Shah Alam. The early session was moderated by Armani Media’s managing director Dato’ KK Chua, juxtaposed with Dato’ Seri Matthew Yeoh and James Ong, to phase out their innate views on the recent budget announcement. The founding partner of law firm Yeoh, 46 I DECEMBER 2016 www.propertyinsight.com.my
Mazlina and Partners, Dato’ Seri Matthew Yeoh, was asked on his views on the postbudget. He stated candidly “from a lay man’s point of view, the budget was meant to help the lower income bracket earners, expanding in relation to tax collection. The more incentive percentage increased, better taxes are catered for individuals.” KK Chua posed the same question to James Ong, a renowned investment and real estate consultant in Malaysia and Singapore, also the chief executive officer of Fortis FP Consultancy, an individual that
has most likely had multiple involvements with other cross border nations. He first started out in a foreign bank, and then joined a factory in Klang, dealing with plastic injection moulding. He later came to own his own company in his early thirties, inherently becoming a business owner. “The budget outlook in general, didn’t affect me. I still pay GST, and other taxes. I am not from a niche or certain segment of the market. Despite that, I will still expand my views and impact on small to medium industry, especially on the overhead cost,
PERSONALITY OF THE MONTH salary, bills and more,” said James. GRASS ROOTS IN BUSINESS James went on to define the small media enterprises (SME) to the eager-looking crowd. “SME covers a wide range of industries like manufacturing, mining and agriculture; supporting the economy handin- hand with the government ‘s initiatives. “As defined by the government in 2013, SME’s with a turnover of not more than 50million should not hire more than 200 employers, semi-manufacturing sector in services with less than 20million turnover and 75 employees, small holders like tool and dye companies which falls under 5060 employees, tourism related businesses, organic farming which supports gross domestic products (GDP) in support of the industry comes from these groups. 75% of GDP comes from this group in our economy,” added James. GOVERNMENT AIDE Dato’ KK Chua requested the panel to share on the government’s initiative of RM6.1bilion to be injected into SMEs development; with the move projected to affect rising entrepreneurs and existing players in the industry. The success of fiscal allocation on how to help SME is the good news which in turn will be a turnaround in growth within the new few years. Despite that, the country running through a few rough patches on crude commodities and slumping oil prices have inadvertently brought lower consumer spending and domestic demand, but the government has a framework drawn out to counter negative connotations. James added that there is a minute 1% of income tax reduction which might benefit the overhead costs of these SMEs. This in the long run will benefit those who are making money, however for the companies which are not, then the 1% reduction will not matter much in hindsight. The tax rate on SME’s chargeable income has reduced from 19% to 18% from year of assessment 2017. A significant e-commerce masterplan in financing or provision of RM75million, has been allocated to close the gap between SMEs and financiers. The British started this move, an alternative financial service, with an online platform regulated as a Peer-to-Peer (P2P) lending business
trend. “A collateral will be needed in this business trend, whereby companies may raise money through an open platform, like crowd funding. Security commissions have identified six lending operators which include B2B Finpal, Ethis Kapital, FundedByMe Malaysia, ManagePay Services Sdn Bhd, Funding Societies Malaysia and Peoplender. Raising money through crowd funding will not be online until next year. This is for the emerging market,” commented James. He went on to add, “SMEs are mostly business owners and they crave passionately for it and run things differently. There is a huge difference between a managing director and a factory manager of a company,”. There is huge allocation for start-ups, for instance RM1.5billion allocated for Bumiputras, RM150million for Indians, RM90million to Chinese holders and micro credit loans of RM20million for Chinese women entrepreneurs. Malaysia has diversified into a digital hub with e-commerce in the future of transforming business ventures globally, and locally, too. Matthew stressed on, that even though Malaysia has its internal challenges to cope with such as underperforming currency market for a couple of years, along with increasing cost of living and prices of goods going up, Malaysia inherently has a higher capability potential compared to its fellow Asian counterparts. James on the other hand believes that Malaysia is truly unique, even many manufacturers have moved out to open their business in other markets, even to dismantle their factories as it failed to add value and was unable to compete with countries offering cheaper labour and overhead costs. He stated that even Malaysia has currently lost out to Indonesia for being the largest palm oil producer in the region. Despite that, Malaysia still stands out in being the biggest pool of outstanding SME owners, due to fluent English and Chinese mediums of communication for the open market concept that pulls in foreign investments. Dato’ KK Chua on his last note asked James on the economic behaviour on a general term. “Hence, we need to embrace the e-commerce concept in our businesses. Every year there will be
Hence, we need to embrace the e-commerce concept in our businesses.” - James Ong
challenges but we must have the flair to do business, be responsive and create a fast reaction time,” “We must also be adaptable and resilient in the market, able to tap and make use of the strengths of other countries in finding partners by following government agencies like Malaysia External Trade Development Corporation (Matrade) for foreign interventions.” He added that Malaysia’s outlook on oil and gas export will fluctuate 10-15% and pose drastic changes in real estate too. The influx of expatriates from this industry will dwindle, causing the economic activities to look bleak. Therefore, an advice suited for entrepreneurs would be to have clarity on their personal and business finances, to prepare for the oncoming economic bouts of possible uncertainties. www.propertyinsight.com.my DECEMBER 2016 I 47
INVESTOR NEXT DOOR
TAKING THE SMART JOURNEY Strategising each purchase while capitalising on opportunities BY: AVINASH SAGRAN
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eep-rooted interest in research saw Kaygarn Tan holding a Masters in Science, exploring in the field of entomology. A scientist by profession and having spent 22 years in the academics, he realized life is not all about working 9-to5. “I felt trapped with my full-time job and I needed to do something different to turn my life around,” he says. “That was when I started to learn how to invest in property, and to be out of the rat race and be financially free.” Today, Tan has become a full-time investor, coach, entrepreneur and recently published his first book The Master Key Method to Unlock the Secrets of Property Investment. With a new goal in mind, Tan aims to inspire and help as many people as he can by age 60. THE JOURNEY “I have enjoyed looking at buildings and properties ever since I was a boy,” said Tan, adding that bike rides with his father to survey property sites were among the most memorable moments. He says investors have full control of their assets from the research, to minimizing all the risks in screening tenants. “You are accountable and take ownership of the situation, unlike shares that
48 I DECEMBER 2016 www.propertyinsight.com.my
predominantly depend on market force. “I decided to invest in property because of the power of leverage. Property is an asset class that you can leverage and get a loan of up to 90 per cent which should not be taken for granted because Malaysia is one of a few countries that offer such a loan policy.” Tan says properties will always remain as hedge against inflation as property value will double up every decade. “Hence, we should utilise it as a tool to create wealth.” Tan urges budding investors to set a property goal, saying it may provide a great advantage, considering his goal of acquiring a RM1.5 million property portfolio 10 years ago that has grown significantly today. EXCITING VENTURE “I never thought about investing, as initially the idea was to buy (a house) for my own stay,” he says. “So I bought a medium-cost apartment that was within my budget. Today, the apartment is rented out as I’ve got a good paymaster.” Fear of purchasing the wrong property may deter one from sealing the deal but Tan insists on investing in yourself first as he started his investing journey from his very own pocket.
INVESTMENT STRATEGY “Your property portfolio should have both for capital appreciation (flip) and for rental (keep). Before you buy any property, you need a clear strategy whether you want to keep or flip (your investment).” Tan advises budding investors to start with residential units, because people are always on the hunt for a roof over their head. Commercial market is a niche segment with different target markets and highly reliant on economical factors and traffic flows within the area. “Once you’ve started investing on residential units, only then can you learn about commercial properties,” Kaygarn says. “A reliant system must be in place to save your money towards financial freedom. No money down is an advance strategy which can get you started with minimal capital, but will snowball your capital for your next purchase.” Never skip research. Tan highlights that consumer demand involves several factors, including location and population. “Therefore, make your purchase according to demand, instead of speculation. For example, if it’s a buy-tokeep investment, study the rental returns and buy at least 10% below market value in areas that have high population density.
INVESTOR NEXT DOOR
www.propertyinsight.com.my DECEMBER 2016 I 49
INVESTOR NEXT DOOR
System must be in place to save your money towards your financial freedom.” - Kaygarn Tan
CHALLENGES AND EXIT STRATEGY Among the challenges Kaygarn faced, was buying without much knowledge, especially when he ventured into commercial property without a proper exit strategy. Having purchased a commercial property during the global financial crisis of 2008-2009, he was unable to rent it out and ended up having a negative cash flow. Asked about an ideal strategy, Tan says: “If you want to rent out the property, buying 50 I DECEMBER 2016 www.propertyinsight.com.my
from a construction property may not be a wise choice as there is no gauge and you need to hold longer. “Secondary market would be ideal but be sure to calculate rental return,” he says, adding that investors should not get a property that offers a return that is below 6.5 per cent “as you would not get a positive cash flow after deducting all the cost”. To flip, the property must meet demands
especially in access to hypermarkets, public transport facilities, schools as well as refurbishment of the property and surrounding areas. OPPORTUNITIES APLENTY “As opposed to popular belief that the current market is soft, the situation today provides a lot of opportunities,” he says. “Now, it is easier to find below market value properties and discover more gems.”
INDUSTRY INSIGHT
VIRTUAL OFFICE ON DEMAND A virtual office will allow more free time to work on your business while lowering costs BY: FELICIA SOON
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f you own a small business or start-up, you will want to keep your outgoing costs to a minimum. Since its inception a year ago, M-Suite Virtual Office offers virtual office spaces at affordable rates. The Petaling Jaya-based company provides your small business with a professional address and complete access to admin and 52 | DECEMBER 2016 www.propertyinsight.com.my
PA facilities without having to pay rent. The ‘virtual’ element literally means you can benefit from all these essentials, at half the cost of renting a full office, making it also a suitable choice to start small businesses, and small to medium enterprises during this economic recession. Property Insight met up with M-Suite
Virtual Office’s director Simon Loke to discuss how they first started their business and how the response has been so far for them. M-Suite Virtual Office was originally set up in Wanchai, Hong Kong, two years ago. Due to the location of high property pricing in Hong Kong, which created a demand for low-rent virtual offices for
Our virtual office will cater to your business needs and our friendly team will be of assistance.”
– Simon Loke
freelancers and smaller companies to start from. A year later, the director, LuZhiqiang moved the idea back to Malaysia. Located in a business district of their choice, M-Suite chose Kelana Jaya as the starting point for their virtual offices set up. “Kelana Jaya is considered as a concentrated area for commercial activities in the region and the parking facilities, coupled with the nearby shopping malls and restaurants, giving it a great potential for development. Everyone has entrepreneurial dreams, wanting to be the boss of their own vision. However, the past few years has seen an economic downturn; therefore, many people are unable to start a business, due to limited financial resources, leading to the decline of entrepreneur’s dreams. M-Suite saw the needs of the Malaysian economy market and thus decided to bring in the concept of virtual offices to Malaysia from Hong Kong, to provide low-rent offices rent and help people complete the dream of entrepreneurship. “The concept of a virtual office is still
relatively new to Malaysians, hence more promotions are needed to allow more people to understand the virtual office benefits and increase the demand for virtual offices in Malaysia. Virtual office rents are low, with rents starting at RM98 per month or from RM18 per day,” Simon said. A key benefit of virtual office space is the professional address. Your address can be used on all your business correspondence and mail, which will reassure your customers and build trust. In addition, the administration department in M-Suite will help deal with receiving and sending mail and other services. “The advantage of virtual offices is that they do not have to rent an entire office, there is no need to purchase furniture and office equipment; therefore, you enjoy the lowest cost, in the shortest possible time to set up your own office. On top of that, the virtual office cost will be less than their rented office – only 50% of the total expenditure,” Simon added. Although setting up in Malaysia within the
time frame of a year, M-Suite Virtual Office has achieved good results. About 60% of the units have been leased. However, if you need a table to work, you can rent a table in the office, for RM450 a month or you may choose a small office, with the monthly rental of RM750 per month. The surrounding area is convenient for easy parking in front of the office, with CCTV cameras that monitor for 24 hours. Access to Zenith Corporate Park and security surveillance also creates better operating results, allowing for more security-based choices. Virtual offices are suitable for home workers, to work at home from time to time, and to occasionally hold meetings, presentations or group discussions in a meeting room. M-Suite also provides conference room access, refreshments and other modes of entertainment. This is certainly a concept that is taking off in today’s portable environment, making accessibility and convenience the order of the day. Ideal for those who need a start up without worrying about the budget.` www.propertyinsight.com.my DECEMBER 2016 I 53
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ROOKIE INVESTOR
ONG CHYUAN:
OWNING HIS DREAMS IN THE FACE OF ADVERSITY, ONE STEP AT A TIME The young daredevil rubs his two cents together on earning 30 properties, before the age of 30 BY: DIVYA PREMBAJ
O
ng Chyuan sits effortlessly in his chair, hands clasped easily on the table in front of him. A glance at him, one would think that he would be your average young, mid-20’s Malaysian youth, just starting out on his journey to seize his
56 | DECEMBER 2016 www.propertyinsight.com.my
path in life. But standard and ordinary, he is not. NOMADIC ROOTS Born in Butterworth, Penang, Chyuan grew up in a humble family of six. Living under
difficult conditions for most of his early life, his parents were not able to own a home, therefore the family found themselves living nomadically and renting from Penang to Kedah, moving around to fit the climate of their financial means. “We’ve rented from
places to places; from single story terraces, to tabooed places near cemeteries, sharing our home with pigeons that nested in our rooftops and windows”, he reminisces with a wry smile. It was this state of constant change that spurred his earliest goal in life - to inherently become a bona fide property investor. Scrambling around as much as possible in his younger days to improve the condition of his family, Chyuan made it a point to work hard at what he wanted in life. At the age of nine, he made WWFMalaysia scrapbooks and sold them to classmates, progressing the following year to selling homemade wallets and recycled newspaper to double his income. The money earned was minimal, but at that age it was a small fortune, a symbol of fortitude to the young entrepreneur who did not have the privilege of having his own pocket money. Tertiary education saw Chyuan sailing through an array of jobs, working part time as a waiter, kitchen helper, dishwasher and so on. Upon completing his form five level of education, he decided to stop studying. However, seeing his friends doing the same and becoming mechanics with low wages, he decided that the money was not enough, and continued onto form six and straight to university at UUM (University Utara Malaysia). Undergoing a business administration course gave him a practical mindset in terms of understanding how the modern world of commerce works, pushing earlier desires to be a lawyer or a doctor out of his mind. “I remember going through my days at university with a minimum budget of seven ringgits a day. For some it may seem a lot, but it consequentially only provided for one meal a day, and some bread on the side”, Chyuan adds. THE INCEPTION OF A DREAM When he first came to Penang to work in his early 20’s, Chyuan had no savings. His first two months on the job allowed him a minimum budget daily, and he constantly tipped the line between Roti Canai and instant noodles for daily meals. It was during this stage in his life, that his ambition to own properties propelled and flourished. He made the daring decision to own a house for himself. It would suffice to say that the memories of his past fuelled this passion, and he
soon made it into a reality with a 3200 sq ft semi-detached home. “I remember the first time I told my parents of this idea, and the rebuke that I got from them, as I had just started working. They called me crazy for making such a decision”, he adds with a smile. Chyuan was not swayed, as it only served to push him harder to make that goal a certainty. His home in Penang was bought at a good deal, via the right loans and stable down payments. After buying his first home, he followed up with another one the following year, thus cementing a vision to own 30 properties, before reaching the age of 30. 30 PROPERTIES BEFORE 30 Even in his young age, Chyuan knew how the market worked. He gauges the market as it fluctuates within the years, and has come to the conclusion that to acquire 30 properties within the next four years, he would need to be a partial millionaire! However, it is his blatant positivity that drives him, every day. When asked why specifically 30 properties, Chyuan answers without hesitation. “It is a straightforward way that people of less fortune can become rich. You have to leverage the banks, and for people with no capital like me, you can only depend on yourself”, he states enigmatically. A subliminal factor that contributes greatly is undoubtedly his childhood, going back to the days of growing up destitute without a firm place to call home. Currently the proud owner of two properties, Chyuan still has a far way to go in reaching his ultimate goal. In the meantime, he takes immense pleasure in imparting his knowledge about the real estate market with his fellow peers, teaching them lessons in investing. Chyuan’s four mantras in property investment : 1. Purchase within your affordability. Know exactly what you have, and to be mindful of spending habits, especially if you are younger. 2. Research the current real estate market, and your options, thoroughly. If it is affordable, you need to ensure that your debt service ratio (DSR) is apt. Once confirmed, discerning the right type of property and price range
will be easier. And of course, finally deciding on which one would gain the most profit and appreciation in the future. Inherently, it is all about making that first step, and being aware of the risks. 3. Personal due diligence. Rely on yourself entirely, seek the guidance and advise from property lawyers and bankers that would pertain to their field of expertise. 4. Look for the standard points in property investing – undervaluation, potential for capital appreciation and rental yield (depending on your purpose for purchase) Chyuan still has a long way to go, but in his mind, it is just part and parcel of life’s tribulations. It is his dedication and discipline that motivates him. “In my life, I’m riding a bicycle on my own. If I stop, the bike stops too”, he chides. The young investor also credits a huge part of his current success, to the idea of demotivation - as challenges make him stronger and fight harder for his dreams. Looking into the future, Chyuan eagerly admits that he has a long term threetiered goal. Firstly, to own a house in every Malaysian state, secondly to own his 30 properties, and lastly to ultimately invest in overseas markets. The young man is certainly not stopping anytime soon, and his progress will surely be a great thing to behold. www.propertyinsight.com.my DECEMBER 2016 I 57
DESTINATION
PHILIPPINES -
ASIA’S FASTEST GROWING ECONOMY
A
t seven per cent, Philippines’ economy has steadily been expanding at Asia’s highest rate within the second quarter of this year. The inflation rate, however, is just 1.8 per cent despite the rapid rise of domestic spending and a growth in wages that remains flat, reflecting the growing disparity between the wealthy, and the man on the street. The Philippines is also the third largest recipient of inward remittances from their overseas foreign workers (OFWs). Every year, about US$30 billion (RM125 billion) flows in from its 10 million OFWs, a number only surpassed by China and India. This inflow provides a consistent source of income and supports a major portion of the country’s domestic spending. The economy is made up of three main sectors – 60 per cent services, 30 per cent manufacturing and 10 per cent agriculture. The highest growth is seen in the service sector, particularly in the provision of business process outsourcing 58 | DECEMBER 2016 www.propertyinsight.com.my
(BPO). This once underrated but welleducated, English-speaking nation has recently overtaken India as the most favorable location for BPO, with demands from major trading partners such as the United States, China, Japan, Singapore and South Korea. According to studies by Deloitte, BPO in the Philippines is growing at 15 per cent a year and is expected to contribute US$25.5 billion (RM106 billion) to the economy in 2016, while providing 1.4 million jobs. In fact, in its 2015 report, the OECD expects Indonesia and the Philippines to lead ASEAN growth through 2019. However, taking the Philippines’ economy beyond its current state will require greater ambition than is currently evident. It is critical that Philippines takes advantage of its current growth to strengthen its economy, infrastructure, domestic consumption and create an environment friendly to foreign capital. A rise in the housing market would necessarily follow,
with growth not constrained to high-end or foreign-owned assets. We believe Philippines market is well established for a long period of prosperity, given its GDP distribution and the growing BPO trend. However, overseas remittance, being the strongest contributor to domestic consumption, does indeed pose a risk as it looks to slow down among global economic headwinds and the strengthening of the domestic economy. Economy aside, the housing market has seen significant growth over the last decade with increasing foreign participation. Investors across Singapore and Malaysia have purchased properties in view of the relatively lower prices. In this article, we will attempt to provide several key points which are critical for investors to consider as they venture into this seemingly rising market. OWNERSHIP OF PROPERTIES BY FOREIGNERS In the Philippines, foreigners can only own
Capital Gains Tax
Other than properties used in the course of trade or business, there is a flat six per cent capital gain tax on all capital assets. Non-residents are allowed to deduct income-generating expenses and personal allowances from gross rental income and the nett income will be taxed at the following rate.
Income Tax
Up to 10,000 (US$213) 10,000 – 30,000 (US$638) 30,000 – 70,000 (US$1,489) 70,000 – 140,000 (US$2,979) 140,000 – 250,000 (US$5,319) 250,000 – 500,000 (US$10,870) Over 500,000 (US$10,638)
5% 10% 15% 20% 25% 30% 32%
on on on on on on
band over US$213 band over US$638 band over US$1,489 band over US$2,979 band over US$5,319 all income over US$10,638
Property Tax
A 1-2 per cent property tax is levied on 20 per cent of the fair market value of residential properties and 50 per cent for commercial/industrial properties.
Document Stamp Tax
This fee is payable upon purchase of property at 1.5 per cent of sale price.
Transfer Tax
Payable to the City Treasurer’s Office at 0.5-0.75 per cent of purchased price.
Real Estate Tax
Computed at purchased price x 45 per cent x 1 per cent payable at purchase.
Notarial Fee
0.1-0.15 per cent of sale price to notarise the Deed of Absolute Sale.
Registration Fee
0.25 per cent of price to register the Deed of Absolute Sale.
Commission
3-5 per cent paid to real estate agent as commission
Value Added Tax
VAT is a rather complicated tax that can be from 3-12 per cent depending on the value of the ordinary asset.
Estate Tax
Can be between 5-20 per cent of the nett estate value.
40 per cent of any condominium. Land can only be acquired on a 60 per cent- 40 per cent basis, where such properties must be 60 per cent owned by a Filipino. The same rules apply to the acquisition of assets using corporate structures. TAXES & DUTIES Taxes and duties in the Philippines are relatively benign. Here are some of the more common taxes and duties that one should take note when investing in the Philippines. Do note that tax can be a complicated topic and investors are well advised to speak to their tax consultants for assistance on their specific class of assets. MORTGAGE/LOANS Mortgage for properties in the Philippines used to come with exorbitant interest rates. Today, the options have expanded with not only the local banks but also with international banks including HSBC. Interest rates can now range from 4.5 per cent to as high as 11.5 per cent depending on the term of the loan. Banks typically would like to see commitment to the market or higher deposit to mitigate against risks of you walking away from the asset. Recent changes in lending rules as part of an effort to rein in prices have seen some banks adjusting their borrower
requirements. Philippines National Bank (PNB) in Singapore, for example, now requires majority ownership of the property to be a Filipino earning more than S$48,000 (RM144,000) per annum. If that requirement is not fulfilled, buyers will have to seek alternatives with developers. SUPPLY & DEMAND & PROPERTY BUBBLE? To skirt around a lack of lending options and price point tolerance of foreign investors, developers have in the last few years came up with micro studios (with buildup of below 25sq m), costing between S$50,000 (RM150,000) and S$80,000 (RM240,000). Some developers take it to the extreme, building over 1,000 units of micro studios in a single project. This has added significant stock to the central Manila market. A few words about these apartments: We are of the opinion that these units are built to sell, and are not built for the local market. Capital growth will be extremely limited and
rental, given the excessive supply, will be challenging. We advocate strongly against these properties. With growing affluence and the rise of the middle class, our preference for our clients would be towards good sized homes, catering to families, mid-level executives and above. Vacancy rates of these prime properties is at a healthy 6+ per cent, while the overall Makati CBD is experiencing the highest level of vacancy (nine per cent), and a trend that is expected to continue to rise. Rental growth has stalled and might fall as additional supply hits the market. It is no surprise the government is now holding back development permits and developers are delaying new launches. While house prices might not be falling anytime soon, do expect a slight slowdown due to the glut of supply coming online. We would not call it a severe bubble, and in fact the present slowdown might present buying opportunities. Of course, only the right products will work.
ABOUT THE CONTRIBUTOR Audrey Liu is portfolio manager at Singapore-based RunningStream International. Audrey originates from Melbourne and was with the National Australia Bank specialising in commercial lending prior to arriving and Singapore. She is an active property investor herself who is also passionate about world economics and markets, and loves sharing her thoughts with clients across the region.
www.propertyinsight.com.my DECEMBER 2016 I 59
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NEGOTIATING FOR A LOWER RENTAL N
62 |
egotiating skills aren’t just pigeon-holed to the domain of bargaining for a good deal in regards to retail therapy, it is also a must in the world of property rental and yields for investors. Prior to agreeing on anything, here are a few tips to help you get the best out of your deal.
DECEMBER 2016 www.propertyinsight.com.my
This article is contributed by PropertyGuru.com.my, Malaysia’s leading property site
www.propertyinsight.com.my DECEMBER 2016 I 63
FINANCE
COMMENTS BY A PROPERTY EXPERT 1.
Is ‘Location, Location, Location’ is still an important factor for perfect property search by the investors/buyers in the Klang Valley? Unfortunately, this is an outdated mantra which I have never applied since I started investing in 2005. Entry price, product and size are far more important than just looking at location. KLCC had one of the
64 | DECEMBER 2016 www.propertyinsight.com.my
best location but it was one of the worst performing property market in Malaysia in the last 10 years.
2.
What is the current property value appreciation in the market this Q4? It varies from one area to another. Generally, I’m expecting a minimal to flat growth for mass market and high end properties in the
next six months.
3.
Can a buyer expect more savings from Islamic policy compared to conventional home loans? Islamic loan features several policies, where some are more expensive than conventional products, while there are some which are similar in nature to conventional
product. But Bank Negara and local banks are pushing for greater growth in Islamic lending, so there are certain advantages to taking up Islamic loan (cheaper stamp duty and no lock in period).
4. Do you have a healthy work-life
balance? I’m a workaholic that I even get restless during holidays. But this career allows me to spend more time with my family on weekdays as I get most of my work done on weekends.
5.
Do you recall the latest property book you read? Can’t remember as I get the latest insight on property from online portals and blogs.
6.
Do you plan to retire early? I don’t think I’ll ever retire. I’ve made several investments in the last 12 months due to competitive market environment and availability of good deals, so I’m taking up more commitments. In other words, delayed retirement.
7.
From your experience, how long does it take to stay at your own property before gaining the value of your purchase? In most data we’ve studied, seven years seems to yield the best short-term returns in most samples of mass-market properties. For properties, the rules are simple, the longer the better.
8.
What would your advice be for single individuals looking for their first home in KL and Selangor? Buy small and keep on a lookout a place with high accessibilities like public transportation. At least when they need to work overseas or even settle down, it’s easier to rent out smaller units compared to the larger ones.
9.
How long will a property take to appreciate especially those bought for investment/quick resell purposes? Wrong strategy and shouldn’t be applied nor considered when it comes to real estate investing. Real estate has always been a medium to long-term investment vehicle. There is simply no shortcut to this.
10.
Comment about Budget 2017 involving the property sector. I hope there’s a greater emphasis on how to encourage and incentivise private sector to build mass market home between RM300,000 and RM400,000, as supply is seriously lacking and this will alleviate pressure from the urban poor.
ABOUT THE CONTRIBUTOR Faizul Ridzuan is the Chief Executive Officer of FAR Capital,founded in 2013. He is also the author of the book WTF? 23 properties by 30. The book is about property investing made easy. faizul@farcapital.com.my
www.propertyinsight.com.my DECEMBER 2016 I 65
FINANCE
WINDS OF CHANGE, FOR FIRST TIME HOMEBUYERS
T
he Budget 2017 announced by Prime Minister Datuk Seri Najib Razak did, among others, address the struggle among first-time home buyers. Earlier in October, Finance Minister II Datuk Johari Abdul Ghani proposed a change in structure in the Employee Provident Funds (EPF) account allocation to address this issue. By increasing EPF’s contributor Account 2 allocation to 40 per 66 | DECEMBER 2016 www.propertyinsight.com.my
cent from the current 30 per cent. Under the existing framework, contributors are allowed to withdraw the funds in their Account 2 for the purpose of house purchase, medical and education. This proposal would help first-time house buyers to place a down payment for their home. According to the National Property Market Report 2015, housing loan approval rates
fell to 50.2, from 52.9 as registered in the previous year. In addition, housing loan application volumes also declined by 10 per cent. The proposed changes in the retirement fund would prove helpful to prospective homebuyers in their purchase, with careful considerations to be made. EPF had warned that over 78 per cent of employees aged 54 did not meet the
recommended threshold of RM198,000 for their retirement. With the increased allowance, Financial Planning Association Malaysia (FPAM) chief executive officer Linnet Lee said the decision on what property and how much down payment could be spent will depend on whether the buyer is able to service the ensuing instalment. “More so if the house buyer has intention to rent out the property, as he/she must be able to service the loan should the property remain vacant, otherwise the buyer would have put himself/herself at financial risk,” she said. With the increased capital from the restructuring of the retirement fund, the options available for a house buyer depends on his or her approach. Lee said if the buyer finds a good deal and intended to capitalise on the gains when the property value goes up and the buyer has holding power regardless of it being let out, it might be worth the investment for a greater gain. “This depends on the buyer’s propensity for investment risk,” she said. Whereas, should the buyer intend to buy for personal residences, then he/she may want to put down a larger down payment and borrow less to save on interest fees and service the loan faster so that they can have liquidity to plan for other life goals. Given the concerns on the usage of EPF account 2 savings, Lee said: “Leaving the money in EPF may be good for those whose lifestyle inflation is lower than the annual dividends paid out by EPF.” This is especially true for contributors who are risk averse, as the value of their money would have hedged against inflation. “However, there are those who do not touch their Account 2, as they use it as a backup for medical and life insurance, especially those who do not have enough
coverage and could not afford the premium for additional policies.” Meanwhile, there are those who leave their EPF account untouched for the sole purpose of retirement. “There are many ways to manage and utilise the EPF account depending of what is suitable for the contributor,” she said. If the contributor is not sure, he/she can work with a licensed financial planner who can help the contributor decide and plan according to their other goals and needs in life. Alternatively, if it is only retirement the contributor is focusing on and wants to handle it on their own, you may want to use the Retirement Advisory Services of the EPF. On the proposal for EPF accounts restructuring, Malaysian Institute of Estate Agents (MIEA) immediate past president, Siva Shanker feels conflicted as he believes the fund should be preserved for one’s golden years and should refrain from dipping into it for that eventuality. “On the flip side,” he said, “it doesn’t matter as you are taking it out of an investment linked account into a property which is another investment.” Given the ever increasing property prices, Siva said there is no use to complain as it is going to happen regardless. “There are many people who can afford the monthly repayment but couldn’t come up with the down payment for a house,” he said. “If the government is serious about helping the people, then the states need to intervene.” While the restructuring of the retirement fund is a good step in the right direction, MIEA’s former president also offered other alternatives to assist first-time home buyers. “The government could help by providing affordable homes, as it is unfair for the
developers to provide affordable homes as the cost is high and it is not profitable.” “There needs to be affordable housing priced between RM200,000 and RM300,000 for 1,000sq ft to 1,200sq ft apartments for a small family,” he suggested. As an alternative, he proposed that the state could make an exception by giving first-time house buyers who are buying to live 100 per cent loan. “As they are buying a property to live in, option for a full loan could give them a leg up.” “With the lagging property, this is the kind of measure needed as an impetus to start the movement in the property market and affordable housing would be a good starting point to get the property market going.”
Property price Down payment Interest rate p.a. Tenure Total Payment Total Interest Monthly Repayment
: RM350,000 : RM35,000 (10%) : 4.6% : 35 years : RM634,336.98 : RM319,336.98 : RM1,510.33
Property price Down payment Interest rate p.a. Tenure Total Payment Total Interest Monthly Repayment
: RM350,000 : RM50,000 (12.85%) : 4.6% : 35 years : RM604,130.56 : RM304,130.51 : RM1,438.41
Property price Down payment Interest rate p.a. Tenure Total Payment Total Interest Monthly Repayment
: RM350,000 : RM70,000 (20%) : 4.6% : 35 years : RM563,855.09 : RM283,855.09 : RM1,342.51
www.propertyinsight.com.my DECEMBER 2016 I 67
STRATEGY
IMPLICATIONS OF A DEVELOPER BEING A LOAN PROVIDER
M
inister of Urban Well Being, Housing and Local Government, Y.B. Tan Sri Haji Noh Bin Omar, recently created ripples albeit shock waves within the housing developers market with his ‘out of the box suggestion’ when he proposed that housing developers be given the additional option [plan B] of being accorded money lenders license under the Moneylenders Act 1951
68 |
DECEMBER 2016 www.propertyinsight.com.my
(Amendment 2011), and also the Pawn Brokers Act 1972 to provide loans to prospective buyers. There were varied reactions from stakeholders as a bagful of ’woe views’ in lieu of the naysayers going to town with their concerns as to how needy buyers would be compromised over the basic essential of the proverbial- ‘roof over the head contention’, whilst loans would
balloon unreasonably albeit diminish disposable incomes of the borrowers ie a situation of perpetual debt. The authorities in an attempt to quell the furore relented and requested the stakeholders to engage in more in-depth discussions before the ‘green light’ was given in the form of a go ahead with the alternative financing strategy to be probably touted as a Plan B Housing
STRATEGY
YEAR
TRANSACTIONS VOLUME
% CHANGE
TRANSACTIONS VALUE
% CHANGE
2010
376,607
11.4%
107,439.55
32.6%
2011
430,403
14.3%
137,439.04
28.3%
2012
427,520
-0.7%
142,844.94
3.6%
2013
381,130
-10.9%
152,372.12
6.7%
2014
384,060
0.8%
162,974.38
7.0%
2015
362,105
-5.7%
149,897.95
-8.0%
Financial Option. A SWOT strategist encouraged ‘deeper soul searching’ as to the fundamental root cause and addressing the financing quagmire from that perspective in terms of policy and the like, instead of adding on layers of sweeteners without correcting the ‘fundamental flaws’ of the equation which would eventually lead to a bubble with its dire circumstances as corrective cycles have shown. Amongst the fundamental flaws were: - The writings on the wall were already there with a quick study of transaction records vis a vis transaction values for the various asset classes spread over a sixyear period as per the table below [NAPIC 2015] - The chart clearly indicates that there was a complete mismatch of prices and values as developers in their quest to boost sales adopted many strategies that boosted speculation and ‘paper profit’ whilst they merrily constructed concrete in designs that appealed to the emotional senses of the investors [rather than genuine homeowners] and allowing rational sense to prevail. - The key equation missing was the astute understanding albeit justification of price vs value in the acquisition cost, as brick and mortar took on pricing mechanisms that defied construction cost. - The absence of a coordinated housing policy that actually brooks zero nonsense in according approvals, coordinating in a balanced town planning rules/regulations albeit plot ratio / densities with matching infrastructure’, drainage, parking and alternative transport connectivity was sorely missing in lieu of development being with the individual state’s authority.
- This missing link saw similar products being replicated on a mass basis beyond the markets capacity to absorb leading obviously to a glut situation. - Property Guru’s minus their turbans and beards purported the virtues of good debt vs bad debt but no one ever broached the topic of ugly debt in the event of a market correction. - As the position stands, Malaysia has the highest household debt ratio in relation to the GDP, in Asia lending credence to swaying away from inch perfect conformity to acting otherwise and towing the line as the re definitely is no short cut to this equation of development. Rome was not built in a day, and with this “mismatch of stock” firmly entrenched in the equation, bankruptcies and defaults are going to be the order of the day for more than a little while whilst Rome burns and the exclusive Nero’s fiddle their fiddles oblivious to the reality on the ground (no bread, eat cake retort). We are basically reaping what
D1
we have sowed from an ‘uncoordinated national housing policy’ whose role is to have a helicopter policy applicable “across the nation”. In any economy, the financial indicators are based on a whole slew of fundamentals, perceptions, rule of law, equitable justice and most importantly the “gearing ratio” of loans to deposit with minimal capital flight to perpetuate the ‘economic multiplier factor’. The situation has been geared to the absolute maximum and granting financial concessions to developers ie take on the role of banks and money lenders can only compound matters further with unimaginable dire consequences as expounded in the table above. Strategies outside the box that can be toyed with during this challenging corrective market cycle amongst others is to institute the following measures: - strict approval of new projects and their viability from adding to the glut and strictly
EXISTING HOUSING STOCK
UNITS
DETACHED
399,817
SEMI - DETACHED
282,402
TERRACE
1,767,519
TOWNHOUSE
24,554
CLUSTER
26,299
FLAT & LOW COST FLAT
817,422
APARTMENT & CONDOMINIUM (INCLUDING SERVICE APARTMENT & SOHO
495,007
LOW COST HOUSE
574,963
TOTAL
4,387,983
sources: Napic (2014d) Department of statistic (2012). KRI calculations
D2
www.propertyinsight.com.my DECEMBER 2016 I 69
STRATEGY AMOUNT (RM)
4.50 %
30 YEARS
6.00 %
30 YEARS
8,00 %
30 YEARS
12,00 %
30 YEARS
250,000
1,267,00
456,120
1,499.00
539,640
1,834.00
660,240
2,571.53
925,750.80
500,000
2,533.00
911,880
2,998.00
1,079,280
3,668.80
1,320.76
5,143.06
1,851.501
800,000
4,053.00
1,459,08
4,796.00
1,726,560
5,870.08
2,113,228
8,228.90
2,962,404
D3
Property Prices Increasing top of the market Lowering rental returns
More construction of new dwellings 12 Top of Marketing
More construction of new dwellings Interest rates reducing
12 Upturn
Too many properties for sale Interest rates increasing
Downturn12
Property sales slowing down
Not enough property to meet demand
Rental returns increasing
Bottom of Marketing 12
Construction of new dwellings slowing down
Not enough property to meet demand
D4 D4 refusing to accord any new approvals for projects of a nature where gluts already exist. - a comprehensive study of the ‘over hang’ stock and the viability of developers offering a rent than buy proposal as from the developers perspective the properties have already been built and pointless holding onto stock that has difficulties in getting a loan anyway - build than sell instead of the other way around as developers would have to take cognisance of the challenging quadrant of the market cycle and initiate discounts albeit sharing their handsome profits over the years. - mortgage loans offered to them should be in tandem with normal market rates 70 |
DECEMBER 2016 www.propertyinsight.com.my
and features of MRP {mortgage reduction programmes} with interest only loans customised into the equation albeit amnesty periods during the appropriate market cycle as exemplified in the next illustration. On a parting note, it would be a bad move for borrowers to pay anything above the cost of funds from banks and empowering developers to charge anything from 8%
to 12% over a period of thirty years {on the back of an envelope calculation} would see a normal loan at blr to balloon to unimaginable proportions…..a big no as a strict national housing policy is a better long term strategy which takes into consideration the housing needs of the populace, rather than pandering to the whims and fancies of the developers who appear driven to maximise profits.
ABOUT THE CONTRIBUTOR WARRICK SINGH is a property agency practitioner and Director of Asian Land Realty, Asian Land Auctioneers and Starfish Training.
NEWS & EVENT
PRISM AND EI SUMMIT: SURGING FORWARD 2017
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rism and EI Summit 2016, the annual Property Investment Summit and Entrepreneur Insight Summit hosted by Armani Media Sdn Bhd (Armani Media), recently held its two day event at Setia City Convention Centre, Shah Alam, on 5 & 6 November 2016. The flagship event which had been running consecutively for the past four years has drawn many participants over the years, encouraging Armani Media to organise and create a strong platform for speakers to impart their knowledge and industry skills to the attendees. Armani Media managing director, Dato’ KK Chua said: “This year’s summit has seen a difference as we are proud to bring two summits for our attendees.
The participants had a chance to witness Prism, Day 1 upon which various industry players had taken on the podium to speak on issues regarding topics consisting of a multi-millionaire round table, improving your financial record to buy more property, and more,” He added “Day 2 saw the launch of the Entrepreneur Insight Summit (EI Summit) presented exclusively by our online platform Entrepreneur Insight. It has added value and provided a conducive platform for successful entrepreneurs, to share their ideas and viewpoints on matters related to their chosen industries,” he said. Prominent speakers such as Knight Frank Malaysia’s managing director Sarkunan Subramaniam, and IBT Management
Centre’s director Dr Peter Yee took the stage on Prism, Day 1 to share their views and ideas regarding the property and investment climate within Malaysia today, in line with budget 2017. Day 2’s launch of Entrepreneur Insight Summit (EI Summit) had involved inputs by intellectuals such as Andreas Vogistzakis, Kent Chua, Loi Tuan Ee, Dato’ Tony Looi Chee Hong, Michael J. Kane and Raja Singham expanding their ideologies on entrepreneurism. Dato’ KK Chua further commented “Surging Forward 2017 is a timely 2-day summit to create insurgence in battling the volatility of market faced by the nation, and on today’s global platform for investors as well as entrepreneurs”.
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NEWS & EVENT
THE 100 MOST INFLUENTIAL YOUNG ENTREPRENEURS (MIYE) GALA - A SALUTE TO YOUNG GAMECHANGERS TRAILBLAZING THEIR PATHS
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ntrepreneur Insight celebrated 100 young entrepreneurs across various industries, at the grand ballroom of St Regis Hotel in Kuala Lumpur, on 11 November 2016. The ground-breaking event brought together forward thinking leaders and innovators across many industries ranging from finance, investment, art & style,
8 | DECEMBER 2016 www.propertyinsight.com.my
education, entertainment and fashion design, culminating in a celebration of their hard work and success. The gala dinner was officiated by YB Tan Sri Datuk Seri Panglima Joseph Kurup and YB Datuk Joseph Entulu Anak Belaun, Ministers in the Prime Minister’s Department, with over 800 entrepreneurs’
representatives in attendance. Also gracing the event were Dato’Sri Khazali Bin Haji Ahmad, Director General of Customs, and Abdul Manap Dim D.N.S, Director of Tax Compliance. Amongst the 100 MIYE recipients included founder and chief eating officer of the BIG Group, Benjamin Yong, founder
NEWS & EVENT
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NEWS & EVENT
of D’Herbs Holdings Sdn Bhd, Dato’Aliff Syukri, group managing director of Naim Indah Corporation Bhd, Dato’ Sri Alex Siaw, celebrity and founder of House of Doll Nur Fazura, along with many more notable personalities. 100 MIYE recipient Clifford Hii, group executive director of HCK Capital Group Berhad, stated “I’m very happy and honored, and it is a great pleasure of mine to be to be nominated as one of the 100 MIYE recipient. With this award, it creates a pathway for young innovators, to be recognized by their peers and to spring up more future entrepreneurs”. Among the night’s many highlights was the initiation of the “Young Entrepreneurs’ Outreach Fund”, whereby a pool of fund collected from the night will be utilized to help budding entrepreneurs into fulfilling and realizing their potential.
10 | DECEMBER 2016 www.propertyinsight.com.my
MAH SING WINS BIG IN SIN CHEW BUSINESS EXCELLENCE AWARD 2016
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roup Managing Director of Mah Sing Group (Mah Sing), Tan Sri Dato’ Sri Leong Hoy Kum won Lifetime Excellence Achievement Award and the Group took home Property Excellence Award and CSR Excellence Award in Sin Chew Business Excellence Award 2016 award dinner that was held last weekend. The awards recognized The Group’s excellent work in property development and its charitable work via Mah Sing Foundation, the charity arm of the group that had contributed more than RM10million since its inception, as well as Tan Sri Leong’s capable leadership that lead Mah Sing to its success today. Tan Sri Leong said, “I am humbled by the recognition and would like to share this achievement with my entire team, for without them, I would not be here receiving this prestigious award. “Mah Sing has come a long way since our transition from plastic to property development in 1994. When I first started off, my vision was to make premier lifestyle communities more attainable to everyone. The success of Mah Sing can be attested by the completion of 13 projects and 33 ongoing developments. Presenting the award was the Minister of Finance II, YB Dato’ Haji Johari Abdul Ghani as well as the Executive Chairman of Media Chinese International Limited, Tan Sri Sir Tiong Hiew King. Tan Sri Leong was also named Entrepreneur of the Year at the ASEAN Business Awards Malaysia 2016, Asian Corporate Director of the Year 2015 by Corporate Governance Asia, Brandpreneur Life Inspired Achievement Award at The Brandlaureate Special Edition World Award 2015 and Best CEO (Investor Relations) at the 5th Asian Excellence Award 2015.
SKYWORLD UNVEILS BENNINGTON RESIDENCES FINAL TOWER AT SETAPAK
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kyWorld Development Group finally unveiled its last tower of Bennington Residences at Setapak. The event was met with a positive response as it attracted close to 1,000 guests who showed up to view the units. Guests, young and old alike, were treated to a host of activities that reflect the SkyArena active lifestyle. These include rock climbing, an inflatable obstacle course, Velcro dart football, and sand art painting. Throughout the day, lucky draws were held with prizes such as iPhones, iPads, Samsung phones and Nikon cameras given away. Bennington Residences’ final tower (Tower A) consists of 284 units of contemporary suites with built-up sizes ranging from 1,092 sq ft to 1,570 sq ft. Priced from RM610,000, the tower enjoys a host of amenities and state-of-the-art facilities boasting five new features
that are amongst the first in Malaysia: the iconic loop pool, triplex SkyGym and SkyLounge, rainforest welcome lounge, as well as four-tier security. Present during the event was SkyWorld Development Group chief operating officer Lee Chee Seng. “We see the great potential that is present in Setapak. With the new infrastructure expansion plan – the addition of the new 1km flyover from Jalan Genting KElang into Jalan Ayer Jerneh, and the 100ft road widening initiatives along Jalan Ayer Jerneh – this will definitely improve the traffic flow and provide the Setapak community with easier access to the DUKE highway,” he added.
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STRATEGY
BUY LOCAL
If you’re looking for successful stress-free investments, buy local.
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here you invest in property is critical. This will not only dictate the future success of your investments, but will also affect your life. If you’re looking for successful stress-free investments, buy local. That means operating within a thirty-to forty-minute drive of your home. This may sound like a tall order especially if you live in an expensive township or an area that lacks demand. However, you would be surprised how many areas of potential investment exist near you. Long-distance property ownership is possible. However, the distance does place a strain on your management ability. Owning a property that is far away means you have less choice in terms of how the property is managed and it can increase costs because you have to outsource so much of the work. This can mount up to additional financial expenses, which impact upon your bottom line. Moreover, when a property is far away, it is impossible to make your rounds and this can create logistical headaches, especially when it involves critical decision making. These factors should be taken into account when considering purchasing at a distance and my advice would be, unless the property is an exceptional bargain or very special, it is best to stick close to your local area. Buying local also means: • You already have an idea of the local market by virtue of living in the area. You may not be a property expert, or have analysed the market in detail; however, you will have picked up a good level of local knowledge just by living close by. • By living locally, you are more likely to have a network of contacts you can call when the need arises. Even if you are
new to the area, it is likely you will know somebody who can point you in the right direction. • Nearby properties are better managed. You can conduct checks frequently and be on hand to attend to any issues. • Living close to your investments means they are cheaper to manage, as you can often do what’s needed by yourself. Even if you want to employ an agent, the proximity of the property will mean the choice is yours to make. If you prefer, you can instruct, or carry out repairs yourself, and you can make viewings, or meet tenants and, ultimately, manage the property from your own doorstep. • Buying properties locally is often less of a risk. Properties that are, if you choose, close by can be checked at regular intervals, and any issues that arise can be solved immediately. As a conclusion, we all know that buying right is just half of the success story, managing it right is another. This advice is just to give you a perspective of what to expect and how to handle it. Good luck!
ABOUT THE CONTRIBUTOR Dato’ 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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