Property Insight November 2016 by PropertyInsight

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COVER STORY

TURNING DREAMS INTO REALITY

NOVEMBER 2016

AREA FOCUS

PUTRAJAYA

MAIN FEATURE

STRATA FOR INVESTORS KDN PP 18181/04/2013 (033492)

NOV 2016 RM7.50(WM) RM9.00(EM)

EDITOR’S NOTE

EDITORIAL

Unlocking Achievements

KK Chua, Editor-in-Chief

Editor-in-Chief KK Chua kkchua@propertyinsight.com.my Writers Mages PV Lingam Felicia Soon CREATIVE

s we edge closer to year’s end, it’s time to look back at all achievements made throughout 2016. The Budget 2017 announced by our Prime Minister Datuk Seri Najib Tun Razak recently opens up more opportunities for Malaysians, especially for the property industry. For our Main Feature, writer Natasha Gideon spoke to key opinion leaders at the Strata Management Workshop and Dialogue recently to take you on an in-depth journey into understanding strata from purchaser’s perspective. Determined to uphold the successes achieved since the last two decades, daughter of Titijaya Land Berhad founder Tan Sri Lim Soon Peng, Charmaine updates us about the developer’s strive for innovation to deliver satisfaction to buyers and investors. As executive director of the brand, Charmaine also shares with us their new focus – affordable housing. The highlight for Developer of the Month is Eco World, focusing on its two new projects – Eco Sanctuary and Eco Grandeur – two different projects that share the same objective to create a verdant environment that is not only a rejuvenating haven, but also modern and

close to nature. In Area Focus, writer Felicia Soon travels to the country’s administrative capital Putrajaya to check on its growth as well as window of possibilities it has to offer to investors and first-time home buyers. Have a read and who knows, Putrajaya may be a place you call home. From the township, we then spoke to an entrepreneur who made his first million at age 25. Driven for success, Coway Malaysia general manager and property investor Ajib Adi gave us a walkthough of his amazing financial adventure. In this day and age where work can be done practically anywhere. As for freelancers, beyond the option of working from cafes, where you generally cannot leave your belongings unattended while you nip to the loo, we searched around Kuala Lumpur for coworking spaces that offer a sanctuary to boost productivity. The more productive you are, the bigger the reward will be. And just like you, we can’t be more excited to unfold the best stories out there in hopes to make Malaysia get stronger and better.

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

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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.

CONTENTS

30 ENTREPRENEUR INSIGHT

10 COVER STORY

Turning Dreams into Reality

Beyond sales, innovative outlook

MAIN FEATURE

Strata for Investors

Strata schemes are meant for owners to take charge of the maintenance and management of the common properties

FEATURES

Buy-to-Let: 5 Factors to Consider

Think Before You Buy

Problems with Rails

To Buy or to Rent?

Add value to your investment

Five property planning mistakes that leave buyers high and dry.

A look at an age-old debate and more

DEVELOPER OF THE MONTH Lean, Mean, Green Machine

Leaping Boundaries with Lepro

Vincent Heng and the team at Lepro are elevating the property industry to greater heights

INVESTOR NEXT DOOR

Local Expertise, Outward Presence

Passionate about achieving a higher benchmark

INDUSTRY INSIGHT

Upscale Service in Real Estate

Durable consultants at the forefront

ROOKIE INVESTOR

Soldier of Fortune

Having made his first million at age 25, Terengganu boy wonder shares how passion and perseverance contribute towards building your own empire.

DESTINATION

Commuters need to rethink before jumping on the train wagon.

Sharing Space

Beyond the option of working from cafes, there are co-working spaces that offer a sanctuary for lone professionals.

LEGAL

64 Companies Bill 2015: Its Impact on Property Investments FINANCE

Eco World creating tomorrow and beyond

AREA FOCUS

STRATEGY

68 Alternative Real Estate as an Investment Tool in a Challenging Property Cycle

Putrajaya

Exciting Future Nestled between Kuala Lumpur and Selangor, the administrative capital is rapidly turning into a mature township

PERSONALITY OF THE MONTH

Expert Key Strategies for Leverages

Reality check vital before buying a property

Can an Employee Become Financially Independent?

NEWS & EVENT

BEKO LANDS IN MALAYSIA

he arrival of Beko in Malaysia recently has introduced a European flare in home appliance products that are known for its sleek design, quality performance and innovative technologies. Beko Appliances Malaysia chief executive Chan Lock said: “Beko has earned a hallmark in delivering products with innovations that improve the everyday life of our customers. The brand has developed insightful smart solutions that support the nuances of everyday life, while celebrating the refined taste in home designs.” Beko has attained considerable success in the global market. The fastest growing home appliance brand in Europe for the last seven years is also the choice for over 440 million customers in more than 130 countries. “Malaysia represents an important market for Beko where we are committed to delivering the brand promise, which

enhances every consumer’s daily life as well as improving home living,” Chan said. Beko has also recently launched the brand’s roadmap at consumer electronics trade show IFA in Berlin. While unveiling a number of world-first technologies for home appliance products, Beko will continue to innovate to bridge global trends. Marketing and product manager Teo Yong Hung said: “Beko refrigerators are

acclaimed for its fresh and intuitive cooling solutions. The NeoFrost technology from Beko is a game-changer which is able to retain up to 95% of moisture. This is by far a benchmark in the cooling technology for optimum freshness of food.” In Malaysia, Beko is distributed via over 400 channels, including mass merchandisers, kitchen specialists and other independent channels. For details, visit www.beko-my.com.

REAL ESTATE FRATERNITY’S FINEST FETED AT GALA DINNER

he real estate industry’s creme of the crop were recognised for their outstanding achievements and success in 2015 at Malaysian Institute of Estate Agents (MIEA) eighth National Real Estate Awards recently. The event was graced by Finance Minister II Datuk Johari Abdul Ghani and was attended by 800 guests. Also present was Board of Valuers, Appraisers and Estate Agents president Datuk Faizan Abdul Rahman. The event is presented annually to agents, firms and negotiators, who were handpicked by independent judges. The eighth edition of the awards ceremony saw an increase in categories from 10 to 19, marking the formidable growth of the real estate industry. One of the more notable awards was the Million Dollar Roof Top, presented to agents who collected at least RM1 million in professional fees last year. Three recipients shared the award, a

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recognition for their diligence in the challenging property market. The Lifetime Achievement award was presented to Lim Eng Chong of Henry Butcher Malaysia for his significant contribution to the growth and development of the industry. This award is not only a recognition but also serves as an inspiration to the newer admissions in the real estate field. National Real Estate Awards Committee organising chairman Eric Lim said Malaysia’s healthy economy and key

real estate developments have opened up new markets for the industry that have also become a reason for improved service and standards. The event’s highest recognition was given to board president Datuk Sr Faizan Abdul Rahman for his outstanding contribution to the Real Estate fraternity. “This award has only been given to 10 recipients in MIEA’s 40-year history,” said president Erick YT Kho. Property Insight was one of the magazine partners of the event.

www.propertyinsight.com.my NOVEMBER 2016 I 7

NEWS & EVENT

UNITING CREATIVE MINDS

ah Sing Group recently held the first-ever Interior Design Students’ Saturday themed IDMOJI that saw 53 cash prizes worth RM15,000 given out to the winners. The event at KL Library and Menara DBKL was aimed at empowering the young creative minds of Interior Design students. This annual event has gathered the largest number of participating institutions to date, 19 public and private higher institutions, with over 800 participants nationwide. These participants competed in 11 categories ranging from conceptual designs and drawing, creative furniture and lighting production, recycled-material creations, innovative fashion design and games. Corporate communications senior general manager Lyanna Tew said: “This event is a great opportunity to engage with future interior designers of the nation. “Mah Sing constantly supports education initiatives by Teach for Malaysia, Dignity for Children Foundation. Last year alone, we invested more than 27,000 training hours for our employees.” Erican College founder Datuk Eric Chong said: “It was high time these budding industry professionals show us the future of Interior Design. Every year, one higher education institution will claim the honour to host this event. Known for its outstanding Interior Design and Graphic Design courses in the region, Erican College was proud to take the baton this year to host this annual event in conjunction with KL Design Week. Malaysian Institute of Interior Designers (MIID) vice-president Ooi Boon Seong said the competition exposed students to what an interior designer does. “Interior design is a highly specialised profession that involves architecture, structural changes and other factors to create space using good designs. “Through the competition, participants learned to work with people to create quality projects in a short duration of time,” he said.

LEONG BAGS OUTSTANDING ENTREPRENEUR AWARD

ah Sing Group managing director Tan Sri Leong Hoy Kum won Outstanding Entrepreneur Award at Malaysia Retail Chain Association (MRCA) 24th Annual Dinner and Crown Awards event recently. “I am honoured to receive this award. My life motto is about continuous learning and improvement. The world is constantly changing and as a marketdriven developer, it is our trade to stay ahead of the market,” Leong said. “Mah Sing has come a long way since its transition from the plastic to property industry in 1994. These achievements were made possible with the support from our dedicated team who have contributed tirelessly to the success of the group.” Being in the property business for more 8 | NOVEMBER 2016 www.propertyinsight.com.my

than 20 years, Leong has lead Mah Sing to its success today, with 13 completed and 33 ongoing projects throughout Malaysia.

Presenting the award was Tourism and Culture Minister Datuk Seri Nazri Aziz, witnessed by MRCA president Datuk Garry Yap.

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COVER STORY

TURNING DREAMS INTO REALITY Beyond sales, innovative outlook BY: MAGES PV LINGAM

he foundation of Titijaya Land Berhad was helmed by Tan Sri Datuk Lim Soon Peng, two decades ago with a steady mission “To build properties people will buy, appreciate and want to buy again”. The forward mission was carried strongly by the daughter of the conglomerate, Charmaine Lim, who is the only daughter and the executive director of Titijaya Land. Charmaine, being equally inspired with the company tagline “Built to Inspire”, has a stronghold to continually work on the feedback of all project developments and putting extra effort to be more innovative to deliver satisfaction and information to buyers and investors. She said these are vital signs now as the market has been proving competitive. “We nurture teamwork among our subordinates and send staff for study trips with the top management, to look into designs, new architectural structures,

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lifestyle and facilities preferred and suitable especially by the younger generation.” She said the market growth has been challenging and the purchasers are always cautious, waiting for a stable outlook before they make a move to purchase any properties. Nevertheless, there are buyers who face no issues and are prepared to buy houses even during this period. As property developers for two cycles now, Titijaya Land has seen the bull and bear in the market. Due to tighter lending criteria, some developers have had lesser launches but she said now, Titijaya Land is concentrating on affordable housing especially targeting first-time home buyers. She is also hoping for a better budget planned by the government to be more favourable towards the developers and buyers. BEYOND EXPECTATIONS Titijaya Land has taken different measures

to approach the buyers’ market now especially on overall return, the land acquisitions, types of products so that the turnover time can be shortened. This implementation can help to maintain a working timeline and the expected planned launch and handover can be catered to the next generation buyers. It strives to receive positive feedback from purchasers on quality product designs and facilities through booking and registration listings. The management has a milestone to shout about especially on growth and improvement via internal study on an integrated software system produced to track the sales and marketing until the stage of handing over the product, which in turn will enable good customer relations and expectations. Titijaya Land has a few campaigns up its sleeve to boost the confidence of hopeful buyers. Charmaine said: “Recently, we

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COVER STORY

H2O 12 | NOVEMBER 2016 www.propertyinsight.com.my

Areca launched a programme called V-Care for first-time home buyers. It features simplified home ownership made easy packages especially on financial support via incentives and rewards.” A reputable developer always has a forward thinking attitude and helpful nature blended in its projects. In this sense, financial incentives were given to first-time home buyers to close the gap to own properties. Then, they also have incentives for referral cash rewards or buyer-get-buyer programme. Any additional properties purchased under them are also gifted with first, second, third buy special rebates scheme. UPTOWN PROJECTS Commenting about Park Residency project in Cheras, Charmaine said: “It is a low-density project with only 62 units of three-storey landed strata. Situated on a 26.8ha land and within the gated and guarded vicinity, it is a matured location facing the green landscape.” Accessibilities to and from Park Residency were made easy via Sistem Lingkaran-Lebuhraya Kajang (SILK), Middle Ring Road 2 (MRR2) and Besraya

Highway. The amenities at Park Residency is fascinating with children playground, badminton courts, BBQ pits, gazebo, reflexology path and jogging tracks which amicably coincide with the lush greeneries surrounding the park. The leasehold landed strata are sold at approximately RM1 million each. “Emporia at Glenmarie, Shah Alam is a sophisticated integrated mix development with hotel, office suites, shopping mall, SOHO Flexi and serviced apartments built with the young home buyers in perspective. It will be convenient, highly accessible, visible and lifestyle will be improved for the surrounding communities.” “As for 3elements project, located in the border of Sri Kembangan and Puchong South, is a modern and innovative development. From our studies, this mixed features office suites and serviced apartments with a 475-761 sq.ft. build up. It has a tentatively rental returns projected at RM1,500-RM1,600 and the phase one shop lots with a rental return of approximately RM1,500-RM4,500 while the office suite units sized at 475 sq.ft. are estimated for rental returns at about RM1,300-RM1,600.” Charmaine continued to express on their land bank strategy which are related to the current market standings also. In 2013, Titijaya Land completed its Initial Public Offering (IPO) to be listed on the main market of Bursa Malaysia Securities Berhad to expand its business. Even though the company is seeing the slowdown in the market, it has not taken any steps backward on landbank

replenishment. “Our current landbank replenishment strategies are mainly on Joint-Venture (JV) basis. This indeed will be able to reduce our holding cost and manage our financial position in a stable and steady pace.” “With this, we are able to time our property launches according to the market sentiments.” Consequently, its waterfront project Areca in Penang hasn’t been launched yet but it has an approximately gross development value (GDV) of RM2.5 billion. It boasts of a serene waterfront view and seated right beside the Second Penang Bridge. The mixed development project is open for registration now with four blocks of condominiums and four blocks of offices each sized at 750-1,100 sq.ft. Recently, Titijaya Land has merged with The Ascott Ltd with a collective GDV of RM4 billion to steer projects in Penang and Shah Alam to give an excellent product take out or deal to their future buyers. “Most of the lands are going for reclamation. Therefore, it will be tough to see more free lands in the future. We are also looking into foreign investors market too as Penang is well-known for heritage properties, values and multi-cultured, which are the factors largely sought after now.” STANDING OUT IN AWE Titijaya Land has trudged deep into their post sales services which deliberately have a strong impact on their sales and marketing strategies. Its services start

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COVER STORY off digitally in information technology applications set up to cater and monitor as well to give an update to its sales team to capture feedback. This way, a twoway communication portal is established to enable a more efficient customer post sales services. Communication can be channelled faster straight to the internal master file over which will be able to improve communications, send any messages without interruptions and a workable dateline be given for feedback by their sales, marketing or construction teams. A launch of the tablet handover to buyers via this application is in line with their vision to aspire to be the best, grow rapidly, to mould an excellent team and a winning culture.

LONG-TERM GOALS Charmaine commented that realistically, banks are stringent on loans approval, that if this is loosened then the load will be lighter for home buyers especially for affordable houses. She pointed out that they will screen through the loans status and capabilities for the interested buyers. After which, their team would advise accordingly on possible purchase or loans. This will then enhance the efficiency of the sales team and it provides a platform for Titijaya Land to advice for their customers on their property appetite. “My solid advice is to always buy within one’s capacity. In the past many young investors rushed to purchase many units

at a go and got themselves into debt. Although, their plan was proven which is obtaining wealth and assets during the period of property appreciation.” OTHER BEST TRANSACTIONS Titijaya Land has some future launches in their pipeline to impress the purchasers especially targeted next year opening with Riveria Sentral at KL in vibrant hotspot KL Sentral. It consists of three towers of office suites, SOHO units, serviced apartments and small retail lots to accommodate the needs of the saturated population. This will be a joint venture project taken with Bina Puri Holdings Berhad and Prasarana Malaysia Berhad. Notwithstanding, Titijaya Land successfully

ON-GOING PROJECTS No.

Project Name

Property Type

Tenure

GDV (RM)

Freehold

228.7

Leasehold

435.0

Zone Innovation Park @ Klang

•

Semi Detached Factory

3elements @ Seri Kembangan

• • •

Shop Office SOFO Suite Serviced Apartment

Embun @ Kemensah

•

4 Storey Courtyard Villa

Freehold

99.6

Emery @ Kemensah

•

2 & 3 Story Semi Detached

Freehold

49.5

H20 @ Ara Damansara

• •

Serviced Apartment SOHO Suite

Freehold

794.0

Mutiara Residences @ Klang

•

2 ½ Storey Terrace House

Freehold

30.3

Seri Residensi @ Klang

• •

2 Storey Cluster Villa 2 Storey Linked Semi Detached

Freehold

102.1

TOTAL

1739.2

UP-COMING PROJECTS No.

Project Name

Property Type

Tenure

GDV (RM)

Leasehold

76.5

Park Residency @ Cheras

•

3 Storey Landed Strata

Emporia @ Glenmarie

•

Mixed Development

Freehold

1,500.0

Riveria Sentral @ KL

•

Mixed Development

Leasehold

1,391.7

Areca @ Penang

•

Mixed Development

Leasehold

2,520.1

Odean @ KL

•

Mixed Development

Freehold

1,268.0

Seri Residensi @ Klang

• •

1 Storey Linked Semi Detached 2 Storey Semi Detached

Freehold

237.9

Klang Sentral

•

Serviced Apartment

Freehold

700.0

Damansara West

•

Residential and Commercial

Freehold

2338.9

TOTAL

10,033.1

*The name of the projects, type of development/property mix and estimated GDV maybe varied during its eventual launching in the future.

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We have to continuously improve and adapt to the Industry changes.” - Charmaine Lim

launched their elite development called Embun & Emery at Kemensah located at the greater side of Kuala Lumpur in Ampang. It’s seated on a freehold land with a built up area of 5.7ha and the selling price range starts at approximately

RM1.8 million to RM2.8 million. The fourstorey courtyard villas and 2/3 storey semidetached are a good catch for any avid property investors. Titijaya Land has been commended largely in the developers’ arena for their

effort to give the best to the clients and receiving recognition in return all the time. They are proud to be honoured at Property Insight’s Prestigious Developer Awards (PIPDA) in April and looking forward for its stars to shine brighter next year.

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MAIN FEATURE

STRATA FOR INVESTORS

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Strata schemes are meant for owners to take charge of the maintenance and management of the common properties BY: NATASHA GIDEON

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MAIN FEATURE

trata title is one of the title structures of ownership and control over a property. It is usually applied to subdivided buildings or complexes such as high-rise buildings, town houses, duplexes, flats, apartments, condominiums and commercial buildings. It gives individual unit holders title over the space they occupy, while the land and common property are controlled by the Management Corporation (owner’s committee). We recently spoke to key opinion leaders at the Strata Management Workshop and Dialogue at Rehda Institute in Kelana Jaya, Selangor to dig deeper within this concept. Strata schemes are designed to give property owners more control over the space they occupy. The structure of strata titles designates the Management Corporation (MC) as the owner of the land. In the eyes of the government, MC is solely responsible for matters involving legal obligations of the council. For the owners, MC generally takes responsibility for maintenance of the common area, insurance and/or informal mediator between residents. Unfortunately, many residents and owners of strata titled properties have not reached the stage where MC is formed.

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WHY IS HAVING THE TITLES TO YOUR PROPERTY IMPORTANT? House Buyers Association urges people to “get, keep and preserve” the strata titles to their high-rise apartment units for these reasons: • As ultimate proof of their property ownership. • As a dealing instrument for instances of charging to banks for s. • As final proof of the built-up area of your unit and ultimately your apportionment of the share in the total aggregate units. • One need not obtain the consent of a third party (the developer) who imposed administrative charges of between 1% and 2% as their consent fees if and when you should decide to sell your property. • The forming of an MC by owners of the subdivided building is needed to maintain and manage the building, and to have their own by-laws, usage or restrictions. Until then, owners usually do not have a say in the way the building is managed or maintained, the monies collected from maintenance charges, building funds etc. As long as the strata titles have not been

transferred, the land and the common property are still owned by the developer. Should the developer-company go under liquidation or becomes insolvent before the strata titles have been obtained, the unit owners will get into a lot of trouble, or might eventually have to pay for the application of the strata titles themselves (which by the grand scheme of things, should not have happened in the first place). WHOSE RESPONSIBILITY IS IT TO APPLY FOR STRATA TITLES? Strata schemes are meant for owners to take charge of the maintenance and management of the common properties, and if so, due care should be given to expedite the transfer of titles to the owners for them to start learning the process. “It is the obligation of developers nowadays; in fact, it is compulsory for them to get the strata titles. If there are no titles being issued, purchasers can take action on the developer,” says lawyer YP Cheong. Meanwhile, National Housing Department deputy director-generalJayaselan K. Navaratnam says there are over 300,000 properties which have yet to receive strata titles. “If you don’t have a strata title and anything goes wrong, it’s much more difficult to obtain one as you will face difficulty tracing the stakeholders,” he says. “There are even buildings with no strata title after 20 years, and the purchasers have no idea who the original architects are.” Unless this issue is addressed, house buyers will continue to wait for developers to take time in transferring the titles to them. Perhaps, the Strata Titles Board would be able to seek a solution to this problem. HBA proposes the following suggestions to expedite the application of strata titles: -Once Certificate of Fitness has been issued for a particular building, copies should be made available to the Land Ministry to ensure Section 8 of the Strata Titles Act is strictly adhered to; -To withhold part of the balance purchase price, of say, 2.5% until strata titles have been transferred to the individual unit owners; -To change regulations that all aspects of maintenance and cost incidental there

to shall be the sole responsibility of the developer until control has been transferred to the MC. There is no standard to monitor the developer-controlled management of strata title properties, except those set by the developers themselves. As such, we can only assume it is so profitable, that developers see this as a cash cow. Chur and Associates founding partner Chris Tan says: “Strata living is a form of community living that require a higher participation from owners collectively to ensure the entire property is maintained and unchanged properly. “It’s akin to shareholders in an elected committee members during the general meetings.” Strata owners should be aware of their rights and responsibilities now more than ever. As Chris says, developers will not be managing the strata property forever; hence its owners will have to take full responsibility for the entire building eventually.

PROVIDE MANDATE DIRECTION TO THE MANAGEMENT A Joint Management Body is tasked to manage and maintain the common property in strata developments from the

time of delivery of vacant possession by the developer to the purchasers until an MC is formed. The MC can only be established after strata titles have been issued and at least, a quarter of the aggregate share units have been transferred to the owners. This gap in time of forming the MC is also meant to be a grace period for the owners to learn the trade of managing their own property with the holding hand of the developer.

RIGHT TO REQUEST FOR AN EXTRAORDINARY GENERAL MEETING (EGM)

To provide timely intervention in any issues, the committee council chairman shall convene for an EGM within six weeks of receiving requisition in writing from strata owners who are together entitled to at least 25% of the aggregate share units.

RIGHT TO REQUEST FOR INCLUSION IN THE AGENDA Owners also have the right to voice out their opinions and discuss any matters they find important, by requesting for an inclusion in the agenda of an EGM or AGM, provided that they hand in a notice at the management body’s registered office no less than seven days before the meeting. www.propertyinsight.com.my NOVEMBER 2016 I 19

MAIN FEATURE

4. RIGHT TO VOTE DURING AGM AND

EGM In order to exercise this right, owners will have to settle all of their outstanding service charges prior to the AGM or EGM. Those who fail to do so will not be allowed to cast a vote for any resolution. Each parcel of land (unit) will be entitled to one vote, on a show of hands, and on a poll, the number of votes shall correspond with the number of share units or provisional share units attached to the parcel or provisional block.

RIGHT TO REQUEST FOR THE REVIEW OF SC AND SF In the event where owners are not satisfied with the SC or SF implemented by the management, they could apply for its review to the Commissioner of Buildings (COB). The COB will then determine the adequate amount that should be charged or get a registered property manager to recommend the said amount.

STATUTORY PRESUMPTION Should there be any inter-floor leakage -dampness, moisture or water penetration on the ceiling or any furnishing material attached to the ceiling, the owner of the upper floor shall be responsible to the said leakage in the absence of proof to the contrary. This means the owner of the above unit will have to foot the bill for repairs.

RIGHT TO FILE A CLAIM UNDER THE SMT Every strata owner’s rights are protected under the SMT, where any dispute related to strata management falls under the jurisdiction of the SMT. Established under the Urban Wellbeing, Housing and Local Government Ministry, the SMT was formed to provide feasible solutions to disputes on the failure to perform a function, duty or power imposed by SMA 2013.

RIGHT TO FILE A CLAIM AGAINST COMMON PROPERTY DEFECT ACCOUNT Common Property has a defect liability period of 24 months, for residential property, similar to the one for your strata unit. Strata owners have the alternative 20 |

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Strata living is a form of community living that require a higher participation from all the owners collectively to ensure the entire property is maintained and unchanged properly.” - Chris Tan

to claim for any defect in their common property such as leakages or faulty elevators within the defect period. Before the handing over of units, developers will have to submit 0.5% of the estimated construction cost or RM50,000; whichever is higher with the COB. This amount is to be deposited into a statutory account as a provision for any possible defect in the development. Should the sum be insufficient to cover any expense, the developer must settle the remaining amount.

RIGHT TO SET UP A SUBSIDIARY MANAGEMENT CORPORATION (SMC) The MC now may establish SMCs to represent the interests of a particular group of parcel proprietors who are entitled to the exclusive benefit of a limited common property. These areas must be clearly defined and marked on a special plan, which must be submitted to the survey director.

This is especially useful for mixed developments, where the owners of commercial units do not utilize certain common property, for instance, an office unit owner will not use the swimming pool facility.

10.

RIGHT TO DISPUTE THE LEGALITY OF ATTACHMENT OF MOVEABLE PROPERTY The COB has the right to issue an attachment for strata owners who fail to pay their service charge on time. A Warrant of Attachment (Form A in the third Schedule of SMA 2013) will be issued, following which the COB would hire people to confiscate the defaulter’s removable property (car, settee, television, etc). If the attachment is done in error, however, owners can then apply to the magistrate’s court for the release of their property within 14 days from the date of attachment.

FEATURE

FACTORS TO CONSIDER FOR YOUR BUY-TO-LET PROPERTY BY: FELICIA SOON

Speculators look solely for capital growth while investors target good rental yield and capital growth. So if you are considering investing in property or improving your returns on your existing unit, here are some factors to consider.

t is never easy to predict the direction of Malaysia’s property. However, this segment always been seen as a long-term investment. Entering the second half of the year, there is optimism from relevant parties about a recovery in the property market, but today, property speculation has slowed down tremendously. PA International Property Consultants managing director Jerome Hong was quoted by a daily, saying: “A lot of the speculators have been removed with the various cooling measures and stringent banking requirements. “Prior to this, developers took care of their own marketing and do not need the services of marketing agents.” While the property market is generally slow, with many citing difficulties to access end financing and rising prices as main factors affecting demand, investors are still at large. The difference between an investor and a speculator is, investors buy to let, while speculators buy to flip. 22 | NOVEMBER 2016 www.propertyinsight.com.my

CHOOSING THE RIGHT PROPERTY Is it better to buy a landed property or a high-rise apartment? Is low-cost apartment better than high-end condominium when it comes to rental yield? What about capital gain? It is important to note that different types of property will have different objectives. You need to ask yourself, are you looking for high rental yield or capital gain? Rental yield per annum is the percentage return based on rental income after deducting the expenses incurred to maintain the property versus the total purchase price of the property. Capital gain, on the other hand, is the gain or loss incurred after selling the property. A general rule of thumb is that a highrise usually will yield better rental, while a landed property has a higher rate of capital gain. Due to the current competition between existing units and newly completed properties, property prices of high-end condominium are expected to remain flat, therefore rental prices are also expected to adjust to the advantage of tenants. The Edge found the highest rental yields can be found at Paramount View (7.0%) in Taman Paramount. Capital values here are depressed by its location close to LRT lines and power lines, with a low average transacted price of RM364 psf. However, the rental market here is buoyed by its proximity to an LRT station. The average unit asking monthly rental price is RM2,028 per unit or RM2.12 psf.

2. DO YOUR MATH

Once you have decided the location and type of property to buy, you need to ensure the rental yield makes the investment worthwhile. For example, if you are buying a 965sq ft condominium unit in Cyberjaya, selling at RM455,000, the market rate for rental is RM1,800 for a partially furnished unit. Some of the cost that may be incurred in a year are the maintenance fee (25 sen psf), assessment tax, quit rent and mortgage insurance. Let’s assume the cost of maintaining a unit in Cyberjaya comes to RM3,000 a year. The net rental yield for this property is calculated as such: Net rental yield = ([(RM1,800 x 12) – RM3,000] ÷ RM455,000) x 100 = 4.08% per annum However, if you have to get the property with a home loan, it is vital to include the annual interest incurred in the calculation as well. For example, you get a fixed rate loan for 35 years at 4.39% with a 90% margin of finance. Your interest for the first year is RM19,356. Net leveraged rental yield = (RM21,600 – RM3,000 – RM19,356)/ RM45,500 x 100 = 1.66% per annum The above rental yield is not promising. The monthly repayment for the home loan is already RM1,910. That’s RM110 more than the rental received. Therefore, it is important to calculate the rental yield to ensure a good investment.

3. MANAGE YOUR INVESTMENTS

Property investment is not something you can buy and not maintain. There is a lot of work involved, especially bearing in mind that it is a relatively illiquid investment. If you are managing the property by yourself, you must set some time for it. From the beginning, you have to bring potential tenants to view the unit and then prepare the tenancy agreement, collect rental, pay maintenance fee and taxes as well as any repairs. If that sounds overwhelming, get a real

estate agent. However, hiring an agent may affect your rental yield.

taxes that you need to be aware of:

4. KNOW YOUR TARGET MARKET

PROPERTY TAX Property owners have to pay for assessment tax on residential property based on the annual rental value of the property, as assessed by the local authorities. It is generally levied at a flat rate of 6% for residential properties and payable in two instalments. On the other hand, quit rent is also payable once a year if you own a landed property. It is charged annually at a rate of RM0.035 psf per annum.

Identifying the target market will help the decision-making process in terms of the type of property to get as well as location. Question: Should you target single expatriates, family, students, young professionals or corporate tenants? If you engage a real estate agent, they can advise you on the best location to go for based on your target market and may already have a database of potential tenants. Most first-time investors make the mistake of imagining themselves living in the invested property, instead of putting themselves in their tenant’s shoes. If you are targeting student tenants, you should look at properties near campuses, public transportation facilities and is of a low rental. However, if you are targeting tenants with families, then you should get a bigger property with at least three bedrooms. Malaysian families prefer unfurnished units as they have their own furniture and would like to decorate it as they please. However, expatriate families may prefer fully-furnished properties that are near international schools and shopping malls.

TAX IMPLICATIONS All buy-to-let property owners will be subjected to tax implications and you should fully understand them by seeking professionals. Here are some personal

INCOME TAX Rental income is taxable in Malaysia. If you find your total income for the tax year exceeds RM5,000, you may have to pay tax. However, the costs associated with the buy-to-let property, such as mortgage interest payments, property management costs and the cost of repairs can be offset against your rental income to reduce your tax payment to the minimum. According to Public Ruling No. 4/2011, the allowable expenses for residential property investments are as follows: CAPITAL GAINS TAX It is also known as the Real Property Gains Tax (RPGT) and the capital gains tax was last increased in 2014. If you decide to sell the property, you may be liable to pay capital gains tax on any profit you make. However, investors who are buying to let may not be affected much as they would probably hold on to the properties for a few years. This does make property investment more illiquid than before, as it is not as easy to dispose of a property at a profit with the new ruling. Therefore, make sure it remains as a long-term investment. Also, you need to ensure you have some savings to cope with maintenance costs. If you choose to go for a home loan, make sure your finances will be able to cope, should the rate increase. You should also consider the budget when your property is untenanted as you still need to pay the bank. Fret not, as with the right choice of property, in the right location, the rewards from managing a buy-to-let well can be fruitful. www.propertyinsight.com.my NOVEMBER 2016 I 23

FEATURE

THINK

BEFORE YOU BUY Five property planning mistakes that leave buyers high and dry BY: FELICIA SOON

24 | NOVEMBER 2016 www.propertyinsight.com.my

hen it comes to property investment, everyone should make buying their own home as the first move. Business magnate Warren Buffett once said: “If you are unlucky and make your purchase just prior to a property downturn, at least you will be able to live in the property and save rent.” Hence before we proceed any further, let’s take a look at five property planning mistakes that people tend to make with investments and how these mistakes can be avoided.

‘THINGS WILL WORK OUT’ VKA Wealth Planners financial planner Kevin K.M. Neoh urges consumers to realise that property purchase is not as simple as investing in the stock market or any other investment assets that can be sold off easily. Even if one is able to match the price between a seller and buyer, it would still take time before the proceeds of sales are received. Kevin says people also tend to believe “prices will go up in future” or “I will be able to rent it out later”, hence the decision of “buy first, think later”.

If you speak to the right person, however, you may find that there are times when investors fail to rent out (especially properties in a new township) what seemed to be the next hotspot properties, but in the end things, did not work out. Case and point, as per what has happened to NZX in Ara Damansara which is now considered a “white elephant” locale. Even if you manage to rent it out, you may still have to close a considerably huge gap between your instalments and the rental income you collect.

‘LACK OF RESEARCH Since property investment is considered ‘financially overwhelming’ for most people, it is only right that you, as an investor, spend time to understand the industry before venturing into the game. As pointed out by Neoh, study the rental market if you plan to rent it out, be realistic if you buy and wish to flip; ask yourself these questions — “If Plan A fails, what’s next?” or “Do I have the flexibility and power to hold on to it, even when faced with difficulties?” Neoh also says investors need to be wary about the management of the debts incurred from property investing, be it by leveraging on other people’s money (bank’s), which can be both a boon and bane at the same time. The only certainty is we know that it is a sword that hurts you most when things turn bad, which by then, is too late to do anything to redeem yourself.

Excessive lifestyle and expenses can cause tremendous pressure for someone who intends to commit further in their new loan repayment. Most banks had adopted the responsible financing criteria, factoring in an applicant’s exposure in lifestyle and expenses to evaluate their qualifications for money-lending purposes. Secondly, why 40% in current loan repayment or Debt Service Ratio (DSR)? The higher DSR means the higher current exposure to debt repayment. Usually banks would perceive someone who has higher DSR to be in a weak position to repay their debt, hence may refuse a loan grant to them. In fact, the 40% DSR is a widely acceptable level for most banks. Finally, the higher the savings ratio (SA), the better position for someone to enter into the property market, especially when new investment opportunities knock at their doors without affecting their current lifestyle and repayment obligation.

‘NO TAX PLANNING Valuation and Property Services Department director-general Datuk Faizan Abdul Rahman emphasises that property buyers must not forget to include costs and fees involved in the investment. There are all kinds of costs involved when it comes to buying a property — mortgage, insurance, renovation and improvements, utility bills, council tax, among others. For a property investment which is going to be let out, there will be tax to pay on the rental income.

Do you have the flexibility and power to hold on to it if you have difficulty?” - Kevin K.M. Neoh

Before each investment, it is necessary to survey the property, which is also part of the additional cost.

‘BUYING BUILDING WITHOUT CF Faizan urges buyers to ask a lot of questions and discounts. As long as discussions with the real estate agents or developers are kept cordial, no one will get upset if you seek such answers. It is vital that you gather all information pertaining the property and observe any defects whenever you are viewing the potential property — all these will allow you to justify the discounts. Avoid buying any unit without a proper Certificate of Fitness, as not only you will not be able to move into the premises until the government’s approval, but also are required pay the loan each month. Finally, be wary of developers who have been blacklisted, as you do not want to become their next scam victim!

‘BUYING TOO MANY PROPERTIES Cheng & Co Wealth Management founder Ng Chee Yong often advise his clients to follow the ‘4-4-2’ approach. The approach, however, is not a football strategy, but rather, represents the optimum financial position that one should prepare before embarking on the challenging journey. Property investment may be rewarding, it is illiquid in nature, needing big capital outlays in each investment. Hence, having a proper property planning process is a requisite rather that an option now for each investor. The 4-4-2 reflects each person’s cash flow position, i.e. 40% expenditure in lifestyle, 40% expenses in loan repayment and 20% savings. www.propertyinsight.com.my NOVEMBER 2016 I 25

FEATURE

PROBLEMS WITH RAILS Commuters need to rethink before jumping on the train wagon BY: FELICIA SOON

Image Courtesy : http://malaysiagazette.com

he government aims to position Kuala Lumpur as one the world’s top investment destinations. To do that, game-changing projects such as the High-Speed Rail connecting the city to Singapore and the integrated Mass Rapid Transit (MRT) railway line are in the pipeline to accelerate Greater KL towards becoming a world-class metropolitan. For buyers and investors seeking new properties, most tend to focus on the connectivity of road networks and 26 | NOVEMBER 2016 www.propertyinsight.com.my

highway infrastructure, since bridges and transportation hubs are prime factors in ensuring property prices within an area would increase. Kuala Lumpur is a thriving hub, with a population of 1.73 million and is poised for continued growth on the back of a resilient domestic demand, inflows of foreign investments and the ongoing implementation of government initiatives under the Economic Transformation Programme.

Knight Frank Malaysia managing director Sarkunan Subramaniam says the capital represents the best value for money across the world, offering the highest yields and the least volatility in the market across the Asia-Pacific region. “Coupled with the step-up on public transport infrastructure, this transformation gives Kuala Lumpur the edge and represents the best value proposition for any multi-national corporations or investors in the Asia-Pacific region,” he says.

HIGH DEMAND Given Malaysia’s growing middle class, developers will surely find greater demand for safe and secure communities near public transport facilities, an increasing consciousness for sustainable solution as well as a greater divergence in demand for suburban communities. In fact, the announcement of projects such as the Kuala Lumpur-Singapore high speed rail, the Tun Razak Exchange and the construction of the capital’s MRT system have also caught international community’s attention as these projects underscored Malaysia’s bright economic future. With this, investing in properties near *urban public transportation system is important since public infrastructure cannot be easily replicated in other property developments. Ideally, a property is best located within 500m walking distance to urban public transport facilities. Urban public transportation systems denote the existing Ampang Line LRT, KTM Komuter, Kelana Jaya Line LRT, Monorail, as well as the upcoming systems MRT Sungai Buloh – Kajang Line, Kelana Jaya Line LRT Extension, Ampang Line LRT Extension and probably the Monorail Extension. The public transport system requires a huge amount of money to develop and the involvement of the government. No developer can construct it by themselves. Thus, owning a property near these transport systems provides greater advantages compared to other properties in terms of attracting tenants and resale value.

needed expansion. However, this makes the problems on the LRT a cause for concern. LRT services came to a halt during morning rush because of downpour recently. The incident turned into a public uproar when images shared on social media showed hundreds of passengers walking between rail lines and on guideways out of stalled coaches towards the Keramat and Damai stations. Prasarana chief executive Azmi Abdul Aziz says the attention showed the people care about public transportation systems. Briefly after the first incident, the Kelana Jaya line was disrupted over a glitch in the signaling and communications system, leaving thousands of commuters. Its chief operating officer Ismail Abdullah says: “We had glitches in the signaling and communication system between Ampang Park and Dang Wangi stations and had to power down the line at several stations to tend to the situation.” While buses were also deployed to ferry stranded passengers to the city centre, these incidents raised serious of concerns over the reliability of integrated public transportation system. How many other similar problems are there that can be traced back to management slip-ups, which will ultimately spill over into disruption of operations? Already, the upgrading needs of power substations for the Kelana Jaya Line threaten further power disruptions.

Notably, the success of the integrated public transportation system depends also on the affordability. A recent complaint heard from a commuter was that a one-way trip from Puchong LRT to Sunway via the Sunway BRT Line costs RM9, while the park-andride service costs RM4 per entry. That’s RM25 a day — a costly fee compared to driving. To make matters worse, constant news of fare hike do little to endear the system to those who needed it most. Another setback is long travel time. An average journey on the LRT from Puchong or Kinrara to Subang will take at least an hour, and commuters have to go through the hassle of changing trains at Putra Heights. Some of the coaches that arrive at the stations are also packed to the brim. So what makes the time spent taking the LRT any different from the time spent driving? If there is no traffic congestion, one may even reach the destination much faster. This is an interesting perspective to look into since Puchong is only about 10km away from Subang. Truth be told, the LRT extension only benefits those that do not own a car or do not drive. The expensive fares and long travelling period, coupled with frequent breakdowns have left most people preferring to drive rather than commute to places within the city via coaches.

GROWING CONCERN To overcome traffic congestion, an integrated public transportation system makes travelling to and from work easier, hence increasing productivity. This is the inertia that will kick off an economic momentum that ultimately translates into growth. The recent launch of Sungai BulohSerdang-Putrajaya Line 2 and the proposed third line for the Klang Valley MRT, with the transformation of the bus and taxi services, and a further growth to Keretapi Tanah Melayu, are all manifestations of this much www.propertyinsight.com.my NOVEMBER 2016 I 27

FEATURE

TO BUY or TO RENT?

A look at an age-old debate and more BY: FELICIA SOON

he housing market has always been influenced by consumer power. Buyers are now spoilt for choice with developers offering attractive loan schemes at one end while owners and investors renting their units at affordable prices. However, the choices are also greatly affected by the restrictions placed by Bank Negara to control spending and the tide of speculation in the country. Property consultant Knight Frank found Malaysians are struggling to obtain housing loans and that the rate of loan applications approved by the central bank saw a drop from 103,412 in 2015 as compared to 121,091 in 2014. Therefore, the question that comes to mind now is, should people buy or rent properties in such a challenging time? Most first-time home buyers prefer to purchase their property with assistance from the bank. Full-time investor Kit Wei Lee, 30, says the revaluation given by the valuer should be the reasonable amount that the bank would approve up to for the purchase of property. This will assist 28 | NOVEMBER 2016 www.propertyinsight.com.my

buyers in managing their budget and expectations and increase the chance of loan application approval. Although renting appears as an easier route, student Theresa Chew, 27, says buying will always be the better option, “but it also depends on the location of your property”. While the decision-making process is in the hands of the customers, Financial Planning Association chief executive Linnet Lee urges consumers to ask themselves whether they can afford to buy a property. Lawyer Datuk Ong Theng Soon shared similar sentiments, saying: “We should buy a home for own stay rather than rent.” Yet convenience can be in the hands of the customer when they rent. This is especially true for those who goes traveling for long periods of time as mentioned by hairstylist Davis Wong, 27, as “it is not advisable to leave a property unoccupied for a long time”. To get a better idea of any property, which include condition, community and accessibility before you decide to buy or rent, here are 10 property portal listing to help find a place you call home.

. iProperty This property hunting portal is available on mobile and website. It is Asia’s leading

online property group, with franchises in Singapore, Malaysia, Hong Kong, India and the Philippines. Here is where you can easily look for your dream home on the go. They also have designated sections such as ‘properties of the month’ and ‘3D shots of properties available’ to make the property searching process an interesting one.

PROPERTY GURU Property Guru Group has been utilised by more than 11 million property buyers, with over 104 million page views and generating over 500,000 enquiries for real estate developer and agent advertisers each month across Singapore, Malaysia, Indonesia and Thailand. The site does not just feature the location of the property, but also the surrounding public transportation. For those with a love for property, they can look find newly featured projects on PropertyGuru through its mobile app or website.

PROPERTY IN MALAYSIA Specially catered for expatriates and foreigners looking to buy or rent property in Malaysia, this website contains a searchable database of properties for sale or rent that is only allowed for this group. Visitors can learn about the rules and regulations imposed on foreigners wishing to buy property in the country through this portal. There is also a special section for estate agents who are targeting foreigners and another showing new developments aimed at foreign buyers.

DURIANPROPERTY.COM DurianProperty allows users to buy or rent a property in a fun way. Other than the typical search bar, it also has an auction tab for hopeful bidders. Another option that DurianProperty has is a section for student housing and this allows students to find houses that are a stone’s throw away from universities. You can also post free advertisements and tap into its network of real estate agents, developers and people who are looking for properties to rent as well.

PROPERTY CIRCLES Property Circles connects those who would inevitably work closely with each other in order to thrive. The site connects buyers, property agents, developers, tenants and sellers to one another under a single platform. Whether one is looking to find an agent, register as an agent or wanting to buy or rent a property, they can do so here.

iBilik iBilik is a website exclusively for renting, hence making it a popular option for students and young professionals. It also gives an option for users to search up short-term rental places. All you need to do is list your place and get approval within two working days, where upon the team in iBilik.my will handle the promotion, online booking and payment collection of your property, while you just sit back and wait for guests to place bookings for your unit. iBilik also has a separate section for reviews, making your decision process a lot easier.

. PROPWALL PropWall is a Malaysian-based property website that features a simple layout for visitors. For first-time buyers and renters, they can search up hotspots and highlyviewed properties. This serves as a convenience for users as they can browse, read the details, view images and leave their contacts to registered agents.

BUMBUNG.CO New kid on the block Bumbung.co, launched last year, is a force to be

reckoned with. This site has been gaining a lot of visitors as it prioritises the movein date of clients, so much so that in its review section, there is a feedback from a past client needing a place within a week and Bumbung.co was able to meet that demand.

9. PROPSOCIAL

PropSocial is a local crowdsourcing property platform which allows users to engage with others about any neighbourhood or area. The interesting element this portal incorporates is, besides sale and rental listings, there are also ongoing discussions and topics that users can participate in such as “Is now a good time to buy properties with the current economic situation?”

10.

WONDERLIST.PROPERTY Wonderlist Property gives you access to a wide range of property listings in Malaysia and Singapore for sale and rent. Through a series of integrated tools, one can search for amenities that are close to their place of stay. Whether it is a university or a bank, WonderList curates a list of accommodations for its users and expedites the searching process. It is also available via mobile app.

www.propertyinsight.com.my NOVEMBER 2016 I 29

DEVELOPER OF THE MONTH

ECOWORLD SETS NEW STANDARDS OF LIVING With Eco Sanctuary and the newly-launched Eco Grandeur, Eco World Development Group Berhad (EcoWorld) offers two unique yet equally desirable places to live.

ECO SANCTUARY: A GREEN HAVEN OF CARE

co Sanctuary spans almost 309 acres in the rapidly growing corridor of South West Klang Valley. This gated and guarded eco-themed haven in the vicinity of Kota Kemuning, offers a refreshing green-inspired lifestyle complemented by an excellent selection of facilities and the best of nature. The development is surrounded by green vistas, picturesque gardens and a breath-taking central park located at the northern front. Twenty percent of the

Grandezza’s Entrance Courtyard 30 | NOVEMBER 2016 www.propertyinsight.com.my

entire development’s land area is reserved for greenery. A total of 246 acres are allotted for the residential component, while 62 acres are reserved for commercial development. Conceptualised to harmonise with nature, Eco Sanctuary has achieved provisional BCA Green Mark Certified Township status. The leasehold development comprises 7 parcels of development. To date, three parcels have been launched with great

success — Parcel 1 comprises semidetached and bungalow units, Parcel 2 terrace villas, and Parcel 3 condominiums. The development is set to deliver a total of 8,000 residential and commercial units over a span of 12 years, beginning from 2015 and stretching up to 2027. LIVING IN LANDED BLISS Grandezza, the final landed gated and guarded precinct in Eco Sanctuary, is the ultimate iteration of the developer’s

vision of creating a mesmerising haven. It makes a bold statement about just how exceptional and luxurious life can be, with extraordinary homes, outstanding facilities and awe-inspiring landscape. Offering the ultimate luxury of space, this 68-acre low-density enclave of 3.8 units per acre, comprises just 100 units of bungalow and 160 units of semidetached house. A 30-foot linear garden runs along the back of the houses creating an attractive and safe place for children to play. The houses offer expansive open-plan living areas with ample openings as well as double volume ceilings, ensuring that the interior is filled with natural light and ventilation. Each house also comes with a sentry post and driver’s quarters to meet the special needs of the residents, further ensuring their convenience and peace of mind. As with the rest of Eco Sanctuary, all Grandezza houses come with excellent security features which include controlled access via the guard house, a 10-feet perimeter fencing around the development. A CCTV surveillance, 24hour patrol by security personnel, intercom systems connecting the homes with the guardhouse, individual alarm systems in every home connected to residents’ mobile phones, and stringent visitor management systems. Residents of Grandezza have exclusive access to a 24,500 sq.ft club house, which is designed to emulate a luxury resort with elegant cubism-inspired architecture. The club house boasts a 30-foot swimming pool with a Jacuzzi and striking dark timber deck, and an elevated gym among its offerings. A SANCTUARY OF CARE Eco Sanctuary is the first development in Malaysia to offer onsite care and wellness services. Dubbed Eco Sanctuary CareHub, this innovative facility will be initially offered at The Parque Residences to enhance the quality of life of residents both young and old. Eco Sanctuary CareHub offers 24/7 access to care with a qualified nurse available on hand to ensure that residents have access to proper care from the comfort of your own home. The services include Care Management, Medication

Management and a Care Concierge. In addition, the Circles of 5 Enriched Living Programme will deliver holistic wellness for all ages through an innovative programme with activities that encompass the physical, mental, emotional, social and financial. COMMERCIAL OPPORTUNITIES Planned as the commercial dynamo of Eco Sanctuary, the 62-acre Sanctuary City will deliver the full complement of business and leisure amenities that meet the needs of the residents of Eco Sanctuary as well as those of the wider community. In addition to the entertainment multiplex,

wellness centre, hotel, convention centre, service apartments, and institution hub, Sanctuary City offers an extensive range of commercial units—from an office tower to shop offices—to suit different business requirements. Eco Somerset is Sanctuary City’s maiden launch, offering smart investors, entrepreneurs and business owners first mover advantage in a premier retail and business address. It offers two- and three-storey shop offices. Their design synthesises elegance and pragmatism into a flexible 22’ x 70’ space that maximises utility with double-volume ground floors and superior frontages.

Grandezza’s Club House

Aerial View of Grandezza’s Signature Roundabout and Club House www.propertyinsight.com.my NOVEMBER 2016 I 31

DEVELOPER OF THE MONTH

Signature Roundabout

Star Gazerâ&#x20AC;&#x2122;s Gazebo 32 | NOVEMBER 2016 www.propertyinsight.com.my

Bridge of Dreams

ECO GRANDEUR: TAKING GREEN LIVING TO NEW HEIGHTS

co Grandeur is a 1,400-acre integrated township development that is the perfect setting for raising a family and cultivating the good life for them. The township offers outstanding architecture, lavish landscaping, excellent security and signature landmarks developed accordingly to environmentally conscious and conservation principles. Eco Grandeur aim to achieve the BCA Green Mark Certified Township status, bringing a new standard of living in the form of comfortable homes in gated and guarded precincts, a thriving commercial centre, a closeness to nature and a closeknit community to Puncak Alam, Kuala Selangor. This up-and-coming district north-west of the Klang Valley is easily accessible via Guthrie Corridor Expressway (GCE), PLUS Highway, LATAR Highway, the upcoming West Coast Expressway, and proposed DASH Highway. Greenery covers over 20% of Eco Grandeur in keeping with the township’s vision statement, “The Original Greens”.

This allows endless opportunities interactive landscaping as well as conservation initiatives. The development is made up of many different garden concepts, each created to suit a different mood or desire. The precincts in Eco Grandeur are gated and guarded with a single entry or exit for easier monitoring. The enhanced security is disguised through landscaping design so that fencing is softened, while the guard house is incorporated into beautiful entrance archways. A 200-acre commercial precinct called Grandeur City is being planned to serve not just Eco Grandeur but the entire Puncak Alam vicinity. Components of this commercial hub will include an international school, convention centre, hotels, serviced apartments, offices, hospital and shopping mall. MAIDEN LAUNCHES This township embodies Modern Victorian elegance, from architecture to landscape.

It draws inspiration from the Victorian era that is famous for grandeur and eclectic character influenced by arts and crafts brought back from the four corners of the world. Two parcels — Avenham and Graham — have been launched in Eco Grandeur. Avenham translates the Victorian house with conservatory into a series of garden homes that boast a charming covered patio that allows one to stay close to nature throughout the seasons. These 30’ x 60’ garden homes are outstanding as they resemble semi-detached houses, with each unit coming with 10 ft of land. Graham Garden is a series of 20’ x 65’ link houses that captures the modest grace of the quintessential Victorian terrace streamlined to reflect modern tastes. Affordably priced, both Avenham and Graham offer purchasers the opportunity to buy spacious, good quality homes that offer good investment potential.

www.propertyinsight.com.my NOVEMBER 2016 I 33

DEVELOPER OF THE MONTH

34 | NOVEMBER 2016 www.propertyinsight.com.my

www.propertyinsight.com.my NOVEMBER 2016 I 35

AREA FOCUS

PUTRAJAYA

Exciting future for property investment in the administrative capital BY: FELICIA SOON

36 | NOVEMBER 2016 www.propertyinsight.com.my

utrajaya is strategically situated between Kuala Lumpur and Selangor. It is served by a network of highways and the Express Rail Link (ERL) from KL Sentral Station to KL International Airport (KLIA) via Putrajaya Central located at Precinct 7 and is a freehold land that is surrounded by many facilities, from shopping malls Alamanda and IOI City Mall to the convention centre, hospital, recreational hotspots and of course government offices. CHALLENGES WITHIN AJC Planning Consultants town planner Ahmad Jefri Clyde says: “Putrajaya has been well-planned and executed. It offers an excellent example of where attention to detail and adoption of higher quality solutions leads a superior and lower maintenance outcome cost for the cooperation. Putrajaya and KLIA have acted as major economic catalysts that have induced urban growth in the Greater Kuala Lumpur conurbation’s southern corridor. Unfortunately, the planning process has seen these two destinations as “end points” and not as important parts of the urban growth phenomenon.

Source: GS Realty park lands,” Jefri says. The present administrative arrangements, particularly with Putrajaya being a federal agency as opposed to Selangor state and the third-tier local government apparatus is not capable of delivering the overview and management of high order urban services required to manage the anticipated growth. This would be a missed opportunity for the country’s most significant contributor to GDP in this development corridor and unfortunately, Putrajaya seems like an “island” being somewhat disconnected from the larger physical, socio-cultural and economic environments from where it is located.

“To address this issue and to anticipate the scale of urban growth — extending into Negeri Sembilan — there is a need for a coordinating agency that will plan for positive growth in the provision of urban infrastructure such as public transport, sewerage and waste management, water and power distribution and provision of public facilities inclusive of regional level

A PLACE OF REFUGE Firdaus & Associates Property Professionals assistant manager Salina Mohamad Ehsan affirms that Putrajaya is ideal for a family staying as this area specifically caters to the needs and demands of families, especially those in the working community of Putrajaya who desire affordable, as well as premium modern homes. To meet these expectations, the city incorporated a wellplanned pathway for recreational activities

that promotes a healthy lifestyle amid greenery settings. Compared to the last 10 years, due to its growing population of 83,300, the city is rapidly turning into a mature township, especially in the northeast, with OIO City Mall and the upcoming Shaftsbury Avenue. LIFESTYLE, HEALTH & EDUCATIONAL FACILITIES IOI City Mall is a sprawling shopping, lifestyle and entertainment hub in Persiaran Lebuh IRC. The four-storey building was launched on Nov 10, 2014, measuring at 130,064sq ft, comprising 350 local and international retail outlets, an indoor ice-skating rink and a theme park. Surrounded by lush greenery and shaded walking paths, the shopping centre also has colourful water fountains and presents a beautiful sunset view. It was carefully designed as a commercial property to cater to those who sought a good address for their retail business, as well as food and beverage outlets. Apart from retails and entertainment, Putrajaya Hospital is also one of the important amenities in the area. Located in www.propertyinsight.com.my NOVEMBER 2016 I 37

AREA FOCUS Precinct 9, the hospital is easily accessible from Maju Expressway (MEX), North-South Expressway (PLUS), Kajang Dispersal Link Expressway (SILK) and PutrajayaCyberjaya Expressway. The hospital serves the neighbourhoods of Precinct 1 until 20, among other neighbouring areas. There is also Heriot Watt University, Malaysia’s first green campus located in Precinct 5 which opened its doors on Feb 12, last year. The ‘green campus’ is remarkable for having the first living grass roof of its kind in Malaysia. At 300m long and 30m wide, it is the most recognisably sustainable feature of the campus. The roof shades the naturally ventilated spaces below and acts as an observation deck, accessible by glass lift. Other environmentally friendly features include solar lighting, a rainwater harvesting system and optimised air-conditioning and thermal control systems. This new campus sits on 4.8 acres in a stunning lakeside location providing exceptional educational facilities in an excellent environment, close to the Putrajaya Marina and its modern leisure and sports facilities. Currently, it has 297 undergraduates, 121 postgraduates and 41 academic staff members with six schools and one institution, which covers the whole spectrum of learning from the Arts, Sciences and Humanities. PROPERTY DEVELOPMENTS Newly completed Tamara Residence is one of the mid-range pricing project in Putrajaya. Located in Precint 8, it is a high rise, condominium built around the Putrajaya Lake. The area is surrounded

38 | NOVEMBER 2016 www.propertyinsight.com.my

by lush landscaped greenery and was completed in March under the development of Setia Putrajaya Homes. It has four blocks and units come with a built-up of about 1,205sq ft and the price ranges between RM480,888 and RM572,088, depending on a multitude of factors including but not limited to floor position and lake view. All units feature three bedrooms and two bathrooms. The exclusive condominium has a low population density, with only six units per floor and each unit is also a corner unit. The properties come partially furnished by the developer; each unit contains two airconditioning units and kitchen cabinets. All unit purchases also come with two

parking spaces. There are plans to include 24-hour security within the premises of Tamara. Putrajaya police headquarters and Hospital Putrajaya are less than 500m away and the nearest shopping complex is Alamanda Putrajaya. Tamara is accessible via the Maju Expressway (MEX), North-South Expressway (PLUS) and Kajang Dispersal Link Expressway (SILK). Precint 8 is a strategic location as it is near to Precint 2 and 3 -- the central hub of the government. Surrounding the development of Tamara is Ayer@8, which was launched in the Q4 2013. This commercial development surrounds the lake and provides

brickz

Transacted Properties Report

true property prices

PUTRAJAYA PRESINT 11 BANDAR PUTRAJAYA, PUTRAJAYA

Tenure : Freehold Land Use : Residential Building Type : Semi-d, Terrace House

Price Per ft²

Price

: 384 25th Median : 488 : 508 75th

: 800,000 25th Median : 980,000 : 1,098,914 75th

Psf and price based on 9 transactions from Apr 2015 to Mar 2016

Recorded Trans actions

Amount (RM)

0M 2002

2004

2006

2008

2010

2012

2014

2016

2018

Date SEMI-D

TERRACE HOUSE, CORNER LOT

TERRACE HOUSE, END LOT

TERRACE HOUSE, INTERMEDIATE

TREND LINE Highcharts.com

Median Price

Amount (RM)

2002

2004

2006

2008

2010

2012

2014

Year PUTRAJAYA

BANDAR PUTRAJAYA

PUTRAJAYA PRESINT 11 Highcharts.com

Median Price Ps f

Amount (RM)

600 400 200 0

2002

2004

2006

2008

2010

2012

2014

Year PUTRAJAYA

BANDAR PUTRAJAYA

PUTRAJAYA PRESINT 11 Highcharts.com

Source : GS Realty

Page 1 of 11

www.propertyinsight.com.my NOVEMBER 2016 I 39

AREA FOCUS TRANSACTED PROPERTIES REPORT

PUTRAJAYA PRESINT 11 BANDAR PUTRAJAYA, PUTRAJAYA Tenure : Freehold Land Use : Residential Building Type : Semi-d, Terrace House

Price Per ft²

Price

25th : 384

25th : 800,000

Median : 488

Median : 980,000

75th : 508

75th : 1,098,914

Psf and price based on 9 transactions from Apr 2015 to Mar 2016

Data Range: 247 Transactions from Apr 2002 - Mar 2016 Date

Address

Building Type

Sub-Type

SEMI-D

Floors

Rooms

Land Area

Build up

Price Psf

Price

3,281 ft²

2,758 ft²

488

1,600,000

2,444 ft²

2,429 ft²

412

1,000,000

4,209 ft²

2,587 ft²

384

1,614,401

7/3/2016

NO.23, JALAN P11F/3

20/10/2015

5, JALAN P11F/13

9/8/2015

PT14202, JALAN P11/2

SEMI-D

5/8/2015

NO.64, JALAN P11A 1/1

TERRACE HOUSE

END LOT

2,100 ft²

1,564 ft²

508

795,000

28/5/2015

8, JALAN P11D/12

TERRACE HOUSE

INTERMEDIATE

1,650 ft²

1,724 ft²

290

500,000

10/5/2015

NO.82, JALAN TANGGILAN P11/28

TERRACE HOUSE

INTERMEDIATE

1,650 ft²

1,799 ft²

545

980,000

7/5/2015

NO.7, JALAN P11 D/12

TERRACE HOUSE

INTERMEDIATE

1,650 ft²

1,727 ft²

492

850,000

23/4/2015

92, JALAN P11F/3

TERRACE HOUSE

INTERMEDIATE

1,400 ft²

1,571 ft²

509

800,000

14/4/2015

PT14222, JALAN P11

3,673 ft²

2,225 ft²

299

1,098,914

9/3/2015

NO. 8, JALAN TANGGILAN P11D/28

TERRACE HOUSE

INTERMEDIATE

1,650 ft²

1,799 ft²

478

860,000

5/3/2015

NO. 7 (PT 6725), JALAN TANGGILAN P11/28

TERRACE HOUSE

INTERMEDIATE

1,650 ft²

1,799 ft²

445

800,000

25/2/2015

PT14221, JALAN P11

2,800 ft²

2,225 ft²

341

955,416

17/2/2015

PT 5037, JALAN P11F/10

1,400 ft²

1,553 ft²

295

458,166

9/2/2015

PT14218, JALAN P11

SEMI-D

4,101 ft²

2,225 ft²

264

1,083,018

4/2/2015

PT14211, JALAN P11 (MYRA RESIDEN)

SEMI-D

3,281 ft²

2,225 ft²

298

976,502

30/1/2015

NO.52, JALAN P11/28 JALAN TANGILAN

TERRACE HOUSE

CORNER LOT

2,400 ft²

1,799 ft²

545

980,000

23/1/2015

PT 5026, JALAN P11 F/3

TERRACE HOUSE

INTERMEDIATE

2,430 ft²

2,568 ft²

337

864,351

5/1/2015

PT14211, JALAN P11

SEMI-D

3,442 ft²

2,225 ft²

302

1,041,112

5/1/2015

NO.71, JALAN P11F/13

SEMI-D

3,281 ft²

2,758 ft²

436

1,430,000

31/12/2014

PT14210, JALAN P11 (MYRA RESIDEN)

SEMI-D

2,800 ft²

2,225 ft²

421

1,179,927

31/12/2014

PT14215, JALAN P11

SEMI-D

4,283 ft²

2,225 ft²

254

1,089,161

31/12/2014

PT14217, JALAN P11

SEMI-D

3,281 ft²

2,225 ft²

298

976,502

30/12/2014

PT14209, JALAN P11

SEMI-D

2,800 ft²

2,225 ft²

387

1,082,805

30/12/2014

PT14212, JALAN P11

SEMI-D

2,800 ft²

2,225 ft²

341

955,416

24/12/2014

PT14206, JALAN P11

SEMI-D

4,101 ft²

2,587 ft²

356

1,457,888

22/12/2014

PT14201, JALAN P11

SEMI-D

3,281 ft²

2,587 ft²

452

1,481,612

TERRACE HOUSE

INTERMEDIATE

SEMI-D

SEMI-D TERRACE HOUSE

Source : GS Realty

40 | NOVEMBER 2016 www.propertyinsight.com.my

INTERMEDIATE

totalling 11 units with a total of 22 units on a freehold land size between 3,932sq ft and 8,854sq ft. Launched on March 26, the price range for the units are between RM3.5 million and RM4.9 million. On the commercial front, PPD developed and built multiple award-winning green building such as the Diamond Building for Energy Commission, which has been accredited with latinum GBI and Platinum Green Mark certifications.

magnificent views. In the future, there would possibly be many amenities all within comfortable walking distance from Tamara. With a low buy-in price and a lot of potential for appreciation, it is a good place to buy for capital investment purposes. Master developer Putrajaya Holdings is responsible for translating the vision of Putrajaya into reality. It was incorporated in 1995 with the initial responsibility of designing and developing the comprehensive, highly strategic 20-year Putrajaya Masterplan. Today, with more than 20 signature development projects comprising office buildings, commercial hubs and residential, Putrajaya Holdings is a maestro in the property market working alongside renowned names in the

construction industry. Another developer in Putrajaya is Putra Perdana Development (PPD), a wholly-owned subsidiary of Putrajaya Perdana Berhad, situated in Precinct 16. Its business encompasses property development, project management and construction, and eventually the sales of properties where required since its inception in 1979. Currently, it has built and handed over more than 1,000 units of residential properties in Precinct 16, ranging from apartments to townhouses, super-link houses, semi-detached and bungalows. Danau Suria is their latest high end project, comprising two and a half storey bungalows totalling 12 units and two storey bungalows

PUTRAJAYA IN THE FUTURE “The one dilemma that Putrajaya will have to face in the future is, the issue on the speed of execution in the township. The problem will arise on the fact that the buildings will age, physically and in terms of design. As there is little cohesion in the design styles between buildings as one finds in old world administrative centres, Putrajaya will eventually appear to be a product of its time or era. As such, there will be a need to unify the street environment, possibly by trees and landscaping, that will give Putrajaya a sense of place as opposed to a series of ‘dated’ buildings in space,” said Jefri. Putrajaya can be the next coming choices and major draw for buyers since it has more comprehensive infrastructure and facilities and not to forget the MRT extension line that leads to Kuala Lumpur.

AGENTS SPEAK ALAN LAI, Senior real estate negotiator of GS Realty “We are often asked about IOI City Mall’s surroundings when it was first launched and we helped arrange accommodations for retail and F&B staff members stationed here. In a very large extent, regional mall attracts more people to the area. Nevertheless, for the property price in Putrajaya, it has the same value as Kuala Lumpur and Selangor. Record shows that in 2012, two-storey landed house in Precinct 9, which was an intermediate house, transacted at RM 530,000, and it was before IOI City Mall was completed, so how much do you think the same house costs now?”

RASHIDAH ABD RAHMAN, Real Estate Negotiator of Reapfield Properties “Previously, the general perception was that only government servants invest on Putrajaya properties but that was probably the case during its early years. Times have changed and more people outside the area are considering Putrajaya as it is now more developed and offers a great concept and good environment. The price range for a flat is between RM230,000 and RM260,000 while terrace link starts at RM600,000 in Presint 8, 9 & 11. As for luxury condominiums, a unit costs between RM450,000 and RM700,000 (depending on size) at the new development area such as at Presint 15 that offers high end properties such as shop offices and semi-detached house which is also near to the Diplomatic Presint 14 and 16.”

www.propertyinsight.com.my NOVEMBER 2016 I 41

PERSONALITY OF THE MONTH

MARCO ROBINSON: EXPERT KEY STRATEGIES FOR Reality check vital before buying a property LEVERAGES BY: MAGES PV LINGAM

hen Datuk Seri Marco Robinson arrived in Malaysia in 1997 and started his stint in the property industry at Tanco Resorts Berhad, he successfully steered through the volatile market by extensively selling resort vacation ownerships. This was a business related to tourism, leisure and entertainment. By 2000, when the Asian financial crisis brought losses in 42 I NOVEMBER 2016 www.propertyinsight.com.my

millions, Robinson left his full-time job and became an entrepreneur. Significantly, his journey began when he bought his first property in 2008 at age 40. Prior to the purchase, he faced some challenges including capital. But as a serial investor, he has learnt that it can be solved via crowd funding. “I don’t trust the banks,” he said when asked about his opinion during crisis

sublime period of market volatility. His prediction for Malaysian property market will see a positive rise after a two-year cycle. The strategies were proven successful as he believed in what he was doing. His roller coaster childhood and having been a school dropout at 16, made him view life in a different perspective. It arrived at a time, he was jobless during an economic crisis in 2008 and he wrote Close the Deal &

PERSONALITY OF THE MONTH

Suddenly Grow Rich, which later became a best seller. Despite that, he wasn’t happy with the royalties from the best seller either then he asked his financial savvy friends the best way to make millions and many advised him to buy properties and invest in the market. “One of the bolder move taken as property investor was, I will fly to a few different countries and obtain loans in that foreign banks. I would set up companies in each of those countries such as Singapore, Australia, the United States and Malaysia,” he said. He would first apply for working permits at the countries after which application for loans from the banks will be done as per their requirements. The loans will be approved eventually when the requirements set by the banks were met to purchase properties. Borrowing from the banks is one of his working strategies for market investment. He said this is one proven way to gain income and be property owners, too. A person can optimise on leverage by letting the market fall before starting to invest and this will give the extra space on top of the line of credit by the banks. As an investor and founder of The Wealth Revolution, he conducts talks and boot camps to educate those who are interested on the know-hows and strategies to leverage in the right property investment or simply on the right timing to buy properties. Robinson also encourages people to invest their capital onto his investment which allows him to buy more properties. Then, he shares the income with the buyers saying “it’s better to have a 25% of something than a 100% of nothing”. Significantly, this self-made millionaire has successfully purchased a whopping 108 units last year and refurbished the property and sells it back to foreign investors. It has an equity value of 40% equivalent to £10 million (RM51 million). Asked about strategies for market outlook, Robinson shared three winning strategies he applied this year: 1. House Multiple Occupants (HMO) or Shared Accommodation; 2. Special Purpose Vehicle (SPV) or buy via an existing company. He said

there are no restrictions in the UK for foreigners for a reduced tax. This will require experts in legal matters 3. Joint venture (JV) A leasehold (restriction to transfer) purchased unit can be written on papers from a freehold (full ownership with no restriction). Likewise, he gave an instance of his latest freehold property of 50 apartments, a lease was created for each individual unit at the building. The lease was for 250 years for any investors or buyers. So, he still owns the freehold and can sell it as separate investment and if you own the freehold then in turn own the leases for the units, too. But this can be achieved with help from a network of sourcing, legal and finance or a mentor who knows how to scale up on the legalities. Robinson said for HMO, a return of investment of 12% can be guaranteed with a minimum sum of investment of £5,000 (RM26,000) by leveraging on any single property via his company. This sum will then be locked in for the next three years. Potential investors were attracted with some benefits for the SPV strategy like lifetime membership with the one-to-one team coaches and oversea retreats. A support method called ‘Exchange Delayed Completion’ (EDC) is a practice used for his property in the UK. When a property has been purchased, an exchange of contract will occur. A contract will be exchanged first, the time between the exchange and the completion can be negotiated. The time of completion of the property purchased can be delayed. In Malaysia, Robinson shared one of his properties he bought for RM430,000 in 2010 at the Berjaya Times Square. It was an excellent buy with RM1,300 rental returns and just sold it this year in September for RM800,000. The property is in demand and frequently occupied by foreigners especially from the Middle East. “Malaysia has always been a speculated property market,” said Robinson. He added if a property is bought now, it will likely drop in value compared to Singapore having a more volatile curve due to its open concept to foreign investment. He also added Malaysians would use up all of their retirement fund in three years, therefore

not to rely on that but start with other investments. For new property buyers, he advised that a market study is vital especially for information pertaining to job growth in the vicinity, demographics movements, structural plan like the accessibilities or amenities and able to decode cyclic process. As for foreign investors, the city of Manchester was recently voted as the best city in the UK. It has shown 75% technology growth, easy to access business grants like free office spaces which increased the sustainability’s of the property purchased there with high accessibility. He stressed that UK has the lowest base lending rate of 0.25% due to the correction of Brexit, therefore increasing higher demand for first time home buyers. UK has opted to exit from the European Union (EU) in June this year, and in turn has predicted a sharp drop in the house pricing. If a property is being bought in Manchester, it will reap a cash flow return of 29%. He said the local currency ringgit has strengthened to a weaker pound now. Robinson added that leveraging on foreign exchange of other foreign countries with lesser market challenges are a way to earn back return on investment (ROI). “Economists said pound will appreciate due to sentiments by foreign trade deals from China and Australia”. China has transformed Manchester as a hub by building a £130 million (RM666 million) China Cluster, incorporating with the Airport city Manchester to lure in the far east firms. Joint venture mentioned by Robinson has an effect on property purchases. A collective fund or crowd funding method will prove to be stronger when a group of people will invest in a property and will receive the share from the returns. Short term or bridging loans basically for a year are introduced for the property buyers in the UK Robinson said Malaysia has yet to have enough affordable homes. Therefore, advised new buyers to do a reality check or research on a property before purchasing it, especially on the cycles like job growth in the area, population growth, the infrastructure and commercial values. www.propertyinsight.com.my NOVEMBER 2016 I 43

PERSONALITY OF THE MONTH Currently his onward investment is Initial Public Offering (IPO) on The Rich-List. “The Rich-List is funding and creating award-winning entrepreneurs,” said Robinson. The recipients will gain access to the capital to start their own business and building brands. The entrepreneurs will be trained and mentored individually, and they will receive customer royalty platform for instance on travel, cosmetics or restaurants. Robinson also mentioned about ‘block chain’, a technology that will be used to open finance and prevent fraud, in this case called ‘the Naked Dollars’. On a lighter side, Robinson balances his time for family and travelling. He said he travels extensively for trainings but he has a team of responsible leaders who take care of his events and business. He loves to spent time with family besides meeting

44 I NOVEMBER 2016 www.propertyinsight.com.my

The Rich-List is funding and creating award-winning entrepreneurs.” - Marco Robinson

new people and sharing his testimonies for success as a millionaire and entrepreneur. His advice for the upcoming entrepreneurs is not to rush into the market but go for smaller achievements first. They should have the burning desires to attract investors and the right people and able to

nail the idea with clarity. Communications, confidence and self-believe are factors that are able to retract capital and network with successful people. For the next five years, his mind and energy will be focused to get his legacy IPO The Rich-List to be known worldwide.

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CONTENTS

30 ENTREPRENEUR INSIGHT

10 COVER STORY

Leaping Boundaries with Lepro

Vincent Heng and the team at Lepro are elevating the property industry to greater heights

INVESTOR NEXT DOOR

Turning Dreams into Reality

Beyond sales, innovative outlook

Local Expertise, Outward Presence

Passionate about achieving a higher benchmark

MAIN FEATURE

INDUSTRY INSIGHT

Strata for Investors

Strata schemes are meant for owners to take charge of the maintenance and management of the common properties

Upscale Service in Real Estate

Durable consultants at the forefront

Finally, oﬃce space in Malaysia that saves you money ROOKIE INVESTOR

FEATURES

Buy-to-Let: 5 Factors to Consider

Think Before You Buy

Problems with Rails

To Buy or to Rent?

Soldier of Fortune

Having made his first million at age 25, Terengganu boy wonder shares how passion and perseverance contribute towards building your own empire.

Add value to your investment

Five property planning mistakes that leave buyers high and dry.

DESTINATION

Commuters need to rethink before jumping on the train wagon.

Sharing Space

Beyond the option of working from cafes, there are co-working spaces that offer a sanctuary for lone professionals.

LEGAL

64 Companies Bill 2015: Its Impact on Property Investments

A look at an age-old debate and more

DEVELOPER OF THE MONTH

FINANCE 30 Lean, Mean, space Green Machine Get oﬃce with everything included – from a receptionist to access to our 66 Can an Employee Become Financially Independent? Eco World creating tomorrow and beyond global network of 3000 locations. It’s all covered by one simple price, and you only STRATEGY AREA payFOCUS for the space you use. 68 Alternative Real Estate as an Investment Tool in a 36 Putrajaya Exciting Future Nestled between Kuala Lumpur and Selangor, the administrative capital is rapidly turning into a mature township

Challenging Property Cycle

PERSONALITY OF THE MONTH

Visit of our for 28Leverages locations in Malaysia and we’ll show you 42 Expertone Key Strategies how. 1800 881 483 | +603 2168 4300

Reality check vital before buying a property

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ENTREPRENEUR INSIGHT

LEAPING BOUNDARIES WITH LEPRO Vincent Heng and the team at Lepro are elevating the property industry to greater digital realms BY: DIVYA PREMBAJ

wning your own assets in todayâ&#x20AC;&#x2122;s digital age comes with a whole new set of rules. Businesses and industries are shifting to a more virtual dimension; standard operating processes are evolving to suit the climate of a digital 46 I NOVEMBER 2016 www.propertyinsight.com.my

age, with the same concept applied to the property industry. Bridging the cybernetic gap of owning your own home and the connectivity of the Internet is precisely where Lepro Systems Berhad fits right in. Founded in January, Lepro is a company

that strives to assert the combination of legal technology and legal process outsourcing, within the property industry. With the advent of the mobile applications Lesys Property and Lesys Tenancy, Lepro is able to take the entire experience of

PERSONALITY OF THE MONTH property ownership to the cyber realm. As a new player in the digital property industry, Lepro did face many initial challenges. Branding, marketing, propelling the Lesys Tenancy and Lesys Property idea, as well as the idea of legal technology, are all fairly new concepts within the Asian region. In Malaysia, it is not common knowledge that one is able to create tenancy agreements through mobile applications or check status updates via these domains on the Internet. Facebook and telemarketing are the current means to spread the knowledge of Lepro, as its target audiences are relied heavily upon property agents, and not the public. What makes Lepro stand out here is that unlike their competitors that focus on the public reach, Lepro puts emphasis on the agents, also providing customer service to assist the agents. This allows tenancy agreements to be concluded in a much convenient and concise manner. Vincent Heng, director of Lepro, began the company with one main idea in mind — to evolve all processes within the property industry to suit modern technological landscapes. “We hope to transform the traditional legal service to keep up with technological updates, bringing our efficiency effectively to client and customers — inherently benefitting all parties in the property industry,” he says. HOW LEPRO WORKS The mode of utilising the Lesys Tenancy mobile application creates speedy and safe tenancy processes. In the conventional way, after an agent prepares the booking and tenancy agreement forms for the landlord and tenant to sign, the forms need to be stamped at any Inland Revenue Board of Malaysia (IRB) office. This process usually takes time, which is where Lepro comes in, by solving the problem via its e-stamping and e-signing services. Once the tenancy agreement is done by their officer, the agent will then create an e-sign. The land lord and tenant will receive a one-time password, similar to Maybank2u’s TAC code. The agent will not need to meet the landlord and tenant to finalise the process, as once it’s been e-signed, the option of e-stamp is also available, removing the visit to the stamping office from the equation.

The entire process takes a quick 2-3 days. Amongst their many services as well, Lepro also includes E-storage, making it extremely organised and convenient to store processing files. The current property industry still uses the commercial manual way to keep files, sometime taking days to retrieve them. Clients typically want fast and efficient service, however, more than usual it lacks the desired quality. If it is quality that is necessitated, then it typically will not be a quick process. Lepro aims to bridge these two crucial aspects to its clients, closing the gaps. “This has been the biggest speedbump so far — good quality along with fast service. By achieving the 3E’s — Efficiency, Efficacy and Effectivity — we will gain ultimate customer happiness, “says Vincent. Lepro is also an end-to-end service provider for legal process outsourcing. The main competition from key players here are from India, followed by the Philippines. Lepro is currently trying to battle this by including legal process outsourcing services, at lower rates with more accessible lawyers within Malaysia. Apart from that, the Lesys Tenancy app also plays a large part in legal process outsourcing today, an aspect in the industry that Lepro’s competitors such as India and the Philippines are lacking. Compared to other property agencies, Lepro provides technological service which specifically meets the market demand in terms of fast and efficient processing. The team at Lepro strive to work on their 3 ‘S’ mantra — Simplify, Standardise and Systemise; to maximise cost effectiveness and customer satisfaction.

“Lepro is all about catering to property changes in today’s world — you buy a property from a developer, and the processes that ensue are long, tedious and time consuming. With Lepro, property players do not have to call the legal firms to check up on their statuses anymore. It’s faster and conducive, and less time consuming without delays,” Vincent says. HOW FAR LEPRO HAVE COME Milestones that Lepro has achieved since its inception include the April launch of Lesys Tenancy, and Lesys Property last month; along with its convenient flagship service centres in Johor, Kuala Lumpur and Penang. Amid such achievements, Lepro’s ultimate goal would be as a fully integrated system, with its processes settled under an hour, an enormous leap from its current two to three-day timeframe. Vincent Heng sees this in Lepro’s future, but there will be a lot of work to be done to get there. “We hope to provide an ultimate service where there won’t be a need to step outside, everything will be done in the comfort of your own home. Wearing a virtual reality (VR) headset, viewing your property, clicking to sign the booking forms, and lastly going through your e-wallet to pay. Everything to be comprehensively virtual,” he says. Lepro’s personal motto will always remain that every property buyer deserves a fair and equal service. Via technology, it doesn’t matter the price of your property or your means of income. It’s the accessibility to fair and convenient legal service to everyone.

www.propertyinsight.com.my NOVEMBER 2016 I 47

INVESTOR NEXT DOOR

LOCAL EXPERTISE, OUTWARD PRESENCE Passionate about achieving a higher benchmark BY: MAGES PV LINGAM

48 I NOVEMBER 2016 www.propertyinsight.com.my

INVESTOR NEXT DOOR

rinting business has a reminiscing place in Loke Moon Chieng’s heart since her father owned a printer company in Shah Alam mainly printing media like books, dictionary and stationaries. She was keen to earn her own pocket money at a tender age and she started by selling bookmarks. After receiving BSc in Psychology at Iowa University, she pursued her curiosity by being a Biotech scientist. She worked in the US for a couple of years before returning to Malaysia to be with her parents. Loke braved through challenges during her stint at the education sector until she realised she needed more in life. Alongside her partner Kenji Piah, they started an advertising company in 2004. POT OF GOLD The company, like any other, faced several setbacks but as time passed, Loke switched her resources and improved her marketing skills which bounced her back to a steady business by 2009. Loke started her investment journey early as she knew and tested the consequences of inflation from her early years in the

business. She struck a deal with a retail seller of nail and beauty business at a low rate in Damansara Perdana. She immediately renovated the space, added more products and upgraded the services whereby the business started to grow. Significantly, when Loke started seeing her efforts begin to reap profits, she decided to sell off the business at a higher price. “I started my first property investment with a secondary market condominium. It was an interesting buy,” she said. “Built in the 90s, the condo’s initial selling market price was about RM300,000 but due to run down mall located just opposite the condo, the price dwindled gradually over a period of 10 years until I finally bought it for RM186,000. “It was a wise buy as the condo management picked up and surrounding areas improved whereby the rental return of investment (ROI) increased thus I managed to sell it after six years with a high appreciation rate.” SWITCHED INVESTMENT SCOPE Despite her young age, Loke managed to indulge in new development projects be it residential and commercial. She switched her investment to concentrate only on secondary market especially on commercial and factory lots. “My principal standing for property investment was, always purchase under the bank value for properties with smooth cash flow in rental so ROI should be 7% and above,” she said. “Currently, I own properties with net worth of over RM10 million which include landed and condominium units, commercial office lots and factories in Selangor, Kuala Lumpur and Johor.” Nevertheless, Loke is still staying at a rented terrace house and also operating her business from a rented factory and office lot! The reason behind this decision was to maximise her investment portfolio, reduce

liabilities and upscale all her investment as assets based only. MAGNETIC BREAKTHROUGH Loke’s breakthrough came after she sold her third business in 2012. She continued to hunt for suitable properties to strengthen her investment portfolio, so she started up with her fourth company MK Magnet. Custom made fridge magnets were seen as a niche market and people started doubting her initiative to manufacture in larger quantum. Despite that, Moon believes in innovation and marketing tactics to be successful in her niche business. “My partner and I brought with us only two staff members from our previous business to start this new venture.” They jump-started first by evolving from the traditional fridge magnets, as souvenir pieces into a “daily magnet” that can let anyone to remember the most joyful moments in life, services or brands for people to remember all the time or urgently. MK Magnet escalated their business and ventured far by manufacturing personalised gifts for events like birthdays, weddings, baby shower and even reunions. Companies have even ordered their magnets as marketing and advertising tools for SME purposes and for corporate growth in areas of customer base and branding. Furthermore, Moon emphasised the growth of their business has brought them to develop original equipment manufacturer (OEM) and premium gift section for magnets. She also studied how to retain long lasting memories, information and details for anyone or any companies. “Always and anytime will be a perfect time to invest in a under bank value property. The only key to success is to be patient,” she said, adding that 80% of her investments are commercial build up. BORDERLESS EFFORT With a tag line “Make your branding stick”, Loke believes in her passion for her www.propertyinsight.com.my NOVEMBER 2016 I 49

INVESTOR NEXT DOOR

PROPERTY INVESTMENT PROPERTY 1

“My principal standing for property investment was, always purchase under bank value for properties with smooth cash flow in rental so ROI should be 7% and above.” - Moon Loke Chieng

business have grown and she diversifies her magnets to paints, chalkboard paints, magnetic labels, tapes, printable photo magnet and more. Her orders have picked up tremendously and created competitiveness in her market. To overcome the company’s competitors, Loke launched her own manufacturing, utilising online platforms and delivering orders on time to her customers. “I believe in expanding global business using online platform and women should 50 I NOVEMBER 2016 www.propertyinsight.com.my

not be overly sensitive but to venture outwardly and seeking for fresher platforms,” she said. MK Magnet proudly added a feather in its cap recently when it made it into the Malaysia Book of Records for a backdrop creation. Loke believes be it in her business model or investment in properties, a person must possess the capability to turn the ordinary to extraordinary and to grow to the next level with passion, enthusiasm and motivation.

Location

SB Jaya, Sungai Buloh

Property type

2 storey factory

Purchase value

RM830k (2013)

Market value (2016)

RM1.3m

Price psf

RM578psf

Rental per month

RM4,400

Rental yield

6.36%

Loan margin

85%

Loan tenure

30 years

PROPERTY 2 Location

Taman Universiti

Property type

2 storey Semi D Factory

Purchase value

RM1,180,000

Market value (2015)

RM1,380,000

Price psf

RM230psf

Rental per month

RM5,500

Rental yield

5.59%

Loan margin

85%

Loan tenure

25 years

INDUSTRY INSIGHT

UPSCALE SERVICE IN REAL ESTATE Durable consultants at the forefront BY: MAGES PV LINGAM

he traditional term property sales agent has been long ditched by MCM Home since its inception five years ago. The Cheras-based company has set aside its house rules to cater for a more concentrated work ethics and to deliver clientele propositions as per market requirements in this competitive era.

52 | NOVEMBER 2016 www.propertyinsight.com.my

Property Insight met up with MCM Home’s directors Cannis Chan and Damon Chan and their top level management experts Mei Ding and Calvin Chai. A look of confidence was very clear while Cannis explained how the company has come a long way from a traditional real estate practitioner to a more niche approach

consultant agency. “Malaysia’s property market will pick up next year as there are always new properties being built and buyers or investors are always looking out too but we need to also assist in the sales of the projects that are contracted to us,” she said. The directors have over a decade of

INDUSTRY INSIGHT

We only encourage fighters in this company, not survivors.” - Damon Chan

experience in the market and have seen the comprehensive property trends in Malaysia. Therefore, they are able to meet demands from clients who always seek for their intermediary expertise. To stay competitive, Cannis said they need the focus on new projects and not to adapt the traditional methods. The consultants are too occupied usually within a time frame of 10am to 10pm as they will be involved in property events weekly. She said the most important drive in her company is her consultants’ commitment and loyalty. Currently, the company has 50 consultants. Their expertise and knowledge is measured with apt key performance index so broader approaches are practised and taught to bring out the best in them. Marketing director Mei Ding said many new agents walk into their agency but only a few can survive the test run. MCM Home consultants are divided into three groups mainly in charge of new projects or developments. Second are consultants in charge of cold calls whereby they will form listings services, advertisements and networking. Lastly the third group is charge of online platform. The first group are largely involved in roadshows, real estate property fairs and shows. Basically, their clients are from Petaling Jaya (Taman Sea), Kuala Lumpur (Sg Besi and Melawati) and Kuantan, Pahang. Damon said MCM Home capitalises projects based along the route of Petaling Jaya and Kuala Lumpur. “We continue to press on technicality due to our position as real estate consultants in a professional outlook to meet up with deadlines and requirements,” he said. Cannis also commented that they practice with standard towards their clients. “If we wanted to get 1,000 bookings is possible and close their work, but we prefer to complete the whole process from the bookings of units till the Sales and Purchase (S&P) signing. The buyers will be directed to the show room; bookings will be done but the most important take that the developers are expecting will be successful signing of S&P. It is tough as cancellations are due to occur when the bank loans declined or requirements are not met by the buyers,” she said. Their consultants are arduously trained by bankers and legal experts. They are the www.propertyinsight.com.my NOVEMBER 2016 I 53

INDUSTRY INSIGHT ones who stand in between the buyer and the seller significantly a sense of loyalty and responsibility falls on their shoulders. MCM Home has tied up with bankers and lawyers to educate and train its consultants so they are able to deliver their pitch professionally even quoting some Housing Acts, Government and Services Act (GST), Schedule Hedge, Stamp Duty and Legal Fees. Damon has a wider outlook for their company. Their focus is on training specially to have an investment mindset, to foresee the property market and advises or tips to their clients. The information they gather on any areas concerning the market or new laws are pre-empted via their investors group by helping to provide solutions. Cannie shared on the success of their current project in Cyberjaya where they managed to sell 150 units. From here, 60 units with successful S&P were signed within three months. Their consultants are paid commission as soon as a S&P are signed so the financial burden are not a question for them but only to boost their confidence. MCM Home moves in groups aggressively and don’t absorb personal or solo sales. According to Mei Ding, the company’s

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record deal to close a sales was three days. And if a novice unable to stand the demand at work, perform or comply professionally within a week they would leave the company on their own accord. So, traditional method of part time salesperson or spoon feeding like basic salary are not practised in their company. “We only encourage fighters in this company not mere survivors,” said Damon, adding the consultants are groomed as partners or investors in properties, too. The projects chosen are based on location and the project will be discussed first with their consultants before a decision is made. Prior to that, an area research will be conducted to determine the value of the projects. A for their income, a fixed consultant fees will be charged to their clients. MCM Home has strong financial standings which are able to sustain their workforce and trainings. His philosophy on real estate is he believes the property market is broad and safer. So he can always trust the volatility of the market curve. Calvin also commented that Malaysia is a buyers’ market. “Compared to five years ago, now there a many projects sold at zero down payment and an array of packages to choose from,”

he said. As for first-time home buyers, Cannis said now is the right time to buy, saying: “If you don’t have a house yet, the property price is down but the value is intact.” Asked about future property market expectations, Damon said he foresees a healthy year. There is a rising wave for the young generation buyers to upgrade their property investment. This set of new purchasers under the age category of 28-35 years old are more selective, too, and more prone to look for prime areas for instance Cyberjaya. The developers are confident to call them in to market and sell their project due to the proven results in the past and trustworthiness to deliver the end results. MCM Home help its clients develop retirement plans and real estate portfolio. Cannis added that they have existing foreign counterparts from Australia and China to support their organisation. Damon has a great expectation for MCM Home in the next five years to stimulate in depth contingencies to help their clients. His dream is to be in the Top 10 Marketing Property Consultant Agency and to move forward to achieve more durable consultants for the company.

ROOKIE INVESTOR

AJIB ADI:

SOLDIER OF FORTUNE

Having made his first million at age 25, Terengganu boy wonder shares how passion and perseverance contribute towards building your own empire BY: ASYRAF NAQIUDDIN

56 | NOVEMBER 2016 www.propertyinsight.com.my

ROOKIE INVESTOR

smooth sea never made a skilful sailor. While most millennials envelop themselves living in the present, 31-year-old investor extraordinaire Ajib Adi busies himself reading up on business books and starting conversations with the right people, all for one vision — “To build my own empire”. The fourth of nine siblings says growing up was far from easy. But that did not stop Ajib from earning pocket money. “At age 11, I helped my grandfather, Ahmad Mamat, tend to his farm picking up durian to be sold to the middlemen,” the Kuala Berang-born says. “Realising how much money we lost to the middlemen, who reaped 90% profit from our hard work, I decided to follow suit and sell everything directly to my consumers — schoolmates. “Spurred by the tiny profit from the farm, my brother, Najmi, and I sourced for video games and managed to rake in threefold profit for each game.” HUMBLE BEGINNINGS Upon graduating high school, the Science Stream student made his way to Universiti Teknologi Malaysia in Skudai, Johor for a year before diving into business studies at Universiti Utara Malaysia in Sintok, Kedah for three years. “I remember my parents had to borrow RM300 just to drive me to Johor,” he recollects. “My heart sunk each time I had to ask for allowance that it took them days just to put RM50 into my account.” Defeated but determined, Ajib persevered and continued selling anything that was within his reach. “Students should not just learn theories. Textbooks are important, but applying theories and formulas to real life provides a bigger impact towards personal growth,” he says. “While studying, I ran a 24-hour printing business from my room where I cater to mostly last-minute assignments. “I also smuggled burgers from a stall operator near the campus and sold them from room to room. Students were not allowed to drive on campus grounds then, so the ‘risk fee’ was enough for me to earn a comfy allowance. “At the same time, I was introduced to the water filter product Coway. I’m

not a natural-born salesman, but I even managed to convince the university’s water dispenser contractor to switch to the South Korean health product.” The rest, as they say, is history. HISTORY IN THE MAKING After finishing his degree, Ajib bunks at his friend’s living room in Kuala Lumpur, determined to turn his vision into reality. With lucrative incentives, the charming sales boy travels extensively to make his sale. “I was still that kampung boy who knew almost nothing about the city,” he says. “Instead of taking the trains, I travelled by taxi which cost over RM3,000 a month. By then, I was already selling over 30 items a month — a tiny cost for a bigger return.” It did not take long for Ajib to gain attention from Coway’s bigwigs. His east coast charm won him the country’s top salesman award six months into his service. Keen on helping others, he drove his team of over 50 muscles to intensify their sales. But as with other visionaries, Ajib sees another opportunity to tap — property. In 2009, 23-year-old Ajib began investing in a RM200,000 apartment on the hill slope of Kampung Cheras Baru, Monte Bayu, along with 33 parking spaces worth RM80,000, for only RM150 down payment thanks to “Islamic Fully Flexi Loan Package”. Charging RM100 a month for each parking space, it only took him a year to settle the RM80,000 credit card bill and four years later, reaped a return of almost 200% for the apartment.

“Despite owning the unit, I lived with five roommates in Taman Kosas, Ampang for RM800 a month,” exclaims Ajib, who holds dear to strategies shared by financial experts from Warren Buffet to Azizi Ali. “But one expert who has my utmost respect is Milan Doshi.” Ajib studied the country’s most recognised property investment coach’s books extensively. “When I first attended his seminar, I already have four properties under my name,” he says, adding that their relationship inspires him to dig deeper into the world of investment. “Now at 31, I own over 10 properties including landed, apartment and commercial units in Ampang, Seri Kembangan, Bukit Jalil, Shah Alam and Semenyih. “I don’t plan on selling any of these properties unless to upgrade to a bigger unit. (The late Tan Sri Loh Boon Siew of) Boon Siew Honda owned half of Penang throughout his life. I intend to create such a legacy.” PAY FIRST, PLAY LATER Ajib urges first-time home buyers and investors to understand their potential property “until there is nothing left to study”. “I focus on townships that is at the ‘centre of gravity’ because that is the only way to make profit,” he says, referring to fullydeveloped locations. “No matter how big your income is, never waste it on bad debts for the sake of keeping up with social media trends. www.propertyinsight.com.my NOVEMBER 2016 I 57

DESTINATION - WORK

HARING PACE BY: FELICIA SOON

he saying ‘home is where the heart is’ may tug at your heartstrings but when it comes to completing paperwork, especially for freelancers, things might progress slower than they should. Beyond the option of working from cafes, where you generally cannot leave your belongings unattended while you nip to the loo, there are coworking spaces that offer a sanctuary for lone professionals. This change of environment also creates endless networking opportunities and for all you know, the person next to you may just be a potential business partner or an important connection. Here is a list of great co-working spaces to check out in Kuala Lumpur.

NOOK Located atop a hill with lush greenery in Bangsar, Nook gets a lot of natural light and inspire creativity on less productive days. This co-working space boasts basic office amenities including a copier, a ‘collaboration bar’ and meeting rooms, high-speed internet as well as great coffee. Entrance fees start at RM50.

9, Jalan Riong, Off Jalan Maarof, Bangsar 03-2201 5781 Working Hours: 9am - 6pm

WHITESPACE INTERNATIONAL This contemporary-styled space features a wide range of meeting rooms and even include the benefits of having a receptionist and courier service on hand. With franchises in Mont Kiara, Bangsar and Puchong, you are spoilt for choice. Monthly fees are between RM169 and RM489.

Jalan Solaris 2, Solaris Mont Kiara 03-6209 9988 Working Hours: 9am - 6pm

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2016 www.propertyinsight.com.my

DESTINATION - WORK

INCUBE8 As its name suggests, Incube8 is an entrepreneurfocused co-working space, at 1 Mont Kiara that puts an incubator twist on traditional business centres. It offers 8,200sq ft of office space, which includes 35 executive office suites, meeting rooms and conference facilities that hold up to 60 people. The office space is furnished and equipped with highspeed Internet access, a dedicated telephone and fax line. Price starts at RM29 a month.

Level 23, Premier Suites, 1 Mont Kiara 03-2785 6800 Working Hours: 9am - 6pm

THE ENTREPRENEURâ&#x20AC;&#x2122;S LAB This contemporary-styled space features a wide range of meeting rooms and even include the benefits of having a receptionist and courier service on hand. With franchises in Mont Kiara, Bangsar and Puchong, you are spoilt for choice. Monthly fees are between RM169 and RM489.

Jalan Solaris 2, Solaris Mont Kiara 03-6209 9988 Working Hours: 9am - 6pm

THE CO The Co is a revolutionary premium shared workspace created to support the way we work today. It features flexible desks, private suites, meeting spaces and event venues in two locations in KL â&#x20AC;&#x201D; Asian Heritage Row and Bangsar. Before signing up, you can book a tour to see if the space is right for you. Plans are available for RM50 daily passes, RM650 for Flex Desk and RM850 for Fixed Desk.

8, Lengkok Abdullah, Bangsar 03-2202 0336 Working Hours: 9am - 6pm

www.propertyinsight.com.my NOVEMBER 2016 I 59

SURGING FORWARD 2017 : THE GAME PLAN

SUMMITS

DAY

MONTH

YEAR

FORUMS

HOUR

EXPERTS

5-6 11 2016 09am-08pm VENUE

SETIA CITY CONVENTION CENTRE Register tickets at www.prism.my

CONTRIBUTOR

RENTING TO FAMILIES OR STUDENTS P

62 |

assive income is the all new in thing and buying properties to rent them out seems to be one of the most common ways of earning extra income. But before you start fixing your rental property up, you will need to decide on your target tenants first. Here are some tips for you to get started!

NOVEMBER 2016 www.propertyinsight.com.my

TO GET A CLEAR UNDERSTANDING OF THE CURRENT PROPERTY MARKET, CHECK OUT THE INFOGRAPHIC:

This article is contributed by PropertyGuru.com.my, Malaysiaâ&#x20AC;&#x2122;s leading property site

www.propertyinsight.com.my NOVEMBER 2016 I 63

LEGAL

COMPANIES BILL 2015:

ITS IMPACT ON PROPERTY INVESTMENTS

fter a lengthy engagement with all stakeholders, the Companies Bill 2015 was passed by the Dewan Rakyat on 4 April 2016 to replace the existing Companies Act 1965. As at 9 Sept 2016, the Bill has not been gazetted and it is yet to come into force. Having said that, it is a matter of time for the Bill to be gazetted into law via an Act of Parliament. As a company is a body corporate, which is a separate legal entity having legal personality separate from that of its members, it is one of the preferred vehicles for property investors in acquiring property. This article seeks to explain several key

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changes introduced by the Bill and its impact to property investors. SINGLE MEMBER AND SINGLE DIRECTOR Under the existing regime, the Act requires a minimum of two or more persons (shareholders) for the formation of a company. The Bill allows private company to be formed by one person. The Act requires every company to have at least two resident directors at all times. On the contrary, the Bill allows for a private company to have one resident director only.

This is in line with Commonwealth company law developments elsewhere. In short, a company can be incorporated by a single member and the same single member can be the sole director. SIMPLIFIED INCORPORATION PROCEDURE The Bill has, to a large extent, simplified the Â incorporation process of a private company. Under the Bill, a private company may be incorporated without the need to appoint a company secretary at the point of incorporation (this may be done later within 30 days therefrom). With

the introduction of a ‘superform’, filing of multiple forms at the point of incorporation will become a thing of the past. The application to incorporate a company would only require the applicant to submit a statement containing basic particulars of the company such as its name, nature of business, address, shareholder and shareholding details. This would expedite the incorporation process of a company for the purpose of acquiring properties. The certificate of incorporation will be made optional and a notice of registration issued by the Registrar is conclusive evidence the company is duly registered. UNLIMITED CAPACITY CONCEPTS The Bill has introduced the concept of “unlimited capacity” which gives a company more power to exercise all the functions of a body corporate and to carry on any lawful business or activity, including

to enter into any transaction to acquire, own and dispose of any property. The power of a company is no longer confined to object clause in its memorandum of association. COMMON SEALS Under the Bill, it is no longer compulsory for a company to have a common seal. If a company decides to have a common seal, then the provisions of the law must be strictly observed. Be that as it may, there are other practical issues to be considered as the National Land Code and the Powers of Attorney Act would still require affixation of common seals when the relevant documents are executed by the company. Unless there are amendments made to these legislations, there is no way a real property company can do away with common seals. SHARE CERTIFICATE Under the Bill, share certificates are optional and will only be issued upon application. Instead, the register of members becomes prima facie evidence as to the title of the shares. The company is required to notify the Registrar of any changes of information to a shareholder within 14 days after the information is recorded in the register of members. BENEFICIAL INTEREST Under the Bill, all companies are empowered to request its members to disclose the beneficial interest in its voting shares. Apart from the Securities Commission and stock exchange, the Bill also allows the Registrar to invoke such powers to ensure compliance by private companies. As such, all nominee shareholders and beneficial owners of any voting shares in a real property company, holding shares under trust or under a nominee arrangement, should be mindful of this new

requirement introduced by the Bill. SHARE Another significant departure from the Act is that all shares issued before or after the commencement of the Bill will have no par or nominal value. Shares will be issued at a price without par value. As a consequence, authorised share capital will no longer be necessary. The abolition of par value means that certain matters linked to par value, for example, dividend and voting rights would have to be addressed either in provisions of the Bill or in a constitution. The Bill provides a 24-month transitional period for existing companies to utilise the monies in its share premium account for purposes as stipulated in the Bill, such as paying premium on redemption of redeemable preference shares issued before the commencement date of the Bill. The capital redemption reserve will also be merged into the share capital account together with the share premium account. WRITTEN RESOLUTIONS The Bill eliminates the requirement for unanimity and allows for written resolutions of private companies to be passed by the same majority as required by the type of resolution (either ordinary or special). The relaxed requirement would expedite passing of resolutions. Under the Act, a written resolution of any company can only be passed if it is signed by all shareholders. CONCLUDING REMARKS The Bill has provided a regulatory framework which facilitates the incorporation and maintenance of companies with relative ease, which may then be utilised for the investment in properties. All private companies are advised to look into their property investment portfolio and review their existing shareholders agreement and constitution to ensure conformance with the Bill.

ABOUT THE CONTRIBUTOR Mike Lee Seang Yik is a senior associate practising law in a boutique law firm at Plaza Damansara, Damansara Heights.

www.propertyinsight.com.my NOVEMBER 2016 I 65

STRATEGY

CAN AN EMPLOYEE BECOME FINANCIALLY INDEPENDENT?

ecently, I met a couple of friends for a cup of coffee. Bruce and Clark (fake names, of course) are middle managers who are doing well in the corporate world. According to them, most employees dream about getting out of the rat race and achieving financial independence. Let’s not debate too much about the true meaning of financial independence. For this discussion, let’s just define financial independence as having enough income to pay your living expenses for the rest of your life without having to work. Here are some of the key points I discovered throughout my journey as a

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NOVEMBER 2016 www.propertyinsight.com.my

corporate leader and reaching financial independence at age 33. DON’T COUNT ON EPF A total of 65% Employees Provident Fund’s (EPF) members have less than RM50,000 in their savings upon retirement. If they spend RM820 a month (which is fairly precarious given our rising cost of living), they can only sustain for five years. If you are part of the 35% and have savings over RM100,000, don’t get too excited either. In fact, don’t bother worrying about how much money you will get upon retirement. The monies received should just be treated as ‘bonus’ or ‘upside’.

Discounting your EPF savings from your net worth strategy enables you to set more financial goals. I make it my life’s work to get my money out of EPF as efficiently as possible. I am not trying to advocate reckless behaviour, instead I am only being logical. The EPF’s average dividend rate is approximately 6% in recent years. In all humility, I know how to manage my own money better and generate a rate of return far exceeding that 6% threshold. WHY BOTHER SELLING YOUR PROPERTIES? Properties are a great way to build

STRATEGY your net worth and for one to reach financial freedom. However, I have met a lot of investors who are always trying to “rebalance” their portfolios. Having believed their properties no longer have any “upside” or room for growth, they end up selling them to reinvest in other high growth areas. In fact, they feel that they need to do “something” all the time in order to reach financial freedom. Sometimes, less is more. The most successful and consistent investors I know have a specialised niche. They would buy properties in their target areas, stay patient and let the equity compound over time. If you have a hectic full-time job, it takes skills and time to switch target areas at a frantic pace. That is when well-meaning people may get stuck with mediocre investments — because of their rashness and lack of familiarity. IF I CAN’T SELL, HOW DO I RAISE CASH? Some people may succumb to the tempting but potentially incorrect notion of selling a property with “limited upside” to raise cash to buy other properties with more “upside potential”. Confession time: I have never sold anything before. I believe the properties in my target areas are sustainable and for the affluent. Places like Damansara, Petaling Jaya, Bandar Utama and Taman Tun Dr Ismail may not be very exciting but I believe they will stand the test of time. Will I miss out on other high growth areas? Perhaps. But I have the advantage of focus, time and precision. I am not interested in selling something for a RM300,000 profit, and then hunt for the ‘new flavour of the month’ to repeat this process again. I would rather build a targeted portfolio of RM3 million and see its value compound to RM7 million over 10 years. To me, that’s how wealth is created. How do I also ‘lock in’ my profit? Well, I am a serial refinancer. Refinancing enables me to ‘cash out’ on my equity without having to sell my blue chip properties. Don’t you think it’s logical that I keep my blue chip properties to let it compound

further over time? Naysayers will say there are costs associated with refinancing. My simple reply: (a) Selling your property also has legal, agency and other upkeep costs involved; and (b) I have focused my mortgages primarily in two banks and have built Priority Banking status over time. That enables me to have a lot of “savings” and “discounts” in my refinancing packages. The author of Investment Riches Dr Dolf De Roos, who is a prolific real estate investor, bought hundreds of properties worldwide; so many that he even lost count. Any guesses how many properties he has sold? FOUR. He’s one of the best serial refinancers in the business. FOLLOW YOUR HEART Find your life’s true purpose. When we know this, we become more empowered and the path towards financial independence and fulfilment becomes clearer. People may argue that being able to

generate a higher Income enables me to have holding power over my portfolio. But the sad irony is that they never ask how I built my income. They never ask what motivates me to excel in my career. They do not know it took 12 years of hard work to build a property portfolio I was comfortable with. I love helping my colleagues excel and inspiring talents under my care. The same passion allows me to build a progressive career and income. When I leave the corporate life, I will only choose endeavours or pursuits that allow me to build teams and inspire people. I feel blessed as many well-intended people have advised me on how to further enhance my wealth, or shared money making strategies with me. A lot of it make sense and I could do it if I wanted to. But I can’t. It doesn’t feel right. Don’t do it for the money. Do it if you love doing it and the money will follow automatically. Chase your passion, not money. Be fearless in the pursuit of what sets your soul on fire. The money will then follow.

ABOUT THE CONTRIBUTOR Mark Chua is a Senior Vice President (SVP) in a financial institution. He is living proof that one can be successful in both our careers & property investments. He can be reached via markchuamy@hotmail.com or www.facebook.com/ MarkChuaMY

www.propertyinsight.com.my NOVEMBER 2016 I 67

STRATEGY

ALTERNATIVE REAL ESTATE AS AN INVESTMENT TOOL IN A CHALLENGING PROPERTY CYCLE 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%

llow me to share this perplexing and confusing strategy, akin to a ‘Plan B’ as the rather vibrant and freewheeling property market seems to be screeching to a halt after what some pundits claim of ‘caution having been thrown to the wind’. There are brickbats from the stakeholders ‘across the board’ that financial institutions

are adopting a whole slew of belt tightening measures based on the nett income. I find it rather amusing when key proponents of the industry make statements like: (a) “The property market should return to normal in 2017/2018”; (b) “Financial institutions would start adopting more flexible lending measures

Property Market Activity by Sub-sector

Residential - 64.4% Agricultural - 18.6% Commercial - 9.3% Industrial - 2.2% Development Land - 5.5%

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NOVEMBER 2016 www.propertyinsight.com.my

next year”; and (c) “It’s a temporary blip on the radar”. I have been a practising estate agent since 1984 and an auctioneer since 1989. Having served the Malaysian Institute of Estate Agents in 2003 as education convener for four years, I initiated the formation of Starfish Training Sdn Bhd. We recently celebrated our 10th year of organising close to 200 seminars for the real estate fraternity albeit the general investing public. It is on the above contention that I beg to differ with the overly exuberant contention of the proponents based on the following reasons. We will start the journey with the transactions/property value over a five-year period as illustrated (D1 and D2): A startling observation include: (a) Drop in transactions over the five-year period despite a significant increase in price values; and (b) The loans to deposit ratio hovering close to 92% otherwise what then was the need to decrease the financial institutions statutory reserve requirement (SRR) from 4% to 3.5%. The nett effect of such an exercise

STRATEGY HOW THE BANK STACKS UP (AS AT JUNE 7)

GROSS IMPAIRED LOANS RATIO (%)

BANK

MAYBANK

2.1

PUBLIC BANK

0.5

CIMB GROUP HOLDINGS

3.0

HONG LEONG BANK

0.8

RHB BANKING GROUP

1.8

AMMB HOLDINGS

1.9

ALLIANCE FINANCIAL GROUP

1.3

BIMB GROUP

0.9

AFFIN HOLDINGS

2.0

ST U B

RE T

ON CTI RA

ERY V O

RE C

understanding the economic cycle

saw liquidity to the tune of RM6 billion being injected into the system. Financial institutions would need a buffer of 4% of the ’financial capital pie’ as ‘operational expenditure’. The thing about financial liquidity is that it is governed by a set of fundamentals like ‘market forces’ — a conducive economic/ political platform albeit an equitable justice system that meets international standards. The double whammy that caused the system to miss more than a beat was the significant drop in oil revenue and the ringgit taking a huge beating. The small medium enterprise/industry community had to quickly shift gears and it was estimated that RM78 billion was converted to the globally principal trading currency. This move was necessary — similar to a peg adopted during the Asian financial crisis of 1997 as there had to be currency value certainty for price pegging purposes on the global trading platform. The down side of such a move has its fair share of consequences on the ‘multiplier effect’ albeit a crisis perception. Also, the data seems to indicate that household debt to GDP now exceeds 86.7% due to high mortgage and consumer credit. I also began to notice significant number of auctions/bankruptcy notices in the principal dailies. I had my suspicions confirmed when an analyst report carried an analysis of all the nine banks and their nonperforming loans that ranged from 0.5% to 3.5%. A quick back of the envelope transaction revealed that there were close to 7,000 odd auctions in the offing (D3). I would like to assume the reader is now beginning to get to the central theme of the plot this article is propagating and the justification for the strategy of alternative real estate investments in a challenging market cycle. What are market cycles and why understanding them is of paramount importance if the savvy investor is to keep ahead of the curve. The market tends to refer to it as the property clock, for instance, having a 12-year life span of ‘Boom, Retraction, Bust and Recovery. The two graphic illustrations hopefully will

D4 lend weight to the alternative investment strategy as each quadrant will weigh in appropriately befitting the jurisdiction capital markets (D4). The economic cyclechart would now lend weight to the herd mentality of 2011 where the order of the day was — investor clubs, zero down payment with hefty credit notes [a 100% loan] as both the bridging and end financing were pockets in the same trousers. The icing on the cake together with further sweeteners were the developer

interest bearing scheme (DIBS), furniture packaged vouchers that even included overseas trips and branded vehicles. The charade had to meet an end of sorts as the clock slid into the second quadrant of the property clock. Inflation and inadequate cash flow has known to bring many an over leveraged investor living in the distant hope of passive income, perceived appreciating capital values, succession/legacy to their knees. The illustration below representing the ‘basket of goods’, vindicates the contention. www.propertyinsight.com.my NOVEMBER 2016 I 69

STRATEGY

CONVENTIONAL REAL ESTATE VS ALTERNATIVE REAL ESTATE

Conventional Property Invesments - Affordability - TDSR / Loan eligibility - Tenant Cash Flow

Conventional Property Invesments - Lease options/Crowdfunding Sewa Beli, Sambung Bayar Solutions, etc.

Value Investment Auctions

Land Banking Opportunities - New growth area - Agricultural conversions with Township Dev plans - Group ownership

On a parting note, the illustration above and the ‘opportunities abound’ will be explained in a free two-hour seminar that is held periodically. To register, call 0163153498 or email lucytanmc@gmail.com.

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NOVEMBER 2016 www.propertyinsight.com.my

ABOUT THE CONTRIBUTOR WARRICK SINGH is a property agency practitioner and Director of Asian Land Realty, Asian Land Auctioneers and Starfish Training.

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