www.propertyinsight.com.my
NOVEMBER 2017
C OVER STORY
RAISING THE BENCHMARK DATO’ SRI NELSON KEE
SHARES ON THE SECRET OF GS REALTY’S THRIVING SUCCESS
AREA FOCUS
PUTRAJAYA:
Reaching the peak of prominence
BUDGET 2018:
Industry experts comment on its impact on the property sector
NOVEMBER 2017 RM7.50(WM) RM9.00(EM) KDN PP 18181/04/2013 (033492)
Contents
MAIN FEATURED PROPERTY
30 | Serene Living At Setia Seraya Residences
Setia Putrajaya Development Sdn Bhd raises the benchmark for luxury living with its project located at Precinct 15 Putrajaya
PERSONALITY OF THE MONTH
34 | Grassroot Planning for a Liveable City
President of Malaysian Institute of Planners (MIP) TPr. Hj Ihsan Zainal Mokhtar shares on the finer points of overseeing strategic town planning in Malaysia
HOME +
6
38 | RiX Marks Its Debut At HOMEDEC
COVER STORY
It was a double celebration for the nation’s leading home design and interior exhibition - HOMEDEC even as it celebrated its 15th anniversary with the debut of RiX
6 | Raising the Benchmark
INVESTOR NEXT DOOR
The success of Malaysia’s leading real estate firm led by Dato’ Sri Nelson Kee operates on the principles of being generous to its high achievers and delivering value-added services to its clients
40 | Maximising the Power of Rental Yields
Understanding rental yield and how to leverage on it for profit
MAIN FEATURE
INDUSTRY INSIGHT
12 | Budget 2018
42 | Mind Over Matter in Property Valuations
Industry experts comment on the effects and Iimpact of the recent Budget on the property sector
SPECIAL FEATURE
16 | Above Par Excellence: SkyWorld’s First Quality Centre SkyWorld Development Sdn Bhd COO Lee Chee Seng shares on the centre’s unique approach in educating the community about the benefits of the QLASSIC and CONQUAS certifications
HASB Consultants (Selangor) Sdn Bhd Director Victor Huang Hua gives his viewpoint from the Valuers, Negotiators and Property Manager’s point-of-view as well as from his professional standpoint
ROOKIE INVESTOR
44 | Prudent Property Investment for Positive Gains
Syed Zulkhieree Syed Hussin shares his take on property investment which has had an impactful monetary influence over his lifestyle
DEVELOPER OF THE MONTH
INTERNATIONAL INSIGHT
18 | Glowing Reports For UEM Sunrise Berhad’s Residensi Solaris Parq
46 | Madrid: A Strong Contender For Post-Brexit Relocation
Despite the downturn, people are still buying into properties by this renowned developer, given its reputation for high quality residences
INVESTMENT TALK
AREA FOCUS
48 | Prime Office Rental Set to Grow By 2.5% Over The Next Three Years
20 | Putrajaya: Reaching The Peak of Prominence
FINANCE
Putrajaya has unveiled itself as a significantly successful township which is working towards achieving a high lifestyle status in Selangor
50 | Can Money Really Grow on Trees?
AREA FOOD FOCUS
LEGAL
26 | Putrajaya’s Pleasure Palates
52 | Know Your Strata Rights 54 | Whatever You Think About Lawyers, Think The Opposite
Check it out!
CELEBRITY CORNER
27 | Beauty and Her Bungalow
Carey Ng relishes the comfort and calmness of her home that complements her hectic lifestyle as a model, wife and mother
2 I October 2017
STRATEGY
56 | Be Different. Be Weird. Stand Out. Even As A Landlord 58 | Principles of Investing 60 | Dispelling Common Myths When It Comes To Investment 62 | Manage Your Debts Wisely 64 | What’s Your Exit Strategy?
EDITORIAL Editor-in-Chief Dato’ KK Chua kkchua@propertyinsight.com.my Editor Yvonne Yoong yvonneyoong@propertyinsight.com.my Writers Mages PV Lingam Felicia Soon
Planning Ahead by Leveraging on The Budget There is no denying that times are tough and everybody is feeling the pinch. From the rich to the middleman to the man on the street, it is undeniable that everyone is feeling the pinch. The resulting after-effects of the higher cost of living brought about by the implementation of the Goods and Services Tax (GST) on April 1, 2015; the removal of subsidies on certain basic necessities such as cooking oil and sugar as well as fluctuations in petrol prices that could also see hikes on certain days have all had an impact on the rakyat. The property industry - a main contributor to the economy is also not spared, having faced severe challenges which is all the more evident now which is reflected in many developers preferring to hold back on their launches and adopting a wait-and-see attitude. At the recent Real Estate & Housing Developers’ Association Malaysia (REHDA) Media Briefing Property Industry Survey 1H17 & Market Outlook 2H17/1H18, President Datuk Seri FD Iskandar Mohamed Mansor highlighted on the issues faced by its members such as higher construction costs and rising material prices like steel hitting an all-time high at RM2,800 per tonne. This he claims, will have an adverse impact on new properties with developers passing the cost to buyers as prices of properties rise in tandem with increased construction costs which will also eat into developers’ increasingly declining profit margins. The recent Budget 2018 brought about some Budget goodies. However, there were mixed reactions from the experts as some thought that more budget could be allocated for affordable housing. Key points highlighted by the Government included the maintenance and refurbishment of houses including the 1Malaysia Maintenance Fund for the sum of RM200 million; Stamp Duty exemption for loan agreement and letter of consent to transfer as well as tax exemption on rental of 50% for rental up to RM2,000. Yet, despite the downturn, there are those who are capitalising on the weaker market sentiment to ride on the waves of opportunity. A good example would be Dato’ Sri Nelson Kee, Director of GS Realty Sdn Bhd who has taken it upon himself to train the next batch of real estate agents. He shares that despite the downturn, the company has surpassed the RM10 billion mark in sales revenue which is an amazing feat in itself, making it the top real estate firm in town and Malaysia. This brings forward the lesson that despite the downturn, opportunities are still present for those who are able to seek them out. After all, the theory of demand and supply for the property market works in cycles. So despite the downturn, investors should prepare for the next upswing. Turn the pages to see what industry experts have to say concerning the effects and impact after the recent Budget announcement for the property sector. Now is a good time to plan ahead by leveraging on the Budget for the future. Hopefully, next year will bring good tidings of an upswing. Till the next issue, stay positive!
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On The Cover www.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.
Dato’ Sri Nelson Kee
Director, GS Realty Sdn Bhd
November 2017 I 3
NEWS & EVENTS
OCR LAUNCHES ISOLA KLCC WITH A GDV OF RM240 MILLION
O&C Resources Berhad (OCR) launched its latest luxury serviced residence project called Isola @ KLCC located at Jalan Yap Kwan Seng in Kuala Lumpur. The freehold project with a Gross Development Value (GDV) of RM240 million is targeted for completion by 2021. The low-density development offers 140 units with built-up areas ranging from 636 sq ft to 3,390 sq ft. OCR Managing Director Billy Ong says they have achieved 80% booking rate with half of them having already signed the Sales and Purchase Agreement (SNP). The developer teamed up with architectural firm Unit One Design to create this luxurious brand which is unique to the Malaysian market. Isola @ KLCC has an efficient automated car park system that feature space savings while enabling the transporting of cars to and from the car park bays easily.
S P SETIA’S WITH MALAYSIA’S FIRST SMART BIKE INITIATIVE AT SETIA ALAM
OVER 5,000 VISITORS AT SUNWAY SERENE’S SALES PREVIEW Sunway Property’s Sunway Serene Residence located at the mature neighbourhood of Petaling Jaya in Selangor recorded more than 8,000 registrations in less than a month. The development promises a lakeside living experience spanning across 17 acres. Serene Residence comprises bungalows and semi-detached units that are located adjacent to a 15-acre lake and the 18-hole Subang National Golf Club. Sunway Berhad Senior General Manager Tan Wooi Teong attributes Serene Residence’s auspicious start to its strategic location, lush surroundings and philosophy of the design. The wholesome setting is ideal for the family.
4 I November 2017
S P Setia unveiled its eco-innovation recently with Mobike at Setia Alam and Setia Eco Park in Shah Alam leading the way. Mobike is the largest smart bike sharing platform whose service was introduced to more than 160 cities worldwide over the past 15 months. Deputy President Datuk Wong Tuck Wai says the Mobike would reduce traffic congestion and decrease pollution while being a cost-effective urban transportation option for residents and visitors. A total of 600 Mobikes will be available for use at Setia Alam and Setia Eco Park by simply downloading the Mobike app and scanning the QR code.
“BANGSAR MARKET” BY JAYA GROCER AT KL ECO CITY S P Setia Berhad continues to lead the way in innovative ideas with the unveiling of the “Bangsar Market” - being the biggest urban grocery market in Malaysia at the Setia International Centre in Kuala Lumpur. The new market would start its operations in 1Q18 at the KL Eco City Mall (KLEC Mall) located in Kuala Lumpur. It will occupy a nett lettable area of 54,000 sq ft at Level 2 of the mall. S P Setia Berhad invested about RM200 million to construct ramps, a bridge and a two-tier internal road system to allow for a smooth traffic flow from the development to major roads.
TITIJAYA’S RM1.8 BILLION GDV GROUNDBREAKING CEREMONY AT KUALA LUMPUR’S EMBASSY ROW
FIRST SMART CITY IN ISKANDAR PUTERI Medini Iskandar Malaysia Sdn Bhd (MIM), the master planner and developer of Medini City, received recognition for its “Smart Healthy City and Communities Township” in Iskandar Puteri, Johor. The award was presented by Iskandar Regional Development Authority Head of Planning and Compliance Puan Hajjah Maimunah Jaafar to Managing Director of MIM Dr. James Tee. Medini City has hosted several local and international fitness and lifestyle events which promote healthy living. The township has 46 parks spanning 342 acres of green space with a 22-km cycling path being the longest of its kind in Iskandar Malaysia.
Titijaya Land Berhad held its groundbreaking ceremony for its 3rdNvenue project at Jalan Ampang in Kuala Lumpur. The development with gross development value (GDV) of RM1.8 billion was officiated by Minister of Federal Territories Datuk Seri Utama Tengku Adnan Tengku Mansor. The project is built on 6.6 acres of land comprising four blocks with a total of 2,400 units comprising office suites, serviced apartments and retail lots. The units are affordably priced from RM299,000 for a 430 sq ft unit. Titijaya Group Managing Director Tan Sri Dato’ Lim Soon Peng says that accessibility and affordable pricing are the key factors for the project which would be completed in 2024.
NIPPON PAINT LAUNCHES ITS CHILD WELLNESS PROGRAMME
MAH SING’S M CENTURA LAUNCHED IN SENTUL
Mah Sing Group Berhad launched its M Centura affordable homes at its gallery located in Sentul, Kuala Lumpur recently. The launch was officiated by Minister of Federal Territories Datuk Seri Utama Tengku Adnan Tengku Mansor and was witnessed by the group’s Managing Director Tan Sri Dato’ Sri Leong Hoy Kum and CEO Datuk Ho Hon Sang. The freehold project is priced from RM328,000 or RM505 psf for built-up sizes ranging from 650 sq ft to 1,000 sq ft. M Centura provides one acre of resort facilities, three-tiered security systems, an Olympic-sized swimming pool and Electric Vehicle (EV) charging stations for hybrid and electric cars, etc.
Nippon Paint Malaysia Group launched its Child Wellness Programme - an educational campaign to empower parents and decision-makers to create uplifting environments via various awareness and educational initiatives related to children’s health and their well-being. Group General Manager of Nippon Paint Malaysia Gladys Goh says that innovation has always been Nippon Paint’s DNA. The launch was graced by Past President of the Malaysian Paediatric Association (MPA) Prof Datuk Dr. Mohd Sham Kasim and Persatuan Pengasuh Berdaftar Malaysia (PPBM) President Norsheila Abdullah. Nippon Paint also provides advisory services on colour selections, kidssafe coatings as well as workshops to educate child care providers.
November 2017 I 5
Cover Story
RAISING THE BENCHMARK The success of Malaysia’s leading real estate firm led by Dato’ Sri Nelson Kee operates on the principles of being generous to its high achievers and delivering value-added services to its clients By: Felicia Soon
6 I November 2017
Razak City in Sungai Besi, Kuala Lumpur is one of the affordable housing projects that GS Realty has undetaken to sell
S
uccess goes hand in hand with the highly competent, multiple awardwinning GS Realty (M) Sdn Bhd real estate agency that has been operating since its inception in 2010. Since then, GS Realty has grown from strength to strength to become one of the largest real estate agencies in Malaysia. Today, the company has several branch offices and representatives spread throughout the country. It continues to operate on the principles of being generous to its high achievers while delivering value-added services to its clients both locally and globally via its international partners who are based in Singapore and Hong Kong. Its corporate headquarters is strategically located in the easily accessible, fast-growing and highdensity Fraser Business Park area situated close to the city’s central business district (CBD) in Kuala Lumpur. To date, GS Realty has been the proud recipient of more than 10 coveted awards from various organisations and relevant authorities in recognition of its
outstanding performance in the industry that spans close to a decade. The latest few awards it has received include the Golden Eagle Award 2016 and Malaysia Model Real Estate Agency Award 2016. GS Realty Sdn Bhd Director Dato’ Sri Nelson Kee attributes the agency’s resounding success to its ongoing commitment in setting the highest standards of quality excellence in real estate practice as well as its quick response to meeting clients’ needs. “GS Realty has been recognised as one of the top real estate agencies in Malaysia. This is due to our agility in selling development projects much faster in comparison to other real estate agencies,” he says. “We have six to seven teams comprising agents, team leaders, person in charge and coordinators to handle any single project. Hence, we are able to sell units quickly for our clients. “On top of that, our agents are rewarded with higher commission as compared to those working for other real
estate firms in order to motivate them to strive harder to deliver results and also improve themselves in terms of sales performance,” he enthuses.
SUCCESS FACTOR Kee has been involved in the real estate industry for more than 16 years. Prior to this, he worked as an insurance agent for a few years and was highly successful in this specialised industry. Later realising that a business opportunity awaited him in the real estate industry, Kee made the wise decision to invest his time and effort by venturing into the property line in 2000. He eventually founded GS Realty in 2010. The company has since achieved exponential growth surpassing more than the RM10 billion mark in sales revenue within a year. Kee’s sterling leadership started creating a name for GS Realty as among the most outstanding real estate agencies in Malaysia. Kee says his team has contributed immensely to his company’s success. November 2017 I 7
Cover Story
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M Vertical, one of the tallest residential tower in Cheras was a project undertaken by GS Realty in which 50% of the units were sold with a record sales target of RM1.8 billion Artistically designed and affordably priced residential units Generous community spaces to cater to the needs of discerning homebuyers
“They have been with me for over five years. I am thankful that they never gave up on me,” Kee shares heartwarmingly. The biggest challenge faced by GS Realty he adds was when its payroll system experienced a setback with errors related to incorrectly entered deductions affecting the agents’ commissions. This problem caused the company grievances in terms of being unable to pay the agents’ commissions for almost a month while they endured a restructuring of the payroll system. “During this setback, there were rumours circulating among our staff that our company was on the brink of bankruptcy,” Kee recalls adding that he was undeterred as overcoming failures is what drives him forward. “Politicking among staff is common nowadays, especially when you have two thousand agents with over one thousand cases of Sales & Purchase Agreements (SPAs) to handle.
BUSINESS PHILOSOPHY For someone who has experienced extraordinary success in running a real estate agency, Kee’s advice to others is humbling yet useful. “We must be willing to work hard. This needs to be coupled with the willingness to share and reward deserving parties such as staff, Negotiators and partners generously. “Indeed, you must be willing to learn as well as be responsible and dedicated.” Kee affirms that these guiding principles will help one to reach his or her goals sooner or later in life. He is also grateful for the many milestones that his company has achieved throughout the years. The experience gained has taught him a lot about himself. He maintains that his greatest achievement lies in his ability to assist 8 I November 2017
his buyers, sellers, landlords and tenants to either own their perfect dream home or achieve profits or attractive rental for their real estate investment. In addition to this, Kee says the company completes all of its business transactions in the most professional manner. “We believe that the core of our success and longevity lies in being a peopleoriented business that deals with property. “Therefore, building a relationship of trust with everyone is the key to running a good agency in real estate.” Kee says he is glad to propogate the company’s mission of recruiting more property agents. “We have been consistently recruiting 200 agents per month and our focus to provide opportunities to passionate, hardworking and aspiring young talents to excel in the real estate industry in order to achieve career success and prosperity so that they can be valuable contributors to society and the nation overall.
PERSEVERING IN A SLOW MARKET Due to the challenging and uncertain state of the global economy, the Malaysian economy also recorded a slower gross domestic product (GDP) growth of 4.2% last year as opposed to 5% and 6% in 2015 and 2014 respectively. As a result of the stagnant growth, no sector is spared including the real estate sector. However, Kee says that GS Realty has been able to overcome this effect as 90% of its sales revenue is derived from selling new development projects. “It is easier for us to sell new developments because developers are consistently promoting the right products to cater to the market’s needs,” he says. Kee opines that as far as the property market is concerned, the most affected would be sub-sale properties that are affected by the cooling measures, rising unemployment and a weaker ringgit.
Kee shares that the challenge faced by homebuyers now is not just being able to find a good property at below market value as they also need to be able to qualify for housing loans. “Getting housing loans approved has been a hassle since banks have introduced stricter lending requirements. Therefore, many unsold sub-sale properties have been left vacant for long periods of time.“ To benefit homebuyers at large, Kee suggests adopting different approaches in managing properties such as turning the property into an Airbnb business. He opines that Airbnb can help to increase revenue and also get great reviews for the property which will help to elevate its value when one decides to sell the unit. Another benefit of being an Airbnb host is that one can choose the type of unit to rent out whether it is a room, shared unit or an entire unit. Additionally, one will have the choice of renting out a fullyfurnished or partly furnished unit. Dispensing his two cents’ worth to those thinking of buying a sub-sale property, he cautions buyers to check on the issuance of the certificate of completion and compliance (CCC) issued by the local authorities. This is because it is quite common to discover that building works have been carried out without the local authority building regulations approval having been obtained beforehand. The reasons for this vary but range from ignorance of the law to a deliberate decision not to apply for consent when it is clear that building regulation approvals should not have been granted for upgrading works.
HOUSING EXPECTATIONS Rising home prices have added to the grievances of Malaysians coping with the higher cost of living which includes basic expenses such as food, taxes and healthcare. This has made affordable housing a key consideration for Prime Minister Datuk Seri Najib Tun Razak ahead of the next General Election (GE) that is anticipated to be held in mid-2018. Kee’s advice to first-time homebuyers who are seeking to own a home is to check out housing development projects from Aset Kayamas Sdn Bhd. According to him, Aset Kayamas which November 2017 I 9
Cover Story
was established in 2011 is today one of the biggest developers that has been contracted to build the Federal Territories Affordable Housing (RUMAWIP) as well as the 1Malaysia Civil Servants Housing Project (PPA1M) in the Klang Valley. Aset Kayamas’s primary focus is to provide comfortable homes that are founded on quality and affordability. The company’s mission is in line with the Government’s plans to develop 80,000 houses in Kuala Lumpur, Putrajaya and Labuan for middle-income earners by 2020. To be entitled for the RUMAWIP scheme, buyers must be Malaysians aged 18 years and above, and either be working or residing in the Federal Territory. Single individuals with a monthly income of less than RM10,000 or married couples with a household income of less than RM15,000 can register for the project. “Several buyers have been fortunate to have been chosen from among the many applicants. RUMAWIP’s development projects are sold below market value and priced between RM280,000 and RM300, 000 for units ranging from 850 sq ft to 900 sq ft in built-up areas,” says Kee. Although buyers cannot rent or sell for 10 years from the date of signing their SPA, this scheme will conclusively fulfill many first-time homebuyers’ wish to own a home and gain capital appreciation in the future.
AFFORDABLE PROJECTS When asked to share on which projects represent the main affordable developments in Kuala Lumpur presently, Kee cites Razak City Residences in Sungai Besi, Kuala Lumpur as an example. The development whose location has been identified as where the Razak Mansion used to be situated will witness a public housing project being developed that will offer serviced residences with built-up areas of RM800 sq ft being priced at RM389,000. Another affordable development project he shares is M Vertica located in Cheras, Kuala Lumpur. Standing at 50 storeys, the condominium is slated to be the tallest building in the area. The units with built-up sizes ranging 10 I November 2017
from 850 sq ft to 1,000 sq ft are priced from RM478,000. However, Kee opines that the pricing can still be considered as affordable judging by the better designs of the condominium. “Both these residences are strategically located close to the city centre and are aimed at first-time homebuyers, young working adults and upgraders as the price is affordable and the size is reasonable,” enthuses Kee.
NEW DEVELOPMENT Kee says that new developments also known as primary properties are usually the first choice of new or young buyers because of the low entry cost of these new development projects. He shares that the minimum entry cost can be as low as RM1, 000 with most other costs such as legal fees and SPA being covered by the developer. “From a buy-to-stay perspective, buying from the primary market gives one the privilege of choosing one’s preferred unit. This also ensures that everything within the property is brand new and buyers can be assured that everything is at its best condition.” He adds that to stay competitive in the market, many developers also offer rebates and freebies to their purchasers. Also, upon completion of the project, the property is in move-in condition with any defects being covered with warranty from the developer. Therefore, for first-time homebuyers who have limited savings to qualify for sub-sale purchases, this is likely the most feasible entrypoint for them to venture into the property market. Furthermore, buying from the primary market may be beneficial in terms of higher potential for capital appreciation especially after the entire project is completed. This can be profitable from an Investor’s perspective.
FUTURE ASPIRATIONS While Kee is pleased with the group’s strong performance, he believes that there is still much more to be done. “We cannot afford to rest on our laurels. When there is demand, we must
be quick to capitalise on it.” Kee shares that the group is progressively stepping up its efforts to build the brand overseas. “Our future plan is to become one of the largest and most professional real estate agencies globally and foray into international real estate markets such as China to bring in more foreign Investors into Malaysia,” he explains. He adds that the conglomerates such as Country Garden and Greenland Group are building residential and commercial blocks in Iskandar Malaysia, Johor. Now the latest mega project, with strong Chinese interest and involvement is Forest City - a multi-billion-ringgit mixed-use development in Johor. “Malaysia’s bilateral economic ties with China has encouraged many Chinese Investors to explore the services sectors including tourism, education,
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GS Realty has been recognised as one of the top real estate agencies in Malaysia. This is due to our agility in selling development projects much faster in comparison to other real estate agencies� - Dato’ Sri Nelson Kee
Top Left: The M Vertica unit for balanced living Top Bottom: Well-planned living spaces
healthcare and wellness, information and communications technology (ICT) as well as e-commerce, among others. As a professional real estate agency, GS Realty wants more foreign Investors to explore investment opportunities of buying properties in Malaysia in lieu of the current residential oversupply and weak property market sentiments. November 2017 I 11
BUDGET 2018
Main Feature Budget 2018
Industry experts comment on the effects and impact of the recent Budget on the property sector
By: Yvonne Yoong, Mages PV Lingam & Felicia Soon The nation was in expectant mode regarding the National Budget 2018 which was announced recently. Following the announcement made by Prime Minister and Minister of Finance Dato’ Sri Najib Tun Razak, a mixed bag of reactions came from the various sectors, industry professionals and the rakyat. While some thought it was overall, a comprehensive Budget, others felt that certain issues pertinent to the rakyat’s main concerns such as the issue of affordable housing could have been addressed in more comprehensive detail. The Budget boasted a revenue of RM239.86 billion with an allocation of RM280.25 billion. The 2018 allocation was divided into Operating Expenditure amounting to RM234.25 billion while the Development Expenditure was at RM46 billion excluding Contingency Savings of RM2 billion. The Budget thrusts, among others, are aimed at Invigorating Investment, Trade and Industry; moving towards the Transformation 2050 (TN50) Aspiration as well as fortifying the Fourth Industrial Revolution and Digital Economy. Related points highlighted by the Government included the maintenance and refurbishment of houses including the 1Malaysia Maintenance Fund for the sum of RM200 million, Stamp Duty exemption for loan agreement and letter of consent to transfer as well as tax exemption on rental of 50% for rental up to RM2,000.
12 I November 2017
Here are what the industry experts have to say:-
DATUK SERI FD ISKANDAR President of the Real Estate and Housing Developers’ Association (REHDA) Malaysia
The Real Estate and Housing Developers’ Association (REHDA) Malaysia views the Budget under the 11th Malaysia Plan as positive and comprehensive for all especially those within the M40 and B40 groups through the various incentives and measures announced by Prime Minister Dato’ Sri Najib Tun Razak during the 2018 Budget. STEP-UP FINANCING SCHEME Firstly, REHDA is grateful to the Government for taking heed of our call to extend the Step-Up Financing Scheme that was introduced for 1Malaysia People’s Housing Programme (PR1MA) last year to include private developers. The incentive will definitely assist homebuyers at their initial stage of purchase especially when deposit is a major issue among buyers today. MYDEPOSIT SCHEME We also commend the Government for continuing to allocate budget for the MyDeposit Scheme first introduced in Budget 2016. Although limited to 2,000 houses only, the Scheme will help encourage the development of affordable housing among developers. We also hope the Government will consider providing further allocation to benefit more Rakyat. GST RELIEF The Goods and Services Tax (GST) relief on services provided by Pihak Berkuasa Tempatan (PBT) will be of great help to developers especially in these trying times where compliance cost is on the rise. In addition, the management and maintenance of stratified residential buildings provided by developers will no longer be subjected to GST effective January 1, 2018. The extension of this treatment will definitely benefit the industry. HOUSING FOR (MIDDLE CLASS40) M40 AND B40 (BOTTOM40) Other incentives provided for the housing industry is namely the 10,000 housing units under Perumahan Penjawat Awam 1Malaysia (PPA1M) - Polis Diraya Malaysia (PDRM); 3,000 units of Rumah Mesra Rakyat; 210,000 units of houses priced below RM250,000 for PR1MA and 25,000 houses for PPA1M to be completed next year. Meanwhile, 128,000 units are at various stages of completion with 17,300 units of Projek Perumahan Rakyat (PPR) being testaments of the Government’s seriousness in addressing the affordable housing scheme.
Laid out as the last Budget in the lead-up to the 14th General Election, the Government presented a positive Budget which is aimed at empowering the rakyat, driving economic growth and promoting sustainable socio-economic developments simultaneously. • TAN SRI DATO’ SRI LEONG HOY KUM Group Managing Director of Mah Sing Group
Budget 2018 which announced several incentives to help Malaysians own homes has revived keen public interest for affordable homes in good locations. The response received this weekend indicated a “feel good Budget effect” which revived sentiments and confidence in the market. Developers would continue to “reinvent affordability” by providing well-located homes at price points within buyers’ reach. These homes would all come with practical layouts, good facilities and amenities. Most importantly, they will be located nearby public transportation such as Mass Rapid Transit (MRT), Light Rail Transit (LRT). Our “Reinvent Affordability Campaign” ties in well with Budget 2018 incentives like step-up financing scheme, My Deposit Program and income tax reduction. This would meet the Government’s aspiration of addressing the current shortage of affordable products that suits the middle-income group.
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MILAN DOSHI Property Investment Coach and Independent Financial Trainer
Despite being an Election Budget, I felt it was a disappointing one especially for property Investors. No drastic measures were announced to assist buyers to own homes, reduce their cost of living, increase productivity, spur foreign investments and more. I would have liked to see stronger measures like the reduction on Stamp Duty, Real Property Gains Tax (RPGT) and incentives to make it easier to get bank loans.
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• HENG KIANG HAI Director of CBRE-WTW
Budget 2018 came against the backdrop of better-thanexpected Gross Domestic Product (GDP) growth in the first-half of 2017 and the country’s continuous pursuit of mega project developments especially in the public transport systems.
On the back of a stronger 2017 economy, the pace of infrastructure developments is maintained, including works on MRT 2 and MRT 3. Meanwhile, work on the East Coast Rail is expected to commence by January 2018. A 50% tax exemption was introduced for rental income up to RM2,000 per month. This will be valid from 2018 to 2020 and is only applicable to Malaysians only. On one hand, the tax exemption will spur investments as the Tier 20 income (T20) Investors perceive better rental yields from residential property investments. As monthly rentals of RM2,000 are applicable to properties priced up to RM1million, this is timely to stimulate renewed demand for such residential properties especially in the Klang Valley. New legislation of Akta Sewaan Rumah Kediaman to protect tenants and landlords is welcomed. CBRE | WTW recommends that the Government would take an extra step to set-up a centralised depository whereby tenant profiles and credit history are kept. This will improve the protection for Landlords who are currently at the risk of tenants defaulting in rent and utility charges. The Government is encouraging the two-step housing loan scheme to be extended to private developers which should ease credit availability and therefore improve sales rates. This will benefit homebuyers as they would only need to serve reduced loan repaymenst for the first five years of their respective purchases. Home ownership hence may be boosted as buyers’ upfront financial commitment is lower and they have a longer period to build-up their financial capacity. 2,000 units of houses have been allocated under the MyDeposit programme and MyHome scheme combined. Under the MyDeposit programme, first-time homebuyers are entitled to apply for funding from the Ministry of Urban Wellbeing, Housing and Local Government (KPKT) to cover the 10% or RM30,000 of downpayment for home purchase, whichever is lower. This again, will improve buyers’ purchasing ability and housing affordability. Incentive in the form of RM30,000 per sold unit of affordable housing under the MyHome scheme will encourage private developers to join in the provision for affordable housing. GST exemption on property management of stratified properties is extended to private developers starting January 1, 2018. This will benefit the middle class (M40), many of whom occupy stratified properties. The credit facility by Lembaga Pembiayaan Perumahan Sektor Awam (LPPSA) will soon cover legal fees incurred for loan agreements. Meanwhile, the introduction of jointloan mechanism with immediate family members on condition that one of the recipients is serving in the public sector, will lower the barrier or increase the loan amount eligibility of civil servants, therefore making affordable a higher range of houses. November 2017 I 13
Main Feature Budget 2018
can blacklist either the Landlord of Tenan. We want that in Malaysia, and are working towards that.
AHYAT ISHAK Founder and CEO of Greater Synergy Group and Author of “The Strategic Property Investor”
Many people say there is not much goodies allocated to the property sector in this year’s Budget. However, there was the declaration about the 257,900 units of affordable houses which the Government wants to build so that is the direct impliation. versus the indirect policy that will balance this situation out. Two examples are how the Government is going to focus on certain industries and how it is going to assist the middleincome group. I love what the Government is doing in reducing tax as many people were lobbying for that. You see, when the Government puts an additional RM300 to RM1,000 into the pockets of Malaysians, that’s significant. The Government is also focusing on Small & Medium Enterprises (SMEs). There were a lot of other initiatives to assist the SMEs and that’s an indirect effect to the property market. Therefore, when you have got more SMEs creating jobs and people creating more value for themselves, then their ability to purchase properties gets better. Other concerns revolve around how to increase logistics with the Government declaring that the MRT 2 is proceeding ahead while the LRT 3 is finally going to have a rescheduled date from 2020 to 2021. Tourism is also going to attract 80 million people so that is going to be significant. People are going to do Airbnb, guest houses, homestays so this is absolutely going to be significant. Medical tourism is going to be big with a lot of incentives for tourists and related businesses. As a rakyat observing the announcement of these initiatives, the Government has a report card against last year’s announcement so my other concern is that this is an all-new high of RM280 billion from last year’s RM260 billion. And, we are only making RM240 billion from collection. Therefore, if the Government is going to spend RM280 billion, that is going to result in a deficit since they are only making RM240 million from collections. The Government didn’t announce anything about minimum wage or an increase in Government servant’s salaries but it gave some goodies for the Government servants, and I am grateful. If there were more increases in the 1.6 million Government servants’ salaries, this will swell up the operational cost. The Government wants to encourage more people to do the rental business in relation to the Tenancy Act which is to regulate the Tenants and Landlords within the whole ecosystem. I love this as it would it result in a more regulated rental tenant scene in Malaysia as Australia and other markets in the world have this system in place. With this, you have the reassurance as a Tenant that your rights are safeguarded while as a Landlord you know you are safeguarded as well. The listing will be held by a Trustee that 14 I November 2017
SIVA SHANKER Immediate Past President of the Malaysian Institute of Estate Agents (MIEA)
Budget 2018 didn’t reflect a solid or stimulus package as per the wish list though there are various agencies and bodies tasked with trying to build and sell affordable homes. If all the strategies take off as planned especially for affordable homes targeted specifically provisioning the bottom 40% household with a monthly income of RM3,900 and below, this would also concurrently be reflected in other sectors of the property market. I also would like to suggest that people should not discount the affordable housing sector as it has potential for huge demand in the future. If a buyer can afford a RM200,000 or less home which can kick- start that part of the market this would result in what I would term a “trickle-up effect” which will step up the vibrancy that would lead to a slightly higher, positive effect. I prefer it if the banks could think of the ‘trickle-up effect’ and the step-up made especially by the low income groups to pay their housing loan instalment gradually as their income increases with time unitl the loan is fully paid.
DATO PRETAM SINGH DARSHAN SINGH President of the Tribunal for Homebuyers Claims, Partner of Pretam Singh, Nor & Co and Past Chairman of the Consumer Claims Tribunal
At the recent 20th National Housing and Property Summit held in Petaling Jaya, Selangor, Second Finance Minister Datuk Seri Johari Abdul Ghani gave some hints as to what would be in the law which is needed to protect both Tenants and Landlords, and the acts in a similar manner as a credit bureau. All the landlords and tenants’ past agreements and claims will be recorded, making it easier to control the players and improve the market. The proposed regulatory body will also make it easier and cheaper for the people to report any rental dispute, instead of taking it to the court. This proposal is certainly the way forward to address problems between Landlords and Tenants. Any Tenant will vouch as to the difficulty of getting back their deposit from recalcitrant Landlords. The Landlords on the other hand, will scream out
as to the number of times that Tenants move out without paying the rent and also the utility bills. I hope that once this Tribunal is set up, it would be like the South Australian Civil and Administrative Tribunal, Civil and Administrative Tribunal (SACAT). SACAT is an independent judicial body that has the authority to make legally binding decisions in disputes between Landlords and Tenants. SACAT can help with private rental, public and community housing, residential parks, rooming houses and lifestyle villages. SACAT decides housing disputes between Landlords and Tenants concerning a residential tenancy agreement; residents and Proprietors revolving around a rooming house agreement; residents and operators of “no premium” retirement villages and residential park residents and owner or operators. SACAT does not decide disputes between Tenants or disputes about holiday rental agreements nor disagreements between Landlords and Agents. (These disputes are heard by the Magistrates Court). It also does not hear disputes concerning residential tenancy or residential park disputes with claims of over AUD40,000 (RM130,000) or commercial tenancy disputes. We hope a similar Tribunal will be set up to help ease the problem for both Tenants and Landlords. This legislative intervention would be a quantum leap forward in promoting a healthy rental economy.
JAMES WONG Chairman, Budget Committee of the Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector (PEPS) Malaysia
The Government under PRIMA plans to build 500,000 affordable homes. In PEPS’ Budget Wish List 2018, PEPS highlighted the affordability issue of the middle 40% of the population (M40) who see a mismatch between house prices and income levels. The lack of State land released at cheaper prices for affordable housing as well as high infrastructure and compliance costs are other issues faced. Budget 2018 saw an allocation of RM2.2 billion for housing projects of which RM1.5 billion was set aside for PRIMA housing to build 210,000 units priced at RM250,000 and below per unit over a period of two years. This is a very laudable move by the Government to address the affordable housing issue in terms of financial capacity to buy and also to assist in increasing the supply of affordable homes. The step-up financing scheme provided to PRIMA which is now extended to private developers under Budget 2018 is also welcome news. In the PEPS’ Budget Wish List, PEPS recommended a measure to reduce building construction costs and speed up the construction period for the Government to promote Industrialised Building System (IBS). It has recommended the Government to provide incentives to both the builders of pre-
fabricated housing components and also to developers who adopt the IBS Building System. Budget 2018 also saw the allocation of RM2.5 billion towards IBS which is only applicable for the improvement and maintenance of dilapidated school buildings. Although it is an initial step towards the implementation of IBS, it is PEPS’ wish that IBS incentives and grants will be given to builders and housing developers who adopt IBS.
DAVID SHIEH CHONG Property Investor and Former Vice President of Malaysia Property Incorporated.
RESIDENTIAL RENTAL ACT Having spent some time working in Ray White Melbourne, Australia and having experienced how residential properties are managed, over there, rental tenancies and bonds (deposits) are properly regulated and kept by a special body during the tenancy period. I believe there would be some aspects of this included in the new Act. When it is passed, both owners and tenants in Malaysia will take some time to adjust to it. It is a very positive step towards promoting rental in Malaysia while increasing the standards and professionalism associated with such transactions. 50% TAX EXEMPTION ON RENTAL INCOME The competition for many Investors to get Tenants in this current market is tough. This situation applies to owners whose rental is around the RM2,000 figure or slightly above so there should be an incentive for them to lower it to. They should also increase access to many affordable rental properties within this affordable range, which previously may not have previously been available, which is a win-win for all. The management and maintenance services of stratified residential buildings are not subject to GST. This is much welcomed news for property owners and Investors as there is still much room for improvement in the standard of property management and maintenance, compared to many jurisdictions, particularly for older buildings which will ease the burden of homeowners.
November 2017 I 15
Special Feature
ABOVE PAR EXCELLENCE:
SKYWORLD’S FIRST QUALITY CENTRE SkyWorld Development Sdn Bhd COO Lee Chee Seng shares on the centre’s unique approach in educating the community about the benefits of the QLASSIC and CONQUAS certifications By: Mages PV Lingam
“
When you visit our SkyWorld Quality Centre, we’ll show you the difference between the QLASSIC and CONQUAS compliant finishing against a noncompliant finishing” - Lee Chee Seng
16 I November 2017
T
he hopes and dreams of SkyWorld Development Sdn Bhd (SkyWorld) is to realise the fruition of a project which would ultimately lend an impact to benefit the community at large. During an exclusive interview with Property Insight, SkyWorld Development Sdn Bhd Chief Operating Officer Lee Chee Seng spoke proudly at length on the group’s first Quality Centre which will see its grand launch opening to the public in mid-January 2018. “SkyWorld has always adapted a community-centric outlook in all of the projects we undertake and the first Quality Centre didn’t step far from that vision,” he says with a smile. Lee shares that the idea for the first Quality Centre was birthed out of Skyworld’s three brand pillars namely; Value Creation, SkyLiving Experience and Innovation. SkyWorld which was founded in 2008, took six years to establish its strong pool of management team. During that time, the team also actively explored, sought-after and assessed quality land banks in the capital city of Kuala Lumpur which is one of the top investment hotspots. The Quality Centre he says would benefit the community at large through the wider exposure of its seven eminent values which form the cornerstone of SkyWorld. These values take into account factors such as location; sky living experience; quality; innovation; sustainability; smart home features and security. These considerations are the outcomes derived from comprehensive research undertaken by SkyWorld to enrich its core values which are then infused into all of the group’s projects. The Quality Centre located at SkyArena
in Setapak, Kuala Lumpur sits on a 13,000 sq ft land area with a total built-up size of 7,500 sq ft. The construction work for the Quality Centre started on April 2017 with the completion date scheduled for October this year. “At SkyWorld, we believe in building responsibly and delivering a quality Sky Living experience in a sustainable
environment. More importantly, we believe that everyone should be able to afford a quality home. “This is something that is close to our hearts. This is the reason that we’ve invested RM3.8 million into our SkyWorld Quality Centre,” says Lee. The components for the Quality Centre includes the SkyWorld Lounge comprising a 30-pax seat mini auditorium and a comprehensive show unit consisting a living room, bedroom, yard, balcony, staircase, corridor, bathroom and more. The Quality Centre is designed with attention to detail in order to raise the bar for building excellence. It would also be a place to welcome valued homeowners, business associates and guests who wish to learn more about the quality of certified workmanship in Malaysia. The Quality Centre would showcase the difference between QLASSIC or CONQUAS-compliant finishings as
opposed to non-compliant finishes. “When you visit our SkyWorld Quality Centre, we’ll show you the difference between the QLASSIC and CONQUAS compliant finishing against a noncompliant finishing” “In Malaysia, an average of 7,600 projects and developments are built every year and only 4.1% are certified by QLASSIC- we are part of the select few. So, when you consider a SkyWorld home, you can be assured of the quality commitment to you,” says Lee. The Quality Centre can also be used for training and educating SkyWorld’s internal employees as well as serve as a sharing hub for Consultants, university students, prospective homebuyers and the public who want to know more about the quality of construction in Malaysia. “We have met a few Contractors and industry players who had only superficial knowledge of QLASSSIC and CONQUAS. “After visiting the Quality Centre, they
were all won over. We hope that this will lead to better reception towards quality workmanship,” asserts Lee. SkyWorld has substantial plans this year and is targeting to launch five projects with an estimated gross development value (GDV) of RM2.2 billion. With its strategic land bank spanning over 130 acres valued at an estimated GDV of RM13 billion, it certainly has a long way to go with a promising future ahead of it. The newly built SkyWorld Quality Centre will be open to the public from January 18, 2018. For further info, queries can be emailed to corporate@skyworld.my.
SKYWORLD’S VALUE CREATION STRATEGIC LOCATION All of Skyworld Development Sdn Bhd’s projects are located in good locations within mature neighbourhoods in Kuala Lumpur. Hence, property values will stand a higher chance of appreciating overtime for SkyWorld which positions itself as a city developer. PRICE POINTS Given the strategic location (nonsuburban areas) of its developments, SkyWorld is able to set a higher premium for its properties. PRACTICAL LAYOUT SkyWorld recognises that space utilisation is important and every corner counts. All its layouts are crafted with purchasers in mind to ensure that all spaces are fully utilised. CREATIVE SPACE PLANNING Innovative space planning was also adopted at the middle level of the building which were converted to accommodate tropical gardens because of the proximity to the water tank. The rooftop Mechanical and Engineering space was not wasted as it was used as lounge and garden areas to give added value to SkyWorld purchasers.
November 2017 I 17
Developer of The Month
GLOWING REPORTS FOR UEM SUNRISE BERHAD’S RESIDENSI SOLARIS PARQ Despite the downturn, people are still buying into properties by this renowned developer, given its reputation for high quality residences By: Yvonne Yoong & Felicia Soon
The economic downturn has seen many property developers holding back on their launches of late. Coupled with the issue of prospective house buyers finding it difficult to receive loans from banks, the shrinking ringgit and rising construction cost and labour charges, developers have understandably been plagued with a host of issues of late. However, this was not the case for UEM Sunrise Berhad (“UEM Sunrise”) which recently launched Residensi Solaris Parq, the first phase of its latest mixeduse development, Solaris Parq, at the UEM Sunrise Showcase in Mont’Kiara, Kuala Lumpur. Located beside UEM Sunrise’s creative retail subsidiary, Publika Shopping Gallery, the overall Solaris Parq development will sit on a 18.76acre freehold land within the Dutamas enclave. Comprising four components mainly Residensi, Galleria, Suites and Offices which will be launched in two phases, the Solaris Parq development will command a gross development value (GDV) of approximately RM3 billion and is expected to replicate and complement the success of Solaris Dutamas. Its serviced apartments, Residensi Solaris Parq which is expected to be completed in 2022 marks the first development phase of Solaris Parq, with
YAP POOI MING
18 I November 2017
its retail, suites and office components following up closely in the second development phase. Commanding a GDV of around RM755 million, Residensi Solaris Parq is designed to showcase a harmonious blend of nature and luxury. Already it is set to enhance the attractiveness of the Mont’Kiara and Dutamas
neighbourhoods as viable destinations to live in, given the attractive array of work and lifestyle offerings. The development is set to enhance the attractiveness of Mont’Kiara and Dutamas as a destination to live in, given its wide array of work and lifestyle offerings. Featuring over 30 lifestyle amenities
QUEENIE TAN
and cutting-edge facilities for its residents to enjoy, Residensi Solaris Parq will also be home to a two-acre urban park comprising four thematically landscaped zones: Grassland (for weekend fiestas and garden events); Play Yard (with designer-crafted playground equipment); Flower Sea (for quiet reflection and inspiration) and Forest Atrium (tranquil space to cherish the wellness of nature). This integrated mixed-use development comprises serviced apartments housed in two towers with 288 units per tower. There are five different built-up sizes at the Residensi Solaris Parq development with units ranging from 721 sq ft to 2,469 sq ft. The selling price for the units ranges from RM873, 800 to RM2, 968, 800. The buyers and investors who attended the launch couldn’t agree more with UEM Sunrise’s Managing Director/Chief Executive Officer Anwar Syahrin Abdul Ajib sharing that “Residensi Solaris Parq is a prelude of what is to come for the overall development of Solaris Parq.” “We are working to not only deliver quality developments which many will be proud to call home, but we want to go beyond that to create sustainable communities.” As of end October 2017, take up rate stood at 80% from the 576 units released.
GLOWING REPORTS FROM BUYERS Judging from the success of its launch, here is what three happy buyers of the Residensi Solaris Parq serviced apartment units had to say about the
development and the reason for their unwavering support towards UEM Sunrise. Commenting on her recent purchase at Residensi Solaris Parq, Yap Pooi Ming a Senior Advertisement Sales Specialist cum property investor says, “Mont’Kiara is my preferred destination for work and play due to its accessibility and connectivity. “These include the SPRINT Highway, Penchala Link, New Klang Valley Expressway (NKVE) and Duta Ulu-Klang Expressway (DUKE),” says Yap who also purchased a unit of 28 Mont’Kiara by UEM Sunrise. Global Capital Head of Sales Queenie Tan says that the two-acre urban park drew her attention towards the development. Together with her partner, Tan shares, “We purchased a unit here in Residensi Solaris Parq due to the various lifestyle amenities offered for example, the park which is an essential component within the development to ensure the overall health, happiness and well-being of residents within the development.” Despite having invested in more than 10 properties, JEK Foods Chief Executive Officer Evelyn Wong who initially bought her first property investment in Singapore more than a decade ago decided to invest in a unit at Residensi Solaris Parq due to its prime location right next to Publika Shopping Gallery. “My office is situated at Publika Shopping Gallery, hence, I find this
development is perfect to invest in due to its vibrant and dynamic destination offering holistic and integrated lifestyle, with immense potential growth for investors. UEM Sunrise is renowned for its award-winning and up-market highrise residential, commercial and mixeduse developments developed largely in the affluent Mont’Kiara international area. Some of their residential projects here includes 28 Mont’Kiara, Arcoris Mont’Kiara , Residensi22 Mont’Kiara and Residensi Sefina Mont’Kiara As one of the leading property developers in Malaysia, the company is also responsible for introducing a creative retail concept in Solaris Dutamas, also known as Publika. UEM Sunrise is a public-listed company and one of Malaysia’s leading property developers. It is the flagship company for township and property development businesses of UEM Group Berhad (“UEM Group”) and Khazanah Nasional Berhad (“Khazanah”). UEM Group is whollyowned by Khazanah, the strategic investment fund of the Government of Malaysia.
EVELYN WONG November 2017 I 19
Area Focus
PUTRAJAYA: REACHING THE PEAK OF PROMINENCE
Putrajaya has unveiled itself as a significantly successful township which is working towards achieving a high lifestyle status in Selangor By: Mages PV Lingam
O
nce a thick jungle existing alongside palm oil plantations, the Putrajaya of today has vastly transformed into what is now known as the Federal Administrative Centre of Malaysia due to the Government’s initiative. Historically, Putrajaya used to be known as Prang Besar which was founded in 1918 and named as Air Hitam by the British. Initially covering a land area spanning 800 acres which then expanded to 8,000 acres, Putrajaya later merged with other surrounding estates including Estet Raja Alang Estate, Galloway Estate and Bukit Prang Estate. This corporate city was named after the first Malaysian Prime Minister Tunku Abdul Rahman Putra. Its territory is entirely enclaved within the Sepang District of the state of Selangor. This planned city now known as the Federal Territory of Putrajaya is also part of the Multimedia Super Corridor (MSC) of Malaysia which is in essence, a special economic zone covering the Klang Valley. This city is the brainchild of former Prime Minister of Malaysia Tun Dato’ Seri Dr Mahathir Mohamad which was given the city status following Kuala Lumpur and Labuan in the year 2001.
20 I November 2017
The census from 2015 states Putrajaya has a population of 88,300 persons. Its meridien coordinates for travellers is 2.9430952°N 101.699373°E.
PUTRAJAYA - COMING INTO ITS PRIME Putrajaya city was intended to be a centralised Government whereby most of the offices were relocated from the congested capital city of Kuala Lumpur. Construction work on Putrajaya began in August 1995 when the area was considered Malaysia’s biggest project and one of Southeast Asia’s largest, with an estimated total cost of USD8.1 billion (RM34.26 billion). The entire township was designed and constructed by Malaysian companies with only 10% of the materials being imported. As of 2012, almost all of Malaysia’s Governmental Ministries had relocated to Putrajaya. Putrajaya also has twin-city status with Cyberjaya and Sejong City in South Korea. Today, Putrajaya has transformed into a sough-after city where world leaders and dignitaries hold high-powered meetings and sessions here. It has grown into a tremendous city of viability and is the epitome of futuristic inclinations leaning towards
a centralised Governmental engine for the nation. Some of the notable public buildings include Perdana Putra which is the official office of the Prime Minister while Seri Perdana is the official home of the Prime Minister and Sri Satria is the official residence of the Deputy Prime Minister. The Palace of Justice and Wisma Putra (Ministry of Foreign Affairs) are other buildings in Putrajaya. In addition, the township also has its own Putrajaya Landmark area in which the Millenium Monument and National Heroes Square take pride of place. Putrajaya is also planned as a garden city and intelligent city with 38% of the area reserved for green spaces where the emphasis is on the natural landscape. In line with this objective, there is the Putrajaya Lake and Putrajaya Wetlands Park as well as the Putrajaya Botanical Gardens representing the largest botanical garden in Malaysia covering an area spanning over 227 acres.
TOWN PLANNING STATUS Principal of FA Planning Consultant and Lecturer at University of Malaya TPr. Dr. Faizah Ahmad shares that there are seven focused areas in Putrajaya.
These include planning; urban design and building; integrating nature into the urban fabric; transportation and mobility; energy usage and water usage; waste management as well as city administration and management,” The Structure Plan Sustainable Putrajaya 2025 gazetted on March 7, 2014 will transform Putrajaya from a Garden City to a Green City. This can be achieved via the improvement of the quality of the living environment by ensuring that urban activities and developments reduce carbon emission, encourage green businesses and a green lifestyle. She adds that Putrajaya is surrounded by highly populated areas such as Puchong, Cyberjaya, Kajang, Bangi and the whole southern corridor of the Klang Valley. The Current Population Estimates, Malaysia 2017 reported the estimated population of Putrajaya in 2017 to be 86,900 which represents a 2.9% annual growth rate from an estimated population of 84,400 in 2016. Putrajaya’s planned population by 2025 is 347,700 while Sepang District’s estimated population in 2017 is 252,300. The current population of Cyberjaya is estimated at 70,000 and is planned to November 2017 I 21
Area Focus
S P Setia Berhad Group’s Setia Seraya Residences
support a living population of 240,000 by 2020. Faizah says that Putrajaya will continue to be the major economic catalyst inducing urban growth in the Greater Kuala Lumpur conurbation’s Southern Corridor. She adds that Putrajaya is a great choice with its more comprehensive green infrastructure, lifestyle, health and educational facilities, high accessibility and intra-city or inter-city connectivity. “The transformation to Green City (status) will be more visible with the implementation of the Low Carbon Green Transportation and the scheduled completion of the Mass Rapid Transit 2 (MRT2) Sungai Buluh-Serdang-Putrajaya (SSP) and Putrajaya Sentral MRT station. “Then, there’s the Kuala Lumpur– Singapore High Speed Rail (HSR) link with a stop in Putrajaya complemented by the Putrajaya-Cyberjaya tram services, and other environmentally-friendly features,” asserts Faizah on Putrajaya further.
DEVELOPMENTS IN PUTRAJAYA One of the prominent projects in Putrajaya is S P Setia Berhad Group’s Setia Seraya Residences which is a condominium with a gross development value (GDV) of RM246 million. Standing tall at 40 storeys with a total of 363 units, the development is situated on 4.54 acres of freehold land in Precinct 15, Putrajaya. The project comprises three layouts namely Type A’s three-bedroom and two-bathroom units featuring 1,002 sq ft of built-up area and Type B’s fourbedroom and three-bathroom units with 1,202 sq ft of built-up area. Type C’s three-bedroom and two-bathroom plus veranda (lanai) units feature 1,420 sq ft of built-up area. Putrajaya Holdings Sdn Bhd, being the master developer of Putrajaya city also launched its Astana Residence project here last year. The freehold luxury lakefront villa development which is situated at Precinct 8 is the first gated and guarded landed residential project in Putrajaya with an estimated gross development 22 I November 2017
value (GDV) of RM234.47 million. The project comprises 58 units of two-anda-half as well as three and three-anda-half-storey villa homes with built-up sizes ranging from 5,348 sq ft to 6,456 sq ft. Nawawi Tie Leung Property Consultants Managing Director Dato’ Nawawi Mohd Arshad says that the selling price of Astana Residence’s villas averages RM680 psf, with the minimum selling price starting from RM3.68 million. He adds that the development is set to be completed in 2018. Putrajaya he adds also represents a choice location for long-term investors and upgraders. Other landed property projects by Putrajaya Holdings include the Turnberry two-storey linked homes located at Precinct 11. Another project at the same Precinct is Fera comprising a three-storey twin villa with six bedrooms and bathrooms. This project features 62 luxury twin villas with built-up areas of up to 5,026 sq ft and land areas of up to 7,707 sq ft. Nawawi also adds that there are vacant detached plots available at Precinct 8, 10
and 11 priced at about RM138 psf with the transacted price going at RM1.2 million. The townhouses located at Precinct 16 meanwhile has seen the transacted prices increase to RM430,000 last year. Recent condominium projects like the Sarjana Aster Condominium which features three bedrooms and two bathrooms located at Precinct 11 in Putrajaya was transacted at around RM480,000. Meanwhile, S P Setia’s Dwiputra Residence at Precinct 15 which is located at the Southern Growth Corridor situated about 25km from Kuala Lumpur was transacted at RM565 psf. According to Nawawi, all of the 440 units are already sold out. He adds that the recent transacted commercial property comprised a three-storey shop office that fetched RM2.0 million last year. A notable mixed-use development in Putrajaya is Shaftbury Avenue comprising retail lots and serviced apartments. The launch price for the retail project was priced between RM1,200 psf and RM1,800 psf while the the serviced
- Dato’ Nawawi Mohd Arshad
- TPr. Dr. Faizah Ahmad
aparments were priced from RM728 psf to RM875 psf. The expected completion date of this project is 2018. Transasia Property Consultancy Sdn Bhd Real Estate Agent Hairil Wahiri says Putrajaya is surrounded by many new development. November 2017 I 23
Area Focus
Putrajaya Holding’s Astana Residences which is situated in Precint 8
These include residential and commercial developments such as IOI Resort City, Malaysia Vision Valley, Serinia City, Cyberjaya, Bandar Enstek, Kota Seriemas which all indirectly act as catalysts for Putrajaya. Hairil adds that a few of the most recently launched and future developments in this township include the terraced hyperlink units named Duta Villa located at Precinct 14 and the semi-detached Astana Residences at Precinct 8 as well as the Augusta project at Precinct 12. Meanwhile, the Aura Residensi condominium project is located at Precinct 8 while the Flora Rosa development is at Precinct 11.” He adds that Putrajaya offers integrated infrastructure facilities for
RECENT RESIDENTIAL AND COMMERCIAL TRANSACTIONS IN PUTRAJAYA No.
Broad Use
Property Type
Location Sampling
Development/ Project (If any)
Median Transacted Price* (RM per sq. ft.)
Median Transacted Price* (RM per unit)
1
Commercial
3-storey Shop-Office
Precinct 8
-
RM425psf (2016)
RM2,050,000 (2016)
2
Residential
Vacant Detach Plot
Precincts 8, 10 & 11
-
RM138psf (2017)
RM1,200,000 (2017)
Townhouse
Precinct 16
-
RM352psf (2016)
RM430,000 (2016)
Condominium
Precinct 11
Saujana Aster Condo
RM455psf (2016)
RM480,000 (2016)
Apartment
Precinct 15
Dwiputra Residence
RM565psf (2017)
RM699,000 (2017)
Flat
Precinct 9
-
RM345psf (2017)
RM241,500 (2017)
Precinct 11
-
RM329psf (2016)
RM230,000 (2016)
Terrace House
Precinct 14
-
RM676psf (2016)
RM1,000,000 (2016)
Semi-D House
Precincts 8, 9, 11, 16 & 18
-
RM526psf (2017)
RM1,400,000 (2017)
Detach House
Precincts 10 & 16
-
RM784psf (2014)
RM3,500,000 (2014)
3
Industrial
N/A
*Note: Based on the latest available transactions by the Department of Valuation and Property Services (JPPH) Source: JPPH; NTL Research & Consulting, 2017
NOTABLE UPCOMING DEVELOPMENTS IN PUTRAJAYA No.
Development
Property Type
Total Unit
1
Shaftbury Avenue @ Putrajaya
Retail Shops
249
Serviced Apartment
746
Source: NTL Research & Consulting,
24 I November 2017
Size (sq ft)
686 – 1,451
Launch Price (RM per sq. ft.)
Launch Year
RM1,200 - RM1,800psf
2013
RM728 - RM875psf
Expected Completion 2018
residents that was developed based on two underlying concept which namely portrays Putrajaya as a sustainable as well as intelligent city. Already, one third of Putrajaya is reserved as a green area with Cyberjaya being developed just around the corner.
ACCESSIBILITY Putrajaya is accessible by highways and public transportation such as buses, taxis and rail lines supported by Park and Ride (P&R) facilities complemented by a network of pedestrian walkways and bicycle lanes. The intra-city public bus services (Nadi Putra) is also provided by Putrajaya Corporation. The Express Rail Link (ERL) meanwhile connects Kuala Lumpur and Putrajaya to Kuala Lumpur International Airport
(KLIA). Highway links include the North-South Expressway Central Link, North-South Expressway, PutrajayaCyberjaya Expressway, South Klang Valley Expressway (SKVE), Lebuhraya Damansara Puchong and Maju Expressway (MEX). Highways and upcoming public transport such as the Multi Rapid Transit (MRT2) Sungai Buluh-Serdang-Putrajaya (SSP) line, the Kuala Lumpur-Singapore High-Speed Rail (HSR), Electric Vehicle (EV) Bus Demonstration project and Putrajaya-Cyberjaya tram services are expected to further improve accessibility and connectivity to Putrajaya. Nik says that the most recently launched projects here include S P Setia’s Setia Seraya Residences comprising high-end condominium units in Precinct 15 and Putrajaya Holdings’ Precinct 11. Besides that, there will be
“
The majority of the residents comprise Government servants as Putrajaya is the center of Government administration. It is equipped with various infrastructure and offers various other facilities that meet the needs of residents who live here. Many have moved to Putrajaya because of these factors therefore the deamand for property is increasing tremendously” - Hairil Wahiri, Real Estate Agent , Transasia Property Consultancy Sdn Bhd
“
Based on the current and future planned amenities, Putrajaya will become a hub for everyone in term of workplace and residences. Furthermore, Putrajaya will also become a good area for investment as it is the Administrative Center of the country ” - Nik Azwan Mohamed Pathil, Assistant Manager -Real Estate Agency, AJC Sdn Bhd
the construction of MRT Phase 2 and THE HSR train to Singapore. This would improve the transportation system and shorten travelling time. The development is easily accessible via Maju Expressway (MEX), DamansaraPuchong Expressway (LDP) and Shah Alam Expressway (KESAS) which lead to Puchong, Subang Jaya and Klang. Travellling to Cyberjaya, Kuala Lumpur International Airport (KLIA) and Nilai is possible via the North South Expressway Central Link (ELITE) and South Klang Valley Expressway (SKVE). Hairil says future infrastructure coming into the area include the Multi Rapid Transit (MRT) via the Sungai Buluh-Serdang-Putrajaya (SSP) line and the Kuala Lumpur-Singapore HSR which will further ease the township’s transportation challenges.
Hotel: The Everly Putrajaya, Dorsett Putrajaya, Putrajaya Shangri-la, Putrajaya Marriot Hotel, Pullman Putrjaya Lakeside, Palm Garden 101 Resort City, Le Meridien Hotel, D’Boutique Hotel. Hospital: Hospital Putrajaya, National Cancer Institute. Eateries: Only Mee Restaurant, Umai Café, Spring Garden Restaurant, Balqis Restaurant, Mr. Kabab & Biryani, B’s Restaurant, Slero D Timur, Thai Tom Yam Kung Restaurant, Medina Tomyam Restaurant, Putra Palace Restaurant. Malls: Alamanda Shopping Centre, IOI City Mall, Suria Mall Putrajaya. Schools: Nexus International School Malaysia, International Modern Arabic School, Sekolah Sultan Alam Shah, SMK Putrajaya Presint 8, SMK Putrajaya Presint 9(2) IB World School. Religious Houses: Putra Mosque, Tuanku Mizan Zainal Abidin Mosque, Sri Maha Mariamman Devasthanam, Pusat Buddhis Dhammaduta Malaysia.
November 2017 I 25
Area Food Focus
TAIBA RESTAURANT
RASHNA 1999
Mouth-watering Arabic cuisine oftentime entails the smell of yummy roasted chicken. The smell of spices and seasonings filled the air as we shred the tender pieces and dipped the slices into the cucumber and yoghurt dip laced with mint sauce. The yoghurt-marinated chicken was moist, bursting with added flavour from the bay leaves, cumin, tomato paste and olive oil. Shakshuka or poached eggs doused in cheese melted in our mouths. A dash of honey, turmeric and paprika mixed with the eggs and served with hot bread brought out the best at Taiba. Team Rating: 8.6/10
Special Muglai Paratha - Paratha bread stuffed with eggs, onions and herbs served with a savoury choice of dips comprising chicken curry and a mix of tomatoes, onions and coriander sauce was the star of the show at Rashna 1999. Bangladeshi and Mughal dishes such as Kaachi or dum Biryani were full of splendour and regality served with layers of yoghurt-marinated mutton and potatoes cooked in aromatic spices. Ghee specially made in Bangladesh was cooked in traditional clay pots making the biryani a winner! Team Rating: 8.8/10
Putrajaya’s Pleasurable Palates
POT AND PAN RESTAURANT
Check it out!
Dining at the hilltop and savouring the popular aromatic Ikan Patin Temerloh Masak Tempoyak was an experience in itself. This river patin or pangasius comprising a species of special catfish which hails from the rivers of Pahang, is a fish broth served with fermented durian or tempoyak. The aromatic taste of the tangy fish eaten with hot rice was delicious to the last taste. The Steamboat Grill comprising a steaming pot of seafood soup is tantalising to the last taste. Once the grill was hot enough, we tried our hands at real life cooking our dinner and were delighted at how it all turned out! Team Rating: 8.8/10
THE PLATED BY PINKY BROTHERS This western fusion concept eatery served the most exotic Duck Olio Spaghetti which was delicious to the last bite. The meat was tender while the portion served was huge. Stuffed chicken with cheese and spinach was a winner as the combination of mushroom, cheese and rolled-up chicken captured our imagination. The texture of the wrapped chicken breast was interestingly crunchy on the outside yet soft on the inside blended well with the aromatic taste of garlic aioli sauce. Team Rating: 8.8/10
PADI HOUSE Padi House is a concept eatery decorated with stacks of flower pots acting as a divider between the dining area and the casual sofa seating place. Here, sumptuous grilled lamb chops are served with divine Café d’Paris sauce topped with soft broccoli, carrots and crunchy wedges. Dessert was a treat in the form of Macadamia Cheesecake. The honeycomb macadamia nuts added a heavenly taste to the sweet cheesecake with the bottom layer comprising a crust base made from crushed cookies. Team Rating: 8.9/10
26 I November 2017
Celebrity Corner
BEAUTY AND HER BUNGALOW Carey Ng relishes the comfort and calmness of her home that complements her hectic lifestyle as a model, wife and mother By: Mages PV Lingam
P
roperty Insight had the special privilege to chat with beautiful former Miss Malaysia-Universe 2013 Carey Ng Sue Mun who stands at 5 ft 10 inches tall as she showed off her bungalow located at the cul-de-sac off Seksyen 16 in Petaling Jaya. Upon arrival, the team spotted a few cars parked on the front lawn and on the right side of the garden which was covered by shady plants. A shimmering blue-mosaic swimming pool was also sited at the front portion of the house. Ng and her husband Roen Cian who is the owner of The Roof, LifeJuice and Common Ground recently welcomed their adorable baby girl Shaelyn and had some changes done to their abode to accommodate the new addition. The couple, being Brand Ambassadors for Adidas share an interest in property, having acquired a few units over the years. These units are peppered around the Damansara Heights and Bangsar vicinity which are their favourite locations. Ng says many are not aware that she is an Architecture Graduate from Nottingham University in London, UK. Alhough she was a former gymnast and ballet dancer, prior to winning the title, she had no prior experience taking part in beauty contests.
ABOUT THE BUNGALOW The 11,000 sq ft bungalow and surrounding garden is obviously wellNovember 2017 I 27
Celebrity Corner
“
We invested in the renovation as we feel this house would be fully utilised. We love the quiet and peaceful neighbourhood. I have never considered living in a nonlanded property either� - Carey Ng Sue Mun
28 I November 2017
maintained by the couple who loves to entertain and hold parties for thier close friends and families. The bungalow has a grandeur type of architectural feel to it, with lots of daylight streaming in via the full length windows of the living hall area. The majestic two-storey bungalow has a cosy feel to it. Many decorative items and souvenirs collected from her travels around the globe now serve as interesting pieces for the home. There are also lots of rustic and wood-based furniture as reflected in the cupboards, shelves and the well-crafted dining table carved from a raw tree trunk originally imported from Indonesia. A few large exotic paintings which were flown in from Bali in Indonesia grace the walls of the dining and living rooms. The warm ambiance in the dining area is evident, complemented by the hanging pendant lights positioned above the countertop and dining table. The kitchen ceiling area has also been fitted with wooden panels that accentuate the spacious space with a touch of warmth. A few of the decorative interior items were handed down from her in-laws. Ng regards these as family heirlooms to be cherished including the antique collection of record labels, vintage radio
couple to accommodate their shoes, elegant attires and other accessories. The house also has five bathrooms. The dining room is also used as an entertainment space by the couple as they accommodate family gatherings and informal meetings here. The backyard of the house literally is a place to keep their pets and grow herb s and fruit trees to nurture holistic living. “We invested in the renovation as we feel this house would be fully utilised. We love the quiet and peaceful neighbourhood. I have never considered living in a nonlanded property either,” opines Ng. The home’s location is strategically centralised - boasting easy accessibility and situated nearby a few shopping malls.
VIEWS ON PROPERTY MARKET and record players. The heavy coal iron and antique fan left on the marbled floor in the dining hall make for a striking display. The 40-year old house was purchased by her father-in-law at only about RM300,000 which is currently valued at a whopping RM5 million. “Whatever changes or renovations undertaken for the house both internally and externally were collectively agreed beforehand among the family members. “Therefore, the house exudes a cosy family feel or atmosphere. I have been living with my family here since young, and now after being married, I still prefer staying here. Being an Asian, we are used to sharing the space among family members as well,” says Ng. She adds that she prefers to preserve the age-old interiors as they hold sentimental values for the family.
A part of the home has been turned into a “man-cave”, a sanctuary for her husband to entertain his guests. Here, the walls of this special area are filled with memorabilia, photographs and frame shots taken with popular celebrities and sportsmen. There is a blue pool table in the middle of the room and a vintage brown chest placed besides the bar area filled with exotic drinks gifted to them over the years. The house has five bedrooms including one which is fully renovated with a walk-in wardrobe for the power
Ng says the market has softened but her father-in-law has trained them to look out for good buys especially for investment purposes. She says she frequently embarks on house hunting in prime locations in the Klang Valley. Ng may consider selling off a few properties to purchase new units from developers as the market has now softened. They will wait for five to ten years before deciding on the next move. In Shah Alam, projects by S P Setia Berhad Group she opines have their own unique townships with schools, hospitals and residences though more time is needed for travelling.
SPACE USAGE Ng, who was an Architect before being crowned as a Beauty Queen loves to spend time in the pool which is her favourite space. She also spends time at the patio area strewn with comfortable blue cushions amid leafy plants and a huge tree adding to the serenity of the outdoors. This space is commonly where she entertains her friends. Ng says she prefers to maintain the original wooden doors with glass panels and parquet staircase which she feels add to the rustic ambiance of the bungalow. Part of the front yard was renovated but the rustic slate floor remains. November 2017 I 29
Main Featured Property
SERENE LIVING AT SETIA SERAYA RESIDENCES
Setia Putrajaya Development Sdn Bhd raises the benchmark for luxury living with its project located at Precinct 15 Putrajaya By: Mages PV Lingam
30 I November 2017
S
P Setia Berhad unveils Setia Seraya Residences, which is poised to become the pride of Putrajaya once the development is completed by 4Q 2021. The project, undertaken by its subsidiary Setia Putrajaya Development Sdn Bhd is set to raise the benchmark for luxury living in the heart of Putrajaya. Situated on 4.54 acres of freehold land in Precinct 15, Putrajaya, the project which was launched recently will feature open spaces, plenty of green lungs and wide boulevards to make living here a healthier and an uplifting choice. Setia Putrajaya Development has also taken it upon itself to further enhance the surrounding vicinity by creating aesthetically pleasing landscape areas for healthy modern living. Setia Seraya Residences which has a gross development value (GDV) of RM246 million features a 40-storey development encompassing only 363 units to ensure quality living for its residents. The units were uniquely designed to optimise modern lifestyles amidst natural surroundings. Meanwhile, easy accessibility characterises the development while comprehensive facilities and amenities would make living here an enjoyable experience. This 142-metre tall tower is set to
elevate the idea of living in a worldclass address. In addition, Putrajaya is a global venue for international attractions throughout the year.
A PLACE TO CALL HOME Setia Seraya Residences has three
layout choices. Type A comprises a total of 249 units of three-bedroom and twobathroom layouts encompassing a builtup area of 1,002 sq ft. Meanwhile, Type B has 110 units featuring four-bedroom and three-bathroom layouts with a builtup area of 1,202 sq ft. Lastly, Type C comprises four exclusive units located
November 2017 I 31
Main Featured Property
on Levels 23 and 24 which feature threebedroom and two-bathroom layouts as well as a lanai. Type A units are priced from RM536,000 while Type B units are priced from RM643,000. Meanwhile, the purchase price for Type C units starts from RM795,000. Setia Seraya Residences is designed to cater for families to enjoy living at one with nature. This is a plus factor for potential buyers and investors alike. The tower will be constructed on elevated ground, making it the tallest structure in the scenic vicinity of Putrajaya. On a clear day, residents can enjoy scenic views from the Sky Garden located at Level 22. The Facility Deck on Level 4 is a podium for recreation and relaxation. This area provides amenities such as a ladies’ pool, lap pool, pool deck, pegola, reflexology track, outdoor fitness, reading and lounge space, clubhouse, shaded pavilion and more. The condominium designed by Asima Architects Sdn Bhd will feature a Sky 32 I November 2017
Lumpur International Airport (KLIA) as well as the Nilai North South Expressway Central Link (ELITE) and South Klang Valley Expressway (SKVE) besides the Federal Highway and North-South Expressway. In summary, Putrajaya has undergone tremendous developments in the past which complement the infrastructural and residential sectors here while benefitting the eco-system on the whole.
PROJECT DEVELOPMENT DETAILS Address: Lot 14124, Jalan P15H, Presint 15, 62050, Putrajaya.
Garden with spectacular views and a lounge. The landscape designed by Landarc Associates Sdn Bhd also adds value to the surroundings.
EASY ACCESIBILITY Setia Seraya Residences is located nearby the Alamanda Shopping Centre, Nexus International School and the Diplomatic Precinct. In addition, IOI City Mall and IOI Resort are attractions located just 6 km away from the condominium. Meanwhile, Putrajaya Hospital and Putrajaya Sentral are situated only 8 km away from the vicinity. Educational institutions like Nexus International School, Tenaga Nasional
University (UNITEN), Heriot-Watt University Malaysia and University Putra Malaysia (UPM) are also located within close proximity to the development. The connectivity gateway surrounding the place is conveniently linked to the Putrajaya Express Rail Link (ERL), Nadi Putra (Bus), Putrajaya Sentral and proposed High Speed Rail (HSR) project as well as the ongoing Mass Rapid Transit (MRT) line 2 project. The development is also connected via major highways and expressways such as Maju Expressway (MEX), DamansaraPuchong Expressway (LDP) and Shah Alam Expressway (KESAS) leading to Puchong, Subang Jaya and Klang. It is also linked to Cyberjaya, Kuala
Land Title: GRN 5547, Lot 10005 Presint 15 Tenure: Freehold Site GPS Coordinates: 2.940729, 101.715953 Website: www.setiaseraya.com Expected Date of Completion: 4Q 2021
PROPERTY DETAILS Built Up in Sq ft
Price
Price psf
Type A 1,002 sq ft
RM536,000 onwards
RM534 psf
Type B 1,202 sq ft
RM643,000 onwards
RM534 psf
Type C 1,420 sq ft
RM795,000 onwards
RM559 psf
November 2017 I 33
Personality of The Month
GRASSROOT PLANNING FOR A LIVEABLE CITY
President of the Malaysian Institute of Planners (MIP) TPr. Hj Ihsan Zainal Mokhtar shares on the finer points of overseeing strategic town planning in Malaysia By: Mages PV Lingam
T
his Master graduate with a City and Regional Planning qualification from Ohio State University in Ohio, US, needs no introduction. TPr. Hj Ihsan Zainal Mokhtar after all, has come a long way in transforming various urban and rural areas into systematic and strategic gridlines on the local map. Currently holding the position of President of The Malaysian Institute of Planners (MIP), Ihsan is a well-rounded person who has clocked in a wealth of experiences. For one, he was among the first batch of scholarship students who pursued his further studies in city and town planning in the US in 1984. After his return to Malaysia in 1986, he was posted to a rural town to lecture at the School of Economics and Public Administration, Universiti Utara Malaysia (UUM) in Bandar Darul Aman in Kedah. “I had a cultural shock due to a vast jump from hyped up US to a tiny paddyfield town,” he recalls. Ihsan who is also Principal of IZM Consult Sdn Bhd now, has served as a Lecturer at the MARA Institute of Technology from 1987 to 1995. He enjoys teaching as in this way, he can contribute to the community at large. “Though the recession engulfed the nation in the 1980s, I was blessed to be able to embark on my lecturing position immediately,” reflects Ihsan. This was despite the initial setback when his Degree wasn’t widely recognised during the time when priority was given to UK graduates instead. Ihsan’s first stint with the private sector was with a company called Magna Park
34 I November 2017
Sdn Bhd in 1996. There, he was in charge of the development spanning 88 acres of land in Kepong, Kuala Lumpur that was valued at RM500 million. He was worked at Renong Berhad’s subsidiary called Prolink Development Sdn Bhd on its 10,000-hectare development of Nusajaya, Johor. Ihsan was also attached to Fadason Holdings Sdn Bhd as General Manager until the year 2000 on a privatisation project with Kuala Lumpur City Hall (DBKL) that was valued at RM400 million, after which time he embarked on his own private practice.
EARLY PLANNING STAGES Ihsan emphasises that planning stages are crucial as the process can contribute tremendously towards the development of a country. He says that back in the US, planning was more participatory as compared to Malaysia which is more towards a “follow the instruction”approach. Since this nation was going through drastic infrastructure changes and economic challenges in the 1990s, town
planners had to adapt and evolve to accommodate the city’s needs. Ihsan was also involved in developing Kepong back then. There was a situation whereby 1,000 squatter homes called Kg Suria - also known as JKR Batu 7 Kepong which is now called Magna Prima had to be relocated as part of its town planning. “This was aimed at improving the lifestyle of those living there. Those living in the now demolised squatter areas were compensated and given alternatives on housing. Therefore, Planners are always at the forefront of social and lifestyle growth,” explains Ihsan. Ihsan’s passion for planning and creative design was obvious even during his school years but became even more pronounced after he spoke to an Australian Planner residing in Terengganu who has dedicated his 20 years in the industry whose inspiration in planning is to contribute back to the society in a bigger way.
TRIALS AND TRIBULATIONS Ihsan’s first trial started in the mid90s after he came back to Malaysia.
Times were tough during that period of recession and many were jobless and found it difficult to secure a job. However, he obtained his chance to be a Lecturer at UUM. Out of the 50 candidates, he was among five shortlisted. He says that the approach to studying in the US tend to be opinionated and open whilst in Malaysia, students tend to abide via standard rules. Although his qualifications were more grounded in the arts and humanity, he discovered that his Master’s qualifications were not recognised by the professional bodies or authorities here. This was a challenge which he endured throughout the years. However, he persevered and overcame the many challenges that came his way. Ihsan regards Tun Dato’ Seri Dr. Mahathir Mohamad as his inpiration and mentor as he has played a significant and integral part in many people’s lives. In addition, he has also contributed towards elevating the well-being of the community in terms of adding value to their lifestyles by putting in place the necessary infrastructure and proper town planning details in place for the benefit of the rakyat. November 2017 I 35
Personality of The Month
“
To me, the property market for the coming years seem pretty stable. There are some housing problems but these apply only for certain segments of the society” – Hj Ihsan Zainal Mokhtar
PAVING THE WAY FORWARD
MISSION POSSIBLE After assuming his position as the President last year, Ihsan has also taken it upon himself to take up the responsibilities of achieving the goals for the organisation. These include to create more awareness among the community and giving an attentive ear to various sectors and segments of people concerning their views and voices. Currently, MIP has around 2,500 members. It is his wish that members would gravitate and exhibit the same 36 I November 2017
passion, role, responsibility towards society. Ihsan also wants more people to know on the guidelines within the framework of the law concerning various issues including fire and water guidelines, technicalities, processes as well as challenges involving city planning and other upgrades. Ihsan says that MIP would continue to advise both the private and Government sectors on the best policies as well as methods which are feasible for the community to implement and promote the importance of planning.
Ihsan asserts that in looking for good deal in properties, the mantra would still revolve around “location, location, location”. He says that the potential buyer must anticipate and consider his property investment move seriously. Investors he says should best know when is the best time to be speculative by planning ahead of time. The same principle applies to town planners as Ihsan says that good planning should also involve avoiding the cutting down of trees and forests. He says that where there are more skyscrapers, proper landscaping should be planned besides including recycling measures and beautifying the city to enhance its liveability in future. In general, he adds that property developers are following this path of greening the city which would be a benefit to city dwellers and the environment. These planning systems are achieving sustainability goals required for a lowcarbon future for cities and buildings. “To me, the property market for the coming years seem pretty stable. There are some housing problems but these apply only for certain segments of the society,” adds Ihsan. He encourages the younger generation that once they are ready, they can purchase their first property instead of holding on. “I feel it is better to rent and save on housing costs, use bicycles instead of cars, and live a healthy and secure lifestyle,” says Ihsan. He ends by quoting Socrates on city planning, “By far the greatest and most admirable form of wisdom is that needed to plan and beautify cities and human communities.”
Home +
RIX MARKS ITS DEBUT AT HOMEDEC It was a double celebration for the nation’s leading home design and interior exhibition HOMEDEC even as it celebrated its 15th anniversary with the debut of RiX By: Yvonne Yoong & Felicia Soon
T
he Home Design and Interior Exhibition (HOMEDEC) marked a majestic milestone as it celebrated its groundbreaking 15th anniversary. It was also a historic HOMEDEC as the homegrown showcase has grown in stature to not only encompass the local story but also spread its wings regionally. This was witnessed in the participation of guests comprising nothing less than high profile regional and local interior designers including past and present Malaysian Institute of Interior Designers (MIID) as well as MIID committee members. Making the celebration a double success was the inaugural REKA Interior Exhibition (RiX) making its debut, being held concurrently at the award-winning HOMEDEC. RiX is an event held under the banner of the inaugural REKA Design Week 2017 following the theme “Design Infinity – No Boundaries” organised by MIID. C.I.S Network Sdn Bhd President Dato’ Vincent Lim who is the organiser of HOMEDEC says the time was right to collaborate with the interior design community in launching RiX. RiX is the country’s first curated design showcase comprising an exhibition of interior design works, products and objects. The interior design exhibition is uniquely tailored by the fraternity of Interior Designers for Interior Designers. Ooi Boon Seong, Vice President of Malaysian Institute of Interior Designers (MIID) and Lai Siew Hong, council member of MIID were the appointed joint Curators of RiX tasked with harmonising elements of the exhibition for visitors to fully experience and be inspired by the concepts on display. RiX’s overarching aim is to further stimulate and promote the constantly evolving interior design industry which is a major contributor to the Malaysian economy. RiX showcased big brands and renowned names of local and global exhibitors representing
38 I November 2017
leading design brands locally and regionally. “Since its inception in 2003, HOMEDEC has been inspiring homeowners with exciting themes and novel solutions to realise their dream homes while serving as a platform for industry professionals to share ideas towards remodeling their properties. Over the years, we have strived to always surprise and entice the Malaysian public with new and exciting elements,” enthuses Lim. The first curated RiX Showcase was aimed at creating new visiting experiences for homeowners with exciting profiles or highlights all these while. RiX represented a platform for visitors and exhibitors to mingle, share market information while enabling all parties to network freely. It was also aimed at homeowners to remember a curatedstyled exhibition unlike any other like RiX at HOMEDEC. Inspiring designs and ideas with a difference for both homeowners and Interior Design profession and industry specifier and exhibitors a different experience when visiting or exhibiting were prevalent. RiX, held concurrently with HOMEDEC (Part 1) from 19 22 October 2017 following a theme “Design & Renovate” was aimed at inspiring homeowners with exciting products and novel services to create the perfect home. This simultaneously served as a platform for industry professionals to share ideas towards renovating purposes. HOMEDEC (Part 2) that was held from 26 - 29 October showcased products and services related to furnishing, refinery, decorating ideas and interior styles under the theme of “Furnish & Decorate”. Part 2 also witnessed Art@HOMEDEC which is a new platform for young and emerging artists to reach a wider audience among the general public being held.
Here’s what participants, speakers, retailer and invited guests had to say about RiX:-
“
It’s my first time in Malaysia and I found RiX to be a global standard exhibition and conference programme. And the organisers should be congratulated for the quick turnaround time from concept to conference. - Claire Bezle, President Elect of the Design Institute of Australia (DIA)
“
We tend to take for granted how the design of a space is done whether at home or at work. Through RiX and the REKA Design Week, we hope to promote innovative interior design products and industry services besides recognising excellence in delivery by designers” - Ar. Chris Yap, MIID President
“
RiX is a yearly best interior design event for exhibitors to showcase their latest product materials and technologies which are related to the interior design industry. It is also a place for designers to share knowledge, information, network and have fun together” - Ooi Boon Seong, MIID Vice President and RiX Joint Curator
“
At RiX, we embrace opportunities to innovate by bringing diverse people together in creative environments to explore new ideas” - Lai Siew Hong, MIID Council Member and RiX Joint Curator
“
RiX is a good place to gather people to share, meet others and get new materials. It’s not just an exhibition but also a good platform for designers and suppliers like us. There was a lot of interaction with the designers and architects as well as students and consumers. They’ve completely designed the hall – setting the mood and taste to have a more lifestyle vibe so visitors to RiX obtained new ideas that goes beyond just buying or selling. - Lex Lee, Manager (M3) Project Division of Acacia Fabrics Sdn Bhd
“
Lai and Ooi are really into design. They helped out with the concept design of the booth. We are displaying our kitchen based on concept. If you stand in the middle of the booth, it’s black and white and structure-wise, there are round elements and a graphic depiction of Tunku Abdul Rahman at the stadium after 1957. Buildings were more square (in design) from the 1960s to 1970s which still ties in with the point of the Merdeka epirit of Independence” - Kellee Tan, Design Director of Bofi
“
Rix has done a good job resulting in many exhibitors or suppliers related to the interior design field coming in to participate, as it showcased a different environment. We introduced high-technology for interior design. Consumers have seen this product in the movies which utilises switchable smart film installed to existing glass resulting in it become optic and transparent in effect. It works on a smart film concept and the product is represented by the REV revolution of interactive film projector behind it enabling it to become a touch screen” - Jeffrey Chong, Director of REV Interactive Sdn Bhd November 2017 I 39
Investor Next Door
MAXIMISING
THE POWER OF RENTAL YIELDS
Understanding rental yields and how to leverage on it for profit By: Felicia Soon
P
roperty Insight speaks to Vincent Nee, Founder of Naga Reka Impian Sdn Bhd who runs a hostel and property management business in Klang Valley. This competent Investor has accumulated an impressive 20 properties to date. He has also mastered the art of investing in properties while coaching others on real estate investment to empower and inspire them to achieve their dreams of financial freedom. “When I was young, I read an article that shared an interesting anecdote. Long time ago, the King owned all the lands and houses, while the peasants worked hard to pay for the rent and taxes. “This childhood story actually propelled me to do some research on properties whereby I discovered that there has been an upward increase in the capital appreciation of real estate throughout the years,” says Nee. With this discovery, he decided to venture into the property industry and own as many properties as he can in order to obtain passive income upon retirement. His aim is to create a onestop solution for property investments for himself and also other Investors whereby one can buy a property, renovate the unit and rent it out instantly.
KEEPING AN EYE ON OPPORTUNITIES
“
The main component of a good property investment is the rental returns. For example, if you plan to buy a property for your own stay or intend to flip the property within a short time frame, then the rental yield should ideally be more than 8%” - Vincent Nee
40 I November 2017
Nee shares that he will normally take a few hours to a few days to conduct research into any property that he is considering investing in. “If the numbers are right for me, I would take immediate action. Opportunities are only available for those who plan ahead, work hard and grab the chance”, he says. “My first investment only took me a couple of hours in which I decided to purchase the unit upon the first viewing. As I have been working around that area, I am familiar with the place hence, it was easy for me to make a decision on buying the property,” relates Nee. According to the research he conducted online, he says that his investment tips on properties revolve around concentrating on discovering the relevant details below:• •
Past transacted price Current market price
• • • • •
•
Bank valuation Price offered by seller Estimated rental returns Cash flow Basic details of the property and the development including number of units, lifts, car park bays and surrounding area amenities Launching price and current year price difference
LEVERAGE ON RENTAL RETURNS Nee shares that the main component of a good property investment is the rental returns. For example, if you plan to buy a property for your own stay or intend to flip the property within a short time frame, then the rental yield should ideally be more than 8%. AN EXAMPLE GIVEN BELOW PROPERTY 1 Location
Avena, Setia Alam
Property type
22 x 75 dsl
Purchase value
RM249, 000
Market value
RM750, 000
Price psf
RM378
Size
660 sq ft
Rental per month current
RM1, 700
This property is below market value. The rental yield based on the purchase value is 8.19% hence, this property is good for one’s own stay. However, looking at the market value with this type of rental returns, this may not be a good purchase. “Throughout my years of investing, I have become good at getting rentals for properties. My first experience in property investment was good as it was a great investment and I managed to generate a yield of 11.5%. “However, I regretted buying the property before attending any of the property seminar courses. Instead, I just conducted my research and entered into the deal in a traditional way,” Nee says explaining that most buyers would just go to the showroom to view the property and purchase it. Elaorating further he says that after the deal is sealed, and only when he
attended multiple courses, he found out that there are so many creative ideas that he missed out on his first property journey. “Eventually I applied all the knowledge that I have learnt unto my subsequent property investments onwards,” he says, “I am happy to share that it is crucial to learn first and obtain information before investing in properties. “After attending all these property investment courses, I managed to obtain a wealth of knowledge which other people would have spent more than five years to accumulate which I instead gained in three days. It really saved me a lot of my precious time,” he elaborates.
GOOD SUPPORT SYSTEM Nee shares that it is very important to have a good support system before starting one’s property investment journey. He says that with a good support system, even if one’s property investment or tenant issue goes haywire, one will still have the backup support system. Otherwise, when things do not happen the way one envisions it such as the property having leakages, wiring problem or tenants ending up not paying rental, then the owner or Investor may not have the courage to invest in another property.
LOCATION, LOCATION, LOCATION “Generally, my main focus is around the Klang Valley as it is situated near my home. Kuala Lumpur is still acceptable for me but my current plan is not any area that is out of Klang Valley. I would prefer that I could see the property anytime or I can travel there anytime rather than the property being located outstation like Penang or Johor Bahru in which I cannot service my clients in case of emergency.”
ADVICE FOR NEW PROPERTY INVESTORS “Basically, I treat my property investments like a game. I build my property portfolio on a consistent and step-by-step basis. I will not enter into a deal blindly to buy and hope for a rainfall. Throughout the years, I have been in the rental market and mastered the art of rental whereby I also attended many property courses to
sharpen my skills and knowledge in how to creatively buy and finance properties. “Upon mastering all the required skills, only then will I go all out and buy aggressively as my strategies and rules for property investments are to make money when I buy and have good cash flow in terms of rental returns,” Nee advises. In terms of property outlook, he says that this year is still the best time to buy as right now, there are a lot of good deals in the market. “It is best that you learn, practice and sharpen your skills and knowledge before you enter into property investment. When you master the skills of buying creatively, then it will be so much easier to find good deals and excel in the property game.”
PROPERTY INVESTMENT PROPERTY 1 Location
Bandar Sunway
Property type
22 x 75 DSL
Net purchase value
RM 830,000
Market value
RM 980,000
Current retal returns
RM 7,000
Rental per month
10.12%
Rental yield
10.12%
PROPERTY 2 Location
Subang Jaya
Property type
22 x 75 DSL
Net purchase value
RM 848,000
Market value
RM 950,000
Current retal returns
RM 6,500
Rental yield
9.2%
PROPERTY 3 Location
Shah Alam, Batu Tiga
Property type
Soho
Size
560 Sqft
Net purchase value
RM 180,000
Market value
RM 6,500
Current Rental Returns
RM 1,200
Rental Yield
8% November 2017 I 41
Industry Insight
MIND OVER MATTER IN PROPERTY VALUATIONS
HASB Consultants (Selangor) Sdn Bhd Director Victor Huang Hua gives his viewpoint from the Valuers, Negotiators and Property Manager’s point-of-view as well as from his professional standpoint By: Mages PV Lingam
H
asmi & Associates was established in 1988 in Sarawak, with the company practising property consultancy and valuation. The company was restructured in 1991 and renamed HASB Consultants Group (HASB) in 1995. HASB Consultants (Selangor) Sdn Bhd’s Director, Sr Victor Huang who hails from Land of the Hornbills, Sarawak says he started his career in 2000 after completing a Degree in Estate Management from the University of Greenwich, the UK. Having served for five years with HASB, Huang now oversees the valuation, estate agency business and property management for the firm’s clients as well as the corporate sector. The actual reason behind his chosen career Huang says jokingly was the fact that he did not get accepted into law school. Hence, Huang is always looking out to offer better and personalised services while concentrating on addressing clients’ needs. He was with Henry Butcher Malaysia Sdn Bhd in Subang Jaya initially and thereafter joined DTZ Nawawi Tie Leung Property Consultants Sdn Bhd in 2010. Before landing himself with the HASB Group in 2013, he was with Complete Real Estate & Management Sdn Bhd.
“
Drawing on experience and business instincts provide Valuers with the necessary intuition to ensure advice given are sound and professional” - Victor Huang Hua
42 I November 2017
ABOUT HASB HASB Selangor started out with a few employees and a registered Estate Agent cum Valuer in the early years. Currently, he has a staff strength of 20 people to carry out the demands of dealing with the valuation, real estate agency business and property management surveying practises. Negotiators have the edge as they can
fall back on the valuation department to assist them in closing deals by providing the market value of the said properties. In terms of valuation, they are guided by the Malaysian Valuation Standards (MVS) from The Board of Valuers, Appraisers and Estate Agents Malaysia (The Board) under the purview of the Ministry of Finance (MOF) Malaysia. Valuers should adhere to the MVS, circulars and practice notes from the Board. Valuation is applicable to various purposes related to loan financing, land acquisitions, inheritance matters, insurance, financial reporting and so on. The comparison method is the most common methodology in valuations while the MVS allows the use of the Sale and Purchase Agreements (SPA), option, with offers and bids to be used as evidence of values besides data provided by the Valuation & Property Services Department (JPPH) which is also under the purview of MOF. He says a sound knowledge of current market situations coupled with patience will result in responsible and sound advice to clients. “Drawing on experience and business instincts provide Valuers with the necessary intuition to ensure advice given are sound and professional,” says Huang. Valuers are generally advised to have a small estate agency team to gauge the market’s movement besides relying on available data from the National Property Information Centre (NAPIC) and inhouse data. The Board has also provided the Malaysian Estate Agency Standards (MEAS) to guide Estate Agents on the estate agency practise. “Parliament has also recently approved for Property Managers to be parked under one act of governance, which will see the Valuers, Appraisers & Estate Agents Act 1981 (Act 242) being renamed to the Valuers, Appraisers, Estate Agents and Property Managers Act 1981,” adds Huang. Prior to this, the Board had introduced the Malaysia Property Management Standards (MPMS) in 2010 to guide Property Managers in their day-to-day duties. Huang says Property Managers conduct periodical inspections of buildings and ensure the properties are in satisfactory condition besides
supervising Contractors, obtaining and vetting quotations as well as securing the services of relevant professionals for repair methods or the construction of new structures. Structural defects in buildings can occur over time due to soil settlement, deterioration, wear and tear, overloading and poor maintenance. Hence, periodical inspection is the way forward to ensure a building is safe for occupation. Basically, valuation, estate agency and property management complement each other in many ways, i.e. good property management practice will enhance the value of a property as both Valuers and Estate Agents rely on transacted data and sale offers to advice clients, etc.
RESOLVING CHALLENGES “Valuation is a combination of art and science, where science is the analysis of relevant facts while art is skewered towards empirical studies. “Science can be taught but art is learned over time. For an estate agency, one has to have added innovative, marketing and negotiating skills for closing deals. Property managers need to know how to tackle related challenges such as Landlords, Joint Management Bodies (JMBs), Management Corporations (MCs), maintenance issues and financial issues as well as having to know various local by-laws, state enactments and Acts of Parliament such as the Strata Management Act 2013, Uniformed Building By-laws, Street, Drainage and Building Act 1974, etc. He recalls the first three years when the country was going through changes in property taxation whereby the new Real Property Gains Tax (RPGT) saw new rates in 2014 as well as the introduction of the Goods and Services Tax (GST) in 2015 for commercial properties besides a host of other goods and services, hence, the challenges were felt at the peak. Huang plans his work whereby he solves issues in a timely manner. His company conducts trainings and meetings to highlight related issues for improvement. Huang, who is also responsible for establishing the Kajang office, attends to inter-branch meetings often, to discuss the changes in Acts, practices or regulations and so on. “I plan my time and ensure proper
delegations are made as I also have my duties as a Committee Member of the Property Management, Valuation & Estate Agency Surveying (PMVS) Division of the Royal Institution of Surveyors Malaysia (RISM),” adds Huang.
SURGING AHEAD Huang has no qualms for the branch to surge forward with plans drawn up for the next five years already in place. He says that all staff in the professional advisory line must be well-equipped and well-versed with the rules, regulations and related Acts. For an estate agency, one needs around four to five years to be a licence holder and be accepted as a professional in the field. This estimate is basically based on the fastest way to be a registered Estate Agent which is via undergoing a Diploma course and the Test of Professional Competence (TPC) conducted by the Board. “Also in the plans is the need to have small cluster teams for the estate agency, with each team headed by a team lead who is possibly a Senior Negotiator or a probationary Estate Agent. As one registered Estate Agent can have 20 quality Negotiators and can apply to have a maximum of 30, our plan is to achieve this staff strength,” asserts Huang. The company is currently managing several condominiums and warehouses under its property management practice. Huang says that a young purchaser needs to have sound information on any property buy. If the purchaser is a new graduate, he should be able to own a property for stay or investment after working for a few years. They need to plan their budget before they are able to obtain loan approval. Huang adds that a new graduate might need to have credit cards or car loans, so that there is a track record of payments in order for them to have better chance of getting property loan approvals. Government’s initiatives to build Mass Rapid Transit (MRT) and Light Rail Transit (LRT) systems in the city centres he says will accessibility which will in turn improve property prices. In conclusion, Huang feels that the property market would be better in the year 2018 based on his observations, provided there are no changes to current Government policies and regulations. November 2017 I 43
Rookie Investor
PRUDENT PROPERTY INVESTMENT FOR POSITIVE GAINS Syed Zulkhieree Syed Hussin shares his take on property investment which has had an impactful monetary influence over his lifestyle By: Mages PV Lingam
A
fter completing his Mechanical Engineering studies at University Sains Malaysia in Penang, Syed Zulkhieree Syed Hussin did not just stop there. In 2010, he went on to pursue his Masters in International Marketing at the University of East London in the UK. And today, Syed is working as a Manager in Petronas Lubricants International located in Ayer Keroh, Malacca. With 21 years of working experience gathered over the years, Syed has also developed an interest in property investment. He reminisces on his journey thus far - working and adapting to differemt situations in this ever challenging and changing times in the economy and political front in Malaysia.
THE PATH TO INVESTMENT “Properties can yield a stable appreciation from time to time and with a proper structured study, I can manage them without much risk. Then, I only need to work hard during the initial stage and it will work out well for me till the end without much effort,” says Syed. He has always had this concept in mind that property investment would be beneficial for his family in the future in terms of improving his financial portfolio by leveraging on the long-term factor. Syed who owns several houses around the Klang Valley says it would take him an 44 I November 2017
average about three months to conduct research before acquiring a property. He would study a few potential areas by using formulas or tools which can easily be found on Google. He adds that the important considerations would be that of factors which could support the properties to fetch higher rental yields and potential capital appreciation. Syed was happy to share his experience in purchasing a few sub-sale and under-construction properties using different strategies.
THE STRATEGIES UNDERTAKEN “For under-construction property, we may get an offset from the Employees Provident Fund (EPF) from Account Two or get rebates from the developer. In fact, developers have absorbed the legal fees since the first acquisition of my property,” adds Syed. Most of the time, he says he only needed to pay RM1,000 as booking fee and the remaining was 100% in bank loan. Though he says that this has been in practice since 15 years ago, this has now taken the form of “discounted pricing”. Sub-sale properties he adds, require larger capital investment as in the first 10% of the booking as well as Sales and Purchase Act (SPA) Agreement and another 5% for the Legal fees. Syed
prefers putting down at least a minimum 20% below the bank value, as in before collecting the rebate after six months in the bank, he would have some shortterm credit facility. He says he determines his purchases by checking on the locations of the properties first which preferably should be within nearby distance to the shopping malls, public transportation hubs and even the neighbourhood’s 24-hour supermart. The property should also not be high-density in nature to minimise the competition for rent or sale. “Normally, I will browse through a few hundred properties before zooming in on the best five potential properties,” opines Syed who also uses Property Negotiators and references websites for information. He also looks at the rental yields and does rental comparison studies as it is wise to be on top of the monthly bank instalments and property management fees. He emphasises on the need to do a physical inspection on the property. “I need to ensure that I wear an
“
I need to ensure that I wear an ‘Investor’s cap’ and not a ‘normal potential owner cap’. This means I need to look at the property from the viewpoint of an Investor” – Syed Zulkhieree Syed Hussin
‘Investor’s cap’ and not a ‘normal potential owner cap’. This mean I need to look at the property from the viewpoint of an Investor,” says Syed. He says he spends his nighttime conducting research and daytime during the weekends to visit the properties he has identified together with his siblings or family members. This has become a family hobby which has led to the sharing of knowledge and overcoming of challenges together. Syed believes that it is very important to seek for advice before purchasing a property in order to avoid mistakes. He advises one to either choose a guru or mentor who has a solid track record and is able to provide pertinent information such as in the case of gurus like Faizul Ridzuan from who he can learn from. He also indulges in reading books to gain extra knowledge.
FUTURE PROSPECTS Syed recalls his first experience of purchasing a property in 1999 followed
by another three years later after reading Robert Kiyosaki’s book. Currently, Syed owns ten properties. The knowledge on how to leverage on the type of loan with daily interest with extra payment made he says may lead to a significantly shorter loan tenure. His properties are located closer to educational hubs - especially those in Malacca and Selangor. His focus is mainly on Gen-Y and the Millennials especially bachelors as they prefer the Klang Valley as choice hotspots. “I built my property portfolio by ensuring good CCRIS and maintaining good DSR at all time. Once I purchase the property, I have to ensure that the rental yield is good and always yields positive cash flow. Once it tenanted, I then move to the next property,” asserts Syed. He says that there is an oversupply of properties priced below RM500,000 in the market. However, most can’t afford the hefty price per sq ft which he says is unrealistic for this class of property. His strategy is to purchase properties within the price bracket of RM200, 000
to RM400,000 which is the real mass market that most Malaysian citizens can afford to buy now and in the near future. In conclusion, Syed believes this year and the next would be the time to purchase properties. “If we think that now isn’t the best time to buy properties due to them being expensive and unaffordable, I think that in the next five years, we will definitely regret it. This is a fact. We should buy property and wait, and not wait for the best time to buy,” affirms Syed.
PROPERTY INVESTMENT PROPERTY 1 Location
Bandar Sunway
Property type
Apartment
Purchase value
RM310,000
Bank value
RM400,000
Price psf
RM302 (not to mention in the report
Size
872 sq ft with balcony
Income per month
Averaging RM2,700
Rental Yield
9%
Loan Margin
90% (not to mention in the report)
Loan Tenure
23 years November 2017 I 45
International Insights
MADRID:
A STRONG CONTENDER FOR POST-BREXIT RELOCATION A
s companies act on their Brexit plans, the main question each and every one of them has to solve is “Where to?” There are notable contenders in dispute aiming for a succulent piece of a Billion Euro pie such as Frankfurt, Amsterdam, Dublin and Paris. These countries were singled out in a recent article featured here in Property Insight. However, I missed out the mention of Madrid which regularly pops up in many a company’s shortlist. So, which are Madrid’s merits that justify the attention? Since 2008, Madrid contributes almost 60% of the total direct foreign investment in Spain. In 2016 alone, it received 40% of the total investment in hotels. Knight Frank, in its Global Cities 2017 report states that the Spanish capital drew more overseas investment in real estate than Singapore - USD5.6 billion (RM23.74 billion) versus USD4.4 billion (RM18.66 billion).
46 I November 2017
About The Contributor
Antonio Vinal is a Partner at the AVCO law firm with offices in Spain, Portugal, Italy and Malaysia (representative office). He has Law and Business Administration Degrees by Universidad Pontificia de Comillas(ICADE - Madrid) and is a Member of the Bars of Spain (Madrid) and Portugal Arbitrator of the Spanish-Portuguese Chamber of Commerce
Meanwhile, CBRE ranks Madrid as the third preferred city for real estate investment in Europe. In PwC’s Emerging Trends in Real Estate Europe 2017, Madrid’s ninth ranking “is justified by the strong belief that the city will continue to attract global capital while domestic lenders and buyers have increasing levels of capital to deploy”. The “Madrid, New North” (“Madrid, Nuevo Norte”) project is possibly the most ambitious one present in any European capital. The total investment will reach €6 billion (RM29.52 billion) and create 200,000 jobs. It covers 2.8 million sqm, of which 1.49 million sqm will be for commercial use and 1 million sqm for residential. New real estate in Madrid is a steal when compared to other competitors. The average transaction price of a new dwelling in Madrid is €3,353 per sqm versus €4,081 per sqm in Amsterdam, €4,300 per sqm in Frankfurt, €4,519
per sqm in Dublin or €12,374 per sqm in Paris. Taxes for property purchase in Madrid are the cheapest in Spain with the transfer tax at just 6% and stamp duty at 0.75% on the purchase price (whether for residential or commercial property). Benefits are also extended to employees. Madrid is easy on the wallet for new tax residents who can benefit from a flat income tax rate of just 24% for up to six years. Compare that with the rates for high earners in the UK (45%), Germany (45%), Ireland (48%), Netherlands (52%), or Sweden (61.85%)! Madrid also offers full exemption on wealth tax and an allowance of 99% on gifts and inheritance tax. Non-European Union (EU) citizens get an added bonus when buying property costing at least €500,000 as they can apply for the Spanish Golden Visa, ensuring a fast and effective temporary residency permit to live and work in Spain. Candidates can also apply for family reunification
at the same time, including spouses or partners, children and parents. With 3.2 million inhabitants, Madrid strikes the right balance between the perks of a big city and the liveability of a small town. Central to Madrid’s appeal is its connectivity. The airport is one of Europe’s main hubs and reflects Spain’s geographical position being at the crossroads of Europe, Latin America and Africa. Over 25 million passengers passed through Madrid’s airport last year (7.5% growth year-on-year). Spain also boasts the largest high-speed train network in Europe with Madrid being right at the centre of it. Let’s not forget it has one of the best metro and short-distance train networks in Europe, helping commuters move around quickly. Although some people might believe that language is a barrier, they need not worry as English-speaking families won’t have problems adapting to their new surroundings. Public schools offer free bilingual education (Spanish/English), plus there is also an impressive range of British and American private schools. Eighteen Michelin-starred restaurants attest to a vibrant culinary scene. Madrid is a foodie’s dreamland with all sorts of Spanish, Latin American and Asian venues to indulge your taste buds. If you’re a footie lover, you’ll be sure to enjoy the best football leagues in Europe and top performances from Real Madrid and Atlético de Madrid. November 2017 I 47
Investment Talk
PRIME OFFICE RENTAL SET TO GROW BY 2.5% OVER THE NEXT THREE YEARS K
night Frank, the independent global property consultancy, launches the fourth edition of Global Cities: The 2018 Report which looks into the continuous trends in real estate across 40 Global Cities, equipping occupiers and Investors with insights for future real estate decisions. As part of the report, Knight Frank ran three-year forecasts for 15 prime office markets in Asia Pacific.
HIGHLIGHTS OF THE FORECASTS: 13 of the 15 markets are expected to see rental growth over the three years (from the end of 2017), with only two markets expected to see rents soften over the period. Manila is forecasted to see the strongest growth in prime office rents in the Asia Pacific region, with nearly 20% over the next three years. Strong occupier demand from the offshoring and outsourcing market is expected to be the key factor in pushing rental levels upwards. Brisbane which in 2017 has seen some rental growth return to the market following four years of rental contraction is forecast to see the second highest rental growth. Similarly, Singapore, a market that has seen office rentals softening since 2Q15 is also expected to turn the corner as demand starts to exceed supply. Hong Kong is forecasted to continue seeing robust rental growth on the 48 I November 2017
From left: Knight Frank Managing Director Sarkunan Subramaniam, InvestKL Chief Executive Officer Datuk Zainal Amanshah and Knight Frank Asia Pacific Head of Research Nicholas Holt
back of an anticipated continuation of the influx of Chinese mainland tenants. Beijing and Shanghai, despite experiencing healthy demand, are forecasted to see some rental softening as the huge pipelines of supply in both cities enter the market. Kuala Lumpur, ahead of the two Chinese cities, is expected to grow by 2.5% over the next three years, coming off from the 1.7% annual decline (2Q16 – 2Q17).
KNIGHT FRANK MALAYSIA MANAGING DIRECTOR SARKUNAN SUBRAMANIAM “Greater Kuala Lumpur is one of the key market leaders in mixed-use developments. These self-contained developments which promote the ‘live, work, play’ factors, integrate the retail, office and residential components and are well-supported by good transport infrastructure such as the Mass Rapid Transit (MRT), Light Rail Transit (LRT) and Bus Rail Transit (BRT). Successful mixed-use developments include Mid
SKYSCRAPERS INDEX: PRIME OFFICE RENTS FOR UPPER FLOORS IN SKYSCRAPERS (AS OF 2Q17) Ranking
Global City
Rent (US$ / sq ft / per annum)
% growth in six months to Q2 2017*
Rent (US$ / sq m/ per annum)
1
Hong Kong
$304
1.1%
$3,273
2
New York (Manhattan)
$162
1.8%
$1,742
3
Tokyo
$140
0.0%
$1,502
4
San Francisco
$117
3.5%
$1,259
5
London (City)
$110
0.0%
$1,187
6
Sydney
$107
3.4%
$1,149
7
Boston
$77
0.0%
$829
8
Shanghai
$67
-3.9%
$719
9
Singapore
$66
-0.9%
$711
10
Beijing
$66
7.6%
$710
11
Chicago
$62
1.6%
$667
12
Paris (La Défense)
$58
0.0%
$628
13
Toronto
$58
11.9%
$620
15
Melbourne
$56
4.6%
$608
16
Mumbai
$56
1.8%
$607
14
Frankfurt
$54
0.0%
$582
17
Los Angeles
$45
-2.2%
$484
18
Dubai
$44
0.0%
$469
19
Taipei
$41
0.0%
$442
20
Madrid
$39
0.0%
$424
22
Manila
$33
0.0%
$356
21
Seoul
$30
0.0%
$324
23
Kuala Lumpur
$23
-0.8%
$250
* Excludes exchange rate effects; conversion to US$ based on 30 June 2017 rates Source: Knight Frank, Newmark Knight Frank, Sumitomo Mitsui Trust Research Institute
Valley City, Bangsar South and Sunway Resort City. Damansara City which is seeing the rejuvenation of its former town centre into Pavilion Damansara Heights will be the new address to watch out for.”
INVESTKL CHIEF EXECUTIVE OFFICER DATUK ZAINAL AMANSHAH “Greater Kuala Lumpur and Malaysia has much to offer in comparison to other Southeast Asian cities. We’ve seen a steady influx of Multinational Corporations (MNCs) into KL in recent years, operating as a regional hub. This is because the ease of doing business is
strong in Kuala Lumpur where Malaysia is ranked second in ASEAN according to World Bank’s Doing Business Report 2017, and we see a few factors such as the MRT launch being the drivers of growth to spur foreign direct investment in Greater Kuala Lumpur.” “With the increase of supply, we see the quality of offices continuing to be upgraded to cater to the requirements of large corporations and multinational companies. For instance, Greater Kuala Lumpur offers a great mix of liveability and lifestyle options, making it a perfect location for young talent to live, work and play.”
KNIGHT FRANK ASIA PACIFIC HEAD OF RESEARCH NICHOLAS HOLT “Rental growth prospects across the major cities in Asia Pacific look positive over the next three years, reflecting solid regional growth prospects translating into strong demand from a number of sectors. Occupiers in technology, media and telecommunications are especially likely to drive demand in many of the gateway cities while we also expect to see more Chinese tenants being active in the major markets.”
November 2017 I 49
Finance
CAN MONEY REALLY GROW ON TREES? D
o you believe money grows on trees? I for one, certainly think so. Having read this statement, you must be puzzled but do bear with me. Let me illustrate my belief by using palm oil as an example. Palm oil is obtained from the seed or kernel of the palm tree. After extracting oil out of the seed or kernel, it is sold in the market, and the oil maker earns money. Therefore, we can conclude that trees have the means of giving us cash. Hence, the notion or idea that money does grow on trees. Another example we can glean into is that of a vineyard. The owner grows grapes and after they are ripe, he gathers the fruits of his efforts and sends batches of grapes to the brewery to turn clusters of grapes into the end product which is wine. After an elaborate process, wine is made and is ready to be consumed. The winemaker then puts it out in the market for sale and the business makes money. There are numerous other examples that can be quoted that doesn’t revolve around trees but by now, you would have guessed what I meant by agreeing with the statement that money does grow on trees. Using this analogy, trees are nothing more but a metaphor for your business, assets and network. These little saplings are not to be despised as they will eventually turn into a tree and give you fruits for your labour in the form of monetary gains. In other words, they generate income for you just like trees produce fruits.
50 I November 2017
For trees to produce high quality fruits, they need proper care and tending to. One has to be very patient to nurture and bring out the best in the trees - not to mention saving them from unfavourable weather conditions, pests and insects. Similarly, if you take proper care of your business, assets, and human network, they too will bear fruits for you. For this to happen, you have got to protect the trees from shortcomings give them sufficient time and energy to flourish. in this manner, your business will flourish and you will be able to gain maximum benefit out of it. We all know the story of the golden goose that laid golden eggs. However, her master was greedy. He thought that instead of her laying just one golden egg a day, if he’d cut the goose’s belly, he’ll then be able to get all the golden eggs that the goose is going to lay in the future.
However, his foolishness and his greed killed the goose. As a result, he lost everything. We must learn a lesson from this. You have to take care of your golden goose as it lays golden eggs for you - just like you have to take care of your tree so that it gives you money. For greedy business people, just like the goose’s owner, they will never be able to benefit in the extended term. The critical point to take away here is that some people don’t have the patience or they are merely short-sighted. If you think that you have found a golden seed and by planting it, the tree will “grow money” for you soon - you’ll be very miserable because there is no such thing in the world. For instance, those who are actively involved in money games, Ponzi schemes or are always out to find unscrupulous dealings and take the shortcut to make fast money can never build a long-term business. There are many types of Entrepreneurs. Indeed, I have seen many. But the most successful ones are those who work on one business at a time, with lasersharp focus. A good example is our home-grown Tan Sri Teh Hong Piow, the Founder of Public Bank who has a net worth of more than RM20 billion. However, he nurtured only one business over the past many decades - banking. It is the same for many billionaires and multimillionaires we know of - such as Chief Executive Officer (CEO) of Facebook Mark Zuckerberg and the late Steve Jobs who was an American Entrepreneur,
About The Contributor
Businessman, Inventor and Industrial Designer. He was famous for being the CEO and a Co-Founder of Apple Inc. There are also the serial Entrepreneurs like Elon Musk, a South African-born Canadian American Businessman, Investor, Engineer and Inventor. Although these Business Owners work on several projects, they entirely concentrate their efforts and resources on one single business at a time and do not allow themselves to get distracted. So, if you put enough care into your money-growing assets right from the beginning, you will eventually see it growing money, season after season, if not all year long. If you want a reliable business cash cow, build it up to be one right from the start. Get the root of the matter to grow its root deep so that not even the most
KC Lau is a Financial Educator who has published six books and has cocreated more than a dozen financial courses. His blog www.KCLau.com is one of the most visited financial websites.
violent of winds can uproot the tree. Also ensure adequate fertiliser for the business to grow sturdy branches and lush leaves. If you want to derive maximum benefit from our businesses, we have to take the best care of it. Money does grow on trees! Happy Farming!
November 2017 I 51
Legal
A
KNOW YOUR STRATA RIGHTS
s of June 12, 2015, all of the states in West Malaysia as well as the Federal Territory of Labuan, enforced the Strata Management Act 2013, also known as Act 757 which governs all matters concerning the proper maintenance and management
52 I November 2017
of buildings and common property. Act 757 has since repealed the Building and Common Property (Maintenance and Management) Act 2007, which was the former law on strata management. For all developers, owners, proprietors, occupiers, tenants, lessees and managers
of apartment buildings, Act 757 and the Strata Management (Maintenance and Management) Regulations 2015 subsidiary legislation thereto are essentially the “must know� (sources) when it comes to the legal aspects of management and maintenance of
apartments, condominiums, office units and commercial units. In essence, they cover all forms of subdivided buildings. What is considered “common property” under the Act? A general reading of Section 2 of the Act makes it clear that common property is anything which is not comprised in a parcel or accessory parcel and which is used, or capable of being used or enjoyed by occupiers of two or more parcels. Thus walkways, lobbies, roads in the development area, amenities such as swimming pool, gymnasium, tennis courts, lifts and lift lobbies all come within this definition of common property. For commercial properties such as shopping complexes, common property will also include amongst others, common areas such as entrances, foyers, reception areas and any other
area which two or more occupiers or the public can use or enjoy. Act 757 has taken into account situations whereby strata management is firstly undertaken by the developer for a period of only one month from the date of delivery of vacant possession. Secondly, whereby the Joint Management Body (JMB) then takes over the management (pre-issuance of strata titles) and finally, where the Management Corporation, or more popularly referred to as the MC takes over the strata management upon issuance of the Strata Titles. For a more comprehensive understanding of the statutory time periods, please refer to the Act, wherein each of the legal entities will take over responsibility of the strata management from the other. As this article presents only a very superficial look into the Act, it will suffice to say for now, that there has to be a maintenance account and sinking fund account established by the developer which will be passed on to the JMB and finally the MC, at various periods under the Act. Under the Act, the JMB and MC will be required to appoint a management committee which should, pursuant to the regulations, comprise at least a Chairman, Secretary and Treasurer. The developer, JMB or MC, as the case may be, are required under the law to maintain and manage sub-divided land and common property; determine and impose the amount of charges for the maintenance and contribution to sinking fund; effect insurance; prepare and maintain a strata roll; ensure accounts are audited; enforce by-laws and do such other things as are necessary and expedient for the proper maintenance and management of sub-divided buildings and common property. It is mandatory under the Act that each of the entities mentioned must convene at the Annual General Meeting (AGM) within a specified period. Attendance at the AGM is important for all owners or occupiers of the parcels as it not only gives one the right to vote for the members who would represent owners on the Management Committee but also to determine and vote on the fundamental issues concerning the
About The Contributor
Nadzarin Wok Nordin is a Senior Partner of the legal firm Messrs Nadzarin Kuok Puthucheary & Tan. He has expertise in advisory and dispute resolution areas including arbitration, adjudication and court litigation in the fields of commercial, property, corporate and civil matters
strata management of the properties concerned, as in the amount to be determined for the maintenance charges, etc. Legally, with rights, also come obligations. One key obligation is the need to pay monthly maintenance charges. Please be reminded that one is only vested with the right to vote if one is not in arrears in terms of maintenance charges and any other dues owing to the JMB or MC as the case may be. Thus, it becomes fundamentally important that one not only pays the charges due but also exercises one’s right to vote as and when the occasion arises as the end effect will determine not only the enjoyment of the common property but also rights and obligations that will be attached to it, be it financially or otherwise. To truly understand one’s legal rights and obligations, read the salient parts of the Act and the subsidiary legislations thereto. It is not the easiest of Acts to comprehend and seek expert advice including legal advice thereto so it is highly recommended that one ensures full compliance with the Act as there are various penalties and offences attached to such non-compliance. Apart from this, it is important to know how to administer and manage common properties in accordance with the law and to ensure that the various procedures mentioned therein are adhered to. November 2017 I 53
Legal
WHATEVER YOU THINK ABOUT PROPERTY LAWYERS, THINK THE OPPOSITE 54 I November 2017
L
awyers in general are considered a bad lot. There are so many lawyer jokes going around and the best is still the one about a thousand dead lawyers being buried under the sea to begin with, in true British humour. The famous Bard Shakespeare also captured the consensus of the day regarding lawyers in his Henry VI play in which he wrote, “The first thing we do, let’s kill all the lawyers!” The infamous line uttered by the actor taking on the role of a crook on stage is ironic because the play is made out to denote that clean hands have been making lawyers look bad for centuries. And, that sets the tone for this article. Are all lawyers really that bad? And is this even more so for those who deal with property transactions? As a lawyer myself, this article was written to defend my fellow legal brethren. They are as human as anyone
looking for livelihood in the world. We toil through law school, suffer everything as much as the next student, had to go through the job hunting process, tolerate bad bosses, uncompromising customers, high expectations from parents and society and be regulated by our own police – the Bar Council. And, all this while, we are trying to live a normal life trying to get married, get married, have kids and go through the pain of adult life, sickness and death. Just imagine that. Oh, you will argue that lawyers are paid well enough to have better standing and expectations from all of those who have to supposedly suffer when dealing with them. The perception is that lawyers are always scheming and want to charge high legal fees. They are known to intentionally lose cases, don’t have an inkling of what they are doing or will do anything to get a case. On the other hand, when it comes to property lawyers, there are many who just can’t balance the expectations put on them by their customers. These include their failure to understand the whole transaction; liasing with the other side’s lawyer; dealing with property agents; asking banks to issue letters; extracting documents in the bank’s safekeeping deep in storage to be given within a specified timeframe; negotiating further extension of time due to other parties’ lackadaisical attitudes; losing crucial documents and the inability to find the file kept in their own vaults. Okay, enough of problems. Let’s get behind the scene and understand why you need to work with your property lawyer and don’t treat them like your lawyer like your enemy. Due to my books and articles in news portals, I am always referred to by the public when they have problems with their property lawyers. The first thing I will ask them is, “Have you tried to talk to them and ask them where the hold-up is.” The second thing is to enquire if there is a possibility of the lawyer being in the wrong. You can ask the lawyer to do a chronology based on what has been done since getting the instruction from you to process the transaction. There are so many types of property lawyers and different transactions that
About The Contributor
Khairul Anuar Shaharudin is a Property Lawyer of 18 years who founded Khairul, Suhaila & Hazlina. He is also an Entrepreneur and the Author of “Ask the Lawyer”. He can be contacted via Twitter under the handle - @kruel74
they have to handle for their customers. Maybe it is not common knowledge but the Housing Development Act (Control and Licensing) 1966 states that each party in a property transaction involving a property developer must have its own lawyer. This means that a housing developer and a property purchaser must be represented by a lawyer in the Sale & Purchase Agreement (SNP) that they sign. If the purchaser decides to”use” the property developer’s lawyer, a usual term bandied around, they have actually given up their right to be represented by his or her own lawyer. And as the joke goes, that’s when the argument starts. This also is the case when it comes to sub-sale transactions. Each party must be represented by a lawyer. If the lawyer you have appointed never told you about this and didn’t ask you to sign a disclaimer that you have agreed to be unrepresented, they have just broken a rule set by the Bar Council. This is basically the problem so everyone seems to think badly of lawyers. However, do they choose their lawyers carefully? Have they checked the track record of their lawyers? In all my nearly 20 years of practice, people seem to make do when choosing property lawyers carefully when they are given the chance to “not pay their own lawyers”. There’s that saying about peanuts and monkeys that comes to mind now. November 2017 I 55
Property Strategy
BE DIFFERENT. BE WEIRD. STAND OUT. EVEN AS A LANDLORD.
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I’ve been asked many questions about tenancy management. How do you rent out your unit fast? How do you find the right agent? How do you build tenant loyalty? How do you get tenants to pay on time? Therefore, I would like to share a principle or two in this article. Let’s face it – the rental market is tough. Tenants are now “King” in most areas in the Klang Valley, and they know it. Agents are playing each other out. Tenants want the best unit at the cheapest price. Landlords are complaining about vacant units. Sounds familiar? I recently took possession of a new apartment in Jalan Kuching, and I found myself “competing” with 300 other new landlords. This article is how I rented out my unit, and hopefully stood out from the “competition”
56 I November 2017
Sometimes, rules are meant to be broken. At our new Jalan Kuching apartment in Kuala Lumpur, the partially furnished and fully furnished rental is around RM1,600 and RM2,000 per month respectively.
Note to reader: My portfolio comprises mostly of long-term and boring tenancies. Yes, the yields may be lower than shortterm vacation rentals, but the payments are automated and I’m comfortable with my strategy. •
•
About The Contributor
THINK DIFFERENTLY. CHALLENGE THE RULES
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The units at the project are mostly one-bedder apartments ranging from 530 sq ft to 600 sq ft. Many landlords tend to make their units fully furnished and demand fully furnished rentals ranging from of RM1,900 to RM2,000 per month. There is however, just one small problem. They forgot that it is now a soft rental market and tenants are now “King”. Vacancy periods for some of them have now stretched to nearly 2.5 months! What did I do? I fully furnished my unit with a simple design (pleasant but not too atas), at a total renovation cost of about RM6,500. Yes, you are not hallucinating and read the RM6,500 figure correctly. The total renovation cost above included the sofa, dining table, curtains, coffee tables, fridge, bed, wardrobe, washing machine, rug, TV, art and décor. (The kitchen cabinets, hood and hob as well as air-conditioners) were provided by the developer. My wife Lauren and I had challenged ourselves to be innovative in sourcing for affordable but quality items. Our furniture range has a designer feel and looks tasteful. Best of all, the furniture was affordable. My unit is now a fully furnished unit but the question is why should I rent it out at the fully furnished price of RM2,000 per month? That’s what the market expects us to do. To stand out, I instead rented out my fully furnished unit at the partially furnished rental price of RM1,700 per month.
Mark Chua is the bestselling author of the book “WHO SAYS”. He was a former Senior Vice President of a bank. He is living proof that one can be successful in one’s career and property investments. He can be reached at hello.markchua@gmail.com or www.facebook.com/MarkChuaMY
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And, that’s my unique sales proposition – a fully furnished unit at a partially furnished rental. Therefore, the tenant wins – he feels that he got a good bargain. The agent wins – he got his commission. And, I win – I got my unit rented out within two weeks. So,everyone wins. Some people mocked me for renting out a fully furnished unit at a partially furnished price. Fair enough, but don’t forget I spent a modest RM6,500 on my renovation. My other “competitors” or landlords furnished their units at “standard” renovation costs ranging from RM15,000 to RM25,000. They obviously feel more compelled to rent it at a higher price. I don’t.
THE MORAL OF THE STORY? •
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Now, I am not saying that I am the best Interior Designer out there. That’s not the intention of this article as many have better technical expertise than me. I just believe in being simple and practical. I view tenancy management as a business whereby my customers are my tenants. When it comes to landlord issues, you don’t just simply charge high rentals for “fun” and without a strategy. Always find ways to add value to the tenant first. IValue creation is always the first step towards wealth creation. This forms the guiding principle of how you can think differently from the rest of the masses.
Property Nuggets
SIDELINE ON PROPERTY NEWS Trive Property Group Signs MoU with Tenaga Meriah for SPNB’s Affordable Housing Initiative with a GDV of RM1.1 Billion in Kuala Lumpur •
Thrive Property Sdn Bhd recently inked a Memorandum of Understanding (MoU) with Tenaga Meriah Sdn Bhd to formalise its appointment as the Turnkey Contractor (Design, Built and Completion Handover) for a Syarikat Perumahan Negara Berhad (SPNB) affordable housing development in Kuala Lumpur.
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Thrive Property which is undertaking the project with a gross development value (GDV) of RM1.1 billion is a whollyowned subsidiary of Thrive Property Group Bhd.
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The affordable housing development will comprise a total of 1,775 units of residential apartments and a total of 50 retail/commercial units as well as a central parking podium.
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Strategically located in Kuala Lumpur, it is located within nearby distance of neighbouring high-end, reputable and mature communities of Desa Park City, Country Heights Damansara, Mont’ Kiara and Taman Tun Dr. Ismail, just to name a few. The development will be easily accessible via the Sprint Expressway (Sungai Penchala).
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Trive Property Group Berhad Executive Director Kua Khai Shyuan says that the mixed development of SPNB’s affordable homes is timely good news for all, especially since house prices in Malaysia has increased tremendously since 2012, affecting many house buyers.
MCIIA OPENS FIRST BRANCH IN MEDINI CITY •
The Malaysia-China International Investment Association (MCIIA) is expanding to reach over 200 members nationwide.
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The association aims to assist businesses and Investors from China particularly from Beijing, Shanghai, Guangzhou and Shenzhen for investment purposes.
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It intends to establish offices in the 2,230-acre thriving urban integrated township of Medini City in Iskandar Malaysia.
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Managing Director / Chief Executive Officer of Medini Iskandar Malaysia Sdn Bhd (MIM) Dr. James Tee was appointed as the Chief Consultant of MCIIA. In his advisory role, he will assist Investors to make well-considered investment decisions by exploring opportunities in Medini City that would fit the needs of different Investors.
PEH WELCOMES FIRST BATCH OF STUDENTS •
Bandar Universiti Pagoh (BUP) has welcomed its first batch of over 5,000 students.
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The Pagoh Education Hub (PEH) covers an area of approximately 506 acres and will incorporate sustainable features that will raise the quality of life for students and staff alike.
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The vast Campus at PEH is equipped with shared facilities such as a library, convention centre, multipurpose hall, sports complex, data centre and guest house as well as a student village.
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The surrounding township is complemented by Research and Development (R&D) centres, commercial hubs and residential developments.
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In addition, a managed Business Park will be developed in phases within the BUP over a period of some 10 to 15 years. Spanning over 4,082 acres and centrally located between Kuala Lumpur and Singapore, BUP is easily accessible being located off the Pagoh Interchange on the North-South Expressway (NSE). November 2017 I 57
Strategy
PRINCIPLES OF INVESTING PROPERTY MARKET REPORT: OVERVIEW
D1
TOTAL VOLUME AND VALUE OF PROPERTY TRANSACTIONS IN MALAYSIA (2011-2016) 450,000
430,403
427,520 381,130
400,000
384,060
362,105
350,000
320,425
RM145,408
RM149,898
150,000
RM162,974
200,000
RM152,372
250,000
RM142,854
300,000 RM137,828
H
ere are some savvy property investment tips to benefit Investors and newbies to the property investment scene including first-time homebuyers alike. Understanding the property cycle of boom, retraction, bust and recovery is crucial in order to be a savvy Investor during challenging market cycles. This principle is one that savvy Investors understand as exemplified in chart D1.
100,000 50,000 0 2011
2012
2013
2014
Source NAPIC
Property, after all, is one of the most tangible options for investment, with real estate being described as an imperishable asset. Ever increasing in value, property is the most solid form of security offering that human ingenuity has ever devised. It is worth noting in my opinion that savvy Investors plan for three generations while poor people plan for Saturday nights. In the same light, Mass Rapid Transit (MRT) connectivity represents a precursor to ideal property investments. Other factors also come into play in the competitive arena of property investment such as price speculations versus value in terms of keeping in tandem with the world-renowned property clock as seen in diagram D2.
58 I November 2017
2015 Volume
2016 Valeu (RM 000,000)
D2
Property Prices Increasing Top of the market More construction of new dwellings More property selling fast Interest rates reducing Not enough property to meet demand Rental returns increasing
Lowering rental returns
12
Too many properties for sale
TOP OF MARKET
9 UPTURN
DOWNTURN 3
Interest rates increasing Property sales slowing down
BOTTOM OF MARKET
6
Prices dropping bottom of the market
Construction of new dwellings slowing down
Unlike many other countries saddled with an ageing population, Malaysia is indeed blessed with a young population which will need a roof over their heads so to speak, as exemplified in table D3.
About The Contributor
NATIONAL PROPERTY INFORMATION CENTRE EXISTING HOUSING STOCK
Developer
DETACHED
399,817
SEMI-DETACHED
282,402
TERRACE
1,767,519
TOWNHOUSE
24,554
CLUSTER
26,299
FLAT & LOW COST FLAT
817,422
APARTMENT & CONDOMINIUM (INCLUDING SERVICE APARTMENT & SOHO)
495,007
LOW COST HOUSE
- 574,963
TOTAL
4,387,983
D3
Warrick Singh is a Property Agency Practitioner and Director of Asian Land Realty, Asian Land Auctioneers and Starfish Training
Source Napic (2014) Department of Statistics (2012). Key Risk Indicator (KRI) calculations
Albeit the diminishing returns of flat money, financial education or literacy appears to be the bedrock of financial well-being. A popular investment strategy among rich people is that they plan ahead for three generations. My opinion is that while it is not one’s fault for being born poor – it is definitely one’s fault if one dies poor. Thus, the key fundamentals of financial planning or education appears to exist on the periphery of fundamental considerations as per table D4. The Klang Valley offers much promise in lieu of its population and infrastructure projects. The hallmark features of Gen Y also appears to be that of “one-stop convenience” and connectivity. It is recommended that Gen Y and savvy Investors look at second- and third-tier developments located “along the tracks” in order to invest intelligently in properties within the affordability quadrant. Property investments in established locations (unless secured below market value) may not serve the “investment strategy” as there has to be room to allow for capital appreciation in the long haul. Whilst the MRT or Light Rail Transit (LRT) lines and upcoming projects of other phases are beginning to materialise, the savvy Investor should also seriously look at the new townships that are beginning to spring forth in the
FINANCIAL PLANNING / EDUCATION
D4
1. Ad Hoc Transfers of Assets to the Next Generation 2. Special Interest Groups 3. Intestacy 4. Wills 5. Life Insurance and Central Provident Fund 6. Tax and Other Considerations 7. Trust 8. Private Unit Trusts and Other Wonderful Structures
Investment across the board in the various asset classes is indeed a “strategy in motion” with foresight, vision and planning being crucial to the investment equation. Financial discipline for Gen Y, many among them pampered, should take cognisance of the following strategies moving forward as a basis of their far-sighted investment strategies:• •
9. Charity and Charities 10. Philanthropy
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11. Syariah Law
• north, south, east and west parts of the city albeit the older trunk roads leading out to these areas as new “breaks of life” are being injected into the equation. The similar fundamentalism of connectivity is found in terms of the numerous private or tolled highways that make it a breeze from the perspective of connectivity. Many of these new townships are planned from the perspective of plot ratio, density, master plan as well as gated and guarded security features. Again, it is recommended that the savvy Investor invests his funds and spreads his investments into the second- or third-tier investments that will manifest into streams of passive income as the years roll by.
MRT routes (new upcoming lines) Second- or third-tier investment grade locations with appreciation potential over the years to come Co-assets or co-ownerships with appropriate exit strategies Properly addressing the Total Debt Servicing Ratio (TDSR) loan hybrid strategies in line with Bank Negara Malaysia’s responsible lending guidelines for healthy LTV (Loan-To-Value) ratios.
Recently, the first-ever virtual property expo became a reality. In the era of disruptive technologies, financial technology (Fintech) and Bitcoin (cryptocurrency), being savvy online links one to the latest opportunities, etc. Rome wasn’t built in a day. Similarly, savvy Property Investors need to manage their time, seek opportunities via attending seminars and coaching clinics, read voraciously and adopt outside-ofthe-box strategies to retire comfortably. November 2017 I 59
Strategy
DISPELLING COMMON MYTHS WHEN IT COMES TO PROPERTY INVESTMENT
2
Here are seven most important yet overlooked real estate investment strategies to guide you on your property investment journey
1
IT’S ABOUT TIMING, TIMING, TIMING AND NOT ABOUT LOCATION, LOCATION, LOCATION When it comes to property investment, most rave about location, location, location. This however, tends to give the assumption that only investing in prime areas matter. Judging from what happened to Singapore’s prime real estate market, a lesson presents itself in that Central Business Districts (CBDs) have been posting the greatest losses in terms of property prices in recent years, with the same applying to KLCC since the peak of 2013. Hence, the above examples prove that this type of thinking is outdated in the context of today’s world. Having observed the performance and patterns of the real estate market in-depth, it is safe to conclude that timing can also be considered more important than location. In fact, I would dare say that timing is the main factor that determines when and where to buy all the time. I have seen how at different times, different locations like Cheras, Puchong and Petaling Jaya witnessed more gains than the Kuala Lumpur City Centre (KLCC) area. Indirectly, these other areas became the right locations in the sense of chalking up capital appreciation. More often than not, they have the same distinctive characteristics before experiencing a price surge.
60 I November 2017
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EMERGING VERSUS MATURE MARKETS Besides timing, ascertain if the market you are investing in is an emerging or mature market. In emerging markets, you can invest in properties literally any time, wait and sit it out for the region or city to become more and more developed. However, in mature markets, you must time your investments correctly in line with the economic cycles. The best time to invest in a mature market is after an economic downturn and during the market’s recovery. One should sell at or just after the peak when markets are breaking records and the rate of growth in real estate starts to slow down.
QUALITY AND BEAUTY BEFORE PRICING An old Chinese saying states:- “Good things don’t come cheap, cheap things don’t come good”. Yet, people tend to look for cheap things instead of good things to buy. Chances are, when you hear of a bad experience in property investment, it is mostly due to the buyers buying cheap instead of good. However, could there be good products that may also be deemed as cheap? Sure, but the criterion is to look for quality before looking at prices or discount packages, etc. Buying an affordably priced property may not be a good option because of the perception of compromised quality it creates. Imagine agents taking buyers around the region to look at the lowest priced development and then saying to the resale buyers: “This is the cheapest and most affordable development in this area.” On the flip side, the most expensive project in the area will have agents or people exclaiming:- “This is the most expensive or nicest property here!” This will create a perception of luxury and quality which will in turn, enhance the value of the property. On top of quality over pricing, one particular factor that tends to be overlooked is beauty. People can tend to be over-technical in their approach to property investment and look for things like lower per sq ft pricing instead of paying more for something stunning. Valuers make the same mistakes by failing to recognise that properties aren’t sold to robots but to people with emotions. For example, units facing the bay at The Sail development in Singapore soared to nearly S$3,000 psf (RM9,300) at its peak versus S$1,700 psf for units not facing the bay. This is a classic case highlighting the huge value of beauty in commanding premium pricing. Besides fetching higher prices, I personally experienced speedier sales when I wanted to liquidate these properties with aesthetic designs. In the previous years when the market slowed down quite significantly and others were finding it difficult to sell their properties, the aesthetic units I owned were mostly sold out within a week as they all had beautiful views. So don’t allow the price of a property to blind you to the importance of its architecture, design and concept.
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5
FLOW WITH GOVERNMENTS Governments of the world tend to be the most wealthy and powerful entities in their countries. Should the Government want to discourage its people to sell or buy a certain product, it has the ability to curb demand or supply which will bring prices up or down. If the Government wants to encourage growth in a particular market, it can incentivise businesses which provide these goods and services so that consumers will seek them. This builds demand and increase value as well. In 2009, the Singapore Government decided that prices of properties in the Lion City became too high. Hence, it needed to step in to stop the prices of properties from skyrocketing which may create social and economic problems. Obviously, the various measures introduced by the Government weren’t aggressive enough and the market continued to rally on. Having noticed a trend in 2014 whereby the volume of properties started tapering off and declining, with prices starting to head south, I decided to sell off my properties in Singapore. This proved to be the right decision as property prices went down for 15 quarters straight. During that time, many so-called experts and analysts came into the market at various stages predicting that the market would reverse but I stood by my prediction that the market had not reached rock bottom and the property market continued going south. The moral of the story is that I simply just flowed with the Government’s mandate. Thus, it is prudent to look at the actions of every Government, including the major powers and see where their money is headed towards
About The Contributor
Colin Tan is the Founder of ColinTan Training International, one of the leading real estate companies in the region. He is also a Consultant for sales and marketing for some of the large real estate developers here
6
CONSIDER THE WORST-CASE SCENARIO People tend to look at the best case scenario when it comes to investing in almost anything including real estate. Many will speculate as if the property will always be rented out at the maximum rental and prices price will always increase, and calculate their level of affordability based on this.This approach is dangerous and may lead many to over-leveraging. I’m not being an optimist but far from it - I’m just being careful. I have invested in many properties and fortunately, have not lost any money. By considering the worst-case scenario, you are basically asking yourself if you would be able to service the loan and hold on to the property in the event that the rental market declines and instalments can no longer be covered by the rent. In an even worst-case scenario, the property is vacant for months without rent. Meanwhile, while experiencing the difficulty of renting the unit out, interest rates can go up. Also, what would happen in the event one loses his or her job? If so, one needs to consider the ability to still afford to hold on to the property. Don’t be caught in a situation whereby one is forced to sell at the wrong time. Therefore, in considering a property purchase and when to buy with confidence, remember that timing is everything - not location.
7
DON’T CONSULT THE WHOLE VILLAGE One of the problems with those who want to become property Investors is that they try to get approval from their entire community, friends, relatives and colleagues about property investment instead of consulting with Analysts and those well-versed in the industry. This is akin to getting opinions from hawkers or teachers about investing in jade. More often than not, they will get lukewarm answers as friends, relatives and colleagues would tend to give them “safe” advice to think carefully before committing to the property purchase. In many cases, people will hesitate to invest when they don’t get a strong affirmative answer. Many won’t advocate buying the properties to avoid being blamed, just in case. The right way to invest is to have a checklist of what makes for good investments and proceed to purchase the properties once these criteria are met.
NEVER LOOK BACK, LOOK FORWARD I’ve come across many people who have missed out on investment opportunities or who make the mistake of buying at the wrong time because they keep looking back and not forward. The countless examples I’ve come across whereby people have missed out on great investments is because they were stuck in the past. This group of people more often than not, will end up buying higher when everyone else has already purchased the property and inevitably pushed property prices up or vice versa. Therefore, always conduct research beforehand to determine the future of the area or city. It baffles me that many people always talk about the past or history of an area or city instead of considering its future in terms of its development and potential for transformation. So the question begats itself - have people forgotten that we sell properties for the future - and not based on the past? November 2017 I 61
Strategy
MANAGE YOUR
DEBTS WISELY
M
anaging debt is an important challenge in life. As most of us cannot afford to purchase everything in cash, we borrow money to buy a house to fulfil our desired goals. If used wisely, debt is a useful tool to help you achieve your financial goals. As such, debt by itself is not a bad thing as it helps you to get the things you want faster and conveniently. However, if you take on excessive debts, you may face difficulties meeting the repayments which could ultimately get you into financial problems. It is important to only have manageable debts by living within your means and never overcommitting yourself financially. Keep in mind that good debt management will help you to reach your financial goals faster while poor debt management will negatively impact your life. All it takes is just some discipline and motivation to manage your debts wisely. Here are seven reasons why you should manage your debts effectively:-
1 2 3 4 5 6 7
IMPROVE CASH FLOW MANAGEMENT
If you are able to keep your debts at manageable levels, you should have more money left over for savings and thus, have a positive cash flow. With a positive cash flow, you have extra funds available each month to help you build an emergency account, pay down debts and capitalise on good investment opportunities. A positive cash flow can be achieved when you have a budget and follow it closely
BETTER WEALTH MANAGEMENT
A big part of building wealth is making wise choices about debt. Through managing your debts wisely, you will be reducing your liabilities and at the same time, enhance your net worth position
AVOID LATE PAYMENT AND PENALTY CHARGES
Be a good paymaster! The better you are managing your debts, the more savings you will have by avoiding various charges. Take the first step to pay off your debts on time
REDUCE BORROWING COST
You can pay off your debt faster by managing your debt wisely and constantly monitoring your progress. The faster you pay off all your debts, the more you will save on interest charges
IMPROVE YOUR CREDIT STANDING
If you can manage your debts well, you are creating a better track record for your future borrowings. This is because all your payment history is tracked by Bank Negara Malaysia (BNM) under its Credit Bureau division.
AVOIDING HARASSMENT AND LEGAL ACTION
To avoid legal action or harassment by your lenders, ensure that you always pay your instalments on time. Paying your instalments late will affect your credit standing negatively.
BETTER RELATIONSHIP WITH FAMILY AND FRIENDS
The better you are at managing your debts, the better your relationship would be with your family members. Very often, family members argue or have misunderstandings over money. With better debt management, your relationship with your friends and co-workers would also improve. This leads to a more harmonious environment at home and better productivity at work
62 I November 2017
CONDUCT FINANCIAL HEALTH CHECKS REGULARLY It is a healthy practice for couples to prepare a monthly budget with a spending plan to track their spending using a cash flow statement. The family’s net worth should also be reviewed at least once a year. You and your spouse must review your household financial commitments regularly. Make this review a fun exercise to do together. Talk about positive ways to improve your household’s financial commitments. Find creative ideas and reasons to grow more money for each other and your family.
WHAT LEADS TO OVER-INDEBTEDNESS? GREED One of the main reasons of overindebtedness is greed. In the words of the late Mahatma Gandhi, “Earth provides enough to satisfy every man’s needs, but not every man’s greed!”. Certain individuals become a little too greedy and are lured by get-rich-quick schemes only to lose their hard-earned money. This is even worse for those who use loans to finance such scams as they only get themselves deeper into debt. LIFESTYLE There are also those who lead a luxurious lifestyle by buying expensive things they cannot afford. These people usually feel that they have to maintain an image to live up to other people’s expectations. People who fall under this category usually charge everything
to their credit cards but only make the minimum monthly payments. They are over-indebted simply because they live beyond their means. CIRCUMSTANCES Some people are forced into over– indebtedness due to unavoidable circumstances. Although you may have taken all the necessary precautions to borrow within your means, your ability to repay your debts can be affected by events beyond your control. These events include losing your job, being disabled, suffering from critical illness or other unforeseen emergencies. The situation becomes more critical if you do not have enough savings. Unfortunately, there are those who do not realise that they are in financial trouble and continue to live in denial, making their situation worse off by the day.
SOME SIGNS OF FINANCIAL DIFFICULTIES CREDIT CARDS • Paying only the minimum amount each month • Increasing the outstanding balance every month • Going over your credit limit • Taking frequent cash advances • Missing payments and paying late • Having your credit card cancelled by the card issuer LOANS • Using the overdraft or automatic loan feature on your current account frequently • Receiving notices from lenders or
About The Contributor
Dr Desmond Chong Kok Fei is a Trainer & Head of the Financial Education Department, Agensi Kaunseling & Pengurusan Kredit (AKPK). He has over 25 years working experience in marketing and management
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creditors for non-payment of debts Being denied credit because of a negative credit report Borrowing money from family or friends to pay off your debts Getting calls from debt collectors regularly
SAVINGS • Using up your savings at an alarming rate • Having little or no savings to handle unexpected expenses or emergencies EXPENSES • Living from pay cheque to pay cheque • Depending on part-time jobs, overtime, commissions or bonuses to pay for your living expenses • Not knowing how much money you owe until the statements arrive • Arguing with your spouse regularly about money
CONCLUSION Always remember to use debt “rightfully” and only for productive purposes as in the example of buying a house either for one’s own stay or investment. Also, avoid taking loans for consumption purposes as in the case of preparing for expensive wedding or a luxury overseas trip. We will discuss the consequences of loan defaulting in next month’s article. November 2017 I 63
Property Strategy
WHAT’S YOUR EXIT STRATEGY? Exit strategy will determine your plan both now and in the future
I
t’s easy to fall into the trap of thinking:“I’ll buy a property, make a million and then retire.’ That’s what so many books, newspapers and television shows have told us over the years. But, those were different days. Today, it’s not that easy to make money from property investment. Buying a property is not like buying a lottery ticket. You won’t wake up one day to find you are a multi-millionaire. Being a Property Investor can make you a lot of money, but it’s not a get-richquick. It also requires lots of work if you want to make serious bucks.
Knowing your exit strategy can guide your investment plan. It may feel like I’m asking you to think about getting divorced on your wedding day - but everybody needs to be prepared for the time when the marriage has run its course. This means you need to enter into the investment process by knowing how, when and what you want to get out of it. For some, there is no intention to sell their properties and the estate will be handed to their heirs. For others, properties may be kept until they reach a certain capital value and then be
About The Contributor
Dato’ KK Chua is the Strategic Adviser and Managing Director of Armani Media. He is also a registered Real Estate Agent and an Investor with more than 10 years experience in the industry. He can be contacted at kkchua@propertyinsight.com.my
disposed of. Your exit route will guide the sort of properties you choose to invest in. Buying a property to rent out for 20 years is very different from buying a property to refurbish and sell for profit within a year. Investing in a property to build a healthy income-stream is not the same as buying a property that will drastically increase in capital value. Each of these outcomes requires different input as in varying levels of money, time, effort and energy. Much of these factors will also be influenced by what you want to achieve in the end. Knowing your exit strategy influences both your entry and also your subsequent investment journey. It will have an impact on how you decide to own a property (for example personally through a Sdn Bhd company); influence how you manage the finances (in repaying the capital debt) or handle the investment on a daily basis (either hands-on or via an agent). Your exit strategy fundamentally underpins your plans both now and in the future. Therefore, you need to know why you are investing, what you hope to achieve and how you are going to exit with your rewards. Think about what you want from your property investment and how it will fit in with your life or potentially change your life. What you achieve at the end is determined by the start - and everybody needs to start somewhere. So start now by focusing on the end goal and your exit route to riches! Now, it’s time for you to sit down with a piece of paper and write down your exit route. November 2017 I 64
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