A L L
P R O P E R T Y
Paul Clitheroe, Australian financial analyst and advisor
F O R T N I G H T L Y
W I T H
Before you start trying to work out which direction the property market is headed, you should be aware that there are markets within markets
FRIDAY, JANUARY 11 , 2013
OFFICes OF THE FUTURE P6
The pot of gold that’s
Malay Reserve Land With land getting scarce, MRL in Kuala Lumpur alone has huge potential for commercial and industrial development not just residential
Kampung Baru located in the capital is proof that Malay businesses on Malay Reserve Land can succeed in drawing a larger customer base of all races
by S. Sivaselvam
THE Malay community is sitting on a pot of gold worth hundreds of billions of ringgit – and doing very l it t le about it. I n t he meantime, that pot is getting smaller. Not only are crooks grabbing chunks of it, even t he fe dera l a nd st ate governments are taking away large portions, some allegedly for the benefit of non-Malay interests. No one really knows how much that pot – Malay Reserve Land (MRL) – is worth, or even how large. Estimates of the total MRL in the peninsula vary from about 50,0 0 0 ac re s to a ny t h i ng b e t we e n 7.4 m illion acres and 10.4 million acres. The gross development value ranges from RM5 billion to RM165 billion and even more, depending on location. At the time of independence in 1957, the records show there were 7.4 million acres of MRL. By 1995, that had whittled to 4.2 million acres, down nearly 44% from the original size or equivalent to a 1.2% per year decline. Land is a state matter except for those in the Federal Territories, and both t he st ate a nd fe dera l governments are required by law to replace any MRL that has been acquired with land of an equivalent size. But this substitution process lags far behind, hence the reduction in MRL size. Just as worrying is the fact
that much of the MRL has been neglected due to family squabbles over use or ownership of the land prompted by the Malay inheritance practices or simply due to ignorance. A significant factor is also the fact that it is difficult to mortgage MRL to gain funding to develop the land; ownership restrictions mean only financial institutions deemed to be majority Malay-owned can seize MRL in cases where the loans are not paid. At the turn of the century, then Prime Minister Datuk Seri (now Tun) Dr Mahathir Mohamad and later the current prime minister, Datuk Seri Najib Razak (then as deputy premier) as well as one-time Finance Minister Datuk Seri Anwar Ibrahim voiced support for calls to allow non-Malays to have joint ventures with the Malay owners in developing MRL. This raised howls of indignation from within the Malay community. Later ef for t s by t he federa l government to improve legislation to facilitate MRL development found little traction as the community viewed the moves with suspicion. O ne of t he concepts behind the formulation and implementation of the New Economic Policy and its successor strategies is the nurturing of a Bumiputera Commercial and Industrial Community. A Bumiputera business community has
grown steadily over the decades and now reaches into all aspects of the country’s economic life. The poser: Why hasn’t the MRL become an integral component of this growth? The MRL is being used a l most exc lu sively for residential development that can be sold only to Malays, hence limiting demand. The government’s stance at one time for justifying the inclusion of non-Malay interests in MRL development was that this would spur industrial and commercial development of such land. While that didn’t come to realisation, the question being asked of the giant Malay companies and even government-linked companies (GLCs) is why they haven’t ventured into developing MRL. Some quarters within the Malay community reject the ready excuse that MRL areas are outside the ambit of economic and business activities and this would therefore be an unviable proposition. “Just look at the road linking Cheras in Kuala Lumpur and Kajang, and t h e K a j a n g- S e m e n y i h st retch,” said a Malay political activist who does not want to be named. “What used to be abandoned land had all been developed, to the extent that one can no longer identify the borders of KL, Kajang and Semenyih. There are acres of MRL with road frontages that can
easily be developed.” A M a l ay g ra s sr o o t s politician, who also wants to be unnamed, pointed to the t rail-blazi ng efforts of propert y developer Andaman Group which is open i ng up t he urba n centres of rural areas in Perak with commercial development and asked: “Why can’t GLCs do such projects in a viable manner?” Prof Salleh Buang, a former Federal Counsel and author of more than 20 books on various aspects of law (including land law, housing and planning law) a nd a Rea l Re s er ve columnist, said: “Those who were against the proposed amendment (to allow for non-Malay involvement in MRL development) shot back with the question: Why depend on the non-Malay entrepreneurs and foreign companies to develop MRL? Why not ask the GLCs to take the lead? “I was in support of the move, but I added a word of caution. There must be safeguards and certain minimum standards built-in so that, when drawing the leases between the MRL owners and the other side, the landow ners are effectively protected.” Dat u k Abdu l R a h i m Rahman, executive chairman of Rahim & Co, one of Malaysia’s largest real estate consultancy firms, has been quoted as saying that the proposal to allow non-Malays to develop MRL
is not the answer to the problem of idle and such undeveloped land. "There are a lot of Malay businessmen and companies that are prepared to develop Malay Reserves but there is no demand," he had claimed. The problem, according to him, was that except for Kampung Baru in KL, large areas of MRL were located in remote places lacking infrastructure. "Allowing non-Malays to lease Malay Reserve Land for up to 30 years will have not much effect on the market. It will help the owner but not the market," he said. Kampung Baru, which lies smack in the midst of KL’s Golden Triangle, is generally regarded as the crown jewel among the MRL. However a New Straits Times article in October 2002 criticised the MRL legislation as having proven to be anachronistic – “Restrictive in its ambit, it has created a land-owning com mu n it y of idle properties, alienated from the country's development. Kampung Baru, for instance, is an island of underdevelopment: a ghettoised existence of urban Malays.” Kampung Baru, which is largely a residential area, also has some small commercial spots which draw customers of all races, belying the assumption that businesses in MRL draw on ly Malay customers. Motor vehicle sales centres i n Ka mpu ng Bar u are
is published by SYED HUSSAIN PUBLICATIONS SDN BHD (25343-K) of Redberry City, Lot 2A, Jln 13/2, 46200 Petaling Jaya, Selangor. Tel: 03-7495 3000 Fax: 03-7495 3200 and Printed by KHL Printing Co Sdn Bhd (235060-A) Lot 10&12, Jalan Modal 23/2, Seksyen 23 Kawasan Miel Phase 8, 40000 Shah Alam, Selangor, Malaysia Tel: 03-5541 3695 Fax: 03-5541 3712
popular, as are handicraft, food and other services. But these thrive in the present single- and doublestorey shops and there is only a clutch of multi-storey buildings where tenancy is weak. T h e g o ve r n m e n t i s striving hard to transform Ka mpu ng Ba r u i nto a modern enclave in keeping with the rest of the city but the vast majority of the residents and business folks there oppose it. Disagreements among landowners of the same plot, political differences and an overa l l su spic ion t h at “crony” companies will stand to benefit from the r e de ve lo pme nt to t he detriment of the residents/ landowners are the main factors for the negative response. In April 2005, property consultant Anjaniman Abu Kassim said the MRL with t he h ighest value was Kampung Baru, with a market value then of around R M40 0 psf or R M4. 321 billion, hence with the potential to raise 70% bank financing of RM3 billion to fund development. In the overall scheme of things, however, Kampung Baru is proof that Malay businesses on MRL can succeed in drawing a larger customer base of all races, that MRL has the potential to be developed not just as residential schemes but also as commercial and industrial centres.
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FRIDAY, JANUARY 11, 2013 A L L
NEWS
Ken City Group will appeal Ramifications of High Court judgment involving Ken Holdings Bhd and Ken City Group of Companies far-reaching by Zoe Phoon WHAT now, after the High Court has decided to stop the Ken City Group of Companies from using the mark “KEN” in their projects? Ken City Group chairman Datuk Foo Wan Kien has confirmed that the companies involved will appeal against the judgment of the court. Meanwhile, contacted by Real Reserve, the defendants’ lead counsel Ken St James said, “My instructions are that although my clients feel that the terms of the court order are wide and have farreaching consequences, the defendants are endeavouring to strictly comply with the terms and obey the order of the court.” Here’s the background: The plaintiffs Ken Holdings Bhd and seven subsidiaries (Ken Grouting Sdn Bhd, Ken Property Sdn Bhd, Khidmat Tulin Sdn Bhd, Ken Rimba Sdn Bhd, Ken Link Sdn Bhd, Ken-Chec Sdn Bhd and Ken TTDI) – known as the Ken Group – filed a suit against 11 companies including Sri Seltra Sdn Bhd pertaining to usage of the words “KEN CITY”. The defendants, in addition to Sri Seltra, are City Motors Sdn Bhd, Kenco Sdn Bhd, Kenco Properties Sdn Bhd, Kenco Construction Sdn Bhd, Kenco Development Sdn Bhd, Ken Concrete Sdn Bhd, Ken City Development Sdn Bhd, Ken
City Bidor Sdn Bhd, Ken City Ipoh Sdn Bhd and Ken City Penang Sdn Bhd. The Ken Group discovered on June 17, 2012 that in a development project developed by Sri Seltra called D’Pines in Ampang, the words “KEN CITY” were used in the promotional materials. It said its development projects have the mark “KEN” as a prefix such as Ken Damansara and Ken Bangsar. It also said the font of the words “KEN CITY” used by Sri Seltra was similar to that of the Ken Group and the usage brought confusion to the public. The defendants said they should be allowed to use the name “KEN” or “KEN CITY” as most of their companies have either “KEN” or “KEN CITY” in their names as part of the company name and they have been in business for a long while since the 1980s. Sri Seltra also filed a counter-claim for defamation based on letters which Ken Holdings wrote to certain authorities while all the defendants counter-claimed for unlawful interference with trade. After nine days of trial in 2012, the court recently decided to declare that the plaintiffs are the common law proprietors of the mark “KEN”. It also dismissed the defendants’ counterclaim. As a result, the court issued an injunction – that the defendants are not allowed to use the mark “KEN” or
“KEN CITY” or any other name or mark confusingly or deceptively similar to the mark “KEN” in the property development and construction industry. Another important order is that the first defendant Sri Seltra and its directors, officers, employees and agents must deliver up and surrender to the plaintiffs any promotional materials or other documents containing the mark “KEN” which are in the possession of all the defendants. So what are the consequences? First, the terms of the order are very wide. Although it is clear that Sri Seltra is not allowed to use “KEN” or “KEN CITY” in its D’Pines and Ken City Square projects, what about the other defendants? For example, can the other defendants not use the mark “KEN” or “KEN CITY” or a name that’s similar to “KEN” when, among the defendants, their names are Kenco Sdn Bhd, Kenco Properties, Kenco Construction, Kenco Development, Ken Concrete, Ken City Development, Ken City Bidor, Ken City Ipoh and Ken City Penang? Second, can each of these companies use its name on its letterhead? Third, do they have to change their names? Fourth, what will happen to companies such as Sri Seltra, which is developing D’Pines and Ken City Square, whereby Sri Seltra
and buyers of the projects have signed sale and purchase agreement (SPA) and other legal documents? Similarly Ken City Bidor which has a project in Bidor, Perak? Fifth, as the names “KEN” and “KEN CITY” appear in all legal documents of these companies, what are they to do? Can they continue to sell their projects using the same SPAs? Other questions: Can any other of the defendant companies do business using their names? Do they have to stop doing their businesses altogether? As to delivering up and surrendering the promotional materials, do the defendants have to do that for all such documents containing the mark “KEN”? What does that mean for the Ken City Group? What does management want for the Ken City Group and what is it going to do about that? “What we want for the companies is for them to be able to continue to use their names in their respective businesses,” said Foo. The court set next Friday, Jan 18, to decide on the amount of legal costs that the defendants have to pay the plaintiffs. On that, St James said the legal costs would be quantified by an assessment of the costs by the court. “In other words, there will be another proceeding to decide on the costs,” he added.
Menang expands presence in Seremban 3 by Geraldine Lim IN addition to building the RM300 million Universiti Teknologi Mara (UiTM) campus under a private finance initiative (PFI) in Seremban 3, Negri Sembilan, Menang Corporation (M) Bhd plans to develop the surrounding area to cater to the estimated 6,000 potential population of students and staff. Group managing director/
group CEO Datuk Shun Leong Kwong said it is anticipating spillover effects from the campus when it is completed and changes the area’s business landscape. Meanwhile, it is looking to build apartments, singlestorey houses, shophouses and neighbourhood shopping destinations at the site of about 470 acres. Group executive chairman Datuk Abdul Mokhtar Ahmad said the campus, now 70%
completed, is expected to be ready by Jan 18, 2014. Other developers in the vicinity include Mega3 Housing Sdn Bhd which is developing affordable houses in Taman Seremban 3. Menang is involved in two other PFI projects – a RM260 million UiTM campus in Puncak Alam, Selangor, and a RM101 million UiTM Training Institute in Nilai, Negri Sembilan. Earthwork on the campus
has started while the group has selected a contractor for the training institute and is in the midst of finalising the contract. According to Shun, each PFI project when completed would give the group 20 years of quality cash flow with the first project having the potential to generate RM49 million a year. Menang also owns over 67 acres of land in Tanjung Malim, Perak, and another 149 acres in Klang, Selangor.
P R O P E R T Y
F O R T N I G H T L Y
W I T H
WorldNews ▶▶ Greece, Spain offer PR for foreign buyers
IN order to help mop up the excess housing stock in Spain and Greece, both governments are willing to provide permanent residency status to foreigners buying properties there. There are over a million unsold properties in Spain where prices have fallen more than 30% while Global Property Guide said residential property sales in Greece fell by over 54% in Q1 2012 despite rapidly falling prices. Spain is offering residency to those buying property above €160,000 (RM636,800) while in Greece, the minimum is €300,000 (RM1.19 million). Another plan is to offer Greek residency to foreigners who invest €1 million (RM3.98 million) in a business. The plans emulate agreements already established in Portugal and Ireland which offer residency permits in return for foreign investment in properties valued at €400,000 (RM1.59 million) and €500,000 (RM1.99 million) respectively. The move could boost property prices and is likely to appeal to Russian investors in both Spain and Greece. It may also attract investors from the Middle East. Currently, only members of other European Union nations have an automatic right to residency in Spain and Greece.
▶▶ Swiss property enters ‘risk zone’
THE Swiss National Bank is under pressure to take measures to curb the country’s property boom as the UBS Swiss Real Estate Bubble Index entered the “risk zone” for the first time since 1991. The index rose to 1.02 points in the three months through September from 0.82 in the previous quarter. The central bank’s vice chairman Jean-Pierre Danthine said he was “uneasy” about the Swiss property market. UBS AG said in a statement that although population growth continues to favour price increases, the high price level is increasingly being supported by demand for real estate as an investment and by the low interest rates. UBS economist Matthias Holzhey said the continued strong increase in household mortgage is showing no signs of abatement and the reversal of that can trigger a price correction. He foresees the index continuing to rise in 2013 driven by interest rates that are “too low”. The Swiss government introduced measures in July 2012 to reduce mortgage-lending risks including rules that will give it the discretion to raise capital requirements for all banks by as much as 2.5% of total domestic risk-weighted assets to target specific parts of the credit market. Switzerland has one of Europe’s most prosperous economies and the euro region’s sovereign debt crisis is spurring crossborder investments. Some 50,000 people a year migrate to Switzerland (population of eight million) where unemployment is lower and income higher than most of Europe, luring foreigners to settle there and leading to a drop in vacancies and rise in rent levels in Zurich and Geneva. Together with Lausanne, the three cities remain most at risk from residential real estate bubbles, said UBS.
▶▶ The Met mulls Scotland Yard HQ sale
THE Metropolitan Police (Met) plans to sell their Scotland Yard HQ, one of a third of its 700 buildings that have to be disposed of as part of national budget and staff cuts as Britain struggles to reduce its huge deficit. The Met bought the Central London building for £124.5 million (RM606.3 million) in 2008 and it costs £11 million (RM54 million) a year to run. London police intend to move to a smaller place, still in the area and around the Whitehall government district, and hope to save £6.5 million (RM31.7 million) annually. London mayor Boris Johnson has asked the force to save £500 million (RM2.4 billion) by 2015.
Falling UK house prices amid clashing views by ZOE PHOON
STRUGGLING families’ reluctance to take on more debt will continue to act as a drag on the housing market in the United Kingdom in 2013 and prices will be more volatile with low sales, according to Hometrack Ltd whose services cover the whole housing market and property lifecycle. Prices fell 0.1% month-onmonth in December 2012, marking the sixth month in a row that this has happened and average prices ended the year 0.3% lower than a year ago, it said. Hometrack’s monthly figures for December 2012 show prices were flat in London and East Anglia; down 0.1% in the Midlands, the South as well as Yorkshire and Humberside; declined 0.2% in the North West and Wales; and fell 0.3% in the
North East. One in five postcodes in England and Wales recorded price increases in 2012 but prices retreated across twothirds of the country. This year, it noted London’s strong demand from overseas buyers and consistent outperformance vis-à-vis other areas. Prices are up in seven out of 10 postcodes and 10% higher than the market’s peak in 2007. However, it predicted that price growth in London, which is vital to keeping average prices up in the rest of the country, would slow down with a 2% annual increase. Price growth in Central London looks set to fall back following the impending introduction in March of a 7% stamp duty rate for residential properties worth over £2 million (RM9.76 million). However, Hometrack’s predictions jar with some
Property analysts expect house prices across the UK to decline 1% in 2013 as the London market shows signs of cooling
other recent surveys including one by Rightmove, a website for properties for sale and to rent. Rightmove said increased competition among mortgage lenders and shortage of residential units to choose from will help push up asking prices by 2% across England and Wales. Meanwhile, the Council of Mortgage Lenders said
it expects the housing market to feel positive, boosted by the multibillion-pound government scheme that has already helped to increase mortgage availability. But it also warned that demand for mortgages could be held back by weakness in the economy and much will hinge on the continued resilience of employment in the UK.
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EDITORIAL
Andrew Wong Gunaprasath Bupalan Daniel Hong
ADVERTISING SALES BC Tiang 016.333.1288
Zoe Phoon Geraldine Lim
S. Sivaselvam Pavither Sidhu
THE MALAYSIAN RESERVE | REAL RESERVE
FRIDAY, JANUARY 11, 2013
FOCUS
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Steady growth for Bumi developers The multi-faceted market holds tremendous opportunities for them
Daim nurtured a corps of Bumiputera entrepreneurs
by S. Sivaselvam and Pavither Sidhu PROPERTY was the first sector that Bumiputeras ventured into after the New Economic Policy (NEP) was launched in 1970. It was among the low hanging fruit that the community could easily pluck as it began its venture to gain a greater share of the country’s economic activities. And that remains true today, with large Bumiputeracontrolled companies being prominent in the property component of Bursa Malaysia. They include Encorp Bhd, Glomac Bhd, MK Land Holdings Bhd, Naim Holdings Bhd and SP Setia Bhd. Property has turned out to be one of the best investment successes for the Bumiputera community. And credit for that should go to then Prime Minister Tun Abdul Razak, architect of the NEP. He conceived and actively promoted the policy of a house-owning democracy, under which housing should be made affordable to the masses. Millions of acres of state land were handed over to the Bumiputera private sector, and housing schemes sprang up all over the country. For instance, in Perak, where the tin industry was in its sunset days, ex-mining land became sites for thousands of houses. The early ventures were almost all of the Ali Baba variety, with the land and the property companies in the names of Malays but the schemes being developed by non-Malays. However, the country soon saw the emergence of a breed of genuine Malay property developers who ran the whole gamut of the development. Prominent among them was Tun Daim Zainuddin, who made his mark as a top Bumiputera property developer and successful entrepreneur in other businesses as well before he was tapped to be finance minister. What was unique about his businesses, including in property, was that he brought together a corps of intelligent Bumiputera wannabes and trained them in the intricacies of the business world. Several of them went on to become prominent corporate players not just within the country but abroad as well. This development was replicated in various other property schemes and the country
has now arrived at a stage where Bumiputeras are property developers in their own right. But there are still missing pieces in the big picture of the Bumiputera property sector. For one, the focus continues to be primarily the residential market, with the development of commercial properties being the excep- Kiara View is a best seller in Kuala Lumpur’s Malay Reserve Land tion to the rule. With the Evohome, Sahar tomers and those who had phases comprising two- and The exceptions are the big said, since only minimum heard of the project via word three-storey semi-detached players like MK Land and construction work will be inof mouth. houses spanning 15 acres Glomac. The non-Bursa listed volved, the initial cost could “Some developers find it back in 2005 with a gross deBumiputera companies tend go down by 40% to 50%, thus challenging to sell high-end velopment value (GDV) of to stick to the tried and true reducing the financial burhouses on MRL; however, RM150 million. path. Even then they tend to den of homebuyers. SNSB had the advantage of While the current market vie with their non-BumiThe first 60 units of the having its project in a prime value of houses in prime loputera rivals for land that is Evohome housing project location surrounded by macations in the neighbourassumed to be a draw with will come up on six acres in ture neighbourhoods and hood such as Desa Sri Hartaboth Malay and non-Malay Beranang in Semenyih, Selreadily available amenities mas and Mont’Kiara ranges house buyers. angor, and is targeted to be and infrastructure,” noted from RM2.2 million to RM2.5 That is why there is a paulaunched in Q1 2013. These Farah. million, the Kiara View city of property development single-storey dwellings will “Malays now have stronger units, with built-ups of on Malay Reserve Land come in standard built-ups of purchasing power to buy high3,833sq ft and 4,644sq ft and (MRL). Among the handful 1,000sq ft and built using the end properties than before and were priced from RM1.3 milgoing against the grain are industrialised building systhis is seen in the take-up of the lion to RM2.5 million, now those who think big and tem under which construcunits for Phase 3.” fetch rentals of RM8,000 to think innovatively. tion would be completed in However, Bumiputera inRM12,000 on a partly furBulatan Mekar Sdn Bhd six to nine months. volvement in the property nished basis, said Farah. (BMSB), along with a team of On its design, Sahar spoke market has ways to go yet. When SNSB launched the researchers from Universiti of a modern facade, similar The government still sees a third phase in 2008, with a Kebangsaan Malaysia's Facto that of medium- to highlag in Bumiputera ownership GDV of RM80 million, most ulty of Engineering and Built end houses. Inside, the lower of prime commercial properof buyers were repeat cusEnvironment, is promoting ground will be a basic oneaffordable homes in a unique bedroom layout built on a fashion – design your own strong footing design that alhome in line with what you lows future addition of an can afford. As the income upper floor that would doulevel rises over time, this ble the space to 2,000sq ft. home can be extended. These units are to be priced The developer’s managing below RM250,000. director, Mohammad Sahar As the concept also calls Mat Din, said the MRL profor the units to be eco-friendject is based on social entrely, he said some of the matepreneurship, where a comrials will be of the reused or mercial entit y promotes recycled type in order to save com mu n it y wel lbei ng cost and to curb wastage as through its business activimost house buyers will eventies. The university supports tually renovate or upgrade research activities for the inthe house later. dustry as part of a joint effort At the other end of the towards community engagescale is Seni Nusantara Sdn Cyberia Crescent 1 is MK Land Holdings’ second residential development in ment. Bhd’s (SNSB) foray eight Cyberjaya Young professionals or years ago into developing a newly-weds can buy a studio 38-acre high-end guarded unit at a lower price and then development located on MRL extend it based on preference at the fringes of Mont’Kiara and affordability. Dubbed and Sri Hartamas. It attractthe Evohome, it is based on ed homebuyers and investors the format that has been alike as well as showed notaadopted in countries such as ble price appreciation. Australia and Canada where The most significant feahouses come with flexible ture of the entire developlayouts that facilitate expanment – known as Kiara View sion, are environmentally – is that it is said to be the friendly and affordable. largest Malay Reserve develThe Evohome project aims o p m e nt w it h i n Ku a l a to help overcome the home Lumpur. affordability problem faced According to SNSB’s marby young executives and keting and sales manager newly-weds. “Many homes Farah Lim Abdullah, the are built for large families company was determined to and exceed the needs of a show that despite being renewly married couple, who stricted to a Malay clientele usually would require only base, the project could be a the basic spaces such as one success. bedroom instead of four,” he It launched the first two added.
ties and has launched a RM1 billion unit trust fund to address this issue. “If Bumiputeras walk around the city and if they look up and see skyscrapers and if they feel high value buildings are not owned by them, for sure this will make them feel discontented and uneasy,” Prime Minister Datuk Seri Najib Razak said at the launch. “At the same time, we do not want to deny the rights of the non-Bumiputeras to keep investing and achieve their ambitions in business and the economy.” He assured that the nonBumiputera stake in the economy is at a high level although the question of what percentage of the economy is owned by which race has never been definitively resolved and has sometimes resulted in heightened political tension. The fund is seen as one of the Najib administration’s initiatives to allay fears among some Malays that they will be sidelined in the wake of economic reforms. CEO Kamalul Arifin Othm a n of f u nd m a n ager Pelaburan Hartanah Bhd (PHB) said the Bumiputera investors can expect “nothing less than 6%” in returns. “Grade A office buildings are our benchmark,” he added.
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Residential property market in consolidating mode However, development of the land in Sungai Buloh and Sungai Besi would generate buyer interest launches. In view of the fact that concerns over the property sector have not abated, it remains to be seen whether additional regulatory measures would be imposed in the current year. Also keep in mind that countries in the region have introduced far more stringent measures to cool their property market. Hong Kong recently imposing a 15% tax on property purchases by non-permanent residents and corporate buyers. For 2012, Singapore’s private residential segment grew by a marginal 2.8%, lower than the 5.9% increase in 2011.
RAJAN PARAMESRAN
THE medium-term prospects for the domestic property market will be buoyed by relatively resilient economic growth, the prevailing low interest rate environment, both locally and globally, and accelerating progress in catalytic projects that could spark interest among house buyers. Weighing on the property market, however, are concerns of any further prudential measures by Bank Negara Malaysia (BNM) that could be introduced in the year and nagging concerns that the sharp house price increases in recent years have by and large remained high and are misaligned with fundamentals. Additionally, in order to address high property prices in hotspot areas and to broaden greater participation of buyers in the sector, the focus would be on affordability, a topic that became front and centre of discussion last year. Key factors that would affect property market sentiments are: Sustainable moderate economic growth: Despite the continuing weakness in the global economy, Malaysia’s g ross domest ic product (GDP) in 2012 is expected to register 5% and forecast to grow to 5.3% in 2013. The growth could be considered stellar compared to countries in the region including the more mature economies of Singapore and Hong Kong which are expected to register GDP growth of 1.5% in 2012 and forecast to increase to 2% and 3% respectively. Malaysia’s growth benefitted from the strong involvement of the private sector with private investment up by 2 2 .9% ye a r- o n -ye a r throughout Q3 2012 while private consumption over the same period increased by 8.5% compared to 7.1% previously. Private investments which stood at RM212 billion as of date will continue to be the growth driver, with the bulk being channelled into projects under the Economic Transformation Programme (ETP). Infrastructure projects such as the Mass Rapid Transit (MRT) in the Klang Valley which would provide greater connectivity would generate interest for properties in the outlying areas. Conducive interest rate environment: BNM’s monetary policy is expected to remain unchanged in 2013, with the benchmark overnight policy rate (OPR) remaining at 3%. The OPR is a key component of the base lending rate (BLR) which is used to calculate housing loan repayments. The BLR has remained at 6.6% per a n nu m si nce May 2011 when the OPR was raised
The Klang Valley MRT is expected to boost businesses in places such as this happening Bukit Bintang as well as generate interest for projects in the outlying areas
Affordable housing taking off: Middle-income earners as well as first time buyers, shut out by the prevailing house prices, have been extended a lifeline towards homeownership through the 1Malaysa People Housing programme (PR1MA. For those with joint-income of between RM2,500 and RM7,500 per month, the programme is expected to build 50,000 homes while an addit ional 30,000 u n its would be built jointly with private developers. The price per unit is expected to be contained below RM300,000. Towards this end, PR1MA has identified land parcels in major areas in Kuala Lumpur, Selangor, Johor, Penang, Pahang, Sabah and Sarawak, where the dem a nd for a f fordable housing has been most acute. Still, despite the affordable pricing tag, buyers could find it challenging to meet their financial commitment given their lower income levels and may need to be supported by full housing loans as well as other incentives such as exemption from stamp duties. Among the conditions stipulated by PR1MA are that buyers would have to inhabit the house and are not allowed to sell it for 10 years.
Demand in Klang Valley stable
PR1MA has identified land parcels in KL, Selangor, Johor, Penang, Pahang, Sabah and Sarawak where demand for affordable housing is more acute
by 0.3%. As inflation is expected to remain at 2.5% in 2013, there is unlikely to be an upside bias for the OPR. Additionally, given that the US Federal Reserve Bank had explicitly stated that it will maintain a near zero interest rate policy until late 2014, there is a strong disincentive for other central banks to raise interest rate lest that may prompt hot money inflow into their countries. The benign interest rate environment, coupled with ample liquidity i n t he ba n k i ng sector, would continue to be accommodative to the property sector’s growth in 2013.
Pr udential measures to curb speculation: In light of the sharp appreciation of property prices in recent years, the government has steadily imposed anti-speculative measures. In 2012, t he gover n ment f urt her tightened the real property gains tax (RPGT) levied on properties sold within a specific period: For those sold within two years of purchase, the RPGT was increased to 15% from 10% previously; and 10% from 5% RPGT for properties sold between two and five years. BNM too has changed the base to calculate housing loan eligibility to net
income of loan applicants from gross income previously. The central bank had earlier imposed maximum limit for loan-to-value for third property purchases. Not withstandi ng these, concerns remain that property prices in key areas continue to stay elevated, exceeding historical trends of the house price-to-household income ratio. These are perceived to be driven to some extent by speculative activities that have not been sufficiently addressed by these measures. Nonetheless, following the central bank guidelines,
lending by banking institutions to the household sector declined by 11.8 y-o-y in October 2012, with credit cards and hire-purchase registering 1.5% and 6.7% respectively. BNM statistics also reveal lending for purchase of residential properties declined by 13.2% in October 2012. The slowdown has been more pronounced in the secondary residential market, with transaction growth significantly lagging primary market transactions. Among the reasons mooted have been the incentives continued to be provided by some developers for new
In the Klang Valley, demand for landed properties remained stable in 2012 with the price of two-strorey terrace houses in certain locations in KL and Selangor showing modest increase. In comparison, sale of highend condominiums, especially within the Mont’ Kia r a a n d K L CC a r e a s, continued to be challenging with the incoming supply. This segment will continue to face oversupply which could be somewhat mitigated by the success of the various projects under the ETP as well as the aggressive promotion of the Malaysia My Second Home scheme, part icularly i n mainland China. Additionally, the development of the Rubber Research Institute land in Sungai Buloh and the Sungai Besi land is expected to generate buyer interest. SEE P5
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SALLEH BUANG LAND MAT TERS
Hope yet for wronged landowners in PJ Old Town
Many PJ Old Town landowners remain concerned about the still undetermined status of their land titles
FROM time to time I came across this same issue raised in the media but I did not comment as I did not have sufficient materials (facts, substantiated conjectures and/or assumptions) to do so. Recent media reports, however, have cast a different light. A certain Residents Association (RA) president in Petaling Jaya, Selangor, told reporters in December 2012 he has “sufficient documentary evidence to demonstrate to any reasonable person” that the landowners in PJ have a strong legal basis to have their leasehold properties “reconverted” to their “original” status as freehold land. The RA claimed that the owners’ land had since the beginning “been classified as freehold”. It further claimed that “through a series of errors and omissions, several areas within Petaling Jaya had been redesignated incorrectly to leasehold”. It maintains that there “was never any legal basis to convert it to leasehold”. The RA stated that at least 500,000 residents and property owners in the Petaling Jaya area are anxiously waiting for the problem to be resolved. KW Mark, in his “Leasehold or Freehold: What’s the truth about Petaling Jaya land?” article (available at http://www.thenutgraph. com/leasehold-freehold/), said: “Petaling Jaya was founded in 1953 under British rule, with houses built and sold to the pioneer residents at prices ranging from $2,500 to $25,000. The town status was officially formalised in the Federation of Malaya Gazette dated 7 April 1955. “This gazette, which lists the lot numbers, corresponds with the lot numbers found in a survey map of the area, which shows the land being owned by one Petaling Estate. “Since the whole area was private land under the ownership of Petaling Estate, and was subsequently sold to the pioneers, should not
the land titles be freehold? Yet, leasehold titles were issued for many of the houses in Section 1 through 4 of PJ. “In order for it to rightfully issue leasehold titles, the state government would have had to own the land before leasing it to buyers. That could only have happened if the government had bought the land from the pioneer residents of PJ back in the 1950s and 1960s to make it ‘state land’. But this did not happen. “Further, the leasehold titles that the Selangor government issued contain anomalies. For one, some of the titles were issued under the National Land Code (NLC), with the date of issue listed between 1962 and 1967. However, the NLC was only gazetted in 1965. What then of the titles that were issued before this year? I would say that many of these titles are suspect.” The article goes further than this but I quoted the crucial part which I think has posed the correct question. I re-paraphrase the question – if the land in question was earlier under private ownership (the Petaling Estate), should it not be freehold? The short answer to that is “not necessarily so”. We should remember that ever since the close of the 19th century, when Maxwell (then the British Resident in the state) brought back the Torrens System from Australia and transplanted it in Selangor, it has been our fortune (or misfortune, depending on how you see it) to have the system as the backbone of our land law and land administration system. There is one cardinal rule under the Torrens system, and it is easily remembered in that famous quote, “Under the Torrens system, the register is everything”. So let us check the issue document of titles (IDT) granted by the State Authority then which had been issued to the Petaling Estate – assuming that these are still available, kept by somebody. Then cross-check them with the official
register maintained by the appropriate land reg- pledge after winning the election in March of istry – assuming again that these are still avail- that year. That plan fizzled out when the state government changed hands. able, perhaps in the national or state archives. The NLC has no specific provision that enaI have no idea if these old records are indeed still available or have been destroyed or gone bles conversion of leasehold to freehold in one easy move. The owner of leasehold land is still missing. required to “surrender” I saw the copy of a his land to the State Auland title provided by thority and the latter KW Mark accompanying DON’T DISMISS will then (in keeping his article (posted in the with its promise) make portal) and I can confirm TAKING THE a fresh alienation of that the title in question what is now “state land” (No. Pendaftaran 6175) JUDICIAL ROUTE to the previous landwas issued by the Penowner the same propdaftar Hakmilik SelanTO RESOLVE THE erty but with a freehold gor (Borang 5C, seksyen PROBLEM OF tenure. In that exercise, 86 Kanun Tanah Negara) the NLC requires the bearing the date 17 July CONVERTING previous landowner to 1964. It is a leasehold pay fees and premiums land for 60 years, set to LEASEHOLD LAND to the State Authority. expire on July 16, 2024. I am not sure whether The content of this TO FREEHOLD the PJ residents who document is puzzling had “inherited” their bearing in mind that the “leasehold” problem over the last several decNLC 1965 came into force on Jan 1, 1966. If the relevant authority had issued this land ades still look forward to the State Authority to title in July 1964, that is before the NLC 1965 resolve the problem in its own sweet time or came into force, the applicable law (and the rel- whether they will take the judicial route. The evant instrument or form) should be the earli- latter should not be dismissed altogether; keep it as a second option. er Land Code 1926, in force since 1928. If it is later substantiated that the PJ resiIt is interesting to note that in June 2011, the Selangor government promised PJ Old Town dents had been wrongly issued with their house owners they could renew their 99-year leasehold titles all these years, that they were leasehold land titles for a mere RM1,000. Was issued in error and without legal basis, the this a hint of sorts that the state government next question is – can the half a million itself has doubts about the legality of the lease- wronged landowners seek financial remedies against the State Authority for their loss ? hold titles? Pity our Torrens law has no room (since its The debate about the “conversion” from leasehold to freehold land has been going on inception) for an Assurance Fund. for some time. In Perak, it surfaced in 2008 when the state government at that time de- Salleh Buang is senior advisor of a company specialclared that it was going ahead with its prom- ising in competitive intelligence. He is also active in ised “conversion plan” to fulfil its election training and public speaking.
The lease of most of the properties is expiring in three to 15 years and their owners cannot renovate nor rebuild until the issue is resolved
Govts to further ease crossborder movements FROM P4
Iskandar Malaysia’s next phase of growth
The completion of key catalytic projects and rapid progress of a series of projects including a cluster of universities and private colleges, together with government investment fund Khazanah Nasional Bhd as the primary driver, have set the stage for Iskandar Malaysia’s next phase of growth. As of date RM95.45 billion in investments have been commit-
ted, of which 38.2% or RM36.5 billion is from foreign investors. The momentum to sustain growth would also be the rekindled interest from Singaporeans following the improvement in ties between the countries. With a direct rail transit link between Johor Baru and Singapore agreed in principle, and anticipated to come onstream by 2018, the resulting interconnectivity to Singapore would further strengthen the appeal of the region.
Another positive factor is that both the governments are looking to ease crossborder movements between the countries. Consequently, in addition to UEM Land Bhd and Gamuda Bhd, several developers from the Klang Valley including WCT Bhd, SP Setia Bhd and Sunrise Bhd are making their presence felt in the region. Rajan Paramesran is a senior vicepresident of Malaysian Rating Corp Bhd (MARC).
Buyers of these residences in UEM Land’s East Ledang township in Nusajaya, Johor, include cash-rich Malaysians working in Singapore
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Enter the office of the future Trends in office space size and configuration will affect the property’s leasing and sales STEWART LABROOY
WHENEVER I visit a Starbucks café for a cup of coffee, I am always drawn to the number of people who are diligently tapping away at their laptops and totally engrossed with what they are doing (of course with their morning cup next to them). I wonder if their bosses know where they are but they shouldn’t be too ups et be cau s e, at f i r st glance, they seem to be very productive. I ask myself – is this how the office of the future would look like? This led me to look at trends and I am quite surprised to learn how the office landscape is transforming with technology. Not that many years ago the equipment and information (telephones, adding machines, copy machines, fax machines, computers, company files, data networks and so forth) we needed for work activities were general-
ly sizeable and expensive; and moving equipment to a different location often required technical specialists. People had to work at the work space where t hei r equipment was and where they had access to work files and information. Cubicles were designed to give an efficient, comfortable work area for people working out of one place for all their tasks. Cubicles create a decent work platform for many tasks but they don’t work well for collaborative work (or for fostering collaborative work) and they don’t provide enough privacy for most phone calls. Cubicles are partly private and partly open – they are not open enough for some tasks and not private enough for others. Customising workspaces Technology of the last 10 years has untied us from having to work at a single office location. Business tools for most of us, including vast resources of files and databases, fit into a backpack and can be set up in minutes anywhere with WiFi and electri-
cal power. Hub members are accustomed to working from wherever they can work comfortably and makes sense for their business activity. Member mobility means we can customise workspaces to be more ideal for different tasks; not try to force every work task into a single type of workspace. Members can move between areas during their work day as tasks or moods change. We used the direction and input of our members as well as the experience of hubs across the world to come up with the designs for our task-specific work areas. This transformation has further accelerated with the second wave of change tied to the rise of smart phones and tablets which have brought portability to the office scene. Coupled with the rapidly growing sophistication and availability of cloud computing, it will mean the office of the future can be virtually anywhere and the need for paper and filing systems will be rapidly disappearing as more and more data is stored in the cloud.
This has meant that the nine-to-five grind spent in an “official” office is giving way to the virtual work environment; the at-my-desk-by-8.59 is becoming the on-myBlackberry or smartphone 24/7, and the Starbucks coffee break has become the Starbucks “home” office as mentioned earlier. Businesses can now capitalise on the evolving nature of the office by striking a balance that combines virtual and physical work and space. This could ultimately increase productivity and lower costs without sacrificing company culture or individual motivation. Information technology has turned the assumptions of where work happens and the role of buildings inside out. It is a paradigm shift which every owner of real estate needs to be aware of. Best use of real estate Innovative corporate leaders have recognised that technology allows their employees to be mobile, to work with colleagues remotely and across time zones, and to get work done in a variety of
settings both inside and outside of the traditional office. These businesses have saved money, increased work flexibility, and made the best use of their real estate. These new flexible workplaces are also providing significant gains in worker productivity. Today, companies are increasingly focusing on the predicament of how to help employees concentrate and get work done – which is traditionally thought to require an enclosed office space – while also allowing for the significant benefits of open and flexible office environments, including creativity, knowledge, teamwork and coordination. We know that open environments can inhibit work as well as promote interaction and knowledge sharing. So what is the solution? Enter the office of the future. The new office environment will provide a mix of enclosed and open work spaces that are available for users to occupy on an asneeded basis. The mobility we now have allows individuals to choose how and where they work
best. A flexible work environment can balance the needs for individual work with the need for interaction. The advent of untethered technology and mobile ways of using space has all but eliminated the challenge of deciding between openness and enclosure when designing a workplace. These new hybrid work spaces offer both open and closed environments that can be useful in a variety of ways. In a hybrid workplace, employees have the option of working individually in a quiet space or working with their colleagues in open, collaborative team areas or rooms. Furthermore, the hybrid workplace can take advantage of technology to combine face-to-face and virtual collaboration, both within the office and remotely. Trends in office space size and configuration will undoubtedly affect office leasing and sales. What will the office of the future look like and how will it affect commercial real estate? Here are some insights:
1. The decline of the cubicle
2. More collaboration meeting areas
3. Work lounges for privacy
Sales of the ubiquitous cubicle have dropped from 37% of all office furniture in 2000 to 26% today. At many companies, such as this Accenture office in Houston, open work areas let people communicate more easily. And they are more attractive than rows of grey, partitioned workstations.
Workers used to shuttle between their workstations and conference rooms for meetings. Now, companies are setting up more gathering areas in “in between” spaces, where workers can hold informal meetings or plop down with a laptop.
At some companies, sofas and other cosy furniture are an inviting alternative to the traditional desk. But don’t get too comfortable: The key to work lounges is that work actually gets done there.
4. Teleconferencing areas
5. The shared office
6. The coffee booth
This is a workstation dedicated to online videoconferencing, with a connection to other key offices around the world that’s always on or ready to go. Telepresence is gaining in popularity as it lets you cut costs, with less travel.
With more workers logging in remotely, firms are splitting office spaces among workers who show up on different days.
Firms are filling open areas with booths like these similar to the Starbucks cafes. These are inviting places to chat with colleagues and peck at the laptop for an hour or two.
MNCs lead the way These are but a few changes that technology will wrought on the office space in the coming years. We will see multinational companies lead the way and that will lead to shrinking demand for traditional office space requirements.
Even today some companies are designing their offices to house 30% more staff with 30% less space. This will impact how offices are designed. Cybercentres will find favour with such organisations which need the connectivity
to cater for their requirements that are heavily dependent on technology to operate. Traditional office spaces will become obsolete if these don’t keep up with the times. A recent LinkedIn survey asked respondents what technology they thought would
soon take over the office. Their response: Tablets, smartphones and cloud storage. No brainer, right? More significant, though, was that many respondents were pretty confident that the rise of more portable computing devices will also
give rise to flexible working hours and stronger reliance on telecommuting and video conferencing. The key message that we got is that the world is changing. It’s becoming more flexible. The future is here and we need to respond quickly.
Datuk Stewart LaBrooy is a prominent speaker on conventional and Islamic REITs in the region. He is chairman of the Malaysian REIT Managers Association, a board member of the Asia Pacific Real Estate Association and CEO of Axis REIT Managers Bhd, the first REIT listed on Bursa Malaysia in 2005.
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POC 2013 to show direction for real estate investors Wealth Mastery Academy’s Property Outlook Conference 2013 aims to help participants avoid costly investment mistakes
The organiser says conference participants can expect unbiased financial and investment advice from real estate experts
by Pavither Sidhu THE two-day Property Outlook Conference 2013 (POC 2013) commencing tomorrow is expected to reveal a clear direction for property investors. Organised by Wealth Mastery Academy Sdn Bhd (WMA), it will be held at DoubleTree by Hilton Hotel, Kuala Lumpur, and is expected to attract more than 1,000 participants from Malaysia and Singapore. WMA CEO Terry Ong said many investors have gone through painful mistakes in property investment and the
conference aims to help the participants avoid making costly mistakes in their investments. “The experts’ useful updates and guidance would mark the start of a good and fruitful year for everyone,” he said. He added that POC 2013 will be different from those it organised earlier as the speakers will cover both the outlook for the property market as well as the opportunities and investment strategies for the various market segments. As WMA also understands why investors of today want to invest in overseas properties,
the conference will be featuring international speakers such as Thomas Senatore, CEO of TLD International LLC from the United States and an authority on US Tax Lien and Tax Deed investing. He will talk about easier and affordable methods to acquire US properties from international locations. Another foreign speaker is Vincent Wong from the United Kingdom and author of Step by Step Guide to Lease Options. The POC 2013 will cover an overview of the local economy and property market; demand and supply trends of property
development and investment opportunities locally and overseas; regional hotspots that will drive the market in locations such as KL, Greater KL, Penang and Iskandar Malaysia; each sector’s performance and outlook; Malaysian real estate investment trusts (REITs); how to buy properties with no mortgage or deposit; and use of creative tax saving strategies to avoid costly property taxes. Local speakers include Datuk George Stewart LaBrooy, CEO of Axis REIT Managers Bhd; Milan Doshi, property guru and author; Ho Chin Soon, director of Ho Chin
Soon Research; Previndran Singhe, CEO of Zerin Properties; and Michael Geh, senior vice-president of Raine & Horne International Zaki + Partners Sdn Bhd. Others are Dr Daniele Gambero, CEO and co-founder of REI Group of Companies; Mohd Noor Abdul Salam, head of marketing and investment, Iskandar Regional Development Authority; and Veena Loh, general manager of Malaysia Property Inc which promotes Malaysia as an international real estate investment destination. Ong said the POC 2013 is also a platform to network
with investors, developers, valuers, banking professionals, property negotiators and other experts. “Networking with the right people and getting the right guidance are factors for success in property investment or in finding new investment partners.” He added that the Board of Valuers, Appraisers and Estate Agents will approve 10 continuing professional development (CPD) hours for the relevant industry professionals who attend the conference, and the Malaysia Financial Planning Council 15 CPD hours.
Germany’s slow price rises ready to accelerate by ZOE PHOON GERMAN residential real estate has been described as one of the safest and most attractive asset classes in Europe or even the world and is regarded as a compelling long-term investment. According to Wexboy Value, a blog about value investing mostly in listed stocks in the United Kingdom, Ireland and the United States and in German residential properties, Germany’s major plus factors are its demographics (a population of 82 million, making it the world’s 16th most populous nation and Europe’s largest); housing demand that exceeds supply; relatively low homeownership rate; and having Europe’s largest and strongest economy. The author said people tend to forget Germany’s sheer population and that of its cities such as the 3.5 million people in Berlin, the second largest city in the European Union and with some of the cheapest properties in the country. The surge in housing completions in the 1990s represents the last great property boom Germany experienced post-reunification. Static property values, the gradual withdrawal of state and mu-
Generational memories of the effects and consequences of inflation remains strong in Germany and such fear increases demand for housing
nicipal authorities from housing in addition to a slow planning permission process contributed to a relentless decline in completions in the 2000s, bottoming out around 175,000 units a year compared to actual housing demand for 250,000 units a year. Although housing permits are now being stepped up, it will still take years to catch up. That Germany is one of the few countries where secondhand property prices have transacted at major discounts to new construction costs,
such as in Berlin, is another reason for the suppressed rate of completions. Meanwhile, despite Germany’s relatively high savings rate of 10% to 12%, its current estimated homeownership rate of 46% contrasts sharply with the 60% to 65% in most western markets, which is surprising. The author went on to explain what happened in the past was that the general thrust of German and municipal policy was to subsidise, stabilise and even suppress rents and housing costs.
The thrust created a situation where citizens generally preferred the cheapness and convenience of renting; they did not see tremendous upside in housing values. In the last decade, however, the authorities increasingly disengaged from such intervention and their move created a whole new generation of property companies and proved a boon to investors: Selling municipal housing, mainly apartments, on a wholesale basis to residential property investment companies has shown to be the only
fast, simple and financially clean method for the authorities to achieve their objectives. It also permitted a higher level of annual rent. This – together with the growing private investor aversion to the European equity markets, prolonged low interest rates and threat of higher inflation – increases demand for properties. On the economic front, Germany has a primary budget surplus and the majority of its citizens and investors remain confident in its ability to manage its own fi-
nances while the eventual rehabilitation of Europe’s banks is expected to see “significant gains in property prices”, the author said. “Best case, Germany’s cheap property valuations offer great investment leverage. Neutral case, its sound domestic economic and property fundamentals offer the best defence. Worst case, property/asset investors could still benefit significantly from potential hard-euro/ new Deutsche Mark appreciation. “German property, especially residential, seems to offer the best medium- to longt e r m r i s k/r e w a r d f o r investors, particularly for European investors suffering through the current sovereign debt crisis,” he noted. He added that German residential property never participated in the mid-2000s real estate boom. “There’s no over-valuation to be wrung out of the market, no bottom to be guessed at, no blight of negative equity to scar a generation, no foreclosure/second home inventory overhang, no multibillion euro mortgage scandals and litigation – it’s just business as usual. That is, a slow and steady price appreciation – the normal default for housing – which now looks set to accelerate.”
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Luxury abodes that are an oasis amid bustling city life The Sentral Residences @ Kuala Lumpur Sentral offers lavish units that come with a package of connectivity, convenience and convergence by Geraldine Lim THERE are those who are so immersed in the city lifestyle that they can’t bear the thought of living anywhere else. Others just can’t wait to get out of the city rat race and have homes where they can be away from it at day’s end. And yet there are those who want the best of both worlds – to live within the city and yet be apart from its hubbub when they want to. While there are a few developments within the Kuala Lumpur city centre that aim to cater to this third group, one stands out head and shoulders above them. Promising to offer connectivity, convenience and convergence in a single place, The Sentral Residences @ Kuala Lumpur Sentral is a 55-storey twin-tower serviced residence located on the renowned site of the number one business and lifestyle address in the city centre – the KL Sentral CBD. Jointly developed by Malaysian Resources Corporation Bhd (MRCB) and the Quill Group of Companies, the superior standard serviced residence has a gross development value of RM1.4 billion and will be surrounded by eight major rail systems which are integrated with multiple highways and expressways as well as being
less than half an hour away from the KL International Airport via the eco-friendly KLIA Express. It will be flanked by other platinum-grade neighbours such as the up-and-coming St Regis Hotel & Residences as well as the established Hilton KL and Le Meridien KL hotels. Residents will also be a stone’s throw from the near-tocompletion Nu Sentral, a lifestyle shopping mall, and a centre for fusion dining and food, Sooka Sentral, both developed by MRCB. The serviced residence will feature 17 floor plan designs with every unit within it graced with “state-of-the-art details and quality finishes”. It also boasts of the Malaysian Green Building Index’s specific standards that are designed for tropical climate. The twin-tower serviced residence has been awarded the provisional Gold rating for outstanding sustainable design and features such as green feature walls and green areas. It will have a total of 752 units with large built-ups ranging from 1,087sq ft to 4,327sq ft and priced between RM1.4 million and RM6.83 million. The units will offer panoramic views of Taman Tasik Perdana and the KLCC. In addition to its opulence and outsized units, residents will also be spoilt with an array
of facilities such as private lift lobby, Sky Club with twin saltwater pools, Jacuzzi, gym and Sky Lounge at level 45. Residents will enjoy convenient covered pedestrian walkways and be connected to the adjacent developments via a link bridge. Those seeking tranquillity can stroll and while away their time at the central diamond fountain and interactive water features at the garden deck. According to MRCB, the serviced residence project has received good response from high net worth individuals, captains of industry, top executives, entrepreneurs, company directors, property investors, overseas buyers and the like. The developer also said buyers of the units could expect about 6% rental return per annum or RM6psf to RM6.50psf when completed. Incentive plans for purchas-
ers include early bird discount, developer interest bearing scheme and low capital outlay. The serviced residence scheme was launched in the last quarter of 2012 and is already 80% sold and booked. It is slated for completion in 2016.
Standing high is the new addition to the KL Sentral CBD, a 55-storey twin-tower residential component called The Sentral Residences @ Kuala Lumpur Sentral
Make a grand entrance at the main lobby
The garden deck offers a green landscape and comes with streams
Panoramic views, Sky Club and twin saltwater pools are some of the luxuries one can enjoy at the serviced residence project
D’Latour offers potentially good rental yields by Geraldine Lim STUDENT accommodation with good rental returns and located near learning institutions is a potentially good investment opportunity. Among these are the soldout units at the Senza Residence, Phase 1 of the DK City located in Bandar Sunway in Petaling Jaya, Selangor, being developed by DK-MY Properties Sdn Bhd. According to a property portal, the highrise residential development is sited next to Taylor’s University Lakeside Campus and potentially commands a high rental yield of 6% to 7% per annum. DK-MY Properties also opened its Phase 2, D’Latour @ DK City, in the vicinity of Senza Residence, for public registration last year.
A check on various property portals revealed that many residential units in the location are garnering gross rental yields of between 7% and 9%. T he s e i nc lude t he 1,450sq ft four-bedroom and four-bath units at the Sun U Residence and the 1,600sq ft three-plus-one bedroom and three-bath units at the Palm View Condominium, making D’Latour another potential hotspot for student accommodation investment. It consists of two 23-storey towers with 629 duplex units of Small office-Home Office (SoHo) in Tower 1 and 332 serviced apartment units in Tower 2. The SoHo units are open for registration at the moment. According to the developer, the project’s features include a sky garden that allows natural air flow through the towers, a roof-
top of landscaped gardens for healthy living and an open skyway that connects various parts of the towers from the lift lobbies. The facilities are expected to include pools, pavilion garden lounge, viewing deck, floating dry and wet sunken decks with Jacuzzi seats, meditation and yoga decks, BBQ areas, laundrette, changing rooms with sauna amenities, maze gardens for children, gym and dance studio, surau and multipurpose hall with kitchen facilities. D ’ L at o u r w i l l b e equipped with access card system and CCTVs in addition to patrol guards. The developer is currently offering various layouts for the SoHo units, one for office use and the other for residential. They feature built-ups from 897sq ft indicatively priced from RM830psf.
DK-MY Properties’ phase two, D’Latour, could be a potential hotspot for student accommodation with good rental yield
Internal void corridors provide natural ventilation
The facilities include an infinity pool, pavilion garden and full-glass wall gym