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UNVEILING GST MYTHS IN REAL PROPERTY

Implementation of Goods & Services Tax (GST) in April 2015 marks the birth of a new tax regime in Malaysia

COVER STORY

HOT TOPIC

PROPERTY DEVELOPMENT

HOT TOPIC

FIRST HOME BUYERS

LINE UP PH Property Expo Kota Kinabalu 2015

Is Generation-Y’s Future At Stake? MAR 2015

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SHAREDA 2014 Property Development Annual Report & Market Outlook 2015 Malaysian Developers’ Council Appeals To Government To Resolve Housing Issues Projection For Property Market 2015

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COVER STORY | Mah Sing Group - KKCC

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Kota Kinabalu city is destined to be a world-class business and leisure destination of the future with the construction of its most ambitious project yet by well-known Malaysian developer, Mah Sing Group. Kota Kinabalu Convention City (KKCC) is an integrated mixed development spanning 8.4 acres in the northern edge of the city and is envisioned as a premier lifestyle residential, commercial and tourism centre to be designed by international consultants. The project,

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with an estimated gross development value (GDV) of RM1.4 billion, is ideally located to take advantage of the superb natural features surrounding the city with coral islands, emerald green sea and forest clad hills making up a picture-postcard setting for this much anticipated new addition to the cityscape.

MASTERS OF THE FUTURE The KKCC master plan will include three hotels of 3-, 4 and 5-star standard, a corporate office tower, mall, lifestyle retail shops, F&B outlets and serviced residences. The towers are interconnected by covered walkways with a central arena featuring deluxe recreational and lifestyle facilities.

KKCC is the second project by Mah Sing Group in Kota Kinabalu after the successful launch of its commercial and residential project , Sutera Avenue situated in the southern edge of the city centre. Both projects will now play a pivotal role in the evolution of Kota Kinabalu that embraces all the features of an ultramodern city being transformed into an enviable centre for international business and tourism.

The serviced residence tower takes full advantage of its coastal location with each unit opening up to scenic panoramic sea views. Augmenting the city’s reputation as one of the top tourist destinations in the region will be the luxurious 5-star hotel managed by Pullman Hotels to bring a whole new standard of service to the city’s hospitality industry.

KKCC has been meticulously designed to bring a fresh perspective to what a modern world-class city is. And Kota Kinabalu has all the ingredients to make it a reality. It will play a central role in supporting the future of Sabah’s tourism industry by providing the necessary products to meet the needs of international travelers and visitors. Strategically fronting Jalan Tanjung Lipat along the scenic Coastal Highway, KKCC is easily accessible to the city centre, Kota Kinabalu International Airport and a host of iconic city landmarks such as the Tun Mustapha Tower, Atkinson Clock Tower, KK Wetlands, Sabah State Museum and Tanjung Aru beach.

It is connected via an elevated and covered sky bridge to the adjacent Sabah International Convention Centre (SICC), which will be the main centre for convention activities and development of the MICE industry in Sabah. An impressive cruise terminal to cater to the lucrative cruise industry will be situated just meters away to woo international tourists to Kota Kinabalu and the pleasures within the KKCC. Indeed, the KKCC will be the new gateway to welcome the world to Kota Kinabalu and where luxury lifestyle facilities, convenience, and accessibility are met to the highest international standard. While KKCC offers all the luxurious comforts and facilities of urban living, the natural wonders of Sabah

is only a short distance away. In less than an hour, you can be at the Lok Kawi Wildlife Park showcasing some of the most unique animal species in the world, diving among stunning sea creatures, relaxing on a paradise island, or shooting the white water rapids of Kiulu River. For the more adventurous, you can trek to the peak of Mt Kinabalu or explore the jungle trails of Tambunan in search of the biggest flower in the world, the Rafflesia. Kota Kinabalu Convention City is the quintessence of the world in one city where every need is taken care of to make you feel you truly belong in a city of the future.

Board of Bursa Malaysia, is one of Malaysia’s most diversified developers with 48 residential, commercial and industrial properties in Kuala Lumpur and the Klang Valley, Penang, Johor and Sabah. Mah Sing Group has won over 100 domestic and global awards for company performance, corporate governance, product design, concept, innovation and quality, namely Euromoney Award, Best Brand in Malaysian Property Award and Malaysia’s Best Overall Company for Corporate Governance by Asiamoney.

Mah Sing Group, incorporated since 1991 and listed on the Main

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COVER STORY | Mah Sing Group - The Residences, Sutera Avenue

THE RESIDENCES, SUTERA AVENUE Mah Sing Group, one of the biggest names in the Malaysian property industry, is set to create a new milestone in the development of luxury lifestyle residences as it inches closer to the completion of its signature project The Residences, Sutera Avenue. Bringing its brand of high quality workmanship and commitment to each project, Mah Sing Group consistently delivers on innovative design and quality finishes, majestic grand entrances, security features, extensive landscaping and green street concept as its hallmark of excellence. Emphasis is also placed on professional customer service that is essential in creating a conducive and safe living environment. THE LATEST CITY LIFESTYLE HOTSPOT Standing out with its sleek and contemporary architecture, Sutera Avenue is poised to be an exceptionally captivating landmark in Kota Kinabalu. Its strategic location along the Coastal Highway, only 3.9km from the Kota Kinabalu International Airport and mere minutes from the city centre, gives Sutera Avenue the upperhand in providing a lifestyle that is accessible, convenient and exclusive. Sutera Avenue, with a gross development value (GDV) of RM502 million includes The Residences which has a total of 320 units of serviced apartments in three towers namely Tower 1 (100 units), Tower 2 (120 units) and Tower 3 (100 units).

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The 10-storey Tower 2 was launched in 2014 and offers a choice of either Type A (1+1 rooms) with floor space ranging from 726 – 758 sq ft or Type B (2 rooms) with a generous floor space ranging from 972 – 995 sq ft. Prices for both types start from RM605,000 onwards. Overwhelming response for Tower 2 serviced apartments, which has reached a take up rate exceeding 70 per cent, is a clear indication of the tremendous investment potential of this project. Mah Sing Group is now getting ready for its next grand reveal which is the launch of Tower 3 scheduled for the end of Q1 2015. Tower 3 will have similar built-up area as the Type A units at Tower 2 but its largest units will go up to 1,198 – 1,220 sqft and selling between RM939,000 and RM969,000. The additional floor space will enhance the opulent interior of the unit and expansive natural and landscaped views outside. Every aspect of The Residences, Sutera Avenue has been meticulously planned to ensure that it continues to live up to the high standards of quality and customer satisfaction that is the cornerstone of every successful Mah Sing Group project. Top priority is placed on security with 24hour surveillance, card access to car park, closed circuit television (CCTV) at the lift lobby and card access to lifts and secured reception lobby. The serviced apartments also come with ground floor reception with professional service staff to attend to residents’ requests and needs. The

grand entrance is designed to create a welcoming sense of comfort and simplicity that is echoed in its tastefully decorated hallways and public areas.

developer is able to set targets for contractors the achieve and also assess the quality of the finished building.

The Residences sits atop the two-storey Festive Avenue Retail which offers a one-of-its-kind retail street concept with a 50-feet wide pedestrian boulevard on the ground floor, and wide dual frontage units served by escalator access on each floor. High-speed broadband infrastructure is available to ensure you are connected wherever you are. With a ready catchment from The Residences, Sutera Avenue Serviced Apartments, lifestyle shop offices and surrounding neighbourhoods, Festive Avenue Retail will be abuzz with vibrant activity and possibilities.

CONQUAS was introduced in Singapore in 1989 and has served as a standard assessment system on the quality of building projects. Today, it is widely recognized and accepted internationally as a benchmarking tool for quality. It is now a registered trademark in Singapore, Malaysia, Hong Kong SAR, United Kingdom, Australia, South Africa and India. A LIFESTYLE INVESTMENT The quest to create the most iconic residence with all the ease and convenience to live, work and play has produced one of the most exciting

integrated commercial projects to take shape in Kota Kinabalu. Its appeal to individuals and the business sector has been overwhelming and continues to grow. The 10-storey shop offices at Block A adjacent to the serviced apartment are already sold out while the 16-unit Festive Avenue Retail at Block B has reached 75 per cent in sales. Having all these perks right at your doorstep will make living here one of sheer pleasure and convenience. Live the premium lifestyle you desire in one of the most enviable neighbourhoods in the city at The Residences, Sutera Avenue.

The mall is built to pamper with boutique shops and tempting cafes and gourmet restaurants for a sophisticated and relaxing retail experience. The 16 units of double-storey lots offer retail space from 2,616 – 3,692 sq ft with price per unit starting from RM3.68 million and above. SLEEK, STYLISH AND SAFE The number of new luxury residential properties is growing by the day and it is essential for potential homebuyers to have the confidence to make the right choice. Quality is one of the major considerations for homebuyers and with the adoption of CONQUAS (Construction Quality Assessment System), you can rest assured that The Residences, Sutera Avenue will be a product of the highest quality. CONQUAS is a standardized method of quality assessment where the

T: 6088-262 608 E: sutera.avenue@mahsing.com.my

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Cover Story KKCC Kota Kinabalu Convention City

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Feature Property Showcase The Hap Seng Chronicle

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Sabah Property News

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Feature Property Showcase Park Residence Sugud

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Feature Property Showcase Bandar Utama

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Feature Property Event First Solar Taxi Station In Malaysia

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Hot Topic First Home Buyers: Is Generation-Y’s Future at Stake?

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Contributor: Charles Tan Gen-Y And Property Myths: Why Knowledge Is Key?

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Hot Topic Property Development Line Up

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International Property News

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Feature Property Event WSG Group Ushers In Year Of The Goat With Lion Head Donation

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Banking and Investment News

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Coffee Talk: kopiandproperty.com • 200, 000 Marriages, 80,000 New Properties • 550sf vs 1,000sf • GST Prices Down vs Prices Up • Next 5 Years, Better Invest In Malaysia • RM50,000 For One Car Park

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HOT TOPIC Tourism and Leisure Property - New Trends in Sustainable Investment Despite being one of the busiest airports in Malaysia and having a broad spectrum of tourist attractions, Sabah is still lacking in 5-star luxury resorts. What is holding back developers in investing in Sabah’s leisure property sector?

Feature Property Showcase Sky World

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Feature Property Event Grand Merdeka: The Latest Suburban Landmark In The Northern Corridor Of KK

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Contributor: Chris Tan Unveiling GST Myths In Real Property

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West Malaysia Property News

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New Trend in Property Ownership - Rent First, Buy Later ( Rent to Buy ) Soaring property prices are putting more strain on the majority of Sabah’s population to earn enough to put a downpayment on their first home. Is “rent to buy” their only option or is it just a fad?

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FEATURED PROPERTY SHOWCASE | The Hap Seng Chronicle

THE HAP SENG

CHRONICLE

Hap Seng Properties is a name synonymous with quality, affordability and trust. It has taken decades to build up this hard-earn reputation from the humblest of beginnings. Generations of leaders and people have been part of this remarkable journey which started with one man with a vision and a community of people who put their trust in him to give them the opportunity of a better life.

From left: Wan Jun Kiong, Senior Manager - Projects (East), Philip Chhoa Chao Yang, Senior Manager - Portfolio Management, Caroline Yong Yah Fui, Senior Sales & Marketing Manager - Sabah, John Tan Duo Zer, Chief Operating Officer - Property Division (East Malaysia), Chong Soon En, Deputy General Manager - Projects (West), David Wan Young Yin, General Manager - Projects (East), Aaron Clement, Project Architect, Lee Tsan Kau, Deputy General Manager - Portfolio Management

This legacy lives on today in the people behind Hap Seng Properties as they continue to bring innovation, passion and commitment to the property development industry in Malaysia.

Photo By Louis Pang

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FEATURED PROPERTY SHOWCASE | The Hap Seng Chronicle

Indah Regency, Bandar Sri Indah, Tawau

THE BIRTH OF A VISION

Palm Heights, Lahad Datu

Astana Heights, Sandakan

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Like many of the Chinese migrants who sailed the South China Sea in search of a better life, the late Tan Sri Lau Gek Poh arrived in what was then known as British North Borneo in 1936. He was just 19 years old, a small town boy from Swatow, Guangzhou, out to seek his fortunes in a new land. His first foray into business began with the opening of a sundry shop called Hap Seng in Tawau. Later he ventured into the lucrative timber industry before diversifying into various other business interests. The origins of Hap Seng Properties began in the suburbs of Tawau where land was plenty but housing scarce. It was the birth of a vision that would eventually place Hap Seng Properties amongst the contemporary giants of property developers in the country. Its rise from a trusted household name in Sabah to spreading its wings to Peninsular Malaysia has been an epic

venture that has carved a lasting legacy for generations of house owners and businesses throughout Malaysia.

THE EARLY YEARS The company held firmly on the belief that the people who work together, stays together. The guiding principle on working hard as a team to achieve success was already well established within the company and efforts were made to ensure that the needs of its employees were well taken care of. The first property developed by Hap Seng Properties was Taman Gek Poh in Tawau in the 1970s as residence for the company’s management staff. It was also the first gated and guarded landed residential project in Sabah. The beginnings of Hap Seng Properties’ venture into affordable housing also took root in Tawau where Taman Air Panas was later developed to provide inexpensive housing for the company’s general staff.

The quality and affordability of these housing projects had set a precedent among the residents of Tawau and Taman Ria at Jalan Utara became the first project by Hap Seng Properties to be put up for sale to the public. Corporate social responsibility had integrated itself into the company’s business philosophy and its focus on providing affordable housing would build a legacy of trust and reliability amongst the people who need it most. As the population of Tawau began to grow, do did Hap Seng Properties’ determination to convert the town’s suburban areas with the necessary conveniences for communities to thrive and prosper. Numerous housing projects were built with Bandar Sri Indah township launched in 2004 being its largest and most ambitious to date. Hap Seng Properties had begun to make strides in developing housing projects that

appeal to the masses not only in Tawau but also other towns in Sabah. Kingfisher Sulaman in Kota Kinabalu, Astana Heights in Sandakan and Sri Perdana in Lahad Datu constructed in the late 1990s and early 2000s underscore the diversity of Hap Seng Properties in its planning for well-structured, organized and progressive areas for living and working in Sabah. Being sensitive to the needs of the people and having the foresight to differentiate itself from other developers in meeting these needs have become the trademark of Hap Seng Properties which held it in good stead as it began its foray into different property markets.

Bandar Seri Perdana, Lahad Datu

Ria Heights, Tawau

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FEATURED PROPERTY SHOWCASE | The Hap Seng Chronicle

THE JOURNEY WEST Tan Sri Lau Cho Kun, co-founder and nephew of the late Tan Sri Lau Gek Poh, who took over the chairmanship of Hap Seng Consolidated Bhd, shared the same passion for growth and innovation as his predecessor. Under his visionary and dynamic leadership, the Group soared to greater heights of achievement. He was instrumental in the expansion of the property development division to become the second highest revenue generator within the group.

In 2004, it acquired the strategically located 22-storey MUI Plaza in the Golden Triangle of Kuala Lumpur and refurbished to give it a face-lift and new contemporary look in 2007. It was renamed Menara Hap Seng to reflect its ownership and went on to win the FIABCI Malaysia Property Award 2009 for Office Development.In 2009, Hap Seng Properties launched the first phase of its Build-Then-Sell mixed residential development called D’Alpinia on a 30.88-hectare land in Puchong, Selangor.

The development projects in Sabah had proven to be the catalyst needed for growth in the years following the timber and oil palm boom and at the turn of the new century, Hap Seng Properties began to venture into new territory with development projects in Peninsular Malaysia. They would be the first Sabah property developer to achieve this milestone.

Its interest in the property sector in Peninsular Malaysia continues to grow with developments such as Nadi Bangsar and The Horizon Residences located opposite the Tun Razak Exchange in Kuala Lumpur with its third high-rise residential project, currently known as JTR 2 also located at Jalan Tun Razak.

Menara Hap Seng, Kota Kinabalu

THE HOME GROUND ADVANTAGE From its early entry into the Kota Kinabalu property market in the 1990s with Taman Ria, Taman Friendship Garden, Taman Aman and Kingfisher Sulaman, Hap Seng Properties has given the residents of Kota Kinabalu the opportunity to invest in a variety of housing options. It is now set to make another grand entrance with its residential development, Kingfisher Putatan and Kingfisher Inanam, and the much anticipated Menara Hap Seng, the first Grade-A office tower with green building certification in the city centre. It has taken Hap Seng Properties decades of consistent and steady progress to establish its excellent track record of building affordable high quality houses, which are well planned and attractively designed to provide ideal living spaces. Its new high-end developments in Kota Kinabalu will now chart a new course for Hap Seng Properties to journey forth and set an even higher standard of excellence for others to emulate. The dawn of its

expansion in Kota Kinabalu has just started and the city will soon be waking up to a whole new world of possibilities. The property division of Hap Seng Group has truly come into its own as a force to be reckoned with. It is the second highest performing division in terms of revenue and is on track to carry on the legacy of Lau Gek Poh of never giving up on your dreams and to strive towards a better future for yourself, your family and your countryman.

Kingfisher Sulaman

Hap Seng Properties has grown into a household name trusted by many to deliver on its promise of quality and value. It transcends geographical and cultural boundaries to become a truly Malaysian company that embraces the real meaning of community, unity and teamwork. It is a proud heritage and a legacy that will live on well into the new millennium.

For more information, please call

+6088 433 711 W: www.hapsengland.com

Menara Hap Seng and Menara Hap Seng 2, Kuala Lumpur

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SABAH PROPERTY NEWS

SABAH

PROPERTY NEWS

Keep track of the latest property and real estate news plus reviews in the property market in Sabah

KIMIS

Chinese-Consulate General’s Office To Be Opened In Kota Kinabalu here, and they warmly welcomed the idea. “We expect a Consul-General for the office here be appointed soon which would also mark the office’s full fledged operation. It may take time, but we hope it’ll be done within the first quarter of this year,” said Liu.

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Consul General of the Republic of China in Sarawak, Liu Quan (Left) met with Chief Minister of Sabah, Datuk Seri Musa Aman

hinese nationals in Sabah will be better represented with the setting up of its Consulate-General’s office here, expected to be ready by the first quarter of this year. China’s Counsel-General for Kuching Liu Quan said an advance team, led by the Consulate-General of the People’s Republic of China in Kota Kinabalu, deputy Consul-General Sun Xiaowu, was currently in the city to ensure the smooth realisation of the much awaited plan.

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“Moves are underway to identify a suitable location for a temporary office, and better still a permanent one. “We have met the State Governor (Head of State Tun Juhar Mahiruddin), Chief Minister (Datuk Seri Musa Aman), Tourism, Culture and Environment Minister (Datuk Seri Masidi Manjun) and State Speaker (Datuk Seri Salleh Said Keruak) to express our intention of opening a Consulate-General’s office

The Consulate-General’s office was among two requests made by the Sabah Government, with the other being the setting up of China banks in the state to further boost the economic sector of both countries. Liu said the Industrial and Commercial Bank of China (ICBC) and the Bank of China had been in the city to carry out feasibility studies, adding: “I believe with the Consulate-General’s office to be opened here, they will give it further consideration.”

He added the Consulate-General’s office would further boost the existing good rapport between China and Sabah. “Even after several incidences involving our nationals here, Sabah remains a favourite destination. The Chinese love the nature, the beaches and the people here. I love it here, too. “Last year, Chinese arrivals accounted for about 300,000 and we expect at least four million arrivals in the next five years.” On another development, Liu welcomed the proposal by the federal government to exempt the visa requirement for China nationals to attract them to the country. “I also found out about it from newspapers. And, although there is no decision yet, I believe Beijing will have a positive response to it.”

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FEATURE PROPERTY SHOWCASE| Park Residence Sugud

Artist Impression

PARK RESIDENCE Scan For EXTRA Content

SUGUD

Park Residence Sugud is located fronting to Pan Borneo Highway at Penampang, developed by DF Development Sdn Bhd. This individual titled residential development comprises of two-storey terrace homes, semi-detached homes and few units of three-storey commercial lots spreading across approximately 15 acres land. Conveniently located within one of the fastest growing district at Sabah, Park Residence Sugud is close to other mega projects such as ITCC and C Park which are set to transform Penampang district into a modern Business Hub, drawing new population and numerous job opportunities in the area.

S

ERENE LIVING ENVIRONMENT Park Residence Sugud is best suited for those seeking to upgrade their living environment in a holistic community.

Artist Impression

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The green features are further enhanced within the development itself. A generous 1.1 acres of landscaped park with a 430m jogging track provides residents ample greenery, in addition to a pockets of recreation including a Tai Chi / Foot Reflexology, adult exercise station, children’s playground for young age to enjoy their daily dose of exercise and resting pavilion. Generous space is also introduced in the form of a 50 feet wide road reserved frontage on main access road, underground services, boxed covered drainages, and other modern infrastructure planning to entire development.

MODERN AESTHETIC, CONTEMPORARY DESIGN & FUNCTIONAL SPACE In line with the developer’s high regard for aesthetics, Park Residence Sugud features a modern and pleasing facade. Each family member will have plenty of space to call their own with floor plans uniquely designed to allow ample space for flexible interior decoration choices, sufficient natural light, and functionality. The simple yet elegant interior of each abode boasts tiles in the living room, dining room, and first floor whilst full-height ceramic tiles adorn the bathrooms. CONVENIENT ACCESSIBILITY Park Residence Sugud is merely a few minutes’ drive away from major towns like, Market place 88, Lintas, Lido, Bundusan and etc. This positive point is further augmented by major highways which provides easy accessibility to the city and, existing highway like Jalan Pintas Penampang (Penampang Bypass Highway) that connects residents to all key hotpots. Residents can look forward to further upgraded connectivity to other districts via Pan Borneo (Phase 1), currently under construction. A lifestyle of convenience is perfectly embodied in and around Park Residence Sugud with a range of

Amenities which includes : •

Donggongon Town Centre / Megalong Shopping Mall

Hotels @ C-Park

ITCC Mall

Plaza Millenium

Kobusak Commercial Centre

Artist Impression modern society deserves comfortable homes with innovative features that are also affordable. Their customers are assured of quality lifestyle, as they enjoy well-planned modern homes that offer sustainable living in a harmonious community.

It takes merely 15 minutes drive from Park Residence to : •

KK City Centre – just 13km away

KK International Airport – just 13 km away

Interested parties may get additional details by calling the hotlines 016-8308718 or 0168891105. Visit our Sales Office at Lot 53A, 2nd Floor, Block I, KK Times Square to grasp detailed explanation on the versatility of the overall development, and many compelling components that helps to add value to your investment profile.

For more information, please call

HP: +6016 889 1105 +6016 830 8718 W: facebook.com/dfdevelopmentsb E: dfd.sb@yahoo.com.my

ABOUT DF DEVELOPMENT SDN BHD DF Development Sdn Bhd brings a new perspective to mixed residential properties in East Malaysia. The developer truly believes that

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FEATURED PROPERTY SHOWCASE | Grand Merdeka Development

Artist Impression

GRAND MERDEKA

GRAND MERDEKA – THE LATEST SUBURBAN LANDMARK IN THE NORTHERN CORRIDOR OF KK Grand Merdeka Development Sdn Bhd (formerly known as Payung Niaga Sdn Bhd) is one of the most seasoned companies in Sabah. Its successful era was in the 1980’s when it converted the foreshore land into Wisma Sabah which is situated in the heart of Kota Kinabalu cityscape.

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nder the leadership of Mr. Chew Sang Hai (Director), in 2011, Grand Merdeka Development Sdn Bhd decided to make a ‘grander’ appearance and be ever ready for competition amongst developers by developing a mixed development called Grand Merdeka consisting of GM Mall, GM Home, GM Corp and GM City on a 19-acre land. Grand Merdeka has a total GDV of RM1.2 billion and is located in Bandar Sierra, Menggatal also known as the Northern Corridor of Kota

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Kinabalu. Aimed to attract the local demography or neighbouring population, Grand Merdeka is inspired by Mutiara Damansara in Selangor, which appeals to families. Some 18 months ago on 3 May 2013, despite the unfavourable market sentiment and stringent loan approval policy at that time, Grand Merdeka was still able to achieve 85% of the allocated sales. GRAND MERDEKA MALL (GM MALL) Spread across a net lettable area (NLA) of 270,000 sq. ft. with 782 entrepreneur units, Grand Merdeka Mall is only 20 minutes away from the

Kota Kinabalu CBD area. During the past 18 months, Grand Merdeka has successfully included additional facilities amounting to RM15 million for Grand Merdeka Mall. Since our pledge to incorporate Green Initiatives in our projects, we have included various measures such as: •

Installed Rain Water Harvest system which will be utilized for landscaping and toilet maintenance

Installed OSRAM’s LED lighting system in the mall with 5 year warranty

Installed a central ducted air cooler system in all common areas.

We have also taken various initiatives to encourage greater foot fall and create a friendly shopping environment for our patrons in the upcoming Grand Merdeka Mall.

For example: •

Additional culvert has been installed on the existing JKR road reserve to reduce the likelihood of localized flood in Bandar Sierra;

As part of our CSR effort, Grand Merdeka will be extending the existing 4-lane carriageway to a 6-lane carriageway with the sole purpose of providing better accessibility to our patrons

Establishment of a leasing department to assist buyers in achieving favourable yield and also higher occupancy rate

2 units of bus stop with a special two-tiered roof feature to be constructed along the Tuaran road access to Grand Merdeka

One of the highlights is the confirmed appointment of TELCO provider, i-Skilled Dynamics Sdn Bhd, to furnish GM Mall with High Speed Broadband services.

CONFIRMED TENANTS

An additional two (2) escalators have been put in place to give the mall a total of 5 units of escalators

DBKK also has given us the green light to adopt the roundabouts and open spaces at our project which will be designed, implemented and maintained by Grand Merdeka

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FEATURED PROPERTY SHOWCASE | Grand Merdeka Development

Artist Impression

ROOF TOPPING CEREMONY, GROUND BREAKING, LAUNCHING & SIGNING CEREMONY On 7 February 2015, Grand Merdeka Development Sdn Bhd successfully organised the Roof Topping Ceremony of GM Mall, Ground Breaking Ceremony of GM Home and GM Corp, launching of GM Corp and Signing Ceremony by 13 confirmed anchor and junior tenants. The roof topping ceremony was held on the same spot where the GM Mall had its ground breaking 18 months ago. The main purpose of the Roof Topping ceremony is to enhance the confidence of the public towards Grand Merdeka Development Sdn. Bhd. The basement carpark of GM Mall has been designed to be integrated

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Artist Impression

with GM Home and GM Corp as well as with future development, GM City.

hypermarket and fast food drivethru outlet.

GRAND MERDEKA HOME (GM HOME) GM Home project is designed to be a one-stop household and home furnishing hub for the Northern Corridor of Kota Kinabalu. Positioned next to GM Mall, and spread across 70,000 sq. ft., it is ideal for various uses such as hypermarket, furniture outlets, speciality outlets and fast food drivethru outlets.

GRAND MERDEKA CORPORATE (GM CORP) GM Corp consists of 20 blocks of 5-6 storey signature office suites, showrooms and retail units. Spread across an approximate gross built up area of 120,000 sq. ft., GM Corp is said to introduce a new perk lifestyle in the Northern Corridor of Kota Kinabalu. On the day of launching, about 9-10 blocks of GM Corp were introduced to potential buyers with a special early bird discount of 3% of the selling price.

On the day of the ground breaking ceremony, it was announced that to date, confirmed anchor tenants for GM Home includes Top Kinabalu Sdn Bhd and 1Homeware. In addition, negotiations are still on-going with an established

GM Corp will also feature an impressive choice of bars and restaurants, complete with a convenient GM buggy-transit to and from GM Mall, GM Home and GM Corp. Ground floor galleria units

feature 22ft. height ceilings with the provision for future mezzanine floor and internal stairways. COMPLIMENTARY FEATURES •

Spacious office / showroom units

Lift service for every 2 units

Garden terrace, gymnasium and spa, and function room

A stone’s throw away from a proposed hotel

24-hour CCTV Surveillance

Internal staircase

Escalator to transport patron from ground to the first floor.

OUR VISION & MISSION The company will continue to look for suitable land to develop mixed-use highrise projects. As a niche developer, Grand Merdeka Development Sdn Bhd will continue to focus on what we do best. We’ve decided that at this point in time, our focus will remain in Kota Kinabalu. With continuous support and cooperation from the staff, consultant members and contractors, we at Grand Merdeka group pledge to continuously explore innovative and niche products at an affordable price for our fellow Sabahans, and we thank all for being a Part of Our Grand Experience.

For more information, please call

+6088 267 889

W: http://www.grandmerdeka.com E: grandmerdeka@gmail.com

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SABAH PROPERTY NEWS

Malaysian Developers’ Council Appeals To Government To Resolve Housing Issues

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Datuk Seri Fateh Iskandar (REHDA President) 3rd left sitting, Dato’ Ir John Chee Shi Tong, JP (SHAREDA Vice President) 2nd left sitting, Mr Joseph Wong (SHEDA President) 4th left sitting

he Malaysian Developers’ Council (MDC) which comprises the Real Estate and Housing Developers’ Association Malaysia (REHDA), the Sabah Real Estate and Housing Developers Association (SHAREDA) and the Sarawak Real Estate and Housing Developers’ Association (SHEDA) convened its 20th meeting on 6 February, chaired by REHDA Malaysia president Datuk Seri FD Iskandar, to deliberate on the state of the housing industry and express concern on several matters. Among them is access to end financing and cooling measures imposed by Bank Negara which remains a major problem to house buyers with members of the three associations reporting that loan rejections have been on the hike where purchasers, particularly first time home buyers, are facing great difficulty in securing housing loans. The stringent housing loan guidelines introduced by Bank Negara Malaysia (BNM) in 2012 and the various cooling measures introduced in Budget 2014 are severely affecting developers’ sales, causing most developers in the Peninsular, Sabah and Sarawak to pull back their launches. MDC fears that such situation will result in shrinkage of supply which will eventually dampen the property market. MDC appeals to BNM and

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the government to review the guidelines and measures which are clearly contrary to the efforts to promote homeownership. The government should instead provide more incentives to help first time house buyers and MDC stands ready to assist the government in the provision of more affordable housing.

MDC acknowledges and fully supports the implementation of GST in making the current taxation more comprehensive, efficient, and transparent and business friendly. However, in view of the impending GST implementation and in support of the government’s objective of building more affordable housing, MDC is requesting that properties within the affordable housing category be accorded GST zero rating. MDC would also like to propose that housing priced up to RM500,000 be considered as within the affordable housing category. MDC believes that the proposal will help spur the development of more affordable houses.

Sabah Property Launches Expected To Soar 154% In 2015

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he 2014 SHAREDA Property Development Annual Report and Market Outlook 2015 released on 9 February can be described as the much awaited silver lining in what has been a gloomy 2014 for the property industry in Sabah. Datuk Francis Goh, president of Sabah Housing and Real Estate Developers Association (SHAREDA), in announcing the release of the second edition of the annual property report disclosed that property launches in 2014 dropped by 50% with a Gross Development Value (GDV) of RM3.74 billion compared to RM7.56 billion in 2013. In 2014, negative figures were shown in the landed residential, condominium and apartment, commercial and mixed development sectors except for the industrial developments sector which increased by a whopping three folds. The downward figures were attributed mainly to new guidelines introduced by Bank Negara, cooling measures by the government to curb property speculation and anxiety over the impending implementation of the GST in April 2015. Many developers held off their launching their new developments as they adopted a ‘wait and see’ attitude to gauge current market sentiment. Consumers’ spending power was severely impacted by the stringent loan assessment procedures implemented by Bank Negara which deterred the ability of potential buyers to purchase property, particularly first time home buyers. Many applicants failed to get approval for their end financing and thus affected the sales performance of each product launch.

Goh says that 2015 will see the realization of 5,116 units of affordable homes by SHAREDA members to help revitalize the housing industry and increase the percentage of house ownership in Sabah. The cumulative value of these affordable housing projects, private developments initiated by SHAREDA members including leisure properties, and development projects launched in the east coast, Sandakan, Kudat and interior region amounts to RM9.5 billion, a confidenceboosting 154% increase from the 2014 figure of RM3.74 billion. Despite the positive outlook for 2015, Goh is still concerned about several outstanding issues that is affecting the property industry development in Sabah. He brought to task the long waiting period of up to 30 months for the approval of development plans. He commented that if the approval period can be shorten to 12 months, it would result in a savings of up to 5% on the development cost which would translate to a reduction in property prices. The lowering of contribution to SESB can potentially shave off another 3% of the development cost which will contribute to even more affordable housing for the public. These issues are currently being addressed by SHAREDA, and collectively with the Malaysian Developers’ Council who recently released a joint statement requesting the government to seriously tackle these issues and implement corrective measures to support the property industry in Malaysia.

Jalan Kolam & Jalan Tuaran Traffic Congestion To Be Eased By 2017

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he solution to the traffic congestion along Jalan Kolam (Luyang) and Mile 5.5 of Jalan Tuaran here in Kota Kinabalu will be delivered in 2 years time. Tan Sri Datuk Seri Panglima Joseph Pairin Kitingan, the Deputy Chief Minister and Minister of Infrastructure Development of Sabah recently officiated the ground breaking ceremony of the construction of the long awaited flyovers revealed that the bridges are estimated to be ready by July 2017. According to Pairin, a fund of RM217,900,000 has been released by the federal government for the construction of the fly-overs. Constructions of the bridges began on 9th January this year, and have achieved 0.3% of construction progress. “The construction of the two bridges will be executed concurrently, and will take approximately 2 years to complete. During this period, traffic condition along these roads will be affected. The authority encourages public to use alternative roads if possible,” said Pairin. The relevant authorities are expected to release alternative route plans to minimise the traffic congestion during the construction period.

Glowbest Partners Digi To Bring High Quality Internet To More Sabahans

He also revealed that DBKK will designate more land as public car park and encourages the use of public transportation to enter the city. Such movement will help to reduce the number of vehicle entering the city which may cause traffic congestion. According to Pairin, traffic congestion is a frequently raised topic, and he appreciates the funds allocated by the federal government to solve the problem. He also said, the state government has requested from the federal government the development of 11 highways in total, 2 of which have been approved whilst the remaining 9 will be executed pending for fund allocation. “The federal government is concern of the traffic congestion issues all over Sabah. We are soliciting for the approval of funds from the federal to construct the remaining 9 highways, which will definitely ease many traffic problems across the state,” said Pairin. On the other note, in response to the proposal by Api Api State Assemblyman Dr Yee Moh Chai to build a light rail system in the city, Pairin said that the federal government will take that into consideration for the betterment of local citizens and tourists.

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The MOU was signed by Francis Chang Yew Chang of Digi Telecommunications (centre) and Benny Ng of Glowbest Sdn Bhd (left)

nternet connectivity is an essential component of any business hub and even more so when it is located further away from an urban centre. Glowbest Sdn Bhd has signed an MOU with Digi Telecommunications Sdn Bhd to bring the convenience of high-speed broadband to its latest commercial venture, Orchard Plaza in Tenom. In his opening speech, executive director Howard Ng acknowledged the foresight of the company’s founder Edward Ng in identifying and developing property development potential in the interior districts of Sabah such as Kota Marudu, Beaufort and Tenom. As projects start to develop, providing the necessary infrastructure including water, electricity and connectivity will play a crucial role in ensuring the sustainability and success of the projects. Benny Ng, a director with Glowbest commented that Digi offers one of the best cost effective solutions in providing setting up telecommunication

infrastructure for development projects particularly those of more modest scale.

“Working with Digi has given us the opportunity to get comparable service at a much lower cost which will benefit us and our clients in the long run,” he says. Francis Chang Yew Chang, head of customer management of Digi Telecommunications said that the collaboration with Glowbest will be a step towards the future in bringing high-speed connectivity to its customers. “I am very pleased with the commitment and confidence shown by Glowbest in engaging Digi to be the provider of this service to its clients. I hope this will be the start of many more collaborations in the future,” he added. The partnership between Digi and Glowbest is the first to be established in Sabah by the telecommunications company.

From left; YB Datuk Bobbey Suan (Assistant Minister to KPI), Datuk Ir.George Wong (Project Director of Azam Jaya Group) , YB Datuk Ghulam Khan (Assistant Minister to KPI) , Datuk Joseph Lo (Managing Director of Azam Jaya Group), Tan Sri Pairin Kitingan (Minister of KPI), Tun Ahmadshah (Chairman of Azam Jaya Group), Datuk Murshidi Ghaffar (Chief Executive Officer of Azam Jaya Group) , Datuk Ir. John Anthony (Director of JKR), Datuk Michael Imban (Setiausaha Tetap for KPI), Encik Ahmad Ag Hashim (Deputy of Permenant Secretary For Ministry Of Infrastructure)

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SABAH PROPERTY NEWS

Look East, Only Closer

Chris Tan, managing partner of Chur Associates

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ne can’t help but to feel the déjà-vu sensation upon every year’s budget speech made by our Prime Minister. For the last three years, Datuk Seri Najib Tun Razak has introduced PR1MA to drive housing with an allocation from the initial RM500 million to the recent RM1.3 billion of Budget 2015. Since Budget 2011, housing the nation has always been a key agenda and the Government has started off by introducing My First Home Scheme through the establishment of Cagamas Bhd that will provide a guarantee to banks for the financing of 10% downpayment for houses below RM220,000. Aiming at the low to middle income groups, this is a new governmental home widely known today as “affordable housing”. As a legal practitioner, one should always start with the definition of “affordable” before dwelling further into the details. The official website of 1Malaysia People’s Housing Programme (PR1MA) seems to suggest a definition of property price range of between RM100,000 and RM400,000 while the target group comprises applicants whose

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household income are between RM2,500 and RM10,000 per month.

translate into benefits in favour of homebuyers. It makes perfect logic.

Comparison can be made to Rumah Mesra Rakyat Scheme by Syarikat Perumahan Negara Bhd (SPNB) which offers homes priced around RM65,000 which targets the lower income category as the requisite household income is below RM3,000. Thus, officially at the federal level we have two definitions. Of course, we are not discounting the effort by the respective state governments in introducing their unique scheme for affordable housing.

Sabah has proposed a different approach to this 20% savings which makes even more sense. The Sabah solution is to specifically address the inability of paying the 10% downpayment and the reluctance of financiers to offer housing loan to individuals who could not even afford the 10% downpayment.

PR1MA was established under the Perumahan Rakyat 1 Malaysia Act 2012 and has been the sole agency to develop and maintain affordable housing specifically for the middle-income category. PR1MA will be the developer for projects on government land and will also collaborate with private sector to develop similar affordable housing projects. More than 700,000 Malaysians have expressed interest in PR1MA thus far. So, how does PR1MA assist the middle-income earners in securing a roof over their heads? Despite the price ceiling for affordable homes, it was mentioned that the sales price of PR1MA houses are 20% lower than market prices which probably explains why a hefty sum has been allocated for PR1MA in the budget. This 20% is viewed as an incentive for the developer to lower the sales price. The motivation for the developer is clear as the subsidy paid directly to the developer would reduce construction cost while the qualified and ready PR1MA home-buyers would save a huge sum of marketing dollars from the developer’s coffer as sales is a certainty. These savings would then

Skim Rumah Pertamaku and PR1MA do not make sense when you put one and one together. Try to imagine this. For a RM300,000 property (20% lower than market price), the applicant with household income of RM6,000 would have to foot a downpayment of RM30,000 upon successful application. The applicant may need to withdraw all his lifetime savings for a down payment of a future house which is to be delivered in three years. Thereafter, he will need to service the interest of loan upon the first drawdown on the progressive payment. This may eventually cause financial constraint to the applicants. PAY THE 20% TO SUCCESSFUL APPLICANTS Sabah Housing and Real Estate Developers Association (SHAREDA) has proposed, and in fact executed, that instead of funding 20% of the sales price, it is more effective to pay the 20% to the successful PR1MA applicant to aid in the settlement of the 10% downpayment. The remainder sum may assist the applicant servicing the house loan and lessen the financial burden of the applicant.

needs a housing loan for the 90% of the sales price. This will ensure a win-win to all parties involved and at least return the decision-making back to the aspiring homeowner. The question now is whether or not the rest of the country would soon follow the Sabahan way and make affordable housing real. The year 2015 will be a challenging one for all Malaysians with the introduction of the goods and services tax (GST). While speculation suggests that property prices are on the rise (it has never dropped) there are further uncertainties on the GST impact in the property market. GST will inevitably widen the gap between affordability and price.

We all know that residential properties are an exempt supply under the Goods and Services Act 2014, and we can only hope that it will not further increase the margin of affordable housing and make it “unaffordable” to the low and middle income rakyat. Perhaps, affordable housing can be “zero-rated” once an official definition can be firmly in place. In the 1980s, the nation has been taught to “Look East” to learn from the industrious land of the rising sun and now in the need to house the young nation, we should look no further than the Land Below the Wind. Look east, but only closer to home!

Of course, a buy-in from the financiersis also crucial towards this proposal as the applicant definitely

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SABAH PROPERTY NEWS

2015 To Be A Good Year For Property Players

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roperty consultants believe that 2015 will be a good year for buyers and investors, as the property market is expected to correct itself in terms of pricing due to the various cooling measures and implementation of GST. As reported in Property Guru online, Raine & Horne International Executive Director, Lim Lian Hong said that property buyers and investors will have more choices in 2015.

“Properties in the long run are always good investments and a hedge against inflation. At the current moment, our ringgit seems to be weakening and property may be a way of preserving the value of your savings,” said Lim. “On the other hand, there will be more choices coming into the market and you may get a good buy if you are patient,” he added. Zerin Property CEO, Previndran Singhe stated in an interview that 2015 would definitely be a buyers’ year due to various affordable housing schemes which will provide first time buyers with more options.

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The Burden Of Households

K Kuching, Sarawak

“This would result in developers becoming more prudent and creative in their product offering and pricing, catering more to middle and upper class buyers where the demand lies,” he added. He said market conditions this year will also attract more foreign investors especially Singaporeans who will be driven by the weakening ringgit. According to Previndran, the first quarter of 2015 will see a hike in property transactions as buyers rush to buy properties, especially nonresidential properties, to avoid the price increase associated with GST. In response, more developers will rush to complete their projects before April 1, 2015. “The commercial market, especially office space leasing, is expected to feel the impact of falling crude oil prices which would affect the oil and gas industry,” he said. Post GST, the property market will remain flat with lesser transactions and property launches in the second quarter as both buyers and developers adopt a wait-and-see approach to assess and evaluate the impact of the GST before starting to experience nascent recovery in the second half of the year while 2016 will witness strong growth in the property market,” he added.

hazanah Nasional Bhd recently rolled out an unflattering report on the state of Malaysian households. The study found that 74% of Malaysian households earn less than RM6,000 per month and house prices in general have gone up beyond the affordable levels of most households. A household with a RM6,000 monthly income is unlikely to be able to afford a home costing more than RM400,000. The commonly accepted definition of affordability is three times median income, but Malaysia’s houses on average cost much more than that. “In median income terms, our houses are more expensive than those in Ireland and even Singapore. At 21%, the profit margins of our property developers are high – almost 2 times those of the US (12%), 1.2 times those of the UK (17%) and higher than Thailand (14%), although Singapore has higher margins (25%),” the report said. “Over and above their usual expenses, households also have to make loan installment payments, which are approximately 18% of their income at current interest rates. The recent hike in interest rates has increased the monthly loan installment for households by 2% and they remain susceptible to further interest rate rises,” it added. The study’s conclusion was reinforced by the national household income survey (HIS) data on individual income

registered with the Employees Provident Fund (EPF) in a joint paper released earlier by the University of Malaya (UM) and Khazanah Research Institute. According to data provided by the EPF on employees’ total income, 74% the active EPF members earn less than RM6,000 per month. About 55% earn less than RM4,000 per month and 23% of its active members earn less than RM2,000 per month. “We obtain evidence of steadily rising earnings inequality in both private and public sectors in the 2000s,” said UM department of development studies senior lecturer Dr Lee Hwok Aun and fellow author Khazanah Research Institute director of research Dr Muhammed Abdul Khalid.

“Property sales also show rising concentration in the upper rungs,” they noted on the development of luxury buildings, and pointed out the top 10% of property buyers controlled more than 40% of the total value of property purchases in 2011, up from 35% in 1997. The share of the bottom 20%, however, hovered at just below five percent throughout that period.

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SABAH FEATURED PROPERTY PROPERTY NEWS SHOWCASE | WSG Development

THE PALM CONDOMINIUM

BENONI COMMERCIAL CENTRE

With less than a 15 minutes drive from Kota Kinabalu International Airport will lead you this humble Kinarut town with exclusive resorts along its coast and mellow residential neighborhood located all around.

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he on-going extension of Pan Borneo Highway spans to Kinarut where it extends the Old Papar Road connecting Kota Kinabalu to Brunei and Sarawak via Kinarut & Papar. Kinarut also acts as an ideal stop over for drivers en route to Kota Kinabalu City from Brunei, Sarawak and other Southern towns of Sabah. WSG Group envisions a stable boost in commercial & business opportunities following our on-going Palm Development in Kinarut. The increase in residential and commercial options in Kinarut will benefit the tourism potential

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in the area and will bring stable economic growth to the town.

The condominium facilities include :

RESORT STYLE LIVING The building was designed ideally to sit on a park to allow the comforts of having a generous open space accompanied by beautiful landscape right at the step of your lobby. Access to the park from the lobby is easy and safe, thus encouraging a safer environment for children and senior citizens to enjoy the beautiful outdoors available to them. 

2) Children pool

The condominium offers various facilities to deliver residents a convenient and comfortable lifestyle.

1) Adult swimming pool  

3) Gymnasium 4) Indoor Badminton Courts  5) Outdoor Basketball Court  6) Covered Car Park 7) 24 Hours Security 24 8) Children’s Playground  9) Landscape Garden  10) Café by the Pool 

Benoni Commercial Centre is a mixeduse urban development in Papar. This is a golden opportunity for business investors to benefit from the economic potential in that area. The commercial elements of Benoni Development consist of spacious double storey shop lots and spaces for retails and offices. The precinct occupies a large parcel of prime land adjoining the two primary roads of Benoni: Papar Spur Road and Pan Borneo Highway, laying a solid platform for future economic opportunities.

For more information, kindly contact

088 269 980 / 088 751 888

W: www.thepalmkinarut.com / www.benoniccpapar.com E: sales.wsggroup@gmail.com Headquarter Office Suite No. E9 & E10, 5th Floor, CPS Tower, Centre Point, No.1 Jln. Centre Point, 88000, Kota Kinabalu, Sabah 088-269980

Sales Gallery Behind G-Mart Supermarket, Kinarut 088-751888

Scan For EXTRA Content

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SABAH PROPERTY NEWS

Datuk Francis Goh Returns Uncontested As SHAREDA President 2015 – 2017

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SHAREDA President, Datuk Francis Goh

HAREDA President, Datuk Francis Goh will be serving his second term in office with another 2 years from 2015 – 2017. This will be the final term for the uncontested incumbent elected President of SHAREDA (Sabah Housing and Real Estate Developers Association) who shall not hold the post for more than 2 consecutive terms. The upcoming 22nd SHAREDA Annual General Meeting will witness the returning of some current office bearers uncontested in several posts in which they were nominated except for two VicePresidents being contested by 3 candidates, namely the incumbent Dato’ Ir. John Chee Shi Tong of J & M Development Sdn Bhd, incumbent Mr John Tan of Hap Seng Properties Sdn Bhd and Mr Ben Kong Chung Vui of Riverson Corporation Sdn Bhd who has held the post of Honorary SecretaryGeneral since 2011. Datuk Sr. Chua Soon Ping of Remajaya Sdn Bhd is also moving up in ranking from an ordinary council member to the post of Honorary Secretary-General uncontested. There will also be some familiar and new faces in the next official council line-up such as ordinary council members Mr

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Raymond Chan Yin Hong of Fine Landmark Sdn Bhd and Ms Kah Gen Fon of Sinar Pembangunan Sdn Bhd. The rest of the incumbent office bearers of SHAREDA duly returned uncontested in their posts are: Deputy President – Mr Chew Sang Hai of Grand Merdeka Development Sdn Bhd; Honorary Treasurer-General – Mr Wesley Chai Meng Kong of Top Green Development (Sabah) Sdn Bhd; Council Member – Pengiran Saifuddin Bin Pg. Tahir, JP of Sabah Urban Development Corporation Sdn Bhd; Council Member – Mr Quek Siew Hau of Wah Mie Realty Sdn Bhd; Council Member – Mr Reggie Sua @ Boboy of Syarikat Perumahan Negara Sabah; Council Member – Ar. Ronnie Ang Gou Wei of RA Concept Development Sdn Bhd. The Immediate Past President, Datuk Susan Wong Siew Guen of WSG Development Sdn Bhd shall continue to be a member of the new Council of SHAREDA 2015 – 2017.

Another five ordinary council members including the Assistant SecretaryGeneral and SHAREDA Youth Chairperson shall be nominated and appointed by Datuk Francis Goh as the newly elected President during the first council meeting that will add up to a total of 18 council members.

Princess Height Development To Include Iconic Mall In Menggatal

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Satellite positioning of Princess Heights development site location

ardie Development Sdn Bhd (HDSB) has launched 96 units of two-storey terrace and 2.5-storey townhouses at Princess Heights in Menggatal featuring a modernthemed design with a gross buildup area ranging from 1,902 to 2,489 sq ft. Princess Height is a mixed residential and commercial development spanning 109.41 acres of prime land strategically located near the junction of Jalan Tuaran and Jalan Sepanggar, within the locality of Kampung Dambai, Menggatal. HDSB executive director, Datuk Andrew Sim said that the clean and simple design of the landed residential units suit the modern family as it provides a spacious living area along with three bedrooms and a study room. He added that the terrace and townhouses, with minimum land size of 24 x 90 feet, have achieved 75% physical progress. “The houses are expected to be completed and the occupation certificate (OC) obtained by the second quarter of 2015,” said Sim. As for the future development of Princess Heights, Sim disclosed

that HDSB has entered into an agreement for the establishment of a Mydin Hypermarket shopping mall in the development. The proposed shopping mall, if realized, will be Mydin Hypermarket’s maiden foray into Sabah. The development will take up around 11 acres and is anticipated to have a total gross floor area of more than 900,000 sq ft with over 800 car parks.

“The hypermarket aims to be an iconic new shopping mall in Kota Kinabalu and aspires to be a landmark attraction found within its locality and environment,” adds Sim. Along with Mydin Hypermarket shopping mall, the proposed development also includes 80 units of three-storey shop offices divided into eight blocks. The modern shop offices will come with more than 500 car park spaces for the convenience of businesses and customers. Upon completion of the hypermarket and shop offices, which will be developed concurrently, the area is expected to become a one-stop commercial hotspot frequented by residents from surrounding neighbourhoods.

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HOT TOPIC | Feature Construction Progress

Feature Construction Progress

Harrington Suites

Lido Four Seasons Residence

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ido Four Seasons Residence, targeted for the medium-income group with facilities suitable for young couples and the urban family, is strategically located close to the Kota Kinabalu International Airport, CBD, Queen Elizabeth Hospital and the Open University. The development comprises of four blocks of 15-storey towers with a total of 840 elegant modern living units. The structure is taking shape rapidly and many of the features such as the activity floor with swimming pool and club house are already visible. The project was launched in 2012 and expected to be completed in 2015. 1.

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BLOCK A – Achieved construction progress to the 13th storey. Image taken from Block B. Architectural works such as tiling, skim coat, door frame and window frame have started and followed up with the structural progress. BLOCK B – 100% completion from the ground floor to the fourth floor. Aluminium formwork on the fifth floor is approximately at 50% completion. BLOCK C – Works for the other half of the block have progressed smoothly. The setting out of aluminium formwork have been completed. 50% completion

from the ground floor to the fourth floor including the lift core and riser room. 4.

BLOCK D – Picture taken on 7th Feb 2015. Half of the block had achieved completion till 12th storey. Notice the endless pool in construction on the club house (lower right).

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View of Block A from the highest point of Block D (12 storeys).

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View taken from the highest vantage point of Block D. This image was taken on the 16 February 2015. Block A (upper right), Block B (top), Block C (left) and the endless pool (lower bottom).

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arrington Suites, located at Taman Sri Gaya, Luyang, Kota Kinabalu offers 116 units of tastefully designed and exquisitely renovated condominiums. Located just 5 minutes away from the city centre, it will be the tallest condominium with exclusive private lift in Kota Kinabalu, Sabah. A generous 20,000 sq.ft. recreational podium, 5-tier security level, 3-ply glass paneling in all of its aluminium windows and glass sliding doors for better heat and sound insulation and ultimate living comfort, are amongst some of the latest features offered in this development.

As of end January 2015, its construction is progressing on schedule with works on Level 5 (4th floor). Its Executive Director, Ms Erica Lim commented, “We are very excited with the progress of work on site, and we are planning to have an actual show unit for all of the five different types of units for public viewing sometime in August or so. This will be on the seventh floor, which is the first level of residential units of our condominium development”.

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For more information, please contact us at +6 (088) 233 123 or login to our website at www. harringtonsuites.com

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FEATURED PROPERTY SHOWCASE | A Pristine Choice In ISKANDAR MALAYSIA

A Pristine Choice In ISKANDAR MALAYSIA

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he phrase “Location, location, location” has been used over and over again, so much till the extent of turning it into a cliché. But the truth is, the location of a property is so vital that it is the fine line that ensures a property’s booming success or its terrible failure. D Pristine Medini Sdn Bhd’s latest development in Medini, Iskandar Malaysia embodies that mantra through and through. d’Pristine @ Medini, the integrated mixed development in Medini, boasts one of the most prime locations in the heart of Nusajaya. It is situated in what will be Nusajaya’s central business district and is directly opposite the well known Legoland theme park, the Urban Wellness Centre by Temasek and Khazanah, and Gleneagles Hospital. In addition, d’Pristine is located within close proximity to a number

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of catalyst developments, including EduCity, Pinewood Studios, Puteri Harbour and Kota Iskandar, SILC, Ascendas Nusajaya Tech Park and Afiat Health Park. This prestigious mixed commercial development is made up of four components – two blocks of SOFOs (small office flexible occupancy), a grade-A corporate office tower, a designer hotel and a three-storey lifestyle mall – that complement each other. “In view of our strategic location, which is a business and leisure hot spot, d’Pristine was intentionally designed as an integrated commercial development. We want it to be a mixed development with other commercial business components because it is targeted at expatriates and local visitors who come to Nusajaya for work, leisure, education, medical

and various other reasons,” says Dato’ Soo Kai Chee, executive director (marketing and sales) of MCT, the project manager for d’Pristine @ Medini. INTERNATIONAL APPEAL The plan is for d’Pristine to house an international community that comprises expatriates from around the world. “We want our buyers to have a prestigious address and the best way to do this would be to have more foreign buyers. To make d’Pristine a branded location, we have to have a diverse range of buyers. Because of the many catalyst developments in the area, there will be many expatriates looking for accommodation, either to purchase or to rent, and we will be able to fulfil this need. Our advantage is that our neighbours are not property developers but rather worldclass venues like Legoland and the Urban Wellness Centre,” explains Dato’ Soo. But that is not all. Investors will also be treated to serene views of the linear park and lake on the other side of the d’Pristine development. The remarkable scenery within this development will certainly be a soothing sight for sore eyes after a hard day’s work.

Dato’ Soo goes on to say that d’Pristine’s location will be a major pull for investors adding that d’Pristine is not just selling property, but selling its location. THE MEDINI ADVANTAGE Medini is located in Nusajaya, which is Flagship B of the Iskandar Development Region. Driven and backed by Khazanah Nasional Berhad, Nusajaya is a strategically planned city. “Khazanah has a long-term master development plan of 25 years for Nusajaya. In the first seven years Khazanah has done a splendid job bringing in catalyst developments from overseas. Now Khazanah is focusing on bringing in property developers to Nusajaya to start developing the area. From this planning, we foresee that Nusajaya’s development will be unlike any other flagships in Iskandar,” says Dato’ Soo. Nusajaya does not only focus on property development. There are also other industries in Nusajaya such as education, leisure, healthcare and logistics, which are already in place. These industries are expected to generate numerous job opportunities for people from Malaysia and across the world.

Another advantage that Medini has is it being the only economic zone that offers investor-tailored incentives. These incentives include the exclusion of Real Property Gains Tax (RPGT) as well as other tax exemptions for selected promoted industries. Foreign investors will not be subjected to any minimum price threshold for the purchase of properties either. FACING CHALLENGES HEAD ON Presently, there is a development boom in Nusajaya but not a lot of investors recognize the potential that it has as visitors to Nusajaya will not be greeted with soaring skyscrapers and many completed developments like when they are in Johor Bahru City, for instance. “This is the reason many of them are more inclined to invest in JB City. Our challenge is to convince and educate investors on the viability of Nusajaya as a prime location with plenty of potential to be transformed into an international metropolis,” says Dato’ Soo. He adds that it is not easy to convince foreign investors, especially those who have not even heard of Iskandar. This is where d’Pristine uses its trump card – its exceptional location. Many

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FEATURED PROPERTY SHOWCASE | A Pristine Choice In ISKANDAR MALAYSIA

investors who have visited d’Pristine’s project site are confident in the tremendous potential it has. SUSTAINABLE RETURNS “We have also assured our investors that once the project has been completed, the management team will stay on to help investors, especially our foreign investors, in managing their property. Initially many investors were wary but soon realised that we too have a high stake in this development. We will not be selling the lifestyle mall and hotel components and would instead focus on managing it ourselves. “Our main intention is to ensure that all our units are fully occupied because if it is not, it will adversely affect our shopping mall and also our hotel. This is why we want to assist our investors in ensuring that we have a healthy occupancy rate as this will add to the vibrancy, liveliness and prosperity of d’Pristine,” Dato’ Soo says.

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This is the first project that involves many stakeholders, including those from Japan, Singapore, Taiwan, China, Indonesia as well as those from other parts of Malaysia, making it a very high-profile project. “As a result of this, our mission is to ensure that the project successfully maintains its completion date in early 2018. We also want to ensure that the project is one that is continually sustainable so that all stakeholders will gain good returns,” concludes Dato’ Soo.

d’Pristine @Medini’s four components: •

Two blocks of SOFOs (small office flexible occupancy)

A four-star hotel with approximately 300 rooms

A Grade-A office block

A three-storey lifestyle mall

d’Pristine @ Medini is developed by D Pristine Medini Sdn Bhd (a wholly owned subsidiary of B&G Capital Resources Berhad, and its project manager is MCT Consortium Berhad.

Five types of SOFO units: •

SOFO Standard at 644sq ft

SOFO Deluxe at 771sq ft

SOFO Premium Suite Type A at 1,308sq ft

SOFO Premium Suite Type B at 1,416sq ft (Dual-key unit)

SOFO Premium Suite Type C at 1,416sq ft

For more information, kindly contact

03-5115 9901 / 07-509 0967 www.dpristinemedini.com

VISIT US AT PH EXPO 2015 (KK)

BOOTH 21 & 22

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HOT TOPIC | SHAREDA 2014 Property Development Annual Report & Market Outlook 2015

As a consequence, 2014 showed a significant decrease in property launches with a total GDV of RM3.747 billion as compared to the RM7.562 billion generated in 2013. This is a significant 50% drop which was recorded in the mixed development, landed residential, condominium and apartments, and commercial development sectors which posted a drop of between 39% and 76% in GDV. One bright spot in this analysis is the whopping three fold increase in the industrial development sector.

SHAREDA 2014 Property Development

Factors that contributed to the decline of property launches in 2014 were the cooling measures which effectively curbed the buying power of property investors. The increase in fuel price and electricity tariff coupled with uncertainties of the impending implications of GST made property buyers more cautious with their investments. Spending power of consumers was also restricted due to stringent loan assessment procedures which resulted in a high percentage of applicants, particularly first time home buyers, failing to get approval for their end financing which affected the sales performance of each property product launching.

ANNUAL REPORT & MARKET OUTLOOK 2015 Fresh optimism for a revitalized property market

The East Coast that includes both Tawau and Lahad Datu districts fell to third place with a GDV of RM341 million

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he Sabah Housing and Real Estate Development Association (SHAREDA) released its 2014 Property Development Annual Report & Market Outlook 2015 on 9 February with the continuing focus on bringing the most comprehensive information on projects launched by its members throughout the year. The report also highlights issues and concerns of the property industry and SHAREDA’s efforts to address them in collaboration with relevant government ministries and agencies.

The delay in development plan approval continued to impede the timely launches of new projects to capitalize on positive market sentiments which were few and far in between in 2014. Although affecting the tourism industry more than the property market, the flight disasters of MH370 and MH17 as well as kidnappings on the east coast placed a further strain on safety and security issues in Sabah andhad a negative impact on investor confidence. The decline in oil palm prices was also cited as a deterrent factor in small holders acquiring properties for investment.

This second edition of the annual report follows on the successful launch of the inaugural issue in 2013 which received encouraging feedback from its intended target audience namely government departments, professional bodies, real estate players, SHAREDA members and its counterparts REHDA in Peninsular Malaysia and SHEDA in Sarawak.

DISTRIBUTION OF PROPERTY DEVELOPMENTS The West Coast continued to dominate the overall number of property launches in Sabah with a GDV of RM2.622 billion out of RM3.747 billion or approximately 70%.This is expected as the West Coast is the epicentre of growth in Sabah. Ranked second is Sandakan with a GDV of RM413 million covering most of the property development products except for mixed development, which was more obvious in the CBD.

The report will once again analyze the development and distribution pattern of properties by SHAREDA members throughout the year and assess the challenges and opportunities that lay ahead in 2015. Despite a turbulent year with negative sentiment felt in almost all sectors of the property market, the report has also identified indicators that point to an optimistic turnaround in the market in 2015 and beyond.

SHAREDA President Datuk Francis Goh is confident that the annual report will continue to play its role as an indispensable source of reference and guide for those in the industry. PROPERTY DEVELOPMENT REPORT 2014 – OVERVIEW The year 2014 got off to a challenging start with new central bank guidelines and government initiated cooling measures to reign in property speculation and control housing prices causing some anxiety in the property market. The onset of GST implementation in April 2015 further exacerbated the situation and caused many developers to predictably delay their product launches.

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Datuk Francis Goh SHAREDA President

The East Coast that includes both Tawau and Lahad Datu districts fell to third place with a GDV of RM341 million. This obvious decline was largely due to security concerns stemming from the foreign intrusion and acts of intimidation inflicted on the area and its people. Tailing closely in fourth place is the Interior Division with a GDV of RM282 million. Kudat Division rounds up the table with a GDV of RM89 million.

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HOT TOPIC | SHAREDA 2014 Property Development Annual Report & Market Outlook 2015

Similar to residential properties, commercial developments are also moving further away from the city centre and are concentrated within 20 - 30km distance from the city in areas such as Tuaran and Papar thoughthere were two significant launches near the CBD namely Donggongon Avenue and T1@ Bundusan, located in Penampang. After many notable projects like Imago Mall @ KK Times Square, Oceanus Waterfront Mall @ KK Waterfront, RiversonWalk, and PacifiCity in Likas Bay that took place in the heart of the city, most of the upcoming developments will befocusing in suburban areas within 18km radius from the city centre.

LANDED PROPERTIES

STILL POPULAR IN

THE WEST COAST DESPITE PRICE INCREASE

Landed residential property remained the preferred product in Kota Kinabalu’s property market. However, property developments continued to move further towards the outskirts with Tuaran, Inanam and Papar posting the largest number of project launches in 2014. Of these three districts, the selling price for houses in Inanam was higher asit is much closer to the CBD while developments 20 - 30km further away carried an average price tag of RM250 – RM295 psf which is still within the affordable range.

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he significant drop for this year’s GDV (RM278,000,000) compared to last year’s GDV (RM830,878,000) was mirrored by a drop from 22 projects launched in 2013 compared to only 10 projects in 2014. The affordable price for an intermediate single and double storey terrace ranged from RM279,194 to RM288,800 with floor areas of 952sq.ft to 1,024 sq.ft. For the medium costing range double storey terrace houses, the prices went from RM338,800 to RM489,338 with floor areas of 1,024 sq.ft to 1,616 sq.ft. The upper and more luxurious landed properties located closer to Kota Kinabalu and its vicinity had considerably higher selling prices. The sharp decrease of 72% in supply and increase in prices of landed residential houses of up to RM550,000 - RM750,000 for a double storey house was attributed to rising land cost within 20km of the city centre. Double storey developments such as in Kinarut

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and Tuaran which is located some 30km away from the city centre boasted good sales performance, proving that the affordable range of landed housing of not more than RM300 psf can now only be found in the suburban areas. Even localities within 16km of the city centre such as Inanam was selling at RM405psf which pointed to the undeniable fact that Kota Kinabalu’s growth area is fast establishing itself within the northern corridor. Secondary sub sales market for double storey houses will continue to be active with limited landed houses from the primary market and developer preference for vertical stratified apartment or condominium projects due to higher return of investment in terms of density gain. Condominium and apartment development projects have been developed in suburban areas such as Sepanggar with a price range of RM325 – RM368 psffor a built up area of 958 sf - 1,112 sf, and in

The GDV for commercial developments was only RM430.6 million compared to GDV of RM499 million in 2013. A total of 6 commercial developments were launched in 2014 and were mostly shoplots and offices with a built up area ranging from 958 sq ft. to 11,115 sq ft and selling from RM237 to RM552 psf.

Kinarut with a built up area of 1,000 sf -1,325 sf costing about RM220 RM226 psf. The latter price range falls under the affordable home category. This has created a demand for properties especially homes that are affordable for the low to middle income earners with less disposable income to buy a house that cost more than RM300 psf based on their income bracket.This current trend has been going on for years and for very obvious reasons such as the scarcity of land, expensive land price and also developers’ need to assess whether potential buyers have the spending power to procure such property and whether the buyers are eligible to secure their end-financing from banks. The total GDV for this sector dropped from RM1.651 billion (2013) to RM1.222 billion (2014) with a total of 9 projects launched in 2014. The price for affordable

apartments ranged from RM250 to RM300 psf, followed by medium cost starting from RM300 to RM500 psf. High end condominiums with some featuring panoramic city and sea view were priced from RM750 to RM1,200psf and were predominantly located within 10km from the CBD. Medium range condominiums and apartments were still the preferred product by developers in favour of achieving a higher density with 1 acre of land yielding approximately 100 units of condos or apartments compared to 12 units for landed terrace houses. Although there was a 63% sharp decrease in condominium supply in Kota Kinabalu’s market from 6,804 units in 2013 to 2,547 units in 2014, condominiums and apartments still dominated Kota Kinabalu’s property market in terms of numbers.

Several notable mixed development projects launched in the last two years located along the Coastal Highway such as Oceanus, Imago Mall, Riverson and The Loft are about to be completed and prices have increased from the launching price of RM750 to RM1,200 psf. Generally, commercial shop offices concentrated within Donggongon and Jalan Bundusan were sold from RM430 to RM550 psf while those located in new townships such as Benoni Commercial Centre in Papar was tagged at a very cheap price of RM237 psf as land in small towns can still be purchased ata cheaper rate.

reduced, the GDV had increased to RM219 million from RM147 million (2013). The main contributorto the increase of GDV is the launching of 34 warehouse units by Big Wheel Industrial Park selling at RM561RM618 psf on a total builtup area of 5,766 sqft. Most industrial developments are still concentrated in Inanam and KKIP although alternative developments taking place in Kimanis due to the booming oil and gas industry thriving there is set to diversify the development spread. One such project which is under construction is the KPARC Industrial Park, a development that will supplement the oil and gas industry with the sellingprice of RM1,468,888 onwards and a built up area ranging from 3,035 sq ft. to 7,397sq ft. Due to the limited supply of industrial properties, an increase of capital value occurred in existing industrial properties in terms ofsecondary sub-sale and rental market. Inanam, Kolombong and KKIP, which are the main industrial centres in Kota Kinabalu, enjoyed good price appreciation.The lack of new industrial properties is attributed to the scarcity of feasible industrial land especially with good road access and proximity to the port. Finally, a total of two mixed commercial office developments were recorded in the West Coast region namely Menara Hap Seng, a 14-storey commercial retail office development aimed at the rental market, and Inanam Mall comprising of a 6-storey 80-room budget hotel, 8-storey 200-room hotel and 4-storeys of retail outlets.

Three industrial developments were launched in the West Coast region with a total number of 79 units of 3-storey light industrial buildings, warehouses, offices and factories as compared to 152 units launched in 2013. Though the number of units launched were

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HOT TOPIC | SHAREDA 2014 Property Development Annual Report & Market Outlook 2015

PROPERTY DEVELOPMENTS IN SANDAKAN

Property development in Sandakan slowed down with a sharp decrease in units from 1,930 units to 788 units only. Landed residential developments decreased significantly from a total of five to only three projects in 2014 with the condominium and apartment, commercial and industrial sectors each recording two projects each.

PROPERTY DEVELOPMENTS IN THE EAST COAST (TAWAU & LAHAD DATU)

There was a significant reduction in property development with only four landed residential developments in Tawau. The selling price for Taman Ming, a 2-storey terrace house development starts from RM454,100 – RM638,000 and offers a built up area of 1,872 sq. ft. Whereas Taman Jaya, a double storey terrace development has a price tag of RM385 – 501 psf with a floor area of 2,047 sf. Bandar Sri Indah Phase 5C and 5D with a built up area of 1,689 sqft and 1,853 sqft respectively fetched a selling price of RM235-349 psf and RM222 -333 psf.

houses with the single storey offering a built up area of 1,111.43 sf, selling price of RM338,500 while the double storey offers a built up area of 2,020 sf selling at RM528,800. Taman Eramas Phase 3 and Phase 4 comprise of double storey terrace and semi-detached houses with the double storey terrace units selling at RM332,500 for of 1,260 sf and the semi-detached selling at RM622,250 over for 1,872 sf.

SUMMARY OF PROPERTY MARKET IN 2014

As predicted, the year 2014 was not a property friendly year especially with the impacts of budget 2014 being influential enough to reduce the supply of properties in Sabah’s real estate industry. Most developers that launched their projects in 2014 suffered from a slower sales pace. The same happened in Peninsular Malaysia, as 85% of 152 developers reported a sales slump! The real intention of budget 2014 was to curb property prices from soaring high beyond control. However, the Malaysian house prices rose 8% in the first quarter of 2014 as compared to 2013 according to Knight Frank Global House Price Index released in June 2014.

Taman Vista Phase 2, Sandakan The sense of insecurity in the East Coast region caused by the hijacking incidents in the Lahad Datu area had spread to Sandakan and affected the interest of developers to launch more projects. This resulted in a decrease of GDV from RM477.5 million to RM413 million with various types of properties recording slow sales. Landed residential developments included 2-storey semi-detached housing projects at Taman Nasalim Phase 7B and Phase 7C priced at RM326 to RM465 psf with a floor area of1,861 sq.ft. Astana Heights Phase 5, a 2-storey terrace housing development offered a spacious built up area of 1,639 to 1,798 sqft with a selling price of RM378,000 – RM579,580. Taman Vista phase 2 also offered landed properties in their developments with a 2-storey terrace house costing about RM273 psf with a floor area of 1,272 sqft. Two apartment products were launched in Sandakan namely Uno Apartment and Taman Vista Phase 2, both of which are 4-storey walk-up apartments. An apartment unit at Uno Apartment costs RM196,888 and above, while anapartment unit at Taman Vista costs RM218,000 and above. One notable commercial property launched was Sandakan’s Sejati Walk. It comprised of 340 units of shopping lots with a GDV of RM 150 million and sizes varying from 230-1,201 sq. ft in floor size for around RM760 – 918 psf.The 12 remaining units were Uno Apartment commercial shoplots located at the ground floor selling at RM648,888 and above for a built up area of 1,245 sq. ft. Several significant industrial developments launched in Sandakan include Majulah Industrial Centre Phase 1 with a built up area of 2,160 sq.ft. going for RM780,000 and also 3,000 sq.ft. going for RM1,280,000. Sandakan Sibuga Industrial Centre offers 3 different property types selling from RM870,000 to RM1,650,000 and with a built up are aranging from 2,285 sq. ft. to 3,498 sq. ft. Both of these developments will contribute significantly to the economic growth of Sandakan as it will create more job opportunities and pull in interested foreign investors.

Taman Sipitang Villa, Sipitang

Taman Muhibbah Jaya Phase 2 The two landed residential properties launched in Lahad Datu were Palm Heights Phase 2 and Phase 4. Palm Heights Phase2, a double storey terrace development, with a built area of 2,023 sf sold at RM208 – RM323 psf. As for Phase 4, a double storey semi detached was sold at RM272 – RM357 psf with a floor area of 2,250 sf. Rounding up the list of developments are two commercial projects in Tawau namely Merotai Jaya comprised of 2-storey commercial shop lots with a price tag ofRM588, 000 to RM700, 000 for a built up area of 2,400 sq ft. Muhibbah Square comprise of double storey shoplots selling at RM488,000 for a net area of 1,176 sq ft.

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PROPERTY DEVELOPMENTS IN THE KUDAT DIVISION

Only two developments were launched in the Kota Marudu district but it has been observed that the Kudat Division will be seeing an increase in new property launches in the future.

PROPERTY DEVELOPMENTS IN THE INTERIOR DIVISION

The stringent bank loan assessment policy is the major contributor to the slower sales performance faced by all developers. The high rejection rate in end financing application by potential buyers has eventually caused all buyers to be more cautious in their spending and desire in property investment. According to a survey by SHAREDA Property Research Unit, there is a lower rejection rate on affordable products that costs below RM250,000 and medium range affordable apartments has a rejection rate of only 22%. Medium upper range condominiums with a price range of RM400,000 to RM800,000 faced higher bank loan rejection rate at 42.35%. Most developers feel the heat as most of their products are ranged in this category. For high end condominium, semi-detached landed houses or bungalow, an even higher rejection rate of 35.14% was recorded. It can be concluded that the higher the selling price of the products launched, the higher the bank loan rejection rate will be. The above findings should form part of the consideration in assessing the market risks for developers who wish to market high end products in the near future.

Industrial and stratified developments are still absent from the development landscape in the interior division of Sabah but commercial and landed residential developments had remained upbeat albeit lower than the previous year. The four landed residential developments launched were Taman Villa Palma Phase 1 in Keningau, Taman Sipitang Villa in Sipitang, Taman Bukit Indah in Keningau and Taman Eramas Phase 3 and 4 in Beaufort. Taman Villa Palma consists of single and double storey terrace houses with a selling price of RM209,800 and RM259,800 respectively for an intermediate unit. With a floor area of 1,793 sf averaging RM142 psf, it is still relatively cheap as the price of land in the interior is cheaper than all other divisions of Sabah. Taman Sipitang Villa boasts the most units with 546 units of single storey and double storey houses selling for RM298 psf and RM342 psf respectively. Taman Bukit Indah comprises of single and double storey semi-detached

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The only commercial development launched in 2014 was Lumat Centre Phase 2 in Beaufort which offered 2- and 3-storey commercial shoplots with a built up area of 2,420 sf and 3,870 sf respectively. The selling price for the 3-storey units was RM730,000 and above and RM630,000 and above for the 2-storey units.

The cooling measures implemented under budget 2014 have failed to stop property prices from soaring. It had only served to reduce the supplies in the market which again reinforced SHAREDA’s statement that the market force cannot be distorted and the only way to reduce the property pricing is to increase the supply in the market.

One Marudu Commercial Centre One Marudu Commercial Centre is a commercial development that consists of 57 units of 2-and 3-storey shoplots that comes with floor sizes ranging from 2,400 – 3,600 sqft and selling prices going from RM670,000 – RM980,000. The other development is 1 Avenue Square which is a double storey Light Industrial development. The price tag on a unit starts from RM738,000 – RM888,000 with a built up area of 2,200 – 2,800 sq ft.

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HOT TOPIC | SHAREDA 2014 Property Development Annual Report & Market Outlook 2015

SHAREDA PROPOSES CHANGES TO BOOST PROPERTY DEVELOPMENT MARKET

In the 2014 Annual Property Market Report, SHAREDA highlighted several pressing issues that have yet to be resolved. There have been some positive signs of resolution to these issues from the local housing ministry but a sense of urgency is still evident as property developers continue to overcome surmounting challenges to keep property prices within affordable range for the public. In his paper for the annual report, Ar Ronnie Ang wrote: Proposal to Expedite Development Plan Approval Back in year 2005, Development Plan for residential development was approved within a period of 6 months with anticipated time of additional 2 to 3 months to obtain Developer’s Licence from Ministry of Local Government and Housing. Later, more stringent measures were introduced from various government agencies for more technical studies like JKR Traffic Impact Assessment (TIA) or Traffic Site Plan (TSP), DID MASMA studies, Environmental Impact Assessment (EIA), and DBKK High risk committee on Hill Slope Development. The Health Department has also now enforced that the “Health Impact Assessment” must be submitted by developers to mitigate the spread of “dengue disease” at construction sites. These additional procedures have deterred the approval process as the studies take a longer time to complete and they must be done simultaneously before reaching a final decision by the local councils before sending over to Central Board for final decision. SHAREDA’S Survey Recent survey amongst SHAREDA’s members has shown that most of

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the Development Plans have taken between 30 to 36 months to obtain a Development Plan’s approval. It is indeed welcoming news when it was announced by YB Datuk Seri Panglima Haji Hajiji Bin Haji Mohd Noor, Minister of the Local Government and Housing at the recent State Legislative Assembly that the Government is setting up a one stop centre to streamline the process of approving developments, building plans and issuance of Occupational Certificates. SHAREDA fully concurs and is supportive of the proposal by the minister as it will definitely expedite the approving process and reduce the unnecessary red tape in all aspects. SEVERAL PROPOSALS BY SHAREDA TO EXPEDITE THE APPROVAL OF DEVELOPMENT PLAN (DP) (i) Submission of DP to Central Board First for Principal Approval The role of Central Board is to deliberate the zoning and rezoning issue, to ascertain the Development Plan is in line with Government’s policies as well as to consider the social impacts created by the proposed development apart from traffic impacts and environment impacts issue. Central Board has no sufficient technical support such as qualified engineers and architects to review the technical aspects of the proposed development. Thus, local authorities still need to circulate the proposed Development Plan to the respective advisory departments for technical comments. This has caused distressful experience to the developers due to heavy capital investment cost on land, resources and fee payments for consultants’ services. Inevitably, this would delay the approval process which will further exacerbate the cash flow problems and service higher bank loan interest. Hence, SHAREDA hereby recommends to the Central Board under the Ministry of Local Government and Housing to accept all development plans to be submitted to Central Board for

approval ahead of the development plans before being circulated to all relevant advisory departments for technical comments. The “Top Down” procedure is more appropriate as Central Board is the highest authority to approve DP prior to the gazettement of Draft Local Plan as a short term solution. The above “Top Down” procedures would save a lot of development risks for developers and many hopes that the Central Board would recommend a Development Planning Approval (DPA) stage to be arranged within 2 months from the date of submission by a qualified architect. With this order in place, the developers would have the confidence to pay up the balance of the land price within the 6 months grace period to prevent huge loss in securing unsuitable land for development. (ii) To expedite the gazette of all Draft Local Plan by MLGH The Ministry of Local Government & Housing (MLGH) through its Town Planning Department must expedite the gazette of all draft local plans so that Development Plans do not need to be submitted to Central Board as a long term solution. The Central Board’s role should only then focus on the issues of rezoning applications and to regulate appropriate development policy. (iii) To set up “One Stop Centre” to gather technical comments in all District Council After the principal approval has been obtained from Central Board, the Development Plan will be submitted to the respective councils for technical comments for final approval. In order to expedite the process of technical comments, it is recommended that the District Council set up a One Stop meeting every month to involve all relevant advisory departments to give their comments on the spot in accordance to what has been suggested by YB Datuk Seri Panglima Haji Hajiji Bin Haji Mohd Noor in his winding up speech in the recently concluded State Assembly.

ENCOURAGE TRANSPARENCY AND ESTABLISH FIXED RATE IN CAPITAL CONTRIBUTION SHAREDA welcomes YB Datuk Seri Panglima Haji Hajiji Bin Haji Noor’s view that the State government would appeal to the Federal agencies involved in providing utilities such as electricity and telephone services to reduce capital contribution charges on local housing developers to be on par with the charges on peninsular Malaysia in an effort to stabilize home prices. The metrical charges of the so called capital contribution will eventually transfer to buyers which constitute almost 3% of the products’ pricing. SHAREDA is of the opinion that SESB or other agencies should advise their contribution charges at the early stage while assessing the development plan so that it may provide an accurate budget to the developers in determining the house price. Otherwise, it may cause budget over run on the estimated development cost. DID MASMA STUDIES SHAREDA urges the District Councils and DID to consider detailed submissions of MASMA after the Development plan approval i.e. during building plan submission provided there is a provision of land reserve for detention pond under the development plan. This will expedite the approving process as the study itself is a comprehensive document that requires longer period to compute and most of the time, retention of water is through sizes of drainage that will prevail after the calculation of drain sizes during the submission of building plan. MASTER INTEGRATED TRAFFIC PLAN SHAREDA opines that the current requirement for Traffic Site Planning is a good move by JKR but it is difficult to resolve the traffic problems due to its individual micro scale studies. It would be prudent if the State Government takes an initiative to study and evaluate the traffic issues in totality for urban areas which will achieve more consistent

approach to traffic planning and sustainable development. The developers should be asked for a Traffic Network Plan only to mitigate the traffic problems within the development site and its adjacent road networks. ENVIRONMENT IMPACT ASSESSMENT EIA should not be required on flat land reclamation so long as the developers can prove where the source of the imported earth is.

WHY BANKS NEED TO PERFORM THEIR CSR TO ASSIST LOWER INCOME GROUP TO OWN HOMES An analysis by Chew Fei Sean on why banks need to perform their CSR to assist the lower income group to own homes amidst current stringent loan application assessment which have resulted in a high percentage of housing loan rejection. The recent announcement of Budget 2015 by our nation’s Prime Minister has put many economic analysts on the pedestal, as the Budget 2015 is within their expectations.

2015 – 31 December 2016. The government has formulated policies to boost the supply of affordable homes through GLCs such as PR1MA Home, JPN, and SPNB. According to Budget 2015, the government has allocated a funding as follows: •

A sum of RM1.3 billion to build 80,000 units PR1MA Homes

A sum of RM644 million to build 26,000 units PPR homes under People’s Housing Programme,

SPNB to build 12,000 units of Rumah Mesra Rakyat, 5,000 units Rumah Idaman Rakyat, and 20,000 units of Rumah Aspirasi Rakyat.

From these figures, we can deduce that an influx of supply of affordable homes in the market, with a total number of 143,000 units with a GDV of RM7 billion. Furthermore, the government has formulated policy to allow high loan ratio of 110% to increase the demand of affordable homes.

What does the Budget 2015 mean to the property development industry and also to the market scenario?

However, SHAREDA opines that the demand of the said property would be hindered by the low repayment ability of the house buyers, mainly due to tight commitment, such as high credit card expenses and mortgages on motor vehicles. With the weak repayment ability, end financiers are less likely to approve the mortgages to buyers.

Budget 2015 portrays two sides of a coin. On the facet, we may presume that the Budget 2015 has orchestrated an attractive incentive package to the middle income earners. For example, the government has allowed reduction in income tax rates and increase in relief for specific expenses, such as medical expenses; extension of stamp duty exemption for the purchase of first residential property to RM500,000, with executed Sale & Purchase Agreement from 1 January

The much debatable government imposition of 6% GST has stirred a significant fuss amongst the affordable housing’s developers and buyers. Although the GST imposition has no impact on the selling price of affordable homes due to the exempted goods nature of residential property, the impact is substantially impacting the development costs of affordable homes. The increase in development costs due to GST imposition has discouraged developers to build more affordable

homes. This would ultimately affect the government’s promise/manifesto to provide more homes for the middle income earners. With the introduction of Budget 2015 and the scenario of the bank loan rejections in the market, what are the roles of the banking institutions in the effort to improve affordability and purchasing power of lower-middle income group? Based on available statistics of the Top 5 Finance Sectors in Malaysia, we can deduce that the 5 major banks in the industry are experiencing healthy profit margin of average 29% annually. In comparison to other industries in the Malaysian economy such as Agriculture, Oil & Gas, and Car Industries, developers only received 9%-12% of the profit margin only. In other words, the banking institutions are in a better financial condition than the developers. Hence, it would be safe to say that the banking industry should play a greater CSR role in improving affordability in the market. Furthermore, SHAREDA seeks assistance from the banking industry to shoulder more responsibility in the implementation of 1 million affordable homes scheme initiated by our Prime Minister Datuk Seri Najib Razak. The local banks should play a more effective role by providing more accessible financing facilities for home buyers, especially the low income group. It was noted that the main reason for the failure of buyers to secure housing loans is stringent requirements imposed by financial institutions despite the incentives and various assistance schemes provided by the government, especially initiatives such as MyHome scheme.

financial institutions are risk adverse and they are taking a back seat on approving affordable homes loans. Bankers are too apprehensive on the repayment ability of affordable home buyers, and also the bankers’ conservative and prudent outlook on our nation’s household debt ratio. On the contrary, it was highlighted in the press release dated 10th June 2014 Tuesday) by Datuk Seri Idris Jala from the Prime Minister’s Department that our nation’s household debt is a concern, however it is NOT ALARMING. Despite this concerning debt, it is consoling to note that: •

Gross Domestic Product (GDP) ration has improved to 86.6% in 2013 as compared to 72.4% in 2009;

Household asset-to-GDP ratio is more than 200%; and

Impairment loan ratio has decreased by 1.8%, from 3.1% in2009 to 1.3% in 2013

The way forward for the market to improve rapidly is to have Bank Negara to relax the stringent loan approval criteria, especially to First Time Home buyers, for example: •

Exemption from CTOS and CCRIS checking

Reduce repayment period for cars to 5 years

Increase of loan repayment period to 35 years

Impose quota to banks to finance first time house buyers and affordable homes.

According to SHAREDA’s survey, we can deduce that housing loan application suffered from a high rejection ratio of 35%. This is definitely detrimental to middle lower income home buyers. From this scenario, it is evident that the

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HOT TOPIC | SHAREDA 2014 Property Development Annual Report & Market Outlook 2015

2015

be introduced specifically for individuals who are unable to obtain bank finance and JPN or National Housing Department. 26,000 units of houses would be built under the People’s Housing Programme (PPR) with allocation of RM644 million as announced in Budget 2015

PROPERTY DEVELOPMENT OUTLOOK

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espite all the turbulence that happened last yearand the future GST implementation on April 1, 2015, SHAREDA Property Research Unit is still optimistic that the Sabah Property Development Market will prevail and bounce back in the upcoming year with support given by the government and self-adjustment by property developers in assessing market risks. Property development sectors, including residential, leisure property and affordable housing are anticipated to be active and robust again due tothe following assumptions and assessments:-

• Following many complaints from Malaysian property developers claiming a slowdown in sales after Budget 2014 introduced cooling measures to curb soaring house prices came into effect, the recently announced

Budget 2015 appeared to be friendlier and less harmful to the property development sector.

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Budget 2015 also announced the Youth Housing Scheme which is a smart Partnership between the Government, Bank Simpanan Nasional, Employees Provident Fund, and Cagarmas Bhd to provide a special loan package to 20,000 first time house buyers from newly married youth couples.

Syarikat Perumahan Negara Berhad (SPNB) is to build 12,000 units of “Rumah Mesra Rakyat” and 5,000 units of “Rumah Idaman Rakyat” and also 20,000 units of “Rumah Aspirasi Rakyat” on privately owned land. Budget 2015 also relieves the difficulties experienced by civil servants in obtaining financing for houses by increasing the minimum eligibility for housing loan from RM80,000 to RM120,000 and the maximum eligibility limit from RM450,000 to RM600,000. The processing fee of RM100 for housing loan applications would also be abolished.

SHAREDA lauded the government’s

Datuk Abdul Rahman Dahlan Minister of Urban Well Being, Housing and Local Government

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move in helping youths and first time house buyers with the Youth Housing Scheme, as well asmore units to be built under 1PRIMA Housing or 1Malaysia People’s Housing Programme. Prime Minister Datuk Seri Najib Tun Razak has announced loan offers as high as 110% will be extended to 1PRIMA house buyers by selected financial institutions. The ceiling of household income for those applying for the 1PRIMA homes will also be raised from RM8,000 to RM10,000 in 2015. Budget 2015 has allocated RM 1.3 billion to build 80,000 units of PRIMA Houses to address the issue of home ownership ataffordable prices. •

A Rent-To-Own Scheme would

Prime Minister Datuk Seri Najib as also committed to build more 1Malaysia Civil Servant’s Housing (PPA1M) and to be sold at 25% cheaper than the prevailing market price, and provide a facilitation fund up to 25% from the project cost to private property developers who will participate in this scheme. •

The announcement by Minister of Urban Well Being, Housing and Local Government, Datuk Abdul Rahman Dahlan on August 30 mentions that the government is open to reintroducing DIBS Scheme if there are indicators that the ban is creating a negative impact is most welcomed by all property developers.

Datuk Abdul Rahman Dahlan also announced on September 16, 2014 that his ministry has no plans to compel housing developers to adopt the Build Then Sell concept for all new housing projects as demanded by house buyers association (HBA). This has again proven that the government is willing to listen to industrial players, of which SHAREDA, REHDA and SHEDA have on many occasions stressed the importance of property development and its spill over impacts to our economic growth as property development directly affects 165 related chain linked industries and is the creator of employment and job opportunities. With the above mentioned friendly budget and supporting gestures from the government, SHAREDA opined that the property market outlook for 2015 will be better than 2014 without much policy risks interfering with the property market apart from the soon to be implemented Goods and Service Tax (GST) in April 2015. Assuming that the variety of projects expected to kick off in 2015 goes according to plan, there would be a cumulative GDV of RM18 billion in development projects which include affordable housing schemes, government initiated joint venture developments, private developments initiated by SHAREDA members and yet-to-be-confirmed development projects in the East Coast and Interior divisions. EXPECTED AFFORDABLE HOUSING SCHEMES TO BE LAUNCHED IN 2015 A total of 15,388 units are expected to be built in Sabah involving the Sabah State Government through LPPB, the Federal Government’s linked housing agencies such as Jabatan Perumahan Negara (JPN), Syarikat Perumahan Negara Berhad

(SPNB), and 1PRIMA Berhad, as well as SHAREDA’s promise of delivery of 10,000 units (which will be actively launched in 2015) at a combined total GDV of RM4.054 billion. SABAH GOVERNMENT INITIATED JOINT VENTURE DEVELOPMENTS Several notable mega development projects which had their joint venture agreement sealed in the last two years with the State Government have come to maturity where the development plan has now been approved by the authority concerned and ready to takeoff. These developments include the Kota Kinabalu Convention City (KKCC), Jesselton Quay, Sabah International Convention Centre (SICC) and Tanjung Aru Eco

in Jalan Bundusan with a GDV of RM371 million, The Riverside Residence @ Sodomon (medium end condominium with a GDV of RM66 million), Maya @ Likas (highrise condominiums with a GDV of RM268 million), Kingfisher Inanam (condominium development with a GDV of RM300 million), and Kingfisher Putatan (apartments in a mixed development with a GDV of RM45 million). Commercial and industrial projects will include Titanium Technology Park (light industrial showroom with a GDV of RM372 million), Orchard Plaza (commercial hub with shoplots and supermarket at a GDV of RM50 million), and GM Home Retail Warehouse (one-stop household

Development bringing the total GDV to RM5.8 billion.

and furnishing hub with a GDV of RM23 million).

PRIVATE DEVELOPMENT INITIATED BY SHAREDA MEMBERS The property market in 2015 is expected to be vibrant in view of several megamixed developments already advertised for preview at the end of 2014. Among the notable projects are the two mixed developments by Homesign Network Sdn Bhd which are 360° Boulevard and Skycity chalking up a GDV of RM3.7 billion.

The leisure properties set to launch in 2015 are Royal Kinabalu Mountain Resorts & Hotel Suites in Ranau with a GDV of RM370 million, Royal City Hotel & Retail Complex in Kota Kinabalu with a GDV of RM337 million, ALILA Dalit Bay in Tuaran with a GDV of RM225.3 million, Aman Saujana Resort Villas Phase 1, 2 and 3 in Tuaran at A GDV of RM210 million, and Aman Pesona Beachside Villas also in Tuaran with A GDV of RM240 million.

The remaining projects with a total GDV of RM3.44 billion include landed residential, condominium and apartment, commercial, industrial and leisure properties. Under the landed residential category are Casablanca Residence in Kolombong with a GDV of RM86 million, Astana Heights Phase 2B & 2D in Sandakan with a GDV of RM30 million, and Bandar Sri Perdana Phase 4E1 in Lahad Datu with a GDV of RM47 million. Condominiums and apartments will be the prime development category in 2015 with D Residence (highrise development in Penampang with a GDV of RM400 million), Unicorn Tower Condominium

Out of the total expected RM18 billion GDV to be realised in 2015, SHAREDA members shall contribute RM9.5 billion (53%) categorized under : (1) SHAREDA – MLGH Affordable Housing Programme (RM1.39 billion); (2) Private Development Initiated by SHAREDA Members including leisure properties (RM7.14 billion), and (3) Development projects to be launchedby SHAREDA Members in the East Coast, Sandakan, Kudat & Interior regions which are yet to be confirmed (RM1 billion).

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FEATURED PROPERTY SHOWCASE | Sky World

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FEATURED PROPERTY SHOWCASE | Sky World

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SARAWAK PROPERTY NEWS

SARAWAK

PROPERTY NEWS

Keep track of the latest property and real estate news plus reviews in the property market in Sarawak

Sarawak Property Market Moderates In 1H2014, Says WTWY

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arawak saw its property market slow down in 1H 2014 as local developers witness knee-jerk reaction in sales while many reduced sales targets and delayed launches, according to CH William Talhar Wong and Yeo Sdn Bhd (WTWY). In its ‘Property Market Review for the first half of 2014’, WTWY said the good run between 2009 and 2013 appears to be consolidating in early 2014, possibly revealing “the tip of the iceberg” of the effects of the tightening measures introduced in Budget 2014. The measures include the abolition of Developers Interest Bearing Schemes, the increase in real property gains tax as well as the strict lending rules implemented by financial institutions and banks. “The last few years have seen property prices increase anywhere between 30 and 100 percent.

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Purchasing power was further weakened with the recent increase in Base Lending Rate (BLR) to 3.25 per cent,” said WTWY in the report.

“Increase in property prices in the primary market due to increase in materials and construction costs have helped to propel the secondary market which is comparatively cheaper… Thus, it is expected that the secondary market would be in good demand.” WTWY believed that the property market for 1H 2014 showed tell-tale signs of correction, with slower sales as most property products were already absorbed during the last two years or so and the decreased number of units developed and launched compared to similar period a year ago.

Notably, the performance of Sarawak’s property market can be said to moderate with transactions recorded by NAPiC dropping 13.3 percent in value and 22 percent in volume. “This is true for almost all subsectors, notably agriculture by 23 per cent and commercial by 28.8 per cent, although values increase by 5.8 per cent and 12.6 per cent for development lands and industrial units respectively,” explained WTWY.

“Of particular interest would be the residential sector which decreased by 22.8 per cent and 20.7 per cent respectively in terms of both total transaction value and volume. “However, it is prudent to note that generally, property prices have not dropped. On the contrary, property prices continue to rise despite the slower sales performance. Selling prices are expected to further increase with the implementation of the GST in 2015.”

Kuching, Sarawak

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SARAWAK PROPERTY NEWS

Sarawak Studying Possibilities Of Creating Retiree Villages

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arawak’s Housing Ministry is studying the possibilities of creating retiree villages in Sarawak. Its minister Datuk Amar Abang Johari Tun Openg said that such type of villages is the latest trend in developed countries. He said one such renowned retiree villages in a residential area in Australia allows retirees to buy houses.

“The village is managed by developers and has homecare, nursing, recreation and exercise facilities.

He added that once the ministry has obtained feedback from

Abang Johari, who is also Tourism Minister, said they had received the paperwork from interested developers, but the appropriate sites had not been identified. “We also received a suggestion from Yang di-Pertua Negeri Tun Pehin Sri Abdul Taib Mahmud to see if the area in Telaga Air can be developed into retiree villages. Thus, we are looking into the possibilities and we are waiting for feedback from developers,”

T

Sarawak state assembly building in Kuching

he State Government of Sarawak is looking to develop land in cities and major towns there that are owned by Malay and other bumiputera communities in a bid to tap their commercial potential and maintain their bumiputera ownership status.

PSB will invest RM400 million in the iconic project, which is expected to begin by end-2015 and will be built over a sevenyear period. Other partners include Hikmah Sarawak, Faradale Development Sdn, Sarawak Baitulmal and Custody and Development Authority (LCDA).

According to State Housing Minister Datuk Amar Abang Johari Tun Openg, the authorities have commissioned Australia-based Kox International Consultant to conduct a research to pinpoint these areas and how to effectively develop them.

Furthermore, LCDA will craft a masterplan for the project so that it will be developed in a more organised and well-coordinated manner.

“To develop such land will obviously require enormous capital and PSB is a special vehicle for the Satok project. We are pooling our resources together either as individuals or with the government’s assistance,” he said. www.PropertyHunter.com.my

Joseph Wong Kee Liong Is SHEDA New President

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oseph Wong Kee Liong of Kintown Development Sdn Bhd has been elected to be the new President of Sarawak Housing and Real Estate Developers’ Association or SHEDA for the 2015 to 2018 term.

He said this in a statement to the media after opening the office of Permodalan Satok Berhad (PSB), a local firm created four months ago to transform a 1.54-ha Malay land in Satok, Kuching into a new commercial hub.

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Vermont Suites: A Stylish And Luxurious Sanctuary

developers, they will start to work out the plans to build these retiree villages in the state.

he said. “These houses are sold, but managed by an appointed company, and when the owner leaves, the house can be resold to other people through its property developer,” Abang Johari said when speaking at the Taman Desa Guru Playground officiating ceremony recently.

Sarawak To Develop Bumiputera Land

Other similar projects being planned are Pekan Selirik in Kapit and Bandar Nangka Baru in Old Oya Road in Sibu, added Abang Johari.

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Vermont Suites Condominium in Stutong

trategically located within the vicinity of Woodlands and Centurion housing estate, and accessible from Jalan Stutong, Vermont Suites condominium lies on 3.81 acres of land along the foothill of Kampung Stampin Tengah, Kuching. A total of 100 apartment units are laid out in six to eight storey medium rise towers, with external frontages and views towards the city, airport, sprawling suburban residential areas, and hillside. Internally, the towers are designed to enclose a central elevated courtyard and smaller pocket gardens. Ample parking facility is provided on Level 1, sheltered by the elevated courtyard and garden deck on Level 2 where the apartment towers are seated. The setting of the condominium is exclusive, gated and guarded with CCTV security services amidst an oasis of eco-friendly and conducive green environment. Meanwhile, the common facilities on Level 2 consist of an elevated swimming pool flanked by the barbecue pavilion and a wellequipped gym. The management office, library and function/games room are situated at Level 1. Vermont Suites condominium offers a variety of apartment types comprising 2+1 bedroom units of

sizes ranging from 1,100 square feet (sf) to 1,200sf, whereas three bedroom units sizes range from 1,400sf to 1,600sf. Larger units in the form of exclusive two storey penthouse and three storey penthouse, with area ranging from 2300 sf to 4900 sf are also available.

The covered open plan parking floor is located on the ground floor with easy accessibility to stairs and lifts which are grouped at the vertical circulation cores. A total of seven lifts are provided to serve the apartment towers. The guarded entrance is located at the extreme northern corner with an inviting landscaped entrance court for an expressive entrance statement. Lush shady landscaped plantings flank both sides of the access road and continues along the eastern side, containing various vegetation along a footpath to create a continuous link between the ground level gardens and the elevated gardens on Level 2, making the jogging and walking experience more exciting and meaningful.

Elected during the recent Extraordinary General Meeting, Wong is supported by Rewi Hamid Bugo of Petra Jaya Properties Sdn Bhd as Deputy President. Meanwhile Jee Chun Fah of Dascom Sdn Bhd is the new Secretary-General and Kevin Choo of Timber Land Group the is the new Treasurer-General. On the other hand, branch chairmen were elected prior to the EGM on January 7. They comprise Dr Christopher Ngui (Tiara Realty Sdn Bhd, Kuching), Penghulu Ting Teck Kai (Upcojaya Construction and Engineering Sdn Bhd, Sibu), Simon Tiong (Borwak Sdn Bhd, Miri) and Troy Yaw (Sarawak Land (Kemena Park Sdn Bhd), Bintulu). The branch chairmen will sit as vicepresidents on the state council, as reported by The Star online. The state council also includes a team of members comprising Alex Wong (Hock Peng Realty Sdn Bhd), Augustine Wong (Sinar

Mekar Properties Sdn Bhd), Bobby Ting (Elica Sdn Bhd), Cecil Lau (Aquabloom Sdn Bhd), Chang Foh Choon (Naim Land Sdn Bhd), Gary Kho (CMS Property Development Sdn Bhd), John Yong (Instarmac Development Sdn Bhd) Lawrence Kong (Rich Venture Construction Sdn Bhd), Robert Ting (WTWY Real Estate Sdn Bhd) and Yek Nai Kwong (BBC Construction Sdn Bhd). The immediate past president, Zaidi Ahmad (Arasy Assets Sdn Bhd), and past president Datuk William Wei (HWS Development Sdn Bhd) sit as ex-officio council members. SHEDA was established in 1993 and has over 200 members. Its past presidents include the late Datuk Mustapha Besar and Alex Ting. The association is recognised as an official channel of communication with other stakeholders on matters relating to the building and construction industry in Sarawak. Last year SHEDA held a series of five home and property roadshows, GST talks relating to the property industry, its annual property expo, annual dinner and excellence awards.

The 2015 - 2018 SHEDA Council lineup

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FEATURED PROPERTY EVENT | Tee Chew Association Kota Kinabalu

FIRST SOLAR TAXI STATION IN MALAYSIA

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ota Kinabalu now has the first ever solar powered taxi station in Malaysia with its official opening in Kampung Air on 16 February, 2015. The taxi station and the technologies that went into its construction is worth RM300,000 and was made possible through the sponsorship and collaborative effort of the Kota Kinabalu Teo Chew Association, Remajaya Sdn Bhd, Colourcoil Industries Sdn Bhd, City Top Enterprise Sdn Bhd, Glimex Corporation Sdn Bhd, Y.S. AluminiumSdn Bhd, BriSteel Corporation Sdn Bhd, LCP Trading Sdn Bhd, N S Stainless Steel Industri Sdn Bhd, Panellite Marketing (Borneo) Sdn Bhd, JS Contractor Enterprise, Platinum Omega Sdn Bhd, TanbarSdn Bhd, Niro Ceramic Sales and Services (M) Sdn Bhd, Unity Marketing (M) Sdn Bhd, OD Paints Sdn Bhd, Expogaya Sdn Bhd, Pemborong K & H Construction Sdn Bhd, Lusecra Sdn Bhd, In Precast Builders Sdn Bhd, Veista Sdn Bhd, Tiara Perkasa Trading, Innotech Design Architects Sdn Bhd, PY Konsep Preunding Sdn Bhd and SME Konsult Sdn Bhd.

Deputy Chief Minister cum Industrial Development Minister Datuk Raymond Tan Shu Kiah officiated at the opening ceremony and described the taxi station as special as it was a project by the Teo Chew community for the people. “It is an encouragement for an association to think of the people at large…I was told that it is high tech and uses solar energy power, which is another step forward since it doesn’t only function as a shade but also provides renewable energy for lighting,” said Tan.

He hoped more of such technologies would be applied in the city since it was the aspiration of the City Hall to turn Kota Kinabalu into a green city.

coming forward and emulating the good deed by the Teo Chew Association, to put a balance between environment and modern technology,” he said.

Sustainable Energy Development Authority (SEDA) chairman Datuk Yee Moh Chai expressed his appreciation to the sponsors and to City Hall for the effort.

The solar taxi station idea was mooted in 2013 and was a year in the planning process before construction began in mid-2014. It was a monumental task to coordinate the construction phase between the various sponsors who donated materials and labour to complete the project, the success of which is a true testament of the aspiration to make Kota Kinabalu city a livable city.

“This is a unique CSR (corporate social responsibility) effort and the project is the first of its kind in the county in terms of the technology involved. We are involve in the renewable sector and are proud to be part of it. And I want to take the opportunity to praise the sponsors behind it, including the Mayor because only with them can we have this successful project,” he said. Meanwhile, Mayor Datuk Abidin Madingkir said that among the Malaysian states, Sabah is the most suitable for harnessing solar power.

From second left: Datuk Yee Mah Chai, Datuk Datuk Chua Soon Ping-Deputy Chief Minister of Sabah, Datuk Raymond Tan- Major of Kota Kinabalu City and Datuk Abidin Madingkir

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“As technologies improve, I hope that there will be more individuals, companies and NGOs (nongovernmental organizations)

Apart from providing a safe and comfortable location for taxi drivers and their customers, the taxi station also features an eye-catching animal cut-out roof design to establish it a new tourist attraction in the city. Leaders in the taxi industry were also pleased with the project. “The new taxi station is a good project and will enhance the image of the city,” commented one of the regular taxi drivers at the station.

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HOT TOPIC | First Home Buyers: Is Generation-Y’s Future at Stake?

carved a successful career in real estate by being driven to succeed. His fortitude comes from the belief that one should equip themselves with the necessary knowledge to accomplish success and finding ways to gain this knowledge.

urban or suburban location is escalating. A major factor causing difficulty in owning a home is the worrying trend of omission in financial planning amongst the youngsters,” says Ishmael.

First Home Buyers:

“Some would rather not think about their financial health as they get more stressed out looking at the figures. However, this is counterproductive.”

STAKE? Is Generation-Y’s Future at

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eneration-Y has been defined as the generation of people born during the 1980s and early 1990s. It is not a globally accepted definition by any standard as there are age variances between countries but there is no denying that this group of people share very similar characteristics. Children born during this time period tend to be web savvy or highly connected via social media due to the constant access to technology in their youth. They are thought to be more family-oriented and place a high importance on work/life balance where a job, a house and a family are the main priorities. But achieving these life goals is getting more daunting with escalating cost of living, household debt and property prices. With the current property sentiment in Malaysia, would it be possible that Malaysia’s Generation-Y end up as a generation of renters instead of house owners? Or can they become as property investor savvy as they are technology savvy, and own a house by the time they reach 30. Charles Tan, a property analyst who blogs about the local property market says entry level house prices can be a crippling factor to any first time house buyer but this may not be the case in Malaysia.

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“Although my situation can be vastly different compared to my peers, I would advise them to not sell themselves short. Do not underestimate your capability but also do not overestimate your purchasing power. When it comes to your first home, purchase one that is closer to town or your work place. Because of your young age, your focus should be on developing your career and strengthening your purchasing power. Therefore, your first property may be a little bit smaller and much older but have a plan on upgrade in the future.”

“There are countries such as Singapore, Hong Kong, the UK and even Australia where whether you are a Gen-Y, Gen-X or whatever Gen, the minimum entry point to buy a property is very high,” he says.

“In Malaysia, if you search any property sites, you would notice that the entry point is much lower. As long as you do not buy in hotspots or huge units, you can get an apartment of below 1,000 sqft for around RM300,000.” If this is the case, and buying a property is within reasonable reach, why is there an affordability issue amongst our Gen-Y? The conundrum can perhaps be explained by looking at the benchmarks set by the Gen-Y on property ownership. Opines Charles: “For a Gen-Y, with a 10% down payment and a 35 year repayment schedule, they can easily afford an entry level unit. However, the perception is that if they buy such units, they would lose face. They also do not want to accept that they must start lower as everyone wants to start as high as they can. That’s the reason why house prices keep increasing. Everyone is buying where everyone wants to buy.... no one wants to stay in a locality where everyone says is not so classy.”

Plan smart, invest wisely As daunting as it may sound, buying or investing in property is not an elusive dream. It does however take a lot of thinking, planning and awareness to mke that all important first step.

Income vs Outcome Ishmael Ho is a director at Ho Chin Soon Research Sdn Bhd, a property information company specializing in data on land use and ownership for industry players. He is also 26 years old and a property owner. He wrote his first cheque for two secondary commercial shop house lots in 2014 and is about to purchase a residential unit for own use this year. For Ishmael, having the benefit of a mentor and work experience to guide him through the intricacies of property ownership has alleviated some of the anxieties the come into play when deciding to invest in his first property. Besides money, one of the major concerns that may prevent many young Gen-Y’s from purchasing their first property is an aversion to early financial planning. “No doubt with income levels not catching up with house price movements, the financial stress to own property in a decent

Chris Tan, a lawyer specializing in real estate thinks that everyone can afford to buy a house before they turn 30 as it is a question of will and whether one is aware of all the options available interim of owning the first home. “The first mindset change is that “your first home is never your dream home”,” he notes. “Your first home should be the one that fits your immediate need to cover only an immediate foreseeable future. The truth is that due to the fast changing lifestyle today, it is highly likely that you will be staying in a few houses during your entire lifetime.

Early financial planning can give young couples a head start in purchasing their first home ”The connectivity and mobility today also means that the concept of a house and a home need to be

and owner of two properties with a total combined value of just under RM1 million. The four words she

redefined. There are many ways to buy a home today, from developers, secondary market to even auction as well as PR1MA housing and low cost housing schemes by the respective state governments.”

used to describe her foray into property investment: security, retirement, asset accumulation. For Vincent, an operations manager with a real estate firm, his decision to get into property investment is to secure his long-term future which included a family.

Being clear of what resources are available at your disposal and not being afraid to use them is another stepping stone to house ownership. “Money is never enough but one can always explore how to leverage on the many available resources within one’s network. Parents, family, friends and even employer should never be ruled out. Work out a feasible and repayment friendly scheme with them is a way out. Consider your EPF too, it might not be enough on its own but it is certainly helpful. Find out more on some government initiated schemes to see if you are eligible. When there is a will, there is a way,” adds Chris. Willpower, self-confidence and forethought are noble attributes, and when applied to property purchase and investment, they can be absolutely necessary. Mah and Vincent are two young property investors in Penang. Mah is 26 years old, an accounts manager

“I decided to invest in property at a young age was because it was time to start a life of my own and build a family,” he says “So basically, my top priorities were to get a home, and make a smart investment. It took some pressure and mountains of advice from my mentor, but I dug deep and managed to purchase my first home on my own at the age of 25. Thanks to the advice on my initial investment, I can now confidently look forward to a second one.” For Mah and Vincent, their choice of first investment was to build a foundation that will continue to grow into a future that they want for themselves. Making sacrifices to achieve this goal comes with the territory although we are often subjected to situations that are outside of our control. Enoch Khoo is a Sabah boy who has

“The challenge faced by most Malaysians is that almost all fresh graduates who enter the workforce are burdened by a car loan. If we look at most developed countries with outstanding public transport, the need to own your own transport is a choice but in Malaysia everyone is forced to own a car thus limiting the disposable income for many and affecting the ability to own a home,” comments Enoch. “My advice to young new grads is to buy a second hand car and not a new car when they start out in their career. Investing in knowledge and having multiple sources of income, provided it is not a conflict of interest to your current job, should also be explored. At the end of the day, spend more time improving yourself and less on complaining about the situation.” The one undeniable truth about property is that the longer you wait, the pricier it gets. The Ministry of Urban Wellbeing, Housing and Local Government is trying to control the increase in house prices while maintaining market price as a reasonable level so that homes will be affordable for the masses. However, the government cannot single-handedly keep building homes on its own. The private sector has to play its part as well. Next year will likely see the implementation of new strategies designed to further boost the capabilities of the private sector in building affordable homes nationwide. How policymakers manage the risks in going forward with their plans will be crucial to housing the nation, for the Gen-Y and the future generations.

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HOT TOPIC | First Home Buyers: Is Generation-Y’s Future at Stake?

ROY CHIEW

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e was in his late teens when he began thinking about investing in property. For Roy, it was something that happened naturally. He was exposed to an early education in property investment by both his parents who were active in the property market. With their help and a long-term financial plan, Roy purchased his first property last year at 25, which he intends to occupy while working on his future investment plans. Roy shares his experience and some tips for new investors. What criteria do you use before making the final decision on which property to invest in? Location, price, potential, layout, design, density, developer. But the final criteria that will determine any purchase is whether I can afford it or not. My advice to someone who is interested in investing in property is to make sure you can afford it, never over-gear yourself. Always be clear what is the primary purpose of you getting the property - for investment or own use – as It will influence your decision.

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Do you agree that a person must be very knowledgeable and experienced about the property market before making the first purchase? It depends. One must be quite knowledgeable, experienced and well financed when it comes to speculating. But for own use and normal investment, just a lot of commonsense would go a long way.

Investing in property is a longterm commitment. Do you think our younger generation fear this and just want things right now? Yes and no, I don’t think the younger generation fear long-term commitment. I think they fear security in the future in terms of monetary security, job security, government stability, social security. I think if the younger generation can see a stable future, they will be more willing to commit to investment. The Malaysian government has initiated several schemes to allow the people to own affordable housing. Can this be a good option for our Gen-Y to start their investment? Yes it is a good initiative from the government but it’s not enough.

The government should create an environment where people get appropriately rewarded (paid), and also provide financing to those who are financially prudent. Nowadays Bank Negara has created an environment where the wealthy are the ones getting the financing whereas these are the people that may not actually ’need’ financing. The government should spend more effort in identifying the people who actually need financing and are healthy borrowers, cap inflation (i.e control fluctuation in commodities), and subsidize more QUALITY affordable housing (i.e Singapore’s HDB is a good example) amongst others. Young people do not need encouragement to spend; they already have a high spending will. What they need is education on how and where to spend their money and to be given the opportunity to spend wisely. Some say that our Gen-Y is not very savvy in financial planning and while others opine that they are fast learners and therefore they should take up the challenge to educate themselves about the options available to them. Your thoughts? I think both are true. It’s true that a small portion of the younger generation don’t plan their finances well enough. But saying that I believe the majority of them do see the importance and necessity of doing so. It’s also true that they are fast learners. However, personal financial planning can only go so far in this context. As an example, just because you can afford 10-20% of a property, it doesn’t mean that you’ll be able to get the remaining 80-90% from the bank. Of course I don’t think the banks should be reckless and simply lend to every Tom, Dick and Harry but the government should create a more sophisticated credit rating system than the one currently in use.

What is your opinion of the property market in Sabah today and the future? Today, I think there are a few problems. The first is that properties in Sabah are generally not value for money. I am not saying that they are expensive. But the product is not “up to standard” as compared to those in other places. For example, dollar for dollar, a RM900/sqft condo in KL will give you much better design, finishing, layout, facilities and other amenities compared to a RM900/ sqft condo KK. On top of that, the yield in KL is higher as the demand for rental property is higher there. However, I feel that Sabah has got a lot more potential than KL. I think developers have to really look into building quality homes rather than just homes that will sell. For the immediate future, Malaysia in general will be facing a tough short- to mid-term economy in all industries, especially the property industry. Mainly due to ineffectual government policies to drive the local and international economy, the tightening of banking policies and the paltry remuneration and salary that the working class people are getting. In fact, even young white-collar professionals are facing the same problems. Doctors, lawyers, architects, engineers, and accountants, they are all underpaid due to the market norm and status quo. That is why a good majority of young professionals, given the opportunity, would opt to work overseas. This is having a toll on the nation’s economy as everyone knows that the true spending power is in these people. On a brighter note, Sabah is a beautiful place with endless opportunities. From natural resources to nature’s wonders, Sabah is rich in many aspects. Given a free market scenario, and driven by a visionary leader, I believe Sabah has great potential. I mean, there’s a reason why I am still here in Sabah.

TOP 10 THINGS

TO LOOK OUT FOR IN A CONDO With property prices going sky high in recent years, many people are struggling to buy their first property. However, not many know what determines a good buy. While there are books available, the knowledge given is often too general and perhaps, not applicable locally. A lack of knowledge and misleading information can lead to painful mistakes. What are the specific criteria that truly determine a good condominium? As properties don’t come cheap, homework is important so that you avoid a painful lesson. Tee Lin Dee wrote an insightful piece in The Star recently about the Top 10 things to look out for when purchasing a condo in the Klang Valley but even if you live in a less urbanized city, this guide might still come in handy to help you through the thought process. Here are the criteria you need to look out for to ensure a solid investment. 1. ATTRACTIVE FACADE Just like first impressions count in people, so does property. You must be impressed at first glance. An attractive facade with elements of luxury and a classy design gives an immediate positive feeling. If you have to convince yourself when looking at a facade for the first time, imagine how a future buyer will feel when you wish to sell it off one day. In property, good looks count. 2. A GRAND ENTRANCE AND LOBBY Good looks must follow through. High-end condominiums are not the only ones today that come with a grand entrance and lobby. These days, everyone wants to live well. A grand entrance and lobby add tremendous intrinsic and extrinsic value to a condominium and gives residents a sense that the developer cares and respects their buyers.

3. EXCELLENT PARKING SPACE DESIGN Are cars a hassle to park? Are corners too narrow and are the walls filled with bumps from accidents? Parking spots must be properly designed for the convenience of residents. Some older condos use a multi-storey or a spiral multi-storeycarpark. This is not the best choice, simply because it is a daily discomfort for the driver. A basement carpark is most preferable, and the parking space has to be designed to allow for wide turning. But all the ease in parking won’t matter if the parking area is not brightly lit. The parking area must look and feel safe enough for residents to walk about at night. 4. SUNNY AND LUXURIOUS ELEVATORS AND LOBBY If you feel afraid riding in an elevator, chances are you won’t be keen to live there. That’s why elevators must be designed with care. While some developers take on the standard design, a welldesigned spacious elevator with a more expensive look, perhaps even a hotel design, will go a long way in giving comfort to the resident. The lobby in which the resident waits for the elevator is of equal importance. With a nice and bright lobby, residents won’t have issues waiting even for five minutes compared to a lobby that is dim and gloomy. 5. WIDE AND COMFORTABLE CORRIDORS Dark corridors, narrow stretches and a lonely feel are no-nos. Today’s condominium corridors must be wide, preferably with plenty of lighting and ventilation. There mustn’t be a dark and dank feel. Residents must be comfortable walking through it whatever the time of day.

6. PRACTICAL LAYOUT DESIGN You may not notice it, but the best condominiums in town do not stinge on land. Tower to tower distance must be at least 120 ft apart. Towers which are too close give a feeling of high density and claustrophobia. It also looks slightly more barrack-like and less prestigious. Look out also for the air-conditioning compressor. A well thought-out condominium will keep unsightly contraptions out of sight. 7. PRACTICAL FACILITIES AND BIG OPEN SPACES When a condominium development has big open spaces, value is enhanced. Condominium land is typically small, and to enhance space, a basement car park is a must. However, the cost of building a basement carpark is high and often developers shy away from it. “The footprint of the building versus the land should be about 30%,” says MCT group of companies’ executive director Datuk Danny Goh. “The open spaces should be reserved for jogging and cycling tracks. Open spaces are a contrast to the tall buildings and this gives far more enjoyment to residents.” 8. SUFFICIENT PARKING RATIO The next time you go to a showroom or visit a property exhibition, ask the salesperson how many parking bays the property has. There must be enough parking spaces for the residents. Residents are often unaware that once parking availability is inadequate, problems arise. A look around some existing condominiums is proof. Residents will be forced to park outside – often far away, and jam up the entrance. This equates to bad traffic and poorer security once the number of residents increases.

9. REASONABLE MAINTENANCE FEES AND THE PROMISE OF CONTINUOUS GOOD MAINTENANCE WELL INTO THE FUTURE When most people buy a condominium, they often hope the number of units is low and equally the maintenance fees. However, this is not the best scenario. “Maintenance fees are very important because maintaining a condominium is very costly,” says Goh. “If the fees are too low and the number of units is low, there won’t be sufficient funds to maintain the development. A condominium which isn’t well-maintained clearly goes down in value. I recommend looking at a development with a minimum of 1000 units.” 10. UNIT MUST BE SEMI-FURNISHED UPON VACANT POSSESSION (VP The developer should build a condominium where the main fixtures like lighting, cabinetry and kitchen appliances are all ready. “For condominiums to sell today, they must be semi-furnished,” says Goh. “From my research, a condominium takes about two to five years before it becomes well-inhabited. This is too long and discouraging for those who want to stay in a thriving development. Often the long process is caused by the renovation works and looking for a designer and contractor. Busy people don’t have the time, and that is why units remain vacant for a long time.” If a condominium is not semifurnished, residents will have to put up with renovation works by others every few months. When a condominium is semi-furnished, people move in faster and a majority of renovation works are cut down. Bring this checklist wherever you go and most likely you won’t go wrong.

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HOT TOPIC| Property Development Line Up

PENINSULAR MALAYSIA AND SABAH DEVELOPERS GET READY FOR FIRST PH EXPO IN 2015 PROPERTY HUNTER EXPO SERIES 2015 KOTA KINABALU Anticipating improved optimism in the property market The PH Expo 2015 series kicks off in Kota Kinabalu from March 27 – 29, 2015 at the Sabah Trade Centre with more than 50 exhibitors from Sabah, Peninsular Malaysia and Australia attending to showcase their top drawer projects located at property hotspots throughout the country. This year the expo will be featuring an increased number of Australian properties to meet the demand of buyers looking to invest in the country. Headlining the list of prominent Peninsular Malaysia developers at the Kota Kinabalu expo is Gamuda Land who has attained recognition as a far-sighted developer that emphasizes on superior infrastructure to ensure that each and every project embarked meets the highest standards in structural integrity and craftsmanship. Gamuda Land sets the bar as the country’s leading developer by offering amplified living essentials to create a healthy lifestyle that not only serves to provide you the best for present times but also sensible solutions for future undertakings. Tropicana Corporation Berhad is the pioneer of residential resort-style living and has redefined the property industry with its innovative creations that focuses on accessibility, connectivity, innovative concepts and designs, generous open spaces,

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amenities, facilities, multi-tiered security and quality. With clear emphasis on its customers’ needs, Tropicana Corporation Sdn Bhd has been innovating and redefining the art of living through the creation of its integrated developments by incorporating residential and commercial components to create thriving townships that are strategically connected. MRCB Land which is in the forefront of iconic developments in Kuala Lumpur including high rise office towers, transportation hub (the largest in Malaysia), retail assets, hotels, and luxury residential and commercial projects will be at the expo as well as other notable Peninsular Malaysia developers such as NTP World, Newfields and Sunsuria with their respective projects. Local giant Kinsabina Sdn Bhd will be sharing the limelight with other top developers with its extensive portfolio of residential, commercial and leisure properties in Sabah. Having built some of Kota Kinabalu’s most significant landmarks, Kinsabina Sdn Bhd continues to meet the city’s demand with affordable housing for first-time home buyers, and leisure property development to support the State’s tourism industry. Visionary projects destined to transform Kota Kinabalu into a world-class city will be spearheaded by Hap Seng Properties Development Sdn Bhd and Mah Sing Group with a mix of 5-star international and business hotels, luxury condominiums, Grade A offices, shopping mall and retail outlets, and an international cruise terminal to enhance the city’s profile.

The city suburbs will also be getting a facelift with projects by Grand Merdeka Development Sdn Bhd and Bina Puri Properties Sdn Bhd to enhance the retail experience of residents in the northern corridor of Kota Kinabalu. Diversified interests by both developers will also see the addition of condominiums and shop-offices to the local property development landscape in the near future. New developers making a splash on the local property market include DF Development Sdn Bhd and Hardie Development Sdn Bhd who will be sharing the stage with seasoned players such as the W Group to increase the supply of condominiums in the emerging hotspots outside the city limits.

Helping you to take charge of your investment planning will be a series of talks by experts on the legal, financial, taxation and insight of property investment.

REGISTER NOW FOR FREE ! DATE

28 Mar

DAY

As the local property market adjusts itself, local investors continue to explore other opportunities overseas. The Kota Kinabalu expo will be featuring properties in Perth, Australia with Fusion Apartments at Burswood, and projects under the Handle Group, who has a very successful track record in creating wealth for investors in the Perth property market. The Property Hunter Expo (PH Expo) strives to educate the public by presenting a variety of property investment opportunities available in the market, as well as to educate keen property investors with the latest information on industry movement.

SPEAKER

TOPIC

1:00 - 2:00pm

Michael Yeoh

How to get your loan approved with the best margin

2:00 - 3:00pm

Enoch Khoo

What you should be looking out for when buying from a property agent

3:30 - 4:30pm

Richard Oon

How can your property save you on paying more tax?

4:30 - 5:30pm

Datuk Francis Goh

Everything you need to know when buying from a developer

1:00 - 2:00pm

Chris Tan

What legal knowledge should you know when buying a property

2:00 - 3:00pm

Faizul Ridzuan

When to buy - Insights into when is the bet time to buy a home

3:30 - 4:30pm

Dr. Daniele Gambero

When to invest- Insights into when is the best time to invest

4:30 - 5:30pm

Ishamel Ho

Where to buy in Sabah, Sarawak, Johor, Penang and KL

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The Malaysian property market, and Sabah in particular, is bouncing back from the sluggish market sentiment of 2014 and industry players are confident that despite its slow pace, there is a sense of optimism in the air. The onset of the GST in April 2015 will test the property market once again before the rest of the year unfolds to hopefully be more vibrant and progressive. 29 Mar

TIME

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To register for any of the scheduled talks, please SMS your details to Victor Yong at 016-819 8505 or email to info@maxxmedia.com.my The following details are required for registration: Name / Mobile Contact / Email / Mailing Address / Speaker Session - (Name or Names or All) Invitations will be emailed to registered participants with an SMS reminder sent out one (1) prior to the session date.

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FEATURED PROPERTY EVENT | WSG Development

WSG GROUP Ushers In Year Of The Goat With Lion Head Donation

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atuk Susan Wong Siew Guen, managing director of Mega Sunwise Sdn Bhd, donated lion heads, dragon and Beijing lions worth around RM35,000 to 14 non-governmental organisations (NGOs) to celebrate the Year of the Goat. The presentation ceremony was held at The Palm Condominium Kinarut Show Gallery after the traditional “eye-dotting” ceremony of the dragon and lions led by Susan, her husband, Wong Ten An and her mother, Datin Seri Panglima Chen Si Mui.

The recipients are Sze Yi Association West Coast, SJKC Yick Nam Inanam, Kota Kinabalu Hakka Association, Sabah Tshung Tsin Alumni Association, Papar Middle School, Persatuan Tarian Singa dan Naga Daerah Kota Kinabalu, Pertubuhan Kebudayaan dan Sukan Tiong Hua Sabah, Kelab Sukan dan Rekreasi Kg Tatahan Kiansom Inanam, Nam Tien Kong (Jiu Wang Da Di) Kota Kinabalu, Summer Dragon and Lion Dance Association, Persatuan Seng Ong Kung, Kuil Hock Teck Kong Sipitang, Persatuan Tarian Naga dan Singa Kwong Ngai Sabah and Persatuan Penganut Dewa Kuan Tee.

“This is an annual event organised to maintain and support Chinese education and traditions as well as the lion and dragon dance which we have practiced for many years,” said Susan.

maximum privacy. The all corner lots have a price tag ranging from RM290,000 to RM390,000 per unit with a built up area of 1,090 sqft with three bedrooms and two bathrooms.

The event also saw a film crew led by Sabah Tshung Tsin Secondary School (STTSS) principal, Hiew Hoh Shing to produce a documentary for the Central China Normal University in Wuhan, Hubei Province, China. The documentary will be aired locally in Wuhan during the Chinese New Year season to promote Sabah’s diverse cultures and harmony.

In conjunction of the festive season and to celebrate the auspicious event, WSG Group offereda special discount of RM10,000 to buyers of the Palm Condominium whilst Bumiputeras enjoy an additional five per cent discount.

The crowd was entertained with spectacular dragon and lion dance performances, an orchestra by STTSS students, singing and dancing as well as a karaoke session. A magic show and special appearance by the God of Fortune to distribute chocolates and oranges added to the merriment of the occasion.

The Palm Condominium

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The Palm Condominium under construction

Other facilities include a meeting hall on every floor, three elevators in the building for the convenience of residents, 24-hour security service, gymnasium, basketball court, indoor badminton courts, children’s playground, wading pool and an adult infinity pool.

The Palm Condominium and Square is located along Jalan Lok Kawi Papar in Kinarut, Papar. There are 16-storey high-rise condominiums has only eight units occupying each floor for www.PropertyHunter.com.my

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FEATURED PROPERTY EVENT | Grand Merdeka

GRAND MERDEKA The Latest Suburban Landmark In The Northern Corridor Of Kota Kinabalu

The hoisting of the steel beam to top off the Grand Merdeka Mall was witnessed by an appreciative audience which included purchasers, contractors, consultants, bankers and company staff who have contributed to the success of the project thus far.

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he tradition of roof topping goes back to the 14th century when the roof of a building structure is prepared and covered. The ‘topping’ refers to the last and highest beam to be placed on the roof before the roof is constructed. It is an important celebration and a gesture of good faith that the building is reaching its goal of providing a roof over the heads of its occupants. The roof topping ceremony for Grand Merdeka Mall was held on 7 February at the project site in Menggatal, at the very spot where the ground breaking ceremony for the mall was held some 18 months ago. Present during the ceremony were the directors of Grand Merdeka Development Sdn Bhd, Mr Jason Tong KokVui, Mdm Caroline Wong and Mr Tong TeckOnn, together with the 13 anchor and junior tenants of Grand Merdeka Mall. Chew Sang Hai, director of Grand Merdeka Development Sdn Bhd, said the project has been progressing smoothly and with 65% of the construction work already completed, he is confident to obtain the Occupational Certificate for Grand Merdeka Mall by the end of 2015. This would mean an earlier than projected delivery date for unit purchasers of the mall.

Besides the roof topping ceremony, guests also witnessed the signing ceremony of the Grand Merdeka Mall and Grand Merdeka Home anchor and junior tenants. Among them are Upperstar and Food Court on the ground floor, Tong’s Department Store on the first floor, Fun Space Amusement Centre and Super save on the second floor and a planned Cineplex on the mezzanine floor which is situated above the second floor. To conclude the event, guests were given the opportunity to witness not one but two ground breaking ceremonies. These were for Grand Merdeka Home (a retail warehouse concept store) and Grand Merdeka Corp (a signature office suite) which will be adjacent to Grand Merdeka Mall and connected via a basement car park for the convenience of its tenants and customers. Earthwork for Grand Merdeka Home is expected to commence in May 2015.

Mr. Chow Sang Hai, Director of Grand Merdeka Development Sdn Bhd

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CONTRIBUTOR| Chris Tan

Chris Tan

Lawyer Specialising in Real Estate

Chris Tan is the founder and now Managing Partner of Chur Associates, a boutique legal practice that thrives in delivering business friendly solutions for its clients and having a niche positioning of ‘Everything Real Estate’ serving the entire value chain from the upstream to the downstream. Chur Associates is a boutique legal firm founded in 2004, specialising in designing legal solutions catered to our clients’ needs. Chur Associates’s brand promise is “We Deliver!” To that end, they offer clientsthe necessary means and methods to ensure their requirements are met. You can get in touch with him at Facebook: Chur Associates Email: consult@churassociates.com

UNVEILING GST MYTHS IN

REAL PROPERTY

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mplementation of Goods & Services Tax (GST) in April 2015 marks the birth of a new tax regime in Malaysia. Fear and anxiety set amid this possible price-hike tsunami, especially for real property. Certainly, property prices will be affected with GST being charged on raw materials and construction expenses. However, incurring GST does not equal to an auto 6% increase of property price. Let us pepper herewith a few GST myths in real property so you may have a clearer picture of its features.

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NOT EVERY TYPE OF PROPERTY IS SUBJECT TO GST Generally, land or property is standard rated supply (6% GST chargeable). Nonetheless, land or property for residential, agricultural and general use is regarded as exempt supply under the Goods and Services Tax (Exempt Supply) Order 2014 (“Exempt Supply Order”). In other words, if you are purchasing a condominium from the developer, GST will not be charged on the purchase price. However, do bear in mind that the developer has to pay GST on the construction and marketing cost and thus causing an indirect impact on the purchase price. Meanwhile, GST is also not chargeable on rental for exempt supply. A recent press statement from National Home Buyers Association indicates that we will be expecting amendments to the Exempt Supply Order to widen its scope to cover all categories of residential stratified properties, including service charges by Joint Management Body or Management Corporation. It is worth to note that residential in this context excludes the likes of Small Office Home Office (SOHO), hotels, inns etc of which are classified as commercial property and therefore a standard rated supply.

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2

NOT EVERY PROPERTY VENDOR CAN IMPOSE GST The basic rule to impose GST on any standard rated property is to be GST registered with the Royal Malaysian Customs Department and obtain a valid GST number. You will soon notice that most developers will display their GST number in addition to their usual company number. For individual vendor selling a retail shop (standard rated supply), you have to be GST registered in order to charge GST on the subsequent purchaser. However, this does not mean that you have to be GST registered prior to selling your standard rated property unless your nature of business is to acquire and dispose standard rated property. The reasoning is simple; you will first need to satisfy the requirement for GST registration, i.e. “for the furtherance of business”. Thus a one-off property transaction definitely does not fulfill such criteria. In another word, property developers are normally GST registered.

3

PROGRESSIVE BILLING FOR STANDARD RATED PROPERTY UNDER CONSTRUCTION IS SUBJECT TO GST Developer will be entitled to charge GST on the progressive payment for standard rated property that is under construction upon April Fool’s day this year (1st April 2015). For purchaser who has already signed the Sale and Purchase Agreement with the developer, the developer will only be allowed to charge GST on your progressive billing if any clause in the agreement specifically provides so. As the agreement is the only binding document on both parties to the transaction, the good news for purchaser in spotting non-existence of such clause means that the developer will absorb the GST impact upon

implementation. Nonetheless, developer may have foreseen such scenario and have adjusted the purchase price beforehand to cushion the impact, i.e. GST element has been embedded into the purchase price.

4

GST IS PRICE INCLUSIVE Section 9 (5) of Goods and Services Tax Act 2014 provides that the display price of any supply of taxable goods or services shall be inclusive of the GST chargeable. In other words, the selling price of the property displayed by the developer on any advertisement will be the purchase price with GST inclusive unless the developer has obtained prior approval for exemption to comply from the Director General of Customs and Excise. Thus it is safe to say that you pay what you see and no calculators are required to calculate the exact amount to be paid.

5

FINANCIERS DOES NOT FINANCE GST Unlike the above, calculator is required to calculate your margin of finance here unless you are good in mental arithmetic. Notwithstanding the implementation of GST, the financiers or banks will only offer loan facility based on

the net purchase price (GST exclusive) of the standard rated property. For example, if you are purchasing a retail shop with a price tag of RM1, 060,000.00 and you have successfully secured a margin of finance up to 90%, the financier will provide a loan facility of RM900, 000.00 only. Thus, on top of the 10% down payment, the GST of RM60, 000.00 will also be borne by you upon the purchase. The best business in this Year of the Goat would be selling chairs as most people will take the “wait and see” approach. While waiting for the implementation of GST and let every uncertainty fall into its place over time, one may also treat this transitional period as a gift of gap where there will be lesser competitors and at the same time more options in the property market where it is akin to Hong Kong in 1997.

While the author makes reasonable efforts to present information which he believes to be reliable, the author makes no representation that the information or opinions contained in this article is accurate and complete. Readers are advised to seek specific professional advice before acting on the views.

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WEST MALAYSIA PROPERTY NEWS

Knight Frank Releases Latest Malaysia Real Estate Report

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night Frank Malaysia, the global property consultancy, has launched its report Knight Frank Malaysia Real Estate Highlights 2H 2014. The report looks into the market performance across the various property mix – Residential, Office, Retail and Industry; and highlights the trends and outlook in the four key markets in Malaysia, including Kuala Lumpur, Klang Valley, Penang, Johor Bahru and Kota Kinabalu.

WEST MALAYSIA PROPERTY NEWS

Market drivers impacting the real estate sector

Sharing news and information about various issues related to the property industry from Peninsular Malaysia.

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It is due to higher transaction numbers were recorded in the first half of 2014 which rebounded after a slowdown in 2013 compared with corresponding period a year earlier.

The Executive Chairman of the company, Tan Sri Abdul Rahim Abdul Rahman explained that first half of 2014 saw a 3.3 percent growth compared to the same period in 2013, with transaction value of 82 billion ringgit which increased about 19.3 percent. The double-digit increase in value, as opposed to a less than 5

percent growth in the number of transactions, indicates that average prices are still increasing. The pace of growth would be “slower” in 2015, he pointed. Their research also showed that slower growth and demand for high-rise condominiums has resulted in an oversupply. The current consolidation of completed units is expected to give rise to more foreclosures going forward. However, the Managing Director, Robert Ang stated that strong liquidity will be able to absorb the circumstance.

REHDA President Datuk Seri Fateh Iskandar Mohamed Mansor

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He said that it was largely due to the various completed schemes entering the property market few years back where small down payments were expected.

2015 MARKET OUTLOOK •

The Government has revised its deficit target and GDP growth following the recent sharp decline in oil prices.

Pro-active measures to sustain development and economic growth include free visa for tourists from China amongst others and increased frequency and duration of mega sales nationwide.

Mr Sarkunan Subramaniam, Managing Director, Research and Consultancy, Knight Frank Malaysia HIGHLIGHTS FOR 2H2014 RESIDENTIAL

The recent plunge in crude oil prices and lower trade surplus could undermine Malaysia’s economy and its property market especially if they are prolonged. Judy Ong, Research and Consultancy, Knight Frank Malaysia, says, “Amid the gloomy economic outlook and plummeting crude oil prices, the slowdown in the Malaysian property market continues.

Property Market To Face Consolidation roperty prices in Malaysia are said to be expected to consolidate this year, according to property consultant, Rahim and Co.

sector with the impending completion of several retail properties in 1H2015.

Buyers may not be able to flip with the high margins they had expected earlier and they may not want to go ahead with the mortgage payments. The rentals may not be able to cover mortgage payments. This may result in the weaker ones falling on the wayside.

He said a number of foreclosures in a popular location in the Klang Valley were taken up very speedily – despite built-up areas of 2,000 sq ft and above – which indicates high liquidity.

Buyers’ and investors’ sentiments have turned cautious with many adopting the ‘wait-and-see’ approach while more developers are turning their focus on the affordable housing segment.

“Selected property subsectors (and locations) may undergo a period of consolidation in terms of slower market activities, pricing and rentals; impacted by the series of cooling measures, uncertainties surrounding the impending GST implementation, and a slowdown in the Oil & Gas sector and its related industries amongst others.”

The series of macro-prudential measures have succeeded in cooling the residential property market.

Slowdown in residential property market with noticeably fewer launches across the board.

OFFICE •

Despite mismatch in supply and demand, the Kuala Lumpur office market remains resilient with both rental and occupancy rates holding firm.

RETAIL •

Prime and established shopping centres in Klang Valley and Penang continue to enjoy high occupancy in excess of 90%; and in Johor Bahru and Kota Kinabalu, more than 80% occupancy. Malaysia, which continues to be on the radar of overseas retailers, sees more new entrants, especially in the F&B segment as well as rapid store expansion of existing brands and outlets, both local and international. In Kota Kinabalu, a very exciting time is expected for the retail

More developers expected to launch their projects ahead of the GST, which is slated for implementation in April 2015, while widening their target catchment by marketing overseas. Continuous efforts by government authorities / agencies such as MIDA and InvestKL are expected to produce positive results and cushion the impact of a slowing economy and property market.

Ananda Krishnan To Lend RM2 Billion To 1MDB

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alaysia’s second richest man, Ananda Krishnan was reported to lend as much as 2 billion ringgit to the strategic investment fund, 1Malaysia Development Berhad (1MDB) to help settling its mounting debts. The interim loan was said to aid 1MDB to settle its loan from two local banks, Malayan Banking Berhad (Maybank) and RHB Bank Berhad. Reportedly, 1MDB has already missed twice payments despite of given a two one-month extension on the facility. According to The Malaysian Insider, an unnamed source revealed that the plain loan from the billionaire was their final option as the due date for the both banks’ repayment is approaching, yet they haven’t seen any other credible solution. It was understood that both 1MDB and advisers to Ananda have been working to look at various options to break the deadlock before the decision was taken. They have to do whatever they can so that the banks get paid and it is not yet a done deal as the terms of the loan have yet to be agreed on, said the source. The company, which is wholly owned by the Ministry of Finance was entangled in a piling debt aftertax losses of 665.4 million ringgit. The recent company’s annual report showed that the sovereign wealth fund’s long-term borrowings had ballooned to 33.5 billion from only 26.3 billion ringgit in the previous year.1MDB had short-term borrowings of RM8.3 billion.

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WEST MALAYSIA PROPERTY NEWS

Don’t Fall For Bogus PR1MA Agents

Sunway Property Rewards Lucky Purchasers During Year-Long Campaign

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hose who wish to apply for the 1Malaysia People’s Housing (PR1MA) programme are advised not to apply from people who claim to be PR1MA agents. PR1MA Chief Executive Officer Dato’ Abdul Mutalib Alias said applications for PR1MA should be applied directly online at www. pr1ma.my.

“There’s no such thing as PR1MA agents, but we have had cases where individuals were conned by those who claimed they could help them in scoring a housing unit under PR1MA,” he said. He added that 137 individuals had been cheated for two thousand ringgit each by so-called PR1MA agents in the peninsula ever since the programme was launched. “As such, those who wish to apply

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s the culmination of its 40th Anniversary celebration, more than 3,000 new purchasers, their family and friends, came together to celebrate Sunway Property’s year-long campaign at the final installation of its Buyer’s Appreciation Event on 20 January. Throughout the year, more than 1,000 property purchasers had purchased properties across the region from Klang Valley, Ipoh, Penang and Johor, putting them in the running for the grand prize. The final Buyer’s Appreciation Event was held across the region with a live feed of the event broadcasted from Sunway Pyramid Convention Centre (SPCC) in Klang Valley, to venues for the celebration at Persada Johor International Convention Centre in Johor Bahru, and Sunway Hotel Georgetown in Penang. Upon registration, guests at SPCC had the opportunity to visit booths from Sunway entities and more. Sunway Medical Centre offered guests free BMI and blood test; Sunway University

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Ong Ghee Bin, Executive Director of Sunway Property, Central Region, Malaysia, with the lucky buyers from the Klang Valley offered scholarships up to RM25,000 for MBA Applications and a special bursary of RM10,000 for pre-enrolment in Sunway International School at Sunway Iskandar; Sunway Pals also had a booth there for purchasers to sign-up for their exclusive membership; MySunwayProperty offered its subscribers first hand news on Sunway Property and complimentary tickets to events and movie screenings; the Lost World of Tambun offered up to 67 per cent discount of Lost World Hotel stay, MontBlanc gave guests 15 per cent off all items and Barry Smith offered exciting discounts on their merchandises.

of Citrine Serviced Residences located in Sunway Iskandar’s Lakeview precinct. Having purchased a Sunway Velocity unit, he revealed that he is very excited and happy with his win and hoped that Sunway Property will have similar events that will add value for its customers.

At the event, cash prizes worth more than RM150,000 were rewarded to a total of 27 lucky purchasers across the region. Lim Soo Lan, a purchaser who bought a Sunway Montana unit, walked away with the grand cash prize of RM40,000 and said that she was speechless and excited about her win.

“In these 40 years, from building homes in the first decade starting from 1974, Sunway has progressed to define townships in the next. From townships, we have progressed to building communities, and that is the purpose you are truly are supporting by being part of the Sunway family – communities that are not only designed for the enrichment of your generation, but also the next.”

Another grand prize winner, Mr. Mah walked away with a unit

During the event, Sarena Cheah, Sunway Property’s Joint Managing Director of Malaysia and Singapore, said that the trust and belief from Sunway’s communities are the two crucial elements that have inspired Sunway Property to come this far and will propel the developer to go even further.

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Mah Sing Signs RM630 Million Agreement

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ah Sing Group Bhd has entered into an underwriting agreement with CIMB Investment Bank Bhd, Maybank Investment Bank Bhd and Affin-Hwang Investment Bank Bhd for a RM630 million rights issue exercise. The entitlement date for the rights issue was fixed for January 26, with the closing date for acceptance of rights issue and excess application on February 12. As reported in Star Property online, the new rights shares and warrants will be listed on the Main Market of Bursa Malaysia Securities Bhd on February 26. Mah Sing’s Group Managing Director, Tan Sri Leong Hoy Kum

“The year 2014 was a year of results and achievements,” he said, adding that Mah Sing had many plans in store for 2015 to enhance and solidify its market position. From amount proceeds, Mah Sing would allocate RM530 million for land acquisition and property development activities while the balance for general working capital, as well as payment for the expenses in relation to the rights issue.

The developer would also earmark RM370 million for part payment for the acquisition of land in Puchong and Seremban, which have an estimated gross development value of RM9.3 billion and RM7.5 billion, respectively. The development of the Puchong and Seremban land is expected to commence this year and Mah Sing expects revenue contribution to commence from 2016 onwards.

Mah Sing’s Group Managing Director, Tan Sri Leong Hoy Kum has given his undertaking to subscribe for his entitlement of 34.6 percent under the rights issue in full. The balance will be underwritten by CIMB Investment Bank, Maybank Investment Bank and AffinHwang Investment Bank as joint underwriters. Leong said the company was gratified to have the support of three major banks which would be underwriting the rights issue, signalling their confidence in Mah Sing.

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Only 600 PR1MA Homes To Be Delivered By Year End

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Perbadanan PR1MA Malaysia (PR1MA) eyes to deliver its first 600 affordable home units by year-end. Datuk Abdul Mutalib Alias, PR1MA’s chief executive officer, said the units will come from its projects in Kuala Ketil (Kedah) and Bertam (Penang), with 300 units respectively. “I would say by year-end, although we are targeting this August. My team is really pushing hard so that all the units can be delivered by August,” he said. Notably, PR1MA recently launched and opened seven projects for application. They are PR1MA @ Bandar Meru Raya, Perak; PR1MA @ Alam Damai, KL; PR1MA @ Kuala Ketil, Kedah; PR1MA @ Sungai Petani 1, Kedah; PR1MA @ Terbrau, Johor; PR1MA @ Bandar Layangkasa, Johor and PR1MA @ Melaka Tengah 1, Melaka. Unit prices will be affordable since they would be lower than market price and the response has been overwhelming, he said. “This process demonstrates PR1MA’s ongoing commitment with another step forward to achieving Malaysian middle-income earners’ vision of owning a home.”

He noted that household income of buyers must range from RM2,500 to RM10,000.

Government Extends GST Exempt List To Stratified Residential Properties

To date, around 890,000 potential buyers have registered for PR1MA houses nationwide.

He revealed that PR1MA will consider proposals from other property developers to build homes as long as they meet certain criteria, such as building material specification, costing, pricing and excellent track record.

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ropicana Corp Bhd eyes to achieve RM2 billion sales by year end with a number of new launches planned, revealed group Chief Executive Datuk Yau Kok Seng. He noted that the firm adopted a two-fold strategy to launch fully integrated townships and landed properties.

Aside from the seven projects, PR1MA will also open for application 14 other residential projects soon.

“I can assure you a lot more projects could be applied,” said Abdul Mutalib.

Tropicana To Achieve RM2 Billion Sales Target

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roperty-related professional bodies revealed that the government has agreed to widen the Goods and Services Tax (GST) exemption list from medium- and low-cost properties to stratified residential properties. The bodies are the Royal Institution of Surveyors Malaysia (RISM); National House Buyers Association (HBA); Malaysian Institute of Professional Property Managers Malaysia (MIPPM) and Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector of Malaysia (PEPS). According to HBA Secretary General Chang Kim Loong, their spokesperson, their petition had sought for a change in classification from the standard rated tax supply to zero rated tax supply for sinking fund, maintenance charges and all other related charges paid by parcel owners. “The good news is that the GST exemption was extended to all stratified residential properties instead of just low- and mediumcost properties, showing the ministry had understood that there was an issue here, but the zero rated appeal was turned down,” said Chang.

The MOF has stated that supplies made by management committees (MC) as well as joint management bodies (JMB) are considered as conducting a form of business although the supplies are for residential parcel owners, said Chang. Moreover, MOF invited professional bodies to call a meeting for the gist of the contention. PEPS advisor Wong Kok Soo noted that the bodies plan to reiterate the need to reclassify the GST to zero rated since only then will it benefit stratified property owners.

He explained that there is no difference between the standard rated tax and exempt supply for stratified development since the government will still collect six percent tax, which will ultimately be borne by parcel owners.

“The 2015 outlook for the property sector will be challenging and it is important at times like this that we differentiate ourselves from our competitors,” said Yau. For landed properties, the group will launch Danga Cove and Danga Bay in Johor Bahru, and Tropicana Kajang and Tropicana Aman in the Klang Valley. Yau said the group’s newest fully integrated development is Tropicana Metropark. With a gross development value of RM6.3 billion, the development is nestled on 88 acres in Subang Jaya.

The development boasts a 9.2-acre central park, which is expected to be completed by 2016, and Ringgit Malaysia 106 million residents-only flyover that connects the development to the Federal Highway. Meanwhile, Tropicana yesterday inked an agreement with GEMS Education to include an international school in its Tropicana Metropark development. Set to open in September 2017, the Ringgit Malaysia 50 million school can accommodate up to 2,400 students aged three to 18. The group hopes to begin construction for the school by mid2015 and be completed by 2017, he added. Notably, the school in Tropicana Metropark will be GEMS Education’s second international school within the country. The first is located in Bandar Tasek Mutiara in Simpang Ampat near Bukit Mertajam, Penang.

The completion of the central apartments within Tropicana Metropark, which are now 60 percent complete, will help drive sales, he added.

Tropicana’s Chief Executive Datuk Yau Kok Seng (Centre)

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Analysts Say More To Be Done To Bring Tropicana’s Debt Down

Capitamalls To Buy Tropicana City Mall For Rm565 Million After A Call Off In 2013

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espite of the successful sales of its two significant assets, Tropicana Corp Bhd’s gearing is said to remain high and there are more to be done to reduce its piling debts according to a property analyst. It is reported that 460 million from the Ringgit Malaysia 565million deal with Capitamalls Malaysia Trust recently is used in Tropicana debts’ repayment which reduced the group’s borrowing from 2.4 billion to 1.95 billion ringgit.

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Tropicana City Mall

n October of 2013, CapitaMalls Malaysia Trust (CMMT) had decided not to pursue further with the acquisition as “both parties are unable to mutually agree on the terms of the sale and purchase agreement”.

CapitaMalls Malaysia REIT Management Sdn Bhd, the manager of CapitaMalls, said it intended to fund the acquisition through debt and/or equity fund raising in a combination to be determined later.

CapitaMalls Malaysia REIT Management announced on Aug 23, 2013 it had received a letter of intent from Tropicana Corp to explore the opportunity to explore the purchase of the four-storey shopping mall and 12-storey office tower.

“Upon completion of the acquisition, CapitaMalls’ property asset value will increase by approximately 16.7 per cent to approximately RM 3.8 billion from RM3.2 billion.

Whilst for 2015, CapitaMalls Malaysia Trust is acquiring the Tropicana City Mall and Tropicana City Office Tower from Tropicana City Sdn Bhd for RM540 million. In a filing to Bursa Malaysia, CapitaMalls said the costs, including the acquisition fee, would be RM565 million. The acquisition will be subject to the satisfactory completion of due diligence, which includes a building audit and valuation exercise.

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“The proposed acquisition is expected to be completed by the third quarter of 2015,” it said. Tropicana City Mall, a four-storey shopping complex, enjoys an occupancy rate of about 89.2 percent, with an established mix of Malaysian and international retailers including AEON BIG, Golden Screen Cinemas, Jatomi Fitness and UNIQLO. On the other hand, the 12-storey Tropicana City Office Tower enjoys full occupancy, with

anchor tenants include Tropicana Group, CIMB Securities and radio broadcaster Star RFM. The property is strategically located at the intersection of two major highways - SPRINT and Lebuhraya Damansara Puchong. The mall is served by feeder buses from nearby Kelana Jaya and Taman Bahagia light rail transit stations and come July 2017, a mass rapid transit station at Taman Tun Dr Ismail is expected to commence operations.

The analyst also stated that due to its sky high gearing, it is possible that the company is now exploring ways to unlock its value, which could be through outright sale of land or even mulling a corporate exercise. Perhaps Tropicana could consider embarking on a Reit exercise, as this would achieve the objectives of de-gearing and value creation, the analyst said. It is also suggested that the best strategy for the group is to grow its operational profits instead of landbanking, in a report published by The Star online. Meanwhile, last year Tropicana in a statement announced that the group had identified some of its 2 billion ringgit worth of assets to be sold for the next two years so they could raise cash to decrease the amount of debts they have. The said assets are including land, property investments as well as noncore assets sited primarily in the Klang Valley and Iskandar Malaysia. The group’s Chief Executive Officer, Datuk Yau Kok Seng said the group intended to reduce its then gearing ratio of 0.616 times to 0.3 times by 2016.

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Iskandar Waterfront City Bhd Inks RM2.4 Billion Deal With Chinese Developer

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t a time when there is an increased level of cautiousness in the Johor property scene, a Chinese developer has inked an RM2.4 billion deal with Iskandar Waterfront City Bhd (IWCB) to acquire 128 acres of land, a value that underscores one of the highest land transactions in the Iskandar region to-date. A subsidiary of Shanghai-based state developer Greenland Holdings Group Ltd has established a joint venture (JV) with IWCB unit Southern Crest Development Sdn Bhd (SCD) to buy the land, which is mostly submerged, from IWCB for a sum of RM2.4 billion. The RM2.4 billion deal works out to about RM430 per sq ft, which property consultants said set the benchmark for property prices in that area as there had not been any transaction of that size in that area previously. Most previous transactions were at Danga Bay, which is at the Causeway and near the Second Link. The agreement is to acquire property and undertake the development and construction of a mixed development comprising commercial and residential components in Plentong, Johor Baru, via a special-purpose vehicle, Greenland Tebrau Sdn Bhd (GTSB).

Group Ltd, which, in turn, is a 60%-owned subsidiary of the Greenland group. KGV International Property Consultant executive director Samuel Tan said while more details were needed to determine if the deal was fair, it sent a strong signal to the investment market that Iskandar Malaysia was still a destination for property development in the long run. “Development by foreign players is not confined to the usual Danga Bay, Medini Iskandar Malaysia and Nusajaya. This is good, as it will result in a more balanced geographical growth within Iskandar Malaysia,” he added. It is learnt that IWCB chose the Greenland group, which is one of China’s biggest developers, because of its experience in building a city over a long term. Already, some 13 local and foreign companies are actively involved in developing Iskandar Waterfront City in Danga Bay with a cumulative gross development value of RM125 billion on the western corridor,

which stretches from Johor Baru to Nusajaya.

“I now want to develop the Eastern Corridor of Johor Baru, stretching from Tebrau Bay to Pasir Gudang,” said Johor Mentri Besar Datuk Seri Mohamed Khaled Nordin in a statement. Khaled envisions the Eastern Corridor to be South-East Asia’s new lifestyle destination, much like Australia’s Gold Coast. The urban development of Tebrau Waterfront City will span a 15-year period and will feature a snow world theme park, an opera house, a hospital specialising in Chinese traditional medicine and a school. “I welcome their long-term strategic interest to jointly transform Johor Baru into a modern international waterfront city and destination,” Khaled said. IWCB is a listed entity which is 47%-owned by Johor-based Iskandar

Waterfront Holdings Sdn Bhd (IWH). The Johor Government, via state investment arm KPRJ, has 40%. The JV would enable IWH to leverage on its Chinese partner’s strength in mixed commercial development, including high-end hotels and residential towers, to reshape its waterfront land in Danga Bay and Tebrau Bay. “We’ve undertaken urban development in over 80 cities throughout China. We’re keen to share the experience with IWH as our long-term JV partner and help transform Iskandar Malaysia into an international destination,” said Greenland group executive vicechairman Xu Jing. This is Greenland’s second investment in Iskandar Malaysia. In April 2014, Greenland signed an agreement with IWH to jointly develop 13.6 acres in Danga Bay for RM600 million, comprising an RM2.2 billion integrated mixedproperty project, which includes the recently launched Jade Palace luxury condominiums.

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and reclamation is not a new thing which instead has been done in a well-developed country such as Singapore and Holland. It was said by the Johor government referring to the controversial multibillion ringgit Forest City project, which will see reclamation of a huge part of Straits of Johor to create four man-made islands.

“Look at Singapore. They have also done massive land reclamation,” Menteri Besar Datuk Mohamed Khaled Nordin said. He also said the public should not be affected by negative views on the environmental impact, as reported in Star Property online. The project would now proceed as it had received approval from the

Department of Environment (DOE) on January 9. Mohamed Khaled said that all projects on reclaimed land in Johor had to meet stringent requirements and receive environmental impact assessment approval from the DOE.

Mohamed Khaled said the state government would ensure that the welfare of

and Taman Ungku Tun Aminah below market value as reported in The Star online.

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Scaled model of the master development plan of Iskandar Waterfront City

fishermen affected by the land reclamation in south Johor would be taken care of under the Fishermen’s Fund. Under a state ruling introduced last year, property developers involved in land reclamation within Iskandar Malaysia have to contribute to the fund.

House Buying Scam Uncovered

s the GST implementation is coming up pretty soon, there will be rush in purchasing property due to avoid the price hike.

In IWCB’s filing, it said its unit SCD would hold a 20% equity interest in GTSB, while Greenland Malaysia Real Estate Operator Sdn Bhd (GL) would hold the remaining 80%.

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Land Reclamation Is Not A New Thing

Sources said they would bring a prospective buyer to the house before collecting a deposit of between RM1,000 and RM2,500 in cash.

Together, Greenland and Johor state government-linked company IWCB will develop an RM3 billion new waterfront city on the land in Tebrau Bay.

GL is a wholly owned subsidiary of Greenland Hong Kong Investment

A project on reclaimed land in Johor

However, criminals are seeing this as an instant way to gain profit by offering to sell houses with very attractive price.

Recently, police has uncovered a house buying scam occurred n Johor after they arrested a couple, in their 30s who had allegedly cheated more than a dozen desperate house buyers. It is learnt that the couple had used popular property websites to post offers to sell their house in Perling

“Most of the time they do not bring the potential buyer into the house, claiming it was still occupied,” the sources said, adding that the victims only realised that they had been conned when they failed to contact the couple after the transaction.

Police have received numerous reports in Johor Baru North and Sri Alam. It is learnt that the couple were tracked down by officers from the state commercial crime unit and remanded. Investigations were being carried out under Section 420 of the Penal Code for cheating. The duo was also investigated for the similar cases elsewhere.

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WEST MALAYSIA PROPERTY NEWS

S P Setia To Be Selective With Launches In 2015

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roperty giant S P Setia Bhd will be selective in launching new projects this year as buyers take a cautious approach.

WHY BUY AT A

PROPERTY EXPO?

Backed by a massive unbilled sales of RM11.1 billion, S P Setia will look towards delivering properties sold in the past and launch more mid-ranged products, said acting president and chief executive officer Datuk Khor Chap Jen. “We will be selectively launching projects with product types that will fare well in 2015. These launches will be focused in areas with established infrastructures and amenities. The demand for property is still very strong as proven by our recent almost sold-out launches of Caffra and Serrata,” said Khor in an e-mail interview with StarBiz. The launch saw 100% and 95% take-up rate of Caffra and Serrata on the first day of launch.

“For S P Setia, our focus for this year is on delivery. With a total unbilled sales of RM11.1 billion as of October 31 2014, we are kept busy this year in ensuring we deliver our products according to the standard that is expected of the brand. Fulton Lane in Melbourne and 18 Woodsville in Singapore will be completed by mid2015, two months and four months ahead of schedule respectively,” said Khor. The large amount of S P Setia’s unbilled sales is expected to deliver fundamental support to the company’s financial performance and share price,

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Perspective of Battersea project in London by S P Setia which over the past few months has been trending upwards.

PNB is the major shareholder of S P Setia as well as Sime Darby.

Analysts said talk of a takeover of S P Setia in a corporate exercise involving Sime Darby Bhd has seen a wave a buying for the stock, which in recent years has been underperforming its peers in the property index.

Analysts said news of the corporate exercise was lifting the shares of S P Setia but noted that a wave of buying calls were made after the launch of the second phase of the Battersea project in London.

Buying of S P Setia’s stock underpinned by the corporate exercise recently lifted its shares to close to an 18-month high. Its shares have dipped a little since then but are up about 26% over the past one year compared with the Bursa Malaysia Property Index, which is 5.25% higher over the same period. Shares of S P Setia hit a recent high of RM3.64 on January 20 after a report that the property arm of Sime Darby was in the midst of taking over S P Setia. The report said the proposal was mooted by a few senior management of S P Setia about a couple of months ago and conveyed to the top brass of Permodalan Nasional Bhd (PNB) and Sime Darby.

“People are also waiting to see what they are going to do regarding the management of S P Setia,” said an analyst. There have been a number of changes at the top management of S P Setia after founder and former president and CEO Tan Sri Liew Kee Sin left the group. Khor assumed his current position starting this year after his predecessor Datuk Voon Tin Yow opted to leave the company earlier than planned. Analysts said that while the takeover and management issues dominate the company’s newsflow to some extent, the fundamental position of S P Setia gives investors comfort in the current soft property market in Malaysia.

S P Setia has projected sales of RM4.6 billion this year, which is about the same as registered last year after missing its previous target of RM5 billion. “Going into 2015, management has set a flat sales target of RM4.6 billion, and plans to roll out more mid-range products, given the challenging market conditions ahead. These include some apartments at Setia Alam (gross development value or GDV: RM250 million), terraces and superlink homes in EcoHill (GDV: RM250 million), and the maiden launch of Eco Templer (GDV: RM190 million),” said RHB Research Institute in a note. “The Malaysian market will still continue to be resilient this year although buyers will take a cautious approach and a waitand-see attitude in view of the impending goods and services tax and global economic volatility. This is underpinned by young demographics and rising affluence. On the international front, we foresee the Australia and UK markets will maintain its current demand and pricing for this year.”

It is the best place to see a variety of property options by major developers in one place. Buying at a property expo will help you save TIME and COST. With all the major developers participating in the expo, you don’t have to travel all over Sabah, Sarawak, Peninsula Malaysia or overseas to get the most updated property investment information. You can: •

Compare property prices on the spot

Find out the current build-up progress of your preferred investment project

Enjoy special buyer benefits

WHAT IS PROPERTY HUNTER EXPO ABOUT?

Many participating developers will be offering attractive benefits and promotions during the expo or for a limited time period. These benefits may include:

Property Hunter Expo is an annual event held in major cities and urban centres in East Malaysia.

Discount on downpayment

* Sabah Editions

FOC legal fees, SPA, furnishings and other household items

Kota Kinabalu (27-29 March), Sandakan (12-14 June), Tawau (3-5 July)

Exclusive free gifts or promotional items

* Sarawak Editions

Property developers at expos are always ready to provide you with additional support such as financial advice and mortgage planning to help you make the right decision, at the right time.

Kuching (1-3 May), Miri (22-24 May), Sibu (14-16 Aug 2015)

It is one of the most prominent property expo series that successfully brings together real estate developers to exhibit and showcase their latest projects – all under one roof. Whether you are a first-time buyer or an investor, attending a property expo is a great way to get to know your investment options and the people behind the developments. And best of all, property expos always come with great deals and exciting promotions to make your purchase even more rewarding. So, the next time a Property Hunter Expo isin town, BE THERE and let it help you grow your personal and business property investment portfolio.

For more information, please contact:

VICTOR YONG +60 88 719 787

victor@maxxmedia.com.my

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No Issue In Selling BBCC Properties

Lower Demand On High End Properties

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recent trend showed that local property buyers have turned to be more cautious in spending their cash especially on the property priced 1 million ringgit and above. The circumstance, which has caused rising glut in the higher end of the market, is said due to the growing numbers of working population in fast moving cities around the country.

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co World’s non-executive Director, Tan Sri Liew Kee Sin affirmed that there will be no issue in selling the properties of Bukit Bintang City Centre (BBCC) project given that it once housed the notorious Pudu Jail. No stigma issue, he said following the signing of a tripartite agreement to jointly develop the BBCC project with a gross development value totaling RM8 billion. The other two companies involved in the development project are UDA Holding Bhd and the Employee Provident Fund (EPF) board.

Bukit Bintang City Centre (BBCC)

This group of working people will keep demand in the affordable housing, said speakers during the Property Market Outlook for 2015 seminar.

entertainment components. Meanwhile, it is also disclosed that the consortium would also be signing a memorandum of understanding with Mitsui Fudosan Co Ltd, a Japan based company to jointly develop the shopping and retail component of the project. The Pudu jail redevelopment is part of the Economic Transformation Programme (ETP) under the New Economic Model to turn the Klang Valley into the Greater Kuala Lumpur economic district and Malaysia into a highincome nation by 2020.

The Deputy Director-General of Valuation and Property Services, Faizan Abdul Rahman stated that the property market is expected to be moderate throughout this year. He said that the residential property market will sustain steadily, especially for the homes priced below half a million, as the price range is most likely to fit the

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In retail and hospitality sector, Adzman Shah Mohd Ariffin, ExaStrata Solutions Chief Real Estate Consultant said the rising number of malls and the increase in integrated developments which combine residential with retail component will further weaken sentiment. The increase in online shopping is another factor.

wallet for the working population and first time home buyers. Meanwhile, it is reported that there is an oversupply of high end condominiums and offices, according to James Wong, the Director of VPC Alliance Chartered Surveyor. The descending in the numbers of launched projects by property developers, a rise in property auction and housing loan approval is getting stricter are among the tale-tell of the said situation. The situation as it is, according to one property consultant, is that high-end properties are aplenty, but low-to-middleincome earners are unable to buy a home due to a shortage of supply in affordable housing. PPC International Managing Director, Datuk Siders Sittampalam opined that the market correction has to come in as the developers have to take part by launching more affordable products for the buyers.

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The scene at a recent world class property exhibition in Kuala Lumpur

he 8th Malaysia Property Summit which held recently is seeing the highlighting several issue including the property price movement post GST in the month of April. Another topic highlighted is the oversupply of high rise residential, hotel rooms, offices and retail spaces yet the shortage of affordable housings, shop houses, industrial lands and landed unit. The organizing Chairman, James Wong in his report pointed that there is an indisputable disequilibrium between the market demand and what offered. He said in the last two years, project developers are focusing more on building high end and upper middle housing. therefore, when the trend of higher demand in affordable housing emerged, it has simply consequencing oversupply in expensive properties.

The BBCC project, a redevelopment of the 19.4-acre former Pudu jail site, will comprise a mixed residential and commercial development with a proposed world-class master plan, consisting strata offices, office towers, a hotel and serviced residences. There will also be a lifestyle centre which will include a Malaysian grand bazaar, a retail mall, food and beverages as well as

Challenging Year For Project Developers

Luxurious bungalow house

Meannwhile, PEPS’ President Datuk Siders Sittampalam noted that the impending GST will not have major impact on property pricing. However, albeit all speculations on how GST to impact property sector, the fairest

thing to do sit and see how the prices will really move after April. Presenting his paper on office space, Christopher Boyd of CBRE, said as of the end of 2014, total office supply stands at 96.6 million sq ft, excluding those in Putrajaya and Cyberjaya, which put Kuala Lumpur above Singapore and standing at the same level as Manila and Bangkok.

He expected that the occupancy rate which is at 80 percent at this moment to deteriorate as well as the rental rates. Despite the market is seeing a flight to quality and older building to struggle, current tenancies are prone to be sticky due to the sign contract and the expensive moving costs. Boyd also reported that the decrease of oil price may affect demand as oil and gas and banking/ finance sectors require large amounts of office space in central/ and strategic areas in the city.

James Wong of VPC added that there are about 200,000 hotel rooms in Malaysia with occupancy of between 60 to 65 percent which is quite low when compared to Singapore and Thailand which seen some 80 to 85 percent of occupancy. He said that hotel room rates are the second lowest in Asean after Cambodia however, in terms of economic status, Malaysia is still setting its foot in the Top 5. The issue is said has resulted the increase of number approved tourism projects to be declined as well as the capital investments disapproval. David Jernel’s Senior Vice President, Jones Lang Wootton said that 2015 is going to be an extremely challenging year for the developers. According to him, developers were said have to be less greedy as the sector is definitely pacing into a slower growth. The annually held property conference is organized by the Association of Valuers, Property Managers, Estate Agents and Property Consultant (VPC) in the Private Sector Malaysia or PEPS.

New Housing Scheme To Protect Homebuyers And Developers

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ood news to all property players, the government now is cogitating the implementation of a new scheme which to safeguard the interest of homebuyers and developers. Reported by The Edge Market, the scheme which is called Housing Guarantee Scheme would be run under a government-owned corporation. Wellfare, Urban Wellbeing and Local Government Minister, Datuk Abdul Rahman was reported saying that the government would take up 70 percent stake whilst the remaining 30 percent could be taken up by the Real Estates and Housing Developers’ Association Malaysia (REDHA) or government institutions with funding capability such as Employees’ Provident Fund (EPF) and Lembaga Tabung Haji. Rahman explained that under the scheme proposal, the basic capital for the corporation is about 400 million ringgit. Thus, the government is to inject a sum of 280 million ringgit as for the 70 percent stake to the corporation. The Housing Guarantee Scheme is a scheme to guarantee the housing project’s completion by charging a minimal amount of premium, ranging from 0.5 percent to 1 percent of the house price, from each transaction. Nevertheless, the government is hoping the developer could absorb the charges in their cost. If the housing project is not completed, the corporation would take over the project and complete it, to ensure that the properties are delivered to the buyers.

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CONTRIBUTOR| Charles Tan

Charles Tan

Founder kopiandproperty.com

Charles loves cars but he buys properties instead. A good car gets you to your journey faster but a good property gives you returns for your comfortable retirement faster! Currently, he has properties in Penang, Klang Valley and Kota Kinabalu. His mantra for property investment is, ‘Buy Objectively’. In his previous role with a leading property portal in Malaysia, he regularly speaks about the property market in property fairs, public property talks, workshops and even as panels in property related forums. He blogs on a regular basis inkopiandproperty.com which is a popular property blog in Malaysia. The blog is dedicated to his personal views about the property market.

GEN-Y AND PROPERTY MYTHS WHY KNOWLEDGE IS KEY?

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hen we talk about property affordability, one generation which is always the focus of many would be Gen-Y. Many articles focus on how this generation is deprived of the opportunity to buy due to the current high property prices. The reason for this focus is because those in Gen-X would have most probably bought one many years ago when property prices were still more affordable. Gen-Yers meanwhile has just reached the age where they would need to buy a property a few years ago. Gen-Yers are those born between 1981 – 1994. In other words, today they are between the ages of 21 – 33. Many have just started their careers and some have reached assistant manager or manager level. Thus, just 5 years ago, majority would not have property in their mind and thus they missed the first boat. Honestly, is this true? Well, amongst all my Gen-Y friends this is true. Majority is still waiting for prices to come down or said they were still saving for their first home sweet home. However, for the few who realized the potential of property as a long-term investment, all of them already have two properties. In other words, one is for own stay and another for investment. One in particular is looking at his 4th property today! Are these minorities very special? Let’s look at a slightly more developed country than us. According to an article in Australia’s major property site by Emma Sorensen, it showed that Generation-Y in Australia is buying properties earlier than all

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other earlier generations! In their annual Housing Affordability Sentiment Index (HASI) survey for 2014, it shows that out of those Gen-Yers who has properties, 89% of them bought their first property before they were 30 years old. Sorry, there is no data available for Malaysia but if I think along the lines of the few who has bought more than one property, they have started way before they reach 30. In terms of Gen-Yers who actually own a property, over half or 53% of all GenYers already own one property and 23% own more than one! 47% even have ambitions to buy a second property within the next 5 years. Pretty awesome stats about the Gen-Yers in Australia yeah? Let us now look at some of the reasons stopping the Gen-Yers in Malaysia from buying their first property. Affordability. Is this really true? Are there really no properties within their capability? Actually, checking online at some of the major property portals would reveal that this is not true, especially in Malaysia. In fact there are even landed properties for RM300,000 in KL today! Only issue is that they are further away from the city centre and may not be in a popular neighbourhood or more run down than usual and needs some touching up. As usual, not many of them are willing to accept buying a slightly smaller, slightly further and slightly lesser property. Yes, many still believe it is their right to get a landed property or even a full facility condo. They believe these further away areas are too troublesome and many are also not willing to consider a secondary apartment instead of a new condo. I think the affordability factor should be changed to acceptability instead.

Life is tough today. It is tougher to buy a property these days. Some said that long time ago, landed semidetached units were just RM80,000. It’s funny that they are saying this because if nothing has changed, it would not be possible for the world to enjoy the advancements of today including but not limited to smartphones, condo with huge parks and swimming pools and even the flashy car that they aspire to drive. Long time ago, their parents also have to SAVE much more than what they are saving today just so that they can afford the loan because getting a loan then was HARDER too. My parents told me that they even had to borrow from relatives to buy their first property. Every week, there was just one day that we got to eat either chicken or fish. Life then was much harder, tougher and much more ‘unfair’ than today. Salary is way too low. If this is the reasoning, let me add two more. Yearly increment is too low. Yearly bonus is also too low. In fact according to the latest survey salary increment for 2015 by JobStreet. com, the expectations from employees about the increment percentage does not match that of what employers are thinking of giving. 54% expected an increment between 6.1 to more than 10 % while only 31% of the employers are planning to give the same percentage of increment. Think really objectively about this. Are the increments and bonuses and even salaries much higher many years ago? Or are there way too many things that all of us are interested to buy and enjoy instead of saving for that first property?

Personally I think the one major thing stopping anyone including the Gen-Yers from buying, is knowledge. The knowledge on when to buy because the older we are, even with more savings, it would get harder to buy. Our savings may increase based on our original base but the property price increases are based on the overall property price. Your 10% extra savings every year will never catch up with the 5% increase in property price no matter how long you save. Buy a property you can afford as soon as you can and use it as leverage for your next purchase. The next knowledge all of us must have is that property is a necessity and not a want. A new smartphone every year is a want. A flashier car is a want. Manage your wants, increase your ‘ammunition’ faster. In the future, someone would buy your property from you because they need a roof over their head. No one would buy your old smartphone or car no matter how well you took care of them. Property investment is however not a race. There are no limits to the number of winners. It is also not a game where you simply choose one and hope it’s the right one. That is gambling. According to many studies, Gen-Y is the generation where the capability to learn is the fastest due to exposure to a lot more information. Based on the study on the Gen-Yers in Australia by realestate.com.au in their Housing Affordability Sentiment Index, it has been shown that Gen-Yers are really good with properties. Last question is, what about the Gen-Yers in Malaysia? You decide.

While the author makes reasonable efforts to present information which he believes to be reliable, the author makes no representation that the information or opinions contained in this article is accurate and complete. Readers are advised to seek specific professional advice before acting on the views.

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INTERNATIONAL PROPERTY NEWS

Hong Kong Offices Are Most Expensive

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ong Kong office space emerged as the most expensive to rent in the world – twice as expensive as prime commercial property in any other global city. Knight Frank’s outlook for global commercial property showed that prime office space in Hong Kong costs US$70,000 (RM253,701) psm, up significantly from second place Singapore’s US$28,340 (RM102,713) psm.

INTERNATIONAL PROPERTY NEWS

“The availability of land and land values are the fundamental issues that are driving rents and capital values in Hong Kong and Singapore, in particular,” said Darren Yates, Head of Global Capital Markets Research at Knight Frank.

Catch up on the latest property and real estate news, views and analysis from across the globe featured

4000 Property Agencies Gave Up The Industry In Singapore With the latest renewals, the top 10 realties here have found that they have lost some agents from end-2014. ERA Realty and PropNex remain the largest agencies with 5,707 and 5,358 agents respectively as at January 1.

High rise residence in Singapore

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t is reported in Business Times online that close to 4,000 real estate agents have dropped out of the industry while over 50 agencies have closed shop over the past year due to the sagging property sales in Singapore. But this has not deterred some 3,006 new entrants from becoming property agents, according to the latest data from the Council for Estate Agencies (CEA). CEA stated recently that it has licensed 1,369 agencies and

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registered 30,830 salespersons as at January 1 this year. This marks a fall from 1,425 licensed estate agents and 31,783 registered salespersons in the previous year’s renewal exercise. Some 3,959 salespersons did not renew their registration. Renewal of licences for agencies and agents usually takes place at the start of the year - there are still some applications pending CEA approval.

PropNex Chief Executive, Mohamed Ismail noted that the lacklustre market has become “a purging system of the fittest agencies and efficient agents”. But it is not all doom for those who exit in bad times. Given how overall sales volumes have dropped by some 30-40 per cent, they may be better off in a job with stable income, Ismail said. Ismail noted that when sales are poor, some agents find having to make regular CPF contributions and forking out money for professional indemnity insurance and Continuing Professional

Development courses deterrents to renewing their CEA licences. Meanwhile, according to ERA Realty Chief Executive Jack Chua, with the smaller agencies closing shop, their agents have joined the bigger firms. This, he said, are among the reasons why ERA’s sales force grew close to 10 per cent from a year ago. But it is a 7 per cent drop compared to end-2014, just before the licence renewal exercise.

“These locations have a very constrained supply of land, combined with high population densities and an abundance of successful global companies with an ability to pay higher rents.” Tokyo was listed as the third most expensive place to rent an office space, followed by Paris. London took on the fifth spot, while Zurich and Geneva settled at the sixth and seventh place respectively.

Meanwhile, Knight Frank expects further growth in cross-border investment this year, despite an uneven global recovery and a strong recent growth in capital values. Given the significant weight of capital targeting real estate, Knight Frank expects global investment volumes to rise by at least 10 percent to more than US$700 billion in 2015.

“Real estate capital markets have been increasingly buoyant and disconnected from occupational trends, which in turn have mirrored the the global recovery,” said Yates. “Investor focus thus far has been on transparency and liquidity, which has played well to the gateway cities such as London, Paris and New York. But demand is increasing for second and third tier cities where competition for stock is less intense and potential returns are higher.”

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ong Leong Investment Bank (HLIB) expects retail real estate investment trust (REIT) to continue outperforming office REIT this year given the pricing power and higher rental income potential from positive rental revision.

The investment bank said other key risk that could dampen the sector included a bullish equity market, improvement in the US economy leading to a rise in US interest rates and a significant slowdown in economic activities dampening rental reversion for industrial REIT.

HLIB, in a research note, said strong rental revision for retail REITs would be underpinned by sustained consumption growth, albeit at a slower rate, in the country.

“The REIT sector could underperform in a bullish market as investors would prefer stocks which give higher capital appreciation,” it added.

“While GST will be a dampener for retail REITs, we see no significant impact as the government has broadened the list of items in the zero-rated and exempt supplies,” it said.

Rounding up the top ten were New York, Stockholm and Oslo.

On office REIT, it said the supply glut for office space in Kuala Lumpur is far from over and upcoming mega projects will create further dent on the problem.

Tan Tee Khoon, Executive Director of Residential Services at Knight Frank on the other hand noted that the start of each year marks a game of musical chairs as some salespersons transfer from one agency to another. Knight Frank is focused on seeking out “career salespersons” who are out to make a living in real estate as a career, he added. Being a full suite consultancy and agency services firm also translates to “a diverse basket of sales and leasing opportunities available to our salespersons”, he said.

Weaker Ringgit To Draw Singaporeans In

“The supply glut for office space in the Klang Valley may result in rental rates for offices to grow at a slower pace or stagnate,” it said.

View of Hong Kong from Sky100 at International Commerce Centre

Meanwhile, on industrial REIT, HLIB said it maintained a “neutral” view with a positive bias on the industrial REIT given its softer rental reversion and limited supply coming in the market.

HLIB said an aggressive monetary policy by Bank Negara Malaysia might also cause interest rates to increase thus making REIT less attractive. However, it said in view of the subdued household financing activities and rising downside risks to domestic growth momentum, BNM was expected to maintain an overnight policy rate at 3.25 per cent for the rest of the year. “Hence, in a positive note, we perceive the current economic situation as favourable for the REIT sector,” it added.

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INTERNATIONAL PROPERTY NEWS

24,000 Private Homes In Singapore Sitting Empty

Worth Putting Money In Malaysia Says Fortune Magazine

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alaysia is featured in a popular business publication, Fortune Magazine in its February 2015 issue as one of the ‘seven emerging markets worth putting your money in’.

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ost of the Singaporean property buyers are still keeping hope that the prices to fall further. However, their waitand-see attitude has brought a consequence in which more completed private homes are sitting empty.

Latest data from the Urban Redevelopment Authority (URA) shows that during the fourth quarter of 2014, there were 308,814 completed private units on the market but more than 24,000 units remained vacant. In a statement, URA said the vacancy rate of completed private residences, excluding executive condominiums (ECs), climbed from 7.1 percent in Q3 to 7.8 percent at the end of Q4. Media reports stated this is the highest it has been since Q4 2005 when a vacancy rate of 8.4 percent was recorded due to depressed rents. The problem could get worse as there are many more uncompleted units in the pipeline. Although the total supply of uncompleted private homes decreased to 68,960 units in Q4 from 74,496 units in the quarter before, there are still 26,742 unsold units in this segment.

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Based on expected completion dates reported by developers, the housing market will see over 20,000 private residential units being completed in 2015. Another 20,000 units will be ready in 2016. According to Alice Tan, Research Head at Knight Frank Singapore, a looming supply glut is expected to further exacerbate rising vacancy rates. This is likely to exert further downward pressure on prices in the upcoming quarters.

American Political Scientist, Ian Bremmer, who is also specialized in global political risk penned that in Malaysia, the incumbent (Barisan Nasional) government is trying to stay ahead of increased demand for change. The Prime Minister Datuk Seri Najib Tun Razak scrapped fuel subsidies and will enact a six percent Goods and Services Tax in April to improve his government’s fiscal position. Bremmer also believed that Najib will likely accelerate his Economic Transformation Programme by introducing further tax incentives for foreign investors as well

as further liberalisation of the manufacturing and financial services sectors. It is a fair bet that as growth tapers in China (and the impact of that slowdown is felt in Malaysia), Najib’s government will feel pressured to boost public spending on infrastructure, education and health care, he further added. That is a good thing, particularly if authorities, as expected, continue to advance a broad fiscal reform agenda, with support from the middle class, to balance the nation’s budget by 2020, he wrote. The other emerging markets that Fortune Magazine described as the ‘lucky seven’ are India, Indonesia, Mexico, Columbia, Poland and Kenya.

To prevent a flood of empty homes on the market, developers chose to sell units from older developments last month instead of launching new projects, said analysts. Despite this, only 230 units found buyers in December, the lowest monthly sales volume since January 2009 when developers moved 108 units. For the whole of 2014, developers sold 7,316 units, significantly lower than the 14,948 units in 2013. Tan also explained that with more housing options available, tenants are now very budget-conscious. This has, in turn, resulted in a rising leasing preference for city-fringe locations rather than the city centre.

Cover of a Fortune Magazine with Mark Zuckerberg on the cover

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BANKING AND INVESTMENT NEWS

$₤ € BANKING & $ INVESTMENT

Projection For Property Market 2015 homebuyer is not required to pay GST in transacting the same but the developer still pays GST for all the supplies and services during construction that are all recognized as standard rated supply. As the developer will not be absorbing the GST by compromising its profit, the same will indirectly pass on to the eventual homebuyer.

NEWS

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The banking and investment industry has a crucial role to play when it comes to property. Read about the most recent news and trends in this trade

015 is a buyer market at large. Those who have the cash and the credit plus long-term holding power will be spoilt with the options and opportunities ahead.

Property Players To Enjoy Stable Earnings Growth Next Year government to address home ownership among first-time home buyers as well as the medium to lower income group may help ease the HPI growth rate further.

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stablished property players such as UEM Sunrise Bhd (UEM Sunrise), SP Setia Bhd (SP Setia), Tropicana Corporation Bhd (Tropicana) and Mah Sing Group Bhd (Mah Sing) will continue to enjoy stable earnings growth next year, according to the research arm of MIDF Amanah Investment Bank Bhd. MIDF Research attributes the stable earnings growth to the developers’ healthy level of unbilled sales.

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Meanwhile, the research firm noted that the measures taken by the government and the central bank to curb the disproportionate increase in house prices via income growth have started to materialise. It said the growth in Housing Price Index (HPI) eased in June, with the reading at 6.6 percent, down from March’s 9.6 percent. MIDF Research believes that the targeted measures by the

During the tabling of 2015 Budget, the research firm also noted that the government extended a number of broad base incentives like the 50 percent stamp duty exemption for home purchases valued at RM500,000 or less. The incentives came on top of affordable housing scheme such as the People’s Housing Programme (PPR) and 1Malaysia People’s Housing (PR1MA) programme. The 50 percent stamp duty exemption may also benefit

property developers such as LBS Bina Group Bhd, UEM Sunrise, Mah Sing and Glomac Bhd, said MIDF Research, noting that these developers have a good mix of products that are priced at RM500,000 and below. Separately, the research house said the property market may witness a rush in property acquisitions in the run up to the imposition of the Goods and Services Tax (GST) as consumers expects prices to increase post-GST. But the lack of property transactions in the near term could see property developers offer discounts in order to lure buyers, while new launches may ease further. With this, the research firm has a mixed view on the property sector’s prospects next year.

Property investment is a different game now, and the winning strategies of the last 5 years are no longer applicable particularly the more mature hotspots like Kuala Lumpur and Penang. Price appreciation will no longer be in leaps and bounds but rather more reasonable as the nation is on the last lap towards developed nation status. This is a stern test to investors to let go of their past experience and adjust themselves to the thinner margin as well as the sophistication in property selection to the details of preferences within the same development. The trader mindset of “buy low sell high” can no longer be sustainable as the paradigm is shifting towards adding values to the property to improve yield thus appreciation. Tenant management has emerged as the most important trait if you want to continue your trade in property investment. Not many can fully appreciate the real impact of the silence on the rate of the Real Property Gain Tax (RPGT) in Budget 2015. It was

muted naturally as the Finance Act has effectively replaced the schedule in the RPGT Act to reflect and adopt the applicable rate of 2014 moving forward instead of the “filters” approach through the ministerial power used since 2007. With the highest bracket of 30% and the lingering 5% after 5 years for company and foreigners plus the more realistic value appreciation, sellers will be more cautious in planning their disposals. The resulting hidden values will ultimately affect the valuation of property in general and that in turn will affect the bank in granting the loan. We could see a situation where asking price is higher than what the valuer is prepared to value. Therefore, the interested buyers would have no choice but to pay the higher difference between the asking price and what the Bank is prepared to borrow based of the valuation. There will be an array of reactive solutions to address such issues should the sellers be motivated to sell. IMPACT OF GST ON HOUSE PRICES An honest assessment of 2015 can never be complete without taking into consideration the impending implementation of the Goods and Services Tax (GST). While residential property is categorized as exempt supply, it merely suggests that the

For non-residential property that is recognized as standard rated supply, it has a direct impact on the pricing as buyers would be required to pay GST that has already been encapsulated in the offer price.

While GST is a contributing factor in pricing, pricing is still a function of supply and demand. The investing public will observe its impact on the market in Q2 while the hottest quarter would likely be Q3 2015. It is also worth mentioning that the banks and financial institutions will not be funding the GST portion of the price. This will certainly have an impact on the cash flow of the investors of non-residential property. GST also has an impact in the lease and rental market too. While nonresidential rental is subject to GST, the collection of the same is still subject to whether the landlord is required to register with the Royal Malaysian Customs for the same purpose. Mandatory registration is for those landlords who have revenues more than RM500,000 per annum and while one could ask for voluntary registration, approval is still discretional. As a result, there are two categories of Landlords with those with GST and those without GST. Reactively, there are also tenants that prefer landlords with GST (to gain the set off in the input/ output tax regime)

and tenants that prefer landlords without GST. In terms of collection of rental deposits, the security value has also been compromised as a result of the contractors charging GST in proving maintenance work on the subject premises from time to time. THE FUTURE POST-DIBS For investors that start with DIBS and have invested in more than one unit in the last few years, 2015 is the year that these units are to be delivered. It would be challenging for their cash flow, as the need to pay monthly installments is now a reality especially when the market is competing for tenants and buyers. Price reduction is an easy way out of any competition and that represents an opportunity to the long-term property investors. There is a call for the return of DIBS in the market to ease the stringent borrowing guidelines by the banks. However, this call should be treated with caution and should be limited to the affordable housing category only. The challenge remains that affordable housing has never been universally defined and the agenda in housing the nation seems to be a stop gap measure at best at this very moment. Once affordable housing can be defined, perhaps the Government should consider affordable housing to be zero rated supply under the GST thus benefiting the qualified first time homebuyer. Banks should play a stronger role in the affordable housing effort with perhaps more lenient borrowing guidelines in this sector. To many, 2015 is a year to wait and see. To the disciples of “Buffetology”, they need no reminder that when everyone is cautious, it’s the best time to seize the many opportunities ahead. Happy hunting, Property Hunters!

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BANKING AND INVESTMENT NEWS

Property Outlook Remains Challenging Before GST Implementation Says, Maybank

Ambank’s Group Managing Director Steps Down

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MMB Holdings Bhd. (AmBank Group) recently announced that Ashok Ramamurthy would be stepping down after three years serving as a Group Managing Director. The 53 year old renowned banker is expected to rejoin his family back in Melbourne and resume his role as a Senior Executive at Australia and New Zealand Banking Group Ltd. in a planned transition.

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ue to affordability issues and subdued buyer sentiment, the property sector outlook remains challenging and is likely to see a lull in demand post GST implementation that could last for six to nine months. According to Maybank Investment Bank Research (Maybank IB), developers were in the final push for sales before the implementation of the six per cent GST this April by bringing forward their property launches and are now offering very attractive marketing packages.

“We think the pre-GST theme is overplayed especially when banks have significantly tightened their criteria for mortgage financing,” the research house said in a note.

no change in the overnight policy rate over the next 12 months, the housing affordability index could decline by a further 2.4 percent. This would impact investment decisions for new purchases and could further dampen property sales. Maybank IB in a statement said property stocks under its coverage are currently trading at 0.340.64 times to their revalued net asset valuation estimates, which it believed were fairly reflected in their short-term subdued outlook.

As reported in The Malaysian Insider, the Chairman of AmBank Group, Tan Sri Azman Hashim noted that the group has made significant progress under Ramamurthy’s leadership. He explained that Ramamurthy is the one who are responsible for repositioning the AmBank brand internally and externally as well as upgrading their technology infrastructure and strengthening strategic position. The Chairman in his statement also pointed out due to these efforts, the group has a bright future thus expressing his gratitude towards Ramamurthy’s contributions for it.

charge of AmBank Group until a proper transition is made to the new Group Managing Director. Ramamurthy on the other hand said that it has been a great privilege to be AmBank Group’s Managing Director over the past three years.

“I am honoured to lead a first class management team and AmBank Group’s 12,000 staffs who are dedicated to supporting our customers,” he was quoted saying. Describing Malaysia as a great place to live and work, the Australian stated that it has always been his intention to return to his wife and family in Melbourne as well as to resume his previous career. Ramamurthy joined AmBank Group from Australia and New Zealand Banking Group Ltd. in July 2007 as Chief Financial Officer and has been appointed to be the Group Managing Director since 2012.

Nonetheless, Azman said that Ramamurthy will still remain in

Housing affordability remained an issue as the index has been trending down since 2009, mainly driven by the hikes in the base lending rate to 6.85 percent from 5.60 percent from 2009 to 2011. It said assuming a six per cent increase in property prices and

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BANKING AND INVESTMENT NEWS

Property Prices Expected To Hold Despite Plummeting Oil Price

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nvestors are shying away from property stocks and underweighting the sector while the equity market saw the result of declining oil prices and the weakened ringgit.

“The units transacted in the primary market saw a decrease of 32% year-on-year in 2013 but has

However, the property prices are still expected to hold despite lower volume in the near term.

Despite the lower volume, house prices appear to be holding well with the House Price Index increasing by 10% year-on-year in 2013, supporting the transaction value growth despite the volume drop.

“The sales targets of big developers are still in the RM2 billion to RM3 billion levels, which we believe is still a healthy replenishment rate. In addition, the good sales chalked up in recent years also bumped up unbilled sales of developers, with some having accumulated unbilled sales that are enough to underpin earnings for the next two to three years. “We are of the view property sales might see demand, albeit slower but we do not believe there will be drastic price corrections in the offing,” said Public Investment Bank (PIVB) in its research note last Friday. In a report by SunBiz, property sales for most property developers were toned down of late, due to the challenging environment and demand uncertainty due to the Goods and Services Tax (GST) which is effective April 2015.

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have also increased substantially, with total contributions and compliance costs rising to as high as 25% of the total gross development value for a landed and mixed development while conversion premium has gone as high as 300%. Again, transactions for properties valued more than RM1 million have in fact been on the uptrend despite concerns of high household debt and cooling measures.”

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since improved, judging from the 19% year-on-year increase in the first half of 2014,” it said.

“Hence, unless the property prices corrected drastically, we believe property sales should still be healthy despite lower volume and demand should normalise in six to nine months post-GST.” In terms of loans, the base lending rate is still at low levels and noted that property lending is still forthcoming with loans disbursements and applications still higher than the five-year average despite slowing growth. “Notwithstanding the challenges, we are of the view that property prices should be holding well, supported by price inflation of input costs and high land prices. Construction costs have doubled from 2003 to 2013. “Also, we understand that land conversion and compliance costs

Meanwhile, property consultants believe that 2015 will be a good year for buyers and investors, as the property market is expected to correct itself in terms of pricing due to the various cooling measures and implementation of GST. Raine & Horne International executive director Lim Lian Hong said 2015 will provide buyers and investors with more choices.

“Properties in the long run are always good investments and a hedge against inflation. At the current moment, our ringgit seem to be weakening and property may be a way of preserving the value of your savings. On the other hand, there will be more choices coming into the market and you may get a good buy if you are patient,” said Lim. Lim noted that buyers will need to adjust to the newer cost post GST and there would be a rush to buy commercial and industrial properties before the implementation. “2015 will be a buyers’ year…the various affordable housing schemes will also provide first-time buyers with more options to consider. This would result in developers becoming more prudent and creative in their product offering and pricing, catering more to middle and upper class buyers where the demand lies,”

told Zerin Properties CEO Previndran Singhe in an interview recently. He said market conditions this year will also attract more foreign investors especially Singaporeans who will be driven by the weakening Ringgit. According to Previndran, the first quarter of 2015 will see a hike in property transactions as buyers rush to buy properties, especially non-residential properties, to avoid the price increase associated with GST. In response, more developers will rush to complete their projects before April 1, 2015. “The commercial market, especially office space leasing, is expected to feel the impact of falling crude oil prices which would affect the oil and gas industry,” he said. Post GST, the property market will remain flat with lesser transactions and property launches in the second quarter as both buyers and developers adopt a wait-and-see approach to assess and evaluate the impact of the GST before starting to experience nascent recovery in the second half of the year, once the market has adjusted to the effects of GST. “Overall, the property market in 2015 will remain flat as a result of GST implementation, the effect from various cooling measures and fluctuations of global oil price while 2016 will witness strong growth in the property market,” he added.

More Mergers And Acquisitions To Come With GST — M&A Securities

Retail REIT To Continue Outperforming Office REIT In 2015

H

ong Leong Investment Bank (HLIB) expects retail real estate investment trust (REIT) to continue outperforming office REIT this year given the pricing power and higher rental income potential from positive rental revision.

M

ergers and acquisitions (M&As) will continue to dominate the local market, say analysts at M&A Securities Sdn Bhd (M&A Securities) following the government’s plan to go ahead with the implementation of the Goods and Services Tax (GST). “2015 will be a period of consolidation following the government’s bold plan to go ahead with GST implementation,” the firm said in a note. “This will inevitably choke and cause risk averseness in consumer spending and hence, the performance of private consumption, our long term anchors of growth. “To offset against this, the government is prepared to dish out even bigger targeted financial assistance on top of generous tax cut for all income brackets. Hence, the impact will not be as severe as initially thought.” M&A Securities notes that this year’s fiscal revenue may not get that much of positive impact due to targeted financial assistance but in 2016, the full year impact could be big, and is expected to contribute over RM30 billion into fiscal revenues. “Nonetheless, 2015 will be a challenging year mainly due to

the current weakness in global commodity prices. A prolong weakness may result in export revenues to take a hit. “To make matters worse, demand for our commodity may continue to suffer due to China’s economic slowdown, the eurozone economic doldrums and India’s economic challenges. “On top of that, the outlook on global commodity market looks murky at best and is poised to tumble once the US starts hiking its monetary rate. The prognosis is less-than-upbeat so to speak.” M&A Securities also predicted a possible policy response in 2015 as a measure to defend the ringgit and avert financial market instability arising from the US next policy step. “Given that Bank Negara Malaysia has set the Overnight Policy Rate ceiling to 3.5 per cent, the possibility of 25 basis points in policy rate hike is there and we predict it to be as such.

HLIB, in a research note, said strong rental revision for retail REITs would be underpinned by sustained consumption growth, albeit at a slower rate, in the country. “While GST will be a dampener for retail REITs, we see no significant impact as the government has broadened the list of items in the zero-rated and exempt supplies,” it said. On office REIT, it said the supply glut for office space in Kuala Lumpur is far from over and upcoming mega projects will create further dent on the problem. “The supply glut for office space in the Klang Valley may result in rental rates for offices to grow at a slower pace or stagnate,” it said. Meanwhile, on industrial REIT, HLIB said it maintained a “neutral” view with a positive bias on the industrial REIT given its softer rental reversion and limited supply

coming in the market. The investment bank said other key risk that could dampen the sector included a bullish equity market, improvement in the US economy leading to a rise in US interest rates and a significant slowdown in economic activities dampening rental reversion for industrial REIT.

“The REIT sector could underperform in a bullish market as investors would prefer stocks which give higher capital appreciation,” it added. HLIB said an aggressive monetary policy by Bank Negara Malaysia might also cause interest rates to increase thus making REIT less attractive. However, it said in view of the subdued household financing activities and rising downside risks to domestic growth momentum, BNM was expected to maintain an overnight policy rate at 3.25 per cent for the rest of the year. “Hence, in a positive note, we perceive the current economic situation as favourable for the REIT sector,” it added.

“We don’t think that BNM would want to adjust beyond the ‘accommodative level’ as it would choke the economy. Putting all the ingredients and cocktail together, we predict Malaysia’s GDP to reach a decelerating pace of five per cent in 2015 from 5.9 per cent in 2014.” Setia ECOCITY and Mid Valley in the background

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200,000 New Marriages,

Y

es, in Malaysia, on a yearly basis there are 200,000 new marriages every year. There are also a total of 80,000 new properties being built on a yearly basis. This information is from Mah Sing’s group Managing Director Tan Sri Leong Hoy Kum. He said due to this, there would always be shortages of property supplies. Thus he believes the group

80,000 would be able to replicate its amazing 2014 sales in 2015. In fact he expected net profit would grow 18% year on year in 2015. Mah Sing is also shifting its focus to affordability, just like many other developers and thus nearly half or 44% of all its properties would be below

New Properties

RM500,000. The take up rate despite the upcoming GST remains at 75% which means that the breakeven stage has been exceeded. In fact he said GST will not be a big issue and the adjustment period should take just 3 months. After reading through all these encouraging information from Tan Sri, what do you think of the property market in 2015? Of course, not all developers are as positive as Mah Sing. Remember last year REHDA members said that the negative sentiment would persist into 2015? However, when we look at the overall market it is very clear that affordability is a very important factor which can continue to drive demand. The founder of

penangpropertytalk.com, Ken told me that affordability is a very popular subject and every time he publishes any of such related articles, the response is very encouraging. I just visited Quill City Mall a few days ago and the baby room inside AEON’s baby department is simply amazing. Think objectively, if this group is not the main target, why spend so much effort for the baby room? If this group is the main target, it brings us back to the number of marriages in the first sentence. Yes, the family formation is also increasing tremendously and not just the number of marriages. Thus, smaller properties of below 1,000 sf all the way to bigger sized condos or even landed ones would continue to be in demand. Yes, it’s also possible that Tan Sri may just be too optimistic but Mah Sing is a listed entity. Its result has to be announced and made easy for all to see and if majority of what he said does not come true, what do you think would happen to Mah Sing’s share prices? Now, what happens if you think he is telling the truth and you are not ready to buy their properties? Easy. Buy some of their stocks and keep for the next few years. According to The Edge, the top pick for 12 stockbroking firms in town is Mah Sing. Prices? Please refer online and kindly do a bit more homework than believing everything that is written. Happy reading and learning.

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550sf VS

1,000sf

O

n and off, I read articles on how best some interior designers redesigned a tiny small space into a liveable space. For some cases, it is tagged as desirable space. In a recent article, someone bought a small garage, made it into a very nice little home which can even be used to host parties for friends. He made it into two levels, so that he can have a bed on the 1st floor and sleep right below the ceiling. Is this a lifestyle that I would want in the near future? Well, even if I am single, not for me. To me, size is very important to me. No matter how awesome a 550sf space can be redesigned into something which looks like a 1,000sf, I would prefer that 1,000sf place anytime. Yes, call me a ‘traditionalist’ but I am quite an objective ‘traditionalist’. Why do I say so?

Space is a premium. This means that whether you own a 550sf or a 1,000sf today, it is likely that these sizes are the maximum that you can afford for the same price levels moving forward. In other words, if RM400,000 buys you a 550sf today or a 1,000sf in a less popular area, this is likely to the biggest money can buy. There is no need to look too far. Just refer to the Hong Kong and Singapore examples. Yes, there is every possibility of another financial crisis and the prices may drop 20% or even 30%. However, we have to understand that once prices drop way too much, it is more likely that supply will stop because there’s just no way to build. Then, the demand and supply takes over and space as a premium would be true again. Size is what I see, not just what I think I have. I open my door and see that I have just a 550sf studio unit but hey! I have two floors which extend the whole unit into 800sf. Wow… not for me.

Many ‘traditionalists’ like me would still like to open the door and cannot finish viewing the whole place without moving about. Yes, if possible with my loved ones or for those with family, then with their families. I am very sure the singles would argue that 550sf is more than enough. I agree but always remember, between a 550sf and a 1,000sf unit, it is not always that people would choose the 550sf unit. For Malaysia, I think until today, the preference is for a larger unit. Ask any Singaporean or Hong Konger and tell me if you think the majority of them would prefer a smaller unit versus a larger one. Let’s be objective on this one, ok? If you really love small units and want to stay in it forever, yes, please do buy one and enjoy it for the rest of your life. If however you are buying small units because the sales people are telling you this is the trend of the future, think again. Even the

Happy ‘GST’ thinking if you still think GST is the main reason for buying or not buying. Singaporeans and the Hong Kongers would still tell you that they prefer bigger units instead. Especially units that is big enough for a small family gathering. And definitely not a unit big enough for the whole family to sleep on the floor. If you buy with your eyes wide open, you should do just fine. Reason being with its affordability price tag, these small units are unlikely to depreciate much even during crisis. However, with its already high overall price visa-vis its size, please do not put high hopes that it would continue to rise to the sky. Happy buying and staying in one, if you truly love one.

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Prices

DOWN

GST:

J

ust two weeks ago, a colleague had lunch with me and asked what would happen with GST in April. She has a condo which she may want to sell and all her friends said that sell only after GST so that she can get a higher price. Then, she also said that she is thinking of buying another property but not sure if she should buy now or wait because everyone said market is bad. Yet, after GST what if prices go up? Let me tell you what I told her at the end. Few days ago, I read something online. For now, let’s listen to all the three different opinions from the Customs Department director of GST, Datuk SubromaniamTholasy, Real Estate and Housing Developers Association (REHDA) chairman Datuk Ng SeingLiong as well as IFCA MSC Bhd’s chief financial officer Daniel Chow.

No bonus for guessing it right based on the designations. Yes, Subromaniam said that prices should be coming down because the prices of inputs have been decreasing especially with the falling oil prices. Therefore, the developers should pass the savings to home buyers. In fact, there’s no tax on residential land, thus there is no justification for any increase. Of course he also said that if everything was the same as previously, the actual increase with GST would be between 0.5% and 2% at maximum. However, as he has said, with the falling costs, this is no longer the case and the prices should fall even with GST. Ng said that any extra costs would not be absorbed by developers but would be passed on to buyers. Based on REHDA’s own calculation, this should result in a 2.6%

vs

UP

Prices

increase. He said the main issue was because of major components such as cement, concrete, bricks and sand. These are not zero-rated and yet it consists of 44% of the total cost of construction.

Chow said that the prices would not be increasing because there would already be an oversupply of residential properties by the end of the year. There have been many buyers who bought properties with the 5% downpayment two to three years ago and these are completing end 2015 and 2016 and the buyers would have to come up with money to pay. The holding power is not likely to be strong. He said with this huge pressure, property developers would have to think again whether they can increase the prices by even just 1 percent. I told my colleague that I seriously do not believe developers would increase prices with the current market

condition. In fact 2015 is fast becoming a year of affordability. Just look at all the new launches. Majority are RM500,000 or lower or even just very slightly higher. Gone are the days when RM700,000 seemed to be the usual price. Ok, perhaps the size may be a bit smaller and the location not that awesome and the number of units are pushed up but hey, think objectively, during good times, would we have this opportunity? I also think the huge supply from the 2011, 2012 and even 2013 years are coming into the market and there’s going to be a huge supply. Prices would not crash though. At worst, the sellers sell at a slight premium to what they bought and prices remain almost the same as the current market. We shall see what happens yeah. Sorry, everyone is just guessing. That includes me too.

Next

5 YEARS,

better invest in

MALAYSIA – Fortune

R

ecently, it has been mostly negative news if any when it comes to Malaysia. From oil prices affecting the economy to oil prices affecting the currency and to oil prices affecting even the Malaysian economy, everything is about how oil prices arewreaking havoc. Even with the decreasing petrol prices, all the restaurants have shown that once prices are up, nothing will come down. Yet, as usual, these popular places continue to be patronised by the so-called ‘poorer’ Malaysians. Fortunately, FORTUNE magazine released its latest top 7 best markets to invest in the category of emerging economies. Malaysia is ranked among these top 7 countries which include others like India, Indonesia, Mexico, Colombia, Poland and Kenya. This is what they said about us. The current government scrapped

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fuel subsidies and will introduce a 6% Goods and Services Tax in April which will improve the fiscal position of the country. More foreign investors will be enticed with Najib’s Economic Transformation Program through further tax incentives for foreign investors. The manufacturing and the financial services sector will be liberalised further. As the slowdown is continuing in the region, especially in China, the Malaysian government will have to continue spending to boost infrastructure, education and health care. Balancing the budget continue to be on the agenda with a final target of a balanced budget by 2020. Okay, assuming Fortune is right and they managed to also convince some of these foreign investors to think Malaysia, what should we do? Well, I think it’s time we think harder about where we may want to invest our money in.

Properties?Probably. Share market, most probably. Other investments? Yeah, as long as you believe that it would give you better returns than just leaving the money in savings account or even Fixed Deposits which will remain low because Bank Negara Malaysia is likely to maintain the borrowing costs until end of 2015. What if you do not believe Fortune’s selection of Malaysia? Well, there are still another 6 countries which Fortune is touting as worth a serious look. Of course, if these 6 are also not your cup of tea, there is still over one hundred countries in the world which we can move our money to. Just have to choose a few and stick to it for these 5 years and change later. Happy investing.

Every developer would want profit but every developer is also well aware that all their previous buyers are also looking at how they price their future projects.

COFFEE TALK | kopiandproperty.com

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COFFEE TALK | kopiandproperty.com

RM50,000 For A Car Park.

SERIOUSLY?

T

o be very specific, 8 years ago, I paid RM10,500 for an additional car park when I bought my Penang condo. I told my brother-in-law and my brother to buy one. Both did not eventually as they felt RM10,500 was very expensive just for an additional car park. Over the years, the price for a car park has slowly risen from RM15,000 to RM20,000 followed by RM30,000, RM40,000 and today my friend, Ken Lim of penangpropertytalk.com told me that an affordable housing project in Penang is selling one (1) extra car park for RM50,000! He called the developer concerned and the final conclusion was that this extra car park was optional. Nevertheless,

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without the network of LRT or even a monorail, most homes would have two cars and thus the pinch. Actually, I seriously believe that these car parks would become more expensive. When it was at RM35,000 I asked my wife to see the calculations which showed that if we have that cash, we may be better off buying that car park than rent. After all, when you sell your home, an additional car park carries a premium of above RM40,000 most of the time. Calculation as follows:

RM34,286 into the bank and not touch this amount for a very long time. Thus, an additional car park may be worth RM35,000 if the rental is RM100 per month. Of course for KLites who are reading this, you would be scratching your head. RM100 for rental per month? My area is already RM150 per month! When I was staying in KelanaPuteri, I paid RM160 for a covered car park for my wife to park. The rental in Penang is always lower, whether it is for an equivalent condo or apartment or even a car park.

Assuming rental of one car park is RM100 / month. This comes up to RM1,200 / year. To earn an interest of RM1,200 with an interest of 3.5%, one would need to deposit

RM50,000 meanwhile is in a totally different league altogether. This assumes that the car park rental would soon reach RM150 per month? I asked another friend who

owns a condo unit in Straits Quay. She said it would cost RM70k for two additional car parks plus a small storage area. Another agent said the usual premium for an additional car park can be up to RM50,000. One car park is definitely not enough today. The decision would be a tough one to make if the RM50,000 price tag remains. I think majority would opt not to buy. When this happens, get ready for a lot of cars parked haphazardly just outside the condo. Perhaps any unsold car park can be rented out for a cheaper rate to the residents instead? This can also be a source of income for the condo committee.

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PROPERTY LISTING |SABAH

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*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

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PROPERTY LISTING |SABAH

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*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

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PROPERTY LISTING |SABAH

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*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

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PROPERTY LISTING |SABAH

136

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

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PROPERTY LISTING |SABAH

TERRACE HOUSE FOR SALE

138

Extracted from PropertyHunter.com.my

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

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PROPERTY LISTING |SABAH

140

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

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PROPERTY LISTING |SABAH

142

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

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PROPERTY LISTING |SABAH

RESIDENTIAL LAND FOR SALE

144

Extracted from PropertyHunter.com.my

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

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PROPERTY LISTING |SABAH

146

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

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PROPERTY LISTING |SABAH

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PROPERTY LISTING |SABAH

TERRACE / LINK FOR RENT

150

Extracted from PropertyHunter.com.my

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

OFFICE SPACE FOR RENT

Extracted from PropertyHunter.com.my

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

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PROPERTY LISTING |SABAH

152

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

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PROPERTY LISTING |SABAH

CONDOMINIUM FOR RENT

154

Extracted from PropertyHunter.com.my

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

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PROPERTY LISTING |SABAH

BUNGALOW / VILLA FOR RENT

SERVICE RESIDENCE FOR RENT

WAREHOUSE FOR RENT

156

Extracted from PropertyHunter.com.my

SEMI - DETACHED HOUSE FOR RENT

Extracted from PropertyHunter.com.my

RETAIL SPACE FOR RENT

Extracted from PropertyHunter.com.my

INDUSTRIAL FOR RENT

Extracted from PropertyHunter.com.my

SOHO / SOVO FOR RENT

Extracted from PropertyHunter.com.my

Extracted from PropertyHunter.com.my

Extracted from PropertyHunter.com.my

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

*Listing are accurate at the time of print. Kindly contact the respective agents for updates. For more real estate listings, please visit www.propertyhunter.com.my www.PropertyHunter.com.my

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160

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161


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Property Hunter March Issue 2015  

Hot Topic: First Home Buyers Is Generation-Y's Future At Stake?

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