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Primarc Development (M) Sdn Bhd offers your dream home in Rawang
Nilai: A Gem In The Southern Corridor Understanding Slope Management + 6 House-Flipping Donâ€™ts KDN PP 18181/04/2013/(033492) ISSN 2289-4233
EDITOR’S NOTE Publisher KK Chua Editor Zuhaila Sedek-De Booij Writers Rachel Joseph (Rachel@propertyinsight.com.my) Aidil Mohd Noor (email@example.com) Junior Writers Imran Roslan Eleyinnina Sahim Contributors Khai Yin Chris Tan Thoo Mee Ling Wong HH KK Chua Kit Au-Yong / Stanley Toh Dr. Ernawati Mustafa Kamal Graphic Designer Lam Jian Wei Junior Designer Muhammad Azmi Photographer Nur Afiqah Anissa Bt Azharuddin Sales & Advertising Andy Fam 012-6019 938 (firstname.lastname@example.org) Marina Binti Mohd Noor 012-2469 703 (email@example.com) Marketing Sofia Alyna (firstname.lastname@example.org) Annand A/L Arivalagan (email@example.com) Publisher Armani Media Sdn Bhd (1032085-H) No. 32-3, Jalan Pekaka 8/4 Sec 8, Kota Damansara 47810 Petaling Jaya, Selangor Tel : +603 6156 3366 Fax : +603 6156 3399 Printer KHL Printing Co Sdn Bhd (235060-A) Lot 10 & 12, Jalan Modal 23/2 Seksyen 23 Kawasan Miel Phase 8 40300 Shah Alam Selangor, Malaysia
hen I was a child, I remember living in a kampong version of a Semi-D. The house was small and yellow in colour. The bottom half was in concrete and the top was in wood. My grandparents lived just a few blocks away and my neighbour, Mak Yah, earned a living by selling kuih-muih. The house was surrounded by a huge yard and I remember my brother accidentally kicking a ball into the other neighbour’s house while playing football with his friends. At the back of our yard, there was this durian tree where we performed a funeral rite for our first pet, a cat with six toes. This house is probably the smallest home my family ever lived in. But it is by far the best home for me. I had a lot of good memories there that I still cherish until today. What about you? Do you have a home that comes to mind whenever you reminisce about the good ol’ days? A home that creates unforgettable memories is exactly what Primarc Development (M) Sdn Bhd hopes to build for the masses. The story can be read on page 8. In this section called Developer of the Month, we talk to Primarc Development’s Managing Director Primus Lim who is very progressive in his thinking but also believes in the importance of family values and quality living. These are the elements he instilled in his company’s latest residential project, Fields of Gold in Rawang. From dream homes, we analyse Nilai’s potential as a property investment hub (page 20) in the Southern Growth Corridor. In the article, you’ll discover that Nilai is a good alternative for those who are in constant search of spacious living, away from the crowdedness of city living. Who would’ve thought Nilai is just as close as Shah Alam from Kuala Lumpur? Don’t miss out on our piece on Slope Management (page 34) where we highlight the importance of understanding slope management if you’re keen to purchase a hillside property, or are living in one. Another exciting feature in this issue can be read in our International Market section where we look at the Philippines – one of the fastest growing nations in Asia (page 48). With Metro Manila ever-expanding real estate industry, there are plenty of reasons to start investing there. So, there it goes. For property investment lovers, you may get more insight reading this issue and for those who are contemplating property investment, you might just make up your mind with this month’s issue. In this World Cup season, remember to not make any hasty property investment decision after watching football matches in the wee hours and to all the Muslims out there, Selamat Berpuasa.
www.propertyinsight.com.my www.facebook.com/propertyinsight.com.my www.youtube.com/user/propertyinsightmy www.twitter.com/propinsightmy Disclaimer
Although every reasonable care has been taken to ensure the accuracy of the information contained in this publication, neither the publisher, editors, writers nor employees and agents can be held liable for any errors, inaccuracies and/or omissions. The contents of this publication do not constitute investment advice. It is intended only to inform and illustrate. No reader should act on any information contained in this publication without first seeking appropriate professional advice that takes into account their personal circumstances. We shall not be responsible for any loss or damage, whether directly or indirectly, incidentally or consequentially arising from or in connection with the contents of this publication and shall not accept any liability in relation thereto. The views by our contributors expressed here are their personal opinions and do not necessarily reflect Property Insight’s views. The publisher does not endorse any company, organisation, person, investment strategy or technique mentioned in this publication unless expressedly stated otherwise. The publisher does not endorse any advertisements or special advertising features in this publication, nor does the publisher endorse any advertiser(s) or their products/services unless expressedly stated to the contrary. All rights reserved. No part of this publication may be reproduced in any form or by any means, including photocopying and imaging without the prior written permission of the publisher.
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ZUhaila Sedek firstname.lastname@example.org
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26 Wonders of Rimbun Kasia – PAGE 26 It’s lush, green and cosy. That best describe Ireka Development Management Sdn Bhd’s first ever mid-range product in Nilai, Rimbun Kasia.
Inside Managing Stratified Properties – PAGE 56 Kit Au-Yong and Stanley Toh write about the challenges of managing stratified properties from the perspective of property managers.
Why Branded Homes Are the Future Of Malaysian Luxury Real Estate – PAGE 28 Branding is key for any product’s success and this also applies to real estate. In today’s challenging market, branded homes might just be what we need.
The Pool Attraction – PAGE 68 Having a swimming pool at home is everybody’s dream. But there’s a lot to think about before you decide on installing one. Aidil Mohamad Noor writes what there is to know.
Malaysians at a Crossroads – PAGE 40 Prices of property are continuing to rise making home ownership impossible for a big segment of the population. So, what lies ahead for Malaysians? Dr. Ernawati Mustafa Kamal writes.
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From Agent to Investor – PAGE 72 Johor-born Win Chong never thought that he would be a property investor and soon a developer. This is his story. The Queen Who Invests – PAGE 76 Chartered accountant and former Miss Malaysia Chermaine Poo talks about her knack for property investment to Rachel Joseph.
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The Appeal Of Crowdfunding The Walkability
Primarc Development Factor (M) Sdn.Bhd offers your dream home in Rawang
Perks Of Subsale Property
Expectations are running high with MRT Line-2 at the forefront
MAN ON A AREA FOCUS Taman Melati Utama , Setapak
Nilai: A Gem In The Southern Corridor
MISSION FINANCE GST in Real Estate: What you need to know
Understanding Slope Management + 6 House-Flipping Don’ts
STRATEGY The Art of Subletting
There’s no giving up for Mah Sing Group’s CEO Tan Sri Leong Hoy Kum in achieving his many dreams
KDN PP 18181/04/2013/(033492) ISSN 2289-4233
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NEWS & EVENTS
NEWS & EVENTS Sunsuria TO CLOSE Acquisition Deal
Sunsuria Bhd, formerly Malaysia AICA Bhd, is sealing its acquisition of four companies and a bungalow project (linked to its executive chairman and substantial shareholder Datuk Ter Leong Yap) deal following a signing of a heads of agreement (HoA) recently. The company joined into a HoA with Sunsuria Development Sdn Bhd, Rentak Nusantara Sdn Bhd and Strata Johan Sdn Bhd which sees a 50 per cent asset injection in the Xiamen University Township Development in Salak Tinggi, Selangor (estimated GDV of RM4.5 billion). Not only that, there’ll be an 81 per cent interest in 7th Avenue 2 Development in Setia Alam, Selangor (estimated GDV of RM1.1 billion), a 75 per cent stake in a proposed mixed development in Medini Iskandar, Johor (estimated GDV of RM4.5 billion) and an ongoing residential development project with 49 units of bungalow lots together with infrastructure in Bukit Raja, Selangor (estimated GDV of RM81 million). Sunsuria was reported that it plans to fund the proposed acquisitions via a renounceable rights issue, which was approved by its shareholders on May 12, a private placement of 10 per cent of its enlarged issued share capital, borrowings and/or internal funds.
KL’s First and Only Urban Forest City Unveiled
IJM Land Berhad and its joint-venture partner, Amona Development Sdn Bhd revealed Kuala Lumpur’s most highly anticipated property – Phase 1 of the Pantai Sentral Park development, known as Inwood Residences, comprising of 211 units of residential condominiums. Touted as KL’s one and only Urban Forest City, Pantai Sentral Park’s Phase 1 offers two-to-four + one bedrooms units, with built-ups ranging from 1,140sq ft to 1,975sq ft. Located in one of few prime property development areas left in the Klang Valley, Pantai Sentral Park sets against the stunning backdrop of the 200-acre forest in Bukit Kerinchi. Designed to integrate residential, commercial and recreational touch points, Pantai Sentral Park has a Gross Development Value of RM2.5 billion. The entire township consists of seven residential phases and six commercial phases and is slated for completion within the next 10 to 15 years. It is expected to accommodate around 15,000 residents. 6 JULY 2014
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NEWS & EVENTS
No to Foreigners
Johor State Government has recently announced that locals are now prohibited from selling off their land to foreigners. The announcement came following reports of locals trying to sell agricultural land to non-nationals due to its rising value. Mentri Besar Datuk Mohamed Khaled Nordin believes that with major developments taking shape in Johor, a lot of foreigners will be keen to have their hands on Johor’s lands. Among the big projects in Johor set for progress is Rapid (Refinery and Petrochemicals Integrated Development) project. However, despite the restriction for foreigners to purchase land from locals, the state government offers a leeway by considering requests from locals to lease their land to foreigners.
Anyone Wants to Buy Zac Efron’s home?
Hollywood’s heartthrob 26 year-old Zac Efron has sold his home in Hollywood Hills West for US$2.8million (RM8.99million). The home has a rich history as it was initially designed for the Case Study Program by Rodney Walker in 1947. The industrial-themed home has a built-up size of 2,424sq ft and it features glass walls, two bedrooms and 3 bathrooms. Special features of the house include its concrete floors which are heated as well as other manly design elements such as corrugated metal surface and a three-sided fireplace, all of which made the house a perfect and hip bachelor pad. To top it off it has an infinity swimming pool that sits on the nearly third of an acre lot.
China’s Home Sales To Slow Down
Bloomberg reported that in the next 12 months, China’s home sales will go down from being stable to ‘negative’, according to the Moody’s Investors Service. The outlook came about following weak liquidity and rise in inventories. The outlook is the first by the credit rating provider since November 2012. It is expected that China’s home sales would go down by five per cent at most on a year-on-year basis over the next year. In the report, it stated that the developers with relatively weak credit quality are more vulnerable to poor performance. The report also indicated that these developers’ refinancing risk will increase as financial institutions are more selective in credit extension due to recent defaults in China. It has been four years since the Chinese government imposed cooling measures to China’s property market but it seems that home sales and property construction remain to slow down and this affects China’s economy as a whole. www.propertyinsight.com.my
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DEVELOPER OF THE MONTH
DREAMS ON CONCRETE For Primarc Development (M) Sdn Bhd, it is not just about building a roof over your head, it is more on realising one’s ultimate dream home. Imran Roslan writes.
s a person, it is normal for us to dream. But a dream without a plan will only turn out to be just a wish, one that will never be accomplished and will forever remain caught in a thin line between what could’ve been and what would never be. However, with the right amount of fuel made up of determination, hard work and driven by motivation, some fortunate people are able to cross the line which takes their dream to a whole new level. A great mind overflowing with ideas, visions, fresh ideas and definitely a master planner of his
own, Primus Lim, the managing director of Primarc Development (M) Sdn Bhd, is one of the fortunate people to be given a shot in accomplishing his dream. Primus, who believes in creating not just houses, but ‘homes’, thinks that the value of a home is not measured by just numbers, size and location. What’s more important is creating a sense of wonderment in that home. Creating Memorable Living “This sense of wonderment is the good memories a home should be able to create for people… and this is what makes a home special. For us, we have
8 JULY 2014 www.propertyinsight.com.my
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Primarc Development (M) Sdn.Bhd Managing Director Primus Lim
the passion to offer something that is different and our objective to build homes may differ from the others. It is not just bricks, tar, concrete and steel when developing homes, it is more about building dreams at a home,” says Primus. The 32 year-old Primus talks about his work passionately. To him, it is a great deal to build homes for people. Not only does he want people to find a shelter, he aspires for these people to create special life memories that they can relate to his development. “I wish people could remember the homes they bought from us with good memories… probably
a place where they had their first kiss, fall in love or grow old together. This is what I want people to remember Primarc by,” says the enthusiastic Primus. “There is a difference in houses and homes. Houses are just like shelters where you come back to after a long day, and you hide from the rain and the sun. Homes are something that you look forward to go back to everyday, an environment for you to build your family and a place that helps you forget about your worries,” he adds. As a developer, Primarc Development may be young but they aren’t quite the new developer. They have been in the market for about 15 years and the company, under Primus’ progressive leadership (he is the company’s second generation leader), aspires to start an innovative residential and commercial property trend in Malaysia. “When Malaysians look for their property, they often ask about the land size, whether it is corner lot or not, how many cars can fit in the porch and so on. There’s nothing wrong with this because we are all accustomed to asking such questions. It is very seldom that we enquire about how much a house can impact our lives, which to me is far more important,” Primus
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believes. Thus, Primus decides that his company must deliver unique developments. For him, unique developments can be defined as something that is different, out of the ordinary and not done yet in Malaysia. At Primarc Development, it is of utmost importance to build high quality homes that are able to project a good quality lifestyle. Primus keeps reiterating that his company does not do what others do and is very strict in delivering high standards development for that special kind of lifestyle. The developer’s keen interest in high quality lifestyle reflects well when Primus expresses that Primarc Development is not into acquiring lands just for the sake of having a big landbank portfolio. “Honestly, we choose our lands depending on what it can offer to our targeted market. Can the location provide the kind of living we want our customers to enjoy? Aside from the fact that land is becoming scarcer than ever, we really don’t focus on being the developer with the biggest landbank. What’s more important is to build homes with values,” Primus explains. Unlike some property developers, he values the design approach manner for his projects, instead of the cost approach manner. The differences between these two are easy to tell. On one hand, design approach manner is a strategy which emphasises
10 JULY 2014 www.propertyinsight.com.my
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the design of the project. Which means that he only looks for the appropriate land after the plan is done. On the other hand, cost approach manner is buying a land, and planning the project to match the surrounding of the land. These two approach manners will result in two very differing outcomes.
possesses much unexplored potential. He says, “It is spacious and away from the chaotic city centers. In Rawang, we can offer the public unique homes at a price that is ‘achievable’. This is the type of place to build a family and memories. Plus, it is only 20 minutes away from Kuala Lumpur.” He describes his projects further. “If someone knows you bought a Primarc home, they will know that you bought a very unique home. If you buy a Primarc home, people will know that you’re different and adventurous,” Primus reckons. Each unit in Fields of Gold comes with a price tag of between RM2.1 million to RM 2.5 million. “Trust me, with the features we are offering, this price is very reasonable. Sometimes, I do feel worried thinking about the increasing materials cost but we really want to give Malaysians the best homes that we could give,” he says. As of now, the take up rate for Fields of Gold has reached 60 per cent. Fields of Gold, is a much awaited project and conceptualises true borderless living amidst the arms of nature. It brings you to a level of balance between minimalistic modern design elements paired with exclusive lifestyle features that offer a luxurious lifestyle with an affordable price tag. One of main features of the project is the first ever 4-season park in Malaysia. It sounds rather impossible to have four seasons in the tropics like Malaysia, but this is merely the theme of the park
LATEST ENDEAVOUR With this in mind, Primus introduces Primarc Development’s latest pride and joy, a 6.75-acre residential project called Fields of Gold that is located in Rawang, Selangor. Despite the misconceptions towards Rawang, Primus is very positive that Rawang will evolve into a developed commercial and residential area. It is underrated but
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where its landscape is inspired by greeneries of winter, spring, summer and autumn. “Imagine waking up every morning to a blooming Asian Cherry Blossom in front of you and a field of blue flowers with boulders, or walking with your loved ones while smelling the therapeutic aroma of Eucalyptus leaves? This is the feeling we want to give our homeowners. You won’t be greeted with the view of another house which is such a turn off,” “With your air-conditioning on, it is as if you’re waking up on a wintery day,” Primus quips. He gives a metaphor to best embody Fields of Gold’s special quality. “A child and her mother walk out to a field and sit under a tree by the lake. The mother reads to the child a story book. This may sound just like any other regular day, but for this boy this is a special moment for him that he’ll remember for the rest of his life. With Fields of Gold’s concept, families out there can make such a memory too,” Primus shares adding that the homes at the development are exactly the type of homes he himself would live in.
Having performed well in his work, Primus kickstarted the turning point of his career by creating an associate company called Cosmic G Sdn Bhd in which he personally developed the Makhota Square in Cheras – the project that highlighted his potential. He is also one the few Malaysians to have had worked on development projects outside Malaysia. He co-created Montauk Homes LLC at Long Island, New York in the United States - a prestigious property development called the Amagansett Estates, consisting of Mansion Estate Homes. Passion is what moves Primus in his journey towards his big goals. When asked about his current position and his future endeavour, he laughs and replies by saying, “I don’t need to be some Tan Sri, drive my Ferrari or Bentley, that’s not my aim to come into this business. I’m very passionate about developing dream homes and it’s something I’ve always wanted to do. I’m actually very lucky to be in this position,” he says. This young talent credits his interest in traveling as the catalyst to his inspirations. He has travelled to many parts of the world namely London, New York,
Primus, the Young Developer Primus graduated with an outstanding double degree in Bachelor of Commerce (Accounting and Finance) and Bachelor of Business System at the eminent Monash University Clayton Campus in Australia. To add to his outstanding tally, he is also a certified chartered accountant. Upon completion of his studies, he went on to work for Ernst & Young before joining Ambassy Sdn Bhd for four years. There, as a Project Director, he managed projects such as Mei on the Madge and Primus Park. 12 JULY 2014 www.propertyinsight.com.my
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and other parts of Europe in pursuit for inspirations that contribute to his non-mediocre ideas and plans. He says that he doesn’t just travel to places to visit local attractions and beautiful sceneries, but to also learn about home designs. Primus counts his blessing that his company has an advantage to develop projects ‘freely’. “Luckily, we don’t have to get a loan for the development, which means we are not bound by interest repayment or looking after shareholders’ interest. I don’t make that much profit but most importantly, I have the freedom to do what I love,” says Primus. Despite expecting a blow in terms of revenue from the soon-to-be imposed of Goods and Services Tax (GST), Primus remains calm and positive about the situation. He explains, “I am absorbing the cost because I already set the price prior to the GST announcement. I will take a big hit but I feel that it’s not the right time for me to do any price increment. As long as we do something good and the owners appreciate it, that is more than enough,” he shares. When asked about his future projects, Primus says that the company is busy working on some new projects which are still in the early stages, but he can’t reveal much on that. “I do have a project targeting young adults and bachelors in mind. I’m still looking for the right place for it, though,” Primus says at the end of the interview.
PAST PROJECTS Amagansett Estates – East Hamptons, New York, USA Amagansett Estates is a venture project by PRIMARC development and Mountauk Homes. Consisting of Bungalow estates developed on 4 acres land at the very exclusive Hamptons address of Long Island, New York. Phase one of the project has been successfully completed in 2014 with second phase about to start. Project : Amaganasett Estates T ype : Bungalow estates (1 acre & above ) Location : East Hamptons, New York, United States of America D-Villa Residences D-Villa residences is a 20-storey hotel and apartments suites which consists of 88 units of hotel apartments, a gym, sauna, pool and café. It is a freehold project and is located in the heart of Jalan Ampang, just 15 minutes away from KLCC. Project : D-Villa Residences T ype : Hotel and service apartments. ( 678 square foot ) Location : 225 Jalan Ampang, 55000 Ampang Hilir, Kuala Lumpur Cost : RM 750,000 Makhota Square Makhota Square is a commercial lot made up of 63 units of various sizes, most units comprise of 3-storey contemporary beautiful shop units with a private basement. It is located beside Aeon Jusco Shopping Center and right in the heart of Bandar Makhota Cheras’s commercial district. Project : Makhota Square T ype : Made up of 63 units of various sizes, most units comprises of 3-storey, there are also 3.5-storey lots. (24 x60, 22 x 75, 22 X 69) Location : Bandar Mahkota Cheras is easily accessible from the Cheras-Kajang highway exit, via the Cheras Perdana Interchange at the 10th mile. An alternative access point is the SILK (Sistem Lingkaran Kajang) Highway exit, via Bandar Sungai Long. Cost : RM 2 750 000 www.propertyinsight.com.my JULY 2014 13
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unforgettable living Primarc Development (M) Sdn Bhd launches its one-of-a-kind residential project called Fields of Gold in Rawang.
s time passes, things come and go but memories remain and it is these memories that lift our hearts and spirits especially on any rainy day. With the hope of creating sweet memories, Primarc Development (M) Sdn Bhd introduces its latest and most innovative project to date, Fields of Gold – an exclusive residential enclave inspired by borderless living. The project is designed as a vessel to serve as a catalyst for unforgettable living.
Not Your Average Home
Crafted to be a unique residential project and to redefine the meaning of a dream home, Fields of Gold is located in a growing township, Rawang, Selangor. It spreads over 6.75-acre of terra-formed land and offers plenty of exclusive home features. In this low-density project, there are 53 units of four-storey designer boutique homes, with built-up space of 4000 sq ft onwards. With a gross development value of RM117 million, each unit is priced from RM2.1 to RM2.5 million. The units comprise of five bedrooms, five bathrooms, a utility room, a basement area fit for four cars or convertible to a designated lounge area and two car park
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space. The basement garage is purposely built onelevel lower from the park (aptly named, a double-tier development), diverting vehicles away from the serenity of the park, ultimately, for homeowners to relish upon the magnificent landscape before them, away from the noise and fumes of cars, safely and securely in the arms of nature. This direct relationship of the park and every home, allows its occupants to access nature that is completely non-accessible by any vehicles. Inspired by the idea of contemporary borderless living, Fields of Gold is undeniably a place where families and communities can grow physically, mentally, emotionally and spiritually together. Taking into account the modern day needs of its residents, each home here features state-of-the-art amenities and technologies for the enriched comfort of living. The interiors are carefully-planned, made of extensive detailing from creatively selected materials from wood-like tiles to floor the kitchen for a ‘close to nature’ cooking experience and the first and second floor boasts of elegant timber flooring extending its way to the private balcony of each room. The master bedroom designed with the luxury of space in mind comes with a one and a half volume height ceiling tiled with wood-
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like strips to welcome the experience of nature indoors while the fancy sliding door opens out to the majestic view of the park, maximising this splendour sight of nature. Each home comes built-in with commercial-grade lift system that connects the garage to the upper levels, automated roller shutter in the basement where the four-car garage can be divided into a fancy lounge and two-car parking space, plus a Hydro One Pool with selfmaintenance system in order for the residents to revel in their luxurious home. Residents of Fields of Gold are to be equipped with added comfort, security and wellbeing as each home will be armed with an Integrated Residential Software System on a home tablet, which connects to a cloud server for security management and prompt communication with neighbours.
Perhaps, Fields of Gold’s star feature would be the 1.5-acre beautifully shaped park that features four seasons of the world as its theme. The concept aspires to bring the idea of seasonal change to the door steps of the homeowners where they can wake up to five differentiated yet memorable experiences, with each presenting trees and plants that embody each season. The zones are; Spring Blossoms with Asian Cherry Blossom trees, Summer Sways with swishing Willow trees, Autumnal Grace with its Eucalyptus trees with barks that peel off naturally throughout the years as well as the White Winters that features White Berry trees and Rustic Pine, flanked by pine trees to reminisce the highlands. At the Fields of Gold, it is a mission for the developer to ensure residents could not only watch the beauty of the park from their living room and bedrooms but designed for a full-sensory experience where every resident embrace the beauty of nature and make the most of it in total peace of mind. The emphasis on landscape is in line with Primarc Development’s belief that nature, ideally, must be observed, enjoyed and loved, not tucked away. This beauty of the nature allows children to grow with the sound of chirping crickets instead of the drone of traffic. Such carefree lifestyle is also what Fields of Gold promises its owners where children can run and play fearlessly at the park and they can tumble all over the greens, while surrounded by families and the arms of nature. Fields of Gold reflects Primarc Development’s drive to deliver a unique concept and passion to always build dream homes through innovation, that re-enacts the memories of buying homes for every resident. Where a home, is not just about the value per square feet, but the
intrinsic value it brings for the families who live within. According to the developer, Fields of Gold is purposely designed to be an interactive gated and guarded development with plenty of recreational activities for the residents to do.
Nestled within an extensive green pasture, Fields of Gold is positioned in a convenient surrounding, just a mere kilometre away from the Rawang North-South Expressway (NSE), Aeon Rawang mall, business and commercial hubs, restaurants, schools and The TWO— a proposed theme park resort, wholesale city and outlet mall. There are over twelve spectacular facilities offered to residents among which include an eco-pond that leads to a bubbling stream across Fields of Gold and a tree house and playground to fulfill the needs of high spirited children. Socialising is also a core activity Primarc Development wishes to promote. As such, they’ve developed common areas such as The Pavilion and the Isle of Fields of Gold. The Sunken BBQ pit with Stone Oven, Teppanyaki station as well as designated food stations are Primarc Development’s encouragement for residents to cook in nature’s embrace, feasting under the shades of trees of Fields of Gold. For those who want to keep up to their healthy lifestyle, jogging and cycling terrain paves the park, equipped with complementary bicycles and a dedicated Yoga deck and putting greens have been strategically dotted in the park for an exercising experience unlike any other. Take a stroll around the park and experience the scent of nature whiffing through your olfactory senses. The development is a masterpiece that seamlessly connects both ends of the spectrum and is an embodiment of borderless living. This is a place where one can fully and truly call, home. For more details call +603-79322993 or visit www.fieldsofgold.my
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WHAT’S AHEAD OF US? Property Insight and property website PropCafe.Net join forces for a roundtable session where the two talk about the market’s issues and prospects.
ith a common interest in property, Malaysia’s top property magazine Property Insight organises a roundtable, graced by members of an emerging property website, PropCafe.Net. This first ever roundtable session is aimed at gaining a better insight on today’s perplexing but yet exciting market. PropCafe.Net is a website that functions based on an information-sharing and was formed by a group of property enthusiasts with a common interest they tagged as “Passion and Love of property investment”. PropCafe’s founders (seven of them) came from various backgrounds, from an accountant, engineer, banker to retiree and a PhD candidate. PropCafe.Net sets itself apart by producing detailed and impartial reviews on various property developments in Malaysia, Singapore and Australia. Due to some circumstances, members of PropCafe.Net will be identified via their initials
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(S.Y, H.C, G.Y, K.S, Y.K, and J.J) in this feature.
Should we wait till the price of property to come down before we start investing?
G.Y: There are two perspectives, one for investment purpose and another one is for own stay. If we talk about your own stay, then anytime is the best time. The question is, if you’re going for your own stay, are you willing to purchase a high priced property? Let’s say you can afford a property of between RM200,000 to RM300,000, are you bold enough to go for the RM500,000 unit? If not, what is the other strategy? For young people, just stick to your affordability, you can always upgrade when the time comes. Most importantly, you must have one to start with. I would recommend to upgrade “partially” and leave the remaining bullets for investment purpose. Two properties are always better than one, don’t always count the profit that sits in your own stay property
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because you cannot monetise it until you sell it. And still, you need another home after that. For me, I prefer to have another ideal property, at least one, sitting in my investment portfolio that can fit my own stay criteria with the purchase price lower than my current own home’s market value. K.S: For me it’s easy, anytime is a good time to buy, as long as it is within one’s capability to buy. If you find something that you feel comfortable with in a preferred location, and then you should go ahead and buy it, don’t time your market. But for investment purposes, it will be a different story as it is depends on your investment acumen. Y.K: I share the same sentiment. If you buy within your comfort level and if the class of the property is what you always wanted, so anytime is the best time, as long as you can afford it and you’ve done your research about it. S.Y: I think if it’s for your own stay, anytime is a good time to buy, based on your personal preferences. If you’re looking for a property in Kuala Lumpur, don’t complain about the high prices. If you want a house nearby good amenities then of course you would have to pay the price for it. Like what K.S said, we can’t time the market. For investment, I’d say anytime is a good time, as long as you do your research and as long as the math makes sense then I’d say it’s good. If you’re buying for investment, it is advisable to be more cautious, and you have to do your own background check of the property, even if the agent tells you the numbers for your investment returns. H.C: I have friends that are waiting to buy since 2005, because they wanted to wait for the price to come down but this never happened. So, if they continue to procrastinate, then there’s no way they can own a house. So for own stay, like the others said any time is a good time. For investment, I found better deal in the sub sales market than in the primary market, i.e. new launch from the developer. For the last two years I am actually looking for sub-sale property, which is much safer. But for investment, I’d rather look for gems that are undervalued or are in a matured area so I can be certain of the price, rental and investment returns. J.J: I don’t think we should wait, whether for own stay or investment, the price will never go down. For your own stay it involves a need and this is why anytime a good time is. But, for me, if I’m going for my own stay, I’d look for subsale properties. Most often than not, the price for new launches is high. Of course we can’t just
wait, if we wait, the price will keep going up. And then we can no longer afford it. But do be wary of the surrounding area. If the property is far from amenities then the price might be lower. I’d suggest to go for prime areas, because even if it crashes, there will be safety net. It won’t go down that far.
What would be your criteria of buying under construction property?
J.J: Price. I would actually look at the submarket for price of below RM500,000 because demands for these properties will still be present. And then I look at the location. For me, a good location is one with qualities you can’t find anywhere else and has good accessibility. For example, if it faces a major highway then I would definitely consider it. H.C: My view is more or less the same as J.J’s, but to add to that, homebuyers need to do some homework about the developer beforehand to be sure whether they are trustable or not to deliver their projects as promised. For those who buy from new and small developers, it is necessary to study the company financial reports to understand the developers’ cash flow, financial health, as under construction property investment comes with completion risk. G.Y: Making sure the developer is reliable has never been more important in current economy and property cycle. The chance of getting property abandoned is higher nowadays because some unknown or new developers have relatively less experience of managing cost or cash flow in property sector. I foresee the economy to slow
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down and then property market will fix itself within 3 years’ time. So, those inexperienced developers will be under tremendous stress soon. One can research on the abandonment risk in previous economy slowdown to validate this. Those who have low risk appetite and low holding power, should make this a key criteria to think about before putting money in any property investment or for their own-stay property. K.S: For me, it would probably be in a different order. First, I’ll look at the location, and then evaluate the product, followed by the price. Finally is to ensure the reputation of the developers.
What’s your take on residential property outlook (until end of 2015)? Are you expecting a gloom or boom?
H.C: With regard to Goods and Services Tax (GST), there are two schools-of-thoughts for it. The first is; when GST is imposed, we will have less money to spend and to invest, so the demand for property will drop. Secondly, when GST is imposed on building materials, labour and so on, the price will climb up so this is why maybe we should start buying now. I believe the first school-of-thought is inclined to apply on the lower income group. G.Y: To me, I think Gen-Y segment (small sized apartment within RM300,000 to RM400,000) will be severely affected by the GST because
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of their lifestyle. If Gen-Y is affected, then we would have oversupply of apartments in both new launches and subsales. Material prices will have an additional six per cent price tag on it, which is likely to affect the overall price of property. So how could the demand sustain after the second or third feedback loop of GST impact in 2015/16? Does Gen Y still have the momentum to follow all the new launches on so-called affordable priced property (but actually playing on its size to equate the affordability and how small can this goes? During pre-GST, there will always be a “buy, buy, buy” pattern or trend. But after GST, what will happen? The last push of property launches pre GST will bring the property prices into a new high, and then we would see the sluggish demand on property launches and subsales. The new launch or subsale price will be challenged based on proper demand-supply equilibrium together with affordability factor. I think the price will still go up but please forget about the minimum of 30 or 50 per cent returns or quick sell-off. Less appealing location with the price tag of good location will be hit the hardest. So, if you are buying at less appealing location now, make sure it is not sold at future price. Going forward, my personal preference for mid to long term holding is to buy prime location property with good value (new or subsales) even though it is not near the MRT/LRT. S.Y: I think GST is a bit overrated, in terms of its impact and expectation. I think the market will keep increasing as usual even after GST. I think
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there won’t be any market collapse after April 2015. It’s like pre-election where people assume something would happen but the future is still unknown, the same goes to GST. Y.K: Even though residential property is not subjected to GST, the mechanics developer will have to absorb the GST and priced it properly. If you’re selling products that are not affected by GST (GST exempt), you can’t claim the 6 per cent tax from buying the materials. From accounting point of view, I think GST will definitely have an impact on the price (increment in price). K.S: It’s the buying anticipation hype that affects the price. The developers are also creating this hype over GST, creating fear and sentiment in buyers from the impact of GST. For me, GST will not have much impact on my investment. It’s not my main criteria for investment; there are other factors that matter more than just GST. J.J: I agree, it’s a tad overrated. GST has never been an issue for investment because we never really looked onto it. Maybe we should look at the LRT that plays a bigger factor in deciding the Return of Investment of a property you purchased.
Where do you think the hotspots for property investment?
Y.K: Kajang and Cyberjaya. Both of them are relatively near to town, and connected by major highways. I think a lot of developers are coming into Kajang with exciting developments. As for Cyberjaya, the location is adjacent to Puchong and Kajang too, so it is very strategic. S.Y: I like Ara Damansara, but I don’t limit my investment areas. J.J: For me it’s Cheras, and the areas within 5km radius of it. Kajang is good too. It’s easier to go to the south and it is near Cyberjaya and Putrajaya. The land price in Cyberjaya and Putrajaya is so high compared to Kajang. So people who have any desire of moving into Cyberjaya and Putrajaya might be considering Kajang too. H.C: For me, I’ve always looked at matured area, such as Petaling Jaya and Damansara. 70 per cent of my portfolio consists of these areas. You can get higher rental at these matured areas as a result of limited supplies. There are not many new launches in these areas compared to other “new areas”. G.Y: Cyberjaya and Cheras. Soon, properties in Cheras, with the completion of MRT project and its proximity to with KL city centre, will increase
in price. Though people always complain about traffic in Cheras, they never complain about the amenities, especially with the multiple LRT and future MRT stops in the vicinity. As for Cyberjaya, if it’s three years ago, I wouldn’t have made any investment there. But now, we can see the change of single master developer township to a “privatised township” with large number big and small developers there.To say Cyberjaya failed after 15 years is an unfair statement. The policy changed a couple years ago and this change showed the start of a proper township development unlike the earlier years. Cyberjaya already has great infrastructures in place, with more commercial developments scheduled to be ready in 2014 onwards, population is expected to grow too. Why? Because we know Malaysians need mall and commercial properties and it is a key factor before you buy your own-stay property. Cyberjaya, being an IT hub, comes with a large pool of working professionals there. This means the area already has a right demographic to start with and has an upper hand than other new township. Now, it is just a matter of how to make them stay. Then we can talk about how it can attract residents from other townships. K.S: KLCC. The value there is always very high. A lot of developers are putting money to refurbish old buildings within the area in effort to make it a better city and therefore adding value in the city. You need to buy right products in KLCC. Readers can follow Propcafe by joining their facebook’s fan page (search for Propcafe.net or be a subscriber of PropCafe.Net website.
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NILAI: CROWN JEWEL OF THE SOUTHERN CORRIDOR Nilai has come a long way and slowly, but surely, it is transforming into a high-potential educational hub just waiting to receive more International recognition.
hen Nilai comes to mind, what do you relate it to? For the uninitiated, Nilai might still be considered a township for wholesale shopping for those planning a wedding, for example. But for those who are in tune with the latest in property development, they’ll be quick to say that Nilai is rich with untapped possibilities. And this is a quality that is becoming rare especially for areas within the Klang Valley. With relatively cheaper land price, unexplored land areas and a strategic location, it is perhaps fair to measure Nilai as Negeri Sembilan’s newest crown jewel. Given these qualities, it is no wonder that more developers are venturing into this once quiet town.
Being part of Negeri Sembilan, Nilai’s history is vibrant with many elements of Minangkabau’s influence to be seen. Back in the 1800s, Nilai was a luak (means village in Minangkabau) in Sungai 20 JULY 2014
Ujong which was managed by a waris (village head). Fast forward to the early 1990s, the Negeri Sembilan State Government came up with a plan to turn Nilai into an educational hub. With the aim of developing Nilai to a university town, Nilai’s aim is to attract various local and international universities and colleges in an effort to bring students from all over the world to this part of Malaysia. With a population of about 150,000 people (approximately), Nilai was previously known as part of the Outer-Seremban Town. It was granted its own municipality in year 2000 - Nilai Municipal Council (previously known as Seremban District Council) by Dato’ Abd. Halim Abd. Latif. The municipality looks after seven districts namely Lenggeng, Ampangan, Rasah, Rantau, Setul/BBN, Labu/BBN and Seremban.
Current and Future Developments Given Nilai’s promising potential, a lot of
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developers have expressed their high interest in Nilai by offering myriad of property assortments, in both the residential and commercial sectors. Perhaps one of the earliest developments in Nilai is Putra Nilai by BBN Development Sdn Bhd, which is tantamount to Bandar Baru Nilai. The project was first developed in early 2000s and is a 6,233-acre integrated township that offers the public different types of property ranging from affordable terraced home to bungalows. Perhaps, the other celebrated residential developments in Nilai are Nilai Impian and Planter’s Haven by Sime Darby Property. An upcoming project to look out for is Rimbun Kasia by Ireka Corporation Berhad, a greeninspired community living development. Rimbun Kasia consists of five residential parcels, a 2.3acre Central Park and Lifestyle Commercial Hub offering a mix of condominiums as well as town villas. Rimbun Kasia is considered Ireka’s first mid-market project, as the developer has been synonymous with high-end developments primarily in the Mont’ Kiara area of KL. The development’s first parcel is called dwi@Rimbun Kasia and showcases courtyard-inspired homes. What’s special about these homes is their flexible 2-in-1 homes concept also termed as Dual-Key homes. This concept allows homebuyers the flexibility of
staying in their own home while at the same time renting out a portion of their residence to earn a monthly income. With an affordable price tag, this development targets young adults who are starting a family, young professionals as well as students. This is certainly a unique development for the astute and enterprising home buyer. For commercial developments, Nilai plays host to Nilai Utama, a project that comprises of Nilai Utama Enterprise Park. This development forms part of the 3,500-acre Nilai Industrial Township and is poised to be its focal point of industrial parks of the future. Nilai Utama is a joint-venture project with Negeri Sembilan Holdings Bhd, a company wholly owned by the Negeri Sembilan State Government. Another commercial development set to make its mark is Nilai Icon City which is planned to be erected on a 43-acre land within Putra Nilai. The project consists of retail showrooms and mixed development with a customised building design to allow for comprehensive business facilities.
Nilai’s Best Qualities
Given Nilai’s status as an educational hub, Ireka Corporation Berhad’s Group Executive Director Lai Voon Hon believes that Nilai is the place investors
Universiti Sains Islam Malaysia
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Link, MAJU Expressway, KLIA Extension Highway, ELITE Highway and Lekas Highway. Being in the Golden Triangle of the southern growth corridor, residents of Nilai get to enjoy easy access to not only the airport but Sepang F1 Circuit and Sepang Gold Coast too. “Nilai gives us the opportunity to develop a mid-market project with a stylish lifestyle concept because the price is still affordable … and this allows us to create an upscale mid-market product,” explains Lai adding that land price in Nilai is cheaper compared to areas like Kajang or Semenyih. “Because of the cheaper land price, we get to add more features in our development to create that special lifestyle element within an affordable price,” he says.
Ireka Corporation Berhad’s Group Executive Director Lai Voon Hon
should pay attention to. He predicts that Nilai will be a fully advanced city in a few years’ time. “Nilai has a young population and it is close to many new-growth areas such as Cyberjaya and Putrajaya. In fact, Nilai is situated in the golden triangle of the southern growth corridor,” Lai says. Lai goes on to stress, “Nilai is very strategic especially when it is located near both Kuala Lumpur International Airports. Often, people have the misconception that Nilai is so far away. Truth is, Nilai’s distance from Kuala Lumpur (KL) is more or less the same as Shah Alam’s (Nilai is about 28km from KL while Shah Alam is 26km). Do you think the public today still thinks Shah Alam is remote? No, I don’t think so.” “Nilai has been earmarked as the State’s residential, educational and trading hub, which will be granted ‘Bandaraya’ status in the near future, under the Nilai Structural Plan (2005 – 2020) drawn up by the Negeri Sembilan State Government,” Lai tells. He also considers Nilai to have better accessibility than towns like Shah Alam because it is open to many highways, among which include NorthSouth Highway, North-South Expressway Central
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Nilai enjoys great infrastructure, highly developed transport links, reliable power and utility supplies and modern telecommunications facilities—making it highly sought-after by seasoned investors and entrepreneurs. Due to its close proximity to major towns, various facilities and KTM Commuter, Nilai is fast becoming a town to be reckoned with. Nilai houses several shopping malls such as Nilai Square, and also hypermarkets like Tesco and Giant. Although The proposed Rimbun Kasia by Ireka Corporation Berhad
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AREA FOCUS INTI International University
the most awaited university that is a reflection of close bilateral relationship between Malaysia and China, the Xiamen University@Sepang will begin development. Reports have indicated that Nilai is accepting over 20, 000 students yearly, which means that Nilai is home for a lot of young people who are not only from Malaysia, but also from abroad. To date, it’s been reported that there are about 30 student nationalities in Nilai.
Conclusion shopping might not be the main attraction in Nilai just yet, you can find Malaysia’s largest wholesale centre called Nilai 3 Wholesale Centre in the locality. The center has become the number one place to visit for couples planning their wedding. Its educational set-up is fantastic with many establishments located within and nearby the vicinity. Among these institutions include primary and secondary schools (Nilai International School, Kemayan Integrated School, Tuanku Jaa’far College) as well as colleges and universities like Nilai University, INTI International University, Manipal International University, Epsom Epsom College @ Bandar Enstek, Murni International Nursing College, Universiti Sains Islam Malaysia and Islamic University College of Malaysia. And soon,
“Nilai is increasingly gaining a reputation as a strategic location for educational establishments to be based in and also for its proximity to many famous addresses namely Sepang F1 Circuit and Kuala Lumpur International Airport. It is also part of the Greater KL coverage” says Lai. He believes that developers can tap into the growing young population in Nilai given their potential to be home upgraders. “Plus, there’s a big chance these graduates who are used to living in Nilai will return to the area when it is time for them to start a family,” Lai thinks. “Currently, property prices in Nilai are still affordable and I feel this gives an edge to the vicinity. It might be quiet now, but after all major developments and the soon-to-be-completed MRT lines are in operation, Nilai will never be the same anymore,” he adds. Manipal International University
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PRICE OF RESIDENTIAL PROPERTY IN NILAI Type
Single-storey medium cost terrace
Average Flow area (s.m.)
Taman Ulu Beranang
Taman Anggerik (Pajam)
Taman sri Mawar (Mantin)
Taman Nilai Perdana
Taman Desa Indah, Nilai
Bandar Seremban Selatan
Taman Bunga Raya Mantin
Taman Seremban jaya
Bandar Seremban Selatan
Taman Anggerik Mantin
Taman Bunga Raya Mantin
Taman Seremban Jaya
Taman Seremban Jaya
Double-storey low cost terrace
Double-storey medium cost terrace
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Average Price Change (%)
Average Land Area(s.m.)
Single-storey lowcost terrace
Taman Seremban Jaya Bandar Seremban Selatan
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PRICE PER SQFT for Condominiums in Nilai Type
Average Floor Area (s.f)
Bandar Nilai Utama
Impiana Service Apartment
Perdana college Heights
Bandar Baru Nilai
Nilai Spring Villas
Green Baverly Hills
Desa Jati Apartment
320 449 78
Rental of Residential Property in Nilai Type
Single-storey medium cost terrace
Average Floor Area (s.m.)
Price Range 2012
Average Rental Change (%)
Average gross Yield (%)
Bandar Seremban Selatan
Taman Bunga Raya, Mantin
Taman Nilai Perdana
Taman Seremban Jaya
Taman Nilai Perdana -Ground Floor 1st Floor
Souce from JPPH (Valuation and Property Services Department) and Ministry Of Finance Malaysia
AGENTâ€™S SAY Charles Chua Reapfield Properties Sdn Bhd
Nilai, started as a small town with lots of estates
Generally, Nilai has a good township. It
in Selangor but due to its close proximity to
is a good place to settle down as it is less
the city of Kuala Lumpur, this little town has
populated than Kuala Lumpur. There are
developed into a somewhat acceptable township,
a lot of nearby facilities and amenities. In
with industries, factories, training centers/
the future, I think that Nilai could be better
institutions and new residential developments to
than Seremban. In my opinion, could evolve
cater for these people working and studying here. On the whole, the future of properties in Nilai depends mostly on its population. Just like any other
Reapfield Proerties Sdn Bhd
into becoming like the Subang Jaya of the south. Definitely a place with potential as
locations should a location be under populated for any reasons, prices of
it has good accessibilities from Kuala Lumpur via the North-South
properties in that location may not appreciate that much or fast enough to the
Highway(NKVE) and the Putarajaya-KL Highway (MEX).
liking of investors. www.propertyinsight.com.my
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MARVELS OF RIMBUN KASIA It’s lush, green and cosy. These best describe Ireka Corporation Berhad’s first ever mid-range product in Nilai, Rimbun Kasia.
hat is a good home, you may ask? For some, it is a shelter that promotes strong family bonding, healthy living and safe social interaction. In today’s modern scenario, these fundamentals have never been more important. In effort to build a house you can call a good home, Ireka Corporation Berhad introduces its latest quality product, Rimbun Kasia in Nilai, Negeri Sembilan. The company known for its many successful luxury projects is for the first time ever penetrating into the mid-range market with its Rimbun Kasia development. This latest offering by Ireka not only aims to endorse vibrant community living within a gated and guarded environment but is set to elevate Nilai to a whole new level.
Discover the Magic
Rimbun Kasia consists of five well-designed residential parcels spreading over 35.6 acres of land with a 2.3 acres given over to a Central Park and Lifestyle Commercial Hub. This stylish development offers condominiums as well as town villas with a gross development value of RM 900 million. To mark its debut, Rimbun Kasia’s first parcel,
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dwi@Rimbun Kasia Courtyard Homes was introduced and is currently open for registration. This most awaited project consists of 382 units of freehold apartments on a block which is divided into two wings - East and West. The key element of this new pride of Nilai is its flexible 2-IN-1 homes concept where residents get to enjoy the flexibility of investing or to stay in the units themselves and relish the many facilities the development has to offer. The 2-IN-1 homes concept, also termed as ‘DualKey’ homes features two entrances. The concept gives homeowners the opportunity to rent out a part of their unit for investment purposes and to live in the other part of it, or they can also choose to live in the whole unit themselves. This also provides any investor with the ideal opportunity to earn an income from these unique 2-IN-1 homes. The Dual-Key units are conceptualised in such a way that the two entrances, with separate lockable doors mean that the residents can enjoy their own privacy with their own access to the unit. There are four types available for buyers at dwi@ Rimbun Kasia – Type A1 (131 units), A2 (118 units), B (72 units) and C (61 units). These eye-catching units range from 650 sq ft to 980 sq ft, and are housed within 10-storey stratified buildings. Type
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A1 and A2 offer 2+1 bedrooms while Type B and C feature 3 bedrooms. Each of the units comprises of two bathrooms. Adding to the tapestry of the development is its energy-saving features. Unlike most buildings, dwi@ Rimbun Kasia Courtyard Homes is built with each side facing north and south, instead of east and west. The reason behind this idea is to limit the need to use electricity for lighting thus enabling homeowners to enjoy natural sunlight to brighten their homes.
Back to Nature
Described as a green residential enclave, the name Rimbun Kasia was inspired by the beauty of a tree of the same name. Once you set foot in Rimbun Kasia, expect the lush greenery to greet you and this can be embodied best by a 2.3-acre central park - the focal point of the development. Such respect for greenery is a reflection of the developer’s determination to bring out the combination of space and serenity. The central park will also function as a natural recreational spot. The park features unique interactive facilities such as jogging paths, exercising platforms, games room, day-care centre, al-fresco dining, a gym and also gathering places for various activities. The façade is cleverly designed in such a way where a pocket communal space is included into the development to encourage a sense of community among residents and owners. A lake will complement and complete the Central Park area, providing an serene environment for all to enjoy. It will certainly be an escape from the hustle and bustle of hectic city lifestyle.
Great Facilities Await
Realising the importance of ensuring home owners’ safety, Rimbun Kasia offers a secure gated and guarded service with features such as anti-climb wall perimeter fencing and 24-hour CCTV surveillance cameras located at the entry and exit point of the guardhouse. Access to the car parks also requires special key cards available only to owners, as an additional safety feature. The roads within the development are designed based on precise and detailed planning. This too, will play a key role in keeping residents safe, topped off with pedestrian pathways and cycle paths.
With the confidence that Nilai could greatly appreciate in value in the near future, Rimbun Kasia is regarded as one of the promising developments located within the golden triangle of the southern growth corridor. The population, comprising of many groupings namely young professionals, students, lecturers and airport workers, get to commute easily to their workplaces including the various educational establishments, Putrajaya, Cyberjaya, Sepang F1 Circuit and Sepang Goldcoast. The notion that Nilai is isolated may no longer apply as the locality is just 28 kilometers away from Kuala Lumpur, almost the same distance as from Shah Alam. Rimbun Kasia is situated just 10 minutes from the Nilai Toll via the North-South Highway and KL-Putrajaya Highway (MEX).The area is also located near the Nilai Sentral Bus Terminal, Nilai KTM Commuter Station and also the Salak Tinggi ERL Station. Travelling in and out of Nilai shouldn’t be a problem even for those without their own vehicle. Besides having a good infrastructure, Nilai is an emerging educational hub and commercial centre. Nilai is home to Nilai University, INTI International University, Universiti Sains Islam Malaysia and the Manipal University, just to name a few. There are also Nilai Square Commercial Centre, Nilai Springs Golf & Country Club, Giant & Tesco Hypermarkets as well as NCI Hospital in the vicinity. Given these factors, Rimbun Kasia is without a doubt ‘The’ place to be if you’re looking for an escape from a demanding city life. The tranquility offered, paired with innovative design makes Rimbun Kasia a must-have development for all who aspire for a special and gratified lifestyle. dwi@Rimbun Kasia is now open for registration Login to unlock more choices now Visit www.RimbunKasia.com.my
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Why Branded Homes Are The Future Of Malaysian Luxury Real Estate
had gone over to The Mentor’s sprawling retirement estate in Nilai for a cuppa on a breezy Saturday evening. Earlier in the week he had messaged me that he had bought a newly launched condominium unit in the KLCC enclave at RM2,000 per square feet – a steep price by anyone’s standards. Knowing that he was bearish on luxury properties for the past few years I really needed to ask him. The Mentor took a sip of his favourite Earl Grey. “I know you’ve been bearish on luxury properties for a couple of years now. So I guess the question is… why?” I asked. He merely smiled. “Khai Yin, do you remember the glut of high end KLCC condominiums which flooded the market back in 2006 to 2008?” I nodded. “Yes, of course I do. I remember going
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to one of the launches where one of the developers pulled me aside and told me that they were expecting rentals of some RM20,000 per month. I thought he was insane.” The Mentor laughed. “Ah, yes. Those were the heady days of upmarket properties which mushroomed all over the KLCC area. And then the global financial crisis came, and those luxury condominiums took a real hit. You know who rents these super expensive apartments, don’ t you?” “Yes. Expatriates. Mostly, anyway.” “Exactly. With many multinationals restructuring all over, those expats either moved out of the country or moved into cheaper apartments.” “I guess mid-market condominiums benefited from this?” I took a guess. “Well, I personally knew some who moved to
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Mont Kiara. But it’s not that Mont Kiara is much cheaper, really, despite what most people think. The current rental levels of KLCC condominiums are approximately RM5 to RM6.50 per square feet. Mont Kiara is marginally less at about RM4.50 to RM6,” he explained. “But those were insignificant,” he then continued. “The rental market took a real beating with expatriates leaving Malaysia. Sadly, many of the high end condominiums didn’t recover even today. Occupancy rate had gotten down to as low as 20%.” “I remember driving through the KLCC area last week at around 10pm and saw some really dark residential buildings. I thought they were all out partying at the Beach Club or something.” The Mentor chuckled softly at this. He then took out some newspaper cuttings and put on his reading glasses. “Well, according to this article from The Star, in the first half of 2012 the average occupancy rate for upmarket properties was as low as 60%. Rental rates also took a hit of some 3040%. And so you know why I have been bearish on upmarket condominiums for a few years now,” he explained. “I don’t understand this,” I said. “Why did you buy that new KLCC apartment unit then? All this data doesn’t seem to favour your decision at all.” The Mentor smiled. “And I thought you’d never ask.”
the growth in population and the economy is underpinning the market uptick in the next couple of months and may well extend to next year. Greater Kuala Lumpur will see its population grow from the current six million to ten by the end of this decade, and the property market will swell up to meet this demand.” I read from my notes. “You know, I agree with him. In fact, population growth is one of the main considerations I take if I want to know if an area is going to be hot. But did he mention anything specific about upmarket properties?” he asked. I closed my notebook and looked up. “I remembered that he mentioned specifically about the appeal of branded developments. One example that he gave was the Four Seasons Place, and he expected to see more brands come in which would also attract foreign investment.” The Mentor gave a broad smile. The Rise Of Branded, Upscale “Hotel Homes” “Interesting that Peter mentioned about Four Seasons Place,” I continued. “I remembered reading an article in the newspapers last year
Lessons From A Seasoned Realtor “I‘ll explain everything in a while. You told me that you went to an investment forum on real estate last weekend. How did it go?” asked the Mentor. “I really enjoyed it. Lots of meaty content. Kinda short though. It was only half a day.” “Did you meet Peter?” he asked. Peter owned a real estate agency in Damansara, and widely seen as a thought leader in the industry. Last year, before I started KLCCcondominiums. com.my and GoodPlace.my, I went to intern for Previn to learn about the industry. And so I spent three months working for him. “Yep! It had been a couple of months since I last talked to him, and when I went over to say hi he gave me a huge bear hug. And the dude’s lost some weight!” “I see. So what did you learn from his talk on that day?” the Mentor queried. I took out my trusty notebook and flipped the pages. I took lots of notes during the seminar as one would. “Peter’s got a pretty bullish outlook about the property market this year. According to him,
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which reported the sale of two penthouses at some RM37 million each. That worked out to be nearly RM3,000 per square feet, which was a record of sorts.” “Yes, that was the highest price ever in the history of Malaysian residential real estate. However, on a total price basis, the record is still held by a Binjai triplex unit at RM38 million.” “So you reckon that branded developments like this would be the trend in the coming years?” I asked. He nodded. “Indeed. I see more developers tying up with lifestyle and luxury hospitality brands in order to increase the value of a development. In addition to the perception of prestige, concierge and room services are an important factor that differentiates these branded residences against other types of properties. Also, it’s not uncommon to see cigar bars, wine cellars, fine dining restaurants, business facilities and even private cinemas in these branded properties.” “I suppose for the premium you’d also expect much higher expectations from the tenants.” “Surely! Consistency of service is a strong selling point. Security and service levels are usually maintained strictly. This can hardly be matched by any unbranded property,” he remarked. “Some seem to think that this is catching on only in the emerging markets such as China, Southeast Asia and Russia where “leagues” of millionaires are being minted rapidly, but this is not exactly accurate,” he continued. “There’s One Hyde Park in London, serviced by Mandarin Oriental, is perhaps the top-of-mind example of a branded residence. It has got the unverified status as the world’s most expensive residential building 1.” “Ritz-Carlton Dorado Beach in Puerto Rico, Blue Hyatt Residences in Miami and The Residences
at Ritz Carlton Towers in Boston are a few more examples.” “So this is not exactly a new thing then,” I offered. “No, not at all” said the Mentor. “It’s new here in Malaysia, though. And it’s going to catch on, and I’ll tell you why.” Strong Brands = Better Prices “Personally, I like branded properties because of its capital yield for the long term. And good brands last for a long time. And for someone with a marketing background, you should be able to appreciate the inherent value of a strong brand and how that builds up over time.” I nodded. “Definitely. Stronger brands means better prices. This is the oft-repeated mantra in the consumer goods industry for example, but I wonder if it also works in the property space.” “Well, the figures speak for themselves. The median price point for KLCC properties is at around RM1,300 PSF. It’s probably at RM1,000 PSF at Mont Kiara right now. Banyan Tree was at RM2,000 PSF when it was launched back at in 2011, and all 441 units were snapped up2. St Regis Residences is at RM2,500 PSF, and Four Seasons average around RM2,700 PSF.“ “That’s pretty awesome. But with prices as high as that, I guess the addressable market is really small.” “That’s true to a certain extent. It’s a low volume, high value business. With beautiful margins. And given that this market is still in its nascent stage in Malaysia, the upside is high.” “Apart from St Regis and Banyan Tree, what’s in the pipeline?” I asked. “Well, let me see. The RuMa Hotel & Residences on Jalan Kia Peng in the KLCC enclave is a prominent one. Harrods on Jalan Bukit Bintang is more of the integrated development kind with a mall, hotel and residential towers. Four Seasons Place will also feature a retail mall. Ritz-Carlton Residences, developed by Berjaya Land on Jalan Sultan Ismail is another notable example.” The Dangers Of Overvaluing The Brand “It does seem that a lot of the premium hinges on the value perception of the brand. In some industries we do see some brands getting virtually destroyed overnight due to bad press, often stemming from decline in product quality.” “That’s a good observation,” the Mentor replied. “The reality is that since the developer and the brand owner are two separate entities, there could be some underlying friction if their interests are not
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aligned. Additionally, construction and operational problems will affect the brand, and for this reason, potential buyers must check if the developers adhere to the requirements and guidelines of the brand owner.” “Alright. Any other watchouts that one must look out for?” “While I am optimistic about branded properties as an investment, these are still early days. As such, we will need to look at actual transactional data in order to validate the assumption that branded homes have higher resale value,” he explained. “But given the trends that we see elsewhere, there are good reasons to be bullish about branded developments. High Net Growth Individuals (HNGIs) are growing in numbers, and as long as there is wealth being created AND retained domestically the demand for good branded residences will always be there.” Key Takeaways The branded homes niche is still in its nascent stage in Malaysia with tremendous upside potential. Its appeal lies in its purportedly strong resale value and long-term capital yield. Average uplift over non-branded luxury
properties tended to be around 50% or even higher at launch. RM2,500+ PSF seems to be the benchmark. Not all “brands” are the same. Some commands a higher premium than the others, and this will impact your capital yield for the long term. Don’t overlook developer reputation and quality, and its adherence to branding guidelines set by the brand owner. For the cautious, wait for the first resale cycle and analyze the transactional data to determine the actual resale uplift. As “bait and switch” schemes are rife especially in the luxury segment, it’s important to engage a reputable agency to help you. About the Contributor Khai Yin is the founder of the KLCC Condominiums Database which you can visit at http:// klcccondominiums.com.my/ . Property Insight readers can download a free copy of the “How To Value A Property” digital report at http:// goodplace.my/blog/pi/
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Jointly Organised by
and SINCE 2005
roperty Insight Malaysia and Prosper Realty Sdn Bhd had recently organised a study tour in Cyberjaya to help ease property search in the fibre optic city for potential homebuyers. The study tour brought participating members to specific locations in Cyberjaya where they visited sales gallery of various developers. The tour made its first stop at Setia Haruman Sdn Bhd, the master developer of Cyberjaya. Upon arriving at Setia Haruman, participants were briefed by the representatives from the company. The tour then continued to Centrus, a project developed by Setia Haruman Sdn Bhd which will have a shopping mall, SOHO units and also commercial areas. Centrus, which is located in Persiaran Flora, is located nearby an upcoming project, CBD (Central Business District) Perdana 2. Just after their visit to Centrus, the participants stopped for lunch at 12.30pm and the tour continued with the well-fed participants visiting Sawtelle Suites gallery, a 1.6 acres development project by Tindak Murni Sdn Bhd, a wholly-owned subsidiary of Country Heights Holdings Berhad . Sawtelle Suites is located at Cyberjayaâ€™s prime location, Cyber Heights Villa and it has a nice view of a garden and Putrajaya Lake, which is a prominent landmark in the vicinity. It consists of 128 suite (units in both tower 1 and tower 2) and has fully-featured condo 32 JULY 2014
facilities, and with of a gated and guarded security service. One of the highlights of the event was a talk by Dr. Daniele Gambero, the CEO of REI Group of Companies. The talk lasted an hour and left participants with useful tips and made them eager to continue the tour. Moving on with the tour, the participants were brought to their next stop, a project that received much coverage from mainstream media, the Aspen & Clover by Mah Sing Group. The Clover consists of 225 semi-detached homes spread out over 35 acres of land. The Aspen, is a smaller project built over 8.8 acres, consisting of bungalows units. Last stop was the Decentrum City, located at Jalan Ikram-Uniten,Kajang. De Centrum Development Sdn Bhd, the developer of De Centrum @ De Centrum City is a wholly owned subsidiary of Protasco Development Sdn Bhd, the property development arm of Protasco Berhad, a company listed on the Main Board of BURSA Malaysia. A total of 34 participations were in the study tour. Fee for the tour was RM50 (including lunch), and the price also includes three months subscriptions of Property Insight Magazine. The programme was a big success and Property Insight and Prosper Realty are in the midst of planning more study tours. For interested candidates, visit our Facebook page or our website www.propertyinsight.com.my.
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THE DOWNSIDES OF LIVING UP HIGH
From afar, hillside properties may look picture-perfect but be wary of the danger they pose to you. This is why slope management is paramount to be understood. Aidil Mohamad Noor finds out more.
ave you ever had that moment when you were driving along hillsides and your eyes caught a glimpse of the properties on the sloping hills? If yes, some of you might ponder on the nice aerial view the houses might have and the cool breeze the residents could be enjoying. To you, itâ€™s like living in the clouds. But beneath all-fine-things hillside property has to offer, the harsh truth of living on higher ground is; thereâ€™s no compromise when it comes to safety. This is why it is important to acknowledge slope management so youâ€™ll understand the advantage
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and risk of owning a hillside property. When we talk about properties built on slopes, it does not just mean those that are on top of a hill, it also means houses located close to the hill. Failing to understand the safety elements that entail hillside properties, unwanted cases such as landslides may occur. In Malaysia, unfortunately, we have witnessed multiple landslide cases that have caused many fatalities which all could have been avoided had Malaysians be more aware of the importance of safety for hillside properties. Perhaps, the worst landslide case in Malaysia is the Highland Tower collapse in December, 1993. This
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most regretted event recorded 48 deaths but was truly an eye-opener for Malaysian developers and homeowners. Fifteen years after the Highland Tower incident, another tragedy followed suit at Bukit Antarabangsa on Dec 6, 2008 where 14 bungalows were buried by a landslide. This event is probably the one that marked a turning point for Malaysian authorities to take more initiative and one of which led to the establishment of a slope management’s Slope Unit (Unit Cerun) at some Municipal Councils. An example of such unit is SlopeWatch, a community program based in Taman Ukay, Ampang. Its director Eriko Motoyama, tells us the essentials of slope management. She was met at the recently held Slope Management Seminar by CIDB Malaysia.
Why is it important?
“Building properties on or nearby slopes is not the same as building properties on flat lands. There are different disciplines and ground rules to building nearby a slope since you don’t have to worry about ground movement on flat lands” says Eriko. She explains that on a slope, the ground movement is very important. Though flat lands might have ground movements in a form of an earthquake, be it a small or big magnitude, it does not happen on a regular basis. Grounds on slopes on the other hand, always move due to the climate of Malaysia, which is warm and humid. This can affect soil on slope and cause it to accumulate
water within the slope which will gradually lose its strength to hold itself together. “It’s like normal wear and tear, even when it’s hot, the soil can dry up and become very delicate,” adds Eriko. When it concerns hillside development, an average homebuyer often disregards the processes involved for developers to undertake before they initiate a hillside project. Truth of the matter is, it is imperative for homebuyers to make an effort to find out the ins and outs hillside development so they’ll know the questions to pose to their developer. First thing first, it is of utmost importance to know the order of slope’s management, as the following: • • • • •
Planning & Approvals Design Construction Inspection / Monitoring Maintenance
Proper planning before the designing stage is crucial. It is through planning developer gets to discover whether the slope they have chosen is suitable for development or otherwise. “These are the questions builders and homeowners have to ask themselves; are we making the right decision in land use? Are we taking the right steps to ensure the geography and geology is correct? Are we developing a sensitive area? Are the right kind of people evaluating it and are they qualified?,” Eriko tells. Then in the design phase, not only the building needs to be designed but also the slope requires
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the same design attention. To ensure developers follow the right work mechanism, Public Works Department has come up with a set of guidelines for them. These guidelines include the correct angle for a slope and the right buffer zone (distance between the development and the slope), among others. The slope design must then be directed back to local authority where it will be checked thoroughly before given an approval. Next is the inspection and maintenance phase – a central stage where issues are often detected. Unfortunately, there’s a loophole in this as there are only a certain municipalities that have their own slope management unit. Thus, projects within the jurisdiction of the municipalities with no slope unit might not be monitored. Also, at most times, homebuyers think that inspection and monitoring are only a responsibility of the authorities. Eriko thinks that homeowners too can do their bit by paying attention to any slope changes and make the effort to report any landslide-prone incident to the local authorities. If homeowners sighted faults on slopes, they need to report it to local authority or inform it directly to the slope owner. She explains that if the slope is under the care of the local authority, it is their responsibility to maintain the slope’s condition and repair works. The same goes if the slope falls in private lands. “Everyone needs to play their part so there will
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be quick actions taken to prevent any unwanted tragedies,” she says.
Slope Unit is a Must
“All local authorities should have a slope unit,” thinks Eriko. Currently, the local authorities that have a slope unit are Ampang Jaya Municipal Council, Subang Jaya Municipal Council, Selayang Municipal Council, Kuala Lumpur City Hall, Kajang Municipal Council and the Public Works Department. Among the reasons other local authorities do not have a slope unit are due to the lack of money, no expertise, small capacity (manpower) and the absence of proper laws for
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slope management. There is another pressing issue on top of the minimum numbers of slope units. According to Eriko, more often than not the public has no idea about the slope unit and this is where residence associations can come in handy and be the mediator. This is precisely the function of SlopeWatch. The association works by mediating issues between the public and local authorities. “Our local authority is still growing in this respect and we are taking baby steps towards practising good slope management. Similar to Hong Kong, we only started our awareness on slope management in 2009. But I think we’re making progress and it’s looking good,” Eriko feels.
Slope issues can be considered as community issues and demand the attention from the public. This is why the public is the perfect watchdog for any slope issues. “From the reports received by SlopeWatch, the residents of Bukit Antarabangsa have sighted the signs of possible landslide before the Highland Towers disaster actually took place,” “For example one of the homeowners noticed that water is flowing directly behind his house instead of following the designated waterways. Due to lack of awareness, he ignored the situation and assumed that it’s normal. He even used the water for his fish pond,” Eriko says. She shares some of the signs indicating a landslide in nearing; 1)faint rumbling sounds that increases its volume gradually 2) unusual sounds such as trees cracking or boulder knocking
Signs of slope failures at hills: • Bulging ground appears at the base of a slope or retaining wall • Water breaks through the ground surface in new location near a slope • Water appears at base of slope • Fences, retaining walls, utility poles, or trees tilt or move • Cracks appear on slope • Broken water pipes
Signs of slope failures around houses: • Cracks appear on the ground or in the foundation of houses, buildings, and other structure • Structures on slope moving away from their original position • Doors or windows stick or jam for the first time
Signs of slope failures around community ground: • Sunken or down-dropped road beds • Slowly developing, widening cracks appear on the ground or on paved areas such as streets or driveways • Land movement and small slides • Outside walls, walks, or stairs begin pulling away from the building.
Fact A slope is an inclined ground which separates two different ground levels. Slopes differ by height and angles. Slopes can be natural and also manmade. Natural slopes as the name implies, are slopes existed on their own while man-made slopes are slopes manually cut by personnel, mostly to change it to the allowed angle for developments.
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together 3) rapid increase in creek water levels with driftwood from the trees above and 4) sudden decrease in creek water levels even when rain is still falling. If you encounter any of these signs, it is advisable that you evacuate immediately. She also says that homeowners can help maintain slopes to prevent landslides by organising gotongroyong where residents can check for debris from drains and slopes, look for damaged drains, inspect the slope surface for any cracks, inspect weep holes and drain for blockage, check if there is vegetation that causes cracking of slope surface, see if there is grass on slope surfaces, look for missing pieces in masonry walls, watch for loose rock or debris from slopes and look for leaking water pipes as well as inspect for rusted metal structures. Any findings should be reported to the local authority immediately. Another way to prevent slope incidents is by assigning a special tax or maintenance fee for hillside property instead of increasing the property’s price. “The tax or fee can be used to take care of slopes and to properly maintain the slope’s sustainability, in account that an agreement is made before the purchase. Also, local authority should calibrate with banks in order to ensure an area is not prone to landslides to help homebuyers to obtain loans to buy property around the area where landslide have occurred,” she reckons. Asked on whether it is possible to rebuild
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properties on affected areas Eriko says this should be of no problem. “Rebuilding properties over an area where landslide have occurred is possible, given that proper repair and maintenance had been done” says Eriko. She adds that if the area is still prone to landslides, local authorities will not approve the development on the slope. This once again falls under enforcement and she hopes that in the future, every municipality will have slope units and she hopes that there’ll be more community programs such as SlopeWatch to help establish a good connection between local authorities and members of the public.
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History of Landslides in Malaysia • December 11, 1993 — Highland Towers landslide in Ulu Klang, Selangor. 48 people perished. • June 30, 1995 — Genting Sempah debris flow that swept away 20 lives in a series of landslides and a debris flow along the Kuala Lumpur-Karak Highway • January 6, 1996 — Gunung Tempurung landslide where a section of a cut slope at KM 303.8 of the North-South Expressway near Gunumg Tempurung, Kampar, Perak crumbled. The impact swept a container truck off the road, killing the co-driver of the truck. • August 30, 1966 — Pos Dipang debris devastated an entire village and scoured trees, soil, rocks and everything that stood in its way for more than 5KM, sweeping 44 people into its roaring waters. • November 28, 1998 — Paya Terubong rockslide occurred in a cut slope at Paya Terubong, Penang. Massive rock slides, tons of boulders and earth slide down to the parking area of the Sun Moon City Apartments, blocking Jalan Bukit Kukus and burying 17 vehicles parked by the roadside. • February 7, 1999 — Sandakan landslide buried 17 people and 2 others among the rubbles of four houses that were hit by tons of mud from a natural slope. Heavy rainfall from the night before and all through the previous week caused massive soil erosion, resulting in this early morning tragedy. • January 28, 2002 — Ruan Changkul landslide Sarawak’s worst known landslide after a catastrophic collapse in a cultivated slope destroyed an eight-door long house and two nearby houses, and claimed 16 lives in Ruan Changkul, Simunjan. • November 20, 2002 — Taman Hillview landslide in which a bungalow house in Taman Hillview, Kuala Lumpur was engulfed by a landslide resulting in the deaths of eight people. The rapid landslide event (less than four minutes) generated debris that destroyed and covered the house, although five out of the 13 people trapped were saved within 24 hours after rescue work began.
• November 26, 2003 — Bukit Lanjan landslide occurred at KM21.8 of the Bukit Lanjan Interchange on the New Klang Valley Expressway (NKVE) in a road cut slope. This landslide was significant although there were no fatalities. The enormous economic cost of the failure and closure of the road caused the Cabinet to issue a directive to set up a Slope Engineering Branch (Bahagian Kejuruteraan Cerun) within JKR. • December 6, 2008 — Bukit Antarabangsa landslide that wiped out 14 homes, claimed five lives and resulted in 14 injured. It completely blocked Jalan Bukit Antarabangsa and trapped 5,000 residents. Eyewitness interviews revealed that signs of landslides had been present for months leading to the incident, a community based monitoring NGO called SlopeWatch was set up. • May 21, 2011 — Ulu Langat landslide claimed the lives of 16 orphans and injured 8 more at the Hidayah Madrasah Al-Taqwa Orphanage. The orphanage was located at the foot of a steeply cut slope. The failure was attributed to prolonged heavy rains as well as disturbances to the upslope area. • August 8, 2011 — Sg. Ruil landslide at the Perkampongan Orang Asli near Brinchang, Pahang claimed eight lives after a landslide hit the village after heavy rains • December 28, 2012 — Setiawangsa landslide featured a partially collapsed embankment that caused the evacuation of 46 households. *Data taken from Slope Management Seminar hosted by CIDB.
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MALAYSIANS AT CROSSROADS
Prices of property are continuing to rise making home ownership impossible for a big segment of the population. So, what lies ahead for Malaysians? Dr. Ernawati Mustafa Kamal writes.
wning a house has proven to be no easy task. Owning an affordable house, on the other hand, is an even harder task. Despite the benefits of homeownership and motivations for individuals to own a house, affordability has become a critical issue. I remember my own experience going through the fuss of searching for a house to settle in. Having just returned to Malaysia upon completing my studies with a teaching job waiting ahead, and a newly born baby on board, my husband and I set our priorities straight into finding a house. Our choice was of course to be on the Island side of Penang due to our work commitments. However it is not an easy task to find a house that is close to work with an affordable price. The housing market in Malaysia has experienced a tremendous increase in the house prices especially in the major cities such as Penang, Kuala Lumpur
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and Johor Bahru. According to Knight Frank Global House Price Index 2013, property market in Malaysia has grew 10.2 per cent, ranking as top 12 in the world in term of price increase. A recent study spearheaded by Sime Darby Property Bhd and Universiti Malaya found that in order to afford a house in Klang Valley area, an average household income needed is RM14,580. Meanwhile, according to CH Williams Talhar & Wong (2012), the prices for most terraced houses in Penang Island are over RM700,000 while most semi-detached and detached houses are in RM million brackets. As for condominiums and so-called affordable apartments, the average price is RM450 per square-feet. Affordability is no longer an issue that only affects the low-income people but also the middle income people who are struggling with the increasing housing price. Anderson et al. (2003) claim that affordability of housing is linked to the health and
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well being of individuals and families. The scarcity of affordable housing forced families that are unable to afford, to limit their expenditures on food, medical care and other necessities in order to pay rents. Based from the Bank Negara Annual Report 2010, the biggest portion of the Malaysian household debt goes to paying off housing loans. According to the report, Malaysians take on increasing amount of housing loans because of rising house prices, low or negative interest rates, and speculative activities. The Bank Negara Annual Report 2010 shows that there are strong indicators to suggest that house prices and ability to service housing loans have been overstretched in Malaysia. A ratio of house price to household income of 3 to 4 times is internationally acceptable but this ratio has risen to over 6 times and over 8 times in Kuala Lumpur and Penang Island respectively.
What Causes The Increase of Housing Price?
The issue of uncontrolled housing price has raised concerns from many perspectives including the people’s affordability, the quality of life and the government’s policy. A research done by Ong (2013) shows that housing price is determined by gross domestic product (GDP), population growth and real property gain tax (RPGT). However, the research also shows that changes in housing price in Malaysia may not necessarily influenced by the GDP, population growth and RPGT. So why the increase in housing price? Housing location is found to affect housing price. The factor of housing location is an important characteristic to consider when purchasing a house. Housing location may help occupants in developing a preferred way of life by identifying the chances available for study, work and access to services and facilities. Proper infrastructure in the housing area also contributes to the increase in housing price. This especially applies if a house is nearby to basic facilities such as school, shopping mall, bank, transportation facility, hospital, restaurant, church, temple, airport and other places that can provide convenience to the people staying at that area, then that house will no doubt possess a high housing value. The decreased in the land supply area due to the rapid urbanisation has a significant effect on housing development costs, thus leads to the increase of housing price. In Penang for example, the scarcity of land for development, the mismatch of housing supply and competing pressures on available
land has pushed up the housing price. Tan (2013) described that the absence of large-scale townships makes it inefficient to comply with authorities requirement because most of housing developers could not acquire a sizable land bank for residential development in urban areas. The increased cost of construction material has caused the developer to protect their profits by raising home prices higher. Until now, the price of raw materials have risen 15 per cent to 30 per cent in five years. The professional workers hires with a high level of education as engineer and the number of labour involved in the construction also cause the increased in construction cost, thus the developer will increase the price of house per unit. At the same time, requirement to provide local infrastructure and the need to meet various obligations have forced private developers to increase the overall construction cost. The cost is directly passed to housing price.
The Government’s Efforts
Realising the critical problem of increasing housing price, the government made an attempt to increase the opportunity for various income groups to own a house through various programmes and initiatives which include: My First Home Scheme (MFH) / Skim Rumah Pertamaku The MFH scheme is targeted at young adults who have just started working aged between 18 and 35 years. Its major aim is to assist them own their first home and improve homeownership among Malaysians (Tan, 2013). Under MFH scheme, the gross income for individuals must not exceed RM5,000 a month for Single borrower and joint borrowers gross income not exceeding RM10,000/ month. The maximum price of property is not exceeding RM400,000 (REHDA Institute, 2013). Under this scheme, young adults are entitled to obtain 100 per cent loan from financial institution.
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1 Malaysia’s People’s Housing Scheme (PR1MA) PR1MA is a scheme introduced after MFH with the same objective to assist the young adults in owning a house. The focus of PR1MA scheme is on middleincome group with household monthly income between RM2,500 to RM7,500. Under this scheme, young adults are eligible to purchase a house ranging between RM 100,000 to RM400,000 in a housing scheme develop by PR1MA Berhad, with stamp duty exemption loan and installment payment would only begin after the house is completed. Increasing the Real Property Gain Tax (RPGT) The new RPGT was announced in 2014’s budget measures to help mitigate the steep rise of property prices due to excessive speculation. Under the new measures, the RPGT IS 30 per cent for property disposed within three years of acquisition; 20 per cent within four years of acquisition; 15 per cent within 5 years and 0 per cent for the sixth and subsequent years. Increasing the Stamp Duty The increase and revision of the stamp duty is to discourage the property speculators from buying multiple properties and creating false demand. The increase of stamp duty is expected to increase the entry cost for the property buyer. Under the revised measures, the stamp duty payable for the third property is 5 per cent of property price; for the 4th property the stamp duty is 7.5 per cent of property price; for the 5th property and thereafter, the payable stamp duty is 10 per cent of the property price. Increasing the minimum purchase price for foreigners In the 2014 budget, the government had increased the minimum price for properties that the nonresident (foreigner) are allowed to purchase from RM500,000 to RM1 million. Raising the minimum foreign purchase price has reduced the affordability of foreigners that are looking for an alternative investment or a retirement home. The initiatives have also limit their resale market as other foreigners are not allowed to buy their units
on the secondary market.
What the Future Holds For Malaysians
Will there be any more houses left that we can actually afford? Will the housing price continue to rise? Or will they gradually make room for the average-earning and non-millionaires people? Those are the questions that come across our minds, which answers are still a blur. Yes, there are (previously mentioned) efforts made by the government. However, these efforts have yet to show solid results as they had just been recently implemented. The current situation in Malaysia shows there is a huge gap between housing price, distribution of household income, people’s ability to borrow and ability to pay the mortgage. We are facing a SERIOUS problem of a mismatch between uncontrolled rise of housing price and people’s earning ability. Hence, there is still a lack of mechanism in controlling and monitoring housing price in the market. Today, with the increasing living standard, the housing issue for Malaysia is not only about provision of house for low income group, but rather about ensuring there are affordable houses that are safe, healthy and comfortable for various segments of society. All in all, I guess only time will tell what the future holds for my fellow Malaysians. It is not just about finding the right house, it is about building homes. The key player in the housing sector need to address that housing sector does not only concern business and economic development for the country, but also the social needs of the people.
About the Contributor Dr. Ernawati Mustafa Kamal is a senior lecturer of Construction Management at School of Housing, Building and Planning, Universiti Sains Malaysia, Penang, Malaysia. Her research interests include: Innovation in construction organisation, technology transfer, absorptive capacity and government’s role towards homeownership. She can be contacted at email@example.com.
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BEFORE YOU BUY... AKPK shares with Property Insight’s readers what they need to know before owning a key to their own home and how to manage their debt to increase their chances of owning a house.
he decision of owning your own home is a good one of course - it is a key part of many individuals’ long term financial plan in most cases, it is an appreciating asset and hence increases the individual’s net worth, it improves the nation’s economy and provides a much needed space for expanding families. While the dream of home ownership may have taken a back seat in view of the recent increase in cost of living, many Malaysians still say that buying a house is in their life plan. Here are a few things to consider before you decide on buying a property: Why do you want to buy a house? Figuring out why you want a house is critical before you begin looking at options of houses. ”What’s the purpose of the home? Are you going to live in it? Are you looking at it as an investment, to rent it out?” This will help you in choosing the type of housing loan suitable for your repayment plans (Conventional or Islamic financing, traditional or flexi loan, fixed or floating rate?) and determine
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the size of the property you need. What can you afford? Ask yourself honestly how much can you afford for the repayment every month? This will be clear through a budget. Make an inventory of all your assets, liabilities, income, expenses and savings. Determine the amount you can comfortably pay every month. Have you factored in the hidden costs? Often we hear people saying, “My rent is RM1,500, if I buy a house, I pay RM1,300. I might as well buy a house.” That’s true if you look at it that way, but have you factored in other hidden costs such as maintenance fees and sinking fund, quit rent/ assessment fee, etc.? Are you planning on staying put for more than five years? If your career path/personal circumstances seem to lead toward an inclination of a move/transfer, it may not be a good idea to buy a house as yet.
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Are the rest of your finances in order? The last thing first-time homebuyers should need to worry about is whether they will be able to stay on top of all the other financial commitments in their life without going under with debts. You should not put yourself in a position where it gives you financial hardships or causes defaults in the payments of other loans. So, ensure all your finances are in order before deciding to buy a house. Once you have positive answers to these questions, start the house-hunt. Take note of developer’s reputation when shopping around for houses. Track record of the developer is important. Assess their previous projects to see if they deliver their promises. Check : • If the properties are delivered on time? • Is the quality of their work satisfactory? • Were all the promised amenities delivered upon completion of the project? • Were their previous customers happy with the units they received? • Note: If a project is abandoned, you are liable for all disbursements made by the bank although you do not get the delivery of the unit purchased. For more information on AKPK and its services, please log on to www.akpk.org.my or call the toll free number 1-800-88-2575. Managing Debts : Signs of Financial Distress To better prepare one ’s self to cope with the high cost of living, consumers must firstly learn to be frugal with their expenses. By learning to differentiate between ‘needs’ and ‘wants’, they will be able to develop a prudent monthly budget. Once this has been done, consumers should adhere strictly to their budgets to ensure that there are on track financially.
Signs that you are NOT in control of your finances: • Have unmanageable debts • Take new loan to settle old loans • Live on pay cheque to pay cheque • Take cash advance for expenses • Make minimum payment on credit card balances • Harassed by debt collectors Consumers should be more discerning with their expenditure during this challenging period and should try their best to live within their means without getting into debts. For example, during any medical emergencies, consumers would seek treatment at public hospitals rather than a private hospital. AKPK recommends putting aside at least 10 per cent of your net monthly income in preparation of emergencies. • To manage debts, one has to take control of his personal finances. Possible actions include: • Negotiate with lenders to lower interest rate and waive finance charges • Pay down loans with highest interest rate first • Make more than the minimum payment on credit card debts • Track ones spending and cut back on expenses • Be a conscious consumer and buy only what one needs For more information, downloaded a guide via this link http://www.akpk.org.my/services/debtmanagement/self-help-guide.
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BEYOND THE HORIZON
With the financing options galore made available for overseas property investment, there are more reasons to go beyond the borders. OCBC Bank (Malaysia) Berhad’s Thoo Mee Ling writes.
iversifying into international real estate has become one of the faster-growing investment options for Malaysian investors over the last two or three years. This view seems to be corroborated by the steady line of Malaysian investors either already into or seriously considering the various overseas properties that beckon. Among the more favoured investment destinations we have observed thus far are in territories that are familiar to Malaysians: the UK, Australia and Singapore. What makes these countries appealing to Malaysian investors is the high degree of affinity embedded in our psyche to these countries, which comes from years of positive associations with them; think education, language, familiarity, family, and you get the picture. Notably, investing in overseas properties which
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used to be the domain of private banking customers has now become a lot more accessible, albeit with its own fair share of risks that include the potential for capital loss. Investors’ demand for overseas property investments vary from person to person, but a common denominator seems to be that all seem to be looking to lock in on the property’s potential capital appreciation and rental yields. Savvy investors who are parents are already planning ahead for their children. They would rather pay now on the bank mortgages and own the property in the long run rather than lose through rental money to a landlord without any returns to show. The cautious mindset residing in the Malaysian investors’ thought-trend remains evident in their deeming properties as a safe investment and something they could eventually pass down to the
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next generation. There are also the ultra-high net worth investors who are looking to acquire overseas properties for lifestyle purposes. Established local developers such as SP Setia have entered the overseas real estate market with a bang. Forays such as this will only further fuel the interests of our local investors to expand their investment portfolios (and horizons) beyond Malaysia’s shores. Take Battersea London for instance. The take-out rate has been phenomenal with 99 per cent sold for Phase 1 and 95 per cent for Phase 2. According to “The Wealth Report 2014” by Knight Frank, London remains the world’s most important cities; hence it is not surprising to see more and more foreign interest being directed here. On top of that, with the GBP at rather ‘affordable’ levels currently, investors are seizing the opportunity to leverage on the favourable environment to diversify. The fact that property prices in our local market are surging forward tells us it won’t be long before our local investors start parking their funds overseas in order to enjoy the corresponding foreign currency advantages. From the various overseas project launches in Kuala Lumpur by the various marketing agencies, there is, without the shadow of a doubt, sufficient evidence that our local investors’ appetite towards overseas properties is healthy and likely to rise in the near future. In a recent event hosted jointly by Henry Butcher Malaysia and OCBC Bank (Malaysia) Berhad, an overwhelming number of people turned up for the preview of Melbourne’s Townliving Townhouse development. During the exhibition, there was a constant flow of visitors attending the exhibition with strong interest and enquiry levels, indicating interest in the Melbourne property market continues to be strong. With the sentiments towards overseas properties growing, funding inevitably becomes an important factor. Selecting the right form of financing requires thorough research because the investor needs to seek out the best offers to suit his or her particular needs. In response to this demand, a small number of banks have, especially since about 2011, risen to the challenge to assist investors by providing mortgages locally for them to acquire their overseas properties, OCBC Bank, Maybank and CIMB being among the key players. In the case of OCBC Bank, for example, the game plan through its OCBC Overseas Property Financing scheme is to help mitigate customers’ exposure from the volatility of foreign exchange fluctuations. This is achieved by offering MYRdenominated financing, where monthly repayments
are in MYR throughout the loan tenure. For Malaysian investors, whose main source of income is in MYR, it remains sensible to consider the benefits derived from a MYR denominated loan, which of course provides the certainty and peace of mind that comes from knowing they will not be affected by foreign exchange fluctuations when they start paying for their instalments. This is especially crucial for those looking to hold on to the property for the long-term. Typically, the margin of advance is 70 per cent, and the loan tenure is 35 years or up to the age of 70. More often than not, investors start scouring for funding only when their properties are close to completion. This seems to be commonplace and embedded into the psyche of even the most seasoned of investors; there simply isn’t any urgency to secure the necessary remaining equity to complete the acquisition. It is only natural for investors to behave in this manner, that is, to come up with minimal capital outlay and nothing more until the property is completed. When the property is finally completed, it is just a matter of finding the right buyer at the right price to offload to. Of course, the point is that this is not as easy as it looks. Some investors may end up holding on to the property for much longer than they would like. With this in mind, it is always prudent for our local investors to take advantage of Malaysian Ringgit loans. Banks that are well-entrenched in the overseas property financing business are constantly looking to provide viable options to customers when it comes to funding. Beyond that, they are bent on ensuring the relationship with customers is not limited to the financing aspect alone. This is crucial especially for entry-level investors as they are really stepping into unchartered territory. Through strong networking with external business partners, banks can ensure that their customers are guided properly throughout their investment journey. Customers deserve to be given the deserved support; from sourcing for the right property to the very detailed issues pertaining to legality, taxation and insurance. Today, more than ever before, the penchant for overseas property ownership and the need for viable financing options are at a point of symphonic harmony.
Ab out The C ontributor Thoo Mee Ling is Head of Secured Lending at OCBC Bank (Malaysia) Berhad.
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Property Insight pays a visit to Manila to find out what it has to offer to investors.
conomic performance of a country is central in providing a long term dynamics of the demand and supply chain, that in turn can lead to good appreciation rates, healthy price momentum as well as risk-minimisation in real estate industry. For the Philippines, the story is the same and her real estates future is filled with great prospective just waiting to be tapped. According to a research by Deutsche Bank AG/Hong Kong, the country is ranked with the highest level of macroeconomic and structural dynamics within the ASEAN nations.
Healthy Market The Philippinesâ€™ capital city, Manila, for instance has an abundance of great properties. But for any International investment venture, it is of utmost importance to study the location of choice beforehand. There are three main zones in the Republic â€“ Makati which is one of the sixteen cities making up Manila and also the financial center with the highest concentration of local and multinational corporations, Ortigas Center also referred as Central business district and Fort Bonifacio known as Bonifacio Global City. We met a developer in Manila, Rockwell Land
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Guzman. In fact, despite the natural disasters that hit the country, Philippines’ high-end residential price outlook for year 2014 is expected to increase by ten per cent. Last year, the country recorded a gross development product (GDP) growth at 7.2 per cent due to strong domestic consumerism, high remittance at US$19billion (RM61 billion), better infrastructure and foreign direct investment (FDI). The World Bank revealed that robust performance of consumption in the Philippines is fuelled by strong remittances and services, supported by investment and manufacturing expansion. The private consumption in the Philippines grew by 5.6% due to low interest rates and the strong demand for office and residential spaces by purchasers. The private construction also increased by eight per cent. In addition, monetary and fiscal policy is progressing well with Consumer Price Index (CPI) inflation easing to three per cent and policy rates remaining at low levels of between 3.5 and 5.5 per
Corporation to find out what makes Philippines one of South East Asia’s epicentres of property investment. Rockwell Land Corporation, which was officially introduced in 1995, is recognised as one of the premier real estate development companies in the Philippines. “There is a noticeable boom in the Philippines’ property industry today. We are seeing a good mix of luxury and upper-mid residential projects. It is a very lively industry now and it has been very good in Manila, and we are also seeing ripple effects in other major cities such as Cebu,” says Rockwell Land’s Senior Marketing Manager Vienn Tionglico-
Rockwell Land’s Senior Marketing Manager Vienn Tionglico-Guzman
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cent for the borrowing and lending rates. Also, the Philippines’ government’s finance continue to progress with better tax administration and efficient expenditure which lead to the revenue collection growth by 12 per cent. The Philippines is also best cited as an investorfriendly country as the government allows foreign
investors to wholly own a property (perpetual property). “Just like Filipinos, foreigners have the same privileges in terms of buying condominiums. For instance, the same introductory discount rates are extended to foreigners when new products are launched, and foreigners can buy without extra charges. Rockwell properties are freehold residential properties, allowing foreigners to wholly own a unit. Because of this, we are currently experiencing encouraging reception from the property buyers abroad,” explains Vienn. When asked about the supply in the property market, Vienn shares, “Some experts disagree on whether or not there is oversupply in the market but, for us, we are doing well in terms of sales. There is a steady operation in terms of luxury and high-rise property markets, especially in Makati. If you take a look at the launches happening in the past years until 2014, there’s still a big market for high-rise and high-end residential projects.” She adds that in the Philippines, buyers are very particular about how safe their properties are from natural disasters such as earthquakes or flooding. In the case of Rockwell’s buildings, every development is built to withstand extreme weather conditions. “Rockwell has commissioned a 100-year flood cycle study to ensure that our developments and residents are safe in instances of heavy rains,” mentions Vienn.
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units for their own stay or as holiday homes. The Proscenium caters to the high net worth individuals and has started construction slated for completion in year 2018 to 2019.
World-Class Development There are plenty of prominent projects in the Philippines. One of which is Rockwell’s flagship project, the Rockwell Center. It is strategically located between the three major business districts of Makati, The Fort, and Ortigas and sits on a site which was previously a thermal power plant. The development is a mixed-use community composed of eight high-rise upscale residential towers, two office buildings, a lifestyle shopping mall, an exclusive city club and a business graduate school on a 15.5-hectare site in Makati City. The Rockwell Center was launched in line with Rockwell’s The Proscenium. It features a 550-seater performing arts theatre that will stand within the 3.6-hectare property. “The Proscenium offers a unique lifestyle, offering the prestigious standard of living that the residents of the Rockwell Center already enjoying,” Vienn says. “One of the special things about the Proscenium is that it owns self-sustaining community. The Proscenium will have premier spaces for residences, businesses, the performing arts theatre, as well as retail row, dining and boutiques to service the community.” The Proscenium introduces an attractive cultural component through its development based on the live, work and play dynamic concept. The development offers three residential towers named Kirov, Sakura, and Lincoln. The project has charted over 60 per cent take-up rate for the first three towers. About 80 per cent of the buyers are locals, with most of them buying the
Appeal of Manila Perhaps, Manila has the most potential for investment in the Philipines given its capital city status. The city is now emerging as one of the top emerging real estate markets in Asia for 2014, according to a new survey by the Urban Land Institute and PwC available on the Abs-Cbn News website. In the survey, Manila is ranked fourth among 23 Asian cities in terms of her real estate investment potential. Manila’s economic structure has attracted investors from all around the world. ULI Asia Pacific chief executive John Fitzgerald was reported saying, “We’ve been hearing for a couple of years now about the success and impact of the Business Process Outsourcing sector, as well as the positive demographics and the city’s GDP growth.”
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PROPERTY: Salva Apartment @ Kota Damansara TENURE: Leasehold BUILT-UP: 800sqft MARKET PRICE: RM300, 000 SELLING PRICE: RM290, 000 AMENITIES/FACILITIES: Giant Hypermarket, Banks, Aeon, Future MRT, Gizamall, The Strands Mall QUALITIES: Playground, One car park, Lift CONTACT PERSON: Stacy, 014-934 0571
PROPERTY: 3 storey shop lot@ Tropicana Sungai Buloh TENURE: Freehold BUILT-UP AREA: 1540sqft LAND AREA: 4620sqft SELLING PRICE: RM1.9 million BANK VALUE: RM2 million QUALITIES: Various Banks, The Store, Cafeteria, Minimarket, Future MRT, Keretapi Tanah Melayu (KTM) CONTACT PERSON: Celine, 016-203 0965
PROPERTY: Prestij @ Kota Damansara PROPERTY TYPE: Semi-D Shop with lift BUILT-UP: 5000sqft (25’ x 67.5’) LAND AREA: 45’ x 105’ BANK VALUE: RM4.5 Million SELLING PRICE: RM4.3 Million RENTAL PRICE: RM2000, RM2500, RM8000 (Floor by floor) RENTAL FOR WHOLE BUILDING: RM15, 000 – RM20, 000 QUALITIES: Future MRT, Banks, JPN, Minimarket, 99 Speedmart, 7-eleven CONTACT PERSON: Celine, 016-203 0965 Property : Commercial Building at No. 110, 112, 114, 60, 62 & 64, Jalan Loke Yew, Kuala Lumpur Property Type : 7-Storey Commercial building with basement Built Up : 111,000 square feet Land Area : 15,501 square feet Qualities : Exquisite retail mall design, Prime location with maximum exposure, Surrounded by upcoming mega projects, Suitable for Retail, Hotel & Corporate HQ Facilities : Surrounded by upcoming mega projects, Suitable for Retail, Hotel & Corporate HQ. Indicative Price: RM63 Million - Sale by Tender Closing Date: 5.00pm 21st July 2014 Potential Yield of 6-7.5% p.a Contact Person :First Pacific-P.L. Lee 012-211 9813, Anthony 016-553 1099/Raine & Horne-S.C. Ho
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PROPERTY: Parklane Kelana Jaya PROPERTY TYPE: Commercial shop office 4.5sty BUILT-UP: 6620sqft LAND AREA: 26 x 62 TENURE: 99 years leasehold SELLING PRICE: RM3.45 million BANK VALUE: RM3.6 million RENTAL PRICE: Upon fully tenanted about RM13, 800 QUALITIES: Brand new with private lift FACILITIES/AMENITIES: Plenty of cover car park at the basement CONTACT PERSON: Janice Har, 012-323 2752
PROPERTY: Cascades Corporate @ Kota Damansara PROPERTY TYPE: Commercial BUILT-UP: 710sqft, 960sqft, 1100sqft TENURE: LEASEHOLD RENTAL PRICE: RM3000, RM3800, RM4500 QUALITIES: 24-hour Security with smart card access, Covered Parking, Future MRT, Beside Giant, 5 minutes walking distance to The Strand Mall, Minimarket, Cafeteria, Banks, Giza Mall CONTACT PERSON: Stacy, 014-934 0571
PROPERTY: USJ Heights, Capril design PROPERTY TYPE: 2.5sty super link BUILT-UP: 3918sqft LAND AREA: 24 x 80 TENURE: Freehold SELLING PRICE: RM1.6 million BANK VALUE: RM1.7 million RENTAL PRICE: RM3,500 to RM4,000 for partially furnished QUALITIES: Quality finishing FACILITIES/AMENITIES: 24-hour security service, perimeter wall with power fencing, Playground CONTACT PERSON: Janice Har, 012-323 2752 PROPERTY: Bukit Naga Industry Park PROPERTY TYPE: Semi-detached factory BUILT-UP: 5200sqft LAND AREA: 10500sqft TENURE: Freehold BANK VALUE: RM10, 000 RENTAL PRICE: RM8,000 QUALITIES: Brand New FACILITIES/AMENITIES: 9 inch thich facing bricks external wall for extra security, 15 feet of Fully high motorised roller shutters, motorised sliding gate, Easy access to major highway, NORTH-SOUTH HIGHWAY, proximity to Klang, North and West Port CONTACT PERSON: Janice Har, 012-323 2752
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Bukit Suburban Living
Within the City
INSIDE MANAGING STRATIFIED PROPERTIES
Kit Au-Yong and Stanley Toh write on the challenges of managing stratified properties from the perspective of property managers.
s land becoming more expensive in urban areas like Klang Valley and other rapid growing cities in Malaysia, strata development turns out to be a practical choice for developers and property owners. It is an efficient way of maximizing land use compared to landed development of the common terraced houses. Generally there are two types of stratified development with high rise condominiums or apartments and for the last few years, landed strata development seems to be gaining wide acceptance
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in areas such as Desa Park City, Kuala Lumpur. A strata living is a form of community living whereby property owners share common properties such as swimming pool, community hall, car parking facilities and services such as lifts and security service. Such stratified development properties need proper management, which is essential in maintaining the properties and services for the residents. However, we still occasionally or should we say quite frequently with news published that many schemes of development have not been managed well leading to various
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complaints from residents. Those complaints range from simple matters such as compromised general hygiene condition, security related issues to much more complex issues such as disagreement between residents and tussle between developers and residents. Managing stratified properties seems to be a straight forward matter but what are the causes that complicate matters here? By just speaking to a few people on the ground, we will get all sorts of answers. Many at times fingers are pointed to the property management claiming they are not performing their function well. However, further investigation always leads to some more objective answers in such cases. In this article, we would like to look from the perspective of property managers or managing agents which usually are the property management firms. Being in the real estate trade permits us to speak to our fellow property managers in great depth where they reveal some of the challenges in managing stratified development schemes. It can be a frustrating experience for some of them when dealing with under-performing stratified properties especially due to faults that were beyond their control. Speaking to a few qualified property management practitioners leads to the same answer regarding the challenges. An experienced property manager sum up the biggest challenge is money and “PEOPLE” which makes a lot of sense too. Money is referring to resources to operate while property management is a professional service rendered by people to other people (residents) unlike factory that can rely on machines. 1. Money - Collection of service charge/maintenance fees Many apartments/condominiums that are not managed well might have problems with collections. Fund collected is a form of resources for the manager to maintain and engage proper services to the residents. Sometimes collections can be a symptom of a more serious fundamental issue faced in any particular property. Lack of awareness of property owners, lack of effort in collection by property managers and owners’ refusal of payment could be some of the reasons that lead to low collection rate. Low collection rate can be a virtue cycle that leads to further lower collection rate as below par property management service aggravates dissatisfaction among paying residents. Usually high collection rate is correlated with high property value because
only well managed properties are in demand. So, it is best to check on the collection rate if you are buying a subsale condominium or apartment. Way below collection rate is always an alert sign for any potential purchasers and thus value of those properties is always suppressed. The current law of stratified development has been quite exhaustive with the like of Building & Common Property (Maintenance & Management) Act 2007 (BCPA) and Strata Titles Act, 1985. It has provisions relating to way of dealing with overdue service charge collection. However, it may be lacking in practicality. For example, a low cost flat of monthly maintenance of RM40 per month could only make up to RM240 if the unit owners fail to pay up for six months. The mere RM240 outstanding may not warrant the whole process of collection and initiate legal action due to cost involve but at the same time, if a large percentage of units owners fail to pay up, the total outstanding collection can put a dent on the much needed income source for the property management operation. Thus, it is not surprising that many of those buildings are not well managed with physical conditions deteriorating and even need to shut down some services such as lifts and cleaning. People will always pay their electricity and water bills because overdue leads to cut off of services but this is not the case when comes to overdue service charge. Maybe we should relook at the whole system of dealing with overdue collection and provided a clear and effective way to reduce such problem. Even until now other than the usual legal route of letter of reminder, summons onto defaulters, property managers still don’t have a clear answer to measures of termination of water supply to unit, refusal to allow defaulting occupied to enter the development and other means to stop those defaulters from enjoying their property.
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2. The people - Residents and unit owners First of all, this is a rather general word to apply here. We start off with the people that are receiving the services, the residents and unit owners. Lack of understanding of stratified property management concept from property owners sometimes make property manager work tougher than he should have. Our attendance in some residents meeting shows some residents still are unable to differentiate the role between property manager and Joint Management Committee (JMC) or Management Committee (MC). In reality, not many residents take interest in property management of their development scheme as joining as management committee members need commitment and effort. According House Buyers Association, “Owners of stratified units should thus realise the three-fold obligations: First, as individual parcel owners; Second, as co-owners of the common areas and land in the stratified project; and Third, as members of a body entrusted to manage and maintain the project.” We fully agree that owners should work together and understand their obligations and others important role and duty that have a significant bearing to the successful property management of their buildings. 3. The people - Property Manager and managing agent Usually a property manager is stationed in the building to ensure all maintenance and services are provided accordingly. However, if they are not performing their work including of fund collection, accounting, budgeting, conducting regular maintenance, resolving emergency maintenance matters and advising management committee, the property may end up with some issues. Thus, a capable and qualified property manager is always essential. Appointment of property managers and managing agents should be based on merit with reference to their track record, experience and qualifications. Employing any unqualified property manager and managing agent without any accountability can be a risk as poorly managed operation can lead to further deterioration of services and conditions of the building while residents there might be left with limited legal recourse against the managing agent. 4. The people - Committee members of JMC or MC Involving in the area of managing the property as members of JMC or MC need commitment
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of time and effort, thus this role has never been popular for many. In fact, the committee is has great power to decide how to run the property management operation provided under the law of Strata Title Act. They have the power to approve certain maintenance work, appoint managing agent, contractors and service providers. Genuine and committed committees’ efforts always make a difference to the property. They will ensure the best contractors are being employed and terminate the service of underperforming contractors, approve proper maintenance work done and balance the budget, among other things. Still, at times, disputes arise due to self-interest of certain committee members or someone would like to operate according to their own way and chooses to disregard the opinion of others. Sometimes this role can be term as a “thankless job” as they are not paid any allowances and solely on part time volunteer basis. They get the blame if things don’t go as planned, which may be out of their control, but they are hardly rewarded too if the building is being managed well. In fact, this is another good reason to engage the professional service of property managers and make sure they perform their duty diligently.
“Way below collection rate is always an alert sign for any potential purchaser as it indicates the value of the property is being suppressed.” 5. The people - communication Again, communication among property manager/ managing agent, JMC/MC and residents is crucial by means of updating the general operation and expectation of results. Residents or owners may not be directly involved in the management operation of the building but they will always take interest in their property which is directly linked the way that the building is being managed. They should be updated on matters being attended to, measures being taken and expected results. Frequent communication and transparent information flows will always encourage better understanding and engagement from the residents which in turn makes property
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manager works easier. 6. Mismatch of resources and expectation It is a property manager/managing agent role to ensure proper property management work is planned and executed but resources allocation should be firstly negotiated with the JMB or MC. When managing agent accepts the task, he or she shall be done and agreed with the resources and expectation. Managing agents or property management firms are profit-oriented organisation that needs to make a profit while rendering a reasonable service in return. We cannot expect managing agent to operate in the thin profit margin while providing the full attention and good service on a sustainable basis just like any other service providers. A property manager relates his experience of a property that only allows him to employ one security guard to man the whole few blocks of building. Eventually break-ins take place and the property manager gets the blame. In such cases, the common residents put the blame on the property managers while not knowing resources are not being allocated fairly to the manager. It is fair that resources should be maximised but not to the extent of cutting corners and expecting satisfactory results. In fact, this is quite a common problem faced by property managers. 7. Other challenges A property management is an area with mixture of some technical, legal related and general management, thus many issues could arise. Talk to any MC committee members, managing agents
and property managers and they can tell us a long list of them. Let us list out some of the common ones here. Defective building design and below par construction standard can be a burden in building maintenance. Common complaints of leakage in common area and flood in car park area due to lack of proper drainage and roof system may require major repair and alteration to the building that can drain off the resources. This is why proper inspection of newly built building during handover from developer is an important process and needs great attention from unit owners. But in reality, while the building is still new, all these problems may not yet surfaced. Professional such as building surveyor can probably help in this respect. Problems that exist and inherited from previous management can also be a drag for the new management. Normally, change of property managers and managing agents are due to unsatisfactory services and conditions of the property such as low collection rate, proper procedures of property management not being implemented. When the new party comes into the scene, he or she will have to struggle and in due time is required to fix the situation. Sometimes even record of accounting is not provided to the new managing party due to improper record keeping. Conclusion Overall, property management is a straight forward matter but it can be complicated due to various reasons. Different types of properties may present different sets of challenges such as collection problem and vandalism of low cost flat as well as high expectation and demand from owners of luxurious condominium. In conclusion, it is undeniably a professional and capable property manager or managing agent who plays an important role but the residents and JMB/ MC should also play an equally significant role in ensuring the success and smooth operation of property management. However, it is still not enough by just putting all the responsibilities to the property managers or managing agents as they too, need the support from the residents, especially from the JMB/MC.
Ab out The C ontributor
Kit Au-Yong and Stanley Toh who are from with Laurelcap Sdn Bhd, a property valuation, consultancy, auction, real estate and property management firm with HQ in KL and branch in East Malaysia.
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TIPS TO READ YOUR S&P AGREEMENT This is the part 2 of Chris Tan’s guidelines to be a master reader of your Sale and Purchase Agreement.
uying property from developer is not the only option to get to your dream house. You can always choose your dream house at ideal location from the available subsale market. Nonetheless, there are some features of the sale and purchase agreement for subsale of duly completed property, as it is different from the sale and purchase agreement when you are buying from developer where the property is still under construction.
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First and foremost, sale and purchase agreement for subsale is not governed by the Housing Development (Control and Licensing) Act 1966 (“HDA”). Both parties have the freedom to incorporate their own terms when drafting the agreement as it is not bound by the standard format prescribed in HDA. Before buying any subsale property, we need to make sure the status of title of the property whether the title has been issued or not. Furthermore, due diligence is to be
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made on the property such as land search and the bankruptcy search on the seller. Afterall, buyer is now exposed with less regulating protection. A typical sale and purchase agreement for subsale property shall include the following salient points: 1. Condition Precedent This is where the agreement is conditional upon terms such as:• Confirmation from the developer that seller had duly settled the full purchase price and is currently the beneficial owner of the property, if title has yet to be issued; • State authority consent for transfer if required. All the condition precedent is to be obtained not later than stipulated deadline in the sale and purchase agreement. Such condition precedent can also include any special terms negotiated and agreed between the parties. 2. Payment of Balance Purchase Price Normally, balance purchase price is to be paid by the buyer to the seller’s solicitors as stakeholders within a three (3) months “Completion Period”. In the event the buyer failed to pay the seller the balance purchase price within the “Completion Period”, the buyer shall be liable to pay the seller late payment interest at a fix rate, in the range of 8% to 12% per annum on a daily basis calculated on the amount that remains unpaid from the day after the expiry of “Completion Period” until the purchase price together with the interest is paid in full. There is normally an automatic one (1) month extension with interest and beyond that is subject to Parties’ negotiation.
3. Redemption of Property When buying a property from the subsale market, the buyer needs to take note that the seller might have taken credit facilities to buy the property thus the sale and purchase transaction is subjected to the seller first redeem the property from the existing financier. In such case, seller shall request from the existing financier to issue a redemption statement stipulating the redemption sum to be paid in order to redeem the property. The buyer and/or his financier shall then pay off the redemption sum to the existing financier in accordance with the redemption statement. 4. Caveat Buyer should take note that he is entitled to lodge a private caveat against the property to protect his interest in the property after entering into the sale and purchase agreement and pending completion of the same. Notwithstanding that it is worth to note that, for property where title has yet to be issued, it is a norm that the developer does not allow a buyer to lodge private caveat against the master title of the property. Lodgment of private caveat by any interested party on the master title may affect and delay the developer’s application to subdivide the master title and issuance strata title. 5. Vacant Possession Vacant possession of the property is to be delivered by the seller upon receipt of full purchase price and late payment interest (if any). The seller is obliged to deliver the property together with keys and to ensure that there is no squatters remain in the property. If the seller failed to deliver vacant possession within the stipulated time, he will be www.propertyinsight.com.my
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liable to pay late delivery interest at a fix rate, in the range of 8%-12% per annum, calculated on the full purchase price on a daily basis until due delivery of vacant possession of the property to the buyer. 6. Apportionment of Outgoings All quit rent, assessment charges, maintenance and service charges, sewerage charges and other lawful outgoings in respect of the property shall be apportioned between the parties as at the date of delivery of vacant possession of the property. Seller shall pay for all such lawful outgoings incurred before delivery of vacant possession whereas the buyer to be liable for the outgoings incur after delivery of vacant possession. Further, the seller needs to indemnify the buyer if there shall be any penalties being imposed by the utilities offices as a result of any late payments by the seller. 7. Real Property Gains Tax (RPGT) For all sale and purchase transaction that caught within the ambit of RPGT, buyer is required to withhold two per centum (2%) of the purchase price of the property and submission such retention sum to Inland Revenue Board of Malaysia (IRB) within 60 days from the date of sale and purchase agreement. The buyer will be subjected to ten per centum (10%) penalty if the buyer fails to remit the two per centum (2%) retention sum to IRB within the aforesaid period. This measure is required by the IRB to ensure the seller pays the RPGT for each
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sale and purchase transaction. 8. Buyerâ€™s Default Buyer needs to be aware that in the event they fail to comply with the clauses stated in the sale and purchase agreement or to pay the balance purchase price within the stipulated Completion Period, the seller will be entitled to terminate the sale and purchase agreement and forfeit the deposit paid, normally being ten per centum (10%) of
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the purchase price, as liquidated damages. Upon termination of sale and purchase agreement, seller is required to refund the buyer all payments made in excess of the liquidated damages within fourteen (14) days; failing which, late interest will be chargeable upon the seller until the date they make the full refund. 9. Sellerâ€™s Default In the event the seller fails to comply with the clauses as stated in the sale and purchase agreement or refuses to complete the sale, the buyer will be
entitled to seek remedy of specific performance against the seller in court. Alternatively, the buyer shall have the option to terminate the agreement and upon such termination the seller is required to refund all monies paid by the buyer towards the account of the purchase price. Further to this, the seller shall pay to the buyer the agreed liquidated damages stipulated therein, normally stands at ten per centum (10%) of the purchase price. Seller is required to make all such payments within fourteen (14) days; failing which, late interest will be chargeable upon the seller until the date they make the full refund. 10. Additional Tips In sale and purchase agreement for subsale property, the seller needs to take own effort to change the name of account holder of the quit rent, assessment charges and other outgoings of the property to the buyer. This is to prevent any liabilities fall onto the seller even after the sale and purchase transaction has been completed, if the buyer did not make the payment of the charges. In conclusion, there is so much to be concerned when reading a sale and purchase agreement, buyer shall be cautious and take note on the tips highlighted above to prevent your journey of getting your dream house from turning into a nightmare.
Ab out The C ontributor Chris Tan is the Founder and Managing Partner of Chur Associates, Advocates, & Solicitors. He is deeply involved
in the real estate industry, having assisted Datoâ€™ Alan Tong as the World President of FIABCI (International Real Estate Federation) in 2005/2006. Chris is now the Honorary Legal Advisor for FIABCI Asia Pacific Regional Secretariat on regional concerns. Chris was elected to serve FIABCIâ€™s Malaysian Chapter for two terms, from 2006 to 2010, as its National Council Member, and in 2009, he was appointed to the Board of Directors of FIABCI International to preside over the portfolio of Young Members aged 35 and below for the term 2009/ 2010.
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BANDAR UTAMA DEVELOPMENT SDN. BHD. 1, Dataran Bandar Utama, Bandar Utama, 47800 Petaling Jaya, Selangor Dar ul Ehsan, Malaysia. Tel: +603 - 7729 8363 Fax: +603 - 7729 8682 www.fir stnationwide.com.my • Developer's License No.: 5203-1/09/2014/0933(L) • Validity Period: 12 /09/2013 - 11/09/2014 • Tenure of Land: Freehold • Adver tising Permit No.: 5203-1/09/2014/0933(P) • Validity Period: 12 /09/2013 - 11/09/2014 • Appropriate Authority Approving Building Plans: Majlis Bandaraya Petaling Jaya • Building Plan Approval No.: The Ef f ingham – MBPJ/12010 0/ T/P10/1546/20 09, 9 Bukit Utama – MBPJ/12010 0/S/P10/6/20 06 & MBPJ/530/P10/191/20 06
6 HOUSE-Flipping traps to avoid
ometimes the best investment strategy is not always to buy, buy, buy. It’s about knowing when to say NO to a deal. Many a time, investors get over confident from their past investment successes or get too psyched up of their first purchase until they lose sight on what is investable according to their objective and what is to be avoided. From my years of investing, I’ve discovered some traps you should avoid when flipping a home. Being indecisive on a good deal Good deal doesn’t wait. Some investors experience ‘paralysis by analysis’. They over-analyse an
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obviously good deal and can actually convince themselves to walk away from the deal. Often, they even refuse to take action and when another investor shows interest in the same property they will start considering it again. And by then, it will be too late for them to act on it. Assuming every day’s a sunny day Every economy will experience their economic cycle, so does the property market. In a hot market, investors often become irrational with their market assessment to a point they might overpay a property. Don’t be too hopeful on a double digit growth every year and always have a
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technically, it’s not a valid agreement. The next time before you pursue a deal, you MUST inspect the S&P agreement or title to make sure they are the rightful owner. Besides, a copy of quit rent, assessment, utilities bill can also give you the indication of whether they are the right person to deal with. Underestimating the cost of repair or renovation When a contractor tells a property owner it takes RM100,000 to renovate the house, don’t take it at wholesale value. Allow at least 10-20 per cent deviation for the amount to go over. Sometimes the contractor estimates wrongly and sometimes there’ll be the last minutes changes or improvements that can contribute to the overrun cost. Don’t get too emotionally attached with the renovation project as if we are staying in it ourselves. Your renovated property should be more appealing than the other homes in your area, but it doesn’t have to be excessively attractive.
contingency plan should things don’t work out the way we plan. Is the owner a rightful owner? Are you dealing with the right decision maker? Anyone can sell a property even those who don’t actually own the property. I have personally encountered a case this year from a very wellmannered pakcik who told me he is representing his aunt from Germany to sell her property. We agreed on a price and proceeded with the S&P preparation. After I signed the agreement, he called to say his aunt changed her mind only for me to find out that the property was sold to another party. There are also instances whereby a husband signs the letter of offer to purchase, but when it is time for S&P signing, the husband changes his mind and doesn’t want to proceed with the sale because the property is jointly owned with his wife and his wife is not agreeable to the sale. Plus, the wife doesn’t sign the offer to purchase so
Do not go over your budget The most important thing when you decide to buy a house which you wish to ‘flip’ is to not spend more than what you can afford. First of all, additional costs will sink in (taxes, renovations, loan payment). Therefore, it is wise to properly plan your budget before doing it. Do not go for houses too low from your budget and not too high either. Do your homework Before buying a house to ‘flip’, make sure you’ve done your homework. And this is the most basic preparation before buying something, especially when it involves real estate and property. Do visit the house you are intending to buy. Check for basic necessities such as, the water pipes, the electric cables, telephone and internet coverage on the area and also the neighbourhood. Next, you should probably check on the value of the location and also foresee the value in the future. About the Contributor KK Chua is the publisher of Property Insight magazine. He is also a registered real estate agent and an investor with more than 10 years of experience in the industry. He can be contacted at firstname.lastname@example.org
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HOME & LIVING
ATTRACTION Having a swimming pool at home is everybody’s dream. But there’s a lot to think about before you decide on installing one. Aidil Mohamad Noor writes what there is to know.
henever I pass by a house with a swimming pool, I think to myself, ‘The owner of this house must be really rich’. For some reason, there is this sense of luxury in having your own private swimming pool. This is the perception I have lived with my whole life, and I always imagined how great it would be to someday own a house with a swimming pool in the yard where I can enjoy some sweet time with my friends and family. It’ll be like spring break, but in a tropical setting. I’m sure I’m not the only one with this sentiment. There must be others who aspire to have their own swimming pools at home. But, hoping for it is easy. Installing one is another issue. Have you any ideas where to start and how to go about with fitting a swimming pool at your home? Truth is, you do not have to own a bungalow or a big house to have your own swimming pool. If your house has adequate space in the backyard, a swimming pool is possible to be built. Sales and Marketing Manager of Desjoyaux Pools in Petaling Jaya, Parry Tang tells us what homeowners need to know before they decide on having a swimming pool at their home.The Variations According to Parry, there are two divisions of swimming pools namely normal and wading pool. Normal swimming pools can reach a depth up to six
Sales and Marketing Manager of Desjoyaux Pools, Parry Tang
feet while a wading pool, unlike a normal pool, is much shallower and is typically placed at one end of a swimming pool, in the shape of a circle. “A wading pool is usually perceived as the children’s pool and it can be about one to four feet in depth,” says Parry. “Let’s not forget about reflective pools, pools that are built for relaxing. It is suitable if we want to dip our legs into the water while reading and sometimes they are just for decorative purposes. Reflective pool is a shallow pool built near the borderline of the house (about a foot), intended for decorative, while conventional swimming pool needs a setback line (distance between the house borderline to the
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HOME & LIVING
edge of the pool) of seven feet and a half from the borderline of the house,” she says. You can have your swimming pool built indoor or outdoor. Most often than not, residents go for outdoor pools due to the space requirement. A vital element to remember is there are also law and regulations homeowners have to follow, which is the Swimming Pools By-Laws which is set by Municipalities. Customising the Feel Natural pools and ponds are a re-definition of a lake. Natural pond denies the usage of chemicals to purify the water, instead it uses the natural purifiers from biological filters and plants rooted hydroponically in the system. To create a Zen-like experience at home, one can opt for ocean pool. Such type of swimming pool has an entry that gradually slopes from the edge, deeper in each step, following the concept of the beach. There are no stairs for this type of pool and this allows easy access for the elderly, young children and also people with accessibility problems. Then there’s the Infinity pool, which probably is the most sought-after design of swimming pools. The infinity pool is quite the trend these days, thanks to the many commercials and advertisements that brand infinity pools as special feature of a
development. Infinity pool, as what the name suggests, has and edge that mimics the sea. The edge is endless, with no border to define it. Often, infinity pool is built at condominiums or hillside houses, since these types of properties provide a view from the top. Your Own Sanctuary With a hectic lifestyle and demanding working hours, more homeowners are looking for a sanctuary at home where they can enjoy some peace and comfort at their home. Swimming pools make great alternative for this because water has the power to offer homeowners a visual treat that is serene and calming. “Swimming pool can give the surrounding of a house a cool and refreshing feel… it provides some tranquillity,” says Parry. She adds that people consider installing a swimming pool at their home as it can make a big difference to their life. “Recharging energy is what concerns people these days. With a pool at home, they get to enjoy quality activities together at the swimming pool,” explains Parry. She also thinks that a house with swimming pool will increase in value and this comes in handy if
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HOME & LIVING
youâ€™re considering property investment. She says that an investment to build a swimming pool is worthwhile since the cost of building a swimming pool would take only five per cent of the total building cost of a house. Building Process Building a swimming pool can take up about a minimum of two weeks to months depending on the builder, design and other factors. Before building a pool, the builder has to inspect the area designated for it in case if thereâ€™s any existence of holes in the ground, scattered concrete or metal plating, all of which can pose big safety issues if ignored. For homes with children, it is of utmost importance to ensure there are borders to separate the house and the construction site of the swimming pool while it is in the building process. Below are the safety elements to be considered: Before Completion (Construction Phase) Ensuring the safety during the construction phase is crucial to prevent any possible accidents. Although it is up to the constructor to sets up borders or restrictions towards the area of the construction, homeowners can play their role by choosing the right material and design.
While most swimming pools use tiles for the interior of the pools, you can ensure a better surface friction by applying liner on the interior of the pool. Unlike tiles, liner gives a shaggy surface, much like adhesive tape you apply on your bath tub. Moss build-up can also be reduced with a liner on the surface of the swimming pool. The design of the pool also plays a significant role. Pointy edges might be suitable if only adults
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HOME & LIVING
are using it. But if children are present in the equation, round edges are more suitable and safer since sometimes in the midst of swimming, we didn’t realise that we had reached the end of the pool and we might knock our head on the edges. If such unfortunate event takes place, round edges may reduce the damage of the injury. Placements of the stairs are also an important aspect. Placing it nearby the door can help prevent children from plunging directly into the water. You can choose to build stairs so you can descend properly. After Completion There are several ways to increase the safety of your pool. The simplest and most common used method is to build fence around the pool. The fence can be the most practical way to protect your child or yourself from accidentally falling into the pool” says Parry. The pool’s cleanliness must also be ensured, which is why a regular clean-up is required to avoid build-ups of moss at the bottom and the side of the swimming pool. Moss build-up can lead to a slippery floor and this can be highly dangerous if one falls down into the pool. Water in the swimming pool must maintain low levels of bacteria and viruses to prevent the spread of diseases and pathogens. Users are advised to
REMINDER No matter what safety measures you take to stop your child to play around the swimming pool alone, YOU are the best safety measure. Always keep an eye for your children. Better safe than sorry.
learn more on purifying the water using suitable chemicals to ensure the water purity level to be on the safe side. Chemicals such as chlorine which usually comes in form of hypochlorite salts and bromine are commonly used to kill pathogens. The colour of the water can changed with the usage of the chemical due to the presence of iron or minerals in the water. “Your swimming pool can be affected by pollution hence it is vital to cover the pool” says Parry. Not only can a pool’s cover ensure the cleanliness of the water in the pool, it can also be a safety net for any individuals who may accidentally fall into the pool.
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INVESTOR NEXT DOOR
FROM AGENT TO INVESTOR Johor-born Win Chong has never thought that he will be a property investor and soon a developer. This is his story.
s a Johorean living in his hometown, Win Chong has the edge to capitalises on the proximity of Johor Bahru and Singapore to make a living as an avid property investor in the lion city. “I began my first occupation in Singapore as a general manager at a Hong Kong-listed company and that job was all about dealing with the higher level managements and board of directors. There, I managed to create a good relationship with many of Singapore’s successful and rich businessmen. One day, during a normal chit-chat session, one of them suggested for me to venture into the property market by becoming a real estate agent. They said I can make a lot of money as a real estate agent,” says Win. The 40 year-old investor said that it was that suggestion than prompted him to study and analyse the property market. Win learned by himself to have a better understanding of the market and in 2005, Win felt ready to take on the challenge and he became a part-time real estate agent selling Singapore’s properties. Years went by, and Win noticed that his income was growing exponentially and seeing such improvement Win decided to dedicate his time as a full-time real estate agent in year 2010. “Thankfully I had made my connections earlier and this is vital as a property agent…without network or
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connections it is nearly impossible to survive in the market,” Win shares. The First Time “My first property carries a sentimental value and there is a story behind it. During my stay (I rented a home at that time) in Singapore, a thought crossed my mind; why must I waste my money to help pay someone else’s house? Why not use my own money to pay my own home?”, Win recalls. Upon this realisation, he became determined to own a property he can call his. After having enough
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INVESTOR NEXT DOOR
capital, he went on to proceed with his purchase only to stumble upon an obstacle. He had wanted to buy a Housing Development Board’s (HDB) flat in Singapore but it appeared that his marital status was a problem. “The agent I approached asked me, ‘Are you married? Because we don’t really sell our flats to bachelors.’ I was shocked after hearing that,” says Win. “I kept my composure and looked for a solution. I found one. So, I went to see my girlfriend and asked her if she could marry me as soon as possible because I wanted to be able to buy a flat,” Win quips. “Luckily, my girlfriend said yes to marrying me and I managed to buy the flat. The story is a quite a memory and it is like, ‘buy one house and get one wife for free!’,” he adds jokingly. Win bought his HDB flat in 2007 at S$200, 000 (current rate is RM518, 542). After that, things started to fall into place and he secured another property worth S$800,000$ (current rate is RM2million today) condominium. The first was for his own stay while latter was merely for investment. After two years staying in the HDB flat, Win sold this much-loved property for S$300,000 (RM 773,131.03) and his second property for S$900,000 (RM 2,319,393.10). “At times, I do feel sad that I sold my first property but I did it for investment purposes. I kept thinking of this to justify the move,” says Win whose mentor is a billionaire from Hong Kong named
Jason Chan. In 2008, after earning his profits from the first two properties, Win invested in a hillside property in Singapore for S$300,000 (RM773,131.03) and he promised himself not to rent it out, nor sell it. He wanted it to be for his own homestay. Malaysian Adventure “During the period when I purchased my first two properties in Singapore, I also bought a doublestory residential property in Kulai, Johor. This was my first venture in Malaysian property market but unfortunately I found that the property didn’t provide much income. So, I sold the property,” Currently, Win owns nine properties comprising of two apartments worth of RM500,0000 to 600,000 in Malaysia. He is also a proud owner of a semi-D house worth of RM2million, three terrace houses with each worth RM1million, one shop lot worth of RM3million and 20 acres of land for his development purpose. To date, Win’s properties in Malaysia are mainly in Johor Bahru, Penang and Rawang. Throughout Win’s property investment journey in Malaysia, he found that investing in commercial properties is way better than investing in residential property. He finds that there are more restrictions to buying residential properties than to commercial properties. Malaysian property market is constantly booming and I knew it will sustain a healthy outlook in a long term. After years as an investor, I’ve gathered enough confidence to test the waters as a hotel developer,” Win tells. “I always wanted to be a developer. When I first started, I often have this feeling of wanting to build a building. Whenever I look at tall buildings I thought to myself, ‘how nice would it be if the buildings are my own’. I know that this is the right thing for me and I can gain a lot from it,” he adds. After doing his research, Win acquired a 20-acre land in Desaru, Johor – where he will start his hotel development project by next year. Currently, the hotel is still in its planning stage. The project will be managed by UMEGAR Realty Sdn Bhd. An Investor’s Hope “As an investor, I focus on what could raise my capital appreciation and I can guarantee that investing in Malaysia is a very good strategy compared to investing in Singapore. But these days, I see affordability a major issue in our property market. “Malaysia is blessed with a myriad of properties. Some are expensive and some are not. There are a lot of appeals here and these attract not on locals but
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INVESTOR NEXT DOOR
overseas investors such as those from China and Hong Kong, among others. Surely, these investors wouldn’t have come here if they are not confident with our property market,” says Win. According to Win, he learns a lot while doing business in Singapore and he notices that Malaysia is starting to pick-up some of the Singapore’s trend. “When Singaporean government wants to restrict property market, they will choose residential instead of industrial and I can foresee that happening in Malaysia, too. So, maybe it is high time for investors to move into industrial property now,” Win thinks. Sharing His Knowledge Knowing that there are a lot of challenges one will face as an investor, Win shares some advices based on his own experience. “If you are trying to get into investment field, the first thing you must do is to study and understand the government’s law. Always keep in mind that each country, as well as each state, may have different laws,” explains Win. “This is what I learned when I first owned a terrace house in Penang. I got to know that the law there is not similar to Johor Bahru’s. For example, in Johor Bahru foreigners can buy a landed property priced from RM1million and above, whereas in Penang, foreigners can only purchase a landed property that has a minimum price of RM2million onwards,” says the investor. “Back in the day, people didn’t pay much attention on the importance of understanding the rules and regulations of buying a property. But today, this factor has never been more crucial and knowing the law is in fact a necessity. It is key to survive in the market,” Win emphasises. He advises other investors to manage their financial
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carefully and he also thinks that if one doesn’t have sufficient cash flow, it is better to start small. Failing to be realistic, one may end up bankrupt. “Try to finance any purchases by using your own cash or minimise loans from bank. I suggest the buyers to take only 70% loan as guideline to evaluate your own affordability for any property purchase,” he urges. Win opines that is vital for investors out there to not to always trust what appears in the news because at times, some are mere rumours. “Do your own research and invest based on your confidence and knowledge,” says Win who feels that positive thinking is another way to succeed in property investment. He also says that by 2020, he predicts Malaysian property industry to have more great amenities and facilities. This will definitely increase property demand and lead to a hike in property prices. “So, to the investors out there you may want to do your investment now before affordability issue worsens,” he shares in the end.
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WHO INVESTS Chartered accountant and former Miss Malaysia Chermaine Poo talks about her knack for property investment to Rachel Joseph.
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hen I set foot at Chermaine Poo’s home, I am immediately struck by her beauty. With a towering slim figure, she welcomes me with open arms and a warm smile. She has this infectious smile and her charm showcases her beauty queen persona. But don’t be fooled by all these because behind her façade, Chermaine is quite an avid property investor herself. Often tagged as beauty with brains, Chermaine is a highly qualified chartered accountant cum actress and TV host. She began her journey in the entertainment world after winning 2005’s Miss Malaysia/Universe beauty pageant. Chermaine, at the tender age of 19, had graduated with a double major degree, BA (Hons) in Accounting & Finance, United Kingdom and subsequently she became a qualified Chartered Accountant. Trained in corporate finance with the largest investment bank in Malaysia and a Big Five international accounting firm, she was involved in preparing IPOs, restructuring, receivership and setting up a billion-ringgit infrastructure fund. Her skills reflect her keen interest in business and this had triggered her interest in property investment. Here, she shares with us her property investment adventure. How did your interest for investment spark? Probably from my parents… I grew up hearing my parents talking about property investment and this was my first exposure in property investment. Once I reached a legal age, I was included in their property investment as a title holder. Eventually, as an adult, I started to venture into property market on my own. But till today, when it comes to property investment, I will always consult my parents first. I will also say that my education is another reason for me to be involved in property investment. Perhaps, what made me an investor is, I know the supply and demand chain of the market and I find that interesting. Plus, after buying a property, buyers have to consider the work that comes with it such as furnishing and renovating. I find that very fun although it can be stressful and nerve wrecking at times.
money or anything out of it. That’s how it went on and that’s how property market is. There will always be a chance for this to happen to anyone at anytime. What’s your investment style? My first property investment was a shop lot in Kota Damansara. My father knew the developer and he discussed with me what seems like a good investment. The office lot was a partnership investment with my mum and of course, the rest is history... But until today, I share the properties I buy with my family members, even though I am the one who pays for the investments. For me, buying a property is a very straightforward matter. If the property is good I’ll buy it but, there are few things I will always consider, such as the location and growth potency of the area, architecture, workmanship as well as the developer. Checking on the developer’s background is very important too because you want the development to be delivered successfully. If a company (developer) owns a sub-standard property building record, I don’t want to buy their property because there could be cracks and the developer will point at the crack saying it is just a crack and nothing serious. But it is a CRACK! on a pillar that was crooked and defected. If that’s the case then I won’t buy the property. Plus, in case if I buy the property and want to sell it to the buyers who are prudent and own very good knowledge in properties, it will definitely be difficult. So, when it comes to property investments, we keep our eyes open and need to consider whether the payments we are paying are worth the investment.
Who is your mentor? I will say my dad, Victor Poo. He’ll just talk non-stop about property investment. He gave all his heart and soul to this industry all these years and I just enjoy hearing him sharing his stories. It is a bonding session for us too. I learnt a lot from my father. One of the experiences he shared was when my father purchased a residential property and he could not get through it due to a very well-known developer who was unable to complete the development. My father didn’t get any
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Hair: Junn Ng, The Met KL Hair Dressing, Park Royal Hotel Make Up: M.A.C. Cosmetics Jewellery: Thomas Sabo Wardrobe: De' Zaine, Puma, Bon Zainal
What do you think is the biggest challenge in today’s market? I think the biggest challenge is to see a development you’re interested in taking shape. The thing about property investment is, you will never know whether it would be a successful project or whether it will meet your expectation until after it is fully done. The question is, you can always go and buy 10 properties at one time but what if you’re stuck and can’t get rid of it? In investment, everything is about risk and if you look at the scale models, everything is beautiful but they are mere models. What are you going to do if the development is not successful? You want to sue the developer? How long would it take to complete the case? 40 or 50 years? It may take a lifetime just to do that. So, you have to bear with this uncertainty. Recently, upon a request, I wrote an article about property investments. It says there, property prices are rising these days but there are still some who don’t realise this. Back in the day, you can buy a decent house for only a couple of thousands Ringgit, but today, where can you get a deal that is cheap? High-end areas are going for millions but how much does a fresh graduate earn? RM2,000 or RM3,000 maybe and how can they pay if the market goes on this way? When property prices are going up, the cost of living is also increasing but, unfortunately, the standard and salary we are earning is not increasing. Also, with GST (goods and services tax) coming in next April. Things will be much more expensive. Have you made any mistakes in property investment and what did you learn from IT? So far, everything has been alright and I thank God for that. The main thing is, don’t get tied up to the point
where you can’t liquid it. I am a very careful and a prudent person. I will think and think and think and do a lot of researches before I invest in any properties. I talk to experts in this industry and gather the knowledge so I act based on this knowledge. Do survey the area you’re eyeing and don’t take action based on hearsay. Check whether the area is developed enough and what are the reasons for that particular area to develop. between the city and OUTSKIRT areas, whERE would you INVEST IN? Currently, I’m targeting an outskirt property. Which means for now, I will go with an area that is a bit isolated. Most of my investments are out of the city because it is too expensive here (Kuala Lumpur) and if I’m going to buy a property in city, I’m not going to stay in it because I already have mine where I have all my things. As of now, I’m looking for something like a holiday home. What kind of properties do you own? I own more residential properties because the potential of renting and selling it are higher compared to
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commercial properties. I have an apartment in KL town itself, another property in Kota Damansara, an office lot in Petaling Jaya and condominiums near Sutera Habour, Kota Kinabalu. I consider the condominiums in Kota Kinabalu as the best piece I have and I expect the properties to increase by 30 per cent in the first two years, simply because of the location. Also, the reason why I chose these areas is because my family and I know the developers and consultants well. So, I’m convinced enough to invest in these locations. Have you tried investing in foreign market? I don’t have any overseas property investment yet but, if I have the money I would invest in Australia. I love Japan and Canada too. I would choose Australia because of the proximity and the amount of people I know there. Do you think fame helps you to get better loans? I’m not sure about that, but they do recognise me. I came from bank investment background and I’m sure bank does what it needs to do. Probably coming from bank investment helps me more since I know the procedures. What is the secret to getting a loan application approved? The secret to getting a loan is simply by having a good track record. Obviously, for banks to lend their money you have to show some form of security to them. Don’t be a guarantor for anyone. Never do that… and it doesn’t matter whether they are family or friends, just don’t do it. It’s not that your family or friends want
to cheat you. It is just you’ll never know what kind circumstances can hit them. One of my friends went through a situation where her sibling went bankrupt and she as a guarantor got into trouble for it. How does your accountancy background help you in property investment? It helps greatly. Accountancy moulded me to be a prudent person. I trust it’s good to know the numbers in everything we do because everything involves numbers. Also, at the end of the day, you need to know your cash flow and bank balances such as how much money have you used? What did you use it for? How can you save it? And so on… What is your advice for those who are interested in property investment but have no courage to take the first step? My advice is, get your hands dirty! Do your research and find out and read a lot of property related books. Don’t just go with hearsay but find out by yourself. Plus, speculations are causing a lot of problems... So, getting into it always needs a good research because it is a big commitment. Only when you do this, you’ll find out a lot of hidden things because it is not like buying a dress or cars. It is a big and long term commitment. So, make sure when you’re going into it, you have a lot space to think throughly. Land is scarce and I always believe if you find a good location then it is time for you to invest. Property prices are going up because of the current supply and demand. So, invest before it becomes too late. Rather than buying cars, investing in properties to me is much more profitable.
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