Page 1

www.propertyinsight.com.my

COVER STORY

DEVOTION TO THE INDUSTRY

JUNE 2016

AREA FOCUS

BUKIT BINTANG

MAIN FEATURE

PROPERTY MARKET REPORT KDN PP 18181/04/2013 (033492)

J UNE 2016 RM7.50(WM) RM9.00(EM)


PUBLISHER’S NOTE

EDITORIAL

It’s the journey that counts, not the destination

KK Chua, Editor

I

t was an exciting month with the launch of our own Entrepreneur Insight brand which serves as an enthusing platform that engages local entrepreneurs via our new website (www.entrepreneurinsight.com.my), social media and events. We are anticipating the success of our brand’s first ever event, the Malaysian Entrepreneur Convention MEC 2016 which will see some 32 prominent business personalities engaging over 2,000 participants with exciting topics. We recently launched the brand, the website and the MEC at a Press conference earlier this month. Read more about it at our News & Events section. This month’s cover features the life and working style of Wong Kuen Kong, the man behind Seri Austin Residence, which clinched the title of most Distinctive Lifestyle Township Development at our Property Insight Prestigious Developer Awards 2016, recently. Our writer Avinash has dissected the National Property Information Centre’s latest report to give you a comprehensive account on what the property market has in store for homebuyers and developers in a special feature. Complementing the special report is another insightful feature by Fara. Gather some tips and tricks on ways you could improve your borrowing power should you be interested in purchasing properties this year. Our experts are telling us that now is the perfect time to buy so go ahead and find out their views. Following our last edition’s feature on Tear-

Jerking Tenants, Natasha has put together an interesting guide for landlords on ways to avoid such tenants. You’d be surprised to find out how the car your drive actually has an impact on the overall picture. We have also drawn some comparison on Affordable Housing projects in Malaysia, Thailand, India and Dubai to let you gauge how things work here and other countries comparatively. This month’s spotlight turns to Bukit Bintang to see what the area holds for investors. Turn to our Destination page and find out what the land of smiles - Thailand has to offer in terms of foreign investment opportunities. Our Featured Property section has some interesting highlights on Eco World’s Eco North Project up north, Scudai Development Sdn Bhd’s Austin Regency @ Mount Austin Johor, down south and Aspire Residence at our very own Silicon Valley – Cyberjaya. Rookie Investor Kit Yew Sen shares his secret on generating passive and stable income through property investment while our Investor Next Door, Hazel Leong will justify why this is a good time to buy properties. Our next issue will feature a celebrity personality in conjunction with Hari Raya so don’t forget to grab it at your nearest newsstand. With that we wish all our Muslim readers a blessed Ramadhan month. Selamat Menunaikan Ibadah Puasa.

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Editor-In-Chief KK Chua kkchua@propertyinsight.com.my Assistant Editor Kamini Raja Writers Fara Petial Natasha Gideon Avinash Sagran CREATIVE Creative Director Sarah Tan sarah@propertyinsight.com.my Designer Irman Hakim BUSINESS DEVELOPMENT General Manager Janet Loh +6012 205 0911 janet@propertyinsight.com.my Andy Fam +6012 601 9938 andy.fam@propertyinsight.com Hagenz Choo +6012 371 8831 choo@propertyinsight.com.my Iris Gan +6012 799 6685 iris@propertyinsight.com.my Wei Yeen, Chong +6012 927 2863 weiyeen@propertyinsight.com.my

ARMANI MEDIA

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Although every reasonable care has been taken to ensure the accuracy of the information contained in this publication, neither the publisher, editors, writers nor employees or agents can be held liable for any errors, inaccuracies and/or omissions. The contents of this publication do not constitute investment advice. It is intended only to inform and illustrate. No reader should act on any information contained in this publication without first seeking appropriate professional advice that takes into account their personal circumstances. We shall not be responsible for any loss or damage, whether directly or indirectly, incidentally or consequently arising from or in connection with the contents of this publication and shall not accept any liability in relation thereto. The views by our contributors expressed here are their personal opinions and do not necessarily reflect Property Insight’s views. The publisher does not endorse any company, organisation, person, investment strategy or technique mentioned in this publication unless expressedly stated otherwise. The publisher does not endorse any advertisements or special advertising features in this publication, nor does the publisher endorse any advertiser(s) or their products/services unless expressedly stated to the contrary. All rights reserved. No part of this publication may be reproduced in any form or by any means, including photocopying and imaging without the prior written permission of the publisher.


CONTENTS

46 49 Austin Regency @ Mount Austin, Johor Bahru The pursuit of contemporary perfection begins here

12 COVER STORY

12

Devotion to The Industry

Shaping the community with passion and commitment

MAIN FEATURE

18

National Property Market Report - Special Focus

Property market is soft but they are not grim

FEATURE

23

Improving Your Borrowing Power

27

Affordable Housing: A Case Study

What you should and should not be doing Until now, policies have focused on managing house prices once the consumer receives the house at the end of the production process. This includes increasing access to finance or subsidising supply that are highly-priced

31 Low-Risk Landlords: A Guide to Avoiding Tenants from Hell

Empty unrented units are better than bad tenants, as they may cause bigger losses

DEVELOPER OF THE MONTH

52 Aspire Residence @ Cyberjaya More than an aspiration

INVESTOR NEXT DOOR

54

Dare to Buy

Success is to those who believe in their judgements during tough times and continue buying properties

ROOKIE INVESTOR

56

Curious? Why Not Explore It!

Generating passive income through a stable source

INDUSTRY INSIGHT

59

Enriching Lives, Families and Communities

How can a real estate agency do all this and more

HOME PLUS

62

Express with Colours

Paint can tell stories through their shades, adding personality to your space

DESTINATION - INTERNATIONAL INVESTMENTS

65

Investing in Luxury with 98 Wireless

New York interior designer Anne Carson styled the grand reception areas and three levels of exclusive amenities. They Include a tea salon and a business lounge that comes complete with Ralph Lauren Home furnishings

34 Building Your Future Home

LEGAL

Healthy, green and luxurious lifestyle built in one place

68

AREA FOCUS

FINANCE

40 Bukit Bintang - A Golden Investment

70

Home to the glitz and glamour scenes of Kuala Lumpur and a must-see location for tourists, Bukit Bintang is a super hotspot in every aspect

FEATURED PROPERTY

46

The Eco North Charms

The Picturesque plains of flourish you have been looking for can now be found in the north

Managing Properties of the Deceased

Smart Financial Management - Part 2

STRATEGY

72 74 76 78

Tough Times - What Should We Focus on Buying Properties - How to Handle Your Emotion Mental Toughness Loyalty Pays


PROPERTY SHOWCASE 2016 EVENTS CALENDAR

A place where the right people meet to achieve their dream homes & investments PROPERTY SHOWCASE

PIPDA GALA DINNER 2016

PROPERTY SHOWCASE NU SENTRAL

3

PUBLIKA

SHANGRI-LA

Solaris Dutamas

Kuala Lumpur

KL Sentral, KL

4 – 6 MARCH 2016

1 APRIL 2016

13 – 19 APRIL 2016

days

1

7

night

days

PROPERTY SHOWCASE

PROPERTY SHOWCASE

INVESTORS’ HOT PICKS PROPERTY SHOWCASE

QUEENSBAY MALL

4 days

KOMTAR JBCC

MID VALLEY EXHIBITION CENTRE

Penang

Johor Bahru

Mid Valley Megamall, KL

12 - 15 MAY 2016

3 – 5 JUNE 2016

3 days

3 days

15 – 17 JULY 2016

HOME+ & PROPERTY SHOWCASE

PROPERTY SHOWCASE

PROPERTY SHOWCASE

IPC SHOPPING CENTRE

CHERAS LEISURE MALL

PARADIGM MALL

Mutiara Damansara

Cheras

Kelana Jaya

25 – 31 JULY 2016

02 – 07 August 2016

12 – 14 AUGUST 2016

7

days

6

days

3

days

PROPERTY SHOWCASE

MALAYSIA’S LARGEST INVESTMENT SUMMIT

GURNEY PLAZA

SETIA CITY CONVENTION CENTRE

4

days

Penang

Shah Alam

27 – 30 OCTOBER 2016

5 – 6 NOVEMBER 2016

2

days

We look forward to collaborating and partnering with you Enquiries: +6012-2050 911 / janet@propertyinsight.com.my


NEWS & EVENTS

ARMANI MEDIA LAUNCHES ENTREPRENEUR INSIGHT & MEC 2016

8 | JUNE 2016 www.propertyinsight.com.my

T

he long awaited Entrepreneur Insight (EI) was officially launched on May 6 at an official ceremony held at The Oak Room Nexus @ Bangsar South. Being another brand of Armani Media, Entrepreneur Insight acts as a platform that engages local entrepreneurs via its website (www.entrepreneurinsight.com. my), social media and events like conventions, expos and social networking. EI carries a tagline of ‘Entrepreneurs Growing Entrepreneurs’, and focuses more on local Malaysian stories ranging from startups to established players in the industry. The website provides readers and businesses a good coverage on local entrepreneurs’ movement, valuable business tips, business trends, events, leadership and lifestyle updates. The content-rich portal also have crisp video coverages on personalities and issues that shape the exciting world of entrepreneurs today. To mark the launch of EI, the brand also held its inaugural Malaysian Entrepreneur Convention or MEC 2016 on May 28 at Nexus Connexion. Attended by over 2,000 participants, the one-day event was named the country’s Largest Congregation of Entrepreneurs under one roof by the Malaysian Book of Records. Prominent business personalities such as Professor Dato’ Michael Tio (CEO & Managing Director of PKT Logistics), Benjamin Yong (Founder & Group Chief Eating Officer of the Big Group), Joel Neoh (Founder of KFit), Anabelle Co-Martinent (Founder of La Juiceria), Jeevan Sahadevan (Founder of LeverageLab), Freda Liu (Presenter & Producer at BFM Radio), Chris Tan (Managing Partner of Chur Associates) and a host of personalities touched on pertinent topics like digital marketing, mentorship, growing and closing sales, and surviving through tough times for the benefit of participants. To access more stories on MEC and to learn more about Entrepreneur Insight, visit www. entrepreneurinsight.com.my


www.propertyinsight.com.my JUNE 2016 I 9


NEWS & EVENTS

PI: SUNSURIA CITY EXCLUSIVE EVENT

S

unsuria City, the upcoming Smart, Liveable and Sustainable township at Putrajaya South, Salak Tinggi, recently held a study tour of the area. Guests were invited to explore exciting investment opportunities that this master planned township development has to offer while winning some exciting prizes through lucky draws. There was also a free bus tour to the township, insightful property talks by Ho Chin Soon, Gary Chua and KK Chua.

PI PROPERTY SHOWCASE: QUEENSBAY MALL

P

roperty Insight has expanded its wings to Penang! Despite it being the first property showcase in the northern region, the responses were overwhelming. The four-day event held at Queensbay Mall was graced by speakers from different areas of expertise including Alan Poon, Dr. Ivan Ho, Dr. Daniele Gambero, Miichael Yeoh, Richard Oon, Elaine Goh, Joceline Chee, June Goh, Kaygarn Tan and our own KK Chua. These experts shared tips and guides on investment strategies.

M CITY MEDIA NIGHT

M

City - Malaysia’s latest iconic development, standing at the corner of Jalan Ampang is developed by Malaysia’s Premier Lifestyle Developer Mah Sing Group (Mah Sing). M City is part of Mah Sing’s Iconic Series which includes Icon Tun Razak, Icon Residence and Icon City. The Iconic Series is part of the Group’s revolutionary developments to change the Kuala Lumpur Skyline. A freehold integrated development spanning 5acres, M City has a gross development value (GDV) of RM1.6billion. The towering masterpiece in modern architecture comprises three Towers with a total of 1,585 units, made up of boutique retail shops, SOHO units, serviced apartments and Sky Residences.

10 | JUNE 2016 www.propertyinsight.com.my


HAPPY FAMILY DAY IN BANDAR RIMBAYU

U

nder the theme “Reliving Nostalgic Memories�, IJM LAND challenged young interior designers to submit their concepts for furnishing of the Penduline homes in Bandar Rimbayu. More than 100 contestants took on the challenge and 14 contestants were shortlisted for round two. These contestants presented their designs based on different floor plans of the showrooms. In the end, Goh Sow Yee and Leo Wong Kwan Theng emerged as finalists of iLDA 2016. To celebrate the finalisation of the showrooms and this important milestone for both IJM LAND and the contestants, the a Happy Family Day was held at Bandar Rimbayu, offering a wide range of fun activities to entertain both children and adults.

WTW TAKE IN CBRE AS PARTNERS

C

BRE Group Inc has entered into an agreement to acquire a significant interest in companies managed by WTW including C H Williams Talhar & Wong Sdn Bhd, WTW Real Estate Sdn Bhd and WTW Property Services Sdn Bhd. They will now be known as CBRE | WTW, led by real estate professionals Foo Gee Jen and Danny SK Yeo. WTW believes CBRE is the right strategic partner to help bring meaningful inbound investment into the Malaysian real estate market

TROPICANA POSTS RM15.2 MILLION NET PROFIT IN Q1 2016

T

ropicana Corporation Berhad recently announced its unaudited financial results for the first quarter ending March 31, 2016. For the first quarter under review, the Group revenue was marginally higher than the corresponding quarter of FY2015. In Q1 2016, the Group recorded revenue of RM286.9 million, compared to RM284.1 million (excluding land sales of RM106.8 million) in the corresponding quarter last year. FY2016, Tropicana plans to launch RM1.5 billion worth of new projects. The new launches include new phases of its highly successful townships, primarily at Tropicana Aman in Shah Alam and Tropicana Heights in Kajang, where previous launches have been very well-received. Plans are also in place to launch the fourth residential tower in Tropicana Gardens, Kota Damansara. The first three towers in this integrated development, which have a direct linkage to the Surian MRT station, are almost fully sold.

www.propertyinsight.com.my JUNE 2016 I 11


COVER STORY

DEVOTION TO THE INDUSTRY Shaping the community with passion and commitment BY: FARA PETIAL

12 I JUNE 2016 www.propertyinsight.com.my


PERSONALITY OF THE MONTH

S

eri Austin was recently crowned the winner of Distinctive Lifestyle Township Development category at the Property Insight Prestigious Developer Awards 2016. The man behind this success is the CEO of UMLand Seri Austin developed by Dynasty View Sdn Bhd (a subsidiary of UMLand Bhd), Wong Kuen Kong. He is a man of few words but his humble nature does not camouflage the leader that he is – stern, focused and visionary. With a strong finance background, Wong was attached to an Australian audit firm before he ventured into the property industry. Why property? “I have gathered a very good experience working in an audit firm so I applied the knowledge I’ve learnt such as managing profits and cash flows when I ventured into the property industry. I like what I’m doing as a developer now. It’s an amazing career path as I am building shelters for people to stay.” BEING A DEVELOPER Twenty years ago, Wong joined the finance department at Seri Alam Properties Sdn

Bhd, a subsidiary company of UMLand. Little did he realise that he will be chosen to lead Dynasty View Sdn Bhd, to develop Seri Austin Township. “UMLand bought a piece of land which has now transformed into the popular Seri Austin. In 2015, my boss asked me to take on the challenge to lead and launch the project. It was delighting to know that he trusted me and gave me a chance to prove myself. Of course I took up the challenge. It was not easy because the 500-acre land is actually not very small. Plus, our land is located among the big boys (developers)!” “There were a lot of headaches during the early days and worst thing is that there were no accessibilities to the project. I had to talk to the neighbouring townships and authorities to find a solution for this issue together.” “After that, I made some amendments to the master plan before launching it. To date, we have been receiving good feedbacks and I can say that the responses have been very positive. We’re now celebrating our 11th year of Seri Austin and have completed about 80% of our plan,” says Wong.

SERI AUSTIN TOWNSHIP UMLand Group is now looking for new land banks to replicate the same successful model for newer townships. “Seri Austin has not only become a township model for UMLand, but also for developments in Iskandar Malaysia. It was recognised by IRDA as the first Smart, Healthy City and Community Township in 2014. We have everything in place. We have the first effective microorganism (EM), which is part of the ecosystem plan in our township. We even collaborated with MBJB (Johor Bahru City Council) to launch this ecosystem project.” “Other than that, we are also the first developer to sign an agreement with Telekom Malaysia to provide UniFi high speed broadband to all residents. With this agreement, we are providing two years of free WiFi to our customers. Not many townships do that. When residents move in, they have a unit that’s Internet-ready. This is something that we wanted to do for the community.” “In prioritising health, we are the first townhsip in Johor to have build bicycle lanes to encourage residents to stay www.propertyinsight.com.my JUNE 2016 I 13


COVER STORY

Everyone should have passion for any kind of job they do. If you have no passion, you can’t get things done. Treat your job as your passion and then commitment will follow suit” - KK Wong

14 I JUNE 2016 www.propertyinsight.com.my

healthy. Our two parks are smoke-free and if anyone’s caught smoking, they’d be fined! In other words, we’re building this township based on the ideal health and stress-free lifestyle concept.” “Seri Austin is designed with hills and a lake. We are the only township within the vicinity that offers such features. I built the lake first before launching the project – so people would have a good landscape to enjoy while driving around. If you ask me personally, I don’t like staying in a commercial area that is packed with shops, people and even cars. Let commercial development stay commercialised. I want to stay in a residential unit with ample greenery surrounding it,” says Wong. “The first phase of Seri Austin comprised terraces, with an old layout. For the next few developments, I changed them to cluster units, semi-detached houses, bungalows and apartments. We are also

planning shopping mall that complements the residential development. Now, Seri Austin has everything in one place; from low-end to high-end amenities.” “We have also embedded Feng Shui elements into the project. The units are designed with basic Feng Shui elements because some buyers today are aware of such elements and definitely compare one project with another based on this. This is mainly because if they choose a project with good Feng Shui elements, they need not do anymore renovations to the unit.” “Home buyers will feel good having these elements in place. As a developer, I always think from the buyers’ side. I always tell my architects, do not build a house for the sake of building it but always have the buyers in mind. If the wives don’t like the houses for some reason, the husbands will not buy it. Knowing and understanding buyers’ needs are important,” says Wong.


PERSONALITY OF THE MONTH

MUST HAVE VALUES The most important values that Wong hold close to his heart are passion and commitment. “Everyone should have passion for any kind of job they do. If you have no passion, you can’t get things done. Treat your job as your passion and then commitment will follow suit. Then, all things will come to you naturally. Creativity, innovation, teamwork and integrity will instinctively be there. If you have all these, then you’re already there.” “A good team demonstrates excellent teamwork. I need to make sure the team members think alike and communicate with each other. We have a weekly meeting with the Heads of Department (HODs). The HODs will then have a meeting with their respective teams. That way, you can keep communication intact. There is no space for finger-pointing and politicking in my www.propertyinsight.com.my JUNE 2016 I 15


COVER STORY team. If something goes wrong, we solve it together. I really need to thank my team for their cooperation and support and also my boss for trusting me with the township project. “As a leader, it is crucial for me to be hands-on all the time. I even go to the site regularly and attend training programmes. Even for our events, I usually go for rehearsals to make sure everything is on track. When you are hands-on, you will face lesser problems. You must enjoy what you are doing and not just leave the work and worry to your employees alone.” Wong is very particular about the quality of his projects that he stays in Seri Austin to observe things for himself. “This is important to me because if I don’t experience the property for myself, I would not be able to detect any defects and deliver the best to my customers.” Quality is easy to spot and Seri Austin exudes not just quality but also care and sustainability and that’s the reason behind their CSR award at The Iskandar Malaysia Social Hero Awards 2014. “It was the first year when they introduced this award and we are glad we won the category. Following that, I was honoured to receive the CSR CEO of The Year at the Asia Pacific CSR Awards 2015. That came as a pleasant surprise because the organisers did not give me a head ups on the win.” “We do a lot of community charity for our township. I have personally contributed to other welfare establishments like the Chinese associations, Iskandar Regional Development Authority’s (IRDA), women’s associations, and a host of other charity events. I am happy to lend support to community programmes and that’s how a lot of associations know me, my project and UMLand.” “It is a good networking opportunity for me. I also give career talks to Universiti Teknologi Malaysia (UTM) students during their talent development programmes and advise them on steps to take after graduation.” JOHOR’S PROPERTY MARKET Wong says the property market is indeed facing a slow down. “I think it’s normal for a market to experience ups and downs and this is not limited to the property market. It is a global 16 I JUNE 2016 www.propertyinsight.com.my

issue. The banks are also tightening their guidelines and that affects the property market because buyers cannot get their loans approved. We do speak to banks from time to time to see how we can at least help first time home buyers get their loans to buy their dream homes,” says Wong adding that things are more challenging for fresh graduates as they do not have a borrowing power. “However, I personally feel that now is actually a good time to buy. Since the market has slowed down, a lot of developers are giving away packages and incentives to buyers. If the market picks up again, it will be too late. Take your time to shop now. Buy, then keep it for five years as an investment.” “I think the Johor people are adapting fast to the changes in their area. A lot of developers are coming in, including the Chinese developers. This helps build a good reputation for Iskandar Malaysia. We are not worried about competitions because ours is a different ballgame altogether. With all these developments, the population will increase and there will be a lot of employment opportunities

opening up.” “My company is doing fine maybe because we are developing residential and landed projects. Our landed units are moving forward and our projects are selling above average. This is probably because buyers like the designs and quality of our products as well as the green environment of our townhsip. He adds that high-rise projects have to be cautious as local demand may not be that great. He reminds buyers to choose the best locations before purchasing a property so that they do not have to worry about the status or values associated to it.

Video interview with CEO of UMLand Seri Austin developed by Dynasty View Sdn Bhd (a subsidiary of UMLand Bhd), Wong Kuen Kong


PERSONALITY OF THE MONTH

www.propertyinsight.com.my JUNE 2016 I 17


MAIN FEATURE

NATIONAL PROPERTY MARKET REPORT - SPECIAL FOCUS PROPERTY MARKET IS SOFT BUT THEY ARE NOT GRIM BY: AVINASH SAGRAN

18 | JUNE 2016 www.propertyinsight.com.my


www.propertyinsight.com.my JUNE 2016 I 19


MAIN FEATURE

B

uying properties at uncertain times seems like an impulsive idea but the recent Bank Negara and NAPIC 2015 Property Market reports indicate that purchasing properties during this time may do buyers some good. Too much focus on the negative side of business has impacted perceptions of Malaysians in general. The market is soft, no doubt but they are not grim and measures are being taken to offset possible losses in favour of buyers and developers. Here is Property Insight’s take on what’s in store for buyers and developers in the property sector this year. OVERVIEW According to the NAPIC (National Property Information Centre) 2015 Property Market Report, Malaysia’s property market has indeed slowed down indicated by decline of 5.7% in volume and 8% in value. Reasons behind this declining trend point towards an economic slowdown, drop in global crude oil prices, softening consumerism, business sentiments and credit restrictions. Financial institutions are basically urging investors to modify and adapt their expectations to the buying patterns in the market for the year ahead but to avoid a major hiccup, Bank Negara Malaysia had instated a cooling period in 2013, implementing several measures that soften the blow to the market. They include preventing pre-approved financing products, reducing home loan tenures from 45 years to 35 years and other antispeculative measures that placed a speed bump on the climbing prices for residential properties. The Malaysian House Price Index was increasing at an average rate of 9.6% for the past 5 years but growth only increased by 5.8% at Q4 in 2015. Repercussions of the measures witnessed reduction of 10% in loan applications and 14.6% in loan approvals for residential properties while non-residential declined by 16.8% in loan application and 24.6% loan approvals compared to 2014. The tightening prevented consumer credit, ability to finance and borrowing thus avoiding any speculative bubbles to float around. Credit crunch by banks are inevitable during this period hence we see a higher loan rejection rates but the banking institution is only doing what

20 | JUNE 2016 www.propertyinsight.com.my

Overall Transaction Volume 440,00

20.0%

420,00

15.0%

10.0%

400,00

-5.0% 380,00 0.0% 360,00 -5.0%

340,00

320,00 Transactions Volume % Change

-10.0%

2010

2011

376.607 430.403

11.4%

14.3%

2012

2013

2014

2015

427.520

381.130

384.060

362.105

-0.7%

-10.9%

0.8%

-5.7%

-15.0%

Overall Transaction Value 180,000,00

35.0%

160,000,00

30.0%

140,000,00

25.0% 20.0%

120,000,00

15.0%

100,000,00

10.0%

80,000,00

-5.0% 60,000,00

0.0%

40,000,00

-5.0%

20,000,00 0.00

-10.0% 2010

2011

2012

2013

2014

2015

Transactions Volume

107,439.55

137,828.04

142,844.94

152,372.12

162,974.38

149,897.95

% Change

32.6%

28.3%

3.6%

6.7%

7.0%

-8.0%

-15.0%


Property Price Trend State

Average house prices (RM) 2014 (4Q) 2015 (4Q) Appreciation %

Sarawak

365,814

391,994

+7.2

Perak

168,955

181,175

+7.2

Negeri Sembilan

185,399

198,043

+6.9

Kuala Lumpur

690,541

734,957

+6.4

Selangor

445,640

473,065

+6.2

Penang

358,245

378,939

+5.8

Sabah

435,396

459,494

+5.5

Melaka

168,381

177,503

+5.4

Johor

232,136

243,374

+4.8

Terengganu

210,071

218,442

+4.0

Pahang

204,898

211,789

+3.4

Kedah

160,918

165,343

+2.7

Perlis

148,470

151,822

+2.3

Kelantan

166,247

167,473

+0.7

it can to safeguard its interest instead of suffering from losses due to defaulted loan payments or non-salability. This however does not mean that one can never apply for loans until the market balances itself out. Housing loans are getting approved so long borrowers show a good credit rating on their behalf. Finance consultant and CEO of GM Training Academy PLT Miichael Yeoh advises home buyers to conduct a mortgage planning and have a contingency plan to pay loans for 6 to 12 months before applying for housing loans. The property market is resilient compared to the 1997 Asian financial crisis – during which the index slumped 39% between 1997 and 1999. REI Group of Companies CEO Dr Daniel Gambero says the planning of Greater Kuala Lumpur has given birth to targeted developments in key locations and this contributes as a major factor that prompted the increase in house prices. Despite a slowdown in transaction, property prices did not decrease because the potential of locations within Greater Kuala Lumpur still holds positive prospect

for buyers and investors in the long run. Additionally, the completion of the MRT Project and extension of the existing Light Rail Transit (LRT) Line is bound to connect millions of people within Klang Valley, forecasting a steady increase in housing price index in the second half of this year. NAPIC figures indicate an increase in overhang units. Records show over 16% increase in volume and 56% increase in value at the fourth quarter of 2015. Basically, the increase in values percentage hovers around the luxury residential units that remain unsold due to their pricing schemes. This does not look good for developers who specialise in luxury units as they are now forced to stop new developments and clear their existing inventory of completed projects. This scenario is already apparent since the beginning of last year as we saw lesser property launches. The number of new launches has dipped by 19% against 2014 as the market softens. They can expect to continue experiencing a slow run at least until infrastructure projects like MRT and LRT are fully functional. Analysts are expecting the market to slowly gain

pace by the end of the year, with some predicting it to be active again after July 2016 and regain full balance by 2020. As far as the commercial sector is concerned, records point to an overhang of 15% in volume and 50% in value due to reduced business activities to compensate for possible losses during a bad economy. The sharp depreciation of Ringgit coupled with weak economic sentiment resulted in numerous businesses cutting cost hence the cautious sentiment behind this sector. RESIDENTIAL FLOAT What home buyers are looking for are houses that are comfortably laid out (doesn’t translate to spacious) between the range of RM250,000 - RM400,000 at a location that is connected by simple infrastructures. With today’s economy, RM500,000 is deemed affordable, or at least that is what the working middle income group - who make up the bulk of home purchasers - are forced to think while their salaries tend to suit properties priced below RM350,0000. According to the NAPIC report however, strong demand for residential properties below RM500,000 is steady and expected to sustain throughout the year. Deputy Finance Minister Datuk Chua Tee Yong says 80% of property transactions in 2015 were for homes below RM500,000 and we expect more demands for such properties.” Knight Frank Asia Pacific research head Nicholas Holt echoes this sentiment. “Affordability is becoming a key word to end users. Luxury units especially those in Klang Valley and Johor are experiencing a dip in sales. Developments in the pipeline need to make adjustments to focus on affordable condominiums and landed properties below RM500,000,” says Holt. Interestingly enough, Kenanga Investment Bank Bhd head of equity research Sarah Lim, in a recent forum says there is mismatch of supply for residential properties and only 35% of upcoming properties cater to middle income group even when the demand for it is strong. Affordable development comes with several caveats for home buyers; you either settle for a tight spaced area within your preferred destination or you purchase properties that are located out of the way. C H Williams Talhar & Wong Sdn Bhd www.propertyinsight.com.my JUNE 2016 I 21


MAIN FEATURE (now known as CBRE-WTW) managing director Foo Gee Jen however says that building affordable homes must be within reachable means as its counter intuitive to build homes in faraway places that adds on to the cost and stress of commuting to and fro. Developers have been developing their land banks at second tier areas such as Semenyih (UMLand), Kota Kemuning (Dijaya, IJMLand, Tropicana), Rawang (Mah Sing) and Sungai Buloh (KLK). Homebuyers in search for their dream landed properties to start a family with a medium budget can look into those options nevertheless if commuting is not bothersome. That said, some Malaysians have also kick started an interesting purchase trend where they get their first property at the outskirts and subsequently one that is of closer proximity to the city amid higher income and borrowing capacity. Kelly Ng purchased her first home in Rawang in 2011 and only recently begun searching a property that is closer to the city as her spending power along with the rental pressure of her current property, increases. Based on the NAPIC report, residential rental market generally showed an upward trend, boding well with people like Kelly who wants to rent out existing units in favour of properties of their desires. Affordability of property is an important game plan on the government’s agenda as highlighted in the government 10th Malaysia Plan (2011-2015) and the initiatives are likely to be extended through the 11th Malaysia Plan as well. This is significant piece of good news for affordable home buyers and the government is fully aware of the property market situation. That is why PR1MA was introduced offering homes at 20% below the market rate. Property gurus and investors claim that this is the best time for Malaysians to grab the opportunity of purchasing their first homes as there are several schemes besides PR1MA, like the Youth Housing Scheme and the Rent-to-Own to assist their purchases. Other programmes like the Private Affordable Ownership Housing Scheme (MyHome) and the My First Home Scheme are also intended to ensure the average Malaysians can afford a home. 22 | JUNE 2016 www.propertyinsight.com.my

Each of these schemes come with its own fine prints so homebuyers’ due diligence is important. DEVELOPERS’ DILEMMA It may not be a great year for developers but as mentioned the property overhang has to be addressed moving forward. The value of the overhang largely rests on high-end luxury properties and developers have to approach the market cautiously considering the fluctuation of Ringgit and unpredictable tractions. Selangor and Kuala Lumpur have taken measures to mitigate the 2015 property overhang by halting permits to build luxury units in both states. These actions prevent the mismatch of supply from developers. To sell, developers are forced to be more creative to attract buyers. Promotion packages, which include significant discounts, tend to be the headline grabber for buyers. The reality of slow economy means people are becoming overly cautious in buying properties. Deferred payment schemes have become increasingly popular to counter that. This package allows consumers to claim the remainder of deposit and differential sum through installments between 18 and 24 months from completion of their sale and purchase agreement (SPA). Have you heard of Free Stay @ No Pay campaign byIJM Land Bhd? This one allows buyers to stay for free for up to 12 months upon vacant possession including a zero-interest installment scheme. Sunway Bhd has also come up with creative schemes offering up to 88% financing to homebuyers. For those unable to secure loans from commercial banks can obtain guaranteed loans from Sunway. This is coupled with voluntary exit plan that gives buyers the option to terminate the SPA as if they are facing financial difficulties. Tropicana Corp Bhd’s Just Bid It! campaign allows buyers to put a price tag on properties they are interested in with a celling price set by the developer. As buyers, we want something, which has high market appreciation but everyone is trying to find ways to purchase properties below bank value. The auction scene, once quiet, has turned competitive and often fills up quickly. Developers cannot runaway from this trend, hence they bundle together schemes with heavy discounts

Affordability is becoming a key word to end users. Luxury units especially those in Klang Valley and Johor is experiencing a dip in sales” - Nicholas Holt and price rebates on top of such trends to lure in buyers. Though prices have not fallen, properties are being sold between the range of market value and bank value because buyers either cannot afford or unwilling to purchase anything at market value. COMMERCIAL’S SURVIVABILITY Shopping comes second nature to most Malaysians. With the weakening currency, retail tourism has certainly picked up, especially with the increase in foreigners’ spending power. With existing malls packed every weekend, new malls are also sprouting everywhere and the NAPIC report states an improvement of 0.4% in this sector. Foo, however, warned older neighborhood mall might witness a slight dip this year although the retail sector is slated to maintain its high occupancy rate. The outlook for retail remains in the hands of shoppers and tourism. In a nutshell, a lot of expectations are being put into the second half of the year. Most experts including the Finance Ministry are expecting a steady recovery of the economy towards year end. We believe the property sector’s market activity will remain moderately active and stable in certain key areas like affordable housing. The weak Ringgit although may not sound sexy has had some positive impact on the retail and industrial sector growth with investors finding fruitful investment opportunities here. How the market absorb the property overhang this year would set a direction for upcoming years in terms of new launches and pricing index.


FEATURE

IMPROVING YOUR BORROWING POWER

What you should and should not be doing BY: FARA PETIAL

www.propertyinsight.com.my JUNE 2016 I 23


FEATURE

A

lthough there are numerous reports that home buyers are facing a tough time in getting their housing loans approved with the current economic outlook, securing loans are still very much possible although the journey may be rough and tricky. The number of transactions has taken a dip, no doubt, but the market is not facing a fatal crash. We may wonder how people are able to get around it but our borrowing power from the banks actually just depends on our credit report and Debt Servicing Ratio (DSR). Bank Negara Malaysia (BNM) keeps a computerised database of credit reports which contains credit scores of individuals. This database system is known as the Central Credit Reference Information System or CCRIS. The CCRIS receives credit dates from various financial institutions (FIs) and generates individual credit reports, which are made available to financial institutions, individuals and even companies upon request. CCRIS contains your information on all outstanding credit, excluding accounts that have been fully settled. There is a special attention account, for the nonperforming loans, loans that are in default or close to being in default. The tricky part is our applications for credit – which have been approved over the span of one year –

24 | JUNE 2016 www.propertyinsight.com.my

are also recorded in the report and banks do take note of them. CREDIT HISTORY Financial institutions refer to your credit report to determine your repayment capabilities before approving a loan application – regardless of how good of a paymaster are you. However, before the bank accesses your credit report, it will inform you in writing that a credit check is to be conducted. Once the application has been approved, the bank will send information to the Credit Bureau on how well we have handled our debts. Banks make periodical reference to this credit report to get updates on existing borrowers. The information stored in CCRIS also includes any new loan applications. Hence, it is safe to say that your banks are fully aware of how many FIs you have already approached prior to applying with them. This may not affect your credit rating, but may send a negative signal to some banks. Licensed Financial Planner of VKA Wealth Planners Sdn Bhd, Kevin K.M. Neoh says financial institutions will look into the credibility of borrowers regardless of the types of loan they are applying. Based on his inputs, banks examine a borrower’s capabilities based on: • Credit History (Character) – It tells the

FIs about your repayment behaviours Cash flow (Capacity) – Stability of savings or other income source • Collateral – For a mortgage, the property will be charged to the banks so in event of default, banks can liquidate the asset to cover up for their losses. The following factors may contribute towards a long review or rejections of loans. • Properties are located close to a landslide or flood prone area, oxidation pond or power station • Properties face high tension wires, major highways and T-junctions • Located near graveyard or any negative factors that would affect the value of the property. • Status of land such as native land, Malay Reserve Land, agriculture, industrial, forest reserve, land with restriction to transfer to non-Bumis or non-Malays or Bumi lots. • Lease duration for Leasehold Properties – FIs need to see a minimum of 30 years (for instance) of unexpired lease at maturity of loan so the property still has a value if it needs to be auctioned off. • Properties without title • Conditions – Duration and terms, repayment capabilities of the loan. Apart from CCRIS, banks will also refer •


to the Credit Tip-Off System (CTOS) to check credit history and payment records and this table provides an overview of the two credit information system.

CCRIS CTOS CCRIS reports will only show records for the most recent 12 months and contains 3 major transaction categories:

CTOS records are kept for an indefinite period. Information in your CTOS record that can affect your loan approval include:

• Outstanding Loans Includes outstanding amount, limits, payment behaviour and any legal status • Special Attention Accounts Highlights specific accounts for NonPerforming Loan (NPL) or ‘Special Debt Management Schedules’ • Loan/Credit Facility Applications Records all loans approved or rejected

• • • •

Bankruptcy information Legal actions taken or pending Defaulted on loan as a guarantor to another Unpaid bills for any subscription or services Records can be submitted by private companies like utilities & Telco

What you should check:

What you should avoid: • Missed or late repayments • Having multiple active loans or credit applications • Using high credit limits on credit cards or overdrafts – indicates poor financial management *You can print out your CCRIS for free at kiosks available at Bank Negara branches or send in a request form

• All personal information is accurate • All records are up to date and correct • That there is no legal action taken against you • Business information and interests are accurately recorded • If there are any legal actions or outstanding payment recorded against you that has been settled but not updated, inform CTOS immediately to change your status *Request a report from CTOS directly (a minimum charge may apply)

Source : Loanstreet

IMPROVING YOUR BORROWING POWER Borrower’s DSR and risk profile are weighted more heavily compared to their property valuation and maximum LTV that’s available to them. An individual’s DSR shows a bank his financial ability to pay his debts and calculates how much of a person’s income is used to pay all debt instalments, represented in %: www.propertyinsight.com.my JUNE 2016 I 25


FEATURE PURCHASE OF RESIDENTIAL Year

Loan Application

Loan Approval

% Change Loan Approval

% Change Loan Approval

Ratio Approval/ Application (%)

2011

186,790.70

95,161.82

12.2

13

50.9

2012

193,743.44

92,834.05

3.7

-2.4

47.9

2013

245,903.78

121,000.60

26.9

30.3

49.2

2014

228,944.37

121,091.53

-6.9

0.1

52.9

2015

206,031.79

103,412.12

-10.0

-14.6

50.2

Source : Bank Negara Malaysia

High debt repayments in comparison to your nett income, will result in a higher DSR – this implies to the bank that you may be borrowing beyond what you can afford and are at high risk of defaulting on your loan. A healthy DSR rate is around 30% of your nett income. However, banks do allow on average between 70-80% DSR. To lower DSR, borrowers need to reduce their total debt or increase their nett income. On top of having a low DSR, banks will also scrutinise your credit history to assess your risk profile and do a background check on your past and existing debt repayments. So it becomes extremely important for borrowers to maintain a good credit history – meaning they need to have a good record of managing their debts and expenses including things like PTPTN loans, credit cards and other personal bills In other words, poor credit ratings are not necessarily because borrowers have insufficient cash but rather because their loans were taken unnecessarily. “You are using your future money, therefore, when you receive the money in future, you have to pay back to what we have ‘advanced’ today. We may not be aware of how much we have advanced and when they are suddenly stacked up, it may be difficult to service these borrowings,” says Neoh adding that this is when people start having misses in their CCRIS. It does not make sense for borrowers to try hard and maintain their savings when they have outstanding payments to make although it is understandable that their actions are driven by the idea to feel ‘financially secured’ but when outstanding payments continue to accumulate or recur every month, the said ‘financial security’ doesn’t help in setting the credit records 26 | JUNE 2016 www.propertyinsight.com.my

straight. The idea of trying to scrape through with that minimal income doesn’t make the money in hand readily disposable and it is a common mistake that most people make without realising the depth of the debt hole they are actually digging. Finance consultant and former banker Miichael Yeoh says the younger generation below are already being blacklisted and facing bankruptcy before they hit 30. “You must remember that when you’ve used your credit card, you cannot simply pay the minimum. Let’s say if you’ve used RM10,000 and you only pay 5% (minimum), you have actually overused your credit and have not serviced it accordingly so banks will wonder about your repayment skills,” says Yeoh Apparently the profession you are in is also taken into consideration to learn the risks of lending. Banks, for example are cautious about the oil and gas industry as it remains vulnerable. “If you get fired, how would you serve the loan and if you work in a factory with machines, that is actually considered a high risk business with occupational hazards. I had a former client who was making really good money but banks were continuously rejecting his applications because the nature of his job is dangerous,” says Yeoh adding that banks put such policies in place to avoid bigger problems like subprime issues that the US is currently facing. He advises consumers to fully disclose all information on their financial positions when applying for loan. In conducting affordability assessments, commercial banks take into account the applicant’s income after statutory deductions, expenditure on necessities and all existing

debt obligations from banks and other lenders. Self-employed applicants need to show proof of savings and regular income source. PRIORITISING NEEDS In order to improve our credit ratings and borrowing power, we should firstly start with our own financial management. While individuals have the liberty to decide how, what and where they would want to spend their money on, a little change and perhaps some amount of sacrifices can be made to control our spending habits. Instead of spending on improving our lifestyle – based on whatever standards we deem fit – its crucial for us the Gen-Ys to have a long term goal and achieve them as early, in life, as possible. You will have set the priority - whether its buying a house for your own stay or even for investment purposes - but at the end, most people would just want to enjoy financial freedom, without worrying about answering calls for outstanding payment or putting in paper works for loans that matter. As suggested by experts, the root cause of our loan application failures lies in our ignorance to recognise the need to manage our cash flows and our spending habits. We are only seeking a restless life when we do not manage our credit reports and have more debts than what we can actually afford. Matters are made worse when we fail to become good paymasters. All we are doing is affecting our borrowing power further which prevents us from attaining our life goals and jeopardising a lot of crucial things – like career, relationships, social standing, responsibilities and selfactualisation – along the way.


FEATURE

AFFORDABLE HOUSING : A CASE STUDY

Until now, policies have focused on managing house prices once the consumer receives the house at the end of the production process. This includes increasing access to finance or subsidising supply that are highly-priced BY: NATASHA GIDEON

M

alaysia takes a common, targeted approach when it comes to affordable housing, where the demographic points towards the lower income segment of the society whom are excluded from the housing market system due to a lack buying power. Many countries combine rental and ownership schemes depending on the specific

demographic (profile and income level) it targets. We have a population of 30.1 million, of which 41% are between 25 and 54 and with growth of mortgage as a significant contributor to Malaysian GDP; 36% in 2015. Amongst the affordable housing schemes laid out by the Malaysian government are the My First Home Scheme (2011),

Perumahan Rakyat 1 Malaysia (PR1MA) and My Home Scheme (2014). The 1976 lending guidelines set by Bank Negara Malaysia mandated lending to priority sectors including affordable housing. It was aimed at increasing the access to credit for affordable housing. It was also meant to provide subsidised access to such credit. The maximum margin of www.propertyinsight.com.my JUNE 2016 I 27


FEATURE MALAYSIA

THAILAND

INDIA

DUBAI

Source : MFE

1.75% above (Base Lending Rate) BLR and maximum profit rate of 9% were imposed for houses costing not more than RM100,000 in Peninsula Malaysia and RM120,000 in Sabah and Sarawak. Other guidelines recently introduced is the loanto-value (LTV) ratio of 70% for the third house purchased; lowering of maximum tenure; and having all banks fix their loanto-value ratio based on the net selling price rather than gross selling price. As the population grows, the demand for affordable housing is said to grow as well. Nora Tahir, Chief Financial Officer of Cagamas believes the size of households however, is getting smaller. A report in the 7th Annual Affordable Housing Projects Conference states there was an average of 5.5 people per household or 182 households for every 1,000 people. By 2020 the forecast shows 4 people, or 28 | JUNE 2016 www.propertyinsight.com.my

250 households for every 1,000 people. The number of households is therefore increasing at a faster rate than the growth of the population that pushes the demand for affordable houses. In another report, Dr. Suraya Ismail, Director of Research in Khazanah Research Institute states that in status quo, the median price for the Malaysian housing market exceeds the median annual household income threshold by three folds, making homes less affordable for Malaysians. In addition, not all states have affordable housing projects whereas areas like Penang and Klang Valley are facing a shortage. A case study done by Khazanah in the Philippines (8990 Holdings) demonstrates that building houses for low-income households can be profitable regardless of the location. The issue needs to be

addressed by not demanding for ‘houses’ but a living territory or a habitat. The difference is simple. If we are building houses as a ‘product of the building industry’, then regulations on land or the provision of public amenities are secondary in ensuring fitness for occupation. A habitat on the other hand, ensures an expansive connectivity of networks within its node; comprising physical (power, water and sanitation, roads), economic (urban transport, labour markets, distribution and retail) and social (education, health, security, family and friends). The ability to connect all of these networks makes a habitat valuable. INDIA The Indian economy witnessed a gradual deceleration in its economic growth between 2008 and 2009. This led to some


serious funding problems for real estate developers as traditional banking channels became more cautious in providing credit and consumer demand witnessed a slump due to the uncertain economic environment. The key drivers for demand and supply for affordable housing in India were urbanisation, rising income levels, availability of land and more importantly financial and regulatory support. National Housing Bank (NHB) was set up in July 9, 1988 under the National Housing Bank Act, 1987 to operate as a principal agency that promotes housing finance and other support to financial institutions. India has since introduced a few central level schemes such as Integrated Housing and Slum Development Programme, as well as External Commercial Borrowing (ECB) for affordable and low-cost housing. ECB itself was introduced to ensure a lower cost of borrowing for the segment According to Monitor Inclusive Markets, the loan market of INR 3-10 lakhs (RM20kRM60k) is worth almost 1.1 million crores (over RM600 million). However, the majority of housing loans disbursed by Housing Finance Companies (HFCs) are to mid-income and high-income groups when nearly 70% of workers in urban areas come from unorganised sector – where they get paid daily and lack necessary documents – causing a mismatch in the industry. DUBAI Dubai has seen a surge in the affordable housing market because of the changing needs of property buyers and Dubai Properties Group chief executive officer Abdullatif AlMulla assures that financial institutions never say no to borrowers who adhere to the mortgage rules of the UAE Central Bank. Their definition of affordable houses doesn’t seem to match the definition of elsewhere, including Malaysia, with some affordable homes in Dubai looking like holiday villas. The lower or mid income segment of Dubai represents 37% of the household population in 2015. For banks to sanction a loan, borrowers need to earn a minimum salary of Dh16,250 (RM 18,000) without any other bank borrowings at all, which obviously doesn’t match the lower income salary bracket. Affordable houses are ranged anywhere between RM550,000

Agency/Ministry PR1MA

Affordable Housing Schemes in Malaysia

Allocation RM1.6 bil

175,000 houses Sold 20% below market price Expected completion 2016: 10,000

SPNB

10,000 units Rumah Mesra Rakyat

RM0.2 bil

Subsidy RM20,000 on each unit PPA1M

100,000 units by 2018 Priced between RM90,000 – RM300,000

2014

GLC

People’s Housing Programme (PPR) 22,300 apartments 9,800 terrace houses EPF to build 800 units

Facilitation fund up to 25% of development cost

RM0.863 bil

Not stated

Sime Darby to build 4,600 units Source : NAPIC 2015

and RM900,000 there. Experts there say the market is not providing enough quality units at those prices leaving, a serious gap in demands. Although the government has been trying to innovative schemes like flexible payment plans, takers are still low among the lower income group as the loans demand a high deposit (of up to 25%) THAILAND According to the latest 2010 Population and Housing Census, 12% of Thai households live in rental units which plays a more important role in Greater Bangkok (about 37% of housing). Most financial institutions in Thailand provide loans for construction rental apartments. Currently, more than 8,000 landlords nationwide have developed rental apartments using bank development loans. A report by Ballobh Kritayanavaj, Senior Vice President at Government Housing Bank in the Asia Pacific Housing Journal explains that housing finance in Thailand are readily available, accessible and affordable to nearly all income groups with low mortgage-interest rates. These residential mortgages have been growing steadily and the total mortgage loans stood at Bt2 trillion (almost RM300 billion) or about 20% of GDP in 2010, an increase by 17% compared to 2005. Their Government Housing Bank plays an important role in providing affordable home loans to low and middle income groups and there is a healthy competition

among all commercial banks in providing home loans. Long-term low interest rate mortgage home loans are relatively easy to obtain and allow a broad range of urban households to purchase houses. The secret of Thailand’s successful middle and low income housing delivery has been the decades of synergies established through the close collaboration of agencies like the Government Housing Bank, National Housing Authority, and Community Organisation Development Institute, to create a vibrant market there. With the demand for affordable homes rising – particularly with the softening of the economy that impacts the property market – the government has been looking at ways to provide quality affordable housing to Malaysians. The development rate however seems to suffer a slow progress, including the effort of reviving abandoned housing projects and turning them around into affordable homes. There is still a gap in integrating publicprivate partnerships to have more private developers on board for affordable housing project implementations. It would take time for the government to create a database of needs to correlate demands based on buyers’ terrain, locations and costs but when the system is in place, financial institutions too, will have to look at ways to ease the burden for home buyers, particularly for the low and mid-income consumers.

www.propertyinsight.com.my JUNE 2016 I 29


FEATURE

30 | JUNE 2016 www.propertyinsight.com.my


LOW-RISK LANDLORDS:

A GUIDE TO AVOIDING TENANTS FROM HELL Empty unrented units are better than bad tenants, as they may cause bigger losses BY: NATASHA GIDEON

L

ike any company or businesses, the lower the turnover, the better your investment. Being a landlord comes with many variables in terms of the risks they take because they deal with different types of tenants. Following last month’s issue on horrible tenants, we at Property Insight have put together a guide to help landlords avoid sticky situations with tenants. There are two stakeholders that need to be assessed through this process, the tenant and the landlord. To handle your properties, hire an esteemed agent, from a reputable firm. Do a background check on the said agent via his or her REN number through the registrant search at the Board of Valuers, Appraisers and Estate Agents Malaysia (BOVEA) website. This helps to confirm the legitimacy of your agent. A good agent is responsive and is willing to do whatever it takes before saying ‘no’ to

your requests. They will also help filter bad tenants as they are used to screening such personalities via personal enquiries. “Prospective tenants would be open to agents verifying their student passes, passport details, employment pass details and so on. They would also not ask inappropriate questions like a price that is ridiculously below market value, if anyone else were to accompany the agent and so on,” says investor and consultant Khalil Adis. Ensure that tenants settle all possible payments before moving in regardless how eager they may seem and how confident they sound when they claim that they have made payment. Remember empty unrented units are better than bad tenants, as the latter can cause bigger losses sometimes. Experts are suggesting an interview with tenants to learn about the jobs and credit commitments before www.propertyinsight.com.my JUNE 2016 I 31


FEATURE

A good landlord will always put themselves in the shoes of a tenant to better understand their needs so as to be able to rent out their homes quickly. For example, a wellmaintained property readily attracts tenants and increases the valuation report of your property” - Khalil Adis

accepting them instead of passing the responsibility over the agents. There have been instances when unassuming tenants have rented homes and used them to manufacture hand grenades or use it as headquarters to make and distribute drugs. Anything can happen in your home when its in the hands of others so landlords may want to do background checks via social media, company or credit references. Sure, it’s a little tedious but at least you would be able to minimise possible problems. “Get to the nitty-gritty details as well, like checking their Central Credit Reference Information System (CCRIS) and CTOS (Malaysia’s leading Credit Reporting Agency) records to ensure you are renting out to good pay masters.” “Once you have established that (nittygritty of tenant’s profile), insist on the full two months’ security deposit and half or full month utility deposit and sign the tenancy agreement before handing over the keys. Do not make the mistake of being lenient because it will hurt you in the end if the tenant ends up not paying,” says Kam Wei Tsung, Author of Start From 0!. Real estate agent, investor and publisher KK Chua has an interesting take on handling tenants - by looking at the cars that they and you drive. He believes that landlords can gauge their tenants by the level of their car’s cleanliness as the upkeep of the very vehicle they use daily should give an indication on how they’d manage their homes. The other school of thought says that the car that landlords drive, will also make an impact and that they should not drive expensive cars when they are collecting the rental 32 | JUNE 2016 www.propertyinsight.com.my

physically. This is to avoid the impression that the landlord is wealthy. Besides conditioning them to believe that you need the money, you also have to be stern and serious about timely payments by reminding tenants on due dates and pushing them to make payment within the first week of every month. Kam suggests giving discounts to good paymasters to encourage and appreciate their initiatives. There are also several steps to attract good tenants and one of them is to ensure a good upkeep of the property. A well-maintained property, says Khalil, readily attracts tenants and increases the valuation report of your property while a gaudy interior may be harder to sell as different people have different tastes. Its best for landlords to use neutral colours and make simple renovations before renting the property out. To sweeten the deal, you might want to include amenities like water heater, washing machines, ovens, microwave and Wi-Fi like some home owners do now. Another investor and landlord, Davis Wong advises landlords to treat their property investments as a business to avoid any form of sentiments. “You can spot signs of trouble when tenants delay rental payments consistently and give your excuses that begs for your pity like ‘my mother is ill’, ‘my wife is pregnant’ or ‘my father passed away’. Again it boils down to treating this professionally. If excuses or situations like these persist, then treat it legally,” says Wong adding that it is equally important to forge a healthy and open relationship with tenants so both parties remain transparent. Another landlord S. Superamaniam

warns against renting properties to selfemployed businessmen or students without performing background checks on them. The checks he meant include their job nature if they claim to be doing their own business and family backgrounds and contact numbers if they are students. Once you have moved pass the phase of interrogation and you have found suitable tenants, ensure you do a proper inspection of the property you are about to rent out to them. Like anyone would do when renting a car for instance, take pictures of the vicinity as proof of the state of the property to make it easier for both parties. As landlords, it is also important to be as swift with follow ups as you would want to receive payments from your tenants. Be efficient in attending to any problems tenants have complained about. Maintenance of your property is also something that is beneficial to you as a landlord. In a nutshell, landlords can: • Hire an agent • Do background check on agent • Do background check on tenants • Interview tenants on your own • Check the cleanliness of their cars • Collect 2 months’ security & one-month utility deposit beforehand • Sign tenancy agreement before handing over keys • Check on them once in a while • Treat tenants professionally • Take delays in rents seriously • Be firm on rental collection dates


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34 | JUNE 2016 www.propertyinsight.com.my


A

sia Green Group added yet another feather to its cap when it was named the Outstanding Developer for Northern region at the recent Property Insight Prestigious Developer Awards 2016. The Managing Director of the group, Tan Boon Huat says the award is not only a recognition for all the great efforts put in by his team over the past 13 years but also serves as a motivation for them to strive harder and continue delivering best designs with high quality homes to their buyers. Tan records his appreciation and gratitude to his team and supporters for believing in Asia Green Group to carry on the legacy of being an authentic boutique developer in Penang.

QuayWest night view

THE JOURNEY Asia Green Group started with a manufacturing company known as Asia Plywood Company in 1964. With a strong background in the Plywood industry, the company was able to support the establishment of their Asia Green Property Development arm. According to Tan, the group has been in the property development field for about 13 years now and has successfully completed several signature projects. “At Asia Green Group, we are always looking for new innovations and creative designs to reconnect with nature through carefully designed landscapes and green touches for all of our projects. We stay true to our values and innovation by creating lifestyle that people look forward to live in. We don’t just develop

great quality homes but we create homes that could be passed down for generations.” In any journey that one takes, there will be challenges that serve as barriers to success. It is the same for Asia Green Group. Tan’s first challenge was to transform the image of Asia Green Group from a conventional plywood manufacturer and developer to an in-trend property developer. How did they do it? “We overcame this by allowing new ideas from our young and energetic team to flourish. We combined the best of both worlds – traditional and modern approaches – to make this concept work, Tan explains. “My philosophy is simple. Everything in life is achievable so long you set your mind to it. Once you put your heart into it, you will work hard to achieve it. There is a solution to every problem so don’t give up easily and always seek creative ways to come up with solutions.” PROPERTY DEVELOPMENTS Other than exclusive resort villas, Asia Green Group is also developing medium-cost housing for the people. Although there is a big gap between the two types of property, Asia Green Group develops them with the same standard and delivers them with the same quality. “We don’t neglect quality when developing the medium-cost housing or the exclusive resort villas. The high standard requirement of our affluent purchasers – from earlier villas and bungalows projects – are instilled into our condominium projects as well. The sense of belonging is felt throughout our projects. The only difference would be in terms of space planning and layout design,

BUILDING YOUR FUTURE HOME Healthy, green and luxurious lifestyle built in one place BY: FARA PETIAL

www.propertyinsight.com.my JUNE 2016 I 35


DEVELOPER OF THE MONTH direct access to their own units. We came up with innovative solutions to expedite the process of construction.” “We also took extra care to ensure that our buyers were able to move into their new homes without any hassle or stress. Our green facilities and features are always given a priority as we stay true to our theme of reconnecting people with nature,” says Mei Tan.

From left : Director, Mei Tan and Managing Director of Asia Green Group, Tan Boon Huat

as we will have to look into the usage and the needs from the market,” describes Tan. The Director of Asia Green Group, Mei Tan explains that their eye for details cannot be matched by other competitors. “We use design thinking to understand

our market and audiences’ needs and wants. Only then we create designs to fit their concerns.” “Take The Clovers project for example. We understood that privacy and convenient is the main concern so we designed two private lifts that provides

QUAYWEST RESIDENCE One of Asia Green Group’s latest development is the QuayWest Residence at Persiaran Bayan Indah, Queensbay. The project is now open for preview and carries the ‘ver la excelente’ tagline which means to ‘see excellence’ in Spanish. When asked about the unique selling propositions of QuayWest Residence, Mei Tan was quick to point out the location of the development. “QuayWest Residence is perfect for that relaxing sea view but at the same time, it is strategically located in a booming area that’s connectable via the iconic Penang bridges, providing easy access to Queensbay Mall, the Industrial zone

QuayWest - Sea view

36 | JUNE 2016 www.propertyinsight.com.my


We are facing a soft market, not a ‘dead’ market so there is still a growing interest in property purchase but we have to be innovative in designing a simple yet functional lifestyle homes” -Tan Boon Huat

and the Penang airport. Surrounding development plans would turn this into a Great Township on its own,” says Mei Tan adding that the development also offers great design and value for money. “We have designed an Olympic size rooftop infinity pool with 180 degrees panoramic sea view, Jerejak Island and the 2 bridges. Full facilities and green touches are in all corners of the projects, along with two private lifts that send our home owners directly to their units.” “The most important criteria for property investment is the return on the investment. QuayWest opens up opportunities for purchasers to buy at the right price and enjoy the appreciation in value, later. With such facilities and features, this project has tremendous growth opportunities and is worth every investing sen,” remarks Mei Tan. THE CLOVERS Other than QuayWest Residence, The Clovers is also one of the Group’s most recently launched development. Mei Tan describes The Clovers as an iconic architecture and design inspired by the rare four-leaf clover. It serves as an auspicious sign, especially to the families of The Clovers, as it signifies a sanctuary that represents showers of good fortune,

Front Drop-off @ The Clovers

Poolside Gym @ The Clovers

abundance of love and bountiful hope symbolised by its leaves and homes. Located at Sungai Ara, The Clovers benefits buyers in many ways including through its short distance to the Penang International airport and the Industrial zone. Mei Tan defines the project as a great place for family living and business travellers. “We have two private lifts, three swimming pools, the first jungle trekking on podium, green wall features and many more facilities that are usually available at luxury condominiums around Kuala Lumpur. Our customers get all these and more at The Clovers, at a very a reasonable and affordable price, so that they can enjoy a luxurious lifestyle with minimal commitment.

“Every unit is a corner unit with views of their choice. There is a proper main entrance as well as a back entrance that leads to the common elevators. Residents will arrive at a proper private entrance with spacious foyer, ideal for shoes and bicycle cabinets.” “Setting itself apart from other condominium designs, where residents are met with the view of the kitchen upon entering the condo, residents of The Clovers are treated by the view of a spacious living hall,” reckons Mei Tan. Staying true to the company’s mission to reconnect people with nature, The Clovers is built with green initiatives that are evident in the designer landscapes and green touches that abundantly envelope the entire development. www.propertyinsight.com.my JUNE 2016 I 37


DEVELOPER OF THE MONTH THE CLOVERS’ GREEN INITIATIVES: • Asia Green Group has allocated a budget of RM4.5m for landscaping and greening initiatives including for the imported trees from Thailand. • The 26.2m width x 13.8m height of Vertical Green Wall is built as an entrance statement. Outdoor facilities are provided to enhance family living space. • Best attribute of living in The Clovers is the unparalleled nature which is seamlessly integrated into the whole project, with the distinct highlight being a lush 14,000sqft Jungle Trek that forges a path of serene tranquillity through leafy surroundings. Within the trek, there are dedicated areas for picnic, meditation, and yoga that enhances the healthy and natural lifestyle habits. Not only will it be your personal haven to relax at your pace, it will be the perfect retreat for the whole family. PENANG PROPERTY MARKET Answering the question of how different is it being a developer in Penang and the Klang Valley, Tan says, “Penang is a small city unlike Kuala Lumpur. It has its advantages as planning is more concise and focused since the projects are smaller in size. The demands and requirements in Penang are different from KL. We are able to plan more quality lifestyle projects that focus family and comfortable living than offices or SoHos.” “We are facing a soft market, not a ‘dead’ market so there is still a growing interest in property purchase but we have to be innovative in designing a simple yet functional lifestyle homes. Gone are the days where purchasers of luxury homes flock the market. There are more developers in the market now, so we really need to understand the needs before embarking on a project.” “Penang still has its colonial charm and greenery. Investors are still flocking to Penang to invest in its manufacturing and property sectors. The State government has done its part in promoting the tourism, 38 | JUNE 2016 www.propertyinsight.com.my

industrial, manufacturing and property industries to foreign investors. Penang also has high payable infrastructure projects in the pipeline to help it standout as a vibrant and well connected city,” adds Tan EMBRACING 2016 Tan’s business motto is very simple. He aspires to see his developments turn into iconic landmarks. “I intend to leave a lasting legacy of Asia Green Group for generations to come. For the remaining of 2016, we need to target the right audiences for our projects. We will also be venturing out of the state and overseas to attract the right crowd to Penang and our projects. We are coming up with new membership packages for purchasers to meet their financial needs.” “We are looking forward to launching our QuayWest Residence once we obtain our APDL and The Clovers will be completed by the end of this year. You will see more of us in the KL and overseas market from now.” Asia Green Group will also be focusing on development projects at the Bayan Lepas area with mixed developments and residential units to be built at Penang

World City, next to Queensbay Mall and Batu Uban.

TIPS FOR PROPERTY INVESTORS: • Location – It is still the most important factor in property investment. Buy in an area that has an active market. Active market tends to see appreciation in prices more rapidly. • Developers’ reputation – It is very important to buy from a reputable developer as one would not want to face pesky problems like defects after obtaining their Vacant Possession (VP). • Infrastructure in the pipeline – Buy in an area where new connectivity for example LRT lines, new roads and new township will be in place. When these roads are still in the pipeline, property prices tend to be cheaper but when these projects are completed, prices will skyrocket.


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AREA FOCUS

BUKIT BINTANG

- A GOLDEN INVESTMENT

Home to the glitz and glamour scenes of Kuala Lumpur and a must-see location for tourists, Bukit Bintang is a super hotspot in every aspect BY: NATASHA GIDEON

40 | JUNE

2016 www.propertyinsight.com.my


B

ukit Bintang is not an unfamiliar name in the property market, neither is it unfamiliar in any industry. From food and entertainment to commercial businesses, you name it, Starhill has it. Home to the glitz and glamour scenes of Kuala Lumpur and a must-see location for tourists, Bukit Bintang is a super hotspot in every aspect. Its centralised location makes it accessible from and to various locations. One can access the Golden Triangle of Kuala Lumpur via the SMART tunnel to get to the Kuala Lumpur-Seremban Highway or the East-West Link Expressway that links Bukit Bintang to areas like Seputeh and Cheras. Other highways like the Maju Expressway (MEX) gets you towards Bukit Jalil and Putrajaya while the turnoffs towards the Kuala Lumpur City Centre provides access to Ampang, Ulu Klang and the other locations in the east of the capital. ACCESSIBILITY Easy access to property and development has now become a prerequisite when investing, and Bukit Bintang has all that and more in store for current and future investors and homeowners. The Klang Valley MRT (KVMRT) Line 1 is coming up, connecting it via Bukit Bintang Station and the Tun Razak Exchange (TRX) station. This underground alignment of the Sungai

Bukit Bintang will always be a sought after area as it is a favoured tourist spot. Any investments in this area catering to the needs of tourists will fare positively” - Susie Tiong Buloh-Kajang line help commuters travel from the first underground MRT station at KL Sentral to the last underground MRT station at Maluri within 16 minutes. The current transportation mode within the area is the KL Monorail which takes you from the Titiwangsa Station to KL Sentral. Built within the city centre and a major tourist hotspot, the KLCC-Pavilion walkway poses as an easy, cooler and efficient way to get around. The bridge links the Kuala Lumpur City Centre (KLCC) and Bukit Bintang: two major retail and tourism spots with just a 15 to 20-minute walk across the five-metre wide, air-conditioned bridge. NIGHTLIFE The nightlife in Bukit Bintang has also intensified over the past few years with new

clubs and bars opening up every now and then, prompting new developments and lodging services such as AirBnB to sprout in the area. Besides hotels, many investors have also made the effort to practice daily rentals in the area. An Airbnb operator Ridzuan vouches for this progress as he admits to an increased number of enquiries. “We just started off this month. Progress is slow but we have been receiving numerous enquiries. I am positive that there is great potential but all Airbnb hosts are up for a tough competition, in terms of pricing. Many enquiries are from business travelers and vacationers from Singapore and Indonesia but we also have Australians who’ve booked our premise. I believe this is good business considering the location. We

www.propertyinsight.com.my JUNE 2016 I 41


AREA FOCUS are of walking distance from Bukit Bintang and the night life in Jalan Raja Chulan,” says Ridzuan. Changkat in Bukit Bintang is one of the more popular night attractions for tourists and locals alike. The happening stretch of bars and clubs are constantly filled with party-goers or executives from nearby offices after working hours. Many opt to invest in serviced residences like Invito Bukit Bintang or One Residency due to the influx of tourists. SHOPPERS’ PARADISE Bukit Bintang is known as Kuala Lumpur’s shopping district with prominent shopping malls in the vicinity, making shopping scene there similar to that of walking in Oxford Circus, London with seamless rows of entertainment, culture and nightlife. Among the prominent shopping malls located here are Pavilion, Fahrenheit 88, Starhill Gallery, Lot 10 and Low Yat Plaza just to name a few. BUKIT BINTANG CITY CENTRE Bukit Bintang also continues to flourish with the proposed multi-billion Ringgit Bukit Bintang City Centre (BBCC), an upcoming project by BBCC Development Sdn Bhd, whom have recently signed a head of terms

42 | JUNE

2016 www.propertyinsight.com.my

In the long run, Bukit Bintang will always be a sought after area as it is a favoured tourist spot. Any investments in this area catering to the needs of tourists will fare positively”

- Susie Tiong


agreements with Mitsui Fudosan (Asia) Pte Ltd and Zepp Hall Network Inc, and a Memorandum of Understanding with The Ascott Ltd. Eco World Development, which is part of the joint venture (JV)believes that with an estimated gross development cost (GDC) of RM1.6bil, the mall will redefine shopping. “The mall is set to cater to all shopping needs with the introduction of popular home grown and new-to-market international brands.” The other JV partners of BBCC that will help develop the 19.4 acres of land into a mixed residential and commercial development include UDA Holdings Bhd and the Employees Provident Fund (EPF).” HOTELS, SERVICED SUITES AND RESIDENCES Quite a number of hotels and serviced residences make up a large percentage of properties here thanks to the big number of tourists Bukit Bintang receives. There are not many residential properties around Bukit Bintang. The place is however, home to many high end hotels such as Furama, PARKROYAL, Grand Millennium, and The Royal Bintang that enjoy a brisk business

RECENT TRANSACTED PRICE OF HIGH-RISE RESIDENTIAL PROPERTIES IN BUKIT BINTANG Developments

Location

Built Up

Price (RM psf)

Jalan Bukit Bintang

1,230 - 2,400

1,500 - 1,800

Setia Sky residences

Jalan Tun Razak

1260 - 1600

700 - 1000

Verticas Residences

Jalan Ceylon

1430

1160 - 1180

Jalan Munshi Abdullah

1345 - 2640

610 -700

The Pavilion Residences

The Capsquare Residences Source : JLL Property Services

RECENT TRANSACTED PRICE OF COMMERCIAL PROPERTIES IN BUKIT BINTANG Types

Year

Developments

Location

Office

Pending

Dijaya Plaza

Jalan Tun Razak

Office

2016

AmBank Group Leadership Centre

Jalan Puncak

Office

2015

Menara ING (17 floors)

Jalan Raja Chulan

Hotel

Pending

Sky Express Hotel

Jalan Pudu

Hotel

2011

Ritz Garden

Jalan 2/78g Lorong Kapa

Hotel

2010

Coronade Hotel

Jalan Walter Grenier

Retail

2010

Sungei Wang Plaza

Bukit Bintang

Retail

2010

Starhill Gallery

Jalan Bukit Bintang

Retail

2010

Lot 10

Jalan Sultan Ismail

Source : JLL Property Services

RECENTLY LAUNCHED RESIDENTIAL DEVELOPMENTS Developments

Location

Estimated Completion year

Built up

Launch Price (RM psf)

Jalan Tun Razak

2016

963 - 3101

RM1,400

Jalan Sultan Ismail

2016

1076 - 2195

RM2,000

Jalan Tun Razak

2016

624 - 1260

RM800

The Manhattan Residence (Residen 61 Raja Chulan)

Jalan Raja Chulan

2017

700 - 1,300

RM1,600

Vortex

Jalan Sultan Ismail

2017

731 - 828

RM1500

Dorsett Residences

Jalan Imbi

2017

652 - 1,331

RM2100

The Robertson Residences

Jalan Pudu

2018

540 - 800

RM1200

Jalan Tun Razak

2018

650 - 1400

RM1200

Jalan Bukit Bintang

2018

700 - 1250

RM3,000

Jalan Dewan Sultan Sulaiman

2020

675 - 800

RM1500

KL Trillion Banyan Tree Signature Pavilion KL Setia Sky Residence - Divina

Expressionz Professional Suites Pavilion Suites The Colony by Infinitum Source : JLL Property Services

RECENTLY LAUNCHED RETAIL & OFFICE DEVELOPMENTS Developments

Location

Estimated Completion year

NLA (sq ft)

Retail

Types

BBCC

Jalan Hang Tuah

2021

1.4 mil

Office

Redevelopment of Hotel Equatorial

Jalan Sultan Ismail

2018

470,000

Office

Tradewinds Centre

Jalan Sultan Ismail

2019

1,660,000

Office

Menara YNH

Jalan Sultan Ismail

2020

1,350,000

Office

BBCC

Jalan Hang Tuah

2020

980,000

Source : JLL Property Services

www.propertyinsight.com.my JUNE 2016 I 43


AREA FOCUS from tourists and local and international business travellers even during non-peak periods. Similarly, due to the high number of expats and working-class, there are more serviced residences to cater to that market. Among those are Pavilion Residences, a six-star residence by Urusharta Cemerlang, Banyan Tree Residences, One Residency and Bougainvilla Condomium to name the few. “Some projects can command up to RM3,000 per sq ft. This area is and will continuously be driven by foreign investors as the minimum purchase price in KL stands at RM1 million whereas Selangor, RM2 million. If you can afford it, it is a good idea to look at the resale market as the units are priced at least 20-30% cheaper than new launches,” shares Khalil Adis. One of the properties that offer a mixed development (commercial and residential) is The Robertson which is located at the KL golden triangle within the next city hot spot, Pudu. The Robertson is the first highrise development in KL to have elevated podium with unique 9-hole putting green, 50m infinity pool overlooking the mesmerising city skyline, sky lounge and garden under one roof. Gamuda Land – the developer of The Robertson – says their property is

44 | JUNE

2016 www.propertyinsight.com.my

perfectly located within the hotspot of KL golden triangle that is experiencing a transformation with projects such as Merdeka PNB 118, redevelopment of Bukit Bintang City Centre and the revival of Plaza Rakyat. The property itself is well connected to public transportation, malls, business districts, lifestyle, entertainment and F&B hubs. With the upgrading of the MRT, LRT (light rail transit), Monorail and a proposed development of a high speed rail, Gamuda Land for one is expecting a boom in business and investments. VIGOROUS DEVELOPMENTS On another note, new developments in the area is a definite sign of a healthy business. The upcoming KL118 Tower is a 4.4million sq ft building comprising residential, commercial and hotel space of 118-storeys. It is scheduled for completion in 2019 and aims to be the third tallest building in the world. This driver will soon ensure the longevity and vibrancy of Bukit Bintang’s with non-stop activities. TREC The newly built TREC, located along Jalan Tun Razak , also acts as a premium

attraction spot. Built on 7-acres with breath-taking views of the Royal Selangor Golf Club, it is an entertainment and food and beverage hub endorsed by the Ministry of Tourism and Culture Malaysia as a Designated Entertainment Zone. Under the KL’s Master Tourism Plan 20152025, TREC has the license to operate up to 5am resounding the future of lifestyle developments. Bukit Bintang has caught up with the culture, aptly so. “Given the current loan cutbacks by the bank and general cautious sentiment, investors and developers alike should be creative in their investment proposals for high end properties like Bukit Bintang.” “For instance, instead of a direct sale and purchase of property, they may want to package a high end project as a holiday club that requires lower investment amounts yet provides a reasonable return. The investors can still enjoy capital appreciation if the project is sold off in subsequent years,” says Dato’ Seri Matthew Yeoh Chin Chong, founder and Managing Partner at Yeoh Mazlina and Partners. Susie Tiong, Executive Director, Valuation & Consultancy, Burgess Rawson Malaysia equates Bukit Bintang to the Orchard Road of Singapore, the hub of shopper’s haven “The area is vibrant with tourists from


all over the world as there are both international and home grown brands to cater to all. In addition, the numerous options of accommodations here ranging from 5 star hotels to boutique type and serviced residences and inns are available for the convenience of many well-heeled visitors,” says Tiong. “There are plenty of choices for F&B – from fine dining to hawkers – and the night life is vibrant. Noticeably, the Arabs and Middle Eastern tourists form the bulk of visitors here. The mode of public transport in the form of LRT and the KL Monorail system also provides some relief although

the area itself is slightly “messy” now with the upgrading roadworks and the LRT system.” “In the long run, Bukit Bintang will always be a sought after area as it is a favoured tourist spot. Any investments in this area catering to the needs of tourists will fare positively,” assures Tiong. At one point, Bukit Bintang was just another shopping zone but today it has become an integrated hub of choices, allowing locals and tourists to soak up the advancing colours of Malaysia via topof-mind brands, lifestyle retail outlets, a sizzling F&B range and big hotel names

that call it their home. Amidst the big names and buzz, you can find little food businesses, soup kitchens, household item suppliers, rest and relax zones, fun and entertainments that cater to all ages, seamlessly tucked in between. You can perceive Bukit Bintang as an integrated lifestyle hub that feeds all kinds of needs. In recent years, it has attracted tourists, expatriates and businessmen due its close proximity to the city centre and this trend does not seem like it will cease in the near future, especially with bigger and greater developments in the pipeline. Being one of the most forward and sought after tourist destination, Bukit Bintang has no choice but to advance from what it is now. Play big, win big, all in the heart of Kuala Lumpur.

Scan here for aerial view video of Bukit Bintang

AGENTS SPEAK FAIZ ALI IQI Holdings Sdn Bhd Property investors usually have three vital criteria before they acquire any property. Location, demand, and quality. These three will determine the return of investment in appreciation of value and consistent rental return. As the prominent shopping and entertainment district in KL, Bukit Bintang has it all. New development in Bukit Bintang offers guaranteed rental return package to attract more investors and for subsale market, the demand is higher than the available properties. Transformation into Greater KL, plus the High Speed Train KL-Singapore, will definitely boost economic activities in the future. With the upcoming 118 storey of Menara Warisan, high rise in Bukit Bintang will enjoy the best view in KL districts, KLCC on the right side and Menara Warisan on its left. For subsales I personally prefer One Residency, Six Ceylon, New development: The Robertson, M101 Skywheel, Dorsett Residences.

CY CHONG Deputy Team Leader, ECG Affirm Properties Sdn Bhd Bukit Bintang has long been a very popular tourist hotspot in Kuala Lumpur city centre or rather, a famous shopping and entertainment district. It is also part of what is often referred to as Kuala Lumpur’s Golden Triangle. It is just 2km away from the world famous KL Twin Towers and KLCC shopping mall, as well as Chinatown and beautiful temples. In terms of accessibility, the upcoming Klang Valley Mass Rapid Transit will see one station for Bintang Bintang, which will be a much-welcomed convenience once it is up and running. Many roads lead to Bukit Bintang as it is right in the city and traffic can sometimes be rather high most of the time. The RM8.7 billion Bukit Bintang City Centre (BBCC) project will achieve several key milestones this year as it continues to attract foreign investors. Investors can also look out for Pavillion Residence.

www.propertyinsight.com.my JUNE 2016 I 45


FEATURED PROPERTY

THE ECO

NORTH CHARMS

The picturesque plains of flourish you have been looking for can now be found in the north BY: FARA PETIAL

46 | JUNE 2016 www.propertyinsight.com.my


B

anking on a distinctive tagline of Creating Tomorrow & Beyond, Eco World Development Group Berhad (EW Berhad) ventured into the Northern region with the development of Eco North Projects. The Group presently has approximately 7,443.9 acres of landbank with a total gross development value (GDV) of RM81 billion. Currently, with a strong presence in the Klang Valley, Iskandar Malaysia and Penang, Eco World has an interesting range of 17 projects including affordable, upgrader and luxury homes, integrated high-rise developments and green business parks. THE DISTINCTIVE VALUES The general manager of Eco World Development Group Bhd (EcoWorld) Penang, Khoo Teck Chong says the Group sets itself apart from other developers in Penang by emphasising more on its services and products. “Our company is relatively new in the market compared to others but we have a very strong background that grounds us in this industry,” says Khoo. “When we build our sales gallery, we take photos and compare them to our artist’s impression images. We will show them to our clients and promise to deliver a home that is so much better than the CGI (computer-generated imagery) version.” Khoo adds that Eco World has its own quality assurance team. “In terms of the quality of our service, we benchmark our service standards against The Ritz-Carlton Hotel Company, one of the top-notch names in the service industry.” “As far as the quality of our products are concerned, our own team checks on them. We also have our own Construction Product Assistant (CPA). I have a very good quality management division that takes care of all this.” Apart from training his own employees, Khoo says he also trains with contractors, consultants and even surveyors. “We get through training together to ensure our contractors, for example, understand what we want when we say the best quality of development. I find this necessary to avoid any issues in the future.

Artist’s Impressions

ECO MEADOWS The project is set in a charming corner of www.propertyinsight.com.my JUNE 2016 I 47


FEATURED PROPERTY Bukit Tambun on Penang mainland. This gated and guarded low-density enclave exudes a noble and graceful aura. Its 59-acre expanse is dotted with classic architecture inspired by the stately English royal houses, set in a lush landscape of manicured lawns, structured hedges, flowering trees and water features. The first phase of Eco Meadows was launched in September 2015. The Northampton Terraces Collection – which is part of the Limited Editions homes – reminisces the British royal residences that are surrounded by lush greenery. Eco Meadows is a strata-titled freehold development that offers amenities such as an exclusive clubhouse and added security features. Eco Meadows has a gross development value of RM918 million and is a low density development comprising 12.38 units per acre. It has a truly peaceful surrounding with 23% of the development dedicated to greeneries. Residents can expect a warm and welcoming atmosphere where they will be greeted by the breath-taking Long Waters, state-of-the-art Grand Entrance, Tree Boulevard, Landscape Roundabout, The Royal Meadows manicured gardens and the majestic Meadows Town Hall. ECO BLOOM The Group’s upcoming launch in Penang is the highly anticipated Eco Bloom, which is strategically situated within Eco Meadows. Eco Bloom offers condominium that comes with classic English architecture design elements that are popular with purchasers. The single tower project has 490 units,

split into two wings. Its 4.8-acre tract also houses 23 exclusive 2-storey shop lots which present an impressive array of lifestyle options for residents and visitors alike. Eco Bloom boasts the best of classic elegance and modern convenience. “Why are we doing Eco Bloom? When we first launched Eco Meadows, it was a landed property selling at RM700,000 while the neighbouring property was selling at around RM500,00. But why would people still want to buy Eco Meadows? It is because we are offering what others are not. Our security doesn’t stop at gated and guarded feature. We’ve added additional security measures and features while we were still at the architectural planning stage.” “Eco Bloom is our second phase and we are already launching a condominium. Subsequently, we are planning to launch

a high-rise property as well. This time, we have to show our customers what our concepts are. There is also a commercial development to complement the project, which we hope will lure more into the township,” adds Khoo. PENANG PROPERTY MARKET “This year is quite a tough year. The market has slowed down especially in the first quarter of 2016. However, the second quarter showed a bit of improvement in buying trends, specifically in the secondary markets. People nowadays are more cautious and choosy when it comes to purchasing properties because there are ample choices in the market, especially in Penang,” Khoo concludes. To experience or learn more on these projects, visit www.ecoworld.my or call 04-510 2255 for further assistance.

General Manager Of Eco World Development Group Bhd (Ecoworld) Penang, Khoo Teck Chong

Eco Meadows - Garden

48 | JUNE 2016 www.propertyinsight.com.my


FEATURED PROPERTY

Austin Regency @ Mount Austin, Johor Bahru The pursuit of contemporary perfection begins here

I

skandar Malaysia was quick to climb the rank as one of the most prominent hotspots in peninsular Malaysia. With a comfortable combination of readily available infrastructures, convenient access to transportation hub and a strategic location, Austin Regency at Mount Austin, Johor Bahru, has gotten home buyers and investors excited about the prospects of owning an elegant and sleek property. With a neat track record in the real estate industry, Scudai Development Sdn Bhd is

known for delivering top notch quality in design and construction while maintaining an affordable range of pricing schemes for buyers. The implementation of a sizeable number of planned real estates in the local market bears testimony to this. Strategically placed in a freehold location that’s booming with mixed developments, Austin Regency, comprises of four 25-storey towers with 1,210 apartment units sprawled across a 9-acre land. The low density project sets itself apart from

BY: AVINASH SAGRAN

other neighbouring projects based on its affordability, offering lowest price per square feet, a good deal considering its prime location. The homes are set to be a haven for residents as its set against a luscious green landscape and a golf course with an elegant city skyline. RELAX, RECOVER AND REJUVENATE A conducive living environment with a plethora of exciting facilities await residents here. Austin Regency’s Roof Top Garden www.propertyinsight.com.my JUNE 2016 I 49


FEATURED PROPERTY

certainly adds on to the Zen feeling when you choose to relax or hangout alone or with company. Fancy a more active way to rejuvenate? Work-out at the indoor gym; play an exciting game at the tennis court or take a dive at the swimming pool to nurture that wholesome and healthy lifestyle with family and friends. Let your body speak to you at the masterfully designed landscape; a space for you to feel free and inspired to build wonderful memories. ALL THAT YOU NEED The area surrounding Austin Regency has excellent facilities to meet your educational, health, leisure and modern lifestyle needs such as Hospital Sultan Ismail, Sunway College, Austin Heights International School, SJK(C) Foon Yew 5 and numerous hypermarkets like Aeon Jusco Tebrau City,

Tesco, Giant and Mydin, convenience stores and fast food outlets. IKEA’s third store in the country is opening up in the vicinity soon. Austin Regency, which is connected with numerous highways, is 14km away from Johor Bahru City Centre and the CIQ complex. Residents are also bound to enjoy wide array of amenities. For those seeking an adventure, Austin Heights Water Theme Park and Austin Heights Golf & Hotel Resort provide a good range of recreational options for all ages. IMMACULATE SERVICE AND QUALITY Catering to a bustling new population around Mount Austin, Austin Regency is poised to become an iconic landmark development in Iskandar Malaysia. The luxury apartment offers four unit sizes for buyers to choose from – 490sqft, 660sqft,

990 sqft and 1,317sqft – and these units are priced between RM285,000 and RM729,000. Residents can enjoy a peace of mind with a comprehensive security system which includes a 24-hour security service, CCTV surveillance and access card entrance for all your safety and security needs. Those seeking for investment, the property has high rental returns. It is also easy to sell considering its mixed occupancy rates. For those seeking the ultimate modern home, do not miss the chance to purchase this exclusive development, crafted to maximise space while infusing practical and innovative design. For further details, email sales@scudai.com.my or call +607-2229090 or +607-3533072.

PROJECT DEVELOPMENT DETAILS Location: Taman Mount Austin , Jalan Perdana 2/1 Property type: Type A (Studio), Type B (2 Bedroom), Type C (3 Bedroom),Type D (4 Bedroom) Concept: Unique Design with Roof Top Garden Land Title: Commercial Land Tenure: Freehold Total Units/Lots: Tower B-301 Units, Tower C-308 Units Total GDV: RM268mil (2 Blocks) Estimated date of completion: Tower B&C completed with CCC CONTACT DETAILS Address: Sales Gallery , Jalan Austin Perdana 3, Taman Mount Austin Telephone: +607-2229090, +607-3533072 019-7155437 Fax: 07-3533076 Email: sales@scudai.com.my Website: www.scudai.com.my

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FEATURED PROPERTY

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FEATURED PROPERTY

ASPIRE RESIDENCE @ CYBERJAYA More than an Aspiration

A

spire Residence aims to provide affordable yet ideally spacious homes in the ever growing and developing city of Cyberjaya. The rapidly evolving town bears witness to a booming development scene all around – mostly mixed and commercial – ranging from RM600,000 to millions. Aspire Residence is meant to replicate cost-effective luxury living without buyers having to fork out

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triple the amount or compromising a comfortable and comprehensive lifestyle. An on-going project by Syarikat Perumahan Negara Bhd (SPNB), Aspire Residence has spacious apartments that boast affordability with units priced between RM395,460 to RM717,873. SPNB is owned by the Minister of Finance Incorporated, which was established in Aug 21,1997 to provide affordable housing and

BY: NATASHA GIDEON

sustainable quality to families in Malaysia, in line with the National Housing Policy. SPNB pioneered the development of Rumah Mampu Milik (Affordable Housing) in Malaysia 19 years ago. Since its establishment, the developer has completed 90,083 units of houses, of which 59,079 are affordable homes. It also has 8,189 housing units under construction and is planning to construct


66,739 units of affordable homes within a span of three years. SPNB also offers a special government subsidy of up to RM20,000 for buyers who want to build a 1,000 sqft house on their land. With such people-friendly initiatives, SPNB’s Aspire Residence medium-cost apartments are set to cater to the middleincome group who yearns for a comfortable living space that’s tailored with safety, privacy and modern lifestyle amenities. Dubbed the Silicon Valley of Malaysia, Cyberjaya is a perfect location for investment and long-term stay. Aspire Residence goes by the Green in the City concept, and is being built with families in mind, to encourage a greener and healthier environment for all. The development offers modern household design infused with a greenery that you can only expect to see miles away from the city. Not only is the development affordable, it also caters to the differentlyabled, with designs meant to encompass a

holistic and inclusive lifestyle. Other facilities include a recreational park in the middle of the development area to assure safety and privacy, a swimming pool and wading pool perfect for family occasions as well and other community facilities that will cater to all occasions and needs. Located on 3.85 acres of freehold land, Aspire Residence apartment units are between 900 and 1,608sqft with a gross development value of RM1.15 million. There are a total of 2,804 units, estimated completion by the second quarter of 2019. The development is ideally located close to schools and universities including SK and SMK Cyberjaya (1), Sekolah Seri Puteri, an elite all-girls boarding school, Multimedia University and Lim Kok Wing University that are expected to spur the area’s growth rate further. Cyberjaya is not what it used to be with developments mushrooming at all corners. Many commercial areas have come up over the past couple of years, and amongst them are Shaftsbury Square and DPulze Shopping Centre, located just 500m apart. Dpulze is known for its retail, leisure as well as entertainment and cinema outlets in the vicinity of Cyberjaya. The food and beverage scene there is also slowly bursting into prominence with names like Tokio Café and a variety of hawker and Malaysian street food options making waves. Aspire Residence is easily accessible from five major highways such as the Maju Expressway (MEX), ELITE highway, Lebuhraya Damansara-Puchong (LDP),

PLUS highway as well as the NKVE highway. Getting to and from the city will never be a hassle for residents. If driving is an issue, the KLIA Transit from Putrajaya Central provides a comfortable option for travellers who prefer the idea of public transportation. Travelling to the airports (KLIA and KLIA2) will certainly be hasslefree. Those inclined to invest in Aspire Residence can do so comfortably as the entire area is experiencing a rapid growth, in terms of value, with condominiums being sold at an average of RM700,000 providing possible rental yield of RM2,200 per month. The fact that Cyberjaya is a hub not just for the working class, but also for local and international students, indicates a good spot for investment.

PROJECT DEVELOPMENT DETAILS Location: Blok 18, Cyber 10, Cyberjaya (also known as Silicon Valley of Malaysia) Property type: Medium Cost Apartment Concept: Green in The City Total units: 2,804 units (Phase 1 : 1,168 units) Land title: Residential Built-up Size: 900 – 1,608 sq ft. Tenure : Freehold GDV: RM1.150 mil Acres of Development: 38.35 acres (Phase 1: 15.13 acres) Est. date of completion: Q2 2019 CONTACT DETAILS: Address: Galeri dan Pejabat Jualan Cyberjaya 01-G-01, Menara 1, Wisma Mustapha Kamal, Cyber 12 63000 Cyberjaya, Selangor Telephone: 03-8318 0417 / 019-276 4342 Website: www.spnbaspirasi.com.my/pendaftaran

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INVESTOR NEXT DOOR

DARE TO BUY

Success is to those who believe in their judgements during tough times and continue buying properties BY: AVINASH SAGRAN

H

azel Leong began her career as a Electronics engineer in Process Engineering. Married to her job, she never really paid much attention to the financial world until she pursued her MBA. Her comprehension on economy and investment was intensified during the 2007-2008 financial crisis. Driven by the notion that the whole world’s economy is going to collapse, Hazel decided to study and analyse the sub-prime crisis in the United States and compare the probabilities of it happening in Malaysia based on housing schemes and banking systems here. Realising the crash will not occur in Malaysia, she begun speed-reading property investment books – digesting two books a day. Hazel never looked back since and marched on to build a strong property investment portfolio over the last 8 years. Delving further into the real estate business, she has been pre-occupied with property launches as she pursues her principle license. BEGINNING FROM THE AUCTION SCENE Up until 2015, Hazel bought majority of her properties through auctions. An unusual method for a beginner but she says, “you have to adapt to different situations and scenario.” “I wanted to purchase a property quickly without having to go through multiple negotiations which was the case with subsale properties. It left me with only the option of buying through auction, where I can secure the property within the same day.” Owning close to 20 properties through

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auctions, Hazel has witnessed numerous problems that auction books do not tell you. But having committed to the method of purchasing property through auctions she has managed to overcome each problem in her own way.

Heading in a new direction this year, Hazel suggests assessing the economic climate and adapting to it accordingly. “I’m now reinventing my methods to purchase from primary market because current schemes and discounts offered by


INVESTOR NEXT DOOR developers are lucrative and still fits into my purchase strategies. FIRST BUY Hazel’s first property purchase was definitely not a textbook purchase that suggests purchasing within 5km radius or 30 minutes away from one’s current location. Leong bought an auction property at Sunway for RM99,000 but was living at Malacca at that time. Her rationale behind this move was that there are no rental pressures when the capital appreciation is weak in Malacca. “Daunting as it may seem, purchasing in a different state and through auctions at that, I made myself commit to the purchase.” Currently the property she bought is valued at RM300,000 by the bank and Leong is not willing to sell it as it bears sentimental values. DON’T WAIT JUST BUY To Hazel property purchase is at a historical high, every year. “No one would regret buying a property the previous year. Five years from now you would wish you had bought properties now. “In 2008, numerous claims were made regarding the possibility of a sub-prime crash in Malaysia while 2009 saw a second wave of speculations based on quantitative easing. Subsequently DIBS was introduced with a lot of skepticism but those did not deter me from purchasing properties. My advice is to believe in yourself and continue buying without waiting.” Hazel believes in holding on to properties as their values will continue to appreciate. “We cannot predict when an economic cycle would jumpstart therefore we are rendered powerless to control the economy. We can however, control the location. Be reasonable, do not buy the most expensive property in the location. Property prices change quite frequently but generally it will always be an upward trajectory.” Hazel adds that residential properties are always a safer bet to invest in as people always need a place to stay unlike commercial properties which suffer during a bad economy. “Rental rates for residential properties can be adjusted during bad economy and that segment rarely suffers from zero rental returns.”

YOU CAN FIND IT CHEAP Always set a budget before venturing into property investment. For Hazel, setting a credit limit for a deposit and purchase would be a favorable trait for loan applicants, as far as banks are concerned. Secondly, she suggests purchasing property that are 20% below bank valuation. Third is location-centred and investors must be well-versed with projected infrastructure and development plans in the area. “I purchase auction properties because I’ve always wondered how bad can the property be? The cost of repair and the stress of dealing with existing tenants and owners are minimal as compared to purchasing a property at market value.” MY SUCCESS Hazel’s success boils down to three very basic structures: 1. Have a strong team, especially lawyers and bankers; this helps when hostile, aggressive ex-owners throw in caveats or decide to cause trouble, and opportunistic developers who attempt to recover outstanding bills and payments from the defaulting ex owners. 2. Have strong intermediaries to deal with tenants or owners; have a clear vision of what you want to achieve from the investment and do not deviate from the main goal. Convey that message clearly to all parties. 3. The desire to treat the property portfolio as a business and willing to put the time and effort in it is key to achieving all the goals set. WHAT DO YOU WANT? Be analytical to grasp concepts and investment structure. Hazel also advises beginners to set their goals accordingly before they get started on property investing. “I have seen people gain profit and lose their money purchasing the same property. Always ask yourself why do you want to purchase that property? Whether you want to increase cash flow then hold it; use it as capital leverage to migrate then buy properties with big capital appreciation; or for your own stay, choose properties based on your work location, accessibility and daily usage. Depending on your plan, track your progress accordingly and do not be afraid to modify your plan for a better

output.” “Tracking progress is crucial as you might get lost halfway through once you gain differing views from others as everyone has different views and plans. If you consistently track what you are aiming for, you will surely have the successful property portfolio that you desire.” OUTLOOK FOR THE YEAR The cloud surrounding the economic climate has resulted in investors and developers clearing their property stocks. Hazel suggests that this is the best time to obtain discounts for properties. “It is a good time to purchase from developers as loan structures are getting more complicated, sub-sale down payments are getting higher and chances of securing loans are becoming lower compared to purchasing from a reputable developer. With new knowledge gained from Gary Chua from Smartfinancing, she has modified her methods slightly to include purchasing of properties in the primary market this year. Her advice to buyers, “buy as many as possible this year.”

PROPERTY INVESTMENT PROPERTY 1 Location

Bandar Sunway

Property type

apartment

Purchase value (2009)

RM125,000

Market value (2016) RM300,000 Price psf

RM147

Rental per month

RM1,100

Rental yield

10.5%

Loan margin

90%

Loan tenure

30 Years

PROPERTY 2 Location

Pandan Indah

Property type

Apartment

Purchase value 2009)

RM115,000

Market value (2016)

RM320,000

Price psf

RM135

Rental per month

RM1100

Rental yield

11.5%

Loan margin

90%

Loan tenure

30 Years

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ROOKIE INVESTOR

CURIOUS? WHY NOT EXPLORE IT!

Generating passive income through a stable source

56 | MAY

2016 www.propertyinsight.com.my

BY: AVINASH SAGRAN


C

uriosity led Kit Yew Sen to amass six properties in just four years. With one foot in the professional world of cancer diagnostics and life science, one would be surprised to learn how Kit got the other foot into property investing. A believer in the notion of investing to obtain passive income, Kit begun experimenting with various ventures in his university days. The idea of property investing crossed his mind in his late 20’s, when he witnessed a close friend reap the benefits of property investment. Having started a family, Kit made having his own roof to call home his utmost priority. TAKE YOUR TIME Novice property buyers often make purchases when the units are visually enticing and if they are able to cover their own down payments. First time buyers should understand that purchasing a home cannot be that simple as that is

where they find themselves in trouble most of the time – when they do not invest some time to do research on the property they are purchasing. Kit says there isn’t a fixed timeline per se to purchase a property but as long as home buyers can justify their purchase, they will not regret it in the long run. “A justifiable timeline for one purchase is between six and 12 months, minimum. During this period, equip yourself with some market knowledge. Advisors or experts from a network of investors and bankers as well as property agents and property gurus will be able to give you the necessary confidence when signing on a big commitment.” “Each expert has their own justification for a property purchase. This guidance will help put things into perspective so you can ensure that your purchases have a justifiable outcome,” says Kit adding that research plays a huge role in ensuring

buyers’ purchase has a good value for money. “Key factors include location, value of property, prospects of growth, upcoming infrastructure developments and current demands for the area. Once the basic research is done, I also check on the background of the developer, gather information from peer investors, compare the prices and try to forecast the growth of that particular property.” Any property below market value is said to be fair price but Kit warns buyers of adverse outcomes ranging from security and developers with poor track record to poor infrastructure placing. He advises home buyers to not assess the units without looking at the bigger picture that speaks about the value of the property. HOW IT ALL BEGIN Kit’s start to property investing was wellplanned. Curiosity got the better of him www.propertyinsight.com.my JUNE 2016 I 57


ROOKIE INVESTOR

Focus on building a source of income first to be entitled to buy your first property without hassle” - Kit Yew Sen in the initial stages, He supplemented his interest with property seminars, bought a few books and established contacts with bankers, investors and lawyers thereafter. He believed in what he saw and decided to spend his time wisely after working hours to establish contacts via research and build a solid network. The emphasis on having a solid support system is crucial in Kit’s eyes. If time permits, his wife would follow him to viewings and meetings. “She places a lot of trust in me and comprehends that property investment is a steady passive income generator so there are no obstacles for me to be fully focused on researching, gathering information and following through the necessary steps to investing.” He also says that fellow team or peer groups are equally important and by meeting different networks of people, it helps him combine the ideas generated and create more options for him to explore. THE VERY FIRST BUY “Unsure whether I have made the right decision, I was feeling anxious when I signed on the dotted lines as it took a big chunk of my savings. Initially, it was meant for own stay but I learned a valuable lesson as I was not aware of how strata title works. I only got the keys after 2 years. I believe time will correct our mistakes. My first property is now being rented out and generating positive cash flow.” The scenario is significantly different with banks tightening loan requirements now. Buyers have to be honest with their financially capabilities because banks value 58 | JUNE

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the borrowing capacity of an individual – which is vastly based on individuals’ ability to earn. Kit advises buyers to focus on building a steady source of income first so that they will be entitled to buy their first property without much hassle. Moving forward, Kit acknowledges the financial shortcoming to continue his expanding portfolio because borrowing has its limits. He recently collaborated with his peer investors to begin joint ventures. He urges those who want to follow in this footstep to find likeminded investors. “This is crucial because you both must have mutual trust, have similar direction and strategies when approaching a property. Joint ventures require strong legal framework to secure both parties from any complications that may arise in the future.”

FOR INVESTORS OUT THERE Economy is speculation driven so any time is a good time if the right deals comes around according to Kit. “A good deal this year would certainly entice me to buy but it has to cover my old school checklist. Regardless of whether it is below or above market value, the potential growth of the property and the location matters.” KIT’S TIPS 1. Secure a good source of income first; 2. Leverage on borrowing; 3. Leverage on parents or spouse capabilities; 4. Understand details of property title; 5. Prepare documentations for loan purposes well ahead.


INDUSTRY INSIGHT

ENRICHING LIVES, FAMILIES AND COMMUNITIES How can a real estate agency do all this and more? BY: FARA PETIAL BY: FARA PETIAL

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INDUSTRY INSIGHT

H

aving been around for almost a decade, Cornerstone Realty is slowly but surely paving the way to be one of the top real estate agencies in Malaysia. Just like setting the first stone when constructing the masonry of any building, Cornerstone Realty claims itself to be the foundation for a better real estate future. The foundation, which not only intends to build its business, but also to help clients build their real estate portfolio and investment. Cornerstone’s Director of Sales & Marketing, Wong Yau Long says, “The agency has been in this industry since 2008. When I first came in, there were only four people in the team. But today, we have about 60 people working together.” Having gained his own experience with a real estate agency previously, Wong says that he has a sharp eye for good property. “I opened a café before in Taman Tun Dr Ismail and the business was not doing very well. So, I thought about venturing into the financial or real estate industry. Then, I remembered my father’s words, ‘People age, but it’s a different case with property. The longer you hold the property, the younger it becomes’. Those very words prompted me to venture into the real estate business.” SPECIALISATION HELPS Specialisation and teamwork are two special elements that helped Cornerstone grow so fast in such a short span of time. “I divided my team into two; Project sales and Secondary market sales. Then, each team is divided into a few other departments – marketing, communication, telemarketing and sales including the team leaders,” says Wong. Each department plays a pivotal role for primary projects. “The marketing department needs to identify if this is the right project we need to take in. We’ll only choose projects that have a good investment potential for clients.” “Once we bring in the project, the marketing team needs to plan all marketing activities including providing exposure on social media and creating awareness. The team leader then needs to supervise all the team members – to train them with market knowledge for the project so that they are equipped to do good presentations. If you do it this way, you will not have an issue in securing a purchaser.”

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“The team leader will usually mentor and assist the team member to close deals because not every team member have the expertise to do so. You need someone who is excellent with presentations and closing deals. Once they achieve certain goals, we provide them with incentives to boost their performance.” “Even for the secondary market, we have one department that deals with the house sellers. They are tasked with getting the listings to advertise with property portals and doing the marketing to reach out to target audiences. Once the marketing team gets a lead, we will segregate the tasks among our team members to approach buyers. All teams must work together to achieve better results, efficiently and effectively,” highlights Wong. “We are not doing anything the conventional way. The conventional way requires agents to do a lot of things; they need to do the listings, marketing activities and still come to the show gallery every week. The main thing that agents need to do is close deals. This is why, in my opinion, teamwork is very crucial in getting things done in this company.” Wong adds, “We want to position ourselves as the market expert so for every product that we deliver to clients, there must be some added value to them. The products must be valuable to them so that in the future, we will continue to have a lot of loyal followers. We do not go to every area available. Our goal is to dominate the areas that we cover. We want to be able to control at least 60% of the market share.” “There were times when we had to face a lot of challenges in terms of sales and marketing – we are unable to get

purchasers. This is when we get all team members to come in, brainstorm, come up with new ideas and implement them. If we fail, we will brainstorm and come up with new ideas again. With this process in place, I could slowly see the end results. Although sometimes the results may not be up to our expectations, I can see the effort that everyone has put in. Those are the moments that make me very proud and keeps me encouraged.” PROPERTY MARKET “Many people are sceptical about coming into the market now because they are worried the property prices will go down. To be honest, all markets are generally facing a slowdown. But you must know that any time is a good time to buy a property, and any time can also be a bad time. It depends on your homework. If you’ve done enough research, you’ll be able to identify a good property. I cannot think of a reason for your not to buy at all.” “The key here is how do you identify a good property? Simple. It based on the location, price points, and the developer. If there are a lot of property developments around the area, you’ll know the inventory is equally big. Even if you make a purchase based on location, you have to understand that the chances of property appreciation will be slow as the supply overpowers demand. Another key feature when you buy a residential property is the security. Although you need to pay a higher price for gated and guarded property, there is an added value to it and you would be able to see greater potentials in terms of property appreciation,” advises Wong. Wong also reveals that he foresees a


lot of potential for the property market in Malaysia. “If you compare Malaysian property prices to several countries, we are still the lowest when compared with Jakarta, Manila or Bangkok, in terms of city to city comparison. Our price point is still very reasonable. A lot of foreigners have also started investing in properties here, so the demand continues to be steady. Malaysia is actually a very strategic location for foreign investment.” “The population too is increasing in Klang Valley. We currently have around 7.2 million of population and this is expected to grow into 10 million by 2020. With the increase in population, you can be assured that the demand for property will get higher. Land is scarce, labour cost and raw materials are also getting pricier by the minute. With all these things combined, I think property investment is one of the best ways to make profit.” REAL ESTATE AGENT “I always believe in dealing with the experts. A good agent will not only find something that will match the prime requirements, but also help the clients gain wealth. Over the last 10 years, we’ve helped hundreds of people to become millionaires. We’ve found the right properties for them, and over the years, those properties have

appreciated in value helping investors make a lot of money. That’s how we got a lot of followers. About 40% of our sales come from repeated clients.” “As a good agent, we need to ask a lot of probing questions to know the exact requirements of clients. What are the property sizes they are looking for? Is it landed or high-rise unit? Once we know their requirements, we need to find something that matches their needs. If there are more than one property that matches their requirements, which should they choose? We also need to advise them on the transacted value, the supply and demand, This is what a good real estate agent means,” says Wong. “I want to position my team as consultants rather than sales people. Consultants are able advise and guide clients while a sales person does delivery jobs. Other than adding value to our people, we must also add value to our clients,” hopes Wong. He advises the young generation who are keen on becoming real estate agents to build their characters and attitude. “More than skills – which can be acquired through training – you must have a good attitude. Of course, its best to have an entrepreneurial mind set when you are stepping into the industry. Know what your strengths before stepping into any industry. Do what you like to do and not because

people say real estate can earn you quick bucks. Choose an industry that you enjoy working in and perform excellently.” PROPERTY INVESTMENT As an investor, Wong recommends future investors to look for these three things when deciding on the property: 1. Location. “What kind of concept is the developer building? It must be a unique product. It should not be the same product that everyone is building and offering because we have an oversupply of those. Choose something that is limited and exciting.” 2. Security features. “Because crime rate is increasing, it’s always good to buy gated and guarded property and bank on it as an added value.” 3. Special features. “Look at the extra features provided by the developer. Some developers add value to the development with green features like lakes and jogging paths. Some residential developments are also complemented with commercial units and amenities such as clinics, hospitals and schools. All this unique features will bump up the property values that you’re thinking of investing in.”

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Kids Room Painted with VirusGuard Anti Viral Paint

EXPRESS WITH

COLOURS

Paint can tell stories through their shades, adding personality to your space BY: AVINASH SAGRAN

62 I JUNE 2016 www.propertyinsight.com.my

A

brand familiar to almost every single household, Nippon Paint Total Coating Solution continues to revolutionise how we view paint. Rebranded as the coating expert, Nippon Paint positions itself as a globally unique coating brand that covers all types of surfaces from your tiles on the floor all the way up to the roof of a building. It does not stop there, as the coating solution extends beyond architectural to automotive, marine and airport runways. The vibrant range of colours and products offered by Nippon Paint clearly gives no reason to leave a dull surface in sight. COLOURS GALORE To each is their own. Nippon Paint customises colours to fit their customers’ needs and desires. There are thousands of colours for consumers to choose from, according to Nippon Paint Group General Manager Gladys Goh. “Nippon Paint provides thousands of colours because we understand the ecosystem in the supply chain. We provide and fulfil consumer demands so that they


happy with any coating of their preference. Nippon Paint had made it so convenient that over 30 types of coatings can be dispersed at over 1,500 colour tinting machines outlets nationwide so that their customers can obtain any colour of their choice in less than a minute,” says Goh. PIONEERING THE FUTURE As the first paint brand to innovate odourless paint, Nippon Paint continues to address consumer needs, providing solution to a range of needs. Nippon Paint coatings ranges from Nippon Odour-less AirCare to Nippon Weatherbond Solareflect– these coatings can absorb formaldehyde and reduce indoor temperature. “Nippon Paint works closely with Green Building Index to develop solutions for a greener living whilst providing satisfaction through the end product. Launching the odourless paint has transformed the painting industry. Businesses can operate in minimal lay off time for paint renovation; families need not check into a hotel when homes are being repainted and most importantly there are no more harmful paint fumes that causes allergies, asthmas or sinus attacks.” Extending on the antibacterial and antiviral component of the paint, the company launched its Nippon Paint VirusGuard the first-of -its-kind functional coating. The new paint formula is developed with Silver Ion Technology to persistently inhibit the growth of viruses and bacteria on the coated surface, decreasing the spread of contagious illnesses including, Hand, Foot and Mouth Disease (HFMD) as well as H1N1. Expanding the market to encompass coating to a wider range of usage allows consumers to have a one-stop solution for all their needs. Secondary properties come with existing tiles, which could be costly to hack, but Nippon Paint provides the solution to simply paint over them. Now consumers can design patterns on the tiles surface according to their liking. “We want to engage with as many industries as possible. The Nippon Paint Momento range provides a wallpaper touch and texture desired by many including hotels without the troublesome process of applying regular wallpaper.” To those investors out there, painting a secondary property is cheaper and adds

Nippon Group General Manager, Gladys Goh

appeal for prospective tenants without burning a hole in your wallet for an expensive renovation. By matching the consumption trends and demands, Nippon Paint is able to innovate affordable range of products for homes as well. AT YOUR FINGER TIPS Consumer engagement is essential for Nippon Paint, so are the feedback and responses which allow Nippon Paint to attend to customer queries and furnish them with the necessary information. “We receive over 100,000 visitors every month on our website. All necessary information is available for consumers to make their decision. In addition ,our customer care line and social media platform like Facebook provides an active platform for consumers to engage with our staff.” To further assist consumers, Nippon

Paint provides colour cards and magazine at all the authorised Nippon Paint Colour Creation Outlets. “As Asia’s number 1 paint brand, we pulled 16 top designers from different Asian countries to forecast the future colour trends. It serves an Asian pallate, by Asians Professionals for Asian known as Trend Beyond Colours.” The magazine with the colour trends are made available at the end of the year but those who would like to visualise the space with specific colour choice can head on to the app store and download Nippon Colour Creation application for free. “Using the app is really easy. It provides all the colours from every collection available from Nippon Paint. The app goes as far as guiding users on ways to match colours for their feature and secondary walls. Users may create a room project to visualise the end result of their potential room. There www.propertyinsight.com.my JUNE 2016 I 63


Nippon Paint provides thousands of colours because we understand the ecosystem in the supply chain. We provide and fulfil consumer demands so that they happy with any coating of their preference” - Gladys Goh Painting on Tiles & Ceramic & Floor

are also four-dimensional showcases made available for developers and architects to conceptualise their vision. We help to realise their demand.” No more regrets after purchasing a can of paint and realising that it does not match your vision. COLOUR TIPS Colours have been proven to have a psychological effect on human emotion and responses. She advises consumers to be careful when selecting colours for certain rooms. “Blue, purple and green are regarded as cool colours aimed at calming, cooling, healing and relaxing your mood. While orange, yellow and red are warm colours aimed at stimulating, creating cheerful and optimistic energy.” “Study rooms should be blue in colour, high ceilings can be lowered down by using a darker tone. Use lighter tone for smaller rooms as the reflective lights would make

it look bigger. Although red is a passionate colour, be careful with painting your bedroom red as it will cause restlessness. Those following trends, grey is in for this season and is widely regarded as a colour that matches anything out there.” COMMUNICATING WITH COLOURS As a brand leader, Nippon Paint believes in brand engagement with homeowners. It is not everyday a coating brand is known across all generations. We invested in a brand icon to communicate colours and brand functionality. So, we brought blobs of paint to live and it comes with thousands of colours and special powers. This provides psychological boost for consumers watching Blobbies paint towns and homes. Nippon Paint has certainly changed the perception of paint from being a mere chemical to an interesting lifestyle choice. Source : Visual.ly

Travertino apply at Utropolis Service Apartment Show Gallery in Glenmarie

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DESTINATION - INTERNATIONAL INVESTMENTS

INVESTING IN LUXURY WITH 98 WIRELESS

New York interior designer Anne Carson styled the grand reception areas and three levels of exclusive amenities. They include a tea salon and a business lounge that comes complete with Ralph Lauren Home furnishings BY: NATASHA GIDEON

W

IMAGE COURTESY: SANSIRI

hat 98 Wireless is to Bangkok, is what Fifth Avenue is to New York with white crisp design presenting itself as an elegant and exclusive establishment. It seems as if one is walking into a movie set that features minimalistic designs, white tiles and white plasters to match everything. The cherry on top is the cascading ballroom like stairs that takes in all the attention. Aptly located in the ‘Upper East Side’ of Bangkok on Wireless Road, 98 Wireless is set to be an iconic luxury condominium valued at more than Bt8.5 billion (RM977 million). The masterpiece

is set on 0.83 acres of land, located nearby Lumpini Park and shopping districts. Most importantly, Wireless Road is the only treelined street in the centre of Bangkok, which does not only exude a private charm but also a sense of exclusivity to the discerning Thai and foreign customers. OUTSTANDING DESIGN Offering a modern twist to a classic setting, the architecture and interior design of 98 wireless is inspired by the classical European Beaux-Arts style that holds on to traditional craftsmanship and artisanal

integrity. The design was led by the globally-recognised creative architecture firm DWP - Design Worldwide Partnership. New York interior designer Anne Carson styled the grand reception areas and three levels of exclusive amenities. They include a tea salon and a business lounge that comes complete with Ralph Lauren Home furnishings. In addition, the Bangkokbased landscape architecture studio T.R.O.P. Terrain + Open Space, designed the formal gardens and outdoor living spaces.

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DESTINATION - INTERNATIONAL INVESTMENTS FINEST CRAFTSMANSHIP 98 Wireless certainly ups the bar for super luxury condominiums as a lot of attention are given to details. It is crafted with the finest natural materials that were carefully handpicked for this project. They include solid white-oak herringbone floors and rare mahogany crotch door panels imported from the United States. Its façades are made of Portuguese Moleanos Limestone that withstands all if not most weather types as it has undergone weathering tests prior to installation. The marble-clad master bathrooms have the best slabs handpicked from a marble quarry in Carrara that’s located100km northeast of Rome. Its residential units come equipped with world-class appliances and hardware brands like SubZero refrigerators and wine cabinets, Gaggenau kitchen appliances, SieMatic kitchen furnishings, Lefroy Brooks bathroom fixtures, and Kallista bathroom products. EXCLUSIVE OFFERINGS Room sizes range from two to three bedroom residences, the Penthouses, and the most spectacular Super Penthouse

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DESTINATION - INTERNATIONAL INVESTMENTS – named “The One” –located on the building’s top two levels. Hospitality takes on a new meaning here as 98 Wireless offers dedicated butler services for every two floors. There are also Bentley limousine service, valet parking, 240 per cent of underground parking including super car parking spaces, and private lifts for each unit. Unprecedentedly, 98 Wireless also provides an on-site luxury lifestyle management service offered by the world renowned concierge company, Quintessentially. A LEADER IN ITS OWN RIGHT 98 Wireless is a signature project of Sansiri Public Company Limited, one of Thailand’s leading premium residential project developer. Apart from ensuring world-class quality and aesthetics, Sansiri

While 98 Wireless may be the most expensive residential in Thailand, its ideal location makes it a valuable investment. 98 Wireless is truly the pride of Sansiri and we are confident that the price will not be considered expensive when investors see the long-term value from this property”

is bent on ensuring that their projects are sustainable and environment-friendly so its no surprise that they are among the few residential projects in Thailand to receive LEED certification from the United States Green Building Council. “Sansiri spent more than five years to craft 98 Wireless to perfection on all aspects, in line with its The Best Comes as Standard concept. The project will be Southeast Asia’s most exclusive address with its exquisite craftsmanship and artisanal quality,” says Sansiri’s CEO Apichart Chutrakul Sansiri expects 98 Wireless to appeal to high-end buyers, especially those loyal customers from the company’s first premium residential project, Baan Kai Muk – an exclusive seafront holiday condominium. “While 98 Wireless may be the most expensive residential project in Thailand,

its ideal location makes it a valuable investment. 98 Wireless is truly the pride of Sansiri and we are confident that the price will not be considered expensive when investors see the long-term value from this property,” adds Apichart. Sansiri anticipates a ratio of 60:40 between local and foreign buyers for 98 Wireless and will make an official announcement on sales upon project completion this October. EXPERT’S COMMENT Sandeep Grewal, an investor in Thailand himself, says it is easier for land transactions to commence due to the absence of lawyers in the process of purchasing properties in Thailand. It may be a bit more difficult for foreigners to invest, but it is still very possible. The reason being, the property investing culture is just starting off and Thailand needs to encourage it for the

culture to progress. “Wireless Road is at a central location and is more of an upcoming area that can be compared with the likes of Damansara Perdana or Section 17, Petaling Jaya. There are many high end condominiums in the area and it is undoubtedly a hotspot for the youth with amenities such as public transportation that connects the city well,” shares Sandeep, Co Founder at Freemen Education. To invest in Thailand, you need to get to know your demographic. Things like car parks are not necessarily a plus point when buying a property as most locals take bikes or the well-connected public transport. The demographic you need to look out for are the young crowd, or depending on the area, foreigners and tourists alike. Sandeep tells Property Insight that Thailand is the investment capital to look out for in the next 5 years. www.propertyinsight.com.my JUNE 2016 I 67


LEGAL

MANAGING PROPERTIES OF THE DECEASED

P

eople gain assets and properties throughout their lives and leave them all behind as they pass on. This has always been the trend for ages. A lot of people are familiar with inter vivos (legal term referring to a transfer or gift made during one’s lifetime) transaction – including buying and selling or transferring an asset as a gift to someone during their

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lifetime – but many do not realise the process that’s involved when transferring a property belonging to a deceased person. The process, known as testamentary transfer, is different from the usual property transaction. The smoothness of this type of transactions would usually depend on the availability of a Will left by the deceased. With a Will, a person can name his

beneficiaries for certain properties in his estate. The testator (a person who has made a Will or left a legacy – deceased) can appoint a person of his choice, including any of his named beneficiaries, to administer his estate, i.e. be his executor. Without a Will, the estate will be distributed according to Section 6 of


Distribution Act 1958, to his next-of-kin, instead of a preferred beneficiary. The distribution effect may refer to table 1: Transaction of immovable properties (land, houses) from an estate requires a two-step process, regardless of the existence of a Will. First, the property will be vested on the executor/administrator by way of transmission. Once the beneficiary to the particular property is ascertained, the executor/administrator will transfer the property to the respective beneficiary. The difference lies in the required document. If there is a valid Will for the said transfer, the executor does not require an Order for Sale for the transfer but if there is no Will, then the administrator will have to obtain an Order for Sale from the court to ascertain the beneficiaries involved in the transfer. An Order of Sale is also needed to determine a purchaser when beneficiaries renounce their rights on a particular property and express intention to sell it to a third-party. A big concern involved in this types of transaction is the stamp duty and the Real Property Gain Tax (RPGT) that are to be paid upon transaction. Stamp duty cost RM10 if the transfer is made to a named beneficiary, regardless of whether the estate is testate (with Will) or intestate (without Will). This is however, not the case if the property is to be transferred to a thirdparty. A full stamp duty ad valorem will be imposed on the purchasers, in this matter. The RPGT was introduced via the Real Property Gain Tax Act 1976. It was suspended temporarily in 2008-2009, and reintroduced in 2010. It only applies when the property of the deceased is transferred to the purchaser instead of the intended beneficiary. Otherwise, the transaction is exempted from RPGT. When RPGT is exempted, the beneficiary to the property is required to file an RPGT Form with the Inland Revenue Department. In a transaction that involves a third-party purchaser, the time and date of death of the deceased must be acquired in order to

1

Spouse only but no parent and issue (children)

whole estate

2

Issue only but no spouse and parent

whole estate

3

Parent(s) only but no spouse or issue

whole estate

4

Spouse and issue

1/3 to spouse and 2/3 to issue equally

5

Parent(s) and issue

1/3 to parent(s) equally and 2/3 to issue equally

6

Spouse and parent(s)

½ to spouse and ½ to parent(s) equally

7

Spouse, parent(s) and issue

¼ to spouse, ¼ to parent(s) equally and ½ to issue equally

Table 1

compute the RPGT. Such transactions would consider the estate being sold directly to the purchaser, hence, the date of death of the deceased will be recorded as the property’s disposal Disposal

Citizens

Non-Citizens

<= 3 Years

30%

30%

<= 4 Years

20%

30%

<= 5 Years

15%

30%

>= 5 Years

-

5%

date. If the beneficiary/executor sells the property within 5 years, the following RPGT rate shall apply. The abovementioned information might help to clear some doubts but it is advisable for family members or nominated beneficiaries to engage a lawyer when faced with transaction or transfer issues to enable seamless administration of the estate and prevent any infringement of law.

ABOUT THE CONTRIBUTOR Chris Tan is the Founder and Managing Partner of Chur Associates, Advocates, & Solicitors. He is deeply involved in the real estate industry, and is now the honorary Legal Advisor for FIABCI Asia Pacific Regional Secretariat on regional concerns.

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FINANCE

SMART FINANCIAL MANAGEMENT – PART 2 F

rom the previous article, we have covered the key elements of SMART Financial Management. Getting the basic financial management knowledge and practicing it right from the start is critical in working our way towards Financial Freedom. In SMART Financing dictionary, invest means to make or grow your money in a meaningful way via OPM (other people’s money). Banks offer various types of credit facility for customers. If managed wisely, we can actually leverage on some of these credit facilities to grow our wealth. In this article, we would like to share some tips on one of the most commonly used credit facility – credit card. The most commonly asked question is whether credit card a boon or a bane? It will end up being a bane if you spend without proper planning and end up paying more interest than earning the benefits. However, this plastic money can be a boon if you can control the credit facility towards your own benefits. Below are examples of how you can leverage on credit cards. • 1. SIGN UP BONUSES Often, banks offer lucrative offers just for a credit card sign up. There are typically 3 stages where you can benefit. • At point of signing up: At this stage there is normally a small value premium gift just for you to sign up. This can be in the form of vouchers or an item. • Upon your credit card approval: Banks want you to start using the credit card as soon as possible. They do not want to give you a plastic to be left in your letterbox or stored in the card holder for emergency use. Some banks offer reward for card activation, while some banks reward when you start spending.

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After activation: Banks are in the business of getting you to recur usage on your credit cards. Often it is done via frequent engagement plans to get you to spend more. High value rewards, like cashbacks, are offered when you meet certain spending criteria.

2. EARN UP TO 59 DAYS OF INTEREST FREE PERIOD BY USING YOUR CARD When you make a purchase using a credit card, you are given an interest free period of 20 to 59 days, depending on the transaction date. By choosing to make more purchases with your credit card, your money stays in your savings account or fixed deposit and earn you interest. Meaning, you’re earning interest on the

money you’ve already spent. You most certainly cannot do this with cash! This is especially beneficial when you make large transactions. Putting in a down payment for a property or a car using your credit card can give you handsome rewards in return. It is a timeline game. If you time your larger transactions at the start of the statement, you will earn more interest on money spent. 3. 0% INSTALMENT PLANS Some retail shops allow you to charge your purchases and convert them into 0% instalments plan of up to three years. This means, you can split your purchases into equal monthly instalments over the period and pay no interest for that purchase. This is done at the point of purchase. You


is by using a cashback credit facility and paying it off in full every month. Different cards offer different cashback rates. Some offer a high introductory rate that reduces over time, while others offer higher rates on certain spending. So, make sure you get the card that best matches your shopping habits. 6. MERCHANT DISCOUNT ON SELECTED RETAILERS Banks are very competitive. In order to make their credit cards more appealing to consumers, banks generally offer merchant discounts. Meaning, if you use their credit card in a listed store, you will get extra rewards points, upfront discounts or endof-bill discounts. For example, some banks offer rewards like complementary tickets or immediate discounts when you watch movies at a particular cinema. Again, you would not be able to do this using cash. Cash is king? Maybe not in this case.

normally need to look out for these sort of promotional signage at the payment counter or by asking the cashier. Don’t be afraid and ask! Do take note that every retailer is different. Some will look into credit cards offered by certain banks and some will look into tenures offered. Most of the time, retailers would not place a minimum amount for such transactions. All you have to do after making large purchases is to save that same amount of money in your fixed deposit or savings account. By the end of the tenure, the interest you’ve earned is your profit.

5. CREDIT CARD REWARD POINTS Most credit cards offer reward points when you spend. The accumulated reward points can be converted to cash value for subsequent spending. Some banks offer fast track reward points, which basically grants you between three and 10 times more rewards if you spend in those categories. Redeeming a cashback or voucher which normally requires a spending of RM20,000 to get 20,000 points, for instance, can be fast track way to earn reward by spending RM4,000 to get the same 20,000 points if you meet the needed requirements.

4. CREDIT CARD DEBT CONSOLIDATION Here are some simple money making tips from such debt consolidation programmes (normally called Balance Transfers). If you some have outstanding balances with other banks, this is a great opportunity to consolidate the various credit card balances you have into a 0% interest rate installment loan of up to 12 months or more under the balance transfer plan. The money that you have can be kept in the savings account longer to help you earn some interest.

5. CASH BACK ON CREDIT CARD “All the above are a hassle to me because I am forgetful?” A simpler but less lucrative way to make free money from credit card

AVOID THE BELOW! 1. Do not revolve on your credit card as you may be charged up to 18% interest per year! 2. Do not withdraw cash over the counter or through your ATM 3. Do not go over your credit card limit Most cards charge a penalty if you breach your credit limit. Also, it will affect your application or credit bureau scores when you apply for a new facility in the future. This is also a reason why applicants get their loans rejected just because they have gone over the limit on one single card, even when they have zero utilisation on all the other cards owned. Credit card is a double-edged sword. You stand to gain from it if you manage it wisely or become a slave to it if you falter. Use it with care to reap its benefits. Stay tuned to our next SMART financial management tips where we leverage SMARTly to financial freedom.

ABOUT THE CONTRIBUTOR Gary Chua runs workshops to educate people on latest winning formulas to stay ahead in these trying times! Please go to www.smartfinancingco.com to get the latest updates on upcoming events. He always welcomes feedback and valuable sharings. Please feel free to drop him an email at general@smartfinancingco.com or connect via social media at Facebook.com/Garychualw

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STRATEGY

TOUGH TIMES –

WHAT SHOULD WE FOCUS ON I

recently read an article that resonated with me. It was a young man named Adam, (name changed for confidentiality) who faced a lot of challenges in trying to keep pace pace with the high cost of living in Kuala Lumpur. Adam earned a fairly decent income of RM4,000 per month, but he found himself living from paycheck-topaycheck. Adam pays rental for a condominium (RM1,000); he has a car loan (RM550), transportation costs which include petrol, toll and parking (RM440), food expenses (RM500), insurance (RM150), Internet & phone bill (RM200) and contributes to his parents (RM500). The sad financial

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reality is that his net pay of approximately RM 3,500 barely covers his expenses of RM3,340 above. He does not have enough money for entertainment and maintains a simple social life. Adam is also in a precarious situation because he does not have a contingency fund for emergencies. I was once in Adam’s situation. I once earned RM 3,000 after deductions; had more or less the same expense structure as Adam, and was living from paycheck to paycheck. I contemplated on various options to cut down on my expenses. At the same time, I felt great a burning anger with my situation. In all humility, there was room to reduce expenses, but

Adam and I were not exactly living a ‘Paris Hilton-inspired’ extravagant lifestyle. Firstly, buying a motorcycle could potentially be riskier in terms of safety. Why should I also be a miser on my food expenses and spend RM2 per day on potentially less nutritious food? My food budget of RM500 seemed modest and didn’t even include luxuries like fine dining. Perhaps moving from my condo to a room would probably save me an additional RM500 or so. I then asked myself a hard and candid question. Can an additional RM500 in monthly savings improve my quality of life in a profound or significant way? Yes, the virtues of disciplined savings are good


STRATEGY and the value of RM500 shouldn’t be underestimated. But let’s face it – RM 500 in savings isn’t going to present you with a lot of options. As such, I refused to be practical. I refused to accept the conventional wisdom to take a more ‘realistic path’. I refused to embark on an austerity drive to further cut down my expenses, which I felt were not excessive to begin with. What did I do? I allocated 0% of my efforts to cost-cutting and devoted 400% of my energy into improving my earned & investment income. I embarked on the following initiatives: 1. I dedicated my time to improve the technical skills for my career in banking. I read manuals, memos and bugged my seniors to help me improve my job knowledge. As such, I found myself wanting to take the LRT to work early to get a head start in the day, as I wanted to avoid the horrendous traffic. I didn’t mind starting early and leaving office late too. I was motivated to do so. The next thing I knew, my commuting and travel costs dropped significantly. 2. My bosses encouraged me to take a Professional Accounting qualification as I was in the Finance department during that stage of my career. I spent the next 2.5 years without any social life. I was glad to spend most weekends at home because I needed to study and prepare for my exams. The next thing I knew, my expenses on food and entertainment dropped dramatically. I was happy to eat simple & healthy meals at home because I wanted to maximise my study time. 3. I built good relationships with my bosses who eventually became my treasured mentors. I went to them regularly for feedback and advice, and they were vested in my success. That year, I was humbled to be rated as the top performer in the division. I received a promotion while my salary increased from RM3,000 to RM4,500 in a single year. 4. My Bonus that year was about RM20,000; which was pretty decent considering my original salary of RM3,000. Whilst I do appreciate

savings as a virtue, it would have taken me close to 3.5 years to save that same amount via regular monthly savings. I used my bonus as a down payment for a cash flow generating apartment and was able to build my portfolio more efficiently. Moral of the story? Sometimes, being ‘realistic’ is the most commonly travelled road to mediocrity. Sometimes, it pays to be unconventional if you want to be better. In other words, the ‘realistic’ approach to both Adam’s and my predicament would be to attack and cut costs diligently. However, I made income improvement the foundation of my habit and a priority over cost cutting. I made it my sole purpose and burning desire. As described above, I then found that my lifestyle needs became simpler and I spent less money, because I was just so focused on improving my skills and income. Please don’t get me wrong – I do advocate the values of savings diligently and not spending exorbitantly. However, wouldn’t it be a better option to cut costs

and increase your income as well? It seems that being ‘cheap’ is now a new social dogma propagated by some gurus and experts. At the same time, spending on luxuries and wants is viewed as nefarious. Hey – if eating cheap ‘economy rice’ every day or not having car rocks your boat, I respect that. But let’s not impose our own lifestyle habits on others. In all humility, I’d like to recommend a life of abundance, instead of limitations. If one likes eating RM50 gourmet meals every day – go for it if you can afford it and if it makes you happy! Just make sure you earn a lot of more to fund that kind of lifestyle. Also, make sure you also invest regularly with your increased income to have a solid financial base. Lastly, don’t be intimidated by people’s opinions, mine included. Only mediocrity is sure of its self, so take risks and do something unconventional. Don’t be afraid of being different; of doing things in a different way. Rather, we should be afraid of being the same as everyone else.

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

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STRATEGY

BUYING PROPERTIES

– HOW TO HANDLE YOUR EMOTION

W

e tend to buy things with a lot of emotions. More so if it is a big ticket item like a house or an investment property. When we go house hunting, we are drawn to several emotional factors. We draw our first impression based on how well the lawn is maintained or if the exteriors are wellcoated. The same applies to condominium where we check if walls and elevators are graffiti-free. If the interiors of the property we are viewing are newly-painted, it contributes positively to our emotions. Our senses are heightened when beautiful views of skyscrapers or the beach meets the eye

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as we open the windows. In a nutshell, we let emotions cloud our judgements on properties. That is why some people end up overpaying for a property or even buying a property in a lousy and out of the way location. While we do rely on our emotions to buy certain things, we should not depend on it entirely when it comes to buying properties. More so, if it is an investment property. Prospective buyers should be aware that experienced real estate agents and sellers would stage a property in pretty light for a quick sale. They would “invest” in a paint job and even mow the lawn to ensure that

we are surrounded with positive vibes when we view the property. Some even go as far as having table runners on the dining table or even deodorising the place half an hour before we arrive. When we invest in the stock market or unit trust or even precious metals, we rely less on emotion to make purchasing decisions. The same judgement applies when we want to put our money into Fixed Deposits. So what is the difference with properties? We tend to use facts and figures to make decisions when investing in stock markets or unit trusts. We should do the same when


we invest in property. We need to assign numbers to assist us in deciding which property to invest in. This is because a property investor would view many properties before deciding on the one to buy. Some property gurus suggested that we need to view and analyse 100 properties before buying the 1 investment property. If we were to follow this suggestion, how could we analyse and finally buy the 1 investment property without assigning a number to the 100 properties that we had seen. Of course, if we are buying the property as our home, we may then choose to ignore some of these numbers. Depending on your exit strategy in investing in the property, we could use different numbers to evaluate the potential investment property. I,n this article we shall be focusing on those who intend to buy the investment property for a rental income stream. YIELD Some people would just rely plainly on Yield, which is easier to calculate. In fact, our friendly neighbourhood real estate agents would often quote this number. Yield is Annual Rental Income divided by the Buying Price.

However many active real estate investors find Yield alone insufficient to capture the full spectrum of variables to analyse a potential investment property. CASH-ON-CASH RETURN Many people are confused when it comes to investing in property. Many would argue that the returns on the investment in property should be the Yield. Let us look at an example to help us understand why Yield is not the number that we should be using. If for example, we put RM100,000 into a Fixed Deposit and we get a 4% return, we will get RM4,000 for the year. However, if we were to buy a RM100,000 property and we can get an annual rental income of RM4,000, we do not necessarily get a 4%

return. Why? This is because we would normally get a 90% loan from the bank to buy the property. This means that we would have put up only 10% (or RM10,000) to get a RM4,000 annual return. Many active real estate investors would prefer to use Cash-on-Cash Return to analyse a given potential investment property. So what is Cash-on-Cash Return?

Cash-on-Cash Return is nett annual income derived from the property (which is the Annual Income minus the Annual Expense) divided with the Total Cash Outlay. The Annual Income is normally derived from rental of the property. Of course depending on the category of property, there may be other sources of income as well. The more advanced real estate investors would even include a number for tenant turnover (or potential vacancy) for a property. In certain locations, we may be able to get a new tenant within three months after the previous tenant had vacated the property. Therefore instead of stating the full 12 months as our Annual Income number, we should be using nine months rental instead. The Annual Expense is the operating expense to get the property rented and it consist of many components. They include; 1. Maintenance Fee & Sinking Fund (if it is a gated community); 2. Local Authority Taxes (Assessment and Quit Rent); 3. Interest Portion of our Home Loan; 4. Annual real estate agent fee; and

5. Other annual expenses The Total Cash Outlay portion of the Cash-on-Cash Return is the money that we initially put into the property. This is typically the 10% deposit that we used to book the property. We may even need to do some renovation to the unit, which includes a new coat of paint. If we intend to rent out a fully furnished unit, we need to put aside some money to buy furniture and electrical appliances. The other component in the Total Cash Outlay includes the legal fees for the agreements, both the Sales and Purchase document and Home Loan to secure the property. After signing the dotted line of the Sale and Purchase Agreement and before getting the keys to the property, we will go through another phase of emotional rides. We term this as “Buyer’s Remorse”. During this period we would have a lot of questions popping up in our minds. Whether we had made the correct decision? Whether we had paid too much for the property? Whether there are any negative things like a leaky roof that we had not noticed in our initial survey of the property? Or whether our analysis is right in the first place. During this nerve-wrecking period, we should take out our analysis, including the Cash-On-Cash Return number to reassure ourselves that we had done the best we could and that our final numbers point to this one property that we had just confirmed buying. Buyer’s Remorse is something all of us struggle with, even the very experienced investors. While it does not mean that we will not buy a dud from time to time, using numbers like Cash-on-Cash Return will help us mitigate or lessen that probability. Happy Investing.

ABOUT THE CONTRIBUTOR Calvyn Laang regularly conducts property investing training to share his vision that investing in property is not only for the rich but is also for everyone. He believes that property investing is the best investment vehicle for an average wage earner to retire earlier if he/she chose to. For more information on his “Secrets to Successful Real Estate Investing” training, go to http://PropertyInsiders.com.my or WhatsApp 016-992 1800.

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STRATEGY

MENTAL TOUGHNESS M ental toughness is a contested term, where people often use to refer to any set of positive attributes that helps a person to cope with difficult situations. Coaches and sport commentators freely use the term to describe the mental state of athletes who persevere through difficult sport circumstances to succeed. Only within

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the past 10 years has scientific research attempted a formal definition of mental toughness as a psychological construct. Mental toughness is many things and rather difficult to explain in few words. Its qualities are sacrifice and self-denial. Also, most importantly, it is combined with a perfectly disciplined will that refuses to give in. It’s a state of mind – we could call it ‘character

in action.’ However, in the broadest sense, it can also be defined as the ability to maintain the focus and determination to complete a course of action come what may. It often means the ultimate difference between success and failure. In Jason Ferruggia’s words mental toughness is usually something you’re born with or develop


very early in life due to your surroundings. Therefore, it’s fair to construe that everyone can improve his tolerance, patience and concentration. BE A SELF-STARTER “A man can only rise, conquer and achieve by lifting up his thoughts; they themselves are makers of themselves. The mind is the master weaver.” - James Allen. The cornerstone of mental toughness lies in the inner desire. People who are intrinsically motivated are self-starters; willingly undertake anything to achieve what they want. They need little or no encouragement to perform their utmost best, and often set goals for themselves. They will not bow to the pressure from outside world. Similar principle also applies to wealth building, we need to revel in the rat race, but focus on our goals and explore best means and ways to accelerate and accumulate our wealth. We set our own race path and gather our energies best for the opportunity that lies ahead of us. Even if the probability of that success seems uncertain, our belief and faith will help us materialise it. Sane, sound and solid understanding of these two traits will assist us in training ourselves to become tougher and endure more to achieve what we want in life, especially when life gets tough. What we need is proper direction and guidance to move out from our comfort zone with ease. It is unreasonable to settle into routine and expect to make permanent progress. Keep improving and keep moving ourselves to the next level of success. Remember, progression is a crucial part of training, applying and challenging stimulus to your life that will give us a greater ability to handle all kinds of stress. It teaches us problem-solving skills and critical thinking, both of which can aid us to enhance our mental toughness. PREPARE FOR MENTAL TOUGHNESS “An entire sea of water can’t sink a ship unless it gets inside the ship. Similarly, the negativity of the world can’t put you down unless you allow it to get inside you.” GoiNasu. Be prepared. To be financially rich, we need to be ready for anything. We should know well in advance what we are going to save, spend, invest and think on matters

No great mind has ever existed without a touch of madness.”

related to wealth. Obviously, you can’t be prepared for everything, but try to be anyway. Pre-anticipate any issues that could arise, have a solution or contingency in mind. What are the available permutations we can select for the most likely best outcome at any material time? Keep your peace of mind? Once we have all these, we will be surprised by how far we can go. By renewing our mind, we stand a better chance to be able to identify more opportunities. In the same manner, we are able to manage our wealth better especially with a new approach or perspective. With rapid changes in today’s world, everything unprecedented, unexpected and unthinkable can happen, By now, we should know that every issue has its solution. Like playing chess, we need to concentrate on our game board, workout the available options and select the best out of them. By creating deep insights into future situations, we are rest assured to be moving closer to our goals. We will always act consistently with our purpose and with firm faith. PROGRAM FOR SUCCESS Therefore, we need to program our mind for success. In this connection, I am very fortunate that I have humble beginning when I was born under-weight. I used my mental strength to overcome physical weakness before I tapped into spiritual strength. I managed not only to bounce back from my depression, but I also

- Aristotle elevated my vibration to a much higher frequency. I was able to go of my past painful experience and move forward with ease, grace and peace. REINVENT FOR SUCCESS I have even re-invented my new life at my late 40s and re-invented my blueprint to make my dream life a reality. I began to realise that the last two years are my most productive years despite my advancing age. Through this colourful and enriching journey, I had found myself in the position to help others. I feel blessed because God is using me to answer others’ prayers. Always remember that our purpose on the earth is not to get lost in the dark but to be a light to others, so that they may find their way through us. Although no one can teach others, we can lead them to discover what they need and want. Friend, make sure you enjoy the journey and that is your surest way to endure through the journey. By now, you must realise how powerful our mind is. When you fill it with purpose and positive thoughts, your life will start to change. You can even be a money magnet if you use it wisely, skilfully and intelligently once it is aligned to your inner voice. That’s how you are able to draw the energy from the universe and use this vitality to make much more things happen effortlessly. That’s how you can multiply your wealth many folds and abundance will still flow in no matter what.

ABOUT THE CONTRIBUTOR James graduated with a Bachelor’s degree in Accountancy from the National University of Malaysia, and Laws degree from the London of University (UK). He is a Chartered Accountant with the Malaysian Institute of Accountant, Certified Professional Trainer with IPMA (UK) & Train the trainer from Human Resources Development Bhd. (PSMB). His rich experience, broad exposure, diversified experiences, passion, and commitment are definitely assets that set him apart from others. He can be reached at jamesoh2003@yahoo.co.uk

www.propertyinsight.com.my JUNE 2016 I 77


STRATEGY

LOYALTY PAYS O

nce you have a good customer, you should do all you can to keep them. It is wise to quote a popular saying “it costs five times more to acquire a new customer than to retain an existing one” and believe that this cost principle should also apply to property investment. Once you take into account the agency fees, voids and property upgrade costs, not to mention the hassle and risks involved in taking on new tenants, it’s likely to be much cheaper to keep your existing good tenants. Good, loyal and long-term customers are critical to building a successful property business. You should make it your mission to attract and retain the best customers to lease your property. For example, I have a tenant who has been renting my property for more than 5 years and I ? have not once raised her rent to incentivise her and retain her as a customer. Quality tenants are worth their weight in gold; they pay your rent on time and they look after your property. Once you have a good customer, you should do all you can to keep them. One way to ensure this is to help them solve any arising problem immediately and the other way is by rewarding them for their good qualities. Rewards speak volumes and show your tenants how much you value them. This way your customers feel appreciated and this will keep them loyal to you while reducing the risk of them seeking out alternatives or worse, losing them to your competitors. How do you reward loyalty? The most valuable reward or initiative for most customers is in monetary form. Keeping your rent purposely below the going market rate and informing tenants you are doing so because they are such good tenants, makes them feel valued because they will be able to save more of their disposable 78 I APRIL 2016 www.propertyinsight.com.my

income. Raising rental exorbitantly are less favoured against the current backdrop of a weak economy, thus softening the blow with a below-market increase are likely to make tenants happy. It can be very tempting to increase the rent (especially if prices have risen); but don’t forget that once an increase has been notified, your tenants will usually start to scout the local market to see what else is available. Unless they are particularly settled on your property or you are offering something difficult to beat, your price increase may potentially drive your customers out and into the arms of your competitors. Tenants do not often think about the additional costs associated with moving, let alone the hassle of moving. The top concern that many of them have when a rent increase is being proposed will be the extra money they would have to fork out monthly if they stay. That being the case, you should take the time to consider how much a new customer is worth to you versus the cost of acquiring them, and stack that figure against the cost of retaining the customers you have. It is worth assessing if a retention strategy is more cost and time effective than an acquisition strategy, and you should plan your customer management accordingly.

ABOUT THE CONTRIBUTOR KK Chua is the strategic advisor & managing director of Armani Media. 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 kkchua@propertyinsight.com.my


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Property Insight June 2016  

Property Insight is a monthly property investing magazine.

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