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JUNE 2017




JUNE 2017 RM7.50(WM) RM9.00(EM)



Celebrating milestones

Dato’ KK Chua, Editor-in-Chief

Editor-in-Chief Dato’ KK Chua Editor Yvonne Yoong Sub Editor Gabriel Lim


ow time flies! This month marks Property Insight’s fourth anniversary which calls for a celebration! Having been in the market providing in-depth coverage of the property industry to investors, buyers and homebuyers alike, it has been a rewarding journey which we have embarked with you, our esteemed readers. Thank you for being part of our journey, even as we continue to explore issues and gain further insights into this industry which is currently undergoing some challenges, given the weak market sentiments. Despite the uncertain market though, we are reminded of the Chinese saying that echoes the idea that behind every crisis lies opportunities. With this in mind, we surge ahead to dig deeper to find creative and innovative solutions, just like property developers are doing now. Even as the magazine went to print on a high note, the team was also kept busy having organised the glamorous Prestigious Developer Awards (PIPDA) 2017 to recognise the nation’s crème de la crème of property developers. It was certainly a night to remember as the glitzy event was graced by the presence of the property industry’s best who came out in full force to support the event. About 600 guests attended the dinner which saw both winners of Malaysia’s Top 10 Developers Awards and Development

Award winners being recognised. The annual Malaysia Entrepreneur Convention (MEC) 2017, organised by Entrepreneur Insight was also a rousing success, attracting over 2,000 attendees. The event, hosted by Armani Media Sdn Bhd, saw a diverse range of entrepreneurs from various industries congregate under one roof. It also proved to be an effective platform for business networking for the attendees. In line with Armani’s mission of trailblazing new heights of achievements, MEC, which represents the largest gather of its kind, also lived up to its name, having made it into The Malaysia Book of Records as Malaysia’s Largest Entrepreneur Convention. This month’s cover issue focuses on the success story of Pembinaan Tetap Teguh (PTT) which is paving the way for developers by sourcing for tracts of land for development and clearing it to make it suitable for development. Two brothers, PTT Group Chairman Terry Teo and Group Managing Director Teo Swee Phin shares how they went from zero to hero. We hope these success stories will inspire you on your journey. On that note, see you next month.

Writers Mages PV Lingam Felicia Soon Calvin Tung CREATIVE Creative Director Sarah Tan Designer Megat Khuzamir BUSINESS DEVELOPMENT Sales marketing enquiries +6012 3788 683


Armani Media Sdn Bhd (1032085-H) No. 32-3, Jalan Pekaka 8/4 Seksyen 8, Kota Damansara 47810 Petaling Jaya, Selangor Tel : +603 6156 3366 Fax : +603 6156 3399 PRINTER Percetakan Osacar Sdn Bhd Lot 37659, No. 11, Jalan 4/37A Taman Bukit Maluri Industrial Area Kepong, 52100 Kuala Lumpur, Malaysia ENQUIRIES Insight Malaysia

Property Insight Malaysia


On the cover: 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.

Left: Terry Teo, Group Chairman & right: Teo Swee Phin, Group Managing Director of Pembinaan Tetap Teguh Sdn Bhd


12 Paving The Way A trustworthy partner for developers


18 Common Mistakes to Avoid When Refinancing Your Property

Why refinancing is not for everyone


22 What to Do When One is Unable to Keep Up With Housing Loan Repayments? Maintain a disciplined lifestyle with steady repayment to avoid complications

24 Time to Sell? How to tell if an investment is no longer worthwhile? We ask the experts

28 Trends and Outlook for Homebuyers Various schemes have been implemented to facilitate home ownership


31 Building with Precision, Quality and Consistency


52 Once Bitten, Twice Shy Having good property knowledge is important for making the right decisions


56 MOMAwater - Championing Cleaner & Safer Water for Consumption Combining technology and innovation for healthy living

“Building Homes of Swiss Watch Standard” is the tagline which guides Orando Holdings Sdn Bhd’s operations



Introducing Johor Bahru’s innovative homestay business

36 Segambut Comes of Age INVESTOR NEXT DOOR

42 Smart Planning in Amassing Properties Harnessing the power of group funding is the way forward for this investor


46 Enhance your home with smart security Transform your residence into a smart home for greater peace of mind


50 Legal Eagle

Imparting positive influences to the next generation is second nature for the founder of Brickfields Asia College

58 Roof Talk Theme Hostel INDUSTRY INSIGHT

60 Architect With A Passion For Design Having spent years harnessing his skills, Mustapha Kamal Zulkarnain is now passing on his knowledge to the next generation


62 Five Things You Need to Know if You are Buying Your Property from the Secondary Market FINANCE

64 No, I Am Not Trying To Be Funny STRATEGY

66 Watch Out The MRT1 is Coming! 68 Property - The Effervescent Global Currency Investment Strategy




he annual Malaysia Entrepreneur Convention (MEC) 2017 organised by Entrepreneur Insight on May 20 was a rousing success attracting over 2,000 attendees. The event hosted by Armani Media Sdn Bhd brought together a diverse range of entrepreneurs from various industries. Prominent speakers took to the stage to share their insights and business experiences on various topics. Among the topics presented were HR – Recruit & Retain the Right Talent; Food & Beverages – Making the Customer the Hero of Your Story; Effects &Risks of Mergers and Acquisitions on Entrepreneurs; Startups – The Secret of Getting Ahead Is Getting Started!; and Marketing – Don’t Follow the Path, Blaze the Trail. The event also proved to be an effective platform for business networking for attendees. MEC, which represents the largest gathering of its kind, lived up to its name, having made it into The Malaysia Book of Records as Malaysia’s Largest Entrepreneur Convention. JUNE 2017 I 5


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roperty Insight recently celebrated its glamorous Prestigious Developer Awards (PIPDA) 2017 gala dinner at the grand ballroom of The Majestic Hotel, Kuala Lumpur on May 5. The annual event was graced by guest of honour Tan Sri Datuk Seri Joseph Kurup, alongside Dato’ Sri Devamany S Krishnasamy, Minister and Deputy Minister in the Prime Minister’s department and Datuk Dr. Abu Bakar Mohamad Diah, Deputy Minister, Ministry of Science Technology and Innovation. About 600 guests attended the dinner which saw both winners of Malaysia’s Top 10 Developers Awards and Development Award being recognised. Recipients of the special recognition awards; namely the Best Real Estate Educator Award went to President College. Meanwhile, the Personality of the Year Award was bestowed upon LBS Bina Group Bhd group managing director Tan Sri Lim Hock San. Partners and sponsors for the event included The Hour Glass and Tatler magazine. The night witnessed entertainment by singer Buddy Loren with a shadow dance performance and live band performance themed the “Roaring 20s Glamour”.

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unsuria Bhd (Sunsuria) marked the grand opening of its Sunsuria City Celebration Centre in style. Malaysia-China Business Council Chairman, Tan Sri Ong Ka Ting officiated the launch of its inaugural Sunsuria City Fest over the weekend of April 22 - 23. Held on the grounds of the 525-acre township, the “Food, Music and Art” themed festival reflected Sunsuria City’s identity as a cultural and education hub, built on its “Smart, Liveable and Sustainable” core values. The event brought together visitors who were encouraged to freely walk and explore

its beautiful streetscapes laden with food trucks, art showcases and exhibitions and live entertainment performances by celebrity singers Fish Leong, Sheila



elebrating 23 years of journey in the property industry, Mah Sing Group Bhd (Mah Sing) recently launched a two-month long celebration cum sales campaign; the “RM23 Million Celebration Rewards” in Icon City, Petaling Jaya. The “RM23 Million Celebration Rewards” campaign was launched by Mah Sing’s Chief Executive Officer, Datuk Ho Hon Sang, Director of Group Strategy & Operations, Lionel Leong and Chief Sales Officer, Gerard Yuen where lucky winners were awarded prizes that were well tailored towards each individual project. Chief Executive Officer, Datuk Ho Hon Sang says, “We want to be very practical, which is why we decided to launch the ‘RM23 Million Celebration Rewards’ campaign. The campaign will end when the total of RM23 million has been given out entirely or on the June 30, whichever that comes first. 10 | JUNE 2017

Majid, Ah Niu, Dennis Lau, Juwei, Korean boyband Block B Bastarz, and Reza Salleh thrilled the crowd.



unway Group Founder and Chairman Tan Sri Dato’ Seri Dr Jeffrey Cheah AO has become the first and only recipient of Rating Agency Malaysia (RAM) Consultancy’s inaugural Sustainability Icon Award, which was presented by the Minister of Finance II, YB Datuk Seri Haji Johari Abdul Ghani, at the RAM League Awards Night. Tan Sri Cheah was conferred the award in recognition of his vision, exemplary leadership, commitment and dedication to furthering sustainability over the last four decades across Malaysia and the region. “The decision by RAM to institute this award is yet another indication that the concept of sustainable development is gaining increased recognition in Malaysia,” he says upon his acceptance of the award.



n echoing the government’s call for a fitter and more active Malaysia, Naza TTDI and Under Armour have teamed up to inspire the public to choose a healthy lifestyle. Launching the Armour@ThePark at the Naza Tower at Platinum Park, Kuala Lumpur was SM Faliq SM Nasimuddin, Deputy Executive Chairman and Group Managing Director of Naza TTDI Group. As he explains, “Being centrally located in the heart of the city, Platinum Park offers an ideal place where locals can gather and engage in activities that promote an active and healthy lifestyle”. One of its unique features is the picturesque public space which offers a refreshing al fresco feel when visitors are working out. The weekly 1.5-hour group workout session will be held every Tuesday until Dec 19. People of all levels of fitness from beginners to fitness enthusiasts are invited to take part. JUNE 2017 I 11


PAVING THE WAY A trustworthy partner for developers BY: GABRIEL LIM GWO SHIN

12 I JUNE 2017



ack of all trades, master of none”, the often heard saying conveys the message that it is better for one to specialise in a skill. To succeed in the market, one has to discover a niche where one can deliver the best to emerge as the market leader. Every business should come up with its unique selling proposition. This is no different for Pembinaan Tetap Teguh Sdn Bhd (PTT), which has successfully established itself as a leading land developer and earthwork contractor in Malaysia. At the helm are two diligent brothers - Group Chairman Terry Teo and Group Managing Director Teo Swee Phin. Unlike most of the developers looking out for strategic land banks to purchase for the construction, launch and marketing of their new projects, PTT specialises in the earthworks and infrastructure planning as a land developer. In short, they function as a trustworthy and dependable support to the developers. “Developers need more projects to increase their turnover. But they may not have suitable land (to develop). As such, they will conduct a land search, buy and clear the land before they can launch their products, be it landed or high rise properties. “That’s where we come in to source for suitable land to get it cleared and flattened.

Once the ground is cleared, developers can purchase the land immediately and start building their houses,” says Terry. Prior to establishing their own firm, Terry was working with a landscape company which undertook projects including the Kuala Lumpur International Airport (KLIA) Main Terminal Building and also the Prime Minister’s Office in Putrajaya. The experience has taught him to take into account the way things work in the construction ecosystem. This realisation emboldened Terry and his brother to establish their own company. GAINING TOTAL CONTROL The company kicked off its business by building schools in Terengganu. It started off with Merbau Patah Primary School, Kuala Terengganu in 2001 followed by Kampung Nyior Secondary School in Paka, Dungun in 2003. In between, PTT also secured a roadworks project in Pusat Bandar Melawati, Gombak in Selangor. He says that the challenges of being a building contractor covers issues ranging from rooftop construction to overseeing the entire building construction project. To counteract the negative aspects of the job, the Teo brothers decided that beginning 2005, PTT would primarily focus on earthworks as the main contractor from their role as sub-contractor since 2000.

BUILDING TRUST Even in their previous role as subcontractors, they were a force to be reckoned with. This fulfills its aspirations of becoming a renowned fast-tracked contractor as it emphasises greatly on performance by investing in machineries. Over the years, the company has invested over RM100 million in machinery. With over 300 units of machines including bulldozers, excavators, heavy trucks and more, PTT has emerged as the largest fleet owner of Caterpillar machines in Malaysia, and has managed to exceed the required specification in ground compaction. And now, filling a bigger role as main contractor, PTT will be able to operate with more flexibility in undertaking more complicated projects, being the owner of the largest fleet of earthworks machinery with over 300 Caterpillar and Volvo machines and counting. Although they are in the challenging construction line, the brothers believe that the only thing stopping them is the weather which they have to compete against in terms of delivering their projects on time. As an earthworks contractor, PTT helps developers to clear and prepare the land for construction. Their main client, Sime Darby Property Bhd, once engaged them to clear 1,000 acres of land and over 10 JUNE 2017 I 13


Swee Phin recently donated RM27,000 to his alma mater Modern designs at the family area for a sense of belonging

million cubic metres of earth to cut and fill in Bandar Universiti Pagoh, Johor within six months – an almost impossible feat which they successfully pulled off. CONCERN FOR THE ENVIRONMENT While PTT deals with the levelling of hills and the clearing of land, they also care about the environment. The company has formed a special task force to handle environmental issues. For example, as huge chunks of land are exposed to the elements without coverage from vegetation at construction sites, it is easy for dust to form during the hot weather while topsoil will be washed into rives and become silt during rainy days. The discharged water could contaminate the nearby land and rivers if not treated properly. “At PTT, the special environmental task force has taken various measures to protect the environment. We have invested in our own Gross Pollutant Traps (GPTs) to ensure that the Total Suspended Solids (TSS) in discharged water is minimised in line with 14 I JUNE 2017

industry best practices to comply with the Standard A requirement of the Department of Environment (DOE), and that the water is as clean as those found in rivers in the forest,” says Swee Phin. The Selangor Water Management Authority (LUAS) has been conducting inspections on discharged water at all construction sites across Selangor. When it came to the northern Shah Alam suburb of Elmina City, a Sime Darby township which PTT handled in terms of the earthworks, they found no issues at all which spoke volumes of PTT’s effort in ensuring a clean environment. PTT takes extra initiatives and preventive measures by also setting up automated water sprinklers to avoid the dust from rising into the air as opposed to other contractors who spray water unto the roads. “By eliminating the need to send water bowsers to sprinkle the roads every few hours, they get to save on diesel too. Besides, the task force also inspects the cut slopes often, to ensure that any erosion

will be under control. “We have also installed rainwater harvesting systems at the sites to harness rainwater for sprinkling and other uses. The construction industry should really embrace more technology to facilitate better quality works while protecting the environment,” affirms Terry. EMBRACING CORPORATE SOCIAL RESPONSIBILITY PTT is no stranger when it comes to corporate social responsibility (CSR). As a philanthropist, Terry serves as the President of the Sakyamuni Dharma Centre in Old Klang Road, Kuala Lumpur. “We managed to buy them a building as they were renting previously, and continued to offer financial aid year after year,” Terry said. Swee Phin also recently donated


RM27,000 to his alma mater, the Chung Hwa Wei Sin High School in Kuala Terengganu for the Academic Enhancement Programme (Program Pemantapan Akademik) to aid students to excel in their studies. As there aren’t many family recreation facilities around Klang Valley, PTT established an equestrian centre for families - the Denai Alam Recreation and Riding Club (DARC). “We started everything empty handed, so it’s time for us to give back to the community whenever we can. Horse riding is my passion, and it has been my dream to transform horse riding from an expensive, elitist sport to a more affordable family activity. There are plenty of golf clubs but you hardly see family clubs. Therefore, we just charge a minimal fee for the DARC

membership, which is just RM290 a year for the whole family, even though the upkeep of a horse costs about RM4,000 every month, and we have 80 horses here,” says Terry. Operating with the intention to help as many people as he can, Terry has also taken up the offer to be the Honorary Consul General for Nepal in the states of Selangor, Negeri Sembilan and Malacca. “I have to attend to a lot of cases involving Nepalese citizens here. This takes up a lot of my time and energy, but I am very happy to contribute my service as I get to help many migrants to solve their problems when they are far away from their homeland. You need a lot of passion and sincerity to serve other human beings. In fact, it is the biggest CSR I am doing,” adds Terry. PTT is also committed to talent development by sending its employees

to the “Caterpillar University” where they can be trained to manage the machines. Besides learning how to operate and repair machines, trainees are also taught how to manage the machinery. With state-ofthe-art technology incorporated into the machines, the fleets can be monitored via satellite, which allows the management team to receive real-time reports on the health of the machines. “Whenever the machines fail to offer optimum performance, or should the diesel consumption increase, the management team will be informed immediately. The Level 3 courses offered by Caterpillar University is equivalent to a degree, whereby graduates will become professional engineers for Caterpillar machines. “They will diagnose the problems and conduct preventive maintenance. For JUNE 2017 I 15

COVER STORY example, while the mindset in Malaysia is to replace a hose only after it bursts, the PTT team will change the hose as soon as a small break is found. This way, the lifespan of the machines are lengthened,” asserts Swee Phin.

That’s where we come in to source for suitable land to get it cleared and flattened. Once the ground is cleared, developers can purchase the land immediately and start building their houses” - Terry Teo

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FAST-TRACK RESULTS PTT capitalises on machine usage to deliver fast-tracked results. While others use their machines for up to 2,000 hours a year, at PTT, each machine can clock up to 3,500 hours of work per year. The rationale behind this is that by maximising machine usage at multiple projects, better results and more profits can be obtained. If machines are left idle, no revenue is going to come in. “Others might want to avoid overtime or minimise investments in machinery. However, we think differently, and make sure we deliver better results with the help of machines. Initially, when we were given (our very first) RM20 million contract, we invested an equivalent RM20 million in machinery. People might laugh at us but if you don’t invest in machines, how are clients going to give you a job? How can you claim to be able to deliver the job? If you are slow, you will delay the subsequent works. Therefore, you must invest and leverage on the machines and build up the track record, so people will have faith in us,” adds Swee Phin.

Counted among PTT’s achievements is its prominent track record that speaks for itself. At Elmina City, PTT has cleared 2,200 acres of land out of the overall 5,500 acres, including 1,000 acres in Elmina East and 800 acres in Elmina West within eight months. Due to the speedy completion of earthworks, Sime Darby Property has successfully launched 1,300 units of landed homes so far. In fact, Elmina has enjoyed the fastest development turnaround time out of Sime Darby’s 24 townships across the nation. “It’s not easy for developers of landed properties to launch products worth RM1 billion in a year, and PTT takes pride in saving time and cost for our clients,” says Swee Phin. “That is why the clients always pass difficult jobs to PTT, because PTT will surely deliver. That is the trust developers have in us. Everything we promised, we have honoured,” he adds. On average, he says the company is clearing 1,000 acres of land for Sime Darby annually. “So far, we have successfully completed our job in Elmina, Denai Alam, Bukit Jelutong and Putra Heights in Selangor, Nilai Impian and Bandar Ainsdale in Negeri Sembilan as well as Bandar Universiti Pagoh in Johor, among others,” adds Terry.

PERSONALITY OF THE MONTH “In years to come, various infrastructure FORAY INTO PROPERTY DEVELOPMENT projects are earmarked to be launched. Like many other successful industry This includes the East Coast Rail Link players, PTT has also ventured into property (ECRL) from Port Klang to Kuantan, Kuala development by forming a development Terengganu and Kota Bharu before ending arm - Mainstay Development Sdn Bhd. in Pengkalan Kubor, as well as the High The word “Mainstay” he explains, is a Speed Railway (HSR) between Kuala truncated version for the term “Remain Lumpur and Singapore. Staying”, which more or less shares the In addition, there will be plenty of same meaning as “Tetap Teguh”. earthworks coming on board. Most Following the instinct of capitalising on developers don’t have this kind of machines one’s niche, Mainstay decided to partner that are needed for land clearing. Therefore, with Horizon Group Properties (HGP) we don’t have that many competitors. As a from the US with its venture into the prudent land developer, we will continue development of a retail outlet store. Horizon to buy strategic land, clear it and offer it to is one of the largest outlet store operators developers. They can sleep well knowing in the US which is rich in experience and that all the earthworks has been done, and technical know-how to ensure the success concentrate on their marketing of the outlet mall. An impressive look of Main Place Residence and Mall campaigns at USJ21 instead,” stresses Terry. For instance, Mainstay will pre-lease the As PTT has grown from strength to retail parcels, and only start the construction strength over a period of 17 years, the after enough parcels are leased out and company needed more talents to run the the breakeven point is attained. While this show. is new in Malaysia, it has been the norm “We think big to remain strong and to stay for all Horizon projects around the world. ahead. From the initial headcount of four, Located in Bandar Serenia near KLIA today we have a workforce of 400, including and Xiamen University Malaysia campus, professionals and technicians. Here at PTT, Horizon Village Mall (HVO) is set to enhance we treat everyone as our family members. Kuala Lumpur’s appeal as an international For us, all employees are our brothers and shopping destination. sisters. That’s why everyone can contribute When asked about their future plans, the happily towards achieving common goals,” Teo brothers are unperturbed despite the adds Swee Phin. challenging market.

At PTT, the special environmental task force has taken various measures to protect the environment” - Teo Swee Phin

Denai Alam Recreational and Riding Club (DARC) JUNE 2017 I 17




efinancing typically occurs when a business or person revises their payment schedule for repaying debt by eliminating an old debt and replacing it with a new one at a lower interest rate. The collateral offered are usually mortgages, car loans and occasionally, the shares of the business owned by the company. The borrower would renegotiate new terms with revised interest rates, repayment plans, amounts and dates for the loan repayment. Once the terms are agreed upon by both parties, the loan would then be refinanced. In this article, Property Insight will be focusing on mortgage refinancing and the mistakes that most commonly plague borrowers who have not taken due diligence to understand mortgage refinancing. SO, WHY REFINANCE YOUR HOME LOANS? There are a myriad of reasons for a person to refinance their homes. Reasons for seeking refinancing could range from an unfortunate change in a borrower’s financial situation to wanting a lower interest rate and lower repayments. For most, the best reason to refinance a home loan would be to consolidate their debts and to only have a singular monthly repayment plan. If a borrower has multiple

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debts from various sources - home loans, personal loans, credit card debts or other high interest loans - and have trouble paying these off, it would then make sense to roll these debts together with the home loan which is typically at a lower rate. Some credit cards charge rates as high as 15% per annum, which is more than what one would find in a typical home loan rate. The key is to make sure the borrower does not lower their repayments once they have it consolidated. The same is true if the borrower managed to attain a lower interest rate on their variable home loan. The savings this provides should then be used to pay off the consolidated loan faster, and not to be used as spending cash. Some borrowers also seek refinancing to use the equity of their homes to pay for home renovations. While this would undoubtedly increase the value of the property, it will also greatly increase the loan term, something that they must take note of if they are nearing the age of retirement. Whatever the reason, refinancing is not always the perfect solution for borrowers. If the current rate of their loan is comparatively low and they do not intend to redraw on the available equity, then refinancing would not be beneficial to the borrower as they may end up incurring

additional costs when exiting besides other administration fees. According to Gary Chua, CEO of SMART Financing, some of the most common mistakes made by borrowers come from their ignorance. He points out that there is a distinct lack of understanding regarding the objectives of their refinancing. “It’s important to firstly identify the purpose of refinancing your property loan as there are costs involved in refinancing. For example, new loans come with a legal and stamp duty fee as well as a property valuation fee,” he says. “Some banks would even charge you a loan processing fee when you deal with

them. Also, your existing loan may still have a lock-in period on it. If you refinance your loan within the lock-in period, you will need to pay the lock-in penalty fee as well.” Once you have ascertained your objectives, you need to understand what I term your “loanability”. This means asking yourself the following questions… “Are you able to take on new loans from the bank right now and are you earning good income now? Is your credit score good enough that banks will be willing to lend you the money?” “Also, you need to take into consideration the aspect of the loan margins that you are qualified for. If your existing loan is

based on a 90% margin and you are only qualified for a 70% margin now, you may need to top-up when you refinance your existing loan,” he explains. There are also further considerations such as the loan tenure. While an individual may be eligible for home refinancing based simply on their current income, the optimum age for financing is 45 years old. Individuals who has 10 years to retirement left may sometimes qualify because their income allows them to pay off the loan before they retire HOW TO AVOID REFINANCING MISTAKES

Miichael Yeoh, CEO and Founder of 2GM Training Academy PLT says that the best way to avoid mistakes is to research thoroughly before refinancing one’s property. He cautions that not reading the new offer letter’s terms and conditions before signing it could lead to buyer’s remorse. Once the legal documents are signed, there is an assumption that the borrower has in fact read the terms of the contract before signing it. Linnet Lee, CEO of Financial Planning Association of Malaysia shares that not doing one’s homework before refinancing is a fatal misstep. “Bank loan officers are very helpful JUNE 2017 I 19


The public tends to look at offer rates and make decisions based on it. However, what is more important is the subsequent rate a borrower must pay for the duration of the loan” - Linnet Lee

people. You just need to know the right questions. When speaking to them, you need to ascertain the appropriate loan schemes which you are interested in. Ask different bank officers to work out the total amount payable in terms of the loan and interest rate for the entire duration of the proposed loan and the services they will provide in terms of ease of loan payment, early payment as well as penalties. “Compare the information with your existing loan before deciding. Most importantly, if the owner has not done his financial planning, he may find that this will impact his cash flow and he will not meet his repayments.”

WHAT CAN BE DONE TO AVOID REFINANCING MISTAKES: DEBUNKING THE MYTH THE HIDDEN COSTS OF REFINANCING: Perception:While it may seem logical, it would be easier and less expensive for your existing bank to refinance your home. After all, the bank would have your credit history, asset information (stocks, retirement and savings accounts, etc) and the current value of your property. It would therefore be assumed that they would also be willing to offer a better price simply because it is easier to keep a good customer than it is to find a new one. Reality:Not so says SMART Financing CEO Chua. 20 | JUNE 2017

Instead he recommends speaking to a few bankers for consultation on their current financial details. This will give them a better understanding on their “loanability” status and given them the chance to shop around for better rates. “Rates are not everything. Look at the various mortgage packages out there as different banks offer different products. Finding a balance between the package which meets your needs and the rate which is worth the refinancing is crucial.” Perform a cost benefits analysis before deciding if it would be worth refinancing the existing loan. A hastily made decision based on what is written on paper would not be enough to the unwary who might find themselves paying more than they had bargained for. CONSIDERING PAYMENTS ONLY AND NOT MORTGAGE RATES: Perception:The lowest monthly payment is always the cheapest option in the long run. Reality:Interestingly, this is not always the case. If a borrower can comfortably afford a higher monthly payment, then choosing a shorterterm mortgage might earn them a lower mortgage rate in the long run. PAYING PENALTY FOR EXISTING LOANS Perception:Most borrowers tend to assume that there is no penalty for their existing loans.

Reality:A prepayment penalty is a fee that bankers could charge if a borrower pays off his their mortgage loan(s) early. It is therefore prudent to check if the prepayment penalty can be waived before refinancing with the bank. If not, carefully consider the costs of any prepayment penalty against the savings a person expects to gain from refinancing as paying a prepayment penalty will increase the time it will take to break even - even when considering the costs of refinancing and the expected monthly savings gained. OVERVALUED PROPERTY VALUE ESTIMATION Perception:Paper valuation of the refinanced property may not be indicative of its actual market value.

Reality:Overestimation of property values can be another pitfall borrowers may not consider. There is a tendency for home owners to value their property at a higher market rate than what is prudent. Banks and other lending institutions could reject the valuation and instead, not lend more than the official appraised valuation. This is especially important if the owner wishes to flip the property for a significant gain. A soft property market will therefore affect the borrower when they are unable to sell or rent out the property, causing it to sit idle while the owner is saddled with a costly loan on hand. It is also advisable for the borrower to delay any home renovations while seeking refinancing. An incomplete house may lead to lower valuation than what it is actually worth. JUNE 2017 I 21


WHAT TO DO WHEN ONE IS UNABLE TO KEEP UP WITH HOUSING LOAN REPAYMENTS? Maintain a disciplined lifestyle with steady repayment to avoid complications BY: MAGES PV LINGAM


t is a huge responsibility to settle your housing loan repayments monthly for a long period of time. Some of the challenges include not being to foresee the challenges ahead. The danger in defaulting on loan repayments monthly can result in the property being auctioned off or reclaimed by the bank. Author and Financial Blogger KC Lau shares his views on some of the challenges that can be resolved by property buyers and investors. “The housing loan is a secured loan offered by banks. It earns the least interest profit as compared to other unsecured loans such as personal loans or credit cards. At the current rate of around 4.5% calculated on daily rest, it is even lower than car hire-purchase loans and other types of loans,” says Lau. Once the property is mortgaged, the buyer 22 | JUNE 2017

needs to diligently keep up the commitment to follow the payment schedule. “If the buyer doesn’t delay the scheduled payment and never misses the loan repayments, he or she will not run into any trouble even when the property market collapses or faces a downturn,” he adds. Having said that, Lau says there is another form of financing which is termed the margin of financing for stock investors. In this case, stockholders pledge their share portfolios to get financing loans from the banks. However, they may be affected when the stock values plummet in the stock market. Borrowers could get a margin call for force-selling at a lower rate and experience a loss in pricing. Let’s examine a situation concerning taking a housing loan from the bank. If the property market experiences a downturn,

and the property market price declines by 30%, then the outstanding loan taken would inevitably be higher than the value of the actual house price. In other words, the house would display a negative equity. In this situation, the bank would not call upon the buyer to top up or repossess the house or property if the commitment to pay the instalment is timely and constant. “The key point to avoid missing the housing loan instalment is to get it done right from the start so you will prevent and nip any problems in the bud,” says Lau. He shares some key strategies to avoid going into default and losing the property altogether. Investors and buyers want to purchase properties that can fetch good rental yield, and are easy to rent out. This is because the income yield can assist in lowering the borrower’s monthly instalment commitment.

The key point to avoid missing the housing loan instalment is to get it done right from the start so you will prevent and nip any problems in the bud” - KC Lau Desmond Chong

Borrowers should also have liquid assets or cash that is equivalent to cover them for at least six to 12 monthly instalment repayments. Lau says that one option would be to withdraw money from Account 2 of the Employees Provident Fund (EPF). This initial withdrawal can be used to pay off the deposit in one lump sum instead of from one’s saving. In a way, instalment options can increase buyers’ cash flow option as well. When applying for home loans, opting for the longest loan tenure could be favourable in the sense that the monthly commitment would be lower for borrowers. To settle the loan faster, borrowers are encouraged to pay extra on their monthly repayments whenever possible. By this, borrowers can arrive at a non-commitment in default during the loan tenure with the financial institution or banks. From the perspective of having a stock portfolio, investors or buyers can apply for additional margin financing facility from the banks. Here, the stocks will only be utilised whenever the need arises from the end of the investors or buyers. In a normal market situation, the stocks will only be sold at a lower rate during a market downturn. This maintains a certain liquidity of wealth in the case of unforeseen volatilities in the future. Credit Counselling and Management Agency (AKPK) Financial Education Department Trainer and Head Desmond Chong says that unlike Malaysia, 80% of the macro household debts in Japan are backed up by assets. “We have the highest base rate in the region. Factors like interest rates

rising higher and the income level being moderately low makes it difficult to fund repayments which can lead to debts,” says Chong. AKPK, set up in 2016, has been providing an avenue for both individual and potential borrowers to seek advice and assistance in managing their finances and debts. People who are in deficit are the ones left in the dark or who may be unsure of how to resolve their financial predicaments. A study revealed that 35% of the debtors have requested AKPK’s help while 50% of them do not have a solid financial plan like having a budget, retirement planning or investment planning in their lifetime. Since AKPK’s inception and up to February 2017, close to 539,776 individuals have attended its counselling services. This has become a last resort for some defaulters to

Counselling At end


avoid them from plunging into bankruptcy. Chong says that 175,336 of customers have also applied to enrol in AKPK’s Debt Management Programme (DMP), which is one the organisation’s initiative to reduce prolonged loan defaults with the banks. In conclusion, AKPK advises current loan defaulters to avoid applying for any future borrowings including credit cards, as they would be turned down due to poor credit ratings. Now, there are about 11,000 creditors who have been educated via this programme in AKPK. Chong adds that he also gives training via four life stages namely; financial education programmes based on financial education, counselling, debt management programme and retirement planning. He says that this has helped approximately two million people in distress due to debts in the country.

Of which: DMP Applications No.

Share of Total Counselling Cases (%)












































32.5 JUNE 2017 I 23


TIME TO SELL? How to tell if an investment is no longer worthwhile? We ask the experts BY: GABRIEL LIM GWO SHIN


s one’s investment portfolio expands over time, some properties will perform better than the rest. Chances are, there will come a point when the investor has to decide whether to keep the property or to dispose it. Deciding whether it is worthwhile to continue keeping a property is something that an investor or buyer needs to consider. While there are indicators whether one should sell underperforming properties,

24 | JUNE 2017

the considerations can vary from person to person, as everyone has different investment goals to begin with. To get a more in-depth overview on this matter, Property Insight sought the views of three industry experts namely; Eddy Wong, Managing Director of Nawawi Tie Leung Property Consultants Sdn Bhd (NTL); Dr. Ong Kian Leong, Creator of the GoFinance™ investment assessment tool and property market analyst Ken Teo.

For Wong, while people may be investing in properties for different reasons and have different goals, one of the most important points is whether the returns are satisfactory. “The motivation for investors is usually based on the returns that they can get. There are two main sources of potential returns which is capital gain or price appreciation of the property and potential rental income from renting the property out to tenants,” states Wong.

Hence, as long as these two reasons are still valid and applicable, and provided the total returns are within the expectation of the investor, then there is no reason for the investor to dispose the property. “However, if either of the reasons is no longer valid, and if there is little prospect of capital appreciation, then the investor should review and consider selling the property as the potential return may no longer be within his expectations. “Another reason is when the investor is unable to find a tenant who is willing to pay a reasonable amount of rental,” he adds. DIMINISHING CAPITAL APPRECIATION Wong opines that it is time to consider liquidating the property when the price appreciation potential has diminished and when the rental returns are no longer forthcoming. This is also the case he says when it is taking much longer to secure a tenant or in the instance when rental rate has come down substantially. Trying to determine the right time to

dispose the property is an important part of the investment cycle, which would determine the profitability of the investment. Imparting advice on the right timing to do this, Wong says that theoretically speaking, one should always aim to sell near the peak of the market performance and buy somewhere near the bottom of the market cycle. He acknowledges that in practical terms, it is very difficult to determine which part of the property cycle the market is at when faced with a decision of whether to sell or continue to hold. “Another alternative strategy is to decide to sell once the market has deviated from your original investment objectives and expectations or when you are no longer achieving the targeted rental return,” he adds. HEALTH CHECK-UP FOR PROPERTIES Staying true to his signature analytical approach, Dr. Ong equates the reexamination of one’s portfolio to the

Dr. Ong KL

regular health check-up one is supposed to undergo annually in order to determine whether the properties are still healthy in terms of maintaining their rental and capital appreciation values. According to him, there are four indicators that could alert investors and buyers when contemplating an exit strategy. First, is what the financial educator would term as incurable problems that are beyond the ability of individual investors and homebuyers to change as when such problems surface, it may be time to liquidate the property. These problems may include a deteriorating neighbourhood, properties that need upgrading or a lack of tenant occupancy due to other rental options nearby. “Each of these problems could have been avoided by carefully relocating an investment. Hopefully, this will not happen to you, because your chance for realising appreciation on the sale will also be hampered by the problems your property is experiencing,” he adds. The second scenario is when changes in goals or situations arise. Investors for instance may decide to sell off one of their properties when their objectives have changed. For example, they may wish to retire and enjoy life, thus they may need to make one final change in their investment portfolio to secure a steady lifelong income. Where equity build-up may no longer be a priority, a certain property can be sold while holding on to the rest which may continue to provide consistent rental yield. “Perhaps something has happened in their lives that have shifted their investment goals and the present property does not fit their long term investment plans anymore. They may be tired of investing in apartments JUNE 2017 I 25

FEATURE However, those who still want to own their properties may consider refinancing them to put the money to better use,” he says. The last scenario Ong considers viable to sell off the property is when equity increases but returns decrease. Although a bigger portion of principal or capital was paid, the returns are smaller. Therefore, the capital is not fully leveraged upon, making it more viable for the property to be sold. However he says, all too often, many may take this situation too lightly. “Once you include your equity build-up and mortgage reduction into the calculation of your return on investment, should your total returns continue to diminish each year, this will be an indication that it’s time to sell,” he adds.

If I don’t sell, I have to stop buying, (and) ultimately the entire masterplan to achieve personal freedom will be affected” – Ken Teo

and want to purchase Small office Home office (SoHo) or retail units for investments. Perhaps, they have suddenly changed jobs. Whatever the reasons, investors from time to time have logical reasons for an investment change,” Ong elucidates. The third scenario concerning when to employ an exit strategy revolves around properties that have appreciated considerably with time. The investor, realising that an earlier bought property is now worth considerably more than what he originally paid for it, may want to sell the property and realise some profit. The presence of newly launched properties that may be selling for twice the price of his unit have inevitably boosted his own property values to his benefit. “At this point in time, many might want to rush to sell their properties. This is more so if they were purchased over five years ago since these properties are now exempted from Real Property Gains Tax (RPGT). 26 | JUNE 2017

WATCH OUT FOR POTENTIAL GROWTH Armed with a clear vision on the goal he wants to achieve, property market analyst Ken Teo has formulated a strategy on when to sell. “I emphasise more on cash flow than capital gain, as I am not a top businessman with huge business income. Hence, I need the proceeds from property sales to fund my next purchase,” Ken clarifies. With regards to the right timing to sell the properties, Teo says one must ask three questions, the first being whether there is any potential growth or the emergence of any supporting factors that will contribute to the price appreciation of a property. “For example, will there be any improvements to the infrastructure or amenities? Similarly, will there be any initiatives by the government? After all, the value of a property does not so much come from its brick-and-mortar - but it is more about the surrounding environment and location.” Teo illustrates this point with a real life example, “I bought a medium-cost apartment for RM250,000 in Kuchai Entrepreneur Park, Kuala Lumpur, right before the government decided to shift the alignment of the proposed mass rapid transit (MRT) Line 2 (Sungai Buloh – Serdang – Putrajaya Line) westward from Pandan Jaya area to the upcoming Bandar Malaysia.” “With a MRT station coming to the Kuchai Lama neighbourhood, I received a call from the bank, telling me that the valuation of my property is now RM80,000

higher. For an RM250,000 apartment, a price appreciation of RM80,000 is quite significant. The banker asked if I would like to refinance the property and get some cash out of the earnings,” he says. “The MRT 2 is still at land acquisition stage, but there is already signs of price appreciation. Therefore, in order to decide on whether to dispose a property, we must look at the overall environment, whether there are anything that will make the property more attractive and accelerate price appreciation,” asserts Teo. The second question to ask is whether the property is located in a mature neighbourhood where people would like to rent and live there. “Usually, I prefer to focus on properties that entry-level young executives can afford to rent. This group of people would rather rent than buy. With about three years of experience in the workforce, they are still saving up for the deposit of their first home purchase, and may be still paying off the hire purchase of their car. “They have no family commitment and spend more. As we can generate a stable stream of income by renting to them, I always look for areas where they like to rent. Young executives just need a roof over their heads and do not demand much. In contrast, I do not prefer properties that target family tenants, because this group of tenants tend to be more cost-sensitive and demand more from the landlord. Therefore, if the conditions in the neighbourhood change and the place attracts more homebuyers and families, the rental prices will usually drop. So that is the moment for me to sell the property off.” Teo adds that investors and buyers have to observe the changes in demographics closely. “It is not easy but you can always go to the morning market and observe. Young executives prioritise privacy, and the rental will keep growing whereas once many families are concentrated there, the rental growth will be stagnant. For example in Kuala Lumpur, a studio unit can easily fetch up to RM2,000 in monthly rental, but it is very hard for apartments to get more than RM2,500 per month.” The third question to ask is whether will there be any potential rental growth. For this to happen, one must again look at the environment and whether there will be

any upgrades in infrastructure and other facilities to attract young executives. “If the answer to these three questions are “No, no, no”, obviously there is no point holding the property further, thus it is the right time to sell. However in real life, the answer is normally, “No, yes, no”, making a decision more difficult to come by. While some other seasoned investors stress on capital gain, stating that this should be the objective of all investments as opposed to only depending on rental yields although rents help to enhance one’s cash flow and holding power, Teo begs to differ. A MASTER PLAN TO PERSONAL FREEDOM “My priority is cash flow rather than capital gain, as for me, capital gain is just a bonus. Personally, the goal of investment is personal freedom. It is not the same as financial freedom. By having money in my pocket, I can do what I like.” “With financial stability, I will not have many obligation that comes with being in employment. I do not need to attend meetings just because I need to. Human beings have unlimited wants but limited resources. If you focus on financial freedom, there will always be the question of when you will be free.”says Teo. Demonstrating how he intends to achieve personal freedom, Teo continues, “My aim is very clear. I focus on things that can provide me personal freedom, for example in the form of rental income. I do not need RM100,000 per month to survive nor do I need to spend on luxuries such as highend European cars when a comfortable medium-range Japanese car will do. And, in every three years, I will upgrade to the latest model of the same series. To achieve such a lifestyle, I need approximately RM15,000 a month.” “With such a goal, I do whatever I need to do, and buy whatever property that can afford me this RM15,000 rental yield monthly. With a healthy yield of 6% on average, perhaps I need to build up a property portfolio worth around RM3.5 million for me to achieve this goal. I will focus on property acquisition that can give me positive rental growth.” SELL TO FUND YOUR NEXT PURCHASE However, Teo says if the price of a property has appreciated, and he needs the capital

gain to strengthen his purchasing capacity, he will not hesitate to sell it off. “I always look at the opportunity cost, and if there is a need to sell. Can I continue to invest? Sometimes, I even have to sell a good property that gives me 9% yield. This is not because there is no potential growth or suitable tenants but because I need the proceeds to fund my next purchase.” “If I don’t sell, I have to stop buying, (and) ultimately the entire masterplan to achieve personal freedom will be affected. Truth be told, to sell a property only when it is not performing well is a very passive way of managing the portfolio. By right, we should sell it when it helps us to acquire better quality properties. Most of the time, I sell because I need the capital gain to fund my next purchase which is to sell one unit to buy two units as this is how you grow. Or, from entry-level apartments to better quality apartments.” “If the value of an apartment has grown

from RM250,000 to RM350,000, the monthly rental might grow by RM300. Should you be satisfied with RM300 extra every month? But, if you sell, you can get RM100,000 cash immediately. How long will it take you to get the RM100,000 by just collecting rental?” In closing, Teo anticipates that further changes to MRT 2 and Bandar Malaysia is unlikely. “There are still many hidden gems along the alignment of MRT 2, especially in the sub-sale market. Follow the infrastructure, find those places with good supporting factors that offer good rentals that can enhance your cash flow. If you find something else and need funding, then dispose your earlier purchases to strengthen your holding power. That is how I plan my strategy, always move on and get more. It is quite simple actually,” he concludes. JUNE 2017 I 27


TRENDS AND OUTLOOK FOR HOMEBUYERS Various schemes have been implemented to facilitate home ownership BY: FELICIA SOON

Eddy Wong


ccording to studies done by the Valuation and Property Services Department of the National Property Information Centre (NAPIC), the property market continues to soften, with both volume and values of property transactions for all sub-sectors recording a decline over the past three years. Notably, the drop in value is not as steep as the drop in volume, meaning that while the number of units transacted has contracted, properties now cost higher on average. YY Lau, Country Head of JLL Malaysia observes that the total value of residential property transactions is considerably smaller than the volume transacted. Eddy Wong, Managing Director of Nawawi Tie Leung Real Estate Consultants Sdn Bhd explains that buyers are now buying smaller apartments or condominiums, as the unit sizes of newer developments have been trending with smaller units in an effort to keep the unit price quantum affordable. As a consequence, there is increased attention placed on the design and space planning of the units, so as to maximise the utility value

28 | JUNE 2017

Michael Geh

Purchasers are likely to buy properties that they can afford” – YY Lau

despite the smaller unit sizes. Wong has also observed an increasing emphasis on the provision of common facilities in the condominium developments. As a result, we are seeing better designed developments offering a comprehensive range of facilities coming into the market. However, the decline in overhang residential units has reversed since the third quarter of 2016. Lau says that there could be a few reasons for the rise in unsold units, especially for high-end condominiums. Firstly, there are more genuine buyers in the market now who wish to own and

occupy the properties, as opposed to the high number of speculative investors in the past. These purchasers are likely to buy properties that they can afford. Secondly, residential property prices have generally declined for most secondary residential market transactions. This has resulted in lower prices transacted in 2016. FACILITATING HOME OWNERSHIP To attract more buyers, many creative products are being introduced into the affordable homes market, especially in term of end-financing that can facilitate buyers to own their respective dream homes. As affordability has always been an issue, various developers have come out with interesting finance schemes, and some of the examples shared by YY Lau are as follow: Firstly, the “Own It Now” Easy Payment Scheme is designed to enable purchasers to own a home and aid them in their home buying journey. The scheme encompasses the following: Buyers to pay RM2,000 upon confirmation

for the legal fees which is not part of the 10% downpayment. This will be followed by the signing of the Sales and Purchase Agreement (SPA). The buyer then pays a monthly downpayment instalment for 42 months (three and a half years).

A loan can be applied at the end of Year three of the instalment (month 36). The buyer now has six months to get the loan approved between month 37 and month 42. Month 43 – Any excess downpayment paid will be used for related deposit required

Year 1: RM1, 000 monthly instalment Year 2: RM1, 500 monthly instalment Year 3 to half of Year 4: RM2, 000 monthly instalment

upon Vacant Possession (VP). If the buyer is purchasing the unit using cash, then he or she must settle the remaining amount (purchase price minus monthly instalment paid for downpayment) on month 43. In applying for a bank loan, the buyer will need to begin to service the bank loan’s monthly repayment. Secondly, there is the Special 1Malaysia People’s Housing Programme (PR1MA) End-Financing (SPEF) scheme. The PR1MA implemented a new end-financing scheme known as SPEF beginning Jan 1 2017. Thus, it will increase PR1MA firsthome homebuyers’ chances of getting a JUNE 2017 I 29


home loan and provide access to a higher loan amount than they would otherwise be eligible for with conventional loans. For example, a household with RM3,000 monthly household income can now obtain a housing loan of up to RM283,200 instead of only RM187,000 under a conventional loan scheme. Another way is through the use of industrialised building system (IBS) components to develop homes at a cheaper and faster rate. This will mitigate the loss that developers face while undertaking affordable housing projects. IBS in simple terms relate to parts of a building, which are assembled during construction in a Lego-like fashion, but which is much more complicated. It enables the building of an entire house in a shorter period of time than conventional construction methods. The cost of construction largely affects the pricing of (new) properties. As such, it can lower construction costs and consequentially, home prices. It offers benefits to homebuyers with good quality houses being built which are comparable to conventional methods, but within a shorter construction period resulting in lower home prices. Some developers using IBS include Sime Darby Property Bhd and Gamuda Bhd. Sime Darby Property Divergent Dwelling Design (D3): Sime Darby Property is banking on the use of IBS components to develop D3 concept homes. Under the D3 Sustainable Homes Initiative developed by the Construction Industry 30 | JUNE 2017

Development Board’s (CIDB) Construction Research Institute of Malaysia (CREAM) and G&A Architects – it aims to deliver quality homes at a lower cost within 24 to 30 months, as opposed to 42 months via conventional methods, with the use of IBS components. Gamuda Industrial Building System (GIBS): Gamuda has invested in not one, but two purpose-built IBS plants in 2015. Gamuda invested more than RM100mil – excluding land cost – in constructing Malaysia’s first robotic IBS factory at a seven hectar plot in Tanjung Industrial Park, Sepang. The factory was completed last June, and is now producing concrete segments for three blocks of affordable housing. An example of Gamuda Bhd’s development constructed using IBS: Jade Hills: Representing three blocks of affordable housing An example of Sime Darby Property’s development constructed using IBS: Kota Elmina: Harmoni 1 Apartments The 900 sq ft unit is priced at RM200,000 while the 1,000 sq ft unit is priced at RM250,000 GOOD BUY FOR THOSE WHO ARE READY Michael Geh, senior partner of Raine & Horne Malaysia who is also Vice President of the International Real Estate Federation (FIABCI) Malaysian Chapter, foresees that the figures for the second half of 2017 will rise by over 10% since the previous drop. Allocations of loans to be disbursed for PR1MA and Syarikat Perumahan Negara Bhd (SPNB) homebuyers, as mentioned in

Budget 2016 will swing into effect by the second half of the year. As the Malaysian property market continues to face challenges in 2017 due to the global economic downturn, affordable residential properties will continue to be in demand. To date, more than 65% of residential transactions were within the price range of RM300,000 and below. It is anticipated that a large number of these units will be completed in 2017. However, rents of prime high-rise residential properties is anticipated to slide further and JLL Malaysia forecasts that net effective rents will decline more this year as compared to last year. This will result in many landlords likely to be under pressure to lower their rents in order to retain tenants. The capital values of prime high-rise residential properties are expected to decline further before picking up in the next few years. Having said that, this is a good opportunity to look out for good buys, as developers are more receptive to offering good incentives to sell their units. Although in the near term, the property market is expected to remain subdued, the mid to longer term outlook is more positive, supported by demographics and anticipated growth in household income. Property buyers should go back to basics when selecting what to buy and examine prudently considerations such as location, connectivity and access to amenities, as these are some of the key factors to ensure good return on investments.


BUILDING WITH PRECISION, QUALITY AND CONSISTENCY “Building Homes of Swiss Watch Standard” is the tagline which guides Orando Holdings Sdn Bhd’s operations BY: MAGES PV LINGAM JUNE 2017 I 31



recision and high quality standards are central to Orando Holdings Sdn Bhd (Orando) as reflected in the company’s tagline, “Building Homes of Swiss Watch Standard”. This is the philosophy advocated by Orando Founder and Managing Director Dato’ Dr. Eng Wei Chun. He says that the company’s philosophy alludes to the Swiss watch’s brand standards of achieving timing accuracy and delivery. Dr. Eng adds that he intends to establish the dynamics of his company and elevate its standards without compromising on quality and lifestyle elements. Since its inception in 2000, the company operates according to three key principles that revolve around status, quality and an appreciation of values. With this notion in mind, Orando aims to provide residents with lifestyles that will be complemented by top-notch building materials based on approved industryleading certifications, sophisticated

32 | JUNE 2017

concierge services, quality security features, branded Swiss tiles as well as US and UK branded lifts, among others. Dr. Eng who acquired his education as a quantity surveyor at the age of 28, later pursued his career as a contractor. From its humble beginnings, armed with a small start-up capital, he went on to manage and secure a RM1million contract in 2000. At the age of 33, he sold the construction company for RM100mil and began his colourful career as a developer and has not looked back since. “Challenges are part of any success stories,” reiterates Dr. Eng who advocates being positive to overcome problems. He aims to deliver better products to the market by responding to what prospective buyers need. He maintains that location plays an important role when acquiring land banks for any development. “Acquiring land banks that have the potential for appreciation in future is

indeed a challenge for me especially in our capital city,” he says adding that future land acquisitions would be concentrated in hotspots overseas. As a developer, they prefer to build one project at a time in order to keep quality checks in place. This also means that Orando only takes on calculated risks without acquiring too many land banks in the process. PREMIUM PROJECTS Its latest Lavile KL development is situated in Taman Maluri which is a stone’s throw away from the capital city of Kuala Lumpur. The freehold project spanning four acres of land has a total gross development value (GDV) of RM1.8 bililion. Lavile KL’s units come with built-up sizes ranging between 750 sq ft and 1,060 sq ft within four 38-49 storey towers. Overall, 1,300 residential units and over 20 retail units are contained within the development.

Level 9 is dedicated to features including an infinity pool, leisure play pool, yoga deck, water fountain pool, infinity party lap pool, and the Datuk Lee Chong Wei (LCW) badminton hall dedicated to the spirit of sportsmanship and championship. Dr. Eng says the badminton hall was named after LCW due to the spirit of championship and oneness present among the spectators during his final badminton game at the Olympics held in Rio, Brazil. He believes this fits in well with the company’s Corporate Social Responsibility (CSR) aim of giving back to society. The company also went so far as to reward LCW with a unit in Lavile KL worth RM1.5 million as a gift to the outstanding sportsman. Meanwhile, Level 10 features the lounge area, floating gym, multipurpose room and surau (prayer room). According to Dr. Eng, Lavile KL has comprehensive security features designed to cater to exquisite lifestyle values for residents that start from the main lift lobby utilising an access card system. They can also count on secure mail access and closed-circuit television (CCTV). The integrated mixeduse development has been built for the convenience of both tenants and visitors alike within a resort-styled architecture design. The units are priced from a minimal RM650,000 per unit. Lavile KL is located within close proximity of shopping facilities like AEON, IKEA and Berjaya Times Square which house eateries, entertainment outlets and recreation centres. It is also easily accessible via a comprehensive network of public transportation including the mass rapid transit (MRT) and bus systems which enable greater mobility JUNE 2017 I 33

DEVELOPER OF THE MONTH within the surrounding areas. The company previously launched Villa Crystal which it considers the epitome of exclusive freehold condominium living. Located in South Desa Park within Segambut, the 38-storey condominium features two tower blocks named Ametrine and Branberg with built-up sizes ranging from 1,155sq ft to 1,295 sq ft. The minimal launch price per unit was from RM590,000. The project also boasts easy accessibility via major highways such as the NorthSouth Expressway (NSE) and SPRINT Expressway. Another older successful project by Orando is Vila Vista which was completed in 2016. The project launched from RM739,000 per unit. Vila Vista comprises of a 39-storey tower block with 137 condominium units. This

34 | JUNE 2017

leasehold project offers six layout designs with built-up sizes ranging from 1,672 sq ft to 2,059 sq ft. Vila Vista is only15 minutes’ away from KLCC and Petaling Jaya and is easily accessible via the Cheras–Kajang Expressway and the Middle Ring Road 2 (MRR2). INNATE APPEAL Dr. Eng says that despite the uncertain market sentiment all over the world, he believes there is still a lot of inherent value and potential to be tapped into in real estate. This is coming from a veteran in the building industry who has for a decade, developed stylish properties that added value to neighbourhoods. Landed developments such as Sri Angkasa Homes in Jalan Puchong Lama, Puchong; Vistaria Residensi in Taman Yarl, Kuala Lumpur and Sky Vista Residensi in Cheras, KL are

counted among the projects undertaken by his firm. Orando has lived up to its promise of being a responsible developer whose properties continue to appreciate despite the current uncertain market. Vila Vista in Cheras, KL and Villa Crystal in Segambut, KL for instance, were built to high precision standards to give residents a high quality of life. Dr. Eng proudly acknowledges that their record for a project in Cheras saw the units being sold off in just one-and-a-half days after the launch period. The condominium with a built size of 1,300 sq ft which was priced at RM300,000 during its launch saw capital appreciation soar to RM800,000 after seven years. Orando, being a pioneer promoting sky garden and grand lobby concepts that have been incorporated into their projects

over the years, has seen interest coming from repeat buyers. Orando has set high branding expectations especially in transcending new designs in architectural and amenities incorporated into the projects. “Orando believes in delivering professional services to obtain mutual trust from our prospective buyers. Therefore, we will not compromise in terms of maintaining a distinguished quality for our projects while following up closely with after sales services,” says Dr. Eng. The company has come up with a list of activities it wishes to accomplish this year including setting up an Orando Holdings Club catered specially for loyal buyers and investors. This will help them to keep abreast of new launches or campaigns and enable wider exposure for branding exercises by Orando.

Orando believes in delivering professional services to obtain mutual trust from our prospective buyers. Therefore, we will not compromise in terms of maintaining a distinguished quality for our projects while following up closely with after sales services”

- Dr. Eng Wei Chun JUNE 2017 I 35




egambut, which was once a sleepy hollow, has matured throughout the years to become a developed township of its own. Segambut is a part of Mukim Batu, Kuala Lumpur, both before 1974 when Kuala Lumpur was a district of Selangor, and after 1974 when Kuala Lumpur became a Federal Territory. In 1994, the Parliamentary constituency of Segambut was created. Some attribute its successful town planning as propelling it to what it is today – a thriving township with a diverse population attracting many who want to live and work here. 36 | JUNE 2017

Almost a decade ago, the Kampung Segambut Dalam settlement underwent various transformations with many kampung or village houses being demolished to make way for the development of condominiums. Due to this, construction works picked up here, resulting in more foreign workers coming into the Segambut neighbourhood. The population also increased alongside the completion of these high-rises, with more people starting to move to Segambut to work and live there. Today, the town has moved another notch higher with the development of roads and

projects extending outwards to include high-end condominiums in the renamed Mont’ Kiara and Sri Kiara vicinities. The middle-class areas of Taman Sri Segambut and Bandar Manjalara and the rural areas of Segambut Dalam and Kampung Sungai Penchala also make up part of Segambut. Progressing from what was a slum area mostly comprising low-cost houses and shops, Segambut has geographically been categorized as being located across the Keroh River from the Mont’ Kiara area. The transformation happening now in Segambut including easier accessibility indicates how it has come of age to become

Sarkunan Subramaniam a sought-after neighbourhood. Knight Frank Malaysia Sdn Bhd Managing Director Sarkunan Subramaniam affirms that new highways and byways that have emerged in the Segambut locality has boosted the prominence of this township, making it even more well-connected and accessible. The main roads stretch from Jalan Tuanku Abdul Halim (formerly Jalan Duta), Jalan Sultan Azlan Shah (Jalan Ipoh stretch from Jalan Segambut to Jalan Pahang) and Jalan Kuching which are connected by various expressways. These include the Duta–Ulu Klang Expressway (DUKE), Lebuhraya Utara Selatan (NorthSouth Expressway) and New Klang Valley Expressway (NKVE). CONNECTIVITY IS KEY Sarkunan says that these highways complement private mode of transportations in addition to public transportation using the current KTM rail service (via the Segambut KTM Komuter station) which is linked to the existing light rail transit (LRT) and monorail routes via designated interchange stations such as KL Sentral. This has been the mode of transportation used widely by commuters to and from designated areas in Segambut. “Future connectivity to the Segambut area will be further enhanced upon completion of the upcoming Duta-Ulu Kelang Expressway 2 (DUKE 2),” adds Sarkunan. Additionally, he says that Phase two of Duta-Ulu Klang Expressway (DUKE), connecting the east and west of the capital city via a 16km link, is expected to complete later this year. The construction of the RM1.18 billion

DUKE phase 2 project which began in Dec 2013 comprises two additional links, namely the Tun Razak Link (TR link) and Sri Damansara Link (SD Link), which will be connected to the existing DUKE 1. The 7 km SD Link from the Menjalara Interchange in Bandar Menjalara which ends at the Segambut Interchange on Jalan Segambut is expected to reduce travelling time to 12 minutes. The 9 km TR Link will connect Jalan Tun Razak near Kuala Lumpur Hospital to the Sentul Pasar Interchange at Jalan Gombak. Meanwhile, the DUKE 2 project will also comprise the construction of the park-andride (PnR) facility for easy transfer to the rail network in Segambut. Sarkunan adds that the proposed Mass Rapid transit (MRT) Line 3 (Circle Line) is expected to cover the localities of Ampang Jaya, Kuala Lumpur City Centre, Jalan Bukit Bintang, Tun Razak Exchange, Bandar Malaysia, KL Eco City, Pusat Bandar Damansara, Mont Kiara and Sentul. It will also be integrated with the Sungai Buloh-Kajang (SBK) MRT Line 1 (near full completion) and the Sungai Buloh-Serdang-Putrajaya (SSP) MRT Line 2. SPILLOVER AREAS OF SEGAMBUT Property Hub (KLCC) Sdn Bhd real estate negotiator Sharon Ealiana who has over 20 years of experience working with different property developers says Segambut has seen extensive project developments being carried out here over the years. Specialising in areas such as Dutamas, Mont Kiara, KLCC and Bangsar, her main focus now comprise the Dutamas area (which can be considered as part of Segambut) where there is a project developed by Bandaraya Developments Sdn Bhd (BRDB). “Verdana at North Kiara is located in Dutamas Kuala Lumpur. Strategically located across The French International School, its proximity to the Solaris Dutamas commercial centre is a great draw for those looking for modern condominium living,” says Ealiana. The Verdana, a freehold project spanning five acres encompasses 298 units ranging from 1,451 sq ft to 3,020 sq ft Its dual key concept, easy accessibility and comprehensive amenities have attracted investors and buyers alike to choose the

project which is situated at the highest point of North Kiara. Segambut is also popular among expatriates due to the location of international schools including Mont’ Kiara International School. She says that rental yields for the residences have increased since its completion in 2014 to its current rate ranging from RM3,000 to RM6,000 per month. Residents will also have no problems travelling to Kuala Lumpur using the DUKE highway, which is just minutes away. “Personally, I have also invested in a unit in Verdana because I see the potential growth in this location,” she testifies. She notes that as Mont’ Kiara prospers, prices have increased over the years. Therefore, Dutamas will also see potential growth in time to come,” she shares. Another point she adds is that


Eateries - Hor Poh Lui Cha, Segambut Yong Tau Foo, Akka Curry House, Joe Wong Bak Kut Teh, Restaurant Thai Avenue, Bapak Catering & Services, Xan Ling Segambut Bah Kut Teh, Hometown Dishes, Solaris Dutamas.


Malls: Hartamas Shopping Centre, Plaza Mont Kiara, One Mont’ Kiara,Publika


Worship Places - Revival City Church, River of Life Sanctuary, International Church @ Mont Kiara, Masjid Al-Firdaus Segambut Luar, , Masjid Al-Qurtubi, Masjid Al-Ubudiah, Kuil Sri Maha Mariamman, Segambut Chinese Temple


Community - Segambut Bahagia Community Hall


College - SRI College, Young Aces Technical College


Schools - Segambut Secondary School, Time International School, Kuala Lumpur, SJK(C) Khai Chee, Segambut Tamil Primary School, French School of Kuala Lumpur, Mont Kiara International School


Clubs - Kuala Lumpur Golf & Country Club & Bukit Kiara Equestrian Club JUNE 2017 I 37


The ERA @ Duta North

KL Metropolis is a project located nearby Segambut which would also uplift the values of surrounding projects. A few developers alone have leveraged on the fact that Segambut Dalam is adjacent to the property hotspot of Mont’ Kiara where recreational and leisure pursuits abound including the Kuala Lumpur Golf & Country Club (KLGCC) and Bukit Kiara Equestrian Club. Some developers opine that North Kiara is the next prime residential area after Mont’ Kiara. Since 2011, the name “North Kiara” has been used by developers to link their developments in the area to Mont Kiara. The first major development to use the term in its branding is Verdana by BRDB followed by Concerto North Kiara (BCB) and a few other developers. The branding of North Kiara which is part of the new Segambut she adds will increase the value of the residential properties. Residences in the area are bought by young professionals for their own occupancy while investors purchased for capital gains and rental returns. The target market for North Kiara she adds is the middle-income group as prices for projects here including Verdana ranges from RM 38 | JUNE 2017

550 psf to RM 700 psf. Another potential factor that could attract investors is the upcoming MRT. JKG Land Bhd which was formerly known as Keladi Maju Bhd with about 30 years of experience in the property development industry, is now making its debut in the Klang Valley with its maiden launch known as The ERA @ Duta North. Given the encouraging take-up rate of 50% of the units launched, it is now fully focused on project delivery and planning the launch of its future phases in a more strategic manner says its managing director Dato’ Teh Kean Ming. Teh says that the units with built-up areas starting from 642 sq ft are priced from RM375,900. Its added attractions include the signatory Forest Village with its 100 facilities, recreational Wetlands, Dual-key designs for multi-generational living and High-Street retail area. In addition, the newly-built link bridge enables residents to walk across directly to Sri Hartamas. The completion of MRT 2 along Jalan Ipoh and DUKE 2 Highway will seamlessly connect with the rest of Greater Klang Valley. Once DUKE 3 takes shape and completes the loop, connectivity in this

area will be even more comprehensive. “There are also talks that the MRT 3 Circle Line will have a station close by,” says Teh adding that JKG Land has taken the liberty to create an urban forest right in Duta North, which is in the middle of Segambut where it is otherwise known for. One Property International Sdn Bhd Senior Real Estate Negotiator Sean Voon says that he personally thinks that the Segambut area on the whole is a nice place to reside as it tends to be more affordable in term of pricing. In addition, units here also tend to have bigger built-ups. He adds that comparatively, some developments including Villa Orkid Condominium @ Prima Pelangi, Segambut and Scenaria @ North Kiara Hills, Segambut are more affordable as compared to properties at Mont’ Kiara. PPC International Sdn Bhd Managing Director Datuk Sr Sidsapesan Sittampalam says that Mont’ Kiara as a neighbourhood is almost fully developed, with only limited land for development remaining. Along with increased land values and limited land, developments here moved up north towards Segambut to take advantage of relatively more affordable land prices which led to a spillover effect in Segambut in relation to property values. “Segambut was originally agricultural in nature which accommodated squatters and farmers. Over the past ten years, the emergence of many high-end developments has resulted in it being an extension to Mont Kiara,” he says by virtue of it bordering Mont’ Kiara and Dutamas at its south and east areas respectively. Some developers he says, have unofficially been rebranding the southern part of Segambut as North Kiara and banking on its name. Siders adds that upon completion of the MRT Line 2 in 2018, there will be a station slocated in close proximity to the Kepong or Jinjang area. With the completion of Line 2 and the Circle Line, the neighbourhood is expected to have improved traffic flow and enhanced property values. “We believe that with improved infrastructure and accessibility in the locality coupled with well-designed residential units, Segambut is poised for tremendous growth. Currently, it is undergoing gentrification. It may take another three to five years to establish

North Kiara as the next locality to seek after for high-end developments,� says Siders. Moving away from the residential enclaves is the Segambut Industrial Park, a freehold integrated business hub. Located at the heart of the bustling Segambut township lies this exciting new concept in

workspaces. According to data obtained from, a detached factory building with a built-up size of 30,229 sq ft on freehold land costs about RM20 million. In conclusion, Segambut is a territory that has experienced positive changes over the past decade in terms of the

mushrooming of property developments here. Demographically, it has shown an upward curve in terms of population growth, complemented by rising property values and rental yields which is anticipated to attract investors and buyers alike.



Built-up Area

Transacted Price

sq ft

per unit


RM505,000 - RM580,000

RM617 - RM708

1-storey Terrace House (2016) Taman Sri Segambut

1,470 - 1,475


2-storey Terrace House (2016) Segambut Garden

1,402 - 1,604

1,420 - 2,018

RM300,000 - RM1,200,000

RM211 - RM595

Taman Segambut Maju


960 - 971

RM565,000 - RM600,000

RM589 - RM618

Taman Sri Segambut

1,475 - 1,464

1,738 - 1,528

RM700,000 - RM820,000

RM403 - RM537

Taman SPPK Segambut





Taman Segambut Muda





Taman Segambut Aman





1,759 - 2,605

RM1,225,000 - RM1,300,000

RM499 - RM697

3-storey Terrace House (2016) Taman Sri Segambut

1,464 - 1,475

Taman Seri Bukit Segambut





Taman Segambut Indah






RM250,000 - RM288,000

RM285 - RM319







2-storey Townhouse (2016) Taman SPPK Segambut


Villa Saujanis


Anjung Tiara





Laman Residence





Taman Cuepacs Segambut


3-storey Semi-Detached House (2015)

2-storey Semi-Detached House (2015) 1,995



2-storey Semi-Detached House (2015) Laman Bayu





Source: PPC Intl Research / NAPIC


Terrace Factory


No. of

Land Area


Built-up Area sq ft

Transacted Price per unit















1 1/2





1 1/2











Stratified Unit


within Industrial




Source: PPC Intl Research / NAPIC JUNE 2017 I 39


Built-up Area (sq ft) per unit


ANTAH TOWER, off Jalan Kuching 1,625



VILLA ORKID, Persiaran Prima Pelangi 1,893

RM820,000 - RM860,000


RM550,000 - RM585,000

RM433 - RM454

ROSVILLA, Jalan Prima Pelangi 1 RM460 - RM490

SRI PUTRAMAS 1, off Jalan Kuching 1,044 1,098







SRI PUTRAMAS 2 (ROYAL DOMAIN), Jalan Putramas 1,109




RM500,000 - RM563,000

RM442 - RM498


RM520,000 - RM620,000

RM443 - RM528
















LAMAN SCENARIA KIARA, Jalan 6/38A, off Jalan Segambut 1,019

RM608,000 - RM660,000

RM597 - RM648


RM575,000 - RM673,000

RM668 - RM782









RM620,000 - RM625,000

RM633 - RM638







NILAM APARTMENTS, Jalan 18/38A, Taman Sri Sinar 926

RM330,000 - RM400,000

RM356 - RM432

MANDY VILLA, off Jalan Segambut 1,012

RM310,000 - RM400,000

RM306 - RM395

BUKIT SEGAMBUT APARTMENT, Jalan 1/38G, Taman Sri Sinar 995




RM475,000 - RM520,000

RM391 - RM428

NOVA APARTMENT 1 & 2, Jalan 30/38A, Taman Sri Bintang 743

RM295,000 - RM355,000

RM397 - RM478


RM330,000 - RM350,000

RM409 - RM434


RM375,000 - RM378,000

RM420 - RM423


RM390,000 - RM420,000

RM431 - RM465







40 | JUNE 2017


Property Type / Level

Land Area

Built-up Area

Transacted Price

sq ft

per unit


En-bloc Shop Taman Sri Segambut Taman Sri Sinar Indah

2-storey Shop-house

Taman Kok Doh Wisma Hiap Lee, Jalan Segambut Taman Sri Sinar

3-storey Shop-office

Taman Sri Bintang



RM955,000 - RM1,200,000

RM334 - RM420

























Stratified Prima Tiara






Plaza Sinar






Source: PPC Intl Research / NAPIC



Type of Property

Villa Crystal @ South Desa Park

Jalan 6/38A (next to Nilam Apartments)


Anjali @ North Kiara

Jalan 3/61 (opposite Royalle Condominium)


United Point Residence

Jalan 1/38C (opposite Plaza Sri Sinar)

Suite Apartment

Suria @ North Kiara

Jalan 30/38A

Service Suites, Shop-offices & Retail

Era @ Duta North

Jalan Segambut (next to Menara TKSS)

Service Apartments & Retail

Flexus Signatures Suites

Jalan Kuching

Service Suites & Retail

Riana Dutamas

off Jalan Segambut

Serviced Residences, Small-Office - Versatile-

Sanjung Residence @ North Kiara

off Persiaran Prima Pelangi


Legend Heights @ Sri Segambut

Jalan Udang Siar

Service Apartments & Retail

Office & Retail

Unnamed Proposed Development @ North Jalan 6/38A


Kiara (next to Villa Crystal) Unnamed Proposed Development (next to

off Persiaran Dutamas

Service Apartments & Retail

Rimbun Residences) Royal Garden (next phase of Sri Putramas) off Jalan Putramas


Prima Harmoni 2

off Persiaran Prima Pelangi, Bukit Prima

Low-density & Low-rise Condominium (Phase1)


High-rise condominium (Phase 2)

Source: PPC Intl Research / NAPIC

SEAN VOON, Senior Real Estate Negotiator, The One Property International Sdn Bhd I personally think this area is a nice place to stay, is affordable in term of pricing and may get bigger built-up space, for example Villa Orkid Condo, Scenaria Residence if compared to Mont Kiara. Just a stone away across the border road, cost of living is much more affordable compared to Mont Kiara area.

SHARON EALIANA, Real Estate Negotiator, Property Hub (KLCC) Sdn Bhd Mont Kiara is approaching the saturation point and development for land is becoming scarcer, property projects have been moving into neighbouring areas such as Dutamas and Segambut. There is a growing interest in the Dutamas and Segambut area as the prices are more affordable and most buyers are looking for own stay. JUNE 2017 I 41


SMART PLANNING IN AMASSING PROPERTIES Harnessing the power of group funding is the way forward for this investor BY: MAGES PV LINGAM


azz Zain, best known within industry circles as Abe Nazz, is an avid investor of under-construction properties. Abe is the Kelantanese slang used to denote abang or brother while daimyo is the Japanese term for “king of small domains”. Working as a salaried employee at a Norwegian oil and gas service provider firm, Nazz, who is a Business Development Manager dedicates his time actively in the pursuit of property investments. He currently leads a team of 250 affluent Bumiputra investors calling themselves Jaegers, under a cooperative company named Jaegers Corp. Headquartered in Shah Alam, Nazz said that their daimyo empire comprises of seven daimyos of which each leader is in charge of a specific territory. Nazz himself is the daimyo of Eco Park. He started his first investment in 2002. Sharing his story, he says he was greatly aspired after reading a book entitled “Millionaires from a Different Planet” written by renowned local financial coach Azizi Ali. “I consider myself analytical and use mathematical methods to determine the types of investment I make. The involvement and commitment coming from other investors who are serious in this type of investment strategy has also added to our success,” says Nazz. His favourite strategy is to learn the “mathematics” of properties currently under-construction through joint venture techniques. 42 I JUNE 2017

START-UP INITIATIVES The first property he purchased was in Cyberjaya which he bought with zero down payment. His journey into property investment has since intensified over time. The initial success sparked his curiosity to explore and learn more about the various aspects of multiple purchases, banking facilities, vacant possessions, costings and smart financing. For primary market products, under-construction properties are bought directly from developers before being launched to the public. Inspired by his siblings who want to know more about investment strategies as well as to raise awareness among rookie investors, Nazz authored a book on investment into under-construction properties. Kitabul Daimyo (The Book of Daimyo) is the title of the book which he wrote that can be purchased online. Nazz’s love for properties was challenged when he was hit with a RM400,000 debt and his credit score at credit reporting agencies including Credit Tip-Off Service (CTOS) was tainted, as he was the guarantor for his family’s business. That prevented him from applying for any bank loans from 2011 until early 2017. With his father encouraging him to stay hopeful, he teamed up with his siblings to settle the debt during this period by pooling their monthly income together to invest in properties. “It took time to fill our ‘war chest’, the term I use for cash reserves. I needed to act fast. The entry cost for under-construction properties was low,” he says.

“We had time to increase our ‘war chest’ while the buildings were being constructed. Luckily, the salary of my joint venture partners also improved over the time, so we did the magic within the time frame,” added Nazz. Nazz told Property Insight that the colloboration with his siblings resulted in the formation of Bani Zain Group (BZG). Between them, they planned to buy properties every six months or whenever the “war chest” filled up. So far, BZG has bought properties worth over RM3.8 million, with each family member contributing RM600 monthly. Mathematically, if this amount is divided among six people, each person has forked out an equivalent of RM633,000 so far. Over the past 15 years, Nazz has proudly acquired 13 under-construction properties and sold off two that have recorded healthy capital appreciation over time. NETWORKING SUCCESS STORIES Nazz believes in networking. He now has a network of over 250 Jaegers all over Malaysia. He regularly gets speedy updates on new launches of upcoming projects online. The Daimyos would help to filter and analyse each project as the underconstruction projects are more dicey as compared to secondary market properties. He recalls his first property purchase in Cyberjaya which caters the students’ market which brought in consistent monthky rental yield. However, he later disovered that the capital appreciation was merely 2% per annum. In contrast, his terrace house in



I have learnt the importance of checking the balance between the purchase price and number of units per acre. The aim is to purchase the first phase of underconstruction units rather than subsequent phases” - Nazz Zain Setia Alam, which gave him negative cash flow (as the rental is lower than the monthly instalment), appreciated consistently at 10% per annum. The awry lesson Nazz learnt was that properties meant for students could perform fairly well for the first five years but subsequently lose out in terms of values due to vandalism or maintenance upkeep issues. That is exactly the opposite for properties meant for families. “I believe in treating property investment as a business deal. Let’s say there are two properties- a student unit and a terrace house. If, after deducting the monthly instalment, the student unit gives me a positive cash flow of RM200 a month, that will be RM2,400 per year or RM24,000 in 10 years. On the other hand, the rental generated by the terrace house is RM500 lower than the monthly instalment, I will lose RM6,000 every year or RM60,000 in 10 years.” “However, if after 10 years, the price of the 44 I JUNE 2017

student unit increases by RM150,000 while the price of the terrace house increases by RM600,000, logically speaking, which one is a better deal? It’s a profit of RM174,000 versus RM540,000!” affirms Nazz. For funding purposes, Nazz prefers to obtain working capital by refinancing his existing properties. He has also established three joint venture groups for investment purposes. The BZG partnership which he established with his siblings has seen them successfully acquiring Shah Alam properties such as Vista Alam and Studio Fourteen besides Avenham Garden at Eco Grandeur in Puncak Alam. They have also invested in Kuala Lumpur properties including Irama Wangsa and Lexa Residence. He also collaborated with another group comprising his office colleagues. Together, they bought units in Transit-Oriented Developments (TOD) including D’sara Sentral by Mah Sing Properties. Meanwhile, his third group is called Jaegers Corp, through which he and selected like-minded investors purchased units including Eliptica Terrace at Setia Alam and MET 1 at KL Metropolis by Naza TTDI. The remaining properties belong to Nazz and his wife. Nazz generates ideas through online networking with his followers and 250 Jaegers. His investment strategies is based on three sets of skills. Firstly, the ability to map out a five-year cash flow forecast, and to calculate the investment potential of the property. Secondly, the ability to act quickly is key, which is facilitated by a strong networking support group, which Nazz considers as being worth more than gold. Lastly, the capability to generate huge yields through the investment of small capital, by utilising any of the effective investment strategies above. OVERCOMING CHALLENGES Even though Nazz is always full of fresh ideas, he also faced some challenges which have taught him valuable lessons over time. He cautions the investing public about purchasing a unit in underconstruction high-rise, high density projects that are entering the final phase. The sheer number of units coming into the market will probably drag down the value and the expected rental, especially during a volatile market.

“I have learnt the importance of checking the balance between the purchase price and number of units per acre. The aim is to purchase the first phase of the underconstruction units rather than subsequent phases,” advised Nazz. He also urged those seeking to kickstart a property investment journey to invest on buying books that can educate one on property investment. He has read books written by Azizi Ali and ”Property Queen” Renesial Leong which have expanded his property investment knowledge. He also believes that investors can upgrade and motivate themselves constantly by following the opinions of experts on social media. Nazz’s dream is to retire young and rich by the year 2022! In his opinion, the property market has hit rock bottom in the first half of this year, as witnessed in the steep plunge in property prices. While others have lost hope in property investment, he anticipates the market will recover by the second half of 2017. “The property market usually lags behind the stock market, and I honestly believe that 2019 will be a good year to sell,” says Nazz. “So the final question to ponder would be, ‘Have we amassed a sufficient number of properties to sell when the bullish market returns in the future?”


Avena, Setia Alam

Property type

22 x 75 dsl

Purchase value


Market value


Price psf



660 sq ft

Rental per month current


PROPERTY 2 Location

Vista Alam, Seksyen 14, Shah Alam

Property type

Dual Keys Soho

Purchase value

RM411, 000

Market Value

RM470, 000

Price psf


Rental per month current


ENHANCE YOUR HOME WITH SMART SECURITY Transform your residence into a smart home for greater peace of mind BY: ALEXANDRA R.K

46 I JUNE 2017


ow is the best time for property enthusiasts to make that house purchase they have been waiting for. However, the tables seem to be turned as the parties intending to sell their units may not easily find buyers given the current market situation. This group of people include property owners as well as developers. Developers especially, are suffering from this scenario as competition for market share has intensified. As it is, many properties lack unique selling points and focus merely on factors such as strategic location, connectivity and selling price for their sales pitch. Therefore, given the current weak market sentiments, developers are on the lookout for innovative ways to attract buyers be it in the form of added private parking bays or enhanced entrance statements and attractive designs. Apart from banking on conventional additions to the units including wardrobes, kitchen cabinets and

air-conditioners, some developers are now in a quest to offer more attractive deals by adding in useful design elements or home appliances to satisfy their customers in the market. While a grand façade or a great view from the living hall or balcony may enhance the allure of a property, some developers are beginning to realise that safety and security remain among the top priorities of almost every prospective buyer. It is safe to say that most property buyers would opt for added safety and security as this is a real concern given today’s social conditions whereby crime is rampant and a threat to one’s residence. Recognising this issue, there is an emerging group of savvy developers who are capitalising on providing safety and security features both internally and externally for their buyers to address this situation. SECURITY ENHANCEMENT Property owners can control the level of security in their homes by implementing designated grilles or purchasing properties in gated and guarded (G&G) communities. These abovementioned features require little or no customisation from the property owner while the safety and security features offered are minimal. Stepping up as a solution to modernday security features is the smart home system which allows one to control devices in one’s home through smart devices. This translates to property owners being able to increase home security which can be personalised according to their needs via the option of remote home monitoring. This method also rewards property owners with greater peace of mind, knowing that one is able to have better control over their homes or businesses despite being away from the property. TAKING THINGS UP A NOTCH One method which property developers or homeowners are adopting to enhance their respective property offerings is through the implementation of a smart home system, which is trending in the market today. This is made possible via new technology by utilising the Internet of Things (IoT), with the main outcome of delivering daily services without manual intervention but instead, one which capitalises on WiFi

connectivity. Similar to how gadgets covering smart wearables, automotives and enterprises work, smart home technology has been crafted to give people peace of mind. Not only does it provide safety and security, convenience and comfort are also the hallmark of this system. Even those who wish to monitor their homes while abroad are able to do so. ATTAINING PEACE OF MIND The home is often regarded as a haven where people live, learn, play and grow. With ageing parents and small children residing here, logic dictates that the home should be a place of safety and security. By installing a comprehensive smart home system, family members will be able to monitor and react to any emergencies at home via their smartphones instantly, at anytime and from anywhere. For example, if an intruder breaks into the home where there is a helpless child or ill parent, anyone can immediately press the panic button which would automatically alert family members outside the home about a possible intrusion. Once alerted by a notification on their phone, they will be able to immediately view and monitor the situation through the smart camera and alert the authorities accordingly. In addition, if family members sense that something is amiss, they can remotely check on the situation at home and instantly ask their neighbours for help to check on their family members at home. Given its usefulness, developers can capitalise on buyers of properties wanting this added security feature to safeguard their homes and include this as a unique selling proposition in their respective properties. SMART HOMES BY AVANCE Avance Smart Home (ASH) Systems which aspires to take home security in Malaysia one notch higher aligns nicely with developers and homeowners’ desire for safety in their homes. Furthermore, the added value proposition provided by such home security systems will not only benefit both property developers and consumers alike, but will enhance home values. Founded in 2013, ASH Systems is committed to delivering an innovative line JUNE 2017 47

of smart home technology and designs. To date, it offers over 40 devices including smart security door locks, door and window sensors, indoor and outdoor IP cameras and panic buttons. This smart system also allows for an easy and user-friendly means of monitoring, controlling lights and temperature and maintaining energy consumption within one’s home. In addition, one can even programme mock scenarios while away from home by using handheld devices such as smartphones or tablets. ASH Systems uses state-of-the-art technology to fill in the gaps which property developers may have left out, which is to heighten the security of internal home and business premises. INTRUDER DETECTION BY AVANCE The Avance Smart Security Door Lock provides users with five unique features namely; fingerprint entry, password entry, mechanical key entry, card scan and remote unlocking via smartphones. Door and window sensors employing this technology will detect instances of break-ins and immediately alert owners, 48 I JUNE 2017

allowing them to take quick action. Elderly persons at home can access the panic button device. This will result in the system activating both the indoor and outdoor IP cameras to start recording while turning on the lights which will ultimately startle the intruders away. A remote voice command or the automatic turning on of the television or home sound system remotely will also further scare intruders away. HOME MONITORING AND HOME ENVIRONMENT CONTROL Once the Avance Alarm System is activated, all motion detectors will be deployed. For example, in the instance when one is away from home, and foreign motion is detected, the Security System will automatically turn on the home appliances to create an illusion that someone is around, aside from connecting to IP cameras, which will able to capture the profile of the intruders. Avance also offers a myriad of additional detectors and home environment controllers such as temperature and humidity control detectors, smoke detectors, smart sockets, smart gas detectors, formaldehyde detectors, carbon monoxide detectors and

water leakage detectors. These devices are able to anticipate a problem and notify homeowners while they are away. For more information on these life changing products, please call the Avance Helpline at +6011-1111 0076, visit www. or scan the QR code below and key in the promo code ‘propertyinsight’ to get 10% off your purchase.



LEGAL EAGLE Imparting positive influences to the next generation is second nature for the founder of Brickfields Asia College BY: MAGES PV LINGAM

50 I JUNE 2017

ounder and Managing Director of Brickfields Asia College (BAC) Raja Singham has gone through a series of unprecedented occurrences and economic downturns in his life. However, in the face of challenges, he is never one to give up. Testimony to his string of accomplishments is the successful running of what is now two BAC branches with over 4,500 students and more than 300 employees. Raja, who oversees the running of the two colleges located in Petaling Jaya and Kuala Lumpur respectively alongside his wife Meera Mahendranathan, considers this passion. The hardships and success stories of building the nation’s No.1 law school and being involved in the business of education made them realise the importance of giving back to society. One of the ways they have decided to do this is by benefitting communities through collaborations with around 80 charitable organisations which they have made an ongoing mission at BAC. “I started lecturing at the college at the age of 24 because I enjoy teaching first, and also ventured into an Internet Technology (IT) business at the same time,” says Raja. Unfortunately, his IT business was not spared from the Asian Financial Crisis of 1997/1998 whereby he lost RM50 million in 12 days by investing too heavily in IT hardware and software. Refusing to lose heart, he continued to lecture at BAC. In 2003, he bounced back by obtaining some financial assistance from his family and bought over what was then the Brickfields College (BC) via a loan instalment plan which he paid back in 10 years. Raja recalls that with a mere capital of RM30,000, he ventured into establishing BAC as its maiden college in Kuala Lumpur in 2004. BAC was the new name that he came up with after the closure of Brickfields College. With the new license obtained from the Ministry of Education, Raja rebranded BC to BAC. In 2013, BAC opened the doors to its RM110 million campus in Petaling Jaya. Raja, also a senior lecturer at BAC, received the prestigious Brand Laureate Education Man of the Year Award in 2015 for his astute vision, contributions and commitment to corporate social

PERSONALITY OF THE MONTH responsibilities (CSR) initiatives under the “Make it Right Movement” for education, health, special needs, unemployment and numerous other non-governmental organisations. An avid entrepreneur and visionary, Raja has been pivotal in contributing to educational platforms via the BAC Education initiative which spearheads projects and causes to help fund start-ups and more. Raja, who has his visions well lined up over the years based on challenges and lessons learnt from his own experiences and people surrounding his entrepreneurial circle of network, believes in staying on course. “I don’t look at competitors. At BAC, we tend to be excited in whatever projects we undertake. If we are busy looking at others, then BAC would be limited. Therefore, we strive to make our services and products better, more creative and innovative. I think it would be better to differentiate and create our own space for the long term,” says Raja. COUNTERING CHALLENGES Some of the challenges faced by Raja in terms of initiatives he wanted to introduce were not taken into account by the regulatory bodies which to him hindered the entire eco-system from moving forward. He asserts that entrepreneurs need to operate in a business-friendly environment but the reality is that there may be unnecessary objections or red-tape which may hinder organisations to perform better. “Teach people to think and be inquisitive to surge ahead,” says Raja. To his credit, at BAC, 99% of the graduates have successfully obtained a job within a month in whatever position they seek. The students he adds take pride in their communication skills, problem solving ability and in being game changers in any projects during their tenure at the college. Ultimately, Raja says that fast track initiatives to create awareness are needed to solve problems of job redundancy especially during the current weak economic situation. BAC recently established a free online portal - JobsBAC which is a podium to help job seekers (now amounting to over 2,000 candidates), with approximately 900 employers registered as well.

STAYING RELEVANT Raja’s philosophy has always been embedded in values related to transforming lives via education. By teaching people to be capacity builders, it enables them to fend for themselves and make them relevant instead of depending on others. Just as companies and even nations in the past have become irrelevant over time, this can also happen to people. He quotes Uber for instance, which has successfully transformed the taxi industry, just as Apple transformed the computer industry. “My credence is to keep learning always and improving (constantly), and the key is to give back to the community via free tuition for all,” he says. BAC has fully funded a free online education portal called which was created for school-goers that is now being utilised by 150,000 students utilising 4500 multi-lingual videos. Raja has a unique organisation that plans well ahead. Being hands-on and independent, his management style is even dubbed as a “walkabout management.” He does not have a specific office space but dedicates his time walking about the college when he isn’t occupied with speaking at conferences, giving talks to students at seminars or lecturing. “The idea is to give people including staff members, a sense of purpose. Essentially, when they know their purpose, they would find ways to mould themselves to become better,” he adds. Raja delegates his work efficiently among his employees as he owns over 20 sub companies under his administration. He keeps an open mind when considering ideas and strategies for the benefit of the companies. WALKING THE ENTREPRENEUR TALK As an entrepreneur, Raja advocates always being alert. Although he receives numerous invitations to attend many functions and events on a daily basis, he places priority on keeping to his responsibilities as a father of two. “I read a lot to keep myself relevant and am actively involved in business development,” he shares. Raja takes his life’s experiences in his stride and appreciates the parental values instilled in him which is never to give up. Raja is also passionate about property

My credence is to keep learning always and improving (constantly), and the key is to give back to the community via free tuition for all” – Raja Singham

investment. Noting that the market has softened considerably, he nevertheless believes in the mantra of location, location, location. In order to get the best return on investments (ROI). During his heydays, he invested a great deal in property at a time when the market was called “asset generation” because the baby boomers then believed in investing in properties. He notes that there are changes in the behavioural patterns of the younger generation whereby the millennials or gen-Z now prefer working and staying within integrated mix-used developments for greater convenience. Coupled with the rising cost of living, millennials are less able to afford property purchases. Therefore, they prefer easier and faster connectivity and enjoy using IT and opt for easy modes of transportations to travel. Properties in prime locations being more expensive he says, also deters the younger generations from buying them. Being an educator and philanthropist, Raja has also created a thought consciousness in the community at large through his entrepreneurial development programmes and active involvement in nurturing students. JUNE 2017 I 51


ONCE BITTEN, TWICE SHY Having good property knowledge is important for making the right decisions BY: FELICIA SOON


aving invested in eight properties, Zachary Yeo and his partner Andy Lee who has also invested in six properties himself, recently met up with Property Insight to have a cup of coffee. Here, they share their inspiring journey not just as property investors, but also in running their own agency – e&core Properties together and their plans to coach more agents into becoming property investors themselves. Property Insight (PI): Who inspired you to venture into property investment? 52 | JUNE 2017

Zachary Yeo (ZY): My dad first got me interested in properties. During my secondary school days, my dad who worked as a land surveyor often brought me to view properties with him, which eventually piqued my interest in real estate. When I was 14 years old, I read the book “Rich Dad, Poor Dad” written by Robert Kiyosaki and Sharon Lechter. After I graduated from college, I worked for a year plus before joining my dad as a property investor, and bought my first property at the age of 22. Andy Lee (AL): I came from a traditional

family where my dad taught me that education is very important. I graduated from The One Academy (same as Zachary), and worked as an in-house designer at a multi-level marketing (MLM) company. There, my colleagues influenced me to do something different. Subsequently, after learning about the property industry from a mentor, I then ventured into property investment. That was about six years ago, when I was 23 years old. PI: How did you land your first

investment deal? ZY: I bought my first property which was an apartment in Subang Jaya for over RM100,000 in 2011. My dad wanted me to start with something small and go through the entire process of learning from scratch. That’s why it was important to have my own experience of buying my first property. The initial rental was RM800 per month and until this day, I am only paying RM300 for the monthly instalment and save the extra RM500. Of course, buying your first property is always the hardest decision to make because everything is still new and there are a lot of things that you may not be aware of at first. Once you have gotten the hang of it, buying subsequent properties will be like clockwork, whereby you just buy and repeat the process again. AL: I did a lot of research before buying my first property, an apartment which was priced below the market rate in Bandar Sunway. At that time, I was fortunate enough to get a full loan from the bank which included cash back. Thus, I was able to pay the legal fees as the apartment was a sub-sale property, and still have extra money to renovate my apartment. Today, my apartment is still being rented out at the price of RM900 per month. PI: How do you conduct your research? What are the main elements you look into? How do you compare prices and know you are investing in the right area? Also, how do you find out about the impending problems around the area? ZY: I do this the old school way whereby I will drive and spend a lot of time in the area to get a feel of the place. I will also take into consideration who the people living there are by commuting to that place. It is very important because when you buy a property for investment, you will either rent it out or flip it, so it is not so much what you like but rather what tenants would prefer. Before I buy a place, I need to identify who will rent from me. And, if I want to sell the property, it’s who the target buyers will be. Can they afford the price I’ve quoted? In short, the first thing I will look into is the location, followed by the demographics of the people at that location. AL: As for me, I will do a lot of online research. Therefore, by the time I walk

in to see a project, I am already aware of everything there is to know about the area. For example, this will include the surrounding amenities, as I would have analysed it beforehand. When I visit the project, I will just check on the size and pricing of the project and if it is reasonable enough for me, I will book a unit straightaway. I prefer to buy something which I have wide in-depth knowledge of, and these days, we can easily obtain information from property portals whereby I can get the selling and rental prices and do my own calculations to calculate the return on investment (ROI). After that, I will proceed to survey the surrounding area. PI: With stringent criteria for bank loans in place, what is your advice for first time homebuyers? ZY: First of all, you need to know your income and your commitment levels. Some people may be vague about their own financial standing. Talk to bankers and seek their advice on whether your profile and credit score is suitable to buy a property. An important lesson here is not to be overly optimistic. For example, if your income is only RM3,000 to RM4,000 per month, don’t plan to buy a property which costs more than RM500,000 as the monthly instalment will be in the range of RM2,500 to RM3,000 per month as the bank will also not issue you the loan. Therefore, it is better to work backwards. For instance, if your income is RM5,000 per month and you are prepared to pay RM2,000 per month for your housing loan instalment, then you can plan to buy a RM400,000 property. PI: What is your advice to new investors? Should the focus be on the location or the property price? ZY: For myself, I have my own internal price ratio. For example, if you give me a very good location but the price is steep, then I don’t have much profit left after paying such a high price. On the other hand, if I am offered a cheaper price but the location is bad, then there is no balance. Actually, the location does not have to be very good, as long as there is value in the pricing. AL: I am more concerned about two

There is no such thing as a bad buy in property, only a wrongly priced property” – Zachary Yeo things, i.e. the location and the ROI. I have met a lot of people who dream about buying their own big house. But is it easier to save RM1 million or get a loan of RM1 million? I personally find it is easier to obtain a loan of a huge sum of money than to save up 30 years for it. Hence, it is best to start small when you first venture into buying your first property as it is easier to get a RM200,000 loan for a smaller-sized unit like an apartment, and then use back the same formula to flip the property or get some rental to increase your income and enhance your profile. PI: What is your opinion on unsold units, and what is the cause and effect of it? JUNE 2017 I 53

ROOKIE INVESTOR ZY: There are so many products coming up and people have more choices now. So, for those units that cannot be sold, it does not necessarily mean that it cannot be sold forever. It just means that it will take a longer time to find a buyer. Some projects are only able to sell a certain portion of their units initially because somewhere along the line, someone else launched a project there at the same price. People will make comparisons based on the various choices that they have. Unless it is a prime location with not much land left, then the properties there will sell very fast. On the other hand, for places with much land left such as Cyberjaya, units there will take a longer time to be fully sold. AL: To garner bigger profits, developers have to sell their units within a short span of time. Furthermore, if there is a new launch coming up, it will likely pose added competition. Therefore, developers need to constantly be aware of any new launches taking place soon and how they can act on opportunities by being flexible in repackaging their products for example, to meet the demand of discerning buyers. PI: How do you ensure that you will get consistent rental income when you invest in a property? ZY: You have to be realistic in your asking price. Some people want to rent their property out for RM2,500 per month when the market rate offers only RM2,200 per month. And because they want a higher rental rate, the property will be left empty for three months. However, if you did not rent the property for RM2,200 per month, you would have incurred a loss of RM6,600 after three months already. On another note, I am very particular about my tenants and I do not mind renting cheaper if the tenant has a better profile. We have rented out a lot of properties before, and received a lot of feedback from the tenants. I have even created a tenant profile analysing system, whereby I can predict the likelihood of someone creating problems for my property based on their behavioural patterns. PI: Is it important to have a good support system to safeguard your property investment? 54 | JUNE 2017

ZY: Property investment can sometimes be very scary to venture into, especially if you are doing it on your own, with no one to ask for opinions or assistance. Of course, it is good to network with others who have already invested in properties and seek their constructive opinions. PI: How has property investment overall been like for you? What were the challenges faced? ZY: It was tough when I bought my first five properties, because every time I made money, I would have to put it back into property investment. Initially, for my first few properties, I was also very hands on as I wanted to save on the renovation costs. Therefore, I would visit many hardware shops to look for the best deals. As such, I had very little time and money left for myself. AL: The overall experience has been fun for me, because besides looking for good investments myself, I also like to teach people on how to invest in properties. Property investment can be risky but first, you have to make sure that you can afford the risk so that you will be ready for the impact when the bad times come. PI: Which are the popular areas for property investment? AL: I prefer to look for mature townships or neighbourhoods, for example in the KLCC area, Petaling Jaya, Subang Jaya or Damansara. I will not look for a new township like Nilai because it is quite risky, and once you have made a loss in property, it is very hard to get it back. For example, if you have owned five properties and you made one bad mistake where you lost money, even the other four properties will not be able to cover your loss due to the mistake you made for purchasing just one property. PI: What is your investment strategy for this year? AL: My strategy for this year is to buy three more properties and keep recruiting new members to expand the company. ZY: This year, I will be extremely aggressive in buying properties, and I am looking into a few deals right now. Hopefully, if everything goes well, I can buy three to four more properties,

Andy Lee

including a shop. I am also planning on expanding the team with Andy. PI: Kindly share your outlook on the local property market in the next half of this year. ZY: We will see more good deals coming up in the market. It may be slow but developers are pushing out good deals, by pricing their products at a very affordable range to sustain the market. AL: We managed to sell 50 projects within four months, so from my point of view as an agent, the property market is still good. Please visit zachinvests and andyleerep for the Facebook pages of Zachary and Andy respectively.



CHAMPIONING CLEANER & SAFER WATER FOR CONSUMPTION Combining technology and innovation for healthy living BY: CALVIN TUNG


erging science, technology and corporate social responsibility (CSR), MOMAwater is making waves with its revolutionary clean water. Championing a safe and healthy lifestyle through quality de-mineralised drinking water and its own brand of acetic acidfree bottles, the company has made it its mission to educate the public about the importance of safe and clean water alongside its company objective to penetrate Peninsular Malaysia. Calvin Tung speaks to Kenneth Toh, marketing director of MOMAwater about the nature of his business, its importance to his personal mission and what water truly means to him. PI: What made you decide to venture into the water bottling industry? Kenneth Toh (KT): There is a global trend that we’ve observed whereby consumers and individuals are moving towards healthier forms of hydration. Globally, what we are seeing is the sales and demand of bottled water going up consistently at about 4% to 7% annually. And on the flip side, sales of sugary carbonated drinks have been on the downtrend. The trend will continue as consumers become a lot more aware and discerning. Therefore, there is a strong demand for good clean water. At the end of the day, the best hydration option is always going to be clean water. You don’t need anything else - certainly not the added sugar to your drinks. In that sense, we see ourselves capturing a very basic market need. That is what we, as a company, represent.

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PI: Tell us more about your company. What does it represent and what are its mission and values? KT: We are a bottled water manufacturer and we produce one of the cleanest bottled water in the country. We also produce the same bottled water for the Singaporean, Australian and Chinese markets as well. As a company, we are starting out with bottled waters. But on a personal level, I am interested in building this company as a brand. This is what MOMAwater means to me personally; it is a brand big on safety and represents trustworthiness, cleanliness, clarity and transparency. We aim to make the best choices and the clearest ones possible amidst all the

confusing alternatives in the market. PI: Please share about the quality of the water that your company has used in the bottles KT: The water is sourced from Sibu, Sarawak. We take water from water sources around the state, and we bottle this clean and safe water. By clean and safe, we mean that it is free from chemicals, bacteria and other assorted minerals and contaminants in the water. Of course, to do that, is not as simple as it sounds. This is something that everybody wants but to be able to clean and clear these particles, there are a lot of effort and investments that have gone into making it as clean as we could possibly get.

PI: You mentioned water purification is an important component. Can you explain the technology behind it? KT: There are three key contaminants in the water that is found – bacteria, minerals and chemicals. So, what we do (as a company) is that we put in place, what we call a process of duo sterilisation to kill the bacteria in the water. Most bottled water companies typically just use one type of sterilisation, which just optimises Ultraviolet (UV) Sterilisation Technology. However, we take in the extra effort to incorporate additional Ozone water disinfection technology which is able to kill all the bacteria found in the water supply. It’s actually quite rare in our industry as not many companies use both technologies at once. At the same time, we also use a MultiPass Filtration System to sift through the minerals in the water which represents the best technology filtration system in the business. It is a very high efficiency filtration system whereby the water goes through at least ten times of filtration before it actually comes out for the bottling process. The third thing that we do is to ensure that the bottles that we use are the safest available. Part of the reasons why chemical contaminations can be found in bottled water is due to the bottles themselves. If the bottles are not properly manufactured, the plastic itself leaching into the water. So, what we do is to create our own bottles. We use the best quality plastics and in the process of moulding the bottles, we make sure that the plastics are temperature controlled to make sure no acetic acid* is found in the water. On top of that, there are also contaminants where there is human interference. For example, if there is human handling in filling up the bottles with water, there is

a risk that contaminants could enter our products. Our plants are fully automated to ensure such an occurrence would be eliminated right from the bottling stage to the final seal in its packaging. PI: What challenges have you faced as a company and how do you intend to penetrate the market? KT: So, apart from market penetration and brand awareness, I would think that one of our biggest challenges is educating consumers about the importance of water itself. Water is such an important part of our lives. We are made of 70% water ourselves. Yet, not many of us think about water, what we drink and what we put into our bodies. Water is seen as a side thought, a liquid consumable that can be drunk as long as it is available. But, that simply isn’t true. There is a world of difference between good, clean and safe water and water that simply isn’t fit for consumption. So, one of the things that we want to do is to educate our consumers to make them aware of what they are putting into their bodies – the water that they take for granted. And hopefully, they will make the best choice. PI: What are your CSR plans for the company? KT: We have been involved in a lot of relief efforts. For example, there were severe floods in Sarawak that resulted in the water supply being contaminated. We worked with our local partners and suppliers to send out clean drinking water for those affected. We have also sponsored rebuilding efforts for those who have lost their homes in fires and provided clean water solutions for them. Our CSR efforts have been focused on Sarawak (where we are based) and it is there that we have concentrated out focus. Of course, we always welcome those who

This is what MOMAwater means to me personally; it is a brand big on safety and represents trustworthiness, cleanliness, clarity and transparency” – Kenneth Toh

wish to partner with us for such efforts. There is an ever present need for everyone to help out. We work locally, and perhaps through our efforts in this region, some good will come out of it. PI: What are your future plans for the company? KT: As mentioned, we are expanding our footprint starting with Malaysia. We first started out the business in East Malaysia and slowly, we have expanded into West Malaysia. There are plans within the company to grow beyond that – with Singapore being our next target and after that, Australia and China. There is a large market out there. We don’t see ourselves as a Malaysian brand but rather, an international one. There was never an intention to only compete locally and our brand reflects that. The message we present is universal: Everyone needs clean water - locally, regionally and globally. And soon, our reach will be global too. JUNE 2017 I 57


ROOF TALK THEME HOSTEL Introducing Johor Bahru’s innovative homestay business BY: FELICIA SOON


hostel is different from a hotel because in the case of the former, guests need to share their rooms and facilities with others. The good side to this arrangement enables the opportunity for guests to make new friends and share their experiences with one another, rather than being secluded. Property Insight recently interviewed Lois Ng, CEO of Roof Talk Theme Hostel to learn how she runs a successful homestay business and operates the hostel on a daily basis. Property Insight (PI): Can you tell us about yourself and how you started Roof Talk Theme Hostel? LOIS NG (LN): I started my property investment journey in 2012. The reason I love the property industry is because I love the feeling of being able to create a home for others and people’s smiles meant a lot to me. I ventured into this accommodation business after I visited Taiwan in 2012. Taiwan’s homestay 58 I JUNE 2017

and hostel concept is beyond mere accommodation. I experienced the homely feeling during my stay there and started to wonder why Malaysia does not have this kind of home-friendly feeling. Hence, I started my first accommodation business whereby I converted a landed property to a homestay in 2013. The Roof Talk Theme Hostel has since served guests travelling to Johor Bahru for a trip. It has also hosted wedding events, birthday celebrations, gatherings, company team building, etc. However, I felt that this type of accommodation could only cater for big group of guests and the human connection was not strong as current and previous guests did not have the chance to get connected with each other. Therefore, I started Roof Talk Theme Hostel in 2014 with the intention to serve not only big group of guests but to foster the human connection as I wish to see each of my guests becoming friends from strangers after staying here. My team and I spent

about nine months from research until the official operations. I even went to Taiwan, Bangkok and Australia to study more on how they run their hostel businesses. PI: Why did you decide to venture into the hostel business? LN: Our main intention was to create a special home ambience and facilitate closer human connection. We choose JB as our starting point because we want to create more human connection in this city as we feel that people here are easily influenced by the Singapore culture whereby their life purpose is just to earn more money and they forget that life is all about a healthy work-life balance. PI: Where did the idea to open Roof Talk Theme Hostel come from? LN: The name Roof Talk Theme Hostel was an accumulation of various words. Roof stands for shelter while Talk stands for people talking and the idea originated

DESTINATION from the belief that under one roof, we can create an abundance of human connections where people can live under one roof like a family. We want Roof Talk to be a home for everyone where people will see it as a symbol of home wherever they go. PI: What is the concept that Roof Talk Theme Hostel portrays to its lodgers? LN: Roof Talk has five core values namely:“Humanisation” design Creating a homely environment where people who enter will feel very relaxed. Reasonable price We do not wish to see people compromise their stay by paying higher rates with no equal value of staying quality or pay lower rates by cramping themselves in a place that is not suitable for staying just for the sake of saving money. Our services and affordable pricing will give guests a sense of pride by staying at a place that they would belong. We aim to resolve our guests’ problems and save their money by settling agent’s fees and other utility bills (water, electric, WiFi and etc). Facilitating human connection We want to ensure that all our customers will meet new friends and enlarge their social circle. Life assistance service We call a place home because our loved ones live there. The services provided here ensure everybody’s needs are taken care of in terms of helping guests receive the courier parcel when they are away from the hostel as well as daily housekeeping services to provide our guests with a clean and comfortable living environment. Reminding everyone the importance of dreams We have designed two feature walls which I have named as the Dream Wall and Letter Wall which allow our guests to write their wishes on. By doing so, they can not only share their dreams but also learn about other people’s dreams as well. We also provide a special letter service whereby guests can post a future letter to themselves. We provide free courier letter services to our guests according to the year they wish to receive their respective letters. We want to encourage people to dare to dream and write down what they wish to achieve in themselves after three, five or 10 years later. We believe we are

here for a reason and want everyone to be brave enough to discover their purpose of being here and what they wish to accomplish in this life. PI: Who is Roof Talk Theme Hostel’s target market? LN: Roof Talk hostel is a co-living place. Currently, our target market comprise 70% long term staying guests including those working in Singapore and 30% shortterm guests who are here for vacation or business purposes. PI: What are some of the challenges faced when starting up Roof Talk Theme Hostel? LN: Co-living is a new concept for Malaysians just like when UBER and GRAB first entered the market here. What is co-living? Co-Living is a modern form of housing whereby residents share living spaces and Roof Talk Theme Hostel plays the role of managing the people who stay there. Initially, we faced challenges in that people could not accept this kind of accommodation. They felt insecure inside a room without an attached bathroom where they would need to share the facility with others. We understand the problem but believe this can be solved as this kind of accommodation is getting more and more common. This scenario is the same like you feeling uneasy when you first enter a stranger’s car as in the case of UBER or GRAB. However, when these transportation services start solving transportation problems, more and more people started using these services which will eventually become a part of their life. PI: What are the services that Roof Talk Theme Hostel provides? LN: The services we provide include daily cleaning and laundry services. Amenities and products such as washing machine, pantry area, kitchen, hot and cold water dispenser, clothes hanging area, living room with TV, DVD player, dart and games board, study area, free toiletry items, postage delivery services and free utilities for guests to enjoy. The hostel offers a flexible tenure starting from one month to yearly packages.

Hostel apart from other competitors? LN: There are two important principles that Roof Talk insist on which are cleanliness and comfort. We make sure our hygiene controller cleans up the space twice a day and that all the bed linen accessories provided to our guests are no different from the quality found in four-star hotels as we source our items from the same suppliers. PI: What are the future plans for Roof Talk Theme Hostel? LN: Our aspiration is to enable everyone to enjoy a home ambience whenever they stay here. We aim to open more branches to add value to our guests looking for any job transfer opportunities or travel options. The hostel enables them to transfer their stay to another state in Malaysia without worrying about looking for a new accommodation. We also wish to provide guests with similar services found in hotels and make them feel proud of being part of us where they can experience a different hostel experience as compared to the experience of renting an apartment. Besides that, we aspire to simplify the current complicated renting services by allowing people to book their long term online stay whereby they can easily access other co-living branches in other cities. PI: Do you see Roof Talk Theme Hostel expanding regionally or globally in the near future? LN: We aim to expand globally with the purpose of providing our guests with greater value when they travel overseas. Just imagine should you choose to stay at the JB branch and one day your company gives you a better offer to work in Australia. Therefore, you could just transfer your rental booking to our Australian branch which we are planning for the future. Referring back to our business model, you can also enjoy the flexibility of staying long term in JB while enjoying the benefits of staying at the KL branch as a short term guest. Hence, we look forward to working together with anyone who shares the same vision of bringing out this new accommodation staying experience in Malaysia.

PI: What is it that sets Roof Talk Theme JUNE 2017 I 59


ARCHITECT WITH A PASSION FOR DESIGN Having spent years harnessing his skills, Mustapha Kamal Zulkarnain is now passing on his knowledge to the next generation BY: MAGES PV LINGAM


ustapha Kamal Zulkarnain, the founder behind Arkitek Mustapha Kamal, a sole proprietorship architectural firm established in 1996, is a man with a passion for design. Having spent years in the architecture field, his innate talent can be seen being expressed in the buildings he has designed. After years of extensive experience in the industry, Mustapha now generously shares his knowledge with those who seek his expertise and advice in design and master planning. 60 | JUNE 2017

He is known for designing projects around the country including Denai Alam’s Phase i-8 terraced houses in Shah Alam, the 3G1 office complex in Putrajaya, Sayfol International School in Kuala Lumpur and also the Seremban Specialist Centre in Negeri Sembilan. He is also credited for designing the Denai Alam township and the Guthrie Corridor Expressway (GCE) along the 12,000-acre Guthrie plantation for Kumpulan Guthrie Bhd, among others. The firm was previously a body corporate collaborating with MBA Architects Sdn

Bhd in Ipoh, Perak, which looked into the marketing and designing departments. Thereafter, Mustapha went into partnership with Klaf Architects in 1994, where he was exposed to East Malaysia’s architectural designs. A STRINGENT WORK PROCESS According to Mustapha who graduated from the University of Auckland, New Zealand in 1988, “design should be contextual and built sensibly”. In addition, he says that communication and people management

are also vital in realising a successful project. To maintain equilibrium, his firm focuses on people-centric and natureinspired designs. Mustapha, who is also a corporate member of the Malaysian Institute of Architects (PAM) acknowledges that a project will usually take up to two to three years to complete. More often than not, a project would require the input of a minimum five employees. “This will be accosted and tendered by the quantity surveyors and affiliate consultants related to the projects,” he says. The firm he adds, must meet project timelines. According to him, the timelines are pre-determined by the World Bank competitive index and monitored by government authorities. “Architecture comprise four areas of concentration. These include the advisory role, schematic visualisation, the submission of drawings (permission to plan which would be submitted to the local authority through the town planners) and managing the project or contact administration which involves contract document management,” adds Mustapha. He says that the architectural firm is given the authorisation to approve and issue the Certificate of Completion and Compliance (CCC), replacing the Certificate of Fitness for Occupation (CFO), which was previously issued by the local authority. The projects undertaken by the firm must synchronise with timelines, resources and be ready for delivery. Being the principal architect, Mustapha says he is responsible for management and negotiation, coordination as well as damage control procedures. A key priority would be to meet project deadlines. After the requirements are achieved and the building is fully built to 100% capacity, only then would he consider the project a success. FOCUSED INSIGHTS Mustapha says, “My fondest memory about the firm was when I first started my practice during the 1997/98 recession. We were blessed with 10 projects at that time when many others couldn’t even obtain projects or hold on to their jobs.” He adds that during that turbulent period of economic uncertainty, he was also sought-after as an advisor which raised his

confidence level. Although the economic downturn saw many developers holding back their launches, he advised them to carry on with their projects and to continue selling once the economy picked up. Mustapha, who learnt the finer points of architecture and management from his predecessors opines that one should gain relevant working experience first before even considering establishing one’s own firm. Adding a feather to his cap of achievements was the recognition he received for the Denai Alam township project. His company was responsible for designing the Guthrie Corridor master plan and the township, spanning 16,000 acres which was further lengthened with another 23 km stretch of land. To his credit, he was one of the first in the market to set guidelines for planned communities in view of achieving economic benefits in the future. For this, the Denai Alam township project was awarded, “The Most Innovative Township Planning” recognition in 2003, by the Malaysian Institute of Planners (MIP). Denai Alam, being a green and naturecentric project, is imbued with a lot of parks to promote healthy living which indirectly also promotes safe city living. Always on the go, Mustapha’s philosophy is based on the saying that “it is never too late to learn”. He also keeps himself enlightened and abreast with the latest in

the market by reading news widely, and encourages his teammates to do the same. Success to him lies in imparting knowledge to his subordinates and the younger generation of architects. He also enjoys giving back to the community via talks that he presents to universities, conferences and architecture firms. Mustapha also receives nominations from repeat jobs and recommendation from professionals in the industry who are familiar with his company’s portfolio of work. Competition doesn’t deter him but spurs him on to achieve more. Therefore, it will not be unusual for him to also submit his work for international competitions. His greatest inspiration in life he says boils down to his experiences. He enjoys being self-taught and receiving positive criticisms which he believes enriches his life. Advising those considering their foray into buying property despite the challenging times, he says that the mantra “location, location, location” still holds water. He opines that if the locations are not that favourable, then it may take a longer time to enjoy positive rental yield. Those who lack sufficient funds he advises should hold on to their properties but for those who have surplus of cash, now is the best time to invest in locations like Cyberjaya or Putrajaya, where economic activities are thriving. JUNE 2017 I 61





f you are looking for a ready, more secure and less speculative type of property, you could consider the secondary market rather than those that are still under construction offered by housing developers. While the costs of entry are higher in the secondary market as compared to buying

62 I JUNE 2017

from housing developers (for a start, there is immediate payment of stamp duty on the transaction rather than upon the issuance of the title later), the legal documents and processes differ as well. Individual owners who sell their already constructed properties are not subject to

the legal regime that regulates housing developments. Since there is no statutory prescribed format of agreement and the parties are free to negotiate the terms and conditions of the Sale and Purchase Agreement (SPA), they will be subject to certain commercial norms, banking

practices and the applicable process of ownership transaction. Here are five things that you should consider if you are buying from the secondary market:


Title Issuance Typically, when transacting secondary property, the very first question would be whether there is any title to the subject property or not. The more accurate version to this question is whether the title of the subject property has been issued at the time of transaction. The key difference lies with the documents and the authority involved. If the separate individual or strata title has been issued for the subject property, the instrument of transferring ownership would be the Memorandum of Transfer (MOT) to be processed by the relevant Land Office. The securitisation for the bank in consideration of the loan given will be the registration of the Charge on the Title. If the separate individual or strata title has not yet been issued for the subject property, the transfer of ownership will be by way of a Deed of Assignment (DoA) to be recorded with the developer, pending the title issuance later. The securitisation for the bank in consideration of the loan given will be another DoA, but in favour of the Bank. In both instances, there will be stamp duty payable to the government to recognise the transfer of ownership. It is also important to note that some banks have policies against lending for property that has yet to be issued the separate title over a certain period of time.


Title Tenure Another frequently asked question (FAQ) by the buyer is whether the subject property is freehold or leasehold. The answer to this question is not only critical in assessing the value of the subject property but relevant for the policy consideration of many banks and financial institutions. Some banks’ policy is not to lend if the balance tenure of the leasehold property is shorter than a certain number of years. Furthermore, leasehold properties are most often subject to consent of the State Authority which requires more time to complete a transaction. Buyers should also be aware of the processes and requirements in extending the leasehold period and accept that it

is ultimately a matter of discretion by the authority.


Before and After Joint Inspection Inspection of the subject property is crucial before making the decision to purchase but not many are prudent enough to do one more round of joint inspection during the completion of the transaction for the purpose of handing over of vacant possession. It is an important step to ensure all remaining issues on the conditions of the subject property can be dealt with between the parties. If you were inspecting a furnished unit before purchasing it but you are buying it unfurnished, you should be concerned about the condition of the unit after all the furnishings have been removed. If you are purchasing a furnished unit, you should be concerned whether you are taking delivery of all the furnishing that you expect to remain in the subject property when you take over possession. Do compile a comprehensive list of furniture and fittings that form part of the purchase and consult your lawyer on the practical meaning of “as is where is” which is important to prevent unnecessary dispute.


Have a Realistic Expectation of the Completion Date As a general rule of thumb, transactions in the secondary market need approximately three to four months to complete to take care of the loan arrangement both ways. “3+1” is a common term used to describe the first three months of the interestfree transaction period followed by the automatic one month extension thereafter with a prescribed contractual interest. Firstly, “3+1” is not a mathematic equation but a simplified understanding of the transaction time that is subject to the wordings of the SPA agreement. “3+1” will only start kicking in if the contract is unconditional. If it is subject to certain consents, there may be a further period of time allocated before the commencement of “3+1” after the

procurement of these consents. “3+1” can also be suspended and resumed in the process which is similar to the “injury time” addition at the end of the football match. The parties are allocated a fixed time frame to deliver and perform certain contractual obligations and the delay or the extra time required to comply will be added back in favour of the other party. Therefore, “3+1” is not necessarily a four-month time frame per say.


Post-Completion Updating of Ownership Record Most parties will be happily moving on after the transaction is completed, having received payment for the full purchase, taking over of possession and formalisation of the transfer of ownership. It is easy to forget to follow through on the other necessary updating of other relevant ownership records. These include the change of name for quit rent, assessment, management office and all other utility providers. Updating all these records is useful in preventing any ownership disputes.

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. JUNE 2017 I 63



I AM NOT TRYING TO BE FUNNY SOMETIMES, COMMON PROPERTY QUESTIONS DESERVE UNCOMMON ANSWERS I am lucky to have investment mentors who share unconventional wisdom with me. I often challenge universal or dogmatic principles in property investing, and try to give an alternative view. Again, I would like to qualify that these are just my opinions and I do not claim them to be the gospel truth.

64 I JUNE 2017

DOES ONE FOCUS ON CASH FLOW PROPERTIES OR CAPITAL APPRECIATION ONES? Personally, my simple answer is this – focus on BOTH. My mentors made me realise that many investors may be unhealthily obsessed with the NUMBER of properties they have, instead of focusing on their net worth or achieving a sufficiently large asset base. I’ve seen many investors who own multiple cash flow properties, especially from the lower to medium cost segments. However, ask yourselves if a strict adherence to this game play will enable you to be financially free. As I’ve said in the past, getting a single unit that generates RM500 positive cash flow per month is already fairly challenging in this market. Now, even getting 10 of such units will garner you just RM5,000 per month, which won’t exactly make you the next Jack Ma. Direct translation – Cash flow plays are useful for HOLDING POWER, but may lack the ability to set you free. It’s the capital appreciation from building a sizeable portfolio that leaps from say RM 2 mil to RM 6 mil that enables you to be free. WHAT KIND OF PROPERTIES DO I FOCUS ON TO BUILD A SIZEABLE ASSET BASE? Most of us would tend to invest in residential properties. As such, it may be optimal to construct a diversified property portfolio of condominiums, apartments, studio and landed residential units. Historically speaking, landed residential units tend to help you build a sizeable asset base, with the best percentage and nominal gains over time. The recent National Property Information Centre (NAPIC) report conducted in 2015 and 2016 states that the average price of a terraced house and apartment in Kuala Lumpur costs about RM800,000 and RM410,000 respectively. However, it is important to note that both the terraced house and apartment showed similar appreciation rates of 7.5% and 7.7% per annum respectively. Direct translation? Even though the price of a terraced house is nearly double that of an apartment, the 7.5%

appreciation rate of the house is nearly on par with its smaller counterpart, which bodes well for portfolio scalability. Hence, as your career and earning power progresses, you may want to consider prime landed residential units in your portfolio construct. IS LOCATION REALLY THE MOST IMPORTANT THING IN REAL ESTATE? What’s so great about Taman Tun Dr Ismail’s location? It used to be a former rubber estate. What’s so great about Bandar Utama’s location? It used to be a former oil palm estate. Ask yourself if you would like to stay near commercial hubs and get stuck in traffic jams every day? Seriously? •

In all humility, the phrase “Location, Location, Location” is overrated. Rather, the phrase “People, People, People” should be given precedence as well. Location doesn’t determine your property’s destiny! Rather, it is the AFFLUENCE or WEALTH of its residents that determine its future price growth. Why do you think areas like Bangsar is still rock solid? The rich get richer because they employ

their capital more efficiently. They are hardly affected by economic calamities. And, you can bet they have no qualms paying a few million bucks for a property in an affluent area. • The Rich love staying with the Rich. They want to be associated with rich neighbours. • What does it mean to you and me? Now, I’m not asking you to only invest in super high-end areas like Bangsar. Rather, choose areas with rising AFFLUENCE and household INCOMES. This bodes well for long term capital appreciation. Do not be overly distracted by infrastructure plays without studying its population affluence and demographics. • Is your target area one with a higher percentage of owner-occupiers? Do they take pride in their homes? Do you see new owners coming in and renovating their homes? Do they have household incomes of at least RM10,000 per month? Ask yourselves such questions too. The moral of the story? Sometimes, conventional wisdom gives you mediocre results. Therefore, sometimes, you got to employ unconventional wisdom if you want to get unconventional results.

ABOUT THE CONTRIBUTOR Mark Chua is the best-selling author of the book “WHO SAYS”. He was a former senior vice president of a bank and is an avid lover of properties. He is living proof that one can be successful in both their careers and property investments. He can be reached via or JUNE 2017 I 65




es, the Mass Rapid Transit (MRT) Line 1 is coming. The second and most important part of the first MRT line in Klang Valley, stretching from Sungai Buloh to Kajang is going to open in just a few months’ time. Just like other rapid transit lines and extensions, it is going

66 I JUNE 2017

to affect the value of property along the alignment drastically. A train system like this will massively disrupt the way people commute and do business. If you look at the system, it is designed to bring in people from the outer suburbs such as those along the

Damansara or Cheras corridors to work in the downtown of Kuala Lumpur. This system has it pros and cons, and just as it can make some areas boom, others can just go bust. For instance, when the Kelana Jaya light rail transit (LRT) line was extended from Kelana Jaya to Subang Jaya

INVESTOR NEXT DOOR and Putra Heights, more people from the outer suburbs could take the train to the city centre without getting stuck in traffic or face the perennial parking problems. This means that businesses and offices in the downtown now have a greater pool of possible workforce who are willing to commute to work in the city centre on a daily basis. If you were to look at the statistics of office rental five years ago, there was a trend for businesses to move out of the city centre to the mature suburbs such as Petaling Jaya. Two factors have contributed to this phenomenon. Firstly, the problem of getting the workforce to commute to work downtown and secondly, the inconvenience faced by clients when someone’s office is located right in the heart of the city. Now, with the additional option of just hopping on a train to get to the city, it stands the chance to become the viable option for the business to remain there or even to return to, if they have moved away earlier. While this presents good news for city centre offices, it also signals negative news for suburban offices which are already struggling in the first place. On the other hand, people who work in the city will now have much wider choices for accommodation. For those downtown residents, cars are not a necessity and thus they can avoid the hefty monthly instalments for car hire purchases. These people have the option of living in Subang Jaya, USJ, Puchong, Damansara, Sungai Buloh, Cheras or Kajang while travelling to their city centre for work every day. Rentals for houses and rooms are so much more reasonable in the suburbs. With a double savings (no car installments and lower rentals), now they can save more money every month, and perhaps even venture into their first property purchase in the near future. The retail segment will also undergo change. For example, one may visit the row of shops in the housing estates less frequently and drop by the small neighbourhood malls that are popping up near the MRT stations more often. Why would you go anywhere else, if you can get everything you need under one roof after work, and go home directly once you are done? The tenant mix in conventional commercial areas might change, with

more eateries coming up to attract people regardless of whether one drives, travels by public transit or moves around in rideshare services such as Uber or Grab. There is also another type of property to look at including those residential properties that are located next to the transportation line but not the station. Naturally, most people do not want to live near a railway track if they cannot access the service easily. As such, demand and rental for those properties will dwindle. However, if those properties facing the railway tracks (and for that matter, highways) are offices, it is believed that these infrastructures will somehow exert a positive impact. So yes, while the urban railway network is still in its infancy, it is slated to transform

not just the way we work, but how our properties fare in the future. Some old areas may stagnate while some others will boom, and new areas with enhanced accessibility will flourish! For instance, Cyberjaya will be served by two new stations under the upcoming MRT Line 2 (Sungai Buloh – Serdang – Putrajaya Line), so perhaps it is time to go property hunting. Change is the only constant in life. In order to reap the most benefit from change, we must be able to predict and adapt to situations before it happens. Are you ready to face the change? Look out for my next article for more real hard truths about property investing. Till then, happy learning and investing.

ABOUT THE CONTRIBUTOR Sandeep Grewal has been investing in properties since 2004 and has purchased over 73 properties so far. He is a Co-Founder of Real Estate Tycoon Club (RTC), which spearheads property investment projects in Malaysia, Thailand and Australia. Besides, he has also co-founded the Freeman Group, which provides life-changing education programmes across Malaysia, Thailand and Hong Kong. JUNE 2017 I 67





o matter what the asset class, it is the fervent hope of every investor to invest appropriately in order to stay ahead of inflation. The goal is to build a nest egg for the golden years ahead which will yield positive cash flow for passive income and maybe even leave a gift of legacy for the next generation. This article hopes to justify the fact that

property will always remain the bedrock of investment and weathering the ill effects of its cyclic nature is part and parcel of the investment game. Property after all, has always emerged “head and shoulders� taller in the longer haul of the investment game. Property, irrespective of its asset class be it residential, commercial, industrial,

agricultural, Real Estate Investment Trust (REITs), etc. seems to be a favourite in the well-balanced portfolio of stocks, gold, fixed deposit and other investments choices. This is due to its tangibility, physical nature that is supported by good location, connectivity and critical mass support as expounded in the illustration below:


House price determined by cost of land, infrastructure, building materials, labour and profit Ability to finance down payment Affected by down payment requirements, available savings, existing debt and loan amount

Cost to keep the house





House occupation cost

Land lease, home insurance, property assestment tax, quit rent and building maintenance costs

Ability to financially service loans

Interest rates and loan tenure, income and non-housing expenditure

Source: Adapted from UN-HABITAT (2011) Source: Adapted from UN-HABITAT (2011)

The downside of property investment, like all other investment classes, deals with the fact that it is deeply correlated to connecting economic cycles, and appropriate loan-to-value (LTV) lending margins and depleting cash flows during economic slowdowns. This applies to businesses and economies across the board. The 2016 property market report seems to lend credence to these fundamentals as espoused in the following tables pertaining to loan applications and their approvals which generally points to the negative consequences of home ownership. 68 | JUNE 2017


Loan application (RM mil)

Loan approval (RM mil)

% change loan application

% change loan approval

Ratio approval/ application (%)





































Source: Bank Negara Malaysia


Loan application (RM mil)

Loan approval (RM mil)

% change loan application

% change loan approval

Ratio approval/ application (%)





































Appropriate bridging and end financing schemes appear to be in the matrix, more so since these schemes are meant to be the cornerstone of any successful construction activity. Missing this crucial element can sound the death kneel in the event of inappropriate balance of figures. The Property Report 2016 further expounded on data and statistics in the slowing or correction of construction activity in all sub-classes, underlying the worrying stock overhang situation.

Numbers of Unsold Completed Units by States, 2015 & 2016 2015



3500 3000 2500 2000 1500 1000 500

k wa

h Sa






rli Pe

nt la

nu ga






h da




n M



ri Ne




k Se







r ho




la Pu

or ng







ja tra





0 JUNE 2017 I 69


The Recent nine MoUs signed between Malaysia and China US$3.458 bil (RM15 bil) Robotic Future City in Johor

Melaka Gateway deal

US$2 bil (RM8.7 bil) petrochemical hub in Sarawak

Innovation Cluster in China-Malaysia Qinzhou Industrial Park

Low-cost carrier terminal in Zhengzhou

US$132.58 mil (RM576 mil) commercial hub in Sabah

US$1.53 bil (RM6.63 bil) fruit export deal

Northport sister port with Weifang in Shandong

Bursa Malaysia and Shanghai Stock Exchange

Diagram 1 Outstanding loans by borrowers also seem to indicate slower economic growth. As of now, residential property loans tend to account for 50% of household debt. In view of the challenging market cycle, reasonably large stock overhangs and diminishing financing margins, Malaysia remains a choice location as it managed to record a growth of 4.2% in comparison to 5% in 2015. This is despite running a tight budget deficit and the floating of government bonds in order to adopt a strategy of deficit spending in an effort to stimulate growth. Malaysia has undertaken many proactive strategies with the stabilising of the ringgit albeit being plugged to China’s “One Belt, One Road” initiative of the century, with the recent signing of nine Memorandum of Understanding (MoU) agreements between Malaysia and China. China is dead set against protectionism as it does no good for economic integration or globalisation. China proposes to underwrite its “One Belt, One Road“ infrastructure initiatives covering roads, railways, ports, power plants and fuel lines. This is found to have a positive impact on property ownership besides countless other economic spin-offs. While we await the recovery of the market cycle as it goes through its four throes of boom, retraction, bust and recovery, thinking-out-of-the-box strategies are recommended as alternative strategies in the current market situation including; 1. Engaging Airbnb as a source of alternate income in situations of glut ownership. 2. Considering rent to own (RTO) with 70 | JUNE 2017

Outstanding Loans by Borrowers1 Percentage points

Annual growth (%)









2Q 3Q 2014

Businesses 1



2Q 3Q 2015





2Q 3Q 2016



Total growth (RHS)

Comprises banking system and non-bank financial institutions outstanding loans.

Source: Bank Negara Malaysia

Diagram 2

Source: Bank Negara Malaysia


the multitude of permutations to convert rentals as payments towards ownership. Taking up innovative financing schemes including S P Setia Bhd Group’s Setia Express Advance Loan (SEAL) to bridge the initial outlay appears to be a knight in shining armour of sorts during this lean times of financial lending.


The colloquial sewa beli or sambung bayar schemes for co-asset ownership should not be discounted to avoid untimely foreclosures or bankruptcies. In a nutshell, real estate should remain as a preferred choice of investment on the contention that the investor in view of the proactive strategies adopted by the government to continuously stimulate the economy as exemplified in the Diagram 1;

ABOUT THE CONTRIBUTOR Warrick Singh is the Director of Asianland Realty Sdn Bhd, Asianland Auctioneers Sdn Bhd and Starfish Training Sdn Bhd. He has 34 years’ experience as a Property Agent, Auctioneer and of late, a Trainer or Public Speaker. He has established BMV Property Link PLT with many BMV (Below Market Value) properties available. Register for a free seminar by sending your details via email to

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