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www.propertyinsight.com.my

COVER STORY

BINA PURI HOLDINGS

MARCH 2017

AREA FOCUS

BANDAR SRI DAMANSARA

MAIN FEATURE

CHALLENGES IN CONSTRUCTION KDN PP 18181/04/2013 (033492)

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


EDITOR’S NOTE

EDITORIAL

Walking To the Beat

Dato’ KK Chua, Editor-in-Chief

P

utting together the March issue of Property Insight has been a real challenge for the editorial team because most people were away on a week-long break for the Chinese New Year holidays, but it was a challenge that we took on together as a team. Therefore, I hope you guys will enjoy reading this issue as much as we enjoyed putting it together for you. Speaking of overcoming challenges, this month we have Bina Puri on our cover talking to Felicia Soon about the trials and tribulations of being a successful developer, especially in this softening market. This month, we also have double main features where Mages shares an overview with us on the challenges faced in the construction industry. As a developing country, we always have to maintain a positive outlook regardless of our economic situation. We may be small on the map but we are raising the bar. On the other hand, Felicia shared with us on the importance of preparing a will as things can get complicated when no will is actually left behind.

Our Area Focus story takes us to Bandar Sri Damansara, Petaling Jaya. Did you guys know that Bandar Sri Damansara is oval shaped? Interesting fact, isn’t it? It may be slightly far from bustling Klang Valley but Bandar Sri Damansara is indeed developing at a quick pace, with two new developments there. So, read up on it and trust me, it gets more interesting by the minute. For our Personality of the Month column, Felicia had the rare opportunity of a lifetime to interview Datuk Wira (Dr.) Haji Ameer Ali Bin Mydin whom not only enliven us with his life inspiring interview, but inspired other young entrepreneurs out there as well. Don’t miss it. Lastly, I hope you have fun reading our March issue and remember, you can catch us at our Property Insight Showcase taking place this 3 – 5 March at Publika Shopping Gallery, Kuala Lumpur. We welcome any feedback you may have, and perhaps you might even be interested to contribute some relevant topics to us. Cheers!

Editor-in-Chief Dato’ KK Chua kkchua@propertyinsight.com.my Sub Editor Gabriel Lim Writers Mages PV Lingam Felicia Soon CREATIVE Creative Director Sarah Tan sarah@propertyinsight.com.my Designer Megat Khuzamir Syarifah Fadhillah BUSINESS DEVELOPMENT General Manager Janet Loh +6012 205 0911 janet@propertyinsight.com.my Andy Fam +6012 601 9938 andy.fam@propertyinsight.com Hagenz Choo +6012 371 8831 choo@propertyinsight.com.my Iris Gan +6012 799 6685 iris@propertyinsight.com.my Wei Yeen, Chong +6012 927 2863 weiyeen@propertyinsight.com.my

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

COVER STORY

BINA PURI HOLDINGS

MARCH 2017

AREA FOCUS

BANDAR SRI DAMANSARA

MAIN FEATURE

CHALLENGES IN CONSTRUCTION KDN PP 18181/04/2013 (033492)

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

On the cover : Datuk Matthew Tee, Group Executive Director of Bina Puri Holdings Bhd & Ng Keong Wee, Executive Director of Bina Puri Properties Sdn Bhd


PROPERTY SHOWCASE www.propertyinsight.com.my

PICK

THE DEAL

ATRIA SHOPPING GALLERY, DAMANSARA JAYA

14-16 APRIL

10am 10pm

012 - 378 8683


CONTENTS

30 HOME+

10 COVER STORY

10 Bina Puri Holdings Bhd: Building a future together Bina Puri heralds a new era of premier-class living

MAIN FEATURE

16 Challenges in Malaysian Construction Business Overcoming the current debacles to move forward

FEATURE

20 Look Before You Leap 22 Things to check before signing your housing loan documents

24 Malaysia At The Crossroads

46 Smart Homes: An Integrated Part Of Your Home Secure and comfortable living now at your finger tip

ROOKIE INVESTOR

50 Versatility: The Gateway To Success Creating your own opportunities to succeed

INDUSRTY INSIGHT

52 Property Hub – Guiding Lighthouse Shining Ever-Bright Spearheading the Mission of becoming an Outstanding Agency

PERSONALITY OF THE MONTH

54 A Man Of Wisdom

No Shortcuts to Success

ENTREPRENEUR INSIGHT

58 8 Habits Of Super Persuasive People Persuasion is a skill that is instrumental to your success in life

Embrace innovation and digital disruption to stay relevant

28 What Lies Ahead

LEGAL

The benefits of will writing

60 JMB Duties And Legal Liabilities

DEVELOPER OF THE MONTH

STRATEGY

30 Tropicana: An Empire Of Success

62 Big Data And The Property Market

A collection of signature developments designed for young executives and families

64 The Property Get Rich Quick Scheme

AREA FOCUS

66 The New Criteria For Property Investment

Destined for Distinctive Upmarket Development

68 Property Outlook For The Year Ahead

36 Bandar Sri Damansara: Peacefully Forging Forward INVESTOR NEXT DOOR

42 Beautiful Investments For A Brighter Future Buy the right property to enjoy positive ROI

71 Don’t Be A Doormat


NEWS & EVENTS

KSK LAND CELEBRATES THE YEAR OF THE ROOSTER WITH TIMELESS CULTURAL EXPERIENCES

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o ring in the Year of the Rooster, KSK Land Sdn Bhd (KSK Land) hosted a Chinese New Year celebration themed ‘A Harmonious Feast’ for staff and business partners at the 8 Conlay signature sales gallery to bond over special traditional delicacies and memorable cultural experiences. The celebration began with an energetic lion dance performance with the lion dance troupe performing amazing acrobatic stunts at the main foyer. Guests were also able to experience traditional cultural activities such as the Chinese knot demonstration, Chinese hand fan calligraphy, Chinese dough doll crafting and a special appearance by the ‘God of prosperity’. Managing director Joanne Kua described the celebrations as a time to be thankful for the past achievements and remain hopeful for the new season. “The Chinese New Year celebrations remind us to love and cherish our family and friends as well as to keep believing in a better future,” said Kua.

SURPRISE GIVEAWAY: 2,017 FREE TOUCH N GO CARDS FROM GAMUDA LAND

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amuda Land, one of Malaysia’s leading property developers, kick started the lunar year by giving away 2,017 units of complimentary Touch n’ Go cards, preloaded with RM30 at the Sungai Buloh MRT station recently. Gamuda Land took the opportunity to introduce two of their latest developments – Gamuda Gardens and Kundang Estates, which are both located in North Sungai Buloh, approximately 10 minutes away from the Sungai Buloh MRT station. Gamuda Gardens is an 810-acre mixed use development that fuses modern lifestyle with nature living in one township while Kundang Estates, on the other hand, is an 89-acre boutique residential development offering a modern countryside living where 56 units of double storey terraces has been fully sold. For the convenience of residents, a direct shuttle will be provided from both developments to the Kuang KTM station, which is just 1 station

away from the Sungai Buloh MRT station by KTM Komuter, allowing for a seamless connectivity to different parts of the Kuala Lumpur city.

www.propertyinsight.com.my MARCH 2017 I 5


NEWS & EVENTS

MAH SING CELEBRATES ORIENTAL NOSTALGIA AT D’SARA SENTRAL ON CHAP GOH MEI

M

ah Sing celebrated Oriental Nostalgia at D’sara Sentral’s Sales Gallery by bringing life to the good old Chinese traditions such as the tossing of raw fish, calligraphy drawing, traditional acrobatic lion dance performance and more festivities during the 15th day of Lunar New Year celebration. The festive occasion gathered plenty of visitors who were interested with the Group’s D’sara Sentral development which has a direct access to Kampung Selamat station, Sungai BulohKajang (SBK) MRT Line. Group managing director, Tan Sri Dato’ Sri Leong Hoy Kum shared, “We have been looking forward to the completion of MRT since the first launch of our D’sara Sentral project in 2014. With the completion of the entire SBK MRT Line in July 2017, D’sara Sentral is about only 35 minutes away from Bukit Bintang.” Besides convenient accessibility, the MRT service will contribute to the appreciation of value of the development too.

SUNWAY PROPERTY RAMPS UP LANDBANKING ACTIVITIES

S

unway Property is looking forward to drive sustainable growth within its operations this year, by ramping up its landbanking activities focusing on strategic lands suitable for standalone or transit-oriented development (TOD). The developer recently added 8.45 acres of prime land located along Jalan Peel, Kuala Lumpur to its portfolio. This brings Sunway’s current land bank to approximately 3,301 acres, in Klang Valley, Johor, Penang, Singapore and China, these lands carry a total estimated GDV is RM50.5 billion. Sarena Cheah, managing director of Sunway Berhad’s Property Development Division, Malaysia and Singapore said, “We are delighted to have this land bank which will be developed as Sunway Velocity TWO, directly opposite Sunway 6 | MARCH 2017 www.propertyinsight.com.my

Velocity and linked to Cochrane and Maluri MRT stations. We also want to assure liveability, hence community needs such as road accessibility, social living, access to healthcare and educational amenities are always in the consideration.”


SIME DARBY PROPERTY AND CREAM REVOLUTIONISE AFFORDABLE HOMES THROUGH THE DIVERGENT DWELLING DESIGN

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roperty Insight was invited to the Memorandum of Agreement signing ceremony held at the Sime Darby Convention Centre between Sime Darby Property MD Dato’ Ir Jauhari Hamidi and Construction Research Institute of Malaysia (CREAM) chairman Tan Sri Dr Ir Ahmad Tajuddin Ali. The Divergent Dwelling Design (D3) concept would improve affordable housing with new methods of design and construction. Sime Darby Property aims to provide customers with the best quality affordable homes by adopting the D3 concept, which offers an innovative advantage. The collaboration aimed for innovative efforts to be focused on various aspects of products including affordability, adaptability, quality and sustainability. Conventional affordable housing projects require about 36 – 42 months of construction time, while with

D3, the buildings can be completed within 24 – 30 months, 28% – 33% faster than conventional methods.

JCORP UNVEILS IBRAHIM INTERNATIONAL BUSINESS DISTRICT (IIBD)

P

roperty Insight witnessed the unveiling of the Spirit of Enterprise via International Business District (IIBD) brand by Johor Corporation (JCorp) at Persada Johor International Convention Centre. The ceremony was graced by His Royal Highness Sultan Ibrahim Ibni Almarhum Sultan Iskandar, Sultan and Sovereign Ruler of the State and Territory of Johor Darul Ta’zim, accompanied by Her Royal Highness Raja Zarith Sofiah Binti Almarhum Sultan Idris Shah, Permaisuri of Johor. Acting as stewards of this key development, JCorp continues to define the identity of IIBD with the launch of its logo and brand promise, and the 4 HOME lenses, namely Heritage, Opportunity, Mobility and Eco-Sustainability, goals that will define and drive development and investment strategies within IIBD. Dato’ Mohamed Khaled bin Nordin, Menteri

Besar of Johor and Chairman of JCorp and Dato’ Kamaruzzaman bin Abu Kassim, president and chief executive of JCorp were among the dignitaries to witness the auspicious event.

www.propertyinsight.com.my MARCH 2017 I 7


NEWS & EVENTS

CBRE | WTW PRESENTS 2017 ASIA PACIFIC REAL ESTATE MARKET OUTLOOK

P

roperty Insight was present at the “2017 Asia Pacific Real Estate Market Outlook Malaysia: Malaysia Economic Overview 2016” where the managing director Foo Gee Jen gave an insight on property outlook in Klang Valley covering the purpose built offices, retail, hotel, residential and industrial. In the same briefing, Peh Seng Yee covered the Penang market in the North, and Tan Ka Leong elaborated on the Iskandar Malaysia market in the South. Locally, GDP was forecasted at at 4.2%. The weakening business sentiment and slowdown in the overall trading is expected to be more apparent in the short term, leading the market to consist of more genuine purchasers with speculative sentiments not as strong as during the boom period. The inflation is expected to remain flat (2016: 3.0%), although pressured by increases of several priceadministered items as well as the weak ringgit exchange rate.

ASLI EXPLORES MALAYSIA’S FUTURE AT THE STRATEGY OUTLOOK CONFERENCE

T

o examine what has Malaysia achieved in the past 60 years and what are the strategies to march forward, prominent local think tank Asian Strategy and Leadership Institute (ASLI) organised the 19th Malaysia Strategic Outlook Conference in Kuala Lumpur recently, and Property Insight had the honour of being its media partner. Experts from various fields shared their insights in this daylong conference themed “Malaysia at 60: Forging Ahead — Where Do We Go From Here?” Five topics were discussed, namely Coping With Global Uncertainty and Challenges; What Are Key Challenges and Opportunities in ASEAN with the ASEAN Economic Community?; The Changing Political Landscape in 2017; What are Key Drivers Shaping the Future of Key Sectors?; as well as Breaking Boundaries – Gearing

8 | MARCH 2017 www.propertyinsight.com.my

Up For Disruptive Technology and the Digital Economy. The opening keynote address was given by Datuk Seri Mah Siew Keong, Minister of Plantation Industries and Commodities, while Tan Sri Dr. Jeffrey

Cheah, Chairman of ASLI and Datuk Abdul Rahman Dahlan, Minister in the Prime Minister’s Department in-charged of the Economic Planning Unit concluded the day with closing keynote addresses.


IJM LAND’S BANDAR RIMBAYU SHARES LAUGHS, BONDS AND GOOD TIME WITH BIG FUN DAY

E

mbracing the spirit of Chinese New Year, Bandar Rimbayu’s Big Fun Day brought family and friends togethergather, at their green and expansive gallery showroom, The ARC. Open to the public, a large crowd of children, young adults and parents were treated to a variety of exciting programmes, including an acrobatic lion dance by the Khuan Loke troupe. Taking the excitement to the next level, the 24-festive drums performance by VR Drummers got the pulses rising with an energetic drum performance. Chinese cultural fans had the opportunity to learn about the traditional art of Bian Lian (face changing), the Chinese mask changing show, presented by Suresh. The highlight of the Big Fun Day was the presence of Astro stars Hui Mei, Nicole, Geraldine and Danny on stage, as they entertained the crowd with their live performances. The popular artists added a touch of glamour and excitement to the event. “Big Fun Day has always been a

day that creates opportunities to bond and strengthen relationships between families, neighbours and the larger community. Besides building homes, we at Bandar Rimbayu are committed to building a community where families can spend quality time together,” said Susan Teh, sales and marketing senior manager at Bandar Rimbayu.

SUNTRACK LAUNCHES ‘THE RIYANG’ IN PRIME, ESTABLISHED KUCHAI LAMA

A

ward winning developer, Suntrack Development Sdn Bhd (Suntrack) is launching its latest residential development, The Riyang — an exclusive residential condominium near Happy Garden, Kuala Lumpur. According to Suntrack CEO, James Tan, the Riyang was designed with families in mind. Comprising of 212 exclusively residential units sized between 1,477 sq. ft. to 1,884 sq. ft., with one dualkey unit measuring 2,798 sq. ft., the spaciousness of each unit makes for a conducive environment, for large families to live together very comfortably. We also took into consideration extensive child safety and wheelchair-friendliness, and maintained design discipline in ensuring functionality of space and the use of natural light and air,” said Tan. With a Gross Development Value (GDV)

of RM251 million, the condominium features a 35-storey tower with eight residential units on each level equipped with five lifts for reduced waiting time. Competitively priced from RM830,000 to RM1.2 million, or RM550 per sq. ft., The Riyang has already attracted a great deal of interest since opening for private previews in June 2016. This luxurious condominium is easily accessible via major highways and is only 1.1km away from the Kuchai Lama station on the Sungai Buloh–Serdang–Putrajaya Line.

www.propertyinsight.com.my MARCH 2017 I 9


COVER STORY

BUILDING A FUTURE TOGETHER Bina Puri heralds a new era of premier class living BY: FELICIA SOON

10 I MARCH 2017 www.propertyinsight.com.my


PERSONALITY OF THE MONTH

W

ith over 40 years of work experience in civil and building construction both locally and internationally, Bina Puri Holdings Bhd has expanded into a variety of core businesses, such as investment holdings, civil and building engineering, property development, highway concession, manufacturing of construction materials, quarry operations, utilities and hospitality management. Their height of achievement is marked by successful completion of various projects, such as roads and highways, light railway transit (LRT), bridges and interchanges, waterworks, land reclamation works, residential and commercial buildings, hotels, hospitals, airports and government complexes. The Bina Puri Group has also established a strong international presence, having undertaken projects in Cambodia, Nepal, China, Brunei Darussalam, United Arab Emirates,

Laman Villa @ Mont Kiara North

Saudi Arabia, Pakistan, India, Indonesia, Thailand and Russia. Listed in Bursa Malaysia since 1995, Bina Puri today owns an outstanding investment portfolio, which includes the 33km KL – Kuala Selangor Expressway, the Main Place Residence and Mall at USJ 21, Subang Jaya, as well as power plants in Indonesia. A journey of a thousand miles begins with a single step, and for Bina Puri Group, the history began with a small building contract for the police station and staff quarters in Kepong, Kuala Lumpur for the Public Works Department (JKR). Despite its humble beginnings, Group Executive Director, Datuk Matthew Tee says, “In the general public perceptions, we only deal with construction businesses. However, we have been involved in property development all these years since the mid-eighties. In this sector, we have been taking it in our own comfortable stride; one at a time.”

locations where there have been little or no developments, thus unlocking the possibilities of these sites and increasing the capital value of the properties for their buyers and surrounding communities. Despite the softening of the market, Bina Puri Group is constantly on the lookout for upcoming areas for their developments, and they make sure that the new targeted investment is conveniently located with easy access to public hubs, and have a wide selection of amenities at its doorstep. This guiding philosophy has propelled Bina Puri Group to surpass the 40 years milestone in 2015, a testament of their staying power in a challenging industry. Out of 46 public listed companies in the construction sector, only 9 companies or 19 percent have matched the feat. For 2017, the group is set to continue executing their sustainable business strategies, with several dynamic projects scheduled to take off.

A HOUSEHOLD NAME Bina Puri has been successful in acquiring landbanks in prominent

LUXURIOUS FAMILY ENCLAVE Located along Jalan Prima Pelangi, off Bukit Prima Pelangi in North Kiara,

Datuk Matthew Tee and Ng Keong Wee (right) www.propertyinsight.com.my MARCH 2017 I 11


COVER STORY

A living area in sync with peaceful surroundings

Kuala Lumpur, Laman Vila is situated on a 3.3 acres of gated and guarded community featuring modern landed Garden Villas and low-rise Condo Villas, built with a touch of ultramodern architecture and bestowed with cosmopolitan lifestyle and panoramic cityscape. The Garden Villas consist of 22 units of 3 & 4-storey landed residence, each with a private lift. Type A features a 3-storey villa with a built-up area of 3,940 sq.ft, while Type B and C comprise of a 4-storey villa with a builtup area of 5,434 sq.ft. and 4,969 sq.ft. respectively. At present, there are only final units left for sale. The price for Garden Villa ranges from RM3.2 million to RM4.5 million each. The rooftop of each Garden Villa

Modern designs at the family area for a sense of belonging

is fitted with solar panels that are capable of generating electricity and are connected to the national grid. The receipts from the power generated to Tenaga Nasional Berhad (TNB), the national power utility company over 21 years of concessions, which are based on the Fit-in-Tariff system (FiT) published by Sustainable Energy Development Authority (SEDA), will be ploughed back into the general maintenance of the Laman Vila community. As a result, Datuk Matthew Tee says that, the residents would be offered 10 years of free maintenance. In case the earning is no longer sufficient to cover the maintenance fee after the first 10 years, only the differences are chargeable to the residents. The low density Condo Villas which are set to soft launch this coming April

An artist’s impression of the common facility at Kerau Homestead development, Karak, Bentong, Pahang 12 I MARCH 2017 www.propertyinsight.com.my

will have only 20 low density units with a built-up area of between 1,600 sq.ft. to 1,800 sq.ft., priced between RM1.5 million and RM1.8 million each. Residents have access to facilities such as ample covered parking space, swimming pool, children’s playground, gymnasium, event hall, garden and a clubhouse. SCALING NEW HEIGHTS Infrastructure improvements on the outskirts of the city such as the completion of the KL – Karak Expressway have assisted in the huge regeneration of some formerly far-flung areas, such as Bentong and Bukit Tinggi. To create a country retreat that reflects the best of both worlds, Bina Puri Group has embarked on a new venture on a piece of beautiful and bountiful land in Karak, Bentong District, Pahang measuring over 1,593 acres. Nestled in a prime location between tourist hotspots such as Genting Highlands and Berjaya Hills (Bukit Tinggi), The Valley is situated 7km away from Karak town and well-connected via the KL – Karak Expressway. It will provide the residents with facilities and an access to a gorgeously landscaped grass lawn courtyard for breathtaking views of the valley. Whilst The Valley is acclaimed for its enchanting vibe and trend-setting characters, the land development has been strategically allocated, with


PERSONALITY OF THE MONTH

For any developments to be successful, we must always prioritise the needs of the Malaysian buyers first - Datuk Matthew Tee

phase 1, the ‘Kerau’ (named after the river that meanders through the entire development) comprising of 158 units of Homestead Lot. The hilly and curving slopes are most suitable for fruit orchards such as durian, as proven by the vast number of durian orchards seen in Karak and Bentong. The prominent new addition to The Valley’s residential scene is The Kerau common facility area – a social hub for residents and guests to indulge in resort living facilities, with a proposed gym, swimming pool and outdoor barbeque pits. The social hub will also have exhibition spaces, meeting rooms and activity spaces. In addition, the future phase of this development includes the Master Plan proposal of a Spa Retreat and Resort Home, Retirement Homes, Equestrian Centre, Martial Art Centre, Fish / Prawn Farms, Special Plantation and Bungalow Lots. LIVING IN NATURE Bina Puri is also renowned as one of the few property developers that have been completing projects successfully in both East and West Malaysia. Their latest development set for completion this year is the Jesselton View Condominium in Kota Kinabalu, Sabah. This new development, Jesselton View provides a high standard of accommodation in a secure, modern and serene community, with the kind of lifestyle that everyone of us longs for, such as unique and spacious façade, www.propertyinsight.com.my MARCH 2017 I 13


COVER STORY spacious layouts and low density living. Comprising of a 5-storey block and 11-storey block, the project boasts 80 units of cosy condominiums in Kota Kinabalu, Sabah. Perched on an elevated land, Jesselton View offers many opportunities for recreation, such as enjoying the great outdoors in the beautifully landscaped garden or the pool. It also offers peaceof-mind living with 24-hour gated and guarded security in a close-knitted community. A NEW WAVE IN LUXURY One Jesselton is another development featuring only 125 exclusive units, with 12 types of layout in one block of 11-storey condominium development, set amidst an urban paradise at Kepayan Ridge along Jalan Banjaran, Kota Kinabalu, Sabah. Ng Keong Wee, Executive Director of Bina Puri Properties Sdn Bhd who has passionately overseen the project, happily shared that the construction has reached up to level 8 as of now. The concept of this development revolves around creating a two-generation home, and most of the smaller units have been sold. To the buyers, this may seems an irresistible deal but at the end of the day, it all comes back to dollars and cents, because potential buyers will first look at the price per square foot. As a rule of thumb, anything below the

selling price of RM1,000 psf is relatively easier to sell, and anything above and beyond will cause a bit of friction. As remarked by Datuk Matthew Tee, Kota Kinabalu has seen its glorious days in property development before being affected by the market downturn in recent years. By offering great products such as Jesselton View and One Jesselton, Bina Puri Group hopes that the property sector will rebound this year and in future as there is a market for it in Kota Kinabalu. “Kota Kinabalu is only 40 minutes away from Bandar Seri Begawan, Brunei Darussalam by flight. There are also plenty of direct flights from Guangzhou and Hong Kong to Kota Kinabalu,” said Datuk Matthew Tee. LOOKING AHEAD Based on recent figures, 82% of Bina Puri Group’s turnover comes from its construction arm. While the share contributed by property division is still not as big as that of construction, it is expanding steadily. In fact, Bina Puri’s property division is on a growth trajectory, boasting big projects such as the RM400 million Opus Service Apartments in Kuala Lumpur and the RM304 million Kuantan Waterfront Resort City in Kuantan, Pahang. Elaborating on their decision to emphasize more on the affordable residential projects, Datuk Matthew Tee firmly stated, “For any developments

An artist’s impression of Opus @ Kuala Lumpur 14 I MARCH 2017 www.propertyinsight.com.my

Ng Keong Wee to be successful, we must always prioritise the needs of the Malaysian buyers first.” An embodiment of Bina Puri’s long term success is none other than the RM291 million Main Place, a resuscitated retail-cum-condominium project in USJ 21, Subang Jaya, Selangor which was idled for about 16 years. Those with a good memory will remember that the project was twice abandoned. The Main Place has high visibility value as it faces the Damansara – Puchong Expressway (LDP), with the USJ21 LRT Station of Kelana Jaya Line (linked directly to KLCC) located less than 250m away. It is also well connected to various major highways such as North – South Expressway Central Link (ELITE), Shah Alam Expressway (KESAS) and New Pantai Expressway (NPE). The project comprised of 4 residential blocks totaling 1,211 units, three-anda-half-storey neighbourhood retail mall and ample car parks. Bina Puri Group worked excessively hard to get the agreement of buyers and bankers on route to revive the abandoned project, and completed it in March 2014. Since reviving this abandoned building in 2011 through their subsidiary, Sumbangan Lagenda Sdn Bhd, Bina Puri Group has once again proven that no project is impossible, and has


PERSONALITY OF THE MONTH

An impressive look of Main Place Residence and Mall at USJ21

left its mark with such an ambitious endeavour. Datuk Matthew Tee was proud to reveal that, having achieved an average price of RM603 psf, the Main Place Residence is now the most expensive high rise residential development in USJ. During the re-launch, all the remaining 168 units were sold. “Before opening the shopping mall, we received an offer of RM170 million, and six months down the road, we received another offer of RM210 million, which meant that the valuation of Main Place had increased by RM40 million over the half year. In the future, when the time is good and the price is right, we may give it a thorough consideration,” Datuk Matthew Tee disclosed. “Nowadays as the retailers are not doing very well, any new investors looking into buying a retail outlet will have to study the yield carefully. Normally for the tenancy cycle, the rental tends to go up once the existing tenancy has ended. Therefore, landlords can enjoy a better deal in terms of the psf price. However as retailers are also bogged down with the implementation of GST, the focus should be more on maintaining the existing retailers,” adds Datuk Matthew Tee. Datuk Matthew Tee further elaborated that the secret to their success in Main Place is that the shopping mall is fully owned by Bina Puri Group which then engaged the expertise of Robert

Jalleh of Retail Network Sdn Bhd, who previously worked with Paradigm Mall and Empire Shopping Gallery Subang Jaya for retail consulting services and insights. He has since turned Main Place into an A-lister place to be and has been entrusted to continue managing the mall. FORECAST FOR THE FUTURE Datuk Matthew Tee shared that, as the property market has been soft since 2012, the industry players are definitely hoping for things to improve. In fact every year, Bina Puri Group is always positive that things will get better compared to the previous years. With the upcoming election, there could be a slew of projects getting awarded, such as schools, roads and the like. Even though the property market is slow, Bina Puri Group is able to sustain their businesses through the construction activities. One of the projects where Bina Puri Group has been appointed as the main contractor is the Melawati Mall project, a joint venture by Sime Darby Property and CapitaLand Mall Asia. This commercial venture is expected to become operational by the second quarter of 2017 and to cater for 740,000 residents in Ampang and Setapak communities and the surrounding neighbourhoods in Kuala Lumpur. Another project where Bina Puri Group will also play the role of main

contractor is the RM1.28 billion Transit-Oriented Development (TOD) project known as Riveria Sentral @ KL, a public-private partnership between Prasarana Integrated Development Sdn Bhd (PRIDE) of Prasarana Malaysia Bhd and Titijaya Land Bhd. The difference between a property development and a construction business is, the former takes up a lot of capital and developer will not see your money until completion much later. On the other hand, for construction business, once the contractor is awarded a project, payments will be progressively paid according to the stages of works done. As a matter of fact, Bina Puri Group’s construction arm supports their property division greatly. This is important because by having an inhouse construction arm within the Group, buyers can rest assured that none of their projects will be abandoned half way down the line. Lastly, no matter which segment of the economy the company ventures into, employees are a company’s greatest assets. An organisation’s success depends tremendously on their employees’ performance. As shared by Datuk Matthew Tee, “Performance is a simple word but tenacity is needed at every level within the group. Bina Puri Group is constantly seeking individuals who dare to benchmark themselves as performers. If you think you belong to this group of like-minded people, do not be afraid to stand out and be counted in.” For the employees, Bina Puri Group is like a family that is much needed in a time of uncertainty and doubts, as the management of Bina Puri Group emphasizes greatly on patience and tolerance, important virtues in fostering the spirit of teamwork in any organisation. Interestingly, the top management revealed that at least 35% of the overall staff are long serving employees who are committed to grow within this esteemed organisation and have stayed for 5 years and beyond. This certainly tells a lot about Bina Puri Group’s success since its inception 42 years ago.

www.propertyinsight.com.my MARCH 2017 I 15


MAIN FEATURE

CHALLENGES IN MALAYSIAN CONSTRUCTION BUSINESS Overcoming the current debacles to move forward BY: MAGES PV LINGAM

16 I MARCH 2017 www.propertyinsight.com.my


PERSONALITY OF THE MONTH

C

onstruction industry in Malaysia has witnessed an impetus upward trend since a decade ago due to tremendous growth in number of projects undertaken by this brick and mortar industry, as well as the advanced technology and measures adopted. The government has been willing to listen to feedback on policies, and elaborating on ways to overcome the impending monopoly of construction materials, because these are the factors that will jeopardise the interst of both property developers as well as buyers. Ban Lee Hin Group group chairman, Dato’ Tony Looi Chee Hong said “Contractors supervise their projects very closely each month. If the project exceeded our budget, then we will immediately call for a meeting with the project teams for troubleshooting, to determine the wastage, workers’ low productivity levels or other related challenges.” He said the team will carry out risk analysis based on the weekly / monthly comparison reports. The contractors will try to minimise the expenses by referring to the analysis, and to optimise the workforce, by allocating the manpower, plants machineries rationally. This to make sure the schedule delivery is achieved for the clients. Concurrently, a

Dato’ Tony Looi report will be submitted with cost impact analysis and seeking for client’s consideration on compensation within reasonable supporting measures. Looi said “There are changes globally every day. If we remain the same, we won’t be able to compete with others and eventually will be eliminated from this industry.” Hence, Looi always urge his human resources department to arrange for staff trainings in areas of skill development and even to the extent of restructuring the company’s organisation. He added that, by working out business initiative and strategies, the company would be able to juggle between fulfilling the market needs, to improve on safety, while being more alert to market changes. He said it would be safer to be well prepared prior to unwanted pitfalls in the construction industry. Looi also reiterated that in this business, the top factors that make up a good workmanship of construction can be categorised as below: a. To optimise productivity by constantly evaluating skills / performances, and to assign tasks to the team according to their strength. b. To keep tab on the work progress, in order to ensure that the respective teams adhere to the disciplines. By supervising the workers during each briefing, team leaders will be able to improve the team leadership, as well as to cultivate the spirit of teamwork. c. Equipped with knowledge via a standard of procedure handbook, to www.propertyinsight.com.my MARCH 2017 I 17


MAIN FEATURE facilitate the skills learning amongst each other in the team. Significantly, Looi said that their project safety officer will conduct a safety or toolbox meeting twice a day. If the officer comes across any worker not adhering to the safety guidelines by wearing required equipment, the worker will be penalised by a warning letter and deduction in wages. That worker will be requested to attend a safety induction and pass a technical examination before being allowed to continue working at the site. “If the worker failed the test, he will in turn be assigned to be the next leader for the day for safety briefing and by then he will learn from the mistake and on the importance of wearing a full gear at site. We are proud to say that we are a zero-accident construction company and is certified by occupational health and safety management system specification (OHSAS),” said Looi. Also, there are challenges brought upon by sub-contractors, for example when they request for higher compensation in the event that some undesirable incidents take place. For situations like this, Looi added that the terms of contract could not be changed, but they will be advised to submit proper supporting documents for verification and further evaluation. If sufficient supporting documents are provided, the contractor can always find ways to offer a reasonable solution. Looi emphasised that elements such as construction cost, the location of land as well as the type of property development will all affect the price of property. He added “The sophistication the construction methodology involved, the specification of the material used, are all factors that will push the selling price of the property higher. Furthermore, as most of the materials used are imported from overseas, distributors and suppliers will have to hike their price as well. A lot of things are tied to the global economic volatility actually.” Hence, Looi said construction development especially residential projects might exceed the needs based on the current population especially in the next couple of years. While the economy might bloom when we welcome foreign investors with opened arms, certain 18 I MARCH 2017 www.propertyinsight.com.my

restrictions must be enforced to maintain the affordability of the offerings according to the capabilities of local residents. Like any other industries, construction industry does face many challenges. One of the challenges of the Malaysian construction industry are the problems of manpower shortages and the need to complete construction projects in time. Master Builders Association Malaysia (MBAM) president, Foo Chek Lee said that adoption of Industrial Building Systems (IBS) in the construction projects have helped to improve speed and reduce usage of manpower. As a result, it will lead to less rework and faster deliverable times that benefit owners and the industry at large. Foo raised the point that the industry is constantly facing shortages of skilled manpower, with up to 15,000 ongoing projects being affected at any given time. Currently, the industry has employed approximately 1.2 million workers. While the population of Malaysia stands at 31.7 million, the unemployment rate stays low at just 3.4%. As such, there is shortage of skilled workers to fill the vacancies in the industry. The industry is further burdened with the difficulty in recruiting migrant workers, as it is now getting more tedious task due to constant change of Government policies as well as the recent increase in cost. “We have been vocal on our members’ need of having more trained skilled workers to reduce our dependency on foreign workers,” opined Foo. However, MBAM are grateful that the government has introduced the Technical and Vocational Education and Training (TVET) programmes that provides essential skills to prepare youth for the labour market, and that will create precious human capital for nation building. More than 330,000 trainees will benefit through programmes which includes RM585 million for TVET training equipment and RM350 million to finance various TVET training programmes. “MBAM is also doing its part by embarking on Work Based Learning initiatives with Politeknik Ungku Omar, as well as our Construction Occupational Competency Development (COCD) related programmes which are essential to reskills and update our trade supervisors,”

remarked Foo. MBAM is also facing the challenge of improving safety awareness and providing proper safety training to industry players by actively running the Site Safety Supervisor programmes that are critical to enhance level of safety. In fact, the Safety and Health Assessment System in Construction (SHASSIC) should be implemented at the site to safeguard the safety and wellbeing of the workers. The benchmark will ensure accidents and loss of life minimisation and improve workmanship and apt quality of work. MBAM notes that to resolve obstacles faced by the industry, better communication and engagement must be carried out with industry players. Through constant dialogues with various Government agencies and Ministries as well as industry stakeholders, MBAM can communicate with the relevant authorities to protect and promote the interest of its members. Foo remarked “MBAM have been actively working together with Construction Industry Development Board Malaysia (CIDB) to nurture more local skilled workers to fill in the void that the industry is facing. Through our programmes such as Construction Continuing Professional Development (CCPD), Construction Occupational Competency Development (COCD) and Site Safety Supervisor Course, it is hope that it will help to produce more professional and reduce our dependency toward unskilled foreign labour.” Another critical issue of concern for the industry is the need to raise the quality and delivery of projects. By promoting the adoption of Quality Assurance System (QLASSIC), MBAM hopes this will also help ensure the quality of the project executed by the construction companies. Furthermore, MBAM is urging the construction companies to have at the very least an ISO certification on quality. This inevitably will instil the confidence of the house buyers on the quality of the projects and the material used. On another front, MBAM has been championing the reduction in import duties for heavy construction machineries. Foo said “The government should consider relooking at the current mechanism to encourage construction industry players to bring in new


PERSONALITY OF THE MONTH machineries. High import duties for some heavy machineries were reduced from 10% to 5% by the government in year 2015, however MBAM believes it is still insufficient for the contractors to fulfil the mission towards mechanisation in this sophisticated industry.” The initiative is vital as it would encourage people in the business to purchase newer construction machineries that will have more safety features, reducing construction time and increasing occupational safety and health while enhancing productivity at work sites. This will also attract the locals to join the skilled worker market here. It is very important for our local contractors who can be competitive by offering competitive prices and services, as the current machineries used by the contractors are old and not efficient. Ultimately, frequent breakdown may result in unnecessary downtime, and may even lead to construction accidents and fatalities besides higher costs. Another challenge to note is that the unfavourable Malaysian Ringgit exchange rate has caused the price of material to be more expensive, and this is a concern to the construction industry. The recent steel bar price hike is a good example of the impact due to Ringgit’s fluctuation. MBAM expressed concern over the rising price trend of steel bar after the government began levying the preliminary safeguard duty. We are urging the government to review the safeguard duty at the end of the safeguard period which is in early April 2017. As at the third quarter of 2016, construction industry contributed 7.9% of the GDP of Malaysia. and expected a growth of 8.3% in 2017. The construction industry also supports the growth of around 140 other downstream industries. Thus, it is hoped that all construction industry players will work closely with the Government to ensure sustainable growth for the nation and the rakyat. The general manager of Construction Industry Development Board’s (CIDB) safety, health, environment, quality (SHEQ) division general manager, Ahmad Farrin Mokhtar said, “The construction sector has one of the highest record of fatalities with 89 fatalities in 2014 and 140 in 2015, From January to October 2016, the number of fatalities were 58. Under

Ahmad Farrin Mokhtar the Construction Industry Transformation Programme (CITP), one of the goals is to half the rate of fatality in the construction industry by the year 2020, from 10.94 per 100,000 workers in 2015.” Since construction requires workers to be at high places, and it involves lifting and movement of very heavy objects, and many of these activities are happening concurrently in the same construction site. Unscrupulous contractors may skimp on safety equipment’s to save cost or save time. Nevertheless, there are companies which are quite exemplary in terms of safety guidelines and policies implementation, which have prioritised the maintenance of safety at construction sites. Besides, there are also plenty of other challenges, including limited emphasis on workmanship quality and assessments; limited levels of safety awareness and enforcement; bureaucratic and regulatory issues; low resilience of construction work to natural disasters; high carbon emissions, energy use and construction waste; a low rate of technology adoption that results in one of the lowest productivity rates across economic sectors; outdated construction methods as well insufficient bumiputra participation. Consequently, increased competition by foreign players in the country, as well as the numerous constraints faced by Malaysian companies venturing abroad, have brought upon a high accident and fatality rate. Besides, limited integration of health and safety aspects in the work culture, poor quality buildings and collapsing infrastructure, and delays in approvals of construction permits are some of the major issues in the industry today that affect the public, businesses, workers and consumers.

We have been vocal on our members’ need of having more trained skilled workers to reduce our dependency on foreign workers” - Foo Chek Lee

Ahmad reiterated that illegal dumping of construction and demolition waste, and the extensive cost of repairing buildings and infrastructure damaged due to natural disasters are key issues to be tackled. The construction industry has one of the lowest productivity levels in the economy. The relatively low productivity reflects the limited adoption of new technology and practices and the reliance on low skilled workforce. “The Construction Industry Transformation Programme (CITP) was launched by the Prime Minister on 10th of September 2015, with the primary objective of transforming the construction industry towards becoming highly productive, environmentally sustainable, with globally competitive players and a focus on safety and quality standards,” Ahmad remarked. In conclusion, he said the features four strategic thrusts are Quality, Safety of and Professionalism, Environmental Sustainability, Productivity and Internationalisation should elevate the industry in Malaysia to a comfortably sustained level. www.propertyinsight.com.my MARCH 2017 I 19


FEATURE

LOOK BEFORE YOU LEAP 10 things to check before signing your housing loan documents BY: FELICIA SOON

T

he country’s property sector has taken a downturn, due to the current economic crisis faced by the Malaysian economy. The sales of property is greatly affected too. Currently, a huge number of property units lies unsold and the number is constantly on the rise. This has been fueled by released unsold bumiputra lots and loan rejections. Even at the end of the first half of 2015, in June,we saw a 114% increase in the number of unsold property unit numbers, according to the information from the National Property Information Centre (NAPIC). Most unsold properties are in the urban areas of Kedah, Penang, Selangor and Johor states. On the other hand, the percentage of property buyers who failed to secure property loans has increased from 29% last year to 35% during first half of this year. In fact, home loans form a large chunk of the lending products in the Malaysian financial market offered by banks, from both the conventional as well as Islamic banking outfits. According to Linnet Lee, chief executive officer and Stephanie Lai, certified member of Financial Planning Association of Malaysia (FPAM), home loan applicants should pay attention to certain things first before arriving at the phase of signing the home loan agreement: 1. MARGIN OF FINANCE Depending on various factors, such as the value of the property, your financial standing and credit ratings, different banks may offer you different margins of financing. As you will be required to pay any amount 20 | MARCH 2017 www.propertyinsight.com.my

not covered by the home loan upfront, this becomes very important especially if you’re short on cash. As an example, for a RM800,000 house, you’ll need to pay RM160,000 upfront if your margin of financing is 80%; but you’ll only need to pay RM80,000 upfront if your margin of financing is 90%. 2. HOUSING LOAN COMPARISON There are various comparison tools available online which let you know your home loan installment even before you have availed your home finance. Also, several online comparison tools available can compare various home loan options from different banks, and let you know the most favourable loan option. Alternatively, customers can visit the official websites of various banks and research through their home loan options, and then decide which home loan product offering suits their financial requirements the most. 3. FEES AND CHARGES A home loan application involves professional and government-regulated processes such as preparation and disbursement of loan agreement, payment of stamp duty and processing by the bank, just to name a few. All these processes usually come with fees and charges that will be borne by you, the buyer. In certain cases, it may also be wholly or partly borne by the banks as part of your loan packages. Hence, is it best to sit down with the loan officers (for all the banks you are considering taking your home loan from) and have them run through the fees and charges with

you. The task may be repetitive and timeconsuming, but it will be time well spent. 4. FIXED OR FLOATING Home loans come at a fixed, floating, or a mixture of fixed and floating interest rate, as such, the customer usually has a choice. For example: AIA housing loans are a great home loan product to avail. These home loans are offered at fixed rates of interest to safeguard customers against any rate hikes, however, loans are also available at floating rates of interest. AIA provides home loans for buying of new as well as old houses. AIA Home Loan can also be availed for those switching from one home finance to another. AIA offers the flexibility to repay home loans earlier than their stipulated repayment period. Besides, customers can choose from the two insurance options available along with the AIA home loans. These insurance schemes are offered to make sure that your housing loan is well covered in case of any unforeseen circumstances. 5. INTEREST RATE Check to see if the interest rates are acceptable. Base Rates is the new system that has been adopted by the banks in Malaysia to replace the old system called the Base Lending Rate. The base rate is what banks use to determine the interest that they intend to charge on loans offered. The change was adopted in order to bring more transparency in the interest rates. Under to the new system, banks announce their base rate, which is the bare minimum they can charge. They also announce their margins


GST has increased the cost of doing business in Malaysia while pushing up the property prices too, making it a double-edged sword that slashes the demand for property in the country” – Stephanie Lai

Guide to Consumer on Reference Rate

From 2 Jan 2015

Before 2 Jan 2015

BLR

BR Base Rate

Base Lending Rate Loars extended prior

Effective 2 January 2015

to 2 January 2015 will continue to

a new reference rate known as

be referenced againts the

the Base Rate (BR) will be used

Base Lending Rate (BLR) or

for new floating rate loans /

Base Financing Rate (BFR) until

financing facilities, such as

their maturities.

housing loans.

Effective 2 January 2015

BR Base Rate

The move to BR does not affect Effective Lending Rates Applicable to floating rate loans / financing acilities offered to individuals.

and based on these two, the effective lending rate is determined. The base rate changes from one bank to another and can range from 3.2% per annum to 4% per annum or more. When banks talk of interest rates, they will say that the interest rate will be BR + 1.25%. If we assume that the a particular banks base rate is 4% per annum then the effective lending rate will be 4% + 1.25%, which comes to 5.25% per annum. 6. LOCK-IN PERIOD Lock-in period is the period you will incur a penalty (usually 2 – 3% of the principle loan amount) if you choose to pay off your home loan in full before it reaches the maturity. When it comes to choosing a home loan in Malaysia, it pays to have the lock-in period to be as short as possible and the penalty as low as possible. Also, some banks do not charge a penalty at all if sufficient notice is given. 7. HOUSING LOAN BALANCE TRANSFER Almost all major banks in Malaysia provide customers with the option of balance transfer on their existing home loans. This means that if home loan from a particular bank has a higher rate of interest, then customers can choose to shift their home loan to another bank that is offering a lower rate of interest. This would lower the monthly home loan installment for customers, and will also lower the overall interest amount that is paid by customer to the bank. Some prominent Malaysian banks which offer home loan balance transfer facility are Maybank, Citibank, Standard Chartered, UOB etc. www.propertyinsight.com.my MARCH 2017 I 21


FEATURE

8. PENALTY FOR LATE PAYMENT Once you get the loan, ensure that you make all payments on time. But if there is any unforeseen occasion that may leads to late payment, do check what does the fine prints say on the penalty before signing the loan agreement.

For illustration purposes:

30 Years Tenure

9. TENURE The tenure of the loans will depend on the banks, and your capacity to pay back the amount that you borrow. The maximum tenure that banks can offer is 35 years, or until such time as the borrower turns 65 years old. 10. PREPAYMENT Prepayment is the early repayment of a loan by a borrower. Prepayments are either free or are charged a penalty fee, depending upon the lending institution. Do check if prepayment is allow for the nonflexi mortgage. If you can, try to go in for a prepayment as you can save a considerable amount of interest if you do. Various banks in Malaysia allow customers to go out of their way and deposit cash over and above their regular home loan installment into their home loan accounts. This has double benefits of faster reduction of loan liability, as well as reduction in the amount of total payable interest as well. Home loans are one of the largest commitments that one can engage in. These loans also last longer than any other loan agreement you are likely to encounter. Therefore, it is essential to understand the seriousness of the situation and what it entails. Make sure you are in control of your finances and never feel pressured into signing these documents, particularly if they are not presented in a way that warrants additional time and attention. Always stay in control over your own financial future. 22 | MARCH 2017 www.propertyinsight.com.my

RM350,000.00 No Lock-In Period

Before 2 Jan 2015

From 2 Jan 2015

Reference Rate

BLR = 6.85%

BR = 3.80%

Interest Rate

BLR -2%

BR +1.05%

Effective Lending Rate

4.85%

4.85%

Monthly Instalment

RM1,846.92

RM1,846.92

What should you do as a borrower? 1

Compare the effective lending rates quoted by different financial institutions

2

Ask for a Product Disclosure Sheet (PDS) providing you with the effective

before taking out a new loan. lending rate and total repayment amounts for the loan / financing facilities you plan to take out.

3

Ask your financial institution to explain the factors which may lead to a change in the Base Rate.

Note:

4

You monthly repayment amount will increase or decrease when there is a

5

You should also assess whether you can continue to afford the loan

change in the Base Rate. repayments in the effective lending rate increases in future.

Financial institutions are required to publish the effective lending rate for a standard 30-year housing loan of RM350,000.


FEATURE

MALAYSIA AT THE CROSSROADS Embrace innovation and digital disruption to stay relevant BY: GABRIEL LIM GWO SHIN

24 | MARCH 2017 www.propertyinsight.com.my


W

e are now in the era of innovation, and the world is changing in a faster pace than it was ever. The reemergence of identity politics in various parts of the world has become a hurdle for us to achieve “The end of history” that was predicted by political scientist Francis Fukuyama, where the advent of liberal democracy would herald in the final form of governance and establish the endpoint of humanity’s sociocultural evolution. On the economic front, the damage inflicted by free trade against the underprivileged segments, which comprises 99% of the society has also led to the rise of protectionism in numerous countries. Almost 60 years after gaining independence, Malaysia has successfully transformed itself from a primary exporter of commodities (such as tin, rubber and palm oil) to a regional powerhouse whose economy is mainly driven by the manufacturing. However, just as Malaysia is spearheading the development of biotechnology, nanotechnology and creative industry, our shortage of talents and the lack of innovation have prevented us from achieving the full potential. Against this backdrop, Malaysia is facing an acute currency depreciation that is much more severe in quantum compared to those experienced by regional trade partners. As President Trump halted United States’ participation in Trans-Pacific Partnership Agreement (TPPA), which his predecessor Barrack Obama fought hard to establish, Malaysia would need to seek alternative ways to secure Malaysian goods and services a level playing ground in the regional market. We are now only 3 short years away from Vision 2020, which envisaged Malaysia to become a

fully developed nation. How do we march forward from here? For many of the industry movers and shakers, change is the only constant in life, so we must always update ourselves, embrace innovation and take advantage of digital disruption. INCLUSIVE, HIGH QUALITY EDUCATION Tan Sri Datuk Dr. Rebecca Fatima Sta Maria, senior economic research fellow at Economic Research Institute for ASEAN and East Asia (ERIA), who is renowned for her sharp and precise analytical views since her tenure as the secretary general of the Ministry of International Trade and Industry (MITI), felt that the formula to create talents for the future lies in educational reform, for example about changes to UPSR, the primary school evaluation exam. She observed that endless discussions on educational reform have been organized over the past decade, yet the political will power to implement the proposals is sorely lacking. “We must do more to provide inclusive, high quality education to all Malaysian children, regardless of colour, creed or gender,” Dr. Rebecca emphasised. Also, for the programmes to succeed, she reminded the authorities that policies and blue prints must be implemented in their spirit, not literally. Since many industry players in the region opined that a TPPA without United States would be less attractive, they now look forward to the Regional Comprehensive Economic Partnership (RCEP) initiated by Beijing as the replacement. However, RCEP’s rules on public scrutiny, transparency, openness, environmental protection and local participation might be less stringent compared to those of TPPAs.

Without out-of-thebox thinking and the right attitude to embrace innovation, competitors will finish us off with disruptive technologies” As there are still some confusion on this, Dr. Rebecca remarked that, “RCEP is still searching for a champion.” Dr. Rebecca said, “It is the duty of the government to make people’s life easier.” For that, she lauded the efforts by various government agencies in assisting Small and Medium Enterprises (SMEs), because over 90% of the businesses in this country are SMEs, thus this sector play a major role in elevating the nation’s economy. “Malaysia Digital Economy Corporation (MDEC, formerly Multimedia Development Corporation), for example, has been very supportive of SMEs!” Regarding the 2050 National Transformation policy which was announced recently, Dr. Rebecca suggested, “Why do we need to reinvent the wheel? We already have Vision 2020 so why not we achieve all the targets first?” INNOVATION TSUNAMI Dato’ Dr Nazri Khan, senior associate director and head of retail research, Affin Hwang Capital reiterated that, to achieve Vision 2020, our Gross Domestic Production (GDP) needed to double every decade beginning 1990. In fact, he shared that back in 1957 when Malaya gained independence, the country was richer than regional neighbours such as Taiwan, Hong Kong, South Korea and Singapore. However, because those 4 reformed education model and offered superb education to the children, they became the “Asian Tigers” and left Malaysia far behind. “South Korea has produced about 90 world class brands so far, such that as Samsung, LG, Hyundai, Daewoo and www.propertyinsight.com.my MARCH 2017 I 25


FEATURE more, and proves the importance of critical thinking and risk taking, especially in an internet economy like today.” Tan Sri Dato’Dr. Ramon V. Navaratnam, the director of Asian Strategy & Leadership Institute (ASLI) and Chairman of Centre of Public Policy Studies (CPPS – ASLI), said that to stay relevant we must herald in the “Innovation tsunami”. While innovation attention is the key to our survival, our country is unfortunately not paying sufficient to the development of soft infrastructure and intellectual property. From university rankings to the Programme for International Student Assessment (PISA), Malaysia has been lagging behind. To be more innovative, Dr. Ramon suggested that “Mindset of the parents must change, they must encourage children to be risk takers, because we will need more scientists and researchers in the future. We will never improve if we are satisfied of staying in the comfort zone as if it is business as usual.” He also urged the people to also tell the government what to do, and what are the changes they would like to see, because we would lose out if we do not change fast enough. THE POWER OF DIGITAL DISRUPTION Similarly on the part of the government, Dr. Ramon also commented that the government should do more, for example subsidise the SMEs on intellectual property registration, or simplified the procedures for tertiary institutions to register new courses with the Malaysian Qualifications Agency (MQA), in order to unleash the power of creativity and innovation. Senior executive director of PwC Consulting Services (M) Sdn Bhd, Edward

Tan Sri Dr. Lau Ban Tin 26 | MARCH 2017 www.propertyinsight.com.my

Clayton wanted people to be cognisant of the fact that digital disruption is everywhere, just like the air we breathe. Digital marketing initiatives such as Air Asia, Airbnb, Maybank2u, Lazada, MyEG, Uber and Grab have transformed our daily life and might have created some new jobs, it is not exactly good news for the traditional business and the suppliers and consumers relying of them. Edward pointed out that Asia has emerged as the biggest market for e-commerce, with China seeing an average sales of USD500 per person per year. Developing countries are leading the future growth in this phase, because many who did not even enjoy desktop computers previously are now participating heavily in m-commerce since the dawn of smart phones. According to Edward, another development that has turned the industry topsy turvy is automation and robotisation, where more and more manual procedures are replaced by robotics. Sooner or later, even Business Process Outsourcing (BPO) such as handling of enquiries in call centres could be outsourced to robots. Of course this new development will create new jobs as well, such as programmers and computer engineers, but those jobs require a different expertise altogether. For business to strive, Edward stated that, “We have no choice but to engage digital disruptions and automation. For example, while many thought that USA is losing jobs to Mexico or China due to the globalisation of supply chain, the manufacturing industry is losing even more jobs to automation. To embrace digital technology, people actually have to change.” Concurring on Dr. Rebecca’s statement that government

Tan Sri Datuk Dr. Rebecca Fatima Sta Maria

should make life easier for the people, Edward stressed that, “The government should reduce their rules and regulations to unleash the potential and creativity our people have.” Thanks to digital disruption, so many industries have disappeared. For example, video cassette rental has been totally replaced by streaming service such as Netflix or Iflix. Many working procedures have also been transformed, such as market survey that used to take months can now be done in a fraction of the time, due to the availability of internet. Edward also applauded MDEC’s effort in creating the Digital Free Trade Zone. He urged everyone to take advantage of it, whether one is in education, business, research or services, but he also realized that smart construction is taking too long to be adopted locally. To be part of the new digital economy, Edward advised that people should “Grow big, to enjoy economy of scale; or go small, to find a compact niche. The world must accept change and focus on software. To succeed, we must go up the value chain and embrace transformation!” Director of research for Khazanah Research Institute (KRI), Junaidi Mansor also reminded all the stakeholders, for innovation and creativity to take root in the society, we shall give the youngsters a free hand in charting the future direction of the country. Demographically, Gen Y is emerging as a major group of workers as well as consumers in the market. Junaidi remarked, “It cannot be overemphasised that the way of work has changed. We must get used to cloud computing and digital disruption. So instead of blaming Gen Y for the new trends, we should find a way

Dato’ Dr Nazri Khan


Tan Sri Dato’ Dr. Ramon V. Navaratnam

to work alongside them, and even facilitate their endeavours to realise their dreams. With decent employment opportunities, the youth will contribute more to the progress of this country.” Saji Raghavan, country director for Malaysia and Brunei, Rolls Royce Malaysia Sdn Bhd welcomed the initiative by the Ministry of Science, Technology and Innovation (MOSTI) in publishing the National Internet of Things Policy in 2015. It could be a guiding beacon on the local community’s adoption of Internet of Things (IoT), a technology that enables all devices, equipment, vehicles, buildings and the like to be wired, making communication and data gathering easier. Saji said, “Now that the policy is in place, the people should exploit the benefits of new technology. We must remember that while Malaysia was also an early adopter of internet, our Multimedia Super Corridor (MSC) unfortunately did not succeed in becoming another Silicon Valley that gathers clusters of research and development (R&D) laboratories. Instead, Cyberjaya has become a property hotbed that houses mostly call centres for multinational corporations (MNCs). This underscores the lack of coordination between different stakeholders.” Saji also added that currently, half of the employees are underemployed, meaning that they are not employed in suitable positions that utilise their expertise and reward them adequately, as not everyone has the willingness or knowledge to change. That is why it is more important than ever for people to be adaptable and change. Examining the SMEs’ reluctance to go for

Prof. Yeah Kim Leng

robotisation and automation, Tan Sri Dr. Lau Ban Tin, the Director of BIG Industries Bhd. who is also a property developer said, the deployment of migrant labours is in fact addictive. However, it is open knowledge that this practice is not sustainable in the long run if we are serious in becoming a developed country. Lau was truly concerned about the future of Malaysian economy, as he said, “Without out-ofthe-box thinking and the right attitude to embrace innovation, competitors will finish us off with disruptive technologies.” INDUSTRY 4.0 Dr. Lau was acutely aware that the latest trend in manufacturing, Industry 4.0 would transform the world significantly, because with Internet of Things (IoT) and cloud computing, automation and data exchange in manufacturing will create “smart factories” that can do more with less. “As of now, about 50% to 75% of factories in Germany have already integrated IoT into their daily operations. Because of rapid Digitalisation and widespread Information Technology, the manufacturing sectors in China has also leap frog into Industry 4.0.” Dr. Lau also predicted that, “In this age of information avalanche, all kinds of information can be found in the internet. With the advent of B2B (business to business e-commerce), even a kampung boy can find all the knowledge and material suppliers from the internet, and become an instant contractor. After all, competition has always been the force to drive world progress.” On ways to create an environment for topnotch education and R&D, Prof. Yeah Kim Leng, professor of Economics at Sunway

Edward Clayton

University Business School said, academics can only carry out their researches, apply for patents and commercialise their products if adequate grants are available. However, it has always been a challenge to share the scarce allocations. “This is where the finance sector comes to the rescue. We need to support researchers, start-ups and entrepreneurs if we are serious about moving into Industry 4.0, else our local talents will be tapped by foreign firms, worsening the brain drain in Malaysia,” stressed Prof. Yeah. To enhance Malaysia’s competitiveness in the 21st century, it is essential for us to formulate a strategic roadmap for innovation, else the nation will be left struggling in the global competition. That will include injecting innovative vibrancy into our ecosystem, so that we can embrace new strategies to first catch-up and then be a trendsetter. And for this to realise, the education and R&D in Malaysia have to improve by leaps and bounds. By introducing a dynamic education system, it is hoped that all the educational institutions will one day be an active player in acquiring knowledge. Besides, our people, including decision makers and business community should also accept innovation as the order of the day, to attract the brightest talents from all over the world into our system. Obviously, a lot of resources are required to draw and reward the best talents, therefore the government, academia, industry and society must all collaborate to make it happen. Ultimately, it will redefine the capabilities of Malaysia towards becoming a truly developed nation, with an advanced economy and an open society. www.propertyinsight.com.my MARCH 2017 I 27


FEATURE

WHAT LIES AHEAD The benefits of will writing BY: FELICIA SOON

M

aking your will is one of the most important things you will ever do, as without one, your loved ones’ future could be at risk of financial uncertainty, emotional turmoil or even long drawn-out disputes. Also, after several years of working, you would have amassed some personal assets such as liquid funds, investments and properties. Hence in the event of an unforeseen occurrence, your assets might be in a mess as they will not automatically pass on to your beneficiaries as much as you wish. According to Jason Tay from Tay Ibrahim & Partners Advocates & Solicitors, a will would not help you to transfer your property but it will help to ensure that the wishes of the deceased are carried out 28 | MARCH 2017 www.propertyinsight.com.my

accordingly. In the event that the deceased has properties, by drafting a will, the deceased would be able to decide on the designation of the properties. For example, if the deceased has a few properties, the deceased could decide which property is to be transferred and / or given to which beneficiary(ies). THE IMPORTANCE OF ESTATE PLANNING Tay further explains that if one dies without a will, the estate will be distributed in accordance to the Law. And the Law only provides for the distribution of the deceased’s estate amongst his / her direct family members. It does not provide for co-habitees and / or others whom are not legally related to the deceased. As such

in certain circumstances, the intentions and / or wishes of the deceased is seldom fulfilled. As shared by Lai Chee Hoe from Chee Hoe Associates, a Grant of Probate arising from a will is meant to spell out the intention of the testator clearly. In this regard, it eases the process of identifying the correct property, portion of the property for distribution and execution of documents for transfer of such property. A will is also an effective way in preventing inheritance disputes. With a will, the deceased could offer a full and proper consideration on how his / her dependents are going to be provided for after his / her death. Since even with the existence of a will, there are still grounds to challenge it, for instance mental incapacity of the


testator, forged signature, forged will etc, the importance of writing a will properly according to the prescribed procedures cannot be overemphasised. Besides that, it is often difficult and expensive to administer an estate that has not been planned well, and many times the poorly planned estate must pay taxes that could have been minimised or avoided altogether with proper planning. Considering the time and effort you have spent accumulating your assets and the goals you may have for your children or other intended beneficiaries, your estate plan deserves careful planning with the implementation of a properly written will. THE PROCESS OF WILL WRITING The initial step in the will writing process is to list down all your assets. For this you have to include all the details of bank accounts, properties, businesses, vehicles, jewellery, antiques or other valuables, investments such as shares or other instruments. Also, you need to gather all the supporting documents and place them together in an easy-to-retrieve file or folder. When it comes to will writing, it is best to use the services of a professional will writing service or a legal firm specialising in probate matters. You would not want to be stingy on something this important, as a will is needed in order for the transfer and vesting of assets and properties to be legally recognised. According to the Deputy CEO of Rockwills Trustee Berhad, Azhar Iskandar Hew, the will can specify which property is to be inherited by which beneficiary and one of the tax advantages is that the stamp duty

Azhar Iskandar Hew

is at RM10 per title under the Stamp Act 1949. However distribution of the property can only be done once the Grant of Probate, debts and liabilities of the estate has been paid. While the contents of the will clearly states the intention and instructions of the testator, the will must be signed by the testator in the presence of two witnesses, who must also sign it. The two witnesses must not be chosen from among the beneficiaries or the spouses of these beneficiaries. In addition, it is best for the testator to look into the matters stated in the following table. To prevent the unintended consequences of intestacy, this can be done by writing a will where assets are given to specific beneficiaries and also to name substitute beneficiaries to them. It is also important to have a residual clause in the will to give away any assets that have not been

A. Appointing the right executor who is experienced, knowledgeable and impartial to all parties to carry out the wishes of the testator. In addition, where there are minor beneficiaries, continual existence of the executor is important, hence setting up a trust company would be ideal. B. Where beneficiaries are given equal shares to inherit immovable properties, fragmentation occurs and this will lead to many complications. Generally, it is better to give each property to 1 or 2 beneficiaries rather than being inherited by a few. C. Where the testator intends to exclude the spouse or child, it is recommended that the testator states his reason(s) for the exclusion either in the will or in a separate letter. This would avoid confusion and disagreement between the spouse or child and those benefiting from the will.

specifically mentioned in the will to be given to a particular beneficiary. Next, the will needs to be kept in a safe place. However, not so safe to the point where the beneficiaries cannot find it! There will be no point at all to the exercise if no one can locate the physical will once someone has passed on. Make sure you tell your beneficiaries where the will is located. Lastly, for those who have yet to take this all-important step, make it your personal goal to get started on will writing right away. Although there are other methods to distribute the assets such as setting up a trust etc, ultimately, each method suits different kinds of situation. As such, the best way to avoid unintended consequences is to always seek legal advice, understand the possibilities of dispute and take appropriate action to minimise it.

Will is a security you provide to your loved ones and minimise the dispute and complication arising from intestacy� - Lai Chee Hoe

www.propertyinsight.com.my MARCH 2017 I 29


DEVELOPER OF THE MONTH

TROPICANA:

AN EMPIRE OF SUCCESS A collection of signature developments designed for young executives and families

Ridgefield Reside 30 | MARCH 2017 www.propertyinsight.com.my


T

ropicana Corporation Berhad (Tropicana) was established in 1990 by founder and advisor, Tan Sri Dato’ Danny Tan when he saw a window of opportunity during the rapid growth of the Malaysian economy and property industry. During that time, Malaysians were becoming affluent and thriving to be like golfers who enjoyed to tee-off early in the morning. He envisioned the potential of property development as he purchased 625 acres of prime land, partly through his own savings and bank borrowings. By transforming this piece of prime land, he created the Tropicana Golf & Country Resort (TGCR) in Petaling Jaya. The project made waves in the Malaysian

property market then, as it was the firstever gated and guarded resort living community in the nation, complete with a 27-hole golf course with its landscaped features, a 450,000 sq. ft. clubhouse, and even its own roads leading to this community. Tropicana’s Executive Director of Marketing and Sales Ung Lay Ting said currently, Tropicana has in place 42 completed and 16 ongoing developments at strategic locations across the growth regions of Klang Valley, Penang, Iskandar Malaysia and Kota Kinabalu. She said, “In fiscal year 2015, Tropicana’s total assets amounted to RM6.9 billion, and as at September 2016, its land bank stood at

ences, Tropicana Heights is the ideal family abode offering modern Park Villas and spacious Semi-Ds

over 1,300 acres, with a potential gross development value (GDV) of more than RM50 billion.” MARVELLOUS TRACK RECORD Ung further asserted that “Clients’ needs have always been our emphasis, whereby we innovate and redefine the art of living, by creating an integrated development that incorporates residential and commercial components,”. This way, Tropicana succeeded in developing thriving townships that are strategically connected. Tropicana have recently handed over Arnica Serviced Residences, the first residential tower of Tropicana Gardens, Kota Damansara and Tropicana Avenue, Petaling Jaya to buyers, while Fairfield Residences, the first phase of Tropicana Heights, Kajang was handed over last year in 2016. With a convincing track record, Tropicana has recently launched a slew of attractive projects, such as Sinaria the first commercial phase and Cheria Residences at Tropicana Aman, Kota Kemuning; Dianthus Serviced Residences at Tropicana Gardens, Kota Damansara; Ridgefield Residences, the third residential phase of Tropicana Heights, Kajang; Paisley at Tropicana Metropark, Subang Jaya and the sky-scraping 55-floors of The Residences at the heart of Kuala Lumpur’s city centre are all testaments to their commitment of providing greater value to homebuyers. SUPERB LIFESTYLE In fact, Cheria Residences is the third residential phase of the 863-acre Tropicana Aman in Kota Kemuning, Tropicana’s biggest township development in Malaysia so far. Tropicana Aman comes with an estimated GDV of RM13 billion in 20 phases, where 2 and 3-storey link homes offered in both phases 1 and 2 have been fully sold. Sitting on a lush 38.5 acres’ land with lush greenery, Cheria offers 272 capacious double storey semi-detached eco-friendly smart homes boasting spacious built-up areas of 3,200 to 3,670 sq. ft., with wide car porch that could fit three cars side-by-side. Future residents of this gated and guarded precinct will also enjoy their own private 4.73-acre linear garden, 3 km pedestrian and jogging track, and a dedicated community hall. Additionally, the project will have a direct www.propertyinsight.com.my MARCH 2017 I 31


DEVELOPER OF THE MONTH access from Kemuning Link, South Klang Valley Expressway (SKVE) and the West Coast Expressway (WCE) which is now under construction. Sinaria is the first commercial phase in Tropicana Aman, located within proximity to the existing residential phases as well as the Tenby International School. As the pioneering commercial project in the township, the 152 units of investment-grade shop offices in Sinaria will serve over 30,000 residents in the community by offering various retail and dining choices. On the other hand, Ung said that Paisley Serviced Residences, situated at the centre of Tropicana Metropark, Subang Jaya is a collection of exclusive high-rise homes in a resort-style environment. The Batu Tiga KTM Komuter station is located just a stone’s throw away and with the upcoming direct link bridge connecting the Federal Highway to Tropicana Metropark, will ensure a fast and easy commute for residents and visitors. Consisting of two residential blocks fronting the heart of the 9.2-acre Central Park, Paisley provides residents a stunning, unobstructed panorama of Tropicana Metropark’s green lung from the comforts of home or any of the residentsonly facilities levels. Meanwhile, Dianthus Serviced Residences is the fourth and final block of Tropicana Gardens in Kota Damansara, an integrated development with diverse components such as high-rise residences, designer office tower and a retail mall, all interspersed with lush green landscapes. The block has 27 levels offering 271

residential units, with built up area from 601 to 1,406 sq. ft. Ung added that there will also be a sky sanctuary at Level 31 with a meditation lawn, sauna, gymnasium and sky terrace. This 17-acre development will have a shopping mall measuring at least 1 million sq. ft. below the residential towers which comes with a direct connection to the elevated Surian MRT station of the Sungai Buloh – Kajang MRT Line, which is partially in operation since end of last year. Besides, the location is also well-served by a myriad of expressways, including Damansara – Puchong Expressway (LDP), North Klang Valley Expressway (NKVE), as well as the Damansara Link and Penchala Link of the Western KL Traffic Dispersal

Paisley Serviced Residences, the latest residential phase at Tropicana Metropark offers stunning panoramic views of the Central Park 32 | MARCH 2017 www.propertyinsight.com.my

System (Sprint) too. SPACIOUS CENTRAL PARKS Regarding the posh Tropicana Heights in Kajang, Ung elaborated that, “Just a short drive away from the rapidly growing Kajang town, Ridgefield Residences is the third phase Tropicana Heights, a lovely township with 199 acres of freehold land, which features a 16-acre Central Park that comes with a 750-meter linear lake.” As many as 178 units of three storey and four-storey park villas, as well as 40 threestorey semi-detached homes (with up to 3,931 sq. ft. of built-up area) have been planned. In fact, 32% out of the 20.18 acres of land is reserved for greenery. The three-storey park villas will have built-up areas ranging from 1,994 to 2,446 sq. ft., while the four-storey units will have between 2,419 and 2,658 sq. ft. Fairfield Residences was sold out and successfully handed over last year, while the phase 2 of Parkfield Residences is on track for completion. There will be a direct link from Persiaran Bangi, while the MRT / KTM interchange at Kajang is merely 4km away. While in the heart of the Kuala Lumpur downtown, The Residences KLCC rises majestically to a sky-scraping 55 floors, comprising the W Hotel Kuala Lumpur on the lower floors and pure, luxurious vibrancy on the upper levels, The Residences KLCC is poised to be the centre of attraction in a happening


Tropicana Gardens, the multi award-winning development in Kota Damansara with direct link to the Surian MRT Station metropolitan city. Ung opined “Our ongoing brandbuilding initiatives and continuous efforts on delivering values to our customers have allowed us to remain competitive, as our continued emphasis on our DNA, such as accessibility, connectivity, innovative concepts and designs, generous open spaces, amenities, facilities, multi-tiered security and quality have successfully shaped us into what we are today.” “For instance, we strive to provide conveniences to our residences and the public through a RM106 million direct flyover linking Federal Highway and Tropicana Metropark, Subang Jaya” said Ung. Besides, there is also the pedestrian bridge linking Surian MRT station to Tropicana Gardens, Kota Damansara. The Central Parks in Tropicana Metropark, Tropicana Aman and Tropicana Heights also offer spacious landscaped public parks for leisure and recreation. The amenities like international schools such as Tenby International School at Tropicana Aman, GEMS International School at Tropicana Metropark and St. Joseph’s Institution International (PJ Campus) at Tropicana Indah also offer

Cheria Residences at Tropicana Aman offers innovative Semi-Ds with the built-in ventilation, home network and security systems

extra value to the residents. BEAT THE SETBACKS While the changing market demographics, evolving consumer demands and the fluctuations in the Malaysian economy have all affected by industry, Tropicana Corporation has overcome the challenges one by one. Tropicana continues to respond to these shifting conditions by forging

ahead and lining up great talents in the team to seize the opportunities presented by the market. Moreover, the company believes that with a greater determination in handling these challenges, they can successfully navigate the market. “The local property market has gone through a challenging patch. Generally, buyers in both the primary and secondary markets have been cautious last year and www.propertyinsight.com.my MARCH 2017 I 33


DEVELOPER OF THE MONTH

“Clients’ needs have always been our emphasis, whereby we innovate and redefine the art of living, by creating an integrated development that incorporates residential and commercial components,”

- Ung Lay Ting

will remain so in 2017, at least in the first half,” said Ung. She added that it is not due to lack of demand but other factors such as financing, a wait and see attitude and of course the question of affordability. Therefore, Tropicana believes that it is imperative for them to make informed decisions based on due diligence and careful analysis of the market supply and demand. This giant developer has evolved to become one of the master builder of communities specialized in developing value-added properties, especially lifestyle properties equipped with great facilities, amenities, security measures, accessibility and connectivity, which allows for a more holistic and vibrant lifestyle. Tropicana is confident that their development projects are different from others in terms of location, unique lifestyle and value proposition. As such, the current market sentiment does not affect the workin-progress, as there is still demand from home buyers for value-added properties at strategic locations. With such highly sought after offerings, Tropicana has emphasized on campaign offerings to attract the first-time home buyers. It aims to do this through building communities and a strong brand following. For instance, their ‘Just Bid It’ campaign saw users placing their lowest unique bids to win a Tropicana signature development 34 | MARCH 2017 www.propertyinsight.com.my

at their bid price. This has proved to be an engaging digital marketing initiative which not only give the masses a better understanding about our developments, but more importantly to bring the developer closer to today’s home buyers. “In our township developments, such as Tropicana Aman, Kota Kemuning which is positioned as a walking and biking community, we host annual walk and bike themed events which are open to the public. Over the past three events, the support has been encouraging and this fosters a tight-knit community. This year, we look forward to host more of these events and initiatives, so do stay tuned!” said Ung gleefully. BETTER PROSPECTS AHEAD Despite that, from the sales perspective, the toughest thing was not closing the deal per se, but on helping buyers, especially first time home buyers to make the right buying decisions, because for many, the first property purchased may be the largest purchase made in a lifetime. “After all, buying a home is a serious life decision; to own a home in a strategic location is a plus point but first time home buyers should always consider their financial position when it comes to buying properties, to avoid ending up overly burdened for the next few decades,” advised Ung. Along with slowdown in the first half

of 2016, the property sector has seen some changes in the recent months. However, the market has gained a gradual momentum in the second half of last year, thus we do remain a positive view on the Malaysian market. The fact that 80% of Malaysian are below the age of 50, means that the demand for houses is going to increase as millennials surge into the workforce and will be looking for a place of their own to settle down. These factors will continue to ensure a healthy demand for properties, especially among first time home buyers and those upgrading to better homes. “We are cautiously optimistic that a recovery is underway for the property market in 2017, as we have seen significant activity in the market across all sectors in second half of 2016, including those targeting first time buyers, as well as those that are priced over RM1 million,” concluded Ung. The promising take-up rate indicates that consumer strength is returning and there are still demand for landed properties and integrated developments in prime locations, especially those with superb accessibility, marvellous amenities, and competitive pricing. As the British architect, teacher and writer once said, ‘Good buildings comes from good people, and all problems are solved by good design.’


AREA FOCUS

BANDAR SRI DAMANSARA:

PEACEFULLY FORGING FORWARD Destined for Distinctive Upmarket Development BY: MAGES PV LINGAM

T

he subtle Bandar Sri Damansara township (BSD, postcode 52200), which comes under the jurisdiction of Petaling Jaya City Council (MBPJ), has been in existence since 1996. It is a corollary freehold commercial and residential developed area conquering a size of 200 acres.

36 | MARCH 2017 www.propertyinsight.com.my

Bandar Sri Damansara is highly accessible via four major highways, namely the New Klang Valley Expressway (NKVE), KL – Kuala Selangor trunk road (Federal Route 54), Middle Ring Road 2 (MRR2) and the Damansara – Puchong Expressway (LDP). Entering from the main entrance to BSD, one will see 8trium

on the right, an office tower with a retail podium by master developer Land and General (L&G). Located on a piece of land measuring 2.65 acres, the project caters to 300,000 people living within a 5km radius. On the left, it is the sports and recreational club Sri Damansara Club with a vast golf driving range, developed by L&G in 1995.


BSD is a mature township developed with freehold terrace houses, semi-detached houses, condominium, apartments interspersed with pockets of commercial development. Located close to townships like Bandar Menjalara, Prima Damansara, Damansara Damai, Damansara Perdana and Mutiara Damansara, BSD is known as a serene neighbourhood. It boasts of an oval shape circular main road which can be clearly seen from an aerial view, which is highly popular among joggers and cyclists. Hotel S. Damansara, a boutique hotel, enjoys brisk business as it is conveniently located 45 minutes’ drive away from Kuala Lumpur International Airport (KLIA), or just 10 minutes’ away from the shopping paradise of 1 Utama, The Curve, Ikea and Tesco, and even Kuala Lumpur downtown is just 30 minutes away. On the other hand, Ibis Styles, KL, a premium economic hotel located along the KL – Kuala Selangor trunk road, offers another accommodation option for leisure and business travellers. Regarding the future developments of BSD, Dato’ Muhammad Nawawi Mohd Arshad, the chairman of Nawawi Tie Leung Property Consultants Sdn Bhd said, “Being a mature township, BSD has less new development taking place due to the

scarcity of land. Hence, it is highly possible that the newly launched properties will be mainly the stratified properties with small parcel units.” The future development by TA Global Bhd that Dato’ Nawawi mentioned will comprise 2 dynamic towers that come with a retail podium as well as a variety of facilities at the rooftop. It will be launched later this year. While the property prices within BSD was basically stable with normal growth, the advent of mass rapid transit (MRT) service is anticipated to elevate the property prices here to a higher level. Since the partial opening of Sungai Buloh – Kajang MRT Line (SBK Line) from Sungai Buloh up to Semantan in December 2016, BSD residents are given a new option to travel as Sungai Buloh MRT station is situated about 5 km away. However, when the upcoming Sungai Buloh – Serdang – Putrajaya MRT Line (SSP Line) opens in 2022, BSD will have its own MRT station, and it will definitely boost the demand and prices of nearby properties. On the latest price movements, real estate negotiator Yip Zhen Hao from Cornerstone Realty disclosed that, “For high rise residential properties, the average transacted price is RM520 psf. The older apartments and condominiums are transacted on average of RM470 psf, while the new condos were transacted at RM530 psf.” Citing the data from Brickz Research Sdn Bhd, he said that from January to December 2016, there were 91 transactions for landed properties at Sri Damansara, with an average price of RM664 psf. Concurring on the facts that MRT service is coming to a mature township with land scarcity, Yip also predicted that most of the new development in BSD will be high-rise properties, and that the price per square foot will continue to appreciate for the next 5 years due to higher demand. Yip added that the latest project launched in BSD was the Amanja Semi-Detached Suites, while there are also 2 upcoming projects to be launched, namely the Ativo Suites at Damansara Avenue, and the phase 2 of Damansara Foresta. As for industrial transactions in BSD, reports from Brickz disclosed that intermediate terrace factory and detached factory lots, transacted prices of RM950,000.00 (built-up area 1100 sq. ft.)

Dato’ Muhammad Nawawi Mohd Arshad

BANDAR SRI DAMANSARA 1.

Hotels: • •

2.

Hotel S. Damansara Hotel Ibis Styles Kuala Lumpur, Eateries:

Ativo – Rondaevoo, The Morning After, Kakatoo

Thirty seconds

Groupbase

Bellstar

Pizza Hut, Secret Recipe, McD, subway, Paparich, Kenny Rogers, Domino’s, Papa John Pizzas,

3.

Worship: •

Masjid Al-Mukarramah Sri Damansara

Methodist Church, Glad Tidings Church, SIBKL

4.

Community: • •

5.

SD Club Community Centre Office Lots:

8trium

Ativo Plaza

Wisma Amanah Ikhtiar

6.

University: •

Twintech International University College of Technology

7.

Schools: •

SJK (C) Desa Jaya 2

SK Bandar Sri Damansara (1)

SK Bandar Sri Damansara (2)

SK Bandar Sri Damansara (3)

SMK Bandar Sri Damansara (1)

SMK Bandar Sri Damansara (2)

Private school - Sri Bestari

www.propertyinsight.com.my MARCH 2017 I 37


AREA FOCUS

Datuk Sr Siders Sittampalam

Eusoff Chua

to RM9.6 million (built-up area16,218 sq. ft.) were recorded in the years of 2015 and 2016. Currently there are only 2 industrial areas in BSD, namely KIP Industrial Park and Tago Industrial Park. Valerie Cheok from Knight Frank Malaysia remarked that, “8trium is a business hub spanning over 2.65 acres of freehold land in Sri Damansara. It is consisted of 2 blocks of 21-storey towers, containing office suites and retail outlets. There is a total of 130 units in each tower with built-up areas ranging from 500 to 7,130 sq. ft., offering a net saleable area of 125,000sq. ft. The corporate headquarters of Land & General is also housed in the Atrium Menara 1 currently.” She said within the housing area of BSD, the transacted price of a 3-storey shop office unit at Jalan Damar SD 15/1 is analysed to be at RM421 psf. Meanwhile, the transacted price for a 2-storey shop office unit at Jalan Dangan SD 2/1G, adjacent to the industrial area of BSD, works out to around RM393 psf. Datuk Sr Siders Sittampalam, managing director of PPC International Sdn Bhd commented that, “Since BSD is predominantly an established neighbourhood, we do not foresee any 38 | MARCH 2017 www.propertyinsight.com.my

major new development other than Damansara Avenue and Damansara Foresta coming on stream. However, if Land & General Bhd pursues with the redevelopment of Sri Damansara Club, which comprises 36 acres of freehold commercial land, then we will see a new commercial centre within BSD.” Generally, he said that property value would experience significant appreciation with completion of mass rapid transit (MRT) lines. Since the construction of Sungai Buloh – Serdang – Putrajaya MRT Line (SSP Line) is scheduled to complete in the year 2022, the accessibility of BSD will improve by leaps and bounds, in contrast to the car-centric traffic pattern in a neighbourhood dominated by landed properties. TA Global Berhad’s head of group sales and marketing, Eusoff Chua said, “Damansara Avenue (DA) delves deeper beyond the conventional parameters of building commercial and residential components. It is the philosophy behind this concept that imparts a different perspective, which is appealingly healthier and dwells at an easier pace of life.” The project will be surrounded by 11 acres of greenery, thus flowing positive energy and weaving harmony across the community. Eusoff highlighted that as BSD is a mature neighbourhood, plenty of amenities can be found within its vicinity, however, most of the existing amenities are widely scattered. Therefore, TA Global Berhad planned to develop Damansara Avenue, an integrated 48-acre master-planned community that encompasses a variety of amenities,

which will connect the people within the community. “We are positive on the price appreciation in Damandara Avenue. Thus far, we have completed and handed over Ativo Plaza (office suites and lifestyle retail outlets) and Azelia Residence (Residential) in Damansara Avenue. In 2015, Ativo Plaza was awarded ‘The Edge Malaysia – PEPS Value Creation Excellence Award’ for the outstanding performance in value creation.” The Damansara Avenue project will be carried out phase by phase, with products such as service apartments, corporate office towers, stratified offices, shopping mall, retail outlets, hotel, sports complex, convention hall and performing arts center targeting different groups of buyers. With the future phases of development and infrastructures planned for Damansara Avenue, TA Global Berhad believes it will add more value to the properties within the development. TA Global Berhad found that BSD is wellpositioned to enjoy great accessibility. As mentioned earlier, BSD is easily accessible via major highways. In the future, a slew of new projects will improve the connectivity further, for instance the upcoming link bridge to the nearest MRT station, Sri Damansara East MRT Station, the proposed flyover from BSD to Desa Park City, as well as the proposed direct access road to LDP and MRR2. Eusoff was delighted to emphasise that, the Azelia Residence in Damansara Avenue, which have been completed and handed over was sold at an average rate


of RM600 – RM650 psf. However, since the handover, the highest transacted subsale price recorded was RM974 psf. As for the competitiveness of this project, Eusoff stated that its charm is unmatched as “There is other integrated master-planned development in BSD at the moment.” Senior real estate negotiator of The One Property International Sdn Bhd, Aida Mustaffa exclaimed that BSD is a

wonderful neighbourhood to live in, and one that has seen tremendous growth in the past few years, with the completion of exciting projects such as 8trium, Ativo Plaza, Azelia Residences and Damansara Foresta, just to name a few. “People like its strategic location, and the fact that it has grown to be this self-sustaining township with plenty of amenities available. Besides being very peaceful, BSD also has

a good ethnic and income group mix that create a vibrant community,” said Aida. Security has improved a lot too, as most clusters of homes have recruited private guards. There are also a few schools to be found within the vicinity, so it continues to attract families and is ranked as one of the most sought after real estates in KL. Aida would like to reiterate the fact that, while the prices for terrace houses in

TRANSACTED PRICE OF SHOP-OFFICE IN BANDAR SRI DAMANSARA (2016) Property Type

Land Area

Built-up Area square feet

3-storey shop-office (en-bloc)

1,765 – 2,088

4,832 – 5,227

Transacted Price per unit

per square foot

RM2,000,000 – RM2,600,000

RM414 – RM497

Source: PPC Intl Research

TRANSACTED PRICE OF OFFICE SPACE IN BANDAR SRI DAMANSARA (2016) Office Building Name Ativo Plaza

8trium Tower

Built-up Area

Transacted Price

square feet

per unit

per square foot

596 – 2,375

RM425,000 – RM1,410,000

RM594 – RM713

500

RM275,000 – RM350,000

RM550 – RM700

935

RM380,000 – RM500,000

RM406 – RM535

930

RM410,000

RM441

965

RM400,000

RM415

Source: PPC Intl Research

www.propertyinsight.com.my MARCH 2017 I 39


AREA FOCUS RECENT TRANSACTED PRICE OF LANDED RESIDENTIAL PROPERTY IN BANDAR SRI DAMANSARA Scheme

Bandar Baru Sri Damansara

Bandar Baru Sri Damansara

Year

Land Area (sf)

Built-up area (sf)

Transacted price (RM)

Transacted price (RM psf)

Tenure

1,302

785 – 780

580,000 – 675,000

403 - 476

Freehold

1,302

785 – 780

615,000 – 663,000

430 - 467

Freehold

1,650

1,232 – 1,506

895,000 – 1,180,000

482 - 642

Freehold

1,647

1,343 – 2,179

900,000 – 1,110,000

481 - 568

Freehold

3,154

2,658

1,200,000

279

Freehold

3,154

2,658

1,300,000 – 1,400,000

311 - 343

Freehold

Type of property Single storey terraced house Single storey terraced house Double storey terraced house Double storey terraced house Double storey semi-detached house Double storey semi-detached house

2015 2016 2015 2016 2015

Bandar Baru Sri Damansara 2016 Source: Nawawi Tie Leung

RECENT TRANSACTED PRICE OF HIGH RISE RESIDENTIAL PROPERTY IN BANDAR SRI DAMANSARA Scheme Paradesa Rustica

Paradesa Tropica II

Year

Type of property

2015

Condominium

2016

Condominium

2015

Condominium

2016 Sri Damansara Tower

Bandar Baru Sri Damansara

Condominium

2015

Condominium

2016

Condominium

2015 2016

Apartment

Built-up area (sf)

Transacted price (RM)

Transacted price (RM psf)

955

370,000 – 400,000

387 - 419

1,145

460,000

402

955

370,000 – 400,000

387 - 419

1,032 – 1,160

440,000 – 480,000

426 - 414

800

352,000 – 385,000

440 - 482

1,120

500,000 – 570,000

446 - 509

800

420,000

525

1,120

503,000 – 560,000

449 - 500

1,425 – 1,610

760,000 – 870,000

533 - 540

914

425,000

465

1,097

410,000 – 435,000

373 - 396

914

410,000 – 438,000

448 - 478

1,044

420,000 – 430,000

402 - 412

861 – 1,023

357,000 – 450,000

415 - 440

861 – 914

366,000 – 409,000

425 - 447

Tenure

Freehold Freehold Freehold

Freehold

Freehold Freehold Freehold

Source: Nawawi Tie Leung

RECENT TRANSACTED PRICE OF COMMERCIAL PROPERTY IN BANDAR SRI DAMANSARA Scheme

Year

2015 Bandar Baru Sri Damansara 2016

Type of property

Land area (sf)

Built-up area (sf)

Transacted price (RM)

Transacted price (RM psf)

Double storey terraced shop office

1,755

3,179

1,150,000

510

Three storey terraced shop office

1,765

4,978

2,000,000 – 2,500,000

879 – 1,163

Double storey terraced shop office

1,760

3,179

1,250,000

566

Three storey terraced shop office

2,088

5,227

2,200,000

828

Source: Nawawi Tie Leung

40 | MARCH 2017 www.propertyinsight.com.my

Tenure

Freehold


RECENT TRANSACTED PRICE OF INDUSTRIAL PROPERTY IN BANDAR SRI DAMANSARA Scheme

Bandar Baru Sri Damansara

Year

2015

2016

Type of property

Land area (sf)

Built-up area (sf)

Transacted price (RM)

Transacted price (RM psf)

Single storey terraced factory

1,200

1,200

930,000

705

Double storey terraced factory

1,194

1,800

975,000

695

Double storey terraced factory

1,200

1,800

940,000

663

Tenure

Freehold

Source: Nawawi Tie Leung

MOST RECENTLY LAUNCH AND FUTURE DEVELOPMENT IN BANDAR SRI DAMANSARA Developer Name

Project Name

Type of property

Ivory Progression Sdn Bhd

Amanja Semi-D Suite @ Bandar Sri Damansara

Serviced Apartment

TA Global Berhad

Ativo Suites

Mixed Development

Selling price (RM)

Built up area (sf)

"567,000 – 2,583,600 780 – 2,419 (727 – 1,068 psf)” -

Tenure

Completion date

Freehold

January 2018

-

(Future Development)

-

Source: Nawawi Tie Leung

BSD have increased ten-fold in the last 20 years, it still is a very good investment for those who start buying now, as buyers could expect a healthy capital appreciation for the next 5 years. And the good news is, in 5 years’ time, not only is Damansara Avenue expected to be completed; the building of Duta - Ulu Klang Expressway phase 2 (DUKE 2) and the Sungai Buloh - Serdang - Putrajaya MRT Line will also be completed. DUKE 2 will relieve traffic on the heavily used LDP and offer alternative routes to and from downtown. Cutting the travelling time

drastically, it will turn BSD into a much more favourable place to live. On the other hand, the Sungai Buloh - Serdang Putrajaya MRT Lines will offer residents a quicker way to get to KLCC and Tun Razak Exchange (TRX), thus continue to sustain the demand for properties in BSD too. Land & General Berhad, sales & marketing department & business development, head Chee Kok Keong said their latest development of 2nd phase of Damansara Seresta will be launched in Q2 2017. It is on a 6.2acres land with 452 units with layout sizes from 1260-

3196sq.ft. It includes generous provisions of facilities at level 8 podium and on 43rd level. As for Damansara Foresta, Chee remarked “When Damansara Foresta was first launched, the average selling price was 430psf. Now completed and handed over to purchasers in early 2016 and averagely selling at RM550-600psf. Sub-sales transaction have been active as prospective buyers appreciate the concept and design of Foresta Damansara and the nature of forest surrounded the development,”.

YIP ZHEN HAO, Registered Estate Agent, Cornerstone Realty In 2016, 91 transactions were recorded for landed properties in BSD, which is translated into one of the highest number of transactions in Kepong area besides Desa ParkCity. BSD is favoured because of the relatively lower density compared to elsewhere in Kepong. This year, we expect the prices for landed properties and old condominiums to remain stable. In the future when the additional developments are completed, there will still be much room for value appreciation as most of them are freehold properties priced at over RM500 psf currently. Moreover, with good connectivity such as the improved ingress and egress, there will certainly be plenty of demand in BSD. AIDA MUSTAFFA, Senior Real Estate Negotiator, The One Property International Sdn Bhd I foresee there will be a significant population growth, especially when Damansara Avenue is fully completed. Even now, with Ativo SOFO and 8trium, BSD is already highly appealing to the young urbanites and working professionals. Damansara Avenue will no doubt complement the growth of BSD and that is the key to price appreciation in the coming years. Those who bought into the area when in its earlier days and are keeping their property are happy to know that they’ve made a great investment.

www.propertyinsight.com.my MARCH 2017 I 41


INVESTOR NEXT DOOR

BEAUTIFUL INVESTMENTS FOR A BRIGHTER FUTURE Buy the right property to enjoy positive ROI BY: MAGES PV LINGAM

42 I MARCH 2017 www.propertyinsight.com.my


INVESTOR NEXT DOOR

D

r Azizul Azli Ahmad, a young and spruced lecturer with University Teknologi Mara (UiTM), voiced out confidently that ‘We are the creator of our own destiny’. Graduated with a diploma in Interior Architecture, he has worked with several interior design agencies and architectural firms in Kuala Lumpur before pursuing his doctorate studies in the same discipline from the Faculty of Built Environment, University of Malaya. These golden experiences were gathered from the opportunities received when he was crafting the interior architectural design of Kuala Lumpur International Airport (KLIA) as well as while working on show houses, boutiques and with advertising agencies. His pursuit for intellectual curiosities and indulgences in academic research drove him to complete his postgraduate studies at the Bandung Institute of Technology (ITB), Indonesia. Currently, he lectures at the Faculty of Architecture, Planning and Surveying in UiTM Perak campus at Seri Iskandar. “There was nothing to shout about when it comes to my first property. In fact, it was a matter of mere coincidence, as I considered the deal was ‘just for fun’. Back then I lacked in investment knowledge, nevertheless it was a turning point in my

introduction to property investment,” said Azizul. He purchased a 1,200 sq. ft. terrace house in Seri Iskandar for RM66,000.00, in the year 2000 when he was just 25 years old. The first property for ‘investment’ was bought via a public auction held in Penang, and Azizul claimed that this could be marked as the first step of his journey in property investment. BOUGHT 6 IN A YEAR Azizul said that the seed, i.e. his initial money for his first property was not a coincidence. In area of property investment, he considered himself as a late bloomer since the awareness only came very much later when he was 35. He chuckled while he thought of that, saying that it was precisely because of that, he purchased six properties in 2012. This story ultimately was written and featured in his book entitled “Mudahnya Beli Rumah: Bagaimana Membeli 6 Rumah Setahun” (It’s easy to buy houses: How to buy 6 houses in a year). “However, the onus of starting much later was that I had quite a good amount of EPF (Employees Provident Fund) savings. By having accumulated a considerate amount under this ‘forced’ (compulsory) deposit, I managed to withdraw a larger sum from my

EPF savings to finance my investments,” shared Azizul. Currently, Azizul has been managing all the 16 properties that he owns personally, and he has a covenant with his wife to purchase two properties for investment every year. Dr Azizul said the biggest challenge he faced was to “buy the right property”. In order to make sound judgments, it requires precise analysis and perfect timing, to thwart unwanted mistakes in buying a property, because the mistakes will be a burden that jeopardise investment prospects. He opined that this would be the biggest challenge faced by any investor. As a prudent and careful investor, hitting the right deal or obtaining a good property is not as easy as it might seem to be. And this definitely demands a lot of thorough background research. TENANT MANAGEMENT IS CRUCIAL “Almost all the properties I purchased so far will be kept for personal retirement and children’s educational purposes; I do not plan to sell any of my properties because all of them are generating positive income and offering healthy cash flow,” said Azizul. He further elaborated that all his properties are residential units purchased for rental gains. Because of this, he said that he keeps a look out for development projects at strategic locations, which can yield a positive return of investments (ROI) on the long run. He revealed that at the beginning, he handled every investment and tenants’ antics personally. That eventually taught him a lot of ways to manage or handle the tenants. When it comes to rentals, strict agreement as well as careful selection of tenants play a major role in effective management. As the number of properties increased, the process required an efficient assistant or manager. “This individual will be responsible in ensuring that the maintenance, collection of rentals and other matters such as tax and regulation are taken care of, on behalf of the owner. Tenant management is crucial since one www.propertyinsight.com.my MARCH 2017 I 43


INVESTOR NEXT DOOR can neither be too strict nor too lenient,” expressed Azizul. TRANSFORM DILAPIDATED HOUSES “I started my investment ride with a lackluster and unattractive auctioned house, but then armed with adequate background knowledge in interior design, I ensured that the property was transformed into a cosy abode,” said Azizul. He said auctioned house from online portals / websites became the most regular online source of reference to aid his search for available properties. Consequently, browsing through these websites, he saw a huge number of houses being auctioned, this immediately led his imagination to run wild. He said approximately 120 houses were being auctioned daily and the chances to win one or more are always available. He was excited at the very idea to transform these unattractive, dilapidated, spooky-looking dwellings into a comfortable home so that the tenants will be ready to pay the quoted price. Azizul said “My humble beginnings in property investment was paved through auctioned properties, although I was a bit ambivalent about it at first, I became more excited when I won one of the two auctioned houses that I bade for.” He shared that Allah knew that he wasn’t bold enough, so when the first attempt was successful, it became a catalyst to strive on for next biddings. Reminiscing about the ordeal, he still feels surreal and is amazed that he has gone through all of that. However, Azizul has also had his fair share of challenges, as he purchased a property which he had no prior knowledge of. Worse still, it was bought using a friend’s funds, thus he had to part with a substantial sum as a result. He considered that part of the learning curve one has to go through in order to gain more experience, and would certainly avoid these predicaments in the future. GO FOR MASS MARKET PRODUCTS For those who wish to embark on the journey of property investment, he advised that beginners should invest wisely by starting from properties that are affordable to those earning around the median salary. Besides, he also has several top-notch tips to share: 44 I MARCH 2017 www.propertyinsight.com.my

Almost all the properties I purchased so far will be kept for personal retirement and children’s educational purposes; I do not plan to sell any of my properties because all of them are generating positive income and offering healthy cash flow” - Dr Azizul Azli Ahmad

If you do not earn much, aim to buy a small property first. Do not rush and grab a property that will cost you more than 35% of your monthly pay in instalment. Also, always ensure that the property you plan to buy costs 10% to 20% lower than the market value. For Gen Ys, they should begin with a house that has 3 rooms and 2

bathrooms. It can be purchased from the open market, because such products are mass market products suitable for a lot of buyers, thus always command a higher demand in the market regardless of the economic climate of the country. • For young investors, start with a property at the value of RM300 psf., to avoid making a wrong choice or paying for more than they can afford. A thought to ponder – the higher the first property costs, the riskier it is to manage it, because if the rental is not high enough or the price does not soar higher to offer a comfortable selling profit, the fall will be harder! • As property investment is a long-term investment, flipping will be very risky in this economic climate, thus is not advisable at times like this. Also, property will not be a good instrument for investment if we do not pay attention to details. In conclusion, Azizul opined that this year we are still bestowed with a “Buyer’s market”, which is a good news for property investors. As such, he is still holding on to the established aim of purchasing two properties a year, and hoped that those who are new to the market can kick start their research as soon as possible.

PROPERTY INVESTMENT PROPERTY 1 Location

Bandar Baru Seri Iskandar, Perak

Property type

Residential

Purchase value

RM63,000

Market value

RM130,000

Price psf

RM52.50

Rental per month

RM750

Rental yield

14.28%

PROPERTY 2 Location

Cyberjaya, Selangor

Property type

Condominium

Purchase value (2011)

RM429,603

Market value (2016)

RM482,700

Price psf

RM463

Rental per month

RM2,500

Rental yield

6.98%


SMART HOMES:

AN INTEGRATED PART OF YOUR HOME Secure and comfortable living now at your finger tip BY: MAGES PV LINGAM

46 I MARCH 2017 www.propertyinsight.com.my


Primus Lim

H

omes are becoming smarter nowadays to meet the unlimited desires of occupants to have apt security, comfort, as well as effectiveness and efficiencies in everyday life. Safety features are marketed by popular brands in town as part of the construction of residential and commercial projects. As more and more people are worried about the crime, safety devices are becoming a requirement for homes in various cities. To make it easy for home dwellers to install these devises themselves, technical support and product specifications are provided for those who are equipped with the basic skills and knowledge. A survey conducted by Coldwell Banker Real Estate Smart Home last year revealed that the original thought of smart homes would be finally going mainstream in year 2020, was beaten as the time might come sooner than estimated, since the poll of more than 4,000 adults in the United States revealed that the homeowners are willing to fork out extra to enjoy the benefits of

smart systems in their homes. It also highlight that 70% of people with smart home technology confessed that buying their first smart home product has propelled them to buy more in the future. Smart home systems nowadays can help the homeowners to take care of appliances automation, surveillances, home care, energy conservation and more. Such systems have attracted the millennials and the well-to-do families to maximise their living comfort by modernising their homes. One of the projects utilising the smart home system is ‘Field of Gold’ by Primarc Developemt (M) Sdn Bhd in Rawang, consists of gated and guarded freehold super-link garden villas. According to Primarc Development (M) Sdn Bhd managing director Primus Lim, the unique proposition which makes the 6.85 acres project attractive is the dual-tier homes that open to a four seasons botanical park throughout the year, boasting a magical landscape that creates a serene feeling within the neighbourhood. Elaborating on the thoughtful layout, Lim said that, “Primarily, the unique concepts of the project are the dual-tier platform, which connects the homes directly to the park, where pedestrians would not come across motorised vehicles while visiting the park. The homes are equipped with smart security system, which allows the home owners to have complete

control over the safety features of their homes.” Lim remarked that to enter the neighbourhood, the guests need to identify themselves via a monitor installed at the guardhouse. However, the guards are not empowered to open the gates to allow the visitors in, only the residents they are visiting can authorise their entry. With such a system in place, the go ahead for visitors to enter can only be given by the residents through the monitor in their homes. This integrated monitoring system is capable of recording all the entry and exit information for 15 years. A bar code will appear on the monitor, allowing the visitors to scan while entering and exiting the neighbourhood. STATE-OF-THE-ART FEATURES “The project is bestowed with safety features such as the digital locks that are activated or deactivated by inserting passwords through mobile devices. For instance, if a cleaner is to enter the house, a temporary password will be given, which will invalid after her work is done,” said Lim. When asked about the cost of incorporating such communication systems, Lim stated that the cost has been absorbed into the project price, thus only the monthly operational charge for server usages will be generated. To avoid disruptions, Primarc Development has prepaid the state-of-the-art server service upfront for 30 www.propertyinsight.com.my MARCH 2017 47


years in, hence none of the costs will be borne by the home buyers. Just like other devices, the fibre optic cables connecting the server and the intercom are fully owned by the project too. The owners will be issued with access cards to enjoy an array of customisable features. In case the owners are going overseas, the access cards can be disabled. If there were suspicious changes, an alert will be issued and sent to the home owner. The home alarm system also comes with vibration sensors and panic buttons where an alert message will be transmitted whenever it is pressed. All these are provided by the developer to ensure that residents will enjoy the highest level of comfortable living. Currently, there are several smart home system available in the market. For those looking for a smart home system that runs on the latest wireless technology, they can opt for those offered by Viz Interactive Sdn Bhd, which features a brain and backbone produced by a well-established European international brand, Fibaro. Viz Interactive’s managing director Ricky Tjandra said that in the past, conventional smart home system will cost a bomb. However, with Fibaro and VIZ integrated systems, people can now actually afford a basic smart home system as low as the price of an iPhone! Believing that everyone should have smarter, safer homes, the company envisages to transform any home into a smart home, providing people with a more secure, convenient and economical solution. INNOVATION AND INTEGRATION Based on the current trends, the smart home systems will be a necessity of the future. Viz Interactive sales and marketing director Derek Chong said, “Smart home is growing and just like cars which all will eventually have power steering and power windows, smart home too will be a norm in future homes.” Property developers are realising the importance of smart home system as a unique selling point. With many new developments now launching with smart home systems and many more jumping on the bandwagon, Viz Interactive is currently working with developers to build houses that incorporate a basic smart home system. Ruma Automation’s Director Jeremy Beh, the distributor of Fibaro products in Malaysia highlighted that Fibaro has produced many innovative devices. Featuring designs that are aesthetically pleasing, Fibaro products has also won numerous awards such as CES Innovation Awards, as well as IF Design Award. As there are so many brands offering different smart appliances in the market, integration is 48 I MARCH 2017 www.propertyinsight.com.my

Ricky Tjandra

Derek Chong

a need to most homeowners. Derek Chong remarked that, “VIZ Interactive comes in here to customize and integrate different preferred brands for homeowners, making it a brand agnostic solution. The integration is made possible with Z-wave certified devices and creates a harmony in the smart home system.” Voice control has been popular since the launch of Amazon’s voice assistant Amazon Echo, or is also known as “Alexa”. Amazon had sold millions of Echo, forcing competitor like Google to launch their version of voice assistant, Google Home. Through the Fibaro system, VIZ Interactive can now provide integration with both Amazon Echo and Google Home, to control all your smart appliances at home. SECURITY CONCERNS Concerns for security is shared by many smart home systems users. With Web Application Firewall (WAF) and Anti-Distributed Denial of Service (Anti-DDoS) system, the access to your home and data are protected by the highest level by Fibaro, which encrypts communication using the TLS protocol and passwords. The myth regarding smart home systems, which claims that wired systems provides a more stable connection compared to wireless ones is absolutely unfound. The Z-Wave protocol runs on a mesh network which is also a self-healing network, so that your devices work seamlessly and has higher fault tolerance. The network is automatically healed when there are failed devices and it will reroute to the most optimum network by itself. Home owners equipped with smart home system can have the advantage of knowing what goes on in their home anywhere around the globe. Sensors which records data of entry and

Jeremy Beh

People can now actually afford a basic smart home system as low as the price of an iPhone ” - Ricky Tjandra

motion, camera which shows live footage, and smart security features to scare away intruders, as well as alerts on your family members’ mobile phones are all part of the smart home wonders. Derek added that, “By installing a smart home system, the home owners will enjoy various benefits including convenience, efficiency, time saving, cost saving as well as energy conservation. Home buyers and certain business entities such as hotels, Airbnb accommodations or homestays usually install user-friendly wireless integrated devices to control the lock system, sensors, curtains, TV, or air-conditioner. People might think that installing a smart home system causes a lot of mess in the house and needs many weeks of installation. Viz Interactive is able turn your current home into a smart home with its wireless technology in a matter of days, without the hassles of re-wiring and messy hacking. As the system offers a comprehensive smart home solution based on your needs and budget, Ricky says that, “Start by implementing a small section of your house with our smart home technology, and you will realise how much you love it.”


SMARTER, SAFER HOME

Lighting

4 in 1 sensor

Air - Cond

Gesture control

Door/ Window sensor

Voice activated control

Multimedia control

Curtain / Blinds control

CCTV & Alarm Intergration

VIZ Interactive presents to you the latest wireless European smart home technology. We assure you that it is the most advanced, affordable and innovative solution that will make your home a smarter, safer and more comfortable place to live in. Our single system of integrated hardware and software creates endless possibilities of smartness to your home. We are a team of subject matter experts who are fully capable in customising and automating your home to your utmost satisfaction.

visit our

SHOWROOM Email : enquiry@viz-interactive.com

Showroom address F-13A-18, Pacific Place Signature Office, Jalan PJU 1A/4A, Ara Damansara, 47301 Petaling Jaya, Selangor, Malaysia. Tel : +603 7831 8067

www.viz-interactive.com


ROOKIE INVESTOR

VERSATILITY: THE GATEWAY TO SUCCESS Creating your own opportunities to succeed BY: FELICIA SOON

8 Dorm Students

A

n epitome of dynamic entrepreneur success, Zyro Wong is a Celebrity Speaker and Social Influencer who has always been a sought-after name for events and endorsement. He utilises creativity, leadership and teamwork to implement and execute solutions that enhance customer value. As the Founder of ZW Consultancy Sdn Bhd and CEO of Sri Indah International Language Centre (SILC), Zyro holds extensive amount of knowledge and experience in managing projects concerning business consulting, marketing, events management, human resources and many others. Paired with excellent analytical, organisational,

50 | MARCH 2017 www.propertyinsight.com.my

logical and creative skills, he has the ability to identify problems, develop and implement practical solutions to meet business needs with a critical eye to detail. Focused with a natural ability to think outside the box, he identifies opportunities, develops focus, and provides tactical business solutions to close deals. To add another feather to his cap, Zyro himself is also known to be a dynamic speaker, trainer and presenter, skilled in employing clarity and innovation to deliver effective presentations to diverse audience at all organisational levels. His excellent communication and proven ability to manage and complete various projects to the highest standard has made him competitive, by nature with a big picture focus,

striving for perfection. Thus far, this amazing individual loves what he does and that makes him more apt to be successful. Following a recent interview, Zyro recounts to Property Insight on how his analytical and logical skills got him involved in property investments and how he identifies opportunities and tactical business solutions to sustain his property investments. A reliable and hardworking professional with a practical hands-on approach, Zyro always perseveres to achieve the unsurpassed results. He bought his first – a high rise penthouse of 3,000 sq. ft. in Setapak, Kuala Lumpur back in 2009 for RM500,000, and sold it for RM700, 000 in 2012. Originally that property


was a Rent to Rent, where Zyro rented it from a landlord, where the landlord received a fixed guaranteed rent. LOOK FOR TENANTS’ PREFERENCE Of course before buying any property, you will need to do a lot of background research to know more about the town or city your target property is located at. This is mainly because investors tend to make poor investment choices by mistaking the area their investment property is in to be just like another community they are familiar with. Hence it is important to learn the essentials, for example getting a sense of the traffic by studying the access routes to the highways nearby. You can also assess how good are the public transportation or shopping options available, or if there is any mature townships with good schools around, because these factors are important to your potential renter or buyer. One should also ask if the area are appealing, and do the nearby properties look well maintained? If you do not like what you are seeing, there is a high possibility that your renter or future buyer of the property won’t either. Zyro also shared that he likes to emphasise on infrastructure when it came to sourcing for new properties. For example if you are buying a property near a school, college or university, you will be targeting to rent to students, so you will also have to look into what are the upcoming future developments within the neighbourhood, to ensure that your property will always remain as the preferred choice of potential tenants. Also, with more amenities and convenience dotting the township, one can be assured that the rental will rising steadily in tandem with the overall development. Of course, when you feel that a particular property is the one for you, you should also look at other similar properties nearby before making an offer. Ask your realtor to show you several options within your price range, including the ones that you don’t like, so you can assess the strengths and weaknesses of different neighborhoods, and have a better sense of your target property’s value. UNDERSTAND THE FUTURE DEVELOPMENT “I seize the opportunity when it is the right one to invest in,” says Zyro. For 8 Dorm at Jalan Ipoh, Kuala Lumpur, I converted a bungalow into a hostel by renting ensuite rooms (rooms equipped with bathrooms) to house students from Chong Hwa Independent High School.

Wardrobe / outfit by Lawrena from Less Than Three Wedding

It is good to understand the potential of your property, and see whether you can transform it into something that generates healthy cash flow – Zyro Wong

Currently the business of renting rooms in 8 Dorm is already in its fourth year. Other services provided in 8 Dorm are home-cooked meals, homework monitoring, laundry service and English Language Programme,” Zyro shares. Looking back on his investment in 8 Dorm, Zyro says he does not have any regrets in making that big decision, and shares that as the Principal of 8 Dorm, he is looking forward to expanding the almost full boarders by opening up a similarly themed dormitory within the area or in Klang Valley.v He also elaborated on the importance of getting some insiders information. This applies to anyone looking to buy a property, as they need to know what would be coming up. For example, when you first buy a new property, you might not realised that down the road, they are going to build a flyover right in front of your property for traffic dispersal. So getting some undisclosed information on what to expect in the next few months or years after a development has been launched is important, as you do not want something to block the visibility of your property, or to disturb your peace of mind while living there. Buying a property does not necessarily mean

it would be for owner’s occupancy, because we can always rent it out or even sell it off when the time is right. Talking about his future plans, Zyro reveals that he will focus on buying more properties in Ampang, Sungai Besi, Subang Jaya or Puchong as these locations are considered the hot spots for high capital appreciation and good rental yield, due to its existing infrastructure and easy connectivity via rapid transit and accessible highways. Lastly, Zyro believes that smart investors always look for ways to be creative when it comes to property investments. While it is good to buy or invest in properties during the market down turn, new investors should also look into investing in properties that will generate more income within the first 3 to 5 years as their main objective, because with a healthy cash flow, you can gradually expand your investment portfolio. “For me, the best strategy is buy to rent, as the biggest benefit of owning a rental property is that the tenants will provide you with a direct income stream. Those monthly rentals will go straight into your bank account, ideally more than offsetting any expenses for the month, and providing you a higher income for future investments,” concludes Zyro. www.propertyinsight.com.my MARCH 2017 I 51


INDUSTRY INSIGHT

PROPERTY HUB –

GUIDING LIGHTHOUSE SHINING EVER-BRIGHT Spearheading the Mission of becoming an Outstanding Agency BY: MAGES PV LINGAM

P

roperty Hub was founded in 2010 by a few founding partners who are passionate in property, including experienced veterans as well as young and energetic property enthusiasts with the necessary skills. By staying true to the vision and mission, Property Hub has successfully maintained a high-level professionalism while dealing with the clients, and earned an excellent reputation in the market. The agency started their base office in Mont Kiara, Kuala Lumpur and focused on high-end residential properties around Mont Kiara, Sri Hartamas, Damansara Heights, Bangsar and KLCC vicinities. Now, the agency has expanded their operation into other parts of Klang Valley as well as the city of Kota Kinabalu, Sabah. The executive director, Wan Choy Heng, 52 | MARCH 2017 www.propertyinsight.com.my

started his career in 1989 as a valuation executive with Raine & Horne International Zaki and Partners Sdn Bhd. He launched a full-time career in real estate in the year 1995, and joined Property Hub in 2011, a year after it was established. THE LIGHTHOUSE AGENCY “Since inception, Property Hub’s goal was to be the ‘Lighthouse Estate Agency’ in the neighbourhood. We wanted to be establish ourselves as ‘The Estate Agency’ at those neighbourhoods that we operated in. We believe in serving our clients in the utmost professional manner at every assignment, and strive to become the only ‘Advisor’ to our clients in every aspect of his property needs,” said Wan. To achieve these goals, the agency has formulated its guiding philosophy, consisting the vision and

mission, as well as their motto of “Passion, Integrity, Teamwork.” With the high aspirations, Property Hub has attracted various like-minded talents to be part of the team. “Our 3 offices namely the Headquarters in Mont Kiara, KLCC and Kota Kinabalu are running independently on its day-to-day operation by its respective management team, based on a common system prescribed by the headquarters, under the supervision of highly qualified registered estate agents,” explained Wan. Currently, Property Hub boasts a headcount of 128 full-time staffs, about 67% of them have been with the agency faithfully for over 4 years. OVERCOMING CHALLENGES One of the biggest challenges Property Hub faced at the initial stage was to convince the


new recruits to subscribe to the company’s core beliefs, and to march onwards with the vision and mission of the agency. As no real estate agency can operate without real estate negotiators, training and motivation is of paramount importance. “In our recruitment programmes, we emphasise on full time commitments, education with trainings, as well as career advancements,” reiterated Wan. When the market was booming between 2010 and 2013, the market was plagued with illegal brokers and part-timers. Most candidates back then were those looking for a part-time vacancy with a view of making a quick buck out of the flourishing market conditions. Hence the recruitment for right candidates was a bit tough. Nevertheless, Property Hub persevered and held onto the original belies of the founding partners steadfastly, and invested more resources into the grooming and strengthening of the existing pool of talents through regular in-house education and training programmes. The staff members were also encouraged to participate in external seminars and training programmes held locally and abroad. The intention was to grow their confidence and belief in real estate business as a long-term career. Besides, Property Hub also grew their brand name continuously. One way to achieve that was by participating in the events, roadshows and seminars organised by The Board of Valuers, Appraisers and Estate Agents Malaysia (BOVAEA) and Malaysian Institute of Estate Agents (MIEA) frequently. Gradually, the efforts bore fruits and the business began growing from strength to strength. Wan continued, “My fondest memory was the instant we won ‘The Best Residential Agency (Medium Size) of the year 2012’ in the National Real Estate Awards by MIEA. It gave us a great comfort and endorsement that we had done it right.” That award also motivated all the staffs to uphold their core values and beliefs in everything they do. Eventually, they won the same award again in 2013, 2014, 2015 and 2016. To ensure that all the staffs are equipped with top-notch business knowledge and negotiation skills, the real estate negotiators are encouraged to attend the regular inhouse Quick Start workshops. Besides, the agency also organises the 3-day Property Hub Success Course (PHSC), which is open to the public, which is accredited with

10 Continuous Professional Development (CPD) points by BOVAEA. THE WAY FORWARD To better position itself for the future market conditions, Property Hub has drawn up a concrete 3-year plan to achieve greater success, for instance: • To achieve the status of Large Agency by MIEA standard by June 2017, for this purpose the total number of real estate negotiators will have to grow to 150; • To open 2 other branch offices within the years of 2018 and 2019, tentatively in Bangsar and Taman Tun Dr Ismail, Kuala Lumpur; • To double the headcount to 250 fulltime negotiators by end of 2019. Previously, it took them 6 years to grow by about 120 staffs; but now with infrastructure, core team personnel and branding in place, it should take just half the time to grow by another 120 staffs. Wan remarked that, real estate negotiators spend a lot of time dealing with people who are related to the subject property, for instance the owners, landlords, buyers, tenants, the appointed solicitors, bankers, co-agents and more. Therefore, the importance of possessing good inter-human relationship cannot be overemphasised. Besides, the positive mental attitude, the eagerness to help solving the clients’ problems, the willingness to learn the latest market updates, as well as the readiness to serve with honesty and integrity are all crucial in making the negotiator’s career a success. MAKE INFORMED DECISIONS On the market outlook, Wan recounted that, “We ended 2016 with no news of new policy forthcoming in 2017 to stimulate the slow property market. In the recently released National Property Information Centre (NAPIC) report, both the total number and total value of the property transactions recorded a doubledigit reduction for Q3 2016. For Q4 2016, we generally do not expect to see much improvement either.” Based on such conditions, Wan felt that the 2017 would not be an exciting year for property market. Having said that, he predicted that there would be many

I anticipate that the general sentiment will improve towards the end of 2017, when more announcements on the progress of mega projects, such as MRT2, LRT3, Bandar Malaysia, TRX, HSR and some of the projects signed with China companies are being made in stages ” - Wan Choy Heng

successful launches of affordable housing in 2017. Wan further elaborated that, “I anticipate that the selling price of landed properties at mature neighbourhoods in Klang Valley with good connectivity, infrastructure and amenities to stablise, due to the high demand for owner occupancy. On the other hand, the rental market around new LRT and MRT stations will also be active, because of the improved connectivity.” For those who are beginning a journey in investment, Wan strongly advocated that before getting into first purchase, one should learn about the market and identify the type of property targeted, to ensure that the targeted property is within one’s affordability. Wan shared that, “Invest your time to study the price movements of the type of property you are interested to buy at the targeted location. Challenging time or not, there are always an opportunity to get a good buy.” When asked to elaborate on his belief that everyone should consider investing in property as soon as one can do so, whether it is for own occupancy or for rental gain, Wan stressed that, “I truly believe that property investment over a long period is one of the safest ways to accumulate wealth!” www.propertyinsight.com.my MARCH 2017 I 53


PERSONALITY OF THE MONTH

A MAN OF WISDOM No Shortcuts to Success BY: FELICIA SOON

54 I MARCH 2017 www.propertyinsight.com.my


PERSONALITY OF THE MONTH

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atuk Wira (Dr.) Haji Ameer Ali Mydin is the managing director of homegrown hypermarket chain Mydin Mohamed Holdings Berhad. He is the son of the founder, Mr Mydin Mohamed Bin Mydin Ghulam who founded the brand name in 1957. From a small shop in Kota Bharu, Kelantan in 1988, Mydin has grown rapidly to become a hypermarket chain with outlets across the nation. The rapid growth over the last 30 years speaks volume for itself. Today, Mydin group has got more than 300 stores. Datuk Wira Ameer delightedly revealed that, “I am very sure at the beginning, we were doing business amounting to RM1 million or RM2 million a year, but now we are having a turnover of over RM3 billion dollars a year. So I think if you look at the numbers, from 2 shops to 300 shops. From RM2 million sales to RM3 billion dollar sales. But those are just numbers and numbers are relatively less important to us.” Since childhood, Datuk Wira has followed his father’s business at the store, and where his father trained him to be more disciplined and thrifty. It turns out that the attitude has become an important principle in his life and his business. “We are already paying for the livelihood of 40,000 people and I think that is quite an achievement. But the bigger achievement is what good can we do to the community. You must have heard of a lot of CSR (Corporate Social Responsibilities) projects that we do. We have not been actively publicising our CSR efforts. We don’t hand over any mock cheques to the beneficiaries, but we do everything from the heart for the community. We don’t do it for the publicity because the objective of the CSR is giving back to the community,” says Datuk Wira. Today, Mydin Mohamed Holdings is a local retailer which is known for its variety of business concepts, such as hypermarkets, mini market, emporiums, bazaars, Mydin Mart, MyMart and Kedai Rakyat 1Malaysia (KR1M), with branches in almost every state. Besides, Mydin Mohamed Holdings has also partnered with Malaysia Retail Chain Association (MRCA) to give more support to the field of wholesale, retail and distribution in the country. MRCA is the leading retail association in Malaysia comprising over

Go with the wind, because to go against the wind is very dangerous” – Datuk Wira (Dr.) Haji Ameer Ali Mydin

200 chain retail stores and franchisors, with nearly 10,000 outlets throughout Malaysia. With such a wide network, MRCA attempts to create 100,000 jobs to enhance the country’s economic growth as well as social wellbeing. ATTRACTING NEW CUSTOMERS Despite being a billionaire, Datuk Wira shares that the good thing about being rich is that you can help people who are less fortunate. By offering employment to someone, or even helping an entrepreneur to succeed, we are actually saving lives and building the society. “I think it is important to help a lot of young entrepreneurs to succeed in business. We share with them our expertise and experience, such as where to source for merchandise, where to find certain products, and we have also sent our talents to China, India, Vietnam and other countries where we import our goods. It might sound foolish telling the people where to buy things, but I have always believed that if you share things with people, you grow faster because when you share, people benefit and people don’t forget that you have helped them in some way and even if they don’t help you materially, they will keep you in their prayers. And in that way, all of us benefit,” says Datuk Wira. As a renowned entrepreneur, Datuk Wira has also been invited to be a speaker at many conventions. “I have given many talks, since I believe we grow by sharing experience together. If the sharing can benefit others, it is definitely worth to share the experience that you have gone through. As the managing director of Mydin Group, I am also a buyer so I am actually the one who bought many of the products that we

are selling here, because in business, it is very important to remember that the selling of any product will not be difficult, when you buy the right products. So the buying is more important than the selling,” Datuk Wira shares. When it came to buying his first shop in the Masjid India shopping district, Kuala Lumpur, Datuk Wira chose a building that used to be occupied by a bank. “When I wanted to buy the building, I ask my father what was his opinion. He told me to look at the number of people walking on this side of the road, as compared to the other side of the road. Never buy any building where people don’t walk. When you see a road, there are always 2 sides. People tend to walk more on one of the sides, so we must observe carefully. You should buy a building where there are a lot of pedestrian traffic because they are your customers. LOVE YOUR WORK Going into the subject of work life balance, Datuk Wira shares that there is no such thing as a balance of life. “You cannot have two things in your life. You can’t say, I want to spend a lot of time with my family, I want to travel around the world, yet I also want to be very rich. I think if you ask those who have grown their business the hard way, or even people like me, we had to work hard and come up slowly. I did not have a balance in life. Nowadays we see a lot of online entrepreneurs and Facebook entrepreneurs, who are going from rags to riches in 3 to 5 years. I hope and pray that they can keep their riches. It is very nice at a young age if you can spend time with your family, travel extensively or go back home early. But I couldn’t do this 10 or 20 years ago. If you www.propertyinsight.com.my MARCH 2017 I 55


PERSONALITY OF THE MONTH want to seriously succeed in life, you really have to work hard. There is no such thing as a 9 to 5 job. We work every day and more importantly, of course you must like your work. When people asked me back then when I have my holidays, my answer would be, my work is my holiday. If I enjoy it, it is not work. If I don’t enjoy it, it is work. So if you treat your work as a holiday, then you are a very happy person, and I think that is how we grow our career,” Datuk Wira elaborated on his attitude towards career advancement. When asked about his leadership and management skills, Datuk Wira humbly stated that he did not consider himself as a leader. “But if you do your homework, and look at the meaning of the word Ameer in Arabic, it actually stands for leader. So maybe my parents know what name to give. I think if you say you are a good leader, at the end of the day a good leader must have people following you, and theoretically speaking, willing to sacrifice their life for you. A leader is someone who can lead the people to do the things that he thinks is right. It doesn’t matter what the world thinks. My hope is that all leaders are good people. That they will not hurt people, that their philosophy will always be to help people. To grow the community, to grow the country, to create wealth for people and help those who are underprivileged,” says Datuk Wira. When it comes to management style, everybody who is a leader will probably has his own style. For example, in the mornings you might find Datuk Wira downstairs in the hypermarket checking the price, moping the floor because he is more of a micro managing leader. “Micro managing is something that I do quite well. A lot of chief executives, a lot of managing directors don’t mop the floor, because they don’t have to, but I like to know on what is really happening down there. So mopping the floor is something that I actually enjoy, because I can listen to the staffs, and the staffs actually know what is sellable and what is not. It is not necessary that your manager might know, so it is best to hear it from the source,” exclaims Datuk Wira. NOT DUE TO GST On the subject matter of rising costs, Datuk Wira states that people are not well informed, 56 I MARCH 2017 www.propertyinsight.com.my

and there is not much explanation on Goods and Service Tax (GST). “Many people that I have spoken too, think that prices are going up because of GST. However GST does not raise prices. Frankly if you understand the implementation of GST, you will know that the 10% sales tax levied on certain good previously has been removed. In Malaysia a lot of things were subjected to sales tax. Many people are not aware of the sales tax that we have been paying. When you pay, you are paying a price, so for example if my cost is RM10, there is a 10% sales tax when I import the goods or when I buy it from a manufacturer, and they will quote me RM11 when actually the cost is only RM10. As they already quoted me RM11, I will mark up the price by RM2 dollars and sell it at RM13. Now that the RM1 is no longer there, my cost returns to RM10. Then I mark up by RM2, and the selling price becomes RM12. With GST, I will add another 6%, so the price will stand at RM12.72, which is still lower than RM13. As a result, the price goes down instead of going up. Unfortunately, as our currency has depreciated massively, we feel the pinch,” says Datuk Wira. “GST is definitely more beneficial to us, because what happened at the end of the day is that the person paying the GST is the customer, who consumes the goods and services. So say for example, if you earn a salary of RM3,000, and you spend RM1,000 on groceries, where RM500 are spent on basic items such as rice and vegetables, and another RM500 you buy sardine, Milo, T-shirts or blouse, you are actually only paying GST on RM500 which with the current rate of 6% is only RM30. That means you are only affected by RM30. But why I say it is a fairer system, because let’s say I earn RM30,000, but my groceries is about the same as you, but my other expenses are higher because I buy more clothes, I go for more entertainment, I go to luxurious restaurants more often. Everything I spend, I have to fork out an extra 6% for GST, yet only RM500 of your purchases are subject to GST. So who is paying more GST, you or me? Obviously me! And when I pay the 6% GST, where does the money goes to? It goes to the government. When the government get the money, the money is used for the people, so when the money is used for the people,

who benefits? If the government use the money to fix the MRT or LRT for you, whose benefits? You or me? You benefit because you use MRT. I got my driver. And when the government use the money from the toll to repair the roads, who benefits? You benefit because I pay the toll more often. Most of the expressways in Malaysia are tolled, so the concessionaires use the toll collected to pay for the expressways, and I use the expressways more often, so I pay more than you. This is assuming that at the end of the day, the government uses the money productively,” Datuk Wira adds. TOUGH MARKET AHEAD When it comes to facing the challenges ahead amidst the economy downturn, Datuk Wira shares that while the economy is not doing very well, everything depends on the perspective. “For example, who are we comparing the economy to?” As someone who travels a lot to scout for good buys, Datuk Wira has noticed that our shopping mall are busier than malls in Thailand or for the matter in Singapore and Indonesia. “But while there are more people out here buying, they are not buying as much as before, which is happening everywhere in the world, because the whole world is affected by appreciation of US Dollar. So when foreign currency appreciates, cost of goods goes up, but your salary does not go up as fast as your cost of goods. The general cost of living is said to have increased by 17%, but many people have not seen their salary increased by the same rate over the last 1 and a half years. Most people’s salary goes up 5%, 7% maybe 10% but cost goes up 17% and purchasing power goes down, hence people have less disposable income, and when you have less money, you buy less and spend less at hypermarkets. It’s a cycle. So generally the world economy is at a slowdown. But I think if you compare yourself to Europe, we are so much better. Of course if you compare yourself to what is happening in Thailand and Indonesia, their growth is higher than ours. So it all depends on who and what you are comparing to. But from the business perspective of course, none of us are happy and we hope that the government can focus more on what is happening in the country, to help the businesses and the people,” concludes Datuk Wira.


ENTREPRENEUR INSIGHT

8 HABITS OF SUPER

PERSUASIVE PEOPLE Persuasion is a skill that is instrumental to your success in life BY: FELICIA SOON

58 I MARCH 2017 www.propertyinsight.com.my


PERSONALITY OF THE MONTH

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hether you want to convince your boss into giving you a raise or win someone’s approval on your ideas, persuasion is the key element of all human interaction, from marketing to everyday dealings with friends, family and colleagues. Persuasion is a basic form of social interaction and persuasive people have an uncanny ability to get you leaning toward their way of thinking. Their secret weapon is likeability. They get you to like more than their ideas; they get you to like them. However many people make the mistake of thinking that likeability is derived from natural traits that belong only to a lucky few – the good looking, the social butterfly or the incredibly talented. But in truth being likeable is under your control and it is all a matter of emotional intelligence (EQ). Below are some key behaviours that emotionally intelligent people engage in that make them so persuasive. Something that we can all learn from to use to our own advantage. 1. They are pleasers: They know how and when to stand their ground, and yet they are constantly making sacrifices that help their cause. In other words, they are always giving in and doing things for other people that make them happy. Persuasive people do this because they know in the long run this wins people over and it’s better to be successful than it is to be right. 2. They aren’t pushy: Persuasive people establish their ideas confidently, without being aggressive or pushy. This is because being pushy will turn people off. The in-your-face approach will just create the opposite effect of sending people running for the hills. Persuasive people focus on being confident but calm. They do not appear as someone who is impatient and overly persistent because they know that if the idea is really a good one, people will catch on given time. 3. They know their audience: Persuasive people know their audience beforehand and they use this knowledge to speak their audience’s language. Whether it’s toning down their assertiveness when talking to someone who is shy or cranking it up for the energetic type, they know that everyone is different and taking note of these subtleties goes a long way in getting them to hear

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your point of view. 4. They paint a picture: Research shows that people are far more likely to be persuaded by something that comes with visuals to bring it to life. Persuasive people capitalise on this knowledge by using powerful visual imagery, and when these images aren’t readily available, they will instead tell vivid stories that breathe life into their ideas. After all, good stories can create images in the mind that are hard to dismiss. 5. They use positive body language: When it comes to persuasion, how you say something can be more important than what you say. Using an enthusiastic tone, uncrossing your arms, maintaining eye contact and leaning towards the person while speaking are all forms of positive body language that persuasive people use to draw others in, because positive body language will engage your audience and convince them that what you are saying is valid. 6. They smile: People naturally mirror the body language of the person they are talking to. If you want people to like you and believe in you, smile at them during a conversation and they will subconsciously return the favour and feel good as a result. Persuasive people know this and smile a lot to create a rapport with everyone they encounter. 7. They acknowledge your point of view: A powerful tactic of persuasion is to

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concede the point by admitting that your argument is not perfect. This shows that you are open minded and willing to make comprises, instead of ruthlessly sticking to your cause. Try using statements such as, “I see where you are coming from,” and “That makes a lot of sense.” To show that you are actively listening to what they are saying and you won’t just force your ideas upon them. This shows respect, which makes the other person more likely to consider your point of view. 8. They ask good questions. The biggest mistake people make when it comes to listening is failing to hear what is being said because they are too focused on what they are going to say next. A good way to avoid this, is to ask a lot of questions. People like to know you are listening and when you ask a clarification question or follow up question, it shows that not only are you listening but that you also care about what they are saying. Soon you will be surprised at how much respect and appreciation you are getting just by asking the right questions. In conclusion, persuasive people are adept at reading and responding to other people. They use emotional intelligence (EQ) to convince people of their way of thinking. With so many proven top performers relying heavily on their emotional intelligence, it’s no wonder that persuasive people should know these are the key behaviours to get ahead of the game.

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www.propertyinsight.com.my MARCH 2017 I 59


LEGAL

JMB DUTIES AND LEGAL LIABILITIES

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he topic although appears intimidating but unfortunately is true. In the course of practising law, I have noticed that there’s an increase of disputes involving Joint Management Bodies (JMBs) and / or Management Corporations (MCs). This is inevitable because of the increase of stratified developments and also legal awareness among the dwellers within. These issues vary and included challenging the validity of proxy holders, use of the maintenance account and sinking funds, the efficiency of managing

agents, statutory duties and so on. I have also been exposed to many operational issues faced by JMBs and MCs because at the time of writing, I am chairing 3 different JMBs. Some of these issues were trivial but some were major enough to secure a conviction for charges under misappropriation of property. Many times, the matters turn litigatious because there was lack of knowledge of the statutory duties and applicable laws on the part of the JMB. While it is close to impossible to list down

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The JMB’s duties include: 04 Insuring and keeping the building insured to the replacement value

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12 Appointing an auditor to carry out audit of accounts

16 Calling a general meeting once in each year, with no more than 15 months lapse in between.

Opening and maintaining a Maintenance Account (MA) with a bank or financial institution

13 Filing certified true copies of the audited accounts with the COB

17 Keeping minutes of all general meetings and proceedings

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03 Maintaining the common property properly

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Complying with any notice or order from the local authorities

09 Enforcing house rules

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Informing and registering with the Commissioner of Building (COB) within 30 days from the first meeting

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all the potential liabilities in this article, I will attempt to list down the most important items a JMB must be aware of. To begin with, let me list down the statutory duties of the JMB which are the most basic duties each JMB should be aware of. It has no intention whatsoever to discourage you from offering your services to the JMB. On the contrary, this article serves to provide you insights into the responsibilities, possible legal liabilities of the JMB.

Determining and imposing maintenance charges and sinking funds

07 Preparing and maintaining a register of all purchasers

10 Using the monies in the MA solely for the purposes provided in the Strata Management Act (SMA)

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Ensuring the Maintenance Account is audited

11 Preparing a balance sheet, income and expenditure statement, and profit and loss statement

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Permitting the COB (or any other person authorised by the COB in writing to act on its behalf) the access to the accounts

18 Dissolving in 3 months from the date of the first meeting of the Management Corporation

Recovering all money lawfully incurred

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Convening an EGM upon requisition in writing made by the purchasers who together are entitled to at least 1/4 of the total number of parcels registered, or upon receiving a direction in writing from the COB


Also, in addition to the statutory duties, one must take note that by virtue of the JMB owning the common area of the high rise residences, the JMB will inevitably face issues of abuse to the common area, façade preservation, unauthorised renovation, appointment of contractors and many more. These issues although appear to be

simplistic, but my experience suggests otherwise as I have come across issues where: • Common areas were abused and used to generate revenue; • Façade was converted into a big advertisement board; • Roof top was made available for installation of a base transceiver

station; • Renovation undertaken not in accordance to House Rules. With incidents like these, litigation will likely follow. At this juncture, both parcel owners and the JMB will be dragged to court to resolve the issues which at time are not the most pleasant way to seek a closure to the chapter.

This is especially so when both parties are litigating in court, their relationship is still very much professionally connected, when the parcel owners bear the obligation to pay the maintenance charges to the JMB, whilst the JMB continues to manage the entire building. There are many more areas of law the JMB must also take into cognizance, especially when JMB enters into contracts with several stakeholders, including the companies offering services of cleaning, security, lift maintenance, landscape etc. Each contract is drafted with different set of terms, and negotiation for a best outcome that will bring benefit to the community. Conversely, if a lopsided agreement was signed on behalf of JMB, JMB may then be sued one fine day (if the breach of the contract caused the JMB to suffer losses) by parcel owners for not protecting their interest because each parcel owners have an interest to the Maintenance Account and the use of the funds. Actually, this is not uncommon and I have personally did a matter when a JMB was ordered by the court to pay a sum of RM200,000 as fortification of damages to the opposing party for an injunction taken.

Many parcel owners have viewed the responsibilities of JMB a menial and easy one. In reality however, it cannot be further from the truth especially if the JMB oversees a mixed development which is very common nowadays. In fact, to take office in JMB, the person must at least be conversant with the law of contract, the law of meeting, law of defamation, law of tort, Building and Common Property (Maintenance and Management) Act 2007 (BCP,   which is now repealed), Strata Management Act 2013 (SMA), Strata Titles Act 1985 (STA) etc. The list above is by no means exhaustive and I must caution all JMB members to know what you are getting into when you offer to take office. In fact, I would go one step further to suggest that each

JMB member should attend an intensive training course for the simple reason of avoiding any unnecessary entanglement with the law in future. Maintaining a building is not an easy task. In addition to attending to the usual maintenance issues, JMB must also pay equal attention to the policies of hiring staff and payment of bonus, selecting contractors and appointing managing agents, setting key performance index, determining the assembly points in case of a fire, ensuring fire regulations are adhered to, and complying with the various newly passed legislation like the Personal Data Protection Act (PDPA) 2010. If in doubt, always consult a lawyer and get a lawyer to sit in each JMB meeting – just like how you would appoint an external auditor to audit your accounts.

ABOUT THE CONTRIBUTOR Lai Chee Hoe is a lawyer and the founding partner of Chee Hoe & Associates. Specialises in civil and corporate litigation, he has over 10 years of experience under his belt. Currently, he also serves as the chairperson for various Joint Management Bodies.

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STRATEGY

BIG DATA AND THE PROPERTY MARKET “Real knowledge is to know the extent of one’s ignorance – Confucius”

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uccess in Real Estate in Malaysia has always been won or lost based on one’s own network of agents and personal contacts with developers or sheer hard work in researching opportunities, reading what reports are available and not to forget our own perception of timing the market. Many also make decisions from friends’ recommendations or attending seminars with a promise to make millions from smart speculative bets. For the investor this makes Malaysia a

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very opaque market to invest in. There is simply no reliable data analytics available. Take Australia for example – they have a very transparent Real Estate market with many companies offering amazing analytics on property data. However things are changing and the property industry will be facing a major disruption. What has happened to finance, media, healthcare, manufacturing and travel sectors will start to happen in the property sector. The two culprits that have

played a key role in reshaping the above industries are Big Data and the Internet of Things (IoT). The amount of data in our world has been exploding, and analysing large data sets – so-called Big Data will become a key basis of competition, underpinning new waves of productivity growth, innovation, and consumer surplus – as long as the right policies and enablers are in place. Leaders in every sector will have to grapple with the implications of Big Data,


not just a few data-oriented managers. The increasing volume and detail of information captured by enterprises, the rise of multimedia, social media, and the IoT will fuel exponential data growth in the foreseeable future. In the age of IoT, the transfer of data among connected devices is much more complex than humans can handle. Big Data is the capture and analysis of huge amount of structured or unstructured data to discover trends or patterns useful to organisations. In Malaysia, Big Data is an opportunity waiting to be capitalised on. There is an urgent need to create a credible database with sound analytics for the property sector. Our current data available in Malaysia is six to eight, months behind real time, and data analytics are almost non-existent. A check on the National Property Information Centre (NAPIC) showed that the latest data on housing was for first half of 2016. In addition, the information provided is not detailed enough for a proper analysis. Fortunately, research on the property industry in picking up and it will help with further liberalisation of the real estate

industry. Major global real estate players have now invested in Malaysia and bringing their research teams with them. However, there still remains huge gaps in the information available, thus offering little predictive analysis to guide developers in decision making, as to what products they should be bringing to the market. If such data analytics was available in 2015, it would have shown that the high-end condo market was going to contract and that developers should re-focus on affordable housing. We generate new property data every day from different public or private sources – land sales, new projects, property listings, sales transactions, rental contracts, management fees, property taxes, housing loans, etc. The question is: • How can we capture, integrate and analyse all this data to provide actionable insights in real-time? • How can we offer transparent information to property buyers and investors to help them spot opportunities, reduce risks, and make better purchase decisions? • How can we create powerful insights to stakeholders in the property industry to help them improve business practices, reduce costs and increase efficiency? Here are some of the ways we can address these issues: 1. Improve the old portals and launch new property portals’ search engines to match buyers and sellers. Currently users are likely to give up halfway through their searches due to frustrations from irrelevant results and lack of insights. If you can today be presented with endless choices for hotels globally through internet portals, the same should apply for property. 2. We need to improve the data available and more sharing is needed amongst the property players. Many

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are reluctant to disclose how their launches are going and the profile of the purchasers or investors. Currently property report findings are questionable as there is no transparency on data collection and research methodologies. Similarly, it is meaningless to say a property is above or below valuation if we have no clue about the valuation methods. It is like a developer who claims that the new project is priced to sell when there is no fixed pricing scheme and agents can offer discounts at their own discretion. 3. Currently the data available fails to provide actionable insights to the developer, buyer or seller. With figures on unsold units and project pipelines, there should be a supply-anddemand correlation to show the size of different property market sectors in a few years’ time, when the next market boom or bust will take place and how long will it last. Data analytics of historical transactions can show what housing type’s buyers are looking for in different districts, the high growth areas, next property hotspots and future ghost towns. 4. Big Data can address the lack of information available and facilitate the buying process by increasing effectiveness between buyers and sellers. Predictive analytics can help to forecast home buying trends and predict profitability of upcoming projects. The lead for Big Data for the property sector should be led by NAPIC and the main property institutions – Board of Valuers, Appraisers and Estate Agents (LPPEH), Real Estate And Housing Developers’ Association (REHDA) or Malaysian Institute of Estate Agents (MIEA), to name a few. Big Data will help shape the property industry and move it firmly into the 21 century. We can’t wait.

3.

4.

ABOUT THE CONTRIBUTOR Dato’ Stewart LaBrooy is the Executive Chairman of AREA Management Sdn. Bhd. a subsidiary of AREA Advisors Pte Ltd (AREA) an appointment he has taken since his retirement as CEO and Executive Director of Axis REIT Managers Bhd (ARMB) on 31 December 2015. With a career spanning over 40 years in the industrial space, he has spent well over a decade since 2005 in heading Axis REIT and establishing REITs as an important component of the capital markets

www.propertyinsight.com.my MARCH 2017 I 63


STRATEGY

THE PROPERTY GET RICH QUICK SCHEME

64 I MARCH 2017 www.propertyinsight.com.my


T

hese days there are so many get rich schemes in the market, and all of them have not really made anyone rich, in fact it has made a lot of people poorer. This is very sad, since the only reason people get into these things is to make their already hard lives just a bit easier “if” they get rich. The promise of being rich is very attractive, with everyone thinking “if” only I could be so lucky to make it big fast, I would definitely be very happy! Well, is property investment the same? Yes it is. Property Investment, Stock Investment, any sort of investment is all some sort of a scheme. And every one gets into it to get rich or richer someday. But does it work? For me only property investment works, why? Because I eat, sleep, talk and dream about properties only. This has been an interest I noticed since I was a primary school child, I wasn’t thinking of property investment but I was so interested in the developments that I eventually bought into some of the properties I grew up wishing I had. In the recent times when the property market has slowed down, a lot of people have been hurt and burnt very badly by it. I have seen some very bad cases. So to these people, the property market is a get rich scheme. But to me, it is just a downward cycle, which I was prepared for and am taking opportunity of. I’ll give you an example of a project I bought into in Iskandar Malaysia, Johor in 2013. Yup I bought into the Iskandar region and this is the best example because everyone is saying the whole region is dying and most people are losing money there. So in 2016, when the developer called me, and told me that it was time for me to collect the keys to my 2 units I had bought there, I was worried. However, I knew I had to bring in all my knowledge and skills to make this work. And guess what? In 45 days both my units were rented out, to some very good tenants who are staying there until today, and pay all rental before the due date! (Actually 45 days was slow by my normal standard, which is 30 days) In this same project, I know other owners who got tenants only after 6 months, and are having so many problems that they keep complaining about the project. That is the exact opposite of my situation.

WHAT DID I DO DIFFERENTLY? 1) I knew my targeted tenant and their budget. As my unit was a 2-bedroom unit, the targeted tenants would be single or couple and from overseas or out of town, who come to Iskandar region for work. a. So this means that I need to fully furnish the living area and one bedroom, because they wouldn’t want to invest in the furniture nor would they have their own. b. The second room was not furnished, because they wouldn’t need it, so I don’t have to waste money. Instead, they can use it as a study or store as they choose. 2) I knew the composition of investors and owner occupying the building. a. This is important because if more are taken up by investors, then you will have more competition to rent or sell the unit at the time of vacant possession (VP). b. This meant that my units needed to be the first units available fully furnished in the building, if I were to capture the higher rental clients. Hence, the furnishing must be done before I get more competition. I rushed my furnish and electricals (all purchased in one day from 5 different

shops), and my unit was already fully furnished so fast, even the agents there were surprised that I had it up and ready .They all loved it because I had what their tenants were asking for. It all comes down to the basic questions, do you know what you are doing, and why you are doing it? I don’t claim to have done all this by myself, I have surrounded myself with the right friends that are experienced and knowledgeable in this industry. This helps a lot. I have been actually investing in properties since 2004. Honestly, when I first started, I knew very little. In fact, a lot of the things I knew were learned from trial and error. Had it not been for the people that have guided me, including my family members, friends and knowledgeable experts, I would not have gone so far and to become who I am today. So is property a get rich quick scheme? Not at all, it is a get rich slow scheme, and it works only if you know what you are doing, and do it with the right people. For me the stock market is a get poor quick scheme, but that is only because I have no idea how it works, and the few times I tried it I lost. That is why I stick to property until today! Look out for my next article for more real hard truths about investing in properties. 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.

www.propertyinsight.com.my MARCH 2017 I 65


STRATEGY

THE NEW CRITERIA FOR PROPERTY INVESTMENT

W

hether you are a seasoned or rookie investor, price, location and size are the three main criteria to evaluate when it comes to property investment. But other factors are just as important! Last December, I was invited to a New Year’s Eve celebration dinner at Dataran Abadi, a Malay reserve land housing project located at Salak Tinggi, Sepang by its developer Sin Hee Yang Group. The issues of bumiputra discount and projects built on Malay reserve land have been regularly raised in the country. Whether affirmative actions structured in such a way can truly help the most needy is of course debatable. To be honest, as the pool of

66 I MARCH 2017 www.propertyinsight.com.my

potential buyers is restricted, the appeal of properties built on Malay reserve land is understandably somehow limited. However, a sentence in the invitation card, “Experience the Malay reserve property like never before” greatly piqued my curiosity, so I attended the event to observe how different it could be, and what boosts their confidence to issue the statement of “experience like never before”. Throughout the night, I was fascinated by not only the price and value, but the interior design and arrangement as well. That introduced me to three new elements for consideration during property investment. Changes are steps to make us different, a lesson learned can always make us better.

American entrepreneur and investor Robert Arnott once said, “In investing, if it is comfortable then it is rarely profitable.” As such, we should exit our comfort zone and start investing to achieve the benefits that we seek. For most of the property investors, price, location and property size are the three main elements to consider while doing property investment. However, after attending the event, I found out three new considerations for property investment, which are price, value and structure. LOCATION VS VALUE Time is money, and since none of us like to get stuck in traffic congestion,


therefore location is another critical element that influences the decision making. Convenient public transportation, duration to hypermarket or shopping mall, journey to downtown are all at play when one considers whether to buy a particular property. However, besides looking at the geographical elements, investors should also focus on the value of the house. What are the other intrinsic values of a property? First of all, the quality and finishing of the house is important whether it’s for own occupancy or rental. Secondly, what are the material used, and whether the materials and finishing provided are worth the price? For example, I would be looking at whether the tiles are good quality products from a renowned manufacturer, and whether the wood flooring are negative ion wood flooring, because I am the type of people willing to pay slightly higher for quality. While we are looking at distance to downtown, we should also take into consideration the demands in the neighbourhood. For example, would you invest in a house selling at RM400, 000, that is located 30 minutes away from downtown, or another one that is priced at RM430, 000, which is 40 minutes from downtown but only a 5 minutes away from a college where a few thousands of students are studying? SIZE VS STRUCTURE Since I was young, my parents have been telling me that, “Boy, earn more money to get a bigger house in the future.” But how big is big, and is it rational to get a big house in the city? Although these are the questions I often asked myself, I still dream to live in a “big house” in the future, until I

went to that event mentioned earlier. Of course size does matter when it comes to property. But whether one can fully utilise the given area within a property may make a difference too. For the house where the New Year’s Eve party was held, the size of property is only around 1,000 sq. ft., but the structure and arrangement of furniture made me feel like the house is around 1,600 sq. ft.! Hence I truly experience the power of space management, and this introduced me to an all new perspective in future property investments. So what is the best investment? I believe a lower cost investment with higher return of investment is always the best choice for all investors, therefore, why don’t we invest in a lower cost property, use the savings to get better renovation and furniture, such as space saving furniture, and rent it to those who are studying or working around the neighbourhood? REBATES, IF ANY Undeniably, price has been the main concern for most of the investors and buyers in every decision making, but what are the details we should look into when it comes to pricing? Market value of the area? Possibility of loan approval? Amount of down payment? To avoid future troubles, we should invest in only what we can truly afford.

Of course for a bumiputra, the concern of pricing would be slightly different. The main concern might not be solely on the selling price but the discounted price as well. Besides discounts, there might also be rebates or other promotions too. A discount of 7% to 9% is commonly heard, but the figure for the Malay reserve property stood at a surprising 15%! And the good news is, now that we are in a soft market, many developers are willing to offer certain rebates to all buyers. Look around carefully, and you will find those projects that are fully furnished, comes with rebates, or will enjoy free maintenance for a number of years! That’s why it’s called a “Buyer’s market”! According to Peter Lynch, “Know what you own and know why you own it,” because these are the important questions to ask to find out whether you are doing a right investment. From the statement above and the experience gained from my social participation, my future investment considerations will not only be on the price, location and size of the property but also on the rebate, value and structure of the house. Last but not least, before we embark on the journey to invest, let’s remember what American business magnet and investor Warren Buffett has in mind, “Price is what you pay, value is what you get.”

ABOUT THE CONTRIBUTOR Nick Ng is a young entrepreneur that currently runs a public relations and events management company. Driven by the motto of “Be Different, be brave, be better”, he wishes to improve his career by learning and sharing regularly.

www.propertyinsight.com.my MARCH 2017 I 67


STRATEGY

PROPERTY OUTLOOK FOR THE YEAR AHEAD

A

s we enter the year 2017, we are indeed walking on thin ice, uncertain at what the economic climate holds in store, the way a ship hobbles aimlessly in unchartered waters. Closer to home, there are a couple of ‘salient core issues’ awaiting answers, and pressing concerns to be addressed, among others: The current state of the Malaysian economy; a. What lies ahead for the Malaysian property market; b. Affordable housing; c. Alternative real estate strategies for layman investors to keep ahead of inflation; d. The ‘Trump Factor’ and the forthcoming perceived protectionism; e. The ‘China Factor’; f. E-commerce and its immense growth potential on all sectors of trade. THE MALAYSIAN ECONOMY Many economists are of the view that the Ringgit will be on a weakening pattern due to the strength of the US Dollar, in view with the rising interest rates of USD coupled 68 I MARCH 2017 www.propertyinsight.com.my

with Malaysia’s inability to increase growth differentials against other investment destinations, thus exacerbating the risk of capital outflows (already happening in a big way), at a time the country is overwhelmed by political uncertainties in anticipation of the upcoming General Election (GE)! The recent compliance directive for SME /SMI’s to stem the already exited RM95 billion outflow by manufacturers, which acted as ‘trading hedges’ and now lumbered by Bank Negara’s move to have them convert 75% of export proceeds to the Ringgit, appears to be a double edged sword with unknown consequences, but an additional cost to the manufacturers / exporters. Bags and lorry loads of working capital that had helped fuel the multiplier effect have already taken flight since the Donald Trump’s victory in the recent US Presidential Election. Earnings in specific sector such as banks, consumer products and palm oil are already facing downward pressure with diminished earnings, due to a shrinking Ringgit that is a panacea to inflation and declining disposable income.

Two years ago, Hari, a 30 something Nepalese security guard exchanged 30 Nepalese Rupee for RM1, but it’s now more like just 24 Nepalese rupee. Similarly in 2012 Neshu exchanged 26 to 27 Bangladeshi Taka for RM1. Today, it is worth only 17 to 18 Taka. The state of the Malaysian economy is self-explanatory. The narrowing current account trade surplus and a deficit budget since 1997 obviously does not augur well for our sovereign ratings. In fact, RM40 billion of our foreign reserves have since evaporated into thin air as the government defended the Ringgit. The humongous debt service hovering at 12% of total income earned is certainly another cause for concern. According to the recently released MIDA report, while it has created 117,550 employment opportunities, the investment in Malaysia actually fell by 3.7% to RM150 billion for the first nine months of 2016. The jobless rates amongst graduates is on a worrisome trend. By having having breached 34%, it basically means that out of every 100 graduates, 34 remain unemployed. This seems to be a consistent


High speed rail will provide non-stop services to major ragional centres & intercity services Direct non stop service

Bangkok

Potential Intercity stops Phase I stops Phase I stops

Intercity Service Pulau Pinang

Average Speeds of 350 to 450 kmph

Ipoh

Creating Seamless and faster journeys Door to door journey time in hours

KL City Centre Kuala Lumpur International Airport

-0.6 -0.5

Seremban Ayer Keroh, Melaka

-0.4

Muar

-1.5-2.0

Batu Pahat Iskandar Region Johor Bahru Singapore

figure over the last three to five years. It is opined by industry players that the mismatch between demand and supply of talent is a key reason why many graduates remain unemployed or under-employed. The current figure of overall unemployment is around 510,700, with the unemployment rate rising from 3.3% in September 2015 to 3.5% a year later. (v) It is reported that an approximated 1,574,700 have failed to pay their Higher Education loans (PTPTN) totalling RM30.07 billion, and have been listed on the CCRIS (Central Credit Reference Information System) thus compromising their credit rating history. This listing is bound to have a dire impact on the economy. THE MALAYSIAN PROPERTY MARKET Transactions are generally slowing down from the lofty peaks seen at the outset of the property bull run in 2011, as with the belt tightening credit crunch measures adopted by the financial institutions, attractive loan margins are tougher to secure. In the meantime, it is hoped that the federal, state and local governments’ initiatives in adopting strategies to stimulate growth will have their desired effects, i.e. the KL – Singapore High Speed Rail (HSR), duty free status for the Forest City housing project on man-made islands in Johor Straits, tax incentives and ‘global appeal’, Transit-Oriented Development (TOD) concept mixed development along newly opened MRT / LRT lines, oil refinery / storage facilities such as those at Penggerang, Johor, the planned cyber

Iskandar Region

Car

Bus

Air

HSR

city of Sedenak (Cyberjaya of Johor), the proposed East Coast Rail Link (ECRL) and relevant infrastructure projects that act as a booster to the economy. Penang in the meantime is also powering ahead with its ambitious infrastructure products, i.e. the RM6.3 billion integrated infrastructure project listed under the Penang Transport Master Plan (PTMP), including three expressways and an undersea tunnel linking Penang Island to the Mainland. The ambitious project does face a couple of uphill battles, in land acquisitions and more importantly, in securing the approval by the federal government. There are also challenges mounted by residents, for example the residents of Seri Tanjung Pinang in the Tanjung Tokong area and the fishing community on the Southern coastal area which are earmarked for land reclamation. AFFORDABLE HOUSING It’s time to re-examine the myth, reality or fallacy surrounding Affordable Housing. The authorities too have launched a multitude of initiatives to quell the rumblings from the low cost / affordable market with a whole host of catchy acronyms. The salient features expounded here may even shatter some of the myth. Basically, the matrix of the paradigm basically remains centred around these themes: i. Affordable housing and housing affordability are often misconceived to be on the same page, but instead represent two different paradigms. ii. Affordable housing deals with the

supply of homes based on the “median average household income”, whilst housing affordability is about the criteria used to examine a buyer’s ability to honour a mortgage, to determine whether one is qualified for the loan. The former is supply related, whilst the latter is demand related. iii. The supply side must work in tandem with the community, by setting the selling price to a maximum of five years of gross household income, which at a divisive multiplier of three, will justify a fifteen year loan . iv. Governments generally have no capacity to undertake construction projects, however, they do collaborate with private developers to hasten up the construction of “affordable homes” that fall within the “desired thresholds”. v. Governments must be willing to offer huge subsidies that minimise land cost, as most private developers are not keen to undertake projects that limits their earning capacity. The current strategy adopted by the developers is to build properties way beyond the abovementioned “median multiple line”, which ultimately renders the whole exercise as one in futility. ALTERNATIVE REAL ESTATE STRATEGIES The investing public is truly encouraged to start looking “outside the box”, as the market steadies itself to an even knell and the Ringgit finally settles to some form of trading stability without the need of artificial props. To initiate cash flow strategies and generate passive income with the distinct capital growth in a challenging market cycle, some viable strategies that are inviting exploration could take the forms as expounded below: i. Transforming your property into a food and beverage outlet, after birth care, confinement homes (rest, recover and rejuvenate}, or a homestay that is listed in online marketplace Airbnb for worldwide customers; ii. Own a home through options to lease first, i.e. Rent-To-Buy, or other creative real estate ownership solutions; iii. Explore cross-border real estate opportunities, for example those www.propertyinsight.com.my MARCH 2017 I 69


STRATEGY mushrooming under China’s much touted “One Belt One Road” initiative; iv. Converting your property into an income-generating asset such as co-working space and student accommodation, through innovative methods such as coownership, creative interior design or flexible tenancy arrangements. THE TRUMP FACTOR The surprising victory seems to have skewed many established equations while throwing financial markets into a whirlwind. Together with the recent BREXIT, it seems to have triggered a massive outflow of funds from emerging markets. The entire equation seems to be shrouded in absolute uncertainty, and the road ahead appears rocky indeed for the Asian tigers who provided cost effective labour, land and tax havens for funds from the developed world. Besides, President Trump’s position on issues such as the oil production cooperation among the Organization of the Petroleum Exporting Countries (OPEC) member states, the Trans Pacific Partnership Agreement (TPPA) advocated by ex-President Barrack Obama, the standardisation of trade tariff within ASEAN Economic Community (AEC), as well as other issues will also give a strong impact onto the life of people around the world. THE CHINA FACTOR The China Factor is best epitomised by the words of a renowned strategist 150 years ago during the colonial powers’ reign, when it spewed the dictum: “Awaken not the sleeping dragon, for once awoken, its fiery flames will engulf the world.” Truth be told, this is in fact an understatement to the emerging economic clout of China. As outlined under its ‘One Belt One Road’ infrastructure initiative, Chinese StateOwned Enterprises (SOEs) and private funds have begun investing heavily in the region. However, its unbridled foray into the South China Sea may well be the trigger that lights the fuse of unwanted military strife.

of Things).The uninitiated will truly be left trailing far behind gasping for breath as they slowly get edged out of the mainstream. FinTech (Financial Technology) is also going to transform the way financial services and retail business are conducted. With the emergence of value added websites / applications, for example PropertyPriceTag. com, Estate123.com and others, technology is now creeping progressively into real estate marketing whilst providing for precursors for further information technologic developments. On a parting note, the horizon out there does not really look all that encouraging for Malaysia with its shrinking Ringgit, political uncertainties, perception / credibility outlook, high household debt to GDP ratio, and an already high level of indebtedness while we are embarking on a questionable policy of turning to debt in order to fund growth. SOME HELPFUL ECONOMIC INDICATORS As the cycle weathers itself out, the one word that could be a source of inspiration in these unchartered waters would be “To err on the side of caution”. Foreign Positioning in govt. Bounds.

Indonesia

37.0% (Now)

Singapore Malaysia

51.9% (MGS, Oct)

Thailand

14.9% (Oct)

India

3.53 % (IGB, Nov)

Hong Kong

12.5% (KTB, Oct)

South Korea Australia

59.9% (June)

China

2.5% (Sept)

Source: Nomura Bloomberg

STOCK MARKET INDICASE CURRENCY PERFORMANCE INDEX

CLOSE (DEC 9)

CHANGE AS AT DEC 9 (%)

CURRENCY VS USD AS AT DEC 9

Bangkok SET Jakarta Composite DJIA HANG SENG KOSPI Singapore STI SENSEX PSEI NIKKEI 225

1,526.32 5,308.126 19,614.810 22,760.98 2,024.69 2,956.13 26,747.180 7,043.16 18,996.37

18.50 15.57 12.57 3.86 3.23 2.55 2.41 1.31 -0.20

1.04 3.82 -0.11 0.65 -0.82 -1.88 -6.07 4.29

KLCI

1,641.42

-3.02

-2.67

SHANGHAI COMPOSITE

3,232.884

-8.68

-6.01

ABOUT THE CONTRIBUTOR E-COMMERCE E- COMMERCE and its impact on world trade is already gaining deep thresholds into the very fabric of things across the board, as all facets of day-to-day routines have them handcuffed to the IoT (Internet 70 I MARCH 2017 www.propertyinsight.com.my

WARRICK SINGH is a property agency practitioner and Director of Asian Land Realty, Asian Land Auctioneers and Starfish Training.


STRATEGY

DON’T BE A DOORMAT Not everyone is going to like you and what you do

P

retty much everyone wants to be liked. It’s far easier to go through life being liked and liking people than the other way round. Not liking people takes up a lot of energy and neg¬ative emotions and doesn’t really get you anywhere – apart from not being liked. But there are times when you are going to have to do something, or be someone, that will not be liked. It’s hard and can be uncomfortable, but life is tough and you are going to have to get over it – not everyone is going to like you and what you do. So how do you get used to not being liked? I don’t know if you will ever really get used to it, but I think you will become more accepting. You understand that you have to separate an action from a person – I may do something you do not like, but that does not mean I am a unlikeable person. For example, I may have to ask a tenant for rent that is overdue when they have a million other bills to pay. The tenant may not like me asking for the overdue rent, and I may not like asking – but that does not make me a unlikeable person. You see, there is a difference between what someone does and what someone is. This distinc¬tion is very important to remember; the action is different from the person. The reason this is important, is that there will come a time when you will have to say or do things to your custom¬ers that they will not like. They will tell you they don’t like them, and they may even say they don’t like you. That can be hard, especially when you are trying to be the Amazon of customer service. However, there is a difference between exceptional customer service and being a doormat. At times, this difference may seem very small; however, it is an impor¬tant distinction nonetheless and one you should be aware of. Saying ‘no’ is much harder than saying ‘yes’. Saying ‘no’ often

involves having to explain the reasons for your answer. A request from a tenant along the lines of, ‘My kitchen is really old, can you get me a new one?’ may seem reasonable enough. If you have the money saved in the bank and the expense is worth the effort, you may well say ‘yes’. But what do you do if you don’t have the money, if you think the tenant is being unreasonable, or if the works are not worth the outlay? Your answer will probably be ‘no’. And you will then have to explain why your answer is ‘no’. Your tenant will probably not like your answer and you will need to be prepared for that – they might even leave on account of it. But not installing a new kitchen when a tenant requests one does not make you a bad person (unless you do not have a functioning, serviceable kitchen – in which case you should jolly well do it straightaway!). It just means you do not have the resources, or the job is not as much a priority for you as it is for the tenant. Understanding it’s OK to not be liked, or to make deci¬sions that will not be liked, is part and parcel of being a property investor. Saying ‘no’ is just as important a part of the business as saying ‘yes’. The key to success lies in knowing which to say and when.

ABOUT THE CONTRIBUTOR Dato’ KK Chua is the strategic advisor & managing director of Armani Media. He is also a registered real estate agent and an investor with more than 10 years of experience in the industry. He can be contacted at kkchua@propertyinsight.com.my

www.propertyinsight.com.my MARCH 2017 I 71


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