Property Insight July 2018

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JULY 2018

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JULY 2018

DATIN LEA CHAN PAINTING THE TOWN RED WITH RED BY SIROCCO POTENTIAL IMPACT OF POSTPONEMENT OF HSR AND CANCELLATION OF MRT3 CIRCLE LINE ON PROPERTIES HOW TO SELL MORE PROPERTY IN THE CURRENT LACKLUSTRE MARKET

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JULY 2018

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contents

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Painting The Town Red with RED By Sirocco

Deciding To Buy A Property?

Think of The 4Ps

Add These Beauties To Your Residence

Believing In The Power Of Properties To Generate Wealth

Potential Impact Of Postponement Of HSR And Cancellation Of MRT3 Circle Line On Properties

China Joins Alibaba To Create Online Renting System with Its Government

How To Sell More Property In The Current Lacklustre Market

YAHOO! Let’s Borrow Money Like Crazy!!

Financial Considerations for Property Investment

It’s About The Money, Not How Many

DATO’ KK CHUA PUBLISHER

EDITORIAL

Race Against Time

Publisher Dato’ KK Chua kkchua@propertyinsight.com.my Editor-In-Chief Yvonne Yoong yvonneyoong@propertyinsight.com.my

CREATIVE

Creative Director James Kua design@propertyinsight.com.my Designer Nasrul Nasri

BUSINESS DEVELOPMENT Sales & marketing enquiries support@propertyinsight.com.my +6012 3788 683

Armani Media Sdn Bhd (1032085-H)

No. 32-3, Jalan Pekaka 8/4 Seksyen 8, Kota Damansara 47810 Petaling Jaya, Selangor Tel: +603 6156 3366 Fax: +603 6156 3399

PRINTER

Percetakan Osacar Sdn Bhd Lot 37659, No. 11, Jalan 4/37A Taman Bukit Maluri Industrial Area Kepong, 52100 Kuala Lumpur, Malaysia

On The Cover

Time seems to be moving at an accelerated pace of late. Seconds quickly transcend into minutes that in turn, swiftly shift gears into hours that translate into days and nights.

The passing of the months turn into years and before time, decades go by, followed by the turn of the century.

Indeed, July has already fast descended upon us almost unannounced. And already, in the blink of an eye, over half the year has flown by.

In this modern age, now more than ever – time is becoming more and more of a valued commodity and great equaliser that many cannot get enough of. Think instant coffee and immediate payment transfers and even property purchases online made possible with the click of a button.

Fresh on the heels of the post General Election (GE) results, Tun Dr Mahathir Mohamad is also a man in a hurry to set a fresh mandate for the country. A heavy responsibility lies on the shoulders of the Premier who is now 92, and will be turning 93 on 10 July, to revive the nation’s economy and restore confidence in the country’s potential as a viable place for investments.

And, given the cyclical nature of the market, we await with bated breath as to the next upcycle as policies get reshaped and reworked while a new equilibrium is established in order to find a sense of balance.

The shifting of seasons also brings fresh opportunities as well as challenges which brings to mind the rule that the only constant in life revolves around change.

In this issue, we weigh the pros and cons revolving around the issue of the postponement of the High-Speed Rail (HSR) as well as the cancellation of the third Klang Valley Mass Rapid Transit (MRT3) Circle Line. These two mega projects and the possibilities surrounding whether they will take off have gotten the market talking.

And, while some are in favour of them, some are not. Many though are happy that the Prime Minister, in a softening of his stance, on 12 June, announced that the HSR project has not totally been scrapped but postponed.

Some believe that the series of speculations surrounding these mega projects may affect rental yields and price appreciation while others don’t think there will be significant impact, considering these two projects have yet to be built.

And, back to the topic of time catching speed, it will be no time at all before Vision 2020 initiated by Tun Dr Mahathir makes its way around. By then, we would be able to ascertain if the HSR will take off and whether Malaysians will be able to take advantage of the high level of convenience afforded by the HSR should it take off.

And, until time whizzes by to next month, happy reading!

DATIN LEA CHAN CEO of Sirocco Hospitality Group

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Property Insight Malaysia

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PropertyInsight

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.

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news & events

Pursuing Excellence at PIPDA 2018 Gala Night

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Property Insight Prestigious Developer Awards (PIPDA) 2018 may have come and gone but the excitement continues. Here’s a rewind and playback of some past snapshots of the gala dinner night.

BY YVONNE YOONG

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cover story

Painting The Town Red with RED by Sirocco

Guided by her entrepreneurial instinct, Datin Lea Chan, CEO of Sirocco Hospitality Group who is also Executive Director of three M101 signature projects shows us how it’s done

BY YVONNE YOONG

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Lobby at RED by Sirocco, Kuala Lumpur

What do you give a lady who has everything on her birthday?

That was precisely the case with Datin Lea Chan, CEO of Sirocco Hospitality Group Sdn Bhd (Sirocco) and Executive Director of M101 who just turned 39 on the day of the video and photo shoot with Entrepreneur Insight.

The interview session took place at none other than at RED by Sirocco, Kuala Lumpur of which she conceptualised the hotel component from scratch into a four-star creative masterpiece to complement the M101 Dang Wangi development located on Jalan Kamunting.

The hotel has been attracting attention lately especially among tourists who visit the area as they pose against the singular tower featuring a full-scale, tastefully done graffiti-infused wall by local artist Kenji Chai whom Chan invited to paint his striking interpretation of a mural on the entire wall in a bid to promote local talent. And, that is only one of the projects this entrepreneur with sassy determination has on her platinum plate of to-do things to accomplish.

Earlier, our team comprising videographer, Photographer and Editor were briefed on the 11th floor of the hotel by her internal Hospitality and Corporate Communications team regarding answers to an earlier set of questions given. The quirky furniture and artistic renderings on this lounge cum check-in level of the hotel complement both Chan and her husband Dato’ Seth’s tasteful painting collection which command instant attention to a tee.

No stranger to photo and video shoots – having graced a few select high profile society magazines with many a chameleon look oozing style and class, she was the perfect personification of

entrepreneurial elegance at the photo shoot that day.

Proceeding to pose at the rooftop of the hotel’s red themed infinity pool juxtaposed against the Kuala Lumpur skyline – it is obvious that the world’s literally her oyster this side of town.

Chan’s charming personality emerges centrestage as she points to the adjoining work-in-progress bar area and conjures a picture of how it will operate once it is ready and in full swing. Already, her mind is at work conjuring a myriad of possibilities for this area – envisioning the parties that would be held here and the deejay hires she would have play at upcoming events held here.

The epitome of sassiness and brains coming together in a downto-earth ensemble – Chan is certainly living proof of someone who can have her cake and eat it – icing, cherry and all. For one, she alongside her husband Dato’ Seth Yap has visualised into reality three M101 integrated developments into conception alongside their own respective signature hotel brands.

“Sirocco Hospitality Group Sdn Bhd is the hospitality arm of M101 Group of Companies, where M101 Holdings Sdn Bhd is the property developer – helmed by my husband. Being the M101 Group of Companies, we champion property tourism as our core business strategy. Instead of your typical development, we aim to build and manage developments that can further elevate Malaysia’s tourism industry,” she adds.

Since the group’s aim is for its hospitality arm to be an extension of its property tourism business strategy, rather than being a typical hospitality service provider which only emphasises on services – the intention is to bring a new flavour to the hospitality industry for instance as reflected in its recent partnership with Hasbro and Planet Hollywood for its M101 Skywheel development.

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cover story M101 Developments & Accompanying Hotels

Painting The Town Red with RED By Sirocco

Clearly instrumental in conceptualising RED by Sirocco from scratch for instance, the hotel is the prized possession of the group’s integrated freehold M101 Dang Wangi in Kuala Lumpur.

The total gross development value (GDV) of the completed mixeduse development comprising commercial retail and Small office Flexible office (SoFo units) exceeds RM100 million and all units have already been fully taken up to date.

“We created the brand RED by Sirocco because we envision the market’s potential in the area where M101 Dang Wangi is located which has always been an essential part of Kuala Lumpur.

Although it is situated within the Kuala Lumpur City Centre, Dang Wangi has managed to retain its local flavour – ranging from food to culture.

Meanwhile, its M101 Bukit Bintang on Jalan Baba in Kuala Lumpur was no small feat either – the accomplishment being with the mixed-used development commanding a GDV of nearly RM300 million and spanning a land area of 25,000 sq ft. Scheduled to be completed next year, the singular tower spanning 27 levels encompasses 255 rooms - boasting eight layouts with built-up areas starting from 407 sq ft.

The development will be complemented by its hospitality arm in the Monopoly Mansion housing the first Monopoly-themed hotel.

Neighbouring the upcoming Bukit Bintang City Centre and Tun Razak Exchange (TRX), its coveted location is compounded by convenience – by virtue of it being located within walking distance to the Bukit Bintang shopping belt and nearby the light rail transit (LRT) and monorail stations respectively.

“Sirocco has infused all these elements in RED by Sirocco whereby we want to bring to life these local experiences to guests who stay with us. Right now, we are working on RED by Sirocco which is a four-star boutique hotel. However, we can definitely enhance it to be transformed into a five-star hotel brand for other projects,” enthuses Chan who is brimming with ideas for her latest project.

RED by Sirocco was incidentally just awarded the “Best City Hotel” last month at the Property Insight Prestigious Developer Awards (PIPDA) 2018. The hotel with its flaming signature red logo adding that extra sizzle to the M101 development here which opened in January has an average occupancy of around 60 to 70 per cent currently.

“I would say that our target market represents the chic, Millennial urbanites who are looking to enjoy a stay at a hotel that has character. We are proud to be named the “Best City Hotel” at PIPDA 2018. This is a testament of the team’s commitment in providing the highest level of customer service and RED by Sirocco’s true hospitality to guests.

According to Chan, this idea of coming up with RED by Sirocco came about as “an extension” of the company’s property tourism business strategy.

Bedroom at RED by Sirocco, Kuala Lumpur

“When we started out as a developer, we coined the property tourism concept because we want to ensure the sustainability of our developments and want the concept to come alive. Therefore, instead of just building, we also looked to partner and build brands which people can easily identify with,” she enthuses.

Being a frequent traveller herself for both business and pleasure, she really appreciates the little things that the hotel provides to their guests.

Not to be left out, the group’s M101 Skywheel located on Jalan Tun Razak in Kuala Lumpur will represent the first-in-the-world integrated development design by Studio F. A. Porsche which boasts the first of Asia Planet Hollywood suites located 200 metres above ground level. The freehold mixed-use development with a total GDV of RM2.2 billion that is scheduled to be completed by early 2022 will house Planet Hollywood. And, if this wasn’t iconic enough – the development would also boast the world’s first Sky Ferris Wheel luxurious sky mall for those wanting their share of shopping pie in the sky.

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Therefore, she reasons how she can confidently share that RED

by Sirocco is designed with the traveller in mind while placing a lot of importance on the guests’ experience with the hotel.

“RED by Sirocco is the new kid on the block with the commitment to never stop providing the best hotel experience to every single one of our guests – from the massage services at The Rub Bar to evening drinks at The Rouge Club representing the rooftop bar.

At the hotel’s red themed infinity pool juxtaposed against the city’s skyline

Receiving the “Best City Hotel” award title at PIPDA 2018

“Although there is a certain industry standard to adhere to when it comes to service, at RED by Sirocco, we practise this as our culture. We want to make sure everyone has 101 reasons to stay with us, and only one reason – if at all – to leave when it is time to check out. At RED by Sirocco, we dream to be inspired.”

Guests will be pampered by a Café Richard coffee making machine and perks like quality Chinese tea in each room. Furthermore, no expense was spared in having a fully automated valet car park life system fitted into the hotel.

“In line with RED by Sirocco’s property tourism strategy (which is reflected in all of our M101 developments), we also aim to grow it into the next phase by expanding the hotel’s regional presence in Bintan and Bali, Indonesia,” discloses Chan further.

Grafitti wall by local artist Kenji Chai JULY 2018

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(From left) Dato’ Seth Yap and Datin Lea Chan

More Plans Ahead “Right now, we are starting with RED by Sirocco but we also aim to extend Sirocco’s DNA of hospitality beyond possibilities to Monopoly Mansion as well as Planet Hollywood suites later on at M101 Skywheel on Jalan Tun Razak in Kuala Lumpur,” she claims.

Similarly, her plans for Monopoly Mansion by Sirocco, Kuala Lumpur and Planet Hollywood testify to her entrepreneurial expertise in which she discloses her plans to enhance the brands under the group’s belt. Situated in Bukit Bintang, Monopoly Mansion will feature 255 rooms.

“The overall look and feel of the hotel will resonate with the distinctive character of Mr. Monopoly’s energetic, charming, experienced and successful lifestyle with class in a 1920s Gatsby feel – harkening back to Monopoly’s origins. The hotel which will also boast thematic facilities, bar and restaurant is targeted to open its doors for operations in 2019.

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success but also elevate both Malaysia’s property and tourism scene internationally.

“Sirocco Hospitality Group Sdn Bhd is the hospitality arm of M101 Group of Companies, where M101 Holdings Sdn Bhd is the property developer – helmed by my husband, Dato’ Seth. Being the M101 Group of Companies, we champion property tourism as our core business strategy. Instead of your typical development, we aim to build and manage developments that can further elevate Malaysia’s tourism industry,” she adds.

Since the group’s aim is for its hospitality arm to encompass an extension of its property tourism business strategy, rather than being a typical hospitality service provider which only emphasises on services – the intention is to bring a new flavour to the hospitality industry for instance, as seen in its recent partnership with Hasbro and Planet Hollywood.

Success Agrees with Resounding Success

“At M101 Bukit Bintang, we are working with the theme surrounding guests experiencing Mr. Monopoly’s mansion. There are so many exciting possibilities to explore and innovate with,” she enthuses.

Claire Gilchrist, Vice President of Hasbro Consumers Products agrees that M101 has built a very successful business partnering with international IP owners.

The aim moving forward she reveals, is to “continue bringing something different to the hospitality industry”. Also central and unique to the fleet of M101 signature developments is the company’s sustainable business strategy.

“We were very excited by their understanding of the Monopoly brand and their creative ideas as well as their innovative approach infusing the brand DNA in memorable ways into every aspect of the hotel experience to delight guests – both young and old.

“Further to being a developer, we also take things one step further by managing our own hotels via our hospitality arm, Sirocco Hospitality Group – thus ensuring the success of our developments and maintaining the quality of our hospitality services. We believe that our business strategy will not only drive our company’s

“What they proposed to us concerning what Monopoly Mansion will be like was a good representation of the brand DNA. M101 studied the profile really well and everything from there went on smoothly,” she says.

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The Essence of RED

by Sirocco is “Relax, Enjoy and Dream”. Its mission is for guests to connect with and fully immerse themselves in the “redness” concept.

This is not viewed as a task but as part of the hotel’s ongoing dynamic mission.

Relax • The hotel houses 143 unique and stylish spacious rooms.

• The rooms are furnished with premier amenities including a Café Richard coffee machine, Chinese tea set, electronic weighing scale and travelling kit.

• Each room comes with an added ceiling fan and balcony to enable guests to enjoy the stunning panoramic view of Kuala Lumpur City and the KL Tower

Enjoy • Standing at the 25 level of the hotel with its signature red coloured rooftop pool overlooking the city, guests can enjoy their breakfast at the Skybar named The Rouge Club or cool off

Maintaining A Balancing Act At Work & Play Trained as a lawyer, Datin Lea Chan’s foray into the property game and other entrepreneurial ventures came about quite naturally stemming from her experience on handling property related deals as reflected in the drafting of joint ventures, Sales and Purchase Agreements (SPA) as well as other payment structures for land deals.

Chan was also elected as a Committee Member of the Real Estate and Housing Developers’ Association Malaysia (REHDA) Youth and also spearheaded the REHDA Planning Policies & Standard (PPS) Committee and Strata Development.

In 2007, she joined Messrs Abraham Ooi & Partners as a Legal Assistant and was subsequently invited to be a Partner of Messrs FL Foo & Co in December 2007. A graduate from the University of London, the UK, Chan received her Certificate of Legal Practice (CLP) from the University of Malaya in 2002 and was admitted to the Malaysian Bar in 2003.

Fundamentally for Chan, finding a balance with her work and family life as well as working alongside her husband makes its all work out.

in the evening by partaking a drink while the live band plays.

• Those seeking to unwind and rejuvenate can visit the hotel’s adjoining spa called The Rub Bar. • Another unique feature lies with the dedicated DIVA floor for women only where guests can host their slumber parties and bachelorette night.

• The DIVA floor will feature personalised amenities such as headbands, facial masks and in-room massages.

Dream • The hotel is located along the stretch of the charming Heritage Row on Dang Wangi and situated within a five minutes’ stroll to Dang Wangi LRT station and the Bukit Nanas Monorail, Quill City Mall and local eateries as well as art galleries and night entertainment outlets.

• Inspired by RED by Sirocco’s location nearby Dang Wangi which is famous for local arts, Datin Lea Chan and her husband Dato’ Seth Yap’s collection of art pieces by local artists are displayed at the hotel’s lounge area while certain replicated art pieces are displayed in the rooms – bringing to life the “Dream” element of the hotel.

• To further emphasise on the “Dream” aspiration, RED by Sirocco also worked together with another local artist, Kenji Chai who painted a huge mural extending the entire length or the hotel wall.

“We have different strengths:- My husband is the adventurous type and his strength lies in strategising. He has other businesses in various other industries; experiences he gained over the years which resulted in him becoming a property developer. For me, I look into the details and am more meticulous. My experience from being a lawyer has taught me to be more cautious and analyse situations from all perspectives,” she attests.

“We both have different strengths, and we recognise that. We believe in acknowledging that to each other and it creates mutual respect as well as allow each other space to do what we believe each other is good at. I would say this is how we complement each other,” adds Chan.

At the end of the day, she says it all boils down to teamwork and working to complement one another.

“Even when we are building a team, we look for talents with good attitude and who share the same vision as us. We each have our own roles and respect each other to play their part. We work as a team and always talk about our goals with each other – just to get each other’s opinion and insight. We are a firm believer in team work,” she sums.

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feature

Add These Beauties To Yo u r R e s i d e n c e

Introduce elegance and class to your home with the addition of these beauties who make for good company any time of the day or night. Surrounding yourself with good company only makes living better as their ergonomic features add comfort and style to your space.

Take your pick from nothing but the best from the ace of German kitchen specialist while letting your inner spaces or outer courts shine with a furniture range that is as enduringly stylish as they are a class act above the competition

BY YVONNE YOONG

Synonymous with the excellence of legendary German engineering perfection, SEA Group - being a premium German Kitchen brand offers top-notch quality, factory-fitted modular kitchens combined with unmatched customer service.

Based on a 101-year old legacy steeped in excellence - the SEA Group successfully expanded its operations to Southeast Asian countries in 2012.

It is no secret that meticulous in-depth research has gone into the culture of local market needs and the requirement for its products to adapt to the variables of tropical climatic conditions. Its ingeniously adaptability in temrs of its design and manufacturing process meets the most stringent standards.

PLYFORM: Handleless kitchen looking exquisitely splendid in Sonoma oak and ebony with indirect lighting providing a sense of illumination on the open shelves

Engineered to withstand the extreme humidity and the heavy usage of the culinary methods practiced in the region, The PLYFORM range is 100% water resistant and possesses a thermal stability up to +150° which ensures maximum durability.

Meanwhile, the FURNIER range also exudes class with its wood clad surfaces that promote an orgainc expression of homely style in the kitchen.

Introduce these timeless beauties into the recesses of your home and the kitchen area will never be the same again.

FURNIER: Serviced apartments will benefit from the look of kitchen stainless steel complementing the open shelves.

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HANA CHAIR has earned its stripes designed as a cover backrest - the result of an adjusted idea in order to create the added option for users to select either fabric or rope to be printed as graphic or plain color on the material. It can be used inside the space or outdoors and is suitable for hotel, restaurant, office, and residences.

Inspired from the petal which is aesthetic to view, the Hana chair can be changeable with various fabrics by using the old frame.

It is efficient use and worth, known as “Repair not repeat” concept .

The idea behind the Q OUTDOOR kitchen lies with it targetting family gatherings and spending good quality outdoor moments together with friends and relatives.

Its flexibility lies with turning a single BBQ unit into a multifunctional BBQ unit by combining heavy duty preparation stone surface, wash basin and even an ice cooler.

Q Outdoor is designed to accommodate a metropolitan lifestyle by shortening the installation process utilising a set of modular multifunctional components in order to let everybody enjoy cooking and dining with each other.

SATURNO designed by Pichak Tanarojviboon is inspired by “Saturn” - a gas giant and its rotation within the ring system. Designed to look as if it is floating by itself while requiring no other structure to support it stainless steel is its staple - embedded in the teak structure to reinforce the strength equilibrium. The stainless steel is of high quality and high strength and having high resistance to all weather types.

The kitchen systems and furniture range are distributed by Quel International Sdn Bhd. For more infrmation, log on to:www.Quelfurniture.com Quel International will be holding an exhibition at Archidex, Booth 7, Booth 7A001A at the Kuala Lumpur Convention Centre from 4 - 7 July 2018.

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Potential Impact of Postponement of HSR and Cancellation of MRT3 Circle Line on Properties

What is the feasibility and impact surrounding these two mega projects that has gotten the market speculating as to the arising implications of properties surrounding these and other areas? Property Insight has the story.

BY YVONNE YOONG

Following a landslide victory in the recent epic 14th General Election, an elated nation – helmed by a new Government is hopeful for change that would affect - among others, the real estate industry - which is seen as a major revenue contributor to the state of the economy. With the reshuffling and announcement of a new cabinet line-up, various changes were swiftly implemented.

Along with the wave of announcements came news of Prime Minister Tun Dr Mahathir Mohamad calling two mega transportation projects – Kuala Lumpur-Singapore High-Speed Rail (HSR) and the third Klang Valley Mass Rapid Transit (MRT3) line project to a halt on 29 May.

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Since Tun Dr Mahathir announced the abolishment of the proposed plans for these two projects that was first announced under the previous regime of Datuk Seri Najib Razak under Barisan Nasional which was leading the Federal Government – the market was abuzz with the potential impact arising for the real estate scene.

This also concerned properties surrounding the seven stations located along the 335km-long HSR track spanning four states to Singapore which was scheduled to be completed in 2026.

The market reacted with a series of speculations as to whether rental yields and price appreciation in the surrounding area and beyond would be affected. Some were of the view that the impact

Prime Minister Tun Dr Mahathir in a softening of his stance, on 12 June, the Premier later announced that the HSR project has not been scrapped but postponed

would not be significant in the sense that the HRS did not attract mega investments in the land surrounding the proposed stations here as other modes of transportation to Singapore already exist while others opine that properties along these routes would somewhat be affected.

Still At Speculative Stage

Other quarters yet predicted that the asking price of properties in the vicinity of the proposed stations outside the Klang Valley would see prices dipping - with areas affected including Bandar Malaysia leading all the way to Iskandar Puteri where many prominent property players are.

This he rationalises is due to the fact that both these projects have not started and thus, any increase in values around the proposed stations are still speculative in nature. Therefore, the latest plans to scrap the MRT3 and to postpone HSR remain and will not affect the general property market, he reasons.

Certain quarters state that the MRT3 Circle Line’s route plies through mostly existing mature townships with existing public transportation systems so the impact of scrapping the MRT3 is minimal. This is especially in light of the fact that work on the MRT3 has not yet begun.

“Many landowners have been capitalising on their lands located near the MRT or HSR stations for developments and developers as well as investors are well aware of the risks,” he analyses.

Never Say Never

Many landowners have been capitalising on their lands located near the MRT or HSR stations for developments and developers as well as investors are well aware of the risks,

Then, in a softening of his stance, on 12 June, the Premier later announced that the HSR project has not been scrapped but postponed during which time - the feasibility of the project would be analysed with its implementation possibly taking place later should funds be lacking or possibly, the scope of the project would be reduced.

“There will be a need for a HSR in the future, probably right through the peninsula. But we cannot afford it at this moment.

So, we actually postponed the implementation of the project,” he shares in an interview with Nikkei Asian Review that transpired in Tokyo, Japan.

“High-speed trains are most effective where the distance is very long. But where the distance is short, it doesn’t contribute much.

So we need to rethink HSR. We cannot say we will never have HSR in Malaysia,” he was quoted as saying.

Datuk Sr. Paul Khong, Managing Director of Savills (Malaysia) Sdn Bhd opines that even if plans to scrap MRT3 and postpone HSR remain, the general property market would not be affected.

- Khong of Savills “The immediate effect would be that capital values in these MRT localities will revert back to their original levels and premiums from the MRT project will cease to have much impact,” he adds.

“The postponement of HSR will keep the speculative element prolonged and the land buyers will still be faced with uncertainties in the location variations of the HSR stations.”

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His views were echoed by Tony Yap, Head of Marketing Team, IQI Global Berhad who believes that the abolishment of the plans for the MRT3 does not hold much impact by virtue of the fact that MRT3 is a Circle Line.

“If you look at Singapore, Taiwan and Hong Kong – their Circle Line ensures that the transit is easier – and Line 3 is an inner Circle Line. Looking at the current situation, Line MRT1 is not fully optimised while Line MRT2 is currently being built,” says Yap. “In my opinion, we need some time to educate our citizens to optimise the usage between Line 1 and Line 2 before proceeding with building Line 3. If you study the model in Singapore, Taiwan and Hong Kong – these are Asian developing countries that have built the Circle Line with those railways optimising the usage. They are in need of the Circle Line to speed up the transition points.”

If we can build a very good infrastructure between KL and Singapore in 90 minutes, this would make no difference for one to stay in KL or Singapore or work in KL and Singapore, - Yap of IQI Global MRT1 stretches from Sungai Buloh all the way to Kajang whereas MRT2 will run from Kepong to Putrajaya. Meanwhile, MRT3 forms the Circle Line.

“With regards to the HSR – I personally don’t think that the project should be cancelled so the news of its postponement is good. The usage of the HSR is part of the China One Belt One Road (OBOR) initiative. The objective is to connect 50% of the world’s population within five hours. And, this would cover China, Europe and Asia,” adds Yap.

Potential for KL To Be A “Replacement Product” with HSR According to his analysis, the main function for HSR lies with the population and economic impact in chiselling Kuala Lumpur into “a replacement product” as compared to Singapore.

This is because all this while, Singapore is known as a major financial city where the commanded rental is very high.

“To get a house or office building in Singapore would come at a very high cost,” explains Yap who rationalises that if the HSR can

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ensure travelling time between Singapore and Malaysia is at 90 minutes – this would be beneficial as most of the labour force in Singapore are from Malaysia.

“With this, you would speed up travelling time and reach Singapore at a faster pace. However, without this – we would still be able to travel by flight, train or car – although to go back to the current way to travel between KL and Singapore would take more time.

So, with the scrapping away of the HSR, Malaysia would not be a replacement product,” he opines.

Yap maintains that “infrastructure is a new allocation that should be given to the city”.

“Just imagine that if we were to build a good highway from KL city to Semenyih or Kajang – and, if one were to stay in the KLCC area – there would be minimal difference in terms of location. Therefore, prices will go up for properties situated in Kajang,” he rationalises further.

“So the same theory will apply if we can build a very good infrastructure between KL and Singapore in 90 minutes. With this, there would make no difference for one to stay in KL or Singapore or work in KL and Singapore,” he rationalises.

In addition to this, he speculates that there would not be much impact on the overall economy but places like Bandar Malaysia would be impacted besides Tun Razak City.

“After the scrapping of the HSR idea, many people were asking for a refund for developments situated at the Tun Razak City township next to Bandar Malaysia though news of the postponement has lessen this impact,” he adds further stating that new developments surrounding the planned route for HSR might also be impacted.

HSR and MRT3 are national social projects that in many countries are deemed not viable.

To make it viable, the Government has to impose land taxes on neighbouring developers and large landowners who will eventually benefit from the HSR project, - Wong of VPC Alliance

High Cost Issues Plaguing HSR James Wong, Managing Director of VPC Alliance (Malaysia) Sdn Bhd says that HSR was postponed because of the high costs involved.

“HSR and MRT3 are national social projects that in many countries are deemed not viable. To make it viable, the Government has to impose land taxes on neighbouring developers and large landowners who will eventually benefit from the HSR project,” he relates.

“This is where the Transit Oriented Development (TOD) model comes in whereby at each of the HSR stations are located. The HSR Concession Holder works with the adjoining owners and developers to integrate the adjoining developments to the HSR stations for mutual benefits,” elaborates Wong.

Likewise, the case for MRT3 which involves the Circle Line would see some indirect land taxes to be extended to the adjoining owners to help “defray some of the costs of the MRT3 Line while also helping to implement the TOD model.

Furthermore, he states that under the previous Barisan Nasional Government, based on the Cost & Benefit Analysis, the exorbitant costs involving the original HSR would not have been viable.

MRT3 Still Relevant In The Overall Connectivity Scheme Siva Shanker, Head of Investments of Axis REIT Managers Berhad believes that there is not going to be any serious effect on property prices at this stage with the postponement of the HSR. “The only people who will be affected are those who may have speculated previously and bought large chunks of land surrounding the HSR route. They may be wondering what they should do with these large tracts of land now,” opines the Past President of the Malaysian Institute of Estate Agents.

“Normal folks can travel on Firefly which is much cheaper than travelling on HSR which would have been more costly. Of course, it would be nice to have the HSR but in the current situation, the country needs more things better that the HSR. Therefore, I think to postpone the HSR would be a more sensible thing to do. So let us just move this to another date and wait and see the outcome.”

To Shanker, MRT3 is a totally different issue of which its cancellation may not be the smartest thing to do as he observes that the city as it is – is already chocked up.

“There is no way we will continue to progress if we can’t get the cars off the street as our public system is nowhere near world-class

The only people who will be affected are those who may have speculated previously and bought large chunks of land surrounding the HSR route, - Shanker of Axis REIT Managers so we would have needed the MRT3. However, we don’t know how bad the financial situation is.

“Pakatan Harapan has been people-centric and my opinion is they will revisit the MRT3 in the near future when they are on a firmer footing. In the meantime, more needs to be done to get more cars off the streets. The last mile connectivity is what is lacking so unless we get this last mile ride with the MRT3 – the ridership would be much smaller than what would be desired,” he analyses adding that the MRT3 would have provided a seamless connection with MRT1 and MRT2.

Weighing The Pros and Cons Ishmael Ho, CEO of Ho Chin Soon Research Sdn Bhd is of the view that although personally, he was looking forward to the HSR being built – its postponement will nevertheless, allow the new Government to reassess not just the costs involved – but also enable them time to look into the strategic land use planning especially in relation to the Bandar Malaysia landbank.

“We are of the opinion that this will be the second opportunity for Malaysia to truly plan out an effective housing policy or strategy to

We are of the opinion that this will be the second opportunity for Malaysia to truly plan out an effective housing policy or strategy to address mass affordable housing, with the first being the Kwasa Damansara landbank, - Ishmael of Ho Chin Soon Research

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main feature

address mass affordable housing, with the first being the Kwasa Damansara landbank,” he says.

Elaborating further, he says that although the supposed targeted year of 2026 was determined for its completion, it should be noted that its construction can be done within three or four years. With this in mind, perhaps when the time to have the HSR comes about – its completion probably would not be too far off from the original target.

“As for the MRT3, I believe that professional planners were involved in the planning of the (overall) MRT transportation Line. Therefore, even back in 2011, when the MRT was first announced, the Circle Line was already part of the plan to have a more complete rail transportation system.

“Let’s allow the new Government to do some spring cleaning. Once everything is more settled, I believe the new Government will revisit on how to improve the transportation system of urban areas,” says Ho. In the real estate context, he mentions that developers that are hoping to use the MRT3 as a selling feature will definitely be adversely affected.

“However, with good product positioning and pricing, a loss of MRT3 for the time being won’t be too detrimental of an effect,” he concludes.

Restrategise and Adapt To Changes According to KC Lau, mega infrastructure projects like MRT and HSR are big boosters for property development.

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Even areas with existing MRT stations take several years to be filled up with newly constructed properties nearby. As an investor, patience is the key so one must be prepared to restrategise when necessary, - Lau, Financial Educator

Therefore he says that after the postponement and cancellation were announced, investors suddenly lost the significant advantage of having their properties located next to or nearby the projects.

“Developers who promote their real estate development as situated ‘next to an MRT station’ have found the attraction abolished. There is no doubt that it will have a substantial effect on the areas that are affected by the cancellation. Investors who purchased the properties that are already premium priced might be caught offguarded,” he opines.

“However, do bear in mind that development takes time. Even areas with existing MRT stations take several years to be filled up with newly constructed properties nearby. As an investor, patience is the key so one must be prepared to restrategise when necessary,” he adds.

feature

How To Sell More Property In The

Current Lacklustre Market

It is a well-known fact that there is currently an oversupply of properties in all sectors of the market. With the economy in its doldrums and an overall soft property market prevalent these past couple of years, more and more developers are seeking new ways to sell their property units. Before we explore how to sell more property, let’s examine some of the key factors affecting the property market.

4 Key Factors That Drive The Property Market Demographics Demographics concern the data that describes the composition of a population such as age, race, gender, income, migration patterns (eg. rural to urban) and population growth. These statistics are an often overlooked but significant factor that affects how real estate is priced and what types of properties are in demand. Major shifts in the demographics of a nation can thus have a large impact on property trends spanning several years, or even a decade.

For instance, the Baby Boomers who were born between 1945 and 1964 are an example of a demographic trend with the potential to significantly influence the property market. The transition of these Baby Boomers towards retirement is one of the more interesting generational trends in the last century. Needless to say, the impact and retirement of the Baby Boom generation, which began back in 2010 is bound to be noticed in the market for decades to come.

There are numerous ways this type of demographic shift can affect the real estate market but for an investor, some key questions to ask may revolve around the following issues-: (i) How would this affect the demand for second homes in popular vacation areas as more people start to retire? (ii) How would this affect the demand for larger homes if incomes are smaller and the children have all grown up and moved out?

Such questions can give developers an insight as to how this segment of the market might evaluate their property investment choices in terms of the type and location of potentially desirable real estate investments, long before the trend started.

Interest Rates and Financing The current strict loan approvals practiced virtually by all banks and financial institutions naturally stem successful purchases, especially among first-time homebuyers.

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feature 4 Key Factors

Demographics

Interest Rates and Financing

The Economy Another key factor that affects the property market is the overall health of the economy. This is generally measured by economic data such as Gross Domestic Product (GDP), employment data, manufacturing activity, the prices of goods, etc. Broadly speaking, when the economy is sluggish, so will the property market be.

Government Policies or Subsidies Finally, legislation and regulatory bodies are also another factor that can have a sizable impact on property demand and prices. Tax incentives such as Real Property Gains Tax (RPGT), etc. besides allowable deductions and subsidies are some of the ways that the Government can temporarily boost demand for real estate.

Strategies and Tactics to Stimulate Sales Now The decline in the industry’s sales performance is more attributable to external factors such as the above and much less due to any lack of consumer interest in property.

Therefore, what actions can developers take now to generate the sales for today? Obviously, no developer is going to just fold their tents and hang up a “Gone Fishing” sign while awaiting “The Recovery” to come around, right?

Here are some strategies to consider:-

1 Power Up Your Sales Team A common sales objection in relation to property purchase right now is:- “The economy is too uncertain right now. I’ll wait.”

Property developers may consider providing professional sales training to their team on how to successfully handle this and other objections that most sales people fear will be the “silver bullet” that kills their chances for a sale.

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Government Policies or Subsidies

The Economy

At our 7 Habits of Sales Champions workshop, we cover among other things, various principles that include:Relationship selling. Successful sales efforts depend first and foremost on trusted relationships that sales people develop with prospects over time. The basis for trust is empathic listening.

Importance of financial qualifications. When prospects say that they like the property and that it meets their needs, the only valid reason for them not to buy would be due to a lack of money (which should be tactfully established if necessary, early on during the discovery stage of the sales process, rather than at the last minute.)

Understanding the prospects’ mindset. When financially qualified prospects who genuinely like the property offer “objections” to buying it, what they are really doing is avoiding the need to make large financial decisions because they are afraid of making a mistake. Sales people thus need to be trained to explore the prospect’s underlying fears and address them.

Professional attitude. Your team must act as professional counsellors who help prospects make good ownership decisions for themselves. They must step into the shoes of the prospect and see the world through their eyes.

Firstly, they should conclude in their own mind that the property is suitable based on understanding the prospect’s needs. Then, they could ask guiding questions that help prospects explore and clarify their objections. Finally, they could advocate the property and lead prospects toward concluding for themselves that they would want to proceed towards ownership.

Memorised scripts. Once appropriate scripts are written and agreed upon, sales people must memorise and practice them out loud so their delivery is easy, natural and spontaneous - as if there were a teleprompter in their head. Top-producing agents have at their command - different sales pitch closing and will make multiple closing attempts — often five or six or more — before ultimately succeeding.

Power Up Your Sales Team

Find Ways to Differentiate from The Competition

Irresistible Contest Strategies and Tactics to Stimulate Sales Now

Customised Promotions

2 Find Ways To Differentiate From The Competition

3 Customised Promotions

Essentially, if you have no unique point of difference, you’re dead. You cannot command the pricing. Here are several ways to differentiate property projects:-

Are you using data analytics to better understand your past and potential customers? Can you design different promotions to attract different customer segments? For example:- To investors, could you offer units that come with added features? Also, for the same budget, offer wedding gown plus top-class photography for firsttime buyers who are about to get married to host their wedding photography at the premise of their purchased units for example?

Product differentiation – What unique features or quality attributes do you have?

Service differentiation – Do you have a simple, easy booking system? Are there added services that you offer? Is the entire customer experience excellent?

Relationship differentiation – Is there competence, credibility, courtesy and care as well as responsiveness and excellent communication?

Reputation Or Image differentiation – Do you have a strong brand? How do customers perceive your brand? Do you have a reputation for excellence, fast delivery, etc?

4 Irresistible Contest Just to be different and in order to create excitement and stimulate action, how about offering lucky draw prizes for the first 50 buyers who put up the specified down payment? And, instead of giving free kitchen cabinets, etc. why not give them the chance to win a great prize. So depending on budget, target market and so on, the prize could be Jaguar XJ or an Alaskan cruise for example. How cool is that? These are some general ideas which I hope you will try out. Would love to hear your results. All the best.

Price differentiation – Can you be the lowest cost developer and provide value for money?

PETER LAM

is a highly sought-after Business & Executive Coach, Master Trainer, keynote speaker and Author. Email at peter@peterlamcoach.com

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strategy When it comes to investing in one of the most immovable and illiquid asset classes such as real estate, a prospective buyer needs to keep in mind critical considerations which form the financial commitment to any purchasing decision. An unexpected financial requirement after all, could either jeopardise one’s aim to acquire the targetted property or worse still, result in one facing severe financial repercussions in the years ahead.

all options available. Do note that any cancellation in booking usually results in a penalty.

DOWN PAYMENTS

While most could relate to getting a bank loan when we talk about financials in property investing - there are other aspects financially which buyers need to be aware of prior to making a purchase.

The amount required for down payment upon signing the Sales & Purchase Agreement (SPA) can be tricky. It is imperative for one to calculate this amount prior to executing the SPA as any balance payment due usually reflects the difference between the Loan To Value (LTV) eligibility and the amount required to pay the developer or seller. The differential amount can be substantial especially when the LTV approval is affected.

At this juncture, it would be reckless not to bring to attention the terms ZDD (Zero Down Deal) or NMD (No Money Down) which can be widely heard of in the market. As much as an astute property investor would like to minimise capital outlay in order to achieve a higher Return of Investment (ROI) rate, truth be told, there are still bound to be monies involved in lieu of securing a dream house or property for investment. Some of the notable ones are as follow:-

While most new developers’ projects include FREE legal fees for the SPA or even loan documents, potential buyers need to enquire about these costs that are required as they can be quite hefty an amount - especially in subsale or auction cases which need to be settled by cash to the legal firm representing the developer or seller.

BOOKING DEPOSITS

PROGRESSIVE INTEREST PAYMENTS

In most cases, booking payments are required for purchases to secure the buyer’s interest and commitment on the subject property. While the amount can be relatively small (i.e. ranging between RM1,000 and RM10,000), a potential buyer needs to lay down this upfront deposit after carefully comparing and selecting

Once the property buying process is completed, do note that the bank loans which have been committed will start to take effect as any drawdown by the developer’s progressive billings will result in interest payments prior to completion of the property. While the amount is relatively small, it is still a critical financial component which needs to be taken into consideration.

DISBURSEMENT & PROFESSIONAL LEGAL FEES

FINANCIAL CONSIDERATIONS FOR PROPERTY INVESTment 22

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RENOVATION OR REFURBISHMENT FEES

MAINTENANCE FEES & SINKING FUND

Any successful property investment for rental yield requires a proper unit being rented out to the targetted rental market. As such, a basic property unit will still require some touch up or makeover prior to handing it to the tenant of choice. Even a fully furnished unit from the vacant possession stage requires some form of expenditure which is part of the buyer’s financial budget consideration.

These compulsory monthly payments are part and parcel of any strata property ownership and should form one of the major considerations when it comes to keeping the property properly intact. Any unpaid dues can affect the tenants occupying the unit as well as violate by-laws which can be quite detrimental.

NEGOTIATOR COMMISSIONS Do not forget that every tenant that comes in through the door requires proper screening and the best way to get this done is through the friendly Real Estate Negotiator (R.E.N.) or agent as most would usually call them here in Malaysia. For a job well done, one month rental acts as payment of commission fee for the services rendered. While this can be deducted from the advance rental collected, do remember that these deposits are required to be fully refunded upon tenancy expiry.

STAMP DUTY (MOT) For all new strata properties purchased that will be handed over to the owner with an individual title upon vacant possession by the developer, a stamp duty for the Memorandum of Transfer (MOT) must be made within 12 months from the key handover to the unit owner. This amount is a large sum which the buyer must prepare in advance to avoid penalty and future complications when it comes to claiming ownership of the said property.

BUFFER INSTALMENTS (HOLDING POWER) Should there be any vacancy for the property purchased while waiting for the tenant to occupy the unit, a good three to six months buffer time zone would be safe in the event occupancy is hard to come by. Post purchase financial considerations should also be taken into account before one commits to a property investment.

While the financial considerations in the list above are not exhaustive, they do form a huge sum required for the property purchaser to get himself or herself mentally prepared prior and throughout the whole process of acquiring a property. In property investment, it is all about the numbers. The more equipped one is with the figures on one’s fingertips, the better one will be in making apt decisions to acquire profitable gems from the onset.

Be a financially savvy property investor always!

ALAN POON

is the Founder and CEO of SuperiorWealth Group.

Email him at alanpoon@superiorwealthmastery.com and for more information, visit www.superiorwealthgroup.com

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strategy

Deciding To Buy A Property?

Think of the The first question that comes to mind before anyone buys their very first property is where the unit would be located. That’s the reason why the mantra has always been location, location and location.

One of the strongest reasons for thinking about location first would be familiarity. We already know enough about the neighbourhood to be able to make an objective assessment.

Have we however wondered about they “Whys” for the location?

What was it which attracted us in the first place? If the answer is that we want to stay close to our parents and they love the neighbourhood, then there is no need for any other reason.

4Ps In fact, even if we have to pay a premium, we should stay as close as possible to them. After all, they have worked their whole lives for us and have spent their time, effort and money on us.

The least that we can do would be to be there when they need us. Location is thus one way to ensure we are closer to them. For any other reasons, perhaps it is worth spending a little more time in order to do some research.

The below would be the 4Ps:People, Price, Policy, Preference.

1. People More people equal higher demand for property. Beyond just trying to google for information about the population count and demographics of the neighbourhood, we could also do the following:-

People

We can drive around the neighbourhood. Do we see an active mall - even if it is a small one powered by an anchor tenant?

4Ps Preference Policies

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Or, do we see a “half-dead” mall with only half the shops open? Do we see many new rows of shophouses, many which are open for business or under renovation?

Price

Or, do we see rows and rows of shophouses with “For Sale” banners by many different real estate agencies?

Do we hear of a new branded university starting its operations in the near future and is this university considered a popular choice? What about a popular international school brand or even a relocation of a new SRJK (C)?

Are there other typical signs such as Starbucks, McDonalds and even a 24-hour mamak restaurant which is rather busy all the time? All these are signs to support our purchase.

Therefore, the lesson is this:- It does NOT need to be in the typical hotspots of today.

2. Price This is another important factor which has helped secondary areas to become acceptable and later, possibly turn into a hotspot.

If given a choice, everyone would want to stay as near as possible to their work place. Thus, the only reason they could not buy a place close to their office is due to the price.

The property is either about the same price but of a much smaller or lower price but located further away.

What happens then if one insists in staying nearby but is paying almost the same price as years before? For one, they can opt for smaller-sized homes.

This is already happening in many advanced markets of today.

When given a choice between a landed versus high-rise property, and both are similarly priced and are situated next to one another, it is a no-brainer that a landed property as an optimal choice wins hands down.

However, the price factor will continue to change property investment decisions.

3. Policy In Singapore, car prices are not considered very expensive even if they are priced in Singapore dollars. However, owners must bid for a Certificate of Entitlement (COE) which represents another significant amount of money.

into the KL city centre. At the moment, there are no signs of this happening anytime soon.

Of course, beyond just increasing in the cost of living becoming higher, we also note that the approval of new residential developments are being tweaked to give more flexibility to the Transit-Oriented Developments.

4. Preference Nowadays, everyone is talking about TODs. Many property experts are saying that buying a property next to the Light Rail Transit (LRT), Mass Rail Transit (MRT) or Keretapi Tanah Melayu (KTM) is already a must-have option for their residential units.

Many of the younger professionals are already getting used to public transport because their offices and homes are just stops away. This is a preference because if the preference to own a car does not change, then TODs will fail. People will buy thinking they could adapt but they could not. Thus they pay a premium to buy a TOD but in the end they continue to spend a lot on petrol and toll. When the jams get too crazy, more people would prefer to stop driving. All these would take time but suffice to say, as soon as the preference chances, we are looking at Malaysians Ride This (MRT) These would be the 4Ps that we should evaluate objectively when it comes to buying our dream property. Other things to take note of when we are buying a property? We must be aware of the duration for the drive and not the distance. There are further places with a lot less jams than nearer places. Renovation should be based on what we need and not what we love. Future buyers may not share the same thoughts about our design.

When we spend too much on renovation, it’s very unusual for future buyers to love our renovation so much that they pay a premium for it. Treat all areas as equal because when it comes to property investment, there are always the 4Ps (People, Price, Policy and Preference). Remember, even if we are thinking of buying just one property, it’s great to use this template to look through the area objectively. Happy buying your home sweet home.

Beyond just the car price, when one drives into the city centre, one would incur additional tolls and the parking is also expensive.

Public housing in Singapore as reflected in the Housing and Development Board (HDB) flats also do not come with a car park and anyone needing to park would have to pay car parking space rental for it.

With the right policies in place however, everyone would be “encouraged” to take public transport.

CHARLES TAN There are already suggestions for more expensive car park fees and even tolls similar to that in Singapore when people drive

is the Founder of kopiandproperty.com where he shares on real estate. Since buying his first home at the age of 25, he has now has properties in Penang, the Klang Valley and Kota Kinabalu

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investor next door

Believing In The Power of Properties To Generate Wealth It is a given that around 80 per cent of the population tend to view property as being the nucleus of real wealth generation while the remaining 20 per cent may think otherwise. However, for investor next door Amy, the maxim certainly holds true.

Relating how she started her journey into property investment, she recalls how in 2005 how she decided to join the real estate industry as a property agent when she saw the property sector growing rapidly.

“My first house was purchased with the intention for own use in 1993 when I was pregnant with my first child at a purchase price of RM165,000. After three years when it was completed, I tenanted it to my brother-in-law for rent until I sold the property in 2013 at RM298,000.

“I connected with some investors as I witnessed and saw how much they managed to bring in from their property sales. In threeand-a-half years, based on my own experienced, I grasped the selling prices of properties and how to sell them. From there, I gained added confidence to the point of me starting myself on my investment journey with my first purchase investment purchase in 2011,” she recalls.

Sharing how this two-and-a-half storey terrace house measuring 22 ft x 75 ft named Oasis and located in Cheras, Kuala Lumpur was purchased at RM428,000 managed to reap in almost double the amount in three years to RM820,000 - her fruitful investment only spurred her to further invest in property investment.

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The terance is a corner, gated and guarded (G&G) property with a generous garden.

Needless to say, the success of her lucky investment streak continued and snowballed into other purchases by means of her looking for other investment partnerships.

And today, she is the proud owner – having some 30 properties in hand.

“I have a company and employ people to handle the properties,” she says answering how she keeps track of so many properties at any one time – leaving the collection details as well as any issues with tenants, maintenance or even in having to deal with property investors.

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investor next door Answering queries as to whether anyone coached her regarding the finer points of investing in properties or venturing into property purchase was her own initiative – she discloses how she read up on successful businessmen who are cash-rich to learn about the secret to their success.

“Before I ventured into the property line, I read about successful entrepreneurs who are rich and how they managed to grow their respective businesses and went into property investment. From here, I learned how they grew their wealth by means of investing in property which is good in the sense that after some time, one will be able to see the capital appreciation on one’s property,” she discloses further.

Sharing that if she had to do it all over again, she would still venture into property investment albeit operating it by being cautious as in studying any area she intends to invest in property well first as well as doing her relevant homework beforehand. She tends to avoid small areas especially those situated outstation and prefers locations nearby where she works and stays instead.

Currently working with Greenfield agency operating as a senior real estate negotiator, she opines that the property market of today is vastly different from that of yesteryears.

Sharing a tip on staying ahead of the real estate game, she says the trick is to employ different strategies via operating on the digital platform.

Her staying power in real estate lies with her loving the business of property investment which continues to spur her to “always think of ways to add value” to her stable of properties.

In parting, she dishes out some advice for your investors intending to venture into property investment.

“Be careful in what you plan to invest in when it concerns the choice of properties. To avoid risks, invest in properties located in strategic locations which are serviced by Mass Rapid Transit (MRT) and Light Rail Transit (LRT) lines.

“Also, look out for properties that are situated nearby malls that will prove convenient for tenants in terms of featuring nearby eateries and grocery stores or market. This is because the theory of supply and demand is very important and remains integral to real estate,” she adds.

In summary – she advises one to ask a pertinent question before committing to the big property decision:- Is the main reason to buy for one’s own use or only invest in property? If the answer is to invest in property – who will be your future tenant? Asking this rhetoric will provide one with the answer says this season real estate agent and property investor.

Two-and-a-half storey terrace house measuring 22 ft x 75 ft named Oasis and located in Cheras, Kuala Lumpur

Year of Purchase 2011 Price of Unit Bought RM428,000

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Year of Sale

2014

Price of Unit Sold

RM820,000

From FREEHOLD

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(490479-v) MILIK PENUH SYARIKAT PERUMAHAN NEGARA BERHAD _SPNB)

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NO. Lesen Pemajuan Perumahan: 14153-1/11/2017/ (0934(L) | No Permit Iklan dan Jualan: 14153-1/11/2017/0984(P) | Tempoh Sah: 05/11/2015-04/11/2017 | Tarikh Dijangka Siap: Mei 2019 | Hak Milik Tanah: Pegangan Bebas | Gadaian Tanah: Tiada | Pelan Bangunan Diluluskan Oleh: Majlis Perbandaran Sepang | No. Rujukan Pelan Bangunan: MP Sepang 600-34/2/71(12) | Jumlah Unit dan Harga: Pangsapuri (1,168 Unit) MIN: RM395,460.00 MAKS: RM958,247.00

JULY 2018

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strategy

China Joins Alibaba To Create Online Renting System with Its Government High property prices has been a grouse in China among its young adults but with a centralised online system - greater transparency, enhanced credibility and increased choices reduce transaction costs could be expected It was a pleasure to be able to participate in a study trip to Hangzhou, the provincial capital of Zhejiang in China recently.

The highlight of the trip was of course, Alibaba. I sat through a few lectures about Alibaba, and walked away with new insights about their corporate culture as well as culture of innovation. I also discovered new information about their journey from a little Hangzhou startup housed in a small apartment to becoming a global conglomerate that it has transformed by leaps and bounds into what it is today.

Tao Hua Yuan and Greentown hovers around RMB 35,000 - RMB 50,00 per sq ft. Meanwhile, rental rates for apartments starts at RMB2,900 per sq ft in the hotspot areas and RMB2,000 outside the city centre. Given the above tie-up between Alibaba and the provincial Government, this will encourage rental comparison to rein in runaway property prices and create demand for uninhabited new apartments that have come up over the past decade.

The sights of Hangzhou are picturesque and would make an ideal place for leisure pursuits, commerce activities or even a place for a leisurely retirement retreat area. And, even from a property perspective, there are lots of exciting prospects for investment opportunities in this beautiful city. In August 2017, Alibaba went into an agreement with the provincial Government of Zhejiang to work on a online smart rental system for residential housing.

We have to bear in mind that property is a basic demand and supply driven industry and in the long run, as the economy of China becomes more and more affluent, the only way for property prices is to go up. The rising middle-class will no doubt have an insatiable demand for properties in the hot spots and city centre.

Culturally, the Chinese just love to own land and properties.

Creating An Online Renting System with The Government What is interesting is that the provincial Government could leverage on Alibaba’s big data, E-commerce credit system, Alipay and online platform, and together with the government’s information about the population, create an online renting system. If this project takes off successfully, this means that any one who wishes to rent a place to stay in Hangzhou will have to go through Alibaba’s system.

The potential tenant and landlord will have all their credibility, property data, preferences and so on all being shared in the system. The key benefit, apart from being a one-stop centre, will be that fraudulent and dishonest transactions, whether from the agents, landlords or tenants will be minimised. On the flip side, it does signify the beginning of a domination of the property rental market by a single entity as it was envisaged that this pilot programme in Hangzhou will be replicated in the whole of China should it become successful.

Current rentals in the hotspots of Hangzhou like Wulin Square, Xixi National Wetland Park, Qianjiang Central Business District (CBD),

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High property prices has been a main grouse in China among its youths and young adults. A centralised system, with all the big data and advance online platform, will provide transparency, enhance credibility, increase choices and ultimately reduce transaction costs.

The provincial and even central Government is keen to prioritise the rental market to smother the runaway prices of properties in China. This tie-up with Alibaba is seen as a way forward to achieve positive outcomes. Will this platform help reduce property prices?

Such a rental system will create a centralised smart rental system with all the frills.However, in the longer term, it is unlikely to halt the rising prices of properties in China. While more people will be attracted to renting properties as a result of the rising prices with the availability of a smart rental system, the propensity to purchase and have their own properties will form a much larger force in China, compounded by the fact that there is a rapidly rising middle class in China. This smart rental system will only serve to enlarge the scope of Alibaba business activities, and in turn lead them to venture into the ever lucrative property market.

RAIKK CHAN

is Head of Asia Pacific for the BPP Education Group, the UK and Education Advisor to vocational training institute Bakewise Academy. Email him at raikkchan@bpp.com

Intersection of 4 highways: SKVE, SILK, North-South Hwy & Sg Besi Hwy Ready student population of more than 20,000 within 2-3km radius Total population of 70,000 within 10 minutes An MRT station (Uniten Station) to be built on Line 2 nearby Major hotels, 14 universities/colleges and 5 hospitals within 20 minutes Lifestyle mall at De Centrum Located in De Centrum city (100 acres of freehold development)

Your neo-urban lifestyle comes with a truly self-contained neighbourhood, where if you so choose to, you won’t need to drive out for almost anything.

Daily shopping couldn’t get more convenient at the De Centrum Mall & Retail Shops. With lifestyle stores spread over more than 160,000 sq. ft. catering to your needs, you couldn’t be more spoilt for choice, with all literally beneath your feet.

strategy

YAHOO!

LET’S BORROW MONEY LIKE • Government debt now stands at approximately RM1 trillion or 80% of the country’s Gross Domestic Product (GDP). Mega projects meanwhile are being cancelled. In addition to this, a 10% paycut has been declared on Ministers’ pay cut. The hunt is also on for defaulters including Jho Low, to make him pay for his financial shenanigans.

• To be fair, most people tend to applaud the fiscal responsibility being demonstrated by the new Pakatan Harapan Government.

CRAZY!!

• I was given lots of advice when I started out investing in property, and I am glad that I chose to ignore most of it. However, there were two valuable pieces of advice that I did listen to, which helped me to be financially stronger. They include the folllowing:The first words of wisdom were, “If you don’t have a 20% deposit then you can’t afford to buy the property”. I know this rule sounds a bit harsh, but I am glad I listened to it. I have always made it a priority to increase my earned income by boosting my cash reserves.

• However, the new Government is now asking for home loan lending guidelines to be “relaxed”. This may also include relaxing the Debt Service Ratio (DSR) to grant more credit to the younger or lower income segments as reported in the mainstream media in June 2018.

• Another “open secret” is:- The best investors out there earn alot of money – either through their career or business. They just don’t really talk about it.

My irony metre has exploded based on the following reasons:-

• Is it easy to earn a lot? Of course not. That is why there are so few successful investors out there who are financially free. The more you earn, the more you can invest.

Are we saying that country debt to GDP ratio is important, but Personal Debt Service Ratio (Personal Debt / Net Income) can be further relaxed? Wouldn’t this mean individuals chould now borrow more freely? In all humility, the principles of lending – whether towards a country or individual I think should be consistent and prudent.

Home ownership shouldn’t be encouraged by making it “easier” to borrow. That is an oxymoronic measure that may lead to unnecessary over-leveraging. The Government should instead, explore new and efficient avenues to boost people’s incomes, embark on more value-added industries and play a leading role in affordable housing.

Finally, banks are in the business of lending. You don’t have to “teach” them how to lend to the younger or lower income segment.

If it was so lucrative, the banks would have already jumped on it like a pack of hungry hyenas. As such, banks in my view, should not be coerced to lowering down their lending standards, as this may lead to many other problems. Remember the subprime bubble?

The second piece of advice was to buy, hold on to your property and never sell. Another was to buy blue-chip or fundamentally sound properties and hold it “forever”.

• Refinance your properties to realise your equity, and use the proceeds to reinvest again - rather than selling your golden goose property in order to buy a larger or additional property.

• Again, I heeded this advice and my property portfolio is based on a “buy and hold” strategy. Sure, you can become wealthy buying and selling your way to a larger property.

• However, how sustainable is this “buy and sell” strategy? Are we suggesting that our earlier property buys are always “mediocre” and we have to constantly buy the newest flavour of the month?

The one who follows the crowd will usually get no further than the crowd itself. However, the one who walks his own path is likely to find himself in a place where no one has ever been before. Agree?

The Best Investment & Leveraging Advice I Ever Received • I can understand the seduction of overleveraging. When I was younger, I was always in a hurry to build my wealth. I came from an era whereby the Developer Interest Bearing Scheme (DIBS), 5/95 under construction promotions, no money down real estate deals, mark-up deals and multiple submissions were rampant.

• Yes, capital conservation and building one’s wealth efficiently is important. However, I do not advocate reckless and mindless over-leveraging.

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www.propertyinsight.com.my

MARK CHUA

is the bestselling author of the book “WHO SAYS”. He is Senior Vice President of a foreign bank and avid lover of properties. Email him at hello.markchua@gmail.com or www.facebook.com/MarkChuaMY

It’s About The Money, Not How Many It does not matter how many properties you own - it only matters how much money you make

As a full-time property investor, my job title is:- Property Investor.

And so, when I meet people for the first time and I am invariably asked what I do, I reply:- “I am a Property Investor”. To which, most people then ask:- ‘How many properties do you own?’

And, to this day, I am astounded by this question. Not only does it show a fundamental naivety concerning the business of property investment, but this is also something I perceive to be an incredibly private matter and not one that I tend to share as one of my opening lines. The equivalent, which many people tend to forget, would be somebody telling me he is a store manager - or whatever other job, and me replying:- “How much do you earn?” Could you imagine the reply I would get if I had asked that question? My question would almost certainly be met with a frosty glare and an unprintable answer.

The fact is - when you’re a Property Investor, your life and business are seen as an open book by many people. They tend to forget that your business is your business and the number of properties you own is a private affair. The latter is often seen by people to be a yardstick of success. If you own lots of property, you must have made it! But really, have you made it if you own thousands of properties but are loaded with mortgages up to the eyeballs and struggling to make the mortgage payments every month? Does owning lots of properties with many mortgages really make you a success? I think not.

Owning lots of properties without mortgages - now, that’s a different matter!

A major issue for many investors is people’s obsession with the number of properties owned. There is a “figure fascination” that underlines much of the thinking in the industry and it is a line of thinking that is wrong. It does not matter how many properties you own - it only matters how much money you make. The bottom line is actually the bottom line. There is no point owning loads of properties if you are not making any money. The only point to investing in property is to make money - if you’re not doing so, then you’re not investing in property but are just spending your money on property. It’s as simple as that.

Never ever confuse owning lots of property with making plenty of money. Property investment is not a race and many investors have fallen by the wayside due to their addiction to quantity over profitability.

DATO’ KK CHUA

is the Strategic Advisor and Managing Director of Armani Media. Email him at kkchua@propertyinsight.com.my

JULY 2018

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