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www.propertyinsight.com.my

COVER STORY

THRIVEN GLOBAL

MARCH 2016

AREA FOCUS

PUCHONG

MAIN FEATURE

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PROPERTY SHOWCASE 2016 EVENTS CALENDAR

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

PIPDA GALA DINNER 2016

PROPERTY SHOWCASE NU SENTRAL

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PUBLIKA

SHANGRI-LA

Solaris Dutamas

Kuala Lumpur

KL Sentral, KL

4 – 6 MARCH 2016

1 APRIL 2016

13 – 19 APRIL 2016

days

1

7

night

days

PROPERTY SHOWCASE

PROPERTY SHOWCASE

INVESTORS’ HOT PICKS PROPERTY SHOWCASE

QUEENSBAY MALL

4 days

KOMTAR JBCC

MID VALLEY EXHIBITION CENTRE

Penang

Johor Bahru

Mid Valley Megamall, KL

12 - 15 MAY 2016

3 – 5 JUNE 2016

3 days

3 days

15 – 17 JULY 2016

HOME+ & PROPERTY SHOWCASE

PROPERTY SHOWCASE

PROPERTY SHOWCASE

IPC SHOPPING CENTRE

CHERAS LEISURE MALL

PARADIGM MALL

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25 – 31 JULY 2016

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12 – 14 AUGUST 2016

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3

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PRISM 2016

GURNEY PLAZA

SETIA CITY CONVENTION CENTRE

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Penang

Shah Alam

27 – 30 OCTOBER 2016

5 – 6 NOVEMBER 2016

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EDITOR’S MESSAGE

EDITORIAL

The ideas of March, or so it seems.....

NADIA GIDEON, Editor-In-Chief

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hen it comes to writing, I’m not confined to strictly one style and within a certain ‘genre,’ I can stretch in so many directions because I understand that each approach requires a unique point of view and style. And that is what I love so much about this job. The team and I enjoyed putting together the March issue of Property Insight because it was a challenge with most people away on a twoweek break for the Chinese New Year holidays, but it became a challenge that we took on. And we think it has come together pretty nicely. Our cover story involves an old player with a new name. Thriven, once known as Mulpha, is not new to the property game, but it has definitely gained in momentum with new and innovative ideas. CEO of Thriven Ghazie, is as charming as he is sophisticated, I’m not sure who had more fun, our writer Natasha who was writing the story or Ghazie himself. Both were just as enthused about the idea. Our Area Focus story takes us to Puchong, where our writer Fara experienced such ease of accessibility and it took her less than 10 minutes to get to a few places within the area. Puchong is indeed developing at a quick pace, there is no doubt about it. Prices for properties

in Puchong have risen to more than double in the last few years. Read her story on Puchong, it gets more interesting by the minute. Our main feature this month is a hip and happening story in the travel industry. AirBnB has taken flight and is not about to land anytime soon. Speaking to a few hosts, we dug deep into how these owners started and where they want to be in a few years. Our writer Avinash took a ride on the Ampang LRT and has a story to tell us on how it will impact its users as well as each of the stations surrounding areas. It’s a must read for those who are looking for the next investment hotspot. Don’t miss it. Do you identify with a certain genre? Or do you shun labels altogether? Well, we have now included a section for Gen-Y investors and we have called it Gen-Y on the Block, like Jenny, only with less curves. I hope you have fun reading our March issue, we definitely had fun putting it together, and as always, we do that with you in mind. Write to us and tell us your thoughts. We welcome any feedback you may have, perhaps even suggestions of topics you might have in mind that might be interesting to our readers.

Editor-In-Chief Nadia Gideon editor@propertyinsight.com.my Writers Fara Aisyah Firdaus Petial Natasha Gideon Avinash Sagran CREATIVE Art Director Sarah Tan sarah@propertyinsight.com.my Designer Irman Hakim BUSINESS DEVELOPMENT General Manager Janet Loh 012-205 0911 janet@propertyinsight.com.my PUBLISHER Strategic Advisor & Managing Director KK Chua kkchua@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.


CONTENTS

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36

COVER STORY

started saving

16

INVESTOR NEXT DOOR

Thriven Global - Affordably Luxurious

The name Thriven was derived from values the company holds close, “Thrive” and “Driven”

MAIN FEATURE

22

AirBnB: Riding the Wave

A home away from home

FEATURE

28

Connecting the People of Greater Kuala Lumpur

The railway revolution is about to hit Malaysia

32

University Townships

Capitalising on the college craze through property investment

DEVELOPER OF THE MONTH

36

Titijaya Land Holdings – Building Bridges of Success

The sky is the limit for Titijaya. Perhaps even the stars.

AREA FOCUS

42

Puchong: Growing, Leaps and Bounds

Good investment opportunities at great prices

PERSONALITY OF THE MONTH

55

Game Plan Ready to Invest in Property

Treat each property differently

INDUSTRY INSIGHT

58

A Comprehensive Approach to Selling

Longevity of an agent is based on their approach

HOME PLUS

60

Affordability and Sustainability

Getting what you have need by using clay bricks

DESTINATION - Industrial Development

63

Johor Halal Park

The next investment destination in Pasir Gudang, Johor

FINANCE

68

Rich Debt, Poor Debt

STRATEGY

71

Be A Balanced All Rounder – Don’t Just Learn How to Borrow & Invest. Learn How to Earn More Too!

74

Power of Focus in Wealth Creation

When it comes to finding properties and good deals in the market, the information comes to him, and not the other way around

78

Property Investment: Slow & Steady Game

GEN-Y FROM THE BLOCK

76 Understanding Sales and Purchase Agreements

49

52

Ishihara Shotaro – A Japanese Investing Pioneer

Investing from Across the Causeway

Ashraf started investing at 21, an age many of us have only just

LEGAL


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Fraud is rampant in the industry by those not registered as an Agent or a Real Estate Negotiator. CHEATING is when one acts dishonestly or unfairly in order to gain an advantage for themselves. ABSCONDING is an act of running away with deposits, not refunding deposits etc. MISREPRESENTATION - It’s an assertion of a fact which is not true, breach of duty by misleading another and causing a party to an agreement to make a mistake. PROFITEERING is charging more than the fees chargeable for estate agency work.

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NEWS & EVENTS

MALTON HOSTS APPRECIATION LUNCH FOR BUYERS AT BUKIT JALIL CITY

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alton Berhad (‘Malton or The Group’), an established lifestyle property developer and construction group in the Klang Valley hosted an event to mark two happy occasions at the Bukit Jalil City sales gallery. In conjunction with the Chap Goh Meh celebration, buyers of Bukit Jalil City were treated to a sumptuous lunch and special giveaways of Crabtree & Evelyn gift set. Eleven buyers were lucky enough to walk away with Chinese New Year (CNY) angpow of RM888 each, signifying prosperity. “This is one of our ways of expressing our appreciation to our valued customers of Bukit Jalil City. Thank you for your continuous support and confidence in us. Without your overwhelming response, we would not have crossed the RM1billion new record sales given the challenging year for property developers. “We believe that there is still a demand for property in niche locations and for projects which offer strong concept, branding and delivery. In fact the soft market conditions present an opportune time for genuine homebuyers and long-term investors to buy properties for their own stay or investment,” said Michael Lim, Managing Director of Malton Berhad. Through the collaboration between Malton and the award-winning Pavilion Kuala Lumpur, Bukit Jalil City is set to be an iconic landmark in Malaysia which will transform Bukit Jalil into a more dynamic and vibrant township with excellent connectivity to the city centre and the southern corridor. Sitting on a freehold land, the initial phases of 50-acre integrated development consist of Pavilion 2 L18, Pavilion Tower, 75, Jalan Raja Chulan, 50200 Kuala Lumpur, Malaysia. Tel : 603 2088 2888 | Fax: 603 2088 2818 | www.malton.com.my Bukit Jalil regional shopping mall, 112 units of the ‘Signature Shop Offices’, 4 towers of luxury serviced apartments called ‘The Park Sky Residence’ and 44 units of the ‘Park Point Shop Offices’. All the Phase 1 Signature Shop Offices were fully sold, and the new flagship development continues to gain sterling success again when 95% of The Park Sky Residence units were sold within weeks of its preview.


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NEWS & EVENTS

RAHIM & CO REVIEWS THE MALAYSIAN PROPERTY MARKET AND THE PROSPECTS OF 2016

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n February the 4th, Rahim & Co International Sdn. Bhd. released their annual publication entitled ‘Property Market Review 2015/2016’. The publication included a market overview of selected property sectors such as residential, retail, office, hotel and industrial covering the whole of Malaysia. It was highlighted that the property market is expected to be challenging with moderate activity this year. More focus will be seen on the affordable housing segment as well as secondary markets with strong owner-occupier demand. The market will still remain cautious whereby buyers are definitely becoming more discerning in their purchases across all sectors while expecting bargain purchases to slowly creep up in the market.

MAH SING GROUP CELEBRATES CHINESE LUNAR YEAR AT 10 SALES GALLERIES ACROSS MALAYSIA

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remier lifestyle developer, Mah Sing Group (Mah Sing) celebrated the year of the Fire Monkey with various Chinese New Year themed activities throughout the weekend. The events were held at 10 of the group’s 35 active projects/sales galleries throughout Malaysia, and was officiated at Southville City, KL South (Bangi) by Mah Sing’s Group Managing Director Tan Sri Dato’ Sri Leong Hoy Kum, Chief Executive Officer Ng Chai Yong, Executive Director Dato’ Steven Ng and key management team. Headlining the event at Southville City was the Acrobatic Lion Dance and Chinese Dance performances followed by the festive drums performances. Guests were also treated to a shopping spree at the bazaar market with 32 stalls offering gifts, accessories, food and beverages, as well as various other items for sale. Tan Sri Dato’ Sri Leong said, “Chinese New Year means different things to different people, but traditionally has been one of the most important festive periods where family and friends get together to have fun. Our Chinese New Year video greeting this year

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NEWS & EVENTS delivered family values messages with a fun twist via the C.I.A (Chinese Interrogation Aunties), and has been viewed more than 1.7million times and shared out by more than 11 thousand people. We were scrolling through the comments – nearly 900 of them! And the commentators were in fact multiracial with all of them identifying with the theme of the video. This is why we welcomed all races to our celebrations. Each of our 10 sales galleries featured acrobatic lion dances and Prosperity Lou Sang, with a twist customized for each location.” “It was also a good chance for buyers to take advantage of our RM8,888 auspicious Ang Pau - a cash rebate campaign in addition to sales packages offered for participating projects,” he commented.

INAUGURAL LEAD CENTRE OPENS ITS DOORS IN SEKINCHAN, SELANGOR

TROPICANA POSTS SALES OF RM1.55 BILLION IN 2015

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roperty developer Tropicana Corporation Berhad today announced its unaudited financial results for the financial year ended 31 December 2015. For the fourth quarter under review, the Group recorded revenue of RM304.9 million, compared to RM904.0 million registered in the corresponding quarter last year. Included in the revenue

BREATHING CREATIVE LIFE

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fter months of planning, the inaugural Malaysia SME Community LEAD Centre opened its doors in Sekinchan on 16th February. The pioneering Community LEAD Centre in Sekinchan will serve as a business compliance services centre, serving the town’s many small businesses and helping them assimilate into the national business community. The objectives of the LEAD Centre are as follows; firstly promote entrepreneurship second-tier cities, secondly facilitate migration of informal businesses into formal entities in compliance with relevant regulations and law thirdly extend outreach of SME assistance programmes and lastly accelerate the growth of SME by leveraging on existing ICT products and services. This is an effort by the business community for the business community.

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reativity and innovation is the name of the game as IJM LAND launched its inaugural IJM LAND Designer Award (iLDA) 2016 at the township of Bandar Rimbayu. The objective of the competition was to spur on graduate designers to realise their designs in blank slate living spaces provided by IJM LAND. New ideas and design techniques were encouraged as furnished interiors are

from the corresponding quarter in 2014 was land sale of RM470.7 million. Profit before tax (PBT) was lower at RM54.7 million for the current quarter under review, compared to RM234.5 million recorded in the previous corresponding quarter, which also included gains from land sale of RM167.9 million and RM17.1 million fair value adjustments from investment properties. Consequently, Group revenue in the full financial year ended 31 December 2015 stands at RM1.25 billion as compared to RM1.76 billion in fiscal year 2014. For the year, Group PBT decreased to RM297.1 million from RM411.6 million from a year ago, whilst net profit attributable to shareholders in FY2015 was RM223.3 million compared with RM333.9 million previously. Tropicana’s de-gearing initiatives are also bearing fruit. The Group’s financial position has strengthened considerably, with net gearing at the end of December 2015 brought lower to 0.30x, a marked improvement from 0.68x registered as at the end of December 2014. Proceeds from Tropicana’s strategic disposal of its non-core assets and investment properties has reduced net borrowings by half from RM2.0 billion as at end of 2014 to RM0.9 billion as at end of 2015

meant for family living. Of which, 87 entries made the cut with preliminary judging took place on 11th January 2016 at Bandar Rimbayu Show Gallery. “We’re delighted at the response,” says Shuy Eng Leong, COO of Bandar Rimbayu. “We’re glad that many talented young designers showcased their creativity. It is our vision that they fully utilise the platform we have provided to excel and create unique and inspiring living spaces.” The winners will be announced in the 2nd quarter of 2016 at the iLDA 2016 Award Night.


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COVER STORY

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THRIVEN GLOBAL -

AFFORDABLY LUXURIOUS The name Thriven was derived from values the company holds close, ‘Thrive’ and ‘Driven’ BY: NATASHA GIDEON

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nvestors buy dream houses, owners buy dream homes, and it can all be found with Thriven. Before I tell you more and go on about how prodigious these developments are, you need to know who Thriven Global Berhad are to understand why it has seen the entry of many major shareholders since early 2014. Mr Ghazie Yeoh bin Abdullah, the Group Managing Director of this establishment agreed to meet us during the busy period of Chinese New Year holidays and upon meeting him did I realise why these developments are the epitome of class, sophistication and elegance. But that

should not be a surprise since he has 15 years of experience in the property industry, and the mannerisms of a perfectionist even in the way he speaks. Thriven does not look like it will stop at being listed on the Main Market of Bursa Malaysia Securities Berhad, but in fact move on to exceptional things. Thriven was once known as Mulpha Land, a company with international exposure, but has since changed its name to suit the direction the company was moving in. The name Thriven was derived from the values the company holds close, ‘Thrive’ and ‘Driven’, embodying all that it

is today, a charging force to be reckoned with. The only right thing to do was to take over a company with a particular brand and value added benefits, and focus more on the Central and Northern region leaving out the Southern region for now. The main objective was to bring in the Australian way of living, holistic and comprehensive, focusing on community in the local market. The Australian way of living starts the day you move in, as all units are comprehensively completed from the kitchen sink to the lights on the ceiling. All this is done in a simplified manner but at an efficient cost. The problem we face www.propertyinsight.com.my MARCH 2016 I 17


COVER STORY

Lumi is not about a development, Lumi is a solution. Thriven provides you that solution” -Ghazie Yeoh

in Malaysia is the fitting out of the said property, tiling, how many air conditioners to put in. Basically, if you buy an apartment in Kuala Lumpur and it says it is a fully furnished unit, it probably just means it comes with one air conditioner and kitchen cabinets, you would still have to put the lights in or fix your own bathroom railings. Thriven has studied the market for years, making their developments cost effective but comprehensive and complete. The Australian lifestyle also revolves around the community and this lifestyle has been emulated to give these homes the same environment. You can also expect practical layouts and effective space planning and activity based healthy living environment with full-fledged facilities. It is easy to say that Thriven focuses on two key niche areas. Thriven is probably the only developer to have a branded affordable housing series, Enesta. These can range from RM150k for a single storey home, also beautifully designed. They also have branded luxury condominiums in their Lumi Collection with a price below market value from RM800k. A walk in their sales gallery echoed luxury and effective space planning. At the back of my mind I was wondering how a place so spacious and beautiful, could cost less than a million Ringgit. It goes to show, everything you see on a Lumi or Enesta brochure, is what you get, value for money especially in this climate. Not something you can find every day. The key to the developments by Thriven is attention to detail, and that is extremely apparent in its units. All of these, backed up by the other business divisions Thriven has in its bag – property development and investment, hospitality and lifestyle 18 | MARCH 2016 www.propertyinsight.com.my

retail and facility management. It’s a one stop solution for the modern Tom and Sally. Unlike the usual stories you hear about badly maintained developments in Malaysia, Thriven global thrives to continue build, retain, manage and ensure sustainability. All this success and meticulous planning has obviously seen darker days. Problems that Thriven has faced is not a surprise to any other developer. “Problems that we’ve faced were around land banking, to look for strategic locations. So we decided to change the areas in which we operate as mentioned earlier, now only in the Central and Northern region and look for good strategic locations to build.” All the developments mentioned are in prime locations. The Lumi Series will see itself in Tropicana and Section 13, Petaling Jaya. Even the Enesta Affordable Series will be located in Jalan Kepong, among other areas. All close to public transportation, in matured locations with a matured population. Thriven follows the footsteps of matured countries like Bangkok. “As traffic grows, transportation becomes key. The answer is not to build more roads, but to improve on public transport.” In the neutral market of 2016, when all industries are affected, the property market takes an equally bad hit. “The good thing about Malaysia is the strong liquidity, but people are taking a wait and see approach. The general population is more conservative with their investments, but they have the potential to choose what they can invest in, and this is why we must be different and also why we are entering 2016 with Lumi Tropicana, an averagely priced branded serviced residence which provides full hospitality services.” Thriven


focuses on four principles; forward living, forward thinking and forward looking and keep evolving towards the betterment of the company. Thriven stresses on affordable living being the most important component of selling in this market as the masses demands for it, and Thriven promises to deliver good homes for the masses. Buying a house with Thriven is buying a home, whether you are an investor or a home buyer, when you get the keys to your unit, you will be able to live there almost straight away, or start looking for tenants immediately. Thriven sees a bright future ahead, with a unique product, great in value and honest in its development. In fact they hope to be a full-fledged home-grown brand like the two best brands in the world, Ascott and Fraser’s, as the Malaysian market has yet to tap into that idea. Thriven is confident it can achieve that status, and honestly, once you see and experience their units, so will you. Other plans include project developments in the Middle East, using their key strategy – space efficiency. “We may not be the bigger boys in the market with thousands of acres of land, but we have the best pieces of land today compared to the majority of developers.” “The way forward is living with space. No one wants to live in a hotel anymore. Look at Italy during the recession and how people continued to buy, but buy things of value like service residences.” The majority of service residences coming up are built but not managed. The Lumi Series in the long run will be managed to create a recurring income for Thriven, under facility management and hospitality services arm. The rest will certainly be from www.propertyinsight.com.my MARCH 2016 I 19


COVER STORY

one-off sales from property development thus creating a sturdy and stable path for Thriven in the future. With its infrastructure, services, and impeccable design, Thriven is definitely taking the lead in the game. “Other developers can try to emulate us, but by the time they do so we would have surpassed them already.” The weakened market foresees a dip in buyers, but Ghazie is confident of what is in store for Thriven. “When the economy shrinks, only those who buy are the ones whose decisions are the most crucial, and we have to ensure we are their number one choice.” Ghazie adds, “Lumi is not about a development, Lumi is a solution. Thriven provides you 20 | MARCH 2016 www.propertyinsight.com.my

that solution.” Thriven will continue to make simplified approaches as done by more advanced countries to try and bring those examples back home. Australian living for example, has a lot of requirements for community focused living which starts from the ability to plan and design a complete and holistic lifestyle with no need to socially reengineer. What drives Thriven to be who they are? Integrity. “As a developer, you are at the top of the ecosystem, with many stakeholders involved. The one thing that binds it all together is integrity. Be honest, pay well, do not cut corners and you will achieve a final product you will be content with.”

Ghazie also expressed his concern for the lack of such values within the Malaysian market, generally in all sectors. “There is a lack of integrity in Malaysia in general and that may be our pitfall, if we do not change soon.” The difference in the final product is apparent when you have the best of intentions. Business is still business, but the way Thriven builds is through the heart of the people, providing them a service and an after service without having to cut costs to earn a measly few extra Ringgit. True to their name, they will thrive and continuously be driven by success.


Bernama Interview with Mr Ghazie Yeoh bin Abdullah, Group Managing Director, Thriven Global Berhad www.propertyinsight.com.my MARCH 2016 I 21


MAIN FEATURE

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ave you heard of Airbnb? The ‘in’ thing in the Online Travel Agency business! I was looking for destinations to go to for the recent long holidays and came across a website called Airbnb.com. The first thing I saw on the home page attracted my attention, it said ‘Welcome Home’. It is a website for people to list, find, and rent lodgings with over 1,500,000 listings in 34,000 cities and 190 countries. Airbnb was founded in August 2008 and headquartered in San Francisco, California, the company is privately owned and operated by Airbnb, Inc. Luxury Boutique Accommodation is one of the agencies using Airbnb in marketing their properties. According to the Founder, Andrew Tan, “Luxury Boutique Accommodation is doing short vacation rentals, which means we rent out our properties on a daily basis. While Airbnb is the platform we use, we become a Super Host on Airbnb. Everyone is so interested to know what Airbnb is about so we are also riding this wave.” Most of Airbnb’s hosts started off with their own extra space, like an extra room or extra home. However, you can also start by utilising other people’s extra space. For example, you could also list and manage your aunt’s extra properties on Airbnb for rent! As for Andrew and his team, they started by talking to the people around them and renting their own properties.

AIRBNB:

RIDING THE WAVE A home away from home BY: FARA AISYAH FIRDAUS PETIAL

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MAIN FEATURE

Nowadays, guests prefer to have the personal touch of the properties they are staying in. I think that is why some people prefer to use Airbnb. It is the feeling of staying in your home though you might be miles away from home. It is the experience that matters” - Andrew Tan

Funnily enough, it was the same for Marisha Naz, a Gen-Y entrepreneur who had a lucky encounter with Airbnb in 2010, when she was still studying in London. “When I was a student in London, I was renting an apartment with my friends. One day, one of my housemates decided to quit her course at university and moved out of the house. The rest of us were having a tough time looking for another tenant and paying the rent! So the story was, when I was scrolling my Facebook’s news feed, I saw this one advertisement at the corner, ‘Need to rent your room?’ so I clicked it and it linked me to Airbnb’s website.” “The response was impressive! We rented out the room for 20£ [RM119] per night. Interestingly, the room rent did not only cover the room’s rent, but the whole unit as well. Ever since we listed it up on Airbnb, we did not need to look for another housemate.” AIRBNB PROPERTIES VS HOTELS Hotels are more established while Airbnb’s business has only just started to bloom in Malaysia. “Nowadays, guests prefer to have the personal touch of the properties they are staying in. I think that is why some people prefer to use Airbnb. It is the feeling of staying in your home though you might be miles away from home. It is the experience that matters.” said Andrew. Andrew and his team put a lot of effors in maintaining their reputation on Airbnb. Gwenyse Ong of Luxury Boutique Accomodation said that, “It is very important for us to take good care of our clients. For example, I will personally contact guests prior to their arrivals to check in with them to see if they have all the information needed or if they need any 24 | MARCH 2016 www.propertyinsight.com.my


assistance from us. Once the booking is confirmed, we will keep in touch with them. From my experience, guests will definitely ask all sorts of questions like, ‘How to get to a specific location by bus?’” “I like renting my properties to the regular users of Airbnb. These people already know that the property is actually someone’s house, not a hotel. They treat the property with care and respect,” Marisha added. Clients that booked their Airbnb properties not only come from abroad, but are locals as well. “We have a lot of local clients. Local here means that they are people from Klang Valley who are looking for a staycation.” Andrew explained. BEING AIRBNB’S HOSTS As stated by Andrew, Airbnb is under the same company as UBER whose business model is termed shared economy. In the system itself, you can be a user and you can also provide a service. In order to become an Airbnb host, you will need to have extra space. “If someone really wants to be an Airbnb host, do it with passion. Try to add value to your experience, rather than

just renting out for money,” highlighted Andrew. If you would want to be a host on Airbnb, you need to have a ‘Verified ID’. First of all, Airbnb will verify you on social media and make sure you have a valid Facebook account – to see who you claim you are. Then they need your ID or driving license that is valid and approved by the local government. After that, they need you to set a password and verification on your phone number. Lastly, they need your utility bills to prove that your address is valid. There are always learning curves and unique experiences in whatever you are doing – Andrew and Gwen are not excused from these. “Airbnb basically discloses our personal information. The worst experience I had was dealing with immigration. There were foreigners who were trying to book with Airbnb and the moment they secured all of our information, they used the details to apply for their visas. They used our names and said we were their friends who guaranteed their arrivals. The immigration called me and I said no, we’re a hotel business. These are just guests, if

Marisha Naz

Gwenyse Ong www.propertyinsight.com.my MARCH 2016 I 25


MAIN FEATURE you deny their entries, it will have nothing to do with us. All we have to do is to say that the guest did not appear on the date mentioned.” Said Andrew. He added, “We also have experienced an incident where a kid ran around in the property and then he fell. The parents sued us for that! The issue was resolved and it was understood that there was a pail of water which the kid spilled and then fell. The incident taught us something. Therefore, we bought Public liability insurance from an insurance company in the case any injury should happen at our property, the guests are allowed to sue us and the insurance company will deal with them on behalf of us. It’s all a learning experience. What we understand from guests, what happened to us, these things teach us, then we learn and move on. That’s the main reason for our success.” Marisha has also some experiences in dealing with clients with children. She claimed that the kids made a lot of noise that the neighbours even complained about it. “That’s why I have the ‘No kids under 12 years old allowed’ in some of my properties,” she said. GOOD INVESTMENT? “Short vacation rentals are a good investment. But if you were to manage one property, then it’s not worthwhile because you have to devote quite a lot of time to it. If I were to manage just one property today – it would not be cost efficient. Because every time I hire a cleaner to clean the property, they will charge me about RM80. Sometimes you will waste your time waiting for one customer the whole day. If you have scalability like 10 to 20 properties, you can actually hire 2 in-house cleaners and save quite a bit,” Andrew advised. He furthered his point by saying, “I would suggest young entrepreneurs with a good mind-set who want to start a business, to start off with Airbnb. But I’d personally suggest them to start with a team of two to three persons. This short vacation rental is very seasonal. In a very good month, you’ll get good rent and high occupancy, but in a slow month, you’ll get low occupancy rates.” “Try not to be too aggressive. Try to rent out space. Work with people around you first. Do not embark on big units. Try the small cosy units. Put unique decorations 26 | MARCH 2016 www.propertyinsight.com.my

and give them unique experiences. Try this on a small scale first.” “Travel industry is a huge business. Most travellers travel on their own and the trend is there. These travellers are looking for an experience and that is what we should give them. We are not selling accommodation. We want our guests to remember Malaysia. Not only Malaysia, but us. Because they’ll recommend us to their friends or for the next time they want to come to Malaysia.” Andrew concluded. Gwenyse also expressed that, “This current time is a very good opportunity because the Ringgit is lower, so foreigners

will actually come to Malaysia to spend their money. As for locals who are in need of vacations and cannot travel abroad because of the tight budget, they just want a staycation – like the ones we are providing now. We are also offering them good amenities, good facilities and they are paying at a lower price.” I myself visited an Airbnb property recently and it actually felt more like a home. The hosts treated me like family! It is indeed a platform that not only provides you with a unique place to stay, but it provides you the sense of security and belonging as well. Airbnb is my home away from home, and right now my favourite way to travel.


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FEATURE

CONNECTING THE PEOPLE OF GREATER KUALA LUMPUR The railway revolution is about to hit Malaysia BY: AVINASH SAGRAN

I

ncreasingly Light Rail Transit (LRT) is seen as an appropriate solution for transportation challenges and heavy traffic faced by suburban residents of suburbs. The convenience to access LRT, in turn changes the strategy for urban planners. With more routes set to be launched in the upcoming months; it will change the face of urban transportation in Klang Valley. With four new stations at Awan Besar, Muhibbah, Alam Sutera and Kinrara BK5 operating since October 2015. I decided to give public transportation a try and to experience what nearly 200,000 passengers experience using the LRT. I have never experienced taking public transportation during peak hours though I know all too well what it feels like to be stuck for nearly an hour in certain 28 | MARCH 2016 www.propertyinsight.com.my

highways along Klang Valley during peak hours. My journey began at 6.00 a.m just to mirror what time I would leave home if I was braving federal highway. I parked my car at the Park & Ride facility at Bandar Tasik Selatan. The ample parking space is definitely a bonus though that is not the feature in all the Park & Ride assigned stations. I took the train to Masjid Jamek as it was the interchange station between LRT Ampang Line and LRT Kelana Jaya line making it one of the busiest stations along both lines. The station certainly lived up to the billing of being the most crowded station but despite the hustle and bustle of the station people went about without any stress; armed with earphones most of them were probably getting themselves mentally ready listening to their morning

Investors who positioned themselves when the LRT extension was announced will be reaping the benefit soon�

- Ishamel Ho

grooves. My mission was to understand how the extension of Ampang LRT line affects the people living in the suburbs of Puchong.


The number of high rise developments along the KESAS Highway is a testament to spin-off effects of the Ampang LRT extension”

- Dr Daniele Gambero

Previously only accessible by the numerous highways connecting Puchong, the options for those residing in Puchong have always been busses and cabs. When I got myself to Kinrara BK 5 Station, I saw large number of commuters mostly in formal wear heading to work. The parking bays were filling up quickly – there were some who parked their cars at the nearby Giant Hypermarket as well. When I asked the ticket concessioner he said “Ever since the opening of the extension line, the number of commuters have increased; commuting by LRT has become vastly popular.” His statement can definitely be corroborated by the number of commuters seen visibly during peak hours. The newer stations are more spacious, perhaps they are predicting a large number of commuters once the entire line is complete. The full Ampang LRT extension of Sri Petaling to Putra Heights is scheduled to be operational in the second quarter of the year barring any unforeseen setbacks. According to Dato’ Ir Zohari Sulaiman, CEO of Prasarana Rail and Infrastructure Projects Sdn Bhd – who is managing the LRT Line Extension Project, “Upon full completion of the LEP project, the extended Ampang Line – which runs from Sri Petaling to Putra Heights, will provide an additional 130,000 passengers daily. Ampang Line currently manages a daily ridership of 195,000 passengers.

The Kelana Jaya LEP, which runs from Kelana Jaya to the integrated station of Putra Heights, will provide an additional of 170,000 passengers daily. Currently, the Kelana Jaya Line manages a daily ridership of 265,000 passengers.” My stop at Kinrara BK 5 was an eye opener as to how the LRT project does not only benefit commuters but also businesses and developers. The landscape on one side of the LRT is an established housing area with schools while on the other side a newly operational Giant and the 8Kinrara Service Apartment by I&P Group. The spin-off business opportunities are enourmous. And investors should not discount the Rail Revolution effect and the many opportunities it comes with. With more people trying to find affordable housing in the outskirts of the city; LRT connectivity is something which connects everyone to Greater Kuala Lumpur. According to Dr Daniele Gambero, the impact of the Ampang LRT extension is clearly visible. The number of high-rise developments along the KESAS Highway is a testament to spin-off effects of the Ampang LRT extension. He further added that the impact of the LRT extension would reduce traffic congestion around residential areas. Housing prices around Puchong and Putra Heights have seen an increase; a key signal property hotspots along LRT lines are indeed the way to invest. Connection

is key for urbanites and with the operation of the extensions; opportunities galore for investors and home owners. The CEO of Ho Chin Soon Research Sdn Bhd, Ishmael Ho also opined that “With the recent opening of the four stations of the Ampang LRT extension, investors are now able to see how rail-based infrastructures can bring potential to a locality. Q1 2016 will see the opening of another eight stations from the Ampang LRT extension and 12 stations from Kelana Jaya LRT extension. Matured places to benefit would be the likes of Puchong, Kelana Jaya, and Subang Jaya. Whereas for new growth areas it would be Puchong Perdana and Putra Heights. Investors who positioned themselves when the LRT extension was announced will be reaping the benefits soon.” We can positively predict that the construction of the LRT will connect urban areas and will serve as a magnet to spur new housing development. Furthermore, existing townships would experience a boost in property values based on the proximity to LRT stations. Connectivity is key for urbanites to gather opportunity; with strong governmental efforts in continuously improving the urban transportation landscape, citizens can feel secure that they can be connected from anywhere within Greater Kuala Lumpur.

www.propertyinsight.com.my MARCH 2016 I 29


FEATURE

LRT Commuters Comments

FIRDAUS AL- SEDDI After the LRT line route was extended to Puchong, it has been extremely convenient for me to travel on the weekends. I do not have to brave the traffic and pay expensive parking tickets. The newer stations are more spacious and accommodating to the growing public which uses public transport. RACHEL Today was my first day trying out the LRT, I did not know I had to change trains in Sri Petaling so that delayed my journey. Despite a bumpy start I believe I would use LRT more often, because it saves me the hassle of driving. With the LRT situated so close to my house, there is no reason why I should not opt to using public transport more often. DOMINIC SOLOMAN GEORGE I’m excited for the completion of the full LRT line. Getting from home to work, gym and church will definitely be easier for me. SHIRLEY KOK I’m happy more efforts are made to improve the public transport in Kuala Lumpur. I can rent in the outskirts and save tremendously on rent. It is extremely expensive to rent in the city; I need to save cost. Expansion of public transport certainly helps us all. MANPREET KAUR I wish there more parking spaces in the park and ride facility. Sometimes I have to wake up extra early to make sure I get parking. RADHIKA ARUMUGAM Rush hour does not feel rushed anymore. I need to leave home only at 7.30am and I’ll get to work in an hours’ time. I’m so glad the Kinrara BK 5 station was one of the earlier stations opened.

30 | MARCH 2016 www.propertyinsight.com.my


BASIC FEATURES

AMPANG LINE KINRARA BK5

ALAM SUTERA

Operate 3 rail systems; Kelana Jaya Line, Ampang Line and Monorail Line

PH12 STAGE 2 EXTENSION OPENING Q2 2016

PH11

Total 60 stations (not including LEP) across 65km (plus 5 LEP Stations) Integrated rail system (Masjid Jamek/Titiwangsa/HangTuah)

MUHIBBAH

PH10

PH13

FUTURE STATION

AWAN BESAR

PH9

PH14

IOI PUCHONG JAYA

SRI PETALING

PH8

PH15

PUSAT BANDAR PUCHONG

Operational Hours; from 6am – 12am

Automated Fare Collection

Universal Access/ Facilities for OKU

Ramps Elevators from concourse to platform

BUKIT JALIL

PH7

PH16

TAMAN PERINDUSTRIAN PUCHONG

SUNGAI BESI

PH6

PH17

BANDAR PUTERI

Easy access from platform to train Wide toilet and safety walkway for wheelchairs Reserved/special seats on trains

BANDAR TASIK SELATAN

PH5

PH18

PUCHONG PERDANA

Tactile markings for the blind Door light indicator for opening and closing.

BANDAR TUN RAZAK

PH4

PH19

PUCHONG PRIMA

SALAK SELATAN

PH3

PH20

FUTURE STATION

CHERAS

PH2

PH21

PUTRA HEIGHTS

KJ37

KELANA JAYA LINE

AMPANG LINE OVERVIEW Driver-operated light rail transportation system Two lines covering the Ampang eastern district to the City Centre

ST1

CHAN SOW LIN

27 km-long with 25 stations from Ampang to Sri Petaling and Sentul Timur

ST2

PUDU

Operates with 30 sets of six-car trains 2.87min headway at peak hours

ST3

HANG TUAH

ST4

PLAZA RAKYAT

ST5

MASJID JAMEK

www.propertyinsight.com.my MARCH 2016 I 31


FEATURE

UNIVERSITY TOWNSHIPS Capitalising on the college craze through property investment BY: AVINASH SAGRAN

32 | MARCH 2016 www.propertyinsight.com.my


University towns are certainly alluring for investors, you can say that rentals are guaranteed by the need for student and staff accommodation� - Dr. Elizebeth Lee

L

ooking for a signature address to live? Does the idea of living in a culturally vibrant community, well-educated population, rising property values even during economic crisis and mingling with people from all over the state and world seem like an intriguing choice? Nestled away from metropolitan centres; university towns offer such inclusive living environments for all generations. The potential that university townships hold s are evident globally; from the traditional courtyards of Cambridge (Cambridge University), scenic ocean scenes from Cairns (James Cook University), culturally rich Bologna (University of Bologna), rare natural and wildlife landscape of Dunedin (University of Otago) and modern cities such as Madison (University of WisconsinMadison). The distinguished features of such townships have seen towns continue to thrive with bustling student communities and residents alike. Most importantly the housing market is very strong across all

property types because of the investment return opportunities available from student accommodation, commercial and retail. With an excellent job base within these areas, varied opportunities are available in the private and public sectors. The trend of creating townships surrounding universities is increasing in Malaysia as of late. Capitalizing the buzz created by the prospect of having students within a township have been a key strategy for developers to highlight at their launches. It has also become a unique selling point among developers to boost investor confidence. A historic success story would be Taman Universiti, Skudai the flagship township of Country View Berhad, is a self-contained township spanning 1,080.23 acres; the township is dominated by civil servants and students. Before University Teknologi Malaysia built sufficient residential hostels, students flocked to the township for outside campus accommodation. Some of these students in

turn made Taman Universiti their homes; building homes with their families in this beautifully landscaped township. The intergenerational mix during the 90’s saw a thriving intellectual community reflected by the number of national high achievers from SMK Taman Universiti. A plethora of retail and dining options mirrors the truly international scene present in this unique township. They say education is the way of the future. My take is simple, do not overlook universities as just an education platform; open your eyes to an array of opportunities available surrounding a university. I’ll give you a few reasons to change your mind; firstly you would be surrounded by good infrastructure and facilities all within a close proximity. Colleges with medical schools often have teaching hospitals that provide medical services to the community; these hospitals may provide treatment in specialised fields and have specialised doctors attending to your needs. Most www.propertyinsight.com.my MARCH 2016 I 33


FEATURE students do not own vehicles therefore mobilization is a priority in university towns hence public transportation is often reliable and affordable. Remember your university days of jamming to music, watching plays and performances? Well you get to relive those quirky off beat moments. Universities bring a group of young people into a town; such youthful exuberance is just the right magic you need to inject in your adult life and inspire one’s children to pursue their degrees. According to Dr Elizabeth Lee, Senior Executive Director, Sunway Education Group and Sunway University “A youthoriented environment is vibrant and always attractive. Hence, it will benefit developers in many ways. Besides spending on their lifestyles, which will support the retail,

Source : www.funnymalaysia.net

34 | MARCH 2016 www.propertyinsight.com.my

leisure and entertainment sectors, youths are also potential new homebuyers as well as a potential entrant into the workforce. Once they are rooted here, they will help to develop and grow the township accordingly.” She further added “To illustrate, Sunway’s The Pinnacle, a MSC Status Grade-A building in Sunway Resort City, has been occupied by multinationals such as Ericsson, Bausch and Lomb, Roche and Pepsico. Furthermore, Siemens has taken up an entire block in Sunway Geo. They are currently building a new 17-storey, 240,000 office tower in Sunway South Quay which will be completed later this year. For the retail sector, a young demographic with high-spending power is beneficial.” On to the dollar and cents part of why university towns are worth your

investment. Universities often ensure a stabilised local economy as the steady flow of students and staff are a continuous cycle. Gen-Y’s are capitalizing on the rising number of university students; opening up picturesque restaurants and coffee shops as they understand the need for students to hangout at in these areas. Small businesses fear not; students are always hunting for wallet friendly eateries. University towns promise an affordable cost of living with many restaurants and local businesses catering to people living on a college student budget by offering affordable services. Kampar was a sleeper town before UTAR Kampar Campus changed the entire landscape of the township. The lake in the middle of the township, reflects its beauty every evening, and is a hotspot for students


to cycle at in the evenings. It is quite a beautiful campus, smack in the middle of Kampar. According to Jason Doo CEO of METROWORLD Realty Sdn Bhd “The education sector reaches the younger generation; students are the upcoming spending group therefore it is important to target the property sector within these groups.” METROWORLD endorsed university town launches for UTAR, Taylors University and MMU Melaka; proving once again how lucrative university township developments can be. Elizabeth Lee further added, “University towns are certainly alluring for investors, you can say that rentals are guaranteed by the need for student and staff accommodation. We, the Sunway Education Group own purpose-built accommodation for students’ residence, and there are times when we

have to turn away students. We continue to build more to accommodate current and future needs. In the Sunway Education Group alone, we have more than 20,000 students here in Bandar Sunway and a large number of our student community reside within the vicinity for ease of access to their institutions. The Sunway Resort City’s world-class integrated components also allow students to live, stay, work and play in a safe, healthy and connected environment.” Developers have been keeping a keen eye on college integrated developments with colleges or within the vicinity of colleges. Mixed developments such as De Centrum by Protasco, Utropolis by Paramount and BSP 21 by LBS are testament to the future of a well-rounded living area with an international feel. With the rising number

of students flocking to universities and colleges, investment returns are certainly guaranteed. A spokesperson from De Centrum mentioned “Some of our apartment units that were sold for RM180,000 in 2007 are now in the sub-sale market for around RM360,000 which is a 100 per cent capital appreciation over a span of 8 years. While the market may have slowed in recent years, there is still room for capital appreciation over the mid- to long-term especially on the back of infrastructural developments like new MRT lines, highways and population growth.” With budding diverse population bound to revitalise the youthful spirit in you, take a short visit to the nearest university town to experience a unique living.

www.propertyinsight.com.my MARCH 2016 I 35


DEVELOPER OF THE MONTH

36 | MARCH 2016 www.propertyinsight.com.my


TITIJAYA LAND HOLDINGS – BUILDING BRIDGES OF SUCCESS

The sky is the limit for Titijaya. Perhaps even the stars. BY: NATASHA GIDEON

www.propertyinsight.com.my MARCH 2016 I 37


DEVELOPER OF THE MONTH

T

itijaya Land Berhad is a famous home grown brand whom have made a name for themselves. I recently interviewed the Executive Director, Ms Charmaine Lim to get to know more about this family business from her perspective. It all began with Tan Sri Dato’ Lim Soon Peng in 1983, establishing Titijaya (M) Sdn Bhd. Under Titijaya (M) Sdn Bhd, he successfully developed his first project of holiday apartments in Fraser’s Hills. When asked about this project, Charmaine remembers this project fondly. It was not easy getting contractors as the system to get to Fraser’s Hill itself is complex. Due to the narrow road leading towards Fraser’s Hill, there are schedules to go up, and to come down. This however, did not disincentivise Tan Sri Lim from going forth with his project. Fast forward a few difficult hurdles along the way and Fraser’s Hill Silverpark was built. These were built at the time, for Singaporeans who would come to this side of the cosway for the cool weather and European like ambience. In 1996 Titijaya Land Berhad launched projects in Bukit 38 | MARCH 2016 www.propertyinsight.com.my

Cheras with a mix of residential and commercial development and today they have successful developments such as E Tiara Serviced Residences and First Subang. Being in a family business, Charmaine takes her job even more seriously, especially when taking advice or constructive criticism. “I do my job with even more passion because your blood and your

feelings are so attached to the company” she explained with such enthusiasm. “I started out at a lower rank and eventually decided to join marketing for the company. We all work closely as you can imagine, even dinner time can sometimes turn into full blown meetings.” Titijaya’s stronghold is within its land banking. They have developments con-


You cannot fight a battle on your own. You pave a clear direction for your subordinates, be fully committed, put in all your dedication and from there you will start seeing a change, making the impossible possible” -Charmaine Lim

centrated in Klang Valley as their initial headquarters were there. “We focused on Klang because we were already there, and we knew the market. Our first highrise development was E Tiara Serviced Residences in Subang Jaya. Then we moved but now we have land secured in Kuala Lumpur, Penang and such so we are not restricting ourselves.” Titijaya

Land Berhad focuses on highly populated areas, especially Transit Oriented Development (TOD) and hotspots. Since going public two years ago, the company has had a healthy cash flow and continues to look for good land banks and joint-venture projects whether public, private or with other developers. The sky is the limit for Titijaya. Perhaps even the

stars. Not everything was smooth sailing for the company. The many problems that the company faced were associated with policies. “We cannot change government policies that affect us, but it is part and parcel of the business and we take it as a challenge. You just have to adapt and be creative about it.” Anyone and everyone will tell you that the market in 2016 is either neutral, or bad or gloomy. This in turn, also means higher rates of loan rejections. “People are more careful now, as they want to keep their investment portfolio clean, so we get more genuine buyers, those who really have made a calculated decision.” But the market and all its gloominess will not be able to stop Titijaya from further acquiring success. “We have a strong fundamental of RM695bil which will contribute to our three launches in 2016 namely, H2O Block B (known as Bellaville), Emporia Office Suites and Park Residency in Cheras. Titijaya is not an unfamiliar name to the industry and that is all thanks to the www.propertyinsight.com.my MARCH 2016 I 39


DEVELOPER OF THE MONTH

premium land banks they have acquired. “We choose to do joint-ventures (JV) either with government bodies, private institutions or with other developers. We try to acquire areas with high densed populations, and those that have a high purchasing power. It also helps that Tan Sri Lim is very involved within the industry especially with his reputation to uphold and coupled with connections from his vast experience.” To highlight the many competitive designs and developments that Titijaya are known to create, buyers will be delighted to know that they are within easily accessible areas, close to the city centre but still comfortable enough to come home to. Bellaville @ Ara Damansara is only 10 minutes from the Subang Airport and well connected to the NKVE Highway. Residents will be delighted to know that there is a connected pedestrian bridge to Tesco. Talk about having amenities! If you have heard of this development before, it is because this is the second phase of the recent development, H2O @ Ara Damansara. Embun Kemensah Courtyard Villas are 40 | MARCH 2016 www.propertyinsight.com.my

residences as cozy as the name sounds. Owning a home here means you are surrounded by 2.5 acres of greenery with a hilltop cityscape view and greenery as far as you can see, straight from the balcony of your own home. If you have travelled to tranquil places like Nepal or Kashmir, you may want to consider calling this place a home, waking up to crisp fresh mountain air. All these personal touches are thought of beforehand especially for home buyers, and in line with Titijaya Land Berhad’s goal, which is to create a win-win situation for both parties and to create a harmonious relationship with their customers. The key to success is always being one step ahead, and that is the strategy used by Titijaya when building upcoming developments. “We sell to those who are looking to upgrade, from an apartment to a bigger more comfortable condo. We look at well-planned communities, forest reserves. Majority of buyers want to appreciate nature, live in comfort and most buyers are looking for this upgrade. And we would like to believe that we provide this.” There is a ray of light down the 2016


path for Titijaya. “The right product at the right location. That’s all you need” exclaims Charmaine who is in charge of the Group’s sales and marketing division. With 80 to 90% of ongoing development being sold so far, it seems like this mantra has its charms. Even with all the slowing down in the market, it is nothing they have not seen before. “We have encountered this cycle before. We just need to focus on what customers need. Times like these push developers to be more innovative and creative. We need to push on affordability and the efficient build-up of products.” Charmaine explains she believes in helping customers achieve their dream homes, whilst maintaining a win-win situation for both sides. All great shapers of the world are ahead of their time, so I asked Charmaine what she foresees in the future of development. “The trend has moved towards Transit Oriented Development. The trends revolve around lifestyle, and we want to provide that. We are working with Prasarana with this on a project near KL Sentral nearer to public transport and malls.” What makes a great team leader? A great team leader understands the need to have good teamwork. “You cannot fight a battle on your own. You pave a clear direction for your subordinates, be fully committed, put in all your dedication and from there you will start seeing a change, making the impossible possible.” Rest assured when buying a home, or an investment from Titijaya Land Berhad, you are buying a product built for you, catered to your needs, which inevitably means good investment returns.

www.propertyinsight.com.my MARCH 2016 I 41


AREA FOCUS

PUCHONG: GROWING, LEAPS AND BOUNDS Good investment opportunities at great prices BY: FARA AISYAH FIRDAUS PETIAL

42 | MARCH

2016 www.propertyinsight.com.my


W

henever I asked any expert in the industry on the property market in Semenyih and how it would be in 10 years, I get the same answer which is “It will be the next Puchong.” That piqued my curiosity made me wonder, I need to see Puchong! So I talked to a well-known property investor in Puchong, Dato’ Shah Razali to discover a few treasures within the area. According to him, Puchong was quite a vacant area in 1995 to 20015 when there were not many developers having projects there – only Talam Corporation Berhad in Putera Perdana and IOI Group in Bandar Puchong Jaya. “Things started developing in Puchong in 2002 when the Damansara-Puchong Expressway (LDP) was built,” said Dato’ Shah. He also stated that in 1995, upgraders were moved from Old Klang Road to the flats in Puchong Permai and Puchong Perdana. “Puchong was previously occupied by the groups of upgraders from Old Klang Road, till Bukit Hitam Development built Bukit Puchong and LBS Bina Group developed D’Island in 2010.” ACCESIBILITIES & CONNECTIVITIES Dato’ Shah mentioned, the main factor that were involved in enabling Puchong to develop rapidly was the LDP – with greater accessibility to New Klang Valley Expressway (NKVE) and South Klang Valley Expressway (SKVE). Also when Equine Park was developed in a neighbouring township, the connectivity to Puchong expanded being a few minutes away from the Maju Expressway (MEX). Puchong will see the RapidKL Light

Rail Transit Ampang Line under its LRT Extension Plan (LEP) stopping at 7 stations from PH13 – PH21. One of the terminals, Kinrara BK5 LRT Station, opened on 31 October 2015. The remaining LRT stations that will serve Puchong areas are: • PH14 IOI Puchong Jaya • PH15 Pusat Bandar Puchong • PH16 Taman Perindustrian Puchong • PH17 Bandar Puteri • PH18 Puchong Perdana • PH19 Puchong Prima The rest of the extension line is expected to be fully opened in March 2016. There are also bus services connecting Puchong to Kuala Lumpur, Subang Jaya, Petaling Jaya, Putrajaya and Cyberjaya. Bus services are provided by RapidKL buses and Metrobus which have routes along Jalan Puchong to various destinations around Klang Valley. Taman Kinrara, one of the nearest housing estates to the city, is only about 30 metres from the border between Selangor and Kuala Lumpur. According to the Director of VPC Alliance, James Wong, “Puchong South benefits from the amenities and facilities available from the established neighbouring townships like LRT Extension Lines (Kelana Jaya and Ampang Line) in Putra Heights stations and 7 new Ampang Line stations in Puchong North, commercial developments like Tesco and Setia Walk in Taman Mutiara Puchong, Cyberjaya and Putrajaya.” LANDMARK AND DEVELOPMENTS “There were not many skyscrapers nor any landmarks so to speak in Puchong previously. But we have the Puchong Financial Corporate Centre (PFCC)

now,” said Dato’ Shah. PFCC is the MSC Cybercentre located in Selangor, and the only corporate office building in the upcoming Puchong vicinity. It is the next hotspot for multi-national and local ICT companies who wish to move into the area. Another notable landmark in and around Puchong is the IOI Boulevard, IOI Mall and SetiaWalk. There are also private hospitals located at Bandar Puteri Puchong, which are Columbia Asia Hospital and KPMC Puchong Medical Centre. In accordance with a spokesperson from IOI Group, “Bandar Puteri Puchong is a 930- acre mature and vibrant township consisting of a mix of commercial and residential components. The inspiration for this place came from the unrelenting thirst to create a better and more vibrant township after the success of the pioneering Bandar Puchong Jaya which put Puchong onto the map of the Klang Valley.” “We were already developing Bandar Puchong Jaya, a close to 1,000 acres township about 1.5KM away from Bandar Puteri Puchong and were familiar with the potentials of Puchong. When the opportunity was presented to develop Bandar Puteri, we saw it as a good opportunity to continue with our master planning for the whole Puchong area and bring this area to an entirely different level of sophistication in terms of green spaces and the attractiveness of the area for work, to live and to play,” IOI Group added. IOI Rio City Envisioned to be the next pulse of South Klang Valley , IOI Rio City is a 72- acre metropolis consisting of secured work spaces, myriad of retail offerings, hotel & residences; all interlinked with a network

Things started developing in Puchong since 2002 when the Damansara-Puchong Expressway (LDP) was built”

-Dato’ Shah Razali www.propertyinsight.com.my MARCH 2016 I 43


AREA FOCUS CONDOMINIUM NO

SCHEME

LOCATION

TENURE

1. 2. 3. 4.

BUILT UP AREA (SQ.FT)

TRANSACTED PRICE IN 2014 (RM)

TRANSACTED PRICE IN 2015 (RM)

% CHANGE

Nilam Puri Condo

Bandar Bukit Puchong 2

Desaria Villa

Kampung Pulau Meranti

FH

915

330,000

375,000

13.64%

LH

1,055

210,000

250,000

19.05%

Calisa Residence Block M Calisa Residence Block N

Taman Mas Sepang

LH

883

NA

325,000

NA

Taman Mas Sepang

LH

883

260,000

288,000

10.77%

Source : JPPH

LANDED RESIDENTIAL PROPERTY NO

DEVELOPEMENT NAME

TYPE

LAND AREA (sf)

BUILT UP AREA (SQ.FT)

ESTIMATE COMPLETION DATE

DEVELOPER PRICE (RM)

TENURE

From 463

FH

1.

Aqua Marine Ph. 2C, Taman Putra Prima

2-storey terrace houses

22 x 75 & 22 x 72

2,456

Mar 2017

2.

Aqua Marine Ph. 2C, Taman Putra Prima

3-storey terrace houses

22 x 75

3,456

Mar 2017

1,430,000 – 2,140,000

From 414

FH

3.

Ph. 3E, Taman Putra Prima

2-storey terrace houses

24 x 70

2,505

Feb 2016

1,062,050 – 1,437,480

From 424

FH

4.

Ph. 3E, Taman Putra Prima

3-storey terrace houses

24 x 70

3,581

Feb 2016

1,332,100 – 1,727,550

From 372

FH

5.

Ph. 6A Taman Putra Prima

2-storey terrace houses

24 x 70 & 25 x 70

2,505

Mar 2016

From 842,000

From 336

FH

6.

Ph. 6A Taman Putra Prima

3-storey terrace houses

24 x 70 & 25 x 70

3,500

Mar 2016

From 1,100,000

From 314

FH

7.

Dumalis, 16 Sierra

3-storey superlink

24 x 80

4,221

Dec 2016

1,391,000 – 2,645,000

From 330

LH

8.

Sierra 6, 16 Sierra

2-storey superlink

27 x 73

2,798

Aug 2018

1,103,220 – 2,135,800

From 394

LH

9.

Sierra 6, 16 Sierra

3-storey superlink

27 x 73

3,526

Aug 2018

From 1,451,520

From 412

LH

2-storey semi-d houses

40 x 70

3,968

2017

1,630,000 – 2,126,900

From 411

LH

10.

Corallia, D’Island Residences

1,136,000 – 1,992,000

PRICE PSF PER BUILT-UP AREA (RM)

Source : JPPH

of pathways, bicycle lanes and park connectors and connected to the 2 LRT stations situated at the fringe of Bandar Puteri Puchong. This will be a very liveable city where people can get around easily without cars The highlights for IOI Rio City’s Phase 1 are the shop offices (11443 sq ft – 19406 sq ft), office suites (850 – 1608 sq ft), service apartments (600 – 1200 sq ft) and nett lettable area of the retail podium – 55000 sq ft. The facilities for the apartment include a lap pool, a private function room, a barbeque area, a state-of-the-art gymnasium overlooking the pool and also a cabana. IOI Rio City is expected to be launched in 1Q 2017. IOI Group also said that “Traffic congestion is one of the drawbacks in determining the success of this township and we are now looking into upgrading the interchange to a free flow interchange for both the incoming and outgoing traffic. The upcoming LRT line with 2 stations at 44 | MARCH

2016 www.propertyinsight.com.my


TRANSACTION SALES PRICE OF DOUBLE (2) STOREY TERRACE HOUSES NO

SCHEME

LAND AREA (sf)

BUILT UP AREA(SQ.FT)

2014 (RM)

2015 (RM)

% CHANGE

TENURE

STOREY

111

93.156

480,000.00

500,000.00

4

Leasehold

2

76.643

58.53

220,000.00

230,000.00

4

Leasehold

2

Taman Puchong Utama

153.285

192.10

845,000.00

860,000.00

1.7

Freehold

2

4.

Taman Puchong Prima

111

130.09

600,000.00

600,000.00

Stable

Leasehold

2

5.

Taman Puchong Perdana

100

84.10

450,000.00

450,000.00

Stable

Leasehold

2

1.

Taman Tasik Puchong

2.

Taman Sri Puchong

3.

6.

Taman Puchong Intan

76.64

83.60

300,000.00

300,000.00

Stable

Leasehold

2

7.

Taman Puchong Indah

100

87.20

390,000.00

430,000.00

9

Leasehold

2

8.

Taman Industri Puchong

77

55.74

250,000.00

280,000.00

10

Freehold

2

9.

Taman Saujana Puchong

153.285 120.77 108.693

161.312 127.521 112.50

450,000.000 420,000.00 400,000.00

450,000.00 420,000.00 400,000.00

Stable Stable Stable

Leasehold Leasehold Leasehold

2 2 2

10.

Taman Puchong Tekali

130

128.65

590,000.00

600,000.00

1.7

Freehold

2

11.

Taman Mutiara Puchong

130

146.21

740,000.00

700,000.00

-5

Leasehold

2

12.

Pusat Bandar Puchong

153.28 130 109

161.46 134.71 96.988

820,000.00 780,000.00 640,000.00

820,000.00 780,000.00 640,000.00

Stable Stable Stable

Freehold Freehold Freehold

2 2 2

13.

Puchong Hartamas

143 130

174.11 130.99

820,000.00 700,000.00

820,000.00 700,000.00

Stable Stable

Freehold Freehold

2 2

14.

Bandar Puchong Jaya

139 143 121 77

132.85 156.26 120.309 82.26

800,000.00 800,000.00 640,000.00 500,000.00

800,000.00 800,000.00 660,000.00 520,000.00

Stable Stable 3 4

Freehold Freehold Freehold Freehold

2 2 2 2

15.

Bandar Bukit Puchong

153 130 109 100

184.84 134.69 146.91 101.58

700,000.00 600,000.00 550,000.00 450,000.00

700,000.00 600,000.00 550,000.00 460,000.00

Stable Stable Stable 2

Freehold Freehold Freehold Freehold

2 2 2 2

16.

Bandar Metro Puchong

153.285 190

149.871 205.54

750,000.00 1,050,000.00

750,000.00 1,150,000.00

Stable

Leasehold Leasehold

2 2

17.

Taman Puncak Kinrara

120.80

135.821

500,000.00

500,000.00

Stable

Leasehold

2

18.

Taman Kinrara Seksyen 4

120.77 92

104.05 86.602

600,000.00 350,000.00

620,000.00 370,000.00

3 5.4

Leasehold Leasehold

2 2

19.

Taman Bukit Kinrara

122.62

116.90

400,000.00

420,000.00

4.7

Leasehold

2

20.

Taman Kinrara Seksyen 3

91.97

81.24

400,000.00

400,000.00

Stable

Leasehold

2

21.

Taman Kinrara Seksyen 2

130 111

141.77 105.93

640,000.00 550,000.00

650,000.00 600,000.00

1.5 8.3

Leasehold Leasehold

2 2

22.

Kinrara Residence

153

202.237

1,100,000.00

1,100,000.00

Stable

Leasehold

2

22.

Kinrara Residence

153

202.237

1,100,000.00

1,100,000.00

Stable

Leasehold

2

23.

Taman Damai Utama

153

175.50

745,000.00

750,000.00

0.7

Leasehold

2

24.

Perumahan Kinrara (BK 5)

153 163.504` 130

184.419 160.35 134.66

980,000.00 880,000.00 750,000.00

990,000.00 880,000.00 780,000.00

1 Stable 3.8

Freehold Freehold Freehold

2 2 2

25.

Perumahan Kinrara (BK 6)

178 153

171.05 186.26

1,050,000.00 900,000.00

1,100,000.00 935,000.00

4.5 3.7

Freehold Freehold

2 2

26.

Perumahan Kinrara (BK 8)

178.40

226.822

1,250,000.00

1,300,000.00

3.8

Freehold

2

27.

Perumahan Kinrara (BK 9)

163.504 153

173.44 150.38

940,000.00 920,000.00

1,000,000.00 970,000.00

6 5

Freehold Freehold

2 2

28.

Taman Mawar

153.285

137.03

570,000.00

570,000.00

Stable

Leasehold

2

29.

Bandar Puteri

153 143

166.93 154.07

950,000.00 950,000.00

1,050,000.00 1,000,000.00

9.5 5

Freehold Freehold

2 2

30.

Aman Ria Residence

167

197.30

-

1,200,000.00

New

Leasehold

2

Source : Firdaus & Associates Property Professionals Research

Bandar Puteri Puchong will further ease the congestion here.” Anchored by IOI Rio City, Bandar Puteri Puchong will transform and influence the lifestyle of many people here where residents will work, live and play in a safe, secured and green environment well

supported with many health and culture related community amenities. O’HAKO IN PUCHONG JAYA Marimo Land Sdn Bhd also developed its O’hako in Puchong Jaya and it has become one of the freehold projects in the

area. O’hako means ‘A Box of Surprise’ in Japanese language. According to the Director of Independent Sales and Marketing of Marimo Land, Andrew Ng, “The project is the result of a deep consideration between the two cultures – Malaysian and Japanese. We aim to www.propertyinsight.com.my MARCH 2016 I 45


AREA FOCUS TRANSACTION SALES PRICE OF DOUBLE (2) SEMI-DETACHED HOUSES NO

SCHEME

LAND AREA (sf)

BUILT UP AREA(SQ.FT)

2014 (RM)

2015 (RM)

% CHANGE

TENURE

STOREY

362.52

214.122

720,000.000

720,000.00

Stable

Leasehold

2

300.996

249.04

-

1,730,000.000

New

Freehold

2

Kipark Puchong

223

179.19

630,000.00

650,000.00

3

Leasehold

2

4.

Bandar Bukit Puchong

315

244.778

1,250,000.00

1,300,000.00

3.8

Freehold

2

5.

Kinrara Residence

297.28

325.51

1,650,000.00

1,650,000.00

Stable

Leasehold

2

1.

Taman Puchong Impian

2.

Tama Puchong Utama

3.

6.

Taman Damai Utama

297.28

263.651

1,650,000.00

1,650,000.00

Stable

Leasehold

2

7.

Perumahan Kinrara (BK 2)

316.789

126.81

1,130,000.00

1,200,000.00

5.8

Freehold

2

8.

Perumahan Kinrara (BK 3)

391

142.86

-

1,350,000.00

ND

Freehold

2

9.

Perumahan Kinrara (BK 4)

256

139.63

1,150,000.00

1,200,000.00

4

Freehold

2

10.

Perumahan Kinrara (BK 5)

264

156.98

1,500,000.00

1,550,000.00

3.2

Freehold

2

11.

Perumahan Kinrara (BK 6)

577.80

220.835

2,600,000.00

2,650,000.00

1.9

Freehold

2

12.

Perumahan Kinrara (BK 8)

316 585.3

233.02 334.33

2,400,000.00

1,750,000.00 2,450,000.00

ND

Freehold Freehold

2

13.

Perumahan Kinrara (BK 9)

300.81

238.389

1,800,000.00

1,900,000.00

5.3

Freehold

2

14.

Bandar Puteri

465

263.17

3,100,000.00

3,100,00.00

Stable

Freehold

2

Source : Firdaus & Associates Property Professionals Research

TRANSACTION SALES PRICE OF DOUBLE (2) SEMI-DETACHED HOUSES NO

SCHEME

LAND AREA (sf)

BUILT UP AREA(SQ.FT)

2014 (RM)

2015 (RM)

% CHANGE

TENURE

STOREY

362.52

214.122

720,000.000

720,000.00

Stable

Leasehold

2

300.996

249.04

-

1,730,000.000

New

Freehold

2

Kipark Puchong

223

179.19

630,000.00

650,000.00

3

Leasehold

2

4.

Bandar Bukit Puchong

315

244.778

1,250,000.00

1,300,000.00

3.8

Freehold

2

5.

Kinrara Residence

297.28

325.51

1,650,000.00

1,650,000.00

Stable

Leasehold

2

1.

Taman Puchong Impian

2.

Tama Puchong Utama

3.

6.

Taman Damai Utama

297.28

263.651

1,650,000.00

1,650,000.00

Stable

Leasehold

2

7.

Perumahan Kinrara (BK 2)

316.789

126.81

1,130,000.00

1,200,000.00

5.8

Freehold

2

8.

Perumahan Kinrara (BK 3)

391

142.86

-

1,350,000.00

ND

Freehold

2

9.

Perumahan Kinrara (BK 4)

256

139.63

1,150,000.00

1,200,000.00

4

Freehold

2

10.

Perumahan Kinrara (BK 5)

264

156.98

1,500,000.00

1,550,000.00

3.2

Freehold

2

11.

Perumahan Kinrara (BK 6)

577.80

220.835

2,600,000.00

2,650,000.00

1.9

Freehold

2

12.

Perumahan Kinrara (BK 8)

316 585.3

233.02 334.33

2,400,000.00

1,750,000.00 2,450,000.00

ND

Freehold Freehold

2

13.

Perumahan Kinrara (BK 9)

300.81

238.389

1,800,000.00

1,900,000.00

5.3

Freehold

2

14.

Bandar Puteri

465

263.17

3,100,000.00

3,100,00.00

Stable

Freehold

2

Source : Firdaus & Associates Property Professionals Research

build this serviced apartment as a perfect home for their buyers, by offering their core values – affordable pricing but with great living space. Taro Fukagawa also dedicated these development to his family who are Takeo father, young brothers Toshie and Makoto.” Since 1990, the Marimo group has always believed that the middle income earners are a country’s biggest contributor. Hence, the Fukagawa family feels the need to provide good quality yet affordable properties to middle class families. “Why we chose Puchong Jaya, you might ask? That’s very simple, because Puchong Jaya fits our development principles – a great location with good accessibility, that caters to the middle income family,” said Andrew. In addition to that, he said “It’s hard to 46 | MARCH

2016 www.propertyinsight.com.my


TRANSACTION SALES PRICE OF DOUBLE (2) SEMI-DETACHED HOUSES NO

SCHEME

BUILT UP AREA(SQ.FT)

2014 (RM)

2015 (RM)

RM (PSF)

RM (PSF)

% CHANGE

TENURE

1.

Saraka Apartment

915

437

454

3.7

Freehold

2.

D’Kiara Apartment

904

420

442

5

Freehold

3.

Akasia Apartment

818 - 828

440

452

2.6

Freehold

4.

Kenanga Apartment

883

464

464

Stable

Freehold

5.

Vista Prima Apartment

915 - 980

260

306

15

Leasehold

1,044 – 1,163

330 - 374

330 - 374

Stable

Freehold

969 – 1,033

435

465

6.4

Freehold

904

487

487

Stable

Freehold

1,048

172

172

Stable

Leasehold

6.

Villamas Apartment

7.

Avilla Apartment

8.

Puteri Bayu Apartment

9.

Puchong Intan Apartment

10.

Sri Teratai Apartment

797

377

400

5.7

Freehold

11.

D’Cahaya Apartment

904

299

420

28

Freehold Leasehold

12.

Pangsapuri KLH

904 – 1.012

257

257

Stable

13.

Sri Bayu Apartment

1,163 – 1,281

327 - 344

344 - 353

2-5

Freehold

14.

Sutramas Apartment

829 - 850

412

423

2.6

Freehold

15.

Kinrara Ria Apartment

807 – 926

300 - 340

300 - 340

Stable

Leasehold

16.

Merak Aparment

872

390

390

Stable

Freehold

17.

Kasturi Apartment

872

400

413

3

Freehold

18.

Kesuma Apartment

883 – 904

354

376

5.8

Freehold

predict future prices, however, a middle class location always offers a great capital appreciation as this group is powerful in numbers. The relevant authorities always mean to serve the majority, thus, we foresee further improvements within Puchong Jaya that will lead to significant capital appreciation. Currently, the new developments surrounding O’hako are transacting around a comparative value of RM800 psf. While our O’hako is selling at around RM500 psf. That’s why we are confident that the room of appreciation is there.” EDUCATIONAL INSTITUTIONS There are plenty of primary and secondary schools in Puchong, as the area is divided into three local authorities; 5th to 7th mile stretch is under Kuala Lumpur City Hall jurisdiction, Kinrara to 16th mile is under

Source : Firdaus & Associates Property Professionals Research

TRANSACTION SALES PRICE OF DOUBLE (2) SEMI-DETACHED HOUSES NO

SCHEME

1.

X2 Residence

2.

Skyz Residence

3.

The Wharf

BUILT UP AREA(SQ.FT)

RM (PER SQ.FT)

DEVELOPER PRICE

TENURE Leasehold

2,415

308

520,800.00 – 1,011,800.00

1,162 – 1,657

550 - 597

750,800.00 – 990,000.00

Freehold

795 – 1,173

377 - 384

300,000.00 – 450,000.00

Leasehold

4.

Zefer Hill Condominium

1,356 – 2,139

403 - 468

546,500 – 1,000,500.00

Freehold

5.

Puteri Hill, Bandar Puteri (Condominium)

1,400 – 1,700

607

From 850,000.00

Freehold

6.

Koi Prima, Puchong

1,055 – 1,098

352 - 372

371,400 – 408,300

Leasehold

7.

Elevia Residence (Condominium)

859 – 2,357

479 - 557

478,800 – 1,129,710)

Leasehold

8.

Skypod, Bandar Puchong Jaya

632 – 1,220

500

From 316,000.00

Freehold

9.

Sfera Residency, Puchong South

978 – 2,003

500

From 489,000.00

Leasehold

10.

D’Aman Residence @ Puchong

883 – 1,389

355

313,000.00 – 650,000.00

Leasehold

11.

Epic Suites @ BP Newtown

624 – 2,475

490

348,048.00 – 1,017,422.00

Freehold

Source : Firdaus & Associates Property Professionals Research

www.propertyinsight.com.my MARCH 2016 I 47


AREA FOCUS the Subang Jaya Municipal Council, and the rest such as Bukit Puchong 2, 16 Sierra, Pulau Meranti and Taman Mas, are under Sepang Municipal Council. However, there are only three main tertiary institutions in the area, one of them is the RIMA International College specialises in LCCI courses, Business programmes from Heriot-Watt, Bioscience, Hotel Management programme from CTH – endorsed by Gordon Ramsay. There are also the Binary University College that specialises in management and entrepreneurship courses, as well as Putra Intelek International College that specialises in Risk Management, Information Technology, Business Management, Accounting and Finance and Forensic Accounting.

PROPERTY APPRECIATIONS James said, “Overall, landed residential properties performance in Puchong South shows an upward trend with capital appreciation ranging from 6.6% to 13.8%. Terrace houses located nearby to the Lebuhraya Lembah Klang Selatan (SKVE) shows an appreciation of 9.72% to 12.00%, whilst location such as Taman Putra Prima and Taman Tasik Puchong has a stable appreciation of 6.59%.” “At the end of 2015, the Selangor Government confiscated and gave the land to Kampung Seri Aman and Kampung Tengah. In 2008, the land was priced at about RM170,000. In less than 10 years, the land was valued at RM750,000. You can see the big range of appreciation there,” Dato’ Shah added.

Dato’ Shah himself bought a sub-sale residential property in Bukit Puchong 10. “The property was launched in 2003 and finished construction in 2005. I bought it in 2008 at RM501,000 – it was a corner-lot unit. Then, I sold it in 2015 at the price of RM1.2 million.” No joke! So I was wondering, what about commercial property? Dato’ Shah said, “I have a commercial property that I purchased at a launched price of RM1.4 million and now it is valued at RM4.2 million. Everything appreciates more than double.” Dato’ Shah believes that Puchong will someday as huge as Petaling Jaya, perhaps in the next 10 years to come. What’s the only drawback to that? Traffic congestion.

AGENTS SPEAK SR FIRDAUS MUSA Managing Director, Firdaus & Associates Property Professionals Sdn Bhd Puchong has always been a test bed for property market activities and has seen its fair share of spikes in property prices and sharp decreases throughout the years. Current trend of Puchong can be seen as stable with very minimal increase in property values as well as a decrease in values for certain type of properties. As there are so many new types of developments in Klang Valley and other new exciting developments in other area offering lifestyle and potential capital growth, we can see Puchong under pressure of with the migration of property upgraders with an introduction of property newcomers to the area within a certain budget. There is still room for growth and we might see another wave of property activity in Puchong in the future.

SALLY CHAN Real Estate Negotiator, Reapfield Properties (Puchong) Sdn Bhd Puchong has seen tremendous development over the past 10 years and will see the same progress in the next 10 years. There are a few LRT stations running through the major towns. Although Puchong is a mature neighbourhood, high-rise properties are still more affordable than those in Subang Jaya and Petaling Jaya. Investment opportunities in Puchong are still good, especially in the Bandar Puteri Puchong area. In terms of facilities and amenities, Puchong has it all – Hotels, shopping centres and hypermarkets such as Tesco, Giant, IOI Mall and Aeon Big, educational institutions comprising primary schools, secondary schools, colleges, universities and international schools as well as commercial centres such as IOI Boulevard, IOI Business Park and Setia Walk. Puchong is located in a convenient place because of its accessibility to nearby highways.

48 | MARCH

2016 www.propertyinsight.com.my


PERSONALITY OF THE MONTH

ISHIHARA SHOTARO – A JAPANESE INVESTING PIONEER When it comes to finding properties and good deals in the market, the information comes to him, and not the other way around BY: NATASHA GIDEON

www.propertyinsight.com.my MARCH 2016 I 49


PERSONALITY OF THE MONTH

T

he Japanese are always known to be disciplined and wise. This seemed truer than true when we spoke to Ishihara Shotaro who moved to Malaysia in 1992 to develop a golf course in Penang. Ishihara then opened his own company in 1999, Tropical Resort Lifestyle (MM2H) Sdn Bhd to promote long-stay and MM2H (Malaysia My Second Home) programme to the Japanese market. Fast forward a few years and soon MM2H reached the shores of Malaysia in 2006, the streets of Tokyo in 2008 and the borders of Johor Bahru in 2012. As of 2015, TPCL has sponsored MM2H for more than 1,500 Japanese people up to date. Ishihara was appointed Japanese Advisor to Malaysia Property Incorporated, a government subsidiary company to promote Malaysia Property Oversea and was a committee member of FIABCI Penang Branch from 2008 to 2012. As an investor in Malaysia, Ishihara started because he knew there were a few ways to utilise property not only as an investment but also as a home, for retirement and such. “The price will always go up, that is a good investment.” Being Japanese, Ishihara had to apply for a Malaysian PR. So, when he started to buy property, he would buy property under joint names of him and his Malaysian wife. At the time, loan approvals were easier to apply for. The economy in 2008 and 2009 was not so bad, so, the process was very easy. “There were no restrictions at the time so the loans was very easily attained. If I were to have bought properties on my own it would have been difficult as I am a foreign investor.” The rest of the process was simple, his seed money came from hard earned savings and a small sum was from Ishihara’s parents-in-law. Ishihara started with a property priced at RM500k, and rented a property for his family of 5 in Penang. It has been 5 years and he has since moved to Kuala Lumpur. “When you are younger and your children are younger it makes more sense to rent out. When you are older you will only want a small place, comfortable enough for you and your wife. So, we rented until our children were big enough.” Ishihara’s strategy in the market differs depending on the situation, as he sometimes holds enough for the capital to 50 I MARCH 2016 www.propertyinsight.com.my

Do not just buy a property for the short term and sell them off. Hold for at least 5 years, but 10 years is better” - Ishihara Shotaro

appreciate, then he may sell it off. “Do not just buy a property for the short term and sell them off. Hold for at least 5 years, but 10 years is better.” He also prefers buying from the primary market nowadays as there are better incentives and so many choices.” For the secondary market, Ishihara prefers to buy residential, as commercial has more capital and you only get a small fraction for the loan. He targets expats when renting out his units. It is easy for Ishihara to handle his tenants and his accounts as he himself owns a few property agents. His own staff do the ground work for him. However, like any other investor, problems arise in one way or another and for Ishihara it is usually related to finding tenants, a common problem

faced by most investors. “Other than that, Malaysian properties usually have technical problems. Defects that should not be there like a leaking pipe or uneven tiles that bulge out instead of being flat on the floor. A lot of the nitty-gritty.” Ishihara says when it comes to finding properties and good deals in the market, the information comes to him, and not the other way around. “You read the newspaper, go to property fairs or through businesses and property brokerages, the information will make its way to you.” Indeed a positive way of looking at it. When asked about hotspots and whether he believed in them, Ishihara immediately answered positively. “I definitely believe in hotspots. Follow the trend of population


PERSONALITY OF THE MONTH change, the in flow and the out flow of the population, the construction of new highways, the construction of MRT and LRT are all things you need to look out for, because that Is what buyers are looking out for, as well. These are important factors to consider and you should buy as soon as the planning of these highways and transportations are confirmed.” Ishihara explains it is always a good idea to buy areas which are deemed hotspots, as he did a few years back. He had purchased a property in Kota Damansara in 2012, which will be completed end of this year. The development itself will be in front of Surian Station, and when the MRT is completed, Ishihara would have already made a 50% profit from this property. Does the future in the property market look bleak for Ishihara? “People always say it is not good, what is happening right now. But as I see it, Malaysia has to go through this process. It is indeed a cyclical process, and this needs to happen now.” Ishihara explains that in 2012 and 2013 property was easily sold due to DIBS (Developers Interest-Bearing Scheme) and other incentives so the price increase needed to be consolidated. “In the long term, this downturn is very necessary, however, there are still good deals out there so if you have the money, go out and buy.” Ishihara explains that from a foreigner’s point of view, with the depreciation of the Ringgit especially for the Japanese, the prices this year are almost similar to a 20% discount, and for some, the prices have even dropped 30 to 40% compared to last year. “It is still possible for the population and their income to grow, so we need not worry.” For those who are not fussy and looking into buying properties soon, the year to do so is 2018, and the properties to buy are high-rise condominiums. “The prices for high-rise condos looks like it will go down so you can wait for that. Prices for midrange landed properties in the suburbs will not, but that also depends on the area.” Aside from investing in property, Ishihara also has a fair amount of other businesses and responsibilities. When he is not investing, he is busy recruiting Japanese investors, companies or industries for the MM2H program in Malaysia. Most Japanese investors aim for Kuala Lumpur, Johor and Penang. Ishihara was also

responsible for facilitating the deal between Malaysia Airport Holdings to bring in the Mitsui Outlet Mall not long ago by Mitsui’s Commercial Team, an investment worth RM300 million. Besides that he also has a JV with Eastern & Oriental Berhad for high end condominiums along Jalan Yap Kwan Seng. His company has been assisting Mitsui Fudosan Malaysian businesses for the past 7 years or so. Other JV include companies like Sunway to develop Geo Serviced Suites in Bandar Sunway. Being a foreign investor and business man, Ishihara also does corporate businesses and has an office in Tokyo as well. It seems as the years pass, more and more Malaysians are going to Japan, either for holidays or to stay, and there has been a rise in the number of Malaysians purchasing properties in Japan. Japanese investors are coming in because of our inexpensive costs of living, our tropical weather throughout the year and being free from natural disasters. As much as we

read on the news, the truth is, Malaysia is quite a harmonious country and Japanese investors like that, besides having an array of tantalising dishes to choose from. I came across a Japanese proverb while writing this article, it says, ‘After the rain, the earth hardens.’ So will the situation in Malaysia with the property market, and all the industries in general. It will be a hard time for all, but if Japanese investors see our market as a good investment, then so should we. This rain is temporary, and when the economy gets back on track, so will the market. Learn from the past and choose properties which are liveable among locals and do not buy properties with too many investors. “Be sure to choose prominent developers with projects at good strategic locations as well. Don’t buy in the city center. Not many people live in the city center anymore.” If Japanese investors can see the potential and beauty in our local property market, maybe it’s time we did too. www.propertyinsight.com.my MARCH 2016 I 51


GEN-Y FROM THE BLOCK

INVESTING FROM ACROSS THE CAUSEWAY Ashraf started investing at 21, an age many of us have only just started saving BY: NATASHA GIDEON

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2016 www.propertyinsight.com.my


while sipping on expensive coffee, but Ashraf chose to invest in the property market. “The property investment market is an exciting and interesting industry. I am constantly in awe with the fresh designs from new developments and there are no boundaries in exploring and making handsome profits.” Already with 5 years of experience in hand, and an investment company, this Gen-Y youth’s strategy in investing is to buy properties at massive discounts for property launches in areas that are in high demand. Ashraf may also be gifted whereby he claims to be able to make good profits by merely using a few tricks and tips to make good profits without coughing out too much money. “Instead of using your own money, which can usually be a huge sum, think of capitalising on other people’s properties to make steady stream of constant incomes through leasing and renting.” In case his ideas and plans go bust, Ashraf says he always has an exit strategy. “Investors must

There is no better career than than a career in investing. As long as it is a good investment, distance is not an issue for me”

- Ashraf Bakar

have an exit strategy. Since I do not put all my investments into one basket, exiting is much simpler, safer and systematic. Definitely necessary.” So what do Gen-Y investors look for

T

he streets of Singapore often bear witness to the shuffling of focused individuals trying to make ends meet in a highly developed environment. The skyscrapers are a testament to how high they aim and what they can do. So this month, we decided to talk to an investor from the other side of the causeway. Ashraf Bakar aged 26 started dabbling in the investment scene since he was 21 years old, an age many of us have not started thinking of saving, let alone investing. Ashraf is an investor from Singapore whom runs an investment company based in Malaysia. The usual Gen-Y would be parading their new cars www.propertyinsight.com.my MARCH 2016 I 53


GEN-Y FROM THE BLOCK when buying property? “For me, it would make business sense to embark on buying residential properties first, followed by buying commercial shop lots or office properties and later expand into industrial properties when my portfolio and appetite gets bigger.” A good sign that Ashraf is going further, with a fiery determination. Do Gen-Y investors also face the same problems as other investors and do Gen-Y look at it from a similar perspective? “Investing in this difficult political and economic climate should be a ‘harvesting or spending spree’ period for smart investors. Today’s market is definitely ‘The Buyer’s’ market. Many weak investors will begin to abandon ship. Hence, it is the best time to take advantage of the situation.” The challenges faced by Ashraf would affect any other Singaporean or foreign investor, whereby the Malaysian government increased the minimum threshold from RM500,000 to RM1,000,000. “It was during this time, the market was trying to adjust itself and buyers and sellers became almost frantic and unsure of what to do with their property.” So what is in store for 2016, is it bleak or is it an opportunity for investors? “The trend will continue to be saturated with the potential of the scale tilting downwards between 5 to 10% in 2016. Every player is waiting anxiously for the Federal Government’s announcement on its interest rate increase or decrease and the Yuan’s potential adjustment or corrections towards the Fed’s increase or decrease. Certainly, the devaluing of the ringgit with its potential of dipping much lower promises a positive climate for smart property investors to select their best deals before the market corrects itself and before the market reaches its equilibrium.” Up to this point, it seems like reading about a profile of a really qualified and experienced investor. The point of this segment is to encourage more Gen-Y to start making informed choices on good investments. Ashraf tells Gen-Y, “Firstly, Gen-Y should be taught to start investing when they are young. Do not follow the footsteps of our parents or fore fathers buying properties at an older age and not being able to enjoy the fruits of their labour. Their children or great grandchildren were the ones who benefited the most. There are lots of property gurus that they 54 | MARCH

2016 www.propertyinsight.com.my

can tap investing skills from. Secondly, as land gets scarcer, property prices will certainly continue to rise over the years. Property prices are never going to go down at whatever expense and the Gen-Y should be informed of this.” Ashraf ends by reminding everyone that a property is not just an investment, but also a legacy for any children you have in the future. Make property investing permanent and full-time. The longer you are in the market, the more tips and tricks you pick up and will be able to use. What is in store for a 26 year old investor from Singapore, how far should one invest? “Investment is in my career. It is in my blood. There is no better career than investments. Properties cannot be stolen. The longer you keep it, the more valuable it becomes. As long as it is a good investment, distance is not an issue for me.” Read on and you will understand this is not just an empty goal without a plan. Ashraf is well equipped with his future endeavours. An inspiration to Gen-Y’s trying to enter the property market. Not many investors are familiar with hotspots, and Ashraf already looks like he has a good start to an early retirement. “The long term plan for both Singapore and Johor Bahru is to turn it to be the next Hong Kong and Shenzhen. Trade will increase 10 fold, more manpower will be

needed to handle these increases and the Singapore government has already started importing foreign workers and issuing them citizenship to prepare them for the big bang in the economy. All efforts by both governments are towards achieving these objectives. More linkways, both land, sea and air will be developed to ease congestion. More and more heavy industries have already began to relocate to Johor Bahru.” Johor Bahru which has been in the news lately, for their humble yet vocal ruler, seeks to turn Johor Bahru into the next Kuala Lumpur with trends already moving towards it. All of which prove to be a positive investment for investors. “Having said all that, the nearer to Singapore, the higher the property prices and undoubtedly, the higher the appreciation and rental values. I will put my money along these perimeters. I usually invest on the outskirts of city centres. I pay close attention to the properties in Iskandar as they are more accessible and convenient for me. There are many gems in Iskandar waiting to be discovered.” If you are a Gen-Y investor, stay tuned for more inspirational and wise investors to follow. If you are a developer, watch this space for kinds of properties that Gen-Y’s are investing in, or buy or even sell! It may not be a good time for all, but what you do in these bad times is what matters.


INVESTOR NEXT DOOR

GAME PLAN READY TO INVEST IN PROPERTY Treat each property differently BY: AVINASH SAGRAN

When investing, quantify whatever you have first, the easiest way is to mirror active income to passive income� - Kam Wei Tsung

www.propertyinsight.com.my MARCH 2016 I 55


INVESTOR NEXT DOOR

K

am Wei Tsung obtained a graduate diploma in information technology from the University of Humberside (UK) in 1992. In his early twenties, Kam aspired to be a wealthy young successful man. Unlike others he focused on opportunities of gaining wealth through passive income. That exact opportunity knocked on his door when someone suggested him to invest in a mutual fund based in Luxemburg. He was promised a good return and saw that as an opportunity to gain better yield. Initially he invested RM20,000, a few months later he received a call to top up the sum, thinking it was an opportunity to gain more yield he decided to get his mother to chip in as well. All in all he invested RM50,000. With months of unreturned calls and news, he realised he was actually a victim of a scam and lost all his money. It is then where he humbly started again from zero, he set out on a comeback plan. The realisation of having generate more active income dawned on him then, he made the jump from IT to life insurance planning. He spent his evenings learning about financing and property. Not long after he bought his first house in the year 1996. He jokes by saying “On hindsight it was a blessing in disguise getting cheated of RM50,000 as now I make a passive income of more than RM50,000.” That one moment changed his outlook on living on a paycheque to paycheque basis. The journey was difficult but it certainly shaped him to be the successful man he is today. Initially the lack of capital and knowledge regarding property investment held him back. His turning point came in 2001 when he attended a talk by Dr. Dolf de Roos who advised his readers to look at property 56 I MARCH 2016 www.propertyinsight.com.my

investment as a business and not just an investment portfolio. With that aspiration, he left his job; becoming a full time property investor in 2004. Kam founded Platinum Property Ventures in 2004 guiding people to buy property especially targeting those with small capital. He continued providing numerous seminars educating people on how to invest in property until he decided to take a sabbatical in the year 2010. A young man named Dexter attended one of his programs in the year 2008. He learned tactics and developed a game plan based on his talk. After 1 year 2 months, he bought his first property and built a portfolio of RM10 Million. As his friends continuously hounded him on how he managed to build such an impressive portfolio, Dexter approached Kam and in 2012 they teamed up and started Property Fast Track. Kam’s primary goal was to contribute back to the younger generation as he believes “Whatever has benefited me can be duplicated.” As youngsters are not well versed in planning their funds and learning about investing especially in this challenging time. Kam mentioned “We are here to teach them how to go about investing in property and provide them with a good footing.” MIRROR YOUR ACTIVE INCOME WITH PASSIVE INCOME “Property is more forgiving in the long run. It is highly based on the valuation of the hotspots. For example properties over at Rawang and Bukit Beruntung; initially the prices took a dip after the initial boom but fast forward to 2016 the value of properties in Rawang have hit new heights.” Kam had a vision, he wanted to mirror his active income with his passive income. He first bought his investment property at Cyberjaya; buying an apartment targeting

the student market as Multimedia University and Lim Kok Wing University was setup in Cyberjaya. Taking Dr Dolf de Roos advice on creating positive cash flow; Kam targeted to build on the momentum to create more positive cash flow. “Each property I purchased, I planned to generate RM500 positive cash flow after deduction of mortgages and miscellaneous fees. I had a RM10,000 active income therefore to mirror my passive income I had to purchase 20 properties and the plan was the same to get RM500 positive cash flow with each purchase. Over the next 4 to 5 years I managed to build the bridge to ensure the bridge is secure and sustaining.” BE SMART WITH MONEY Gen-Y has a new term to get used to; they have to learn the word delayed gratification. Tough times call for cuts in unnecessary commitments. Do not think it is all gloomy and bad for us; we just need to learn to tough it for a short while before rewarding ourselves. “When investing, quantify whatever you have first, the easiest way is to mirror active income to passive income. If it does not meet the criteria do not go for it. If you already have shares, constantly evaluate them whether to keep or liquidate; once you liquidate invest in a few properties so the positive cash flow is constant.” “We initially started off by refinancing our house as it appreciated in value from RM240,000 to RM300,000. We were able to use that as our seed money to invest in other properties. Paying up your house loan is good but it is as though you are locking up money with 100 dollar bills and all your funds are locked in; look forward to capitalizing your gains to garner more income.”


INVESTOR NEXT DOOR up every few years. Your property is very hardworking as it generates income for you while you are asleep.” TOP 3 TIPS 1. Have a proper game plan that produces results. My game plan differs according to the different stages in life so be clear on what you plan to achieve whether it is passive income, capital gain or both. 2. Diversification is key, make sure options are ample and be prepared to make changes. 3. Property investment can be lonely so collaborate with likeminded people who have common goals and continuously learn with professionals in that area. Most importantly stay humble Kam has huge ambitions as a global property investor, he plans to build a portfolio of RM10 million in 10 countries and combined that will make RM100 million portfolio. He aims to guide 1,000 property investors to help achieve this goal. He also believes that when the time is right, property in Malaysia will pick up speed.

PROPERTY INVESTMENT PROPERTY 1 Location

Johor, Skudai

Property type

Commercial Shoplot

Purchase value (2011)

RM1,288,000

Market value (2016) RM2,500,000

HOW DO YOU GO ABOUT DEVELOPING THE GAME PLAN “My game plan for residential and commercial was simple. I needed to know when to keep and when to sell. After properly establishing a solid game plan locally, now I have started becoming a global property investor. Reoccurring income comes from keeping the property; one of which is my student housing investment at Cyberjaya.” “If you are going to ‘buy to sell’, purchase properties from auctions. Not long ago, I purchase properties in Rawang for RM36,000 each unit; with numerous infrastructure development reaching Rawang now, I was able to sell the units for RM 150,000 to RM180,000. That is how I’m able to manage my property portfolio comfortably.”

CAUTIOUS IS KEY IN CURRENT ECONOMIC CLIMATE “Each time, when faced with challenges I think of it as a way to think outside the box and it is a mind expansion exercise. That is how I’m able to refine my methodology to move forward. For instance, with our current economic conditions, we have to look at other ways to sustain positive cash flow.” “The key is to wait out the market, purchase properties 20%-30% below market price. Diversification is the best way to weather the story, constantly look at how to improve your portfolio. Remember to look at property as a business, treat each property as your employee, there are made out of four walls, do not give excuses, work 24/7 and do not complain; touch them

Price psf

RM210

Rental per month

RM9,200

Rental yield

8.38%

Loan margin

80%

Loan tenure

20 Years

PROPERTY 2 Location

Kepong, Kuala Lumpur

Property type

Strata Warehouse

Purchase value 2012 (Bought at auction)

RM165,000

Market value (2016)

RM529,000

Price psf

RM72

Rental per month

RM2760

Rental yield

20%

Loan margin

Paid Cash

Loan tenure

Nil

www.propertyinsight.com.my MARCH 2016 I 57


INDUSTRY INSIGHT

A COMPREHENSIVE APPROACH TO SELLING Longevity of an agent is based on their approach BY: AVINASH SAGRAN

F

ollowing his passion in sales and marketing the journey for Anndy Yap began like any other real estate agent 14 years ago. Driven by the thirst to succeed, Anndy made the transition step by step from an agent he became a team leader. His positive and honest energy did not go unnoticed as he rose through the ranks to be a manager and marketing director not long after. Anndy made the decision 3 years ago to open his own agency; armed with a team who believed in his leadership he opened Wynn Properties (M) Sdn Bhd. 58 | MARCH

2016 www.propertyinsight.com.my

Having interviewed Anndy in his office at Scott Garden, the ambience of his office had a Zen like quality which is unusual in the marketing and sales sector. Soon he explained how his agency distinguished itself from others. According to Anndy, his agency operates differently as they prioritize in giving developers and projects the optimum advantage. He insistant that significant study is conducted to ensure the best outcome for both parties; he does not believe in selling what is given by the developers. In the long run the outcome might not be favourable as it is a lazy form

of work. “We usually help developers repackage projects if necessary; we conduct extensive market research, we analyse the appropriate selling price and we conduct studies on the right launch time for the market. We do it the old fashioned which is proper way of sitting down and planning it out with the stakeholders. Depending on the state of the project such consultancy might take between 2 to 6 months but it is well worth the time and money spent.� Anndy mentioned how one of the biggest hurdles faced by all agencies is when


I strive my best to ensure all my agents are sincere and honest in providing information to home buyers” - Anndy Yap

payment is delayed by developers and when sales does not hit the intended target. Financial sustainability is the biggest challenge for everyone to overcome. His solution is to be very hands on with all the clients, be there for them, explain to them thoroughly and be determined to get the job done. “One should be satisfied with their sales if it makes the target; they should go above and beyond to sustain and improve it but they must always do it in a sincere and honest way.” Having transitioned from as an agent to CEO of an agency; he is someone who is truly appreciative of his team. His fondest moments are with his team as they are good followers and are able to reciprocate his vision from when he was a leader to present as a CEO. His guiding philosophy to his staff is that practise until you become successful. “I tell my staff do not try your best but do your best; no one can help you unless you work hard on your goals yourself.” “I strive to do my best to ensure all my agents are sincere and honest in providing information to home buyers. Everyone can buy any property they desire not just specifically my agency projects but the home buyers have to know what the right product is for them.” He highlighted homebuyers have to be clear on an end goal for their purchase. Determined from the get go whether it is for own use or investment, long-term or shortterm, buy to keep or buy to sell and rental investment. Once homebuyers determine the use; they have to know their holding power and financial capacity. Be realistic to forecast no tenancy or financial hiccups;

take the current economic climate as an example of a slowed down property market. He predicts it would be a tough time for agents out there in the current economic climate but strongly believes his agents different approach would prevail. Unlike others who push for commission, his agents provide timeline analysis and provide proper investment return guidelines because they have been with him from the time he was a team leader; their mindset in how to do sales and marketing are guided by the same philosophy. “My long term goal to my team is to ensure they are successful and I want each of them to hold positions as directors. Furthermore I want my agency to be in every state in the country.” “Three tips for homebuyers; firstly be honest to yourself, do not lie to yourself regarding your financial capacity because down the road you will not survive if your holding power is poor. Secondly get numerous opinions before making the purchase but make sure its professional

advice not by family members or friends because the market foresight is with the advisors not with those not directly in the field. Lastly, if you are buying a home for your personal usage do not look at the price if you want a certain area; home is where everything begins so make that choice wisely and do not be calculative.” No matter in what circumstances or whatever market condition, my self confidence is very strong. Hence, any projects that I am involved in were a success. Do not be undermined or intimidated by any negative remarks. An intelligent person might not necessarily be successful, however a hardworking and confident person will surely be able to survive or “put food on the table”. In my dictionary, there is no project that is not saleable, regardless whether in a favourable or unfavourable market conditions. During good times, there are people who fail, during bad times, there are also people who succeed.

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AFFORDABILITY AND SUSTAINABILITY Getting what you have been wanting using clay bricks BY: FARA AISYAH FIRDAUS PETIAL

60 I MARCH 2016 www.propertyinsight.com.my


A

ffordability goes hand in hand with sustainability. In this current market, we all would choose to buy the things we can afford or the things that can sustain us. Why? Because they will give us less trouble and trust me, you would want to stay away from any type of troubles in every possible way this year. I believe everyone knows what affordability means and how it is related to the property industry. What you might not really know is that we, the next generation of home buyers cannot emphasis enough on how hard it is for us to grab a property that we are able to afford. What is the real issue here? What makes property prices so expensive that we can barely get our loans approved? SUSTAINABILITY Recently, I talked to Dato’ Yap Yee Chong

of Selangor Bricks Association and I could see vividly the relation between affordability and the sustainability of a property. The secret lies in the construction materials! Can you believe that clay bricks are able to solve at least half of these issues? Clay bricks are a little more expensive compared to other cheaper materials, and will cost you around RM1,500 more in total. However, clay bricks is a winner on the sustainable side of things! If you are using clay bricks for your property, you will see the difference in the electricity bill that you are paying for every month. Let’s be sceptical and imagine, what if in the near future the electricity tariff goes up? Mind you, when the utility bill goes up, it is going to ruin your fixed monthly budget. It is a different case if you are using clay bricks because it works as a cooling factor. Your house would be a little cooler and you

can save on the electricity. It is an ecofriendly product which hardly needs any maintenance! Clay bricks are also very durable that if you are drilling your walls to do some decorations, the plaster will not peel off as easily. Some people do not even plaster their houses if they are using brick walls. It’s kind of trendy as well. Your house could look prettier and more luxurious. ECO-FRIENDLY Clay bricks are processed with less pollution compared to other materials. This means that the association increases the production of the bricks while lowering the cost. According to Dato’ Yap, “We reduce pollution by reducing fuel consumption in making our bricks. Instead, we use the industrial wastage like saw dust in making www.propertyinsight.com.my MARCH 2016 I 61


clay bricks. Do you know how much of industrial wastage is produced in a day? And how much is put into the dumpster? But now those wastages are sent to brick factories and used in brick making. Which means that these products are no longer wastage, but are called by-products.” Hence, the production of clay bricks not only creates a product that is affordable and sustainable without a lot of complications, but preserves the earth as well. Don’t we want the earth to be more sustainable? SELANGOR BRICKS ASSOCIATION The history of clay bricks in this country goes all the way from the early 1950’s. During that time, all the bricks were imported from other countries. Selangor Bricks Association was established by a group of local people who decided to form a bricks association because they could foresee the demand in the market as new developments started to come up during that time. The association was aptly named Selangor Bricks Association because previously, it was located in Selangor and only serving the Klang Valley area. However, things have changed so much since then. “They realised that they could not import so much bricks and decided to make bricks locally. The association started in 1980 with only 33 members but now it has expanded to Peninsular Malaysia, except for Johor. Back in the day, brick factories would be nearby mining areas because they were not using hill clay at the time. That is why you can see that, previously the bricks were not red in colour.” Said Tan Boon Cheng of Selangor Bricks Association. Dato’ Yap added, “Our market is now shrinking because of cheaper material substitutions. Therefore, it is compulsory for us to produce better materials in terms of quality and durability to compete in the market. That is why now we have started to exchange information with other factories and industries, to improve our association and its product.” It is a misconception that clay bricks are only for the rich and for high-end properties. We all can afford it. As a matter of fact, clay bricks are the best and cheapest materials when compared to building columns. To find out more about Selangor Bricks Association and what they do, please visit www.myclaybrick.com. 62 I MARCH 2016 www.propertyinsight.com.my


DESTINATION - INDUSTRIAL DEVELOPMENT

JOHOR HALAL PARK The next investment destination in Pasir Gudang, Johor

M

alaysia has aspirations to becoming a global hub for the production and trade of Halal products and services, as outlined in the 2006 Third Industrial Master Plan (IMP3). As a modern Islamic country at the forefront of economic development, Malaysia has unparalleled potential. With a progressive living and operating environment boasting political stability and consistent economic growth, the country is fast becoming a business hub of choice for all industries. It has unique advantages in developing and promoting the Halal products and services industry for many reasons.

Malaysia is a progressive Islamic country which is business-friendly to Muslims and non-Muslims alike, making it a Halal industry advantage. Racking up its global competitiveness, Malaysia has moved up the value chain to a high-technology, knowledge-based and capital-intensive powerhouse, incorporating design as well as research and development activities. Therefore, from Halal product traceability to Islamic Finance facilities, Malaysia is able to provide end-to-end Halal services. The county is strategically located within Asia Pacific, providing easy in-roads to emerging markets in Asia and a total

BY: FARA AISYAH FIRDAUS PETIAL

population larger than 500 million. 1st INTEGRATED BIO-HALAL PARK IN JOHOR I recently went discovered a few hidden upcoming gems in Johor Bahru, and UMLand’s Johor Halal Park caught my interest! I think it is very timely to start investing in the Halal industry because I can see that there has already been a buyer’s market in the industry. UMLand is set to transform Cahaya Baru to become the first ever Bio-Halal Park in Johor, which is a joint venture collaboration between the developer and the Johor State via the Johor Biotechnology & Biodiversity www.propertyinsight.com.my MARCH 2016 I 63


DESTINATION - INDUSTRIAL DEVELOPMENT

Corporation (J-Biotech). The Halal industry is a fast emerging sector in the world, and Malaysia’s 13 Halal standards have met international benchmarks with the Codex Alimentarius Commission of the United Nations validating the country’s MS1500:2004 as the global Halal standard. With such a joint venture in place, it furthers both the interests of high quality property development under UMLand, and the commercial aspects of biotechnology under J-Biotech with the support of the Johor state. At a total gross development value (GDV) of RM1.5 billion over the next five to seven years, the 350-acre freehold park consists of plans to develop a Regional Marketing and Clearing House (RMCH), Integrated Packaging, Warehousing and Logistic (IPWL), One Stop Centre, Scientific and Halal Laboratory, and Incubator facilities with international standard. The development of HALMAS designated halal parks is one of the key components in the halal eco-system to realise the vision of ‘Malaysia being the Global Hub’. HALMAS is an accreditation given to Halal Park operators who have successfully complied with the requirements and guidelines stipulated under the HDC designated Halal Park Development. The development offers excellent connectivity and complete amenities and is earmarked to be the next fastest growing 64 | MARCH

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Halal and bio based industrial park in Flagship D, Iskandar Malaysia, on the eastern corridor of Johor. CATALYTIC DEVELOPMENT UMLand Group CEO Datuk Charlie Chia Lui Meng optimistically sees the potential growth with a strategic MOU with J-Biotech to establish and explore collaborative initiatives in the field of biotechnology and bio-based activities; Chia says, “We are proud with the strategic partnerships we have built with the Johor State Government, various authorities namely Majlis Perbandaran Pasir Gudang (MPPG) and State Unit Pembangunan Ekonomi Negeri (UPEN), who complement J-Biotech and jointly collaborate to conceptualise, develop, transform, facilitate one of the key projects that will transform Iskandar Malaysia into a world-class and dynamic metropolis.” On the other hand, the CEO of Tentu Teguh, Mohd Noor Abdul Salam said, “Together, these various business driven-initiatives, strategic collaborations between State Government and Federal Government’s Iskandar Regional Development Authority (IRDA) 20 year master plan is targeting to attract estimated MYR25.0 billion investments within the Eastern Gate Development of Iskandar Malaysia (Pasir Gudang), as well as with

MIDA, BiotechCorp, SME Bank, SME Corp, Teraju amongst others, in promoting smallmedium enterprises”. “We aim to build a conducive Halal and Bio-based ecosystem to support the R&D as well as the commercialisation for AgriBio and food production sectors. It is a platform where we pool the soft infrastructure – financial incentives, human capital development, business and operational set-up facilitation.” added the CEO of J-Biotech, Wan Amir Jeffrey These are the facilities that will be included along with the component of the park area – Dedicated Bio-Processing Hub, Regional Marketing and Clearing House (RMCH), Integrated packaging, Warehousing and Logistic (IPWL), Scientific and Halal Laboratory facilities of international standard will enable companies to accelerate their Halal and Bio-based business and commercialization activity. From my observation, the development of Johor Halal Park will definitely cater to the needs of conducive bio-based ecosystem and to enhance Johor Bio-economy initiatives. It has become the next trend in property development and investment, especially since everyone has been eyeing the Islamic market.


DESTINATION - INDUSTRIAL DEVELOPMENT

JOHOR HALAL PARK INFORMATION FACT SHEET Company Tentu Teguh Sdn Bhd (a wholly owned subsidiary of UMLand) Project Johor Halal Park Total Built-up Area 350 Acres Location Pasir Gudang, Johor Type of Development Phase 1 24 Units Double Storey Terrace Factories Type A1 13 Units Double Storey Terrace Factories Type A2 40 Units Double Storey Cluster Factories 12 Units Double Storey Link-detached Factories 36 Units Double Storey Shop office Halal Scientific Lab

No. of Units 89 Units Land Area 50 Acres Gross Development Value (GDV) MYR 300 mil Ground-breaking Ceremony September 2014 Construction Progress Approx. 45% completed Completion Date with CCC April 2017

JOHOR HALAL PARK PROXIMITY

Phase 2 Ready built and built to suit factory Commercial Property Regional Marketing Clearing House (RMCH) - Integrated Packaging, Warehousing & Logistic (IPWL) International Islamic School Youth Park Phase 3 Commercial development Gross Development Value (GDV) > MYR 1.5 billion Business Park Accreditation HALMAS Accredited by Halal Development Corp (HDC)

Type of Industrial Properties

JOHOR HALAL PARK - Phase 1

Highway/Expressway Pasir Gudang Highway Senai – Desaru Expressway Plus Highway

Distance 19 KM 25 KM 26 KM

Ports Senai Airport Pasir Gudang Port Tanjung Langsat Port Johor Port Singapore

Distance 38 KM 15 KM 16 KM 14 KM 59 KM

Built-up Area (sq.ft.)

Land Area (ft)

Price (MYR)

Type A1

Approx. 3,401

32’ X 80’

Type A2 Double-storey Cluster Factories

Approx. 3,276 Approx. 5,673

32’ X 80’ 101’ X 85’

From 2 mil

Approx. 14,532

140’ X 158’

From 5 mil

Approx. 2,776

20’ X 70’

From 625 k

Double-Storey Terrace Factory

Double-storey Link-detached Factories Shop Office

From 1 mil

AMENITIES:

JOHOR HALAL PARK UNIQUE SELLING POINTS

-

-

-

Fibre – Optic Cabling Internet Connection up to 1 Gigabytes internet speed 600 Pax Workers Enclave Gated & Guarded with 3 tiers security Water & Electricity Facility Liquid Petroleum Gas / Liquid Natural Gas Ground Water Facility

-

Sustainable lifestyle with herbal environment landscape Bio-based business Accredited as HALMAS Halal Hub Business Incentive such as 10 years corporate tax exemption World class facilities and services such as IPWL, Halal Lab and TCM Center International Industry Linkage through Scientific and Halal Laboratory

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EXPERT COMMENT

BUDGET 2016 REVISIONSCOMMENTS LEE CHENG HOOI Regional Chartist, Maybank Investment Bank Bhd “The market was very good on Thursday and Friday after the Prime Minister’s recalibration of the budget and the market took kindly to that. Basically, the region took off and Malaysia followed suit as well. I think the fund managers who underestimate Malaysia and underunderestimated certain stocks, like banking and plantation, piled on the market yesterday and the market rose 33 points to a very good 1667 points high.” TAN SRI MOHAMAD SALIM FATEH DIN Group Managing Director, Malaysian Resources Corporation Berhad “The revised budget has addressed the needs of businesses, employees and the rakyat through various incentives for growth. As a property and construction company, MRCB welcomes the stimulus for affordable homes which will help to steer the housing sector to be more robust and vibrant. Additionally, the implementation and continued commitment for major projects such as the LRT and MRT projects will further enhance public mobility and ease road congestion.” JAMES WONG Director, VPC Alliance Sdn Bhd “One of the highlights of the revised Budget 2016 is that all new housing projects priced up to RM300,000 would be sold only to first time buyers. In our opinion, this programme will receive a good response from the lower-middle income group only in Klang Valley, Penang and Johor. In other States, there are many new houses that are priced below RM300,000. Take-up rate of housing developments priced below RM300,000 will be affected as the developers can only sell to first time home buyers.” CHARLES TAN kopiandproperty.com “Recalibrated Budget 2016 aims to maintain GDP growth through domestic consumption. Ringgit’s depreciation means nothing if the whole world is not buying. Negative sentiments must be managed or else it may derail all the new measures. Many first-time home buyers are adopting a ‘wait-and-see’ approach as they fear the risks. The first measure, reduction of EPF contribution from 11 percent to 8 percent may have failed from my personal observations. It is vital that the RM6 billion funding for SMEs be disbursed to the right ones. These are good multiplier effects. Lastly, the tourism sector must step up and stay focused.” KIT AU YONG Laurelcap Sdn Bhd “The revised 2016 budget is a logical move to balance the spending and income especially from the effect of the sudden sharp drop of petrol price. This is to ensure sustainability of the government budgeting beyond the short term period. In the real estate market, we believe that the market trends will continue to remain subdued as it has already entered into consolidating phase with the effect of cooling measures from tightening of bank loans, the subdued sentiments of purchasers and a general cautious outlook of the economy. The wait and see attitude of purchasers especially investors are expected to continue until any sign of turn of events happen. Specifically, on the measure of mandating houses priced at RM300,000 and below to first time buyers - that is a good move from a social point of view, but has limited effect on the Klang Valley area except for a selected few projects, as more houses are priced beyond that. This measure probably has an effect for some other areas where houses are priced below RM300,000 which will definitely help the first time buyer but in turn may constrain the developers from offloading their units quickly as they will lose out on the opportunity of selling to investors and upgraders owning houses. Selling to first time house buyers may not be an easy task as those are normally young adults with limited earning capabilities and tight cash flow. Apart from that, the new budget measures of lowering down EPF contributions, tax relief and prudent spending hopefully can have some indirect effect in helping the economic growth by way of sustaining consumer spending and budgeting.”

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BUDGET 2016 RECALIBRATION

PM Najib Announces Revision on Jan 28

2016

Expenditure cuts

3.1%

TREASURY

privatisation plans in revision

fiscal deficit target at

Oil

price assumption at

USD48/barrel BUDGET BREAKDOWN AND TRENDS

43.9% RM162.1b

2009

7.4%

2010

5.6%

2011 2012

2015 2016 2020

RM215.7b RM206.2b RM212b

RM208.6b RM251.6b RM224.1b

3.5%

RM264.2b 3.9%***

RM222.5b RM260.7b RM225.7b

3.1%

RM267.2b 0%*

Revenue

Non-Tax Revenue

RM183.4b

Expenditure

* Targeted deficit ** Revised budget on Jan 20, 2015 *** If budget unrevisedin 2015

3.4% Other Direct Tax

WHERE IT GOES [RM265,224MILLION (1)]

RM252.4b

3.9%

Income Tax

15.9%

RM207.2b

4.5%

3.0%* 3.2%**

21.9%

Indirect Tax

RM162.1b

5.4%

2014

WHERE IT COMES FROM [RM265,224MILLION (1)] Borrowings And Use Of Goverment’s Assets 14.9%

2009-2016

2013

THE FEDERAL GOVERNMENT BUDGET 2016

Security Social

1.9%

General Administration

0.6%

Emoluments

26.6%

4.9% Economic

11.4% Other Expenditure

Debt Service Charges

10.8%

10%

Subsidies

9.8%

Grants and Transfers to State Goverments

2.9%

Supplies and Services Retirement Charges

13.7%

7.4%

[1] includes revenue, borrowings and use of Government’s assets [2] excludes contingency reserves

Source: Ministry of Finance, Pemandu

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FINANCE

RICH DEBT, POOR DEBT W

hat is a Debt? It seems to give a negative impression. Sometimes it even gives some people a chill just hearing this word. The dictionary, both layman and business, defines debt as something which someone gave permission to borrow but with the condition to repay back. From a business dictionary perspective, a debt is usually taken to perchance large transactions that they could not afford under normal circumstances. Now when it comes to organisations around the world, debt is an engine. Use of debt in an organization’s financial structure creates financial leverage that can multiply yield on investment provided returns generated by debt exceed its cost. Because the interest paid on debt can be written off as an expense, debt is normally the cheapest type of long-term financing. So looking at this, is debt a good thing? Does a debt puts you in a better position or worse? Does a debt makes you richer or poorer? The answer to this is…… It depends! There are many types of debts. There are many reasons why people take on a debt. People may incur debt because of an emergency, a large purchase made earlier, to improve one’s lifestyle and, a mode of investment and etc. Yes my friend, people and organizations use debts to grow. Let’s dive deep into how debts puts you in a worst off situation, and what is actually a good debt. POOR DEBT In the world that we live in today, especially 68 | MARCH

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for middle class employees, it always seems that the cost of living is picking up faster than what we earn from our pay cheques. Despite this, we have seen tremendous growth in lifestyle expenditure. The unfortunate part of this culture is that it has created a lot of debts which makes people poor. Let’s take credit cards as an example. An average of 40% of customers today revolve (never pay credit card spending in full every month) on their credit cards. It is shocking that this has grown from only 25% more than a decade back. When you spend beyond your means and revolve unnecessarily, especially on lifestyle expenditure, you are paying as high as 18% annual interest. To make matters worse, most of these expenses depreciate over time. Personal loans are another form of new age credit facilities which has an attractive easy cash access with no security pledged or charged. Many have been attracted to the sudden access to large volumes of cash which can be used for anything at all. This is another lending that gives an after effect of possibly one week of pure enjoyment and up to 5-7 years of painful commitment. A commitment that after a while you may ask yourself; was it even worth it. Credit card and personal loan debt is one of the most expensive debt in the market. Please see below on the comparison of the interest rate based on EIR (effective lending rate). Personal Loan - 16%-24% Credit Card - 15%-18%

Car Loan - 7%-8% Mortgage - 4.5%-5% People who get stuck in expensive debts ie Personal Loans and Credit Cards will eventually become poorer and poorer. Let me show you how this works: • You get continuously stuck in an expensive debt trap • You see that your debts have continued to pile up with no way to get out of it • You are trying to have it all but have no financial roadmap • Your money is being spent faster than being used to make more money • You continue to ignore big debts • You continuously pay debts which you can then incur more debts • You buy depreciating items • You put today’s happiness before future Financial freedom • You incur debts that gives you short term happiness and that does not work hard to grow your wealth for the future • You invest on other things instead of yourself. • You are spending too much on housing • This refers to your own house. You invest heavily into your house where lifestyle expenditure on it exceeds the current market value of the property. According to Robert Kiyosaki (author of Rich Dad, Poor Dad), wealth is measured in time. If you were to lose your job today, how long could you afford to live at your current standard of living? If it’s 3 months,


then you are “3 months wealthy.” Your income becomes largely irrelevant. In short, a poor debt is basically using any future income to pay for past expenses. RICH DEBT Let’s look at debts that can actually make some of you richer. Imagine this. A) Catherine buys an asset worth RM1mil, and after 3 years, she sells it off for RM1.2mil and makes a handsome profit of 20%. She has the cash to pay the entire asset of RM1mil but she chooses not too. She initially took a loan that financed 90% of this asset. Her capital outlay is only RM100,000. After 3 years, her property is potentially worth RM1.2mil. B) Tommy buys the same asset worth RM1mil, and after 3 years, he too has the potential to sell it off for RM1.2mil making a handsome profit of 20%. He too has the cash to pay the entire asset of RM1mil in cash and decides not to take a mortgage for it. After 3 years, his property is potentially worth RM1.2mil.

What do we see above? Who is a smarter investor? Who makes more money? Who is financially more resilient? Here are some observations to ponder • Catherine only used RM100,000 to make RM200,000 over 3 years. • Tommy on the other hand used RM1Mil to make RM200,000 over 3 years. • Catherine has a remaining RM900,000 in her banking account for any life emergencies she might have. She can also continue to invest when the opportunity arises. • Tommy on the other hand does not have this advantage. In simple terms, your RM100,000 investment has given you a return of RM200,000 over 3 years. Doesn’t that make more financial sense? Catherine has successfully leveraged her way for higher gains. Many of us know that property is one of the safest investment journey’s one can take and make money over time. But it only makes sense if the initial cost of investment

is pushed to the minimal such as a low down payment on a property, while the benefit of appreciation and capital gains are based on the total value of the property. WHAT IS LEVERAGING? By definition, leveraging is any process that compounds risk. In the context of investing, leveraging is the process of using borrowed money (someone else’s money) to make money. A mortgage is a cost-effective way of borrowing. Interest rates on mortgages is no doubt the cheapest form of borrowing available in the market simply because the loan is secured against your property. You are essentially using other people’s money (the mortgage) to purchase something (property) which increases in value over time. What this has created is that you are now boosting your wealth with effective returns. Just as the example of Catherine and Tommy. But, what about paying for monthly instalments? Is that still a bad debt? Alternatively, leveraging can be a means of force savings too. The difference www.propertyinsight.com.my MARCH 2016 I 69


FINANCE opportunity which you may come across. The value of opportunity may be difficult to define but it is certainly real. If a oncein-a-lifetime business opportunity arises overnight, would you be able to take advantage of it if your money has gone to pay off your mortgage or purchase a property without a mortgage? You might be saving a great deal of money by avoiding mortgage interests but that might pale in comparison to what you could make in a business venture. It could be a new business opportunity or it could be another new property investment opportunity.

is you would invest a lump sum of borrowed money and your money would start working immediately. On a monthly basis, you would be paying the interest instead. Any way you do it, forced savings is essential to building wealth. On top of that let’s look at it from a financial security stand point. While there is a certain sense of security that comes from paying off your mortgage, there is security too in having cash in the bank because you have a mortgage on your home instead of paying all cash. Life is fraught with rainy days--from car breakdowns to illness and job loss--and every one of them is costly. You will be in a much better position to weather economic storms with a mortgage 70 | MARCH

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than without, assuming you have put money aside. This money would become handy in needy times and are not locked into your investment. On the other hand, taking up a mortgage and freeing up existing cash flow has another benefit. There could be a future

BORROWING IS NOT NEW Think about it, you borrow money everyday. We borrow to buy our homes, we borrow to buy depreciating assets like cars and we also borrow to buy items that have no value like consumer goods (via credit card). Most of the time we borrow to do things that are not financially productive. Leveraging can be incredibly productive when it is understood and used properly. Even corporations understand this is the right way to do it. Many large companies have the cash to pay off debt but they do not. They understand the power of leverage. In fact, most companies are highly leveraged! Why? They raise public debt in the form of bonds at 8% and turn around to make 15% on that money. They have it figured out. Why can’t individuals do the same? We certainly can! Equip yourself with the right financial knowledge and start using mortgages as a wealth creation tool. A mortgage is not necessarily a bad thing. It can be used as arbitrage to leverage what you don’t have and yet benefit base on the total current value of the property when it appreciates over time. The key here is mortgage allows us to leverage and leverage allows us to Do More with Less!! Be a SMART investor, pay off the Poor Debt and start accumulating Rich Debt today!

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


STRATEGY

BE A BALANCED ALL ROUNDER –

DON’T JUST LEARN HOW TO BORROW & INVEST. LEARN HOW TO EARN MORE TOO! CONTRIBUTED BY: MARK CHUA

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STRATEGY

H

appy Chinese New Year! For those of you newly acquainted to me, I believe in being a Balanced Allrounder. I am a father and husband, senior employee, investor & writer. I do my best to excel from a family, career and investment perspective. Most people wrongly assume that whatever little comforts I enjoy today come solely from my investments. That’s a fallacy. Rather, a strong career and earned income, coupled with support from my loved ones enabled me to build a property and investment portfolio that I am happy with. More often than not, we are often influenced by many so-called ‘experts’. Unfortunately, some ‘experts’ may be unbalanced & just advocate that we leverage and buy properties. How about efforts to boost your earned income, business cash flow or career? What about efforts to boost your interpersonal, social or soft skills? Shouldn’t there be balance in our skillsets?

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OH NO! MY DEBT SERVICE RATIO (DSR) IS HIGH! I’M ‘STUCK’ NOW! True Story - Gerald (fake name of course) came to me recently for advice. He just attended a property course not too long ago. He earns about RM 4K per month. After the course, he wasted no time and bought 2 properties in succession. One property was an Under Construction Property with negative cash flow, while the other was a subsale property generating a little bit of positive cash flow. Gerald now feels ‘stuck’ because his Debt Service Ratio (DSR) is high at circa 70%, and he can’t borrow anymore. His career and salary has been stagnant at RM 4K for about a year, and he found that he doesn’t really have the skillset or aptitude to climb the career ladder. In other words, he didn’t really put serious effort or time to improve his Earned Income. Gerald isn’t alone. Many people moan and groan that they want to take on more debt, but are currently ‘constrained’ or ‘stuck’ because of their high DSR.

Admittedly, my views on this can be a little unconventional, as I tend to go against stereotypical thinking. I do apologise if my views are too sweeping. I just hope my thoughts can introduce more paradigms of thought which challenges the status quo.

BORROW, BORROW AND BORROW ONLY? LEARN HOW TO EARN MORE TOO! Let’s recap the DSR formula - Debt Service Ratio = Debt / Net Income. It’s not just debt, folks. DSR comprises of BOTH debt AND income. Many people attend various courses to learn how to buy properties. On where to buy, on how to borrow or leverage efficiently. But I’m normally perplexed that hardly anyone invests the time to build or invest in their earned income. Direct translation – hardly anyone puts in effort to build their earned income, whether it is from their career or business. We are too impatient to hurriedly build wealth, and tend to focus on Investments, while compromising on our earned income,


STRATEGY careers and business. This may not be wise, and a balanced approach is probably needed. Remember this adage - THE MORE YOU EARN, THE MORE YOU CAN INVEST. THE MORE YOU EARN, THE MORE YOU CAN LEVERAGE. In all humility, let’s be balanced. Don’t just learn how to borrow, borrow, borrow and buy, buy, and buy. Ensure your earned income also grows at the same exponential pace. If you’re an employee – I suggest you set career goals and set salary targets. Invest in books or courses on how to fly up the career ladder. Find mentors in your workplace that are willing to invest in your success. Learn how to lead and manage teams. Learn how to navigate office politics and to build alliances. Develop your interpersonal skills. The list goes on. Somehow, learning how to have a better Career isn’t as ‘sexy’ as learning how to be a good investor. That’s why high flying employees cum savvy investors are a rare breed. Savvy investors who are flying high in their careers or businesses tend to be more successful over the long term. Don’t take my word for it. Just observe savvy investors that are successful employees or business owners, and see if you arrive at that conclusion. (Look hard; they are a rare breed). A savvy investor that earns RM 40K per month tends to be a lot more successful than a savvy investor that earns RM 4K per month. It’s just simple mathematics. The higher income investor is in a position to replicate and leverage his portfolio more efficiently compared to his lower income counterpart. THE WINNER ISN’T THE ONE WITH THE BIGGEST DEBT, BUT WITH THE HIGHEST NET WORTH Many investors often confuse Asset Values, Debt and Networth. There’s even a well renowned Guru out there that says “Retire with RM3 mil of Property Debts”. To me, that’s a little strange. Again, I advocate a balanced approach. In all humility The one that builds their net worth most efficiently wins. Simplistically speaking, net worth is defined as the market value of your assets less your liabilities (Mortgages)

Does it make sense to have a lot of assets, but also coupled with tons of mortgages & liabilities? Does it make sense to have tons of assets, but you overgear yourself with a DSR of say 100% and above? We are often taught how to ‘game’ the system, and how to borrow or leverage to the hilt. How to leverage via ‘multiple submissions’. How to find below market value (BMV) properties to have a zero down deal. How to find bankers with looser credit policies. Well, I have no problems on that per se – but I humbly suggest a balanced approach as well. We should also learn how to optimise our debt and paydown our debt more efficiently. Focus on this while building your asset portfolio, and this will ensure a net worth creation that is more efficient and sustainable. E.g. if you took a RM 400,000 loan over 30 years, and you made a humble RM 4,000 prepayment per year – you will save 101K in interest and reduce your mortgage tenure by 8 years. Another example – if you just make ONE advance payment per year – you will shave off 5 years in a 30 year mortgage. Meaning, let’s say your mortgage is due on the 30th of the month. Just pay on 1st of the month, 30 days in advance. Do this only ONCE per year. In terms of cash flow, you are not any worse off – instead of paying on Jan 30th, pay on Jan 1st. Where did I get this

knowledge from? A RM 40 book which is inexpensive and a lot more technical and detailed than most courses. MORAL OF THE STORY? Don’t be blinded or misguided by ‘experts’ who say that you can only reach the promised land via investments alone. Don’t be discouraged when these ‘experts’ make condescending remarks that you are wasting your time as an employee. With due respect, can these experts achieve the same rate of return in properties in today’s market vs. the 2007 to 2011 ‘golden’ era? Please ask them to show us how. If I’m being honest, I know how to build wealth, but I know my rate of return will be a lot slower today vs. the 2007 to 2011 era. In today’s anaemic market, I humbly suggest a balanced approach for us to achieve our dreams. Don’t just learn how to borrow, borrow, borrow and buy, buy & buy properties. Learn to also improve your earned income. If you are an employee, fly up the career ladder and earn a salary well above your peers. If you are business owner, expand your business and get fantastic cash flow. The more you earn, the more you can invest. The more you earn, the more you can leverage efficiently. The one with the biggest debt isn’t the winner. It’s the one with the bigger net worth that wins.

ABOUT THE CONTRIBUTOR Mark Chua is a Senior Vice President (SVP) in a Financial Institution, who has achieved financial freedom through property investments. Mark is living proof that one can be successful in both our Career & Property Investments.

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STRATEGY

POWER OF FOCUS IN WEALTH CREATION

T

he biggest let-down in life is aimless living, exactly just like a sailing ship without a compass. What would you expect to happen when you are fully occupied with your daily busy routine, leaving you no time for important but less urgent matters? How many of us are in this situation? What makes thing worse is when the surrounding chaos sets in from our other areas of life, namely finances, which causes us to feel like we are losing control of everything. What do you think will happen when you try and tackle problem after problem or goal after goal without proper strategic planning? Are you going to be a fire fighter all your life without searching for what you were initially created for? Guess none of us want to be in this position. “A success warrior is the average man with laser-like focus. You need to align all your focus with the solution not the problem. Otherwise, you will unnecessarily drain out your resources and energy.”

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As such, you need to stay focused on your goal and not let the circumstance divert you from your goal. Direction is far more important than determination and dedication. To head towards the right direction, you need to stay focused on the larger purpose. Similarly to create wealth explosively, you need to have a clear picture of what you want. The clarity of goal will pull us through our obstacles. To illustrate how this works we can look at the illustration of how a magnifying glass held under sunlight for a sufficient length of time can light up a piece of paper underneath it. So, assess yourself honestly, where you are now and where you intend to go. Only then will you be able to craft your strategy and vision accordingly. For instance I want to be a prominent writer, what I need to focus on is writing and not painting. Similarly if you want to be financially free or rich, you need to focus on generating passive income in addition to active income.

Passive income is an income without having to work for it. It may either derived from tangible or intangible assets or both. Knowing your end will enable you to explore all the possibilities to enhance your core competencies to achieve growing your wealth permanently and perpetually. HOW TO STAY FOCUSED? How do we create ‘powerful, empowering and concentrated thoughts’? To do so, we must ensure that no negative elements penetrate our minds. Can you imagine what would be the outcome if a ship has even a tiny hole in the middle of the ocean? To empower yourself, keep asking appropriate questions such as ‘How can I be a successful and prominent writer earning not less than half million dollars in five years time?’ Or ‘How can I earn 1.0 million dollars of passive income per annum?’ Let your imagination search for the solution for you. Keep fanning your imagination to search for improved ways


and means to bring you to your situation. In my case, my imagination delivers me more products in term of articles, eBooks, books in hard copies, training programs and so on. By enhancing my core competitiveness; I am able to differentiate my products from my competitors so as not to compete in terms of price alone. Inch by inch, moment by moment, edge by edge I am reaching out to a larger magnitude of people globally. If you focus on one to three goals, the chances of achieving all the 3 are much higher. However, if you focus on 10 goals, you may likely only achieve one or two goals. If you focus on all goals, then it is very likely that you will achieve none. Successful people have the ability to focus on a single task until it is completed. It is one of the best ways to achieve results in whatever you do. Setting priorities is also crucial in determining the impact. Always focus on the top highest priority so as to obtain the most with least effort. “Here is the prime condition of a great success,” said Carnegie. “Concentrate your energy, thought, and capital exclusively upon the business in which you are engaged. Having begun in one line, resolve to fight it out on that line, to lead in it; adopt every improvement, have the best machinery, and know the most about it.” The root cause of many failures in enterprise is the lack of concentration. Attention is like a searchlight; when its beam is spread over a vast area, its power to focus on a particular object becomes weak, but focus on one thing at a time, and it becomes powerful. So, focus on one thing until it is successful. Great men are men of concentration. They put their whole mind on one thing at a time. With concentration, you can disengage your attention from objects of distraction and focus only on one thing at a time. Through his mind, man can unleash his mind power to accomplish what he desires and safe guard all doors of failure from entering. Self-discipline is required for you to acquire full concentration so as to accomplish the goal of achieving long lasting sustainable growth for your chosen enterprise while having a significant impact and influence to the society and world as a whole. “In the search for your destiny, you will often find yourself obliged to change

direction.” Paulo Coelho. In summary, it can be safely said that the more you focus, the higher your awareness and the greater the result. In life, if you focus on your life’s purpose, then the chance of entering into the rat race is much lower than the majority. This is because your tendency of focusing on passive income (PI) relative to expenses (E) is much easier. You will keep improving the PI/E ratio as the indication of your benchmark to achieve your financial destiny. The higher the ratio, the better it is. MEASURE, MONITOR, MANAGE AND MOTIVATE To have financial freedom, you need to carry out the plan that brings your desired result. Constantly measuring, monitoring, managing and motivating are the surest ways to achieving it. In order to help you set your financial targets, there are two things you need to consider:1. Increase your passive income by either creating or acquiring income generating assets or 2. Reduce or eliminate your unnecessary expenses which serve no value to you. BETTER THINKING, BETTER DECISIONS AND BETTER RESULTS Better results are the outcome of better informed and more insightful decision making. To achieve better results, go back and look at your saving and spending patterns, look at the likely causes in details and then reshape your financial behaviour accordingly. Your why must be big enough to endure your whole journey. Invest in yourself to increase your financial literacy if necessary and your skills appropriately. Take action plans to realise your goals. Learn from your mistakes to understand why it fails to deliver the expected results. To have more desired results is to have more fun throughout your walk. Slowly and surely you will reap your

rewards. You will make it a fulfilling activity. Begin with yourself, expand your team and take it further by reaching a much larger magnitude of people ultimately. Workout your financial roadmap based on how you spend, save or invest over time to shape your future. However, this roadmap is not set in stone and you need to review it frequently to adjust, and adapt to the changes of the circumstances. These changes may include the tax regulation, technology and other personal financial circumstances which may warrant the changes. Therefore, it is important for you to review your plan on a regular basis to ensure that you remain consistently on track with your financial goals. CONCLUSION Every action counts. No action exists in isolation or is wholly independent. It is all inter connected just like compound interest which has a snowball effect. For those who have not generated sufficient passive income, your first goal is to replace your active income with passive income. By subscribing to the above formula, you are on your way to the next level of success. Have actionable faith, you will attain it eventually. So, by holding yourself fully responsible to your financial goals, you are able to create the future you want. Stay humble and hungry. You will be successful because you are a forward looking person and are ready to grab every available opportunity to make yourself better no matters what. You shall be more inclined to take action to move forward to achieve results rather than to seek for reason. In every success, action triumphs in everything. Your mind is then focused on finding best solutions to grow your wealth speedily and significantly than what you thought possible. Repetition is the key to mastery.

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

www.propertyinsight.com.my MARCH 2016 I 75


LEGAL

UNDERSTANDING SALES AND PURCHASE AGREEMENT

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hile purchasing a property, one will not feel secure by merely signing only the Letter of Offer and Letter of Acceptance, notwithstanding the vendor or the purchaser. This insecure feeling of will persist until the signing of the formal agreement – Sale and Purchase Agreement (‘SPA’). SPA is the main contract governing both parties and setting out the details like the agreed purchase price, conditioning precedents to be fulfilled, the payment manner, the details of the property, loan, the manner of delivery of vacant possession and any other arrangement in this buy sell event. Therefore, it is utmost important to understand every detail in the SPA because you are bound by whatever you sign. Before committing into the purchase of the property, a prudent buyer will always make an effort to view and inspect the property that will form the main cast of the SPA. This is not different from purchasing from Developers where one will view the showroom to get a rough idea of what to be expecting in the near future.

76 | MARCH 2016 www.propertyinsight.com.my

Nevertheless, do not expect that the unit you actually get will be exactly the same with the showroom unit. Showroom is nothing more than a display unit for you to get the idea of the selling. It is no difference from the scale model of the whole development which is usually display in the middle of the sales gallery which is not stipulated in the SPA – you will not be getting the same at the end of the SPA transaction. Thus, if the specifications like ceiling height, fixtures and fittings, parking, building material are of a concern, details like these should be inserted specifically in the SPA. This is applicable notwithstanding if you are purchasing from a secondary market or not. This article will focus on the salient items in a SPA. There is no such thing as a standard SPA as the spirit of an agreement is to set out the terms mutually agreed by the parties. The purchase price is fixed upon signing the Letter of Offer, but the bargaining process continues during the period before the SPA is signed. The good news for homebuyers in Peninsular Malaysia is where the


lawmakers have laid down a set of SPA terms for the Developers to adopt in the Housing Development (Control and Licensing) Regulation 1989. The developers may only amend the stipulated SPA if they are offering better terms, ie. shorter delivery of vacant possession period or longer defect liability period. Although this set of SPA is only applicable when one buys residential properties from developers, it also serves as a good guideline for all other SPA terms to follow, ie. buying commercial property from developers, buying any property from subsale market. As a result, it will absolutely cut down the people who go to court due to the ambiguity of the SPA signed. The most important factor in the SPA will be the manner of payment, regardless the vendor or purchasers. Purchasers must know the manner of payment of purchase price not only to manage his/ her finance but also not to incur penalties by accidentally/unintentially breaching the terms in the SPA. Purchasing a residential property from developers, the billing stages are stipulated clearly in schedule 3 of the SPA. The manner of payment in a subsale agreement will be less complicated as the transaction period is shorter and the property is usually ready for delivery. The common process will be the first 2-3% as a booking fee upon signing the Letter of Offer, the remaining 10% deposit is due during the signing of the SPA, then the remaining purchase price of 90% to be settled within 3 months after signing the SPA. In some events, it may be automatically extended for a further 1 month by incurring late payment interest. As mentioned, there is no standard SPA, one may decide to deviate from the norm if it is agreed by both parties. What purchasing a property, your next major concern will be the time you can get the vacant possession. Vacant possession is a legal term that means the property is in a state fit to be occupied. In simpler words, this means the delivery of access keys and cards to your newly purchased property. For residential development by developers, vacant possession has to be delivered within 24 months for landed property and 36 months for high rise stratified building. On the other hand, delivery of vacant possession for sub-sale is usually 3 – 5

working days after the purchaser settle the full purchase price. The SPA is subjected to the tenancy when the purchaser is purchasing a tenanted unit. The purchaser will be getting the legal possession as the owner of the property but not the keys to the unit. Effectively, the rental and deposits shall be delivered to the purchaser by way of assignment of tenancy. If you have purchased a house in secondary market, you will not notice the ‘Defect Liability Period’ clause in the SPA. A defects liability period is the warranty period which the Developer is contractually obliged to repair the defects which have appeared within the period of time due to defective in construction works and material. Contrary to the privilege of having developer’s warranty, the purchase of sub-sale properties requires sufficient due diligence of the purchaser when viewing and inspecting the property

before entering into the SPA. Due diligence includes checking every part of the house especially sewage, piping, leakage, electrical appliances, rooting and any other fixtures and fittings to prevent any undesirable situation arise. Should the purchaser require the repair of anything prior to vacant possession, the purchaser shall make sure his/her lawyer inserts this in the SPA. Be meticulous, be scrupulous. Do not make assumptions but make sure. No purchaser will want to jeopardize his/her deal or ruin your happiness due to your own carelessness. It is always prudent for the parties to inform their lawyer accordingly of their intentions and to enquire the available protection for anything that matters in the sales and purchase transaction during the drafting of the SPA, not after signing on the dotted line.

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

www.propertyinsight.com.my MARCH 2016 I 77


STRATEGY

PROPERTY INVESTMENT: A SLOW & STEADY GAME

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roperty investment demands capital and, unless you have a large pile of cash or find a joint venture partner, your progress will be constrained by how much money you have access to. This is the key stumbling block and frustration of many investors – lack of upfront capital. I’m sorry to say, there is no magic bullet to fix this. The fact is, property investment needs money. Ignore the claims some people make about ‘no money down’, ‘lease options’ or any other such ‘creative way’ to buy a property – you do need some money. While it is possible to leverage investments via mortgage lending, banks will still require you to supply a deposit. Moreover, if you are letting out a property, you will also need access to funds to ensure the smooth everyday running of the tenancy. People often get demoralised when they begin investing in property, as it can feel like you’re not getting anywhere fast. In the early days, any money a property makes will likely be required to feed the business – either by improving a current asset or by acquiring more. However, by reinvesting that cash, you are growing your business into a stronger, more valuable entity with the potential to make more money in the future. Building a business takes time and it may take almost a decade for you to get where you want to be. The best way to grow your business is to keep your personal expenses as low as possible and save as much capital as you can 78 I MARCH 2016 www.propertyinsight.com.my

to invest. That means minimising the mortgage payments/rent on your own home and kissing goodbye your expensive cars/toys, branded bags and exotic holidays. All of these personal expenses will massively impact upon your business because you are spending money now, which you could be investing for the future. Accumulating property is a long steady game, but, given time and the right investments, the cash your assets will start to generate will enable you to live the life you want to lead in the future. Investments take time to mature, which is why it’s critical you choose properties with healthy cash flow, which can sustain you while the underlying asset is gradually appreciating. Making money out of property is not an overnight lottery win – but it should be remembered that, by investing right today, you can have more tomorrow.

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


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Property Insight’s Prestigious Developer Awards (PIPDA) recognises innovation and outstanding achievement across the entire property industry with individuals, groups and sector projects being eligible to enter one or more categories. PIPDA, as it is fondly known, works as an independent bi-partisan professional body with the broadest possible involvement in the property industry. We are proud to host this widely recognised program within the property industry, culminating in a Gala Dinner.

PRESTIGIOUS DEVELOPER AWARDS 2016 CATEGORIES DEVELOPMENT Best Best Best Best Best Best Best Best Best Best Best Best Best Best

Mixed Development Family Living Development Hi-Rise Development - Northern Hi-Rise Development - Southern Boutique Lifestyle Self-Sustained Development Sustainable Township Development Landed Development Luxury Landed Development Luxury Lifestyle Development Urban Lifestyle Development Integrated Development - Northern Township Development Facilities Development

DEVELOPER Outstanding Developer - Southern Outstanding Developer - East Malaysia Best Boutique Developer Best Emerging Developer Best Affordable Housing Developer Top 10 Developer

SPECIAL RECOGNITION Most Aspiring Personality

FINANCE Innovative Financier

ENTRY & JUDGING The Awards acknowledge and highlight the quality developments of Malaysia’s best and their landmark projects that shape the landscape of Malaysia’s nation building and development progress, propelling the country towards our vision of becoming a First World Nation by 2O2O. The Property Insight Malaysia’s Prestigious Developer Awards 2O16 is audited by professional accounting consultant firm HML & Co.


PRESTIGIOUS DEVELOPER AWARDS GALA DINNER Celebrating Malaysia’s top award-winning developers at a night that recognises their contribution to the country and nation, Property Insight Prestigious Developer Awards Gala Dinner 2015 was graced with more than 440 industry partners at Westin KL with the acknowledgement of our Minister of Tourism and Culture Malaysia. Property Insight Prestigious Developer Awards 2016 will be held at Shangri-La Hotel, Kuala Lumpur on 1 April 2016*.

CONTACT: Ray: 016-647 92 88/ray.lopez@propertyinsight.com.my OR Janet: 012-205 0911/janet@propertyinsight.com.my


AWARDS ARE MEANT TO INSPIRE THIS TIME, IT IS THE OTHER WAY AROUND​ Officiated by:

YAB Dato’ Sri Najib Tun Razak Prime Minister of Malaysia Submit your entries on www.pipda.com.my or email support@propertyinsight.com.my

Property Insight March 2016  

Property Insight is a monthly property investing magazine.

Property Insight March 2016  

Property Insight is a monthly property investing magazine.

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