Recognising Excellence PANEL OF JUDGES
Tuan Haji Nordin bin Daharom
Ooi Boon Seong Vice President Malaysian Institute of Interior Designers (MIID)
Director General Valuation Property & Services Department
Ezumi Harzani President Pertubuhan Akitek Malaysia (PAM)
Eric Lim President Malaysian Institute of Estate Agents (MIEA)
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Taking The Road Less Travelled Growing up on a staple diet of Enid Blyton books that I would bury my nose into – spending countless hours lost in the adventures of her stories and the like – I concur with my English literature Lecturer’s comment that if you hadn’t grown up reading her books– half your childhood would have been lost. And for this, I owe a debt of gratitude to this great Author of children’s books for forming my command of the Queen’s English to forge ahead in my literary career. Pursuing English Literature as a subject, the introduction to four-time Pulitzer poet Robert Frost’s (1874 – 1963) famous inspirational poem “The Road Not Taken” fabulously depicts the decision making process whereby he opted for the road less travelled instead of following the safe path others have taken before. “Two road diverged in a wood, and I took the one less travelled by, And that has made all the difference.” Those words continue to echo with the wisdom of the ages for me. I didn’t realise the profound measure of those words but when weighed now with the wisdom accumulated over the years, they resonate with a resounding and overwhelming truth. In this issue, read all about Benjamin Lee’s decision to embark on the road less travelled – diverting his plans to launch his career in Singapore to work in Kuala Lumpur. He is now overseeing the maiden UMLand development in Negri Sembilan called Mahkota Hills as Director of Kia Ace Development Sdn Bhd, transforming this once sleepy hollow which is now fast waking up to a myriad of possibilities with his grandiose plans for the sprawling 360-acre site. Among this next generation developer’s plans include many smart partnerships within this gated and guarded enclave. Selling at below the half a million price tag, residents here will be able to enjoy the benefits of living in a community-centric setting whereby they would also be granted access to comprehensive facilities within the development – with a clubhouse to cater to their leisure hours. Spoilt for choice, this will be the new hotspot of Semenyih and up till now, possibly a best-kept secret. It’s almost “Semenyih at a steal!” to put this in a nutshell. Anticipating the winds of change for the better this year for the property market, Lee doesn’t intend to rest on the laurels of success already witnessed in over 90% of the first phase of Mahkota Hill’s Albury units having already been sold – but, as related in an exclusive interview in this month’s cover story of Property Insight – he anticipates more other developers will be making a beeline to Semenyih in launching affordable units. Already, his team is ready to up the ante of their game plan to raise quality standards higher. Another key lesson from Lee, who is being groomed by UMLand Executive Deputy Chairman Dato’ Ng Eng Tee is the pertinent and not often expounded ideal that everyone should win in undertaking a development. The win win situation he says should not be at the expense of suppliers or buyers. In fact, developers should make a profit but at the end of the day, suppliers should also have their fair share of success – while purchasers – having invested their hard earned money into the development – deserve quality units. Well said indeed for the 30-year-old who is looking forward to launching Mahkota Hill’s next phase of development named Woodbury. Should more developers employ this mindset, thriving communities will abound which will accelerate the value of the units and prosper the area, resulting in a win-win situation for all parties, with everyone gaining in the long run. And with that, here’s wishing you a great April. Till we meet again in next month’s issue.
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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.
Director of Kia Ace Development Sdn Bhd, a wholly-owned subsidiary of UMLand
April 2018 •
NEWS & EVENTS
M101 Holdings Together with Hasbro Announces World’s 1st Monopoly Hotel M101 Holdings Sdn Bhd together with Hasbro announced the world’s first Monopoly hotel today in Monopoly Mansion by Sirocco, located in Kyala Lumpur. Scheduled to open in 2019, the boutique 5-star hotel will be housed at M101’s secondvdevelopment, M101 Bukit Bintang.
RSIM Presents Its “Real Estate Trends: 2018 and Beyond” Seminar The 27th National Real Estate Convention organised by the Royal Institution of Surveyors Malaysia (RISM) held recently focused on the theme:- "Real Estate Trends: 2018 and Beyond". The convention witnessed industry practitioners capitalising on a series of talks expounding on various topics related to the real estate industry.
Savills Malaysia Hosts Breakfast Forum Savills Malaysia recently held a Breakfast Forum to present its recent findings on the property market. Entitled “What Trends Will Shape Real Estate in 2018 and Beyond”, the audience listened to the key findings by Andrew Staples, Global Editorial Director of Economist Corporate Network and Yolande Barnes, Director, Head of Savills World Research. Other panellists included Chris Marriott, Chief Executive Officer of Savills South East Asia and Datuk Chris Boyd, Executive Chairman of Savills Malaysia.
• April 2018
Meridin East Holds GroundBreaking Ceremony for SJK (C) Sim Mow Yu
Central i-City Announces Its Anchor Tenants Central Pattana Public Company Limited (CPN)’s maiden international regional shopping centre - Central i-City announced its anchor tenants comprising Sogo Department Store, Village Grocer and TGV Cinemas. CPN is championing the shopping centre’s “landlord-retailer synergy” - honouring its commitment to grow together with its tenants towards success.
Mah Sing Group today held the ground-breaking ceremony for SJK (C) Sim Mow Yu - the first Chinese vernacular school in the Meridin East’s township as well as the public preview for Ixora Commercial Centre at the Meridin East Sales Gallery and Show Village. The groundbreaking ceremony was officiated by Minister of Transport YB Dato’ Sri Liow Tiong Lai.
Regus Further Expands In Malaysia with The Opening of 4th Centre in Penang
Regus, the world’s largest provider of flexible working solutions, further expands its investment in Penang by expanding with the opening of its fourth business centre in Bayan Lepas SPICE Arena. This is the latest centre after opening the Menara Boustead facility last December. The new centre is anticipated to attract foreign Investors and support local firms by linking Penang to a global network spanning 100 countries across 1,000 cities in line with the local national launch of inititives including productivity targets for enterpreises, and the adoption of innovative technology for Small and Medium-sized Enterprises (SMEs).
April 2018 •
GEN Y DEVELOPER MASTERING THE ART OF REAL ESTATE Armed with a disarming smile, astute mind and assured composure, Benjamin Lee - the youngest UMLand director of UMLand’s meteoric rise to property stardom is evident in him throwing all the right punches in elevating his maiden Mahkota Hills development as the new star of Semenyih. BY YVONNE YOONG Towering at six foot, the newly minted next generation property developer with a can-do attitude indeed looks well-poised to work his way to the top, judging from the stellar reviews surrounding his maiden project at Mahkota Hills, Lenggeng, tucked in the heart of Semenyih. At 30, Benjamin Lee is United Malayan Land Bhd’s (UMLand) youngest director spearheading the group’s wholly-owned subsidiary - Kia Ace Development Sdn Bhd - in launching Mahkota Hills which coincidentally, is also first foray into the state of Negri Sembilan. Fast on his feet and armed with a steady disposition as well as philosophical outlook, Benjamin is already making a meteoric name for himself in the concrete laden world of bricks and mortar. Pitting the competition, the young Benjamin who is born in the year of the Dragon could perhaps be compared to the late great legendary Bruce Lee for his witty comebacks and fastmoving moves – but in his case – in throwing all the right punches for Mahkota Hills. It is no secret that the Gen Y developer who is adept at taekwondo is fast gaining a reputation for pushing boundaries in an age-old industry by throwing in more than his fair share of surprise strategic moves for Mahkota Hills. Blessed with a bright disposition and charismatic appeal, his ambassadorial approach of always wanting to create a balanced, win-win situation for all parties whom he deals with – from his colleagues, consultants, suppliers and clients – has carved him a reputation for quality leadership that exemplifies him. Brimming with the burning desire to be the best in all his endeavours, this Gen Y developer, born and raised in Singapore to a Malaysian father and Singaporean mother is no stranger to taking the proverbial road less travelled. Having graduated from the prestigious National University of Singapore (NUS) and inducted into an international fraternity of business scholars under Beta Gamma Sigma (BGS) in recognition of his scholastic achievements, he chose Malaysia as the place to launch his career from what would otherwise have been a safer choice of finding a stable job in the Lion City. “I wanted to forge my career and create my own legacy; and not just settle for a routine job. I reasoned that Malaysia has amazing opportunities which would give a budding Entrepreneur like me the best chance of success,” he explains.
• April 2018
“In terms of culture and language, we are like one people, thus enabling me to shorten my acclimatisation process. Looking at past trends, the new ideas and technologies emerging from Singapore will eventually spill over to Malaysia. My value-added proposition here hinges on the fact that I can leverage on the networks in Singapore to accelerate international technology transfer to stay ahead of competition,” says Lee.
The Road Less Travelled The decision to join UMLand he says was due to him wanting to create something tangible in a career choice that “could stand the test of time and would be beneficial to society”. “Coordinating and working in teams has always been a strength of mine. The diverse nature of property development and inherent opportunities present to work with people from literally every other industry presented a challenge that I could not resist,” he elaborates. Under the careful tutelage of UMLand Executive Deputy Chairman Dato’ Ng Eng Tee, Benjamin had the distinct privilege to learn from one of Malaysia’s pioneer developers with an enviable track record locally and internationally in township, niche and hotel developments. By assisting in the management of the many on-going projects under UMLand’s portfolio, Benjamin says tongue-in-cheek that he was like American Actor Ralph Macchio in “The Karate Kid” doing the “wax on, wax off” routine - absorbing a crash course study of development - ranging from land acquisition to design planning, financial structuring, down to construction, sales and marketing - like a sponge. Other facets of his role that initially included drafting official letters and policies, engaging in business development, hotel and mall operations have made him well-versed from the bottom up with regards to the intricate details of the business and beyond. An inquisitive person by nature, Lee wanted to apply his knowledge to put in practice. Hence, when the opportunity presented itself, he volunteered to take on the construction and renovation of the penthouse floors in Suasana Bukit Ceylon in Kuala Lumpur that included designing the spacious duplex corporate penthouse where this exclusive interview with Property Insight was held. Starting from scratch with the units all being in a shell state, all of the 10 penthouses were eventually completed within seven months of him taking over.
“Managing Dato’ Ng’s expectations of budget and delivery were the hardest!” jokes Benjamin who was exposed to the need to accommodate the client’s last minute changes in plans while being pressed for timely delivery. Undertaking that role enabled Benjamin to quickly gain technical experience to move on to bigger things as in overseeing the success of his maiden development in Mahkota Hills. Prior to this, he also gained international exposure through the group’s collaborations with global conglomerates in forming strategic partnerships. Chalking up his list of experiences, Benjamin counts the strategic partnership with Samsung Group for UMLand’s Star Residence and Medini Lakeside projects as among the key highlights of the exposure he received. “Our team was invited to Korea to understand Samsung’s construction methodologies and were given front row seats to cutting-edge technology. The Koreans’ immaculate attention to detail and the integration of superior technology to maximise efficiency was an eye-opening experience. I incorporated parts of these takeaway pointers into the makings of Mahkota Hills,” shares Benjamin. Echoing Bruce Lee’s ideal that “Knowing is not enough, we must apply. Willing is not enough, we must do” in some respects Benjamin wants to evolve the way things were being done in the company by breaking away from cookie-cutter conventional approaches to developments. The Goliath challenge of being a David with a lean and young team was met with one of the fastest moving sales achieved. He says that being surrounded by illustrious developers such as Eco World Development Group Bhd and SP Setia Bhd did not deter the team but only served to spur them on to work harder at an accelerated and more efficient pace to set an even higher benchmark though the project is comparatively an affordably priced development but equipped with comprehensive facilities including a clubhouse within a gated and guarded community.
April 2018 •
Making A Debut With Makhota Hills Kicking things off, Benjamin was an integral part of the team which acquired 360 acres of land in Lenggeng, Negri Sembilan, just South-East of Semenyih on the boarder of Selangor for the project. The pockets of land purchased included a one-acre clubhouse equipped with a swimming pool, gym and sauna facilities. “It was a steep learning curve for the team as we had to acquaint ourselves with local municipal regulations and requirements for our development with a gross development value (GDV) of over RM250 million,” he recalls. As destiny would have it, two days after turning 28 years old on March 1, 2016 - Lee became the youngest head of a UMLand subsidiary to oversee the newest township under the auspices of Kia Ace Development Sdn Bhd. This was where Lee’s mettle was tested – and where the rubber met the road. The first launch was an ambitious 713 units of terrace houses at one go. Lee took to his new position like a duck to water - transforming the once sleepy neighbourhood into a budding township and setting an enviable blueprint of a successful model for a rapidly emerging development packed with value-added benefits within a turnover time of two years – including everything from land acquisition to the delivery of keys. Besides ushering in a sense of regal polished finesse into the neighbourhood within a gated and guarded setting, topping the icing on its lavish offerings is the fact that the spacious units are designed with plenty of room to raise a family. Best of all, the units are truly affordably priced. “Our mandate was to price the units below the RM500,000 mark respectively, and the concept was right. We were in the right segment of the market,” he analyses. “We designed this for young starter families and first-time homeowners. I was a first-time homeowner once, and I learnt a
lot from my own experiences of buying a house. When you have to renovate unusable space or relocate poorly placed electrical points, it is a lot of cost - on top of just buying a house by itself, so we try to eliminate all of that through careful planning so that the purchaser doesn’t have to do much more,” shares Lee. On top of that, the team also ensured that the process of financing, arguably the most tedious part about buying a property, remains relatively stress-free. With an attractive yet easy to understand sales package, its sales and marketing team will carefully guide purchasers through the entire process and handle any financing issues if necessary. The beauty of this development he maintains, is the fact that although the Mahkota Hills developemnt may be priced competitively, buyers are in no way, short-changed. “Mahkota Hills is all about providing quality homes at affordable prices. Unfortunately, sometimes the word ‘affordable’ has a negative connotation. But at UMLand, we are looking at value more than just the price point alone,” says Lee. “I’m happy to share that even for our first phase’s units which initially started selling below RM320,000, we still managed to obtain a QLASSIC score of 83 points. “So, that’s kudos to our project team who worked extra hard to value-add in the engineering exercises in order to squeeze every last drop of savings to pass on to our purchasers. Lastly and most importantly, our team was extremely blessed to be supported by good construction delivery partners. Without their help and like-minded desire to deliver a quality product, Albury would not have been so highly acclaimed by purchasers.” Apart from the awards conferred by industry experts, the biggest validation its young team received was witnessed in several happy customers dropping by the office with lunch or teatime treats as a gesture of appreciation. “Their good words of encouragement spur us to keep on improving,” shares Lee. Lee attributes the achievements to his like-minded young team averaging 33 years of age who take great pride in handling things well and executed instantly coupled with the hunger to prove themselves in pursuit of excellence. “I am very fortunate to be guided by the top management at UMLand as well as having experienced and capable leaders and dedicated staff within the team,” adds Benjamin. As proof of the pudding, Albury, representing the first phase of Mahkota Hills has achieved 100% sales of its 331 single-storey homes, and 88% take-up rate of its 382 double-storey homes despite the current uncertain property market sentiment.
• April 2018
King of The Hills At Mahkota Hills In true Bruce Lee style, Benjamin unleashed the full force of his creative ideas unto Mahkota Hills with a series of knock-out winning strategies rarely witnessed by a new challenger in an established industry. “A signature entrance statement, gated and guarded community as well as spacious toilets comparable to luxury homes and squarish rooms to eliminate grey spaces can be expected in this development,” shares Benjamin. “Being a Gen Y myself, Internet connectivity is almost like a necessity next to air, water and food. So, one of the first few things we did for the township was to leverage on UMLand’s smart partnership with TM Unifi to make the township fibre broadband ready,” he shares on the accelerated Internet access. This means that purchasers do not have to wait in hope that there are enough residents to apply for Internet services.
“As with evolution, the team will try to continuously improve our product. The next phase will be designed by BEP Architects who are known for their iconic designs and creative layouts to bring about something new, fresh and exciting,” elaborates Benjamin.
Underground cables were implemented immediately instead of being above ground in order to maintain a neat look in the development which comprise part of the UMLand DNA and ethos to maintain and enhance the value of purchasers’ properties here.
Apart from launching Woodbury, Benjamin continues to share that the team has just begun planning another 678 singlestorey terrace homes to be launched under the Negri Sembilan Affordable Housing scheme known as Desa Perumahan Negri Sembilan (DPNS).
Future Forward For Mahkota Hills
“Planning for 1,034 units is no mean feat and I have confidence that the team can do it,” asserts Benjamin.
Sharing on UMLand’s future plans for Mahkota Hills, he says the team is preparing to launch its next phase named Woodbury in 3Q18. The project will comprise 356 double-storey terraces that will be spilt into three different types with built-up areas of over 1,500 sq ft, 1,700 sq ft and 1,800 sq ft that will be priced affordability.
He discloses that his team will be moving over to the site in the middle of the year, and a small commercial zone opposite Albury will be completed by mid-2019. Preliminary talks with a hypermarket brand have already started with the hypermarket being planned to be situated in front of the township.
April 2018 •
CANDID TAKES WITH BENJAMIN LEE, DIRECTOR OF KIA ACE DEVELOPMENT SDN BHD Property Insight conducted an exclusive interview with the youngest director of UMLand on his successful affordably priced maiden project – Mahkota Hills in Semenyih - on what constitutes his management style, winning punches and worldview. In essence, Lee is as much self-made - in as so much as he is bold - having chosen to venture down the proverbial path less travelled which has ultimately made all the difference. BEING A GEN Y WELL-VERSED WITH INNOVATION AND IN YOUR POSITION AS DIRECTOR OF UMLAND FOR MAHKOTA HILLS WHEREBY YOU HAVE ACCUMULATED A VAST RANGE OF EXPERIENCES, WHAT IS YOUR ADVICE TO YOUNG ENTREPRENEURS? I think first and foremost, as an Entrepreneur, you must be ready to accept any rejection or failure. I think that whatever you undergo - either success or failure, you have to learn and improve from there - so, do not feel discouraged. Especially when whatever decisions you make today, will only come to fruition maybe three or five to six years from now. So, you really have to stay strong and soldier on. Business-wise, you always have to have the end user in sight. Fundamentally, you have to know what your target market wants. You also need to know your market better and not only that – whatever you do, you need to have all your stakeholders’ values in mind. One party cannot just be the winner with the other being the loser. Everyone has to win. You have to ensure that your product and pricing are appropriate. You can make a profit but you cannot allow your suppliers to lose or else your purchasers may get a lousy product. Everyone must win in the deal and so, if you can balance all your stakeholders’ interests – you put yourself in a better position to move forward in your business environment. WHAT DO YOU THINK ARE YOUR WINNING TRAITS IN THIS BRICKS AND MORTAR INDUSTRY? WHAT IS IT LIKE TO LEAD AN ENTIRE DEVELOPMENT AT SUCH A YOUNG AGE? By no means have I won anything yet. I go to work every day wanting to learn more and apply what I learn. I don’t presume to know everything, because I don’t. It is fortunate that at UMLand, there is repository of knowledge waiting to be tapped. I am never afraid to ask for counsel or opinions from industry experts. If you are willing to ask and learn as well as be humble enough to acknowledge your need for assistance, then help is always forthcoming. It’s my duty to lead; so how do I do so at such a young age? Constant communication and clear direction are paramount. My job is to expedite by making the team’s job easier in facilitating what they need. Selection of personnel with the right attitude is key but equally important, is giving them a role they can thrive in. Finally, leaders must relish the burden of making decisions -especially tough decisions which may not be popular but will be beneficial in the long run.
• April 2018
WHAT MAKES YOU PROUD TO BE WITH UMLAND? One thing that makes me proud to be working with UMLand is that industry players and our brand partners appreciate our value-added offerings to the business venture. Although UMLand has never really branded itself in a truly big way, it has always fallen back on delivering quality and innovative products which are something that stakeholders would be proud to own.
must weather the storms, be able to pay your bills and quit rent assessments - even when you are not gaining any income.
We have worked with many international players including Samsung, Onyx Hospitality, CapitaLand Singapore and Roca Spain. Everyday, we learn new things from international players about their business philosophies and good practices. What’s more they’ve chosen to work with UMLand. You can say a lot of things but if big names like those mentioned above are willing to brand themselves alongside the company, I think there is certainly huge value in that.
Always choose a good location and buy what you can afford. Be prepared to hold in case the market goes bad and hopefully, the market will recover sooner than later. But, going back to the fundamentals, you have got to manage your cash flow well.
YOUR TAKE ON SEMENYIH’S POTENTIAL AND IT LIKELY BEING THE NEXT AFFORDABLE PROPERTY HOTSPOT? Definitely. There are not too many places left in the Southern Klang Valley growth corridor with cheap undeveloped land. When factor inputs are cheaper, developers can keep their costs low and transfer the value to purchasers. The key to any region’s growth would be largely determined by two factors - infrastructure and jobs. Infrastructure will bring in commerce and jobs. Once there are jobs, there will be demand for housing. With the recent completion of the Kajang-Seremban Highway (LEKAS) together with the Mass Rapid Transit (MRT) Line 1 nearby in Kajang, connectivity is improving. And, coupled with the upcoming Malaysia Vision Valley and Jack Ma’s Digital Free Trade Zone (DFTZ) catalytic initiatives by the Government, these initiatives should further spur on job creation within this zone. YOUR MARKET OUTLOOK FOR 2018? I think everyone knows that the market outlook in terms of the last few years was very challenging. Fortunately, for us at Kia Ace, we were in the right market segment at the right time. Basically, we are pricing everything competitively and giving people a lot of value for their money. So, I think it’s so far, so good. I believe other developers are going to be competing in the same market segment in 2018. This only inspires my team and we try to evolve one step further. I believe that with the strong fundamentals already in place, one can already sense a recovery coming on. YOUR ADVICE TO INVESTORS OUT THERE? Property investor-wise, I believe you should always know what you can afford and what your holding power is. Property is one of the best investment tools around. However definitely, you
Many people also make the fallacy of buying a house - thinking that after they get the keys, they can sell it immediately. But, I think if it is one of you plus the 300 other keys you are competing with and if you are all thinking the same way, that’s where demand will be more than supply.
HOW WOULD YOU DESCRIBE YOURSELF? I am like water. I constantly need to be flowing, moving on to more challenging tasks. The moment I am not challenged, I feel like stale water growing stagnant. People fear failure, I fear not winning. I often set quantum targets for myself and the team. Contrary to popular goal setting models, setting quantum goals have no limitations but serve as a mere reference point or an ideal state. When you push yourself as hard as you can, only then will you know your true limits. WHAT QUALITIES DO YOU ADMIRE MOST IN OTHERS? I will go out on a limb and be cliché: sincerity, humility and loyalty. Growing up wasn’t always a bed of roses. In times of crisis, only then would you come to understand who your true friends are. Even though our family didn’t have much, we were blessed to have kind relatives and genuine friends to assist us during difficult times. Sincerity - We need to be sincere in helping others to become better or lead better lives, whether there may be any returns in the future or not. Humility - People in privileged positions should know they were put there to serve others in need, not to flaunt wealth or status. Loyalty - The faith entrusted upon others should not get taken advantage of, and partners should stick through thick and thin to come out of any crisis stronger HOW CAN ONE UP THE LEVEL OF THEIR GAME PLAN? Before embarking on any business, do a reality check on what is the value proposition of the product or service. Find a problem to solve, because people will only pay money for a problem that they need solutions to. If you can’t find a very strong reason why your business can value add to the lives of others and your stakeholders, then it is best to reconsider. Don’t buy yourself a job.
April 2018 •
UNDERSTANDING LEASE OPTION Here’s a quick guide to understanding this topic The words “lease option” can be broken down into two components. Firstly, there’s the lease and secondly, there’s the option. The lease is where the buyer takes the property on rental from the owner for a specified period and during the period of the tenancy, the buyer is given an option to purchase the property sometime in the future at an agreed price. A lease applies when the rental period is for above three years while a tenancy rental period is for three years and below. The term “lease option” can also be used in reference to “rent to own” or “rent to buy” for struggling home buyers who want to own a property but are not able to do so due to financial constraints.
The Lease The Option Why Lease Option The Parties The Contract Ingredients • • • • • • • • •
UNDERSTANDING LEASE OPTION
Option Sum Option Period Purchase Price Tenancy During Option Failure To Exercise The Option Option Nomination and & Dealing Dealing With With Profit Profit Caveat The On The Property Property Default By Holder Default By Owner
• The Owner • The Property • Documentation Property Under Individual/Strata Title • Property Outgoing
Why Lease Option:i. The owner faces difficulty in selling the property. ii. The owner is unable to service the monthly housing loan instalments. iii. The owner is migrating to another country and wants to release himself or herself from managing the property. iv. Some owners own the property for a short period which is still within the taxable period of the Real Property Gains Tax (RPGT). He or she wants to dispose off the property after the taxable period. v. S ome owners are servicing their bank loans which are still within the “lock in period”. They would want to wait for the expiry of the lock-in period before disposing off the property.
• April 2018
vi Divorce or separated from their spouse and do not wish to stay in the matrimonial home. vii The owner’s property is going to be foreclosed. The option sum upfront may help the owner to settle the overdue housing loan and regularise the housing loan account. viii Potential buyers wanting to own a home but are unable to do so due to ineligibility in obtaining a housing loan for many reasons. ix For Investors who want to lock-in the price now and decide later whether to proceed with the purchase or to sublet the property and offer to a sub-tenant, a rent-to-buy option.
3. Purchase Price The owner and holder or tenant agrees on a purchase price. It can be higher or lower than the market value. This depends on who wants the deal more. 4. Tenancy During Option During the option period, the parties will enter into a tenancy agreement with an agreed rental price. When the option is exercised, the total rent paid will be utilised as part payment towards the purchase price. It is important to ensure that the terms of the tenancy coincide with the terms of the option.
The Parties Involved:Since a lease option has two components - the tenancy and an option, the parties involved will carry different names and occupy different positions. In an option agreement, the owner is referred to as the “writer” while the prospective purchaser is the “holder”. In the tenancy agreement, the owner is referred to as the “landlord” while the holder becomes a “tenant”.
The Ingredients:Please note that the ingredients of the option contract and tenancy agreement will depend on the parties’ negotiation skills and techniques. Below is a useful guide to follow:1. Option Sum The holder or tenant pays option money to secure an option to purchase the property in the future. The option money can be utilised as part payment towards the purchase price should the holder or tenant exercise the option to purchase the property. In the event the holder or tenant fails to exercise the option, the option money will be forfeited. 2. Option Period The option period may range from three months to seven years - depending on the parties’ arrangements. It is very important to note that if the holder or tenant wishes to exercise the option, an option notice must be served to the owner at the last known address or via email. The notice clause is therefore important in the option agreement to ensure that the owner’s contact details are updated.
5. Failure To Exercise The Option In the event the holder fails to exercise the option at the expiry date of the option period, the tenancy is terminated and all rentals paid will be treated as collected rent. If the holder fails to redeliver the property to the owner, the owner may proceed to seek relief from the court for eviction and double rental for the period the tenant overstays on the property. However, if there is an arrangement for the renewal of tenancy, then the tenancy can be renewed although the lapsed option. 6. Nomination and Dealing with Profits The holder shall be entitled to nominate other parties or company(ies) or corporation(s) to enter into a sale and purchase agreement (SPA) with the owner at a purchase price that may vary from the purchase price stated in the option agreement. To secure the profit payment, it is important to obtain from the owner an irrevocable instruction and consent addressed to the solicitors - authorising the solicitors to release the profit to the holder. 7. Caveat On The Property The holder has the right to caveat but since there is no title nor registrable interest, the holder cannot put a caveat on the property. The holder has been granted a right to purchase the property in the future but he has in fact, not taken any action to purchase the property yet. The right granted was a right to purchase - not a right over the property. Therefore, an option is not a registrable interest. The holder’s right will be protected under contract. 8. Default By Holder If the holder does not exercise the option, there is no default. The holder will have to move out from the property. The option sum paid is forfeitable. This depends however, on the arrangements between the parties. 9. Default By Owner If the owner fails to sign the SPA and transfer form after the holder has exercised the option, it’s a default by the owner. The holder may seek the relief of specific performance and/or injunction of the court to compel the owner to sell and sign the SPA and thereafter, place an injunction restricting the owner from selling to third parties.
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Due diligence is a must before signing off the option agreement. Various searches and verifications must be carried out on the property, owner, property documentation and the outgoings on the property.
1. Must view the property and confirm that the property is as per the property postal address. There have been situations whereby the property doesnâ€™t exist or the address and the property itself do not match.
The verification on the property documentation would depend on whether the property is under individual, strata or master title or whether there are encumbrances on the property or any restriction in interest.
2. Latest land search must be conducted on the property to check on the ownership status and/or any existing encumbrances. It is advisable to conduct a search every six months from the beginning of the option until the completion of the SPA after the option is exercised.
A. Owner:C. Documentation - Property Under Master Title:1. Meeting the owner in person. 2. Verify the identity card of the owner at Jabatan Pendaftaran Negara. 3. Searches on the owner to ensure there are no bankruptcy proceedings or any other legal proceedings against the owner. It is advisable to conduct searches every three months from the beginning of the option until the completion of the SPA after the option is exercised.
1. It is advisable to obtain a confirmation letter from the developer, confirming the beneficial ownership of the property, the existence of any encumbrances on the property or whether the property is under a Bumi lot. The letter from the developer is crucial to ensure that the owner is not engaged in any other dealings on the property. 2. To obtain a complete (full set) of SPA and any other documents evidencing the transaction between the owner and/or developer or first owner on the property. 3. If the owner has purchased the property by way of cash, then it is important to have sight of all original documents in the ownerâ€™s custody.
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D. Documentation - Property Under Individual/Strata Title:-
E. Property Outgoings:-
1. If the title has been registered under the owner’s name, then a copy of the title must be obtained together with a complete (full set) of the PA and any other documents evidencing the transaction between the owner and/or developer or first owner on the property.
1. It is important to obtain the outgoing bills as follow:• Quit Rent (Cukai Tanah) • Assessment (Cukai Pintu) • Statement of account from the management office (service charge, sinking fund, insurance and water, etc.) • Indah Water bill • Electricity bill
2. If the owner hands over the original title, don’t be too quick to be happy as there are many cases whereby the original title turns out to be a “fake” title. The original title must be obtained from the owner to conduct verification at the relevant land registry. 3. Check on the title restriction whether it is under “Tanah Rizab Melayu” or “Malay Reserve Land”.
About The Contributor
2. Should there be any outstanding bill, then most often than not, the option sum will be utilised to settle off the outstanding and regularise the relevant accounts. The lease option has been practised by many individuals on a willing seller and willing buyer basis. As mentioned earlier, the contract is drafted based on the parties’ negotiation on option terms. It is important to appoint a legal specialist to handle the legal documentation of the lease option deal.
is the Managing Partner of Elizabeth Siew & Co. Prior to her obtaining her degree in law in 2004, she was attached to both litigation and conveyancing departments of a few legal firms and a developer in the Klang Valley since 1995. She can be reached at firstname.lastname@example.org
April 2018 •
UMLand Grows Its Global Presence Via One of The Largest Design Competitions United Malayan Land Bhd (UMLand), an award-winning property developer which prides itself on creating world-class lifestyles that complement the modern community, continues to expand its international presence through its latest involvement in “The Apartment: Passion for Design” reality competition show for the second consecutive year, as one of the major sponsors. “The Apartment”, which is the premier design competition show in Asia, is a highly addictive television series showcasing passionate amateurs who must brave razor-thin budgets and exacting time-frames to create stunning one-of-a-kind rooms in developments throughout South-East Asia. All of this drama takes place under the watchful eyes of International Design Superstar and Principal Judge Laurence Llewelyn-Bowen.
• April 2018
The show is back for the sixth season and this year features one of UMLand’s most established townships, UMLand Seri Austin. It also includes the biggest prize in the series’ history – the deed to a luxurious apartment at D’Lagoon worth over USD140,000 (RM541,8800), which is UMLand’s latest luxury development by the lake in Iskandar Malaysia, Johor Bahru. The exciting series was also filmed at one of the luxurious double-storey semi-detached houses at Aster 2, UMLand Seri Austin. The location sponsorship provided an opportunity for the 12 talented contestants and the judging panel of esteemed celebrity designers to experience living at the First Smoke-Free Town Park and the First Smart Healthy City and Communities Township throughout the 10-week filming period.
“The strategic partnership with the reality series showcases the beautiful landscape of UMLand Seri Austin and Johor as one of the most liveable cities in the future for potential Investors and buyers from around the world. “It has also given us the opportunity to put UMLand on the international map once again as we reaffirm our sustainable developments that are of high global standards,” says KK Wong, Chief Executive Officer of UMLand Seri Austin cum Group Director of Townships, UMLand.
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“I am incredibly proud of our latest season of ‘The Apartment’,” adds Riaz Mehta, President of Imagine Group Entertainment, the producer of the show. “Our cast is better than ever, with a fiery chemistry between them that will keep our viewers entertained every minute of the show as our budding designers will do whatever it takes to succeed. The show offers something for everyone - whether you just want to be entertained by the characters or inspired by amazing designs.” “The Apartment: Passion for Design” features 12 talented contestants from various countries including Malaysia, Thailand, Singapore, Philippines and more, who will compete to become the next interior design superstar.
• April 2018
“The Apartment: Passion for Design” also features a judging panel of esteemed celebrity designers including returning international superstar Laurence Llewelyn-Bowen as Principal Judge, and award-winning Designer and Author Jamie Durie as returning Host and mentor. This season also sees the introduction of two new Judges, Filipina Interior Designer and influencer extraordinaire Cat Arambulo and Tyler Wisler, one of New York’s dynamic designers. “The Apartment: Passion for Design” premieres on 22 March 2018, Thursday at 9pm (8pm JKT/BKK) on Sony Channel and Astro’s AXN channel 701 starting from 25 March 2018 every Sunday at 8.05pm.
April 2018 •
THE FUTURE OF GLOBAL REAL ESTATE
â€¢ April 2018
Established world city real estate markets are going to see lower capital growth in the next decade as interest rates rise. Therefore, income will be the key reason for investing, opines International Real Estate Advisor Savills. In its new flagship publication, Impacts: The Future of Global Real Estate, Savills states risk needs to be measured differently, as security and scale of income become the major driver. The firm identifies cities which are “resource rich, young and fastgrowing, economic powerhouses or at low risk of natural disasters” as those to watch for the next decade. According to the report, the ability of cities to attract people and talent pools will be a key indicator of income security in the next 10 years. Savills has analysed rental growth in different real estate sectors in world cities and plotted where each stands on the new Savills rental wave. It identifies cities and sectors which Investors may want to take look at more closely for security of income and potential rental growth. •
Prime office growth has been highest in San Francisco (+99%), Shenzhen and Beijing (both +71%) and London West End (+69%) since 2008. This leaves these city sectors near the top of the rental curve:- In late upswing, on a high plateau or in early downswing.
In Singapore, double digit falls have been witnessed in prime offices (-26%), residential (-25%) and prime retail (-15%), leaving these sectors in or near the trough of the rental wave.
Hotels in Shanghai, prime industrial in Melbourne and Shenzhen residential are examples of early-stage rental growth in the current cycle suggesting further potential, but Investors may face tough competition and high prices for assets in these markets.
Shenzhen has experienced the most rental growth in residential since the end of 2008 (+82%).
New and growing economic powerhouse Jakarta is near the end of the late downswing phase of the cycle and potentially offers high rental growth. But, this comes with the greater risk of a young market in an emerging economy.
Established investment classes in world cities, e.g. prime offices in cities like London, Tokyo and San Francisco are at the top of the wave but may offer a safe harbour for Investors as rents could remain on a “high plateau” for some time.
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“If the 50 years of real estate investment before 2007 were about capital growth and the post GFC decade (was) about survival and riding the recovery, the next 10 years and beyond will be about security of income in a low interest rate world, with Investors increasingly shifting their focus towards rental markets in world cities,” says Yolande Barnes, head of Savills World Research. “Whether Investors are looking for capital growth or stable income streams, the behaviour of rental markets is key,” says Barnes. “Rents don’t lie; they’re a function of two market fundamentals:- Occupier demand – put simply, where people want to be - and supply conditions. In many global investment markets, there is very little scope for further yield compression so capital growth can only come with rental growth.” Investment funds are increasingly focused on how to pay pensions to ageing populations in advanced countries. This is a permanent shift, made more urgent in a low inflation, low interest rate era, and increases focus on the quality of income, states uts report. By contrast, in more emerging economies, notably across China, Investors are still in the phase of needing to grow portfolios, so they can take advantage of growth opportunities in riskier markets. Investors need to understand the risks posed by economic trends, new technology, social change, natural threats and resource scarcity as well as how these impact different real estate sectors at a city including at a world region level.
• April 2018
Savills Rental Wave – Understanding Where Cities Sit In The Rental Cycle: The report introduces the Savills Rental Wave which describes all possible stages of rental growth. Cities in the “early upswing” are described as ones for Investors to watch as they have scope for further rental growth. However, Savills warns that intense competition for stock may lead to yield compression and high prices in some locations, while others are difficult for international Investors to access. On the basis of rental growth alone, Singapore appears poised for investment in many sectors; Jakarta and Perth in prime
offices; Shenzhen for residential and prime retail; Shanghai for hotels; and Melbourne for prime industrial. However, some of these cities are expensive while some sectors have already seen heavy investor activity pushing yields down.
real estate sector. Rental growth prospects do not necessarily indicate a ‘buy’ status, particularly if the price is too high, or if an injection of new supply could tip a sector into oversupply and a rental double-dip,” continues Barnes.
Singapore’s prime office rents are still on average -26% below their 2007 level, states Savills, but Chinese investor demand for Singaporean assets has continued to suppress yields. Investor appetite reflects the expectation that the city could potentially become the region’s lead economic powerhouse.
Youthful Cities Tipped for Growth
Many core, world city residential real estate markets are heavily concentrated in the “late upswing’ phase, including London mainstream, Berlin, Sydney, Melbourne, Beijing and Tokyo”. Meanwhile, Frankfurt and Shanghai are on the cusp of a ‘high plateau”. In this group, the highest residential rental growth of the past ten years has been in mainstream residential lettings in Shanghai (59%) and Sydney (57%) while European listings have also been strong since 2008, with Berlin up 53% and Frankfurt up 42%.
Cities, Sectors and Growth on the Savills Rental Wave A high plateau positioning should not necessarily discourage investors, states the report. The combination of economic stronghold and relative economic and political stability can augur well for those more concerned with stable and secure incomes than rental-driven capital growth in sectors such as prime offices in London, Tokyo and San Francisco or budget hotels and retail in Tokyo. By contrast, high rental growth prospects likely come with far greater risk. This is refleted for example in Jakarta (where the metro population is forecast to exceed Tokyo’s by 2027, but whose real estate markets are still small and relatively immature on the world stage) or Shenzhen which is relatively inaccessible to many foreign Investors but remains one of the most youthful and fast growing cities in the world.
Understanding social change is essential. Cities with youthful populations are more likely to be centres of higher education, magnets for skilled migration and catalysts for innovation and economic growth. Rental growth will follow, states Savills. The firm has earmarked key cities in each world region where the Gen Z (15-34 year olds in 2027) to Gen X (50-69 year olds in 2027) ratio is forecast to be highest within the next decade, which include Shenzhen, Jakarta, Auckland and Austin.
Savills Cities To Watch – Measuring Future Occupier Risk: Cities which rank as “economic powerhouses” or “youthful” are likely to offer a substantial variety of future opportunities for investors, says Jeremy Bates, Head of Savills Worldwide Occupier Services. “The biggest asset in any nation’s economy is its people. But competition is intense for talented workforces in developed countries with ageing populations, while emerging economies are nurturing an increasing number of young people.” New generations will drive occupier demand for certain types of buildings and locations that may lead to a shift in what constitutes a quality “covenant” with buildings let on short leases to a deep pool of small local businesses likely finding the most favour with Investors as sources of reliable income.”
“To correctly understand real estate risk, it’s imperative that Investors understand markets at a city, and even (at) a neighbourhood level and how that applies to each individual
April 2018 •
Meet The Maverick of Architecture
Past President of PAM Ar. Dr. Tan Loke Mun BY YVONNE YOONG
Born and raised in Petaling Jaya, Selangor, Ar. Dr. Tan Loke Mun wears many hats. Being the Founding Director of ArchiCentre Sdn Bhd and DTLM Design Group - the industry veteran is also Principal of DrTanLM Architect - architectural design studio situated in Subang Jaya. Tan obtained his architectural training from Deakin University, Australia in the 1980s and later received his Doctorate from The University of Melbourne. His doctoral studies was in social and selfhelp housing and after graduating, he worked in many urban and rural parts of Australia, Uruguay and Argentina to put into practise what he learnt. Perhaps best known for having designed the S11 House in Petaling Jaya - arguably the first Green Building Index (GBI) Platinum rated house in Malaysia, Tan’s interests are wide and varied - just like the commissioned work that his studio has undertaken. From home renovation and interior design projects - to designing green houses and new shopping retail malls, Tan’s list of accomplishments include designing convention centres, corporate offices and also the master-planning of neighbourhoods, cities and townships. Having founded ArchiCentre in 1994 - the Founding Director of this firm continues to undertake work assignments for the practice that now has grown exponentially - with offices and projects around the South East Asia region. The Past President of the Malaysian Institute of Architects (PAM) for the 2005-2007 term, Tan was instrumental in setting up the GBI. He was also the Past Chairman of the Board of Architects Malaysia or Lembaga Arkitek Malaysia (LAM)-PAM Green Building and Sustainability Committee while also being a Past Member of the GBI Accreditation Panel (GBIAP) and also a member of LAM. Commenting on the architecture of S11 House, he says the GBI Platinum rated work for domestic architecture also won the Tropical Building Category of the Asean Energy Awards in 2013 and was the Winner of the PAM Architectural Steel Colourbond Award 2011 and a Finalist in the World Architecture Festival
• April 2018
(WAF) Awards 2012, among others. The S11 House while not the firm’s largest project, has been one of the firm’s biggest ideological successes. Boasting a body of widely published works, Tan who has received numerous architectural awards for his works lectures on architecure and design - a topic close to his heart and is Adjunct Professor at University Tun Hussein Onn Malaysia. He is also an industry advisor to Taylors University at the PJ Lakeside Campus and Tunku Abdul Rahman University College in Setapak, Kuala Lumpur.
Zeitgeist and Social Crafting Tan shares that ArchiCentre’s works are often said to be “clearly recognisable” although there is no clear distinctive style of expression or materialism. Instead, he says that there is a common thread of “contextualisation, social crafting and craftsmanship” reflected in his firm’s works. “The patterns of my firm’s early works sometimes reflect the derivatives of time-tested typologies often imploded or expanded for new modern day uses.” According to Tan, the work represents “the search for innovative expressions to enhance the sanctity of the golden rules of regionalism, climate and culture”. Guided by this premise, the practice seems to be driven by “an almost unquenchable quest for modernity and innovative solutions for age-old needs”.
The Art of Building The School of Architecture at Deakin University in the 1980s adds Tan was the training and feeding ground for an architecture dynamic that was buildable yet socially and environmentally responsible, shaping his design sensibility to the next level. The architect shares that the turning point came through the appreciation of the values of modern architecture that
S11 House is the first GBI platinum rated green house in Malaysia
reinforced into the notion that “great innovations and ideas are closely related to the abilities and technologies of the age”. Equipped with this enlightenment derived in the last two years spent studying at Deakin, he relates that this further shaped his design adventures that stretched beyond size, scale and location. Tan’s first project as a designer upon graduation was in collaboration with the populist Geelong permaculture cooperative Architect and Activist Peter Lockyer on a city hotel for a Vietnamese restaurant owner client. Recalling how they worked together in Lockyer’s home office in the centre of Geelong City, lunch Tan shares, was simply plucked from Lockyer’s garden and lightly tossed over the stove. This had an impact on the young Tan then as Lockyer to him was a living testimony to his advocacy that permaculture was the way communities could prosper whilst living in harmony with the earth.
Helping Oneself To Help Others Armed with some level of skills picked up coupled with a desire to pursue a more excellent built future, Tan pursued his post graduate architectural studies at Melbourne University’s School of Architecture and Building. There, under the tutelage of Professor Allan Rodger and economist- planner Dennis Ingemann from the Victoria Ministry of Housing and Construction, he developed and launched the “Group Self Build Housing” scheme for low income families seeking home ownership. His dissertation work relates Tan, involved setting up a new Government-enabling scheme that was based on “people participation in design and construction transforming into sweat equity value”. In the course of the research, Tan had the privilege of working with John F.C and Bertha Turner who were the foremost proponents of self-help enabling strategies for housing. This involvement in social housing left a significant mark on him in addressing two issues namely; the basic need for shelter and importance to do for one-self what one is able to do.
Equipped with this belief, Tan worked first as a Consultant and then later as the Team Leader at the Ministry of Housing and Construction’s Special Housing Branch in Australia. During that time, he also obtained his professional Architects registration as well as his Builder’s License. The framework of the new housing programme was also exported through technology transfer to Uruguay in the early 1990s. The development of Group Self Build Housing in Victoria earned Tan his Doctorate in Architecture in 1992. Professor Rodger continues to be a strong ally and Adviser on sustainability and green building and they teamed up again in 2008 and 2009 to develop the GBI for Malaysia
Early Years Practising in Kuala Lumpur Upon returning to Malaysia in early 1992, Tan worked at BEP Akitek under the late Dato’ Kington Loo. Later, after leaving BEP Akitek to heed the call to move on and find his own architectural expressions, he co-founded ArchiCentre with Ar Lim Wei Hong. Tans’ architecture continues to embrace and interprete regionalism within a modern social context. In a rapidly changing world landscape, Tan echoes the belief that well-designed buildings and spaces can create value for all users of the built environment. As such, he seeks to find the delicate balance between modern standardisation and the subliminally-crafted details that can create the requisite emotional experience for his projects.
Embracing The Mod-Trop Expression The early experiences with self-help housing and social architecture is evident in the strong emphasis on buildability, economic realism and craftsmanship, emphasises Tan. And, while he says there is no specific evident style or formulaic solution, each commission he shares, is site and brief dependent. In true maverick style, Tan is comfortable working with the whole plethora of materials and systems.
April 2018 •
Architecture is also sustainably achieved through a good grasp of materials and available technologies - areas that he is wellversed with. In addition to this, issues of climate and locality are addressed through complementing the land. The modernisation of tried-and-tested typologies led to the Mod-Trop (Modern Tropical) period in his works.Tan singles out a successful example of this is the exclusive Duta Tropika (2005) housing development in the outskirt of Kuala Lumpur. Here, he took the tropical resort villa typology and translated it into modern terrace homes. A wider 26 feet frontage was introduced to “open up a host of planning opportunities” while the villa master bedroom with outdoor bathroom on an entire floor helped define the garden resort feel of the homes.
this principle is carried through in commercial projects. The process of establishing a theory and testing it on a lab project like a house can also be applicable to a larger mass market. Likewise, the increasing opportunities to “build green” has since been replicated in other commissions of various private homes.
The Clay Roof House is a green building in Malaysia
The Mod-Trop period expression is also mostly evident in Setia Hills (2008) at Ampang Hills in Ampang where the villa or pavilion concept with an accompanying pool was translated into a housing development set on a hillock. Setia Hills would form the apex of Tan’s experimentation into the Mod-Trop approach. However, Tan has not returned to this period of works again. Sizes of projects have since grown exponentially - as much as the size of his practice. Master-planning has also become an integral part of Tan’s interests as he began to work on eco cities including SetiaCity in Setia Alam, Shah Alam and Aeropod in Kota Kinabalu, Sabah. He also worked on eco townships here and abroad as witnessed in Ecolakes Ho Chi Minh City, Vietman and Hanoi Parkcity in Hanoi, Vietnam.
Leveraging On A Green Foundation In 2008/2009, Loke Mun led the team of professional and academic volunteers under the PAM to set up GBI - Malaysia’s own green building rating tool that was officially launched on May 21, 2009 that has since then changed the way cities and buildings are designed and constructed. “It raised the awareness that we could no longer take the world and its resources for granted. The way we approach architecture and buildings had to change,” he professes adding that the GBI was the culmination of his belief that something drastic had to be done for the environment and it is the “guide for developers and builders and end-users to do the right thing”. Tan says he is motivated by a constant drive to “innovate and experiment with the available technologies”. This is in order to ensure that his buildings are “sustainable and stand the test of time.” An example of him walking his talk can be seen reflected in the “radiator sunscreen” that was applied to encapsulate his office in Subang Jaya (AC55), among other projects. Increasingly, Tan’s buildings have become akin to “machines for living in” as they provide more environmentally-friendly benefits than mere shelter to the occupants. The constant experiments done on these private homes he says will find their way into the larger consumer and mass market projects when
• April 2018
Verandah 8D House, Kuala Lumpur, MALAYSIA
Social Service and Making A Difference Tan has been an active member and contributor to the Malaysian architectural profession from his early days following the example set in place by the late Dato’ Kington Loo who invited him to serve on several working committees of the institute, his role expanded to more and more areas through the years. Tan has contributed towards architectural education, information technology, heritage and conservation, awards and competitions. He was instrumental in launching the Continuing Professional Development (CPD) programme for the profession - making it the first mandatory CPD programme to be implemented in the Asian region. In his role as the previous PAM President (2005 – 2007), he put together and launched the PAM Convention that brought the Malaysia Architecture, Interior Design & Building Exhibition (ARCHIDEX) and International Architectural Design Conference (DATUM) together.
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email@example.com 012 378 8683 April 2018 •
7 Interior Design Tips To Increase The Value of Your Property 1. Clever Design Concept
Design in accordance with the culture and lifestyle - be it according to familiar concepts or Small office Home office (SoHo) style that appeals to younger residents. Be sure to tailor the design concept in line with the targeted group’s financial investment capacity.
2. Larger Layout Planning
Layout planning is essential. Outlining the traffic flow and selecting furniture that fits well into the scale of the room can go a long way in making the space feel larger than it actually is. Although the actual square footage of a house will directly affect the value and perception of the unit - proper layout planning can make a room feel more spacious and comfortable so buyers will likely see the potential of the unit.
3. Use Vertical Space
If the height is enough, one can go about by smartly using the vertical space to design visually in order to increase the entire square footage of the unit. The size of the space will dramatically affect the value of the space as the square footage of the floor area isn’t the only space that counts as the overall visual space and entire ambience will ultimately generally transform the unit at large.
• April 2018
4. Capitalise on Convertible Features
Make the space convertible to be able to be flexible enough to accommodate any function. For this to happen, ensure that the living room can double up as a library or music hall while the dining area can be converted into a workshop corner. The multiple and diverse creative layout will ensure flexibility of the furniture layout design that will add to the magical transformation and the function of the space.
5. Monitor The Flow of Natural Light
Natural light is always a positive feature for any space. The idea is to draw and invite natural light into the room - making it look larger while generating energy and uplifting the overall mood. If the windows overlook a natural setting - so much the better as this will increase the effect of added space while offering added visibility. Adding a single large mirror to a room can also visually lend the illusion of doubling the overall feel of the space.
6. Increasing Energy Efficiency
Focus on nurturing natural energy such as sunlight, air, water and energy into the space. Natural light offers energy savings while the use of something as small as light-emitting diode (LED) light bulbs or as big as installing solar panels on the roof can have a big impact. Rainwater harvesting can result in recycled water being used for miscellaneous daily uses. If the space is large enough, one can set-up an aquaponics system which maintains an ecosystem of plants and water creatures. This offers organic sustainability and can be a form of renewable energy resource.
7. Green the space
Integrate with outdoor greenery into the interiors via the illusion of well-planned space deisgn. Not only will this improve the indoor aesthetic feel of the space - but this will also subconsciously articulate the user’s emotion to inculculate a sense of calm relaxation. Besides introducing an extended illusion of the space by inviting the green landscape in by a sense of open visual connection, the indirect result of improved air quality by removing formaldehyde from the interior space will also ultimately benefit the occupants.
Fendarie Su is the Founder of Santa Fe Interior Architecture Sdn Bhd, an international award-winning interior design firm specialising in conceptual interior design for corporate offices, institutions, hotels and commercial projects. Established since 2006, the firm has garnered over 40 international and local design awards. In 2013, it was nominated the one of the “Top 10 Best interior Architecture Company in Malaysia” while Su received the “Women of Excellence Award (Malaysia)” in 2014. April 2018 •
Who Will Be The Last Winner In The Current Volatile Property Market? The supply of rental properties in the cities has started to pile up as many of the new developments that were launched during the property’s hot market boom between the years 2012-2014, have now been completed and flushed into the property market. As a result, the gap between the rental demand and supply market has widened and that in turn, has caused the rental market to be under pressure, leading to price adjustments. Needless to say, competition amongst rental properties remains fierce. Under such circumstances, the tenant now has an upper hand in being able to rent good quality properties at very affordable, good bargain prices. It is a so-called tenant’s market now. Some owners are giving more incentives or upgrading their properties in order to win over tenants from their competitors in this highly competitive rental market. It seems like tenants are having an advantage in this current climate. However, what the majority of the market doesn’t realise is that in long run, Investors will still be rewarded and will walk away with a handsome return of capital appreciation for their properties eventually.
• April 2018
The reason being that on the other side of the current property cycle, people tend to rent rather than own a property - simply because it seems to be cheaper to rent. However, at the end of the day, the rented properties are still the owner’s who are going to enjoy the appreciation in capital in the future. How so? Despite the drop in rental, a big portion of the monthly instalment that is to be paid by the owner, is subsidised by the tenant via the rental received. The difference in the rental collected from the tenant and the monthly instalment paid by the owner, is still contributed back to the Investor’s capital. In short, the property is heavily funded by the tenant and this will earn the Investor good capital appreciation. Ultimately, genuine Investors will still be able to take advantage of the current soft market by locking into good bargains. They will do well to properly manage the collection and cash flow of the investment while they wait for the yield to be improved through time and appreciation in both sales and rental. As mentioned earlier, the rental market is in stiff competition hence, good management of the property is needed in order to attract tenants. Better interior design coupled with the valueadded features of the property as well as maintaining a good landlord and tenant relationship will eventually help Investors to get their assets rented out at a higher rate and within a shorter time frame at a fair market price. Investors are also advised not to overgear their finances and be wise in selecting their investments in order to match the needs of real demand. There are many classes or seminars available in the market that expound on rental management, renovation, creative leasing and so on for Investors to learn from on how to improve
About The Contributor
how they run their property investment as a business. These tools are weather-proof in a stormy market or otherwise. Overtime, we believe that the supply will slowly be digested by the market especially in the context of the capital city, thanks to the major upgrading infrastructure works in the city to improve the standard of living. Furthermore, world-class commercial developments will drive the economy, with job opportunities following suit. This will result in increased urban migration to the capital city that will in turn, create more demand for shelter. Granted, this will take time. So, whether the Investor or tenant will be the last one standing or emerging as winner or champion after weathering the current climate, really depends on how far one’s investment strategy is and the end goal in mind.
is involved in diverse businesses including real estate as well as real estate investment and management, interior design and renovation, light-emitting diode (LED) lighting and Food & Beverage. Managing over 50 operational staffs and 200 sales personnel, his group of companies has a total annual turnover of RM1 billion in sales annually.
April 2018 •
The 5 MUST–KNOW Legal Trends for Property Investment In Malaysia There is no real estate if there is no law. Real estate, like any investment, is actually a byproduct of the law. The law gives you the fundamentals in real estate - from the issuance of the land title, recognition of boundaries and ownership. Therefore, observing the legal trends in property investment will give you a head start in making your property investment sustainable in the long run. Here are five pointers to take you through at least the next 10 years:-
Home Buyer Protection Over Investor Protection If you buy a house and you stay in it, you will get more protection over someone who buys for investment purposes. The last few years were essentially a nationwide home ownership campaign by the Government, with a focus on affordable housing. If house ownership gets harder, buyer protection will get increasingly better - as the authorities will want you to own your house. Having a roof over one’s head is key before housing becomes a state welfare like in the case of many of the developed nations that concentrate purely on affordable housing.
• April 2018
Harder to Become A Developer Tun Dr Mahathir Mohamad’s Vision 2020 foresees Malaysia becoming a developed nation. “Delay expected, destination targeted” - we might not get us there by 2020, so perhaps a few more years down the road is needed. Personally, I’m hopeful. In a developed country, there will be less developers as there will not be much land to build on. There will be compliance matters, and if you want a good location, you will have to tear down existing buildings and restart all over again. The Housing Development laws put a lot of obligations on developers while the entry cost is higher. Adding further insult to injury is the Goods and Services Tax (GST), the weaker ringgit and oil price slump. Private housing property developers may soon join the likes of the panda and the Malayan Tiger as endangered species in time to come. As Malaysia slowly progresses into developed nation status (perhaps in 10 to 15 years time), to buy a first-hand property then would be a very expensive proposition. Some may need to get used to buying second-hand property though the problem is, we always want new things!
Strata Is The Way Of Life
Property investment is now a team sport. It is no longer an individual game. The barrier of entry is higher while bank financing is tightening. Therefore, you will have to find a couple of like-minded individuals and leverage on each other.
Strata is not your everyday product.
You also have to be more innovative, as you can’t just rely on “flip and keep” strategies anymore. You have to come up with new ways to raise your capital that are not just limited to the bank. You will also need to consider the way to sell and dispose of your property. So, work together with your buyer or seller.
You’re part of it - and no different from a shareholder in a corporation. If your condominium is managed properly, the price of the units will definitely go up.
You need to transform from the tiger that hunt alone to the lion that hunt in a pride.
Property Management Is The Driver Those who solely buy property and sell property aren’t Investors - they are just property traders. A good Investor must know how to manage the property and add value to it. If you just buy and hold on to the property, the wait to cash out could be longer given that the Real Property Gains Tax (RPGT) is high for early disposals, and your margins are thinning out in today’s context. Therefore, you will need to know how to squeeze water out of stone. We are entering an era of low yield and high appreciation. You either have to compete via price or selling features - for instance, paint your unit orange to attract that niche buyer!
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You have to be very involved, whether it concerns the service charge, sinking fund or management of the property.
It isn’t about whether they serve a buffet during the Annual General Meeting (AGM). Strata is all about “Love thy neighbour”; It is no longer, “My home is my kingdom”. If only one person doesn’t pay the service charge, this effectively means the whole condominium or apartment is under-maintained. Here’s a sad fact:- What is the average number of people who pay on time? 50%. The percentage is higher for high-end projects because owners know about strata living. The management is not your enemy. Being ignorant of what strata living is all about is by far, the greater the enemy. Now, think about your property investment portfolio and see how knowing these five trends could be helpful to you. Also, knowing is never enough without taking action.
founded CHUR ASSOCIATES®, a legal boutique firm that delivers friendly solutions for its clients ranging from corporate advisory to “everything real estate”. He is a regular guest speaker at corporate and public events; guest commentator for radio stations and a frequent article contributor for local and overseas media publications.
April 2018 •
THE RISE OF TENANT MANAGEMENT In recent times, real estate investment has been surrounded by many new and creative methodologies from various property coaches and industry players that were unheard of in the past. For a start, there are so many sponsored advertisements promoting the services which have flooded almost every scroll of the screen - from our browser to the familiar Facebook wall. These surges of occurrence are basically a means to an end as more and more property buyers and Investors are genuinely looking for ways to increase their rental yield and not to mention, supplement their income, given the challenging property market where cash flow is of prime importance from the perspective of making an investment decision. “Short stay vacation rentals” or generalised as “Airbnb” is the trend for properties located within the radar of the tourism factor. Aside from renting out property via peering through the lenses of hospitality, property Investors can up their game by sub-dividing spaces for co-living and even co-working. Despite many considerations such as additional expenses for the customised makeover, not to mention the hassle of handleingmultiple sub-tenants legally, property investment returns can only make sense when the expected derived income surpasses all necessary liabilities such as maintenance fee and bank instalments. As more and more similar models are being offered in the market with approaches that surprises us each day, there is one pertinent issue which we need to address - aside from the quantum of rental returns and need for speed to fill up those vacancies for a property.
• April 2018
All stratafied properties are subjected to the Strata Management Act 2013 and related laws. While property management is governed by The Board of Valuers, Appraisers, Estate Agents and Property Managers (BOVEAP), tenant management presents aspects which are uniquely different when properties are used - especially for short stay rentals. A few key highlights on the need for tenant management involved in any rental can be observed as follow:-
HUMAN EXPECTATION Handling tenants is all about managing expectations between the landlord and the occupant(s) - be it for traditional rental or short stay vacations. Maintaining a property is easy but managing the landlord - tenant relationship is a different story altogether which requires constant engagement.
EMOTIONAL FULFILLMENT Taking care of a tenant’s needs require more than just a “systematic and automated process” - it is also about fulfilling the emotional side of the occupant’s staying experience - whether it is for a short, medium or long term basis. A satisfied tenant is always your best referral marketing you can get for FREE!
DAMAGES AND REPAIR More often than not, normal wear and tear is part and parcel of a tenancy when it comes to the furniture, fixtures and fittings. The unsuspecting landlord never expects to frequently refurbish the unit unless he is required to do so. When a tenant is well-managed, one can reduce the risk of the property being damaged during the tenancy period - irrespective of it being an Airbnb unit or not, hence avoiding the case of asset depreciation.
SUSTAINABLE RETURNS While property value appreciates if the building is wellmanaged, good tenant management allows for uninterrupted and continued rental returns - assuring its host or landlord peace of mind. Good tenant management is akin to ensuring the hassle of downtime in between finding the next tenant being reduced to a minimum.
other countries whereby a simple database can be used to verify and check the legitimacy of each prospective tenant.
Despite applying good tenant management that is common sense concerning all property rentals; it is not surprising that many may find the experience daunting and cumbersome.
Henceforth, it is not surprising that during the last Budget announcement, we may expect to see the all-new Rental Act being implemented for the very first time in our country to safeguard all property Investors. With a centralised blacklist system in place, it is the hope of every landlord to draw to a close, the days when they invited tenants from the dark side into their abodes wrongly and suffered the unwanted consequences that they have dreaded to facec.
There have been many stories of tenants from hell and the nightmares they represent. We have all heard - time and again, these stories and, for some, the effect can be to the extent of even frightening potential Investors away from putting their monies into property. Malaysia may still be far away from having a platform of blacklisted tenants unlike
Meanwhile, let us sharpen our skills to filter and screen through for the right and proper tenants to rent our property and maintain the great ones for the sustainable and dream rental we all desire in our property investing journey. Here’s to your tenancy success and happy property i nvesting!
About The Contributor
is recognised by The Malaysia Book of Records as “The First Author to Launch Three Books Simultaneously” that includes his three “Good Tenant Great Tenant” series. The Founder and CEO of Superior Wealth Group can be contacted via firstname.lastname@example.org
April 2018 •
WHAT DOES IT MEAN TO BE “RICH”? WHAT A 6-YEAR-OLD BOY TAUGHT ME In the pursuit of wealth and property investment as well as riches, we sometime forget what matters the most to us. Hence, I would like to share a personal story with all of you • I still remember that Monday morning. It was a public holiday but I was already up early to prepare for my speaking engagements whilst writing articles at a frantic pace and doing lots of planning work. • I was in my study, deeply focused in my thoughts. There were tons of notes, books and reading materials all over the floor and table. And, I was driven to achieve my goals and dreams. • I didn’t realise it, but my 6-year-old son Colin crept up behind me and gave me a hug. I was startled and it messed up my concentration. Not only that, Colin managed to make a big mess of the notes that were scattered on the floor. Colin looked at me meekly and said, “Daddy, please play Lego with me.” • I screamed at him. I shouted at him for messing up my notes and for disturbing me while I was working. My 6-year-old son walked away with tears in his eyes. • My wife Lauren walked into the room and looked at me with such sheer disappointment. I still remember the words she said to me:- “Mark, 20 years from now, you would do anything for those little arms to come up to you and give you a hug. You’ll do anything to have him wanting to come into your room.” • I bowed my head in shame and quickly came to my senses. I ran out of the room and hugged my son. I apologised and wiped away his tears.
WHAT DID I LEARN FROM MY 6-YEAROLD SON? • What have I come to realise from this incident with Colin? Many people these days are busy making a living but they are not really “making their lives”. We want to be rich but we may not spend time enriching the relationships that mean the most to us. • I’ve learned that in my last final days on earth - my career or property portfolio won’t keep me company. It’s my family, loved ones and children who will do so.
About The Contributor
• April 2018
• Hence, I’ve got to make the time for them, and not just give them my leftover energy. • I’m not suggesting that we should slack off and not be goalorientated. By all means, we should work hard to achieve our dreams. But, I don’t need to feel like a supreme failure if my new career as an Author, Coach or Speaker doesn’t work out.
DON’T JUST LIVE FOR THE “MOUNTAINTOP” MOMENTS. ENJOY THE JOURNEY TOO • Life is a journey. Life is not really about getting to a destination. There is no such thing as a finishing line. Some people spend their whole lives trying to reach their goals - only to find out that it’s not quite as “happening” as they thought it would be. • The reality is that life is mostly just routine. Most of us get up every morning, go to work, come home, have dinner, go to bed and do it all over again the next day. There are very few “mountaintop” moments such as graduating from university, earning that big promotion, closing that big real estate deal or the birth of your child. • Don’t just live for the “mountaintops”. Many are so focused on earning those promotions that they work night and day. Many are so focused on building their tangible wealth but they neglect their children. They are so caught up in solving daily problems that they don’t enjoy the best moments of each day. • My friends - don’t make the same mistake I made with my son. The real joy is in the simple things. It’s about spending quality time with your family or loved ones. It’s about taking your son or daughter out for lunch. It’s about getting up early and enjoying the beautiful sunrise. It’s about calling your mum to tell her that she prepares the best meals in the world.
• If you have people in your life to love, you are already rich. • If you have your health, you are already rich. • If you can hear your little boy’s footsteps as he creeps up behind you for a hug, you are already rich.
is the bestselling author of the book “WHO SAYS”. He was a former Senior Vice President of a bank and an avid lover of properties. He is living proof that one can be successful in one’s career and property investments. He can be reached via email@example.com or www.facebook.com/MarkChuaMY
Add Value In Areas That Are Valued The Value-Added Should Be At Least Double The Cost Of The Work When a property needs work, it’s very easy to get carried away and think you need to do everything. And, some properties do need everything going to get them back into a habitable state. However, before you jump in and start revamping the unit, you need to ask yourself:- “Am I adding value to the unit?” In the world of property, only certain things add value and some areas add more value than others. The trick to successful property investment is in understanding where to add value. What is it about your property that people value - or will value? Properties are not built equal and what is important in one property may not be as important in another. You need to take the time to understand how your target market, property and location fit together to ensure you get the most out of your investment. So, how best to add value? You need to start by identifying those areas that people value and work out a priority order for them. Every property requires a modern functioning kitchen and bathroom, but which of these adds more value? What is more important to your audience? Which area takes priority? The same goes for finishes and the quality of the fixtures and fittings as well as the type of wall and floor coverings. Real hardwood flooring may be expected and required in some properties, whereas with others, a good quality laminated wood floor will add just as much value. By analysing the priority aspects of a property that people are attracted to, you can add value in areas that are valued.
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Woodchip wallpaper in the lounge may not be the first choice of many people. However, if this is a property that you are putting up for rental, you have to ask yourself:- How much value will changing that wallpaper add? Even if the property is intended as a re-sale unit, you have to calculate how much it will cost you to undertake the work versus how much value will be added to the end product. How much does the woodchip detract or deter from the sale of the property? What other areas of the property are valued? Is it really the wallpaper in the lounge that people will be prioritising or can you spend that money in other areas such as upgrading the kitchen to achieve more value? When faced with a refurbishment project, it’s easy to convince yourself that you can do everything - and, given unlimited time and money, everything and anything is possible. However, you need to remember that property investment is a business - and it needs to make money if you are to remain in business. This means you need to focus on those areas that are of value and spend the most in those areas. A good rule of thumb to follow is that the value-added should be at least double the cost of the work. That means, if it costs RM5,000 to remove the woodchip wallpaper in the lounge area, then, you should anticipate the new smooth walls should add at least RM10,000 to the end value of the property. Of course, you may argue that’s more to do with saleability. However, you need to be clear that you’re investing money to make more money rather than spending money for the sake of it.
Dato’ KK Chua
is the Strategic Adviser and Managing Director of Armani Media. He is also a registered Real Estate Agent and an Investor with more than 10 years experience in the industry. He can be contacted at firstname.lastname@example.org
April 2018 •
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