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DECEMBER 2015

COVER STORY

DATO’ COLIN TAN

EXCLUSIVE INTERVIEW

MENTERI BESAR TERENGGANU

MAIN FEATURE

PRISM 2016 OUTLOOK December 2015 RM7.50(WM) RM9.00(EM)

KDN PP 18181/04/2013 (033492)


EDITOR’S MESSAGE

The year that was & the year ahead... NADIA GIDEON, Editor-In-Chief

I

t was a busy month for us at Property Insight. We organised PRISM 2015, Malaysia’s largest property investment summit and received 6000 registrations with 4500 of those showing up, in contrast with the 3100 guests who attended in 2014. Some of the best speakers in this country helped us with tricks and tips for investing in 2016. If you weren’t there, you missed out on a fantastic show. A big thank you to all our speakers, participants, guests, but mostly to our team. What an amazing team we have. To each and every one of you, this, would not have been possible without you. Check out KK Chua’s strategy on Dream Teams and what this could mean to your business, there is a lot of truth in what he says. Our Cover this month, is a man with a heart of gold. Dato’ Colin Tan, is a hard working man who believes that integrity is the key to being successful. I am in agreement with him.

His story is inspiring and genuine and there is a lot he has to teach us. Don’t just stop and stare at his picture (you did, didn’t you), there is so much more to Dato’ Colin than meets the eye. We have put together a summary on the advice and sharing’s of some of our main speakers, as well as a market survey from 1346 respondents, and we have added infographics on the Outlook for 2016, along with key takeaways from speakers at PRISM 2015. Who knows, this might help in your next big property investment decision. At least, we hope so. Finally, with all the unrest and intolerance in the world, we hope you and your friends and family find peace and have a safe, healthy and happy holiday season. And let’s all hope for a more prosperous year next year. We’re facing a new year, a new set of challenges and opportunities, and a clean slate for the year ahead.

Merry Christmas and a Happy New Year to all those celebrating. Let’s bring in the New Year with a Bang!

www.propertyinsight.com.my

www.youtube.com/Property Insight Malaysia

Property Insight Malaysia

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EDITORIAL Editor-In-Chief Nadia Gideon editor@propertyinsight.com.my Writers Fara Aisyah Firdaus Petial Natasha Gideon Daniel Sim CREATIVE Art Director Sarah Tan sarah@propertyinsight.com.my Designer Aina Mardia Zakaria 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

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

PropertyInsight

ENQUIRIES enquiries@propertyinsight.com.my

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


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CONTENTS

44

16 COVER STORY

PERSONALITY OF THE MONTH

16

58 Davis Wong – man with the midas touch

Dato’ Colin Tan

Blood, sweet, tears and success

Making a 180 switch towards the arts

MAIN FEATURE

INVESTOR NEXT DOOR

22

60

PRISM outlook

FEATURE

26

Malaysia’s retail property market- outlook and performance Two industry experts tell us about investing in the retail property market in Malaysia in 2016

The wealth dragon

John Lee’s investment story

INDUSTRY INSIGHT

62

Valuing Property Investment

Property Insight met up with Azmi & Co’s (KL) Sdn Bhd MD Khamsiah Binti Shamsuddin to talk about the role of a valuer

30 Transit Oriented Development: on the right track A more forward Malaysia, where we are able to balance our family, economy, work and play

34 ECER: attracting investments in Kuala Terengganu City Centre

Transforming the landscape and property market scene in the state capital of Terengganu

DEVELOPER OF THE MONTH

38

A living experience like no other

Senibong Cove - Where form and functionality coverge

AREA FOCUS

44

Sg. Buloh no longer the ‘backwoods’

64

What bricks do you use for your homes?

The first question our parents asked developers would have been, ‘What bricks do you use?’

68 Floorcoverings solution provider

Inovar - 20 years of the best flooring products and services

LEGAL

70

A cost effective and expedient platform for consumers - Tribunal for consumer claims

FINANCE

One of the most sought after neighbourhoods in Klang Valley

72

FEATURED PROPERTY

STRATEGY

52

75 How does the Ringgit’s fall impact local and foreign property buyers?

Albury at Mahkota Hills

Well-Thought-Out. Inside Out.

54 Ekotitiwangsa the heart of KL river city

A unique development in the northern hemisphere of Kuala Lumpur

78

The perceptions and realities of property investment

Assemble your dream team


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PROPERTY SHOWCASE

EVENTS CALENDAR

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

3

2016

PROPERTY SHOWCASE

BUMIPUTERA SHOWCASE

PUBLIKA

MESRA MALL

Terengganu 24 – 26 MARCH 2016

Solaris Dutamas 4 – 6 MARCH 2016

7

PROPERTY SHOWCASE

INVESTORS’ HOT PICK PROPERTY SHOWCASE

NU SENTRAL

MID VALLEY EXHIBITION CENTRE Mid Valley Megamall, KL 15 – 17 JULY 2016

Kuala Lumpur 11 – 17 APRIL 2016

3

days

days

PRISM Malaysia’s Largest Property Investment Summit

SETIA CITY CONVENTION CENTRE

2

3

days

days

5 – 6 NOVEMBER 2016

days

We look forward to collaborating and partnering with you Enquiries: +6012-2050 911 / janet@propertyinsight.com.my


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2015 www.propertyinsight.com.my


NEWS & EVENTS

BRACING THROUGH 2016

32 industry experts shared their views and comments on property investment and the dynamics of the economy at large

P

RISM, Malaysia’s Largest Property Investment Summit, was back for a third year. The event was held at Sunway Convention Centre from 14th to 15th November 2015. It hosted many renowned speakers in a 2-day summit where industry experts discussed property investment opportunities in Malaysia and the outlook of the upcoming year. A crowd of 3600 participants attended this year’s summit as opposed to the 3100 participants who attended last year. 32 industry experts shared their views and comments on legal, financial and

property issues such as market sentiment, new policies in strata and management, and the dynamics of the economy at large. Participants had the opportunity to personally meet with 32 property experts and industry key players at the event. PRISM’s keynote speaker, Steve McKnight who is Australia’s best-selling business author shared a lot of valuable knowledge during the event, such as ‘How to Use Real Estate to Achieve Your True Life Purpose’ and ‘How to Find & Buy a Great Deal’. KK Chua, Strategic Advisor & Managing Director of Armani Media Sdn Bhd mentioned in his speech “We are now looking towards 2016 and following the tabling of Budget 2016, and the concern that some might have, on the weakening ringgit, we must learn to adapt and move forwards. 47% of the population are under

25 years old. We are a young country and we Malaysian’s, are resilient. We survived 2015, and when the market rebounds next year, we will thrive again. It is with this in mind that we initiated PRISM back in 2013. PRISM is a commitment we have undertaken each year as a means to connect to the right people at the right time so that they are able to attain their dream homes and investments.” PRISM 2016 hopes to engage with more developers and prominent speakers to provide Malaysian’s with property and investment knowledge through a multifaceted platform which has now become the number one property investment event in Malaysia’s annual calendar. You can register for PRISM 2016 which will be held on 4-5 November 2016 at Setia City Convention Centre at www.prism.my for your early bird tickets. www.propertyinsight.com.my DECEMBER 2015 I 11


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NEWS & EVENTS

PRISM MINGLING NIGHT 2015 - MARKET SENTIMENT SHARING

P

RISM Mingling Night 2015 was a fun filled event held at Busaba Thai Sunway Resort Hotel. The dinner was hosted by Property Insight in conjunction with PRISM 2015 – Malaysia’s Largest Property Investment Summit. We welcomed our peers and industry stakeholders such as our main speaker, Steve McKnight, the first lady who ever graced our cover, Fallon Loo, our developer friends such as Dato’ Sri Dr. Vincent Tiew, the Managing Director of Andaman Property Management Sdn Bhd, Leong Yeng Kit, Managing Director of WiraDani Development, the First Vice President & Group Sale Manager of United Overseas Bank Malaysia, Tan Mun Seng and many more. It was an amazing night and everyone delightfully shared their thoughts on the market sentiment and 2016’s outlook.

EXPLORING BANDAR AINSDALE

WITH PROPERTY INSIGHT

C

urrent economic conditions and political instability have made Malaysians wary about investing, however many successful property investors beg to differ. On the 8th of Nov 2015, Property Insight collaborated with Sime Darby to organize a private event that provided a free city tour around Seremban with the intention of making the public aware of the potential Seremban holds on becoming a hotspot. The event also included two talks from

seasoned property investors such as Faizul Ridzuan who talked about the benefits of investing in a township and Gary Chua who showed us several ways to maximise property investing. The crowd that attended mostly consisted of investors who needed some insight and guidance from professionals on current conditions of the property market. Participants left with deeper insight and knowledge on current economic conditions and trends.

www.propertyinsight.com.my DECEMBER 2015 I 13


NEWS & EVENTS

RM500MIL INTEREST FREE VENDOR FINANCING

FROM STONEMASTER FOR BUILDING FINISHING MATERIALS

K

uala Lumpur - Mah Sing Trading Sdn Bhd, a wholly owned subsidiary of Mah Sing Group Berhad (Mah Sing) today signed a framework agreement (FA) with Stone Master Corporation Berhad (SMCB) for interest free vendor financing services of up to RM500mil. The FA which is valid for 18 months, will see SMCB extending Mah Sing a credit

limit of up to RM500mil for its products and services which include natural stones, ceramic tiles, sanitary wares and other building finishing materials. Any part of the RM500mil vendor financing utilized within these 18 months will be interest free and payable over 5 years in 60 equal installments, which shall commence within 30 days upon physical completion and handing over of the work.

SUNWAY BERHAD IS PROPERTY DEVELOPER OF THE YEAR

AT MALAYSIAN PROPERTY PRESS AWARDS 2015

K

uala Lumpur, 13 November 2015 –With another significant award under its belt, Sunway Berhad has been recognised by the media as the Property Developer of the Year at the Malaysian Property Press Awards 2015 recently held at Sheraton Imperial Hotel. Now in its sixth year, the Malaysian Property Press Awards 2015 initiated by Terra Value Sdn Bhd, a strategic property content provider, recognise the

outstanding achievements of participants within the property industry via a unique format. This unique property awards ceremony is adjudicated exclusively by senior members of the press utilising a comprehensive selection process that takes into account the positive market impact, performance, quality of products, calibre of services and the scope of corporate social responsibility activity that candidates have exhibited.

SMART FINANCING WITH GARY CHUA

W

e spent an amazing threeday weekend with SMART Financing Guru, Gary Chua and his team. We were told about how investing is the way to achieve financial freedom and we learned that knowhow was just as important and a key to success in the investment business. Gary’s course is definitely a course worth sharing and attending. There are a few key points we observed and learned during the course. He explained how

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2015 www.propertyinsight.com.my

TEAM is the spirit that each successful person requires to succeed. According to Gary’s course, TEAM stands for Together Everyone Achieves More! The Motto

speaks volumes, and what it says is, `learning never stops and learning is fun.’ For more details on the seminar, email general@smartfinancingco.com


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COVER STORY

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2015 www.propertyinsight.com.my


DATO’ COLIN TAN

BLOOD, SWEAT, TEARS AND SUCCESS BY: FARA AISYAH FIRDAUS PETIAL

D

ato’ Colin Tan’s story is not a ‘rags

During the early days when we started

end product. And that is why we decided

to riches’ story, this much is true.

this company, we invested a lot of time in

to become developers.” Colin explained.

People have always had the opinion

building our brand, to be acknowledged by

Hatten Group was established 10 years

that he was born to inherit his fortune from

the industry, to prove that we are able to

ago, and during that time, property prices

his father. Truth be known however, Colin’s

deliver what we promised. I feel honoured

in Singapore were very high. “Back then,

success was not due to luck at all; it has

to receive the award and I am committed

when we were about to establish the

been blood, sweat and tears for Colin all

to working harder in the future to prove

company, the property price in Singapore

the way.

that I deserve it.” said Colin.

was about RM1,000 per sq. ft. and we did not have much capital. Then it struck

His hard work in managing the Hatten Group paid off when he was recognized for

HATTEN GROUP

us that maybe our neighbour, Malaysia,

his efforts and recently won ‘Real Estate

“My father, Datuk Wira Eric Tan is more

would be an ideal place to invest in.”

Personality of The Year’. Apart from feeling

into construction and finds satisfaction

“We came to Malaysia, did the research

honoured, he feels a sense of responsibility

in the physical aspect of things. He feels

on locations within each state, went to

to live up to expectations from others.

happy when he sees one of his buildings

places like Kuala Lumpur, Selangor,

“Winning this award means that I have to

completed. While I am more of a people

Penang, Pahang, Ipoh and Johor Bahru.

work harder in my career, managing my

person and I focus more on customer

After much deliberation and research, we

company, and contributing more to society.

satisfaction especially, when we deliver the

decided that Melaka would be the best www.propertyinsight.com.my DECEMBER 2015 I 17


COVER STORY

place to develop Hatten Group. It was a

everyone is trying to occupy land space in

800 retail stores. There are also three hotel

big gamble for us as we were not sure if it

Pulau Melaka. This will increase property

towers in Harbour City namely, the Cruise-

was going to be successful or not, but we

prices in the area.”

themed Hotel, Hatten Resort Hotel and

Harbour City’s 500,000 sq. ft. theme

saw the potential in the area .”

International Chain Hotel.

“Time plays a crucial part here. We

park situated in the middle of the building

“This whole development has taken

entered the industry when the timing

consists of an outdoor and indoor theme

Melaka to another level altogether as it

was

conditions

park which provides an exciting variety

has now become ‘the’ landmark of Pulau

during that time were stable and property

of water rides and slides as well as child-

Melaka,” claimed Colin.

prices started going up. Of course, there

safe splash pools. The water theme park

Commercial property investing is like

was a minor financial crisis in 2007 but

promises a unique and unforgettable

residential property investing’s big brother.

we managed to overcome it because

experience for endless fun and enjoyment.

Many investors start out in residential

right.

The

economic

our investments were sustainable. Even

property because it is safe and familiar

now, the cost of buying land in Melaka

while a smaller percentage of investors

is still cheaper compared to Klang Valley,

focus solely on commercial real estate.

therefore, property prices in Melaka are more affordable than properties in the

PROPERTY MARKET

Klang Valley area.”

“If I was a Singaporean investor, I would

According to Colin, Hatten Group’s

not hesitate to enter the current Malaysian

current key project is Harbour City.

market and invest. Why? Because the

Harbour City brings together a Theme

currency is low now and whatever you

Park, a Shopping Mall and three Hotels

buy at this time, will increase in value.

in one exciting location amidst a tropical

For example, while you are waiting for the

island setting. “This project is our baby.

project to be fully developed, the value

We want to develop it so that it gives

of your property is already appreciating.

something back to society, something that

What happens if the currency appreciates

the Malaccans can be proud of. Harbour

again? Well, then your property value will

City is located in Pulau Melaka, a place

be worth so much more!”

that Malaccans considered a ‘taboo area’

“An ideal property is when the developer

not so long ago. In previous years, a lot

makes money when selling, and the buyer

of shop-lots were sold there but somehow

makes money when buying. It’s a win-win

they were abandoned for a few years. Only

situation. I think for now, tourism projects

until recently were they revived.”

are the preferred investments. Of course, there is a lot of speculation – they say that

“This project has also been adopted by the government as an initiative to boost

On the other hand, the shopping mall is

if it’s a commercial project and you sell it

Pulau Melaka. If you look at the area now

an oceanic-themed mall with six levels of

as a strata title, it will not be a worthwhile

– a lot of developments are coming up,

“thematic shopping experience” and over

investment. But it depends on the location

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www.propertyinsight.com.my DECEMBER 2015 I 19


COVER STORY

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2015 www.propertyinsight.com.my


and how it is being managed. If the

you strike gold, you must look back and

buyers and investors. They are the people

property is managed efficiently, then it is a

think of the people that have helped you.

who keep our businesses going. We strive

valuable asset because whatever happens

Whatever you do, you must think about

to build a trusted reputation and we take

the purchaser will reap returns from the

giving back to society.” Colin expressed.

pride in our work to continue on as a

property.”

“But how do we give back to society while

sustainable business.

“I always emphasize this to purchasers

we profit from our businesses? For Harbour

As a developer, I believe in branding

– when you buy a property, you have to

City, I ask myself, what am I contributing

combined with values that are proven

be clear of what you want from it. If you’re

to Malaccans? I’m developing a landmark

through our actions. Take Hatten for

buying property for your family, then I’d

for the people, something that they can

example, our price might be considered a

suggest a residential property. However, if

be proud of. Now that we are developing

little expensive but I promise you that the

you decide to buy property for investment

Harbour City, Melaka has started to garner

property will appreciate over time.”

for the long term, I’d suggest buying

widespread interest. People are starting to

“We also assist our home buyers in terms

commercial property, for example, a strata

look at Melaka more seriously in terms of

of management. We are there for our

titled asset. You reap the returns over a

property investment and the surrounding

clients in every circumstance and through

period of time, and then when the time is

area is developing significantly. Everyone

any situation.”

right, you sell.”

wants to be a developer in Melaka these

One of the first things investors do

Colin’s motto is ‘never say never’ and the secret to his success is staying positive. “I

days.” Colin smiles and says.

when assessing whether or not a person’s

“We are also assisting in monetary

am always positive and I believe that there

investment is making them money or

terms and providing funds for community

is always a way. Opportunity is always there

losing them money is to look into the

buildings,

amount they are spending on the property.

orphanages

namely and

old

homes,

no matter what obstacles you encounter.

community

It’s your mindset that defines everything.

folks

other

“When you flip it, you use the capital to

programmes for the underprivileged. We

In the property industry, for example, there

invest in something else. There is no point

are committed to giving a helping hand to

is a lot of hearsay that the market is slowing

holding it for a long period of time because

our fellow Malaccans.” Said Colin.

down and it’s not the best time to buy. But some people find this the best time to buy.

if you do that then you are not doing justice to your investment. I am however

COLIN’S PERSONALITY

The only difference is what you believe in,

not a big fan of flipping properties. I always

“In this line of work, the number one

and that is your perception and that is the

tell people that if you want to hold a piece

principle to hold on to is, integrity. You

deciding factor.”

of property, hold it for at least six years to

have to have integrity because it builds

give it a chance to appreciate in value. Exit

your credibility, not only in your career but

things

only after this has occurred.”

your life as well. As developers, we must

blindly, it’s about you and what you

use proper materials during construction

choose to do about it. Your success is in

DOING GOOD SHOULD BE APART OF US ALL

then, inspect and ensure that everything

your hands. Whatever path you choose, as

“The core value in life which my father

we have promised our clients was what

long as you stay focused, you will find your

continues to teach us time and time again,

was promised upon delivery.

way.”

is ‘gratitude’. He keeps telling us “when

“It is up to you and your mindset. See positively.

Don’t

follow

others

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MAIN FEATURE

PRISM OUTLOOK 2016 P

STEVE MCKNIGHT Australia’s Top Property Investor www.propertyinvesting.com

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RISM 2015 wrapped up a few weeks ago and one of the Key speakers was Steve McKnight. Steve McKnight is a qualified chartered accountant who acquired his first property in 1999, and since then he has purchased over 800 income-producing dwellings. In both his talks on topics ‘How to use real estate to achieve your true life’s purpose’ and How to find and buy a great deal’, Steve talked about guiding principles that one must adopt before investing. Steve also talked about the kind of attitude and aptitude reprogramming one needs to make his or her vision a reality. Steve shared how he began his journey as an investor. It was after attending a wealth creation seminar in May 1999, Steve began investing in positive cash flow real estate, beginning his property portfolio with a $44,000, 3-bedroom house in Ballarat, Victoria. What was special about the property was that after all expenses,

the rent provided a small surplus. “The plan was simple”, says Steve. “If we could own enough positive cash flow properties, then the surplus income could be used to replace the earned income from the accounting practice, at which point Dave and I would be financially free.” Using the money made in their accounting practice, Bradley & McKnight began buying positive cash flow rental homes and blocks of units in Ballarat, La Trobe Valley, Tasmania and New Zealand. Aside from rental income, some of the properties were on-sold using vendor finance to potential home buyers who could prove creditworthiness but lacked a deposit. Steve spoke to a full house and the crowd sat listening intently. There were far too many takeaways to mention so, don’t forget to book your tickets for PRISM 2016. We look forward to having Steve back again in the future and we wish him all the best.


IMPACT OF GST ON PROPERTY INVESTMENT

S

LAU THYE MUN Senior Assistant Director of Customs Goods & Service Tax (GST)

ince its implementation on the 1st April 2015, Goods & Service Tax (GST) has never been fully understood in totality, especially with property investors. Thus, the Senior Assistant Director of Customs II, Sector IIIProperty, Construction and Professional, GST Division of Royal Malaysian Customs, Lau Thye Mun share with us at PRISM 2016 and gave us closure on the ‘Impact of GST on Property Investment’. Who is liable to register with GST? Lau answered, “Property owners, developers, contractors, real estate operators professionals and any person involved in the operation of land development, whether in a company, partnership, statutory body or as a sole proprietor are liable to register if their annual turnover exceeds the RM500,000 threshold of 12 months supply. However, one may apply

for voluntary registration if the annual turnover does not exceed the threshold, but must remain in the GST system for a minimum period of 2 years”. The procedure to develop SoHo as residential shall comply with the Housing Development (Control & Licensing) Act 1996 and the condition are: • Obtained Approved Planning Letter to develop residential property • Approved layout plan and approved layout building shall contain the characteristic, features and design or adapted to be used or to be used as a dwelling • The sale and advertisement required permit issued according by the Housing development Rules • The developer and purchaser sign the Sale and Purchase Agreement under the Housing Development Rules

WHAT, WHERE AND WHEN IN THE MALAYSIAN PROPERTY MARKET DURING CHALLENGING TIMES

D

r. Daniele Gambero is the Chief Executive Officer of REI International Holding Sdn Bhd, the strategic marketing consultant for property developers. In the recent PRISM 2015, he talked to property players about the ‘What, Where and When in the Malaysian Property Market During Challenging Times’. According to him, property investment decisions are made based on reality, not perception. One must stop buying concept driven developments and start buying demand driven developments. To know the demand, we must first analyse our Malaysian demographics, who are the buyers? He stated that 38% of Malaysian renters consists of 18 – 24 years, while 48% of owners are from the 25 – 32 years group of people. Which group are we looking at? Generation-Y, are more interested in safety

features, trendy & conducive life-style as well as connectivity. The next question would be their purchasing power. This generation needs affordable housing as it is harder for them to get their mortgages approved. Dr. Gambero said “60% of houses should have values from minimum RM200 up to max RM700 psf to cater to the Generation Y’s needs. He also highlighted in his talk that one of the game changers in the Eleventh Malaysian Plan is to strengthen infrastructure to support economic expansion. This improves on the connectivity, which implies the ‘where’ you should invest or develop your property. “Smart buyers will look for scarcity,” he added. How do you get your facts and figures right when investing? The answer is – education.

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MAIN FEATURE

5 LATEST MUST-KNOW LEGAL TRENDS FOR SUSTAINABLE PROPERTY INVESTMENT IN MALAYSIA

C

CHRIS TAN Founder Chur Associates

hris Tan is the Founder and Managing Partner of Chur Associates, a boutique legal practice that thrives in delivering business friendly solutions for its clients and having a niche positioning of ‘Everything Real Estate’ serving the entire value chain from the upstream to the downstream. Speaking to Chris, he seems to have it all-together. He is an interesting speaker and he brings his own flair to his talks. One cannot help but remember him. Chris shared an interesting topic with us “5 LATEST MUST-KNOW Legal Trends for Sustainable Property Investment in Malaysia”. Chris talked about the 5 current trends in the property market today. And what exactly are these 5 trends? • Homebuyers protection over investor’s protection • Property Management as a Driver • Harder to be a developer • Collective Investment

• Strata is the way of life If these are the current trends according to Chris, then 2016 will have a similar impact. Perhaps we need to do our homework as it is a big financial and emotional decision and therefore we need to take into consideration what experts have to say about current trends before we make our decisions. Chris also shared his insight on a panel discussion entitled “Post Budget 2016 – Where is the Economy Heading” together with fellow panelist Veena Loh General - Manager of Malaysian Property Incorporated, Ho Mee Ling – Founder and Manging Partner of HML & Co and Richard Onn – National Tax Director of TY Teoh International. It was an interesting and engaging discussion and for those of you who missed it, we advise you to book your tickets early for PRISM 2016.

REVISITING LESSONS FROM 97-98 & 2009 CRISIS?

F

aizul Ridzuan, founder and CEO of FAR Capital, a consulting firm specializing in property investment and author of ‘WTF? 23 properties by 30’ was the first speaker of PRISM 2015. The enthusiastic young investor spoke on ‘Revisiting lessons from 97’ to 98’ and 2009 Crisis’ to a very receptive audience. Mr. Faizul started with a brief history of what happened to Asia in 1997 where we had a high dependence on foreign currency debt via corporate debt, foreign exchange reserves to short term debt was low and the rise in inflation led to the expeditious rise in property prices. Policy makers reacted to these affects by hiking short-term nominal interest rates and real estate rates. SME’s were put out of business, bank loans were tightened and it was an extremely difficult time. So, is Malaysia heading into another crisis? Faizul takes us through a step by step analysis of the situation. Nonperforming loans have decreased inversely

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with the increase of monetary deposits (as of September 2015). Malaysia’s unemployment rate is still lower than some of the more economically stable countries such as Canada, Germany and United Kingdom. So to answer the question above, fundamentally, it is a “no”. Malaysia has lower interest rates. Our banking system is more resilient and we are persistently taking deflationary measures. Faizul shared an elaborate plan and strategy on investing in these challenging times, complete with future projections. Starting with four properties and a monthly net cash flow of –RM2,359, one can earn RM20,938 in 25 years. Those are just a few of the many tips he talked about during the event. But most importantly, his reminder to us all, “Do not buy to flip!” “The property market will be challenging in 2016” says Faizul. “But due to the inelastic nature of the market, it will be more resilient in terms of sensitivity to price shocks against the stock market.”

FAIZUL RIDZUAN Author & CEO FAR Capital Sdn Bhd


INTENTION TO BUY WITHIN NEXT 12 MONTHS

MARKET SENTIMENT 2016

From a survey of 1346 respondents, Property Insight conducted a survey to gauge market

8% PROBABLY 36% YES 56%

sentiment for 2016

NO

TOP 5 FACTORS WHEN INVESTING

TYPES OF PROPERTIES 42%

HIGH RISE

29%

LANDED

14%

OTHERS

15%

COMMERCIAL & INDUSTRIAL

INVESTMENT BUDGET

48%

RM510k TO RM1m

41%

BELOW RM500k

11%

ABOVE RM1m

PROPERTY MARKET PRICING FOR Q1 & Q2, 2016

43%

11%

PRICE INCREASE

PRICE LOWER

32%

14%

PRICE REMAINS

NOT SURE

www.propertyinsight.com.my DECEMBER 2015 I 25


FEATURE

ECER: ATTRACTING INVESTMENTS IN KUALA TERENGGANU CITY CENTRE

Transforming the landscape and property market scene in the state capital of Terengganu BY: DANIEL SIM & NATASHA GIDEON

T

he East Coast Economic Region Development Council (ECERDC) is a statutory body established to spearhead the socio-economic development of the East Coast Economic Region (ECER). The ECER of Malaysia covers Kelantan, Terengganu, Pahang and the district of Mersing in Johor. It occupies an astonishing area of 66,000 sq km or 51% of the total area of Peninsular Malaysia. ECERDC plays the lead role in setting directions, formulating policies and developing strategies for the socio-economic development of ECER by promoting and facilitating investments into the Region. One of the key ECER projects being implemented by the ECERDC is the

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development of Kuala Terengganu City Centre (KTCC), which is expected to attract a total investment of RM5bil and it is expected to create over 10,170 jobs in various sectors. The KTCC development will not only attract investors from within and outside the country, but will also benefit the people of Terengganu in terms of job creation and entrepreneurship opportunities. KTCC project components, which will be developed in phases, include integrated lifestyle centers, KTCC Mall shopping complex, serviced apartments, hotels, retail/office lots and education centres. Healthcare Wellness Village and a cruise ship point will also be developed at KTCC, making it an ideal choice for retirees and

expatriates. Similar to Penang, Terengganu also offers beautiful beaches and is well-known for its coral-ringed islands, but the state has the comparative advantage of lower living cost and a more relaxed pace of life. All these are expected to boost the position of Kuala Terengganu as Heritage Waterfront City, in line with the State Government’s vision. The KTCC Mall, for example, will become a new landmark in Kuala Terengganu, where it will offer 200 retail lots, a 10-screen Cineplex, and a 48-lane bowling alley which will be the first of its kind in Kuala Terengganu. The KTCC development will not only create employment and entrepreneurial opportunities for people in Kuala Terengganu, but it will also enable


local residents to shop and perform leisure activities with the family in comfort. The headquarters of Kuala Terengganu City Council and the State Foundation building will also be built in this KTCC area.

commenced on 13 August 2014 and is expected to be completed by March 2017. This bridge is designed to ease traffic within the city core in addition to stimulating the city’s connectivity and future growth.

THE KTCC DRAWBRIDGE The construction of the KTCC Drawbridge, which will have direct connection to Kuala Terengganu International Airport, will play a pivotal part in promoting in the tourism industry in the state in particular, and ECER in general. ECERDC has also conducted a detailed study on the homestay programme in ECER, whereby the matter is now being pursued by the Ministry of Tourism and Culture. Having an improved and efficient direct accessibility and connectivity into Terengganu will allow development to thrive in a more viable manner, which in turn, will attract further investments into ECER. Terengganu’s current limited accessibility has been identified as a major challenge faced by the State. “In the same development, Kuala Terengganu will be transformed into a Heritage Waterfront City with the construction of a new bridge linking the north and south of this water city. This state initiative, initiated in September 2014, is expected to be completed in 2016. The new administration centre in Padang Nenas for Kuala Nerus is newly formed and is expected to be a catalyst for future development in nearby areas,” said Dato’ Seri Ahmad Razif, Chief Minister, Terengganu. The drawbridge connects Muara Utara to Kuala Terengganu’s Central Business District (CBD) and its surrounding areas of Muara Selatan. The construction

The completion of the KTCC Drawbridge will reduce the travelling time from Kuala Terengganu’s Sultan Mahmud Airport to the City’s Central Business District. Moreover, its completion is expected to promote a vibrant and robust economic growth within the CBD area through job creation and business opportunities from tourism, commercial and industrial activities. The development of retail offices, residences and hotels will definitely boost the economy for the people of ECER as well as the state of Terengganu. INFRASTRUCTURE DEVELOPMENTS BY ECER The construction of Bukit Kuang Bridge in Kemaman was completed by ECERDC in November 2014. The bridge connects Teluk Kalong with Chukai town and it has helped improve the traffic flow within the area and will play an important role in the development of the ECER Special Economic Zone (ECER SEZ). East Coast Expressway Phase 2 (LPT2) is an expressway between connecting Kuantan to Kuala Terengganu (KT), where it would reduce travel time between Kuala

Lumpur and Kuala Terengganu from seven hours to an astounding four hours. It is part of the East Coast Expressway development which includes East Coast Expressway Phase 1 (LPT1) from Karak to Kuantan and East Coast Expressway Phase 3 (LPT3) from Kuala Terengganu to Tumpat, which will connect to the Thai border at Pengkalan Kubor. This transportation network is one of the main transportation and logistics initiatives within ECER undertaken by the government. The implementation of the Expressway is in line with the corridor development plan under the ECER Master Plan and provides internal transportation and connects the provinces to generate the development of economic activities in rural areas. It is expected to support the development in Terengganu as the network cuts through ECER linking it to growth areas in the West Coast. The Government is also looking at the possibility to implement the East Coast Rail Link (ECRL) project in the future, which would further enhance the Region’s transportation network. The East Coast Economic Region (ECER) offers various investment opportunities to property investors who are keen to leverage on the Region’s rich resources and natural assets, such as pristine beaches and coral-ringed islands, particularly in the areas of sustainable, integrated tourism development. The on-going development of Kertih petrochemical cluster, Kertih Biopolymer Park (KBP) and Kemaman Heavy Industry Park (KHIP) within the ECER Special Economic Zone (ECER SEZ) will definitely attract a concentration of both foreign and local investors. Hence, the property market should be ready and able to meet the needs and lifestyle requirements of this group. Property Insight reached out to Terengganu Chief Minister, Dato’ Seri Ahmad Razif Abdul Rahman and this is what he had to say.

KTCC Aerial View: The Kuala Terengganu City Centre (KTCC) integrated development spearheaded by the East Coast Economic Region Development Council (ECERDC) consists of various components which will be developed in phases, including integrated lifestyle centres, KTCC Mall shopping complex, serviced apartments, hotels, retail & office lots, Healthcare Wellness Village and education centre. KTCC Drawbridge: The iconic Kuala Terengganu City Centre (KTCC) drawbridge will be the first-of-its-kind in South East Asia and Malaysia, whereby it will connect Muara Utara to Kuala Terengganu’s Central Business District (CBD) and its surrounding areas of Muara Selatan.

www.propertyinsight.com.my DECEMBER 2015 I 27


FEATURE

Kuala Terengganu will be transformed into a Heritage Waterfront City with the construction of a new bridge linking the north and south of this water city. This state initiative, initiated in September 2014, is expected to be completed in 2016.” – Terengganu MB

PI: WHAT IS THE CURRENT STATE OF TERENGGANU’S RESIDENTIAL AND COMMERCIAL PROPERTY SUB-SECTOR?

development recorded growth at 6.4%. The transaction value also saw positive movement with residential property leading growth by 26.3% followed by commercial development by 16.3%. Prospects for the property in 2015 is expected to remain positive. Kuala Terengganu City Centre Development (TCC) is expected to strengthen Kuala Terengganu as the Tourism Gateway of the East in ECER. In the same development, Kuala Terengganu will be transformed into a Heritage Waterfront City with the construction of a new bridge linking the north and south of this water city. This state initiative, initiated in September 2014, is expected to be completed in 2016. The new administration centre in Padang Nenas for Kuala Nerus is newly formed and is expected to be a catalyst for future development in nearby areas. PI: WHAT IS THE STATE GOVERNMENT’S ROLE IN PROMOTING THE PROPERTY MARKET IN TERENGGANU? MB: To meet the demand of the subsector

residences in Terengganu, the method of joint ventures and smart partnerships have been conducted in which state government encourages and supports statutory bodies such as PMINT and UDA in implementing housing projects. A common problem when housing projects are implemented by the developers of the private sector is the delay to start after approval. As a solution, the state government is trying to reduce contribution rates and the lesser restrictions of the conditions imposed on developers involved. The state government encourages housing projects carried out by ‘mixed developments’ to offset development costs, optimize the use of land and to complete the housing area.

MB: Terengganu’s property performance

increased minimally in 2014. This year recorded 20,319 transactions worth RM2.46 billion. Compared to 2013, both number and value increased respectively by 2.0% and 18.3% (2013:19,919 transactions worth RM2.08bil). Residential property is the lead subsector market performance with 62.8% of the market share while commercial cycles were at 2.7%. Activities for subsector residential property market recorded a growth of 1.4%, while subsector commercial 28 | DECEMBER

2015 www.propertyinsight.com.my

PI: WHAT ARE THE CHALLENGES FACED BY THE TERENGGANU STATE GOVERNMENT IN IMPLEMENTING POLICIES TO PROMOTE PROPERTY INVESTMENT IN TERENGGANU? MB: The lack of major players involved

in real estate subsectors. Most subsector investment in residential and commercial property is driven by the State through the State Economic Development Corporation (PMINT) and the Board of State Heritage Trust Fund (LTAWNT). Here there is an

imbalance in the effort to develop the property. In addition to that, high property values also play a major factor in the involvement of real estate investors to come to invest in the State. This valuation is high due to a surplus in demand. Lack of subsector residential construction activity in particular, also affects a higher valuation of residential properties. PI: WHAT IS THE STATE GOVERNMENT’S VISION AND PLAN FOR THE PROPERTY MARKET IN TERENGGANU IN 5 YEARS? MB: Within the next 5 years, the state

seeks to balance the ratio between the demand and supply of the real estate sector by involving as many key players possible in their respective subsector development plan within the state. For subsector residences, bank data related to state housing will be created. This bank data will include findings of actual demand for housing in the state that will be carried out by the Institute of Darul Iman (IDAMAN). Development of housing for privatization through joint ventures and smart partnerships will also be made whereby the state government will encourage and support through incentives to investors. PI: THERE WERE REPORTS THAT TERENGGANU MIGHT FACE A HOUSING SHORTAGE IN YEAR 2020. HOW WILL THE STATE GOVERNMENT MITIGATE THIS? CAN THE STATE GOVERNMENT ELABORATE MORE ON AFFORDABLE HOUSING? MB: The State Government through the Housing Unit has drawn up a strategic plan with a direction on developments within the state, especially in the segment of affordable housing. To this day, the state government has provided a total of 9,078 units of affordable housing where most of the units that have been completed have already been distributed to eligible applicants. In the last 5 years, the state government has been committed in providing more quality housing adequate for the people. We provide housing to citizens by controlling the quality of construction with the use of quality materials.


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FEATURE

T.O.D TRANSIT ORIENTED DEVELOPMENT: ON THE RIGHT TRACK

To Rudyanto it means a more forward Malaysia, where we are able to balance our family, economy, work and play. It also means getting to know your neighbours better, reigniting the sense of community we once had as Malaysians BY: NATASHA GIDEON

T

ransit oriented development, or TOD, is a type of community development that includes a mixture of housing, office, retail and other amenities integrated into a walkable neighborhood, located within a half-mile of quality public transportation. Booming into a community less dependable on driving, TOD promises to address many social issues and maximize public transport. To quote Gustavo Petro, the Mayor of Bogota, Columbia, “A developed country is not a place where the poor have cars. It’s where the rich use public transportation.” There already are TOD’s in Asia that have benefitted the community. For example, compared to other developed economies, 90% of all trips in Hong Kong are made by public transport thanks to a nationbuilt on the TOD theory. We spoke to Rudyanto Azhar, Group Director of Special Projects, President and Group CEO’s Office for Prasarana. A group that inspires to create a lifestyle of new living conditions where people do not just stay in houses but live happily in their homes. The social aspect of living, culturally should be rich socially and they would have to look into the social, spiritual side of things. We aspire to have hospitals and vertical sub-schools or a mosque within one of our TOD’s to relieve roads of

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DECEMBER 2015 www.propertyinsight.com.my


RUDYANTO AZHAR

TOD STATION LINE - PRASARANA NO. JV PARTNER

LOCATION / STATION LINE

1.

Naza TTDI Ventures Sdn Bhd

Taman Tun Dr. Ismail

2.

Intan Sekitar Sdn Bhd

Dang Wangi Station - Kelana Jaya Line

3.

Binapuri Development Sdn Bhd

Lot 1233 (previously known as PT 110, Brickfields) Tun Sambanthan Station, Monorail Line

4.

ADS Projek Sdn Bhd

Station 2, Ara Damansara - Kelana Jaya Line Extension Project

5.

IOI Properties Empire Sdn Bhd

Station IOI Puchong Jaya - Ampang Line Extension Project

6.

Brilliant Corridor Sdn Bhd

Stesen 1 Awan Besar, Bukit Jalil - Ampang Line Extension Project

7.

Damansara One Sdn Bhd

Kelana Jaya Station - Kelana Jaya Line

8.

-

Bangsar (Portion B) - Kelana Jaya Line

9.

-

Glenmarie Station - Kelana Jaya Line Extension Project

jams during Friday prayers. All you have to do is take the train and be on your way, and this is apart from regular retails. According to Rudyanto, TOD is not new in Asian countries as there are such developments in Singapore, Hong Kong and Japan. The idea of TOD reverts to the close-knit community we used to live in. It is more than that. A more honest reason as to why we’re reverting, is the increasing high cost of living. To Rudyanto it means a more forward Malaysia, where we are able to balance our family, our personal finances, work and play. It also means getting to know your neighbors better, reigniting the sense of community we once had as Malaysians. In the future, you will be able to find these TOD’s along the rail alignment, which indirectly has the interest of most people in these areas. They will be built where the economy is expected to grow and will most likely be nearer to city centers. However, do not mistake a TOD for the development of the transit station per se. The focus area is usually within 400 meters surrounding the station as can be seen at the KL Sentral Station. The vicinity is made up of Grade A and energy efficient offices, service residences, malls and world class hotels. Rudyanto tells us that a key element in these areas are mostly to inject a sense of vibrancy with mixed activities, hence the need to prompt local authorities, transport operator and developers to come together to create a new standard of sustainable urban mobility and lifestyle. www.propertyinsight.com.my DECEMBER 2015 I 31


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A developed country is not a place where the poor have cars. It’s where the rich use public transportation.” - Gustavo Petro, Mayor of Bogota

The idea of TOD’s itself is indeed intriguing, so here comes the question on everyone’s mind, will it work in other parts of Klang Valley and Malaysia, in general? “Why would it work? Why would it not? I guess as Malaysians being Malaysians, we always look at the cost of living. There is a chance it might not benefit us, because if we leave it to developers, the cost of living within 400 meters of a TOD would be unaffordable. Local authorities must play their part and have some sort of control on property prices within those areas.” Rudyanto tells us. He continues to breakdown the ideal mathematics of it all saying that the development within the area of the station will be premium but within 400 to 800 meters the prices of homes would be affordable. The upside to this is that everyone will be sharing these facilities as it will be of walking distance within the community. Prasarana intends to look into offices, hotels and even into providing facilities such as electric car services whereby a unit comes with 1,000 hours of usage of the electric car provided by the collaborating company. Prasarana are fervent advocates of the TOD concept. “We are talking to local authorities and various land officers because they will have to look at the Strata” he adds “We are working with the state planner, the municipal planner to work on the ratio, car parks as well as the walkability components of it.” The fact that this concept is new also means more 32 |

DECEMBER 2015 www.propertyinsight.com.my

challenges and unprecedented angles need to be focused on. Now that we know that a TOD is highly possible in Malaysia, when and where can we expect to see one, you may ask? Taman Tun Dr Ismail will be a TOD within a residential area, approximately 300 to 400 meters from the MRT Station and the KPJ Hospital. The soft launch itself will happen this year. We can also expect a TOD in Dang Wangi which will mostly be offices, service apartments and most probably an area for retail. Rudyanto confidently exclaims that as an investor “You will not be disappointed.” These areas will be highly accessible through public transport. “Imagine when the LRT extension line goes to Putra Heights or Klang within 45 minutes. You don’t have to think about traffic.” This translates to a good investment. “The UK just started connecting their stations to existing malls therefore regenerating old shop houses just like in Shibuya, Japan.” Rudyanto tells Property Insight one of the many examples of TOD’s. But within South East Asia, from his observation, the best at TOD thus far has to be MTR Corporation limited. MTR Corp. Ltd. runs Hong Kong’s Mass Transit Railway (MTR), and is also a major property developer and landlord in Hong Kong. “I am not an expert, but from my observation MTR is a developer first, and an operator second. They started in 1972 and within 10 years they have managed to turn a non-profitable public service into a

profitable one.” Only 10% of Hong Kong’s population does not take public transport. “Unlike in Malaysia, we pay for future value which means developers pay for the land without the rail to the government and the government then collects taxes. So winwin, the government doesn’t have to spend on the rail infra, the rail infra cost comes from the TOD profit and the government doesn’t have to spend on developing the area.” Eventually all TOD’s will demand to be in open spaces, leaving Malaysia in a situation similar to our neighbour’s. The idea of building downwards instead of up naturally strikes most developer’s minds. That same idea is easily forgotten once they realize it is 7 to 8 times higher in cost. It is up to developer’s to determine whether the investment is good enough. But Singapore is going downwards and taking up the idea of underground developments. Rudyanto adds it would also compliment the River of Life project if we chose to do so. The project will not only change the aesthetics of rivers but that of its surrounding areas and also people’s perception of ariver. So what it boils down to is connectivity. Once we have development in Taman Tun Dr Ismail and Dang Wangi, people are connected to areas where they would love to go. At the moment we have places like Lake Gardens but there is no public transport there. Imagine the development of the area once the MRT and LRT are ready, and the endless possibilities once TOD’s start coming up.


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FEATURE

MALAYSIA’S RETAIL PROPERTY MARKET

OUTLOOK & PERFORMANCE Two industry experts tell us about investing in the retail property market in Malaysia in 2016 BY: NATASHA GIDEON & DANIEL SIM

H

as it crossed your mind how investing in retail property defers from investing in residential and commercial assets? “To begin with, investing in retail property would require a higher investment cost and more work such as the need to have more documentations done and also a longer duration to secure tenants,” said Henry Butcher Retail managing director Tan Hai Hsin. Henry Butcher is an international asset consultancy firm. The good thing about investing in retail property is really about obtaining better

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returns as compared to investing in residential and commercial assets. In Malaysia, there are 899 shopping centres with a total nett floor area of 137 million square feet. The average occupancy rate is 81.3%. Shopping centre yield in Malaysia ranges from 4% to 10% depending on the location and success rate of the shopping centre. The retail property market includes shopping centres, shop offices, strata shops, and shops below service apartments, shops below office buildings and shops below hotels.

Before investing in the retail property market, Tan advised that an investor should know that the retail market is more volatile as compared to the residential market. Retaining tenancy is important as it is difficult to find or replace good tenants in a short time even though it is easier for tenants to quit when market conditions are poor. The cost of financing is much higher than residential properties. Thus, the risk is higher. But the reward can be higher as well. The cost of maintenance is also much higher than residential properties, office


the last 2-3 years. The yield 2 to 3 years ago was between 6 - 7% for malls in prime locations however it is now around 6 - 6.5% due to higher operating costs and lower revenue,” shared ExaStrata Solutions Chief Real Estate Consultant Adzman Shah Bin Mohd Ariffin. ExaStrata Solutions is a real estate consultancy firm specialising in providing real estate solutions. He opines that the current global economic conditions have affected the local economy and also the retail market. Growth will be slower between 5-6% in 2015 following drop in consumer spending due to GST implementation. The weak currency and oil price will continue to affect sentiment.

properties and industrial properties. Tan remains optimistic when it comes to retail property investment even during an economic climate and policies that discourage property investments. “This is the best time to invest now due to soft market prices. But this is only for longterm investors, not speculators. Because you may not be able to find tenants in the immediate term or tenants able to pay higher rental rates,” said Tan. “Retail property market has been active the last 5 years. The supply of retail malls have been increasing quite drastically for

THE ISSUE OF OVERSUPPLY Tan shared that one of the issues normally raised by potential investors is regarding an oversupply of retail property in the market, particularly the shopping malls located in Klang Valley, this situation is true but it doesn’t mean that there is no room for growth. In fact, it has been the same for the last 10 years, yet developers are still building shopping centres throughout the Klang Valley. Oversupply situation is not location specific, but project specific. For examples, Suria KLCC, Mid Valley Megamall, Pavilion KL, Berjaya Times Square, One Utama, Sunway Pyramid and a few other malls, will remain as popular shopping centres in the Klang Valley. Some of the basic critical success factors for a mall in Malaysia includes having a strong retail property management team that is responsive to market changes, and having a mall that is able to offer a wide variety of goods and services for that target audience. There is still a clear disparity between success and failure. Popular shopping centres throughout the country continue to attract shoppers and quality tenants despite intense retail competition and a weakened economy. At the same time, shopping centres that have been suffering from low shopping traffic will continue to face challenges in attracting crowds. Some shopping centres are giving long rent-free periods to their retailers. Despite free rental, they still fail to attract sufficient retailers. Some older shopping centres will lose

To begin with, investing in retail property would require a higher investment cost and more work such as the need to have more documentations done and also a longer duration to secure tenants.” – Tan

retailers and businesses to newer, bigger and modern shopping centres. Shopping centres that have not been performing well will need to work harder to retain existing tenants and attract new tenants. Older shopping centres will need to improve their trade and tenant mix in order to remain relevant and sustainable. To remain competitive, some shopping centres have undergone refurbishment in order to stay competitive. In Klang Valley, these would include Sunway Putra Mall (formerly known as The Mall) in Kuala Lumpur city centre, Plaza Sungei Wang in Bukit Bintang, Klang Parade in Klang, Avenue K in Jalan Ampang, CapSquare in Kuala Lumpur city centre, Axis Atrium in Pandan (renamed as Fiesta Mall), 1 MK Mall in Mont Kiara, Summit in USJ Subang Jaya, Bukit Raja Shopping Centre in Klang, Tesco Extra in Mutiara Damansara, LIFE www.propertyinsight.com.my DECEMBER 2015 I 35


FEATURE Centre in Kuala Lumpur city centre, and the list goes on. A few undertook complete redevelopment, including Plaza Ampang (now called Intermark) and Bukit Bintang Plaza in Kuala Lumpur city centre as well as Atria in Damansara. “The supply of retail space in KL city centre can be considered not excessive since the occupancy rate is evidently good. Even the existing regional malls in the suburban locations are faring well in occupancy rate and average rental rate,” said Adzman. He further stated that there is however a rise in neighbourhood malls which are sprouting in developing townships. Some of these smaller malls are not well designed and have weak anchors and tenant mix. Thus, they are not attractive to retailers and are suffering from poorer occupancy rates. In view of the economic slowdown, retailers have also slowed down in their expansion and hence the retail space will not be taken up so soon. It would therefore appear that there is an oversupply due to the weak take up following poor demand, but in actual fact the malls are not conducive and the terms are not attractive enough to compensate the retailers. ExaStrata predicts that the space will be taken up if the rental terms are more reasonable and attractive to retailers. Retail properties normally command better rental returns especially those in prime locations compared to residential and commercial properties. The tenancy periods tend to be longer too and rental rates are expected to be reviewed upwardly at certain intervals. There is however constraints where retailers who are sought after by malls such as anchors and mini anchors tend to request for fit out contributions and preferential rental rates. Thus, retail property investors may have to offer attractive terms to attract retailers to take up space. Investors should also be wary of investing in stratified retail malls as there are constraints in the management and these are less preferred by retailers. HOTSPOTS FOR RETAIL PROPERTY INVESTMENT “As long as there are new population growth areas in Malaysia, there is always potential for retail property investments. 36 | DECEMBER

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But timing must be right. You do not want to be in a situation where your shop is ready to rent, but the immediate population has not moved in yet,” shared Tan. He adds that there are still many townships being developed and planned at the fringe of city centres and town centres in Klang Valley. For examples, there are still new large township developments in Semenyih, Bangi, Cyberjaya, Sepang, Northern Shah Alam, Northern Kuala Lumpur and Southern Klang. Once these townships have a sufficient population, there will be demand for shopping centres. “Locations close to the city and town centres with visibility, good linkage to public transportation and ample parking and proximity to good a catchment population of a minimum of 50,000 people or more within 5 minutes, will be good for investment,” said Adzman. He shared that those who have good accessibility to MRT, LRT and BRT will benefit from increase in footfall. More transit oriented developments (TOD) with retail components are expected to be developed. A PROSPECT FOR THE FUTURE Tan said that it is difficult to determine the trend right now, but at the macro level, it is positive. At the micro level, it may be too early to conclude now. This is because it will take several more years for residents in Klang Valley to get used to using public transportation to work and shop, instead of driving. On the other hand, Adzman advises property investors who are interested to invest in retail property to do their research and ask retailers if they like the retail property they are considering. He also says they need to be prepared to rent at the target rental before they put down the deposit. “Avoid strata malls unless the mall manager has a good track record.” Investors must understand the risks involved. Price for retail space tends to be expensive and therefore, if investors do not have holding power or financial strength, they could be facing a challenging time trying to achieve a good return on investment. Retail properties in Malaysia are considered still fairly priced and in Ringgit Malaysia, hence attractive to foreign investors especially from Singapore. An

The supply of retail space in KL city centre can be considered not excessive since the occupancy rate is evidently good.” – Adzman

investor should carry out research on who could be the target market in the subject location and thereafter, what category of retail trade would appeal to the target consumers. Understanding the catchment profile is also important in order to determine suitable retail and tenant mix. The investor will need to estimate the target rental that could be achieved and whether the retailers are prepared to pay the target rental rate in order to establish the yield rate and whether the rate is acceptable and justifies the investment. He shares that retailers had experienced 20% drop in sales so far compared with last year and the signs indicate that the slowdown will continue in 2016. Retailers need to find ways to maintain sales performance and sustain business. This situation will affect the retail property market as major malls also rely on turnover rent which in turn will result in lower revenue due to lower sales and thereafter, dividends for investors will fall due to lower yield.


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DEVELOPER OF THE MONTH

Mangrove

A

s the Malaysian arm of the renowned Australian property firm Walker Corporation, Senibong Cove was inspired by the best of Australian concepts and waterfront developments. At the heart of the development’s design concept is a philosophy to merge form with functionality. This is demonstrated in Senibong Cove’s modern tropical theme, where nature and greenery, as well as the surrounding waterways and waterfronts are incorporated into the design planning. Most houses at Senibong Cove, whether low or high-rise, afford panoramic views of surrounding greenery and water bodies. Large green foliage of trees and plants line the roads, walkways and gardens, allowing residents to enjoy nature within their homes and around the estate. To offer residents an al fresco lifestyle while keeping cool in Malaysia’s tropical climate, the units also feature huge roof overhangs, canopies, sun-shades and projecting balconies over the canals. The fenceless and gateless layout and spacious design emphasises a sense of openness to the development, allowing residents to enjoy the surrounding environment. Senibong Cove is master planned to ensure the developer offers world-class standards of living for its residents at minimal cost to the ecosystem. The development is located within the thriving Iskandar Development Region, which offers easy access to Malaysia and Singapore. The architecture and design planning integrates the best of Australian waterfront living with the lush and tropical landscape and waterways as key features, residents can enjoy space and

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Senibong Cove master aerial view


A LIVING EXPERIENCE LIKE NO OTHER

Senibong Cove - Where form and functionality coverge BY: NATASHA GIDEON & DANIEL SIM

www.propertyinsight.com.my DECEMBER 2015 I 39


DEVELOPER OF THE MONTH privacy at Senibong Cove. It features over 35 acres of nature, and includes five specially designed parks, all linked by a 2 km long boardwalk. Each gated community within the development includes a residents’ clubhouse that comprises of gym and swimming facilities, and a proposed 20,000 square metre boutique mall, expressing the company’s commitment to quality living within a low-density integrated community. As part of the development, Senibong Cove is also responsible for conserving and maintaining the Lunchoo River and nearby mangrove swamp. The development is a safe gated community, boasting a threetier security system. Senibong Cove offers an unprecedented sustainable living experience. Beyond serving as a safe and well-designed home, the development offers various activities for residents in nature and sustainability. Social element components such as a multipurpose hall, public hall, kindergarten, river management centre and marina facilities are also included in Senibong Cove. In short, Senibong Cove is a master planned waterfront community. “The Iskandar Development Region also remains an area with much growth potential, and we are confident that our

Isola Grandeur canal

The Iskandar Development Region also remains an area with much growth potential, and we are confident that our suite of offerings and facilities, and master planned developments, will continue to create and maximise value for our residents and investors.” - Quay

Central park

40 | DECEMBER

2015 www.propertyinsight.com.my


Isola Grandeur interior

suite of offerings and facilities, and master planned developments, will continue to create and maximise value for our residents and investors,” Front Concept Sdn Bhd project director Quay Chew Keong, shared with us. Quay shared that a sustainable plan and the environment shape the design and development of Senibong Cove, and are crucial aspects to the township. This includes implementing a robust sustainability initiative for the Lunchoo River near Senibong Cove. In addition to research, since 2010, active efforts have been taken to clean-up and maintain the river, so that it is conducive for residents and the surrounding community. The river is also home to a diverse range of marine and wild life, and efforts are being put in place to sustain the mangrove swamp surrounding the river to continually preserve the area and its marine life. “We also engage actively to encourage residents in sustainable living practices by highlighting 3R (reduce, reuse & recycle) practices within their daily living. Notwithstanding these various programmes, we are always exploring ways to elevate our sustainability efforts for the long-term,” mentioned Quay.

VALUE FOR MONEY Senibong Cove offers both low and highrise units, with a focus on low-density housing. This includes apartments, semidetached housing and waterfront villas, among others. Precincts and units within the development are as follows: • The WaterEdge Residences, comprises 244 waterfront terraces and semi-detached houses. • Isola Villas offers 144 units of semidetached, link villa and waterfront villas. • The WaterEdge Apartments, are high-rise condominiums, designed such that most units would have unobstructed views of the marina, Lunchoo River and the Straits of Johor. • Isola Grandeur offers the best in low-density waterfront villas, with 86 units on an exclusive island. This development consists of waterfront villas that are spacious and offers complete privacy that can be fully enjoyed with waterway-fronting lifestyle decks, balconies and roof. It also offers a resident club house which includes a gym and a swimming pool.

There is no one-size-fits-all plan, therefore the developer will continue to develop Senibong Cove to meet the needs of its customers to offer the very best in waterfront living. A key highlight of Senibong Cove is its 35 acres of nature, including five specially designed parks that boast greenery, which are extensively integrated throughout the development. In addition, it overlooks the scenic Lunchoo River that is served by a marina with 80 berths for residents to dock their boats. All these are linked by 2 kilometres of walkways and boardwalks to ensure that facilities are well-connected. Each precinct within the development also contains facilities to ensure that residents are provided with recreational options, including a residents’ clubhouse that comprises of gym and swimming facilities. Community activities including fishing, as well as other planned activities on river sustainability are in the works, to better engage residents. Going forward, the developer plans to expand their suite of waterfront offerings to cater to a premium marina lifestyle, such as boating facilities and more F&B outlets along the boardwalk.

www.propertyinsight.com.my DECEMBER 2015 I 41


DEVELOPER OF THE MONTH

The Hills Residences, type A interior

A proposed 20,000 square metre boutique mall is in the works, for the future, which will feature shopping and dining options that fulfil residents’ needs within a self-contained development. Currently, 55 units within The Hills Residences, which boast a low-density, have been launched and are open for buyers. The property is distinctive in its use of the courtyard concept, featuring a new living experience that allows sustainability and a ‘nature-inspired’ way of living. “Senibong Cove was developed on the principle of quality over quantity. We offer distinctive low-density housing and a large number of our landed and waterfront units are top-end. Our vision is to transform the coastal area of Senibong Cove into a first-class waterfront development that offers unparalleled quality living for our residents,” enthuses Quay. While there is a much more conservative buyers’ sentiment in the market at the moment, the developer’s outlook for Johor Bahru is still sanguine in the long-term. The creation of industrial areas in the vicinity will likely bring in economic growth and job opportunities. Rather than exponential growth, the developer expects to see Iskandar grow at a steady rate. In addition to the upcoming Woodlands North MRT, should the KL-Singapore High Speed Rail project be implemented, the connectivity between Singapore and Johor Bahru will be even more accessible and seamless. With this, Johor Bahru will definitely offer a valuable proposition to expatriates and Singapore residents, and Senibong Cove is well-positioned to tap the future growth potential. 42 | DECEMBER

2015 www.propertyinsight.com.my

The Hills Residences, type B interior

Senibong Hills, The Hills Residences, street view

IT’S ALL ABOUT COMMUNITY “As Senibong Cove is a close-knit community that has its residents at heart, we believe in investing time to understand our target market and to ensure that Senibong Cove remains relevant to their needs,” said Quay. According to the developer, buyers range from individuals seeking affordable and quality housing for their families or retirement, to high net worth individuals who are going for premium properties or who are looking to invest. Many choose Senibong Cove for its strategic location in Iskandar and its close proximity to Singapore. Potential buyers are invited to experience the waterfront lifestyle offerings of the development. The developer also set up a sales office in Singapore earlier this year to better cater for potential customers in Singapore. THE DEVELOPER’S STORY Walker Corporation is one of Australia’s largest private development companies. Established in the 1960s, it is known for

developing large-scale, award-winning iconic developments. The company sees the Iskandar region as a diamond in the rough. With rising real estate prices in Singapore, it expects the region to become more attractive to investors from across the causeway, and to become a sought-after residential area for both Malaysians and Singaporeans alike. The developer also have ongoing plans to further develop Senibong Cove with additional units and with enhanced lifestyle amenities for residents. These include augmenting the Beach Park and club house within Senibong Hills to support the health and wellness of its residents. Together with Singapore’s Wong family, the developer intends to embark on a joint venture to develop Senibong Hills, offering cluster homes, terrace homes, condominiums and more with distinctive designs. Sited on elevated grounds in the vicinity, the development overlooks the surroundings for magnificent views of the Senibong Cove Marina and the straits of Johor.


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AREA FOCUS

SG BULOH,

NO LONGER THE ‘BACKWOODS’ One of the most sought after neighbourhoods in Klang Valley BY: DANIEL SIM

S

ungai Buloh literally means bamboo river although one can hardly see bamboo trees in the area these days, but when you drive up to this area from Kota Damansara, its immediate neighbour, you will notice the place sprouting with high end gated and guarded communities. Sungai Buloh borders the Gombak district and is a sub-district of Petaling Jaya.

44 | DECEMBER 2015 www.propertyinsight.com.my

The latest available data from the statistics department shows that it has 466,163 people including 37,537 non-citizens (year 2010) living there. There are many sought after upscale neighbourhoods in Sungai Buloh and this includes Bukit Rahman Putra, Sunway Putra, Taman Villa Putra, Sierramas and Valencia. Cars are now aplenty on the road and

its population has increased drastically. This is probably due to its close proximity to - Kuala Lumpur at 23km, Mont Kiara at 22km and Petaling Jaya at only 19km. It will take you less than an hours drive to get to KLIA from Sungai Buloh. In fact in the 1930’s, Sungai Buloh was the second largest leprosy settlement in the world. It was set up due to the Leper


Enactment Act that came into force in 1926 which required the segregation of those infected with the disease and those who were not. Eventually the community within the colony decided to build flower and plant nurseries to assist in bringing in an income and these nurseries have been around for decades. The good news is that the government has announced to implement other modes of transport to not just ease the congestion but also to improve on the current transportation system, focusing on rail lines such as the Sungai Buloh – Kajang MRT Line and the Sungai Buloh- Serdang – Putrajaya lines. The MRT line from Sungai Buloh to Kajang will be completed and will be expected to commence its operations at the end of 2016.Currently, residents of Sungai Buloh use the Sungai Buloh KTM station as a means of public transportation. Property developments nearby will benefit from such facilities and will see a rise in the value of their property, one of the many examples being D’Sara Sentral by Mah Sing. For those who prefer travelling by road, you are in for a treat because Sungai Buloh is quite strategic as a location as it is accessible to established retail areas such as IKEA, the Curve in Mutiara Damansara which is only 15 minutes via the Sungai Buloh Exit on the North Klang Valley Expressway or NKVE or the Penchala exit on the Lebuhraya Damansara- Puchong (LDP), residents of Sungai Buloh can

WHAT IS THE RECENT TRANSACTED PRICE OF LANDED RESIDENTIAL PROPERTIES IN THE AREA TYPE

STOREY

SCHEME

Sg. Buloh Country Resort

Taman Villa Putra

LAND AREA

3,400 - 4,800 sf

3,000 - 3,200 sf

2

Tmn Bukit Rahman 3,200 - 5,800 Putra sf Semidetached house

Valencia

2.5

3

Tmn Bukit Rahman Putra

Seri Aman Heights

3,500 - 4,500 sf

1,900 sf

2,270 - 3,870 sf

YEAR

MIN (RM)

MAX (RM)

COUNT

2010

320,000

380,000

4

2011

450,000

450,000

2

2012

490,000

600,000

2

2013

490,000

590,000

3

2014

490,000

600,000

3

2010

615,000

739,000

7

2011

650,000

850,000

13

2012

810,000

1,020,000

7

2013

1,030,000

1,030,000

1

2014

915,000

950,000

2

2015

1,025,000

1,200,000

2

2010

700,000

1,274,000

9

2011

818,000

1,600,000

12

2012

935,000

1,550,000

10

2013

1,150,000

1,600,000

6

2014

1,000,000

1,690,000

9

2015

1,500,000

1,500,000

1

2010

1,110,420

2,400,000

11

2011

1,428,480

2,500,000

13

2012

1,800,000

2,500,000

9

2013

1,980,000

2,500,000

9

2014

2,398,000

2,850,000

4

2015

2,430,000

2,500,000

2

2010

500,001

580,000

4

2011

550,000

680,000

5

2012

780,000

930,000

4

2013

550,000

950,000

9

2014

940,000

1,055,000

4

2015

900,000

1,000,000

3

2010

648,800

750,000

13

2011

762,000

1,050,000

6

2013

900,000

900,000

1

2014

1,000,000

1,200,000

4

www.propertyinsight.com.my DECEMBER 2015 I 45


AREA FOCUS also reach Kuala Lumpur city centre via the Middle Ring Road 2 (MRR2) and the Duta - Ulu Kelang Expressway (DUKE). Currently, there is a tendency for traffic congestion to occur during peak hours due to the construction of MRT. However, this should ease up after the completion of the MRT in 2017. Another factor to consider when buying property in Sungai Buloh is the amenities. There are two international schools here, the IGB International School and ELC International School which will be a boon to parents wanting a private education for their children. Besides international schools, parents can also opt to send their children to major schools such as SMK Bandar Sungai Buloh and SMK Bukit Rahman Putra. Or if you are looking for institutions of higher learning, there is Segi college and Help University College, Subang 2 (upcoming 2014) as well as UiTM’s medical faculty. Not only does Sungai Buloh have excellent amenities but it also has the transport infrastructure in place. It is close to many hypermarkets notably Tesco, The Store and Giant, while residents of Sungai Buloh can seek medical treatment at local major health institutions such as Putra Medical Centre and Tropicana Medical Centre, Kota Damansara or the Sungai Buloh General Hospital which is located in the heart of Sungai Buloh and approximately 25km from Kuala Lumpur City. SUNGAI BULOH NEW TOWNSHIP This Sungai Buloh New Township used to be a huge mass of land owned by the government belonging to the Rubber Research Institute , the site is 3,152 acres and it was sold to Kwasa Land for RM2.28 billion, Kwasa Land is wholly- owned by the employees’ provident fund (EPF). Kwasa Land announced that it projected to generate RM50bil in gross development value (GDV) over the next 20 years from this project in Sungai Buloh. The new township will be developed and called Kwasa Damansara with an expected population of 150,000. It is located near the development belt of Damansara and Selangor Vision Valley, this will be a new satellite city for the northern part of Greater

46 | DECEMBER 2015 www.propertyinsight.com.my

TYPE

STOREY

SCHEME

LAND AREA

Bdr Baru Sg Buloh

1,400 - 1,650 sf

Paya Jaras

1,098 sf

Bdr Baru Sg Buloh

1,400 sf

Bdr Pinggiran Subang

1,075 sf 1,400 sf

Mutiara Subang

1,540 sf

Sg. Buloh Country Resort

1,400 sf 1,540 sf

Subang Bestari

1,400 sf 1,540 sf

Taman Puteri Subang

1,300 sf

Taman Subang Murni

1,650 sf

Tmn Bukit Rahman Putra

1,650 sf

1

Terraced House

2

1,650 sf Tmn Sri Buloh

900 sf

YEAR

MIN (RM)

MAX (RM)

COUNT

2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014

140,000 150,000 175,000 173,000 183,000 250,000 73,000 88,000 110,000 120,000 150,000 110,000 178,000 187,000 225,000 230,000 305,000 400,000 220,000 245,000 268,000 295,000 350,000 430,000 257,000 275,000 280,000 250,000 380,000 150,000 165,000 170,000 230,000 260,000 373,000 250,000 290,000 310,000 380,000 400,000 473,000 249,500 325,000 300,000 380,000 300,000 275,000 280,000 375,000 450,000 480,000 280,000 320,000 438,000 495,000 645,000 598,000 184,000 190,000 288,000 300,000 415,000 410,000 95,000 130,000 135,000 155,000 158,000

220,000 295,000 300,000 310,000 320,000 400,000 115,000 140,000 150,000 177,000 200,000 110,000 330,000 310,000 320,000 400,000 430,000 400,000 330,000 350,000 355,000 440,000 448,000 480,000 280,000 350,000 410,000 380,000 380,000 280,000 300,000 285,000 340,000 345,000 450,000 364,223 368,000 490,000 523,000 570,000 607,900 350,000 375,000 408,000 470,000 490,000 320,000 450,000 450,000 488,000 490,000 500,000 530,000 600,000 670,000 665,000 700,000 243,000 265,000 386,000 475,000 465,000 410,000 135,000 250,000 280,000 298,000 200,000

26 17 19 20 22 7 4 5 5 6 6 1 7 9 5 6 4 1 12 15 12 6 2 3 3 12 8 2 1 27 33 13 15 14 2 18 14 19 15 8 5 6 3 6 4 4 3 13 8 3 3 43 24 17 19 6 6 3 5 2 4 4 1 4 2 9 10 4


Kuala Lumpur. The new township is said to be ‘going green’ with its 5.5km, 160 acres, green park. It will incorporate carbon reduction by promoting a walkable and safe environment. Another plus point is affordability which is a major issue faced by urban Malaysian’s today. The Sungai Buloh New Township will incorporate an integrated transportation system which will have the MRT linking the township to other parts of Klang Valley. Because of the huge land area, the township will be developed into eight precincts and will have its own urban design guidelines. Key features of the design and layout plan of the location is a development hub comprising modern residential, commercial, recreational and educational facilities. More good news for those looking for affordable housing, as per the 2016 budget, 800 units of affordable homes will be built within Kwasa Damansara’s town centre. D’SARA SENTRAL, SUNGAI BULOH Further to the serviced residence, Mah Sing’s D’Sara Sentral comprises of D’Style Shops (single and dual unit lifestyle retail shops); and D’Sovo Suites (Smart Office Versatile Office). D’Style Shops offers units with built-up ranging from 472 sq ft to 9,230 sq ft. D’Sovo Suites offers units with built-up starting from 504 sq ft onwards. The integrated development has a gross development value (GDV) of RM901million. D’Sara Sentral is located diagonally across the Kampung Selamat MRT Station, the second station on the Sungai BulohKajang MRT line. The Sungai Buloh-Kajang MRT Line will also be linked to the newly proposed Sungai Buloh-Serdang-Putrajaya (SSP) line, giving more accessibility to residents. There will be a covered walkway linking the development to the MRT station. “D’Sara Sentral’s strategic location provides residents with hassle free traveling options. The development is located diagonally across the Kampung Selamat, the second station on the Sungai BulohKajang MRT line. The MRT line will pass through KL’s Central Business District, making the transit from D’Sara Sentral

Artist impression

TYPE

STOREY

2

SCHEME

Valencia

Sierramas Resort Homes

Luxurious Terraced House

2.5

Sierramas West

Valencia

3

Valencia

LAND AREA

2,350 sf

1,755 sf

1,765 sf

2,077 sf

1,765 sf

to KL City much more convenient for our residents,” added Tan Sri Leong. “We are building an integrated development where convenience enables residents to have more valuable time. Living at Mah Sing’s D’Sara Sentral, we hope that resident will be inspired to focus on blissful moments in their lives, such as spending time with their loved ones. With extra time on their hands and the facilities provided, we hope residents will

YEAR

MIN (RM)

MAX (RM)

COUNT

2010

900,000

1,650,000

7

2011

1,320,000

1,638,000

4

2013

1,350,000

1,900,000

3

2014

1,480,000

2,100,000

4

2015

1,590,000

1,880,000

2

2010

900,000

1,480,000

7

2011

1,000,000

1,870,000

2

2012

1,328,000

1,450,000

3

2013

1,000,000

2,150,000

2

2014

1,500,000

1,700,000

2

2010

800,000

1,630,000

10

2011

915,000

1,728,000

7

2012

980,000

1,640,000

2

2013

1,500,000

1,840,000

3

2014

1,800,000

1,800,000

1

2010

1,170,000

1,728,000

4

2011

1,550,000

1,920,000

4

2012

1,650,000

1,735,000

2

2013

1,850,000

1,985,000

2

2014

1,390,000

2,080,000

5

2015

1,850,000

2,100,000

2

2010

950,000

1,400,000

12

2011

1,100,000

1,785,600

40

2012

1,070,000

1,526,000

4

2013

1,080,000

1,550,000

5

2014

1,380,000

1,750,000

7

be motivated towards practicing a healthy lifestyle, striking a balance between their work and personal life,” said Tan Sri Leong. Strategically located, D’Sara Sentral has ready catchment from surrounding areas like Sierramas, Valencia, Kota Damansara, Sungai Buloh, Shah Alam and Bandar Utama. SQWHERE BY SDB SqWhere is a mixed-development located

www.propertyinsight.com.my DECEMBER 2015 I 47


AREA FOCUS WHAT IS THE RECENT TRANSACTED PRICE OF COMMERCIAL P

WHAT IS THE RECENT TRANSACTED PRICE OF HIGH-RISE RESIDENTIAL PROPERTIES IN THE AREA TYPE

SCHEME

Astana Putra Condominium

BUILT-UP AREA

850 1,335 sf

Condominium Condovilla, Villamas

Sunway Rahman Putra

Medan Mas Apartment

Apartment

Mentari Apartment

Seri Bintang Apartment

Subang Suria Apartment

1,268 1,281 sf

807 1,149 sf

800 1,012 sf

650 sf

750 sf

778 1,012 sf

ROPERTIES IN THE AREA

YEAR

AVERAGE (RM PSF)

COUNT

2010

160

2011

194

2012

210

24

2013

246

12

2014

341

6

2015

418

4

2010

218

17

2011

232

17

2012

296

4

2013

356

8

2014

385

5

2015

453

1

2013

374

14

2014

409

1

2010

129

2

2011

128

9

2012

161

11

2013

170

11

2014

200

6

2010

99

9

2011

102

10

2012

106

10

2013

116

8

TYPE

STOREY

SCHEME

YEAR

MIN (RM)

MAX (RM)

COUNT

29

2010

330,000

760,000

12

25

2011

400,000

785,000

24

2012

380,000

740,000

10

2013

600,000

808,000

8

2014

700,000

878,000

2

2015

450,000

700,000

2

2010

550,000

644,500

7

2011

651,000

724,000

8

2012

502,600

828,000

14

800,000

Bdr Pinggiran 1,680 Subang 1,760 sf 2 Taman Villa Putra (Shop Office)

STOREY

Bdr Baru Sg. 1,540 sf Buloh

Shop-office

2

2011

1,600,000 2,150,000

8

2012

1,890,800 2,050,000

3

2013

1,600,000 2,100,000

6

2014

1,600,000 1,830,000

3

2015

1,350,000 2,500,000

2010 3

1,650 sf

Bdr Pinggiran Subang 1,760 - 1,798 sf

850,000

4

1,320,000

23

2011

1,116,000 1,575,000

11

2012

1,490,000 1,740,000

11

2013

920,000

1,500,000

2

2010

400,000

700,000

17

2011

430,000

880,000

6

2012

656,000

1,690,750

4

2013

600,000

1,544,850

14

124

6

127

3

2010

127

4

2014

750,000

1,130,000

8

2011

154

8

2015

550,000

1,000,000

3

543,000

543,000

1

2012

165

9

2010

2013

173

13

2011

650,000

730,000

2

2014

197

14

2012

650,000

718,000

5

2010

114

31

2013

500,000

700,000

2

2011

127

40

2014

840,000

1,035,000

4

2012

134

11

2015

835,000

1,025,000

2

LAND AREA

Bdr Pinggiran Subang

1,680 1,760 Sf

Taman Villa Putra (Shop Office)

1,600 Sf

Bdr Baru Sg. Buloh

1,540 Sf

Shop-office 1,650 Sf Bdr Pinggiran Subang 1,760 1,798 Sf

Bdr Pinggiran Subang

2

1,500,800 1,700,000

2015

2

4

1,908,888

2010

2014

SCHEME

3

1,600 sf

2013

4

Bdr Pinggiran 1,765 sf Subang

WHAT IS THE RECENT TRANSACTED PRICE OF COMMERCIAL PROPERTIES IN THE AREA TYPE

LAND AREA

1,765 Sf

48 | DECEMBER 2015 www.propertyinsight.com.my

YEAR 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015

MIN (RM) 330,000 400,000 380,000 600,000 700,000 450,000 550,000 651,000 502,600 800,000 1,500,800 1,600,000 1,890,800 1,600,000 1,600,000 1,350,000 850,000 1,116,000 1,490,000 920,000 400,000 430,000 656,000 600,000 750,000 550,000 543,000 650,000 650,000 500,000 840,000 835,000

MAX (RM) 760,000 785,000 740,000 808,000 878,000 700,000 644,500 724,000 828,000 1,908,888 1,700,000 2,150,000 2,050,000 2,100,000 1,830,000 2,500,000 1,320,000 1,575,000 1,740,000 1,500,000 700,000 880,000 1,690,750 1,544,850 1,130,000 1,000,000 543,000 730,000 718,000 700,000 1,035,000 1,025,000

COUNT 12 24 10 8 2 2 7 8 14 2 2 8 3 6 3 4 23 11 11 2 17 6 4 14 8 3 1 2 5 2 4 2

directly opposite the Kampung Selamat MRT Station, at the intersection between Jalan Sungai Buloh and Jalan Welfare. Phase One is consisting SOVO units (95% sold) and Office Spaces (80% Sold). Phase Two is now open for registration. SqWhere is designed to become a well-connected and self-sustaining development which contains elements that contribute to the ease of daily living of those who live or work there. We see the potential of Sungai Buloh to grow into an established township. It’s well connected via highways and now through the introduction of the MRT line which integrate it into key areas within the Klang Valley, including Bandar Utama, KL Sentral, Bukit Bintang, extending all the way to Kajang. It is an area which is seeing a lot of growth. It’s a strategic location and want to offer an opportunity for people to experience an SDB development here.


WHAT IS THE MOST RECENTLY LAUNCHED DEVELOPMENT IN THE AREA DO YOU HAVE ANY INFORMATION ABOUT THE FUTURE DEVELOPMENTS IN THE AREA PROJECT

DEVELOPER

TYPE

Aman Putri @ Phase 2

PPC Glomac Sdn Bhd

112 units of shop-offce

Aman Putri @ Phase 1D

PPC Glomac Sdn Bhd

73 units of 2-storey terraced house

Putra One - SemiD Suites

NLY Ventures Sdn Bhd

1 block of 30-storey serviced apartment (167 units)

Seri Tijanni Condominium

Golden Armani Sdn Bhd

Condominium

Jasmine Villa @ Pinggiran Rahman Putra

N/A

2-storey bungalows (Bumi only)

Suria Putra

Suria Land Development Sdn Bhd

1 block of 25-storey serviced apartment (486 units)

N/A

Bayu City Development Sdn Bhd

1 block of 24-storey apartment (136 units)

Sierramas Heights

Terang Murni Sdn Bhd

1 block of 17-storey condominium (98 units)

Park Manor

Tan & Tan Developments

3-storey strata villas (41 units )

The idea is to design a mixed-development where each component is complementing one another. Thus it is a place where one can live, work and play, all in one place. The MRT which is just a short stroll away, allows you to hop in and out of Sqwhere with ease. We have created some interesting facilities which are surrounded by lush green landscaping in selected areas within SqWhere, such as the Retail SqWhere and Level 8 Facilities Podium. The GDV for the total development is approximately RM550 mil. There are other tracts of land being developed or will soon be developed in this area – this too will spur the growth of Sungai Buloh.

AGENTS SPEAK Sungai Buloh is already a mature township. It has low, medium and highend residents and dynamic commercial and industrial activities. In the coming 5-10 years, I believe that the population in Sungai Buloh will grow rapidly, thanks

GEORGE TAN

Head Sales Division Reapfield Properties (S.J.) Sdn Bhd

to the MRT and numerous mega mixed developments. Not only will the property market in Sungai Buloh be stimulated, but it will also turn this area into a selfsustaining city like petaling jaya in no time.

Sungai Buloh is already surrounded by matured neighbourhoods like Kota Damansara, Sunway Giza, Curve and 1 Utama. In 10 years it will become just as vibrant as Kota Damansara. Two major reasons for this. 1. MRT1 from Sungai Buloh to Kajang. The MRT1 infrastructure will be able to transport 400,000 people daily providing an integrated public transport system linking to LRT, BRT, HSR. (Fully operational July 2017). No more traffic

RAPHAEL WONG

Team Manager Real Estate Finders (MY) Sdn Bhd

nightmares, smooth travelling perhaps just like in Singapore. 2. There is a new planned township called Kwasa Damansara 2,330 acres that will be developed over the next 5 to 15 years. It will have a town centre like KL Sentral with commercial centres, lifestyle malls, lots of greenery and parks. You can look forward to a better quality of life, with lots of conveniences. If you want to invest in the future, buy a property close to MRT stations.

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FEATURED PROPERTY

Artist impression only

ALBURY AT MAHKOTA HILLS Well-Thought-Out. Inside Out. BY: FARA AISYAH FIRDAUS PETIAL

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lbury is named after a small quaint town in England within the Surrey Hills, that is known for its outstanding natural beauty. The project by Kia Ace Development Sdn Bhd (a subsidiary of UM Land) is located in the Southern Corridor of Semenyih, that is nearby the mesmerising Broga Hills. According to the director of Kia Ace Development Sdn Bhd, Benjamin Lee, “Albury is a 52.1 acreage development consisting of 331 single storey terrace houses and 382 double storey terrace houses. It is the first phase of UM Land’s interest within Mahkota Hills, where we have another 300 acres kept for future development. This project is also the homage to our legacy in township developments in Seri Alam, Seri Austin and Seri Albion.”

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It will be a part of a well thought out township that provides a comfortable suburban lifestyle without all the unnecessary frills other developers provide but purchasers pay a hefty sum for. MADE FOR HOME OWNERS “We wanted to create a product that is affordable for the market. We incorporated value engineering at an early stage to enable us to achieve cost effective design and constructability, thereby allowing us to to transfer the savings back to our buyers.” “We also work closely with our exclusive marketing agent, REI Group and our panel of bankers to provide a worry free experience on getting the mortgage approved. Most of our purchasers obtain a loan margin of 90%.” Said Lee. In terms of the product, the team

scrutinised the plans and layout of the building. The architects worked with interior designers to ensure the function complimented the aesthetics. Lee added, “We are able to optimise every space that provides a more comfortable space for kitchens, spacious toilets and bedrooms. Every power outlet was carefully placed so that purchasers will not have to do much renovation when they move in.” “The well thought out mantra extends out of the house into the overall township. We spruced up the landscape, provided gated and guarded facilities, and will maintain a clubhouse with ample facilities for all residents to enjoy at minimal cost.” LOCATION “Albury is located right in the heart where top tier developers have also started


Artist impression only

developing. So the question remains, why do the smart players want to develop projects here in Semenyih? As for Albury itself, it is located south of Klang Valley where urbanites seem to be moving towards. It is the epicentre with Kajang and Cheras to the North, as well as Seremban and Nilai to the South. This area is where raw land is still affordable. As long as the input factors are cheap, developers are able to set their products at a cheaper price.” This new development is located to the East of UMLand’s sister township Bandar Seri Putera in Bangi, a joint venture project between UMLand and CapitaLand Singapore. Mahkota Hills is accessible via the Cheras-Kajang Highway and the Lebuhraya LEKAS. There are a few schools within a 10-20 KM radius, with Nottingham University being the most recognised institution. “The drive to and from the LEKAS highway is surrounded by household brands such as McDonald’s, KFC, Pizza Hut, Giant and Tesco to name a few. More often than not, when such brands are present, it is indicative that the area is maturing or is ready for the next phase of development. This is because these conglomerates would have done extensive analysis on demographic and economic data to determine the feasibility prior to opening an outlet. Likewise, these big firms share the same positive outlook of growth potential in this part of the South of the Klang Valley.” Lee added. INVESTMENT OPPORTUNITIES “Mahkota Hills will be the next Puchong. We are aiming to have at least 30%

Artist impression only

Artist impression only

genuine investors for our project. Why? Because investors are the ones who generate transactions at the end of the day. Generating transactions means it will help to push up the value for future phases.” “Look at our surrounding neighbours, they are all Malaysia’s top developers. They are all here building double storey houses, three storey houses, linked terrace homes, semi-detached and bungalow houses. What are we building, you might ask? Well, we are building single storey houses. It is about scarcity and that is why we decided to build single storey units. The scarcity, the affordability – which means that the demand for our kind of project is higher. There will be a limited number of units and if you were to purchase one now, you would be one of the few people to own an affordable product that has a very strong demand.” Lee concluded. Albury’s double storey houses will be launched very soon in 2016. It will still be an affordable development and priced below RM500,000.

To experience more on Albury @ Mahkota Hills, please call 03 – 8723 2323 / 016 – 361 1002 or visit www.albury.my

PROJECT DEVELOPMENT DETAILS Property: Albury @ Mahkota Hills Developer: Kia Ace Development Sdn Bhd (a subsidiary of UM Land) Location: Semenyih South Property type: Single Storey and Double Storey Terrace Homes Concept: Gated and guarded with clubhouse facility Tenure: Freehold FOR ENQUIRIES Address: No. 13, Jalan Kiara 1, Kawasan Perniagaan Kiara, 43500 Semenyih, Selangor Darul Ehsan Telephone: 03 – 8723 2323 / 016 – 361 1002 Fax: 03 - 8723 3636 Email: albury@reigroup.com.my Website: www.albury.my

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FEATURED PROPERTY

EKOTITIWANGSA

THE HEART OF KL RIVER CITY

A unique development in the northern hemisphere of Kuala Lumpur BY: DANIEL SIM

I

magine living in a place where you are given the option to cruise through a RM4.4 billion revitalised river to reach the nearest LRT station as well as future MRT 2 station. This can now become a reality with EkoTitiwangsa, a RM600 million freehold residential development that will be located at the heart of the Kuala Lumpur River City. The Kuala Lumpur River City project spans across a 3 km stretch along the Gombak River and is located just 5 km off the city’s golden triangle, this is a pioneer riverside development of the River of Life (ROL) project. Covering 110 km in length, the River of Life project covers Sungai Kling from its upstream until its confluence with Sungai Kerayong, as well as its tributaries, the Gombak, Batu, Bunus, Jinjang and Kerayong Rivers. The River of Life is part of the government’s Economic

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Transformation Programme under the Greater Kuala Lumpur plan. Inspired by Cheonggyecheon River project in South Korea, the Kuala Lumpur River City (KLRC) is a world class riverside mix development consisting of a shopping mall, green public space, office tower, retail space and EkoTitiwangsa, the residential segment of the development. With a concept of sustainability in mind, the Kuala Lumpur City Hall has approved the masterplan for the KL River City where water taxis will be used to connect to the Titiwangsa LRT and monorail stations as well as future MRT 2 station. The development will also feature a direct tunnel link to Titiwangsa Lake and recreational park once the construction is completed. The development also encourages cycling as a mode of transportation.

HOME BY THE RIVERSIDE EkoTitiwangsa comprises of three blocks of low-dense serviced apartments with a total of 696 units. For the time being, the developer had launched 270 units of tower C priced at RM750 per sq.ft. this year. Tower A and tower B will have 240 units and 180 units respectively, however, all units will be completed at the same time in 2019. The three towers will each have 50, 40 and 36 storeys with many layouts that will suit different wants and needs. Furnished with kitchen cabinets, airconditioning, hood and hob, these units will also have water heating system, shower screens and vanity tops installed in their bathrooms. Home buyers will be able to choose any of the residential units with sizes ranging between 820sq.ft. to 1,340sq.ft.


city, allowing only water at a depth of one metre to remain constant all year long, and this is done by employing a nonmechanical operational system called the ‘double decker’ that relies on gravity. The upper deck of the project will offer a breathtaking river walk experience and the water can be used for safe recreational use. Accessibility to EkoTitiwangsa is aplenty starting with the DUKE 2 highway that will run through the podium block with direct access into the parking lot which will reduce traffic noise and pollution. EkoTitiwangsa is also well connected to other major highways such as the DUKE, DUKE phase 2, MRR2, Mahameru Highway and Sentul Link. Those who are interested to find out more about this project may call +603 4032 1881, or visit their website at www.ekotitiwangsa.com

Like any high rise development, home buyers will be delighted to know that most of the units will have a balcony with either the magnificent view of the KL skyline or a more relaxing view of the greens from Genting hill. Home owners of EkoTitiwangsa will be able to enjoy a variety of hotel-like facilities that will keep the residents healthy such as the infinity and wading pool, jacuzzi, gym and sauna with changing rooms. There are also designated barbecue areas and multipurpose halls for home owners to get together as a close knit community. A surau will also be built for Muslims to pray, as well as a laundry room and also a playground for young residents to play in. Homeowners will not need to be wary of security as the development will have a three - tier security system which includes

a guard patrol, 24-hour CCTV surveillance and smart card access for its residents. EkoTitiwangsa will be in close proximity to restaurants that give your taste buds a treat, residents can also send their children to nearby renowned colleges and popular schools or do their banking close to home, shop at retail outlets and be close to medical institutions. Those who prefer public transportation will have the Ampang LRT line and the KL monorail within walking distance of their homes. Whilst one has concerns living close to a river, the good news is that the developer has done thorough research and design on the KL River City in such a way that the whole development will not experience flooding. The rainy season flood water will bypass the river corridor and will be channelled into a flood tunnel below the

PROJECT DEVELOPMENT DETAILS Property type: service apartment Units: 696 units Acres of development: 2.91 acres Tenure: freehold Lot size / land size: 2.91 acres Gross development value (gdv): RM6mil Completion date: March of 2019 Developer name: Ekovest Land Sdn Bhd (a wholly owned subsidiary of Ekovest Berhad) Website: www.ekotitiwangsa.com Phone no: 03-4032 1881 / 03-4021 5948

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PERSONALITY OF THE MONTH

DAVIS WONG

MAN WITH THE MIDAS TOUCH Coming to Kuala Lumpur with nothing, completing a business degree and then making a 180˚ switch towards the arts, he now owns more property than anyone else his age, and looks good doing it BY: NATASHA GIDEON

T

he fact that our Personality of the Month bought his first house at the age of 18, and intends to retire by 35 already shows how determined and relentless he is. Starting at such a young age, Davis Wong, the multifaceted hair stylist cum property investor is already making headlines for the work he does.

From modelling, to hosting shows, not to mention his three hair salons all aptly named The Scissors Palace, there is no doubt in my mind that Davis will reach his goal of retiring at 35. Davis’s story began 4 years ago when he first started learning about hairdressing from scratch. With a fiery passion for hair

styling, he was determined to achieve greatness even though he already had a degree in business and a property in hand. Slowly he acclaimed recognition for his ‘work’ on famous actors and actresses namely Yasmin Hani, Sazzy Falak and Maria Faridah to name a few. From then on his hair styling career was set. www.propertyinsight.com.my DECEMBER 2015 I 57


PERSONALITY OF THE MONTH

“I graduated with an international business degree, mainly because I come from a family whose roots are entrenched in business. My dad is a developer. But I realized I am still very passionate about doing hair. He wanted me to go into business, and out of all the businesses he did at the time, I was only interested in property.” So Davis left for the art industry and has not looked back since. He has 58 I DECEMBER 2015 www.propertyinsight.com.my

no regrets. Davis put himself through his business degree by working four jobs as a student and went on to pursue his dream by opening The Scissors Palace 2 years ago with his business partner. Soon, The Scissors Palace will be transformed into a boutique salon where fashion meets style. The great thing about The Scissors Palace is that it is more of a family than it is a business. Everyone is treated the same

and you feel it the minute you walk in. But that is not all. Davis also believes in giving back to the community. On weekends, Davis and his team help the less fortunate by giving them free haircuts. Something he vowed to do from experience involving an unforgettable incident. “When I used to work in the previous salon, a customer came in and he had cancer, so half of his face was slightly


My strategy is always buying low-cost housing. The rich won’t buy expensive houses they will build their own expensive houses.”

deformed, he went around the city but he couldn’t find anywhere to have his hair cut because a lot of people discriminated him.” The customer then walked up to the counter, signed an empty cheque and replied “I don’t know what you are worth but thanks for giving me a haircut. I have no family or friends, I am about to die and doctors say I only have a month or two to live”. Heartbroken and disappointed

with society, Davis vowed to help the less fortunate, “So when I started the salon, I made sure everyone in my team cut hair for the less fortunate.” Even with all this esteemed success, and time to spare for the less fortunate, his inclination towards the property investment market never ceased. Close to 8 years ago, Davis purchased a property in the middle of nowhere, in Sungai Plan, Bintulu. At the time, 18 year old Davis took a loan from the bank for RM14,000 with his father as a guarantor and basically bought a shack for RM14,000 and turned it into a long house divided into 7 units. Little did he know that Sungai Plan would be a satellite town, with Honda and Shell setting up base there, his ‘shack’ is now worth close to RM400,000. It has now been extended to 14 units, with 10 more units coming up. Taking a loan at 18 years old sounds difficult, but due to the time, and the small amount, Davis was able to buy, and still continues making money from his first property. “My strategy is always buying low-cost housing. The rich won’t buy expensive houses they will build their own expensive houses.” The idea and strategy is to focus on the middle class income earners who will rent, or buy more affordable housing. “Low-cost is already cutting down half of your risk” he says. He chooses to focus on affordable housing due to the current economic climate. “Properties above half a million are less interesting for me because it is too much for a lot of people, especially at a general income of RM4,000.” Davis puts months of effort into researching his areas of interest, which includes meeting the people whom live in that vicinity. “Before you purchase the house always ask the

neighbours first, how long have they lived there? How is the neighbourhood? It does not matter if you are going to rent or live in that area, knowing the neighbourhood is very important.” Davis frequently flies back to Sarawak to check up on his properties. He rents them out around Curtin University in Miri and there are always tenants. But it is not always sunshine and rainbows. “Once, I saw footprints on the ceiling of one of my properties in Senadin and I don’t know how that happened. As a house owner, I am always terrified with whom I rent my properties out to.” Between following other investors and property investment speculators, Davis opts for the more trusted source, mainly, himself. “I consider myself more of a business man and I manage my business by always knowing what is going on, and this includes my properties.” As the son of a businessman whom also engages in property investment, Davis was sent for property management training. “You will know how to judge the analysis yourself towards property. Buy an area that already has a McDonald’s or a Starbucks, because they did their analysis way before you came in.” The future looks bright for this entrepreneur extraordinaire. But what does the market sentiment look like to him? Almost as promising as the services in his salon. “I think at the moment after GST, a lot of people are letting go of their properties because they are trying to lower the risk by reducing the amount of properties they have. But, if you ask me about the present market, yes it is currently a good market to invest in.”

www.propertyinsight.com.my DECEMBER 2015 I 59


INVESTOR NEXT DOOR

THE WEALTH DRAGON John Lee’s investment story BY: FARA AISYAH FIRDAUS PETIAL

J

ohn Lee, CEO and co-founder of Wealth Dragons started investing in property in his early 20s. By the time he was 27, he had achieved his goal of becoming a self-made millionaire. His many experiences inspired him to share his knowledge with others and he was soon teaching at property investment seminars throughout the United Kingdom. “I started investing 10 years ago. I remembered staying in a house that my mother bought at £12,000 [RM79,156] and then sold it at £85,000 [RM560,690]. There’s a huge difference in the amount so that made me think, there’s always profit to be made in the property investment market.” “I was working in a company and my salary was £36,000 a month. One day, I was listening to this self-motivation channel and there was this one particular PhD holder who tried so hard to get a job while trying to invest in property – at the same time. Eventually when he finally got a job, he also managed to buy a property. The salary he was offered was £30,000 per month, while the property that he had bought and flipped also gave him a profit of £30,000. It got me thinking, ‘Why didn’t I do that?’” “So my journey began! I went to a networking event and started talking to people about my intention to invest in property. I met this one lady and I told her I wanted to invest in property, would there be a way that she could help me? So she said yes and sold to me a property at the price of £85,000, when the market price for that piece of property was about £145,000. If you convert it to Malaysian Ringgit, I made a profit of half a million Ringgit in two months when I flipped the property.”

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INVESTMENT STRATEGIES John exclaimed that the first thing about being a successful property investor is, becoming flexible to market situations. “You have to adapt to the current market. For example, look at the current stagnant Malaysian market. Developers are struggling, banks are tightening on loans and it gets harder to get your mortgage approved, then what happens? Property prices are starting to decrease. And what does that mean? Buyers can now bargain! When everyone is buying you should be selling, when everyone is selling you need to start buying.” “How does one adapt to the market? At a time when you cannot sell or rent your property, you have to force the appreciation. For example, how do I force the appreciation of a one bedroom apartment? I renovate it and turn it to two bedroom apartment, then the value becomes higher. It’s not going to have the same value with your neighbour. By knowing the right investment strategy, you can invest regardless of market conditions.” “I have three rules or criteria when looking for a good deal. Number one, every property that I buy must be below 25% of market value. Number two, I have to be able to rent it, and number three, I have to be able to sell it. If it does not fit the three criteria’s I mentioned, or if it only fits one of them, I will not invest in it. So, the question is, how do you know if the property is going to be sold or rented out, right?” “Here is my trick! If I was going to buy a semi-detached property with two bedrooms, I would publish a fake advertisement in newspaper that says ‘2 bedroom Semi-D for rent at RM4,000’ and I’ll wait and see how many calls I get about that property. If I only get one call, I won’t buy it. But if I get 100 calls, I will definitely buy it. I test the market and that’s how I know whether it is a good deal or not.” DO WHAT OTHERS DON’T Just like every landlord, John has also had bad experiences with tenants. “I rented a house to a couple who paid me six months upfront. So after six months, I contacted them but there was no answer. I haven’t heard from them since then. I decided to

go to the property and check on it by myself but no one was there. So I sent my builder to the house to take a look around.” “My builder called me and said, ‘John, you really need to come here.’ When I arrived, I was shocked! They turned my property into a cannabis farm! There were cannabis leaves everywhere and they even built in a sprinkler system – can you imagine a whole ventilation system being built in the house? I was told it would be £30,000 in damages. I could not sell or rent the property because no one was interested in a house that smelled like cannabis.” “So how did I solve the problem? I didn’t want to spend £30,000 fixing it and I wanted to rent it quickly, so I published a newspaper advertisement that said ‘Looking for builders. If you can fix my house, you can have it!’ Amazingly, I got thousands of calls! I said to everyone that called, ‘If you fix this house, I will allow you to rent it with an option to buy.’ This is how you force appreciation. That’s why you have to be creative. I am well-known in the industry with this saying, ‘Do what others don’t and have the tomorrow that others won’t’.” MORE THAN TWO PENNIES WORTH “People have always asked me ‘How do you buy so many properties?’. Well there are three things that matter. Number one, when you buy a property, you must make sure that you make money from it. Number two, you must be able to find good deals. They are eveywhere now because people are trying very hard to sell their properties. I am not talking about going to auctions, I am not talking about going where everybody else goes, but you need to go and find motivated sellers. And number three, you must learn to manage your finances.” “You never invest money in property, you invest money in the property business. There is a big difference between those two. Whenever I invest in property, I always use a concept called OPM (Other People’s Money). By doing this, you can control your property and manage its finance. For example, you can joint venture with people and buy properties together. You’ve got to find creative ways to buy property. As a matter of fact, my friend and I have bought a property in Cheras that was

How does one adapt to the market? At a time when you cannot sell or rent your property, you have to force the appreciation.”

worth RM210,000 but we bought it at RM140,000. We use an in-and-out strategy. So we put RM140,000 in and refinanced twice before we finally took RM140,000 out. That’s how we were able to take the money out and then put it into another property investment, and that’s how you build a big portfolio.” “Property investment is not about what you do but it’s about how you do it. According to Darwin’s theory, it’s not the strongest nor the weakest species that survives, but the most adaptive species.” Lee advised.

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INDUSTRY INSIGHT

VALUING PROPERTY INVESTMENT

Property Insight met up with Azmi & Co’s (KL) Sdn Bhd MD Khamsiah Binti Shamsuddin to talk about the role of a valuer BY: DANIEL SIM

D

o you know what property valuers, property estate agents and property management have in common? They all need to be registered with the Board of Valuers, Appraisers and Estate Agents (BOVAEA) in Malaysia and the public can identify their services based on their registration numbers. Stepping into the doorstep of Azmi & Co (KL) Sdn Bhd is like being in the mini version of the spacious yet vibrant google office. There is a room where one can find a FIFA table soccer machine and a tennis table for the staff to relax and bond as playmates, there are also comfortable sofa sets where one can take a quick light nap. Plus, a small baby room prepared for female staff who are breast-feeding. Located in Alam Damai, Cheras, this branch is managed by managing director Khamsiah Binti Shamsuddin who is not only a registered valuer but also a registered Estate agent and a mother to four children. “According to the Board of Valuers, Appraisers and Estate Agents Malaysia (BOVAEA) there are less than 1,000 registered valuers and about 2,000 to 3,000 registered estate agents in the country,” mentioned Khamsiah. The numbers are low because BOVAEA imposes strict guidelines before anyone can qualify as a registered valuer in comparison to being a registered real estate agent. Those who want to be a valuer must first and foremost obtain the relevant knowledge through an education and this is usually a bachelors degree in property or business,

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the aspiring valuer will then need to sit and pass the Professional Competence exam set by BOAVAEA board after working for two years in the industry. The test will also include an interview session with the board before they can become registered valuers. A registered valuer’s license will only be successfully renewed annually after the valuers earn 10 credit hours by attending continues professional development talks organised by BOVAEA. “There are two ways that the board can issue a license to you as a registered valuer or even a registered estate agent,” shared Khamsiah. She said that the public can identify a genuine valuer by doing a registrant search at the BOVAEA website. “The board used to issue a V number, where V stands for valuer, an E number

for estate agent or PM for property management, “It was a hassle then for the industry because they would have to set up three different companies in order to obtain these three different licenses”. Now she said the board may also issue license registration based on the VE number, where all three services are combined under one license thus industry practitioners can practice all three services under one roof. It is also a BOVAEA regulation to prevent a conflict of interest, that if a firm who has both the V and the E licenses issued to them, they may not provide valuation services for the properties their own agencies are selling, “in a way even with one license, we are able to run our businesses independently from one another. We are also on the RHB bank


panel so for any property valuation needs, the bank will call us.” 2+2 DOES NOT NECESSARILY EQUAL 4 There is a common misconception that the value of a property increases because of renovation. This is not true because Khamsiah said that “ a valuer will normally buy property transaction data from the National Property Information Centre (NAPIC) each month, therefore the value of a property is determined based on the data and not on the added structure of a property alone.” She illustrates that the increase in valuation is actually because of demands in a location that could be affected by factors such as the infrastructure and its amenities. ‘If you bought a home in Bangsar 10 years ago for RM70,000 and then decided to sell it this year at the market valuation of RM300,000 without doing any renovation, the bank will approve your valuation and it will be easier for your buyers to get the loan, it would not be the same case if another seller with a similar property type who after doing his renovation wanted to sell it at a higher price, this is because the valuation is based on the market value. One cannot just determine the price of a property because of the materials used or the renovations done rather it is the market force of demand and supply in a particular location that determines this.” ARE THEY GENUINELY REGISTERED? “Besides the issue of illegal estate agents

and negotiators, one of the major issues regarding registered estate agents are the number of negotiators they claim under them,” said Khamsiah. This is because a registered real estate agent can have up to 30 negotiators according to BOVAEA regulations. “We have about 40 negotiators and they are still doing great in the industry by bringing in six to seven sales a month despite the negative perception or sentiment of the property market in Malaysia,” enthuses Khamsiah who attributes these successes to the company’s strategy of focusing on selling properties that are priced from RM200,000 to RM500,000 from within the Klang Valley and all the way up to Negeri Sembilan where she believes the market will grow. The asking price and the market price in this segment does not differ much which helps to spur the demand and eventually the sales. “We educate our negotiators in terms of screening their potential buyers based on their DSR or debt service ratio. The DSR is a method used to determine the amount of the loan they might potentially get from a bank and then we educate our negotiators to advise purchasers on buying the right properties” this she said helped the buyer get a house to stay at while at the same time preventing the rejection of their loan application. Khamsiah said that she knows all the negotiators by not only their names but also their nicknames and their likings. The company frequently organises activities so that co-workers are able to spend time together just like a close-knit family. Many of their negotiators and staff stay with the company despite getting potentially higher commission structures with their competitors. WORK-LIFE BALANCE Beyond her calling as a valuer and an estate agent, she would like to see other employers provide a work-life balance system to their employees, providing the necessary facilities to help their employees feel more comfortable. After all, she believes a happy employee is a productive employee that will eventually affect the bottom line of the company.

One cannot just determine the price of a property because of the materials used or the renovations done rather it is the market force of demand and supply in a particular location that matters.” - Khamsiah

LIFE & FATE “I guess it was fate that drove me to this industry. I’m learning to love this industry even more every day. I was seeking a career direction back then and I knew I wasn’t the kind of person who could do a 9 to 5 job confined in an office,” said Khamsiah. She has an uncle who was a valuer back then and she realised that being a valuer would provide the opportunity for her to see the world on a bigger scale. It is not true that valuers only deal with numbers and property transactions, it is actually an industry that is constantly evolving. When Khamsiah first started, there was no concept of a gated and guarded community which today, is a norm. Khamsiah has over 20 years of experience as a valuer, beginning her career in 1987 and she started the branch of Azmi & Co (KL) Sdn. Bhd in Alam Damai, Cheras in early 2014, www.propertyinsight.com.my DECEMBER 2015 I 63


WHAT BRICKS DO YOU USE FOR YOUR HOMES? In the 80’s when our parents were buying their first homes, the first question they asked developers would have been ‘what bricks do you use?’

H

ave you ever thought about the type of bricks that a developer uses when you purchase your dream homes? What is the actual cost of bricks for your homes? Clay bricks commonly known as red bricks were the only main building material used before the 80’s. However, due to the sudden boom in the housing industry during the 80’s, cheaper and inferior substitute products were introduced to the building industry to meet the demand for bricks. Why you might ask? Well, setting up a cheaper substitute product factory would only need two months, but setting up a clay bricks factory would require at least two years. The cheaper substitute products were initially used for low cost houses which were priced at RM 25,000.00. Due to the shortage of clay bricks, some developers managed to get clearance to have the substitute products in other house

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categories. However, let me remind you that the fire department will always insist that partition walls for houses require you to use clay bricks due to their fire resistance properties. Here are some practical reasons why clay bricks are an advantage.

and it adds a touch of class to the house or building. Even property valuers value a property at a higher price if the property was built using clay bricks. Housing developers with repute will always insist that their houses are constructed with clay bricks.

HIGH QUALITY In the 60’s if you were staying in a house not made of clay bricks it gave people the impression that you were staying in a low cost house. In the state of Johor, house buyers would not consider purchasing a house if the developer didn’t use clay bricks. Johor is one of the biggest clay bricks suppliers in Malaysia. Johorean’s have been so used to quality clay bricks that they would not think twice about using any other material unless of course they were purchasing a low cost house. A house built with clay bricks will always give the impression that it is of higher value

FIRE RESISTANCE Due to the fact that clay bricks are produced or fired at very high temperatures, usually at above 1000° Celsius in a chamber, hence they are the best building materials in terms of fire resistance. They are non-combustible and have low thermal conductivity, therefore it will take a longer time for the fire to affect its structure which in turn makes clay bricks a good fire resistant material when building houses. The next best material to clay bricks in terms of fire resistance is only able to withstand a temperature of 600° Celsius before its starts to disintegrate. From the


experience of the fire department, a clay brick wall can normally withstand intense heat at a longer time compared to a wall built of other materials in a case of a fire. IT IS SOLID Clay bricks do not dent, wrap, rust, split, peel, or fade as easily as other materials. Houses constructed from clay bricks last a life time. Before reinforced concrete was introduced to the building industry, houses were built entirely using clay bricks. In western countries a lot of the buildings are still built using only clay bricks with little or no reinforced concrete at all. Places where temperatures would drop below 0° Celsius, whose walls were not built with clay bricks, would start to crumble. The strength and durability of clay bricks ensures better safety for home owners, as it is also not easy for burglars to break into houses made of clay bricks. Most swiftlet house owners insist on using clay bricks particularly because of this when compared to other substitute products where clay bricks stand out as the most durable building material. As for DIY enthusiasts, they should be aware that when they drill holes in a clay brick wall there will be red powdery debris from the drilled holes however they only need to use thin wall plugs as the wall is

very sturdy as opposed to if the wall was built of other substitute products. ENERGY SAVING Using clay bricks for wall structures reduces the temperature within your homes as they reduce the passage of heat through walls. Clay bricks are not only a high density material, they have a high thermal mass. This means that houses built with clay bricks have reduced internal temperature fluctuations because clay bricks absorbs heat from the sun gradually and slows down the process of heat transfer making the house cooler on a hot day. Homes using clay bricks extensively do not require as much air conditioning on a long term basis and translates to potential savings on your utility bills. Even if air conditioning is required for the house it will still save the house owner money on the electricity bill. When you go into an old shophouse for a cup of coffee, you will realise that even without air conditioning you don’t feel the heat inside the shop. Old shophouses were built without reinforced concrete and normally contractors will use a double layer of clay bricks to support the building and that’s the reason why the old shophouses give you that cool feeling. Most owners of swiftlet houses in the birds nest industry choose clay bricks because www.propertyinsight.com.my DECEMBER 2015 I 65


of their high thermal mass properties. Clay bricks stabilise the temperature of these swiftlet houses which is important to the hatching of young birds because a sudden fluctuation of temperature could cause them to face thermal shock and die. Malaysia is situated in a tropical area where the climate can be very hot and wet at certain times. The change in temperature between both periods could cause a lot of construction materials to contract and expand which tends to make them deteriorate sooner. So far, clay bricks have already proven to be the most suited product for this kind of weather. ECONOMY A standard double storey house would only require about 15,000 pieces of clay bricks costing around RM 5,250.00 which is only about 30% more compared to a cheaper substitute but this could save a house owner up to RM 150.00 per month on their electric bill. It is wiser to choose clay bricks rather than other cheaper substitutes which may initially cost more but in a long term the owner will save more in utility and maintenance bills. ENVIRONMENTALLY FRIENDLY Clay is obtained from construction sites as well as from hilly areas where development is not yet feasible. Made entirely from naturally-occurring minerals, homeowners living in a house built with clay bricks need not worry about the dangers of exposing themselves to unnecessary reactions of chemicals gases and volatile organic compounds. Clay bricks can be salvaged, cleaned and reused to build new buildings, it can also be recycled into other

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building materials such as aggregate for concrete. Clay bricks that are recovered after demolition are reused extensively for aesthetics and structural purposes. SOUNDPROOF Clay bricks also work as a good material for sound proofing. For home owners who consider having a double volume cavity wall, the soundproof quality can be as good as the best soundproof material available in the market. If you think about it, these days, we can actually hear clearly the conversations that are coming from our neighbours houses. With clay bricks, you never have to worry about this. WATERPROOF Back in the day, houses had water tanks that were built from clay bricks in their bathrooms and toilets. Water was retained in clay brick water tanks for the households’ daily use. Senior citizens may recall this experience. Malaysia is a tropical country with a warm and damp climate and this makes clay bricks the best building material for

houses as they prevent leakage or slippage during heavy monsoon rains, thus making your home a safer place to live in. Clay brick walls do not crack as easily if they are laid strictly according to construction guidelines. Clay bricks also do not shrink or expand in tropical climates. FLEXIBILITY Clay bricks are so flexible that you can design a house to form any shape. You can even use clay bricks to build a curved ceiling like most of the underground tunnels in London. Houses do not need to have fixed designs and shapes, so clay brick house owners who want to renovate or make modifications to their homes can easily knock down walls or partitions that are no longer needed, just like LEGO bricks. If you really think about it, it probably doesn’t take a genius to understand how clay bricks would benefit you in the long run and why it is the best material for your dream homes. Find out if houses built using using clay bricks increase in property value in our next issue.


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FLOORCOVERINGS SOLUTION PROVIDER Inovar - 20 years of the best flooring products and services BY: FARA AISYAH FIRDAUS PETIAL

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novar started it’s operations in 1996 when Group Managing Director, Tam Pak Cheong decided that he would take the plunge and see his vision through. After all, he had been involved in the fibreboard industry for more than 30 years. With a handful of investors who shared the same vision to fully utilise their strong wood based industry, Tam established the first laminate flooring plant in 1997. It was the first ever laminate plant outside Europe (Germany is where the technology initially derived from) boasting high precision and automation. It is a pioneer within the industry, not only locally but overseas as well. The difference with Inovar Floor and other flooring material is its superior core board. Inovar Floor uses 68 I DECEMBER 2015 www.propertyinsight.com.my

only high density fibre-board (HDF) that is sourced from Sarawak. Besides that, the manufacturer is a renowned Japanese conglomerate that produces the best HDF in the world. With the combination of technology and quality raw material, it is only a matter of time before we see this particular product in pole position. In its first 10 years, the factory’s main main client base was from North America, Asia and the Middle-East. It was very much an Original Equipment Manufacturer (OEM) producer. It wasn’t until 2007 that the company changed its business model to come out of the shadows and sit as the same table as the big boys. It set out to establish its own brand, with direct participation in the end user market,

cutting down on OEM. FLOORCOVERINGS SOLUTION PROVIDER Inovar believes Floorcoverings Solution Provider can bring the flooring industry to a whole new level. Equipped with the knowledge of the industry and technical know-how, the company sees itself as a game changer in transforming the industry. The word solution itself explains the direction the company is taking. Solution basically means a service. Its intention is to provide a specialist service to the glaring need of a demanding market, which is crying out for a higher standard both in quality and function. The flooring product becomes part of the solution. Whether it is laminate, vinyl, carpet, decking, bamboo or


solid timber, Inovar will provide a solution. Towards this goal, it’s primacy is the transformation of its people. The entire organization would require a change in mind-set to be very much service driven rather than just selling products per se. Training and equipping will be the prime activity of the management for the next three years, churning out a new spirited team of service oriented employees. INOVAR’S GREEN POLICY Inovar’s Green policy surrounds an environmentally sustainable program. It’s tagline – ‘Reuse whenever usable, reduce wherever possible and recycle whatever’, demands a cut down on wastage and maximised usage. The company will launch its first Green Program next year with its new policy of collecting back and disposing of products that are non-biodegradable. Inovar aims to convert these ‘stories and initiatives’ into useful articles and recycle them to educate the general public while creating a sense of awareness.

As an example, Inovar’s products are environmentally friendly and requires easy maintenance, while it is also affordable and child friendly in the home. If the owner is particular about a natural look which is classy and prestigious, yet an environmently friendly product, Inovar strongly recommends solid strand woven bamboo. INOVAR’S FUTURE 2016 marks the 20th anniversary of Inovar. This is a very significant year for the company. Firstly, it speaks volumes with regard to its competitiveness and tenacity to weather challenges the company had faced over the years. Secondly, it marks a new chapter in Inovar’s journey with its new purpose and direction. Setting new heights for the entire organization to immerse itself in the industry while providing their clients with excellent products and services – assuring its customers that they need never have to worry about the quality of the products they buy from Inovar.

Inovar is a key player in today’s global market. In fact from its inception, Inovar has been setting it sights outside of Malaysia. With a high capacity manufacturing facility that the company has invested in, the local market has become too small. Today, Inovar is sending 70% of its products to its subsidiaries in Thailand, Vietnam, Cambodia, Singapore, Indonesia, India, Taiwan and Australia apart from its distributors in South Africa, North America, Japan and others. It is still the number 1 brand in Japan, consecutively over the last 5 years. This is an achievement the company is very proud of. The company is very thankful to Matrade for their assistance in helping Inovar through various marketing grants while providing assistance in bridging the overseas market problem. Visit www.inovarfloor.com.my or call 03-77851266 if you need a reliable flooring product and service.

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Inovar Floor now caters to all age even the special needs and older generations

Inovar dedicated sales team will always be ready to provide customers with better floorcoverings solution

www.propertyinsight.com.my DECEMBER 2015 I 69


LEGAL

A COST EFFECTIVE AND EXPEDIENT PLATFORM FOR CONSUMERS

- TRIBUNAL FOR CONSUMER CLAIMS SMT undoubtedly reduces Court attendance in matters related to strata management

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e all know the old saying that “customers are always right”. A consumer that is unsatisfied with the products or services purchased may wish to take legal redress against the vendor or service provider that may have mistreated the consumer or misrepresented its product or service. However, pursuing the legal remedy through court is a lengthy process and unworthy of the legal cost that may exceed the value of the claim. Hence, the Consumer Protection Act 1999 has provided a cost effective and expedient platform for consumers - Tribunal for Consumer Claims. Similarly, the Housing Development (Control & Licensing) Act 1966 has set up a Tribunal for Homebuyers Claims for the protection of homebuyers in Peninsular Malaysia. Recognising the need for protection for the various stakeholders in strata development, the Strata Management Act 2013 (“SMA”) established the Strata Management Tribunal (“SMT”) to resolve disputes relating to the management of strata properties. The parties that may file a claim to the SMT are strata property owners, developers, the Joint Management Body, the Management Corporation and managing agents. SMT’S JURISDICTION The monetary limit of the claim amount with SMT is RM250,000.00. In other words, the strata stakeholders may file its claim as long as it is within the monetary limit. One may notice that the monetary jurisdiction of SMT is higher as compared to the two tribunals mentioned above, the rationale is that the penalty imposed to any non-compliance of the SMA 2013 is also RM250,000.00. The subject matter of the jurisdiction of the SMT is summarized below:• Dispute on failure to perform a function, duty or power imposed by SMA 2013 • Dispute on costs or repairs of a defect • Claim for the recovery of charges, contribution to the sinking fund or any debt • Claim for an order to convene a general meeting, invalidate proceedings of a meeting, nullify a resolution on matters decided in the general meeting 70 |

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• •

Claim to compel for supplying information or documents Claim for an order to give consent to effect alterations to common property or limited common property • Claim for an order to affirm, vary or revoke the authority’s decision However, it shall be noted that the SMT shall not have jurisdiction over disputes relating to the title, estate or interest in a land. NO LAWYER DURING THE HEARINGS The general rule is that neither party is allowed to appoint a lawyer to represent them at a hearing. Nonetheless, the law also allows an exception - where the matter in question involves complex issues of law and one party will suffer severe financial hardship if he is not legally represented.

The popularity and the current trend to buy into a strata development signifies a higher chance of strata management disputes, thus the establishment of the SMT is right on time to deal with the dispute that may arise and serve as a platform for a consistent strata dispute resolution.” RULES AND PROCEDURE The SMT may conduct the proceedings in such manner as it considers appropriate, necessary or expedient for the purpose of ascertaining the facts or law and determination of a claim. A summary of the powers of the SMT in conducting proceedings includes: 1. To determine the manner to conduct the proceedings 2. To determine the manner of discovery and providing of the evidence 3. To draw on its own knowledge and expertise 4. To order the giving of security for costs from the first date of the hearing commences. Reasons to reach its award shall also be given in all proceedings. An award by the SMT is as good as a Court order, thus whoever fails to comply will be committing an offence. Upon conviction, that person will be liable to a fine not exceeding RM250,000.00 or to imprisonment for a term not exceeding 3 years or to both. In the case of a continuing offence, meaning the failure to comply continues to linger for days, a further fine not exceeding RM5,000.00 will be imposed for every day or part thereof during which the offence continues after conviction. A Tribunal may make the order and the party will need to be bound by the order made. The Strata Management Tribunal may order a party to the proceeding to: 1. Pay or refund a sum of money or compensation or damages to another party 2. Varies or set aside of a contract or additional by-laws

3. Pay interest on monetary award at a rate not exceeding 8% per annum 4. Dismiss a claim which it considers to be frivolous or vexatious 5. Any other order as it deems just and expedient and 6. Ancillary or consequential orders or relief as may be necessary to give effect to any other order made by the Tribunal CONCLUSION As the SMA 2013 has just been implemented for 3 months and the SMT being newly established, the effectiveness of the SMT is still being tested. Nonetheless, the establishment of the SMT undoubtedly reduces court attendance in matters related to strata management. On the other hand, the popularity and the current trend to buy into a strata development signifies a higher chance of strata management disputes, thus the establishment of the SMT is right on time to deal with the dispute that may arise and serve as a platform for a consistent strata dispute resolution.

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

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FINANCE

THE PERCEPTIONS AND REALITIES OF PROPERTY INVESTMENT W

hen we speak about property investments today, the general assumption is that it is a GET RICH QUICK SCHEME. The true essence of investing in properties has been blurred with many seeking to make quick profits where properties are treated like commodities rather than an appreciating asset. In good times, properties are traded or resold in short periods of time. This is usually referred to as FLIPPING. A SHORT HISTORY Over the last 15 years or so there have been many investors who have actually made money in the short term. This started in early 2001, after the Asian Financial Crisis. Property prices were flat and many were unable to repay mortgage payments. Effective 1st January 2001, the government waived the Real Property Gains Tax (RPGT). This was used as a stimulus for property transactions and to encourage property development. Over the next few years, the property market picked up steam and prices of properties started to climb. This then spurred on the developers as well and it was all honky dory with many new projects launched over the next few years. However, this eventually ran out of control. Property prices started to escalate furiously and the MANTRA was: If You Don’t Buy Now, You Will Not Be Able To Buy In The Future.

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MISGUIDED, PROPERTY INVESTMENT ACTIVITIES Property investments became the hottest topic at all social functions and the media paid a huge amount of attention to this. Many made handsome profits in short periods of time and that prompted others to follow suit as it was deemed to be the road to riches. With that in mind monies profited from the early sales were reinvested in other properties which further accelerated investing activities. Soon after, there were many Self- Acclaimed Gurus who were hosting seminars on striking gold via property investments. The market was a buzz and thousands of people invested heavily in new property developments merely to resell upon completion of the project. At this point the basic fundamentals on property investments were ignored or should I say grossly misunderstood. It was all about buying in and cashing out upon completion. It was about making quick profits. GREED AND EMOTIONS Initially the investors were happy to purchase one or two properties. Then greed set in, investors began pooling their resources together to qualify for loans. There were all kinds of offers and deals being offered by developers. Discounts on the purchases, No Money Down Schemes, Guaranteed Returns and so on. The buying frenzy carried on.


To further escalate the buying frenzy, developers introduced the Differed Interest Bearing Scheme (DIBS). This scheme allowed investors to pay a minimal down payment and thereafter only start servicing their loans upon completion of the project. This scheme made purchasing a property very easy and further enhanced speculation. The response to DIBS was over whelming as from a cash flow perspective, it was perfect. In the midst of this frenzy, Bank Negara became concerned as many of these investors were over gearing themselves and property prices were escalating at a feverish pace. Then came the cooling measures imposed by Bank Negara in January 2012. The new buzz word was Responsible Lending Guidelines. The implementation of the new guidelines had an impact on the volume of sales and suddenly, property investments seemed like something from the past, a forgotten misadventure. Today, many who had purchased to cash out upon completion of the developments they had invested in are caught. THE REALITY IN PROPERTY INVESTMENTS Property Investments in Malaysia, is generally safe and secure. Historically, since our independence, property prices have gradually increased in value. While the property market did experience downturns in 1986, 1997 and 2008, prices very quickly recovered and surpassed previous levels. This is largely due to our Asian culture, where a great amount of importance is placed on property ownership. What all investors must realize, is that property investments work well when a long term approach is taken. Rental incomes grow over the years and with inflation creeping in every year, values also tend to appreciate. THE OPPORTUNITIES AVAILABLE Today, there are numerous opportunities to invest in, office spaces and shop offices offer investors good long term tenants with escalating rental reviews. Factories tenanted by multinational companies are also available for sale with long term tenancies locked in. The problem today is that the returns on investment (ROI) average at about 4 to 5% annually, this does not meet the criteria set by most institutional investors and the individual investors are not particularly excited with these kind returns as well. This is because, with a 7% ROI, the rental returns covers the monthly mortgage payments. This is the ideal investment scenario. It is my humble opinion that, not only in Malaysia but even globally, margins on safe and traditional investments

are becoming thinner as the demand for safe and secure investments are highly sought after. Pension Funds, Insurance Companies, Investment Houses etc are constantly looking for opportunities with such returns. The more volatile investments definitely offer better returns and are readily available. So if you are a little more adventurous there are many investments out there that will give you returns in excess of 10%. However be prepared for the unexpected. A REALISTIC APPROACH For the individual investor, my advice is simple, buy in now with 4 to 5% returns and hold on to your investment for 5 to 7 years at least. Rental values will be reviewed and in the longer term achieving a return of 7 to 8% will become a reality. Additionally, your properties would have appreciated in value should you decide to liquidate. In conclusion, property investments generally are safe and secure, but to ensure a profitable exit strategy, do not over gear on your borrowings and ensure that you are willing to hold on to your property for a minimum of 5 years. Property Investments call for careful planning and patience.

ABOUT THE CONTRIBUTOR Nixon Paul is the founding partner of Carey Real Estate. The company was incorporated in 1983. Nixon served as the president of the Malaysian Institute of Estate Agents from 2011 to 2013.

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STRATEGY

HOW DOES THE RINGGIT’S FALL IMPACT

LOCAL AND FOREIGN PROPERTY BUYERS? “What I foresee is luxury project developers gearing up with more attractive packages or marketing campaigns aimed at attracting foreign investors in the coming months”

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he Malaysian property market in general, particularly Iskandar, is going through a difficult cooling period right now. This is partly due to the launching of many luxury residential apartments, tightened bank borrowing, the introduction of the Goods and Services Tax (GST) in April this year, and political issues. To make matters worse, the Ringgit has been in a freefall for the past few months, reaching historic lows against the US dollar. I guess everyone knows these facts by now. The question is, how does it affect the property market in Iskandar? The first impact I see would be on the property developers. Up until recently, many new projects have been performing poorly especially the high rise property segment. The timely depreciation of the ringgit has sparked a new wave of interest from foreign investors, especially Singaporeans. What I foresee is luxury project developers gearing up with more attractive packages or marketing campaigns aimed at attracting foreign investors in the coming months. These may include lower down payments or even rebates to balance out the state consent fee. Another change I expect to is in the sentiments of local property buyers. As the ringgit spending power gets weaker overseas, prices of imported goods are starting to be affected and locals are getting wary of spending the ringgit they do have. Many are opting for the ‘wait and see’ strategy when making big purchases, especially for property.

This situation doesn’t seem like it will get any better until the currency stabilizes in the market. So due to the aforementioned mentality, some Malaysians are even keen on buying properties overseas during this period! Perhaps, they perceive these countries to have a more competitive economy and a stable currency so they can enjoy steady passive income from rental without worrying about the next change in currency. Another possible outcome of all this is the cost of materials and overall inflation. IJM CEO Datuk Soam Heng Choon said in an interview that a weaker ringgit would not affect developers’ costs, as long as they did not use imported goods. This is true to a certain extent, as higher exchange rates do not directly impact developers who source materials only in Malaysia. However, the developers I have talked to have expressed concern over this as one of the factors that will push up the construction cost in the mid to long run by as much as 15%, the other being the recent GST hike. Add that to the shrinking demand in a slow market, and we can see over the next few months to years, the prices of new property probably will not stay at current levels regardless of demand. So now that you have all this information, what are you going to do with it? Well, the answer depends on who you are and what you’re buying the property for.

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STRATEGY

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STRATEGY

FOR HOME BUYERS

FOR FOREIGN INVESTORS

We are definitely at a period where the developers’ profits are being slashed to razor-thin margins. Knowing that prices of new properties are unlikely to drop over the next few years, now is a pretty good time for home buyers to look for a bargain. Since there is no pressure to secure good rental for your home, you can consider new projects in matured townships with convenient amenities just around you. A landed property would be a better choice than a high rise apartment as the value of your landed property will increase at a relatively stable rate compared to other residential types. Go for it especially if the issue of inadequate rental to cover the instalment is not going to be an issue for you.

Do your research independently to find attractive areas worth investing in. Even at the 1 million range, the projects you often hear about are what everyone else is buying but very few are staying. Look instead into areas less well advertised but with a good mix of amenities nearby, and preferably near a mega-project to be completed in the next few years. Landed property investments may be more suitable if you have sufficient cash flow and don’t mind inadequate rental. Firstly, the capital appreciation is more stable compared to high rise developments. Secondly, landed properties tend to have high initial valuations that easily go over a million at desirable locations, yet relatively easy to offload to rich locals or even expats. On a final note, I’ll just like to remind everyone, this is a good time to pick up a bargain, but financing remains a concern and rental is still lower than normal. Remember to keep some cash in reserve to deal with unexpected emergencies, and don’t overleverage as you look for your ideal home or investment.

FOR LOCAL INVESTORS Take a look at local properties instead of foreign property investments. Firstly because the fluctuating ringgit may make it difficult to service a foreign property loan in the short term as it seems to be depreciating. Secondly, with the ringgit trading at a historic low, converting your ringgit to a foreign currency would be a bad investment if the ringgit goes up sharply again. The only scenario where it makes sense is if you expect ringgit to keep falling for the next year or so. This is unlikely, given that many market analysts are already saying it is currently undervalued based on its economic fundamentals. When looking for deals, consider looking for investments with sustainable rental and new infrastructure or amenities being completed in the next few years. Now is the best time for the buyer market to get hold of really good deals. Real value investment property have been popping up in both sub-sale and developer projects.

Thank you for reading this, and happy hunting!

ABOUT THE CONTRIBUTOR Rachel Lim is the co-founder of CORE and a self-made millionaires through property investment. From her 16 years of experience in property investment, she has design a proven system to train and guide thousands of people pursuing their wealth and financial freedom.

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STRATEGY

ASSEMBLE YOUR DREAM TEAM Y

ou may have a great idea, but your company’s fate depends on the strength of your team. In fact, many successful business tycoons or icons say that the character, complementary skill sets and working style of the key players in a particular company are some of the most important factors in selecting companies in which to invest. Therefore, assembling your dream team is not mutually exclusive to property investors. The success of a company relies heavily upon the strength of its team members. Yet most property investors try to do as much as they can by themselves for fear of being cheated. What do you need to start up your dream team? Find the source of your business. This may be an estate agent you have managed to befriend. The key point is that they need to be able to supply you with deals or leads that will help you to buy properties. The second part of the equation is to find a trusted agent or person to look after your property. Even if you plan to manage the property yourself, it’s likely you will need some assistance in the future. The same is true when selling – having a trusted person you can call upon makes all the difference to achieving a sale. You will also find that recruiting a banker you can talk to and who believes in you will come in extremely handy. Finding and raising finance can be extremely time-consuming and difficult. By working with professionals in the industry and setting forward your business case, you are in a better position to take advantage of deals when they come along. Think like a business, show your financial workings, display how you intend to make money and show how you have arrived at your calculations. People want to help people who help themselves – help yourself by showing what a strong business case you have. Find a friendly and down-to-earth lawyer or solicitor who speaks in plain English and one that doesn’t try to confuse you. You will need someone whom you feel comfortable asking questions and understand the ins and outs of any deals. Good lawyers can provide a wealth of information and have unique access and insight to the property market, which enables you to make better decisions. If you are planning to rent your property, it is a good idea to have a lawyer on standby for advice, should the need ever arise. A good contractor, that is able to turn his or her hand to most projects or at least advise on what is entailed, is a key part of your dream team. Look to build long-term trusted working patnerships where you are able to call on them for any type of job. Be fair in your dealings and understand that tradespeople also need to earn a living. Professionals don’t like to cut corners, so try to avoid 78 I DECEMBER 2015 www.propertyinsight.com.my

putting them in a position where they will not feel proud of their work. Aim to build a dream team that you know is better than you. Don’t be afraid to use people who know more than you. Actively seek out those who are more knowledgeable and learn from them. Set your standards high and aim to measure up to them yourself. Ultimately you have to find people who can pull their own weight and work for the greater good. If you are about to put together your dream team, ask friends, family and colleagues for recommendations and start to locate key members you want to do business with….today!

CONTRIBUTED BY 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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NOTE: Please allow 3 to 4 weeks for delivery of your first issue. Receipt will be sent upon request only. Suspension and cancellation of subscription is not allowed.

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2015

We look forward to seeing you at PRISM 2016

REGISTER NOW FOR FREE 2016 TICKETS AT

www.prism.my Thank You For Your Support

TEAM KERIS BERHAD

(Co. No. 702437-W)

For partnership and collaborations, please email janet@propertyinsight.com.my


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11/20/15 1:23 PM

Property Insight December 2015  
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