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â€˘ Feb 2018
Titan of Titijaya
Impact of GE on Properties
Recovery or Bust? HSR: Carrying the Property Market Forward
Developing with the Stars
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Jewel of the South
Valuing Property Investments
Never too late to leverage on properties Seriously? You want to buy 9 properties in 9 minutes?
Buying a house?
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Konvensyen Pelaburan Hartanah
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EDITORIAL Editor-in-Chief Dato’ KK Chua email@example.com
Celebrating Titans In Our Midst We all love a good story of the underdog overcoming adversities in life. This is probably why so many films like the 1976 film Rocky garnered a staunch following back in the heydays when colour televisions ruled over a captive, mostly Baby Boomer generation and also that of Generation X. The American sports drama film which was both written by and starred by Sylvester Stallone spotlighted the rags to riches American Dream story of Rocky Balboa - an uneducated but kind working class Italian-American boxer. Barely making ends meet, he undertakes the role of debt collector for a loan shark in the slums of Philadelphia, the US. Armed with dreams of making it big, the film portrays him as a small-time club fighter who, as chance would have it – gets a shot at the world heavyweight championship. The tale of overcoming adversity was underlined by drama and memorable scenes of Rocky training against the harsh elements of nature including the unforgiving winter and via overcoming steep mountains, etc. when pitted against an almost undefeatable “machine-type” foe before finally emerging victorious. The film’s citation with a modest budget of slightly over USD1 million (RM3.89 million) became an instant hit – garnering USD225 million (RM875.25 million) in global box office receipts – propelling it to become the highest-grossing film of 1976. It went on to win three Oscars, including for Best Picture. Having received overwhelming positive reviews, Stallone literally became an overnight celebrity and major star. So much so that in 2006, the film was selected for preservation in the United States National Film Registry by the Library of Congress - cited as being “culturally, historically or aesthetically significant”. In fact, Rocky is considered by far to be one of the greatest sports films ever made, spanning six sequels – Rocky II (1979), Rocky III (1982), Rocky IV (1985), Rocky V (1990), Rocky Balboa (2006) and Creed (2015). Closer to homeground, seven-time Mr Olympia Body Building Champion and Action Hero Arnold Schwarzenegger also told his underdog story of overcoming adversity on the silver screen and also in real life when he was last in Kuala Lumpur at the Global Transformation Forum in 2015. He is a living example of having defied the odds from poverty to ruling the blockbusters at the cinema and also – becoming the 38th Governor of California – deemed the richest state in the US at that! Talk about an unknown emigrant to the US becoming an international superstar and more – all through the power of grit. In this issue, we celebrate a titan in our midst – Titijaya Land Berhad’s Tan Sri Dato Lim Soon Peng who single-handedly overcame the adversities life stacked against him – from being born poor to having his development company being listed. Having to quit school at 11 years old to grow and sell bean sprouts at the market, Lim’s tale is awe-inspiring – in not only him managing to break himself and his family free from the shackles of poverty – but here is a man who, having grown in stature and propelled to exponential heights of success – has a heart of gold. Being able to identify with those dealt with advertisty and poverty, he has opened his heart to giving back to his alma malter. From Lim’s youth spent helping out at the Selangor and Kuala Lumpur Tong An Association, his inspiring tale has seen him forming the World Lin Chamber of Commerce and establishing the Malaysian Chinese Women Entrepreneurs Foundation while championing the Love and Care Programme committed to ending hunger. From these inspiring tales, we learn this nugget of wisdom, in that:- “Fortune favours the kindhearted”. On this note, here’s wishing everyone a Happy New Year! Dato’ KK Chua Editor-In-Chief Property Insight
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On The Cover
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Property Insight Malaysia
Tan Sri Dato Lim Soon Peng
Founder & Group MD, Titijaya Land Berhad
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.
Feb 2018 •
Titan of Titijaya Titijaya Land Berhad’s Tan Sri Dato Lim Soon Peng changes the course of his destiny from rags to riches, poverty to overwhelming prosperity – and lives to tell his tale - while continuing to give back to society BY YVONNE YOONG
• Feb 2018
Success agrees with Tan Sri Dato Lim Soon Peng, Founder and Group Managing Director of Titijaya Land Berhad. In fact, it agrees with him so much that one would well be hard-pressed to think that he came from truly humble beginnings - so much so, that describing himself as “poor as a lump of iron ore” as a youth then, he used to pray, “I want to become a rich man!” every night to the heavens through the hole of his roof. Such was his childhood epitomising the tale of rags to riches and poverty to overwhelming prosperity that a young Lim had to endure life filled with ongoing and recurring hardships. This included him quitting school at 11 years old to grow bean sprouts on a 10 ft by 15 ft plot of land with his sister. Every week, he would fill some 50 katies of fresh bean sprouts into a large bamboo basket attached to his bicycle to sell at the market to keep the family afloat. A slender boy with a small frame, he nevertheless had the strong capacity to endure hard work. Lim didn’t shun toil but took everything in his stride and worked his way, literally from the bottom up. Today, he stands tall on the shoulders of giants, represented by kinsmen from the Tong An clan where his grandfather hails from in Fujian, China. In fact, his early years were spent doing charity work guided by those whom he considered his worthy seniors. From them, the seeds of good works were planted with Lim being inspired by his mentors’ saying, “A Well That is Often Drawn, Is Always Full”. This meaningful phrase that he inherited from his seniors when he started his philanthropy works in the Chinese community has had a profound impact on his life till today.
Likening the act of charity to that of opening a well to supply water, he says if water is never drawn from the well, it will become stale. This has formed his tenet for charity work as reflected in the analogy of drawing water from a well to share. He rationalises that the more water is drawn, the more water the well will continuing supplying and the clearer the water will get – benefitting everyone. Therefore, the motivation to continue giving only refreshes the giver further - stemming from this belief. This saying became the title of his self-produced biography outlining the story of his life in his recently printed second edition book which he says was produced to motivate and encourage people in society who may find themselves faced with unfortunate circumstances. “Some people always think that they can’t be successful in life as they lack money or knowledge. However, I want to tell them that I was poor and uneducated but am what I am today because I stay eager and am ready to try new things. I train myself (to be diligent) and dare to step out of my comfort zone,” says Lim. “Don’t be discouraged because of your background, poor status or lack of wealth. If you are brave, willing to try and hardworking – you can motivate yourself to be confident that one day you will be on par with other successful people,” attests the charismatic property magnate. “I want to prove to people by showing them that though I only had primary level education and come from a poor background, I was able to give a talk at the University in Beijing, China. I hope to set an example to others by my actions and ‘rags to riches’ story,” relates Lim earnestly.
Feb 2018 •
Success from Standing on the Shoulders of Giants Lim’s success is derived from standing on the shoulders of giants – his predecessors, extended family, relatives and senior members of the clan associations he is attached to. He spends 30% of his time focusing on public welfare besides benefitting social groups stemming from clan associations formed as far back as during the Ming and Qing Dynasty in the hopes of maintaining ties of kinship and birthplace. In those days, Chinese emigrants who journeyed on the perilous seas to Southeast Asia were heavily reliant on clans of kinship for reciprocal assistance and protection. From Lim’s youth spent helping out at the Selangor and Kuala Lumpur Tong An Association which is a subsidiary of The Hokkein Association Klang, he witnessed how his seniors compassionately helped other kinsmen in difficult situations – a practice that he has taken upon himself to continue to this day.
A man of action, demonstrating his care concerning his kin relationship has seen him having no qualms in travelling by boat to the remote Sungai Lima fishing village at Pulau Ketam in 1995 upon learning of the 95% Tongan descendants’ plight of its local Tang Ua social club needing an overhaul. An enterprising Lim then quickly enlisted help to source RM400,000 in terms of funding for the project for what is considered as possibly the only Tongan village outside China. Three years after the new social club was formed, Lim stepped in once more upon learning that regular expenses became a problem for the Board Members, and arranged for a telecommunications company to rent the space on a 10-year lease, with derived rental at RM30,000 per year. The practicality of this solution now allows residents to communicate with the outside world via utilising modern technology while providing regular income to the social club – demonstrating Lim’s ingenuity in solving problems and adding value to the community.
Standing on the shoulders of giants who were benevolent examples exemplifying generosity of spirit in lending a helping hand to other members, Lim has not taken the seeds sown by his predecessors for granted. Leveraging on the understanding gained by major thinkers of his time who paved the way for him to harness a sense of social and moral obligation to his community and country, Lim, having achieved his dreams, has been honouring his dedication to contribute to the welfare of the community at large right to this day, and has no intention to stop.
Serving as President of the Selangor and Kuala Lumpur Tong An Association from 1996 to 2001, he also brought these residents overseas to participate in the International Conference of the Tongan Clan in China. In 1998, he rendered assistance to the Melaka Tong An and Kim Hah Association in organising its third International Conference which culminated in a grand function attended by around 4,000 people. This event then toured across the states – setting a new precedence and benchmark for the Tong An Association.
Fortune Favours the Kind
Acquiring the First Pot of Gold
“The happiness of helping others cannot be measured in money.” “As long as you do good deeds, fortune will enter your life without notice.” While these sayings that he picked up, stemming from the wisdom of his gracious seniors at the clan associations may just be wonderful sayings to others, Lim’s accountability is seen from how he walks his talk and views his responsibilities to his fellow kinsmen in his actions – taking seriously the lessons passed on to him by senior clan members.
A man of few words even when young, (so much so that he earned himself the nickname “Ah Bu”, meaning ‘the rich boy’ in the Hokkein dialect given to him by his grandfather to tease and coax him into speaking more and also with the hope he would strike it rich in life), Lim prefers to let his works and actions speak volumes for him.
Two seniors whom Lim looked up to have since passed on but they have left an indelible impression on him - with their ideals forming the bedrock of his belief on how to be a “fortunate person”. The lessons learnt highlight the fact that it doesn’t require a lot of money in order to accumulate fortune as good deeds can constitute extending one’s time and effort in helping the elderly or assisting the needy as these acts will unlock the storehouses of fortune. Through these bonds of old – akin to that of a father and son relationship – fashioned in the furnace of adversity and formed in the trenches of comradeship - an impressionable Lim soaked in good values which he holds dear to today. This has formed his solid foundation that has honed his interpersonal and business skills besides shaping his endearing quality of spirit in never looking down on the unfortunate – but instead, to lend a helping hand whenever necessary.
• Feb 2018
Dealt with the death of his father, Lim worked even more diligently since he had promised the patriarch that he would take care of his mother and younger siblings. However, it was only in the 1990s that his business took off in a big way after a decade of toil. A hiccup in his success was also marked by the closure of the three-star Mutiara Hotel in Klang in 2002 that Lim started in 1997. However, this did not deter him. Eventually, an opportunity presented itself in the form of a villa project in Fraser’s Hill – something which other contractors weren’t interested in - given the long and arduous winding roads and time restrictions to reach the project site at that time but he insisted on transporting the building materials up the hill every day while dealing in land transactions at the same time. In true unwavering form, Lim won the bidding for the project and completed it on time, earning for himself his first bucket of gold in life which unlocked many other new opportunities for him.
own businesses then. Lim’s approach to ascertaining market demand and requirements is also unique as he himself would go to the grassroots to ascertain what they want. The sensitivity to market sentiments is derived from his own acute observations whereby it is not uncommon for Lim to conduct the survey himself - spending time engaging in chats at the coffee shops with residents there. Lim would go the extra mile to understand the unique local conditions and development potential before purchasing land and devising the property market positioning and pricing including what types of properties would flourish besides determining the built-up sizes of the units. From its operations in Klang, Titijaya shifted to its headquarters in Subang Jaya when it ventured into the property markets there as well as at Ara Damansara, etc. Titijaya launched 3rdNvenue @ Jalan Ampang in Kuala Lumpur
“It was a difficult task as during the construction period, I myself had to drive the lorry to the site. That time, the road was narrow, so it demanded many small lorry trips to transport the building materials,” recalls Lim. Among the other sacrifices were driving the lorry across three states within a single day including to Fraser’s Hill, when the lorry driver couldn’t take on the assignment at the last minute. The difficulty in constructing was amplified by the lack of electricity and water at times. At the height of the 1997 Asian Financial Crisis, when many businessmen backed off from the market, Lim started boldly acquiring several strategic plots of land in the Klang Valley which provided him with new avenues to expand his business. Looking back, the Financial Crisis was a blessing in disguise – being the ultimate unexpected platform which launched him a series of opportunities to accumulate prized land banks at strategic plots of land in the Klang Valley at favourable prices. And, once the economy recovered, Lim was in a stronger position than ever – having laid a strong foundation - to build his real estate empire.
To date, Titijaya has ongoing projects with a total Gross Development Value (GDV) of RM2.3 billion. In 2017, Titijaya launched Phase 1 of its 3rdNvenue @ Jalan Ampang in Kuala Lumpur development with a GDV of RM580 million. Titijaya also launched its H20 development in Ara Damansara comprising four blocks with a GDV of RM916 million and The Shore @ KK in Kota Kinabalu with a GDV of RM575 million. In terms of its long term plans, Titijaya has projects valued at around RM13 billion GDV that is expected to be launched in the next few years which will keep it busy until 2027. Till today, the mass market remains very much part of the developer’s core target market which augurs well for its projects – given the fact that the purchasing power of this niche market has been on the rise. Lim says the market here is big enough, with Malaysia undergoing what he terms as a golden era of doing business although he doesn’t discount the prospect of going international in the future.
Being an astute visionary, he foresaw demand in the affordable housing segment of the market which he focused on after the crisis. True to his acute vision, the single-storey terraced houses he introduced in 1997 was an instant hit among house buyers. In 2001, Titijaya launched its series of competitively priced semi-detached houses in Klang. Three years later, Titijaya launched its first high-rise development, E-Tiara Serviced Apartments in Subang Jaya. In 2007, it also launched its Small offices Home offices (SoHo) project with its First Subang office development launched at Subang Jaya. This is directly in response to what he perceived to be a growing market demand as many opted to start their
Titijaya also launched its H20 development comprising four blocks in Ara Damansara
Feb 2018 •
Poverty Will Not Last 3 Generations The spectacular tale of Tan Sri Dato Lim Soon Peng’s rise from a one-man show business of yesteryears all the way to Titijaya Land Berhad going public on November 27, 2013, has all but inspired Lim to take the company to even greater heights to better its own achievements. Although a primary school drop-out who poverty forced to take on part of the breadwinner role for his family, Lim has never complained – as he took on everything from selling bean sprouts to welding and building his construction business from scratch. Today, Lim has certainly defied all odds and proven that poverty will not last three generations, testament to his uncle’s hopes and profession of faith for the family. Forming the World Lin Chamber of Commerce to foster cooperation and in forging an international business network, he was also responsible for establishing the Malaysian Chinese Women Entrepreneurs Foundation. Lim also champions the Love and Care Programme committed to ending hunger. He shares that his future plan is to join the World Chinese Chamber of Commerce when the time is right. Expressing regret in being unable to finish his primary school education and beyond, this filial gentleman has not forgotten the humble education he received until Standard Five by presenting RM200,000 besides other regular contributions to his alma mater to promote Chinese education. Understanding that education is a luxury for children from poor families and tool for breaking from the shackles of poverty, he launched the tuition lunch aid programme forking out RM20,000 annually for the fourth year now, having known hunger during his school days. Last year, Lim personally handed out RM1,000 to each of the 12 students who had attained at least 3% progress academically. He also donated RM500,000 to his alma mater for the construction of new class rooms, an administrative block and canteen named after his parents. Being in the presence of such an accomplished Entrepreneur, Property Magnate and Tycoon rolled into one was an experience in itself, as a wealth of information descended upon us who were privileged to take in what he divulged on his life’s journey – progressing steadfastly from his primary school education to astounding prosperity in a two-hour long interview translated by his external Public Relations team. One can only look on with respect at the towering achievements of this remarkable man – who has risen in stature against all odds and defied the opposition stacked against him since young to emerge victorious. Reading his biography was an eye opener, as so beautifully exemplified by this Titan of Titjaya who is not only a giant in terms of achievements derived from his sheer efforts and perseverance – but whose care and heart for others, is overflowing with benevolence. Despite the many achievements and accolades bestowed upon him, nothing makes him happier
• Feb 2018
than contributing to the underprivileged as he himself was once in their shoes. Never one to waste food, he takes delight in indulging his employees, security guards and friends with what he partakes of himself and his thoughtful gestures speak of a heart filled with gratitude and sincerity. From the towering success of his public-listed Titijaya today, Lim has certainly overcome the odds and proven to his uncle and relatives that “Poverty Will Not Last Three Generations”. Hailing from an impoverished family, his parents made a humble living by rearing pigs and growing vegetables with Lim being the eldest son in a family of 11 children. And, given his good deeds and heart for the community, it is without a doubt that when he least expects it, fortune and goodwill will flow in abundance to reward in full, this man of humility and integrity, imbued with a different philosophy of giving back to society in his capacity as property developer extraordinaire. Living proof that the impossible is within reach, if only one would stop weighing in on whatever negative circumstances one finds oneself in, his message is - harness the will to succeed and take steadfast action, throwing in persistence and hard work to achieve the impossible dream. Lim rationalises that if he can do it, so can anyone else, given their more favourable life circumstances. Above all, the strength of his character is also proven in how he treats not only his business associates but also other people, his staff and workers with sincerity – a lesson he has imparted to two of his children – Lim Poh Yit and Charmaine Lim Puay Fung who worked their way from the bottom up. As those who know Lim will attest, he continues to treat those around him in the same manner – dealing with them fairly regardless of their wealth or social status, since he himself came from humble beginnings though he now has his title and a thriving business.
Up, Close & Personal with Tan Sri Dato Lim Soon Peng of Titijaya Land Berhad At 63, Tan Sri Dato Lim Soon Peng, who is born in the year of the Goat says that many Entrepreneurs in Malaysia that he is acquainted with also coincidentally are born under the same sign. “In my era, INTI Education Holdings Sdn Bhd Founder and Chairman Tan Yew Sin, Country Heights Holdings Berhad Founder and Executive Chairman Tan Sri Lee Kim Yew and Tropicana Corp Berhad Founder Tan Sri Danny Tan Chee Sing are all born under the sign of the goat,” he shares with a smile. The following is an excerpt of the no-holds barred interview with Lim.
use all their savings to buy a house thus, as a responsible developer, it is our duty to ensure the project will continue to develop until completion without the risk of abandoning the project. The quality of the property is also very important. Advice to young Entrepreneurs? The younger generation can elevate the entire nation as this is the era of the high technology generation. The opportunity to be Entrepreneurs arise from information and technology. The current generation is very different from our previous era. Technologies are shaping society today. Thus, the main principal for Entrepreneurship for the current generation is to embrace the technology in pursuing opportunities. Your thoughts on “Poverty will not last for three generations?” I strongly believe in this. When we were poor, we tended to question why people can be successful and rich. With this, we will be motivated to do more and go all out to be successful. We have to always ensure that poverty will not exist in our family after three generations. This is the key to motivate ourselves. I came from a really poor family. Everyone was poor by that time, and I told myself I cannot be poor anymore, and so I used any available approach to earn money.
Why did you venture into property development? My life started as contractor. When I started to do business, I started as contractor and subsequently, I realised that a contractor and property developer is actually from the same industry so I ventured into property development. The first construction project that I did was the project in Frasers Hill. That time, no one is willing to take up the job. During that time they didn’t have the current roads, and there were a lot of difficulties and hassles in doing construction there. I feel that being a property developer is very meaningful, besides making the profits. Many famous and renowned entrepreneurs get rich and successful from being a property developer. The meaningful part of being a property developer is the ability to provide a shelter for people. It is a “good deeds business”. There is a saying, “Birds need nests to provide a safe place for eggs and young birds to develop, and humans need houses.” This show how important it is to have a house. What is your secret in success? Whatever we do in life will have its difficulties and challenges but how we deal with these issues will determine whether we are successful or not. I strongly believe in not doing something that is bad for people. As long as you stay with this belief, you will be able to solve problems. I strongly hold on the principal of integrity in that there should be no conflict of interest in the things you do, as once you have interest in the dealings, you won’t be so neutral in making the right decisions. This includes the morality in dealing with things. My secret of success is - “Stay true to yourself”. This all depends on how one faces and solves problems. Do the things that people say cannot be done, and always push yourself. What is needed to be successful in this industry? I believe that property developers must take into consideration the importance of a house to the buyers. Some purchasers might
What else do you intend to accomplish? There are three things I want to do and achieve in my life:Firstly, adopt orphans: I thought of the times when I was young, and had no money for education and food. So, I want orphans to receive good care and education. I hope to make a change to their lives. I have adopted over 100 children from my old school. Secondly, I want to provide micro loans to Malaysia Chinese women as many countryside women face the problem of getting loans for doing business and end up borrowing money from loan sharks. This reminds me of the times when I faced the same issue in first starting my business. Without a track record, banks would not lend money. Thus, I set up the Malaysian Chinese Women Entrepreneurs Foundation in order to support them. Thirdly, I want to help the seniors as it reminds me of my grandparents. I lost both of them before I became successful and had no chance to take care of them. But, I have a chance to make a difference in other elderly people’s lives. So, I thought the best way to repay my grandparents is to bring love and nurture over 200 elderly people whom I have adopted. I believe that in treating people well, one will get blessings. What about your next phase of business plans? The next phase of my business plan is to provide business opportunities to the people who live in rural areas that are having a hard time selling their produce and maintaining their quality because of issues of transportation, etc. I want to provide a platform that would link the providers and also buyers because I believe that through improving the life of these people, it will indirectly increase their income and improve the economy. Since logistics is a problem for villagers, what I envisioned is a concept like Uber/Grab, matching the providers with the people who need them. Feb 2018 •
Impact of the General Election on Properties
Will the impending 14th General Elections bring about positive outcomes for the real estate sector or otherwise? Property Insight investigates BY YVONNE YOONG
â€˘ Feb 2018
The General Elections (GE) is the buzzword on the lips of everyone in the industry of late, and for good reason. Notwithstanding the speculation on when it will be held, everyone seems to have an opinion on the GE and its impending impact on the property market. Will it bring about a boost to the property market or will it depress prices further – depending on which party emerges as winner? Or, will the status of the market remain as status quo? The movers and shakers of the real estate market too are abuzz with opinions not spared – as they anticipate the ramifications the GE will have on the current property market.
Managing Director of IJM Land
Director of VPC Alliance Sdn Bhd
Not Much Significant Impact Generally speaking, some uphold the view that the upcoming GE is not anticipated to have too much of a significant impact on the property market as can be seen translated into a general wait-and-see approach to buying properties pending the clarity of business and economic decisions for now, given a general climate of anticipation and uncertainty. “The election result is not expected to have any significant effect on property pries unless there is a drastic change in Government policies post-GE. Prior to the GE14, some businesses making new commercial or industrial investments may defer their decisions whilst some buyers may adopt a wait-and-see attitude for their investment decisions. Once the political landscape is clearer post-GE14, business will return to norm as the election result will provide clarity for their investment decisions as well as the nation’s economic direction and business policies,” opines Edward Chong, Managing Director of IJM Land. “It is also anticipated that there may be some delays in the approval process for new projects due to the transitional period of forming the Government post-election. The demand for residential ‘own use’ properties which are strategically located and priced appropriately will continue to garner demand,” he elaborates.
“We will continue to enhance the value of our developments and nurture community relationships by driving innovation, customer-focus and quality excellence,” he says adding that the property market has been relatively stable with signs of a gradual recovery. Projects that are strategically located with strong value propositions he anticipates will continue to attract buyers with product, pricing and location will continue to be the determining factors behind a project’s performance. Another industry veteran who concurs with this viewpoint is James Wong, Managing Director of VPC Alliance Sdn Bhd who anticipates that the outcome of the GE is not expected to have any serious impact on properties. He reasons that this is because the market factors that are currently affecting the slowdown in the property market will still be there such as oversupply in the property market, affordability issues, difficulties in getting loans and constant wages as well as disposable income remaining flat. Wong anticipates that whichever party wins the GE14, there will not be much changes to the economic policies and direction of the economy.
This in turn, will give confidence for businesses to make informed decisions including IJM Land which remains optimistic about its growth with its focused set of strategic initiatives that have already been established.
“Understandably, many potential buyers are adopting a waitand-see attitude and delaying the purchase of property as the GE is approaching soon. Many housing developers have also slowed down their launches, partly due to the overhang and oversupply (situation) which is also partly due to some uncertainty on the GE14 results. After the GE, whichever party wins, we will still be expecting a stable Government and without much structural changes to the economy.
Post-GE14, he anticipates the property market is expected to be resilient in 2018 with some signs of gradual growth anchored by the country’s relatively young population and continued strong economic growth.
“The general relief that the GE will finally be over may result in more potential buyers entering the property market. Hence, in 2018, we expect more property transactions in 2017 but in view of the oversupply, we still expect the property market in Feb 2018 •
2018 to remain flat and sluggish without much changes in the movements of property prices,” he adds. Wong observes that owing to the huge oversupply, the Government has imposed a freeze on property prices at RM1 million and above per unit. “This will help to reduce the oversupply in the next two to three years and hopefully, for demand to catch up and help stabilise property prices. We do not anticipate the property market in 2018 to be better than 2017, although the economic growth rate will be better. Depending on when the GE will take place, the longer the delay, the status quo in the property market will remain.” Wong generally maintains that the property market has bottomed out therefore in 2018, the property market will still be flat but property prices will be expected to trend upwards from 2019. Commenting on affordable housing, the main issue is not on the demand side as there is demand for affordable housing is affordability as most of the affordable housing that is being built is more than 250,000 and whereas based on Khazanah Research Institute, housing affordability is a function of both house prices and income. “At the national level, meridian house prices were 4.4 times median annual household income in 2014. According to global standards, this signifies a ‘seriously unaffordable’ housing market. An ‘affordable’ market should have a ‘median multiple’. (Median house prices as a multiple of median annual household income) of 3.0 times,” he adds commenting that when it comes to luxurious residential developments, among the upper middle income and high income property clientele, there is still a lot of surplus cash for purchasing the high upmarket housing segment.
Uncertainty Affecting Investors’ Sentiments On the opposite side of the trajectory, prior to GE14, others believe that the sense of uncertainty may have also affected investors’ sentiments to some degree which is quite normal due to the political situation being ambivalent coupled by a weakening economy and the fluctuating depreciation of the currency. Having said that, they also believe that once GE14 is over, the direction of the country’s leadership will be clearer. Sr Adzman Shah Mohd Ariffin, Chief Executive Officer/Chief Real Estate Consultant of ExaStrata Solutions Sdn Bhd is an industry veteran who subscribes to this school of thought as he expects post GE14 to encourage investors as well as homebuyers to return to the market with renewed enthusiasm. “The Government post-GE14 will need to address the issues affecting investor sentiment and come up with more initiatives to boost market activities,” he says.
• Feb 2018
Sr Adzman Shah Mohd Ariffin CEO/Chief Real Estate Consultant ExaStrata Solutions Sdn Bhd
“The GE14 will provide certainty in the country’s leadership amidst the recent negative reporting involving Government Officials and Government Linked Corporations (GLCs). GE14 will also at the same time result in changes within the Government line up which will require a few months to stabilise,” he envisions adding that this will also result in delays in approvals and may even involve change in policies. Foreseeing that it will take a bit of time for the political situation to stabilise, he is of the view that the first half of 2018 (1H18) will see property prices “staying as they are”. However, if the GE14 results bring about drastic change in the Government whether at State of Federal level, he speculates that the market will need more time to stabilise before picking up again later in the second half of 2018 (2H18). Although the property market for 2018 remains to be seen, he adds that the GE14 and the festive periods will affect the buying mood with Chinese New Year being in February while Ramadhan or Aidil Fitri will take place in May and June respectively. “Any positive movements may only occur later in the second half once the dust has settled after GE14,” he summarises adding that the price for older properties in the secondary market has been seen to have adjusted lower while newly launched properties are facing challenges presently in terms of take up. “This however mainly affects developers who have poor track record and overpriced projects. The affordable housing segment is at risk of oversupply in 2018 due to completion of Perumahan Penjawat Awam 1Malaysia (PPA1M), Rumah Wilayah Persekutuan (RumahWIP), Selangorku and private schemes. “Luxury properties are selectively improving presently with those with high profile inhabitants being sought after as those which are now lower in asking price compared to 2 years ago. Location also is a factor being considered by purchasers whereby those properties closer to public transportation fare better,” he concludes.
Brian Koh Executive Director Invstment/ Research and Consulting Nawawi Tie Leung Property
Koh doesn’t envision 2018 to be exactly be a better year for real estate though, despite what he terms as “the somewhat good Gross Domestic Product (GDP) figures last year” and what is expected for this year as well - unless there is a significant adjustment to current pricing. As such, he says that at this current level, there is really no strong incentive to buy more properties.
Consultants Sdn Bhd
Psychological Changes Affecting the Property Market As much as mindsets will impact the end result of the property market, decisions governed by psychological rather than economic factors too can continue to affect real estate in tangible ways. Brian Koh, Executive Director Investment/Research and Consulting of Nawawi Tie Leung Property Consultants Sdn Bhd is one who believes that the property market will have an impact in more psychological than economic ways, in as much as “markets hate uncertainties”. Thus, according to his rationale, buyers will likely delay any major decisions until the later part of 2018 if they need to enter the market. “Of course, if a new Pakatan Harapan Government comes into place, it may even take a longer time for the market to settle in so there will be some wait and see as the previous Government’s projects get shelved or delayed with new policies and stability of the coalition, etc. coming into play. If Pakatan Harapan wins credibly and once it can provide confidence and stability in a reformist Government and general buying in from the rest, there could be a bounce back as early as 2019,” speculates Koh. Thus, he rationalises that any buying decision will be delayed until a clearer political picture emerges especially when it is for investment or business expansion. And, given that generally most sectors are over supplied, the “market needs to work itself over the excess”. “This entails a period of consolidation over one to two years or more for certain sector such as commercial offices. This mean risks of further decline in pricing. Depending on who wins, there might be more backlash in policy term on Mainland Chinese buyers or developers,” he adds.
“The market will take some time to bottom up. The impact of the GE can already be seen in the budget allocation for affordable housing for the last two years – more allocations and impetus through various schemes introduced. There are no current good stories to drive the luxury segment and foreigners are still constrained with no strong reason to buy unless they want to catch the stronger ringgit momentum,” analyses Koh.
Erick Kho Associate Director of IQI Global & Immediate Past President Malaysian Institute of Estate Agents (MIEA) 16th President (2015 – 2017)
Property Prices to Stablise and Increase In as much as there are plenty of talks about the uncertainty evading the property market, property prices, according to a certain spectrum of the market, will see property prices stabilizing and possibly increasing later. “Before the GE, there would be too much politicking or speculations that will put off a lot of purchases while business investments tend to be on hold henceforth the oversupply situation will remain high. After the GE, we hope that the new Government will work towards taking initiatives including election promises to bring much needed confidence to the investors,” says Erick Koh, Immediate Past President of the Malaysian Institute of Estate Agents (MIEA) 16th President (2015 – 2017) “Property prices are expected to be stable now, while there is a bottoming out for the luxury properties sector. This is expected to increase after the GE with market confidence that will come with fresh mandate for the elected Government,” he adds.
Feb 2018 •
In fact, he goes so far as to say that prices are expected to increase as the inflationary factors of rising costs of many products will influence the construction costs. “It is hoped that the Elected Government will bring about confidence and work on strengthening the Ringgit. Demand for real estate along the Mass Rapid Transit (MRT) lines are expected to remain good which applies also to prime locations such as the Central Business District (CBD) of Federal Territory areas for example, South Bangsar, etc. that will be places to watch out for. “After almost three years of slow down, many projects have gone through a repositioning or redesign to build units that meet market demand. In view of the increasing costs of land and buildings, smaller building units are expected to be launched, thus reducing the overall value of properties for sale,” adds Koh saying that the liquidity situation is still a problem with difficulties arising in procuring loans with up to 30% - 40% comprising the loan rejection rate. “Increased construction costs coupled by the weak Ringgit are expected to have an impact on affordable housing prices. The Government needs to make available cheaper land with reduced compliance costs to help subsidise developers. Luxury properties will be under a lot of pressure as many condominiums are breaching the RM1 million selling price but rental return remain very low at 2.5% - 3.5% which is not a good sign for investors with little hope of price appreciation. Those units selling below RM1 million will see strong demand regardless of the built-up sizes which units with Guaranteed Rental Return (GRR) and creative final product packaging with complete fully furnished units will be in good demand.”
Silver Lining and The Feel Good Factor On the more optimistic side, certain quarters believe that the immediate impact pertaining to the upcoming GE14 will see a major stir in the economy, as people would have the “feel good factor” providing them the impetus to go shopping, which also entails shopping for properties. “Usually, during the GE, both the Government and opposition parties would make various promises and offers in their manifesto to the people in order to win more votes, and most of the time, this involves the property sector,” says Eric Yong, Group Managing Director of Crest Builder Holdings Berhad. “There are always more affordable housing on offer with the ruling Government’s side having created various schemes such as the PR1MA, (Perumahan Rakyat 1Malaysia) PPA1M (Perumahan Penjawat Awam 1Malaysia), Dasar Rumah
• Feb 2018
Eric Yong Group Managing Director Crest Builder Holdings Berhad
Wilayah Persekutuan (RUMAWIP), etc. while the Selangor State Government has also created Rumah Selangorku,” he enthuses commenting on the impact of the GE14 and its effect on properties. On the flip side though, he admits that the biggest concerns however, are that these incentives could potentially create an oversupply situation for affordable housing, especially in the rural areas. “As it is, property prices has been rather stable, and while it may seem like the higher end property prices are hovering downwards, I believe the prices will hover back upwards towards the second half of the year. The current situation is seen as a form of minor correction and also a knee-jerk reaction, and will soon correct itself. “The first half w ill still see some of the weak 2017 sentiments, and it will improve itself towards second half of the year. We have seen project rollouts coming out more, and I foresee more projects will continue in the later part of the year. This is generally the market trend and also characterises Malaysian developers and their ‘Malaysia Boleh’ mentality whereby local developers generally learn to adapt to current conditions much faster. Hence, we are not so affected by global market trends as much as our neighboring countries,” adds Yong. He believes that the market has bottomed out for a while now and will see a pick-up this year which will likely be more obvious in the second half of 2018 after the GE14. Luxury properties meanwhile he says, will see a rise in prices and demand as well, with this being the ongoing trend for the last six months and thereafter, he foresee the real estate market will become stronger.
Government Linked Companies (GLC) linked developments such as Bukit Bintang City Center, Warisan Merdeka Tower and Tun Razak Exchange (TRX), the landscape of Malaysia’s major city, Kuala Lumpur will change but the benefit may not be felt by Malaysians,” he asserts.
Khairul Anuar Shaharudin Partner/Lawyer Khairul, Suhaila & Hazlina
Status Quo and More for Real Estate Then, there are those who foresee that the impending GE14, as well as its effect post-GE, will be a mixed bag of status quo and more. Khairul Anuar Shaharudin, Partner or Lawyer of Khairul, Suhaila & Hazlina believes that there will not be much impact in terms of GE on properties as the housing situation has been addressed by the ruling and opposition government equally at the Federal and State level. “Affordable housing soundbites are just soundbites which do not solve the housing problem. The houses are not the problem but people can’t just afford the exorbitant prices of houses. We will also have affordable housing glut if a registry of houses are not properly maintained or adhered to. NAPIC is the institution that should lead the way by giving them more bites. “The pros of the upcoming GE14 is the immediate feel good factor and more public housing schemes as more foreign direct investment will come in. The cons can be more of the same, even if the opposition can make a dent at the Federal level as well as unbridled and uncontrolled launches of more of the same type of properties,” he says.
He anticipates there will be more changes on the horizon. “The market will decline further, as Kuala Lumpur will move further into Greater KL territory with Serenia City by Sime Darby, KWASA by Kwasa Land and Rawang area by Gamuda and others with the completion of the Mass Rapid Transit (MRT) and more interchanges from PLUS highways. “Affordable housing will be pushed further towards these areas including Seremban, Rawang and it may even pushed to Ipoh, Genting (Bentong/Bukit Tinggi) and even Melaka with the advance of technology (fast train). As for luxury properties, a new campaign is needed to promote such type of properties which should be spearheaded by a government agency in selected foreign countries. Malaysia is already known as a great place to retire and that should be a marketing ploy.”
Conclusion In summary, the GE may altogether herald subtle and more obvious changes that will impact the property market but much remains to be seen as to how this will all pan out in the end. One thing’s for sure, the market waits with bated breath as to the impact of the upcoming GE not only on the property scene, but the overall effect this will have on the market overall as a whole which in turn, will have a bearing on the property market.
Khairul anticipates that before the elections, there will be a prime pumping of contracts and after it prices of properties will start to shoot up but there will be no to less takers. “Prices of properties will not stabilise because of the GE but it will be glossed over by the feel good factor. The hammer will fall in certain areas such as around KLCC and Iskandar Malaysia but the Government of the day will again save the day. Transit Oriented Developments (TODs) will be a main area to look at with East Coast Rail Line (ECRL) and High Speed Rail (HSR) coming up soon. “This year will further make property market worse even with General Election but a win for Barisan Nasional will help the property market looks good for awhile but depending on the
Feb 2018 •
Sharing Work Space According to Harvard Business Review, coworking space is defined as membership-based workspaces where diverse groups of freelancers, remote workers, and other independent professionals work together in a shared, communal setting. Chargespot states that coworking spaces are essentially shared workspaces. They offer affordable office space for those looking to escape the isolation of a home office or coffee shop.
While it might still be a relatively new concept in Malaysia, coworking space has been thriving in other developed countries. What makes coworking space so special? What is so cool about sharing work space with people whom you don’t really work with? One of the reasons is because these people who use coworking spaces see their work as purposeful. They don’t feel as if they have to conform to the company’s space and they feel a stronger sense of identity since they are working alongside many types of people at the coworking space. They are also able to help each other out seeing as people who share the work space usually come from different backgrounds. It is the culture or rather, norm, to lend a hand.
These shared workspaces offer a suite of office-like amenities such as hot-desks, private meeting rooms, kitchens, coffee and more. Often, they also offer a community. Occupants typically are freelancers, entrepreneurs, start-ups and small teams who want to take advantage of a flexible space.
Another reason would be that they believe that there is more job control. They can decide when they want to go to work, how many hours they want to clock in; they are more in control of the amount of time they spend doing work. It’s almost like going to the gym. You paid for the gym pass, and you can choose to work out at any time of the day you want, and you choose the what you want to achieve for the day.
In addition to culture, cost is another big draw. One of the advantages of these spaces is the ability to rent out only what you need vs an entire private office space, which can be costly. Through various membership based models, costs vary and allow for flexibility. These include options for daily fees or monthly fees. Membership costs also differ based on whether you use a shared desk or want a dedicated one.
Lastly, people feel that they belong to a greater community. Although it is not compulsory for people to interact with each other, but it creates a sense of belonging where everyone can choose to discuss business with anyone, or just choose to be alone in some corner. It seems like coworking space just might take off in Malaysia. So let’s take a look at the top four coworking space in the country.
1. UPPERCASE Uppercase is a collaborative workspace located within a repurposed commercial printing factory in Bangsar. In fact, this printing heritage is how they got their name. This coworking space is in the loft of the 64-year-old factory – a 6,000 sq. ft. open space with an eclectic aesthetic that combines repurposed wood, concrete, and steel. With plenty of natural light and indoor plants, it’s a creative space designed to inspire and help people focus.
Photo courtesy of uppercase.asia
• Feb 2018
This cool space offers in-house facilities, connectivity, community, food and beverage belt and a pocket park. Don’t know what that is? You have to check out the place then. With monthly fees between RM96 to RM4,250 per month for condensed plan or team rooms respectively, your membership will also provide you with exclusive access to Uppercase’s speciality curated programmes. Come for free or discounted events, workshops and classes. Make new connections through these programmes to enrich your journey.
Winner of the 2017 Malaysia Rice Bowl Startup Awards for Best Coworking Space Malaysia, WORQ is aiming to create the largest and most productive coworking community by taking care of all your workplace needs and facilitating deeper connection. Located on Level 3A of Glo Damansara Mall, TTDI, WORQ is connected to the TTDI MRT Station, close to Tropicana City Mall and next to Damansara Specialist Hospital.
Currently, CO3 Social Office is Malaysia’s largest and leading co-working space. It is located next to IOI Mall in Puchong. Built on the core values of COnnectivity, COllaboration, and COmmunity, CO3 brings social networking into your daily living. This is where fun is infused into everyday work, personal growth is matched with team spirit, and endless opportunities are right at your fingertips within the CO3 ecosystem.
It offers members access to the WORQ network, events and services, a shared workspace in a common area, and an assigned space in an enclosed office shared with other members. Membership fees can range between RM60 per year for the Lite Membership to RM500 per person per month for a private suite.
Never thought of working in an airplane? Well, at CO3, you could, almost. Priced between RM60 to RM1,000 per month, you have 24/7 access to the space, fat-pipe WiFi, honour system for food and drinks, arcade room, business class printers and scanners, and sleeping pods to name a few.
Photo courtesy of co3.co Photos courtesy of worq.space
4. COLONY SPACE Colony Space takes pride in providing the coworking and serviced office space where you don’t have to choose between a life and a job. Colony Space is more than just a physical space – it is a nexus between business and pleasure. Nestled between KLCC and Pavilion, you can eat, play, work, and rest. Strike the perfect balance with facilities tailor-made for your every want and need in the co-working space of your dreams. The purpose at Colony is to raise the standards of what working should be like in the region. According to the site, Colony states that we don’t have to sacrifice having a life for a job. We can have both. It wants to transform the work experience with beautiful serviced office spaces, and world-class amenities; creating the office of the future. Their mission is to revolutionise the work experience so that a work life balance can be achieved, and to aid in employee retention with the provision of desirable work spaces.
Photos courtesy of colony.work
With day pass priced at RM60 per day to a private office priced at RM2,088 per month, you are pretty spoilt for choice at Colony Space.
Feb 2018 •
MARKET REPORT 2018
Recovery or Bust? Is Malaysia’s property market going through recovery? Or are we going into another year of downturn? Foo Gee Jen, Managing Director of CBRE-WTW weighs in with his thoughts in this PI exclusive.
The property market in any part of the world is cyclical. For Malaysia however, it’s a 10-year cycle. Every 10 years, the Malaysian property market will experience its fair share of market downturns and upcycles affecting the volume of units launched in the market and the price growth of various types of real estate—residential, office and industrial.
The government has also voiced equal concern over the 140 new shopping complexes targeted for completion by 2021. This will increase existing supply in the Klang Valley, Penang and Iskandar Malaysia by 70%, 40% and 150% respectively, amid vacancy rates of 13.4%, 30.6% and 24.2% as at 1Q2017 the report states.
According to a recent report published by property consulting firm CBRE-WTW (Williams, Talhar and Wong), the property market remained flat following the third quarter of 2017.
A freeze on office and retail developments has also been recommended by the government similar to the freeze on luxury properties.
It further adds that two sectors looking to appear less affected by an impending glut are hotel/tourism and industrial properties. However, it cautions, this is not a signal for investors or developers to rush into these two sectors which could potentially cause a spillover effect to all property sectors in the market.
For 2017, the report states that the residential sector continued to dominate the overall market with 62.1% of market share in volume and 48.7% in value. Slower absorption rates have caused an increase in unsold residential units (completed and under construction), estimated at 146,497 units as at 2Q2017 compared to the historical average of 72,000 units per year between 2004 and 2016. Housing starts were up 16% from the first half of 2016 (1H2016) totalling 67,662 units in 1H2017. In the Klang Valley, office vacancy rates reported by NAPIC are at 23.6% as at 1Q2017 and with incoming supply of 38 million square feet, vacancy rates could climb to 32% by 2021. In other words, there might likely be a vacancy of 1 in 3 offices.
According to the report by CBRE-WTW, the overall Klang Valley residential market moderated in 2017 with more completions but slowed down in transaction activity and new launches. The slow down continued into first quarter of 2017 with increases in overhang and lower sales performance, it is anticipated a moderating growth throughout 2017. As at 3Q2017, 129,841 transactions with a total value of RM137.33 billion were recorded. More than 21% of the transactions involved residential properties priced between RM250,000 and RM500,000, this reflected a decline of 9% quarter-on-quarter. Prices for residential property continued to grow moderately despite the current market glut, evidenced by a slower growth of 6.6% and 5.8% in both Kuala Lumpur and Selangor House Price Index.
Government’s implementation in curbing speculations and lending measures by Bank Negara showed a positive outcome in ensuring sustainable price growth.
• Feb 2018
In 3Q2017, Klang Valley recorded 6,022 transactions of shops/ commercial lots worth RM10.55 billion, indicating a decline of 23% of total transactions compared to the previous year. Of the total, about 23% or 1,376 transactions were two to 3-storey shop-offices worth RM1.94 billion. In terms of office, Kuala Lumpur is poised to continue attracting foreign investments and become a choice of location for multinational companies (MNCs), lending support to demand for office space. In 3Q2017, Klang Valley recorded a total of 54,149 rooms by 187 hotels, an increase of 4% or 2,222 rooms year-on-year. In terms of new completions, a total of 1,614 rooms were recorded in the first three quarters of 2017 through the opening of seven hotels, examples are Stripes Hotel KL, Sunway Velocity, Sofitel Hotel Damansara and Element Kuala Lumpur.
In Other Regions For Penang, as the overall market activity continued to trend downwards in 2017, the bottoming of the Penang property market is expected on the horizon. It is anticipated to remain subdued but resilient in 2018. The aftermath impact of the storm and flood incident to the property market would be short term. Following the nationwide freeze directed by the cabinet, developers having land banks at the eastern portion of Penang Island are expected to be more impacted. (However, as of December 2017, the government has softened its stance on the freeze.) Since 2015, the overall activity in the Penang property market had continued on a downtrend. According to the recently released statistics of NAPIC, a total of 12,174 properties were transacted in Penang state up to 3Q2017, representing contractions of 10.1% and 25.1% as compared to January to September 2016 and January to September 2015, respectively. Compared with January to September 2014 (before the downturn), the total number of overall property transactions in January to September 2017 had reduced 34.8%. The total value of properties transacted in Penang state was approximately RM7.87 billion in January to September 2017, higher 14.8% as compared to January to September 2016. Compared with January to September 2015 and January to September 2014, the total value of overall property transactions in January to September 2017 had dropped 10.7% and 24.1% respectively. The downtrend in number and value of property transactions was prevalent almost across the board of various property sectors.
The property market is anticipated to remain generally subdued in 2018. This is in consideration of the imbalances of supply and demand in certain property sectors and the prevailing rising cost of living that erode purchasing power. However, it is expected to be resilient, to be supported by the trickle-down effect of the gradual recovery in the national economy. Bank Negara Malaysia recently announced the countryâ€™s latest economic growth at a commendable 6.2% in the third quarter of 2017, the fastest since June 2014. In addition, as reported by the Malaysian Rating Corporation Berhad, the household income has grown, albeit at a slower pace. There are also various initiatives proposed in Budget 2018, address the cost of living and affordable housing issues, and boost other major economic sectors. In early November 2017, Penang and certain parts of Kedah and Perak states were affected by one of the worst storms and floods in recent history. A major portion of residential areas in low lying areas and the inner city of Georgetown were inundated. There were also landslides at certain hill slopes. Fortunately, major industrial parks and commercial centres were generally not affected. Following the incident, prospective purchasers and tenants would refrain from considering properties affected by the recent flood and landslide. Banks would also be more cautious on flood-prone and landslide areas, and may restrain extending loans which are to be secured by properties in such areas. However, the aftermath impact to the property market is anticipated to be short term. The recent weather havoc was caused by the usual inter-monsoon season exacerbated by the isolated incident of the tail-end effect of Doksuri Typhoon, which impacted mostly the Philippines and Vietnam. Furthermore, the impact would also not be long lasting with remedial actions taken by the governments and relevant authorities. In view of Johor, its Gross Domestic Product growth was 5.7% in 2016. In Johor state, the services and manufacturing sectors outperformed other sectors, due to encouraging investments. Johor recorded the highest domestic direct investment approved in the manufacturing sector, amounting to RM15.22 billion, while foreign direct investment approved was RM11.20 billion. Johor also recorded the highest investment in the manufacturing sector in 2016, totaling RM26.41 billion or 45.15% of total investments in Malaysia. The investment trend in Johor for expansion of projects also remained healthy. The sources of investments in Iskandar Malaysia comprise a balance mix of foreign and local investors. Outside Iskandar Malaysia, the bulk of investments are in the Pengarang Integrated Petroleum Complex.
Feb 2018 â€˘
MARKET REPORT 2018
Moving into 2018 The Klang Valley residential market in 2018 is expected to be uneventful while for Purpose-Built Offices (PBO), a huge incoming supply is expected to be entering the market and slow commodity prices may pressure the occupancy down further as the retail marketâ€™s reshaping of tenant mix is expected to continue in the next few years. There is still plenty to look forward to in the tourism and hotel industry while for the industrial market, business activity evolution spanning the manufacturing and services sector is slowly transforming the demand for industrial production and inventory spaces. In the Iskandar Malaysia, there is a downside in residential for 2017 which is expected to stabilise in 2018 accompanied by the stabilisation of the shop office market and the retail sector. However, the hotel and industrial market in Iskandar Malaysia continues to improve moving into 2018 and further.
â€˘ Feb 2018
The Kuala Lumpur-Singapore High-Speed Rail remains the main catalyst to drive the market as well as the Rapid Transit System (RTS) linking Johor Bahru to Singapore. The RTS is expected to accommodate 30,000 passengers each day with 25% of those passengers being Singaporean. This will create a positive impact on the Johor property market with an expected property boom sometime in the future. The Penang market will prove to be subdued in 2018 with expectations of a recovery in the near future supported by a trickle-down effect from the gradual recovery in the national economy. There was a general downtrend in the Penang property market in 2017 which will spill over into 2018 in terms of property values and transactions translating to a bottoming of the Penang property market expected on the horizon. The impact of the storm and floods in Penang was prevalent albeit short-term. According to the report, this will only affect developers with land banks in the Eastern portion of Penang which are usually planned for high-rise luxury residential projects and other major commercial developments. Despite this, with the abundant of units being launched and constructed in the past three to five years, there will be more choices of residential units in the market which will lead to overhanging products to be gradually taken up. Whether or not we are at a downturn remains to be seen, however, investors and stakeholders are expected to prepare themselves for the upcoming turbulence. Foo says that moving into 2018, a lot of good has emerged from the flattish market in 2017 even though this new year doesn’t seem to be that exciting.
The only challenge he says, is how to fill up the vacant units. When asked about his opinion on the recovering market, Foo says that the outlook is looking good. “The current market is bolstered by the improving infrastructure amid the ease of doing business as well as the cross-border relations with our neighbours from Singapore,” he says. “The fundamentals are still there. Our property market is still good. Bank Negara has played a part in moderating the property market with their cooling measures and we expect the impact of the flattish market to not be so bad. The market just needs to take a bit of time to moderate itself.” Despite the flattish market expected in 2018, Foo assures us a bubble will not happen. “We have not seen panic selling except in some parts of Cyberjaya but the overall market may not be so quick to panic sell. Take up rates are strong and there is still a demand in property.” He reassures us that there are some choice products to look at and that investors should look towards the industrial segment of the market. “The industrial market is very much underrated. It is actually showing strong growth driven by the public sectors demand for industrial space.” When asked how stakeholders can assist with the market recovery, Foo adds that the country needs to improve infrastructure. “Infrastructure need to move as fast as real estate is moving. We need to introduce more rail services and bus services and reduce the number of cars on the road. The key here is reasonable connectivity,” he says.
“Overall volume across the different property sectors have improved, supported by developers re-strategising and launching products that meet the need of the market instead of for profit-chasing purposes.”
Regardless of whether the Malaysian property market moving towards a recovery, what is certain however, is that we can continue to expect further market turbulence in 2018.
Feb 2018 •
MARKET REPORT 2018
PROPERTY OVERVIEW MAIN MARKETS ISKANDAR MALAYSIA Summary of Gross Domestic Product, 2012 - 2016
Johor Year 2016 2015 2014 2013 2012
116,769 106,709 99,997 91,289 88,029
Year 2016 2015 2014 2013 2012
GDP at Current Prices (RM mil.)
Year 2016 2015 2014 2013 2012
GDP at Constant 2010 Prices (RM mil.)
Year 2016 2015 2014 2013 2012
5.7% 5.6% 6.5% 4.7% 6.5% GDP Growth (%)
Year 2016 2015 2014 2013 2012
3.65% 3.61% 3.56% 3.47% 3.46% Population (mil.)
104,480 98,880 93,665 87,974 84,050
Average Annual Population Growth Rate (%)
Year 2016 2015 2014 2013 2012
2.6 2.8 3.1 Unemployment Rate
Source: DOSM, CBRE | WTW Research
â€¢ Feb 2018
PROPERTY MARKET INDICATORS All Sectors
High Rise Purpose-built Residential Office
MAIN MARKET Klang Valley Penang Johor Bahru Kota Kinabalu Kuching
REGIONS NORTHERN REGION Alor Setar Ipoh SOUTHERN REGION Seremban Melaka Batu Pahat EAST COAST Kota Bharu Kuala Terengganu Kuatan SABAH Tawau Lahad Datu Sandakan Labuan
SARAWAK Bintulu Miri Sibu
Black arrows = Moderating Green arrows (up) = Increase Red arrows (down) = Decrease
Feb 2018 •
HSR: Carrying The Property Market Forward
When the Kuala Lumpur-Singapore High Speed Rail (HSR) was announced by Malaysian Prime Minister Dato’ Sri Najib Tun Razak and Singapore Prime Minister Lee Hsien Loong in 2014, market analysts across various segments of the economy rejoiced. This meant that the HSR would become one of the main catalysts to drive the market moving forward. Once operational, it would also mean ease of doing business, better cross-border relationships with our neighbours Singapore as well as an abundance of real estate opportunities along the HSR lines.
BANDAR MALAYSIA BANGI-PUTRAJAYA SEREMBAN
MELAKA MUAR BATU PAHAT
LEGEND HSR Aligment
KTM North-South Expressway Customs, Immigration & Quarantine
Expected to be completed in 2026, it will translate to a more synergistic relationship between Kuala Lumpur and Singapore and the overall growth of the region upon completion. The proposed stations will be located in Bandar Malaysia, Kuala Lumpur; Bangi, Selangor; Putrajaya, Selangor; Seremban, Negeri Sembilan; Melaka; Muar, Johor; Batu Pahat, Johor; and Iskandar Puteri, Johor.
What does this all mean? According to Malaysian real estate consultant, Zerin Properties, the HSR is expected to play a big role in Malaysia’s transformation plan. “Development of the HSR, which will cut travel time to a mere 90 minutes from KL to Singapore via six cities in Malaysia, will lead to numerous positive impacts and will become a growth catalyst to the local property market at its proposed station locations,” says Zerin Properties Chief Executive Offi cer Previndran Singhe. “The extent of the growth, however, will differ according to the stations’ locality due to infl uencing factors such as magnitude of improvement to existing accessibility and connectivity, local economic profile, opportunities for future growth (i.e. land bank availability and land use planning) and supply and demand dynamics,” he adds.
• Feb 2018
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Previndran continues that as per the norm in international railway projects, Bandar Malaysia will see the most prominent growth as the terminus location of HSR. Bandar Malaysia, a mixed-use urban development, is set to become the next major transportation hub and will serve as Kuala Lumpur’s gateway to Singapore with excellent connectivity to other parts of Greater KL via MRT lines 2 and 3, KTM, ERL, and future access to major highway networks. He adds that the location of the terminal station in Bandar Malaysia, which is only 7km away from Kuala Lumpur City Centre, will result in multiplier effect on other mega developments such as Tun Razak Exchange and Bukit Bintang City Centre. KLCC property market and Taman Desa (located within close proximity to Bandar Malaysia) will see growth in property values and rental yield as a result of increased demand for housings. This would augur well in addressing the oversupply situation in Kuala Lumpur’s high-end condominium market. Moreover, it will also improve demand for offi ce spaces and benefit tourism and retail sectors in Klang Valley due to tourist influx from Singapore (Singaporeans and foreigners alike).
sectors.” and wellness, education hub, hospitality, retail and office markets such as development of retirement villages, healthcare station is also anticipated to create opportunities in other niche homes from Singaporeans and expats, HSR Iskandar Puteri commercial areas.to benefit from increased demand for cheaper which is expected will encourage property developments newfrom neighbourhoods and on surrounding market.of Apart residential market services, improve connectivity and is locatedif2 materialised, minutes’ awaywill is agreatly testament to the HSR’s impact connection to Putrajaya Sentral Cyberjayavillas via which tram Melia Residence and Leisure Farm and resort-styled village homes on Malay reserve plots. The proposed Brisk sales of residential productsland in Gerbang Nusajaya i.e. in gentrification of the are proximity presentlytooccupied by considering the size of itsarea landwhich bank and Singapore. Precinct next toPuteri Kampung Abu Bakar will result will house14, Iskandar HSR station, is theBaginda, biggest benefi ciary The proposed location developer of Bangi-Putrajaya station in He adds, “UEM Sunrise, of Gerbang HSR Nusajaya which
Melaka Golf Club and Baba Nyonya Resort, to name a few. Previndran. IOI Properties, Taman Tasik Utama by MTD Capital Bhd, Tiara stations in order to capitalise on development potential,” says namely Bukit Katil Development by of Encorp and Felda, IOI Citythe by HSR stations will result in change land use surrounding Melaka. It willasalso benefit various and developments land as well development land.townships It is expected that proposed station is anticipated to boost tourism andmostly hospitality industry in These transit stations are surrounded by agricultural Located in Durian Tunggal, town, Ayer Keroh developers with land banks16km at orfrom nearMelaka the proposed stations. market in these areas will be mostly driven by major property of ciaries. “Asbenefi for the HSR transit stations, the growth of local property stations, on the other hand, will likely to benefit a larger share The proposed locations of and Ayerforeigners Keroh andalike). Bangi-Putrajaya HSR Singapore (Singaporeans and retail sectors in Klang Valley due to tourist influx from amenities and a clubhouse. will also improve demand for office spaces and benefit tourism residential areas, high-end shopping condominium centres, schools, various public in Kuala Lumpur’s market. Moreover, it Bhd 2006.augur Pura Kencana spans 8,000the acres and will comprise This in would well in addressing oversupply situation Kencana in yield Sri Gading, a project launched by Genting and rental as a result of increased demand forPlantations housings. station is to proposed to be within Gentingvalues Pura proximity Bandar Malaysia) willthe seetownship growth inof property with banksmarket near Batu station. Thewithin Batu Pahat KLCCland property andPahat TamanHSR Desa (located close Genting and Johor the major such as Plantation Tun RazakBhd Exchange and Corp Bukitare Bintang City players Centre. will result in multiplier effect on other mega developments improved connectivity. Malaysia, which is only 7km away from Kuala Lumpur City Centre, are intended actlocation as catalyst forterminal the developments He adds that tothe of the station in through Bandar areas and residential areas. Locations of these HSR stations three universities, highway networks. student village, business park, commercial Universiti Pagoh is an comprising KL via MRT lines 2Johor. and 3, KTM, ERL,education and futurehub access to major dBandar Iskandar Puteri, based education and research and specialised services while Singapore with excellent connectivity to other parts of Greater Selangor; Seremban, Negeri Sembilan; Melaka; Muar, use planning) and supply andmanufacturing, demand area focusing on and high-tech tourism, skilltransportation hub serve as KualaKuala Lumpur’s gateway to ations will be located in will Bandar Malaysia, Lumpur; ortunities futuredevelopment, growth (i.e. land bank MVV is aforurban public-private development mixed-use is set toeconomic become the next major Singapore and the overallintegrated growth of the region upon sting accessibility and connectivity, Vision (MVV) and Universiti Pagoh respectively. growth as terminus oflocal HSR. Bandar Malaysia, a 2026, itValley willthe translate to Bandar alocation more synergistic relationship o influencing factors such as magnitude within Sime Darby’s development areas as prominent Malaysian railway projects, Bandar Malaysia will seeknown the most wth, however, will differthat according tothe the Similarly, hecontinues adds, and Muar HSR stations are located Previndran as per norm in international opportunities alongSeremban the HSR lines. r relationships with our neighbours Singapore as well as indran Singhe. . Once operational, it would also mean ease of doing locations,” says Zerin Properties Chief e HSR would become one of the main catalysts to drive catalyst to the local property market at arket analysts across various segments of the economy l lead to numerous positive impacts and ato’ Sri Najib Tun Razak and Singapore Prime Minister 90 minutes from KL to Singapore via six Singapore High Speed Rail (HSR) was announced by “Development of the HSR, which will cut s expected to play a big role in Malaysia’s ysian real estate consultant, Zerin
The Property Market Forward
is all mean?
“As for the HSR transit stations, the growth of local property market in these areas will be mostly driven by major property developers with land banks at or near the proposed stations. These transit stations are surrounded mostly by agricultural land as well as development land. It is expected that proposed HSR stations will result in change of land use surrounding the stations in order to capitalise on development potential,” says Previndran. He adds, “UEM Sunrise, developer of Gerbang Nusajaya which will house Iskandar Puteri HSR station, is the biggest beneficiary considering the size of its land bank and proximity to Singapore. Brisk sales of residential products in Gerbang Nusajaya i.e. Melia Residence and Leisure Farm resort-styled villas which is located 2 minutes’ away is a testament to the HSR’s impact on surrounding property market. Apart from residential market which is expected to benefit from increased demand for cheaper homes from Singaporeans and expats, HSR Iskandar Puteri station is also anticipated to create opportunities in other niche markets such as development of retirement villages, healthcare and wellness, education hub, hospitality, retail and office sectors.”
Similarly, he adds, Seremban and Muar HSR stations are located within Sime Darby’s development areas known as Malaysian Vision Valley (MVV) and Bandar Universiti Pagoh respectively. MVV is a public-private integrated economic development area focusing on high-tech manufacturing, tourism, skillbased education and research and specialised services while Bandar Universiti Pagoh is an education hub comprising three universities, student village, business park, commercial areas and residential areas. Locations of these HSR stations are intended to act as catalyst for the developments through improved connectivity. Genting Plantation Bhd and Johor Corp are the major players with land banks near Batu Pahat HSR station. The Batu Pahat station is proposed to be within the township of Genting Pura Kencana in Sri Gading, a project launched by Genting Plantations Bhd in 2006. Pura Kencana spans 8,000 acres and will comprise residential areas, shopping centres, schools, various public amenities and a clubhouse. The proposed locations of Ayer Keroh and Bangi-Putrajaya HSR stations, on the other hand, will likely to benefi t a larger share of benefi ciaries. Located in Durian Tunggal, 16km from Melaka town, Ayer Keroh station is anticipated to boost tourism and hospitality industry in Melaka. It will also benefit various townships and developments namely Bukit Katil Development by Encorp and Felda, IOI City by IOI Properties, Taman Tasik Utama by MTD Capital Bhd, Tiara Melaka Golf Club and Baba Nyonya Resort, to name a few. The proposed location of Bangi-Putrajaya HSR station in Precinct 14, next to Kampung Abu Bakar Baginda, will result in gentrifi cation of the area which are presently occupied by village homes on Malay reserve land plots. The proposed connection to Putrajaya Sentral and Cyberjaya via tram services, if materialised, will greatly improve connectivity and will encourage developments of new neighbourhoods and commercial areas.
Feb 2018 •
Changes to the Malaysian Landscape Since KL-Singapore HSR is a long-term project with scheduled completion in 2026, it is essential to develop a transit-oriented master plan for each transit station to ensure creation of wellplanned and sustainable townships. Last mile connectivity within the locality of each transit station as well as the frequency and reasonable fare structure is also pertinent in order for HSR to be a game-changer in the local property market.
“However, these could vary depending on location and type of use. Properties that experienced greater improvement in terms of connectivity and accessibility through completion of HSR stations, are anticipated to enjoy higher appreciation rates than properties which already has good connectivity.”
When asked if the eventual completion of the HSR would invite transit-oriented developments (TODs), Previndran mentions that TODs are definitely intended to be part and parcel of the HSR stations which is evident through the establishment of HSR Corridor Socio-economic Development Programme (SDP).
“Nevertheless, residential properties especially landed properties that are located too close to the stations may experience decline in property prices due to factors such as noise, vibration and congestions. As KL-Singapore HSR project is still at preliminary stage and also since majority of the stations are proposed at new growth areas which are earmarked for future developments, it is too soon to forecast extent of the HSR’s impact on values for the surrounding properties,” he adds.
“It was announced that SDP framework which was jointly created by all key stakeholders (at federal, state and local levels), including representatives from the private-sector with MyHSR and the Economic Planning Unit (EPU), will focus on three main components; Economy, Inclusivity and Sustainability. The sustainability component focuses on Transit-Oriented Development, public transportation and implementation of low carbon city,” he says. In terms of appreciation rates for the surrounding properties, Previndran mentions that on a general rule of thumb, properties located within 500m from proposed rail station and are tied to station area through proper planning, may appreciate up to 30% with commercial properties likely to achieve higher appreciation rate up to 50% especially if located within close proximity to interchange stations. “Properties that are located further than 500m from the proposed HSR stations but are within considerably short distance with good accessibility to the stations will also likely to experience increase in prices, albeit at a lower appreciation rate,” he says.
• Feb 2018
When asked about the types of products and the trends that will shift in the property market, Previndran says that considering that the HSR is a long-term project, construction of the project will play a vital role in helping to shape urban development along the corridor especially within the surroundings of transit stations. “This would result in accentuation on high density development around stations, giving rise to development of mass housings, commercial uses (shops and offices) and visitor services such as hotels and serviced apartments, not only during construction but also after completion,” he explains. In terms of land prices, Previndran says that it is a known fact that there is a “strong relationship” between proximity of transport system and land values.
Bringing It All Together Worldwide studies have shown that a new public transit project can affect property values along the alignment wherein values generally rise in proximity to stations, reflecting the improved, more accessible, character of the property. He adds that the land prices within proximity to HSR stations are expected to go up following announcement of location of
Worldwide studies have shown that a new public transit project can affect property values along the alignment wherein values generally rise in proximity to stations, reflecting the improved, more accessible, character of the property.
the rail stations and might escalate further nearing completion. In general, the land prices are forecasted to reach a stable or saturated level upon the completion of stations with the exception of prime land parcels with permitted greater development density. “However, the distribution of this increase might vary among the stakeholders (owner, public authority, transport infrastructure investor, real estate investor) and according to locations. Most of the proposed HSR stations, are located within or near land banks which are earmarked for future developments by major property developers. Meanwhile, land surrounding HSR stations that are owned by private individuals are mostly agricultural land while some are development land. It is expected that proposed HSR stations will result in change of land use surrounding the stations in order to capitalise on development potential.” He further adds, “The increase in land values can range from five to 30 per cent within the immediate station locations (within 500m) depending on the land use and economic characteristics of the locality as well as the extent of improvement to the areas’ accessibility and connectivity. Land values of commercial land may rise as much as 50 per cent in certain cases particularly those that are within walking distance to stations with interchange connections to other rail networks.”
He also adds, “Yes, in fact land prices within proximity to the HSR stations will start to escalate considerably following the announcement of the HSR stations’ location. The announcement and public display of the HSR project has brought some much needed certainty for developers to identify hotspots and accumulate landbank within HSR stations’ vicinity.” Lastly, when asked if the amount of stations planned for the HSR will hinder the train reaching its maximum speed and in turn increase the time it takes to reach Kuala Lumpur from Singapore, Previndran says that it is highly unlikely as the HSR rail operations are strategically planned to provide separate rail services to suit the needs of the travellers. “The HSR’s express rail service is a non-stop express service from Bandar Malaysia to Jurong East in Singapore which will be served by two trains that will run every 30 minutes, shortening the travel distance between the two countries to a mere 90 minutes. The HSR’s domestic service from Bandar Malaysia to Iskandar Puteri with intermediary stops at all seven stations within Malaysia, will also run every half-hour and will take 120 minutes. From Iskandar Puteri, passengers will be able to take a shuttle train service, which will take another 15 minutes, to Jurong East, the terminus station in Singapore,” says Previndran.
Feb 2018 •
Developing With The Stars
Ushering in prosperity filled with abundance of luck and opportunities BY FELICIA SOON
Feng shui, originally known as ‘Kan Yu’ is about living in harmony with nature. In order to achieve this, we need to first understand what is feng shui all about before we can practise it. The practice of feng shui is a skill and not just the art of placement. Hence, a feng shui practitioner needs to understand how the ‘Qi’ (the beneficial energies) in our environment and particular location can work in given periods of time. This will subsequently help the feng shui practitioner to ascertain outcomes of events or prevent possible mishaps from happening. Feng shui can also be applied to create opportunities in life and improve health. Way Fengshui Group Grand Master Tan Khoon Yong will share more on the lucky directions that will allow you to tap into the best, most potent energy. This information is usually applied into areas where you tend to spend the most time, such as in your own house and at your office. In addition, Tan also provides the suitable months for renovation. Choosing an important date for renovation is important because it will ensure that the project will launch and finish smoothly. Hence, by following these auspicious dates to do your renovation, it can help to assure you on the creation of a beautiful and harmonious home. Now let’s take a look into the lucky and unlucky directions for owners with homes that faces different orientations and the suitable months for them to do any renovation.
• Feb 2018
North: Danger Amid Wealth On a brighter note, the presence of two Wealth stars denotes flourishing finances and career growth, making it a good year to make investments. However, your journey is filled with obstacles, so ensure you make detailed plans and think twice before acting to avoid encountering disastrous outcomes. This year, be on your guard whether you are at home or outdoors to avoid being the victim of accidents. Ensure that you have sufficient savings to cover any emergencies that might come your way.
Northeast: Look Forward To Benefactor Help The presence of the Three Jade Star, in combination with other benevolent stars, makes northeast the third most auspicious direction in 2018. Consider integrating the fire element into your home decoration (candles, lamps or the colour red) or display fish-shaped items to help promote emotional balance and improve affinity with benefactors. Suitable Months For Renovation 2nd Solar Month 5 Mar 2018 - 4 Apr 2018 5th Solar Month 6 Jun 2018 - 6 Jul 2018 6th Solar Month 7 Jun 2018 - 6 Aug 2018 8th Solar Month 8 Sep 2018 - 7 Oct 2018 11th Solar Month 7 Dec 2018 - 4 Jan 2019 12th Solar Month 5 Jan 2019 - 3 Feb 2019
East: A Prosperous Year Ahead Owners of east-oriented homes face the most auspicious direction in 2018. Try to incorporate water element features into your home decoration (sea view paintings or the colours blue and black) or display sceptre-shaped items to ward off negative energies and maintain your auspicious luck cycle. Suitable Months For Renovation 5th Solar Month 6 Jun 2018 - 6 Jul 2018 6th Solar Month 7 Jul 2018 - 6 Aug 2018 7th Solar Month 7 Aug 2018 - 7 Sep 2018 12th Solar Month 5 Jan 2019 - 3 Feb 2019
Southeast: Presence Of The Disaster Star Southeast is opposite to where Grand Duke resides in 2018. Hence, it is important that you remain well-rested and approach all matters objectively to take advantage of opportunities. Do not be too harsh on yourself when dealing with matters that are out of your control. Instead, learn to let go and find an alternative solutions. This year, look forward to bountiful returns in the form of wealth gain and career advancement but keep your health in mind, especially for those of the Dragon zodiac. 2018 will be filled with challenges for you, so refrain from putting your eggs in one basket and take things in moderation to avoid major losses. Try maintaining good interpersonal relationships to reduce the likelihood of encountering conniving characters. On the romance front, spend more time with your partner. Feb 2018 â€˘
Northwest: Presence Of The Grand Duke The presence of Grand Duke and the Robbery Star shall see you fighting an uphill battle that may lead to fatigue and emotional turmoil. To keep your fighting spirit high, take care of your health and persevere. Be cautious and think twice before acting, especially if you are of the Dragon or Dog zodiac. When it comes to meeting new business partners or negotiating contracts, do not be easily influenced. On a brighter note, singles can look forward to a new relationship blossoming, while couples will enjoy intimate moments together. However, attached individuals should be wary of cheating partners.
West: Presence Of Illness Stars You are blessed with the Romance Star for enhanced interpersonal relations. Together with the Two Black Star, these two stars help boost career prospects and wealth opportunities. As you achieve career progression, long working hours may take its toll on your health. Hence, you will need to schedule in plenty of rest to combat the malevolent effects of Illness stars. This is especially true for those of the Rooster zodiac. This year, emotional turmoil is rift and this might affect your relationships. If you are married, do approach matters objectively. Romance progresses smoothly, especially for those of the Snake, Goat and Pig zodiac. Singles can also look forward to finding their significant other in 2018.
Southwest: Promising Career Advancement Southwest-facing homeowners will experience good career prospects in 2018 as the Six White and Benefactor stars hovers favourably above the household. Consider doing some renovations or organising any activities to further enhance luck. Try to utilise water element features at home (sea view paintings or the colours blue and black) or display vase-shaped items to balance energy and increase harmony within the family. Suitable Months For Renovation 2nd Solar Month 5 Mar 2018 - 4 Apr 2018 5th Solar Month 6 Jun 2018 - 6 Jul 2018 6th Solar Month 7 Jun 2018 - 6 Aug 2018 8th Solar Month 8 Sep 2018 - 7 Oct 2018 11th Solar Month 7 Dec 2018-4 Jan 2019 12th Solar Month 5 Jan 2019 - 3 Feb 2019
â€˘ Feb 2018
South: Avoid Renovation In 2018 The Four Green Star is present to lend a helping hand in academic matters. If you are able to overcome self-imposed limitations and distractions, you will achieve stellar results in school or at work. In 2018, south is an ideal direction for scholarly pursuits so position your study desk and bed to face that direction to boost academic luck. If you are working, consider taking up enrichment courses.
Drink plenty of water and maintain good lifestyle habits to remain hydrated and fresh for a peaceful and safe year. As you are in danger of offending the Direction Killing and Major Disaster stars, remember to visit a doctor at the first sign of illness.
ar, you can also adopts gold, silver and old, silver and crystal jewelry. If you are of Chinese New Year, one should wear
rder: gold, silver and white. ental colours to maintain the balance of the practical theory of the harmony of much of a certain elemental energy can
elemental parts to be of earth signifies h element. This means that 2018 will be the year of the dog, both the Earthly d into two elemental parts namely the
fore the auspicious colours would be
th element colours to balance the fire month, day and hour) contains too much generate or suppress another element. etaphysics states that the five elements
t auspicious colour for this year? ,Band is the year of the dog according to
Feng Shui Master Louis Loh. element and have found out the most e have had the honour to share with hese different colours can bring positive composed of the Five Elements, each
Pick Your Hue It is said that everything in this universe is composed of the Five Elements, each element corresponds to certain colours, and these different colours can bring positive and/or negative effects to our daily lives. We have had the honour to share with our readers some of the infl uences of each element and have found out the most auspicious colours for 2018; all thanks to our Feng Shui Master Louis Loh. The year 2018 is the year of the Earth element, and is the year of the dog according to the Chinese animal zodiac. So what is the most auspicious colour for this year? The art and science of feng shui and Chinese metaphysics states that the five elements interact with each other, and one element can generate or suppress another element. Take for example: If your Bazi (the birth year, month, day and hour) contains too much fire element, you can wear the water or earth element colours to balance the fire element. However, everyone has different Bazi, therefore the auspicious colours would be different for each individual as well. A little background info: Each year is divided into two elemental parts namely the Heavenly Stem and the Earthly Branch. For the year of the dog, both the Earthly Branch and the Heavenly Stem are of the earth element. This means that 2018 will be a year of the earth element and having both elemental parts to be of earth signifies mutual prosperity. Having said that, moderation is key. Having too much of a certain elemental energy can bring imbalance and disharmony. So based on the practical theory of the harmony of the Five Elements, you can use the Metal Elemental colours to maintain the balance of energies. These colours are, in no particular order: gold, silver and white. Loh has also suggested that on the fi rst day of Chinese New Year, one should wear white clothes, and match these clothes with gold, silver and crystal jewelry. If you are planning to organise any major event this year, you can also adopts gold, silver and white to generate good fortune.
Feb 2018 â€˘
Forecast and Analysis Fengshui Republic, a feng shui consultant firm, is where Loh provides in-depth consultation for his clients. The firm has gladly included an analysis of the possible outcomes for the year 2018 and we are happy to provide our readers with an overview. Here are the six points to consider for the year of the dog: 1. Make peace, not war The earth element is often associated with values of trustworthiness and great partnership. This year we see a time of less confl icts and struggles. It is safe to say that we will see more efforts to bring benefi ts by all parties. However, as the metal element is hidden in the earth element, we will not see a sudden improvement in the global economy but rather a gradual and slow progress. 2. The year of talent and leadership The Hurting Officer is an element of the Bazi that signifies talent. But, if there are too many Hurting Officers in the Bazi, this is a sign of arrogance and egoism. However, if the Hurting Officer is paired with a Seal Star, there will be a balance in energy as the Seal Star is a star of rationality and control. If the Hurting Offi cer is adorned with the Seal Star this is a good sign as there will be more capable leaders in both the political and business world.
â€˘ Feb 2018
3. Manage your relationship(s) wisely The Bazi for this year shows that there are two Mao signs, and this sign signifies problems in the relationship; also known in Chinese as the Peach Blossom. These two signs Mao signs are in conflict with each other, and this means we will see more issues caused by troubles and disagreements for the relationship. Based on this, one needs to handle relationships carefully and wisely in order to enjoy greater financial, career and academic improvement.
6. Spring Ox and Book of the Mother Earth The Spring Ox photo contains predictions on weather for agriculture. The Book of Mother Earth is a poem on agricultural forecast. The Spring Ox photo shows the cowherd standing before the ox, indicating the beginning of spring will occur before the first day of Chinese New Year. The cowherd is not wearing shoes and his trousers are folded upwards signifying a rainy year. Those involving in agricultural and husbandry industries should be cautious of floods.
4. Individual Bazi and yearly Bazi As stated earlier, everyone has a different Bazi therefore everyone will be affected by the yearly Bazi in different ways. This year, for those having the Wealth Star and Dragon in their Bazi, they will receive the infl uence of the Earthly Branch Xu. What this means is that these people will have a very good chance to see improvements in their wealth.
As for the Book of Mother Earth, it warns about poor harvest and suggests preventive actions for incidents caused by floods. Those in the husbandry industry should take extra care to prevent animal-related diseases.
Those with Bazi that are unfavourable to the earth element, they will be more likely to experience sickness and injuries. If your Bazi belongs to this category, take better care of yourself.
oal. apital. Keep yourself firmly grounded and stay focused on your e cautious in any investment that involves a large amount of re a business owner, prepare to experience more stress and n maintaining harmonious interpersonal relationships. If you he year of the dog will be a year that requires proactive efforts ringing It All Together
ossible losses. eal estate should avoid taking drastic actions to prevent low one. Those who are interested to invest in property and nd real estate business blooming this year, the process is a lso be crucial for one’s success in 2018. Despite the property Multiple platforms such as digital, social and commercial would oint here is to work practically to accomplish your goals. nterpersonal relationships to ensure success in 2018. Another ne of the key points for businesses is to maintain good usiness and Property Predictions care to prevent animal-related diseases. floods. Those in the husbandry industry should take extra and suggests preventive actions for incidents caused by As for the Book of Mother Earth, it warns about poor harvest
husbandry industries should be cautious of floods. litical and business signifying a rainy world. year. Those involving in agricultural and odissign there will be and morehis capable leaders in not as wearing shoes trousers are folded upwards heoccur Hurting Offithe cer fiisrst adorned with theNew SealYear. Star The cowherd before day of Chinese energy as the Sealthe Star a star of rationality and of spring will standing before ox,isindicating the beginning Offi cer is paired with aThe Seal Star, Ox there willshows be a the cowherd agricultural forecast. Spring photo s for a sign of arrogance and egoism. However, agriculture. The Book of Mother Earth if is a poem on ifThe there are too Offipredictions cers in the on weather Spring Ox many photoHurting contains g. Offi cer Ox is an the Bazi that signifies PB Spring andelement Book ofofthe Mother Earth 018 • and leadership talent nd inhabitants of the home. B e used for all homes, regardless of ut rather a gradual andearth slow dog. progress. rosperous year of the This euide will not see a sudden to organise yourimprovement house for ain the global s the2018). metalYou element is this hidden in the earth uary may use chart chart will take effect from the day of re efforts and to bring benefits by all parties. uspicious inauspicious directions sFlying conflicts struggles. It isis safe to say that we Starand Chart for 2018 a map ness and great partnership. This year we see a ositions element is often associated with values of e, not war
ix points to consider for the year of the dog: re happy to provide our readers with an overview. d an analysis of the possible outcomes for the year epth consultation for his clients. The firm has ublic, a feng shui consultant firm, is where Loh
Taisui. the Hurting Officer. Thus, this signifies a conflict with the of 2018 shows the Seal Star clashing with the Eating God and problems during pregnancy. This is because the yearly Bazi precautions and seek professional help if they encounter any better care of their health first. They should also take extra newborn babies into the family. It is important that they take very likely couples who have tied the knot to be welcoming 2017 was an auspicious year for marriage. Hence, it is 5. Word of advice for parents-to-be yourself. If your Bazi belongs to this category, take better care of they will be more likely to experience sickness and injuries. Those with Bazi that are unfavourable to the earth element, very good chance to see improvements in their wealth. Branch Xu. What this means is that these people will have a in their Bazi, they will receive the influence of the Earthly ways. This year, for those having the Wealth Star and Dragon everyone will be affected by the yearly Bazi in different As stated earlier, everyone has a different Bazi therefore 4. Individual Bazi and yearly Bazi financial, career and academic improvement. relationships carefully and wisely in order to enjoy greater for the relationship. Based on this, one needs to handle will see more issues caused by troubles and disagreements Mao signs are in conflict with each other, and this means we known in Chinese as the Peach Blossom. These two signs and this sign signifies problems in the relationship; also The Bazi for this year shows that there are two Mao signs, 3. Manage your relationship(s) wisely
5. Word of advice for parents-to-be 2017 was an auspicious year for marriage. Hence, it is very likely couples who have tied the knot to be welcoming newborn babies into the family. It is important that they take better care of their health first. They should also take extra precautions and seek professional help if they encounter any problems during pregnancy. This is because the yearly Bazi of 2018 shows the Seal Star clashing with the Eating God and the Hurting Officer. Thus, this signifi es a conflict with the Taisui.
Business and Property Predictions One of the key points for businesses is to maintain good interpersonal relationships to ensure success in 2018. Another point here is to work practically to accomplish your goals. Multiple platforms such as digital, social and commercial would also be crucial for one’s success in 2018. Despite the property and real estate business blooming this year, the process is a slow one. Those who are interested to invest in property and real estate should avoid taking drastic actions to prevent possible losses. Bringing It All Together The year of the dog will be a year that requires proactive efforts in maintaining harmonious interpersonal relationships. If you are a business owner, prepare to experience more stress and be cautious in any investment that involves a large amount of capital. Keep yourself fi rmly grounded and stay focused on your goal.
Avoid renovation •••••••••
To remedy with copper coins •••••••••
Hang by a wind chime
A piece of red cloth to be placed here
• • •••••••
Activate by a fish tank
To remedy with copper coins
Activate by Jade Stamp
2018 Feng Shui Positions The Nine Palace Flying Star Chart for 2018 is a map that shows the auspicious and inauspicious directions of the year. This chart will take effect from the day of Lichun (4th February 2018). You may use this chart as a reference guide to organise your house for a harmonious and prosperous year of the earth dog. This chart can also be used for all homes, regardless of direction, layout and inhabitants of the home.
Open window ofter
Activate by water plants •••••••••
Activate by books
Feb 2018 •
Jewel of the South The southern region of Malaysia has always been a favoured location for property developers with its ease of doing business, available land banks with affordable entry costs, good connectivity as well as our favourable relations with our neighbours in Singapore. However, none stand out more in the south than Iskandar Puteri, one of the five flagship zones of Iskandar Malaysia. Formerly Nusajaya, with the official launch of the Iskandar Puteri City Council (MBIP) in 2017, Iskandar Puteri has been recognised as the 14th city in Malaysia and Johor’s second city.
Even as Iskandar Puteri slowly becomes Johor’s latest jewel, efforts are still underway by stakeholders, developers and investors to transform Iskandar Puteri into the next growth area for Malaysia. As master developer of Iskandar Puteri, UEM Sunrise Berhad (UEM Sunrise) is one of Malaysia’s leading property developers and flagship company for the township and property businesses of UEM Group Berhad. Based on UEM Sunrise, the developer is currently undertaking various residential, commercial and mixed-use developments in Iskandar Puteri (formerly known as Nusajaya), one of the five flagship zones of Iskandar Malaysia. Upon completion, Iskandar Puteri will become the largest fully-integrated urban development in Southeast Asia that will provide significant investment, financial and business opportunities. Embracing innovation and technology, Iskandar Puteri will be the role model for an economically, socially and environmentally sustainable city. With modern infrastructure and cutting-edge architectural masterplan, the expected social and foreign investment inflows into Iskandar Puteri will propel economic growth and transform the Southern Peninsular of Malaysia into an exciting centre of economic development in the region. The thrust of Iskandar Puteri lies in the array of signature and catalytic developments including Kota Iskandar, the Johor State administrative centre which houses the State and Federal Government offices; Puteri Harbour, an integrated waterfront development; Southern Industrial and Logistics Clusters (“SiLC”), a managed, clean
• Feb 2018
and green industrial park; Afiat Healthpark, a comprehensive medical park offering modern, traditional, and complementary medicine and wellness; Educity, education hub comprising worldâ€™s best university faculties; and Medini, an international mixed-use development. The residential property sector is led by medium to high-end landed properties come with a mix of residential, commercial and industrial properties; hotels, resorts and many other amenities. The high interest for residential property in Iskandar Puteri experienced in 2010 was kept alive in 2015 through multiple product such as urban waterfront development, Puteri Harbour; 275-acre garden-themed luxury residential development, East Ledang; affordable ownership plan, Nusa Bayu; and peace of mind with precinct-based living, Nusa Idaman.
Gerbang Nusajaya, the second phase development of Iskandar Puteri, is a 4,551-acre project which will also feature various signature and catalytic developments and will be developed over a period of 25 years with components such as lifestyle and retail parks including FASTrack Iskandar; campus offices and industrial parks including Nusajaya Tech Park; as well as residential precincts including Melia Residences, and Gerbang Nusantara. Despite Iskandar Puteri located 10 minutes away from the Johor Bahru City Centre, it currently enjoys a spillage of opportunity from the whole of Iskandar Malaysia.
UEM Sunrise is also cementing its commitment in delivering affordable homes with the launch of Bayu Nusantara and Denai Nusantara, which are integral to the Companyâ€™s pledge of developing 10,000 units of affordable homes in Iskandar Puteri.
Feb 2018 â€˘
Current Market Report According to recent property market report published by CBREWTW, in Iskandar Malaysia, although there was a downtrend in the residential market in 2017, it is expected to stabilise in 2018 accompanied by the stabilisation of the shop office market and retail sector. The hotel and industrial market in Iskandar Malaysia continues to improve moving into 2018 and beyond. In terms of infrastructure, the Kuala Lumpur-Singapore High Speed Rail remains the main catalyst to drive the market as well as the Rapid Transit System (RTS) linking Johor Bahru to Singapore. The RTS is expected to accommodate 30,000 passengers daily with 25 per cent of those passengers made up of Singaporeans working in Johor Bahru. This is expected to create a positive impact on the Johor property market. Based on UEM Sunrise’s 2016 annual report, the Southern region remains a key property development area for the company as this is where a majority of its land bank is predominantly located. Approximately 9,100 acres including joint venture development lands are available for development in Iskandar Puteri, Desaru, Kulai and Mersing. This comprises land for pipeline projects, remaining developed land i.e. Puteri Harbour, Southern Industrial Logistics Cluster and Afiat Healthpark, as well as lands for which the company has no immediate development plans. The remaining estimated GDV to be launched including phases of ongoing property developments is approximately RM93 billion. It adds that during 2016, the company launched 1,583 units in Iskandar Puteri with a total GDV of RM451.3 million. This includes 1,217 units in Denai Nusantara and 366 units in Melia Residences. UEM Sunrise also completed 351 units in Bayu Nusantara in June 2016. Developments in Desaru and Kulai are undertaken jointly with Desaru Development Corporation Sdn Bhd and KLK Land Sdn Bhd respectively with planning currently in progress.
Future Developments Another prominent property developer in Iskandar Puteri is Mah Sing Group Berhad (Mah Sing). According to Mah Sing, the developer has been active in the Iskandar Puteri region since 2000 with its maiden development in Johor, Sri Pulai Perdana. Being in the region for nearly two decades, Mah Sing has projects ranging from established township in its Sri Pulai Perdana, integrated development in The Meridin@Medini and industrial products in its iParc@Tanjung Pelepas. In terms of Outlook, Mah Sing continues to be optimistic of the property industry in the region foreseeing healthy growth through the many new prominent developments in both housing and transportation which are slowly coming to fruition.
• Feb 2018
“EduCity Iskandar Malaysia and Pinewood Iskandar Malaysia Studious are among other developments continuing to strengthen the Iskandar Puteri economy as they attract talent to Iskandar Puteri,” it adds. “Legoland Malaysia is also a popular tourist attraction that brings in both local and foreign tourists. Various economic stimulus by the government are also attracting neighbouring countries such as Singapore to invest in Iskandar Puteri. The upcoming High Speed Rail (HSR) station in Iskandar Puteri will further boost the economy of Iskandar Puteri and Meridin@ Medini will benefit from the spill-over due to the influx of tourist and potential businesses in the Medini area. The HSR is expected to be operational in 2026.” In addition, according to Mah Sing, the recent establishment of Iskandar Puteri City Council (MBPI) will play to our advantage as it gives an added boost to developments in Iskandar Malaysia. The district will be the official centre point for high-impact economic activity. Regarding Mah Sing’s expectations on Iskandar Puteri, it maintains high expectations for the region as the company takes into consideration the development progress of Johor’s second city. “Iskandar’s geographical position as well as its new status as Johor’s second city will be an important factor in attracting investment from both local and international players,” the company says. “There is strong growth potential which can be unlocked in Iskandar Puteri. For example, EduCity is continuing to expand and will attract students both locally and abroad as renowned education institutions have opened up campuses in the Education Hub. The current 3,000 student population is expected to grow strongly as more students take up their educational journey in EduCity. In fact, Mah Sing recently partnered with EduCity to be their 1 st external student accommodation provider.” The Meridin@Medini, which is located just 3.6km from EduCity, will be offering a total of 183 fully furnished units which will cater to approximately 370 students. This partnership shows that Iskandar Puteri is on an upward trajectory. “We also look to build on the overwhelming response we received for The Meridin@Medini when it was opened for registration of interest back in 2012. It had already attracted 5,000 registrants confirming their interest even before the official launch. This shows that the current market is on the lookout for strategic development at good price points, an area which Mah Sing is firmly focused in. Iskandar Puteri, as a whole, also has many economic factors to be considered,” adds the company.
A Reflection on the Property Landscape Looking back at its entry into Iskandar Puteri, when Mah Sing first entered Iskandar Puteri in the year 2000, the region was facing an oversupply of homes, especially in high-rise developments.
When asked if Mah Sing would consider other opportunities in Iskandar Puteri, it mentions that Johor is a key area for the property developer and this includes Iskandar Puteri.
Being a market-driven developer, the company addressed the issue by developing homes that were strategically-priced. In fact, Mah Sing introduced the concept of gated and guarded living for link homes with grand entrance statements, and even a 12-acre Roman-inspired central garden, which were all unheard of 18 years ago in Iskandar Malaysia.
“The Group will continue to lookout for landbanks which have potential and in line with our investment portfolio,” it adds.
In today’s market, Mah Sing focuses on developing affordable priced developments with practical layout and in strategic locations which is added value proposition for our customers. “We have always believed that our Iskandarian story would be for the medium to long term. Buyers who bought our developments would have benefitted from the first mover advantage,” Mah Sing says. “The increase in economic activities, investment in better infrastructure and catalytic projects will make Iskandar Puteri an appealing prospect. Iskandar Puteri has always had tremendous growth potential. In fact, the entire Iskandar region is a key economic zone and one of the most dynamic growth areas in Malaysia.”
According to a recent property market report published by CBRE-WTW, in Iskandar Malaysia, although there was a downtrend in the residential market in 2017, it is expected to stabilise in 2018 accompanied by the stabilisation of the shop office market and retail sector.
Feb 2018 •
Valuing Property Investments How sharing knowledge with others create success BY FELICIA SOON
I nearly made a mistake by attempting to buy a house which was poorly located. – Wong Sing Wah
Born and bred in Petaling Jaya, Wong Sing Wah graduated from Universiti Tunku Abdul Rahman (UTAR) in the year of 2006 and made a living doing telecommunication sales for three years at Digi Telecommunications. During his working period at Digi, Wong took the initiative to learn as much as he can before advancing his career by joining P1 (Packet One Networks Malaysia) as a Senior Manager in Trade Marketing. The company is now known as Telekom Malaysia’s (TM) Group Webe Telecommunications.
First Property Investment Wong’s first property purchase was not for investment purposes. He bought it with the intention of staying in it where he is currently still residing in Koi Kinrara Condominium located at Puchong Jaya, Selangor. “I bought Phase 2 from the developer. Previously I was renting a place at Ara Damansara. My first property was not a difficult entry as I was offered the package of 10% discount for the house which eventually offset my down payment. I was able to secure the property with just a RM2000 booking fee,” says Wong. However, Wong did withdraw some cash from his Employees Provident Fund (EPF) which allowed him to renovate and furnish the condominium further.
• Feb 2018
There was one particular incident worth sharing that Wong felt nearly cost him more than just a couple thousand in losses. This was when he almost made a big mistake in property investing especially when he was still new to the game. “I nearly made a mistake by attempting to buy a house which was poorly located. The property is Koi Prima located at Taman Mas, Puchong. Located deep inside Puchong, the traffic congestion there was bad and the area was poorly developed,” Wong recalls. One of most important factors when buying a home is location, location, and location. Too often, people make decisions based on the home itself, instead of the location and that is a mistake. Location is vital to property investing because the condition and price of any home can be changed. You can even change the size of the house. But the one thing that you can’t change is the home’s location and location creates desirability, which in turn creates demand and demand will help to raise property prices in the long run.
Lucky Strike The deal Wong chanced upon in buying his first property was that the developer offered him a 10% discount which subsequently help him to offset his down payment as well. He felt that it was a good deal because he was buying it for his own stay and he could easily sell it later for immediate profit or there could be a demand for rental by foreigners working nearby. However, due to the various cooling measures imposed by the Malaysian government and Bank Negara Malaysia to help curb escalating property prices, the number of loans approved for residential properties also decreased tremendously which, in turn, further impacted the softening property market. After going through the difficult process of securing a bank loan to purchase his first property, Wong decided to hold on to the property by using it for his own stay first.
Wong also learnt about tenant selection and tenant management in no time when he faced competitiveness of renting out his unit to tenants and still needed to rent his unit out fast. “I managed my tenants in terms of being responsive towards the issues and requests that they have. Secondly, I ensured the maintenance of the property. I believe these are the key factors to having a happy and a durable tenant,” he enthuses.
Need For Preparation His advice to those who would like to start investing in properties would be to have the diligence within themselves to first and foremost do sufficient homework before deciding to purchase a property. “Always look at property price comparison and do not be in a rush during the buying process of a property,” Wong advises. It is also necessary to start building up a good financial income statement and cash flow for easier loan approval by the bank and also have sufficient funds for the down payment of buying a property for the first time.
Leveraging For Better Returns Wong believes that no man is an island and leveraging with likeminded property investors is a very important step forward in enhancing one’s property investment portfolio. “I have another property Nadayu28 Residences which is located in Bandar Sunway, Selangor. The property was a joint-venture investment because of its strategic location as it is situated nearby Sunway University and Monash University,” says Wong. He is also grateful to know other property investors who are generous in sharing their street-smart knowledge and good property deals. Wong will usually go hunting for properties using the Internet and then make calls to the agents who are active in that particular area. He would also participate in some of the property expos from time to time to source for good deals.
PROPERTY DETAILS FIRST PROPERTY Location: Puchong Jaya Property type: Condominium Purchase value: RM480,000 Market Value: RM590,000 Price psf: RM418 Current rental per month: RM2,000 Loan margin: 90% Loan tenure: 35 years
SECOND PROPERTY Location: Bandar Sunway Property type: Condominium Purchase value: RM1,135,000 Market value: RM1,550,000 Price psf: RM837 Current rental per month: RM8,100 Rental yield: 6.27% Loan margin: 90% Loan tenure: 35 years
Feb 2018 •
INVESTOR NEXT DOOR
Never Too Late To Leverage On Properties Albert Chin gives his take on accumulating more by leveraging with other property investors BY FELICIA SOON
Albert Chin, a seasoned property investor from Penang shares with Property Insight his property investment experience and his strategies in dealing with the softening property market now. Chin developed a keen interest in purchasing properties for investments right after he purchased his very first property. “All this while, I knew that properties will bring profit over time regardless of where is its location. In fact, it was the passive income and the capital appreciation that initially captured my interest to pursue this investment of purchasing solid and tangible assets for the long term returns,” he says.
• Feb 2018
First Property Chin worked hard for the first few years in order to save up enough money to purchase his first property which was a subsales high-rise unit in his hometown.
Joint-ventures and leveraging can be good options for those who are interested to buy a property for investment purposes but do not have enough savings yet.
“The seed money was from my savings throughout my early years of working a full time job. I was also fortunate enough to be able to secure a unit through price negotiation. Actually, savings enables one to buy their first property and with its appreciation, it will enable you to buy a second property and so on as things get easier from there,” enthuses Chin. Chin added, “Financing is usually a problem for most people which was why I did extensive study on my own cash flow and expenses before deciding to buy my first property.”
– Albert Chin
Feb 2018 •
INVESTOR NEXT DOOR
Chin’s investment strategy is to hold and only flip when the time is right as the property market is currently on a down where the selling price for a RM500,000 landed house has decreased to RM300,000. He also believes that it is a good idea to partner with a friend or a colleague to purchase a property. Nowadays, there are so many opportunities and one of my strategies is that instead of buying a property that you can afford, buy a property that you can’t afford as well through joint venture if the capital appreciation yields good returns in the long term.
Although the current property market is a little slow, his friendly advice to other property investors out there is that whenever the market goes down, it will come back up. Always do your research to acquire the right market data to know the current value of the type of property that you are buying at the moment and what your unit can offer in terms of its pricing and affordability.
“Getting the right person to join venture with you in buying a property for investment is also important as joint venture is a long time partnership. Hence, it is always best to cooperate with someone whom you know and is dependable,” opines Chin. He adds that no man is an island and joint venture was one of the ways in which he used to secure more properties in three years for his investment portfolio.
“Before buying a property, location is my first consideration followed by its surrounding amenities. The master plan of the overall project is my second consideration, which will determine which investment mode I plan to have i.e. to buy and flip or to buy and then rent out,” says Chin. He realised a little too late that buying a bigger unit meant it will be harder to sell it off at a later date. Nowadays, the trend is that the young generation mostly would prefer a small yet comfortable space to live in. This is because a larger space would mean that they would need to pay a higher maintenance fee for the extra space and the larger area would also require more time and effort to keep it neat and clean at all times. “Start with what you can but not try to achieve something out of your league. Joint venture and leveraging can be a good option for those who are interested to buy a property for investment purpose but do not have enough savings yet,” he advises.
Future Plans At present, Chin has a total of three properties and he does not plan to stop investing in properties anytime soon. “My next plan is to try to dispose the first property at a reasonable price and acquire an under construction project in a different area, perhaps somewhere in a prime location,” Chin shares.
PROPERTY INVESTMENTS PROPERTY 1 Location: Butterworth, Penang Property Type: High Rise Purchase Value: RM425,000 Market Value: RM600,000 Price psf: RM238 psf Rental per month current: RM1,500 Rental Yield: 4.24% Loan Margin: 90% Loan Tenure: 35 years
• Feb 2018
PROPERTY 2 Location: Bukit Minyak, Penang Property Type: Landed Purchase Value: RM635,000 Market Value: RM750,000 Price psf: RM235 psf Rental per month: N/A (Own Stay) Rental Yield: N/A Loan Margin: 90% Loan Tenure: 35 years
PROPERTY 3 Location: Bukit Ceylonz, Kuala Lumpur Property Type: High Rise Purchase Value: RM680,000 Market Value: N/A Price psf: RM1,380 psf Rental per month current: Under construction Rental Yield: Under construction Loan Margin: 85% Loan Tenure: 30 years
Seriously? You Want To Buy 9 Properties In 9 Minutes?
PROPERTY INVESTMENT ISN’T A JJPTR (JJ POOR TO RICH) SKIM CEPAT KAYA • This article articulates some of my thoughts on Property Investment. Again, my apologies if my views are sweeping or cause any offense. • To me, successful property investment is a long-term affair. It’s not very sexy and can even be a little boring. It’s about as exciting as watching fungus grow. • It’s not a Skim Cepat Kaya. It bloody hell ain’t no JJPTR. • You know what I find amazing? I still get tonnes of unbelievable advice telling me how I can build a property portfolio using my lunch money, or how I can quit my day job and buy 9 properties in 9 minutes. (I’m exaggerating, but you get the point).
Wealth is the transfer of money from the impatient to the patient.
MORAL OF THE STORY? • Not surprisingly, most people that speculate in the latest fads, or engage in high frequency “pasar malam” buying and selling may not have made much money. • When you are tempted to do this, remind yourself that real estate has been the number one, LONG-TERM multimillionaire maker throughout Malaysia’s history. (Well, with the exception of Jho Low, of course). • You want to build wealth? Be patient. Build consistently. In all humility, good things take time. After all, wealth is the transfer of money from the impatient to the patient.
I HAVE NEVER SOLD ANYTHING IN MY LIFE BEFORE • Recently, a client asked me what is the process of selling a property. I blanked out. I bloody well didn’t know the answer! • I just realised that I have never sold any property since becoming an investor 16 years ago. In fact, I have never even sold any of my stocks before too! (This is a story for another day). • I buy and hold my property. I let the magic of time, compounding and leverage increase its capital values over the years. We each have our own strategy, right? I am just revealing mine. • And why should I sell? My properties are “boring” ones in fairly prime areas, where the emerging middle class are staying. BORING IS GOOD. If you want exciting stuff, I would like to humbly suggest skydiving. • Frankly speaking, I would rather have properties that go up by a boring but consistent four to five per cent per year, compared to the latest fad that’s supposed to rocket upwards by 60% per year. • Some investors classify the buy and hold strategy as only suited for senile folks with a learning disability. • They are constantly looking for the latest fad or trying to find the next hot spot. They are always itching to sell something, “lock” in their profit and find that new flavour of the month.
is the bestselling author of the book “WHO SAYS”. He was a former senior vice president of a bank and an avid lover of properties. He can be reached via email@example.com or www.facebook.com/ MarkChuaMY
Feb 2018 •
BUYING A HOUSE? Why buy in cash when you can get a loan BY CHAN YC
Do the math To buy a property, should we buy through cash or take a loan? The most common answer that most Malaysian home buyers would choose is to buy with cash if a choice is given. However, if taken from an investment point of view, buying properties using 100% cash may not be as practical. From return of investment (ROI) point of view, the most effective way to invest in property is to leverage, because the ROI of property is not equivalent to investing in stock or fixed deposit, where the ROI in per cent is higher on a 1-to-1 profit point of view. Why banks would provide a loan to houses but not other investment channel such as stocks? No matter how much a person earns in a month, at the end of the day, a portion of the money earned will eventually return into real estate as part of the basic needs regardless of whether you are renting one or buying one. Therefore, as a property investor, cash buying may not be practical but to leverage from the bank is a must do.
â€˘ Feb 2018
Let us assume we have a 7% capital gain per annum for all kinds of property in Malaysia. A 7% compounding across 10 years would make any property value to double up. This is called the Rule of 72. Take the first example: If you have a sum of cash of RM200,000 in hand, and you choose to buy a low-cost flat of RM200,000 today; 10 years later, the appreciated value is RM400,000 and once you sell it, the gross profit gained is RM200,000 in 10 years. Take a second example, if you have RM200,000 cash on hand and your salary is high enough to get a 90% loan of a RM1,000,000 property; 10 years later the appreciated value is RM2,000,000 and once you sell it, the gross profit is RM1,000,000. This equals to five times the profit of buying a property with 100% cash. Now, the only challenge of taking a housing loan, is to have a well structured plan to manage your cash flow. If you are able to manage the cash flow in 10 years, RM1,000,000 profit could be yours.
While applying for a bank loan, we must always prepare ourselves from time to time. Here are the three simple steps to get yourself well prepared:
The bank sees your income with a term called Debt-ServiceRatio (DSR). DSR is simply formulated as below:
Step 1: What is your plan on property investment? Most of us do not have a plan. When asked about the plan, the common answers, “Don’t know” or “See how” or “Take keys first” will appear most often. A structured plan will help you to know what are you going to buy and what you have bought. With a structured plan, then there will be a well-planned cash flow. With a well-planned cash flow, can you buy one property every year? Are you planning to rent the unit out? What is the projected rental? How much is the coverage? Not to forget as well to plan on the Loan-To-Value (LTV). Every individual will only be able to buy two residential properties with 90% loan margin and the third at 70% loan margin.
Step 2: Do you know about your credit status? A good paymaster will show you your capability in repaying the loan on time. This is the most common advice from most of the property gurus. However, here’s something we have to bear in mind as well. Always keep track of your own credit status. Print your Central Credit Reference Information System (CCRIS) from time to time to check your credit status. It is just like you are going for a health screening every three to six months.
Step 3: Do you know about your loan capability?
FORMULA NET INCOME (AFTER TAX & EPF DEDUCTIONS)
Most Malaysian banks will approve the loan if the DSR is kept below 75%. For example, if the monthly after taxed income of a 30-year-old electronic engineer is RM7,000, his RM650,000 loan will likely be approved by most of the banks because the computed DSR is 37%. What do you do if DSR is insufficient? You may consider joint borrowing. Joint borrower may have to consider if the joint name has used up all his loan-to-value (LTV) quota for residential properties. You may consider rental income. Rental income only recognises 80% of the rental amount. Fix Deposit slip may be a plus point too to raise the denominator value.
Word of Advice As a summary, being a property investor is not mainly about what you buy and what will your profit be. It’s always about risk management. If you can manage the risk, you will make money. Happy investing!
The most common method of applying for a housing loan: Book a unit, submit documents to banker, pray hard for the loan to be approved. If you are one of these types of buyers, stop praying, start preparing. Get yourself partnered with a trustworthy property agent to help you analyse your loan capability from time to time, or seek advice to get yourself aligned to your plans. If you wish to analyse it yourself, here’s a very simple way to do a quick check.
About The Contributor
Before joining IQI Global, Chan YC was a test engineer in the semiconductor industry. Throughout his career, he has successfully helped individuals within his circle i.e. amounting in 40 over loan applications to be approved in 2017.
Feb 2018 •
NEWS & EVENTS
LBS Bina Group Berhad (LBS Bina) successfully launched its latest development in Bukit Jalil called Residensi Bintang Bukit Jalil with a gross development value (GDV) of RM954.7 million. The two-tower condominium project comprises 1,342 units of apartments with prices starting from RM553,000 onwards.
LBS Bina Group Berhad launches RM954.7 million Residensi Bintang Bukit Jalil
The Residensi Bintang Bukit Jalil which sits on a 5.47-acre strategically located parcel of land in the epicentre of existing and upcoming renowned education, sports, entertainment and leisure amenities, offers home buyers three unique layouts of two to three-bedroom apartments with a built up ranging from 805 sq ft to 1,209 sq ft. The development also includes over 90 facilities such as indoor pool, aqua gym, games room, reading room and children’s playground among others. Another unique selling point of the development is its 15 meter elevation from the main road, which makes Residensi Bintang Bukit Jalil the highest condominium in Bukit Jalil, giving residents a breath-taking view of the city skyline and the majestic backbone of the peninsula, the Titiwangsa range.
Mah Sing Foundation Presents Dialysis Machine to Tanjung Karang Hospital
Mah Sing Foundation, the Corporate Social Responsibility arm of Mah Sing Group Berhad, one of Malaysia’s top property developers, recently presented Tanjung Karang Hospital in Selangor with a new dialysis machine to help in treating patients with kidney failure. The dialysis machine was presented by Dato’ Indera Syed Norulzaman Syed Kamarulzaman, Chairman of Mah Sing Foundation to Dr. Mohd Zamri Wagiman @ Saim, Director of Tanjung Karang Hospital. Also in attendance was Jailani Arshad, Chairman of the Board of Visitors of Tanjung Karang Hospital and hospital employees.
• Feb 2018
Mah Sing Arts & Lights Expo
The public can now immerse themselves in the country’s first pop-up art and technology platform at Mah Sing’s Arts & Lights expo. The developer recently showcased the expo at two of its strategically located sales galleries in Kuala Lumpur; M Centura in Sentul and M Vertica in Cheras respectively. Both expos ran from 6 to 20 January 2018 to give Malaysians around the country the opportunity to enjoy this once in a lifetime experience. “Arts & Lights is a strong testament to our transformational efforts in ‘Reinventing Spaces, Enhance Life.’ With Arts & Lights, we aim to bring a breath of fresh air for the people as well as presenting them the opportunity to come and experience the quality of our project first hand,” said Mah Sing’s Group Managing Director, Tan Sri Dato’ Sri Leong Hoy Kum. “We are glad to see Arts & Lights garner such a rousing response from the public. It was nice to see people from all over making the time to visit this extraordinary event.”
GREENERY WITHIN THE CITY
SPNB ASPIRASI SDN BHD
(490479-v) MILIK PENUH SYARIKAT PERUMAHAN NEGARA BERHAD _SPNB)
Marketing agency: For enquiries:
03 8318 0417
016 321 9033 017 779 1688
NO. Lesen Pemajuan Perumahan: 14153-1/11/2017/ (0934(L) | No Permit Iklan dan Jualan: 14153-1/11/2017/0984(P) | Tempoh Sah: 05/11/2015-04/11/2017 | Tarikh Dijangka Siap: Mei 2019 | Hak Milik Tanah: Pegangan Bebas | Gadaian Tanah: Tiada | Pelan Bangunan Diluluskan Oleh: Majlis Perbandaran Sepang | No. Rujukan Pelan Bangunan: MP Sepang 600-34/2/71(12) | Jumlah Unit dan Harga: Pangsapuri (1,168 Unit) MIN: RM395,460.00 MAKS: RM958,247.00