EKOVEST TRANSFORMING THE REAL ESTATE ENVIRONMENT
MAIN FEATURE GREEN INVESTMENTS MAKES SENSE
RAWANG, THE NEXT BIG SATELLITE TOWN OF GREATER KL
August 2015 RM7.50(WM) RM9.00(EM)
KDN PP 18181/04/2013 (033492)
here are only few who can truly made it to a level where others have not been able to reach. What is their secret? From a small time contractor to a major highway builder and connector of Greater KL. Ekovest achieved exactly that today with their DUKE phase 1 highway, and they already gotten the necessary approval to build DUKE phase 3 from the government. Passion is one of the factors that determine your success, truly ‘Malaysia Boleh!’ Locally, investing properties in Rawang is the next big thing. Serving as the northern gateway of Greater KL, this is an area that is rapidly developing, and will be the next property hotspot. Meanwhile, Hong Kong is the focus for our International story this time around. Knowledge is power, what is term as ‘green’ might not be so green after all, learn to invest in green properties the correct way. There are also stories to not just inspire you but also to show you how to invest. My advice is that you get a copy of this magazine and enjoy reading.
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Although every reasonable care has been taken to ensure the accuracy of the information contained in this publication, neither the publisher, editors, writers nor employees or agents can be held liable for any errors, inaccuracies and/or omissions. The contents of this publication do not constitute investment advice. It is intended only to inform and illustrate. No reader should act on any information contained in this publication without first seeking appropriate professional advice that takes into account their personal circumstances. We shall not be responsible for any loss or damage, whether directly or indirectly, incidentally or consequently arising from or in connection with the contents of this publication and shall not accept any liability in relation thereto. The views by our contributors expressed here are their personal opinions and do not necessarily reflect Property Insight’s views. The publisher does not endorse any company, organisation, person, investment strategy or technique mentioned in this publication unless expressedly stated otherwise. The publisher does not endorse any advertisements or special advertising features in this publication, nor does the publisher endorse any advertiser(s) or their products/services unless expressedly stated to the contrary. All rights reserved. No part of this publication may be reproduced in any form or by any means, including photocopying and imaging without the prior written permission of the publisher.
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COVER STORY 12
Ekovest Transforming The Real Estate Invironment
Narrowing down on the impact that expressways have on communities and real estate developments
DEVELOPER OF THE MONTH 46 Rise With UEM Sunrise
UEM Sunrise managing director / chief executive officer Anwar Syahrin Abdul Ajib shared with Property insight UEM Sunrise’s take on the Property market
MAIN FEATURE 20 Green Investments Make Sense
Investors should not underestimate the benefits of going green
FEATURE 26 Preparing For The Afterlife Planning and investing in land for burial is wise as it is getting more expensive
Protecting Property Assets With Insurance
Find out how you can protect your assets via insurance with Alllianz Life Insurance CEO Rangam Bir
AREA FOCUS 34 Rawang, The Next Big Satellite Town Of Greater KL Some say Rawang will be like Puchong, Is this for real?
PERSONALITY OF THE MONTH 52 The Burning Flame To Success
Passion is the defining factor that determines Fallon Loo’s success in investing, sales & marketing, and mentoring
INTERNATIONAL MARKET 56 Staying High And Stabil
Foreseeing The Hong Kong property market
INVESTOR NEXT DOOR 62 Taking Calculated Risk
With 28 properties, doing due diligence paid off for this young girl
FEATURED PROPERTY 40 Cassia @ Antara Gapi PKNS has ventured into Rawang with its newly launched landed property
Beautifying Your Home With Curtains
The right curtains will reflect the characters of your home
FINANCE 68 Foreign Exchange And Property Investors STRATEGY 72 Home Financing For 1st Time Home 77 Global Real Estate Investment
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NEWS & EVENTS
PROPERTY INSIGHT PROPERTY SHOWCASE Will you invest in property, knowing if the market will rebound by June 2016?
hat a crowd it was at Property Insightâ€™s Property Showcase! After a few months since the implementation of Goods and Services Tax (GST), it appears that sentiment of the property market is recovering and the crowds are returning. This was seen at Property Insightâ€™s Property Showcase, recently held at the Tropicana City Mall in Petaling Jaya from 7th to 16th August 2015. The event saw the participation of developers and home product providers, such as Titijaya, Mah Sing, Sime Darby, Country Heights, and Belka. Shoppers were treated to insightful presentations by real estate experts on topics such as real estate investment, security, financing, and area studies. Not all the events at the property showcase had to be taken seriously. There were family-oriented events that were fun for shoppers. It is not a stretch to the imagination that the event was a success to the organizer and exhibitors. Watch out for the next Property Insight event, which are featured in the events calendar!
8 | SEPTEMBER 2015 www.propertyinsight.com.my
019 320 3877 012 732 3877 www.thepano.com.my www.propertyinsight.com.my SEPTEMBER 2015 I 9
NEWS & EVENTS
eal estate experts on real estate in the Asia Pacific region gathered in Kuala Lumpur on 6th August 2015 to share new ideas in a conference titled “Positioning Malaysian Real Estate: Post GST & 11th Malaysian Plan 2015”. Organised by Malaysia Property Incorporated (MPI), (initiative under the Economic Planning Unit of the Prime Minister’s
POSITIONING MALAYSIAN REAL ESTATE: POST GST & 11TH MALAYSIAN PLAN 2015 BY MPI Office) participants included business leaders and CEOs of top funds, investment banks and top developers in Malaysia and Singapore. Award-winning master planners from Jerde Partnership (USA), Benoy (UK) and AECOM (USA) shared the stage to discuss the success stories in other cities (Hong Kong, Shanghai & Singapore) on Transit Oriented Development (TOD) concepts in the
light of more than RM40 billion worth of infrastructure being planned in the next few years i.e. High Speed Railway (connecting KL – Singapore City) and other new rails being built in KL (Mass Rapid Transit Line 1 & 2, Light Rapid Transit Line 3). AECOM also talked about the on-going transformation of KL river into what would be a very pleasant and liveable communal space for city dwellers.
CERIA RESIDENCES @ CYBERJAYA
etia Haruman launched its Ceria Residences Show Gallery and two show units last August, unveiling the next generation of homes for Cyberjaya that caters to the larger and growing families. The launch was officiated by the Timbalan Yang Di Pertua of Majlis Perbandaran Sepang, Muhammad Hafiz Bin Shaari, amidst a carnivallike atmosphere, which saw hundreds
TTDI GATEWAY IN SECTION 13, SHAH ALAM
ome Product Centre (HomePro) recently signed a land lease agreement with Naza TTDI to establish its flagship store presence in Malaysia at Naza TTDI’s RM2.5billion TTDI Gateway development in Shah Alam. The agreement was executed by HomePro Malaysia managing director Anuchar Jitjaturunt and Naza TTDI deputy executive chairman and group 10 | SEPTEMBER 2015 www.propertyinsight.com.my
From left: Idzham Mohd Hashim, Chief Strategy Officer, Naza TTDI, SM Faliq SM Nasimuddin, Deputy Executive Chairman and Group Managing Director, Naza TTDI, Anuchar Jitjaturunt, Managing Director, HomePro Malaysia,Teh Ah Hock, VicePresident, HomePro Malaysia.
managing director SM Faliq SM Nasimuddin. The lease covered a land size of 4.03 acre over a period of 32 years. TTDI Gateway is a 38.8 acre
of potential home buyers enjoying the revelry. The Ceria Residences, located on 19.5 acres of freehold land, comprising of 150 units of 2-storey terraced villas, was launched in July 2014. With a gross development value of RM 330million, the Ceria Residences is the ideal investment for home owners, investors and families who are looking to upgrade their existing home.
development in Section 13, Shah Alam, that will be developed over three phases will consist of offices, serviced apartments, and retail components. The entire project is expected to be built with a gross development value of RM2.5 billion and is targeted for completion by 2020. The first phase of the development, TTDI Sentralis, was launched last year, comprising of business suites and retail units, which received a good response. Naza TTDI plans to launch the serviced apartments, following the strong interest and registration recently, due to the announcement of the upcoming LRT3 station, which will be within walking distance to the development.
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www.propertyinsight.com.my SEPTEMBER 2015 I 11 (574362-W) (GST ID NO. 001867145216)
TRANSFORMING THE REAL ESTATE ENVIRONMENT
Narrowing down on the impact that expressways have on communities and real estate developments BY: DANIEL SIM
12 I SEPTEMBER 2015 www.propertyinsight.com.my
he Duta-Ulu Klang Expressway (DUKE), a major infrastructure development by Ekovest, speaks for itself as a timely creation, if you agree that time is the essence of everything. The creation of the first phase of DUKE in 2009, which spanned a length of 18km, and has a concession period of 30 years, had opened up a new avenue for traffic in the nation’s capital of Kuala Lumpur. In Malaysia, there are players focusing solely on infrastructure development, and others are focusing on property development, but they generally do not integrate together both disciplines. This is where Ekovest differentiates itself. Ekovest managing director Datuk Lim Keng Cheng shared, “We are playing the role of not just building and constructing, but also integrating both property and infrastructure developments. The first point of integration is the KL transportation master plan.” Ekovest’s development strategies are three-pronged. First, they intercept cars on the DUKE expressway. Then, Ekovest hosts them at their ‘Park and Ride’ facilities, which has ample parking bays, and then leads them to the rail system. Ekovest makes sure that all their expressways are joined together and linked with other highways to encourage motorists to use them. “I helped the government save on subsidies when I proposed the DUKE, because all the cars will use fuel more efficiently, rather than be stuck in heavy traffic jams with no
other alternative roads. I also save the environment, as less CO2 is released, and this is eco-friendly. That is why we feel very proud of this project,” said Lim. He stated that urban cities in Malaysia, just like the United States, use cars as the main mode of transportation. “I was with a friend in Boston, United States, a city with 1.2million in population. I joined my friend for golf at 6am and after I came back into the city, it was still having a massive traffic jam, even though it was 9.30am already,” shared Lim. He stated that in Kuala Lumpur alone, we have a population of 3 million people. People will travel by car from as far as Bangi or Nilai in the south, and Bukit Beruntung in Rawang from the north, to Kuala Lumpur city centre to work, even though the distance is 20 to 30km away. Therefore, developers should not just focus on building highways, but rather on value-added highways, which include linkages to other major highways and the rail system. One such developer who came up with such bold move was Ekovest. According to research done by Ekovest, the DUKE has helped reduce road usage, caused by motorist on local roads, by up to 30%. Ekovest believes this is happening, because motorists who continued using the DUKE saw how the expressway benefited them, even though they have to pay a toll fee of RM2. It provides a shortcut across the east to the west of Kuala Lumpur. The DUKE consists of the Duta, Ulu Klang, and the Karak links. www.propertyinsight.com.my SEPTEMBER 2015 I 13
Before the conceptualisation of DUKE, motorists had to use the Middle Ring Road 2 (MRR2) or the inner ring roads, which consists of Jalan Tun Razak and Lebuhraya Mahameru. This meant that there used to be only two route options for someone coming from Petaling Jaya to Gombak area. Most of the motorists from Gombak would have to use Lebuhraya Mahameru, which is part of Inner Ring Road (IRR), which will then lead them to Jalan Duta and Hartamas areas. It was also the only way to reach premier neighbourhoods like Bangsar. Now with the DUKE phase 1 completed and accessible to the public, it will not only be an additional choice as a route, but also shortens the distance considerably between various neighbourhoods. Now, because of the connectivity, even during peak traffic hours, it takes only about 5 minutes to reach Hartamas area. 14 I SEPTEMBER 2015 www.propertyinsight.com.my
“There were a lot of challenges to construct DUKE phase one. It was very difficult to construct, but it was the most beneficial for road users. We don’t take road users outside and then back into the city. We give them a shortcut,” said Lim. One of the major challenges in constructing the first phase of DUKE was to cut through a lot of areas where there were many squatters. Relocating the squatters was really challenging, even though the lands belonged to the government. However, Lim shared that the easiest way to construct a highway is when the land is empty, so that the highway developer can just cut through thick jungle, much like the North South Expressway. “Currently, we are constructing the DUKE phase two, which consists of two links,” shared Lim. He pointed that the two links are the Sri Damansara Link
and the other is Tun Razak Link. There will be road-widening works along Jalan Tun Razak, near Institut Jantung Negara (IJN) and Hospital Kuala Lumpur (HKL). Then there is the flyover to Bulatan Pahang. One will come into Jalan Pahang and connect to the existing DUKE at the Jalan Pahang area. the Bandar Sri Damansara link starts from where the MRR2 in Bandar Manjalara, Kepong. With a total length of 16.4km, it will have a three lanes designated flow from each point. The added value is that once the DUKE phase 2 is completed, it will help connect motorists from one end to the other end of MRR2. DUKE phase 2 will not only served to reduce traffic jam and time to reach your destination it will also help NKVE in the sense that it runs parallel with the NKVE. “Ekovest has actually sponsored the Klang Valley master plan. We have engaged traffic consultants to look
at how we can solve traffic problem in Klang Valley and Kuala Lumpur,” shared Lim. He added that Ekovest asked the consultants on how, as a developer, it can integrate these highways with public rail network. “We realised that there are areas lacking if we just continue to build highways only and if there are MRTs without integration with road infrastructures. We want to have a holistic transport master plan that is sustainable in the long run,” mentioned Lim. He said that one of the reasons why Ekovest managed to convinced the government and obtained government approval for the construction and development of DUKE phase 3 was because they showed how this integration and sustainable elements can co-exist. One of the many methods was where Ekovest proposed to build the ‘Parkand-Ride’ facilities along DUKE at points where it connects with the rail system. This meant that for someone who is staying in Shah Alam can drive along DUKE and park at one of the ‘Park-and-Ride’ facilities, then travel into the city without driving. “I think the problem is that, for most people staying in the Klang Valley, the traveling time between their homes and the rail networks might take 15 minutes or more, and then they have to wait for their trains when they reach the stations to bring them to their destination, so the proposal will provide flexibility for residents using the DUKE,” shared Lim. Once DUKE phase 3 is implemented, it is going to have its own traffic management system where it will be able to channel vital information to motorists, such as which ‘Park-andRide’ has the most available parking lots, and real-time reports of traffic conditions for routes that one has to take, to travel to city centre. “The unique thing about this ‘Parkand-Ride’ facility is that this will be the first in the country to connect to a high capacity expressway, because most of the ‘Park-and-Ride’ facilities
now can be accessed via local roads,” pointed Lim. For example, one would need to come out from the DamansaraPuchong Highway (LDP) or New Pantai Expressway (NPE) to go to a local road to access the facilities. Presently, Ekovest has proposed 10 stations, and the first ‘Park-andRide’ facilities, under Ekovest phase 1 of the DUKE highway proposal, is being constructed. The first ‘Parkand-Ride’ facility, where construction is underway, is at the KTM Segambut area, and will have up to 4,000 parking
lots to begin with. It is being built concurrently with the DUKE phase 2 project and expected to be completed by end of next year. “This ‘Park-and-Ride’ facility is being built underneath our toll plaza, so we have to make sure we construct the DUKE 2 and the ‘Park-and-Ride’ facility at the same time, or else the facility will not be able to serve the function we intended it to be, as there is already an existing KTM Segambut station there,” shared Lim. According to Ekovest’s research, the current existing DUKE is already
www.propertyinsight.com.my SEPTEMBER 2015 I 15
serving 130,000 motorists on an average daily basis. Although the data shows that the numbers peak during weekdays and drop a little during weekend, it is still a favourite among motorists during festive period to commute to Kuala Lumpur. Therefore, the DUKE and its alignment are good, not just for the vicinities located along the highway, but also outside of KL. COLLABORATIONS WITH DEVELOPERS “If you have lands that are served by a highway or an expressway, your plot ratio will go up automatically. For example, for the existing DUKE, we got a couple of developments proposals. We also got our own Ekotitiwangsa,” shared Lim. He stated that without DUKE, these projects won’t be launched, because there is no way you can cater for the density of the crowd
that the developments bring. Any major developer can get a project approved, but it will be for a very low plot ratio, like 1:3 as an example. Lim highlighted, “Once an expressway comes in, the plot can shoot up to a ratio of 1:6. This enhances value for developers. Ekovest wants DUKE to be the catalyst for the next phase of Kuala Lumpur’s development.” The DUKE 2 is going to have direct access into Ekovest’s property developments. This is an infrastructure and property feature that we have not seen much in Kuala Lumpur. The whole development called the KL River City has eight acres of land with a 2.2km length of river-front development that Ekovest is aiming for the government to master plan. Three acres of land will be used to develop Ekotitiwangsa. It will consist of residential serviced apartments and commercial products. Ekotitiwangsa involves all the
16 I SEPTEMBER 2015 www.propertyinsight.com.my
components one would expect to find in stylish living, where work and play converge seamlessly. There is an elevated rooftop green sanctuary that forms part of the KL River Centre, and commercial developments that offer retail, dining and entertainment experiences, raising the benchmark for urban live-work-play environment. Ekotitiwangsa is a gem encapsulating three unique towers of 696 units of freehold serviced apartments, perched above podiums of trendy retail space. It faces KL River City, Genting Highlands, Titiwangsa Lake and Kuala Lumpur City Centre. Providing a captivating yet rare abode in the city that only the privileged few can possess, each serviced apartment unit ranges from 820 sq. ft. to 1340 sq. ft. and are designed to optimise the natural light. Amenities including a wading pool for children to have fun with water
www.propertyinsight.com.my SEPTEMBER 2015 I 17
Once an expressway comes in, the plot can shot up with a 1:6 ratio, which is one of the key value enhancements for developers, Ekovest wants DUKE to be the catalyst for the next phase of Kuala Lumpur’s development.” - Lim and infinity pool for residents who just love to swim, Jacuzzi pool to relax after a long day, gymnasium to keep yourself fit, multi-purpose hall for functions, laundry for your clothing and barbeque area to just get to know your neighbours better, and many more that will definitely help to provide residents with an abode that exudes comfort. Ekotitiwangsa is located just 5km from Kuala Lumpur City centre, within walking distance to LRT Ampang line and monorail, and is linked to proposed future development of the KL River Centre, as well as major travelling routes such as DUKE, DUKE 2, Jalan Pahang, MRR1, Lebuhraya Mahameru, MRR2 and Sentul link. It is conveniently located close to medical facilities, colleges, schools, shopping, as well as the serene and picturesque Titiwangsa Lake and recreational park. “The take-up rate is very good. We have a discussion with our top management where we are talking about one block that we do not want to sell, but even when we want to sell, the price will be double when it completes because not easy to have this development,” commented Lim. He shared that, “Imagine you are fronting the river, but the ambience is like KLCC. You are going to have fish inside. We are taking natural water; we treated these ponds for 18 I SEPTEMBER 2015 www.propertyinsight.com.my
sediment to come down before it comes. Sustainable infrastructure very important.” “Every great city has a river going through it. For example, London has the Thames River, but Kuala Lumpur has yet to have one, even though we have the KLCC twin towers. That is why the idea of the River City project where Ekotitiwangsa will be located was mooted,” said Lim. He shared that is also what the government wants to achieve, a life-line that goes through the city centre. Under the River of Life program, Lake Titiwangsa will also be upgraded. The Government will spend up to RM1 billion to beautify this River of Life which flows until Mid Valley City. Lim stated that the water quality of the river will be better. It is safe for water sport activities such as kayaking, even though they have heard of complaints that the colour turn into ‘teh tarik’ colour, but in actual fact, it was not caused by pollution but by mud and slide after rainstorms, due to the mud going downstream into the river. He said that even now, the Gombak River has many fishes, but they couldn’t thrive because they get washed down by the storm water. “We have also proposed a double decker river system where we would have low flow on top, and storm water will actually go down through a tunnel, similar to the smart tunnel concept,
so with this innovative and creative method, we hope we can mitigate the fact that some of the muddy water will actually flow down, and then this top flow of about one meter depth water will be maintained and be pleasing to the eyes,” shared Lim. The whole project will take 5 year to complete, where Ekovest has been given a completion dateline by DBKL. FRIENDLY ADVICE “I always say that you don’t over commit, but this is the best time to buy property if you can afford it, because developers are giving discounts. When it is a booming time, you will have no choice but to buy at a higher price. Especially with the current situation of the currency, one should take the advantage to buy,” shared Lim, who mentioned that he does not share the negative sentiments of most property consultants in Malaysia regarding the property market. In his own personal view, the government spends a lot of money on building new infrastructures such as MRT 1, 2, and 3, and expressways such as DUKE. “The market was a little bit overheated in the past, but it is the right time for people to invest as it is correction time for the market and is not crashing as speculated,” shared Lim.
GREEN INVESTMENTS MAKE SENSE Investors should not underestimate the benefits of going green BY: MAK KUM SHI AND FARA AISYAH FIRDAUS PETIAL
GEO (Green Energy Office) Building, Malaysia’s first Green Building Index (GBI) Certified Building.
any people, not just Malaysians, do not have a clear perception about what green building is all about. The reality is that green building is beneficial in many ways, and that it isn’t only morally right to go green. It makes sense on an economic, productivity, well-being, and lifestyle perspective. “The problem we have in Malaysia is that a lot of people think going green is expensive. Is it true? Where do they get the numbers from?” GreenRE executive director James Chua said. “People assume it is expensive 20 | SEPTEMBER 2015 www.propertyinsight.com.my
to build a green building. This is a misconception. For example, a developer built a new residential development in Rawang. In order to get one point in getting a green certificate, he must build bus stops outside the development, but there are no bus services there! What is the point of building a bus stop, and spend thousands of Ringgit on it? The tools are good, the bus stops are good, but that is provided there is a bus service.” Citing a world survey, Chua said, “The perception is that to build green buildings, it will cost 0.9% to almost
29%, on top of their gross development cost. These are estimates that were worked out during the design stage, but is it true? The truth is, when such buildings are actually built, it is minus 0.4% to 12.5%.” “The Building & Construction Authority in Singapore published a report, stating that if you want to build a platinum-rated green building, it would actually cost you 2% to 8% (above the gross development cost). If you want to build a normal-rated green building, it actually costs you 0.3% to 1.0% (above the gross development cost). However, the misperception is
THE GBI RATING SYSTEM BUILDING WILL BE AWARDED THE GBI RATING BASED ON 6 KEY CRITERIA: ENERGY EFFICIENCY (EE) Improve energy consumption by optimising building orientation, minimizing solar heat gain through the building envelope, harvesting natural lighting, adopting the best practices in building services including use of renewable energy, and ensuring proper testing, comissioning and sustainable regular maintenance.
INDOOR ENVIRONMENTAL QUALITY (EQ) Achieve good indoor environmental performance in indoor air quality, acoustic, visual and thermal comfort. These will involve the use of low volatile organic compound materials, application of quality air filtration, proper control of air temperature, movement and humidity.
SUSTAINABLE SITE PLANNING & MANAGEMENT (SM) Source: GBI
that people think that green building must be expensive.” “If you design properly with a good passive design, then your cost would be very much lower. What is a good passive design? In Malaysia, if we look at our own kampong (village) houses, they are very comfortable. Our kampong house is environmentallyfriendly and cool. Why are our architects not designing based on what our forefathers had designed before?” Malaysian Institute of Architects immediate past president Ar Chan Seong Aun commented, “If you measure it in dollars and cents, and a lot of time, effort, and the extra cost that we put in, depending on the component, we can recover the capital cost within two to five years. This is very fast. It is already proven.” “Looking at our completed projects, which have seen one to five years of electricity usage, water usage, and waste management, we measured with actual numbers from existing
buildings. When they send in (the numbers) for verification and assessment at the final stage, we actually measure and track all these, and the results actually shows that there are savings.” “What we are concerned about is the way the economy is developing right now. We keep continuing to increase our energy demand, polluting our environment, and expanding our urban space. When we look at our industries, if we don’t control them, they will pollute. This is where, we try to encourage them to reduce pollution, reduce energy usage, and improve the working environment. This is the key thing we are looking at. It creates value with a little bit more effort.” However, Social Responbility Monitor principal consultant Michael Chiam cited that when new townships are built, all the trees are cut off from the start, and then replanted when the township is completed. “Are there efficient ways to build homes and at the same time, leave the trees alone?”
Selecting appropriate sites with planned access to public transportation, community services, open spaces and landscaping. Avoiding and conserving environmentally sensitive areas through the redevelopment of existing sites and brownfields. Implementing proper construction management, storm water management and reducing the strain on existing infrastructure capacity.
MATERIALS & RESOURCES (MR) Promote the use of environmental-friendly materials sourced from sustainable sources and recycling. Implement proper construction waste management with storage, collection and re-use of recyclables and construction formwork and waste. WATER EFFICIENCY Rainwater harvesting, water recycling and water-efficient fittings. INNOVATION (IN) Innovative design and initiatives that meet the objectives of the GBI. Achieving points in these targeted areas will mean that the building will likely be more environment-friendly than those that do not address the issues.
GBI CLASSIFICATION POINTS
The (RNC aspec linked townh
This t Site P Energ deve the e inhab provis comm impro
Such negat a bet comm
GBI RN EE EQ SM MR WE IN 0
The G Ratin criter Effici Quali on en and w
On-si proce provis fatigu
The t but t based
This t the (FMM
GBI IN EE EQ SM MR
76 to 85 points
66 to 75 points
50 to 65 points
Source: GBI 4
www.propertyinsight.com.my SEPTEMBER 2015 I 21
WHY GREEN BUILDINGS? 1
Green buildings are designed to save energy and resources, recycle materials and minimise the emission of toxic substances throughout its life cycle.
Green buildings harmonise with the local climate, traditions, culture and the surrounding environment.
Green buildings are able to sustain and improve the quality of human life whilst maintaining the capacity of the ecosystem at local and global levels.
Green buildings make efficient use of resources, have significant operational savings and increases workplace productivity.
Building green sends the right message about a company or organisation – that it is well run, responsible, and committed to the future.
“People are doing things selectively, which is wrong, because they focus on what benefits them. The awareness must be raised to make people aware of what a green building looks like, and not just on saving on the electricity bill on lighting. He questioned whether green building really helps people a lot, or it is beneficial to certain people.” DEFINING GREEN BUILDING A green building focuses on increasing the efficiency of resource use, such as energy, water, and materials, while 22 | SEPTEMBER 2015 www.propertyinsight.com.my
reducing building impact on human health and the environment during the building’s lifecycle, through better siting, design, construction, operation, maintenance, and removal. Green buildings should be designed and operated to reduce the overall impact of the built environment on its surroundings. Chua shared that green buildings are buildings that promote sustainability in the built environment, and raises awareness among developers, architects, engineers, planners, and the public about environmental issues
Even if you are a house buyer, you wouldn’t want to buy something that doesn’t appreciate in value, wouldn’t you? Green saves you money. Good corporate image, good branding.” - Chan and the responsibility to the future generation. “Sustainable development is something that is defined as development that meets the needs of today, without compromising the ability of our future generations to meet their needs.” There are many established green rating tools providers, such as Building and Construction Authority GreenMark (Singapore), Green Building Index (Malaysia), Leadership in Energy & Environmental Design (USA), Building Research Establishment Environmental Assessment Methodology (UK), Green Star (Australia) and more. In Malaysia, GreenRE, a non-profit organisation that is owned by the Real Estate and Housing Developers’ Association (REHDA), has been promoting green yet affordable efforts among property developers. GreenRE’s tools come from Singapore’s Building and Construction Authority (BCA). The
significance of such tools is that they comply with Singapore’s Green Mark standards, which is among the highest in the world, where environmental conservation is concerned. Chua said, “GreenRE is more userfriendly, more affordable, and is notfor-profit. GreenRE is adapting Green Mark from Singapore. Green Mark has assessed more than 40 million square metres of buildings and developments in 15 over countries.” In the case of GBI, it is Malaysia’s green rating tool for buildings and towns, created to promote sustainability in the built-environment. The GBI rating tool provides an opportunity for developers and building owners to design and construct green, sustainable buildings that can provide energy savings, water savings, a healthier indoor environment, better connectivity to public transport, the adoption of recycling and greenery for their projects, and reduce our impact on the environment. Chan said, “If property buyers do not have technical knowledge for them to access the building on their own, they should look for the Green Building Index certification, because most of the buildings, if the developer, they are proud of what they have done, they would normally go for a rating. They normally put a plaque at their entrance and display it in front of their sales brochure. We don’t allow anyone to post this up without proper certification. It helps to keep our environment clean, and ensures our buildings are of high standard and cooler.” “These are all the key things that architects and engineers are trained to be GBI designers or facilitators. They will apply that to all their designs. Whether or not buildings are rated, they gained the knowledge, and will start to apply it to the buildings to make them better. Under our GBI scheme, we are coming close to three thousand facilitators. Not only do we do it for Malaysia, we also help our ASEAN neighbours.”
MORE THAN RINGGIT AND CENTS There are clear benefits in going green. In recent years, the government had introduced incentives to encourage environmental conservation and resource management. In Prime Minister Dato’ Sri Mohd Najib Tun Abdul Razak’s Budget 2014 speech, he stated that the government was committed to providing a clean, safe, and healthy environment for the present and future generations. Among the programmes that were implemented were the National Carbon Reporting Programme (MyCarbon) by the corporate sector, establishment of a National Conservation Trust Fund for conservation of degraded areas and permanent forest reserves, as well as natural resource management. To strengthen the development of green technology, the government had provided investment tax allowances for the purchase of green technology equipment and income tax exemption on the use of green technology services and systems. The Malaysian Green Foundation was also established to promote and enhance the use of green technology by the corporate sector and the general public. A launching grant of RM15million was provided to the Foundation. Malaysian Institute of Architects immediate past president Ar Chan Seong Aun said, “If you buy a greenrated property, there are a few things that are certified by outside parties. The first is the living environment will be cooler, brighter, and healthier.”
Sustainable development is something that is defined as development that meets the needs of today, without compromising the ability of our future generations to meet their needs.”
Chan added, “Whereas if you buy from a non-rated building, you could end up with a dingy office, not enough daylight, paint that is not rated, smelly, and unhealthy, and buildings that have a lot of glass and is not properly shaded, and the right type of glass is not selected, then the building will become very hot. The only way to counter the heat would be to put on a lot of air-conditioning.”
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MAIN FEATURE “Green buildings are cooler, in terms of appearance, inside environment, and uses less air-conditioning. This is where the technicalities come in. Modern buildings have a lot of glassy areas. The glass areas are very good, because they let in all the daylight, so you don’t have to switch on the artificial lighting.” “When it is brighter, you have a better feeling about the place, but at the same time, when you design it correctly, it blocks out all the heat. It lets the daylight in, but it blocks the heat. It is either shaded, or has the right type of glass where it reflects out all the heat as well, does not allow the heat to come directly into the building. On the inside, blocks out all the areas where you don’t need the glass, but on the outside, it looks nice, with all the glass.” Chua stated that according to international research, if you build a building with a lot of good design, a lot of good windows that allows you to look outside, you actually can help yourself to think better, and mental memory can improve by 10% to 25%. Today’s hospitals are designed with windows to allow patients to look outside, because it helps them to shorten their stay in the hospital. Chua cited, “According to our Malaysian Standard MS1525, I need at least 300-400 lumens luxes (a measurement for light) for a worker to work efficiently or a student to study effectively. According to research, if a student, if you ask him to study under the shade in the daylight, you are actually helping them to learn faster, by 20-26%. If you worked in an office with good daylight, you will be more productive, at least 18% more productive. If you have good ventilation, you will work at least 11% better.” “If I am going to open a retail shop, I am going to sell clothing, if my clothing has good daylight, and people can see the real colour, your sales will improve by 15% to 40%. All these are statistics from the world.” 24 | SEPTEMBER 2015 www.propertyinsight.com.my
Chan cited, “We have a clear understanding of what water usage is like in Malaysian homes and offices. So typically, Malaysian homes average use is about 300 litres per person per day, compared to the United Nation’s standard, which is 150 litres. We almost double. So that means we are not very efficient in the use of our water. Not only should we be reducing that amount, we should use it more efficiently.” “In green building, we encourage the owners to collect the rain water from their roofs, use that rain water that is not drinkable to water their plants, wash their cars. You can save about 50% of your water usage. Although it is not a big item in terms of dollars and cents, it is actually saving the environment.” However, Chiam advised, “You must take the whole thing holistically when going green due to climate change. Don’t just think of the glass wall that will provide lighting, as you may pump up the air-conditioner. Whatever benefit has gone to the electricity bill for air-conditioning. You also look at the water element. Look at things like the roofing and solar energy. It is a very good idea to have these green things but better design is required.” “If a person was buying a unit in a green building, is there a rainwater harvesting system? Do they have any benefit in terms of water supply? Can energy be tapped from the roof by using solar panels? The only benefit in green building is coming from the windows.” Greenbuildingindex general manager Dr. Herman Teo said, “The occupants benefit from it. Energy efficiency would be a long-term thing. If you save energy, you save costs. The other thing that is important for the occupant is the indoor environmental quality.” Teo commented, “I feel this is a win-win situation. By doing corporate social responsibility roles, it enhances the developers’ reputation. On the other hand, the end-user is buying a
You must take the whole thing holistically when going green due to climate change.” - Chiam valued property. It is higher in value. Even in the long run, it saves energy and it is a better environment for its occupants.” Chan added, “Even if you are a house buyer, you wouldn’t want to buy something that doesn’t appreciate in value, wouldn’t you? Green saves you money. Good corporate image, good branding.” Citing an experience in a green hotel in Copenhagen, Chiam shared, “They had open declaration, that they are doing charity work by adopting two schools for children and one old folks home. The hotelier contributes to those organisations from the savings that they generate from green practices. Any food that is not thrown away is not wasted and is given to charity homes. Don’t just think about energy saving. They use recycled wood for their furniture, and they declare this.” In conclusion, given the benefits of being environmentally responsible, investing in green buildings and adopting green practices makes sense, not just for real estate investors, but also for everyone else.
PREPARING FOR THE AFTERLIFE Planning and investing in land for burial is wise as it is getting more expensive BY: DANIEL SIM
ccording to the United Nation’s projection, Malaysia will become an ageing nation by 2030. The National Policy for the Elderly mentioned that a country achieved the status of an aging nation when 15% of its population consisted of those aged 60 years and above. Many in the year 2040 would be aged 36 and above, according to the National Statistics Department’s (NSD) Population Projections 20102040 document. The NSD said Malaysians would also be making fewer babies while the annual growth rate would decline
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from 1.8% in 2010 to 0.6% in 2040. On the other hand, the population aged 65 years and above is projected to increase more than three-fold compared to the 2010 population. The UN Development Programme (UNDP) stated that 90% of the contributors to the Employees Provident Fund (EPF) in Malaysia did not even have enough money to live a simple lifestyle for a period of five years after retirement. The fourth Malaysian Population and Family Study by the National Population and Family Development Board, which was matched with the results of the Population, and Housing
census of 2010, found that about 23%, or 538,000 of the 2.4 million senior citizens in Malaysia suffered from the ‘empty nest’ syndrome. The even more pressing question is what will happen to this group of people once they pass on to the next world. Property Insight met up with Nirvana Asia Group chief marketing officer Olivia Lim to understand how one should start early to save and buy a burial plot to avoid complications later. “With a land bank of about 1,670 acres, Nirvana Asia Group is one of the largest privately owned memorial park in South East Asia and has been
in Malaysia for 25 years. Nirvana has been perceived as a memorial park catering only to the high end premium market,” said Lim who also stated that it was partly factored by the positioning of Nirvana’s products. However, in reality, Lim said that, “Nirvana Asia Group also offers many affordable burial lots as we have plenty of land allocated for the average middle income group-those earning RM60,000 per annum - to low income segments.” BURIAL PLOTS GETTING EXPENSIVE Presently Lim shared that most Malaysians will only buy burial lots when they turn 55 even though death can strike anytime. Young people, like those aged below 30, will usually work hard to buy a car, a medical card or even a home first. She has seen many families left without burial lots or even funeral services as diseases such as heart attacks can strike at a young age. “Nirvana encourages young Malaysians to start investing in pre-need burial plots as a form of investment for the future, we do not encourage speculation because of the nature of our business,” said Lim. She said based on the studies done, the most popular trend will be family lots, as many will be taking out their EPF to buy that. This shows that consumers know that burial lots will become less affordable in the future. In fact, the prices of burial lots have doubled compare to 10 years ago. Different locations for the burial plot will be priced differently, with an average family lot (corner lot) of RM228,000 to a corner lot of RM1.4mil. According to Lim, the most expensive family burial lot was sold for RM8million, and was transacted in the year 2012. She said that people will buy for such a price because they can keep it for a few generations. “We have several packages, what we call affordable housing, which will include not just the bare land but also the tomb,” shared Lim, who
mentioned that the lots are for two people, priced at RM30,800. The lower range package which will be without the tomb is priced at RM23,300, while the price of columbarium for two people is RM8,200,” explained Lim. FINANCING FACILITY According to Lim, Malaysians wanting to buy a burial plot can actually pay by monthly instalment without any interest. They can share the cost with their family members or relatives and buy together, and they can immediately use the land, as soon as they complete the payment. She gave an example where an
individual buying the combo package for two, will be paying RM30,800. This includes the tombs and everything else. They have to first place a 20% deposit or RM6,000, and then pay the rest via instalment within 24 to 48 months at CIMB bank nationwide. “We call ourselves a developer as well, but for a different market. The difference is that we do have to provide perpetual maintenance unlike most developers,” said Lim who also shared that the supply of land however, would not come easily as one of the criteria is to have good ‘Feng Shui’. She said that Nirvana, unlike other developers, cannot just acquire any land for burial because burial plots
Nirvana encourages young Malaysians to start investing in pre-need burial plots as early as a form of investment for the future, we do not encourage speculation because of the nature of our business.” - Lim
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must have specific land forms, water, soils and rivers, which is also one of the main reasons why people come to Nirvana when they want to purchase burial plots. Nirvana is doing so well that it’s turn over per annum is about RM700million per annum. NON SPECULATIVE TRADE At present, Lim said that the price growth rate for burial plots increases by 10% each year, which is very fast, in view of supply shortage for certain range of products. Therefore, Lim advises the younger generation around the age of 30 to buy the burial plots now and lock in the price for future use. They should set aside and save a sum of between RM400 to RM600 to acquire these plots. “We don’t encourage speculation, but just like people buying ‘insurance’, 28 | SEPTEMBER 2015 www.propertyinsight.com.my
when they realise they are financially tight, they can always dispose off by approaching any one of our 2,000 Nirvana agents,” shared Lim. According to Lim, the owner will receive a certificate for every plot of land or what is termed as ‘land title’, therefore, there will be an administrative fee of a minimum of RM300 or 2% - whichever is higher for any name transfer. “Nirvana does not do transaction for customers, only name transfer, because we believe some who have kept their plots for over a decade might upgrade to a nicer design,” suggested Lim. There are two zones in Nirvana Memorial park, the first one is the old zone which has an oriental concept, while the next zone has a ‘Zen’ concept.
FUTURE PLANS In the last decade, families may have 10 children, so if their parent pass away, the 10 children can fork out the money to pay for the burial, but the demographics have changed so much since then. Lim said that young Malaysians should be independent, and not dependent for their children to take care of their future needs like the old days, because of their lifestyles. “Therefore, Nirvana will be rolling out a new plan for young Malaysians to own burial plots, we call it pre-plan life management and will launch it on January 2016 which is when they can start to pay for the instalments,” said Lim. This is vital as she believes that nobody can get any more suitable land for burial in the next 20 years, due to land clearance. Nirvana itself has even announced via radio that they have purchased a parcel of land for a building over Dewan Bahasa dan Pustaka (DBP) with a few thousand compartments for urns. Lim shared that Nirvana has a sinking fund that will be managed by the bank, which in-turn generates dividend funds for perpetual maintenance cost. The money will then be used to maintain the park through gardening, fertilising, manpower and cleaning work to ensure the parks are in tip-top condition.
7/6/15 11:48 AM
PROTECTING PROPERTY ASSETS WITH INSURANCE Find out how you can protect your assets via insurance with Allianz Life Insurance CEO Rangam Bir BY: DANIEL SIM
alaysians would know that we are living in trying times. This is especially true if one reflects at the current state of the country’s economy. Nowadays, with the monetary policies tightening, owning a home in a good location and at a good price seems to be priceless, but there is more for homeowners than just owning a home. It takes a lot of effort to properly own and manage a property, which ranges from setting a timeframe to settle the mortgage loans, to preparing a contingency plan of ‘paying the bills’ 30 | SEPTEMBER 2015 www.propertyinsight.com.my
in the event unfortunate incidents happen. These measures will enable you to protect and safe guard the value of your property. Property Insight met up with Allianz, a company that has been around for 125 years, and chatted with Allianz Life Insurance Malaysia Berhad chief executive officer Rangam Bir to find out how Malaysian home-owners and home-buyers can insure their property. Aging society is a big issue in parts of the world where they are completely dependent on the social safety net. Malaysia on the other hand, does
not have a wide social safety net, but does have healthy and positive demographics. A substantial portion of the population are individuals between the ages of 25 to 35 years old. Thus, Malaysians need to plan ahead and use all opportunities to invest accordingly. According to Rangam, the life expectancy of the population in the 1950’s was only around 54 years for males and 56 years for females. These days, a healthy individual can expect to live in the excess of their 70’s. “The fact is that the life span is
increasing and the new generation (Z generation) could possibly live to their 90’s and 100’s as access to medical facilities improve,” commented Rangam. The retirement age has increased from 55 to 60 years but many individuals have already exhausted their EPF funds by then. This is why according to Rangam, the Malaysian government has diversified and moved away from a single pillar to a multipillar pension provisioning system such as the PRS, and other annuity schemes. “We basically launched a savings product, targeting the current environment. Our tagline is ‘everyone can save’, so basically we encourage young people to start saving on a regular basis using a disciplined model at a very low premium of about RM200 a month, which is normally an amount that you might spend over the weekend,” said Rangam. Rangam shared that Asian society traditionally has a much higher savings rate, as investing into real estate is an inherent part of our culture. It forms an important part of the asset-base we create, because, whenever we look at established families, they believe in having a secure home to live in. At the end of the day, how do you measure your wealth? Rangam pointed that we measure it by our Net Asset Value, which might be the outstanding value of our insurance, investment, cash in the bank, and
at the same time, the market value of our property, while netting off any credit that we might have to spend to finance that real estate. Most individuals have mortgages to finance their real estate. Most banks required and encouraged those mortgages to be insured, because that assures our asset value is protected in the longer run. “I personally see Malaysia’s Real estate market to be quite an interesting market, providing a lot of opportunities still. Malaysia after all is a stable environment,” commented Rangam. He said that the biggest concern right now is the devaluation of the Ringgit, but on a personal level, he is convinced that the Ringgit is fundamentally a very stable currency. He said what we face today is a sentiment issue. At the end of the day, sentiments will recover, and thus the currency will recover. From a value perspective, the value of real estate in Malaysia will be stable. It is an attractive market to invest. “When you take a look at the real estate market in Malaysia, you also are taking a look at what type of urban infrastructures are supporting the real estate in Malaysia,” added Rangam. He mentioned that the Malaysian government is doing quite a lot such as investing in rail connectivity. The availability of financing and the wellregulated financial market in Malaysia provides investors with an attractive opportunity to invest in the country’s
We have solutions for different kind of property, such as residential property, for Small and Medium Enterprise (SME), large corporations, and also for retail clients, where we are able to protect the property itself.” - Rangam real estate market. “Our customers have policies longer than 10-15 years. Therefore when we invest, we have a long-term investment horizon,” said Rangam. He added that Allianz invests in government bonds, equity, alternative assets, infrastructure projects, and real estate trust, which is quite a diverse strategy.” MRTA AND MLTA “We have the MRTA insurances. Basically the value of the insurance gets adjusted as the value of your outstanding credit decreases. The insurance in essence pays out your credit, because the credit is the differentiator to the net asset value of your real estate property,” commented Rangam. MRTA and MLTA serve different purposes. MRTA is cheaper because the premium that you are paying is very much linked to your outstanding credit. The MRTA is purely protecting the credit that you have. It is a form of protection for your family, so in case anything happens to you as the primary breadwinner, the outstanding credit that you have will be secured and taken care of. www.propertyinsight.com.my SEPTEMBER 2015 I 31
FEATURE You have nothing in addition at the end of the MRTA contract, it winds down as the credit winds down. The MLTA on the other hand, requires you to pay a higher premium, so that even when the credit is paid off, there is something remaining in case something happens, and it acts as additional cash value for the family. “What you can always do is that you can always have an MRTA with a lower premium which protects the credit, and then with the differences in premium, you can go in for a
“We also have what we call the house owner and the householder policies which basically protect the property from any damages from natural disasters such as floods, earthquakes, fire, lightning -basically providing protection on the property themselves,” he added. But at the end of the day, people are buying things for their home. That’s why Allianz also has a home guard insurance policy. The policy’s function is to protect the content of the home.
From left : Allianz Life Chief Sales Officer Ong Pin Hean and Allianz Life CEO Rangam Bir officially launch FlexiSaver, a new universal life savings plan that provides a wide choice of premium payment and coverage term to suit different savings needs.
different kind of insurance product, which allows you to meet your other insurance requirements. At the end of the day, what is your other insurance requirements, is it purely for a protection purpose,” advised Rangam. Insurance is quite an important part of protecting the value of your assets against the credit you have taken, but you also need to make sure you maintain the assets/properties in the long run, because at the end of the day, the net asset value is the market value of the property you have. There are various insurance solutions to protect these assets. “We have solutions for different kind of property, such as residential property, for Small and Medium Enterprise (SME), large corporations, and also for retail clients, where we are able to protect the property itself,” shared Rangam. 32 | SEPTEMBER 2015 www.propertyinsight.com.my
natural disaster such as a fire, where you might not be able to operate the business until you have repaired everything or until you recover. This is what we call consequential loss,” pointed Rangam. Other than insurance focusing on your business premise, a business owner might have liabilities for the products they are selling, which they can protect with liability insurance. There are also insurances for infidelity, where sometimes you might be faced with fraud cases by your own staff, or insurances requiring you to offer a bond or guarantee when you win a business contract. Insurance agencies will have insurance that supports the logistics as well. IS IT ENOUGH? According to Rangam, “what the company has found that there is a protection gap. Malaysians do not have enough savings, and as a company, we really try to advise clients on what would be the right level of coverage, given their current income,
From left: CEO of Allianz Life Insurance Malaysia Berhad Rangam Bir and CEO of Allianz Malaysia Berhad Zakri Khir during the company’s recent launch of providing insurance solutions for Persons with Disabilities
COMMERCIAL PROPERTY INSURANCE “We have clear cases of thefts, they can be known or unknown. Sometimes, you may find things missing after you leave for work, but for businesses, it is a different kind of risk. Protecting businesses against natural disasters is also present, similar to the benefits of protecting residential property.” “But on the business side, you might have a business loss as a result of a
family situation, future obligations in terms of education for children, any outstanding credit mortgages, and the lifestyle one would like to adopt.” “You are always welcome to speak to our financial advisers, we have around 8,500 agents in Malaysia alone, and they have the tools to work together with you and make the necessary recommendation for your needs,” mentioned Rangam.
6/18/15 5:48 PM
RAWANG,THE NEXT BIG SATELLITE TOWN OF GREATER KL Some say Rawang will become like Puchong, but is this for real? BY: DANIEL SIM
awang is known to many of us as a small town brought up by one of the earliest mining industries in the country. Besides the North South highway, many people will use the Karak highway to go Genting Highland. For the people staying in Hulu Selangor, most of them will go through Rawang before they reach Genting Highland, a place where many tourists go for vacation. On June 2011, the KL-Kuala Selangor Expressway (LATAR Expressway) was officially opened, linking Kuala Lumpur at Templer’s Park with the township of Ijok, creating an alternative link road, the expressway has successfully shortened the travel distance among Kuala Lumpur, Rawang and Ijok,
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making it more feasible for Rawang residents to work in elsewhere or the other way round. “Currently, there is no integrated rail system available within the township except for KTM, travelling by KTM will be via the KTM Rawang Station sited nearby the Rawang town,” said Oregeon Property Consultancy director Sr Kok Chin Yee. Rawang may not be on the top list initially in the eyes of purchasers and developers years ago. Now Rawang has become a place ‘so hot’ where new projects can be seen all over Rawang and selling at good prices. According to Oregeon’s research, landed houses are still the popular type among the new developments. “From being a township offering
place to work and live, Rawang is now offering more job opportunity and bringing in entertainment elements, transforming itself to a self-sustain township, buyers have become less hesitant to move in,” shared Kok. According to the Selayang Municipal Council town planning department officer Noriza Binti Bahari, the size of Rawang is 26,314 hectares, with a population of over 700,000. “Our borders extend from Sungai Choh also known as Batu 20, until Batu Arang and currently there are many industrial areas here. On the nature side, Rawang preserves its greenery as there is the Bukit Lagong forest reserve. However, things are changing with more top Malaysian developers, such as Mah Sing, Guocoland, Gamuda, and PKNS, are coming into Rawang and building up the residential market. Some of these developers have projects that are under the ‘Rumah Selangorku’ affordable schemes.” She mentioned that Rawang is divided into two sections, Rawang New Town and Rawang Old Town. There is not much distinction about the old and the new, except for the sentimental value where there are several terrace houses and old commercial buildings, and how the name of the roads are retained till today, such as Jalan Maxwell. “One of the hottest spots of development in Rawang would be the Kundang area. Before this, the area is
mostly consisting of small villages and agriculture land,” said Noriza. She said there are at least two main reasons why major developers are coming into this area. “There are the LATAR and GUTHRIE highways that will pass through the area. Therefore, we believe that the up-and-coming developments are targeted for people working in the Kuala Lumpur City centre or even as far as Shah Alam, as the distances are cut short to about 30 minutes with the highway.” “The land price is also another factor. One of the major reasons why property prices are so high is because the developers have to pay a high price to acquire land,” said Noriza. One would find the land price in Rawang cheaper comparing to Selayang and this spurs the growth of property developments here. Unlike many other parts of Greater KL, Rawang does not have any major highlights. From a residential perspective, the development trends tend to be for the landed residential units for now but that is all about to change in the next five years. She commented that new landed properties launching at RM400,000 are the norm in Rawang nowadays, “compared to RM150,000, five to ten years ago.” She said that Rawang’s pattern of development is very much depending on supporting the patterns of Kuala Lumpur’s development. Most of the people will travel from Rawang to work in KL as there are many offices in the capital city. Infrastructure-wise, Rawang will have the Rawang Underpass, which will connect Rawang town to Serendah, Hulu Selangor. The Public Works Department (JKR) will be commencing works to widen Jalan Rawang (B27) from 16 inchwide roads to double lanes, in order to facilitate the bottleneck starting from Rawang Town area. The road connects the Rawang toll to Batang Berjuntai area. Already, there are many major developments by top developers
happening along the road, such as Kota Emerald by Guocoland, Saujana Rawang, Country Homes, and Kota Selatan Indah and PKNS. With a GDV of RM40,500,000, one of the many PKNS’s products in Rawang would be Cassia @ Antara Gapi. PKNS believed that this area is a new location, where it could be developed just like Shah Alam, PKNS is targeting those who prefer to the beauty of the serene nature. Some of the highlight of this location is being one of the area, well – connected via the NorthSouth Expressway and other routes and shortcuts, one will take only 10 minutes to drive to other township such as Hulu Yam Baru, Hulu Yam Lama and Batang Kali. According to PKNS, a wider array of amenities can be found in Batang Kali such as Econsave Hypermarket and the many shop lots area located near to the hypermarket which houses banks, pharmacies, clinics, restaurants, cafes, saloons and many more. SRK Antara Gapi is so far, the only school that is positioned within the vicinity of Antara Gapi. Apart from that, there are also other schools that are sited within a 3km radius away from Antara Gapi like SK Bukit Sentosa, SMK Bukit Sentosa, SM Bukit Sentosa and SJK(C) Serendah. Those who travel via public transportation can also find a Serendah KTM Station located about a 2.47km away from the town. PKNS believes that this location will boom in the next 5 years because the area will be an interesting place for eco-tourism. Sime Darby is developing Lagong Mas in Rawang, Selangor. DA Land is developing the TWO and LakeClub ParkHome, the first-of-its-kind resort home. There is also TESB, a whollyowned subsidiary of Gamuda. Gamuda’s huge land acquisition was concluded last year that involved 14 parcels, totalling 724 acres in Rawang. Gamuda paid RM620mil for the land, which worked out to RM19.65 per sq. ft.
The leasehold agriculture land was tendered out by the Government and Gamuda outbid a number of big property players to clinch the land. The project is pending layout approval and is expected to be launched around the second quarter next year. According to Gamuda, the proposed acquisitions will enable the group to establish its position in property development and increase its investment property portfolio to provide long-term earnings streams. For entertainment and leisure wise, there is Jaya Jusco and other malls such as Tesco, Parkson, AEON, and Giant. There is also a possibility of an international school built near here by BRDB. MPS has discussed with SPAD who has agreed for Rawang to have a new bus operator and new bus route in Rawang by the end of this year. On the rail side, MPS created clusters of the rail orientated industry, as there is KTM Rawang, where many Rawang residents will use as the main mode of transportation to Kuala Lumpur. MPS is pursuing the MRT extension matters with SPAD. According to AREM Malaysia principal A.R Nathan, “due to land scarcity and high prices in city centre, there will be several new property hotspots in suburban areas such as Rawang and the southern Klang Valley
In the north, you will have the Low Yat group project, at the south of LATAR highway is the KLK’s Bandar Sri Coalfield development. The LATAR highway interchange that will be opening in 2016 will boost developments area such as Bandar Tasik Puteri.”
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AREA FOCUS such as Semenyih, Puchong South, Putrajaya and Cyberjaya.” AREM is a property consultancy company that operates throughout Malaysia, which provides property valuation, property management services, and real estate services. He added that there is long-term growth potential in Rawang, driven by the dwindling development land supply and escalating prices within the Kuala Lumpur-Petaling Jaya-Shah Alam corridors. He concurred with the MPS local municipal council’s stand that not just property developers, but also the residents living in Rawang, would benefit from the existing LATAR highway. This will be a plus point for people who purchase properties in Rawang. Based on AREM’s research, the most recently launched development in Rawang is a gated-and-guarded
community known as Taman Sari @ Rawang. Amaryllis is the phase 1A of this development, with a total of 117 units, consisting of three storey terrace houses priced between RM894,000 to RM1.2million. This is a development by a subsidiary of BRDB Development. “M Residence is an upcoming premium development in Rawang that is launched by Mah Sing. This is a gated project with 56 units, 2 ½-storeys, with prices from RM868,800,” shared Nathan. There is also the gated Seiring, East@ Rawang by Indah Jaya Development, with 32 units of 2-storey semidetached starting from a price range from RM956,800. “There are three main corridors that are either rapidly developing or are projected to grow exponentially. The northern corridor stretches all the way to Rawang - the northern gateway from the Greater KL, the western corridor that is all the way to Port Klang, and the southern corridor where we are seeing major developments that reaches even to Nilai, in Negeri Sembilan,” said PPC Agency chief executive officer Siva Shankar. According to REI Group of Companies CEO and co-founder Dr. Daniele Gambero, the ‘Rumah Selangorku’ project by Mah Sing is another plus point especially for the middle to low income group earners to buy affordable housing in the Klang Valley area such as Rawang. “Property hot spots are supposed to have fast take-up rates in sales and a
good promise of capital appreciation in the medium term. The one that comes up to my mind is mostly Templers Park area, where in the last few years, some developers have been offering interesting projects,” shared Dr. Daniele Gambero. “This is possibly a good alternative for a future better development of Rawang. Surely first time home buyers should be able to still find their dream home there at quite affordable values as the ‘land key factor’ is still priced quite reasonably,” shared Gambero. HCS Research chief executive officer Ishmael Ho said that Rawang is a huge area, but the southern part (or Kundang area) is where the action is. “In the north, you will have the Low Yat group project, at the south of LATAR highway is the KLK’s Bandar Seri Coalfield development. The LATAR highway interchange that will be opening in 2016 will boost developments area such as Bandar Tasik Puteri,” shared Ishmael. To date, it is believed that Rawang will have more than 400 commercial lots, including financial institutions and departmental stores. One notable example is Plaza Bandar Rawang, which is a multi-storey plaza with more than 500 stalls. Ever since the North South Highway (PLUS) started operation in the 90s, the area of Rawang in Selangor has enjoyed tremendous growth both in property development and population. In recent years, Rawang has attracted many potential buyers and investors to purchase properties there. As such,
The Rise, 0-lot Freehold bungalows by GuocoLand Malaysia Sdn Bhd
36 | SEPTEMBER 2015 www.propertyinsight.com.my
RAWANG RESIDENTIAL LANDED PROPERTY MARKET
RECENTLY COMPLETED, ON-GOING AND THE PROJECTS IN APPLICATION FOR APPROVAL IN RAWANG PROJECT
Rasa Anggun Development Sdn Bhd
7 storey ‘Rumah Selangorku’ (120 units)
Perbadanan Kemajuan Negeri Selangor
176 units of 2-storey link houses
Rawang Lakes Sdn Bhd
109 units of 2-storey terraced house
Mantap Bumimas Sdn Bhd
28 units of 2 to 3-storey bungalow
Caspia@M Residence 2
Major Land Development Sdn Bhd (Mah Sing)
Gated community with 168 units cluster and semi-detached houses
B&G Majestic Property Sdn Bhd
1 block of apartment (240 units)
Guocoland Malaysia Sdn Bhd
74 units of 3-storey & 2.5 storey zero lot bungalows
Desa Country Homes
Temasya Mentari Sdn Bhd
2 units of 2.5-storey bungalow, 76 units 2.5-storey semi-detached house and 271 units 2-storey terraced house
Westwood Development Sdn Bhd
2 to 3-storey terraced houses
Nouvelle Industrial Park @Kota Puteri
Aysm Properties Sdn Bhd
42 units of 3-storey semi-detached factories
DA Land Sdn Bhd
Setia Eco Templer
Setia Eco Templer Sdn Bhd
270 units stratified property consist of 238 units of 2-storey terraced house, 26 units of 2-storey semi-detached house and 6 units of 2-storey bungalow
Rentak Arena Development Sdn Bhd
38 units of 2 to 4-storey detached house and 20 units of medium cost apartment
Dolomite Templer@Templer Park
Dolomite Sdn Bhd
30 units of 3-storey semi-detached house
Majestic Sanctuary Sdn Bhd
50 units of 3-storey terraced house
M Residence 2
Semai Meranti Sdn Bhd (Mah Sing)
110 units of shop-offices, 1 block of low-cost apartment (142 units) and 2 blocks of ‘Rumah Selangorku’ (488 units)
Kerjaya Prospek Property Sdn Bhd
1 block of 8-storey low-cost apartment (100 units)
Aneka Kiara Realty Sdn Bhd
30 units of 3-storey terraced house
Puncak Puri (M) Sdn Bhd
16 units of 2-storey semi-detached house
Synergy Development Sdn Bhd
77 units of shop offices
Oriental Unigreen Sdn Bhd
143 units of 2-storey terraced house
N/A at the moment
Source: Oregeon Property Cosultancy
www.propertyinsight.com.my SEPTEMBER 2015 I 37
AREA FOCUS RECENT TRANSACTED PRICE OF LANDED RESIDENTIAL PROPERTIES Type
Bandar Country 2,100 sf Homes 2 Semidetached House
Kota 1,920 Emerald 3,978 sf
Tiara 2,100 Putri, 2,440 sf Rawang
Bandar Tasik 1,600 sf Puteri 1 Taman 1,400 sf Bersatu
Bandar Country 1,300 sf Homes
Bandar Tasik 1,040 sf Puteri
Kota 1,400 sf Emerald Â M 1,260 Residence SF Rawang Taman Bukit 1,650 sf Rawang Jaya
Taman Rawang 1,300 sf Perdana
Bandar Country 1,540 sf Homes
Min (RM) - Max (RM)
2010 170,000 - 345,000 2011 185,000 - 400,000 2012 185,000 - 410,000 2013 250,000 - 580,000 2014 330,000 - 660,000 2015 300,000 - 455,000 2010 450,000 - 580,000 2011 493,000 - 738,000 2012 520,000 - 888,000 2013 555,000 - 980,000 2014 610,000 - 980,000 2015 665,000 - 975,000 2010 758,800 - 965,800 2011 800,000 - 990,000 2012 700,000 - 1,260,000 2013 970,000 - 1,170,000 2014 1,075,000 - 1,280,000 2010 82,000 - 140,000 2011 105,000 - 160,000 2012 88,083 - 190,000 2013 90,000 - 165,000 2010 106,000 - 165,000 2011 100,000 - 180,000 2012 110,000 - 180,000 2013 130,000 - 272,000 2014 120,000 - 257,000 2015 200,000 - 225,000 2010 88,000 - 200,000 2011 110,000 - 265,000 2012 130,000 - 330,000 2013 248,000 - 330,000 2014 220,000 - 385,000 2015 190,000 - 400,000 2010 80,000 - 160,000 2011 75,000 - 161,000 2012 90,000 - 180,000 2013 80,000 - 175,000 2010 200,000 - 240,000 2011 235,000 - 378,800 2012 306,300 - 475,000 2013 360,000 - 505,000 2014 400,000 - 580,000 2015 490,000 - 490,000 2012 410,800 - 410,800 2014 485,000 - 550,000 2015 500,000 - 550,000 2010 133,000 - 245,000 2011 150,000 - 280,000 2012 130,000 - 290,000 2013 195,000 - 350,000 2014 230,000 - 330,000 2010 110,000 - 190,000 2011 120,000 - 250,000 2012 150,000 - 260,000 2013 140,000 - 335,000 2014 220,000 - 350,000 2015 265,000 - 265,000 2010 180,000 - 250,000 2011 160,000 - 220,000 2012 150,000 - 280,000 2013 175,000 - 350,000 2014 335,000 - 390,000 2015 430,000 - 450,000
Source: Oregeon Property Consultancy
38 | SEPTEMBER 2015 www.propertyinsight.com.my
Count 20 12 14 18 15 3 16 22 11 25 27 2 19 7 8 7 4 18 14 27 17 7 12 10 7 8 2 25 29 20 14 15 3 49 32 35 33 5 14 9 21 16 1 1 7 4 16 17 11 4 4 21 22 20 12 18 1 5 8 6 6 6 3
WHAT IS THE RECENT TRANSACTED PRICE OF COMMERCIAL PROPERTIES Type
Min (RM) - Max (RM)
380,000 - 530,000
380,000 - 570,000
380,000 - 595,000
620,000 - 675,000
780,000 - 780,000
575,000 - 1,000,000
520,000 - 900,000
625,000 - 950,000
Bandar Baru 1,650 2012 Rawang sf
Taman Rawang Mutiara
Taman Rawang Perdana
1,630 2011 sf 2012 2013
850,000 - 1,000,000
390,000 - 597,000
1,400 2011 sf 2012
420,000 - 453,800
543,000 - 543,000
580,000 - 580,000
170,000 - 220,000
220,000 - 240,000
270,000 - 270,000
230,000 - 230,000
260,000 - 320,000
430,000 - 560,000
1,650 2012 sf
Taman Setia 1,400 2011 Rawang sf 2013
500,000 - 500,000
900,000 - 1,000,000
650,000 - 1,050,000
480,000 - 1,200,000
Bandar Baru 1,650 2011 Rawang SF 2012
620,000 - 1,200,000
575,000 - 1,200,000
620,000 - 1,548,000
980,000 - 1,400,000
Rawang 2011 Commercial 1,650 2012 Centre SF 2013 (The Reef)
1,100,000 - 1,460,000
1,200,000 - 1,250,000
1,400,000 - 1,400,000
1,160,000 - 1,500,000
1,430,000 - 1,430,000
Rawang Intergrated 1,930 2013 Industrial sf 2014 Park
Taman Rawang Mutiara
1,105,000 - 1,560,000
1,140,000 - 1,600,000
1,600,000 - 1,600,000
408,000 - 420,000
1,200 2011 sf 2012
443,800 - 460,000
490,000 - 520,000
490,000 - 550,000
RECENT TRANSACTED PRICE OF HIGH-RISE RESIDENTIAL PROPERTIES Type
1,434 1,519 sf
Casa Ria Apartment
Perdana Park Apartment
730 - 800 sf
650 1,679 sf
Source: Oregeon Property Cosultancy
Average (RM psf)
2010 2011 2013 2014 2015 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014
121 142 161 179 264 90 84 110 148 133 89 89 95 98 114 145 167 179 184 226
3 1 6 6 1 13 13 19 11 3 6 4 9 6 2 35 54 49 42 41
property prices have soared in the span of only a few years. “Rawang is seen mainly as a medium-end property investment area but that can change soon as land becomes scarce in the Klang Valley, it is gaining popularity as a place where people are buying homes to live,” said UCM Homes sales director Vanees Wong. CURRENT AND UPCOMING DEVELOPMENTS IN RAWANG Currently, there is Bandar Tasik Puteri (BTP) in Rawang by Low Yat Group. At the moment, it connects the 2,670acre township to Kuala Lumpur city in only 25 minutes. BTP is a flagship project targeted to be a comfortable living environment without industrial elements. Despite of the current property market, developers are basking on the long-term prospects in Rawang. For example, LakeClub ParkHome by DA Land is building an 11-acres resort home development where there are stylish and premium facilities such as a featuring a clubhouse that is 5-star, perfect for relaxation and play for both young and old. Home buyers would also be happy to know that the developer has engage security consultants GDSS System to ensure the security condition of the 450 units development is world class.
This development is estimated to be completed in 2018. Beside LakeClub ParkHome, DA Land is also constructing the TWO. This phase 1 of this development is expected to be completed in 2019. The TWO will have 1,267 commercial lots. The TWO is a mixed development featuring hotel, service residences, showroom office, and shopping mall that will integrate an outlet mall, together with indoor and outdoor theme parks. Primarc development is developing Fields of Gold, a unique development sited on a natural landscape of fir and pine tree mountainous range and beautiful flowers, the developer’s birth out this development concept based on the classical industrial architecture from the United Kingdom. Field of Gold consists of 53 units of freehold boutique link villas, which is expected to be completed by the first quarter of 2017. The total GDV of this development is RM117million. Guocoland, a subsidiary and property arm of Hong Leong Group is also another major developer in Rawang, It is the developer for Emerald Rawang, a 1,000 - acre of Kota Emerald township. Glucoland has been actively developing Rawang for the past 10 years, recognising its potential for Greater Kuala Lumpur.Given Emerald
Rawang’s close proximity to Kuala Lumpur and Petaling Jaya, it is also the largest re-energised Hub along the North-South Expressway, which is the most important and busiest highway in Malaysia. Emerald Rawang is a master planned township development, taking into account the natural surroundings and the reasonable selling price with fast access to Kuala Lumpur in the coming future with the development of the LATAR and Guthrie Highways. Nearby amenities include Aeon Rawang, Chinese School and various shop outlets making it one of the most prime areas in Rawang at the moment. “In 2016, we expect the LATAR Highway interchange and the current Guthrie Expressway will connect Kuala Lumpur and Shah Alam directly to Rawang and cut down the journey time to merely 30-35 minutes for residents,” said Guocoland Malaysia managing director and country head Tan Lee Koon. Tan believed that this will make Rawang the next boomtown in the Greater Kuala Lumpur area, not to mention its property values. Emerald Rawang will also take special care in creating thoughtful spaces for residents imbuing nature into its landscape inspired by the nearby forest reserve.
AGENTS SPEAK SIVA SHANKER PPC International Agency chief executive officer Overall, Rawang is growing despite of the lack of infrastructure such as the MRT or the LRT line at the moment, the main reason is because of the price and because of the LATAR highway, the development by DA Land that will feature indoor and outdoor theme parks will definitely bring traffic to Rawang.
VANEES WONG UCM HOMES Sales Director Some of the reasons that will make Rawang an attractive location for property investors include being a strategic location to other mature townships. Good job opportunities for residents in the township - Key industrial entities that have made Rawang as their base among others are Scomi Engineering, MBM Resources, Perusahaan Otomobil Kedua, Eversendai Corp, and Cocoaland Holdings, to name a few. This primarily industrial township has a population size of more than 120,000 with many of its residents employed in industries. www.propertyinsight.com.my SEPTEMBER 2015 I 39
CASSIA @ ANTARA GAPI PKNS has ventured into Rawang with its newly launched landed property BY: FARA AISYAH FIRDAUS PETIAL
40 | SEPTEMBER 2015 www.propertyinsight.com.my
awang, one of the current hotspots for property development, has welcomed Cassia @ Antara Gapi, a newly launched project by Perbadanan Kemajuan Negeri Selangor (PKNS). Antara Gapi is town sited in Serendah, Selangor, which is located approximately about 50km from Kuala Lumpur and 7km from Rawang. It is near to Erina Heights, Hulu Yam Baru and Hulu Yam Lama. Homes at Antara Gapi feature attractive facades and quality finishing coupled with its affordable price offerings. The development in Antara Gapi comprises of leasehold single, and double-storey terrace houses, doublestorey shop-offices and residential bungalow lands. CASSIA @ ANTARA GAPI Fulfilling its responsibility to build communities, enriching lives, and realising dreams, PKNS developed Cassia with a contemporary urban
Cassia Step-up Type Unit
design with double frontage concept environment. The landscape is tropical green while the interior design concept is modern. The 2-storey semi-detached house promotes peace of mind from the hustle of the city, what homebuyers are looking for nowadays. Cassia not only offers a serene living environment to the people, but as well as a spacious, comfortable, and practical home design. The development brings a tropical green landscape. As it is circled by a green environment, the flora and fauna habitat life can also live longer in line with the sustainable lovely residence. This project is a leasehold land title for 99 years and will expire on 20th February 2103. It is expected to be completed on September 2015, which also makes one of the reasons for Rawang area to be given more attention by property investors.
The spacious and cosy living room
www.propertyinsight.com.my SEPTEMBER 2015 I 41
FEATURED PROPERTY The average price per sq. ft. for Cassia is RM286, and the unit price ranges from RM679,830 to RM804,450. It is built with a total 54 units, and divided to two types of layout. One of the layouts is flat unit while the other is step-up unit. The floor area for flat unit is 2,375 while step-unit is 2,615. Promising comfort and practicality, Cassia is built with five bedrooms and five bathrooms on the land area of 3,250 sq. ft. AMENITIES AND ACCESSIBILITIES As Cassia is located at a strategic location, there are a lot of modern amenities and recreational park located nearby the project. Academic institutions such as Sekolah Kebangsaan Antara Gapi, Maktab Rendah Sains Mara - Hulu Selangor, Sekolah Menengah Kebangsaan Serendah, and Sekolah Agama Serendah are among the attractive points for families to stay in the vicinity. With such conveniences in a
The blue room for young children
safe and peaceful area, Cassia’s target market is on families, either young or adult ones. The latest PKNS’s project is also placed close to retails, entertainment, and leisure such as Eagle Nest Outbound Adventure Eco Resort, Serendah Golf Resort, and Templer Park Country Club. Mydin, Rawang and Sungai Tua Malay Reservation are also only few minutes’ drive from Cassia residence. Apart from that, Cassia has a stunning view for the residence as Banjaran Titiwangsa offers breathtaking sights. Eco-tourism hotspots and scenic views are just some of the beryl bonuses home buyers get to enjoy within the vicinity. Cassia is accessible via major highways. It is well connected from the North South Expressway (PLUS) as well as number of alternative routes and shortcuts. Public transportation is also convenient for Cassia residence as Serendah KTM Station is about 2.47km away from the town.
The lavender coloured room for little princess
The furnished master bedroom
42 | SEPTEMBER 2015 www.propertyinsight.com.my
Institutions 1. Sekolah Kebangsaan Antara Gapi 2. Maktab Rendah Sains Mara, Hulu Selangor 3. Sekolah Menengah Kebangsaan Serendah 4. Sekolah Agama Serendah Retail, Entertainment & Leisure 1. Eagle Nest Outbound Adventure Eco Resort 2. Serendah Golf Resort 3. Templer Park Country Club 4. Mydin Rawang 5. Sungai Tua Malay Reservation Connectivity 1. North South Expressway (PLUS) 2. KTM Komuter Train from the Serendah KTM Station about 2.47km from the town Unique selling propositions 1. Easy accessibility via highways 2. Modern amenities and recreational park are just around the corner 3. Well-connectivity via the North South Expressway (PLUS) as well as number of alternative routes and shortcuts 4. 5 minutes from Serendah KTM Station Demographic (target market) 1. Young Families 2. Adult Families
For more details on Cassia @ Antara Gapi, please call: • 016-251 0113 / 019-269 7641 • 013-939 0310 / 013-342 1098 • 013-393 8183 / 019-303 4342 • 013-323 2158 or visit website www.pkns-property.com
PKNS’S STORY PKNS is not only a government agency that provides residential projects as project Hijauan Enklaf, Aquavilla, Kristal View, Vega Residensi, Opal Grandeur but PKNS also build iconic buildings like the Laman PKNS, Datum Jelatek. In addition, PKNS also partner well with foreign companies such as Encorp Berhad, Sunway City Berhad, Dijaya Corporation Bhd, Tropicana Indah, Q.Cells and Andaman Realty. Furthermore, with the rising demand for homes and residential units, PKNS has targeted to develop 10,000 affordable homes with enhanced facilities within the next 5 to 7 years in various townships. Mid 2011 saw the launch of the first prototype home in Bangi under
Cassia Flat Type Unit
the new concept in which each unit is priced between RM65, 000 to RM99,000. PKNS also involved in CSR program. KASIH are the branding for Corporate Social Responsibility Program activities (TSK) PKNS which was launched on
25th February 2012 by the Honourable Mr. Ir Iskandar in conjunction Home Repair Program in Sabak Bernam. Towards transformation in the era of globalization, PKNS always offset any development with its social responsibilities to all stakeholders.
Property Name: Cassia @ Antara Gapi Location: Section 2c Antara Gapi, Serendah Property type: 2-Storey Semi-Detached House Land title: Leasehold Tenure: 99 years expires 20th February 2103 Total units/lots: 54 units Average price per sq. ft.: RM286 psf Unit price range: RM679, 830 â€“ RM804, 450 Estimated date of completion: September 2015 Total layout types: 2 types Layout specifications: Flat unit & step-up unit Total bedrooms: 5 bedrooms Total bathrooms: 5 bathrooms Land area: 3,250 psf - 6,975 psf Floor area: 2,615 psf (Step-Up Unit), 2,375 psf (Flat Unit) Developer: Perbadanan Kemajuan Negeri Selangor (PKNS) Address: PKNSâ€™ Central Region Sales Division, Level 2, Kompleks PKNS Shah Alam, Persiaran Tasik, 40000 Shah Alam Telephone: 016-251 0113 / 019-269 7641 013-939 0310 / 013-342 1098 / 013-393 8183 / 019-303 4342 / 013-323 2158 Fax: 03-5513 3832 Email: email@example.com Website: www.pkns-property.com
Location: Cassia @ Antara Gapi
www.propertyinsight.com.my SEPTEMBER 2015 I 43
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DEVELOPER OF THE MONTH
RISE WITH UEM SUNRISE UEM Sunrise managing director / chief executive officer Anwar Syahrin Abdul Ajib shared with Property Insight UEM Sunriseâ€™s take on the property market BY: DANIEL SIM
Conservatory in Mackenzie Street, Melbourne
46 I SEPTEMBER 2015 www.propertyinsight.com.my
n spite of the challenging property market in Malaysia, UEM Sunrise remains optimistic and expects transactions to pick up in the second half of the year, driven by affordable prices as well as demand for homes amongst the younger demographic/ first-time home buyers. Although they had noticed a slowdown on take-up rates, particularly for the whole of Iskandar Malaysia, selected types of properties are still recording good sales. This is particularly evident in the ‘bread and butter’ segment, as there is still strong demand from the local market, especially in the mid-priced landed properties. “We believe that our best move during the weaker cycle of property transactions is to offer a good mix of quality products that appeal to our customers from all income segments and target markets with an equal balance between landed and highrise strata units,” said UEM Sunrise managing director / chief executive officer Anwar Syahrin Abdul Ajib. “It’s all about customising our product to suit our target audience,” Anwar said. “Buyers are more cautious in selecting the properties they want to buy. Those who already have a few properties, have a lower margin of financing when seeking house loans, while first-time buyers are looking at properties priced below RM500,000. Banks, on the other hand, are getting stricter when approving housing loans,” commented Anwar. UEM Sunrise is also not spared by these market conditions. In view of the market in 2014, launches of new projects were deferred. Sales were mainly derived from existing inventories, the likes of Almãs, East Ledang and Nusa Idaman in the Southern Region as well as Residensi22 Mont’Kiara, Symphony Hills and Arcoris Mont’Kiara in the Central Region which contributed about 39% of total sales in 2014. The launch of Aurora Melbourne Central in October 2014, helped cushion the impact of the slow Malaysian market, contributing 60% of
Our products in the central and international regions are doing very well and we see that as a potential for sustainable earnings within the next few years.” - Anwar UEM Sunrise’s total sales. However, the company is quite confident of the property market in 2015. It plans to launch an estimated RM3.7billion worth of properties, comprising mainly of new properties. After taking into account the current property market conditions, UEM Sunrise’s launches consist of diversified products ranging from affordable to premium. About 32% of the properties UEM Sunrise intends to launch this year will be below RM500,000 per unit and a further 14% between RM500,000 to RM1million per unit. The bulk of the 32% would come from Denai Nusantara, UEM Sunrise’s affordable homes project in Nusajaya, which the company hopes to unveil to the public in the second half of 2015. In terms of revenue recognition, the bulk of the contribution is still from the southern region, mainly from projects like Teega and East Ledang. “Our products in the central and international regions are doing very well and we see that as a potential for sustainable earnings within the next
few years,” shared Anwar. In the Central Region, UEM Sunrise expects the bulk of the earnings to come from Residensi22 Mont’Kiara in Kuala Lumpur and Symphony Hills in Cyberjaya. “Regardless of the market condition at present, we still have a sizeable land bank despite 77% of it being in the southern region. Lands identified for pipeline projects, which we have yet to launch to the market, are close to 7,000 acres with a conservative estimated GDV of RM82billion,” shared Anwar. UEM Sunrise still has available land parcels in their catalytic projects in Nusajaya, such as the Puteri Harbour, the Southern Industrial Logistics Cluster (SiLC), and Afiat Healthpark of close to 360 acres, for future development, as well as other undeveloped lands with no immediate development plans. “We are confident that once the market improves, we will have no issue in launching more new projects into the market, and creating the sustainability in earnings as anticipated,” shared Anwar. The Ringgit now seems to be at its lowest since 16 years, indicating costlier overseas ventures, which have to some extent played a role in deciding whether UEM Sunrise should continue to pursue overseas developments. At the moment, Anwar shared that UEM Sunrise’s overseas involvement is only 0.2% of the total land bank the company own. The company’s presence on the international front is in Quintet, Canada, which will see completion soon, and the recently launched Aurora Melbourne Central, to be followed by the Conservatory, both in Melbourne CBD, Australia. Located in Mackenzie Street, Conservatory, a high rise mixed residential development is built on 0.5 acres of land and comprises 473 units of apartments. Conservatory commands a GDV of RM602.6million(AUD200.6million) and offers a retail space of 3,000 sq. ft. The development is expected to be launched this year. UEM Sunrise had also just www.propertyinsight.com.my SEPTEMBER 2015 I 47
DEVELOPER OF THE MONTH announced the acquisition of the 21-storey office tower on 412 St Kilda Road in Melbourne, with the intention of developing an unprecedented ultraluxurious residential development, potentially with a mix of ground floor retail and serviced apartment components. “Our presence in Durban sees us owning about 36 acres of land together with the Durban local council. This is currently under planning. In April 2014, we acquired a 4.9 acre land in Alderbridge, Vancouver, Canada which is located approximately 800 meters from our current Quintet development,” said Anwar. The company plans to develop it into a mixed residential and commercial development as it is strategically located
Aurora Melbourne Central
48 I SEPTEMBER 2015 www.propertyinsight.com.my
across Landsdowne Station, a Skytrain station, a rapid transit railroad system of the Greater Vancouver. The land also happens to be located very near the Vancouver International Airport. Plans to explore potential sites in London as well as Australia are still on track. But UEM Sunrise is also being cautious and mindful of the current global sentiment as well by strategising their resources in the short term. “In Johor, we will continue to launch projects but we will tilt our new launches in 2015 toward landed (terrace homes) and shops where there is still demand for those types of products,” shared Anwar. Based on data from Valuation and Property Services Department, 59% (23,072 units) of residential properties transacted in Johor were terrace homes in 2014 and UEM Sunrise expect this trend to continue over the near term. For commercial properties, the most popular type in Johor continues to be 2-2 ½ storey shop (45% of the commercial market share) and 3-3½ storey shop (25% of commercial market share). UEM Sunrise’s total property development sales for 2014 was RM2.4 billion which was mainly contributed by Aurora Melbourne Central in Melbourne, Residensi22 Mont’Kiara
Durban Point Waterfront
and Symphony Hills in Cyberjaya while the largest contribution in Nusajaya came from Almãs @Puteri Harbour. THE PRESTIGIOUS DEVELOPER Public-listed UEM Sunrise Berhad is one of Malaysia’s top and prestigious property developers. This is the flagship company for township and property development businesses of UEM Group Berhad, which is whollyowned by Khazanah, an investment fund of the Government of Malaysia. UEM Sunrise is the master developer of Nusajaya, one of the five flagship zones of Iskandar Malaysia, Johor and is currently undertaking the development of the area into a regional city like no other. Upon completion, Nusajaya will become the largest fully integrated urban development in Southeast Asia that will provide significant investment, financial and business opportunities to the economic growth and development of the region. The company has core competencies in macro-township, high rise residential, commercial, retail, and integrated developments, as well as property management and project & construction services. Gerbang Nusajaya, the second phase development of Nusajaya, is a 4,551-
Serenity Aralia units at Estuari Gardens
acre project, which will feature various catalytic developments including Nusajaya Tech Park, FASTrack Iskandar, Signature Residences, and Gerbang Nusantara. Gerbang Nusajaya will be developed over a period of 25 years and will include components such as retail parks, campus offices and industrial parks, as well as residential precincts. In the Central Region of Malaysia, UEM Sunrise is renowned for its Symphony Hills project in Cyberjaya, an exclusive residential development, featuring the country’s first Connected Intelligent Community (CIC), as well as the numerous award-winning high-rise residential, commercial, and mixed-use developments largely within Kuala Lumpur’s affluent Mont’Kiara enclave in Kuala Lumpur, the Kuala Lumpur City Centre, Bangi, Shah Alam, and Seremban. Internationally, UEM Sunrise’s presence extends into Vancouver, Canada via Quintet mixed-use development and Aurora Melbourne Central in Melbourne, Australia. It is also the appointed Project Manager (Marketing) for developer, M+S Pte Ltd (a company owned by Khazanah and Temasek) for its Marina One and DUO mixed-use developments in Singapore. The Company retains a
land bank in Durban, South Africa. UEM Sunrise believes in brand loyalty, where as long as the company offers quality design, infrastructure, and finishes to go along with the excellent lifestyle qualities for their developments, they will be able to generate good take ups for all their property launches. “We are targeting a sales target of RM2billion in 2015, and we remain optimistic, given the current challenging market conditions of the property sector as we plan to weather it out by leveraging on the diverse mix of product offerings,” shared Anwar, who also mentioned that UEM Sunrise will ensure their new launches reach specific target groups, and meet their discerning needs and expectations. EXCITING DEVELOPMENTS AHEAD Property investors and potential home owners are seeing a lot of excitement in second quarter of this year with UEM Sunrise new launches, which includes Residensi Sefina Mont’Kiara and Serene Heights Bangi in Klang Valley, as well as Estuari Gardens in Puteri Harbour, Nusajaya. “We expect these property projects will contribute to our 2015 sales target, namely Serene Heights Bangi, and Residensi Sefina Mont’Kiara, from www.propertyinsight.com.my SEPTEMBER 2015 I 49
DEVELOPER OF THE MONTH
Residensi Sefina Mont’Kiara
the Central Region, while from the Southern Region, Estuari, Signature Residences and Denai Nusantara, amongst others. Internationally, we expect to reap good returns from the newly anticipated Conservatory development in Melbourne, Australia,” shared Anwar. RESIDENSI SEFINA MONT’ KIARA Launched in early August this year, Residensi Sefina Mont’Kiara will be built on approximately 3.06 acres of freehold land in Mont’Kiara, commanding a gross development value of RM307million. This is a condominium development consisting of 245 units spreads across 35 stories. Built ups for the units are between 1,333 sq. ft. and 1,771 sq. ft. and is being sold from RM1.06million onwards, the indicative price per sq. ft. is from RM837. Facilities include wellness garden, gymnasium, reflexology path, hammock garden, pool deck, pavilion, sun deck lounge, BBQ deck, wading pool, playground, Jacuzzi, and reading pavilion. Construction is expected to be completed in 2019
and as of August, the take-up rate is 60%. SERENE HEIGHTS BANGI Built on 448 acres of freehold land with a GDV of RM3.2billion, Serene Heights Bangi is expected to be completed in 10 years. This development is set to offer life’s simple pleasures with natureinspired environment in a modern township. The first phase was previewed on 27 and 28 June, which saw 274 units of double storey terrace homes opened for sales worth RM181million in GDV. The first phase featuring Acacia (121 units) and Begonia (153 units) have built-ups between 2,143 sq. ft. and 2,837 sq. ft. During the two-day preview, 121 units of Acacia with a GDV of RM73.4million were snapped up by purchasers, while 30% of Begonia units were taken up. Prices for the units start from RM550,800 to RM1.05million. Facilities and amenities include a hopscotch valley, takraw park, Gasing land, Congkak place, wellness garden, leisure garden, and Serene Lake park. The first phase is expected to be completed in June 2018.
50 I SEPTEMBER 2015 www.propertyinsight.com.my
ESTUARI GARDENS Located in Puteri Harbour, the crown jewel of Nusajaya in Johor, the overall Estuari development will be built on 394.4 acres of freehold land with an overall GDV of RM7billion, and is expected to be completed in approximately seven to ten years. This is UEM Sunrise first landed-and-gated development here. Part of the first phase of Estuari called Estuari Gardens comprises 350 units of double-storey super link homes spread across 47.8 acres commands a GDV of RM634 mil. The built-up area for Estuari Garden’s units is between 2,708 sq. ft. and 3,550 sq. ft. with a price of RM1.39million onwards. This gated and guarded development offers its community 24-hour security, wide walkways, and cycling paths, large landscaped open areas with a lush verdant linear park, a children’s playground, outdoor gymnasium, and exercise areas. In August, 83 Estuari Gardens’ Serenity Aralia units were launched. Estuari Gardens is expected to be completed in July 2017. Estuari Gardens is set to attract Malaysians who are looking for residential upgrades, and Singaporeans who have businesses in Johor and who would like to purchase houses for
Fully sold Acacia units of Serene Heights Bangi
Begonia units still available at Serene Heights Bangi
weekend homes. This will also be a development targeted for foreigners who enjoy Asian lifestyles and are enrolled in the Malaysia My Second Home (MM2H) Programme. In terms of the company’s strategy on developing its landbank in Johor, Anwar opined, “We may form selective joint ventures to develop some of our strategic land bank. We are looking for partners that can enhance our reputation with more word-of mouth advertising, new distribution channels and new markets to enter. It may also be outright land sale for developments with catalytic potential, designed for greater catalytic impact in the immediate surrounding area.” Anwar also stated that for new developments, “we would like to incorporate smart communities. To transform from silo-based model to a more integrated model incorporating smart energy, buildings, healthcare and citizens.” The smart community will be run by a central network that connects individual smart buildings such as homes, offices, schools, and hospitals, to a central city management bank. “When these buildings are interlinked, we will be able to manage energy consumption in the houses, work between physical and virtual offices,
interact with students and teachers around the world, and even providing healthcare regardless of location,” he stated. UEM Sunrise has already been collaborating with Telekom Malaysia and Ascendas Group to develop the Nusajaya Tech Park, carefully designed to incorporate environmentally sustainable elements, namely efficient sewage, utility, and energy management that can minimise carbon footprint and reduce operating cost. Diversifying to other locations is part of the corporate strategy and UEM Sunrise is in no way withdrawing from Nusajaya as the company is fully committed on their long-term plans for the Flagship Zone B of Iskandar Malaysia. As a testament to its commitment, UEM Susnrise in April 2015 unveiled a comprehensive development plan of Gerbang Nusajaya that commands a GDV of RM42 billion. This 4551-acres second phase development of Nusajaya, designed for growth via catalytic developments and strategic partnerships with established developers and multi-national companies. Gerbang Nusajaya will serve as the commercial and business engine for Nusajaya. It will draw leisure attractions, trades and industries together with a population attracted by
UEM Sunrise’s residential and lifestyle offerings. Gerbang Nusajaya is master-planned for connectivity and is easy to reach from Malaysia, Singapore and regional cities. It is strategically located just five kilometres from the Tuas Checkpoint via the Malaysia-Singapore Second Link. It is also ready to capitalise on the potential High Speed Rail link between Singapore and Kuala Lumpur. “We anticipate the upcoming HSR will bring influx of people to the area, leveraging on the improved connectivity. Besides that, it has access to four international seaports namely Tanjung Pelepas, Tanjung Langsat, Pasir Gudang Port and Port of Singapore,” highlighted Anwar. Gerbang Nusajaya features a number of catalytic developments including the 519 acre Nusajaya Tech Park and the 300-acre FASTrack Iskandar which will be complemented with commercial districts and signature residential precincts. With many UEM Sunrise projects coming up in strategic locations, this will definitely spur the property market in Malaysia, and leave investors spoilt for choice when it comes to investing in real estate.
Birds’ Eye View of Gerbang Nusajaya
www.propertyinsight.com.my SEPTEMBER 2015 I 51
PERSONALITY OF THE MONTH
THE BURNING FLAME TO SUCCESS Passion is the defining factor that determines Fallon Looâ€™s success in investing, sales & marketing, and mentoring BY: MAK KUM SHI AND FARA AISYAH FIRDAUS PETIAL
52 | SEPTEMBER 2015 www.propertyinsight.com.my
eing passionate and motivated are key ingredients to success, and in GS Realty sales director Fallon Loo’s case, she demonstrates these virtues admirably, whether it is in real estate investment, sales & marketing, or mentoring her peers. Where investment is concerned, her perspective is quite simplistic. When saving money in the bank is compared to investing in real estate, the better choice is clear. In an exclusive interview with Property Insight, Fallon commented that values in real estate always go up, as supply is finite. As a matter of comparison, she cited that the top ten tycoons in the world would have something to do with real estate, and that the top five will not be in direct selling. She indicated that the property market in Malaysia is considered very solid in Asia Pacific, because properties in Malaysia are still considered very cheap, when compared to Hong Kong, Singapore, and Taiwan. Furthermore, she stated that in developed countries, their economic growth would be linked with the property industry. Therefore, real estate is very important for developing countries’ growth. LOCATION, PRICE, DEVELOPERS Sharing on her investment strategy, Loo said that she looks for location and the developer when buying properties. She would consider a property development if it is at the right place by the right developer. Citing Bukit Kiara Properties as an example, the developer has excellent branding, and that buyers would not make a loss if they bought the developer’s properties. Beyond location and developers, she had also cited the importance of sales packages. With the property market already being very competitive, developers are trying to adjust the price of their mid-range products, and offering terms such as low down
payments to make it easier for people to buy properties. Among the places that she likes to invest in includes the Kuala Lumpur City Centre (KLCC), Bangsar, and Mont’Kiara areas. As a real estate professional, she has the advantage of getting first-hand information from developers. This allows her to buy developments before investors. She also obtains good tips, and this allows her to make substantial profits from investments. She cited an example of her investment experience that took place about four years ago, where she bought a condominium in the KLCC area from a developer that had a reputation for
Product knowledge is the key to success. You have to master the key” - Fallon poor workmanship. She bought two units of the development despite being discouraged by her peers, who were worried by its branding. Her rationale for her purchase was that there was nothing to worry about in regards to the brand as the location was considered prime, and the price of the development was going to appreciate. At that time, she bought it at RM780 per sq. ft. Since the time of completion, almost every day, she had received calls from people wanting to rent or buy her units, or have ready tenants. This drove her to sell a unit at RM1,480 per sq. ft. and she had requested for her units to be removed from listings. At her selling price, this implied almost a doubling in value of what she had originally invested in. The moral of this story is that as an investor, we have to be really sharp,
and that we have to truly believe in the real estate industry. This implies that by being truly passionate in the industry, investors would be able to spot emerging opportunities, regardless of market condition. BEING PASSIONATE The secret of Fallon’s success in investing is attributed to her passion in the things she does. In her professional experience, she has sold knives, software management, insurance policies, and properties. While such products may not be related to one another, from her perspective, the task of selling is still the same. The only difference is that she is selling to different markets. “Product knowledge is the key to success. You have to master the key,” she emphasised. “A lot of people just sell for the sake of selling. To me, you have to love something in order to sell. You don’t sell just for the sake of selling. You need to love it, be passionate about it.” “I’m a very positive person. I’m very passionate and enthusiastic when I do things. Honestly, I wasn’t like that previously. When I was young, I didn’t have such a strong character. After I had returned from the United States, I was moulded that way, because I learnt from the best. I won the All American Scholarship and am proud of this, because my company has twenty thousand representatives for selling knives, and they only give this scholarship to the top 25 in the country. When you are following the right people, you are doing the right job.” Fallon attributed her selling expertise to the time when she first learnt how to sell knives through raffles from CutCo & Vector Marketing in the United States. By going through intensive training, she built her confidence and learnt how to sell. Upon her return from the United States in 1997, she started working in an information technology (IT) firm, selling software management applications. Fallon cited an incident www.propertyinsight.com.my SEPTEMBER 2015 I 53
PERSONALITY OF THE MONTH
Even if you have confidence, it is not guaranteed you will win. However, if you don’t have confidence, you have definitely lost it.”
54 | SEPTEMBER 2015 www.propertyinsight.com.my
a few years after then, when she observed her sister’s associates, who were in the insurance industry, were having a conversation. In spite of her sister’s associates being poorly conversant in English, Fallon observed that they were earning more than her. This prompted Fallon to venture into the insurance industry. She was then referred by a colleague to a star performer in the insurance industry. In this respect, Fallon remembered her mentor’s advice, to lower down her self-esteem, learn from the master who is good in the business and excel. Never look down on anybody, lower her ego, and do better than her contemporaries. Fallon followed the star performer for a week and learnt the tricks of the trade. In the first year when she was in the industry, she qualified for the ‘Million Dollar Round Table’ (MDRT) standard within 46 days. In subsequent years, she achieved her targets within one to three months. After being challenged by her sister to qualify for the ‘Court of the Table’ (COT) standard, which was six times
harder than MDRT, Fallon went for it and achieved the qualification in three months. However, in subsequent years, when more people qualified for the standard, she was no longer excited about it. At that time, she met a schoolmate who had suggested that she should consider real estate marketing, because there is a very big market. After posing some questions about his earnings, the sales turnover of the best agent, and how well his group’s performance was, she decided to venture into the real estate industry. “Right now, my mentors are developers and partners. They did not come from rich families,” Fallon shared. “What are the common traits of these people? What do they have in mind? I’ve found one thing (consistent between them). The rich people wake up early. That’s why I do the same thing now.” MENTORING LEADERS OF TOMORROW Given her accomplishments as an investor and sales person, it is natural of her to be passionate when she
mentors her colleagues. Fallon urged, “You have to love learning, and be passionate about what you are selling. If you can’t, fake it until you can make it.” “Look at Jack Ma, the founder of Ali Baba,” she exclaimed. “Look at his face, at his size, that doesn’t matter. He has a very good vision and dream. That’s what I always tell my people, dare to dream and think big. Be careful with what you think, because that’s what it’s going to be. You will realise that soon. Even if you have confidence, it is not guaranteed you will win. However, if you don’t have confidence, you have definitely lost it.” As sales director, Fallon is overseeing a big team. However, while there are many people in her company, they are not united, because they tend to only do their jobs within their own teams. Given these circumstances, her job is to unite her colleagues, and she mobilises the whole team and gets them to focus on two to three projects at one time. With her colleagues having conservative backgrounds, she commented that their perceptions are that it isn’t easy to make money in real estate, as it requires knowledge, going for examinations, and a lot of thinking. However, she disagreed, stating that one doesn’t need to go for exams and gain specific knowledge in real estate. Citing an example, she had a negotiator joining her company, and after two days, was already able to sell a condominium unit. A MATTER OF PRIDE Motivation is the most important factor to success. Its importance is above talent and education, and Fallon illustrates this by sharing her experiences in mentoring her colleagues. Based on her experience, Fallon noted that 80% of her top sales people were less educated, while the remaining 20% were educated. The reason for the difference is that those who are educated aren’t able to lower
their pride. They felt it is beneath them to go to the booth and wait for people to come in. However, this cannot be expected to happen currently. She exclaimed that for a sales person, it is important to go all out and reach clients through various avenues, such as booths, social media, and outside networks, instead of being expected to be spoon-fed. “That’s why I always tell my colleagues, ‘if you are educated and you can put out your ego, you’ll be the top of the crop. No one can beat you’.” Citing her standard operating procedure for training, a new colleague is assigned to a trainer and placed in a group. Weekly meetings are held with all the agents, after which, she has a meeting with the leaders. She gives motivating speeches to her colleagues, and invites those who successful close deals to share how they do so. She explained that a good sales agent must have purpose and certain qualities. The importance of the right mind set is not to be underestimated. He must have the desire to always win, excel, and find a way to do so. “I always tell my people, it’s either you are a turkey or an eagle. Turkeys can never mix with eagles. When turkeys sit down together, they know the market is down, and it is hard for loans to get approved. Even though units are sold, the loan ratio requested will not be approved.” “When they sit with the eagles, what do they discuss? Susan just sold seven units today. Linda closed 14 units per day. When the turkeys come into this environment, they do not fit in.” “You want to be my top sales person? A person needs to exceed RM11million. How much was the top sales amount achieved last month? RM10million. You have to keep on raising the bar. I am not talking about group sales. Even for some agencies, the entire sales team cannot achieve this amount. To me, it only takes one agent.” “Therefore, we need to create the winning platform for them. A lot of
eagles like to be on stage and we have to recognise them.” THE FLAMING ROUTE TO SUCCESS The implications of the experiences that Fallon had shared are not to be underestimated, as they are not just applicable to real estate investors, but also to any individual. Real estate can bring good returns on investments, but it is important for real estate investors to be passionate about the industry, and become sharp enough to spot investment opportunities for themselves. Anyone can master a subject as long as they are truly passionate about it, and this is equally applicable to real estate, whether it is about investing or selling. Humility plays an important role for anyone. With humility comes the willingness to learn and respect others. At the same time, it is important for people to have confidence in what they do. By being passionate and confident in what they do, these qualities would pave their way to success.
If you are educated and you can put out your ego, you’ll be the top of the crop. No one can beat you.” www.propertyinsight.com.my SEPTEMBER 2015 I 55
STAYING HIGH AND STABLE Foreseeing The Hong Kong property market BY: FARA AISYAH FIRDAUS PETIAL AND DANIEL SIM
esides Penang, do you know which country is also known as the Pearl of Orient? It is the Hong Kong Special Administrative Region of the People’s Republic of China, one of the world most densely populated regions. Even though Hong Kong is only 1,104 sq. km., its population has grown steadily and as of 2014, it stood at a total of 7.2 million. Hong Kong is a city generally considered to be an important node in the global economic system. The Heritage Foundation Index of Economic Freedom named Hong Kong as one of the countries with the freest market economies, due to laissez-faire economic policies, low taxation, and free trade. There are still lots of opportunity in the Hong Kong property market. In the residential market, investors have begun to absorb the impact of property cooling policies and transaction volume has rebounded since 2014. “Mass residential prices are expected to increase 5-10% in 2015. For the office sector, growing demand from the expanding Chinese firms will support office rental growth and price appreciation,” Hong Kong Knight Frank senior manager Pamela Tsui. “The upcoming challenge include US interest rate hike, which will have a negative impact on investment sentiment in the property sector. The recent stock market volatility in Hong Kong and China may negatively impact the property market as well. Meanwhile, the retail sector outlook is still uncertain,” said Tsui.
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RESIDENTIAL MARKET According to Knight Frank, Hong Kong sees the strongest price growth in the region, while China is expected to further liberalise outbound investment. It said that “house prices in Hong Kong defied the ongoing cooling measures by rising a staggering 18.4% in the 12 months to Q1 2015. This is the highest annual price growth in the overall market since the second quarter of 2013.” The number of residential sales transactions, after having dropped to 4,329 in March, affected by the credit tightening measures implemented in February, has since rebounded for two consecutive months, reaching 4,549 in April and 5,168 in May. The number of mass residential sales transactions worth below HK$10million rebounded to 4,444 in May, a figure still lower than the over5,000 levels reached during the first two months of the year. Meanwhile, the number of luxury residential sales worth KH$10million or above exceeded 700 in May, the highest level thus far in 2015, reflecting a shift of some buyers from the mainstream to the luxury segment, as the government’s latest measures target small to medium-sized homes. During the first four months of the year, primary residential sales represented 25% of total sales, a higher proportion than in previous years, as developers remained active in launching new units at competitive prices with attractive, beneficial packages.
As stated by Knight Frank, more new projects will be launched in the coming months, including Skypark in Mong Kok and Grand YOHO in Yuen Long. For the first five months of 2015, luxury home prices rose 1.4% and are expected to increase up to 5% over the year, due to sustained demand and limited supply. Mass-residential prices, having increased about 7% during the first five months, are set to rise by a total of 5-10% over 2015, considering strong end-user demand. PRIME OFFICE MARKET In its report, Knight Frank stated that both the Grade-A office sales and leasing markets remained robust in Hong Kong. “While prices hit a new record high, rents increased in the CBD and decreased in CBD2.” “In the housing market, the number of sales transactions rebounded for two consecutive months, despite the implementation of new mortgage
measures in February. Meanwhile, the retail property leasing market remained subdued, except for a few transactions in prime retail spots.” It is mentioned that Hong Kong’s office sales market remained heated in May, with numerous major transactions being recorded in the month. “For example, a high floor at Nine Queen’s Road Central sold for approximately HK$480million or HK$34,861 per sq. ft., a record-high unit price in Hong Kong. The price was 15% higher than the previous record set in the same building one year ago, demonstrating positive market sentiment for office property investment.” In the leasing market, Manulife has renewed the lease on 340,000 sq. ft. of its office space at Manulife Financial Centre in Kwun Tong. The lease on another 160,000 sq. ft. of space has not been renewed, as the company has decided to relocate part of its offices to One Bay East West Tower in
the same district, which is scheduled for completion by end of 2015. With abundant available space in Kowloon East, Knight Frank expects office rents in the area to experience mild drops in the coming months, although leasing activity will remain active, given robust demand. In May, China and Hong Kong regulators jointly announced the ‘Mutual Fund Recognition Scheme’, which allows funds domiciled in Hong Kong and China to be sold in each other’s markets, effective from 1 July 2015. In the long term, this arrangement is expected to boost office leasing demand in Hong Kong from related firms, such as funds, banks, and asset management. Capital values made some minor headway across most sectors in the second quarter, with the exception of prime street shops which recorded a 2.5% decline. Luxury apartments in particular
posted a spectacular performance as values increased by 6.2% on the back of buoyant stock markets in both Hong Kong and mainland China. We doubt this rate of growth will be repeated in the second half, however, given recent uncertainties. The industrial market, and warehouses in particular, managed to hold on to price gains but after a long bull run, it may be time to see some slowing of price growth,” said Hong Kong Savills head of research Simon Smith. Rents overall also showed modest growth during the second quarter with Grade A office rents outperforming, pushed upward by demand from financial services firms as a result of the Stock Connect schemes. As vacancy rates rose in the warehouse market, rents drifted and we expect further weakness over the second half. Logistics has been hit by the slowdown in the retail market where prime street shop rents dipped by 5.5%. We remain moderately bullish www.propertyinsight.com.my SEPTEMBER 2015 I 57
INTERNATIONAL MARKET PRIME OFFICE
Shopping centres will remain relatively resilient, with prime mall rents expected to remain flat and noncore shopping centre rents to slightly increase over 2015. We are definitely seeing more land sale opportunities, given the government’s eagerness in increasing supply in the market. With chances of an upcoming correction amplifying, ahead of the imminent interest rate hike and uncertainties on the external front, more developers are taking the current opportunity to build cash reserves and reduce gearing, in preparation to acquire development land upon tipping of prices. We have seen more smallto-medium-sized developers as well as Mainland developers participating in government land sales. “Given the housing shortage and affordability being a growing issue in Hong Kong, developers have been building more small flats in the city, to meet the genuine demand from endusers. Going forward, mass residential units should take a huger slice of the pie,” said Jones Lang LaSalle head of research Dennis Ma.
Awards, the transaction costs in buying and selling Hong Kong’s property are as follows:
Source: Economic Property Research Centre Note: All transactions are subject to confirmation.
Source: Knight Frank Note: All transactions are subject to confirmation.
on shopping mall rents, however. “The expanding office market took the luxury apartment along with it and budgets of HK$100,000 to HK$150,000 per month were again active. Rents rose by 3.2% over the second quarter,” said Smith. RETAIL MARKET “The number of visitor arrivals to Hong Kong rebounded 0.9% year on year in April, compared with the 8.7% drop in March, from a year ago. However, the retail sales value fell another 2.2% in April from a year earlier, with the fall continuing to be led by the sales of the government’s classification of ‘Jewellery, Watches and Clocks and Valuable Gifts’,” said Knight Frank. The retail leasing market remained subdued in May, except for a few transactions involving prime retail spots. According to Knight Frank, an electronics appliances retailer reportedly took up a ground floor space measuring about 2,000 sq. ft. at 537 Lockhart Road in Causeway Bay. The previous tenant, a mid-tied fashion retailer, relocated to ground floor shops 1-3 Excelsior Plaza in the same district, covering a total of 2,353 sq. ft. Amid a challenging retail environment ahead, Knight Frank expect prime street shop rents to drop a further 5% in the second half of 2015. 58 I SEPTEMBER 2015 www.propertyinsight.com.my
TRANSACTION COSTS INVOLVED IN HONG KONG PROPERTY According to Mayer Brown JSM, nine times winner of Real Estate Law Firm of the Year, by Asian Legal Business
a) Stamp duty Stamp duty is chargeable on a property transaction at a sliding rate with reference to the purchase price or the market value of the property. Currently, the maximum rate is 4.25%, if the purchase price or market value of the property is over HK$21,739,120. Both seller and buyer are liable to pay stamp duty but market practice is that the duty is typically borne by the buyer. b) Special stamp duty Effective from 20 November 2010, any residential property acquired on or after 20 November 2010 and resold within 24 months, will be subject to a special stamp duty calculated with reference to the purchase price or the market value of the residential property, at a sliding rate depending on the length of time between acquisition and resale. The maximum rate is 15% if the residential property is resold within 6 months from the date of its acquisition. Both seller and buyer are liable to pay special stamp duty and it is open for the parties to negotiate who will pay it and/or the proportion of payment. c) Broker/estate agent’s fees Broker/estate agents’ fees
Keep all your legal and tax needs under one roof:
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Level 41, Vista Tower, The Intermark, 348 Jalan Tun Razak 50400 Kuala Lumpur Tlf.: +603 2690 1499 Fax: +603 2690 1301 www.propertyinsight.com.my SEPTEMBER 2015 I 59
INTERNATIONAL MARKET historically been charged at a usual rate of 1% of the purchase price (often payable both by the seller and the buyer) but, these rates are open to negotiation depending on market conditions. This is particularly so in the case of larger transactions.
held by way of a long-term investment. As a rule of thumb, a property owned for 3 years or more typically is treated as a long-term investment, and not part of any trading stock. As a result, any gain on its disposal should not be subject to profits tax.
d) Legal fees The amount of legal fees is subject to negotiation by the parties and to some extent depends on the size of the transaction, but unlike brokers/estate agents the price is not directly based on a percentage of the purchase price.
b) Property tax Property tax is charged at the current rate of 15% on 80% of gross annual rentals less rates generated by real estate. Companies that own real estate generally avoid this tax by electing to be assessed for profits tax on this income instead.
PAYABLE TAXES IN AND AFTER THE PURCHASE TRANSACTION Mayer Brown JSM also explained the payable taxes for purchasing property in Hong Kong as below: a) Profits tax Corporations (whether incorporated in Hong Kong or overseas) which carry on a business in Hong Kong will be subject to Hong Kong profits tax at the current rate of 16.5%. It is possible for a company which buys and sells real estate in Hong Kong to be treated as trading in real estate and have any gains arising on a disposal of such real estate assessed to Hong Kong profits tax. In order to avoid profits tax the real estate must be
60 I SEPTEMBER 2015 www.propertyinsight.com.my
c) Stamp duty An agreement for sale or a conveyance on sale of immovable property in Hong Kong has to be stamped. The time for stamping is normally 30 days after the execution of the agreement for sale or the conveyance. A penalty of up to 10 times of the amount of stamp duty payable may be imposed for late stamping. An unstamped agreement or conveyance is not admissible as in evidence in civil proceedings and cannot be filed or acted upon by any public officer or any body corporate. d) Capital gains tax There is no capital gains tax in Hong Kong.
e) Withholding tax There is no withholding tax in Hong Kong on dividends paid by companies to their shareholders whether local or foreign. f) Estate duty Estate duty was abolished in Hong Kong with effect from 11 February 2006. CONCLUSION Colliers International, on the other hand, predict home prices in Hong Kong will stay at a high and stable level in 2015. Since the market absorbed much of the end-user demand last year, it maintain its forecast that prices for both mass and luxury properties will see slower growth of 3% in 2015. There are several factors supporting the residential market. Interbank liquidity is still at a high level of HK$239 billion, vacancies hover at a low 4% to 5% and supply in the secondary market remains low. There will be no oversupply, with 15,000 new flats due for completion in 2015, which matches the primarysales absorption rate of about 15,000 units in 2014. It foresees rents rising 7%, faster than the 3% increase in prices, so yields should edge up 10 basis points in 2015.
INVESTOR NEXT DOOR
TAKING CALCULATED RISK With 28 properties, doing due diligence paid off for this young girl BY: DANIEL SIM
nvesting at a fairly young early age would be a huge challenge to many but not for 24 years old, full-time UTAR Student, Tan Ching Sen. Hailed from Labis, Johor, Tan majored in Actuarial Science. She has been a real estate investor for about three years already. “A lot of people have told me that I am a full-time investor and a part-time student because of my travelling time from Kuala Lumpur to and back from Iskandar Malaysia,” shared Tan.
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DUE DILIGENCE MATTERS To date she owns around 28 properties, mostly located in the growing market of Iskandar and Kuala Lumpur. She invested mainly in residential, commercial shop lots, and an office lot Being a proactive person, Tan took the initiatives by attending many courses that teaches property investment, and as a result of that, she gained the necessary knowledge in a clear and organise manner in
understanding the fundamentals of property investment. For example, she will study the whole master plan of the property development, the surrounding infrastructure and also the boom factors. “Some of the courses I attended, focuses on doing a holistic research, such as how to select new project launches for flip profit and also the fundamentals of sub-sale investment,” said Tan, who acquired a clearer mindset on what her investment appetite and investment strategies should be as a property investor. She started looking around for properties in Kuala Lumpur in year 2012, focusing in Setapak area as she was studying there. As a student and an investor, Tan shared that mathematic is the most important subject when it comes to investment and business. Being good in math helps when it comes to calculate accurately the cash flow, the rental yield, the reinvestment, and the reserve funds needed for her before investing in a property. “I invested in properties with the intention of using little cash up-front and leverage on loan financing at that time, I started from RM10,000 and purchase a condominium in Setapak,” shared Tan. “I focus on making sure I did my due diligence such as performing a background search on the seller profile, do a bankruptcy search, review loan capacity, check CCRIS, and do land title search, and checked with property agents to find out more about the property,” shared Tan, who takes down all the details whenever
she made a property purchase. She spent a lot of time to do a lot of driving around the site and checking the 5km radius of the area to ensure the work, play, live, and study areas are around before she makes a decision on whether to invest, and was never influenced by emotional desire or the hype of the market at that time, as she believes this will help her gain a good profit. Sure enough, she made her first pot of gold when she flipped her first property with RM90,000 profit within three months. Motivated by her first success, she continue and spent three months to look for more properties, and in the process found many good sub-sale properties that suits her investment portfolio. She believes in balancing her property portfolio with the liquidity level of 60% sub-sale rented properties and 40% new launches capital appreciation opportunities. Her focus shifted southward when she heard her friends talking about Iskandar and decided to explore the area as she is a Johorean. She did an Iskandar market research trip in October 2012, with a few investor friends, which opened up new possibilities of capital appreciation as a sub-sale investor. She shared that her property investment strategy was to buy nomoney-down properties and to pool all these together for rental yield of at least 8% per annum. “During the trip, I found sub-sale market as low as 300k and rental yield of 8-10%. For the capital appreciation
potential, I found developer projects in a good location with good fundamental and boom factors,” shared Tan. She described boom factors as purchasing property near to where the ‘crowd is gather’, such as shopping malls, new F&B street or outlets, new commercial and office developments and amusement parks. “After coming down south, my investment have rental yield has achieved 6-7% and capital appreciation of 30%-50% within two years,” shared Tan. She has continue to reap profits and rental due to the tenants demand. Personally, she believed that investors will reap progressive cash flow either from the capital and rental gain in the next five years when Iskandar matured. She pointed out that despite people giving some negativity on the property market in Iskandar Malaysia, the location is still at the early stage of becoming a developed city. The most expensive property she bought was a 5,191 sqft shop lot at Adda Height, Johor Bahru. She purchased this shop lot at RM1mil, when the market price is RM1.3mil or 30% below market value. She is enjoying a rental yield of 5.72%. “I bought the unit because it is in a good location, a good location
I restructured my loans by getting several bankers to advise me on how to restructure my income, and my cash flow so I may be able to optimised my loan capabilities rating with a higher loan ratio.” - Tan means more than just connected infrastructure with easy access to the property, but in this case the location has a good tenancy demand, approximate with the tenants coming within less than three months,” said Tan. The single biggest challenge for her is to execute the exit strategy, she reasoned “because when you start to invest in a big property portfolio, the coordination of the property investment of how to sell and rent need to be very systematic and coordinated.
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INVESTOR NEXT DOOR
FINANCING AND VALUE ADDING She is very detailed on where her monies goes, and when to refinance her properties, to ensure all the funds are returned to her. “I do not encounter issues of making the wrong choice when it comes to property investment, as all my investments are made with conscious effort focusing on the fundamentals,” said Tan. Starting early at a young age is also an advantage for her as she later realised that it is easier for her to qualify for long tenure loan, where she can then leverage on the loans to receive attractive capital yield. “I restructured my loans by getting several bankers to advise me on how to restructure my income, and my cash flow so I may be able to optimised my loan capabilities rating with a higher loan ratio,” highlighted Tan. 64 | SEPTEMBER 2015 www.propertyinsight.com.my
As a property management owner now, she has vested a lot on the structural and interior design of the property. She focused on the defect checks to ensure there are no problems with the structural, piping and the ceiling issues. She commented that based on your target market, doing some simple interior designing to your property will help to increase the possibility your units will be the first to be rented or purchase, besides that, renovation and furnishing helps in fetching a better rental yield. “The renovation I did to my properties help increase my selling price or rental rate by 10 to 15% from the market price,” said Tan. BETTER THINGS TO COME The Malaysia property market is definitely moving into a sustainable and focused market where investors and buyer are focusing on value investing compared to the frenzybuying time in 2013-2015 period,” commented Tan, who also believe that this is actually better for the property market. Tan believes that 100% result comes from 100% of the intention. Moving forward, she has vested in new properties with minimum cash down but will enjoy maximum capital returns in less than a year before completion.
PROPERTY INVESTMENT PINES RESIDENCE, NUSAJAYA Property type
Purchase value (2013)
Market value (2015)
RM 352 (950Sf)
Rental per month
HORIZON HILLS, NUSAJAYA Property type
Purchase value (2013)
Market value (2015)
24’ X 75’ (3,600Sf)
Rental per month RM 4,000 Rental yield
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BEAUTIFYING YOUR HOME WITH CURTAINS
The right curtains will reflect the characters of your home
BY: DANIEL SIM
ou might be figuring out how you could decorate your room to have a more oriental look, or your daughter might like to have a room that portrays ‘royalty’. Choosing the right curtain can help to live out that dream. “Curtain is an important element for household décor. This is because placing the right curtain with the right colour and texture on the window panel of your rooms or living hall helps to smoothen the overall mood of the entire home,” said MK Curtain’s founder and group chief executive officer Dato’ Calvin Khiu. Khiu opined that a good curtain is not just based on a customer preference but also the curtain’s function, and the many different feelings that you would like the curtain to portray. If you are staying in a place with 66 | SEPTEMBER 2015 www.propertyinsight.com.my
constant sunlight exposure, you can use a curtain with darker colour tone to shield and protect your skin from the sheer amount of sunlight. Curtain will also be useful for those who are sensitive to noise as it acts to reduce the sound produced from the noise, and like a picture, pictures can be imprinted in the curtain to tell a story. For example, if you are a person who likes nature, curtains imprinted with trees, grass and flowers can help you relate to those feelings better, right in the comfort of your own bedroom. HOW MK CURTAIN DIFFERS FROM THE REST? According to Khiu, many people do not really know what they want when it comes to decorating their homes with curtains despite its versatile usage.
He opined that many home buyers “rather take the easy way out and let their interior designer do the job for them.” Therefore, in some cases, the true feeling of what home buyers or home owners aspire, might not be represented accurately by the interior designer accordingly. Khiu claimed that MK Curtain is actually the biggest curtain producer in South East Asia. “We have many different types of curtain sets on display in our outlet that will help homebuyers visualise the look and feel of the curtain when they place it in their home.” Khiu commented that another plus point for home owner or home buyer to visit MK Curtain is that they would become more knowledgeable about curtain, and thereafter, would be able to take charge and be in control of
Provide one stop, door-to-door service. To give your house a stylish makeover
MK Curtain Founder & CEO, with 3M Window Film products
how they want to decorate their homes with the right curtain, rather than just leaving it ‘point blank’ at the hands of another who might not even give them what they want in the first place. In Malaysian context, the price and the quality are two things that Khiu personally believes will hugely affect the buying process of curtain, unlike clothing, where people follow the type of brands. “In the future I want people to buy curtain just like how they would follow fashion one day,” shared Khiu. MK Curtains’s products are sourced and imported from overseas, as far as Germany, Japan, China and our neighbouring country, Indonesia. This ensures the good quality of the product remain stable. He commented that the products, even though are imported, are in the medium to affordable range. As MK Curtain has a huge showroom at their premium outlet, customers are spoiled for choice and because of this Khiu claimed that the prices of curtains sold at their premium outlet are at least 20% cheaper than those sold in the outside market. “Customer satisfaction and feedbacks are very important. I recently did a referred tender price project in Melaka. The person (customer) told me he had saved 35% in cost when doing business with MK Curtain and even promised to deliver more projects for me,” said Khiu. MK Curtain also caters to custommade curtains and wallpapers. “A kindergarten might want to imprint the alphabets on their blind and we can
The biggest curtain showroom in Southeast Asia - 99,000 sq. ft.
do that,” shared Khiu, who also said that just like the ‘selfie’ trend, one can also imprint their profile pictures in different poses to hang around their room. Khiu mentioned that he has five staff that will go all around the Klang Valley to help clients install and measure curtains in their home. Besides curtain, MK curtains also sells carpets and wallpapers and will be expanding to the home furnishing business in the future. Tentatively, there is only one premium outlet, located in Nilai, Negeri Sembilan, which also happens to be the company’s headquarters. “Three years ago, I participated the creative young intermediate award and managed to reach top 10, even though many people had yet to know about MK Curtain, and those who did know said that curtain is a sunset business. I want to change that
perception and let every household in Malaysia know that curtain plays an important role in home décor, “said Khiu with pride. Khiu said that developers would now look for him for joint-venture purposes where the developers will build the condominium and MK Curtain will install the curtain in the units. He said that he is not discounting the fact that MK Curtain will expand to Kuala Lumpur if he can find a location with ample parking space. “I already achieve much success with this outlet and would like to emulate the premium outlet concept to other states in Malaysia, so that Malaysians can enjoy more choices when it comes to curtain selection,” said Khiu, who is also targeting to open one premium shop every two years, and to have MK Curtain premium shops everywhere in Malaysia within the next five years. www.propertyinsight.com.my SEPTEMBER 2015 I 67
FOREIGN EXCHANGE AND PROPERTY INVESTORS
Variation in foreign exchange, commodities, and economies can have an impact on international real estate investment decision
eal estate investors come from two different perspectives; the locally-based investor and the internationally-based investor. Depending on which one you are, there are different ways of factoring in the exchange rate and the way it affects your property investments. Foreign exchange trading allows someone to further diversify their investment portfolio and if you are an investor in international real estate, you cannot underestimate how useful this can be to your investing strategy. The link between foreign exchange and investing in international real estate is quite simple to understand, and with due diligence it is possible to make sound investments. Over the past year there has been significantly increased volatility in the global currency markets and if you are an investor in international real estate, it would not surprise me in the slightest to hear that you have noticed that investing in international property has become very expensive in some places, and likely far more attractive in others. If you invested in property in the United States a year ago, you would have noticed that the USD has since strengthened against most major currencies. That means that just one year later, you could sell your investment and more likely than not make a healthy profit. On the other hand, if you invested in either Japan or Europe, you may not be feeling as confident as you would have noticed that these currencies have weakened
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dramatically against the USD over the past year. This means that if you sold your property in Yen or Euroâ€™s now, you would have more likely than not noticed that you have lost money on your investment. What about investing now? Both Japan and Europe will be an attractive addition to most portfolios because their economies are supposed to improve in the future, which more likely than not means their currencies will also appreciate in the future too. Purchasing in either of these two markets would therefore be a long-term strategy. What about Malaysia? Well, investing in the Malaysian property market from the point of view of an international investor has become a very attractive option, because the Malaysian Ringgit has received complete punishment against a basket of currencies over the past half-year. Due to the continuous pressure the Ringgit has faced, international investors can expect to receive far more money when transferring money into Ringgit than they would have previously anticipated. This means Malaysian property has become attractive to investors, and it would not surprise me to learn that more overseas investors are investing in Malaysia. Locally-based real estate investors in Malaysia with USD or Euro savings abroad may think of purchasing land by first exchanging foreign currencies into Ringgits and then paying for their property, thereby benefiting from a favourable exchange rate, regulations permitting. Speaking
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about the global economy, things are looking more positive than they were this time last year. While the dramatic tumble in commodity prices has inspired unexpected pressures on those economies reliant on commodity exports and concerns over declining economic momentum in China are continuing, both the US and UK economy are performing on a consistent basis. Job creation is the star performer of the US economy and has become the backbone of the economic revival in the United States, while the economic outlook for the UK is the envy of developed economies. Although the pace of economic progress has been questionable at times, there is finally some signs of improvement in both Japan and Europe. The pace of improved economic data from these two major economies has come under scrutiny in the past, despite this we have seen signs that both economies are benefiting from their dramatically weaker currencies in recent weeks. This is something that will need to continue in the second half of the year, although an improved economy in both Japan and Europe would improve the global market sentiment tenfold. With that being said, the economies that are reliant on commodity prices have been hit hard by the dramatic decline in the price of crude oil since the middle of last year. This decline has also affected global inflation expectations, and to be honest, only the US economy has managed to escape the downside pressures such an unexpected phenomenon has presented. In regards to those economies that have been negatively impacted by the decline in the price of oil, it is mostly the emerging markets that have felt the brunt of the force and this has result in continuous pressure on currencies such as the
Malaysian Ringgit, Indonesian Rupiah, Nigerian Naira and even the Russian Rouble. The combination of the decline in the price of oil coming at the exact same time optimism emerged over the Federal Reserve being in a position to begin raising interest rates has truly pressured the Malaysian Ringgit. While it is true that the decline in crude oil has inspired downside economic burdens, the economy of Malaysia is still performing at an acceptable level and the recent GDP report was still stronger than some expected. It is the trader attraction to the USD that has inspired the downfall of the Ringgit, with this being the major catalyst behind the currency depreciating dramatically to a multi-year low against the Dollar this year. As mentioned above, this is not an impact that has just been restricted to Malaysia and we have also encountered a 12-year low in the Indonesian Rupiah, while also seeing record lows in the Nigerian Naira and Brazilian Real. The anticipated timing of a US interest rate rise will unfortunately be coming at a time when the emerging markets will have a strong preference towards avoiding any more additional pressure on their currencies. This may be unavoidable, however, the likely US interest rate rise in the next couple of months will mean further downside pressures on the emerging markets in the months ahead. However, the Federal Reserve being in a position to finally begin raising interest rates should provide confidence in the global economy with a massive boost, and this is something that can also help the emerging markets and global economy in the longer-term.
ABOUT THE CONTRIBUTOR Jameel Ahmad is the Chief Market Analyst at ForexTime (FXTM). Follow Jameel on Twitter, @Jameel_FXTM
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HOME FINANCING FOR 1ST TIME HOME BUYER
Net income is used for loan application. Gone are the times when gross income is used. By net it means deducting gross salary from EPF (Employee Provident 72 I SEPTEMBER 2015 www.propertyinsight.com.my
Fund), Socso and Income tax. The net amount will be used to compute one’s Debt Service Ratio (DSR)
DIBS scheme which was once popularised by a lot of developers are now banned.
In any purchase of property a net sum will be used to derive the loan amount by this it means that if there is any freebies such as wardrobe, kitchen cabinets, heater or air conditioning that comes with the purchase of such property, the sum of the above should be deducted before arriving at the loan amount. Frees are legal fee is considered as a freebie and thus will be deducted as well. Therefore, it is important to know the changes that took place in the loan industry that might affect one’s application.
he moment we step out from our tertiary education life into the working life, a myriad of changes take place. We are given the authority to manage our own financing for the very first time via our employer and to manage it wisely we must. The 5 ‘Cs” began playing in our mind namely ; credit card, car, condominium, cash and career…not necessary in that particular order. As we move along in our career path we accumulate assets and debts that is within our limit and there will come a time before we think of acquiring the biggest asset in our young working life ie a house or condominium. Buying a property is like taking part in a decathlon event where every discipline either makes us stronger or give up. Launches after launches, prices escalated more than 20% at times and becomes difficult for 1st home buyers to even dare to put down the downpayment. This lead to the next obstacle that by doing so they might overcommit themselves which might result in they being late in payment for their instalment and thus turned it into non-performing loan. On top of that worry on interest rate hike or rejection from banks for their loans submitted compound the issue further that buying a home is out of their reach. Therefore, the only solution is to pray for a bubble to burst or just wait. An analysis of a 22-year period of movement of house price index in major cities in Malaysia was tabulated (see below ) and over that period, our housing index experienced two bull runs and two major financial crisis. For example, in that period, KL house prices increased 3.72 times in 22 years that is an average of 6.15% per annum. For Selangor that is a 4.91% per annum. Conclusion here is that even if one were to wait for any corrective action to come, prices of houses will go up. So the question is “Do you still want to wait?” Because of such escalation in prices post-subprime crisis, Bank Negara(BNM) has introduced some policies to soften the market. The policies applies throughout and first time home buyers are not spared. They must know what are the policies in placed.
100 80 60 40 20 0
Source: Bank Negara Malaysia
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The above chart indicate the amount of loans for the year 2014. The banks received a total of RM764.3 billion and approved amount is RM367.8 billion. This gives a percentage approval rate of 48%. This means that for every two application that the bank received one gets approved and the other rejected. Why is it so? According to a statistic properties ranging from RM250,000.00 to RM500,000.00 a staggering of 34% rejections in loans comes from this range. The categories of home buyers in this region are the 1st home buyers and young working adults with a small family. What are the reasons for such a high drop out rate?
CREDIT CARDS It is easy to obtain credit cards. A young working adult coming out into the workforce can easily apply and obtained a credit card. The assumption is that it’s a status to have a credit card and if one does not know how to curb one’s spending habit, eventually they will fall into the trap of outstanding loan with credit cards. This will have adverse effect of their loan applications. Visa International conducted a survey and found out that one in every five respondents will not have any savings at all and 70% will not be able to overcome any financial difficulties for 3 months and above. A scary finding if one does not know how to make the proper financial planning for their future.
PERSONAL LOANS Another trap young adult usually fall into is personal loans. Some banks offer almost 100% approval for personal loans. It makes obtaining money becomes easy but when the repayment becomes a chore then their name will be blacklisted and thus the repercussion is in their loan applications. The only solution for those who are in the above traps is to eliminate these debts before it becomes any worse or even declared bankrupt by the financial institutions whom they owe monies to. There are steps in making the right and proper debt elimination programme and if they follow diligently they can reduce their debts within the shortest span of time.
There are two places one can check on your personal credit rating: CREDIT TIP OFF SYSTEM (CTOS) CTOS is a private owed company who specialised in keeping information on individuals who are under legal implications from the banks or any summons which are posted in local newspaper. The information will be permanently in the system even after the party informed CTOS of the case being settled. Banks will check your CTOS before processing.
CENTRAL CREDIT REFERENCE INFORMATION SYSTEM (CCRIS) CCRIS is a report on an individual banking information which can be obtained from BNM. In order to obtain such a report one needs to bring the Identification Card to BNM and print from one of the kiosk in the bank. In this report it will state the individual’s type of loan taken from all banks, outstanding amounts, status, repayment frequency and many more information. Banks are particular in the area “repayment frequency” as this will indicate if the borrower pays promptly or miss any monthly instalments. The best result is ‘0’ which indicate prompt payment.
DEBT SERVICE RATIO (DSR) This ratio is calculates as a percentage of existing debts over net income. With the percentage in hand, compare that with the bank ‘s DSR. If your DSR is lower than the bank’s your chances of getting a loan is higher and any interest rate is subjected to one’s credit risk So with the introduction of ‘Affordable Housing’ to the lower-income and middle-income earners, the prospect of obtaining a home seems brighter. First-time home-buyers can surf www.srp.com.my for more information on the terms and conditions to obtain up to 100% loan package with the government. The good news is that all local banks are participating in this scheme. So like any good decathlete, after completing most of their disciplines, it’s time to review if their present condition allows them the opportunity to own a place called home.
ABOUT THE CONTRIBUTOR Miichael Yeoh is the CEO and founder of GM Training Academy PLT. He is a veteran in property and mortgage industry for 19 years. He can be conctacted at michaelyeoh.com.my. The article is co-written by his manager, Mun Goon Looi.
www.propertyinsight.com.my SEPTEMBER 2015 I 75
GLOBAL REAL ESTATE INVESTMENT A look into real estate investment from a variety of perspectives
s investors, irrespective of whether we are novices, veterans, or in between, it is always useful to ask, “How can I use real estate to achieve financial freedom in today’s property
market?” When I started investing it was a matter of buying as many cheap positive cash flow properties as possible, sometimes selling to free-up capital to buy more. That approach worked in 1999, but with property prices a lot higher today, it won’t work as well because you’ll run out of investing capital before you get rich. Today there is a better approach, and I look forward to sharing it at the upcoming seminar in November. After seeing an incredible opportunity in 2009 (low prices relative to replacement cost, high yields, high buying power of the AUD), my business partners and I acquired about 200 income-producing dwellings in Florida. Since then the Australian dollar has fallen against the US dollar, and property prices have increased in the areas I bought by 50% or more. A good result! More recently, I set up a retail-managed investment trust to acquire US commercial property. That is going well thus far and has assets more than AUD$115m. It has a ten year life though, so there is more work to be done to acquire and unearth value for those who invested. The biggest issue foreign investors have in the US is finding quality management, otherwise the aggravation will be crippling. The fundamental differences between markets in Australia, Asia, UK / Europe and the USA are return yields. The concept of negative gearing is alien in many other jurisdictions as the rent will normally cover expenses. However, yields have been compressed in Australia and Asia since property prices rose faster than rent. It’s hard to see how that will change in key population areas.
Of course, business, property and tax laws vary, as do the rights and responsibilities of tenants and landlords. Those interested in investing offshore should definitely visit that location in person before committing any funds or buying any property. While I previously strongly advocated what property to buy (or not buy), I now believe it is up to each investor to find the right property for their time, money, skill and risk tolerance thresholds. What might be a good property for one person may not be suitable for another. That said, the right property will be the one that makes the most money, in the quickest time, for the least risk, and the lowest aggravation. Rather than understand what makes the winds blow, or where they might blow next, I try to ascertain the wind’s speed and direction and trim my investing sails to suit. When change happens, I simply adjust my sails. Experience is the best teacher, and after buying 500+ properties in 16 years, in three countries, in all sorts of real estate markets, you learn a thing or two. I once read that smart people learn from their mistakes whereas wise people learn from the mistakes of others. With that in mind, my books are a gift of knowledge. Hopefully that gift is well received by wise investors.
ABOUT THE CONTRIBUTOR Steve McKnight is a best selling author, and has bought over 500 income-producing dwellings. He will be a key note speaker at the upcoming Property Investment Summit & Expo (PRISM)
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