Property Insight Malaysia
Property Fair TROPICANA CITY MALL, PJ Main Atrium, Ground Floor 14 MARCH - 16 MARCH 2014 | 10 AM - 10 PM
FREE PROPERTY TALKS BY EXPERTS
L U CK Y DRAW
Property Book Launches
Prizes worth more than RM10,000 - Samsung S4 - LCD TV - Ipad
HAPPY HOUR GIVEAWAYS * Exclusive gifts! 14-16 March, 3pm - 5pm
Some of the featured exhibitors:
NCT Group of Companies
Official Loan Partner
Official Media Partner
Official Prize Sponsor
F o r m o r e i n f o r m a t i o n , p l e a s e v i s i t w w w. p r o p e r t y i n s i g h t . c o m . m y
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your office the Doâ€™s By: Ameena Siddiqi
All businesses require a place to conduct their business and each has its unique requirements. The job of fulfilling these requirements fall on the shoulders of the interior designer (ID), whose job is to seamlessly combine functionality with aesthetics. There is a lot to office designing then meets the eye. Why? Because office design needs to not only look good, but also be functional.
eing a business owner means providing a place for the business to be conducted. Therefore, the decision to renovate an office should not be made lightly. There are many factors to consider when renovating an office space. How many people will be working there? What will the work flow be like? Aesthetics is important, but must not be put above everything else. It is even more
important to make sure the office has enough space, is properly ventilated, and has durable wall panelling and flooring. It is also important to make sure the wiring is done properly and to provide sufficient toilets for the number of people working in the office. All this seems trivial to the layman, but to a professional ID, they are part of the considerations.
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Budget Apart from all these, “The most important factor is budget,” says Aaron Chong of A Works Design, a 13-year veteran of the industry. He has worked on everything—from offices to restaurants, condos, and terrace houses. Proper budgeting is key to the end result, whether it will be classic or modern or high-tech in design.
advises that you should always allocate an extra 10–15% of the original budget for contingency expenses. It is also best when employing a contractor to get the exact quotation, with as much details as possible (i.e. description of materials, breakdown of costs, etc), to avoid possible misunderstanding, as they tend to only provide rough costing.
For a 1,000 sqft office space, the budget can easily range between RM 30,000–300,000. Why such a large range? Well the cost depends on the materials used. If the materials used are reasonable, then the cost will be reasonable, but if the customer needs higher-end materials, then the cost will go up accordingly.
If you have a good designer, he will have to manage within your budget, however. People have to understand that there is a difference between a designer and a contractor. A contractor will build what you want according to the design you give them, but a designer will advise you how to achieve the style you want and build it for you. Designers are professionals. They charge 5% more than contractors (approximately RM 8,000–15,000), and if they suggest something, they probably have a good reason for it. It is best to usually follow their advice. For example, if it’s supposed to be a classic design, but you decide to include an ultra-modern chair, then the whole look will be ruined.
A lot of people are into smart offices nowadays and they want touchscreen light switches which can cost up to RM 100 for a single switch, whereas a normal one costs only RM 5. Others want fancy walls—stainless steel, for example, to give off a hi-tech feel—this can make the cost go up as well. According to Chong, a typical office would normally require just RM 40,000 to renovate and refurbish, complete with air-conditioning units, carpeting, and other furniture. Design usually includes everything, such as furniture, lighting, and smart systems. Chong
Designers also plan for the interior to be more long lasting, as they are aware of durability and future trends. Hence, they choose materials and furniture very carefully after taking everything into consideration. www.propertyinsight.com.my
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Ot her Things to Consider There is a vast difference between designing an office and a home. When decorating an office, many aspects have to be considered. The two most important aspects are: • it needs to be practical, and • it must suit the nature of the business. For example, if it is an information technology (IT) company, proper wiring must be done for all the workstations and for the server room. If it is a lawyer’s office, it must exude power and confidence. If it is an advertising company, it has to be a creative environment. A showroom would require a large, open, spacious, and welcoming reception area for walk-in customers. It would have to be very attractive to the customer for them to want to come in. Each design has to suit the nature of the business.
Funct ionality of Office Space When designing an office space, functionality is of utmost important. The customer (business owner) is usually the best person to know what kind of office he needs for his business. For example, would he have walk-in customers? If so, he needs to have a pleasant and attractive reception area which should attract his customers. What kind of concept does he want? An open space or one with many rooms? Does he need manager’s rooms? If so, how many?
The look and feel of the office plays an important role as it creates the right atmosphere for the staff and customers. People’s perceptions are based on their first impression of a place. If a place is well designed, people will have the right impression. A company selling wine, for example, has to have a luxurious office, because some wines are very expensive and as it is a very niche business and for a certain class of clienteles only, that exclusivity and high-end factor has to be reflected in its décor. “I once had to design an office for an advertising company who wanted their space to have a factory look and feel, so I used grey walls and netting with exposed wiring and piping to give the look of a vacant factory,” explains Chong. A great example of creative offices would be the Google offices around the world, cites Chong. They are perfect combinations of functional and creative design.
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C ur re nt Tre nd s Most people, when they redecorate or even move into an office, it usually is for 5–10 years. They also prefer modern and contemporary designs nowadays, as opposed to the olden days, when people preferred more classic designs. Back then, people preferred plain colours, but nowadays, they are braver and prefer more colourful environments. Patterned or luxurious wallpapers can save costs if you want a colourful environment. Wallpapers have a stronger impact than paint as they are patterned. Nowadays, people also don’t prioritise much on privacy and prefer spacious, open offices compared to closed offices.
Feng Shui in the Office When asked whether Feng Shui is incorporated into any of his designs, Chong says, “I usually tell my clients to take my design plan and consult their xifu (master), as most people have their own Feng Shui masters whom they follow, so it is best to get advice from the experts.” Though admits that he himself has studied under a Master Sow in Hong Kong, and does sometimes include some Feng Shui aspects should his clients request for it. A Works Design is based in Kota Damansara. They can be reached at 03 6156 5863. Visit their website to discover more of their work: a-worksdesign.com www.propertyinsight.com.my
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C omp any : Vino - Vino Bist ro Ty p e : Wi ne hous e and of f ic e C onc e pt: E l egant and lu x u r ious Interi or d esig n & renov ati on c o st : RM 800,0 00 T he Stor y : T he elegant and cl ass ic Eu rop e an dĂŠ c or sug gests an inter nat iona l fe el w it h hi g h- cl ass t astes . T he c are f u l ly co ordi nate d f u r n itu re, l ig ht ing (esp e c i a l ly t he chandel ier) , and w a l lp ap er c ol ou r are a l l el ement s t hat c ompl ement t he hig h s o c i e t y l o ok wel l, ex u ding a st rong cl ass y and lux ur ious fe el.
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C omp any : B e st C ont a c t S d n . Bhd. Ty p e : O f f i ce C on c e pt : Mo d e r n and conte mp or ar y Inter i or d e si g n & ren ov ati on c ost: RM 300,000 Th e Stor y : The interior design and materials relate to the identity of B est C ontact and its logo, w it h its charac ter ist ic f o n t a n d t h e c o l o u r s y e l l o w, w h i t e , a n d d a r k b r o w n . T h i s o f f i c eâ€™s design has a modern concept, which combines both functionality and relaxing colours to create a suitable atmosphere for working.
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PropertyTalk & Lifestyle Malaysia
ropertyTalk & Lifestyle Malaysia (“PTLM”) is a Malaysian-founded social media networking platform for young like-minded Gen-Ys and general members of the public who discuss Malaysian real estate investments, financial management, socio-economic issues, entrepreneurships and start-up ideas, civic infrastructure, lifestyle trends and shopping habits. At PTLM, ideas, opinions and personal experiences of fellow members are shared and communicated through the Facebook group. PTLM also provides snippets of the latest property development and lifestyle proposition news on a daily basis and strives on innovation to educate and report from different perspectives.
1. Greetings, would like to seek advice on a transaction. i) Getting a house but owner insists that the 3% deposit paid is not refundable and not subject to loan approval. Earnest Deposit is an initial payment made by prospective party to indicate serious interest in buying the property and it may or may not form part of the final agreed purchase price and normally the earnest deposit is paid to a trusted professional 3rd party (Normally Real Estate Agency or Lawyer) as stakeholder. Earnest Deposit may also be forfeitable depending on the terms & conditions of the agreement. In the above mentioned scenario, 1. It is best that the purchaser(s) check with their bankers/mortgage brokers on their financial situation and if possible, get some assurance from their bankers on the approval of the loan first before placing the earnest deposit and sign the letter of purchase for the property. 2. 3% earnest deposit is to determine the seriousness and commitments of both parties in buying and selling the property. The higher amount of earnest deposit paid, the lower the chances for the vendor(s) to back out from the deal (due to whatever reason) after signing the offer letter to purchase as the vendor(s) have to pay a higher compensation to the purchaser and therefore, the purchaser’s interests are protected in that sense. ii) Cheque is on escrow with the realty’s company and he hasn’t signed the offer of acceptance letter yet. When purchaser(s) sign the offer letter to purchase, at the same time they are required to place an earnest deposit (payable to estate agency as stakeholder) to show their interest in purchasing the subject property. Then, the real estate negotiator in charge will bring along the proof of the earnest deposit paid together with the offer letter to purchase and to meet the vendor(s) for their acceptance of the offer. The vendor(s) have the right not to accept the offer and not sign the offer letter to purchase. If it is so, the estate agency have to refund to the purchaser(s) soonest possible the earnest deposit paid earlier without any interest.
2. I’m ready to purchase my 1st property but unsure what are the steps on how I should go about, any recommendations? Step 1: Shopping for the best mortgage available in the market. Know your financial position on how much u can buy/invest is how much u can borrow. Step 2: Find a good lawyer. Firstly, know how much is the legal fees to engage on the property transaction. Secondly, get your own lawyer to represent you. This is to protect yourself from any future hassle in the transaction should there be any issues arising. Step 3: Find good/reliable agent. Get a trustworthy agent, check the company background. Step 4: Find the right property. When u identify the property that u want to buy compare it with a few choices and surrounding market prices.
iii) Is this a common/fair practice?
Step 5: Prepare down payment. After both party buyer and seller agreed on the price, buyer has to prepare down payment to secure the Letter Offer to Purchase
For purchasing a sub sale property, at the end it comes to willing buyer and willing seller and the terms and conditions in the agreements are to be agreed by both parties and the agreement shall not contravene with the laws of Malaysia. If one party is not agreeable to certain terms & conditions, they have the right not to enter into the agreement. Most important is to state out the terms and conditions that you want and understand well the terms and conditions of the other party first before signing the agreement.
Step 6: Consult your lawyer. The seller’s lawyer will send the Sale & Purchase (S&P) Agreement to your lawyer for review before signing. Check every detailed clause in the S&P and consult your lawyer if you don’t understand the clause stated as this is part of their job.
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3. Does buying a freehold or leasehold property affect its selling price? There are various other factors that determine the viability of a property and hence affect the selling price of it other than just whether it is freehold or leasehold. Some examples of these other factors are product quality, location, security, surrounding amenities and more. If we were to assume all factors being equal, of course the freehold property would definitely command a premium over the leasehold property. Nevertheless, all these other factors are never ever equal nor constant, and hence there are many cases in which the leasehold property has appreciated more in value than the freehold property. This is usually observed during the initial 20 to 30 years of the leasehold tenure.
Beyond that however, the value may stagnate due to concerns of obtaining loan financing for purchase of leasehold properties with less than 50 years remaining on the lease. For example, if you purchase a leasehold property with 60 years left in tenure, you may obtain a loan at that point of time but your next buyer could face difficulty a couple of years down when the remaining tenure is even shorter, making it difficult for you to sell. Recently, many approvals of the application for renewal of the leasehold tenure by the state governments have been observed and hence investors have been less concerned of the leasehold factor. These investors are
more concerned with the location and demand for rental income. Also a very common opinion for high rise properties is that the apartment or condominium building with eventually deteriorate and hence investors that hold such an opinion are indifferent as to whether the high rise property is leasehold or freehold. Nevertheless, it should be noted that should the property be designated for redevelopment in the far future, the compensation from developers will definitely be better off for the freehold. Then again, this is of the far in the future as of now and many are not concerned with this at such an early stage of our property market.
4. Is there any difference between SoHo, SoFo and SoVo in comparison to Serviced Apartments and Condominiums? I was told that property built on commercial land has a different utility rate. Condominiums and Apartments (Pangsapuri/Apartmen) are stratatype residential properties built on residential zoned land with residential strata title, of which condominiums are normally used for medium cost and above. Condominiums could exist as a low-rise low-density, mid-rise or a high-rise. In contrast, serviced Apartments or now popularly known as Serviced Residences are stratatype residential properties built on commercial zoned land with residential strata title. Beginning 1 April 2007, all serviced apartments come under HDA just like all condominiums. The visible difference is normally serviced apartments would have a large number of privately-owned commercial strata shop units beneath or surrounding it compared to condominiums. Of late, serviced apartments are increasingly popular and dominated the new property launches. They are often built within a mixed development zoned as commercial and as such developers are able to build based on plot ratio and smaller unit sizes in order to maximise returns. Since they are built on commercial land, serviced apartments
naturally would incur higher assessment charges, quit rents, presumably higher maintenance fees and higher utility rates, with exception the developer able to get a waiver for residents to pay on residential rates. It is interesting to note that most serviced apartments in Malaysia are targeted at long-term owner-occupiers, hence you would not expect housekeeping, personalised and concierge services. Only a handful of high-end serviced apartments with â€œmanagedâ€? obligations by a hospitality operator or the management would provide that. It is interesting to note that since serviced apartments come under HDA, transactions involving it will be exempted from GST beginning 1 April 2015. Much like its name, SoHo is small-office-home-office, built within a mixed development zoned as commercial. It is a hybrid product of serviced apartments and office suites. Young couples or professionals are able to incorporate their workspace within their living space. As a result of economic and lifestyle considerations, SoHos have small pantry area and
generally smaller built-ups but utilising clever interior designing. All SoHos must now come under HDA, much like serviced apartments, and there is a high chance GST will be imposed on SoHo due to its commercialized status. The respective authorities involved are reviewing this matter in depth and shall be made known to public soon. A further innovation in the property industry is the emergence of SoFo, SoVo, SoLo, SOS/BOS and Designer Suites. Most of these are essentially commercial office suites with open layouts, do not come under HDA and pay fees like a commercial property. SoFos provide greater flexibility for owners to decide their living or working space as internal partitions can be customised or fit-out as they please. Owners can opt to buy two units of SoFos side-by-side and erect an internal connection. SoVos are versatile office suites targeted at entrepreneurs and they are equipped with a wide range of facilities, particularly those that are able to enhance your business while you live within. Facilities such as WiFi and highspeed broadband ready, high ceiling height, have business or meeting room plus gymnasium and a swimming pool. www.propertyinsight.com.my
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For the newly arrived Year of the Horse, Property Insight decided to gather some of the industry experts and pick their brains on their outlook for this year. Will it be all doom and gloom for property investors and buyers or a galloping at full speed to snap up those properties out there? By: Ameena Siddiqi
Adrian Un Mortgage expert with a career spanning over 20 years in the industry and winner of numerous awards. He is the Managing Director of Mortgage Broker Sdn. Bhd., as well as the CEO of Skybridge International, a property education company. New launches will be at full steam, however, my concern is that though more people will still be interested to buy or invest, due to the stricter financing guidelines, there may be a dearth of buyers who can qualify to get loans. Mortgage approvals will be tough, so less Malaysians are likely to buy at this juncture. Lots of developers will focus overseas, mainly Singapore, Taiwan, China, and Japan. Singaporeans will still be the largest buyers because of Iskandar. Overall, the first quarter will be slow as most people and banks are still not sure of the regulations to be implemented by Bank Negara. Hence, they will wait and see. The second quarter will see more transactions.
Chris Tan Founder and Managing Partner of Chur Associates, Advocates and Solicitors. He is heavily involved in all aspects of the real estate industry, having been an honorary legal advisor to FIABCI. This year will be the Game of two horsesâ€”hold your horses, then let your horse come to you! Why? Simply because there is a lot of uncertainties, as new directions from Bank Negara has not been clarified, such as the stand on DIBS and the pricing on the net selling price. These uncertainties will contribute to the first quarter being slower than normal. A lot of developers will be looking for guidance on their next move based on the directions from Bank Negara to the banks; developers need to ensure the guidelines are clear in order for them to come up with their marketing campaigns. A lot of marketing campaigns revolve around the financing aspect, so there is no point in doing a campaign unless there are some clearcut guidelines. Once everything is settled, the creative businessmen will come up with a lot of solutions. Chances are that you cannot leverage as much as in the last five years, but there will be a lot of options. The wiser investor would be looking at yield as a long-term play compared to a short-term gain. A lot of properties would have matured this year, and most matured markets are not based on buy-and-sell, but rather on rental yield. This year, the options will include the secondary market, as it will be a situation where the developersâ€™ products and secondary market will be more equal in terms of pricing, therefore, making it on par with the primary market in terms of attractiveness for the buyers. Most prices will not come down that much, due to inflation and other aspects; this is the direct effect of the cooling measures, hence this will equalise the two markets. 70 MARCH 2014 www.propertyinsight.com.my
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Patrick Chay Accountant by profession, he is one of the administrators of Property Talk & Lifestyle Malaysia (PTLM), a platform for Gen Y’s who are passionate about Malaysian real estate and investments. The year is supposedly a good year, but then for the property market, most people are expecting a slowdown, not because of the slowdown in demand, but due to financing. Developers may be looking at the affordable market range, as the demand there will be more. These are the RM 300,000–500,000 units, but probably the units will be smaller than earlier units of the same price. Lending and credit has tightened, so the high-end market will be affected. Properties priced RM 1 million and above have already been affected, but for this year, those priced between RM 600,000–1 million will have relatively slowed down a lot. Regulations such as the DIBS ban will require people to put in a lot of deposit money—no more just a RM 10,000 deposit. Financing for properties to be on net price calculation for loans will also affect financing. Gen Y’s have no choice but to buy smaller units. They probably will also have to move out to the outskirts and away from the traditionally “hot” areas.
Richard Oon The current National Director of TY Teoh International, one of the leading consulting service providers in Malaysia, is an author as well. With more than 25 years of experience in taxation and business consulting, he is an expert in Malaysian property law. To me, I think this will be a pretty slow year due to the higher cost of living—at least for the first half of the year. The government measures, like the increase in RPGT, is not such a big deal. If the investment is good, then the returns should be good. However, the outlawing of DIBS will be a big issue, especially for those who leverage a lot. As investors build a portfolio, the loan-to-ratio value plus the financing will put a damper on new property investors. They shouldn’t be too overcautious, though. Moving into 2015, the GST and other things will add to the cost of properties, through the additional cost of building materials and other incidental costs. Developers might pass on the impact to buyers, because after all, they are businesses, so they need to maintain their profit margins. The inflation and GST will increase the cost of houses. Those developers who are in the midst of selling properties, they are not affected yet. Therefore, their pricing should still be able to maintain the cost. Once GST is implemented and subcontractors start charging it to developers, they will include it in their pricing, then there will be an increase.
Renesial Leong Investor extraordinaire with dozens of commercial, industrial, and residential properties. With more than 20 years of experience in property investment, she is also known as the Property Queen, and has authored several bestselling books. The budget has certainly caused quite a stir, and just like a herd of horses galloping past, the dust has yet to settle. Hence, I don’t expect to see good demand in the first quarter of 2014. However, things will turn better as we approach the second and third quarter, as there would be those looking into entering the market before the GST sets in in April 2015. Barring any unforeseen circumstances, I do not see a major price correction across the board as land, building costs, and cost of labour continue to rise, amongst other things. There are still investment opportunities. The name of the game is riding on sustainability.There are hidden gems everywhere. Yes, they exist. If you can find them, invest a little more time and look harder. www.propertyinsight.com.my
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Property Insight Malaysia
his coming March 14th to 16th, Property Insight Malaysia is going to launch its first property fair at Tropicana City Mall, Petaling Jaya. As we educate our readers in all matters related to property buying and investing, we would also like to offer them an opportunity to practice what they have read and learnt and go on to the next level, which is applying their knowledgeâ€“be it their first, fifth, or hopefully their 50th property! The fair will showcase developers who were previously featured in our Developer of the Month and Area Focus sections, as well as other well-known established developers. This offers the perfect platform for developers to showcase their latest residential and commercial projects. A wide range of property developments, including high-end condominiums, luxurious bungalows, and affordable linked-houses will be showcased for the discerning buyer and investor. Prospective buyers and visitors with long-term plans have the opportunity to obtain advice on financing options from Loanpro.com.my, a mortgage specialist who will be on hand to help you with your queries regarding mortgages. We would not be Property Insight if we did not have some form of knowledge sharing sessions with our readers. Hence we will conduct book launches and talks by the stalwarts in the industry, such as Ahyat Ishak, one of our regular contributors, an investor, and now an author; Faizul Ridzuan; Ishmael Ho of Ho Chin Soon Research; and a host of other speakers. They will provide you insights into the maze of property buying, such as home ownership schemes, investments strategies, and more. Take advantage of the free talks and learn from some of the successful and experienced experts in the real estate industry. Admission is free.
For more information, please visit
www.propertyinsight.com.my Official Bookstore
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Official Loan Partner
Official Media Partner
Official Prize Sponsor
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TROPICANA CITY MALL, PJ Main Atrium, Ground Floor 14 MARCH - 16 MARCH 2014 | 10 AM - 10 PM
FREE PROPERTY TALKS BY EXPERTS Property Book Launches
HAPPY HOUR GIVEAWAYS * Exclusive gifts! 14-16 March, 3pm - 5pm
LU C K Y DR A W
Prizes worth more than RM10,000 - Samsung S4 - LCD TV - Ipad Some of the featured exhibitors:
NCT Group of Companies
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ver y sale and purchase transaction is dif ferent f rom the other and unique in their own sense. Whether you are a vendor or a purchaser, you would want the transaction to go through smoothly and without any hiccups to the extent that for some, the signing of the sale and purchase agreement has to be on a specif ic date and/or specif ic time (auspicious dates / time) so that things will proceed smoothly. But sometimes, knowing what can go wrong helps you to prepare for it. With that in mind, I have written this ar ticle with hope that you can avoid cer tain show stoppers or complications, more so if you are a purchaser. This ar ticle is written on the assumption that the purchase is not from the developer and it is a simple sale and purchase transaction (with title issued).
1. Do Your Own Due Diligence. Investors, purchasers or even vendors nowadays use the term “due diligence” and instruct their lawyers to “conduct due diligence” for any property transaction. In practice, your lawyers only conduct land searches and insolvency searches. If companies are involved, they will conduct company searches at the Companies Commission of Malaysia. They will then verify the ownership, the title etc. Unless otherwise specifically instructed, your lawyers will be doing just that when you tell them to conduct “due diligence”. As a purchaser, you have your own due diligence to do as well. At the very least, you have to inspect the property physically and with your own 2 eyes. You need to know: • the physical condition of the property, • the location of the property and • its surrounding properties / areas. If it is at a location entirely new to you, try to make a trip as if you are leaving the property during rush hour to gauge what type of traffic you will be facing. If you are an investor, is there an existing tenancy? If not, who are the potential tenants? It may come as a surprise to many of you but there have been cases where an investor / purchaser has not even seen the property (or even the interior of the property) except for photographs provided by the agent and yet, proceeded to execute a sale and purchase agreement only to find out later that there is a cemetery nearby. You can only imagine the complications that follow involving claims of misrepresentation and litigation.
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2. Instructing Your Solicitors Whether you are a vendor or a purchaser, make a checklist of the things which you want your lawyers to be included into the sale and purchase agreement. Save and except for purchases from housing developers, sale and purchase agreements are not a form where lawyers merely fill up the blanks with your name, address, property details and purchase price. The most common complication is “what comes with the property?” hence your need to exercise due diligence on your own. Do not assume what you see is what you get. Agents could be mistaken as well when asked “what comes with the property”. Sometimes, even when vendors are present and questions are posed directly to them as to what comes with the property and what is not included in the sale, misunderstanding and miscommunications still took place resulting in disputes especially during the handing over of vacant possession. Parties should agree on the list of fixtures and fittings. Be specific about it to avoid disputes. Even if the wardrobe is a built-in wardrobe and you may think the vendor will not be removing it, list it down and have it included in the sale and purchase agreement! This is simply because by the time you complete the sale and purchase agreement, the built-in wardrobe could have been damaged and you will be required to accept the property “as is where is” basis, fair wear and tear excepted!
Apart from the above, the other common complication is the promise to repair or replace something as part of the agreement to purchase the property. This should also be specifically spelt out in the sale and purchase agreement if you do not wish to have disputes after that. As food for thought, imagine you signed a sale and purchase agreement and it contained the normal terms of delivering vacant possession, “as is where is” basis, fair wear and tear excepted. Then the vendor removes all of the property’s lights, the lights’ casings and all electrical sockets from the wall. The agreement is silent on this. What is going to happen next? Your lawyers will definitely have their hands full in a situation like this. In addition, agreements will usually have a clause to say that “it is the entire agreement between the parties and all oral agreements (or even earlier written agreements) are superseded unless otherwise incorporated into the current sale and purchase agreement”. Therefore, whatever, the parties agreed whether verbally or in writing prior to the sale and purchase agreement (such as agreement to make certain repairs to the property) will not be enforceable. As such, do let your lawyers know what has been agreed upon between the parties in order that the same will be incorporated into your sale and purchase agreement.
3. Understanding the time frame for completion Whether you are selling or buying a property, understanding in advance the time frame for completion helps you to manage your expectations and avoid frustrations and agitation. If you are seller, it is obviously managing your expectations when you will be receiving your money and managing your utilization of the same. If you are a buyer, it is about managing when you can expect to move in (on the presumption that you are buying the property for your own residence). Time frame for completion generally relates to whether the property is freehold or leasehold as summarized below: Freehold Property
3 months from date of the sale and purchase agreement with 1 month extension
3 months from the date of your lawyer’s receipt of the consent from the State Authorities with 1 month extension
Leasehold properties generally carry a restriction in interest which reads “Tanah ini tidak boleh dijual, dipindahmilik, dipajak, digadai tanpa kebenaran Pihak Berkuasa Negeri” and as such, consent from the State Authorities is required. It takes approximately 3 months from the date of application to obtain the consent from the State Authorities. Therefore, it usually takes up to 6 months from the date of the execution of the sale and purchase agreement to complete the transaction. In some cases, the application was rejected by the authorities and an appeal was submitted. The decision for the appeal could take up to another 3 months which means, the transaction could take up to 9 months to complete.
Freehold properties generally do not carry a restriction in interest but that does not mean all freehold properties do not have restriction in interest. There are freehold properties that have the restriction in interest which means State Authority consent is required and it will take at least 6 months from the date of the sale and purchase agreement for the transaction to be completed.
As such, if you are a seller with a leasehold property that carries a restriction in interest, be prepared to wait at least 6 months from the date of the sale and purchase agreement for the transaction to be completed and to receive your money. And if you are a buyer, be prepared to wait at least 6 months to get vacant possession.
Do note that the 3 months plus 1 month extension completion time frame is not law nor it is cast in stone. It is merely a practice adopted by many. You can always negotiate for longer completion time frame but it is rare for a shorter time frame to be negotiated and agreed upon.
If you want to know whether your property has any restriction in interest, you can take a look at your title and look for “Sekatan Kepentingan”.
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4. Early Vacant Possession There are times when a purchaser wishes to have earlier vacant possession of the property for many various reasons. Most of the time this is easily resolved by the vendor allowing the purchaser to move in earlier subject to payment of rental but there are some risks to be considered: RISK TO THE VENDOR • • • •
RISK TO THE PURCHASER
Purchaser fails to complete the transaction; Purchaser refuses to move out (or delays in moving out) after failing to complete the transaction; Vendor has to commence court action to evict the purchaser; Purchaser has done renovations to the property (worst case scenario, major renovations commenced but not completed leaving the property in worst condition than before)
Purchaser has incurred costs / expenses in the renovations and the property cannot be transferred to the purchaser or, the purchaser fails to complete the transaction or, the vendor defaults and fails to complete the transaction.
Usually if things go very wrong, the purchaser would be at the losing end since most purchasers would have commenced renovations and even completed the renovations. Vendors will normally not compensate the purchaser for such completed renovations in the event the transaction fails if the failure is not through the vendor’s default. The vendor, on the other hand also stands to lose if the renovations are neither here nor there, i.e. commenced but not completed. If not careful, sale and purchase agreements only provide forfeiture of 10% deposit and this is usually not sufficient to compensate the vendor.
5. Purchase Price Insufficient to Redeem Property If you are a buyer and the property has been charged by the seller to a bank, do ask your lawyer or, you can always ask the vendor directly for a copy of his latest bank statement to show the amount still outstanding to the bank. This is to ensure that the purchase price you are paying is sufficient to redeem (to discharge) the property from the bank.
Although your lawyer will draft into the sale and
purchase agreement appropriate clauses to protect your interest, such as the vendor’s undertaking to top-up the difference if the balance purchase price is insufficient to redeem the property, you still need to go through the trouble of enforcing that clause through court action if the vendor refuses to do so. If you call for a default, you still need to take action to get back your 10% deposit. Therefore, it is advisable to check the balance owing to the bank before you sign the sale and purchase agreement.
6. Shopping Around For Loans The completion period for a sale and purchase transaction is normally 3 months. Some investors or purchasers will get their loan approved before executing the sale and purchase agreement or at least, get some form of confirmation that they will not have difficulties in getting their loan approved by the banks or financial institutions. However, there are investors or purchasers who will only start shopping around for loans after the sale and purchase agreement has been signed thinking that they have full 3 months to do so. There are also purchasers (especially first time purchasers) who thought
that once they signed the letter of offer from the bank, it is considered as done and the bank will release the loan. Unfortunately, that is never the case as the bank and the bank’s lawyers still have procedures to follow and legal documentation to complete. In addition, they can only act after they receive certain confirmation, undertakings and/ or documentations from the lawyers handling the sale and purchase transaction as well as the seller’s bank. In reality, these processes take easily 3 months to complete and if the purchaser only gets a loan approved and letter of offer signed after 1 month from the date of the sale and purchase agreement, delay in completion is bound to happen.
7. Signing the letter of offer Offer letters prepared by real estate agents generally state that the sale and purchase agreement must be signed within 14 days from the date of acceptance of the offer. If the vendor fails to sign, the vendor has to pay damages. If the purchaser fails to sign, the vendor forfeits the earnest deposit as damages.
quickly when 1 lawyer is negotiating terms and conditions with the other. Lawyers generally end up asking for an extension of time and rest assured, there have been many occasions where extension of time was not granted and threats of forfeiture of the earnest deposit was made.
This clause on 14 days period has always created unnecessary stress and disputes. If there are 2 lawyers involved in the transaction, the 14 days period passes
It is advisable if the parties agree to “signing of agreement within 14 days after the respective lawyers have agreed to the terms and conditions”.
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8. Selling and Buying at the same time Let’s put it this way, selling a property to raise funds to buy another property, all at the same time (or within the same completion time frame) is not exactly a good idea. There are many variables that may delay any one of the transactions, especially in the “selling transaction”. If there is a delay in the “selling transaction” it will obviously result in a delay in the “buying transaction” and bearing in mind, the completion time frame is usually 3 + 1 months, with the +1 month incurring late payment interest. You may even say you are fine that you pay the late payment interest but if the delay goes beyond the 3 +
1 month, it also means an automatic termination in some cases. If you have no other choice but need to do this, I would strongly advise you to inform your lawyers about your intention and shock them earlier than later. It is also advisable to have the same solicitor handling both your “selling and buying transaction”. And finally, always bear in mind that the time frame for completion is not law and it is not cast in stone. If you can (or have the bargaining power), negotiate for a longer completion time frame for your “buying transaction” if you know you need to sell a property to raise funds for it.
9. Understanding your sale and purchase agreement Failing to understand the terms and conditions of your sale and purchase agreement gives rise to complications, in particular completion mechanisms and completion time frames. Ask your solicitor to explain to you the terms and conditions of your sale and purchase agreement. Understand the terms and conditions and the completion mechanism before you sign it. Nowadays with technology, your lawyers will usually email you the draft sale and purchase agreement for your review and comments and when it comes to signing, some lawyers even assumed that you have already read the agreement since numerous drafts have been emailed to you which will result in them not explaining the terms and conditions to you but merely asking you to
sign the agreement in their presence. Even for experienced investors or purchasers, we would advise you to read your agreement and have your lawyers explain the terms and conditions to you. Although lawyers would have template agreements, there is no “standard” agreement except for sale and purchase agreements involving housing developers. This is because each and every transaction can be different and unique, resulting in lawyers making amendments to the template. Negotiations with other lawyers or other transacting parties will also cause the template to be amended over and over again, resulting in changes to terms and conditions of the agreement.
10. Using the “same” lawyer Always bear in mind that a lawyer cannot act for both parties in a sale and purchase transaction. Many vendors misunderstood this and believe that they can tag along and use the “same” lawyer. The lawyer will always act for the purchaser. If the vendor does not have a lawyer, the purchaser’s lawyer will only assist by filing the vendor’s real property gains tax form and getting the property discharged from the financiers. If there are any disputes or complications, the lawyer will of course protect his client’s interest which is the purchaser’s! Therefore, vendors are advised to appoint their own lawyers to ensure that their interests are protected. Reade rs are strong ly adv i s ed not to rely or ac t s olely on the basi s of thi s ar ticle which i s meant for general infor mation only and which i s not inte nded as leg al adv ice. Indiv idual circum stances do var y, s o spec if ic adv ice mu st be s ought before under taking any tran s ac tions , taking any ac tion or making any deci sion . Any liability that may ar i s e f rom any reliance on or u s e of any par t of the contents in thi s ar ticle i s ex pressly di s claimed .
About Contributor - Graduated with an LLB (Honours)
degree from the University of London and Masters of Law from University of Malaya, Chan Chee Woei is a Partner at Messrs Tay & Helen Wong. He has over 15 years of experience in corporate, commercial and conveyancing law. Among his diverse work include handling property development projects, dealing with secondary market sale and purchases, advising on joint ventures of property development and other corporate exercises.
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PERSONALITY OF THE MONTH
eric lim -
Taking Real Estate
to a New Level
ric Lim was born in the small town of Muar, Johor, but moved to Kuala Lumpur/Petaling Jaya in the 1980’s. Despite starting his career in the corporate world, Eric became interested in real estate because of the compelling rewards. “Sometimes we make money, and sometimes we lose some, but that’s just a small part of it. Most of the time, you can make money, and it is more promising than perhaps, stock market,” Eric says, also highlighting that the best part of property investment is leveraging.
Hartamas Realty was formed during the tough recession period of 1997, it was a challenging time but the company has persevered to this day and has grown tremendously. Winning several awards and establishing itself as a premier real estate agency. Hartamas, which literally means “Golden (Emas) Properties (Harta)”, grew from its initial focus on secondary market (which includes listing and selling commercial units such as shop houses, office spaces and residential
units) to corporate services specialising in office spaces. “We want our people to concentrate on office space, because in such a competitive market, you can’t have people who are constantly juggling everything (listing and selling for both commercial and residential). When we dealt with huge firms such as DHL, we learnt that these companies want someone who knows the field and the company well, not a Jack of all trades. Our company hence, specialised services to meet the demand in office spaces,” Eric explains.
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You know what they say, if you want to find the almost perfect tenant, you should take a peek at the inside of his car. Property Insight takes a glance (which you may call a visit) to Hartamas Real Estate Sdn. Bhd. to meet Mr. Eric Lim, the Managing Director – the leader who spearheads the agency to a whole new level – to learn the secrets to his success. By: Faiz Fadzil
Just to share, after we embarked on corporate services, we also started our own project marketing department. Some developers do have their own marketing team to market their projects, while some do not. So those developers, who may not have a marketing team, will outsource their projects to us. Our first project was with MRCB, which had been the stepping stone for us. Since then, we were involved with more projects. Today, we have had about RM3 to RM4 billion sales. This is also to say that one of our strengths is our project marketing, which involves high-end high-rise developments (i.e. condominiums and serviced apartments). As of now, we are involved with two major projects, one of them is the project under Alpine Return Sdn. Bhd., a joint- venture company between UM Land and Bolton Berhad, in KL. The prime residential site will boast three-block condominiums in the vicinity of KLCC; and I have to say the location, bounded by Jalan Yap Kwan Seng and Jalan Mayang, is fantastic. They have just launched the first block in the last three months. What’s your opinion on the latest measure on registering all the estate agents?
Do tell us a little bit about more about your company. ERIC LIM: One of the three other people who founded this company is my wife, who has been supportive and understanding. Unlike me, she was from a different background, and did not undergo the processes of sitting for the examination, getting the license and all. She helped manage the agents and administration. Only later she went through the whole process, including the practical training to be on par. Now, our company has grown to almost 200 people.
ERIC LIM: I’m also sitting in the Board of Valuers and Estate Agent (BOVAEA) as a board member. Actually, the idea of registering all these real estate agents was mooted by me. We’ve heard many cases where people were scammed by real estate agents. It’s shameful that these people are hood winked by a con man and lose their hard-earned money. Something needed to be done to promote their awareness. It’s not easy to do something without involving the board. So if we intend to impose something, we need to regulate the existing policies and have the laws amended to change a certain event, in this case, the illegal negotiators. I had prepared a paper regarding the case and presented it to the board. Frankly speaking, it wasn’t a stroll in the park to convince them. It had to go through several processes before they finally accepted my paper
(chuckles)! Once acknowledged, we were assigned to amend some rules; which resulted in the obligatory oneday course for negotiators to attend. To apply for this course, they have to apply through their company, and they should fill certain forms and prepare relevant documents for the company to submit to the board. These agents have to be trained under the associations (i.e. approved providers) that are affiliated to the board. Once they have undergone this phase, they will be rewarded a certificate, which will be sent to their respective companies. Once received, the board will give the agents a unique tag (with a series of number). Currently, we are processing the submissions, such as keying in data and producing the tags and generating the numbers. The usage of the card will be effective by 1st of May this year and the number on each card may be in your name card or any other (promotional) material. Therefore, by May, if you see someone without the number or the tag, that person is an illegal estate agent. We had spent a great deal of revenue to market this shift, promote awareness and educate people on how to distinguish a registered agent from an illegal one. Among the easy ways to check whether they are registered or not, is by calling the board for confirmation, or by checking their profile on the board’s website or even by scanning the tag! If you are a real estate agent and you want to differentiate yourself to the public then you must go through the process and get yourself registered. As of January this year, we already have about 15,000 registered agents. What else can be done – are there any regulations? ERIC LIM: Yes, the board has set some standards according to the rules expanded from the parliamentary Act (242). Since going against the Act (prosecute buying with a fee) is considered skirting the law, we are trying to work with the police to eradicate such illegal practice. However the police force is currently preoccupied with other things, so we are also trying to work closely with the police in the commercial crime (Bukit www.propertyinsight.com.my
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Aman) apart from various associations such as MIEA. We are looking forward to brief the police on what are the difference between a registered agent and an illegal one. Now that these agents are registered, we would have authority to look after our agents and our firm. There is also an avenue for people to complaint. If they bought something through a firm/negotiator and it didn’t go through so well, they can lodge a report or refer to the board (or specifically to the Complaint Management Committee (CMC)). Once a complaint is received, we’ll investigate it thoroughly – by calling the complainant and the registered agent before we file a case. BOVAEA also has few investigation officers who will go into the market and conduct necessary investigation to see whether the agents are registered or not. If the negotiator is an illegal one, the case has to be handled by the police. That’s why it is very important for buyers to work with registered agency firm or negotiators. So what should people look out for in a real estate agent? ERIC LIM: The most important thing to do is check the firm. The firm should be an established one and those who are registered with the board, which you can check from the board’s website or the MIEA website. Of course when people buy or look for property, they usually refer to newspapers or website. With the new measure, people can
start looking for properties in these medium and check the firm as well as the agents’ names and numbers in the board’s website straightaway. The second equally important method is to find the right negotiator. Find somebody who knows the area you’re eyeing, well. The good thing about finding an area specialist as your negotiator is that they can advise you on your budget, pricing of properties, potential appreciation in that area and upcoming developments.
I personally find that condos and shop houses are good properties with high return and capital appreciation! What are the qualities that we should look for in real a estate negotiator? ERIC LIM: Four traits to be specific. One, is honesty. Second, is sincerity. Third, the agents are not pushy. Fourth, they need to have a good listing, which indicates that they are the specialists of certain areas. The listing conveys their focus. Therefore, the more listing they have, the more focused and knowledgeable they are. Do you invest? When did you start? ERIC LIM: Yes, I do invest, mostly in condominiums! My first purchase was a house in Taman Mayang in 1998 for my own because you can barely start an investment without a roof above your head (laughs)! It was very cheap, about RM100, 000. I already sold it to my relatives, once I had renovated it at only RM 400, 000. I believe the house is worth RM850, 000 by now. I really started investing when I bought several shop houses in Bukit Jelutong. Soon after that
we (personal and group investment) began buying condos, and more condos of the projects we marketed as we are confident with the products of the projects I do not invest in landed properties, as good location is hard to come by. I personally find that condos and shop houses are good properties with high return and capital appreciation! Back when you started the business and investing, what was the property market like? ERIC LIM: In those days, the market was not as vibrant as today’s and property value was much lower. When we sold a house back then, we only got little commission, especially for cheaper units. Now we can sell a house for a million, and get better rewards. In other words, we have more properties and wider choice to market and a better overall property market. The other difference is that we get to differentiate ourselves (estate agents) with the rest in such a competitive market. I won’t say the market is tougher though, but rather, we have more choices as compared to earlier days. Buyers nowadays are more discerning; they know what to look for, especially with the help of the internet which has unlimited information. Thus, as an agency we aim to help and educate people, we provide the correct information and attract our clients by doing such. What are among the factors that we should consider when we are deciding to invest? ERIC LIM: The location of your future property is the most essential factor. The location should be of convenience, such as available amenities and facilities. Take also into consideration the concept of the development and the background of the developer which builds your property. Some people are now beginning to move away from KL, because landed properties are getting quite expensive in city, but they have to take into account the transportation
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What is your advice to people who want to become real estate agents?
time and other expenses such as petrol and tolls. Some other locations also have the same high price as KL, like Rawang and Semenyih, therefore, decide wisely.
Generally, I would say right now it’s a bit of a buyer’s market and still, comparatively, I feel that our property prices are cheaper than other countries’.
Some would buy smaller units because they are cheaper, especially when they already have their own amenities and facilities (self-sustaining developments) that are much needed. Vertical living is also in demand for its security.
What are among your tricks in investing in property?
What’s your property market outlook for this year? ERIC LIM: After the announcement of budget, people are taking a cautious approach. Transactions have gone down a little bit. Now the power is in people’s (buyers) hands, since they are the movers of the market. Usually, people would practice wait and see attitude and just to see how they (the measures) work. And this could go on for quite a while, since not all measures (foreign ownership etc. is going to be implemented only in April) are effective on 1st Jan. When market is bullish and good, land owners or sellers tend to push the price a little too high. For example, the asking price was already RM1 million when their property was only worth RM800, 000. But these are slowly changing and correcting in two or three months as people are holding back. Hence during this period, I would say that the market is in a good condition, since sellers can offer a more realistic price.
ERIC LIM: You have to study or look for positive capital appreciation and rental yield. If you get about 5.5%-6%, it’s already good, but don’t compare it to the total repayment, but rather, on the cost. The essential part in investment is to always have a positive cash-flow. Generally I think your return should be more than the inflation, which is officially at 2%-3% or 5%-6% for the unofficial one. Normally you’ll get more of the unofficial inflation which may hit up to 10%. But with capital appreciation and investment return, you’ll safely get more than 10%. So it is true that properties are the hedge to inflation. How do you like Hartamas to be seen three years from now? ERIC LIM: We are growing and hiring. Last year, we just expanded our company to two new branches – one HQ near Kota Damansara and another one in Old Klang Road; and we are still planning to expand further. We’re currently Klang Valley-based, but we are prepared to go further south in Johor and north in Penang. We are also looking forward to helping developers sell their properties as the market is getting more competitive in nature.
ERIC LIM: They need a licence. If they work hard and really focus, they’ll make a good fortune – they can even make five to six figures a year. However, they must be very disciplined and hardworking. Some young graduates jump in straightaway not knowing the real nature of this job. When you become an agent, you might take one to six months to close your first deal, so this job is not easy. Sometimes you need to use your own savings to cover your expenses because the first few months are no doubt very challenging. So you need to prepare yourself mentally for some tough times throughout the first few months. Other than that, of course you have to go to an established firm, undergo proper orientation and job training. In short, you need to have commitment! What are your future plans? ERIC LIM: One of them is to delegate more tasks to young people to train them to manage and drive the team. Why young people? Because they have more upmh (energy)! Also, perhaps, I would like to be involved in property development. We have all the information to be a smalltime developer. It could be a personal or company’s mission. But I haven’t really planned it yet. We also have our own training academy (Hartamas Academy Resources Sdn. Bhd.) which has just begun its operation four months ago. We are collaborating with the UCSI to run two programs: the Diploma in Real Estate and Masters in Real Estate. My vision is to empower our people, because I believe that people need more information, proper education and exposure on real estate. It’s also a part of our CSR. Currently we are the only agency that has this training academy – with the aim to improve the standard of the agency in the industry. More often than not, real estate agencies don’t have a very good reputation. So Hartamas strives to not only achieve a good reputation, but we are making sure our people are well-trained. This new academy is open to anybody so if they want to differentiate themselves, they are encouraged to join in. www.propertyinsight.com.my
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saved me What were you up to when you were 19 years old? Four years ago, I remember spending half my savings on clothes and travelling (in Peninsular). The rest of the money was used up when I was in University. Unlike me, Dr. Shah Razali had a dream when he was 19. And that particular dream is a reality today. Some of our readers especially those in their early 20’s or 30’s may still not own a house. To help kick start on the process of owing your own property, Property Insight asked SIX tricky questions to Dr. Shah Razali a prominent entrepreneur, business coach, investment consultant and a seasoned investor. By: Faiz Fadzil
is uncle was rich. But he wasn’t exactly a rich man because he wasn’t an engineer nor he had a lot of money. He was rich because he owned an impressive property portfolio – which was the very reason DSR wanted to follow his footsteps at such a young age.
Armed with a degree in business, this father of three children jumped into the banking industry in 2001 as a management trainee. He only earned about RM1,000 when he first started, but his father kept pushing him to buy a property as he thought it was a solid foundation (an asset, which in this case, a HOUSE) that a man should have. After six months of working, one night, they saw a banner on a newly launched property in Klang. They called the number and decided to go to the showroom the next morning. Once
there, there was no question asked. His father had made his mind, DSR needed to book the house which cost RM80, 000. Dr. Shah was worried, and it shows as he recalls the story. His father gave him only RM1, 000 for the installment, and the rest – the loan servicing – was Shah’s job. The process of buying the property was one of the most significant experiences that he ever had. “I learnt a lot from this event. I learnt how to save money (I only used public transport!), how much money is really needed to buy a property, the fees, and the processes to apply for a mortgage loan, the interest, the S&P and much more. That’s why, today, the house still remains,” he says.
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INVESTING VERSUS WORKING
In 2007, he decided to leave his job and become a businessman. “The payment I received from working with bank was already 5 figures. But because I didn’t want to work for anybody, I wanted to be involved in business, just like my mother, who was very supportive. My father on the other hand, was very angry with my choice, as he was in the banking industry too,” DSR says. He started his own business in external plumbing construction, and at first all seemed well. Until later in 2008, bankruptcy dawned on him as his business started failing. “There were nine teams that ran the business, but since the owner of the license ran away, I was left with only three teams. It was quite impossible to keep up with the business with that number of workforce and to settle outstanding debts, especially during general election,” Shah says. Luckily, by that time, he already owned more than 30 properties in KL, Kota Bahru and Penang. To his surprise, three days before the declaration, his refinancing disbursed and he managed to sell a few of his units. He settled his debts and started a new business again in 2009, the year he claimed the title selfmade millionaire. “I always put an emphasis on how to really rise from bankruptcy to fortune during my seminars, because I have gone through the experience. Some coaches out there may be able to talk about overcoming bankruptcy, but they may not have the firsthand experience,” Dr. Shah comments. With countless times going to the court and more than 5,000 hours of coaching and interacting with people from different walks of life and financial backgrounds, DSR says that he could relate to people with financial crisis.
One of the many people that inspired him was his father. According to Dr. Shah, his father is not exactly an investor, but he does own a few properties. He built houses on his own land, and rented them out to the people in the area. Once he had the money, Dr. Shah too bought his own land and built small terrace houses to be rented out to the people in Kota Bharu – for only about RM300 a month. DSR never really stops his search of properties since the first one. Today, he has more than 70 properties, scattered mostly in the Klang Valley, ranging from commercial, retail spaces and residential units. As for this year, Dr. Shah is planning to buy another two properties. When asked about leverage, he humbly says that a lot of leveraging doesn’t worry him as it might to some other people. “I chose property investment because it is the most secured investment. I’ve worked with unit trust and banks before, so I have to know how money works, observe how it changes every month and keep track of the changes in the packages. But with properties, you only have to keep track of the money at the end of the month – that is the rental! ” At this point he also has ten distinctive subsidiaries under Shah Group Sdn. Bhd., such as construction, cosmetic, dentistry, media, publishing, human development and advertising, headed by ten different professional managers. He is also looking forward to own his own general clinic and a hospital to benefit people and at the same time, add to his income, which DSR coins as the power of leveraging. “Once I have these businesses running on their own, I have more time to spend with my family, especially my wife and kids. I can also play golf more often, without having to worry much about the businesses,” he says.
COMMERCIAL VERSUS RESIDENTIAL
To DSR, both types are equally good, and have quite the same potential. But he suggests that people should look for residential properties in primary market if they are planning to stay in the properties investment game. For investment purpose, he recommends sub sale properties (secondary market) because they are physically there, which reduces the possibility of, “It WILL or WILL NOT be completed.” Referring to mainly youngsters, Dr. Shah believes that many people nowadays have low income, yet still eager to jump into the game and
buy properties. “They thought they could depend on the rental alone. That is dangerous. You have to at least have eight months of savings, or a year, for the installment,” he advices. On benchmarking, Dr. Shah shares that his benchmark has always been five years. If he intends to sell a property, he would wait for five years. If the rental or the capital appreciation is good, he will keep his properties. If it doesn’t look promising, it’s time to let them go. www.propertyinsight.com.my
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PLAY IT COOL VERSUS TAKING RISKS To be able to answer whether playing safe or taking risk is a better way to invest, DSR reveals that there are two things that you should consider; and they are: 1. Understanding your financial strength. “Do not follow other people who can afford to buy. I can see a lot of youngsters who simply invest because it’s a trend in their group. You have to have a master plan. I cannot deny that we will face problems, or even fail, even if we do have plans. But a carefully planned escape strategy will help you at the end of the day.” 2. Knowing the marketability of your properties. “Marketability is heavily dependent on the season. Let’s say you buy an under construction property in 2013, a strata which will take about three years to complete. That means, the property will be ready in 2016. According to an economist, there will be a recession during this time, because it is a 10 year cycle. So is it really a good time to buy now, especially when you don’t have strong financial support?” Dr. Shah rhetorically asks. He further explains that he is preparing himself for the anticipated shortcoming in the future, and suggests that first timers to not buy sub-construction properties during this time. Generally, DSR feels that the best one should do is to play safe due to these uncertainties.
MULTIPLE UNITS IN ONE AREA VERSUS DIFFERENT AREAS
“It really boils down to location of the properties. I bought two units of Suria Mas in 2006 which cost only RM180, 000. Currently, the price of each is already RM520, 000. I do not plan to let them go, as the rental is good, which is at RM2, 000,” he illustrates. Being a banker before is indeed an added value to him. He further explains that it is important to build good contacts and keep in touch with the developers who have credibility, lawyers and agents for more accurate prediction and information, especially on the market outlook and hotspots.
One of the shortcomings when choosing the wrong area is to pay the excessive burden of loans that you never intend to pay on your own. “I bought two units of property in Kajang, but since I do not have any buyers or tenants until now, I have to service the loan up to more than RM6, 000 a month for both units. That is why it is very important to plan early especially in terms of the cash-flow,” he confesses. According to this expert, there are four essential keys that you have to remember when choosing a property.
They are: 1: Location 2: Tenantable and re-sellable (potential) 3. Positive cash-flow 4. High capital appreciation potential
And the best part to these four principal is they are free! “You can easily check this with any agents, friends or even the neighbors there for insights,” he exclaims. “My strategy though, is quite different. My aim is to not buy properties above RM700, 000. Once I have the price in mind, I’ll be scouting for the location. Some people look for location first, then price. Speaking of location, there should be existing infrastructure, at least roadways,” he says. When asked about prime locations with established infrastructures, he comments that Mont Kiara and Putrajaya properties are a bit on the higher side in terms of pricing. “If you could get the same kind of facilities in Putrajaya somewhere else, with no toll, but with cheaper rental, which one would you buy?”
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MARK UP VERSUS MARK DOWN For those who intend to rent or sell their properties, the first thing they would have in mind is to hike the price. Dr. Shah however, takes a different stand. Though shocking, Dr. Shah reveals that, “I made profit before I even buy the property, not after I sell it. If you buy a property with a lower price (below open market value), you already make your profit. Therefore, you buy low, you sell low.”
“When you want to rent a unit out, take a look at the prices people are offering. If people are asking for RM2, 000, you rent for RM1, 950 – give your tenants a discount provided that they pay on time. If people sell at
RM400, 000, you may sell at RM395, 000,” he explains. Just like beauty which lies in the eyes of beholder, Dr. Shah also believes that prices are subjected to the eyes which act as a judge. If people see things with lower prices, they would be more inclined to these things. This concept, however, depends on the season. If the open market value denotes that your property is worth RM500, 000; and you sell at RM550, 000, no one would buy when they check with the valuers. “But,” Dr. Shah further highlights, “If you sell at RM550, 000 in 2011, they would definitely buy, since they have a lot of money during this season.”
BUY NOW VERSUS BUY TOMORROW
“If you watch television, read magazines and listen to the radios, you will notice that the main concern is the high cost of living and properties. People, especially youngsters are too worried; and they keep finding the reasons why. Electricity, sugar, toll and many more experience the rise of cost. I humbly agree it’s expensive. When I pumped my car last time, it was only RM120. Now it has reached RM150.”
that I really liked. But eventually I did anyway, because I did part-time jobs for side income. I sold insurance, unit trust, etc. I worked hard. Every second is golden. You may not have the time to lepak-lepak (hanging out) or play around now. But you would have those moments with your loved ones when you finally have a secured foundation,” he gently rebuts.
“The answer to this mind-boggling quiz is simple – it’s the inflation. We are born into capitalism, and capitalism was set up about 2,000 years ago. This is to say that we can’t fight against the system of inflation. What we can do is to be smarter than the system. Young people who just graduated often fantasize living in a bungalow or a terrace house straightaway. In Puchong for example, you couldn’t get a terrace not less than RM700, 000. Is this really property prices or it’s just you? Hence, you should look for convenience,” he comments.
In short, Dr. Shah encourages us (especially firsttimers) to be a genius. Every human is born the same – there are no rich kids, poor, dumb or smart. You have to decide to be genius. “If you are a genius, you could make money. And with money, you could operate you own clinic even though you’re not a dentist. I believe in being smart in property investing, as both these parts can fix your issues,” he concludes.
“Buy only what you can afford, and be smart about it. If you buy a flat with 667 sq. ft. for RM140, 000 (the lower the better!) in Kota Damansara in 2014, for example, imagine how much would you get once you sell it five years later? With MRT slated for completion and RPGT exemption, you could simply get at least, RM100, 000 (or RM200, 000)! By then you would have your own saving for other investments.” “Where do you get that load of money in the first place? Find more money,” he concludes. “Easier said than done,” we simultaneously exclaim. Dr. Shah Razali chuckles, apparently, he knows what we feel. “When I was posted (bank), I earned about RM3000. I couldn’t pay the down payment to buy a sub sale house
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I just came back from my 15 days Property Exploration from 29th January to 12th February. It brought me to 2 nations; Spain and Portugal, 3 ghost towns: Ciudad Valdeluz, Sesena and Castellon Airport and 7 cities: Barcelona, Madrid, Seville, Cordoba, Granada, Valencia in Spain and Lisbon in Portugal.
t was a blitz of an exploration, after flying 18 hours from KL to Barcelona, with a transit in Doha, Qatar which was only a 10,500 km distance one-way, traversing 3,500km in the Iberian Peninsular of Spain – Portugal, in 15 days, meeting 10 property investors there and learning as much as I can from them. The experience and lessons I will keep forever, from investors who have seen it all, the crazy BOOM and the equally devastating CRASH!
Here are the first 3 powerful lessons, out of the many that I will be sharing in my articles to come, that I bring back from my Spain – Portugal property exploration.
I came back from this property exploration feeling like a new person. I was humbled at the experience of my travels and interviews with the investors there. I got jolts of excitement and fear running through my spine listening to their stories of the boom and bust. But the fear I had quickly turned into motivation. I realized something powerful was happening to me. The more I pursue knowledge about property bubbles and how devastating its impact is to investors, the lesser I fear it. With knowledge, I was liberating myself from fear! We’ve all heard this adage before, “The only way to rid yourself of fear, is to face it!” Property investors today cannot operate with fear. It is a silent emotion that distorts your investment senses and disrupts your natural ability to make sound investment decisions. Too many property investors fear property bubbles, and too many times I’ve been asked to talk about this taboo of a topic. Why should it be a ‘forbidden’ topic to talk about? Why do investors fear it so much? In most instances, we fear the unknown. Let’s talk about property bubbles; the booms and the bust not with the intention to incite fear, but rather, to liberate us from fear! Only once we can operate without fear, can we truly be invincible investors!
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I run the risk of being labeled as a pessimist and be a doctor doom by talking so much about all this. But the truth of the matter, I am not. In fact, I tend to think of myself as the opposite, an optimist. The only reason why I am so driven in the pursuit to learn about the booms and the bust of the property market is because an economist once told me that you need to learn history to predict the future. That was another one that I never really got? How can we predict the future by learning history? I finally got it. Human beings are so predictable as they are creatures of emotions. And bubbles happens time and time again in the history of mankind. It happens with every asset class imaginable; in equity, in property, in businesses and even for the silliest things; tulips and roses!
some worse than others. Spain and Ireland saw their property bubble burst more dramatically than perhaps Italy and Portugal and some others. Do we have to let it happen to us to finally learn? Can’t we learn from others to save ourselves from destruction? It is almost a common sense that is perhaps uncommon amongst investors. I urge you, if you are serious about being great investors, make sure that you will spend equal amounts of time learning about history, as you so passionately learn about strategies to make more money in property investment. As avoiding losses and understanding risks is of fundamental importance in your pursuit to creating immense and sustainable wealth!
Was the American housing bubble that imploded in 2006/2007 the first that the country has seen? What happened to the California housing market in the 1970’s? It has happened before but perhaps in a smaller scale. Then in the 1980’s the boom happened in Japan and then the stock and property bubble burst in the 1990’s, followed by the lost decade of the Japanese economy; which seems more like it is reaching it’s third decade, never really being able to pull itself out even until today. And then the great bubble burst in the late 2000’s, which hit too many countries all at once;
Early in my investment journey, a property sifu told me, “Ahyat, you don’t just want to be a good investor, you need to be a great investor”. I often dwell deep into these words of wisdom by these great gurus that god has given me the privilege to learn from, but only to find myself more confused. I never understood what he meant, and why he used the word ‘need’ when he asked me to choose to be a ‘great’ investor. Coming back from this property exploration, I finally got it. As I was able personally meet and shake the hands of great investors, chat with them over coffee in Spanish cafes and listening to their stories. Mediocre investors had been flushed out of the system. Many have ceased to exist from the face of the Spanish and Portuguese investment landscape. But many great investors survived through the irrational boom and the destructive crash. But it would be wrong for me to use the word ‘survive’, because some truly thrived through the grave times, being able to rise from the ashes and be able to call themselves great investors. They didn’t consider themselves that, but in my eyes, they were truly great investors. Who are still standing tall even after the crash.
Today I see so many people jump into the bandwagon and call themselves property investors. Many such players in the good times. And just as in Spain and Portugal, everybody seemed like smart investors in the boom times, but where are they in the bust? Make a decision to be great investors and be able to invest in any times; good and the bad! Stay tuned for more powerful lessons that I have learned from my Spain-Portugal property exploration. You can check out my youtube channel AhyatPropertyTV for more than 60 videos I made while I was there. You can also check out www.ahyat. com for other online resources as well.
Contributor: AhyatIshak is the author of the book “The Strategic Property Investor” and the founder of “The Strategic Property Investment Model & Program”. You can learn more at his website www. ahyat.com, his YouTube channel: AhyatPropertyTV and his other social media resources. www.propertyinsight.com.my
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Ara Damansara was really hyped up back in 2013. Access to affluent neighbours have boosted its profile, causing highrises to crop up here and there. Is there still time, or have you missed the boat?
By: Zulhilmi Ghouse
little-known fact about Ara Damansara is that it is the southernmost of all the Damansaras. Blocked off from its northern sibling, Kota Damansara, by Tropicana Golf and Country Resort, and alienated by its eastern sibling, Damansara Jaya (SS2), it is a little distanced from the rest of the family. It’s closer to Kelana Jaya (SS4) than any of the Damansaras, in fact. It has survived quite well on its own, though; being within reasonable distance of three major highways, an airport, and three golf clubs has certainly helped. For these very reasons, the 762-acre township has made a name for itself and amassed quite a following. It has even outshone Puchong, that hallmark of commercial success and traffic congestion. Ara Damansara was, in 2013, one of the three hottest areas that investors were eyeing, partly due to the status of its lands, which are mostly freehold.
The township itself first began development in the year 1999, when Sime Pilmoor Sdn. Bhd., a subsidiary of Sime Darby Bhd., acquired the land. By taking the name of the nearby Kampung Sungai Kayu Ara (Ara being the Malay name of the fig trees which probably used to be aplenty in the neigbouring kampong area) and mashing it up with Damansara, the magic word to attract the upper class—Presto! Ara Damansara was born. While not being a gated township, it does have a closedcircuit television (CCTV) system, guard houses at several precincts, and street patrols. “It was a quiet area initially, as it was not connected to the Tropicana, PJ, and Damansara areas, even though they were just next door, due to traffic issues. However, a link has been opened up, which makes it now just 5 minutes’ away from
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Tropicana,” says Rose Wong, a top real estate agent at Oriental Realty. “We used to use the old Subang Airport Road to access Ara Damansara. Now we also have the NKVE highway.” The first phase comprised of double-storey link houses around the Jalan PJU 1A/22 area (The northwestern side). The developer later developed more parcels, adding semi-detached and bungalow houses to the mix (Along Jalan PJU 1A/3, the central and main road), along with a development called Ara Hill, consisting of several luxury resortstyle condominiums. After the landed properties have sold out and people started moving into the area in 2002, Sime Darby began launching the commercial centres, like Taipan 1 and NZE Commercial Centre. “Initially, it was a quiet area, as there was not enough population to support it. But after many years, it has bloomed into a major town centre for all,” comments Wong on the township’s success story.
Around 2012-2013, other developers started moving into the area, to cash in on the action. As land was scarce, the only offering they had were high-rises. Some of these are Verde, AraGreens Residences, and H2O—all of which are still under construction. The appeal of the area, apart from its accessibility and amenities, is the relative peacefulness compared to other areas in PJ (If you can ignore the constant roaring of airplane engines). Peak hours notwithstanding, it is neither congested nor overcrowded—something valued by stressed out city dwellers who are always on the go. However, Wong notes that while there are no problems with traffic within the Ara Damansara township, serious traffic jams clog the interchange to the North Klang Valley Expressway (NKVE) and Federal Highway, due to bottlenecks. But naturally, residents who are familiar with traffic timing and the road network will find their way to avoid the congestion.
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Commercial centres are spread evenly throughout. To name a few, there is: Ara Damansara Business Park, Taipan 1, Taipan 2, NZX Commercial Centre, and Oasis Square, where there are banks & many popular food outlets available. Ara Damansara Park and A19 Park are both right at the centre of the township, so the health-conscious will have no trouble finding exercise areas. The township is also conveniently sandwiched by two golf clubs: the Tropicana and Saujana Golf and Country Clubs. A third, the Glenmarie Golf and Country Club, lies across the NKVE, while a fourth, the Subang National Golf Club, lies a bit further southeast, near the Federal highway.
Take a quick look at Google Maps and you will see that from the farthest reaches of Ara Damansara, it would only take you approximately 10 minutes to access both the NKVE and Damansara-Puchong Expressway (LDP)—given good traffic conditions. The Federal Highway and SPRINT Expressway just a bit longer, at an estimated 12 minutes and 16 minutes, respectively. And of course, the old Subang Airport Expressway is literally at Ara Damansara’s doorstep. There will be two upcoming light rapid transit (LRT) stations servicing the neighbourhood: One along Jalan PU 1 1A/46, near D’Aman Ria Condominium and Crimson Apartments, and another one near Jalan Lapangan Terbang Subang and Suria Damansara Condominium, with a park and ride facility. Many buses are also available, with proper bus stands for pick-ups and drop-offs.
The one and only hospital in the area is Ara Damansara Medical Centre (Formerly known as Sime Darby Medical Centre Ara Damansara), which belongs to the master developer’s parent group. Based on their flagship hospital in Subang Jaya, The tertiary hospital has Centres of Excellence for Brain, Heart, and Spine and Joint. There are three schools in the area, namely: Sekolah Rendah and Sekolah Menengah Lembah Subang, and the Japanese International School, which lies across Jalan Lapangan Terbang Subang. There is also a Kolej Pernerbangan Awam, a pilot training academy within 2–3 km distance from Ara Damansara. Apart from that, there’s Life College, which offers diplomas in accounting, business, mass communication, and multimedia. Bachelor’s Degree and Master’s courses are still under planning, so there is a chance that the student market will expand in the future.
From the main road, the Sultan Abdul Aziz Airport (Subang Airport) is around 10 minutes’ drive away, making Penang, Langkawi, Alor Setar, Kota Bharu, Kuala Terengganu, Kerteh, Johor Bahru, Singapore, Medan, and Koh Samui very accessible. Shopping-wise, residents of Ara Damansara has CITTA Mall, which opened in 2011. The open-air mall has tenants like Harvey Norman, Times bookstore, MBO Cinemas, GNC Live Well, Vitacare Pharmacy, +Wondermilk, E Cut Studio, Nova Fitness, and a host of food and beverage outlets. Meanwhile, Tesco Extra has just opened in Ara Damansara in November 2013, with, among others, a KFC and McDonald’s outlet, as well as a food court. For quick grocery shopping, there is also a 99 Speedmart. 50 MARCH 2014 www.propertyinsight.com.my
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For such a prime neighbourhood, prices are, of course, not cheap. According to Wong, the price bracket of properties in Ara Damansara is nearer towards those of Petaling Jaya, Damansara, and Tropicana. This is in stark contrast to properties in Subang Jaya, which are still below the RM 1 million mark. “In the year 2000, the developer launched terraces below RM 400,000, and they have remained below RM 500,000 for many years due to slow development and population growth. Since the link to nearby expensive locations—Tropicana and Bandar Utama—opened up, it has caused a major rise in price for landed properties. They have gone up more than double over the years. Now we’re looking at RM 1.2–1.5 million—Crazy jump,” adds Wong. “Decent condos like Ara Hills are selling in the range of RM 1.3 million for sizes of less than 1,800 sqft. There used to be many empty unoccupied shops due to the lack of demand, but now they are fully occupied and prices have doubled from below RM 2 million to RM 3 million or so, depending on the location, the direction they face, and rental returns.” According to Joanne Chen of GS Realty, meanwhile, the current market price for intermediate terrace houses (2,000 sqft and above) range from RM 900,000–1.4 million, while condos start from RM 800 psf. “It’s still a reasonable price for such a convenient location. For the last 3 years, terrace house prices have increased by more than 60%. In 2006, a fairly new terrace house around Jalan PJU 1A/1G (Alissia type) transacted at RM 450,000 in the sub-sale market. Now, they’re selling at RM 1.3 million for intermediate units.”
FEDERAL & SPRINT HIGHWAY
SUBANG AIRPORT EXPRESSWAY
10MINS NKVE & LDP
Whether the prices are reasonable or not is subjective, but it still takes a lot of money to afford even a condo unit in Ara Damansara—assuming you can still get one. There might still be hope in its new commercial and retail offerings. As many new high-rises and mixed developments are coming into the picture, one of the agents warns that investors should be cautious, as Ara Damansara is being overbuilt, citing that the oversupply might be somewhere in the range of 90%. With lack of demand, it can take quite a long time before the population catches up again. A word of caution: The pokok ara (strangler fig) is known to slowly sap its host tree of nutrients, choking it to death. One wrong investment, and your property could be choking you. Judging from all the plus points alone, Ara Damansara does indeed sound like the promised pot of gold at the end of the rainbow. It is a less crowded PJ, a more prestigious Kota Damansara, and a more affluent Kelana Jaya. Weigh all your criteria carefully, especially your return of investment, lest your investment backfires on you.
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Rose Wong Oriental Realty
Joanne Chen GS Realty
Rachael Wong GS Realty
Ara Damansara has progressed to be one of the hotspots for investment, with major developments coming up, like Oasis Corporate Centre, with offices and commercial properties, and the still-under-construction LRT line extension, as well as many upcoming condos. The big player is Pacific Place, with condos, commercial units, retail units, and offices. Most new condos are sold out, despite their very high prices. Rental for landed properties range from RM 3,000–4,000; for condos, RM 4,000–5,000, and for commercial properties, RM 5,000–8,000, depending on the furnishings, etc. Most people are looking to buy landed properties there. However, due to high prices, condos are more affordable for homebuyers with budgets below RM 1 million. Currently, all investors are investing in condos, as there are no new launches from the master developers. Just handed over by Sime Darby is Sri Pilmoor, with highend semi-Ds selling from RM 3.5 million and above and bungalows from RM 4.9 million and above. If I was an investor, I would consider condos, but they are all sold out.
Ara Damansara is a good place to invest in, with lots of amenities. There are shopping centres like CITTA Mall and Tesco Extra Hypermarket, and many children’s playgrounds and public parks for jogging and cycling. Conditions are very good. Recently, all the children’s playgrounds have been refurbished. New cycling lanes, jogging paths, and pedestrian walks have also been improved throughout the whole of Ara Damansara. Traffic in Ara Damansara is smooth flowing, with many alternate access routes. Back to property, landed units can get you 3% rental return, while condos can get you 5%. There are some new launches in the area which you can look into, like Oasis Corporate Park, AraGreens Residences, Verde, Pacific Place, and H2O. Personally, I would invest in the Oasis Square area, or in serviced apartments.
At this moment, Ara Damansara is considered to be in the developing to mature stage. It is also the main base for Sime Darby’s headquarters. This is a good sign which shows that there is potential growth for this township. Besides that, it shows promising value appreciation for property in the long term. Ara Damansara is ideal for own stay and also investment, as the township promotes the concept of 50% homes and 50% greenery Prices of landed units measuring 22 x 75 feet have reached RM 1 million and above. Condo prices are RM 450,000 and above, while apartments are RM 250,000 and above. We forecast the property value will be steadily growing by 5–10% annually. For new investors, I suggest looking at those apartments or condos with attractive rental returns. When your capital gain is good enough for you to afford a landed property, you can go ahead. For me, the properties in Ara Damansara are considered as “blue chip”.
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PRICES OF SELECTED EXISTING DEVELOPMENTS DEVELOPMENT NAME
BUILT UP AREA
RM 810,000 1,000,000
1,650 (22’ x 75’)
2-Storey link house (4R3B). Basic
RM 820,000 - 900,000
1,650 (22’ x 75’)
2-Storey link house (4+1R3B). Renovated
RM 349,888 - 373,888
1,650 (22’ x 75’)
1,650 (22’ x 75’)
RM 1,150,000 1,250,000 May 2013
1,650 (22’ x 75’)
2-storey link house (4+1R3B). Basic intermediate
1,950 (26’ x 75’)
2-storey link house (5+1R4B). Renovated corner lot
2-Storey link house (4R3B). Renovated special lot
RM 1,150,000 1,200,000
RM 1,388,000 1,500,000 RM 1,430,000
2-storey bungalow (6R6B). Partially furnished
2-storey bungalow (6R6B). Corner lot
Semi-detached house. Basic & renovated
Semi-detached house (6R6B)
Semi-detached house (7R6B). Partially furnished
Bungalow (5+1R7B). Angsana type
RM 3,600,000 2010
RM 2,638,888++ RM 4,000,000 Feb 2014
Villa ground floor. Pool view
Villa ground floor. Pool view
Condo (2R1B). Fully furnished
Strata 669 Oasis 1,108 Pacific Place
Condo (2R1B). Partially furnished
Condo (3R2B). Partially furnished
Dataran Ara Damansara
4,610 (22’ x 75’)
NZX Commercial Centre Oasis
RM 1,550,000 1,700,000
3-, 3 1/2-, & 5-storey shop lot
RM 1,538,800 3,131,000
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CELEBRATING WOMENâ€™S DAY SPECIAL ON MARCH 8
WOMEN AND PROPERTY
omen play a vital role in the workforce in Malaysia. According to The Grant Thornton International Business Report (IBR), women recorded 40% of the total workforce. This makes us the highest one in Asean.
On the other hand, in terms of salary received, women take home a lesser income than men. According to Household Income and Basic Amenities Survey Report 2012 published by Ministry of Statistics, men in town receive a monthly average pay of RM 6,010 while women only receive RM 4, 239. Although the average salary is lower than what men have, it is still at a level of eligibility to get a loan to buy a property, with the condition that they meet the bankâ€™s requirement. Women have a bigger buying power nowadays. However, women involvement in property investment is still comparably smaller than men. Most women are still interested in investing money for a collection of handbags and shoes; the stereotype. In this 21st century, women are no longer a regular mom and housewife. Life is challenging as more women now are employers, professionals or mothers with careers. The cost of living is also rising. This causes sole dependency on the husband for the household income and future financial planning not a good decision. Women have to play an important role or have a solid backup plan.
LEVERAGE If let say one payslip may enable someone to have at least two 90% housing loan, two payslip will result a four 90% housing loan for four properties. Obviously, four properties are better than two. It means, there is more passive income stream and more asset for retirement. This is why the most successful property investors are normally those who have financial planning and act together with their spouse. They are like-minded couples with the same objectives. A team will make it easier and therefore provide better leverage.
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HAPPILY EVER AFTER? Most women feel very comfortable being dependant on the husband. They are of the opinion that, having one nice house to stay in is good enough. As long as they have just enough money to survive, they are doing well. However, according to the Minister of Women, Family and Community Development, from January to June 2012, there are 22,306 divorce cases filed and recorded by National Registration Department. Muslims’ case is 22,306 that is more than 95% of the total figure while for non-Muslims’ it is 1,062 cases. This is shocking figure shows us that marriage is not a happily ever after story. Women should be ready to equip themselves with mental strength, a good career, enough saving and a financial plan for themselves and their children should this sad situation occur.
WHEN TO START Therefore, though property investment is a guy-thing. Women should learn, to break men’s monopoly. But, when to start? Looking at the divorce rate and to safeguard women’s welfare after divorce, they must act and think ahead of time. They should start to buy property while they are still single. This is due to the fact that Malaysian law treats any property acquired during the marriage as matrimonial property. Even if the property is bought under one name, bought under joint-effort or single effort, his or her spouse has the right to claim his or her share on the property. This applies to Muslims and non-Muslim marriages.
Their ex-spouse will not be able to claim any share on this property because it is bought before the marriage. However, the woman must manage the property itself and ensure that the there is no contribution, either monetary or non-monetary from the ex-spouse to the house. Women seek security. Therefore, having a 100% ownership house is the most secure thing they should think and plan when they begin their career.
The ex-spouse may file a claim to the High Court, if the couple is non-Muslims, or to Syariah High Court, if the couple is Muslims. They have to prove that the property is acquired while they were still a valid husband and wife and to prove their contribution to the property or to the marriage. Then the court will decide how much the share the claimant deserves. Therefore, to prepare themselves from this unfortunate event, women must buy at least one property before they get married. It is good enough if the property is a low cost flat. As long as it is a home where she can go back and stay if the home-sweethome is no longer a sweet one. www.propertyinsight.com.my
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TOO MUCH PHYSICAL WORK? It is true that managing a house will require physical work. Pipes may break. Electricity wiring may have problems. Tenants may cause broken doors and it needs to be replaced. These are among the issues owners have to handle when renting their house. Thus, for some pretty ladies out there, they think these issues and rectification are not suited for them. That is why they ignore the potential of property investment and let it be conquered by men. They forget that they do not need to do all these things on their own? There is some people out there called as handyman, plumber or electrical technician that can help them anytime.
TEDIOUS HANDLING TENANTS Some women feel that it is tedious to manage tenants. The process of letting a house itself needs some effort. They as a career women and a mother could not cope to add one more things-to-do in their already hectic days. Do not worry. As I mentioned above, you can get a professional real estate agent to help you find a tenant and take care of your house. Plus, there are individuals who do sublet business. You may rent out your house to them for a longer period of term. They will then furnish it and re-rent it for a profit margin. As long as you get your rental consistently banked in into your bank account every month, you will be happy enough. It is for them to bare the risk if the tenants move out and the house is vacant for a certain period of time. They also will take care of the house and maintain it so it is always in a tenantable condition as they need to attract tenants.
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JOINT LOAN After marriage, most women tend to do joint loan with their husband to buy a decent house to stay. If the husband’s salary is only eligible for a loan of RM 200,000, joining with the wife’s income may enable them to buy a bigger house. Maybe they are able to secure a loan to buy a RM 400,000 house, if for example the wife’s salary is about the same as the husband. This is a popular and good strategy to own a more comfortable house for a big family. However, this may end up not a very brilliant plan. Refer back to the story about matrimonial home. If anything happens to the marriage, the husband will have 50% share of the house. Imagine, this is the only house this couple have. Of course, after the divorce, both will fight for their right. Therefore, it is better for women to have a backup. Buy at least one property before marriage. Then do not do joint loan. It is better to buy two property with the total price of RM400, 000 rather than buy one property at the price of RM 400,000. Worst case, the divorced couple can have one property each. Another reason why a joint loan is not a very good idea is because of the 70% loan-to-value
restriction for the third property onwards. Joint loan causes both buyers to have one housing loan record in the CCRIS, the credit record kept by Bank Negara. If there is two joint loan applications, means this couple can only buy two properties with the loan of 90%. The third house will be 70% loan, either under one name or also under joint-application. In comparison, if the wife does not agree to do joint loan application, the couple may buy four properties with 90% loan. There will be two properties under the name of the husband and two others under the name of the wife. Again, obviously four properties is way better than two.
NO MORE MEN MONOPOLY Every year, the number of women who enrol to a higher institution is increasing. Hence, the number of them entering the workforce is increasing too. Women are brilliant. They are hardworking. They have the courage and are able to face challenges. As there is no longer a job identification by gender, women can enter and perform almost all jobs out there. They can be a great engineer, an architect or even a ship’s crew. Therefore, there are no excuses that women cannot do property investment and generate a handsome profit out of it. At the end, this is for their own good and their children’s future.
About the contributor: Rohaniah Noor is a property blogger at www.propertywaltz.com and the author of 2 ebooks, named ‘Wang Besar dalam Pelaburan Hartanah’ and ‘5 Langkah Jana Wang Sewa Besar’ She can be contacted at firstname.lastname@example.org
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NEW SYSTEM TO REPLACE BLR Bank Negara Malaysia (BNM) has just proposed a new framework for reference rates, which might replace the current baselending rate (BLR). The new framework has been given to banks and other financial institutions for them to examine and provide feedback to BNM. TF implemented before the end of the year, it would allow consumers to better compare banking products. As it is the BLR, ranging from 4.2 - 4.9%. This is so because the BLR does not really affect the funding cost of banks. When a bank charges an interest rate of BLR – 2.4% (4.2%) it’s profit margin spread from lending money is estimated to be 0.6%, however, this not clear to consumers. The new reference rate framework aims to rectify this. Ultimately, it is the consumers who will benefit. The framework is yet to be implemented so all you can do is wait for BNM to fine-tune it. In the meantime, enjoy this little infographic that we have prepared.
(e.g BLR -2.4% = 4.2% interest).
WHEN? 14 JAN
Industry consultative paper issued by BNM (Proposol).
BLR is the base interest rate that banks use to decide how much interest to charge you for your mortgage loan
since 11 May 2011
BLR MOVEMENT Highest 12.27%
14.00% 12.00% 10.00% 8.00% 6.00%
Deadline for financial institutions to provide feedback regarding proposed system.
BEFORE END 2014 Implementation.
Current BLR system adopted by financial institutions is not tranparent enough. Reduces sensitivity to institutions’ funding costs & compability across institutions.
BLR - 2.35% BLR - 2.25%
NOT BLR - 1.90%BLR - 2.30% TRANPARENT
BLR - 6.6%
is irrelevant & confusing!
42 MARCH 2014 www.propertyinsight.com.my
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BLR - 2.35%
BLR - 2.30%
BLR - 2.25%
BLR - 1.90%
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IF IMPLEMENTED... MONETARY POLICY CHANGES
New reference rate will directly reflect changes to financial institutions’ funding cost due to:
MARKET FUNDING CONDITIONS
BNM will continue to
monitor lending rates
changed by banking institutions to safeguard
There will also be a 10 year consumer education programmes.
S O , BOTTOMLINE:
Borrowers will be able to better compare lending rates between financial institutions. (Enhanced financial literacy) & Fair pricing across all banking products.
BUT KEEP IN : necessarily mean MI
Interest rates don’t
Those who have taken fixed rate loans won’t be affected. Variable rate loans remain to be seen. New loans & refinancing will follow the new framework.
B L R
Each banking institution will, under the new framework, have it’s own BLR based on its cost structure & business strategies.
Highest BLR in Malaysian history (1998)
Overnight policy rate (OPR) expected to increase.
lowest BLR in Malaysian history (2009) The number of years that BNM plans to educate consumers on the new framework.
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If I Could Do Property Investment All Over Again I Would... Ryan Khoo a seasoned investor in Singapore and Malaysia reminisces about his Property investment strategies and what he would do different if he had the chance.
38 MARCH 2014 www.propertyinsight.com.my
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1. BUY MORE COMMERCIAL PROPERTY Commercial property such as shop houses and offices can be quite intimidating to new investors because of the unfamiliarity of it. In fact I would still recommend residential property for first time investors. But commercial property does offer the twin engines of potential high rental income and high capital appreciation. They also have benefits such as: •
Tenants tend to sign longer leases (2 years or longer) Tenants don’t move easily (unless business is no good, tenants will tend to stay at the same location to remain visible to their customers) Minimal maintenance required as tenants will do their own renovation and there are usually no maintenance fees for shop houses For shop houses, you own the land (unlike strata condominiums) and commercial titled land it is usually much more valuable than residential land.
• • •
My suggestion for those who are new to commercial property to perhaps consider co-investing with close friends or family (to minimize disputes). This helps to bridge the initial financial gap and gives some confidence to hold the units longer if necessary.
When buying commercial property it is important to have a clear strategy, especially if you are buying new shop houses, then some holding power is usually required, more so than residential property. I missed out on 2 commercial property deals early on in my investment journey and had I participated, my returns would have far outshone anything else that I have in my portfolio today. Painful experience!
2. CREATE A SEPARATE RENTAL PROPERTY PORTFOLIO AND FLIPPING PROPERTY PORTFOLIO As a new investor, my initial focus was to buy property that had strong rental ability/ rental income. The logic was that I would build a property portfolio with properties that give strong positive cash flow and that is how I would free myself from my job/ salaried income. Those days there were many properties with 10% gross rental incomes and with 90% financing, I took opportunities to invest in as many such properties that I could. While I built a strong positive cash flow, I noticed some of my other investor friends were doing the “flipping” game otherwise known as buying new properties and selling them upon completion. Initially I was not so into this investment style as it was speculative in
nature and if I got it wrong, the impact to my cash flow was high, but during the property boom years of 2007 to 2011, this was a very profitable strategy. I should have separated some funds for this “flipping” portfolio and there was a good risk reward situation for this strategy at the time. Today I would advise investors however to be more careful and not put all your funds into a “flipping” portfolio alone as the risk would be too high. A good investor should maintain both a rental income portfolio as well as a flipping portfolio, ideally the positive cash flow from your rentals should cover any potential negative cash flow in your flipping portfolio.
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3. INVESTED EARLIER IN ISKANDAR OR SINGAPORE I was introduced to Iskandar and Singapore markets back in 2009. At the time, I was still very much focussed on the Klang Valley market and as a result, I missed out on some great investment opportunities in Iskandar and Singapore. Once you have obtained some experience investing in your local areas, it is good to venture out and look at other locations. While you may not end up investing, it is a good exercise to compare different markets and understand how they work especially if you are spending much more time there. It’s important to keep an open mind and see things from how the locals there view it. It took me another 2 years to understand the Iskandar-Singapore relationship, and by then I was considered late to the party.
When I’m talking about mentors, I am not talking about “connections” but more of the investment mindset that they have
4. SPENT MORE TIME WITH EXPERIENCED MENTORS AND ADD VALUE TO THEM Experienced mentors are the real reason how I graduated to be a more sophisticated investor from the newbie that I was then.
From the various mentors I had, I picked up a thing or two that allowed me to build my own investment journey and I only wish that I had learnt more. Good advice is priceless and rarely free of effort.
When I’m talking about mentors, I am not talking about “connections” but more of the investment mindset that they have. Different people make money in different ways and for new investors it is to understand how they did it and what did they go through to achieve it. You may not be able to replicate it exactly, but the “how” normally gives you ideas on how you yourself can achieve your own level of success.
With hindsight, everything can be done 100% correctly but no investment journey is ever free of mistakes. I am quite happy with what I achieved so far and all investors should see property investing as a journey with ups and downs, and learn and enjoy the process along the way.
The next question is “How do you get yourself noticed to be able to spend time with them?” The answer is to be of value. You provide your own investment ideas, do homework on locations, offer yourself as a driver on property site trips, volunteer at their events etc. If you ask a question like “Please advise which project is good to buy?” You are expecting to be spoon fed and that is not going to get you anywhere or noticed by anyone. Don’t be lazy, be passionate.
Contributor Details: Ryan Khoo is the Director and Co-Founder of Alpha Marketing, a real estate investment club based in Singapore. He owns properties both in Malaysia and Singapore with a significant portfolio in both countries. He advises club members both in Malaysia and Singapore on their property portfolios and how to achieve the best returns via property investing. Alpha Marketing organizes regular events on the property market, networking nights, property tours and helps investors to bulk buy property or co-invest together. Membership is FREE. Find out more at alphamarketingsg.com or on Facebook at Malaysian Investors in Singapore. The author can be reached at email@example.com.
40 MARCH 2014 www.propertyinsight.com.my
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THE NEXT INSPIRING TOWNSHIP IN KLANG
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For any enquiries Galleria and Serviced Apartment please contact:
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FLIP or KEEP Between flipping property, buying and holding property, which one is better? Before we can answer that question, we need to get an overview of the significant difference between the two.
roperty flipping is the practice of buying a property normally under construction from a developer at a discounted price, foreclosure property or under- marketvalue property due to the property condition and then disposing of it at a profit. Sometimes, for foreclosure or under-market-value property, some cosmetic enhancement is required before it can be successfully flipped for profit. House flippers do their best to not hold onto a house for a long period of time. Instead, they flip them quickly. To gain maximum profit, this is
KK Chua is the publisher of
Property Insight magazine. He is also a registered real estate agent and an investor with more than 10 years of experience in the industry. He can be contacted at email@example.com
preferably done within the shortest period of time possible. The time frame is normally less than three years. Buying and holding an investment on the other hand, involves buying a house, possibly making some improvements, but then keeping the property for a longer period of time. The investors will pay for the monthly costs of financing, taxes, utilities and other maintenance, the property will be rented out to a tenant. In some cases, the real estate investor might buy the property with the purpose of selling it at some point in time, but normally for up to five years or more. The Pros and Cons The two types of real estate investing have their largest differences in the fact that one produces quick profit in a shorter period of time (not more than 3 years) while the other creates monthly positive cash flow perpetually (best case). Now letâ€™s study some of the biggest pros and cons for both.
34 MARCH 2014 www.propertyinsight.com.my
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The Pros of Flipping Less Risky: Unlike the stock market, which at times can fluctuate quite extensively even in a single trading day, real estate markets are more easily predicted. With this, flipping properties could be considered a less risky investment strategy because it is intended to keep low capital risk for a minimal amount of time and because it lacks the management and leasing risks inherent in holding real estate. Because you are holding the real estate for a short period of time, drastic local market fluctuations, if any, are less likely to affect your profitability. High ROI: The property flipper can make a higher return on investment (ROI) if he/she can manage to flip the house in as short of a time as possible. This is in contrast to buy-and-hold real estate investing where the investor has to wait for longer periods of time before they can cash it out for a profit when selling. Money and Time: The most apparent advantage to flipping property is the ability to immediately realize gains and to have capital tied up for the least amount of time possible.
Tenants Free: Perhaps best of all, property flippers don’t have to deal with landlord and tenant headaches. Generally, in Malaysia, the law protects tenant more than the landlord. Some of the issues that flippers don’t have to face: eviction, repair and maintenance of properties, and chasing tenants for rent collection.
The Cons of Flipping: It Takes Actual Practice To Be Experienced: You don’t get really good at property flipping by just reading some books or attending a seminar on property flipping and then claiming that you’re an expert. It takes time, to study and to gain first-hand experience to get really good at it. Unforeseen Circumstances/ Conditions: Even when you do get really good at it, you’ll still encounter situations where it’s not in your control. For example, the completion is delayed, the failure to get Certificate Of Completion and Compliance (CCC), failure of your contractor to deliver on time if you are doing some property enhancements, upward revision of interest rates, introduction of new ruling e.g. loan margin, net income borrowing etc. As a house flipper, you have to anticipate these curveballs – even expect them. It’s all a part of the business. High Costs: Flipping houses does come with transactional costs on both sides of the equation. When you buy and when you sell, there are costs. When you sell, if you are
taking a loan, the bank will impose early settlement penalty, apart from that, the legal fees and agency fees. Not forgetting the interest as well as stamp duty that has already been paid when acquiring the property. These transactional and holding costs can directly affect profits. But if managed well, you can still make a healthy profit. Taxes: When flipping houses, the newly revised Real Property Gains Tax at 30% on the profit for property acquired less than three years. So to accurately predict your net profit, you’ll need to factor these costs into your projections as well.
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The Pros of Holding Steady Income: Owning multiple properties which are all producing positive cash flow and steady rental income is a very appealing way to build a reliable stream of income. Although you can get this kind of steady income with house flipping, you’ll need a steadier stream of house flipping deals. Usually, one right after the other. Wealth Creation: There’s no question that great wealth has been amassed through buy -and -hold real estate. It’s well-documented that real estate values increase over the long term. All things being equal, the longer you hold the piece of real estate, the greater your potential for appreciation. Most “old money” in Malaysia and abroad
was accumulated through real estate ownership. Some of the wealthiest individuals in the world like Li Ka-Shing, Donalad Trump amassed their great fortunes through buy-and-hold real estate investing. No Urgency to Sell: A big advantage to buy and hold real estate is that if the real estate investor does not need to sell immediately, that he doesn’t have to. Unless it’s an emergency, the buy-and-hold real estate investor can wait out market downturns until market conditions improve. Pride of Ownership: When I first started buying rental properties, I would just drive by them at least 3 times a week. Also, it felt pretty good to be helping people in need of a good home to find a nice, clean and attractive place to live. If you have good tenants who pay on time and a house that requires little, if any maintenance and you’re also realizing a tidy monthly profit with healthy cash reserves, then buy and hold real estate investing is pretty great indeed.
The Cons of Holding Market Fluctuations: Of course, if hard financial times hits the buy and hold property investor will need a quick injection of cash, they can only sell their property at prevailing market values. They can’t hope for the market to recover at that point in time, they are stuck with selling at the current market prevailing price even if it’s lower than the acquisition price. Legal Tenant Issues: Buy and hold real estate investing comes with its own inherent management and legal issues with regards to tenants. There are a number of management related issues you need to deal with on a regular basis for instance eviction, repair and maintenance of properties, and chasing tenants for rent collection. All these if not Flipping properties is considered more of a tactical strategy whereas holding properties is long-term investment strategy. In order to decide whether flipping properties or holding them long-term is the more appropriate strategy, one needs to answer a few critical questions. An investor must decide whether the capital allocation is long term or short term and whether it is a core part of an overall property portfolio or a means to enhance returns. Also, one needs to determine what risk and return is appropriate for this portion of their property portfolios.
handled well, will have serious repercussions financially as well as emotionally. Tenants Management: Finding quality tenants, servicing those tenants, handling repairs, upkeep of accounts, managing rental collection, all can be incredibly stressful and time consuming if they are not managed well. The process of finding and managing good tenants requires time, energy, and lots of patience. flipping properties is more appropriate for investors wishing to realize short-term capital gains for as long as the present market will allow.
Although the choice between the two strategies in question depends on one’s particular financial situation and investment goals, the long-term holding strategy is generally more appropriate for those using real estate as a core portion of their overall property investment portfolios; 36 MARCH 2014 www.propertyinsight.com.my
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DEVELOPER OF THE MONTH
HATTEN GROUP –
BREATHING LIFE INTO A HERITAGE CITY
or property developers, two of the things that make them truly stand out from the rest are the quality of their developments and the socioeconomic impact that they bring about. The former is subjective, but the latter is highly visible. Where in a bustling city like Kuala Lumpur, the socioeconomic impact of a block of shop houses or a shopping mall might go unnoticed, in Melaka City, the impact is quite apparent.
Being accessible to hundreds and thousands of people commuting to and fro from Kuala Lumpur to Singapore via the North-South (PLUS) Expressway, Melaka remained for a long while barely on the radar of local and Singaporean investors, and only so
because of its historical attractions and food. This changed gradually in the past 15 years, with the rapid expansion of Melaka’s tourism industry and the extensive reclamation of its coast at Klebang, Bandar Hilir, Fort Road, Kota Laksamana, and other coastal areas north and south of the city. The availability of new land saw the shifting of Melaka’s central business district to Bandar Hilir. Since then, Melaka City has slowly shed its old image of a backwater tourist destination, with the rise of mass tourism and a booming property development sector spearheaded by Melaka-based Singaporean company, Hatten Group, now one of the largest developers in the state.
By: Zulhilmi Ghouse
28 MARCH 2014 www.propertyinsight.com.my
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DEVELOPER OF THE MONTH
SOUTH TO SOUTHWEST
The company first came to Malaysia in 2004, headed by its then 21-year-old MD, Colin Tan, son of Singapore property development tycoon, Datuk Wira Dr. Eric Tan. Backed by a wealth of experience on their home soil, they searched for land banks all around the country and found Melaka to be ideal as it was centrally located between Singapore and Kuala Lumpur. “It just happened that our architect was the same one who was working on Dataran Pahlawan at the time, which was abandoned by its developer. We decided to drive up and see the place. He was saying that it was not a good area, because there were already three abandoned projects in the city centre at the time. He told us we would be better off going to Penang or KL,” recounts Tan of the group’s initial foray. “But we saw it differently—There weren’t any competitors here. Other developers weren’t building high-rises. There are also the historical sites, which are just behind Dataran Pahlawan.” In a bold, daring move, Hatten Group then took over Dataran Pahlawan, completely redesigned it, and turned it into a hip mega mall, instantly changing the feel of the city. The previous developer initially designed it as an approximately 100,000sqft, three-storey mall with an open-air concept, with a field at ground level—a stark contrast to what it is now: A whopping 450,000-sqft underground and ground level mall, with the field above the underground portion. It is hard to imagine life in the city without the mall now, as it has become the go-to mall for locals and tourists alike. “When we opened the mall, it was a success, because lots of retailers were coming in. We opened with Carrefour, Golden Screen Cinemas, Espirit, MNG, Padini Concept Store, and others. The locals were really happy about it,” says Tan with a smile. “In 2004, we sold units for RM 800 psft. Today a unit there costs RM 4,200 psft. We are happy that the price is going up. The total gross development value of Dataran Pahlawan right now is roughly RM 500 million. On a per year basis, we record roughly 13 million footfalls, mainly locals from Johor Bahru, Muar, and Seremban,” he adds.
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DEVELOPER OF THE MONTH
Currently, Tan has Hatten Group going strong in Melaka, with multiple developments and close to 1,000 acres of land in the state, 200 of which is in the city centre, while the rest are on the outskirts. Their biggest project as of the moment is Hatten City, a 25-acre mixed development by the newly reclaimed Melaka Waterfront, with nine integrated projects in it, adding to a gross development value (GDV) of RM 2 billion. There are three phases, the first of which consist of 6 acres of land, where the group is building another shopping mall (Elements Mall), two blocks of hotels (DoubleTree by Hilton and Hatten Hotel), and SilverScape, which is their flagship luxury condominium. The first phase was launched about two-and-a-half years back, to much fanfare by investors. SilverScape is expected to be completed by year-end, while the whole of Hatten City is expected to be completed in 2018. The next phase will start by the middle of the year, according to Tan. They also have another mall called Vedro By the River in Bunga Raya. Naturally, with Iskandar Malaysia being the government’s promised goldmine and it being closer to home, Hatten Group has also embarked on a project there. They are building another mixed integrated development called Capital City in Danga Bay, Johor Bahru (JB). It is a smaller, 14-acre Hatten City in Johor, so to speak, but its GDV is almost in the same range of RM 1.5–2 billion. Hatten Group is also expanding their presence up north in Seremban, with two developments that are going to be launched in either March or April this year. One of the developments in Seremban is called UniCity, as it is next to Universiti Teknologi MARA (UiTM), comprising of apartments and a campus mall for the university crowd. Naturally, success breeds competition, and the competition is indeed heating up on their home turf of Melaka, as more developers are coming into the area, but Tan is adamant at retaining Hatten Group’s heavyweight champion title. Having said that, he reveals that only 60% of their efforts are concentrated in Melaka, remaining are directing towards other states.
30 MARCH 2014 www.propertyinsight.com.my
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DEVELOPER OF THE MONTH
Trials of Youth Tan admits that things haven’t always been smooth sailing for the group. As a young person heading a large company in the industry, it was hard to command confidence from purchasers and government bodies. “My first sale involved a very arrogant purchaser. He said to me, “You’re so young and yet you have this empire (Dataran Pahlawan). Are you sure you can ensure that the value of the property will increase?” Then I explained to him that you have to look at these criteria; it’s not about my age, but about the project itself. In the end, he bought it and we became friends,” recounts Tan. “Back then, when I have to meet bankers and government body heads, I would normally ask my dad to go with me, so his presence will lend me some credence. He would sit beside me and pull some weight. But I think it’s a normal thing to be dismissive whenever you meet a young person,” says Tan, shrugging off the experiences as confidence-building exercises.
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Shooting for Success To dominate the local market so successfully, Hatten Group has ensured that they stick to their mission statement of pioneering and innovation, always offering something unique and different to their customers. “For example, for Dataran Pahlawan, our unique selling point was ‘the biggest shopping mall in Melaka’. For Hatten Hotel, it has ‘the most rooms in Melaka’. When I came up with Hatten City, I wanted it to become ‘the icon of Melaka itself ’. Why would it be an icon? Because of its sheer height and size, and it’s facing the sea,” explains Tan. Perhaps this is the product of the marriage of the Kiasu spirit and Boleh-ism. After all, everything also can [sic].
Tan has also identified his strength, and that is converting abandoned projects into feasible ones, doing joint ventures, and amassing land banks. He knows that he can’t fight head-to-head with big industry players like YTL Corporation in terms of land banks, but he knows that totaldevelopment-value-wise, Hatten Group is in a position to take the top 20 on. The group aims to be among the top ten developers in Malaysia in the near future, and is still working on its plans to be publicly listed.
32 MARCH 2014 www.propertyinsight.com.my
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DEVELOPER OF THE MONTH
Looking Out for Stakeholders “Whatever projects we launch, we always make sure that in terms of capital appreciation, once the building is completed, our purchasers will get at least a 30% increase in price. But talking about real appreciation, let me give you an example: For Hatten, when we were constructing, its value was about RM 450 psf. A lot of people were saying the price was very high. But once it was completed, it was selling at RM 1,200 psf,” says Tan. According to him, it is due to this very reason that for all their launches, Hatten has managed to sell 70% of their inventory within three weeks. The group has amassed some loyal buyers who keep wanting to buy properties from them, as they have seen for themselves the kind of price appreciation that can be achieved. “A lot of people thought that buyers in Melaka are mostly foreigners. But the Singaporean market only takes up about 20% of what we are launching. Most of our buyers are locals,” says Tan. For years since the country’s independence, Melaka has been languishing, with a lacklustre economy compared to other regional centres up north and down south. It was, at one time, one of the poorest states in the country. But those days are long gone. Next time you go to Melaka City, you will be surprised with the metropolitan feel of the city, and you can thank developers like Hatten Group for that.
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What’s Up in 2014 –
by: Zulhilmi Ghouse
40 New Developments in Greater KL, Part I “What do I buy?” and “Which location is the best?” are perhaps the two most common questions we hear from first time buyers and investors. We can’t actually promote any single development, so we decided to share with you 40 developments that you can look out for in 2014. Good luck on choosing! Any investor or property buyer worth their salt will do their due diligence, and the first step of due diligence is to know what is on offer. Apart from property that’s already been in the secondary market for years, there are new ones coming out all the time. A representative of one particular developer even told us once that they have property launches every week—That’s 52 properties a year! If the secondary market is not to your liking and you’re looking to buy new properties we have prepared here a list of new developments in Greater KL which are scheduled to launch in 2014. We have picked 40 of the best, based on our own criteria (more on that below), just for you, our readers.
Based on the original list and our own extensive research, we extracted 40 developments based on these criteria: price, location, and potential. For the full list, which is updated from time to time, please visit PTLM’s Facebook page. Now, on to the technical part: The listing covers only the Greater KL area as defined by the government in the Economic Transportation Programme (ETP). In no way is it an indication that the developers have received advertising permits and developer licences (APDL).
Some of our readers have been asking us for good locations and properties to invest in, so we finally decided to work on something to help them out.
There is a possibility that developers may change the specifics of their developments. As such, we wish to clearly state here that the execution of all the developments listed is subject to the absolute discretion of the respective developers as well as the necessary approvals from the applicable authorities.
We would like to take this opportunity to thank our good friends at PropertyTalk and Lifestyle Malaysia (PTLM), who compiled the list, especially Patrick Chay.
With that, here’s 20 first. For the other 20, you’ll have to buy our May 2014 issue. Enjoy your window shopping, and as we like to say invest away!
22 MARCH 2014 www.propertyinsight.com.my
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COVER STORY Project Name: Eclipse Residence @ Pangaea Developer Name: Wawasan Rajawali Sdn. Bhd. (Subsidiary of OSK Property Holdings Bhd.) Property Type: Fully furnished serviced residence Expected Launching Date: 29th & 30th March 2014 (Eclipse Residence show unit launch) Number of Units: 668 Indicative Price Range: RM 364,800–803,800 Location: Persiaran Bestari, Cyber 11, Cyberjaya (Opposite MMU) Built-up Size: 450–990 sqft Gross Development Value: RM 1.2 billion Unique Selling Points: • Strategically located in the western part of Cyberjaya. • Surrounded by international education hubs and MNC’s. • High rental yield and capital appreciation potential. • 5-acre central park and shopping mall within Pangaea. • Fully furnished for hassle free, immediate occupancy.
Project Name: Novo Ampang Developer Name: Alfranko Development Sdn. Bhd. Property Type: Serviced apartments Expected Launching Date: 2Q2014 Number of Units: 421 Indicative Price Range: RM 1,200–1,600 psf Location: Jalan Ampang (Opposite Gleneagles Hospital) Built-up Size: 682–865 sqft Gross Development Value: RM 400 Million Unique Selling Points: • Located at a strategic location. • Surrounded by an international community. • Stone’s throw from LRT station & proposed MRT station. • Only 3 km to KLCC. • North-south orientation.
Project Name: VERVE® Suites KL South Developer Name: KL South Development (Joint-venture between Albatha Bukit Kiara Holdings and Affin Islamic Bank) Property Type: Luxury serviced apartments Expected Launching Date: Mid-2014 Number of Units: 321 Indicative Price Range: From RM 600,000 Location: Jalan Klang Lama Built-up Size: 555–876 sqft Gross Development Value: RM 500 million Unique Selling Points: • Fully-furnished designer suites. • 45 SOHO units and retail units at ground level. • Sky Bridge that links its two towers together. • Also has Sky Gym, Sky Kitchen, Sky Diner, Theatrette, Chill Zone, and Bridge Lounge. • Equipped with two levels of recreational decks. Project Name: Dorsett Residences Bukit Bintang Developer Name: Subsidiary of Far East Consortium International Limited (HK) Property Type: Luxury serviced suites Expected Launching Date: April/May 2014 Number of Units: Studios –69; 2-bedroom suites –182; 3-bedroom suite–1 Indicative Price Range: RM 1,256,000–2,550,000 Location: Jalan Bukit Bintang Built-up Size: Studios – 652 sqft; 2-bedroom suites – From 802–1,098 sqft; 3-bedroom suite – 1,333 sqft Gross Development Value: RM 447 million Unique Selling Points: • 3 minutes’ walk to Pavilion and Starhill Gallery. • Stone’s throw away from KL monorail stations and the upcoming MRT station. • 15 minutes’ walk to Tun Razak Exchange, Royal Selangor Golf Club, and KLCC. • Sun deck and gym which provides an expansive panoramic view of the KL skyline. • 24-hour concierge, lounge, and valet parking services. www.propertyinsight.com.my
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COVER STORY Project Name: Canary Garden @ Bandar Bestari Developer Name: KSL Holdings Bhd. Property Type: 2-storey link houses, 2- & 3-storey semi-detached houses, bungalows, & shop houses Expected Launching Date: May 2014 (Phase 2) Number of Units: Phase 1 – 384 Indicative Price Range: From RM 988,800 Location: Klang-Banting Built-up Size: 2, 847–5,013 sqft (32’ x 80’ & 40’ x 80’) Gross Development Value: RM 5 billion Unique Selling Points: • North-south orientation. • 52-acre French-inspired garden. • Accessible via the KESAS Expressway and Klang Town Centre. • Upcoming mall, KSL City 2, and a medical centre. • Near Blackwater River. Project Name: The Weave Developer Name: Titian Sama Sdn. Bhd. (Subsidiary of Eupe Corporation Bhd.) Property Type: Residential, high-rise Expected Launching Date: 3Q2014 Number of Units: 361 Indicative Price Range: Avg. RM 650 psf Location: Taman Shamelin, Cheras Built-up Size: 950–1,700 sqft Gross Development Value: RM 280 million Unique Selling Points: • Cutting-edge architectural form designed to be an iconic presence in the locality. • Inner urban location provides direct access to the city centre. • Nearby education and shopping conveniences.
Project Name: Resonance Developer Name: Eupe Bangsar South Development Sdn. Bhd. (Subsidiary of Eupe Corporation Bhd.) Property Type: Serviced apartments & SOVOs Expected Launching Date: 3Q2014 Number of Units: Serviced apartments – 645; SOVOs – 79 Indicative Price Range: Avg. RM 800 psf Location: Jalan Kerinchi (Near Bangsar South) Built-up Size: 640–1,463 sqft Gross Development Value: RM 460 million Unique Selling Points: • Near iconic addresses such as Mid Valley City and KL Sentral • Classy fit-outs will define the interiors. • Sizes of units are kept manageable yet spacious enough. • Pockets of garden retreats for recreation. • State-of-the-art amenities and a top-notch security system. Project Name: Puteri Hills Development Name: IOI Properties Group Bhd. Property Type: Luxury town villas & condominiums Expected Launching Date: 4Q2013 Number of Units: Town villas – 120; condominiums – 120 Price Range: Town villas – From RM 1.5 million; condominiums – From RM 850,000 Location: Puteri 11, Bandar Puteri Puchong Built-up Size: Town villas – From 3,606 sqft; condominiums – 1,400 sqft & 1,700 sqft Gross Development Value: RM 280 million Unique Selling Points: • 3 private parking bays for each duplex villa. • 12 m x 300 m landscaped deck. • Every unit is a corner unit for the condominium. • 2 car park bays per condominium unit. • Pristine landscaped gardens. 24 MARCH 2014 www.propertyinsight.com.my
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COVER STORY Project Name: Ken Rimba Condominium 1 Developer Name: Ken Rimba Sdn. Bhd. Property Type: Condominium Expected Launching Date: 2Q2014 Number of Units: 679 Indicative Price Range: From RM 399,000 Location: Ken Rimba, Section 16, Shah Alam Built-up Size: From 1,119 sqft Gross Development Value: RM 300 million Unique Selling Points: • The most affordable green-rated condominium. • Within Ken Rimba, Malaysia’s first multiple award-winning green township. • BCA Green Mark GoldPLUS Award (Provisional).
Project Name: Brasenia Tower @ LakeFront Residence Developer Name: LakeFront Residence Sdn. Bhd. (Subsidiary of MCT Consortium Bhd.) Property Type: Condominium Expected Launching Date: February 2014 Number of Units: 304 Indicative Price Range: RM 667,200–868,600 Location: Cyberjaya Built-up Size: 1,323–1,568.5 sqft Unique Selling Points: • Gated & guarded community. • Near a Chinese primary school. • Surrounded by Multimedia University (MMU), Cyberjaya University College of Medical Science (CUCMS), and Lim Kok Wing University College of Creative Technology (LUCT).
Project Name: LakeFront Villa Developer Name: LakeFront Residence Sdn. Bhd. (Subsidiary of MCT Consortium Bhd.) Property Type: Bungalows Expected Launching Date: March 2014 Number of Units: 110 Indicative Price Range: RM 2,168,920–3,806,080 Location: Cyberjaya Built-up Size: 40’ x 85’ & 60’ x 105’ Unique Selling Points: • High ceilings. • Gated & guarded Community. • Near a Chinese primary school. • Surrounded by Multimedia University (MMU), Cyberjaya University College of Medical Science (CUCMS), and Lim Kok Wing University College of Creative Technology (LUCT). Project Name: Sawtelle Residences Developer Name: Tindak Murni Sdn. Bhd. (Subsidiary of Country Heights Holdings Bhd.) Property Type: Duplex condominium Number of Units:128 Indicative Price Range: RM 530,000–580,000 Location: Cyberjaya Built-up Size: 710 & 753 sqft Gross Development Value: N/A Unique Selling Points: • High populated and matured areas nearby. • KLIA 2 and Xia Men University in Dengkil will inevitably make Cyberjaya an attractive property investment spot. • New shopping malls and retails are expected to be ready in the next 3 years. • Cyberjaya is home to more than 600 companies, of which more than 35 are MNCs.
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COVER STORY Project Name: Skyz Residences Development Name: IOI Properties Group Bhd. Property Type: Condominium Expected Launching Date: 2Q2014 Number of Units: 1,041 Location: Bandar Puchong Jaya Built-up Size: 1,095–1,580 sqft Gross Development Value: RM 730 million Unique Selling Points: • Situated 150 m above sea level at the highest floor. • 23 acres of freehold land. • Resort-style condominium with 4 acres of recreational space with full clubhouse facilities: Olympic sized swimming pool, jacuzzi, tennis court, jogging track, gymnasium overlooking the pool, cabana, tai chi lawn, secret garden, therapy garden, barbeque corners, basketball court, yoga deck, and follies. • 4 landscaped decks with different themes. • 10 full height glassed sky lounges with panoramic views of KL city centre.
Project Name: Olive @ Hill Park Shah Alam Developer Name: Puncak Alam Resources Sdn. Bhd. (Subsidiary of MKH Bhd.) Property Type: 2-storey link houses Expected Launching Date: April/May 2014 Number of Units: 343 Indicative Price Range: From RM 490,000 Location: Bandar Puncak Alam Built-up Size: 22’ x 75’ Unique Selling Points: • Spacious layout and wide driveways. • Numerous parks. • Near UiTM, schools, a medical centre, and Econsave supermarket. • Accessible via LATAR, GCE, NKVE, Shah Alam-Puncak Alam Highway, Federal Highway, and the proposed DASH. Project Name: i-Suite @ i-City Developer Name: i-City Properties Sdn. Bhd. Property Type: SOHO Expected Launching Date: Currently pre-launching Block B Number of Units: Block B – 498; Block B1 – 328 Indicative Price Range: From RM 437,680 Location: i-City, Shah Alam Built-up Size: 566–850 sqft Gross Development Value: N/A Unique Selling Points: • Serviced by Best Western. • Fully furnished as per hotel specs.
Project Name: EVO SOHO Suites Developer Name: PKNS-Andaman Development Sdn. Bhd. (Joint-venture between PKNS and Andaman) Property Type: SOHOs Expected Launching Date: April 2014 Number of Units: Intermediate – 616; duplex – 88 Indicative Price Range: RM 264,700–750,000 Location: Bandar Baru Bangi Built-up Size: 454 sqft, 1,217 sqft, & 1,352 sqft Gross Development Value: N/A Unique Selling Points: • Right in the middle of Bandar Baru Bangi town center. Mature neighborhood with ready market for goods and services. • EVO is a comprehensive commercial center with not only SOHOs, but also a modern shopping center—the first in Bangi. • Will be connected to EVO Shopping Centre via a covered pedestrian sky-bridge. • Near UKM, UNITEN, and Kolej Poly-Tech MARA (KPTM), amongst others. • Well connected to KL via PLUS, as well as to neighbouring Kajang and Semenyih, with direct connectivity to Putrajaya/Cyberjaya. 26 MARCH 2014 www.propertyinsight.com.my
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COVER STORY Project Name: H2O Developer Name: Epoch Property Sdn. Bhd. (Subsidiary of Titijaya Group) Property Type: Serviced apartments & SOHOs Expected Launching Date: April 2014 Number of Units: Phase 1, Block A & B – 540; Phase 2, Block C & D – 840 Indicative Price Range: Serviced apartments – From RM 580,000; SOHOs – From RM 415,000 Location: Ara Damansara Gross Development Value: RM 572 million Unique Selling Points: • Heavily landscaped and a waterscaped environment which will please even the most discerning of buyers. • Relatively small built-up apartments and SOHOs with high ceilings and modern compact layouts, popular with today’s lifestyle demands. • Facilities including a swimming pool with an aquarium where residents can dive with marine life, a clubhouse, and areas for exercise and other recreational activities. • Near golf courses, both local and international schools, shopping malls, and a medical centre. Also close to Subang Airport. • Accessible via major highways such as NKVE, Federal Highway, and GCE. Project Name: Southville City @ KL South Developer Name: Tristar Acres Sdn. Bhd. (Subsidiary of Mah Sing Group) Property Type: Condominium, retail shops, & link houses Expected Launching Date: Currently open for registration Number of Units: Savanna Eecutive Suites – 3,192; Savanna Lifestyle Retail Shops – 104; & Garden Link Houses (2½- & 3-storey) – 196 Indicative Price Range: Savanna Executive Suites from RM 318,000; Savanna Lifestyle Retail Shops from RM 1.2 million; & Garden Link Houses (2½- & 3-storey) from RM 860,000 Location: Bangi Built-up Size: Savanna Executive Suites from 956–1,017 sqft; Savanna Lifestyle Retail Shops from 2,643 sqft; & Garden Link Houses (2½- & 3storey) from 2,650–3,668 sqft Gross Development Value: RM 5.13 billion Unique Selling Points: • Superb accessibility—Proposed direct interchange from PLUS. • Approximately 15 minutes’ drive to KL. • Gated and guarded community with resident private clubhouse. • Nearby education hubs include UKM, UNITEN, and USIM. Project Name: Sierra 6 Developer Name: IOI Properties Group Bhd. Property Type: Link villas Expected Launching Date: 2Q2014 Number of Units: 217 Indicative Price Range: N/A Location: 16 Sierra, Puchong South Built-up Size: From 3,700 sqft (27’ x 74’) Gross Development Value: RM 296 million Unique Selling Points: • Every unit is designed as a corner unit that opens to a private garden. • High ceiling and large windows in the living area, dining area, and bedrooms and windows in all bathrooms to enhance natural lighting and ventilation. • Pedestrian-friendly pathways which lead to the precinct’s Tic-Tac-Toe themed garden. • Security features include single entry and exit point, home alarm systems, and digital entrance locks.
Project Name: Ion d’Elemen Developer Name: Galeri Tropika Sdn. Bhd. (A member of NCT Group of Companies) Property Type: Resort-style serviced apartments Expected Launching Date: March 2014 Number of Units: 1001 Price Range: Phase 1 & 2 – RM 727,773–4,455,000 Location: Genting Highlands Built-up Size: 866–2,970 sqft Gross Development Value: RM 1 Billion Unique Selling Points: • Spectacular view above 6,000 feet over tropical rainforest. • Cool weather all year round with less pollution. • Many different type of coaches, buses, cable car, and taxis can be found to go to Genting Highlands; not too far from the city or international airport. • Exclusive interior and exterior design with furnished apartments; 5-year defect liability warranty period offered. • Award-winning development (Best Leisure Development Asia Pacific, Highly Commended Apartment Malaysia, Highly Commended Residential HighRise Development Malaysia, and Best Leisure Development Malaysia). www.propertyinsight.com.my
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ighways are a staple diet for most Malaysians living in urban areas, particularly Greater KL. KLites have them every day after breakfast and before dinner. They are like really long snack bars with shorter, cuter, loveable nicknames (DUKE and SPRINT, anyone? MARS maybe?). They are the crux of a love-hate relationship for commuters. Everyone has something to say about them.
IT’S EITHER OR THE
“Not another one!” “Why are they increasing the toll charges so regularly?” “If I take the highway, it’s like I’m paying to be stuck in a traffic jam.” And yet people still use highways, addicted to the taste; not knowing any other alternative. There is no dearth of the long snaking things in Malaysia. We are connected by a total of 30 highways and counting. They are historically and geographically important. In schools, we’ve been wrongly taught that the backbone of the country is the Titiwangsa Range, while it is in fact the North-South Expressway (PLUS). Without that single stretch of tarmac, our economy would not be anywhere close to where it is now. When house-hunting, we will always look for that magic sentence, “X minutes from highway.” People mostly rejoice when a highway opens up near them. They throw parties. Eat nasi minyak. And they will continue to, for the Malaysian expressway network is still expanding every year. But then again, there have been protests against proposed new highways by residents of housing areas near them. Not everyone can tolerate noise pollution, diminishing green lungs, and additional congestion from increased traffic flow.
By: Zulhilmi Ghouse
Patience. That’s what you need on highways. One for the baby, and one more for the road, as Sinatra says. We always deem that the authorities are not doing a good enough job with highways. Here’s the other side of the story.
Good Snacks There is only so much planning you can do when there’s a roadblock. The Malaysian Highway Authority (MHA), which is the government body which supervises and executes the design, construction, regulation, operation, and maintenance of inter-urban highways, are helpless when new highway plans are faced with such vehement opposition. Some reasons given are understandable, but people need to look at both sides of the coin. “With highways, we can ease congestion. Looking at the bigger picture, it does look like the government and rakyat are losing in the long run to highway concessionaires, but we do ease congestion and help traffic flow. It is a shared burden. Our investment is the land. We are paying for the land,” explains its Director General, Dato’ Ir. Ismail Md. Salleh. “Without highways, the traffic would be worse. But keep in mind that highways have capacities. Every day, the NKVE (North Klang Valley Expressway) and other highways are congested. Yes, it is an issue. Even we
16 MARCH 2014 www.propertyinsight.com.my
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THE HIGHWAY OLD WAY
ourselves are not very happy. We are providing you a service, so we want to ensure that we provide a good one—without traffic jams. We know that highways are limited. That is why we are building four-lane highways now,” he adds. “I can proudly say that our highways have really boosted the economy and property prices. Now, outskirt areas are already developing fast.” In Greater KL, this is most evident in areas where the Guthrie Corridor Expressway (GCE), Maju Expressway (MEX), Damansara-Puchong Expressway (LDP), and Kajang-Seremban Expressway (LEKAS) snakes through, not to mention other highways outside of KL. Areas like Bandar Puncak Alam, Bandar Saujana Utama, Bandar Putra Permai, Puchong, Damansara, Petaling Jaya, Kajang, Semenyih, and College Heights would not be what they are now without highways. Highways have cut travel time greatly. Certainly not during peak hours, but can you imagine how long it
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would have taken to travel from Semenyih to Jalan Sultan Ismail as far back as the year 1997? Regrettably, with the building of new highways comes a lesser problem—more and more people are forgetting that there exists other alternative roads. Younger drivers might not even know of the existence
of alternative routes to their staple highways. The Ampang-Kuala Lumpur Elevated Highway (AKLEH), for example, can be bypassed via Jalan Ampang and Jalan Dato’ Keramat, depending on where you’re headed, and of course, traffic conditions. But does your Ampang and Ulu Kelang teenager know this?
Treat Request Other residents of housing areas who are more receptive towards highways often question why highway interchanges are not built to connect their neighbourhoods to the highways. For example, the Duta-Ulu Kelang Expressway (DUKE), which was completed in 2009, could have so many more interchanges, or at least, improved exits (Jalan Semarak interchange, to name one). To this, Ismail replies that interchanges are sometimes added to existing highways on the initiative of third-party developers. Some examples are Bukit Beruntung and Lembah Beringin on PLUS Expressway. They can apply to build one, and if everything goes well—structure is sound and safety is certified—, the interchange will be approved.
Approval also depends on the kind of toll system that the highways use. There are basically two toll systems in use in Malaysia: Closed toll systems, where tickets are issued and toll rates depend on the distance travelled; and open toll systems, where toll rates are fixed for each toll plaza. Developers need to have large land banks to build interchanges. Add land procurement cost to the cost of financing the construction, which can reach on average RM 110 million, and the operation and maintenance cost, which might last for 10–15 years, it is not as cheap or easy as you might think to build one single interchange.
Uber Snack Whatever developers’ and the government’s plans are, the bottom line is that new highways must connect to the whole public transportation network—KTM, LRT, monorail, and buses. They must all support and complement each other, gelling into a perfectly smooth and healthy snack. “Highways cannot stand on their own; it must connect to someplace. If you want people to park their cars and ride on other forms of public transport into the city centre, you have to provide them the connection. You can’t simply build the highway in isolation of other public transportation systems and ask people to park and ride. It will all go haywire. We must think about both sides: the town council’s plans and ours,” says Ismail. Adding that highways need to follow the national development plan, he goes on to say that the MHA does not simply follow plans proposed by private developers. “The private sector is looking at things in the short term. They are only looking to build and make money. After the highway is completed, what happens? Traffic jams. We must make sure that the highway will disperse the traffic and meet the objective locally and nationally,” he comments. 18 MARCH 2014 www.propertyinsight.com.my
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Fresh Jam Of course, it is all easier said than done, as proven by existing highways, which are congested even during off peak hours (SPRINT and Federal Highway being just two examples). Congestion is mainly of two types: Congestion at the main artery due to high volume and congestion at toll plazas due to slow movement. The only solution for the latter is building more toll lanes or improving the use of electronic toll collection (ETC) systems, which the authorities are promoting with SMARTag and Touch ‘n’ Go, albeit not so successfully. You would think that the logical solution for the former is to build more lanes, but the problem lies at the exit points, where the highway joins federal roads. Too commonly, exit points are also congested, as the large volume of
vehicles create bottlenecks. According to Ismail, the solution lies in public transportation systems. A bus rapid transit (BRT) system is currently being studied by the government, to ease traffic woes. If implemented, the system would see buses run in dedicated lanes separate from other vehicles, thus reducing peak hour traffic in KL. In Indonesia, a system called TransJakarta has been implemented way back in 2004. Ismail cites it is a possible improvement to the whole shebang, but maintains that it is not a magical cure-all. Public willingness to part with their loved cars and adopt other modes of public transport is still key, and until mentalities change or public transport systems buck up, the status quo will remain. Your snacks will remain unhealthy.
Highway Updates Paroi-Senawang-KLIA Expressway (SKLIA) •
• • • • • • • •
Highway connecting Senawang, Negeri Sembilan to Kuala Lumpur International Airport (KLIA) and North-South Expressway Central Link (ELITE). Proposed by UEM Group Bhd. 45 km long. Bypasses the congested stretch of PLUS near Seremban and Nilai. Also links Paroi Exit on KajangSeremban Expressway (LEKAS) to Senawang interchange. Announced in 10th Malaysia Plan. In principal, already approved by the government. Awaiting finalised proposal (costing, design, alignment, etc.). Once proposal is ready, LLM will evaluate it, and agreement between government and developer will be signed. Construction may commence next year, earliest, depending on when proposal is handed over.
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Maju Expressway (MEX) Phase II • • • • • • • • •
Extension of MEX from its current Putrajaya interchange to KLIA. Proposed by Maju Expressway Sdn. Bhd. 18 km long. Was halted initially because of unviability (low traffic volume). Land has already been acquired since day one. Already received finalised proposal from Maju Expressway. Government is evaluating proposal currently. Construction may commence as soon as proposal is approved. Claimed as ‘the fastest route from the city centre to KLIA’.
East Coast Expressway (ECE) Phase III • Extension of ECE from Kampung Gemuruh interchange (Kuala Terengganu) to Kota Bharu. • Proposed by MTD Prime Sdn. Bhd. (Now ANIH Bhd.). • 171 km long. • Government still discussing the matter and have not decided when to build it. • Traffic volume is still low at LPT, hence the delay.
West Coast Expressway (WCE) • • • • •
Highway connecting Taiping, Perak to Banting, Selangor. Proposed by Kumpulan Europlus Bhd. 233 km long. Alternative to PLUS. Agreement has been signed between government and developer and is fully effective. • Now LLM is in the process of acquiring land for the expressway for the developers. Construction expected to commence April 2014. • Expected to complete in 2018. • There are plans to connect Banting all the way to Melaka.
East Klang Valley Expressway (EKVE) • • • •
Highway connecting Rawang to Semenyih. 39.5 km long. Alternative to MRR2. Progress halted because of environmental issues with Bukit Tabur and unviability in terms of budget (high tunnelling costs) and traffic volume (very low). • Alternative alignments being studied at the moment: Semenyih to Ukay Perdana, so it will take some time. • If everything goes well, construction will begin 2015.
Penang Second Bridge (Jambatan Kedua) • Second bridge connecting Batu Maung, Pulau Pinang to Batu Kawan, Seberang Prai. • Proposed by Jambatan Kedua Sdn. Bhd. • 24 km long. • Alternative to Penang Bridge. • Will begin operation end of February 2014, if all goes well. • In the process of safety checking at the moment of writing. • The government has also not finalised the toll rates at the moment of writing. 20 MARCH 2014 www.propertyinsight.com.my
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Most people have never probably heard of ‘River of Life’ before. We spoke to non-other than Mr. Scott Dunn the Vice President of AECOM, the company behind the waterfront revitalization project “River of Life” to give you a better understanding.
By: Faiz Fadzil
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ost ancient civilizations and early settlements were built around rivers as rivers provided essential natural resources such as food (fish) and clean water, mainly for drinking and farming crops – a catalyst for survival and growth of population. The rise of these civilizations were due to the wealth brought in by cultivating land surrounding rivers and gaining control of the rivers for trade which eventually created communities around it. Kuala Lumpur is perhaps one of the most relatable examples to illustrate such a fascinating historical fact.
The name “Kuala Lumpur” (KL) was taken literally from the muddy confluence where the rivers of Klang and Gombak meet. When a tin mine was discovered and established back in the 19th century, the confluence became a goldmine to merchants and traders alike; and the tin industry prospered through time. Today, KL is one of the world’s renowned cities with its spellbinding skyline. However, the rise of skyscrapers hinders the sight of this sanctuary and gone is the glorious tale of these two rivers. River of Life aims to bring back those glorious days of the confluence being the center of attraction for the city of lights.
CURRENT PREDICAMENT If you walk along these rivers a few years ago, you probably thought that these rivers with concrete banks were big drains. The rivers which were once intimate with people around it, have over time disappeared into the background, as buildings, infrastructures and rail links are developed away from this natural water source with their fronts only facing the streets. As if that isn’t bad enough, these rivers are abused by irresponsible people who throw garbage into these rivers, apart from the existing pollution from industrial waste as well as oil and sediments (that come off from the roadways) that are fatal to wildlife, making it impossible for things to grow as the water degrades. This has gone on for decades. Yes, you read that right, DECADES. And it needs to be stopped. The unfortunate event saw a hint of hope only in 2011, when
River of Life (RoL) project was launched as one of the Entry Point Projects to build Greater Kuala Lumpur & Klang Valley (KL/KV) which aims to transform these forgotten rivers into a liveable waterfront, which will eventually spur economic activities and commercial value by 2020, when buildings and infrastructure intertwine. “From north to Duke Highway, these rivers are actually not too bad – at class IIA to IIB. Once you hit Duke Highway, there are several compound areas which discharge sewage into the river, which results in water pollution; and this goes into the ocean. The quality of water when it was first tested was Class IV in some locations. The goal is to get to IIB (suitable for recreational activities) – the level where the water doesn’t smell, so people can touch and be near these rivers without having the fear of getting sick” comments Mr. Scott Dunn, AECOM’s Vice President.
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WHAT IS THE RIVER OF LIFE PROJECT?
River of Life has three components namely the “River Cleaning” which is being led by Department of Irrigation and Drainage Malaysia (JPS), “Beautification” led by AECOM and “Land Development” led by DBKL. In dealing with the first part, JPS has identified all the sources of pollution and areas for retention ponds (which deals with sediments). Scott Dunn explains that, “If you retain water in a long period of time, the flood is less likely to happen; and the brown condition (substances in the river) can be filtered out before the water gets into the river.” JPS too, has also come up with series of areas where they would either increase the capacity of the sewage facilities or add new sewage treatment plants to efficiently treat the polluted water, and thus far has succeeded in doing so for about 1,200 square km for Klang Valley River.
3. RIVER DEVELOPMENT
1. RIVER CLEANING
2. RIVER MASTER PLANNING & BEAUTIFICATION
from adjacent communities to the river; and when they do, they would have a clear path. With that vision in mind, AECOM has been working closely with the local authorities in identifying different areas for further developments. “We’ve created some of these areas where proposed urban design could be reconfigured for better connection in order to rationalize (mostly to increase) the density of the areas, primarily around transit and public open space, so that people could really live and work,” Dunn explains. Since greater KL aims to grow its population by up to ten million people in 2020, more public transits and people are needed for the city of this size. However, according to him, “We cannot have 80% of the people drive.”
Meanwhile, AECOM is in charge of providing integrated ser vice for river beautification which includes the 10.7km riverfront along Klang and Gombak Rivers and the detailed design and construction super vision. The plan is to rehabilitate the water and revamp the river banks to create an iconic waterfront which integrates converging commercial, residential and social developments. “This approach is about Connecting, Activating, Regenerating and Enlivening (C.A.R.E). Each one of these presents an opportunity for re-orientation of urban fabric to achieve our primar y goals, which are to transform the rivers from barrier to connector, to promote public transits nodes, establish an identity through beautification, revitalize spaces to preser ve heritage and to allow social and cultural functions, rejuvenate ecology to re-introduce some of the habitats that used to exist and promote the awareness.” In short, the vision is to integrate all solutions for environmental, economic, transportation, landscape and urban design requirements into solutions for all 11 precincts involved in this project. The Klang and Gombak rivers intersect at Masjid Jamek area which is in Precinct 7, where AECOM has put on a lot of emphasis. That includes Chinatown too where the project specifically began considering the complexity of the ownership of properties, density and the old infrastructures. As the place is popular with people, it was decided that the initial phase would commence in this area so as to create the biggest, positive impact on the community. Their plan is to connect the places around it so that people could cycle or walk around the targeted areas without crossing the roads and eventually encourage people to use public transportation such as LRT. For this reason, it is of utmost importance to utilize the streets available to bring people
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Features (also Upcoming)
Puah and Titiwangsa Lake & Village
Puah Park, Food Bazaar, Eco Valley (consisting of Cycle, Pedestrian and Habitat Corridor), Eco Guiding Gallery
Pekeliling and PWTC
Cultural Transit Hub Riverbank Community and Riverside Park
4, 5 & 6
City Hall, City Center and Kampung Baru
The Canal and Treetop Walk
Masjid Jamek, Bangunan Sultan Abdul Samad, Merdeka Square, Central Market
Riverfront and Heritage Trails & Quarter, Daya Bumi Promenade, Bangkok Bank Triangle (Plaza)
8, 9, 10 & 11
KL Central, Brickfields, Mid-Valley
Festival Plaza, Union Square, Farmer’s market, Brickfields Boulevard
The div i sion of Prec inc t s and the ir respec tive area s, name and features.
Also referring to Precinct 7, Dunn says that it is deemed essential to recreate an open plaza and to upgrade the street and pedestrian path in the Bangkok Bank Triangle. “It is actually being built right now and we have closed only one roadway for the purpose of the development; and this phase should be completed soon. Once completed, we’re going to move forward to the next ones (Masjid Jamek’s front river to Merdeka Square) specifically with the hope to efficiently connect Masjid Jamek and Central Market (walkways),” he reveals. One of the many things that has been done is the installment of a rubber dam to keep the water consistently high to lift the drain façade off the river. Apart from the aesthetic, this unique rubber
dam also deflates when water starts to rise, letting the water through to avoid flooding. Generally, River of Life project in its development and construction stage, is rolled out without affecting people’s movement along these rivers; even Kampong areas are barely affected, except on the water treatment part, which is dealt by JPS and DBKL. RoL does not majorly impact the traffic as only few roads will be closed, based on the traffic planning which had been done prior to the project. In terms of facilities, new water treatment plants will be built, while current plants need additional pipes which will collect water for treatment, before it is released into the river.
POTENTIAL PRICE APPRECIATION The “Land Development” component is in fact highly dependent on RoL. There are two parts under this component, which are the government land (controlled by the government) and private sectors’. Under the Economic Transformation Program (ETP), RoL project which costs over four billion ringgit is set to impressively enhance growth in an aggregated way to drive the Gross Domestic Product (GDP), Gross Domestic Income (GDI) and especially property value. Areas immediately adjoining the river tract will likely see increase in land value due to enhancement of the riverfront . The government owned land is being evaluated to determine the most valuable use and typology that helps to create better livablity in central Kuala Lumpur where density and population is linked to transit-oriented development and green open space.
14 MARCH 2014 www.propertyinsight.com.my
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AECOM also extensively engaged with the private sector on this project. “What you might have seen is that more private sectors have started to respond, filling in the voids in terms of connection. All of them have been incredibly supportive towards this effort. They have seen the potential this project may bring; and gratefully, these stakeholders are willing to re-orient their own developments – which may already be in mid planning – according to the master plan (to connect to the waterfront). We have also seen a lot of developers who see the potential in increase of value to their own properties
by doing that,” he says. In fact, some of the developments have already undergone re-orienting, such as Daya Bumi (by KLCC Property Holding) of which ground floor has been redesigned to face the river for stronger connection to the river and Central Market. Meanwhile, others are also branding their developments in close association to the RoL project. He also believes that, “Once you have both clean flowing water; and developments connecting back to the river in different locations, the value will further increase; hence encouraging more stakeholders to join.”
PUBLIC AWARENESS Dunn understands that not everyone is aware of the progress of the project. He expresses that public awareness is as important as any parts of the project. Without the help of the public, the river will always be utilized as a dumping site. To overcome this situation, the JPS lead team has prepared an educational plan for the whole Klang Valley. One thing that is being extensively done by JPS is providing relevant information by dealing with schools and going into different neighborhoods through a program called “The River of Life Public Outreach Program (ROL-POP)”, with the aim to foster partnerships and to improve both attitudes and behaviors of the public to reduce pollution in the rivers and thus improve the quality of water. “It takes time to get things in order and to outreach, since this ROLPOP involves multi stakeholders at different level. You will probably start to see more news on River of Life this year since the Federal Territory has also embarked on media campaign for support,” he adds. For Central KL, AECOM focuses mainly on the physical aspects. Dunn shares that the idea is to guide people and connect them to the river. “We’ll be using guiding lights in certain neighborhoods so that the residents can see these lights, which will lead them to certain locations along the river corridor. Another part of the plan is to have guiding galleries, which are the bigger environmental centers. Currently, we are proposing one such center, which will hold all the informative materials on the project, the importance of water (including general information on water and its cycle), ecology, how rivers transform, maps and information on all aspects to why water infrastructure is essential to building strong and livable communities.” Dunn also highlights that this ongoing project has received strong government commitment and support. For example, just recently, Datuk Seri Ahmad Phesal announced that the first Sunday of every month will be a ‘Cycling Day’ in the city of KL. He said that DBKL is currently contemplating the idea to provide special lanes to encourage KLites to use bicycle as one of the alternative transportations in the city, under the RoL project.
PROMISING RESULTS The success of this project is definitely promising, given the public participation in this project. By simply not trashing in our legendary rivers is one of the easy ways to do so. In terms of the planning and the overall progress, we might not have to be worried about the completion of the project, as AECOM has been present in Malaysia for more than 40 years, focusing more on Malaysia’s ETP and private property market, to help in the growth and expansion of these areas. “This project is in line with the ETP, which stretches to 2020. Now that has been the timeline all this while. I hope people know that there are different parts that are being completed at different times. If we’re lucky, the whole project will probably be completed in 2018,” Dunn concludes. Hence, if you really want to see Greater KL with a new edge, play your part!
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EXTENDED SPACE, FOR EXTENDED FAMILY
generations under one roof – that’s the singular idea. Throughout the years, Puchong has seen a steady demand for larger homes that can comfortably house three generations of a family. Laman & Bayu is thus designed specially for that very need.
Here at Laman & Bayu, space is designed the way you – and the other generations – like it. The magnificent 2-storey and 2 ½-storey Semi-Ds, extending from 2,672 sq ft to 3,058 sq ft per unit offers room for everyone, for every occasion. Indulge in your evening read upstairs as the kids host a slumber party downstairs. If you like, a weekend barbeque hosted in your lush garden to catch up with more loved ones. There’s space to enjoy family-time, me-time, anytime.
Natural Harmony among 3 Generations At home, your private garden awaits. Instead of a conventional 10 ft garden for a typical semi-D, practise your green fingers in a 15 ft one! A step away, you’ll find your spacious residents’ park, and we really mean spacious – it’s 30,000 sq ft full of greenery beauty! So tend to your lush green as Grandpa and Grandma stroll along garden pathways, and the kids frolic in the park. At Laman & Bayu, there’s space for 3 generations to live comfortably as one, in a guarded community. Private space within family space – that’s what we intend to achieve. The low-density development concept guarantees peace and solitude while surrounded with the warmth of family. 8 MARCH 2014 www.propertyinsight.com.my
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With Extended Space, Comes Extended Comfort & Style At Laman & Bayu, you’ll find every inch of family space and private space covered with quality finishings. Large windows up to 7 ft. tall in the living room, for brighter living spaces and better ventilation. Polished porcelain tiles for elegance the ladies of the house would love. Timber flooring for that cosy, inviting ambience. These are all highlights to the exquisite style of your abode. Other comforts include en suite bathrooms, ready air-conditioners throughout the home, except for the maid’s room, waterheater in the Master Bathroom, and ready broadband infrastructure. All planned for your convenience and easy move-in.
Str ate g i c L o c ati on, Mu ltipl e Ameniti es Situated nearby major townships including Subang Jaya and Petaling Jaya, Laman & Bayu are also located at the centre of multiple amenities. Convenient for parents, there are two nearby schools just 2km and 7km away. You can reach Tesco and Aeon Big within minutes for that quick grocery shopping. But wait – it gets even better. Expect a lot of upcoming developments around Laman & Bayu, including the almost complete Taylor’s International School, IOI City Mall, and IOI Vivo City – all happening in 2014. It’s a fast-developing area you surely don’t want to miss! While providing easy access to these amenities, Laman & Bayu is also easily accessed from Subang Jaya, Damansara, and even the city centre. How? They are only 8 minutes away from the LDP interchange, while other highways such as MEX, NKVE, Elite, and SKVE are all reachable within 15 minutes. Weekly family gathering? Right on! Slated to completion by end of 2014, Laman & Bayu have all the convenience a house should have – complemented with exquisite style, comfort, and space that fits all three generations. So wait no more. You can now book your future home by calling 018-222 8735 or 012-322 3353. For more information, pay a visit to www.sdb.com.my. www.propertyinsight.com.my
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NEWS & EVENTS
NEWS & EVENTS Melaka’s New Iconic Waterfront Project
KAJ Development Sdn. Bhd. unveiled their master plan for Melaka Gateway, a prestigious waterfront development project, in a grand ceremony on Pulau Melaka on 7 February 2014. Once completed in 2025, the development will comprise Southeast Asia’s largest cluster of islands at 609 acres. With a gross development value of RM 40 billion, the project will see the restoration of Melaka as the region’s maritime importance, with the establishment of the Melaka International Cruise Terminal and Southeast Asia’s biggest
marina. Melaka Gateway will also boast 15 km of premier waterfront addresses, mainly high-rise luxury condominiums, exclusive marina villas, and the iconic Gateway Beacon Tower, which will house a 7-star hotel and luxury apartments. At the event launch, Prime Minister Dato’ Sri Najib Razak said that the ground-breaking project is expected to attract an additional 2.5 million tourists over the next 12 years, with high-yield consumers expected contribute substantially to tourism earnings.
10,000 Affordable Homes to Come to Sabah Sab ah C h i e f Mi ni s t e r D at u k S er i Mu s a A ma n has c onf i r m e d pla ns t o bu i l d mo r e a f f o r d a b l e house s w i t h i n t h e s t at e , i n a d d i t i o n t o t he i n i t i a l 23,126 uni t s se t t o be c om p l e t ed i n a f e w y ea r s ’ tim e . T h i s i s t o a c c om m od at e l o w - a n d mi d d l einc om e f a m i li e s h opi ng for d ecen t ho mes w i t hi n the ir b u d ge t . Re c e nt ly, 5 00 u n i t s o f l o w -co s t house s i n Li nt a s S i buga , S a n d a k a n hav e b een hande d ove r, for m i ng pa r t o f t he 1 3 ,75 6 l o w c os t unit s c om ple t e d i n S a b a h s o f a r. 6 MARCH 2014 www.propertyinsight.com.my
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NEWS & EVENTS
Pre-launch Sales Ban Unnecessary, Says Expert Founder and Chief Executive Officer of Zerin Properties, Previndran Singhe deemed prohibiting prelaunch sales as unnecessary since some elements of manipulation and speculation will still occur regardless. He added that pre-launch sales are also an effective way for developers to test the market. On the other hand, Minister in the Prime
Minister’s Department, Datuk Seri Abdul Wahid Omar was all for the ban in order to curb speculation. Previndran believed the solution lies in efficiently-managed supply and a proper delivery system. Also sharing this view was Research Head at Mercury Securities, Edmund Tham, who believed pre-launch sales do not equate to speculative buys.
New Mall in KK by May Asian Pac Holdings Bhd.’s new Imago Mall in Kota Kinabalu is targeted to contribute an additional 25% to the group’s overall revenue in two years’ time. Chief Executive Officer, Raymond Yu confirmed that 65% of the mall has been leased to several prestigious lifestyle brands. With 300 retail outlets and 800,000 sqft of
lettable area, Imago Mall is believed to be the first non-strata fully-leased shopping mall in Kota Kinabalu. Yu further revealed the group’s intention to open the mall in the fourth quarter of 2014, saying that the development is part of their strategy to generate more recurring income and better earnings growth.
Sime Darby Launches Housing-Income Index In a first-of-its-kind private-public collaboration in the housing and property industry, Sime Darby Property Bhd. and University of Malaya’s Faculty of Built Environment teamed up to develop the Sime Darby Property Housing-Income Index. By analysing homeowners’ household incomes and spending patterns and relating them to home ownership in 12 selected locations across the Klang Valley, the index provides a better understanding of home owners’ profiles and the houses they can afford. The study found that the mean household income of the
respondents living in the 12 areas is around RM 14,580 per month, and they are able to afford to spend 26% of their monthly household income to service a mortgage.
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What’s Up in 2014 – 40 New Developments in Greater KL, Part I
With the help of PropertyTalk and Lifestyle Malaysia, we have compiled a list of 40 developments in Greater KL which are going to be launched this year. Here’s what’s up.
ISSUE 9 | MARCH 2014
DEVELOPER OF THE MONTH
HATTEN GROUP: BREATHING LIFE INTO A HERITAGE CITY Developers have the power to alter entire landscapes and the economy. This particular Melaka-based developer is set to profoundly change Malacca City’s skyline within the next few years, with offerings of swanky malls and luxurious condominiums, will change the whole look and feel of the land of Hang Tuah.
ARA DAMANSARA – HOT AND RISING We know many of you have been waiting for us to cover Ara Damansara for Area Focus. Well, here it is, an analysis of one of the hottest areas for investment in 2013.
HOW BANKRUPTCY SAVED ME
Everyone has different experiences, preference and choices. Unlike choosing a dress for a dinner, property investing needs proper consultation and advice. Dr. Shah Razali invites Property Insight to answer a few puzzling queries on property investment! 4 MARCH 2014 www.propertyinsight.com.my
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NEW SYSTEM TO REPLACE BLR Nick Tan is an entrepreneur and one of the admins of Property Talk & Lifestyle Malaysia (PTLM), who has managed to grow a sizeable portfolio over the years. Find out how this investor next door did it. Property Insight has a chit-chat with this ready-to-smile investor.
EXPERTS’ OUTLOOK FOR THE YEAR OF THE HORSE Our panel of property experts offer you their outlook for this year. Is it time to gallop or unmount? Either way, there’s no horsing around this year.
GREENING THE BACKBONE OF GREATER KL Have you been wondering what River of Life is all about? Property Insight gets a clearer picture with the help of Mr. Scott Dunn, the Regional Managing Director of AECOM on the plans, hopes and future of Gombak and Klang rivers.
IT’S EITHER THE HIGHWAY OR THE OLD WAY The Director General of the Malaysian Highway Authority (MHA) talks about the challenges they face and gives us an update on new highways.
TAKING REAL ESTATE TO A WHOLE NEW LEVEL Our Personality of the Month for March is Mr. Eric Lim, who founded, managed and expanded Hartamas Real Estate Sdn. Bhd, the real estate agency which has successfully been the Best Agency award for three consecutive years.
PERSONALITY OF THE MONTH www.propertyinsight.com.my
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