Page 1

JANUARY 2016

COVER STORY

DE CENTRUM CITY

AREA FOCUS

SELAYANG, MATURE AND VIBRANT

MAIN FEATURE

GEN-Y SPOILT OR STRUGGLING? January 2016 RM7.50(WM) RM9.00(EM)

KDN PP 18181/04/2013 (033492)


EDITOR’S MESSAGE

EDITORIAL

Ushering in the year with a few tricks up our sleeves

Editor-In-Chief Nadia Gideon editor@propertyinsight.com.my

NADIA GIDEON, Editor-In-Chief

Writers Fara Aisyah Firdaus Petial Natasha Gideon CREATIVE

I

t’s about that time again: A new year is upon us, which means new beginnings and the utmost attempts for self-betterment. Some of us will have resolutions to live up to while others promise to put aside money for that dream home. A number of us might even resolve to grow professionally. Whatever it is, I hope you all have a plan. There’s a proverb that states, “If you want to go fast, go alone. If you want to go far, go with others.” Not sure who said that, it seems to stay in my head. This proverb is one that resonates Dato’ Kenny Chong, the man behind De Centrum City. He is leading a team of great individuals into an exciting new year and from what I can tell, we will be hearing a lot from them in 2016. Our Developer of the Month, EMKAY Group, has had a slight facelift through a rebranding process but what is most exciting about their development is that it targets a younger and more

vibrant clientele. Chief Operating Officer Mazrita Mazlan, talks about EMKAY’s latest development targeting a younger generation of buyers. Which should be good news for the young people we interviewed in our Gen-Y story. Listen to what they have to say. They are after all, the leaders and influencers of tomorrow. In closing, let me say what a wonderful year this has been for Property Insight. We recently took some time off and wandered into the wilderness to embrace being one with nature. It was an amazing trip and from what I can see, it has done wonders for the team. If 2015 was a good year, then let’s make 2016 an even better one. We have quite a few surprises in store for you, so keep reading. Here’s wishing each and every one of you an exciting and fruitful New Year and may you achieve all that you have set out to achieve.

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Property Insight Malaysia

www.twitter.com/propinsightmy

Designers Irman Hakim Aina Mardia Zakaria BUSINESS DEVELOPMENT General Manager Janet Loh 012-205 0911 janet@propertyinsight.com.my PUBLISHER Strategic Advisor & Managing Director KK Chua kkchua@propertyinsight.com.my

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Happy New Year from all of us at Property Insight!

www.propertyinsight.com.my

Art Director Sarah Tan sarah@propertyinsight.com.my

Percetakan Osacar Sdn Bhd Lot 37659, No. 11, jalan 4/37A Taman Bukit Maluri Industrial Area Kepong, 52100 Kuala Lumpur, Malaysia PropertyInsight

ENQUIRIES enquiries@propertyinsight.com.my

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


TCM_SP Setia_Dec.pdf

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CONTENTS

16

52

COVER STORY

INVESTOR NEXT DOOR

14

58 Drinking latte, talking property

Dato Kenny Chong

DE CENTRUM CITY – An urbanised knowledge community

Charles Tan’s investment story

MAIN FEATURE

INDUSTRY INSIGHT

21

60 ECG Affirms its own success

Gen-Y investors

Spoilt or struggling?

ECG Affirm sets up base in Taiwan and Singapore

FEATURE

26

ASEAN

30

Malaysia’s long arm of property law

34

Multimillionaire round table

Its impact on the property industry Strategizing your development to be crime free From property investors to multi-millionaires

DEVELOPER OF THE MONTH

38

EMKAY Group

62 Load – Bearing What is Load-Bearing and how it benefits home buyers?

64 From buds to beds

The concepts at SSF are based on the creativity of the team

INTERNATIONAL MARKET

66 Investing in Doha

Turning Cyerberjaya around

Doha – Poised to be renown for its architectural designs and its rich culture

AREA FOCUS

LEGAL

44

70 Harder to be a housing developer

Selayang – Mature and vibrant

A township with a lot to offer

FEATURED PROPERTY

FINANCE

52

72 Compounded returns on your money invested – It matters!

Sky Living– The way foward

SkyWorld creates a concept of living better known as Sky Living

PERSONALITY OF THE MONTH

55

Linnet Lee

Financial planning 101

STRATEGY

75 GST – Impact on the property market 2015 78 Be prepared


2016

PROPERTY SHOWCASE

EVENTS CALENDAR

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

3 days

7

3

days

PIPDA GALA DINNER 2016

PUBLIKA

MESRA MALL

SHANGRI-LA

Solaris Dutamas

Kemasek, Terengganu

Kuala Lumpur

4 – 6 MARCH 2016

24 – 26 MARCH 2016

3 days

1 night

1 APRIL 2016

PROPERTY SHOWCASE

PROPERTY SHOWCASE

PROPERTY SHOWCASE

NU SENTRAL

AEON CHERAS SELATAN

QUEENSBAY MALL

KL Sentral, KL

Balakong

11 – 17 APRIL 2016

2 – 8 MAY 2016

Penang 12 - 15 MAY 2016

days

3 days

BUMIPUTERA SHOWCASE

7

days

4

days

PROPERTY SHOWCASE

INVESTORS’ HOT PICKS PROPERTY SHOWCASE

HOME+ & PROPERTY SHOWCASE

KOMTAR JBCC

MID VALLEY EXHIBITION CENTRE

IPC SHOPPING CENTRE

Johor Bahru

Mid Valley Megamall, KL

Mutiara Damansara

3 – 5 JUNE 2016

15 – 17 JULY 2016

3 days

7 days

25 – 31 JULY 2016

PROPERTY SHOWCASE

PROPERTY SHOWCASE

PRISM 2016

PARADIGM MALL

GURNEY PLAZA

SETIA CITY CONVENTION CENTRE

Kelana Jaya

Penang

Shah Alam

12 – 14 AUGUST 2016

27 – 30 OCTOBER 2016

5 – 6 NOVEMBER 2016

4

days

2

days

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


NEWS & EVENTS

HATTEN GROUP LAUNCHES

NEW SALES GALLERY IN MUAR, JOHOR

MAH SING TO HAVE

SECOND RAMADA BRANDED HOTEL TOWER IN MEDINI ISKANDAR

M

ah Sing Group Berhad (Mah Sing) will have a 322-room, 4-star hotel under the Ramada brand in The Meridin@Medini integrated

project in Johor. The hotel tower, called Ramada Meridin Johor Bahru is located next to Legoland. Mr Ng Chai Yong, Chief Executive Officer of Mah Sing Group signed a franchise agreement with Mr David Wray, Vice President Acquisitions and Business Development, Wyndham Hotel Group South East Asia and Pacific Rim to procure the Ramada Brand System for its second tower of Meridin Suites in Iskandar Malaysia. Held in conjunction with the signing ceremony was the grand opening of hotel-serviced suites’ show unit. The show unit is furnished to offer guests the actual experience

AUTOVILLE COMPLETES CYBERJAYA WITH

THE ONLY LIGHT INDUSTRIAL DEVELOPMENT

D

ecember 3, 2015, Marks the completion of Autoville, Cyberjaya’s first and only Light-Industrial

10 | JANUARY

2016 www.propertyinsight.com.my

development developed by EMKAY Group. This new addition to the development of Cyberjaya will boost its growth potential

H

atten Group celebrated the grand opening of its new Sales Gallery comprising stylishly designed offices, meeting spaces and its showroom located in Muar, Johor. Officiated by Datuk Wira Eric Tan, Group Chairman and Dato’ Colin Tan, Group Managing Director, the exclusive event was by private invitation only with approximately 80 special guests in attendance. The opening of its Muar Sales Gallery points towards the rapid growth and expansion of the group. “Johor is on the fast track towards achieving World City and Metropolis status and we are keen to be a part of the development and growth of this high-potential state,” Datuk Colin Tan added.

“Property investments are still viewed as a good hedge against inflation. We believe that buyers are attracted to the guaranteed rental returns offered, reputable hotel operator and brand name, and the strategic location next to Legoland.” Ng added.

and attract a lot of interests from investors. Autoville is developed on a 10.03 acres of freehold land on the west side of Cyberjaya with an estimated GDV of RM 100 million. This development is strategically located within the entry and exit point to Cyberjaya (via Lingkaran Putrajaya) and directly fronting Persiaran Multimedia. Linked to all the major highways such as Lingkaran Putrajaya, MEX Highway and Lebuhraya Damansara – Puchong (LDP); connectivity is another attraction to entice investors. “Autoville’s unique. Once fully operational, we truly believe that it will benefit Cyberjaya and the surrounding neighbourhood. Being the only light industrial development, it has huge potential in becoming a promising hub for Cyberjaya in the future” said Pn. Mazrita Mazlan, Chief Operating Officer of EMKAY Group.


VISTAS ABOVE THE ORDINARY 4 -Storey Green Cour t yard Villas

EMBRACED IN NATURE’S LEGACY

70% SOLD

2 & 3 -Storey Semi-D Villas

FREEHOLD | GATED & GUARDED | 24-HOUR PATROLLED SECURITY

semi-Ds and 4-storey courtyard villas is enveloped in pristine rainforest tranquility, complete with cascading creeks and waterfalls. Nature’s magnificence meets urban

Seri Utama School

Wangsa Walk Giant

AEON AEON Big WANGSA MAJU

TA

Minutes away from highways and KL city | Mountain fresh air | Cascading creeks |

TO KLCC

"Good fengshui for good living" endorsement from Master Kenny Hoo

TO KLCC

KLCC

KEMENSAH HEIGHTS Zoo Negara JLN TAMAN ZOOVIEW

Fairview International School

TO MONT’KIARA / HARTAMAS DUKE

Exclusive clubhouse | Perimeter fencing | Cool temperatures | Scenic city views |

SR Agama Muwafaqah

AKLEH Gleneagles Medical Centre

Sayfol Great International Eastern School Mall

MRR2

inspiration - make it your daily experience.

JL N

SMK Taman Melawati

AN

with sweeping panorama of the world below, this elite enclave of 2 & 3-storey

M

Luxury homes perfected for the ultimate in urban green living. Perched on a hilltop

M EL AW AT I

TO GOMBAK / GENTING TAR College

Sungai Ampang Waterfalls Sri Inai School Mutiara International School ISKL Ampang Puteri Specialist Hospital Ampang Point JLN AMPANG

TO CHERAS

GPS Coordinates: 3.219305, 101.760982

EMBUN SHOW HOUSE

PT 18223 T/Supply Jalan Melati Indah 2, Kemensah Height Taman Melawati, 53100 Kuala Lumpur.

www.titijaya.com.my

Download the Titijaya free app on your smartphone or tablet for more info!

MS No.: 05 100 14023

MS ISO/IEC 17027 : 2011 QS 16122006 CB 05

Brought to you by Titijaya, winner of the prestigious Asia Pacific Commercial Property Awards 5 Star Best Mixed Use Development Malaysia 2010.

www.propertyinsight.com.my JANUARY 2016 I 11


NEWS & EVENTS

UNITY.ASEAN ‘LANTERN & MUSIC SHOW’

C

ountry Heights organised Malaysia’s BIGGEST lantern festival, themed as UNITY ASEAN ‘LANTERN & MUSIC SHOW’, and illuminated by more than 1,000,000 light bulbs. The highlight of the show was 16 giant signature lanterns featuring different themes of all the ASEAN countries together with more than 200 various display lanterns at various zones. Visitors to this unique venue were also entertained by a series of staged arts & cultural performances and a musical

fountain. This attraction opened its doors to the public on 11th December 2015 (Friday). Country Heights invited his Highness Sultan Sharafuddin Idris Shah AlHaj, Sultan of Selangor to officiate the event. Parallel to this event, Country Heights also launched the ‘2015 ASEAN Product Fair’ with the participation of exhibitors from ASEAN countries; providing a perfect platform for visitors to purchase a wide range of products and services.

M101 HOLDINGS SIGNS MOU WITH

LEADING IT COMPANIES TO CREATE AN INTEGRATED METROPOLITAN HUB

M

101 Holdings Sdn Bhd, a visionary developer focused on creating smaller scale boutique developments has today signed a Memorandum of Understanding (MoU) with four leading IT companies namely Alcatel-Lucent, Select TV, 12 | JANUARY

2016 www.propertyinsight.com.my

Nutanix and Panduit to create an integrated metropolitan hub for their new development projects. The company aims to incorporate the cloud-based integrated solution to all its future property development starting off with M101 Dang Wangi and M101 Bukit

Bintang properties. Both properties, which have a total GDV (gross development value) of RM600 million are expected to be completed in 2017. “The idea of building an integrated metropolitan is to centralize various city conveniences combining properties like hotels, commercial units, retail outlets, entertainment features for consumers to form a prolonged interaction with each service and facility. This diversifies consumption and increases spending,” quips Datuk Chua Eng Pu, Executive Director of M101 Holdings Sdn Bhd.


NILAI IMPIAN TOWNSHIP

O

n the 29 of November 2015, Sime Darby collaborated with Property Insight and organised a trip to Nilai and its surrounding area. Nilai Impian is a township developed by Sime Darby Property and is set to take Greater KL by storm. Two well known speakers within the

property industry were invited to speak to the public of the upcoming issues faced by property investors in the property market. CEO of Smart Financing Gary Chua talked about the “Winning Formula to stay ahead in Securing Financing banks in this trying time”. Key opinion leader and author of the book WTF?, CEO of FAR Capital Sdn Bhd, Faizul Ridzuan talked about “How to evaluate boosters when investing in landed properties”. Bookings were made on the Kiara Court

and Azalea projects and three were made immediately after the trip concluded. In an effort to add value to this event, Property Insight also gave Bonus Link Redemption points to individuals who made their bookings during the event. Organisers had targeted 40 people in attendance, but were pleasantly surprised with a turnout of 70 people. This was an astounding response indeed and guests left with a sense of reassurance that the Nilai Impian Township was indeed a good investment.

the largest continuous forest complex in Peninsular Malaysia, it is believed to have been in existence for over 130 million years making it one of the world’s oldest rainforests, older than both the Amazon and the Congo. The dream team enjoyed a 3 day 2 night stay at the luxurious yet close to nature Belum Rainforest Resort. Their

stay included exciting activities such as bamboo rafting, jungle trekking, watching Rafflesia blooming, swimming in prestine waterfalls, while also visiting the Orang Asal of Belum. All in all KK and his dreamteam had a blast. The team are already looking forward to their next retreat!

RETREAT AT BELUM RAINFOREST RESORT –

PROPERTY INSIGHT SURVIVES THE WILDERNESS

L

ike vintage wine, 2015 was a good year for Property Insight with 7 events including - PRISM 2015 Malaysia Largest Property Investment Summit, PI’s Guide to Investing 2015/2016 and Property Insight magazine’s accomplishments. With the saying, “All work and no play makes Jack a dull boy,” in mind, KK Chua decided it was high time that he embarked on a trip with his dream-team. And where better than Belum Rainforest! Why Belum you might ask? Belum is

www.propertyinsight.com.my JANUARY 2016 I 13


COVER STORY

DE CENTRUM CITY – AN URBANISED KNOWLEDGE COMMUNITY

Property Insight talks to Dato’ Kenny Chong, Managing Director of Protasco Berhad about his plans for De Centrum City BY: NADIA GIDEON

T

here is a buzz about town, a township called De Centrum City, that caters to a sizable population, consisting of residential, commercial, educational and modern lifestyle attractions, and is all set to redefine the urban landscape of the Southern Corridor of Kuala Lumpur. Property Insight chatted with Dato’ Kenny Chong, Managing Director of Protasco, to get a feel for the Group’s plans in 2016. Our first impression of Dato’ Kenny is that he is an easy going, personable, and very eloquent. There are no airs about him and he seems most comfortable in his own skin. After chatting for almost an hour, it seemed that we may have forgotten we were in the middle of an interview. That’s how comfortable he tends to make you feel. We asked him his thoughts on a few of the Group’s projects. 14 | JANUARY 2016 www.propertyinsight.com.my


www.propertyinsight.com.my JANUARY 2016 I 15


COVER STORY

PI: The city’s land size is over 100 acres and will be developed over 15 years or so. CAN YOU EXPLAIN THE STAGE TO STAGE PROCESS? Dato’ Kenny: We have put in quite a bit of effort to develop a master plan over the last couple of years, the plan has changed a few times but I think we’ve got it this time around, but again, no guarantees that it will not change. We went through quite a tedious process of looking at the different types of components that we thought might affect the market here, however, that may change over time too. We looked at the potential sub division of plots and we divided the 100 acres as per what we intend to build and develop eventually in this parcel, and of course we have to accommodate our education sector. I think we have struck a balance, we have residential properties that will be launching in the first quarter of next year and we started residential developments about five to six years back plus we also have a mixed development on the commercial plot that is Gallerie De Centrum. So yes, we are planning a 15 to 20 year development duration and as per our previous plan it is still a GDV of around 10 billion ringgit. TELL ME WHY A PURCHASER SHOULD BUY INTO YOUR PROJECT? Protasco Berhad is a diversified group. However, in terms of professional expertise, we are especially good in the technical and engineering side of things. Again we are pretty up there in the infrastructure sector, I would say that we are one of the ‘bigger’ companies in Malaysia with six different sectors across the group. There is the maintenance sector, the construction sector, property development, 16 | JANUARY 2016 www.propertyinsight.com.my


trading, education as well as engineering and services. We have across- the-board expertise, so I can safely say that we have the capability to execute projects successfully. We are now looking at building high end developments. We are making sure that our products are balanced. Apart from walkability, we are promoting sustainability and connectivity, so we want the entire development to work around the people within the community. Our urbanism concept is one that drives a modern life style back to nature, and sustainability. Living in a modern environment but away from the hustle and bustle. I’VE READ MANY OF YOUR INTERVIEWS AND YOU KEEP USING THE PHRASE ‘LONG TERM DEVELOPMENTS’ WITH REGARD TO DE CENTRUM CITY. WHAT EXACTLY DOES THIS MEAN? We have a 100 acre parcel which forms our development playground, with a total GDV of 10 billion ringgit. The land is fully paid off, and our entry level was pretty low when we acquired the land more than 15 years ago. So we are able to plan our development in phases and also have the liberty to change and be dynamic with our master plan, that is one reason we use the word ‘long term development’, we are dragging it to 15 years to have the flexibility to relook at our market and adjust accordingly. Doing this also enables us to ride out sluggish and slow market conditions, similar to how we strategized for 2016. Let me give you an example. Let’s say you have invested 100 to 200 million on a land bank somewhere. You are not going to sit on it for the next 20 years, you have to develop the land now. Again, as we have invested in the capital from day one, we want the capital to come back as soon as possible. Hence, the

reason we are able to plan out the entire development phasing while stretching it out more in the long term. WHAT IS YOUR LAND BANK STRATEGY? That is a very good question. You see, Protasco is not solely a development company, as mentioned earlier, we have six main core divisions and property is just one out of six, so putting all our resources into one basket is not our management

and corporate strategy. We have our 100 acre parcel and we have developed about 15% to date, so we are still looking at another 80% – 85% land that is ready for development. We are not looking to do low dense landed developments, but rather we are looking at mixed and high rise developments and mid to high end developments for this parcel of land. So the GDV will come in at a minimum of about 400million per parcel. We do have parcels in east Malaysia as well, but again we are looking at what to do with it because our focus now is strictly here. Having said

that, we are also looking at increasing our land banks and our sound long term plan still applies. We are looking for small development parcels such as boutique parcels. Currently we have about 5 to 6 projects in JB that we are looking at. At the same time we are working on a government housing project within Putrajaya and that is a development project as well. HOW MANY STUDENTS DO YOU THINK YOU HAVE IN THE AREA TO DATE AND HOW WILL THEY COMPLEMENT DE CENTRUM CITY? IUKL itself has about 4500 students, I would say easily half of them are residing on campus, then again we also have UNITEN and UPM students that reside here. I would say, easily a population of no less than 20,000 students in a 5 to 10 kilometre radius. If you take a walk through Mines and IOI city mall, you can see that the students dominate retail vibrancy in those malls, be it entertainment, fashion or F&B. We have a neighbourhood mall here in De Centrum and we believe that there is an instant need for something of this size within the area. If we go by the student demographics, most investors or buyers want to invest here because they know that there will always be a constant demand for student housing. However, that could be a barrier too, and we will cross that bridge when we come to it. I mean, it is common knowledge that student properties don’t command a very high price. So far we have managed to hit the balance and a lot of it has to do with the product itself and the strategy that has been put in place. I think we have found the right balance. Like I said earlier, De Centrum and IOI complement one another. The first thing people ask before buying our Unipark condo block C and D was, ‘what our www.propertyinsight.com.my JANUARY 2016 I 17


COVER STORY

student numbers were’. So I believe yes it does bring a lot value to us, but we need to manage the market perception of what student population mean to a township. ARE YOU SAYING THAT THIS MIGHT PUT PEOPLE OFF YOUR RIMBAWAN RESIDENCIES? No, not at all, we are not UPM, we don’t have 15-20 thousand students to manage. We have about 4500 students and only half of them are residing on campus. Also, I need to mention that our student demographics show that we are very multi-racial, so again that brings in quite good cultural racial vibrancy within the development. We have planned it so that even though you get that vibrancy, the university is comfortably tucked to one side. You will not see students roaming all over the place. Rimbawan is targeting a different market, it is more for families that want to migrate from north to south. Families that want an upgrade. I LIKE THE IDEA OF A (KNOWLEDGE COMMUNITY) AND YOU MENTIONED THIS MAY BE A FIRST OF ITS KIND, TELL US WHAT YOU MEAN BY THAT? Well I wouldn’t say it is the first, obviously if you look at Sunway with Sunway College and Monash University it is a big success. But if you look at the size, I think we can be considered one of the first ones to incorporate the education hub into our development and we have planned it well. Also, there are a number of startup companies, technology incubators and other amenities to support an entrepreneurial ecosystem here. YOU MENTION ‘NEW URBANISM’ QUITE A BIT, WHAT EXACTLY DO YOU MEAN BY THAT? 18 | JANUARY 2016 www.propertyinsight.com.my

We knew what we wanted to do with each individual parcel, we knew how we wanted to connect each individual parcel, we knew what kind of community we wanted to capture but we struggled with the word for it. We wanted to have a balance between an urban modern life style residency coupled with an old school community based residential area, so that is why we kept the word urban and we wanted it to relate back to the community factor. And that was how the phrase, new urban concept, was formed. New urbanism promotes a few things, connectivity, walkability, quality of life, and also sustainability. Currently our offices are spread out over 100 acres, our back bone infrastructure for high speed wireless broadband is already in place. To be fair, Gen-Y isn’t just about having free Wi-Fi etc., I think what most of them are looking for would be a place they can call their own, a liveable place, or a hangout place. We believe that we can cater for most of Gen-Y’s needs here, but we are not going to over-look families. Besides, developers like IOI, with their shopping malls and other facilities, already offer quite a bit to the community at large, infrastructure wise. SEEING THAT THERE IS A NEW PRICING STRATEGY INVOLVED WITH RIMBAWAN, WHAT VALUE DO YOU ADD TO YOUR PURCHASERS? We wanted to dislodge ourselves from the developers that have launched before us and of course we were inching towards the mid to higher range market as well. If you have seen Rimbawan’s montage, it is about upping our game. There is always the right product and the right pricing strategy involved with that product, so with Rimbawan, we think we have struck a very good balance between product quality, the

extended facilities that we are providing and the environment that surrounds the development which in turn, offers an improved quality of life. WHAT IS YOUR OUTLOOK FOR 2016? I foresee 2016 being a great year for Protasco. Since 2013 we have been locking in a growth rate of about 10% to 20% and we expect to hit those figures in 2016 as well. We are seeing growth across all major sectors, on the property side, we have a few launches planed out for 2016. We may not be growing exponentially, but we are still recording decent growth rates, so yeah, it’s going to be a good year. I do believe that the general public and most developers are already well informed. However just to add my 2 sen I’d like to say that 2016 will be a relatively sluggish year for the property industry and the construction sector, but we in Protasco believe that there is always the right product for the right market. There is no right time to launch, you can always strategically plan your launches and ensure you deliver good quality products for the correct market. I believe the market will adjust itself, and we can definitely expect the market to improve over time.

Bernama interview with Dato’ Kenny Chong, MD of Protasco


www.propertyinsight.com.my JANUARY 2016 I 19


De Centrum.indd 2

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MAIN FEATURE

“What Gen-Y are facing – Expenses go up, salary remains the same.” BY: FARA AISYAH & NATASHA GIDEON

We

all have that one uncle or aunt that is always going on about how this generation is glued to their phones, come out of college in debt and aren’t able to afford the necessary things in life because we’re that “spoilt” generation. At the dinner table they keep telling you old tales of how they were able to buy homes with the same salaries we are earning now. So if they could do it, why can’t Gen-Y? So we called upon Gen-Y investors to see if these stereotype stories are true. Are we spoilt? Or are we living in difficult times?

www.propertyinsight.com.my JANUARY 2016 I 21


MAIN FEATURE

HACE WONG, 27 Property Investor

I

’ve always wanted to buy my dream house, and to do what I like with it. Then one day, I came across ‘Rich Dad, Poor Dad’, a book that introduced me to the idea of financial freedom. The book briefly explains how property helps you achieve financial freedom, and taught me the method used in property investing. Since then, I started saving money for my first property. I think most Gen-Y are more interested in Forex, stocks and other such investments. They want fast money. The process is a bit longer in property investment because you really have to ‘invest’ in it – you have to nurture it and grow it. Little do they know, property can be more than that – you can make fast money and get a passive income depending on your game plan. It is important for Gen-Y to realise the benefits of property investment.

I think it is important to know what the angle is for them, meaning what they want to achieve through property investment, then I will share and explain with them what are learned on my journey. To me, showing them through example is the best way, instead of telling them my theories or sharing my ideas. I think it is more important to create this awareness first before we educate them. I realised one thing about property investment and this has helped me to move closer towards my dreams – I want to run my own business. Gen-Y are a generation of entrepreneurs. So some of them might be thinking ‘I want to run the business, but I don’t have the capital, how do I run it? How am I going to run a business without good cash flow?’ Here’s a way for you to use your property investment to generate cash flow for your business.

I

ZOOL RAIMY, 33

General Manager and Anaesthesiologist. 22 | JANUARY

2016 www.propertyinsight.com.my

am an anaesthesiologist practicing for the past 6 years in Galway, Ireland but decided to come home 5 months ago due to family reasons. I am the newly appointed General Manager for my family’s company. I am planning to learn how to run the family’s business from my elder brother and my job is to find new investment opportunities and also to develop the business and further grow the company. I was born in Melaka but grew up in Gombak, Kuala Lumpur. My parents were teachers but my dad decided to start his own company and this is the same company we are still trying to grow and improve 30 years down the line. I am an investor and I chose this market simply because my family is involved in property development so they know the current market trends. My strategy in property is to always ‘know your stuff’. So, research, research and more research. I believe, to understand a particular investment, you need to gather as much information as you can regarding the investment so that you can make an informed decision. You also need the information in order for you to calculate the risks. Same goes for my exit strategy, you always have to be prepared. Always have a plan B, C, D and E. You need to be able to understand when you can cash out and cut your losses. If anything goes wrong I can fall back on anaesthesiology. As of now, I don’t have any specific types of properties I choose to invest in. My investment depends on my research and the risk taken. But I believe up to a certain extent the market is influenced by the political turmoil that Malaysia is going through. So far, the biggest challenge I have faced as a Gen-Y investor would be in trying to acclimatise myself with the working environment here in Malaysia. The Irish working environment is completely different. The year 2016 looks weak with minimal growth but I am optimistic and I will find more investment opportunities. I am sure that prices will go down to stimulate buying. That is what I hope. Nevertheless, Gen-Y should be more aware. Education leads to awareness and awareness leads to good investments. So the future for me is unclear, but as long as I am comfortable in investing, I will continue to do so. If not I will follow my exit strategy and cut my losses.


MC TIAU, 24 Property Investor

B

efore I ventured in property investment, I joined a lot of property talks. I was inspired by a friend who is my course mate. When we were in University, she had engaged in some property talks and she shared a lot of information with me and that is how I started to get interested in property investment. I have been interested in buying property for a long time, in fact, since I was studying, but I was not working so it was impossible. That is why I worked as hard as possible to get the money to invest as soon as I started working. When I wanted to register for this one property course, I had only RM900 in my account while the course’s fee was RM4,000. So I paid the deposit which was RM500. Luckily I had three months’ before the due date of the investment course. During that time, I had just started working as a teacher and I knew it was going to be

impossible to get acquire the money, no matter how much I could save from my salary. So I decided to do a lot of tuition. I was busy with work, 24-7. I worked straight through without taking any off days and eventually earned enough to pay for the course. The following two months, I managed to save around RM10,000 to start my investment. I had enough of working and I did not want to work anymore. Not ever again. If you ask me about Gen-Y, I think they would like to buy properties that come with better packages – such as, zero down payment and rebates. For me, I like the feeling I get when I invest in properties – when I get a good deal or when I buy a good piece of property. So if you ask me how long I would want to invest, I would say as long as possible. It is not just about the money, it is how I can inspire other people as well.

BURHANUDDIN MOHD NOOR, 23

Student, Bachelor of Mechanical Engineering at UNITEN

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he reason I am interested in property investment, is because the value doesn’t decrease. For example, even if I purchase a new car today, the price will decrease tomorrow if I were to sell it. But not in property investment, it keeps on increasing year by year. We are all aware that properties are not as cheap as it was before. Nowadays, new houses are all expensive, and even the secondary property prices are equally high. We want affordable and spacious houses for us Gen-Y. Why? Because we fresh graduates, cannot afford to take a loan of more than RM200K with a mere RM2K salary and it takes years to earn a high salary. I think only a few GenY’s are aware of the advantages of property investment and everyone should be more exposed to this so that it is not too late for

them. Investing is a choice many people make at one point or another, in the hope of bringing wealth to their lives. Whilst there are many investment alternatives such as stocks, bonds and cash, property investment tends to be viewed as one of the safest and easiest options. The value of your property will grow over time and may be extremely financially beneficial if you make the right decisions not only will you benefit from steady capital growth, but regular monthly rental returns. My dream is to have my own house, chalets in tourism areas and a hotel of my own. I did a business before and that was when my eyes were opened and I learned about property investment through a mentor of mine. I learned a lot from him and I’ve not forgotten what he taught me.

www.propertyinsight.com.my JANUARY 2016 I 23


MAIN FEATURE

ILI AQILAH, 26

Full time writer and part time social media representative

I

’m now based in Ipoh and intend to invest in the near future. I chose the property investment market due to its enticing valuation. Unlike cars, once you buy a property, the value increases by the year. My investment strategy is to acquire a landed house nearby a public attraction and either rent it out or turn it into a homestay. However, I still do not have an exit strategy if all else fails. As a Gen-Y investor, with the imbalance of rising living costs and a stagnant income, I intend to buy cheaper properties with low maintenance fees in order to afford the investment. The biggest struggle for me, and most Gen-Y investors, are our financial

capabilities. I struggled to choose between buying a new car and buying a property, but I’m glad I made the right choice. But second to that, it was the difficulty in finding a property that fit my budget, in a good location. But that has not deterred me from investing in the near future. Things will get more and more expensive all thanks to GST and unnecessary price hikes. If I can earn more, of course I’ll invest. Despite the market sentiment, the plan is to at least own 2 properties. One for myself and the other to be rented out. As I mentioned earlier, I am currently eyeing a few upcoming residential areas near a theme park scheduled to open next year.

RACHEL POON, 27 Property Investor

I

worked in Singapore previously as a graphic designer for years. I did not like the nature of my job, so, I wanted to try and invest in something new and I found property investment less risky than other investments. I actually wanted to invest when I was still working in Singapore, but at that time, my mind-set was more on buying a dream house instead of investing. Because of this, I actually missed a chance

to invest in Puchong, on a property that was priced at RM700k. After a year, I came back and the price had gone up to RM900k! I was thinking to myself, how can property price increase so much in one year? So I think that is one of the problems that Gen-Y are facing – property prices hike, expenses go up, but our salaries remain the same.

WE ARE NOT SPOILT, WE ARE TRYING TO COPE We come from a generation filled with dreams and amazing aspirations. We innovate and thrive within a market that tries so hard to pull us down. We are a generation of tech savvy geeks who have the same hopes, wants and needs as Gen-X and Baby Boomers. We are a generation with our phones to our faces because that is the nature and environment we were brought up in, but it is also the same nature that inspires us to be better than generations before. We have the same worldly scheme as you do, we want the same bright future you wanted for your kids. Sadly, our struggles are our own. And just like Gen-X and Baby Boomers, we have to fight our own battles. We are not spoilt. We just bury ourselves in all this inspiring technology because that is the only way we know how to cope and live in the environment you have left us in. The future looks bright, and with these new and upcoming investors, the market looks even more promising. 24 | JANUARY

2016 www.propertyinsight.com.my


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12/23/15 11:24 AM


FEATURE

ASEAN

AND IT’S IMPACT ON THE PROPERTY INDUSTRY IN MALAYSIA BY: NADIA GIDEON

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here is little doubt that ASEAN’s property market holds great potential in some of the 10-member countries with its young people eager to make their mark in the world. Malaysia took a big step forward in 2015 becoming ASEAN’s Chairman for the fourth time since its formation. One huge step for ASEAN, one giant step for Malaysia. The Association of South East Asian Nations (ASEAN) comprises ten diverse nations and has

been around since 1967. ASEAN leaders adopted the ASEAN Economic Blueprint in 2007 with a master plan to guide the integration of the regional economies into a single market and production base. They then established the ASEAN Economic Community (AEC) which provides businesses with seamless access to a market of over 600 million people – 8% of the world’s population – living in a land area of 4.46 million sq km.

Global consultancy firm CBRE’s ‘ASEAN Economic Community noted that conducting business in each member country is different. While it’s generally transparent and relatively easy to do business in Singapore and Malaysia, other countries like Myanmar, Laos and Cambodia have a lot of catching up to do in terms of creating a more conducive environment for businesses.

ASEAN Countries Ranking for World Bank’s Ease of Doing Business 2015

Source I World Bank, CBRE Research, August 2015

26 | JANUARY

2016 www.propertyinsight.com.my

Country

2015

2014

Singapore

1

1

-

Malaysia

18

20

+2

Thailand

26

28

+2

Viet Nam

78

72

+6

Philippines

95

86

-9

Brunei

101

98

+3

Indonesia

114

117

+3

Cambodia

135

134

+1

Laos

148

155

+7

Myanmar

177

178

+1

Movement Up The Ranking


Malaysians can look forward to a great year ahead starting from February, especially in the field of real estate. From the real estate perspective however, the ASEAN integration could improve regional connectivity in terms of investment in roads and rail transport networks, and further the growth of the local urban development and real estate markets. In Australia for example, a 4 percent profit from investments is considered a good year. In Malaysia, developers and property investors are earning up to 25 percent in profits. Growth in 2016 is poised to be comprehensive and should be a contrast from the sluggish of 2015. Malaysia’s gross domestic product (GDP) is expected to grow by 5.6 per cent this year, according to Malaysian Institute of Economic Research (MIER), riding on the advantage of ASEAN and is well ahead of other parts of the world. “In large part, the ASEAN Tiger Cubs present an ‘enjoy it while it lasts’ story,” the report added, referring to the combined economies of Indonesia, Thailand, Philippines and Malaysia that is worth US$2 trillion. Having said that, Malaysia needs to aggressively come up with strategies and policies to adjust to the increasingly complicated and challenging globalised environment in property investment. For example, policies have to be more investorfriendly. The government can grant more incentives in areas with huge development potential due to its economic advantage or underdeveloped areas that would reap great benefits from the participation of foreigners, a concept that is similar to Medini in the Iskandar region. With

The currrent trend shows continued growth in Thailand, a very hot market in Bali, and a rising star in the Philippines while Malaysia is singled out as a private island hotspot” - Knight Frank LLP regard to cooling measures however, this should not be applied across the board but should be more segment-specific and targeted at specific problems. On the other hand, this has been a challenging year for Malaysians with the imposition of GST, difficulty in obtaining financing as well as, the increased cost of living. International property consultant and speaker, Dato’ Sri Gavin Tee is of the opinion that the impact of Asean integration, targeted at the end of 2015 in the form of AEC (Asean Economic Community), will have the “Asean Effect”. Tee announced the arrival of “The Greater SEA Era” (Greater Southeast Asia) as further liberalisation takes place down the road among the 10-member Asean states, this region, which currently is the fastestrising economy in the world, may be the best place to scout for properties due to its huge upside potential, he said. Property experts such as Tee, and many more from around the globe are of the view that Asean could turn out to be the biggest

beneficiary of the current global economic slowdown. But Malaysia needs to come up with more incentives to stimulate its property market as competition intensifies with the coming Asean integration. According to Tee, Asia on a whole can no longer be seen merely as emerging economies, but should be considered a bona fide global player that has entered a phase of explosive growth. He added that 80 per cent of the world’s biggest metropolis will be located in Asia within the next 10 to 20 years, and that Asia will be home to 60 per cent of the global population. Not only that, the middle class is rapidly growing in Asia 60 per cent of the world’s middle class will be based in Asia. Time can only tell if the promises of the AEC will be realised when it finally commences at the end of 2015. We have also recently completed negotiations for the Trans Pacific Partnership agreement (TPP), which had taken several years. Althought we do net yet have details of that agreement, we can assume that

www.propertyinsight.com.my JANUARY 2016 I 27


FEATURE strengthening the AEC in the post-2015 era will be crucial to ASEAN and its business partners, particularly as market access issues in Laos, Cambodia and Myanmar, have presented the most serious challenges for the AEC. Another report from Knight Frank LLP – the international property consultancy,

shows continued growth in Thailand, a very hot market in Bali, and a rising star in the Philippines. Malaysia is singled out as a private island hotspot. Malaysia, where foreigners can already own land, is ASEAN’s premier destination for private island ownership. Luxury yachters looking for adventure travel all know about the Western Pacific’s Coral Triangle, and

Malaysia’s Northern Borneo coast features numerous private islands within it. These emeralds in the turquoise sea can be had for much less than many people would expect, and give the height of exclusivity to their owners. Islands can be bought already developed, or still in their pristine, natural states.

INTRA-ASEAN REAL ESTATE INVESTMENT ALREADY SIGNIFICANT AND LIKELY TO GROW Cross-border real estate investment within the ASEAN region has been concentrated around Singapore, both as the largest recipient of cross-border investment flows in the region, but also as the main investor itself within the ASEAN region. These figures are slightly misleading given the number of institutional investors based out of Singapore (deploying capital originating from throughout the world). However the transparent and liquid Singaporean market has certainly been seen as a relative “safe haven” when compared to some of the additional risks elsewhere. As the AEC targets are met, the aim of strengthening capital market integration across the region will boost real estate investment, while bilateral tax agreements between all the member states will improve transparency and reduce risk. As capital is more efficiently allocated across the ASEAN countries, and raising capital across borders becomes easier, we expect investment volumes to increase and pricing to become more straightforward. The opportunities therefore for intra-ASEAN investors and for external investors looking for exposure into this growing market are significant.

Figure 8 Origin of cross-border capital flows into ASEAN property 2009 - 2011 (US$million)

0

500

1000

1500

2000

2009 2010 2011

Figure 9 Destination of cross-border capital into ASEAN property 2009 - 2011

0

500

1000

1500

2000

2009

2016 www.propertyinsight.com.my

2500

Singapore Malaysia Indonesia Thailand

2010

Vietnam Cambodia

2011 Source I Real Capita Analytics, Knight Frank Research

28 | JANUARY

2500


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12/23/15 18:54


FEATURE

MALAYSIA’S LONG ARM OF PROPERTY LAW Developers get top notch security and advertise it as is, buyers get to own safe homes for the rest of their lives BY: NATASHA GIDEON

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hat started out as a simple joke turned this mastermind into almost a pioneer in what he does today. Shamir Rajadurai, CEO of PreventCrimeNow.com, as he is fondly known, is a Crime Safety Specialist currently pursuing his Masters in Criminal Justice and a certified Crime Prevention Through Environmental Design (CPTED) Practitioner, wanted to highlight crime and 30 | JANUARY 2016 www.propertyinsight.com.my

educate the public on crime prevention. In 2007, he started doing research on crime and safety related to property. Shamir does this solely through his passion and his vision of living in Malaysia without fear, for him and for generations to come. So how does one help in preventing a crimes and is it possible to do so? The answer seems simpler than it should be. “Be more aware as a buyer, question your

developer about the security of the area you plan on buying. A gated community can be safe, but a gated community can also just mean a normal wired gate outside your area. That can easily be taken down with the right tools.” Shamir urges buyers to question what is defined by gatedcommunity to avoid break-ins etc. “Also, ask about the type of guardhouse they will be providing, whether the guards have


a proper place or if it’s just a guy sitting under an umbrella” As an owner, if you have already bought your property, it is not too late to question the safety of your area. “It is important to ensure the walkways surrounding the development are not too narrow. Big trees and lighting can also be a problem. If your trees are covering the street lights, that can be dangerous as well. The trees should be above the street lights, not below. It also is quite redundant if your lights are covered. Do not be stingy when buying locks. Pay more for a proper lock and key rather than lose your household items and jeopardise your safety.” Even nature can be helpful when ensuring safety, says Shamir. “If your neighbours dogs are barking, it’s probably best if you check out what is happening. Animals are more aware of things that are out of the ordinary.” As a member of the community, Shamir

urges property owners to be involved in Residential Association meetings. Most areas where crimes are low are thanks to the “Rukun Tetangga” in that area. Shamir tells a story of an area in Shah Alam that used to be high in crime. The Residential Association decided to beautify the area and make it more liveable. The murals on the walls were repainted, children would play in the area more often and that indirectly led to lesser crimes. Lesser bikes being stolen and no more vandalism. “I realise if I go to an area where the neighbours are friendly and are more aware of what is going on, that is a sign of a safe area. Robbers and thieves don’t want to rob your house if they know you are a close knit community” As a developer, there is a bigger incentive to keep crime at a low, and security at a high. During the planning stages, developers should sit down with the architects and

Certified CPTED practitioners to discuss the Crime Prevention Through Environment Design (CPTED). Most developers follow a few CPTED steps but not all. Most of them hire a security consultant which only provides them the theoretical aspect of CPTED which lacks the understanding of Malaysian Crime. Take time to talk to the residents of the area to ask of their concerns. Simple things can go a long way. “The bushes next to the sidewalk should be at least 3 feet away to avoid snatch theft from occurring. One way lanes are also big contributors to snatch theft. It is easier for them to make an easy exit after they take your stuff and leave when there isn’t any oncoming traffic.” A smart crime preventer thinks like a criminal, this is the insight I gained while interviewing Shamir. We do not see things the same way criminals do. This is why CPTED should be implemented not only in

www.propertyinsight.com.my JANUARY 2016 I 31


FEATURE

Be more aware as a buyer, question your developer about the security of the area you plan on buying. A gated community can be safe, but a gated community can also just mean a normal wired gate outside your area. That can easily be taken down with the right tools” - Shamir Rajadurai

theory but also in all its essence. The incentive in this equation is simple, by potentially spending less developers get top notch security and advertise it as is, and buyers get to own safe homes for the rest of their lives. So the question is, will this be expensive and exclusive to the rich? “Yes and no. If you are going to pay for security anyway, why not pay a premium price for your safety. But no, there are things as mentioned before that you can do without spending more money, like using LED lights in the vicinity of your development which is energy saving.” If we start using CPTED in Malaysia, it would show useful and affordable results as it is a design based solely on the physical environment to help protect us. Even if the houses and developments are ready, CPTED can still be implemented after. But the most startling thing about CPTED is probably that it has yet to be implemented in Malaysia as no one has the qualifications for it yet. Except Shamir, of course. He received his qualifications from Florida Atlantic University, and advocates for CPTED to be implemented here. “The biggest problem (besides not having qualified CPTED advisors) is that developers seldom include the Polis Di Raja Malaysia (PDRM) when planning their development. The PDRM are always happy to assist in any way they see fit. As no one really knows about CPTED, the second best thing to do is to collaborate with the PDRM.” Developers often tell Shamir they do follow CPTED, and it is to some extent true. But not in its entirety. There is a lack of understanding as to what CPTED is, so 32 | JANUARY 2016 www.propertyinsight.com.my

CPTED features available: Lighting is not blocked by the trees. Proper signage is available CPTED features not available: Walkway not well maintained. There is no barrier to prevent snatch theft

developers merely follow what they know, 25% of what CPTED really is, and only in theory. Get shamir to take a quick look around and he will spot all the flaws within the development. But the blame cannot be pushed to a specific party as there is a lack of awareness and expertise. This is where Shamir comes in, and he is hoping to put together proper guidelines.

“The federal guidelines now only state that you have to follow CPTED, and no one knows what that is, and it is approved by people whom, do not fully understand CPTED” Shamir explains how this problem is cyclical. Shamir hopes to see at some point, CPTED incorporated and working hand-in-hand with development, as it should be.


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FEATURE

MULTIMILLIONAIRE ROUND TABLE From property investors to multi-millionaires BY: FARA AISYAH FIRDAUS PETIAL

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here are many multi-millionaires who has found their way to success through property investment. Steve McKnight, Australia’s best-selling business author, Jerome Tan, the founder of PIP Holdings Pte Ltd and Frankie Wong, the Founder of the Association of Asia Investors shared their investment stories with the audience at PRISM 2015 – Malaysia’s Largest Property Investment Summit.

INVESTMENT STORIES Jerome’s first property deal was in Singapore, which he bought with no money down. “During that time, Singapore had this structure called deferred payment – which meant that you put a down payment and paid nothing till it was certified with CF (Certificate of Fitness). The property I bought was an industrial property and we were required to put a 20% deposit which required us to take a loan. So what I did was I looked for people that had cash but couldn’t take loans. I found a couple who couldn’t apply for a loan and I told them that they could put in the 20% and I would put in 80% and the profit made out of the property would be split equally, 5050. They agreed and put down the 20% down payment, and I took the bank loan – meaning that I paid nothing because once the property was completed, we sold it and made around 200,000SGD and we got 100,000SGD each.” That is how he started. After going through the process, he was able to repeat, without forgeting 34 | JANUARY

2016 www.propertyinsight.com.my


My biggest challenge in Kuala Lumpur was adapting to the culture, since it is quite different compared to Hong Kong”

-Frankie Wong

this only applies when one knows what properties to buy, where to buy and at what price to buy. “In certain areas, you should buy residential property and for some areas, you should buy commercial properties. Of course you also need to know how to borrow money and how to sell or lease property out – you need all these soft skills,” he said. Steve agreed, and was impressed with what Jerome had said. he said, “That is a really valuable lesson that Jerome just shared that you may not have picked up, and I want to polish that diamond. You don’t necessarily need money to make money but you need ideas, so what Jerome did was, he took an idea and then effectively saw how to make money on the idea. So if you have money, it is easy to make money but if you don’t have any money you have got to find an idea that works and find someone that doesn’t have that idea but wants to jump in that idea with you.” As for Frankie, the challenges he faced being a foreigner in Malaysia was to adapt to the procedures here. “My biggest challenge in Kuala Lumpur was adapting to the culture, since it is quite different compared to Hong Kong. When I entered the property market and I was talking to agents to look for a particular property, the communication was challenging not only for me but my team as well. We had to spend a lot of effort and energy just to find out what we really wanted out of the deal. We couldn’t talk directly to the owner, vendor or any agent, especially when we worked with government bodies who only used the Malay language. But, the market here has a lot of potential and I can see that Malaysians are eager to learn and that is a good thing.” Said Frankie.

how he senses a good deal, as he is experienced in buying various types of properties. He said, “From my personal experience, you need to always keep your eyes on the market, keep practicing and negotiating. Focus on your target, be it landed properties or shop-lots, and practice in negotiating. When you have a good sense you can see from a mathematical point if the deal is good. Just encourage yourself to talk to different people to know your options.” “There are a few things to look at when

The easiest way to have positive property cash flow is to have no debt”

- Steve McKnight

SENSING A GOOD DEAL Frankie has been asked countless times. www.propertyinsight.com.my JANUARY 2016 I 35


FEATURE determining a good deal,” Jerome opined. He continued by stating Penang as an example. “I also invest in Penang, and how many of you want to know why I invest in Penang? Because I heard Li Kashing saying, a while back, that if you buy a property on an island with a majority of Chinese, it will never go wrong. Take Hong Kong and Singapore as examples. I did some research and found out that Penang property prices go up 7 % per annum. Before you buy property you must have an exit strategy, so I was deciding whether to buy commercial property or residential property. So I went to Gurney Plaza to look at the number of shoppers on a Saturday night. I was surprised to find out that the numbers were low when compared to Singapore, it seems that taxes in Penang are very high. Then I realised I better not venture in commercial properties investment. I also realised that Malaysians have this MM2H which encourages foreigners to retire in Penang.” “Then it struck me that I should buy retirement properties, which require only about 1,000 to 1,500 sq. ft. in total. In addition to that, I only bought sea view properties because everyone loves a view of the sea which makes it easier to rent and sell if compared to Singapore where you can only get a ‘sarong view’. To me that was an opportunity and I now own 10 units from Mah Sing at South Bay Plaza, and all the blocks are facing the bridge. When I first went to see them they said they had 60 units facing the sea, and I wanted to take all but I couldn’t because the Director himself bought 10 units! So if the people on the inside are buying, then I should definitely buy that particular property,” Jerome expressed. POSITIVE CASH FLOW Jerome is keeping his cash flow positive buying at a lower price and waiting for the ‘down time’. “If you have a ‘golden goose’, meaning you have a property that is giving you positive cash flow, make sure you don’t sell it. Don’t be desperate to invest, if the price doesn’t suit you then don’t buy. There is always someone who is willing to sell below market price and you must make the effort to look for these people. But remember don’t just simply buy cheap properties without research. Always remember that ‘cheap is not good, good is 36 | JANUARY

2016 www.propertyinsight.com.my

You need to know how to borrow money and how to sell or lease property out – you need all these soft skills”

- Jerome Tan

not cheap’. It also depends on the location and the right type of property. But the most important thing in property investment is taking action, having all the knowledge won’t do you any good if you don’t apply it.” “The easiest way to have positive property cash flow is to have no debt,” claimed Steve. “I teach people who get into debt, how to get out of it. Aside from that it is a mathematical calculation, the property is either with a positive cash flow or not. Most real estate in capital cities in first world countries will not have positive cash flow, and why not? Because homeowners are willing to pay a premium above and beyond what an investor is willing to pay because they want to live in it as a home. Whereas a good investor only looks at the numbers, rather than the emotional ties to the building,” he added. PRESERVING WEALTH “It doesn’t matter how much money you make, what counts is how much you keep. I am going to give you a 1,000 dollars of free accounting advice right now – The real question around keeping wealth is to own nothing and to control everything while the legal way to do that differs from country to country. The essential principle of owning nothing and controlling everything ensures

that you are never robbed by Robin Hood who robs from the rich and gives to the poor. If you want to help the poor then do it on your terms and not in the terms imposed onto you. How would you preserve your wealth?” Steve asked. Jerome’s personal opinion is that “I would grow my money not because of the money alone but also because of the challenges that come with it – because I do not want to be in my comfort zone. I come from a rich country, so RM1mil is a small amount to me. I always try and add value to people. I always ask myself how I can add value to people. Find something that you are passionate about and don’t retire. I myself retired twice and I found it very boring till the day I heard my late Prime Minister Lee Kwan Yew say ‘If you retire too young, you are going to die fast’. I did not want to die young so I decided to do something that I was passionate about and that is to create more value for people and in the process to help them make more money. So I write books, teach and make products that help people make money. We must have passion.” “It is very easy. If you make money from property investment, then continue doing it in order to preserve your wealth,” Frankie concluded.


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12/28/15

4:39 PM


DEVELOPER OF THE MONTH

EMKAY GROUP

TURNING CYBERJAYA AROUNDChief Operating Officer, Mazrita Mazlan talks about EMKAY’s latest projects in Cyberjaya BY: NADIA GIDEON

38 | JANUARY 2016 www.propertyinsight.com.my


T

here are powerful women who have been given a head start in this industry, and then there are women who build a career for themselves and work their way to the top. Mazrita Mazlan is the latter. Besides being Chief Operating Officer with EMKAY Group, she is a mother and a daughter first and foremost. But being a family oriented person has never deterred her from being good at her job. Property Insight spoke to Mazrita, or MM, as she is fondly known as by colleagues and close friends, and asked her about her early days at EMKAY, their rebranding and positioning and their latest projects in Cyberjaya. HOW DID YOU BEGIN YOUR CAREER AT EMKAY? I started my career 15 years ago as a business development executive. I knew nothing about the property industry at the time, but could sense the potential power of the business. That business development role gave me a quick insight on how things worked, for example, how does one look for land banks, how does one see if that piece of land that you intend to utilise is suitable for development. So

many questions with so few answers, and in less than a year, I was assigned to streamline the policies and procedures of the company. It was then that I had a deeper insight on how the property industry operates. Recalling those days, I have to say, it wasn’t just about writing the procedures in an air conditioned room, I actually had to sit with all the parties’ involved and interview them one by one and then to put that into writing so that people who weren’t familiar with a particular procedure, could understand and apply that to their day to day work. I was fortunate to be a part of the team that developed the total process. To be honest, I did the reverse of what most people would do, I started writing the manual first. While getting to know people within my company and within the industry, taking in everything that I possibly could, and today I am overseeing the operations of the group. I owe my thanks to our Chairman, Tan Sri Mustapha Kamal, for giving me the opportunity to work on many such projects. I owe a lot to him. He is a great trainer for many of us at EMKAY. He would www.propertyinsight.com.my JANUARY 2016 I 39


DEVELOPER OF THE MONTH

The story of the development itself, is more important. You have to really sell the story. And that is exactly how we plan our developments” - Mazrita Mazlan

target market and it is the basis of how we communicate and reach them. And that is exactly how we plan our developments.

usually ask you to do something you hadn’t done before, and you wouldn’t dare say you didn’t know how. And that is how all of us at EMKAY learned to do things beyond our comfort zones. Back then, extra work was taken as an added opportunity, and that is how I perceive things because if you have the attitude that a certain task is not your job, you will not improve or climb to greater heights. WHAT INSIGHT CAN YOU GIVE US ON DEVELOPMENTS UNDERTAKEN BY EMKAY WITHIN CYBERJAYA? Right now we are focusing on a 50 acre stretch of land, whereby 22 acres has been developed which leaves us with 28 acres. The completed developments consists of more than 1 million square feet of office space within 6 buildings which have been sold. We are fortunate that the last of the 6 buildings have been sold. Based on the insights of our prospective buyers and tenants then, we noticed that having retail outlets and eateries within the

40 | JANUARY 2016 www.propertyinsight.com.my

vicinity was important to them. People may actually have to drive out to get to a retail area. We figured we should do something about this within this stretch of the development, where the ground floor would be mainly for retail, while the upper floors would be offices. And that is how Radius Business Park came to be. Radius is currently under construction and we believe that whatever comes next, should complement the whole developmental plan. We are also planning a mixed development which will consist of 402 SOHO units, plus a retail area of about 73,000 square feet. This may not seem like a big retail zone but it is enough to service the SOHO community, while the rest of the 25 acres will encapsulate more mixed developments; adding more residential elements to that stretch. However, we realised that, whatever that comes next must gel with the right concept because these days people really buy the concept, the story of the development itself, is more important. You have to really sell the story because the story actually defines our

HOW DO YOU FEEL ABOUT IT? DO YOU FEEL EXCITED ABOUT THIS NEW PROJECT? Yes, I do. In fact, I’m thrilled. The most immediate project coming up is actually catered specifically for the younger generation, because we find that a huge population within Cyberjaya are made up of youth who are tech savvy. There are so many affordable homes offered to first time home buyers, so we asked ourselves ‘where do these young people go’? I realised that they are a unique generation, they speak their minds and they want what they want, but they want things fast. So we looked at their wants and needs, and we said to ourselves, hey why don’t we come up with something for these young and ambitious people. Something of value that they believe would be a smart investment. So our next development which is called Clique, and mind you, the name wasn’t just plucked out of the air, there’s a story behind it and it is relevant in so many ways. We realised that we had an opportunity to tap into new markets as an alternative to affordable homes that would attract first time home buyers as well. We decided to build something that may be the first of its kind within Cyberjaya, specifically tailored for Gen Y (the mobile generation). Everything in the development will be tailor made to cater to their wants and needs, and this includes the


unit itself, the surrounding space, the area and even places they would like to hang out at. Connectivity is very important to them. They can live without a lot of things but the internet is a must for them. All these things have been taken into account. We have designated free wifi zones in the facilities area that enables them to stay connected even when theirout of their SOHO units; which ranges from 450 to 650 sqft. We want people to come out and utilise the space around them; so we have squash courts and basketball courts; especially to those who stay indoors and tend to be cooped up in their homes. From the retail area of about 73,000 square feet, we also intend to have basic retail units, so it becomes a self-contained area. There will be laundrettes and hang-out places that are less ‘mainstream’ as they like to call it. Don’t ask me why they like that phrase, I just learned being ‘mainstream’ is not as cool as being a little ‘hipsterish’ and independant, from my kids. The thing about Gen Y is that it doesn’t have to be an established chain of retail outlets, so Clique being a part of a SOHO type community, gives them some flexibility to experience ‘an office, a home, or both’. They can work from there or they can live there. We have special packages to encourage them to own properties as their homes, or as space for their start-ups. We are helping Gen Y to move towards entrepreneurship. Take Steve Jobs for example, where did he start his career? That’s right. In his garage. WE UNDERSTAND THAT EMKAY IS UNDERGOING A REBRANDING EXERCISE COULD YOU ELABORATE PLEASE? In 2012 when EMKAY turned 30 and mind

you, that is also when Tan Sri Mustapha Kamal passed the baton on to the next generation, we had a strategy workshop with the management team. We hit the pause button and we tried to reflect on what we had done in the past. We looked at what we had done right and we asked ourselves, how do we stay relevant? We realised that amongst other things, we needed to work on a rebranding exercise. Don’t get me wrong, there is nothing negative about how we used to do things. But we did think we needed a new look and feel. We got everyone involved in the process, and what came out from the rebranding exercise was the efforts of everyone. We engaged a professional consultant to conduct research as well, because we wanted to know what the public’s perception was. The fresh new look also denotes the new leadership as well, plus we define where we want to be in the next 30 years. THERE IS A LEGACY CHANGE FROM FATHER TO CHILDREN, CAN YOU TELL US HOW THAT IS WORKING SO FAR? It was definitely a challenge for Tan Sri Mustapha Kamal 30 years ago to build from nothing to what you see today, but it is not going to be easy for the next generation of leaders as well. Staying relevant, yet perserving what was, will help take the company to the next level. For me personally, I am very fortunate because I am able to work with both generations, it really gives me good exposure, especially with the young workforce now, I think a younger leadership is timely and fortunately I am able to adjust. HOW ARE YOU GOING TO REINTRODUCE YOUR BRAND TO THE PROPERTY MARKET TODAY WHEN THERE ARE

ALREADY SO MANY PROPERTY DEVELOPERS OUT THERE? Ok when we talk about the rebranding as far as we are concerned the essence of the brand remains the same. What is going to be different is the way we operate, the way we approach things, the way we reach our market, the image we portray and the work culture. You know how everyone talks about the Google culture? Well, we aspire to be just like them. The emergence and how we embrace social media plays a huge part in ensuring our brand remains relevant in the property industry. We have to be very careful with what we say and do in social media as it can work for you or against you. WHAT IS THE PROPERTY SUPPLY LIKE RIGHT NOW IN CYBERJAYA? I would say that the general perception is that there is an oversupply, but then again there is a reason for that. The MRT will be coming to Cyberjaya soon, and the announcement that a hospital will be built here (which is timely), could be one of the many factors that the big players are coming here. I think that kind of explains it all. People have always had the perception that Cyberjaya is far away and I really don’t understand why but when I started to work here I realised that ‘hey it is only a half an hour drive from PJ and KL.’ Plus Cyberjaya is so well connected. Cyberjaya is accessible via 5 major highways. As for public transportation, there is currently a dedicated transportation system (DTS) that comes through Cyberjaya and with the coming of the MRT, I really don’t see the problem. The real question to me is, why stay in Kuala Lumpur? Everyone knows that the prices there are really high. Gen Y cannot afford the prices in Kuala Lumpur especially if they are just starting out. If you ask me, people that work in KL travel for more than an hour every day. With all the facilities and advancements to come, prices for properties in Cyberjaya will rise, so why wait? WHAT KIND OF FUTURE PLANS DO YOU HAVE FOR THE SURROUNDING AREA? We started with office buildings and we wanted to do justice to this community, so we developed Radius to help service the community better. Then we thought about the living element, and that is how Clique came about. It is a mixed development that has a little bit www.propertyinsight.com.my JANUARY 2016 I 41


DEVELOPER OF THE MONTH of everything. We will still include office buildings in our future developments but, these will not be the main elements, so I foresee that there will be more residential developments. Again we have to consider market trends and needs and analyse the target segment further. We would like to attract end users, but we are not going to reveal too much. However, we would like to ensure as much as possible, that the vision for a lifestyle concept will not be diluted. TELL US A LITTLE MORE ABOUT CLIQUE, IT REALLY DOES SOUND INTERESTING. Just to talk about the SOHO units, we want to make sure that our purchasers are able to afford it. Smaller spaces are very affordable however, if they have deeper pockets they can purchase 2 or 3 units and they can even knock down the walls in between the units. Clique was designed to be flexible and that is why we provide only the basic needs. In short, we are telling them the first quarter of 2016. It is somewhat challenging with the current market but i think with the right approach it could work. HOW DO YOU THINK RADIUS IS GOING TO BE ABLE TO CONTRIBUTE TOWARDS CYBERJAYA? Radius is a shop office development, so we welcome retail and small offices. It is a development that complements the earlier phases. Not everyone can afford the whole block but with Radius we offer the opportunity for the smaller ones, we even sell by the floor. Those who are renting can actually relocate to their own space and those who are outside Cyberjaya can relocate because Cyberjaya is growing fast, I think there is a captive market here. Radius offers something different, other than doing business and just selling it off we would like to contribute to the growth of Cyberjaya by attracting people to relocate to Cyberjaya. We are still talking to some people but one name that is already here with us is Jakel Group. With the coming of Jakel Group we hope to attract big players to Radius. COULD YOU TELL US ABOUT YOUR LIGHT INDUSTRIAL DEVELOPMENT, AUTOVILLE? Autoville is the first and only light industrial development in Cyberjaya. Targeted to be fully operational by Quarter 1 2016, Autoville

42 | JANUARY 2016 www.propertyinsight.com.my

comprises a combination of 40 detached, semi-detached, double storey and single storey industrial units. It’s name and concept reflects EMKAY Group’s focus on creating an area to cater to the automotive industry ancillary services in particular; and also light manufacturing businesses and F&B outlets in general. The challenge we always have is promoting the location. All developers within Cyberjaya are promoting the location because property is always about location, location, location. In reality there is nothing wrong

with the location at all. Where else can you get detailed facts about the area you are developing? The players in Cyberjaya, including the developers, are all closely knit and information is readily available. What I see in Cyberjaya in a matter of years is that it will be an all-inclusive city, where you have developments of various types and purposes, and you don’t have to leave Cyberjaya for anything at all. It will be selfsustaining and self-sufficient in the very near future.


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AREA FOCUS

SELAYANG, MATURE AND VIBRANT A township with a lot to offer now and in the near future BY: FARA AISYAH FIRDAUS PETIAL

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2016 www.propertyinsight.com.my


activity has been carried out here in the township.” Wong opined, “It is noted that most of the recent projects are a mixture of residential and commercial developments within a wide range of entry prices from low-cost semi-detached houses to luxurious villas. It is expected that with the huge supply of affordable residential units, the population in Selayang will have a great impact upon realisation of these projects. However not all projects within Selayang have had smooth passage. There are projects that have been struggling on certain issues causing some delays.” PROPERTY DEVELOPMENT Currently, Selayang is undergoing a moderate yet rapid development of notable properties. For example: SALCON’S RÉS 280 In 2013, Salcon ventured into the property development business with its maiden project in the fast growing township of Selayang, Selangor Darul Ehsan. As an emerging player in property development, the Group has been looking to further strengthen the property development division by aggressively expanding its

landbank and strategic partnership with land owners. Located within Taman Selayang Jaya and directly fronting the Kepong – Selayang Highway, Rés 280 is an exciting development which provides a work-life balance to its residents. Rés 280 is an exclusive back-to-nature development located along the Selayang - Kepong Highway in Selayang. The resort lifestyle SoHo and shop commercial title project is a joint venture between Salcon and Mepro Marketing, who appointed Azitin Venture as the developer. Built on approximately one-acre of land, the development has an expected GDV of RM140 million. Rés 280 comprises of a 20-storey block with 280 SoHo units and 12 shops located on the ground floor. The built-up for the dual-purpose space units range from 845 sf to 890 sf. Each home office has two rooms and two bathrooms with lots of open areas for a living room or an office. The small room can be used as a bedroom, personal workstation or a utility room. There is also a balcony for residents to utilise, where the higher units facing north would have a view of Forest Research Institute Malaysia (FRIM). Each unit of Rés 280 is complimented

S

elayang lies within the district of Gombak and is about 10 km northwest of Kuala Lumpur, and a few kilometres away from Kepong, Rawang and Batu Caves. Bandar Baru Selayang, a new township in the area is sited just 2 km away and was named after the town, where Majlis Perbandaran Selayang is located. Most of Selayang is administered by Majlis Perbandaran Selayang while part of the town that spills over into the Federal Territory of Kuala Lumpur is administered by Dewan Bandaraya Kuala Lumpur. Managing Director of Oregeon Property Consultancy Sdn Bhd, Sr Wong Wen Chet said “The town is built mostly with terrace houses and village houses, and unlike other nearby schemes where high rise buildings are preferred while being built in high volume to maximize the use of land. Other than residential schemes, industrial activities are found mostly along Jalan Ipoh, however not much commercial www.propertyinsight.com.my JANUARY 2016 I 45


AREA FOCUS TABLE 1.0.1 TRANSACTION SALES PRICE OF SINGLE (1) STOREY TERRACE HOUSES NOS.

SCHEME

LAND AREA (SQ. FT)

BUILT UP AREA (SQ.FT)

2013

2014

% CHANGE

2015

% CHANGE

TENURE

STOREY

1.

Taman Selayang Jaya

1650

1200

RM470,000.00

RM530,000.00

11.0

-

ND

Freehold

1

2.

Taman Sri Melati

1650

1122

RM450,000.00

RM470,000.00

4.2

-

ND

Freehold

1

3.

Taman Bidara

1650

818

RM420,000.00

RM420,000.00

Stable

-

ND

Leasehold

1

4.

Bdr Baru Selayang

1500

861

RM300,000.00

RM400,000.00

25.0

-

ND

Leasehold

1

5.

Taman Desa Minang

1765

1054

RM255,000.00

RM400,000.00

36.2

-

ND

Leasehold

1

Source : Firdaus & Associates Property Professionals Research

TABLE 1.0.2 TRANSACTION SALES PRICE OF DOUBLE (2) STOREY TERRACE HOUSE NOS.

SCHEME

LAND AREA (SQ.FT)

BUILT UP AREA (SQ.FT)

2013

2014

% CHANGE

2015

% CHANGE

TENURE

STOREY

ND

Freehold

2

Freehold

2 2

1.

Taman Selayang Jaya

1650

1732

RM700,000.00

RM780,000.00

10.2

-

2.

Taman Selayang Baru

1540

1485

RM570,000.00

RM635,000.00

10.2

RM780,000.00

3.

Taman Selayang Indah

1650

1500

RM500,000.00

RM700,000.00

28.5

-

ND

Freehold

4.

Sunway Batu Caves

1400

1495

RM600,000.00

RM650,000.00

7.6

-

ND

Leasehold

2

5.

Medan Batu Caves

1604

1380

RM620,000.00

RM640,000.00

3.1

-

Leasehold

2

Source : Firdaus & Associates Property Professionals Research

with quality kitchen cabinets, hood and hob. The 10-foot high ceiling, assists in creating an airy space, complimenting the porcelain tiles, power coated aluminum glass windows and solid timber door finishing. Anticipated as being the next iconic landmark in Selayang, the premise of Rés 280 certainly holds potential. With its resort living concept, landscaped gardens and plenty of outdoor areas for residents to utilise, this joint venture project offers prospective buyers a different living ambience than most would find in the area. FACTS & FIGURES The average price and transaction volume of non-landed residences in Selayang (Selangor), have been on diverging paths since mid-2013 with momentum picking up in recent years. The local secondary market has been buoyed by the many new developments in Selayang. The new projects are more upmarket such as Rés 280, 228 Selayang, Emerald Avenue, Selayang 18, Selayang Star City and V-Residensi. These projects will contribute some 2,100 new residential units to Selayang in the next few years. Generally, transaction data reveals that average prices have been rising across all market segments. However, transaction activity has fallen significantly in the lowerend segments thus, the average price of 46 | JANUARY

2016 www.propertyinsight.com.my

the region has spiked upwards. The Selangor portion of Selayang, is a fairly mature suburb. The non-landed

residential landscape is dominated by lowcost apartments, and the mass market remains fairly affordable.

NEWLY LAUNCHED • Rés 280 is a mixed development comprising of 280 units of SOHO suites and 12 units of retail offices in a single towered twenty-storey building was recently launched by Azitin Venture Sdn Bhd. It has a built up range between 845 square feet to 890 square feet selling at RM470 to RM560 per square foot. • Polaris Suites is the first phase residential development within Selayang Star City project by Leadmont Group. The twenty-eight (28) storey building will have 600 suites with a built-up ranging from 624 square feet to 983 square feet. The average selling price is about RM550 per square foot and was snapped up with a take-up rate at 85% of units sold. • V-Residensi is the two (2) block twenty-one (21) storey semi furnished building is developed by MCT Land offering a total of 482 units of condominiums that has a built-up size ranging between 1,042 square feet to 1,213 square feet and the launch price will start at RM383,000. • Selayang 18 Residence by F3 Capital Sdn Bhd is located within Bandar Baru Selayang and right next door to Majlis Perbandaran Selayang. It has a built-up size range of between 856 square feet to 1,264 square feet and is selling at RM445,000 to RM646,000 (RM510 to RM520 per square foot). • Lakepark Residence presents 916 units of serviced apartments is being developed by JL99 Development Sdn Bhd. With a built-up sizes measuring from 975 square feet to 1,548 square feet, it comes in six (6) different sizes and with 19 designs options. The price starts from RM521, 625 to RM1,089,600 (RM535 to RM700 per square foot). Source : Firdaus & Associates Property Professionals Research


According to the Head, Market Research and Valuation Helpdesk Department of Firdaus & Associates Property Professionals Research, Farizan Ivana Hamzah, “Overall, the movement of prices within the Selayang area is on the uptrend depending on the product introduced especially so with gated and guarded communities, comprehensive facilities, new concepts and designs.” “The new commercial property offers three (3) and four (4) storey shop-offices with a land size of 1,430 square feet to 1,650 square feet and the built-up area is about 4,136 square feet to 6,424 square feet. The price for the three (3) storey shop-office is about RM1,600,000 to RM2,900,000 depending on the location and the type of business activities within the said area. Meanwhile for the four (4) storey shop-offices, the price range is between RM2,700,000 to RM4,000,000,” she added.

NEWLY COMPLETED • Emerald Avenue service apartments and SOHO is a newly completed development located within Prima Selayang and right next to Hospital Besar Selayang and UITM Medical Campus Selayang with a built-up size ranging between 612 square feet to 1,131 square feet with a selling price of RM450 to 500 per square foot. • 228 Selayang Condominium is a newly completed development by Mahumas Sdn Bhd and offers a total of 219 units of condominiums of which 9 units are villas. 7 designs are available for condominium with the built up size of 965 square feet. The developer price starts from RM288,000 to RM439,000. • T-Parklands Condominium is located within Templer Park, is a one (1) block of sixteen (16) storey building with the built-up size between1,235 square feet to 1,669 square feet and the price starts from RM270 to RM300 per square foot. FUTURE DEVELOPMENT • Dolomite Park Avenue, a project by Dolomite Properties, will launch two (2) blocks of twenty-nine (29) storey buildings comprising 474 units of condominiums. Dolomite Park Avenue has a wide range of units, starting from 1,171 square feet, 1,200 square feet, 1,212 square feet, 1,270 square feet, 1,233 square feet, 1,310 square feet, 1,386 square feet, 1,518 square feet and 2,583 square feet. The launch price starts at RM391,500.

AMENITIES & ACCESSIBILITIES Among amenities built in Selayang are the Stadium MPS, the MPS Sri Siantan Sports Center (namely the public swimming pool, locally known as Kompleks Sukan Sri Siantan), Selayang Hospital, the public library, public universities and lots more. In the planning and implementation of Selayang Hospital, the Ministry of Health (MOH) has worked in line with the objective of Vision 2020 whereby Malaysia shall reach the status of a developed country by 2020. This implies that Selayang

Source : Firdaus & Associates Property Professionals Research

TABLE 1.0.4 TRANSACTION SALES PRICE OF DOUBLE (2) STOREY SEMI-DETACHED HOUSES NOS.

SCHEME

LAND AREA (SQ.FT)

BUILT UP AREA (SQ.FT)

2013

2014

% CHANGE

2015

% CHANGE

TENURE

STOREY

Freehold

2

1.

Idaman Hills

2454

2018

RM1,450,000.00

RM1,600,000.00

9.3

-

ND

2.

The Takun

3200

2561

RM1,000,000.00

RM1,400,000.00

28.5

RM1,400,000.00

Stable

Leasehold

2

3.

Bdr Baru Selayang

4268

1563

RM1,350,000.00

-

ND

-

ND

Leasehold

2

Source : Firdaus & Associates Property Professionals Research

TABLE 1.0.5 TRANSACTION SALES PRICE OF THREE (3) STOREY SEMI-DETACHED HOUSES NOS.

SCHEME

LAND AREA (SQ.FT)

BUILT UP AREA (SQ.FT)

2013

2014

% CHANGE

2015

% CHANGE

TENURE

STOREY

1.

Idaman Hills

2454

4845

RM1,350,000.00

RM1,830,000.00

26.2

-

ND

Freehold

3

2.

One Sierra

2884

2900

RM1,450,000.00

RM1,450,000.00

Stable

-

ND

Leasehold

3

3.

Templer Saujana

2300-3000

1600

RM600,000.00

RM560,000.00

-7.0

-

ND

Leasehold

3

Source : Firdaus & Associates Property Professionals Research

www.propertyinsight.com.my JANUARY 2016 I 47


AREA FOCUS 4.0.1 RESIDENTIAL NOS.

SCHEME

BUILT-UP (SQ. FT.)

RM (PER SQ.FT)

DEVELOPER PRICE

TENURE

965

477.00

460,000.00

Leasehold

1.

228 Selayang Condominium

2.

Polaris Suites, Selayang Star City

538 – 983

600.00 – 650.00

349,000.00 – 614,000.00

Leasehold

3.

Res 280, Selayang

845 – 890

470.00 – 560.00

399,000.00 – 498,000.00

Leasehold

4.

V-Residency, Selayang Heights

1,187 – 1,213

322.00 – 450.00

383,000.00 – 542,000.00

Leasehold

5.

E-Suites, Emerald Avenue Serviced Apartment (Soho)

612 – 1,190

450.00 – 460.00

277,000.00 – 548,000.00

Freehold

6.

E-Duplex, Emerald Avenue Serviced Apartment (Soho)

806 – 1,131

450.00 – 500.00

435,600.00

Freehold

7.

Selayang 18 Residences

8.

T-Parklands @ Templer Park

9.

Lakepark Residence @ Kl North

10.

Dolomite Park Avenue, Batu Caves

856 – 1,264

510.00 – 520.00

445,000.00 – 646,000.00

Leasehold

1,235 – 1,669

270.00 – 300.00

364,833.00 – 451,777.00

Leasehold

975 – 1,548

535.00 – 700.00

521,625.00 – 1,089,600.00

Leasehold

1,171 – 2,583

330.00

391,500.00

Freehold

Source : Firdaus & Associates Property Professionals Research

Hospital is designed and equipped to meet world class standards. It is also a centre specialising in Gastroenterology, Rheumatology, Hepatology, Hepatobiliary Surgery, Vitreoretinal Surgery, Colorectal Surgery, Microsurgery, and The Renal system. In addition to that, the Selayang Hospital Library which which opened its doors on 15 August 2005 in tandem with the Faculty of Medicine and Universiti Teknologi MARA’s (UiTM), all have a presence at Selayang Hospital. UiTM shares the premise with Hospital Selayang Library and places its staff to man the service counters alongside Hospital Librarys staff. Apart from UiTM – Selayang campus, there is the International Islamic University Malaysia (IIUM) Selayang for tertiary education. There is also the Selayang Community College for those who want to a more affordable education, resulting in certification or diplomas. Selayang Capitol and Selayang Mall are both popular landmarks of the area. Pasar Borong Selayang (Selayang wholesale market) is also well-known among households and wholesale traders throughout Selangor. It is one of the busiest markets, attracting people to purchase wet

48 | JANUARY

2016 www.propertyinsight.com.my

Other than residnetial schemes, industrial activities are found mostly along Jalan Ipoh, however not much commercial activity has been carried here in the township”

- Sr Wong Wen Chet


products at cheap prices. Other than that, Selayang Hot Spring is also a very popular place among locals. Selayang is on the main route to Rawang through Jalan Ipoh, and this route is connected to Jalan Kuching as the main Rawang-Kuala Lumpur route. It is also an optional getaway to Damansara via the Kepong-Selayang Highway, which is a neighboring town to the southwest. There is also a a route connecting Selayang and

Gombak towards the east through Jalan Batu Caves. RapidKL and Metrobus provide bus services within the Selayang area and passes through the Batu Caves Komuter station, formerly the old Batu Caves railway. Wong said, “Access to the township is mainly off Jalan Lingkaran Tengah 2 (MRR II), Jalan Ipoh, Jalan Batu Cave, Selayang Kepong Highway, or Jalan Sungai Tua. The current available rail system is merely the

KTM commuter station located in Batu Caves, nevertheless upgrading works have been planned. In view of this, the MRT line 3 is proposed to enhance transport capacity in the northern corridor linking the developing regions of Selayang, Sungai Buloh and Kepong. Upon completion of these facilities, it is believed that it will ease current traffic conditions, bringing a positive vibe vitality to the town.”

AGENTS SPEAK

Selayang is slowly becoming a choice area due to its established proximity and accessibility within Greater Kuala Lumpur with its new upmarket developments planned and completed to cater for a new lifestyle living at slightly cheaper prices than other conurbations nearby, especially Kepong and Gombak. It is gaining some

SR KOK CHIN YEE

Director Oregeon Property Consultancy Sdn Bhd

popularity as an alternative investment plan with good capital appreciation in recent years. Selayang has more to offer in the future as there are still undeveloped areas that can be planned for exciting types of new development concepts and property components.

Taking a step back and having another look, Selayang is in fact located within close proximity of Kuala Lumpur city centre where jobs can be easily found and as it is also the preferred working environment amongst many. Upon completion of the MRT project, travelling to the work place has become easier and more convenient, imagine getting to work

SR FIRDAUS MUSA

Managing Director Firdaus & Associates Property Professionals Sdn Bhd

where it’s just several stations away. In the past, part of the town was built with single to double storey terraceand village like houses in a congregated manner, where use of land has not been fully utilized. Perhaps in the future, a more high rise living will be needed as the township is getting a bit crowded.

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STRATEGY

USHERING 2016 WISELY 2016 may find market conditions in favour of buyers and renters BY: NATASHA GIDEON

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he PropertyGuru 2016 Outlook Forum brought together a distinguished panel of industry experts. The forum saw the sharing of candid views and insightful perspectives on the general health of the property sector in Malaysia, as well as touching on various key issues that have become talking points for many. Panellists consisted of Dato Sri Dr Vincent

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Tiew (Andaman Property Management), Dr Daniele Gambero, (REI International), Milan Doshi (Wealth Mastery Academy), Siva Shanker, CEO (PPC International), Gary Chua (Smart Financing) and K.K. Chua, Strategic Advisor (Armani Media). The report provides a comprehensive review of the performance of the property market in 2015 and leads on to key trends

and developments expected for the coming year. It can be downloaded for free via: www.propertyguru.com.my/property-news While there were differing views on various issues, the general consensus was that 2016 may find market conditions in favour of buyers and renters while most property developers will face a challenging year ahead.


FOLLOWING WERE SOME OF THE KEY FINDINGS AND INSIGHTS DISCUSSED DURING THE FORUM AND REVEALED IN THE PROPERTYGURU 2016 OUTLOOK REPORT: BUYERS’ MARKET IN 2016 In 2016, the property market is expected to continue with its downtrend for the first half of the year, before recovering or stabilising within the second half. Essentially, prices in general are expected to come down as would transaction volumes. In summary, 2016 will be very much a buyers and renters market with plenty of bright spots and plenty of opportunities. LOCATION IS IMPORTANT BUT NOT EVERYTHING One of the biggest questions for 2016 is where to purchase? The city centre or in the suburbs? The answer depends on one’s career path. If you’re young and have a bright career, then buy smaller that are closer to the commercial and business heart as it would better support your career. The experts shared that first and foremost a property is a home. It should be about supporting and elevating your desired lifestyle, not buying a house then adjusting your lifestyle to suit it.

NEIGHBORHOOD CAREER

MARKET VALUE

impacting property prices and rental yields. Locations within 1km of an MRT station is expected to garner a modest premium on valuations and rentals. TIGHT FINANCING CONDITIONS Despite calls by many parties to relook financing for 2016, expect lending policies to remain tight as Bank Negara Malaysia seeks to address the household debt-toGDP ratio. The onus is on buyers to ensure they are credit worthy for housing loans. So a good move in 2016 is to improve one’s financial track record. Pay off or reduce credit card debt, check your credit standing via CTOS.

IMPACT OF GST GST will continue to impact market sentiment for the first half of the year before the public accept it as part of the cost of doing business and begin to start transacting. While house prices are GST exempt, construction materials and other resources required for the development of property are not and any increase in cost due to GST is likely to be passed to consumers. The same applies to increasing compliance costs.

CONDITION

BIGGEST GAMECHANGER – MRT / BRT / LRT The MRT is perhaps the biggest gamechanger for 2016 with the first line earmarked for completion and operation by end 2016. When this happens, the impact of the MRT will be tremendous from alleviating traffic congestion, influencing future development trends and of course, www.propertyinsight.com.my JANUARY 2016 I 75


FEATURED PROPERTY

SKY LIVING-THE WAY FORWARD SkyWorld does not just provide homes, SkyWorld creates a concept of living better known as Sky Living BY: NATASHA GIDEON

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ith swanky names like SkyArena and Bennington Residences, SkyWorld talks about what’s truly behind their new developments. Both have a theme of their own, catering to different lifestyles. SkyArena in Setapak offers a youthful, sporty, vibrant and energising feel for those who are always up for a challenge. Whether it is a full day of meetings or a hectic day in the office, these homes provide the perfect environment for those who are always on the go. Bennington Residences on the other hand offers a serene and tranquil 52 | JANUARY

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environment. Built for the nature loving go-getter. Why stay anywhere else when you can have the city as your playground but greenery as your garden? Bennington offers tranquillity for those who need their daily retreat from the concrete jungle, while delivering its promise of serenity through its 2 acre wellness deck and garden and is Malaysia’s first 3 storey SkyGym. If heavy exercise is too much, head down to the beautiful panoramic loop pool for a few laps while overlooking a beautiful scenery. When you are done with that, you can head up to the rooftop SkyTheatre to unwind.

Bennington Residences is up to date with the latest trends for more affordable units and are offering 5 different unit sizes and layouts. In addition to that, SkyWorld has also included a high value automated waste management system which is usually only found in higher valued developments, creating a holistically healthy development. If that is not enough, they also have dual key units, adding to the list of the impressive high-value infrastructure systems they offer. SkyWorld does not just provide homes, SkyWorld creates a concept of living


better known as Sky Living. “SkyWorld is born from the idea that design, when executed to perfection, can elevate living experiences to new heights. At SkyWorld, we aim to be more than just a property developer. We pride ourselves in being the designer that creates unrivalled sky living experiences, and a provider of urban and modern lifestyles in the heart of major cities.” The strategy was to create a living culture, so that buyers buy into a lifestyle, not just a home. “The foundation of our business lies in our everlasting passion for design. We strongly believe that aesthetics plays an important role in shaping living experiences, and that belief motivates us to prove that form and function can indeed go hand-in-hand.” SkyWorld makes living close to nature in the heart of a city center, possible. This can be seen through its spacious open concept developments

with infrastructure to compliment said culture. Bennington Residences is located in Setapak, formerly a tin mining and rubber plantation area. “Setapak is a suburb of Kuala Lumpur which is known to be densely populated, the area is filled with houses that are significantly aged and in need of refurbishment. Nevertheless, Setapak is generally a choice of location and has a good demand for high-rises due to the buoyant rental market fuelled by a growing working population.” This all sounds exciting, so what is the investment value like for this lifestyle housing development? “The offered pricing of Bennington Residences is RM580 psf on average is reasonable and competitive compared with newly completed highrise developments in the vicinity which are selling between RM580 – RM650 psf.” Residents can enjoy the 42 facilities and a 2-acre rainforest SkyPark for a minimal maintenance fee. If you believe in hotspots, Setapak is voted one of the best investments with an average rental yield of 5% to 6% per annum according to a market report. Another pulling factor from an investment stand point, Bennington Residences @ SkyArena is located in the only integrated development in Setapak that consists of residential, commercial and a 9.4 acre multi-storey sports complex. Since our last interview with SkyWorld, a lot has happened. Block B of Bennington Residences was launched in November 2015 which some 70% of the units were already booked weeks before the official launch. Block A units will be released for public booking in the first quarter of 2016. The dual-key concept units have been the

best sellers so far as it is more appealing for those whom want forever homes or those buying as an investment. Let us delve more into the highlight of these facilities, the RM2.5 mil automated waste-management system which will transport garbage via indoor and outdoor load stations to a central waste-handling facility (CWHF). This will ensure a smooth system to ensure rubbish is managed in a streamlined and efficient manner to ensure a hygienic environment. This technology is designed in such a way that the hinged, hand-operated intake hoppers are designed to restrict the size of material loaded into the chute and eliminate long, oversized objects, prevent the clogging of offsets and the hamming of the discharge. The rubbish will pass through the discharge valve before it enters an underground pipe leading to the CWHF. For bigger and heavier items, there are other disposal areas within the development. Whether you are planning on buying your first home, or just to invest, here’s some useful information about the value of this development. Bennington Residences is unique as it is part of the only integrated development in Setapak that is dedicated to health and wellness. As part of urban living, millennials are finding more ways to lead a more balanced life within the city centre and that includes considering properties that are able to offer the experience of nature and convenience to have a healthier lifestyle outside of work. With this, SkyWorld is confident that the potential capital appreciation for Bennington Residences will appeal to both home owners and investors alike. www.propertyinsight.com.my JANUARY 2016 I 53


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FINANCIAL PLANNING 101 Linnet Lee, the CEO of Financial Planning Association of Malaysia tells that financial planning is for everyone BY: FARA AISYAH FIRDAUS PETIAL

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innet Lee, Chief Executive Officer of Financial Planning Association of Malaysia (FPAM), was not a finance major and learned to work her way up to where she is now. She started her career as a secretary, handling operations and administration before she ventured into doing pharmaceutical sales. “I did pharmaceutical sales for four years and I’m proud to say that I qualified for all the annual incentive trips! While I was working there, I learned about doing ‘ethical sales’. You know why? Because dealing with doctors is a serious business, it involves patients’ lives!” “After that, I was an Associate Manager of a high-end electrical and electronic company for retail and projects. Previously the business unit was unprofitable. When I took the job, my boss said ‘This unit is not making money, so it’s very simple – you make it or you leave it’. But I stayed on, and the unit turned to a unit with double digit PBIT (profit before interest and tax). Interestingly, it also had a million ringgit turnover annually. I obviously didn’t do this by myself, I had a great team that worked with me,” Linnet said enthusiastically. ETHICAL CLIENT-CENTRIC APPROACH Linnet started her journey in financial industry as a unit trust consultant and at that time, she needed to manage her time as a working mother. In doing sales, Linnet believed that the more ethical you were, the more clients you would get. “During my early years in the financial www.propertyinsight.com.my JANUARY 2016 I 55


PERSONALITY OF THE MONTH

industry, I learned a lot and picked up many practices to avoid when selling financial products. For example, pretending to be from a bank to secure appointments, getting prospects by pinching name cards from restaurant or hotel reception desks, selling unit trusts by performance, as well as hard selling where you stayed at a client’s office or house and refused to budge until you got a sale. All these short term unethical practices yielded short term and painful results,” advised Linnet. After five years of marketing unit trust, insurance and estate planning, Linnet has mastered a client-centric approach which has provided her with long-term clients. Linnet then progressed into financial planning. “At this point, I started helping my agency leader to do training and amazingly, I found that I had a knack for it. By then, my daughter was more independent and it allowed me to explore employment as a trainer-cum-programme developer. I became an independent workshop facilitator for about three years doing training and sales coaching for selected financial institutions, agency groups as well as lectured specific modules of the CFP programmes.” She has been a member of FPAM since 2002 and has participated in its consumer 56 I JANUARY 2016 www.propertyinsight.com.my

The challenges for our Gen-Y is mainly consumerism, having protective parents who attempt to provide everything for their kids and being in the era of easy credit”

- Linnet Lee

financial education through media groups such as ASTRO, BERNAMA and BFM89.9. As the CEO of the association, Linnet’s dream is to nurture her members to become sought-after and trusted CFP professionals in terms of ethics and competency in their areas of expertise. “They will then help Malaysians become more financially-savvy in managing their own monies and this will result in Malaysians attaining a better life and achieving their life goals.” said Linnet. “On the home front, I would like to strengthen the foundation of FPAM to be able to sustain and serve its growing membership. At the same time, I would like to create a conducive working environment for my team members to contribute their

skills, grow their experience in becoming more financially-savvy with their personal finances.” she added. FINANCIAL PLANNING PROFESSION According to Linnet, it is a noble profession whereby being ethical ensures you long term clients and a consistent income growth. “In the consumer world, there is a tendency to highlight strength of products and downplay its weaknesses, unless the consumer knows the right questions to ask. Furthermore, having gone through nervewrecking financial woes personally, I found that it is better to have the right knowledge when making informed decisions.” “This is why I took up the CFP


programme, completing all six modules of earlier years. After that I took up the Challenge Status for my Islamic Financial Planning (IFP) Certification. Being on-track in my financial life gives me peace of mind about my future and achieving my goals. It also helps me serve my clients better.” Linnet believes that every Malaysian should have the same opportunity to have financial knowledge and be more discerning about their personal finances so they can understand which financial products and services suits their needs. “Working solo was a nightmare,” said Linnet. During the time that she was working alone, she struggled with paperwork at night as following-up with clients was time consuming for her. “Having a systematic way of working with clients and getting extra help from the administrator on the appointment scheduling is important as it frees my time to work on my clients’ cases and have deep conversations with them on what they want out of life.” THOUGHTS ON GEN-Y Linnet claimed that every generation has their own set of financial planning challenges. “The foundation of financial planning is having a solid budget and sticking to it. Discipline, discipline and discipline. Keeping a watchful eye on expenses and planning for tomorrow through temporary delayed gratification.” “The challenges for our Gen-Y is mainly consumerism, having protective parents who attempt to provide everything for the kids and being in the era of easy credit.” said Linnet. In addition to that, she said, “Many young adults enter working life with debts from PTPTN. They also take loans to invest Amanah Saham instead of using their own money. Then, the moment they get their pay cheques, they will be offered credit cards from banks. Is it any wonder why debts are their nemesis? Not forgetting their need for instant gratification which is readily available in the form of onlineeverything.” “Other than that, they have parents who provide them with almost everything including their own future financial planning! Gen-Y will live a better life if they are taught responsibility and management of their own finances. The most important thing is that Gen-Y should start saving their

own money. It’s always better to use your own money rather than taking loans.” “If you are a first time home buyer, consider buying a small and affordable property. I myself started with a 640 sq. ft. home that we bought at RM60k for our own stay, and then upgraded to a single storey corner lot and rented out our first home. The property we rented out was to generate income to pay instalments, and we finally sold it for RM85k. We paid off the loan and the surplus was plonked into a double storey in Bandar Utama.” Below are reccomended steps for first time buyers: 1. Know when, where, and the price of the property you want to buy. 2. Work out acquisition costs: Legal fees, bank processing fees, transfer fees and add it in your down payment. That is the target amount you must have. 3. Check out the instalments payable and ensure you have enough from your income to pay for it. 4. Do a credit check with CCRIS, CTOS or RAMCI to ensure your credit store is good since the bank decides the quantum and interest rate based on the report. The better your report is, the better terms you will get from the banks. (Please bear in mind that your record will stay for 12-24 months and the reports will show your payment behaviour for that duration). “As for the property market, prices may drop if the economy continues to be at the current level. Higher end properties will be vying for buyers. This will be a good opportunity for those who started saving 5 years ago to buy a property because they have a wider choice range.”

COMMON MISCONCEPTION IN FINANCIAL PLANNING Myth No 1: Financial planning is only for the rich. Myth No 2: All financial planners are selling unit trust or insurance only - which is not true,” laughs Linnet. “If you think you don’t have enough to live on, you definitely need a financial plan which will show you where your leakages are and how to plug it, making sure your savings are in the right investments to achieve your life goals. The rich are more concerned about wealth management and planning because they have enough of everything, they just want to make more.” “For the rest who think they are mere mortals doomed to financial doldrums, all is not lost. Set smaller financial goals for yourselves and build on affordable self-rewards to make the journey worth taking. If you need help, get a Licensed Financial Planner registered with Securities Commission who is fully certified in financial planning such as CFP CERT ™ or IFP®.” Linnet concluded. “Last but not least, if you plan to work with a financial planner, remember to ask these key questions: 1. How much experience do you have in financial planning? 2. Are registered with Securities Commission? 3. What are your credentials? 4. How much are your fees and the scope of service you offer for the fees you charge? Also be sure to cross check the information given with Securities Commission website as well as our Association’s website, just to be sure.

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INVESTOR NEXT DOOR

DRINKING LATTE, TALKING PROPERTY Charles Tan’s investment story

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harles Tan, the editor and writer of the famous property blog – kopiandproperty.com shares with Property Insight his property investment experience, and how he survives the current ‘cautious’ market. Charles has been working for 17 years, after graduating with his first degree, he started writing in his blog on a daily basis to share his insight with other investors that were out there. “Actually I started my blog when I was hospitalised due to kidney stones. I undergone an operation so I was on medical leave and I was still feeling weak at the time, so I decided to spend my time writing a blog. The blog was created to remind me of some of the things that

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BY: FARA AISYAH FIRDAUS PETIAL

I wanted to share with people, and after sharing it, I realised that it enabled me to remember things as well,” he said. FIRST PROPERTY Charles bought his property at the age of 25, before he was married because according to him, it was his in-laws condition before marrying their daughter. “I went to view at least 20 to 30 different apartments before I managed to find one that suited me. During that time, I could only view apartments because it was the only thing I could afford. The property was priced at RM123,000 but my wife and I had a long discussion before we decided to buy it. It was in Relau, Pinang. Although it was not a high-end area, but it had

everything that we needed – and was close to my wife’s workplace and nearby malls. Basically, it met all of our requirements.” “I love property a lot. When I bought my first property, I was so happy when I opened the door for the first time with my keys, even though it was only a 700 sq. ft. apartment. It is different from buying gold, or equity, it is not the same feeling. Property is easy to manage – you just rent it out and after five years, the price appreciates,” Charles added. Charles seed money came from his own savings. He said, “Savings, I guess, is the only thing that is lacking with people in today’s society. Previously, when jobs were hard to come by, people saved a lot because the stability of being employed


was not there. Nowadays, there are so many opportunities and people tend to think differently, making them skip the savings part. Actually, savings enables you to buy your first property and with its appreciation, it will enable you to buy a second one and so on, in, things get easier from there.” “I got my loan approved because of affordability – because I could afford the property. I think affordability is a very important factor. My advice is that instead of buying a property that you can just about afford, buy property that you can afford whilst having extra capital as well, so that you won’t be over stretched.” INVESTMENT STRATEGY Charles’ investment strategy is to buy and then rent, only if it shows signs of appreciating, would he sell to buy more. “For example, I had a condominium in Kelana Jaya. After I sold it, I had enough money to buy two more units and that increased the number of properties that I owned. But when I reach 45 years old, I think I won’t be buying as much as I am now, I will maintain the properties I have to receive rental income continuously. But then again, my strategy might change over time.” “I used to like primary properties, but right now I prefer secondary properties. The reason for me liking secondary properties is because secondary properties are actually cheaper while primary is much more expensive and it is hard to know if there is actually an oversupply,” Charles opined. “So far, I have only rented out my properties to students once. My tenants are working adults and I normally rent out my condo’s with a full permit. Fully permit means I will have a premium of RM300 above all the rest – therefore, in terms of the target market, this is very low because not many people will be willing to pay RM300 extra. I target quite well off tenants. In my years of renting out, I only had one bad case where the tenant did not pay. But the rest are just fine, I think if you find a right tenant there should be no problem. People say it is better to rent out properties closer to where you live but I actually have a property in Kota Kinabalu which is rented out. This is proof that distance is a small issue.” Charles highlighted that when we talk about accessibility, accessibility is always

I don’t care about current market sentiments, I care about what I believe because I read a lot and talk a lot with industry friends. My friendly advice is that every time the market goes down it will come back” - Charles Tan

there. Don’t look at the distance, but duration instead. “When we look the areas, why do you think some more popular? It is because the area is nearby transport hubs, like LRT lines and highways. In the near future, many areas will be next to MRT stations, that means the number of areas will not reduce but increase, so when the number of areas increase you should buy undervalued now, because a new station will definitely come into the location.” CURRENT MARKET SENTIMENT “I don’t care about current market sentiments, I care about what I believe because I read a lot and talk a lot with industry friends. My friendly advice is that every time the market goes down it will come back up. Always understand that if you buy overvalued, then anytime is a bad time to buy. There are investors who bought in some resorts overseas, the resorts have still not been completed to date, and they lost all their money. So no matter where you do your investments, it is important to do your homework, and don’t just rely on your friends.” Charles added, “Many people say it is a buyers’ market, and I disagree. But if the buyers are willing to work hard, I think they will be able to get a good deal. However, if you are saying that the market is in depression mode and everyone is looking to flip, I think we are very far from that. A lot of these sellers can hold for a very long time, this being that years ago when they bought the property, the prices were much lower. Even if they get rental that is lower than current market, it is still higher than their purchased price. Those investors will definitely hold the property unless there is a crisis. So my advice is identify a property that you like, start viewing and start offering.”

INVESTMENT TIPS “Don’t just buy property. I also invest in stocks because I believe property is good for long term but it is not very liquid, meaning you cannot turn it into fast money. My next bit of advice is, to always buy undervalued, do not buy where everyone is buying, and understand why people are buying – then be one of the first to buy in, because, most of the time people don’t buy the property itself, they buy because of the area,” Charles advised. PROPERTY INVESTMENT PROPERTY 1 Location

Relau, Penang

Property type

700 sq. ft. apartment with facilities

Purchase value (2003)

RM123,000

Market value (2012) Sold - RM215,000 Price psf

Bought: RM175 Sold: RM307

Rental per month

RM680

Rental yield

5%

Loan margin

85%

Loan tenure

25 Years

PROPERTY 2 Location

Kelana Jaya

Property type

1,053 sq. ft. condominium

Purchase value (2008)

RM192,000

Market value (2014)

Sold - RM465,000

Price psf

Bought: RM182 Sold: RM442

Rental per month

RM1,400

Rental yield

11.5%

Loan margin

90%

Loan tenure

30 Years

www.propertyinsight.com.my JANUARY 2016 I 59


INDUSTRY INSIGHT

ECG AFFIRMS ITS OWN SUCCESS

ECG Affirm have recently set up bases overseas, namely in Taiwan and Singapore BY: NATASHA GIDEON

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CG Affirm is located smack in the centre of Kuala Lumpur, where business transactions are part of the everyday routine. The hustle and bustle of the city, closely emulates everything that goes on in ECG Affirm. Hendry Lee dropped out of school at 14 years old and started working immediately. But no matter what he did, his job was always closely related to sales. His life changed for the better after picking up a book on property, and he has been in the industry since he was 22 years old. To prove how ECG Affirm has advanced in the past few years, they are already expanding overseas and marketing their project in Japan, United Kingdom and Cambodia. The agency was setup in 2004 and now has around 150 agents. Hendry claims proudly that his agents are reliable, able to deliver what is promised and are able to nurture a good relationships with clients even after a sale is done. “Our agents keep a good relationship with clients by updating them with new deals and we even create events and invite our clients as a sign of appreciation. In turn, clients trust the brand and stick to our agents because of that trust and good relationship.” Hendry has this resilient look on his face, as though no problem is too big to handle. So when asked about his greatest challenge when setting up ECG, he calmly explained that the natural process of agents coming and going was the only challenge he had faced. “We try to create our own culture amongst our agents and keep each other’s spirits up. We have a complete system in place and a positive environment that helps nurture successful and professional realtors.” It is not just work in ECG Affirm, they play 60 | JANUARY

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just as hard as they work. The team has celebratory outings when they reach their sales targets, and as you can imagine, they have quite a lot of celebratory outings. But more importantly Hendry’s more rewarding times at ECG Affirm is when he sees his agents who had come from very little, turn into outstanding and inspirational people. The agents in ECG Affirm are put through intensive training before they start in the field. The first week of work would comprise of 4 days theoretical training, and another 12 classes of sales skills training. So what does it take to be a successful agent, and why is it important as buyers to look out for these agents? They need to know and look for what clients want and need. The duty of an agent is to take care of the needs and wants of the client such as, figuring out details such as loans and agreements or pricing problems on behalf of the client so they can focus and are not bogged down by trivial things. With all its achievements, ECG Affirm

does not look like it will be slowing down any time soon. In the next 5 years you can expect them to be in more countries and grow their talent pool as a platform for their agents to expand their horizons. Hendry explains the path that needs to be taken to reach this goal and this boils down to 5 things. Being reliable and trustworthy as an agent, patience and perseverance, being a professional in conducting business with clients, having the knowledge and resources to complete a transaction and lastly being able to deliver top notch service to clients. Hendry advises future buyers, or future clients to wait and buy only when it is affordable. “Get a combination of a few good investments and wait for a positive cashflow.” More importantly, he advises Malaysians to be more conscious of the property market and its developments. Buyers are inadequately equipped with knowledge on what they can do with their homes, or who is in charge of maintenance.

Our agents keep a good relationship with clients by updating them with new deals, we even create events and invite our clients as a sign of appreciation for their loyalty. In turn, clients trust the brand and stick to our agents due to that trust and good relationship” - Hendry Lee

While this may sound simple enough, as a buyer there should be an inherent incentive to expand on our know-how and to maximise the investments we make.

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LOAD-BEARING MANSORY CONSTRUCTION SYSTEM What is LB and how it benefits home buyers? BY: FARA AISYAH FIRDAUS PETIAL

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n Malaysia, there has been a need to develop cheaper houses in a lesser duration to meet the growing demand, especially affordable housing prices for the lower income groups. According to Prof. Ir. Dr. Che Sobry Bin Abdullah, an expert in Concrete and Brickwork Technology from Universiti Utara Malaysia, “Load-bearing mansory construction system is considered one of the most pertinent agendas in the socio-economic development of the country”. Dato’ Yap Yee Chong, Selangor Brick Factories Association, Kuala Lumpur said that “Everybody is looking for the best and cheapest method but they fail to realise that this strategy is the cheaper method when compared to building columns.” ADVANTAGES OF THE LB MANSORY SYSTEM The system offers several advantages as


compared to the conventional Reinforced Concrete (RC) frame system. “The overall construction cost using LB masonry is much cheaper mainly due to the elimination of formwork for columns and beams as well as from the savings obtained for using raft foundations instead of piled foundations,” expressed Che Sobry. By using clay bricks, one can save a lot of capital in the long run. “We estimated that one can save about RM200 to RM300 on electricity bills in one month if their house wall is made of clay bricks. I myself just built my own house with a double wall of clay bricks, which no one is doing anymore these days. But the result is, my house is a bit cooler and we do not need airconditioners, just a fan keeps us nice and cool,” said Yap. Theoretically, block-laying per square metre is cheaper than brick-laying because of its size and shorter laying time. The speed of construction using an LB wall system is faster than the RC system. This is achieved by eliminating or minimising the use of a concrete framework, a very quick start-up of wall construction and continuous construction due to the rapid strength gained from the brickwork. For RC buildings, the proceeding construction work would have to wait until the casted concrete gains enough strength before the formwork or falsework can be

dismantled. When compared to other building systems such as the prefabricated precast building system, LB brickwork can be used even for one single construction unit at any location, whether in urban or isolated rural areas. It also has the flexibility of construction to any layout required. In terms of quality control, brickwork does not require the tedious site cube and slump tests as concrete, since the quality of bricks are pre-tested at the factory during production. A construction site using this system looks more less messy than the RC construction site. It is a well known fact that brickwork is very durable. Plain masonry does not pose any problem if used for coastal and marine structures. Modern brickwork is strong. Thin walls can replace the thick walls that were formerly required to prevent ingress of moisture. The appearance of brickwork does not deteriorate with age. It derives from the colour texture and size of the bricks, bond and joint width. CLAY BRICKS AND AFFORDABILITY Affordability is the main concern being highlighted by every home buyer, especially to Generation-Y. The thought that clay bricks is more expensive is not necessarily true. “The difference in price is actually nothing. For a normal double storey house

you will use about 15,000 pieces of bricks, so if you compare the price of both bricks it is actually only RM0.10 each. In total, you might only need to pay RM1,500 more. But if you look at the bigger picture, you could save a lot later when you save on your electricity and maintenance bill,” said Yap. He added that, “Walls made of cheaper material are easy to drill, but it is harder for clay bricks’. Even the Fire and Rescue Department of Malaysia prefer houses that are made of clay bricks! Clay bricks is a better fire resistant material than sand bricks. As a matter of fact, clay bricks will stand for a longer duration during fire, than sand bricks! Sand bricks will collapse faster, just imagine if it collapses?” “Load-bearing means that the bricks carry the weight of the building,” explained Yap. Over the past few decades, this method has gone through tremendous advancement in materials, design, and construction technology. It offers several advantages in terms of cost, speed of construction, durability, aesthetics and flexibility. Despite these advantages, the system has not been widely used in Malaysia. Find out if houses built using clay bricks increase in property value in our next issue! www.propertyinsight.com.my JANUARY 2016 I 63


FROM BUDS TO BEDS! The concepts at SSF are based on the creativity of the creative team, and it is easy to do with such versatile pieces of furniture BY: NATASHA GIDEON

W

e walked into SSF Cyberjaya located in Dpulze Shopping Centre with a gloomy feeling. It was early and empty, shops were just opening and we found ourselves sucked into a winter emotion. But we entered SSF and it seemed like we might have made a turn by the Cheshire Cat. The whimsical decorations, and the mini indoor garden not only looked good, it felt good. I immediately looked at the prices on the items. No furniture shop this beautiful could possibly be within my budget. I was 64 I JANUARY 2016 www.propertyinsight.com.my

wrong. The prices made me as happy as the dĂŠcor made me feel. You will start at an enchanted little garden, complete with an outdoor coffee table set, and walk through the greenery as if in a botanical garden. A few minutes later you find yourself in an English vintage like hall area, equipped with English Rose tea sets. From a garden view, to a hall from the Renaissance era. We interviewed the geniuses behind it all, Ms Adel Lina, Art Director / Visual Merchandiser and Mr Castor Yong, SSF Purchasing Department

Senior Manager to share with us their unique concepts. Just like other commercial brands, no one really knows what SSF stands for, or how it got to where it is today. People just want to buy their products because of their brand name. SSF was derived from their name, Seven Star Floral. But they deserve more than seven stars. As the name states, the company started out as florists, providing services for small to large scaled events 28 years ago. Now they have an array of flowers and home decor in 22 outlets nationwide.


We cater to all ages, whether you are single or are buying for a family home. As I said our items are versatile. Maybe not for first home owners, but more towards families or owners wanting to fill up their forever homes”

- Adel Lina

The unique themed sections displayed are part of this company’s success. “We have items that can be mixed and matched with any theme, we have a matured team helping us with a good system of procedure and a whole lot of experience. We have a dedicated team that travels to look for new and sellable items directly from factories all over the world whom purchase these items with Malaysian buyers in mind.” Said Adel Lina. The concepts here in SSF are based on the creativity of the creative team, and it is easy to do with such versatile pieces of furniture. When asked what kinds of demographics SSF looks at, the answer was simple, “we

cater to all ages, whether you are single or are buying for a family home. As I said our items are versatile. Maybe not for first home owners, but more towards families or owners wanting to fill up their forever homes.” Says Adel Lina, Art Director / Visual Merchandiser. SSF is equipped with everything from your bed spreads to your kitchen utensils, all with their own quirky styles and designs and not to mention great holiday sales and offers. For those who do not know, SSF also has a department dedicated to wedding preparations, from goodie bags to wedding dais. “Weddings are something most of us will do at least once in our lifetime, why not spend slightly more to get your dream

wedding, that is what we intend to provide.” Adel Lina says with a twinkle in her eye. So with all that’s going on with SSF, what do they have in mind next? “We intend to open more showrooms, at least one in every state in Malaysia. So expect more showrooms in 2016.” With the surge of progress, and the overwhelming support from the general public, we can expect to see a lot more from SSF in the near future!

www.propertyinsight.com.my JANUARY 2016 I 65


INTERNATIONAL MARKET

INVESTING IN

DOHA

Doha - Poised to be renown for its architectural designs and its rich culture BY: NADIA GIDEON

66 | JANUARY

2016 www.propertyinsight.com.my


THE LANDSCAPE Situated almost midway down the east coast of the Qatari peninsula, Doha is the country’s center of administration, finance, culture, transportation, and social services. The modern city grew from the fishing and pearling port of al-Bida, which at the end of the nineteenth century had around 12,000 inhabitants. Doha still has a way to go before it might challenge the historic cultural role of cities like Cairo, Damascus, and Baghdad—which, in previous centuries, exerted the greatest

influence among Arabs—but Qatar’s position as a guardian of Islam’s aesthetic heritage is beginning to sprout wings. Doha is many things but mostly it is a city in search of an identity, with domed skyscrapers and a backdrop of sandy dunes, it is poised to be renowned for its architectural designs and its rich culture. However, Doha may have its shortcomings. Living in Doha brings a high cost of living with it, especially when it comes to having a roof over your head. An increase in Doha property prices, particularly plots of

land, has pushed rentals for homes and commercial space sky high. Rentals may increase by 10% by the end of the year if the upsurge continues. MALAYSIAN TRADE MISSION IN DOHA Malaysian Trade (Matrade)’s Office in Doha, supported by the Ambassador of Malaysia to the Kingdom of Qatar (His Excellency Dato’ Ahmad Jazri and the Embassy team), facilitated by Malaysia Property Incorporated (MPI), organized a senior business delegation event

www.propertyinsight.com.my JANUARY 2016 I 67


INTERNATIONAL MARKET at Matrade Office Doha, to promote Malaysian real estate companies and related industries. Participating companies in the delegation included Emkay Group, B&G Capital Berhad, Ecoloo Group, Malaysian Institute of Architects, Property Insight Magazine, Tropicana Corporation Berhad and Ewein Berhad. Malaysia’s deputy Head of Mission to the Kingdom of Qatar, Mr. Mohd Noor Zaky represented the Ambassador HE Dato’ Ahmad Jazri together with Malaysia’s deputy Head of Mission to the Kingdom of Qatar, along with prominent Qatari business leaders and various chambers of commerce and banks shared current real estate market trends in Malaysia, through a lively panel discussion session moderated by Mr. David Chong, (VP 1, Malaysia Property Incorporated) where the panelist comprised of Ms. Veena Loh (MPI), Mr. KK Chua (Property Insight), Mr. Adrian Soon (B&G Capital Berhad) and Mr. Royce Tan (Tropicana Corporation Berhad).

68 | JANUARY

2016 www.propertyinsight.com.my

INVESTING IN DOHA Property Insight took some time in between meetings to speak to Dr. Mohammad Ghiyath Shiekhah, Head of Local and International Investments, Treasury and Investments, Qatar International Islamic Bank. “For foreigners to invest in Doha, you just need to either come with cash, or you can get financing from our local banks. The banks will assist you in with the details, but that is how it is done.” Said Dr. Mohammed. He added that an investor could receive 5-6% on return on investment for a property owned in Doha. An interesting bit of news when you think about it. In Doha, the decision is made easy if your intention is to buy property. Expatriates can only buy property in specific largescale developments in Doha – such as The Pearl-Qatar, West Bay Lagoon and Al Khor Resort Project. Regardless of whether a property developer claims that foreigners can legally buy property in


their development, it is wise to verify this information with Ministry of Municipality and Urban Planning (Baladiya) before making a commitment. DOHA OUTLOOK 2016 The real estate market in Qatar continues to prosper with a positive outlook for the economy over 2016 and investments should remain strong in the real estate sector, which should only increase in the longer term as the country is advanced in real estate expenditure as it prepares for the world cup in 2022. While Qatar’s real estate sectors falls in the shadow of some

of its more prosperous neighbours such as UAE, developments such as the 2022 world cup and 2030 vision programme auger well for the real estate market in Qatar. For the most part commercial real estate in Qatar relates to its main cities Al Khor Al Wakra and Doha, however there have been significant plans from the Qatar government to improve real estate in other areas of the country. For example, they plan to spend USD45billion on real estate development in Lusail city. In terms of its actual population Qatar is quite small recording just over 2million people last year. However, the population is incredibly

wealthy and in terms of per capita income it is one of the richest countries in the world. The affluent nature of the population along with a growing tourist sector has seen a growth in demand for modern retail facilities, particularly for luxury good outlets. This has led to the development to many shopping malls including mall Qatar which will open in this year 2015 at a cost of USD84million. This demand for retail properties will more than likely continue in the mid to long term and it should remain the fastest growing of all real estate sub sectors.

www.propertyinsight.com.my JANUARY 2016 I 69


LEGAL

HARDER TO BE A HOUSING DEVELOPER P

roperty development has captured the imagination of Malaysian businesses across the board in the last decade. Almost every sizeable company has a property division and almost all businesses with extra cash and land banks are venturing into property development. Even landowners without capital are joint venturing with developers to ensure they share a bite on this seemingly expanding yet lucrative piece of cake. One may see companies relocating their operation or headquarter from the very prime land which they were sitting on, to state their claim as property developers on it. To further maximise the return on land while incorporating a preferred lifestyle living in urban Malaysia now, the strata format has gained momentum. Not to mention the current market trend is to move out of their parents’ homes upon financial independence because every family is seeking its private living space. With the effective implementation of Housing Development (Control and Licensing) (Amendment) Act 2012 (“HDAA”), Strata Titles (Amendment) Act 2013 and Strata Management Act 2013 (both “Strata regime”) on 1st June 2015, the rules of the game have now changed and the barrier of entry has never been higher. Previously, housing developers have to deposit RM200,000 with the Controller of Housing (“Controller”) as a requirement for the developer license and it has now increased to 3% of the estimated cost of construction minus land cost. The estimation nature on this basis would open up the floodgates on consultation until an amicable agreement. It is also a requirement now under the Strata regime to file the Schedule of Parcels prior to the developer selling any parcel or proposed parcel in the development area which in effect restricts the developer from making any adjustments to the proposed quantum of provisional share units for its later phase development. The mere act of filing is simple but the upfront commitment in limiting the commercial gain is painful to the developers. There are also notable amendments to the prescribed sale and purchase agreement under HDAA 2012 especially Schedule H that facilitate the strata residential development. Under the new Schedule H to be used for housing projects with advertising permits and development licenses issued after 1 June 2015, the developer has to settle the redemption sum owed to its bridging financier if the amount of the redemption sum is more than 35% of the purchase price before the purchaser makes

70 | JANUARY 2016 www.propertyinsight.com.my

payment in excess of 50% of the purchase price. The purchaser need not make any further payment until the developer complies with the same. The stipulated manner of delivery of vacant possessions in Schedule H now is conditional upon the separate strata title that has been issued by the authority. Nonetheless, the developer may apply for certification from the Controller before the delivery of keys to the purchaser in the event that the strata title is not issued yet, provided that such non-issuance of strata title is not attributable to the developer’s fault; The previous 14 days deeming provision for delivery of vacant possession is now 30 days from the date of service of notice which effectively cut the construction period to 35 months. The amendment in the schedule of payment postpones 5% of the purchase price to be paid to the developer previously, during the construction stage to the date of taking vacant possession by the purchaser. There is now improved statutory terminations and abandonment provisions under the HDAA 2012 that provides for a situation where the purchaser may terminate the sale and purchase agreement when the housing developer ceases or refuses to work for a continuous period of 6 months and the housing developer upon conviction, shall be liable for a fine ranging from RM250,000 to RM500,000 or maximum 3 years imprisonment or both. Homeownership is the undisputed agenda of the day. While the Government is still playing catch up in its effort to provide affordable housing, a regulated regime in private housing development is the better way to go now. The significance of raising the bar will phase out smaller and “fashionable” developers from the housing development system while ensuring the serious players deliver on their promise under a much regulated regime. Indirectly, homebuyer protection in Malaysia has now moved up a few notches.

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


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FINANCE

COMPOUNDED RETURNS ON YOUR MONEY INVESTED - IT MATTERS!

T

he next time somebody tries to sell you some investment plans, ask him (or her) this – “What’s the annual compounded return that I can expect on my own actual money invested?” If he can’t understand the meaning of “compounded returns” or “own actual money invested”, then he is really not qualified to advise you on any investment plan. If he gives you a percentage, then you should know exactly how much of your money invested would materialise in a certain period of time, given a set of assumptions. That’s the basic of investment. One must have an objective before taking the plunge. There has to be a financial goal. Otherwise you are just investing for the sake of investing without knowing where it takes you. Let’s say you aim to accumulate RM1 million in 10 years by putting aside or investing a certain fixed sum every month. Let’s start with the most basic way, by allocating a certain sum every month into a bank savings or fixed deposit account. The best rates you can get in the market today pays 4.5%. To save RM1 million in 10 years with a constant return of 4.5% 72 | JANUARY

2016 www.propertyinsight.com.my

per annum (p.a.) compounded, you would need to save RM6,590 every month for the next 10 years. That’s a lot of savings for the typical Malaysian. What other investments can you look at? Unit trust or mutual funds? The top 10 best performing mutual funds in Malaysia made an average return of 12.71% p.a. over the last 10 years. Not bad, considering it

beat the returns of the KL Stock Exchange ($KLSE @ average returns of 8.09% p.a. over 10 years 2005-2015) and the Dow Jones over the same period ($DOWI @ 5.79%). Assuming the unit trust company you invest with is going to make the same returns of 12.71% p.a., you would need to invest RM4,126 per month to accumulate up to RM1 million in 10 years.

MONTHLY INVESTMENT REQUIRED TO ACCUMULATE TO RM1 MILLION IN 10 YEARS Assumed Returns Per Annum

Monthly Investment (Rm)

Fixed Deposits

4.50%

6,590

Dow Jones Industrial Average ($Dowi)

5.79%

6,143

Kuala Lumpur Stock Exchange ($Klse)

8.09%

5,403

Mutual Funds – Top 10 Average

12.71%

4,126


None of the above is an easy route to take. Possible, but not attainable in practice. First, you need high discipline in constantly investing, month after month. As your account builds up, you may stop and ponder. Doubts set in, if your return is going to continue the way it did. You may also be tempted to dip into your accounts for a nice holiday, or to purchase luxuries, derailing your plan. So what other types of investments to consider? ETFs, CFDs, forex, commodities (cotton, coffee, corns & pork bellies) & precious metals (gold, silver, platinum)? If you speak to enough investors involved in such investments, majority would have lost monies. You need to be at the top of your game to make significant meaningful profits from these markets. And a cool head too, with high control over emotions. So what is the best investment that gives the best compounded returns? PROPERTIES! No doubt about it. Property investment is the best, safest and surest way to wealth accumulation. Every person planning for the future, either for their children’s education, or for retirement, must consider property investment. Property investment provides a high rate of return because of the leverage factor. Banks love to give loans for property purchase, as they are deemed to be the safest collateralised loans. Hence, an investor need not pay the full purchase price of the asset, he can take a loan of up to 90%. In fact, there’s lots of opportunities in the market today where one can structure a purchase to minimise the initial outlay, making it possible to buy a property from as low as RM5,000. The table below show some examples of financial commitments required in buying and maintaining well selected properties within Greater Kuala Lumpur; and the resultant compounded returns. With such cash outlays and monthly commitment, it is definitely easier to accumulate wealth through property investments when compared to others.

Initial Outlay (RM)

Monthly Commitment (RM)Cash

Out in 10 years (RM)

Compounded Returns per annum

5,000

500

500,000

30.73%

20,000

0

500,000

39.77%

30,000

1,000

1,000,000

26.47%

80,000

0

1,000,000

25.53%

A carefully selected property will always double in price within 10 years. That’s when substantial capital gains are made. One of my client purchased a property in 2009 costing RM258K with just a cash outlay of RM10K (and zero monthly maintenance thereafter) In 2014, he sold it off for RM450K, earning RM220K net profit (after repayment of bank loans and all other related selling expenses). That’s a staggering 2100% return over 5 years from the initial outlay of RM10K. Using the principle of compounded

returns (where interest is added to principal annually), the rate of return will be 85.6% compounded annually over 5 years. Another client invested RM25K in buying two properties worth RM520K in 2004 (also with zero monthly maintenance thereafter) and sold them off in 2014 for RM1.73 million, making RM1.38 million net profit That’s 5420% return over 10 years, but when compounded annually, the return is calculated to be 49.35%.

Initial Outlay (RM)

Net Profit Net Profit after 5 after 10 years (RM) years (RM)

10,000

25,000

220,000

Total Returns

Average Annualised Simple Annual Return per Return year

2100%

420%

85.60%

1,380,000 5420%

542%

49.35%

Investment in properties is a very lucrative business, as can be seen from the examples given above. In fact it is estimated that 90% of millionaires in the world made their money from properties. Be a landlord. Collect monthly rental from your tenants and hand that over to the bank to pay the monthly bank instalment. Do that willingly and patiently, for over a period of time, your property will increase in value, and your outstanding bank loan will decrease. When your loan is fully extinguished, then the rental income becomes a source of passive income. At any time, you can also sell your property to realise some cash. Even if monthly rental income does not cover bank instalments, treat the shortfall as a “monthly commitment towards investment in properties. Treat that as a forced savings. But depending on your loan tenure, it is always possible to cover the bank instalment with the rental income, freeing cashflow to embark on a second purchase. Learn how to invest in properties today; for investment in properties will give you the best compounded returns on your money invested!

CONTRIBUTED BY Patrick Fung is a Chartered Accountant by training but finds real passion in Real Estate. An avid property investor for the last 20 years, Patrick is now attached to Huttons One World (real estate group) as Associate Director and Speaker, advising clients on property investment, both in the local and international markets. He can be contacted at patrick@jsfventures.com

www.propertyinsight.com.my JANUARY 2016 I 73


74 | JANUARY

2016 www.propertyinsight.com.my


STRATEGY

GST

IMPACT ON THE PROPERTY MARKET 2015 It is a fallacy to only blame GST for the increase in property prices in all sectors

I

recently gave a lecture at Sunway University in Kuala Lumpur on the GST impact on the property market to students from across the globe. There was a lot of interest as well as some confusion on the topic. Therefore, the purpose of this article is to clear some doubt on the part of the public at large. It is not intended as GST advice but rather as an overview of facts that need to be considered. It is a fallacy to only blame GST for the increase in property prices in all sectors. While, it has contributed somewhat to the price increase, it cannot be said to be the sole contributing factor. The fundamentals of supply and demand, economic market forces, and location are still major considerations to be taken into account when determining the price of property. PRE GST: Purchase of building materials: Prior to the implementation of GST, no Sales Tax was imposed on the purchase of any basic building material for example bricks, cement, or floor tiles. However, other materials and fittings such as asbestos-cement, lighting and wooden flooring were subject to Sales Tax at either a 5% or 10% rate.

Purchase of services: Service Tax of 6% was payable for services acquired from architects and consultants. All taxes incurred were irrecoverable for the business and therefore would be included into the cost of development or cost of sales of the property. Sale: Sale of any property prior to the implementation of GST was not under the scope of Sales Tax or Service Tax. In a nutshell, any taxes paid within the value chain of the property industry were already incorporated into the selling price of the property, and no additional Sales Tax or Service Tax was charged on the final selling price of the property. POST GST In Malaysia, Goods and Services Tax has replaced Sales Tax (either 5% or 10%) and Service Tax (6%) by legislation as part of the Goods and Services Tax Act 2014. With the implementation of GST on 1 April 2015, GST will be charged onwider range of the supply of goods and services made by a taxable person (i.e. businesses registered for GST). Property developers for example will incur GST on acquisitions from GST registered suppliers, at the standard rate of 6%. However, GST input tax credit is available for the GST incurred on acquisitions www.propertyinsight.com.my JANUARY 2016 I 75


STRATEGY

74 |I JANUARY SEPTEMBER 2015www.propertyinsight.com.my www.propertyinsight.com.my 76 2016


STRATEGY attributable to taxable supplies. Therefore, GST incurred on acquisitions is not necessarily a cost to the business. The sale of commercial properties is subject to GST at the standard rate of 6% if the seller is GST registered. Whereas the sale of residential properties is exempt from GST (i.e. no GST is chargeable regardless of whether the seller is GST registered). Notwithstanding the fact that no tax is chargeable on the sale of residential property, the sellers of residential properties are unable to claim any input tax credit for the GST on any costs incurred which are attributable to the sale of the residential property. The unclaimed GST will form part of the cost to the business similar to Sales Tax and Services Tax IMPACT OF GST FOR THE PROPERTY INDUSTRY - SOME INCREASE IN COMPLIANCE AND OPERATING COSTS The responsibility of charging GST appropriately and submitting GST returnson a timely basis lies with the GST registered person. Therefore GST registered property developers/ contractors/ property investment holdersare likely to incur additional compliance costs (e.g. consulting costs, staff costs, training costs, IT costs, etc). Some of these costs may be one-off in nature while some will be recurring. Furthermore, in the event where the property developer/ contractor/property investment holder is not registered for GST or is exclusively involved in the sale of residential property which is exempted from GST, the GST incurred on acquisitions is not recoverable and hence, will increase operating costs. INCREASE IN THE PRICE OF PROPERTIES The sale of commercial property is subject to GST at the standard rate of 6%. If the property is acquired by either a non-GST registered buyer or by a buyer making non-taxable supplies, the GST will not be recoverable and will therefore become a cost element for the purchaser. Furthermore, despite the fact that no GST is chargeable on the sale of residential property, developers will – as part of their selling price -pass on the non-recoverable GST cost incurred to maintain their margins. As a result, the selling price of newly developed residential property will inherently increase when compared to the price set during the pre-GST era. Despite the fact that property investment holders will incur little to no operating costs, the overall prices of residential property will undoubtly increase due to the overall rise in market prices.

REGULATORY CONTROL The government has also enforced the Price Control and AntiProfiteering Act 2011 to ensure that local traders and suppliers do not profiteer/unreasonably increase the prices when supplying goods and services due to the introduction of GST. The mechanism of determining whether unreasonably high profits occur within the fixed period until 30 June 2016 is set out in the Price Control and Anti-Profiteering (Mechanism to Determine Unreasonably High Profit) (Net Profit Margin) Regulations 2014.

Proper GST planning will enable players in the property industry to maximize tax benefits from the input tax credits available� GST PLANNING Proper GST planning will enable players in the property industry to maximize tax benefits from the input tax credits available. This is particularly important for property developers principally engaged in developing commercial and residential properties where partial GST tax credit can be obtained from the Customs Department. It is essential that developers get sound advice in this respect from a trusted GST practitioner. CONCLUSION GST will result in some price increase as additional taxes are imposed on the final non-GST registered property buyer as compared to the pre-GST era. Of course if the buyer is a GST registered commercial business purchasing a commercial property, the effect will be different. However, the impact of GST on property prices is nominal when considering the bigger picture. In fact, the property industry should pay more attention to other factors such as market demand, fluctuations in exchange rates, interest rates, and foreign investment policies which play a larger role in the property industry as compared to GST.

ABOUT THE CONTRIBUTORS This article has been prepared for general informational purposes only and is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither the authors nor the global EY organization or any of its member firms can accept responsibility for loss to any person relying on this article.

Dave Ananth is a Director in the Indirect Tax practice of EY Malaysia.

Yeoh Cheng Guan is a Partner in the Indirect Tax practice Malaysia.

www.propertyinsight.com.my JANUARY 2016 I 77


STRATEGY

BE PREPARED

The best way to prepare for emergencies is to always have a list of useful contractors whom you can call on at a moment’s notice

T

he best way to prepare for emergencies is to always have a list of useful contractors whom you can call on at a moment’s notice. The best way to avoid trouble is to be prepared. As you never know when an emergency may happen, the best way to prepare is to always have a list, or database, of useful contractors whom you can call on at a moment’s notice. These contact details should be stored in your main mobile phone, and also be backed up in another format, in case you should ever need to share the contacts with a third party. A simple list can be created in Word or Excel and emailed to yourself or saved using a facility such as Dropbox. Some types of emergencies happen more often than others and so it is useful to have two or three reliable contractors for the most typical ones. The key emergencies in property management are: • plumber • electrician • interior designer of your renovated house • locksmith • nearest police station • contractor of your renovated house It is advisable to always ensure your contractor list is up to date; where possible, add further tradespeople to your database to ensure you are covered for most eventualities. Roofing matters and pest control may not be run-of-the-mill emergencies; however, at some point you may well have to call for them, and when you do, you’ll need them in double-quick time! 78 I JANUARY 2016 www.propertyinsight.com.my

Ensure your tenants know who to contact in the case of an emergency. It is advisable, in addition to your details, to provide tenants with contact telephone numbers for key contractors in the event of an emergency. Preferably these contractors should be trusted people whom you have worked with previously and whom you have made arrangements with in advance. This will ensure any problems are repaired as quickly as possible, minimising any further potential damage to the property. Unless you live close by, and have the time available and skills required, it is always best to have an emergency contractor as a contact. Remember only use contractors that you have used before and are happy with their service or being referred by relatives/friends. Although there are websites that provide for such service providers,from my experience it doesn’t work as well. They either are too busy to answer the phone or never turn up for appointments. Make a list of emergency contacts and ensure you save them in a place where they can always be remotely accessed; for example, via email or Dropbox. Always have details for at least two to three contractors for each type or emergency.

CONTRIBUTED BY KK Chua is the strategic advisor & managing director of Armani Media. He is also a registered real estate agent and an investor with more than 10 years of experience in the industry. He can be contacted at kkchua@propertyinsight.com.my


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AWARDS ARE MEANT TO INSPIRE THIS TIME, IT IS THE OTHER WAY AROUND​ IT’S T ​ HAT ​TIME ​OF YEAR TO ​NOMINATE YOUR DEVELOPMENT FOR MOST PRETIGEOUS DEVELOPMENT AWARD 2016 WHERE WE ORGANISE MALAYSIA BEST WITHIN THE PROPERTY INDUSTRY

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12/23/15 19:01


Property Insight Jan 2016  

Property Insight is a monthly property investing magazine.

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