Andaman optimistic on earnings from Perak project

Tiew with a scale model of the company’s Upper East Tiger Lane high-end apartment project.

SUBANG: Andaman Property Management Sdn Bhd, which will be launching its Upper East @ Tiger Lane high-end apartment project in Ipoh, Perak, this month, expects the development to start contributing to earnings from 2016.

“Although construction of high-rise developments will usually take 36 months to complete, we’re looking to build and complete earlier,” said Andaman managing director Datuk Seri Dr Vincent Tiew at recent a press conference.

He said the project would be launched on Dec 14, with construction slated to begin in January.

With a gross development value (GDV) of RM330mil, Upper East @ Tiger Lane features a total of five blocks comprising 529 units. The company invested RM5mil on landscaping.

The units range from 1,162 to 1,787 sq ft and are priced from RM400 to RM500 per sq ft.

On the requirement that foreigners now need to pay a minimum RM1mil to acquire property in Malaysia, 

Tiew said foreigners with the Malaysia My Second Home (MM2H) status were allowed to buy property over RM250,000 in Perak.

“We expect 5% of our buyers to comprise foreigners,” he said, adding that he expected the project to be almost fully taken up within six months of its launch.

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IOI Prop eyes Taipei 101

NG BEI SHAN beishan@thestar.com.my

PETALING JAYA: Property heavyweight IOI Properties Group Bhd (IOI Prop) is making a bold move into the Taiwan real estate as it proposes to buy a stake in iconic skyscraper Taipei 101 for RM2.74bil (NT$25.14bil) at a time when the ringgit is weakening.

The company acknowledged risk factors like fluctuations in currency exchange rates and interest rates that accompanied the proposal on top of any potential political, economic and regulatory changes.

The Taiwanese dollar has strengthened against the ringgit by 3% in a year.

The hefty price tag of the 37.17% stake in Taipei Financial Center Corp that owns Taipei 101 is about 

one-third of IOI Prop’s market cap.

An analyst told StarBiz: “IOI Prop’s move to seize the rare opportunity in the global iconic building is justified by the estimated rental yield of more than 5%, which is decent.”

Knight Frank Research said in a report earlier this year that the average prime yield for Grade A offices in Taipei was 2.25%.

The opportunity to acquire the stake emerged as the seller, Taiwan’s food giant Ting Hsin International Group, was under pressure to divest its stake amidst food scandals in the island.

Ting Hsin is the second largest shareholder in Taipei Financial Center Corp after Taiwan’s government-linked entities that control some 44.35%.

Taiwanese media reported that financial firm CTBC Financial Holding Co, which already have a 7% stake in Taipei Financial Center Corp, was interested in the stake.

However, IOI Prop managed to reach an agreement with Ting Hsin, which refused to give up the prized possession a month back.

The acquisition required approval from the Investment Commission of Taiwan and was expected to be completed by the first quarter of 2015. Market talk was that IOI Prop was looking into establishing a real estate investment trust in the long-term and the proposed acquisition could be a way to position itself.

The analyst, however, was neutral on the deal as it would not have much impact on the stock in the near-term.

“The potential comes from the long-term prospects of Taipei 101 but the risk is that the group is entering a new market,” she said.

Most of IOI Prop’s investment properties worth RM2.46bil are in Malaysia except for IOI Palm City (RM303.45mil) in Xiamen, Fujian, China.

IOI Prop’s investment properties are worth RM2.84bil versus RM3.09bil for its land held for property development.

Another analyst was more cautious as she opined that acquisition might be earnings dilutive and that the group could have allocated the money for landbanking purposes.

The purchase consideration, which is expected to be funded via internally generated funds and/or bank borrowings, could raise IOI Prop’s net gearing from 0.16 times to 0.4 times.

The firm registered cash and cash equivalents of RM531.01mil and borrowings of RM2.06bil for the quarter.
For its first quarter ended Sept 30, property development accounted for 82% IOI Prop’s operating profit while property investment made up 11%.

In the quarter, property development contributed RM311.3mil to the group’s topline and RM124.3mil to its operating profit compared to property investment which contributed RM28.5mil and RM17.1mil, respectively.

The property developer said the proposed acquisition provided an opportunity for stable rental income and potential rental accretion in a well-located and well-tenanted landmark building in the central business district of Taipei.

“Furthermore, there is potential capital appreciation due to the strategic location of the property,” the company added.

The building houses a number of well-known companies including Google Taiwan, Taiwan Stock Exchange Corp, KPMG and BNP Paribas and achieved an occupancy rate of 96%. It is also served by the MRT Xinyi Line since the fourth quarter of 2013, which had improved accessibility and accelerated the take-up rate of space, according to DTZ Research.

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Sekinchan’s first high-rise condominium

The One Residence@Sekinchan development that rises over this sleepy fishing village known for its paddy farming is poised to boost economic activities here.
By YVONNE YOONG
yvonneyoong@thestar.com.my

THE coastal town of Sekinchan which is known as a hub for eco-tourism heralded by emerald green paddy fields and rustic fishing villages woke up to its maiden high-rise development named One 

Residence@Sekinchan in Sabak Bernam, Selangor that integrates high quality city living with serene countryside ambiance.

Located in the heart of Pekan Sekinchan and situated about 28km from Kuala Selangor, this development representing the first-ever condominium developed in a small coastal town in Malaysia was undertaken by Bina Variamas Development Sdn Bhd, a subsidiary of KM Land Group.

One Residences@Sekinchan comprises 286 condominium units.  It is complemented by seven units of three-storey shop offices. Tower A, with its 15 storeys that has been named “Ally” was launched in 2011. To date, it has recorded sales of over 100 of its units ranging from 1,000sq ft to 1,200sq ft. With the key handover taking place in November 2013, Tower A is now sold out to owner occupiers in the form of local residents who also purchased the units as holiday homes while investors have also purchased the remaining units priced at around RM360 per sq ft or from RM350,000.

Known for its lively fishing village, abundant paddy fields and fresh seafood, the tourist destination of Sekinchan welcomed its first high-rise condominium named as One Residence@Sekinchan in this peaceful small coastal town.

Having obtained the Certificate of Completion & Compliance (CCC) this August, the 178 units at Block A have vacant possession and ready for moving in.

Following the successful take-up rate of ‘Ally’, over 70% of the 102 units at the 18- storey Block B with built-up areas ranging between 1,200sq ft and 1,400sq ft named as ‘Bliss’ which will be completed by mid-2015 has already been sold.

“One Residence@Sekinchan has now become a sought-after residence as it integrates a high quality lifestyle within the development while enabling residents to enjoy the pleasant countryside environment,” said KM 

Land Group founder and managing director Kee Lian Yong.

The leasehold development spread across 3.95 acres (1.59 ha) of land that comes with a GDV (gross development value) of approximately RM120mil is located in the picturesque countryside overlooking the 

Straits of Malacca. He said that it will form a new eye-catching landmark and will spur economic activities for the community, given the potential of the low-built village famous for being a major rice producer in the central Peninsular of Malaysia and a pivotal supply point for seafood.

The One Residence@Sekinchan boasts panoramic views of paddy fields in the distance and that of the Straits of Malacca.

 This first of its kind development in Sekinchan will be boosted by 24-hour guarded security facility coupled by full condominium facilities which include a half-sized Olympic infinity swimming pool, jogging path, children’s playground, badminton/basketball multipurpose hall and a fitness gymnasium. There will be three-storeys allocated for car parks and each unit will come with a free car park. The maintenance fee will be priced at an estimated 15 sen per sq ft per month.

According to Kee, he undertook this development with PKNS (Perbadanan Kemajuan Negeri Selangor) and the Selangor State Development Corporation because of the value creation the project could generate for the community here while establishing high quality residences.

He added that this was a consolidated effort to kick-start the transition of a normal agriculture, fishing village towards the path of urban development using the instruments of value creation, sustainable development and quality enhancement.

Established in 2010, KM Land Group’s aims include bringing integrated commercial and residential developments to suburban areas in its attempt to improve social values and contribute to the economic progress of suburban areas.

These include developments such as One Kesas in Klang and SB Perdana, Sabak Bernam in Selangor and Sungkai Perdana in the old town of Sungkai.

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Posted on December 4, 2014 | 978 views | Topic : Featured, Property News. BY LIM WING HOOI winghooi@thestar.com.my Buyers taking a closer look at the proposed development plan for the township. With a vision of “Creating Tomorrow & Beyond”, property developer EcoWorld Development Group Berhad (EcoWorld) unveiled its first Klang Valley show village. The event, held recently, attracted more than 1,500 visitors, giving them a taste of how its future township development will look like. Spanning over 12ha, the EcoMajestic Show Village is situated in EcoWorld’s 440ha, RM11bil strata-titled fully-gated and guarded EcoMajestic township in Semenyih. The show village consists of the EcoWorld Gallery, a 2.1ha Swan Lake and a collection of 10 different showhouses spread across 0.5ha. The 2,787sq meter EcoWorld Gallery consists of office space with eight-metre-high ceiling to create a feeling of grandeur. It also has function rooms, a lounge area, a coffee corner and a special theatre room. Its green features include a rain water harvesting system, LED lighting and a design that maximises natural sunlight into the gallery. The township also has a 40ha of green zones and recreational area. Despite the rain, guests, mainly buyers and their family members, thronged the showhouses to see what their future home might look like. They were treated to a 3D holographic show that was projected over the Swan Lake. The video portrayed the essence of the EcoMajestic development and concluded with a message of appreciation from its management and staff. EcoWorld president and chief executive officer Datuk Chang Khim Wah said the group had achieved another milestone with the opening of the show village. “The team has been looking forward to this day for a long time since the project was first conceptualised more than a year ago,” he said. Chang said they had incorporated new elements to reflect the group’s vision. The group has approximately 2,000ha of land bank with a potential of RM47bil gross development value (GDV). “We can finally showcase this masterpiece that we have been talking about,” he said. Developments will be launched in phases. Cradelton Precinct, its first phase, which comprises terraced houses was launched in May. Since then, bungalow lots, cluster homes and semi-dee homes have been introduced to the market. The Merrydale Precinct is scheduled to be launched this month. The project comprises 586 terraced homes with built-ups from 201sq metre and prices from RM688,000 onwards. SHARE Related Articles: Six-tier security wins Kajang's Tiara Park Homes 'Safe Home' award for Asia Posted on May 23, 2013 2396 ViewsHogging space at carpark in Semenyih Posted on August 12, 2013 429 ViewsLandlords make a fortune by renting out to students and migrant workers Posted on September 10, 2013 1601 ViewsEditor’s Choice Ipoh: The latest property hotspot Posted on November 16, 2014 40463 views G&G: Inclusive exclusivity of the horizontal condominium Posted on September 30, 2014 9299 views Triple GG&G developments in vogue Posted on September 30, 2014 2148 views What lies ahead for the property market? Posted on September 30, 2014 31349 views Categories •Property News9204•Investment640•Home & Living364•Foreign Property News192•Events135•Promotions102Most Popular How GST Will Impact Home Prices & The Property Market Posted on July 7, 2014 41,096 viewsIpoh: The latest property hotspot Posted on November 16, 2014 40,463 viewsTop 10 most inspiring offices in Malaysia Posted on July 23, 2014 36,024 viewsWhat lies ahead for the property market? Posted on September 30, 2014 31,349 views

Buyers taking a closer look at the proposed development plan for the township.

With a vision of “Creating Tomorrow & Beyond”, property developer EcoWorld Development Group Berhad (EcoWorld) unveiled its first Klang Valley show village.

The event, held recently, attracted more than 1,500 visitors, giving them a taste of how its future township development will look like.

Spanning over 12ha, the EcoMajestic Show Village is situated in EcoWorld’s 440ha, RM11bil strata-titled fully-gated and guarded EcoMajestic township in Semenyih.

The show village consists of the EcoWorld Gallery, a 2.1ha Swan Lake and a collection of 10 different showhouses spread across 0.5ha.

The 2,787sq meter EcoWorld Gallery consists of office space with eight-metre-high ceiling to create a feeling of grandeur. It also has function rooms, a lounge area, a coffee corner and a special theatre room.

Its green features include a rain water harvesting system, LED lighting and a design that maximises natural sunlight into the gallery. The township also has a 40ha of green zones and recreational area.

Despite the rain, guests, mainly buyers and their family members, thronged the showhouses to see what their future home might look like.

They were treated to a 3D holographic show that was projected over the Swan Lake.

The video portrayed the essence of the EcoMajestic development and concluded with a message of appreciation from its management and staff.

EcoWorld president and chief executive officer Datuk Chang Khim Wah said the group had achieved
another milestone with the opening of the show village.
“The team has been looking forward to this day for a long time since the project was first conceptualised more than a year ago,” he said.

Chang said they had incorporated new elements to reflect the group’s vision.
The group has approximately 2,000ha of land bank with a potential of RM47bil gross development value (GDV).

“We can finally showcase this masterpiece that we have been talking about,” he said.
Developments will be launched in phases. Cradelton Precinct, its first phase, which comprises terraced houses was launched in May.

Since then, bungalow lots, cluster homes and semi-dee homes have been introduced to the market.
The Merrydale Precinct is scheduled to be launched this month. The project comprises 586 terraced homes with built-ups from 201sq metre and prices from RM688,000 onwards.

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Outcry over GST on property unnecessary

Association: Real estate prices depend on demand and supply
KUALA LUMPUR: The hullabaloo surrounding the impact of the goods and services tax (GST) on the property sector is unnecessary as it will be a one-off event and given time, the market will find its own level based on demand and supply, said four property consultants.

Association of Valuers, Property Managers, Estate Agents and Property Consultants (PEPS) president Datuk Siders Sittampalam said it was impossible for anyone to be specific about the quantum of increase in house prices as a result of GST.

“It is about 4% but it will be a one-off thing so house buyers should not be overly excited about it,” he said.

“By and large, there will be an immediate impact in the first couple of months but after that the market will find its level as a result of demand and supply,” said Siders during a press conference at the 24th National Real Estate Convention themed Real Estate in 2014: Issues, Perceptions and Review.
Siders is also property consultancy PPC International Sdn Bhd managing director.

Siders: ‘It is about 4% but it will be a one-off thing so house buyers should not be overly excited about it.’

 There seems to be “a bit of confusion” with regards the GST with differing opinions with regards the quantum of increase on the different property segments, said PEPS vice president Foo Gee Jen.

He said the GST would play a part in raising prices but in the long run, it was the consumer who would decide whether he wanted to buy or not.

“If the consumer is not going to pay, the developer will have to absorb not only the GST but others costs as well. However, in the immediate three months or so after April 1, when the GST is imposed, there will be an immediate impact.”

Foo, who is also C H Williams, Talhar & Wong Sdn Bhd managing director, said he expected prices of the residential segment to increase by 4% and commercial developments by more than 6%.

A greater concern, said Foo, would be the commercial sub-segment.

A couple of weeks ago, it was reported that the Customs Department expected a 0.5% to 2% increase in house prices while the Real Estate and Housing Developers’ Association Malaysia maintained a 2.6% increase.

Organising chairman of the event Datuk Seri Mani Usilappan suggested property buyers to consider the secondary market if they want to avoid the GST element.

“About 80% of residential transactions are in the secondary market so if they do not want to pay GST, they should consider the secondary market,” Mani said.
On the overall high property prices, Mani said prices would dip if the economy did not perform, as there was strong correlation between the property market and the gross domestic product.

“Besides, the high prices are confined to the Klang Valley.
“The property markets in Ipoh and Johor Baru have been sleeping for a long time. It is only of late that prices are increasing.

“The thing is 90% of the attention is on the Klang Valley while 90% of the population are outside the Klang Valley,” said Mani.

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Rehda: GST will push up home prices by 2.6%

But it says still too early to determine exact increase

BY ISABELLE LAI
isabellelai@thestar.com.my

PETALING JAYA: Home prices will rise by about 2.6% once the goods and services tax (GST) comes into play, said the Real Estate and Housing Developers’ Association Malaysia (Rehda).

The chairman of the association’s task force on accounting and taxation, Datuk Ng Seing Liong, said that the calculation was based on its consultations with industry experts and member developers.

Rehda’s 2.6% estimate differs from that of the Customs Department, which expects the GST to have an impact of between 0.5% and 2% on house prices, assuming there’s no change in supply and demand conditions.

Ng said the association was in full support of the GST and concurred with Customs GST director Datuk Subromaniam Tholasy, who had said that land did not incur the 6% GST rate.

However, he said land was by no means the largest cost component in property development.

“As our calculation clearly spells out, the construction cost, which constitutes 46% of the total development, is not only the largest component but also the component which will attract the GST of 6%,” he said in a letter to StarBiz.

He said the GST on this component would inevitably lead to an increase in house prices.

Appending calculations for a housing unit originally priced at RM400,000, Ng said the price post-GST would be around RM410,560.

Under the 46% construction component, costs were broken down into non-service taxable and service taxable segments, representing 44%, or RM176,000, and 2%, or RM8,000, respectively.

Under the non-service taxable segment comes items such as cement/concrete, steel, bricks and sand, while the service taxable segment includes tiles and fittings/sanitary. Under the existing sales and service tax, no tax is imposed on the non-service taxable category, while the service taxable category has a tax of up to 10% imposed on it.

Post-GST, Rehda’s calculations showed that the non-service taxable cost had gone up to RM186,560, while the service taxable cost remained at RM8,000.

It maintained the same cost estimates for other items, including land (15% or RM60,000), infrastructure and pre-development works (10% or RM40,000), professional fees and marketing costs (6% or RM24,000), finance costs (6% or RM24,000) and profit (17% or RM68,000).

Ng said Rehda also disagreed with Subromaniam, who had said that developers could easily absorb cost increases as their margins were around 30%.

He said it was currently impossible for developers to earn up to a 30% profit, as most development costs were on the rise, along with various capital contributions and charges imposed on developers.

“On average, as tabulated in the calculation, developers, most of which are public-listed companies, are only making around 17% at best,” he said.

However, Ng said it was still too early to determine the actual house price increases post-GST, as Rehda was still in discussions with the Government and there appeared to be many more issues to be ironed out.

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Building for the future

Sunway Group thrives on delivering on its promise in serving the community

(From left) Sunway Berhad Property Development Division joint managing director (Malaysia and Singapore) Sarena Cheah receiving the Malaysia’s Builder of the Year 2014 award from MDeC chairman Tan Sri Abdul Halim Ali at Front & Sullivan’s Best Practices Awards ceremony. At right is MDeC CEO Datuk Mohd Badlisham Ghazali.

OVER the years, Sunway has garnered numerous awards and the winning factors lie in its three core values — integrity, humility and excellence.

In an interview with StarMetro, Sunway Group deputy chairman Tan Sri Datuk Seri Razman Hashim shared that Sunway’s goal was to do the right thing, serve the community and deliver what was promised.

“We do not set out to get awards, we set out to do what is right and what is beneficial to the community. We do it honestly and make sure that what we deliver is accepted by the community.

“In the process, we get awards – that is a bonus,” he said.

As a diverse conglomerate with business interest across 12 industries in some 50 locations worldwide, Sunway has garnered a wide collection of awards that recognise its expertise, contribution and leadership in different fields.

“With property and construction being the core businesses, we can be proud of the recent Frost and Sullivan’s Builder of the Year award, which underscores our aspirations to contribute to nation-building efforts in line with the Government’s aim to transform Malaysia into a high-income nation,” said Razman.

Sunway also clinched three highly coveted awards at the Malaysian Construction Industry Excellence Awards (MCIEA) recently, namely Builder of the Year, Prominent Player and CEO of the Year awards.

MCIEA recognises outstanding individuals and organisations that have demonstrated all-round excellence and have contributed towards enhancing the image and performance of Malaysia’s construction industry.

Awards are a benchmark of excellence and strond testament to Sunway’s commitment to high standards.

The FIABCI Prix d’Excellence, which is deemed the Oscars for the international property industry, is a prominent award that Sunway values deeply. Awarded by an international panel comprising top real estate professionals and experts, the FIABCI Prix d’Excellence rewards overall merit and not just aesthetics, functionality or size.

“This award attests to our ability to compete against the world’s best, and emerging as winners goes to show that Malaysian developers can set and elevate the benchmark on the global stage,” explained Razman.

“Thus it represents an outstanding achievement and allows us to gain access to unique international platforms for projects and ventures with companies in the extensive FIABCI network of more than 60 members’ countries and over 120 professional organisations worldwide.”

Elaborating on Sunway’s core values, he said, “Integrity is a value that drives us to do the right thing at all times.

“We are professional and transparent, we do not shortchange our clients, we do not take shortcuts; and that is ingrained in our staff,” he said.

“Humility is also fundamental to our organisation.

“We are respectful. This is very much the Asian culture, it is rooted in our upbringing.

Add caption

Razman says the awards would not be possible without the contribution of Sunway employees.

“When people come and tell us what they do not like, we rectify it, we do not shut the door on them just because they have already paid for their property,” he stressed.

Excellence, Razman said, was the guiding principle behind the organisation continuously improving and innovating to progress, and seeking to inspire others to excel.

“It is about continuous and lifelong learning, which I believe is an enduring quality that permeates the Sunway group of companies.

“The awards reflect our persistence in excellence,” he said. “These awards are a benchmark of excellence and strong testament to Sunway’s commitment to high standards.

“We will continue to work towards strategic awards that can benchmark us against regional and international players, in line with Sunway’s vision to be the leading property and construction group in this part of the world.

“Our key goal within the next five years is to expand internationally beyond our current markets, be it in terms of products, services or geographic locations.

“We aim to realise significant contribution in terms of revenue from overseas businesses at the end the five-year period.

“Another of our key goal is to increase the level of innovation at Sunway and the level of research collaboration with Sunway Education Group through its ties with Harvard, Oxford and Cambridge universities.

Sunway Iskandar – Medini’s only seafront integrated city.

“On the property development front, we expect our Sunway Iskandar projects to be in full swing, which will be carried out over the next 15 years or so,” he said.

 Sunway Group is not about to rest on its laurels and if anything, the awards are spurring the Group to reach greater heights.

“We are continuously striving to be the best.

“It is easy to get to the top but to remain at the top and sustain is the challenge,” Razman acknowledged.

“We have a dedicated team who have remained loyal to the company. We know we have the right people because other companies try to hire our staff.”

To encourage employees in pursuit of excellence, he would tell them, “If you love your job and do it with passion, you are bound to do your best.”

“Although the company has achieved so many awards and it helps build up the brand,” said Razman, “at the end of the day if you do not deliver or do not continue to deliver what you promise, you will lose your clients and their trust. And that is definitely not our intent.

 “We build for the future.”

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Bukit Bintang Plaza is safe, says MRT Corp

MASS Rapid Transit Corporation Sdn Bhd (MRT Corp) has given assurances that Bukit Bintang Plaza (BB Plaza) was not under any threat of collapse or damage due to the construction of the Bukit Bintang Station.
In a press statement yesterday, the company said all other buildings on the surface of where underground works were conducted were also safe.

The statement added that the technology applied for the construction is state-of-the-art, and all necessary precautions were undertaken by the contractor, MMC Gamuda KVMRT (Tunnelling) Sdn Bhd (MGKT).
This assurance was given following UDA Holdings Bhd’s media releases on Oct 16 and Oct 27 which had stated that BB Plaza was “not very safe for occupation due to underground works for the construction of the MRT.”

The statement further stated that throughout the tunnelling works, no buildings along the road were damaged.

“Our contractor, MGKT, had taken all necessary steps to monitor ground movements during the activity, to ensure that building and public safety was not compromised.
“This included installation of monitoring equipment on buildings and structures along Jalan Bukit Bintang, as well as visual monitoring of roads and buildings by engineers.

“Apart from two sinkholes that appeared in April 2014 at the western end of the very busy road, no other untoward incidents were reported to have occurred as a result of MRT construction there, or along the 9.5km underground alignment of the Sungai Buloh-Kajang (SBK) Line,” read the statement.

On UDA Holdings’ intention to redevelop the site on which BB Plaza sat, MRT Corp said it welcomed the move as the development of a new mall next to the Bukit Bintang Station would be an added attraction for both local and foreign tourists.
Once completed and operational in July 2017, the SBK Line will have the capacity to transport 20,000 passengers per hour per direction.


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CH Williams Talhar & Wong managing director and member of the Malaysia judging panel Foo Gee Jen (left) congratulates Wong at the awards ceremony.

PETALING JAYA: Property developer S P Setia Bhd has added another win under its belt by clinching the Best Luxury Condo Award (Malaysia) at the prestigious South East Asia Property Awards 2014.
The company won the award for its luxury high-rise development, Setia Sky Residences, sited on 2.4ha of prime freehold land in Kuala Lumpur.

S P Setia executive vice-president Datuk Wong Tuck Wai, who received the award on behalf of the group, said there had been some truly exceptional properties on the shortlist.
“We are truly honoured by this recognition as it speaks volumes of our innovative inspirations and our commitment to deliver excellence to our customers,” he said in a press statement yesterday.

Setia Sky Residences also won the Best Luxury Condo for Central Malaysia at the Malaysian chapter of the awards, as well as the Special Honour Award at the Malaysia Landscape Architecture Awards 2013.
S P Setia is the only Malaysian developer to have received six FIABCI Prix d’Excellence Awards by the International Real Estate Federation (FIABCI) and eight FIABCI Malaysia Property Awards.

As of Aug 31, 2014, S P Setia had 33 ongoing projects and 1873.7ha of undeveloped land-bank worth RM93bil in remaining gross development value, of which its effective stake is RM64bil.
The South East Asia Property Awards 2014 was organised by Ensign Media, the publisher of Property Report South East Asia magazine.

Over 300 entries were shortlisted by BDO Advisory, one of the world’s largest auditing firms, which acted as an independent auditor for the awards ceremony.
About 30 awards were presented, including Best Commercial Development, Best Green Development, Best Villa Development and Best Developer.


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Strata living – a tale of two cities

Real Legal
BY CHRIS TAN

“IT was the best of times, it was the worst of times…
We had everything before us, we had nothing before us,
We were all going direct to heaven, we were all going direct the other way…”

The famous opening line in A Tale of Two Cities by Charles Dickens presents to us the tension and opposing attitudes borne between the inhabitants of the two cities. This disparity reflects our perception of “Strata Living” – a form of progressive yet regulated community living made possible by its inhabitants within its gated guarded boundary.

Strata is a legal concept that has been around officially for almost three decades in Peninsular Malaysia since the introduction of the Strata Title Act in the 80s and has never cease to expand its roots till to-date. As a working concept, it stretches further back to history under the subsidiary title under the National Land Code.

Official statistics from the Housing Ministry in late-2012 shows that one out of four stays in a strata development in Peninsular Malaysia. In response to such pressured demands, the yet to be enforced Strata Title (Amendment) Act 2013 (STAA) and Strata Management Act 2013 were passed in parliament to better serve such needs.

Strata living often relates to the affordability and buying power. The common presumption is the less fortunate gets a piece of “air space” made possible by construction technology. Nonetheless, parallel to the scenario in the Dickens fiction, there may exist a twin (a Siamese genre for this instance) with overlapping similarities while simultaneously distinguishable by the underlying motivation akin to the two sides of the same coin.

The reality of strata living has come about due to the scarcity of land in areas where infrastructures are concentrated and increasing land cost. Over the years, the Government has been trying to improve house ownership through the introduction of affordable houses, with the most recent example being PR1MA. The basis of strata living is self-management and self-sufficiency.

In other words, once developers have done their part, they wipe their hands clean of any further obligations save for any latent defects or negligence. This form of strata living is seen as affordable. The negative part is you have small plots of land with residential units densely packed together; a suffocating and uncomfortable setting to raise a family. So is the tale of one city – a grey and morbidly dense city.

Yet, by a flip of the same coin, the concept of strata living need not be restrictive. It is not confined to vertical multi-level structures but also horizontal living – gated, guarded and landed communities. This type of strata living is naturally more expensive and caters to the higher income group – lavish strata living with lesser restraint on space, practically the area of an entire building with landscaping. Imagine the typical Western upper-class neighbourhood – the lack of fencing between the houses within the gated boundary creates opportunities for connection and interaction. Children are able to roam freely and safely within the gated boundary.

With the soon to be effective STAA 2013, the exclusivity in strata living lifestyle is expected to increase. By virtue of the Act, the management corporation (MC) has the discretion to designate limited common property areas for the exclusive enjoyment of a particular group of parcel owners. In other words, there will be more diversity in strata living moving forward.

With such an enactment, one can only envision the inevitable formation of the MC that is akin to that of a resident’s committee in Singapore. Moving-in resident, owner or tenant, is required to undergo MC screening, which resembles a school admission interview and will be categorised based on social status, income levels etc.

Moving up a notch, one can envisage the setting up of a property management fund contributed by the owners and managed by professional fund managers to ensure a handsome return to the MC for long-term sustainability in maintaining the desired lifestyle of the strata community. Simultaneously, without much restraint financially, outsourcing such maintenance work to a professional management group is made possible.

Such is the tale of another city – a desired city of hopes and possibilities. There are both strata projects, but so vastly different.

From the above, one city simply does not reflect the other. While the idea of chipping into strata living is involuntary at large, there are pros in strata living that warrant the higher income group to choose and favour strata living.

Bundling with the improvement of the strata regime that caters to the wants of this higher income group, strata living is the way forward for Malaysia in our path to a developed nation.

>> Chris Tan is the founder and managing partner of Chur Associates

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PR1MA gets down to work

90,461 out of 500,000 housing units approved for development

Artist’s impression of PR1MA@Alam Damai, Cheras. Registration for specific PR1MA developments nationwide will soon be opened through newspapers and PR1MA’s website.

PERBADANAN PR1MA Malaysia, tasked with undertaking the 1Malaysia Housing Programme to build affordable housing schemes for middle-income Malaysians, is getting on with its responsibility with 90,461 housing units approved for development across the country.

Established under the Perumahan Rakyat 1Malaysia Act 2012, it has a panel of Members of Corporation (MOC) to oversee the operations of PR1MA in the performance of its functions and powers. They comprise of Tan Sri Jamaludin Jarjis, Datuk Abdul Mutalib Alias, Tan Sri Dr Ali Hamsa, Tan Sri Dr Mohd Irwan Serigar Abdullah, Datuk Azlin Alias, Datuk Sri Mohammed Shazalli Ramly, Tengku Datuk Zafrul Tengku Abdul Aziz and Datuk Seri Abdul Wahab Maskan.

According to PR1MA chief executive officer Datuk Abdul Mutalib, PR1MA is the sole authority empowered to plan, develop, construct and maintain affordable housing and townships under the 1Malaysia Housing Programme.

“Our mandate is to build 500,000 units of PR1MA homes. Close to 40,000 units would have started construction or will start construction by end-2014. A cumulative total of 160,000 units will be approved by PR1MA’s MOC for 2013 and 2014,” he tells StarBizWeek.
Under Budget 2015, RM1.3bil has been allocated for PR1MA to build 80,000 homes, with the qualifying monthly household income ceiling raised to RM10,000 from RM8,000 previously.

The PR1MA projects will be built in all the states nationwide, and for the Klang Valley, the approved projects are located in Cheras, Brickfields, Bukit Jalil, Bukit Bintang, Setapak, Sepang, Kajang and Ampang Jaya.

Abdul Mutalib says the PR1MA projects that have commenced construction are in Kuala Lumpur, Johor, Melaka, Negeri Sembilan, Kedah and Perak. The developments comprise landed properties, high-rise apartments and mixed developments.

“The development offerings will vary; from studio units to 3-bedroom units to suit the needs of our customer profile.

“We also hope to offer “Grow Homes” or “Rumah Ibu”, a type of home that is meant for the various groups of middle-income earners including singles, young couples and single parents, who will appreciate the flexibility of having the infrastructure to grow their house bigger. This type of homes however, are restricted to areas where land is cheap,” Abdul Mutalib explains.

Explaining the PR1MA development concept, he says the housing projects will be aesthetically pleasing, in a community where the amenities and facilities are thoughtfully planned.

The projects will be secure to ensure the safety of all PR1MA residents, and areas where they can come together socially through recreational spaces, amenities and facilities will be provided.
PR1MA townships will include verdant gardens, play grounds, surau and day-care centres as standard features.

To meet PR1MA’s objective of playing the catalytic role of providing affordable housing for the middle-income group, he says the key focus will be to undertake demand analysis to identify the need for the
PR1MA homes in order to monitor and manage the quality, supply and demand situation; supervise, plan and execute the design, construction, maintenance and operations of the PR1MA homes and communities; building the brand of PR1MA homes by setting and enforcing the standards for the developments; set the selling prices and allocate PR1MA homes to eligible buyers as well as offer buyer financing assistance programmes; and drive the public-private partnerships to accelerate the delivery of the mandate.

PR1MA is working closely with private developers, local authorities and partners, to expedite the standard operating procedures and processes in the least time possible.
It is also exploring collaboration possibilities on Industrialised Housing Technology with other building technology providers from Japan, Australia, UK, US and China to expedite the building process.
Public-private collaboration

Abdul Mutalib says given the scale of development that PR1MA has to undertake and deliver, it needs ample land to build the houses but so far, the lands that have been received from the Federal Government are rather minimal.

“As such we also need to look to the state governments to source for the required land as they can be obtained at a lower cost.

“We also work with government linked companies, private developers and cooperatives in identifying land which are suitable for PR1MA developments. We encourage the relevant parties to collaborate with PR1MA to build the houses,” Abdul Mutalib says.

PR1MA also works with other developers to build developments that are designed to meet social, environmental and economic sustainability objectives, where people want to live, work and play, in thriving and safe communities which are actively engaged.

He says registration for the specific PR1MA developments nationwide will soon be opened through the newspapers and PR1MA’s website.

“We will continue to open for registration more PR1MA developments as and when they are ready, and subsequently do ballotings for these developments. To date, PR1MA@Seremban Sentral has been opened for application. The balloting for this development will be organised soon,” he says.

Explaining the building process, he says before the house can be delivered to the buyer, there are many processes that must be followed such as proper research, planning, approval of the board, approval of the land development application, the local authority and other approvals that are needed to be obtained before construction begins.

Construction will take approximately 24 months for landed property and 36 months for high-rise developments.

To be eligible for a PR1MA Home, applicants must meet several key criteria. Applicants need to be a Malaysian citizen aged 21 years and above, with preference given to residents in the area where the PR1MA development would be built. Applicants should not own more than one property in Malaysia.

They should also have an individual or combined gross household income of between RM2,500 and RM10,000 a month to qualify.
The income band has just been expanded from a ceiling of RM7,500 previously, to RM10,000.
This is in line with the National Household Income (HHI) survey data which has shown that the average HHI has been rising the past few years with a significant increase in urban areas such as Kuala Lumpur, Putrajaya and Selangor.

Rising in tandem is the average value of properties in these areas which have been on an upward trend.
Statistics show that the average property value in Kuala Lumpur and Selangor have risen by 37.6% and 19.9% respectively, between 2012 and 2013 (according to Property Market Report 2013 Valuation and Property Services Department).

This rapid increase in market house prices have surpassed the means of the middle income group, especially those living in urban areas.
By expanding the middle-income household bandwidth, Abdul Mutalib says PR1MA would be able to offer home ownership opportunities for a wider segment of the population.

“Besides the public at large, civil servants, including teachers too, will stand to benefit from this expanded bandwidth.

“The salary structure of a government officer (Grade 44) has a gross monthly salary of RM3,600. If combined with their spouse’s income, and factoring in annual increments, it would definitely exceed the RM 7,500 threshold.

“Through this increase, not only would it provide an opportunity for this group to own a home, but it would also open avenues for those individuals up to Grade 48 and even Grade 52,” he says.

Under the PR1MA end-financing packages with its panel of banks comprising Maybank, MBSB and CIMB Bank, end-financing packages of up to 110% margin of finance from the sale and purchase agreement price will be provided. These financing packages include funding for MRTA/MRTT, legal fees, stamp duties and other loan-related expenses. No deposit is required and all loan-related expenses will be covered. The loan tenure is for up to 35 years or up to age 70, whichever is earlier.

Buyers may choose to either service the interest during construction and commence instalment only upon completion of the property, or another option is to capitalise the progressive interest into the loan amount whilst waiting for completion of the property.

No processing fees will be imposed for the loan. The moratorium is 10 years for outright purchases.
And to help those who are not able to get bank financing even through PR1MA’s panel banks, purchasers can opt for a deferred home ownership scheme called Rent-to-Own (RTO).

RTO is a 10-year rental scheme developed to help buyers to eventually own their home.
Participants will initially rent a PR1MA home and eventually purchase the PR1MA home at a pre-determined option price through conventional end-financing when their credit position has improved.

For outright purchasers, they cannot sell the house for ten years, while for those on the RTO scheme, the moratorium is 15 years.

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Eco World eyes the world

A file picture shows crowds checking out a scale model of Eco World’s project recently.

PETALING JAYA: Tan Sri Liew Kee Sin and his associates are planning the first property special purpose acquisition company (SPAC) to be listed on the Main Market of Bursa Malaysia to raise some RM1.87bil.
It is a record of sorts because not only is it the first property SPAC to be listed on Bursa, it is also the biggest in terms of funds raised after Reach Energy Bhd’s RM1bil initial public offering in August this year.
The SPAC, known as Eco World International Bhd (EWI), is led by the property magnate, Datuk Teow Leong Seng, Datuk Heah Kok Boon and other experienced team members.
Among the three, it is believed that Teow would be heading the management team of the SPAC.
It is understood that EWI would submit its application to the Securities Commission in the next few weeks. Eco World Development Bhd (EcoWorld) had to disclose its interest to acquire a stake in EWI because the intention was deemed material.
“EWI has no operations or income generating business at the moment but it is undertaking the proposed EWI listing for the purposes of raising funds to acquire real estate assets such as vacant land and/or redevelopment projects overseas in countries such as the United Kingdom and Australia,” Ecoworld said in an announcement.
EcoWorld has expressed its interest in subscribing to 30% of EWI’s enlarged issued and paid up capital for RM562.5mil.
The stake comprises of 1.125 billion EWI shares at an indicative issue price of 50 sen apiece that comes with 1.125 billion free detachable warrants.

EcoWorld said it was in the midst of evaluating several proposals to venture into new markets and the proposed subscription would enable it to venture overseas via investing in a property SPAC with a management team that has a proven track record.
Liew is well known for his stint in SP Setia Bhd where it undertook the re-development of the Battersea Power Station in London where he is still playing a pivotal role.
However, Liew left SP Setia in April this year and most of the staff in the company are now with EcoWorld, formerly known as Focal Aims Holdings Bhd. However, EcoWorld is a relatively small company and its subscription for shares in a SPAC is a fast way for it to expand its wings outside Malaysia.
“Apart from income contribution towards the group, the investment in EWI has the potential of boosting sales in EW Bhd’s Malaysian projects, through its association with the EWI brand when it is established globally,” it noted.
EcoWorld said it would be able to gain exposure in the international real estate market without incurring much costs and resources so that it, stay could focused on its local businesses.
“As a listed entity in its own right, EWI would also be able to undertake a larger and more diversified pool of projects globally than EcoWorld would be able to do on its own,” it added.
With that, it announced to forgo the offer for the acquisition of the 1.18 acres in Sydney, Australia for A$28mil (RM80.33mil) to develop over 300 units of apartments.
The developer also said expression of interest did not constitute an offer to subscribe for the securities in EWI was subject to the execution of a definitive subscription agreement, shareholders’ approval as well as the approval of the SC and other regulatory authorities in respect of the EWI’s proposed listing.
Liew, Liew Tian Xiong and Heah will be abstained from deliberating and voting on the proposed subscription at the relevant board meeting due to their interest in both companies.
It also said that an independent adviser would be appointed to advise the minority shareholders as to whether the proposed subscription was fair and reasonable.
Shares of EcoWorld fell 7.47% or 31 sen to RM3.84 amid bearish sentiment of the overall market.

First-time house buyers to gain

HBA is happy that more affordable homes are to be built under Budget 2015 and DIBS ban stays.
THE National House Buyers Association (HBA) wishes to thank the Prime Minister for the measures announced in Budget 2015 to build more affordable homes for the rakyat.

HBA is grateful that the Prime Minister rejected calls from the Real Estate and Housing Developers’ Association Malaysia and other groups with vested interest to reintroduce Developer Interest Bearing Scheme (DIBS) for first-time house buyers.

DIBS
The HBA is glad the Government has continued to heed our call to ban DIBS or any permutation that entails interest capitalisation.

Developers, being entrepreneurs, have to be responsible and bear the risks that come with their investment. They should not be allowed to enjoy profits at the expense of house-buyers who bear the risks on their behalf. Thus, when developers claim that DIBS is good because they “assist new purchasers”, they should be asked to use the Built Then Sell (BTS) 10:90 concept instead if they are sincere in not wanting to shift the risks to the house-buyers. Developers, being profit driven, merely want to sell their products, by whatever means. They even recommended DIBS for first-time house buyers on the guise of “assisting them”. We are glad the developers did not succeed in this endeavour.

The prohibition of DIBS in Budget 2014 has been effective in curbing the unbridled escalation of house prices. DIBS must continue to be prohibited and outlawed. Do not allow first-time house buyers to be sucked in.

Budget 2015
Among some of the measures announced is the Youth Housing Scheme, which is a smart partnership among the Government, Bank Simpanan Nasional, Employees Provident Fund and Cagamas.

The scheme offers a funding limit for a first home not exceeding RM500,000 for married couples aged between 25 and 40 years with household income not exceeding RM10,000. The maximum loan period is 35 years.

Under the scheme, the Government will provide monthly financial assistance of RM200 to borrowers for the first two years to reduce the burden of monthly instalments. The Government will also give 50% stamp duty exemption on the instrument of transfer agreements and loan agreements.
It will also provide a 10% loan guarantee to enable borrowers to obtain full financing including cost of insurance. Borrowers can also withdraw from Employees Provident Fund (EPF) Account 2 to top up their monthly instalment and other related costs.

Hence, HBA urges young people to grab this opportunity which is offered on a “first-come first-served basis” for 20,000 units only.

While the scheme is laudable as it aims to assist married youths to own their own property, HBA urges some caution as providing a monthly cash subsidy of RM200 may send a wrong message. The said family may start to spend beyond their means during the first two years and may end up in financial difficulty when the government stops giving the cash subsidy after two years. In addition, HBA has always cautioned against so-called “Zero Entry Cost” properties whereby the buyer does not need to make any down payment as it may encourage and promote irresponsible house buyers. House buyers must understand the intricacies of taking responsibility as an owner. They must pay their dues – quit rent, assessment rate, maintenance charge, sinking fund, insurance premium and budget monthly expenses. It is very important that they pay monthly instalments to the bank. It is not surprising to hear of lower and middle income homeowners losing their homes for not being able to keep up with payments.

HBA also urges the Government to impose a restriction that properties under the Youth Scheme cannot be sold for the first 10 years, similar to properties under the 1Malaysia Housing Programme (PR1MA).

Additionally, the scheme must be for “first-time house buyers” and must be owner-occupied.
Additional measures are:

1. PR1MA to build 80,000 affordable houses and eligibility raised from monthly household income of RM8,000 to RM10,000;
2. National Housing Department to build 26,000 units under the People’s Housing Programme with an allocation of RM644mil; and
3. Syarikat Perumahan Negara Bhd (SPNB) to build 12,000 units of Rumah Mesra Rakyat and 5,000 units of Rumah Idaman Rakyat. SPNB will also build 20,000 units of Rumah Aspirasi Rakyat on privately-owned land.

HBA is grateful that the Government has taken the initiative to build more affordable houses. However, HBA cautions on the right implementation to ensure the said affordable housing reaches the target market.

Government agencies must be mindful – and keep reminding themselves – of the following adage: “Build the right number at the right location for the right population at the right price and with the right type.”
The affordable housing must be built at the right place and priced reasonably (between RM150,000 and

RM300,000 and not more than RM400,000 for prime locations) and only for first-time house buyers and not to be made available for second-time house buyers which PR1MA is allowing with certain conditions. Don’t ever build where there is no population, just for the sake of building and meeting key performance indicators (KPIs).

PR1MA must also ensure that all the allocated land are used to build affordable housing and not to partner with private developers whereby only 40% of the land (from what we understand from the market) are for affordable properties with the balance used for lifestyle properties to build commercial and high-end properties.

HBA further opines that the best agent of delivery for private affordable housing, notwithstanding PR1MA and SPNB, are private developers. The Government can boost the delivery of affordable housing by giving incentives and rebates to private developers building affordable housies such as:

• Lower corporate tax rates;
• Lower land conversion premiums;
• Fast-track release of unsold bumiputra units; and
• Lower compliance costs.

To enable more people to own their first home and reduce the cost of buying a house, the Government has agreed to extend the 50% stamp duty exemption on instruments of transfer and loan agreements and increase the purchase limit from RM400,000 to RM500,000. The exemption will be given until Dec 31, 2016.

HBA agrees with measures to assist the lower and middle-income group to acquire their own properties and to prevent any abuse of these measures, the assistance should only be given to first time house buyers.

The Government also agrees to improve Skim Rumah Pertamaku under the purview of Cagamas by raising the ceiling price to RM500,000 in line with the stamp duty exemption. In addition, the age of borrowers to qualify for the scheme will be increased from 35 to 40 years.

HBA agrees with the these measures and further recommends that there be no age cap as there are many older low and middle-income groups who have yet to own their first property.

Conclusion
The curbs announced and implemented under Budget 2014, i.e. increase in Real Property Gains Tax (exit costs), the loan-to-value and prohibition of DIBS have achieved its objectives in partially deterring speculators and “bogus” house buyers. It has also bought some sense of orderliness to the housing arena.

We have appealed to the Government to adopt more measures in Budget 2015, especially the increase in stamp duties (entry costs).
The current stamp duty regime can be maintained for the first two properties held, one being for own stay and one for long-term investment. However, stamp duty must be increased for the third and subsequent properties. Our recommendation for stamp duty is as follows:

• First two properties, based on current scale rate;
• Third property – flat 5% of value of property;
• Fourth property – Flat 7.5% of value of property; and
• Fifth property – Flat 7.5% of value of property.

HBA’s proposal will not penalise the majority of the rakyat who can only afford to buy two properties.

HBA is prepared to wait and see the performance of the property market as to whether “speculators and bogus” house buyers will remain to “play” the market. We are sure that our Prime Minister and his advisors are fully aware of the situation and could always expeditiously implement this proposal in Budget 2016 if “speculators and bogus” house buyers were to plague the housing market.
>> Chang Kim Loong is the honorary secretary-general of the National House Buyers Association, www.hba.org.my, a non-profit, non-governmental organisation manned purely by volunteers.

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