4 basic points first-time property investors should know

StarProperty.my and Propwall.my held a forum for first-time home buyers at Tropicana Metropark Property Gallery recently. One of the speakers was Alexander Woo, and he presented “Important must-know basics of property investment”.

Woo speaking on the topic ‘Important mustknow basics of property investment’ at last Saturday’s forum.

Buying a property is not as simple or as easy as ABC’s. In order to be successful in property investment, you should do plenty of research to get substantial amount of information and also find a sensible investment strategy to adopt.

Woo touched on four basic points that first-time investors should know to understand the way around property investment.

1. Why invest in real estate?Investing in real estate is beneficial compared to many other investments because it is a way to hedge against inflation. Property investment is considered as one of the best ways to grow wealth and leverage to purchase more property.

“If you compare between buying, holding and selling your real estate, you make money when you hold the real estate.

“This can happen in two ways, through capital appreciation and rental income. Capital appreciation ensure increase in property value over time, whereas monthly rental can help with the mortgage and side income,” Woo explained.

2. Get updates on current issuesSome might not be aware of this, but certain current issues that are happening in the country can affect a property’s market value. Depending on the issue, it can either increase or decrease the property’s value.

According to Woo, the current issues that property investors should be on the lookout for are political stability, real estate bubble (also known as property bubble or housing bubble), depreciation of the ringgit (RM), bank rules on mortgage loan, government curbs and also the implementation of Goods and Services Tax (GST).

Another thing to note are the features that should be considered before purchasing a property, such as affordability, infrastructure, distance, security, maturity, as well as the return on investment (ROI) and future growth.

3. Be aware of pitfalls as an investorWitnessing a high return on property investment could make one eager to buy without careful planning, research and preparation.

Woo shared five pitfalls and mistakes that some investors have made which are:

• blindly following trends just because you see friends and relative buying property
• not paying attention to the absolute price versus psf value
• imposing own value on property
• buying during bad times or without a good deal
• buying even though the property is not within budget

4. Think like a savvy investorInvesting in property is not just about money-making, but also about having the right mentality to make savvy investment decisions.

Bear in mind that property investment is not a decision to be made on impulse. When it comes to making profit like savvy investors, make sure that you are familiar with the “Triple F” concept: Finder, Financer and Funder. Having all these three could increase the probability of you securing a good property deal.

One of the most important things in property investment is to know the necessities in order to build a solid investment strategy. Woo shared that even after three unsuccessful attempts at purchasing property, he never gave up. He continued with his investment plan and managed to purchase his very first property at age 20.

“It is important to learn and understand the game of investing in property, and to maintain objectivity. You also have to make sure that the property that you buy is always below market value,” Woo said.

About Alexander WooAlexander Woo is currently the chief executive officer of VIVO Capital Sdn Bhd, director of IQI risk management Sdn Bhd and vice president of financial education for IQI holdings.

He majored in Psychology, but has always had a keen interest in business. He started doing property investment as a part-time job when he realised that he was making more profit than earning a monthly salary.

Inspired by his late father, who has a successful business at a young age, Woo tendered his resignation at the age of 27 to make property investment as a full-time job.

He said that he is lucky to have an aunt who is a Real Estate Negotiator because she has been guiding and helping him in making the right investment decisions.

Property wise, he prefers to invest in high-rise developments because it usually cost lower than landed property, and also because it makes quite good rental income.

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REIT plan for WCT, likely IPO next year

BY THEAN LEE CHENG, INTAN FARHANA ZAINUL

Picture shows The Paradigm Mall in Kelana Jaya, Selangor, owned by WCT holdings. “We may consider injecting our hotel business when it is mature,” WCT managing director Peter Taing Kim Hwa(inset) told StarBiz.

PETALING JAYA: WCT Holdings Bhd plans to launch a real estate investment trust (REIT) next year to unlock the value of its assets and pare down debts.

It will firm up plans by year-end and if it does go ahead with the fund-raising event, the initial public offering (IPO) is likely to be towards the end of next year.

The company will have four malls by then with a total net lettable area (NLA) of 3.3 million sq ft. The plan is to list a REIT that comprises purely its malls in the initial stages because the hotel business is still in its infancy.

“We may consider injecting our hotel business when it is mature,” WCT managing director Peter Taing Kim Hwa told StarBiz.

The plan is to REIT its PJ Paradigm and Bukit Tinggi AEON malls, with a combined NLA of 1.68 million sq ft, next year and inject Gateway@klia2 and JB Paradigm, with a combined NLA of 1.61 million sq ft, two to three years later.

PJ Paradigm Mall and the Bukit Tinggi Aeon Mall are more mature, with an estimated total asset value of RM1.2bil.

If WCT’s plans were to take off, it would join the likes of CapitaMalls Malaysia Trust, IGB, Pavilion and Hektar REIT, which are all focused only on malls.

Taing said the eventual plan was to have a total of five million sq ft of NLA in its REIT.

The JB Paradigm Mall, among the largest in Johor, will have an NLA of 1.25 million sq ft. It will be operational by September 2016. Located on 13 acres fronting the Skudai Highway, the project will comprise residential towers, offices and a hotel with a development cost of RM1bil.

“The gross development value of the project is targeted at around RM1.5bil, spanning over three years,” Taing said, adding that the company will have a signing ceremony of its anchor tenants on Aug 13.

WCT has recently renewed its tenancy agreements for its PJ Paradigm Mall, which is 93% occupied.

It will also be launching a hotel – to be managed by Hong Kong’s New World Millennium – at PJ Paradigm Mall.

On its plan to go the REIT way, Taing said the idea is “to get ready a platform” to list its new malls as and when they are ready and consistent with their long-term plan of establishing a recurring income, while maintaining a reasonable gearing at group level.

“From the listing of the REIT, we will be able to reduce our gearing,” he said.

As at March 31, WCT had a net gearing of 0.7 times. The firm’s total borrowings was at RM2.4bil, while cash and cash equivalents stood at RM762.7mil.

Said Taing: “Our plan is to swap all our current investment in the malls with new shares in WCT REIT, which is consistent with our long-term plan to grow our property investment business and unlock value.”

He said the company hoped to retain about 40% in the REIT, as it would allow WCT to remain as the controlling shareholder and property manager of these assets.

On the potential rise in interest rates (in the US), which may be a dampener for valuations of REITs, Taing said interest rates were a macro-economic factor.

He said interest rates may affect REITs in the short term, but WCT’s objective is to establish a long-term recurring income from the property investment business.

“We reckon that the other industrial players are strong and we will face stiff competition from the day we enter the mall business. But we believe we have the capability and resources to compete and achieve our long-term plan on property investment. To date, our mall business is stable and generates commendable returns to the group and we will stay focused on achieving our goals,” he said.

On the yet-to-be-received claims awarded by a Dubai tribunal over a long-standing contract dispute with Meydan Group LLC, Taing said WCT would use part of the RM1.2bil award for debt repayment, but declined to reveal the breakdown.

Meydan Group in Dubai had abruptly cancelled a construction contract during the 2008 global financial crisis.

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Tadmax gets RM30mil loan from MBSB

BY CHERYL POO

PETALING JAYA: Tadmax Resources Bhd has accepted a RM30mil loan from Malaysia Building Society Bhd to develop a 41.5-acre parcel of land in Ganggarak, Labuan.

In a filing with Bursa Malaysia, the property developer said the bridging financing-I facility was accepted via its wholly owned subsidiary, Ganggarak Development Sdn Bhd, for a period of 36 months.

The project comprises two components – 1,560 units or six blocks of 14-storey affordable housing apartments known as Ganggarak Permai, and a mixed-development project consisting of a commercial centre with condominiums.

Tadmax, which had sold 310 acres of land in Pulau Indah for RM294.38mil, said Ganggarak Permai would be completed with associated infrastructure, facilities and amenities for a targeted total gross development value (GDV) of RM288mil.

The affordable housing apartments would be carried out over three phases, each comprising 520 units. The (loan) facility will part-finance this phase, Tadmax said.

The mixed development would be carried out over four phases, separately, and will have a GDV of RM323mil. Both projects could generate an estimated total GDV of RM611mil.

The facility would be solely used to fund the development of Tadmax’s project and such interest expenses will be covered by the revenue from the project.

In a separate filing, Tadmax said it had incorporated a subsidiary company known as Tadmax Permai Sdn Bhd as a private limited company for property development and construction.

Tadmax holds a 70% share in the subsidiary, while the remaining 30% is held by Maxcorp Development Sdn Bhd director Datuk Syed Azmi Syed Othman.

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OSK Holdings’ offer for PJ Development becomes mandatory

KUALA LUMPUR: OSK Holdings Bhd’s voluntary takeover offer for PJ Development Bhd (PJD) shares has become mandatory as of Tuesday, as its shareholding in the property and construction firm has exceeded 33%.

OSK Holdings told Bursa Malaysia that the terms and conditions of its offer remained as set out in the earlier takeover notice (at RM1.56 per share and 60 sen per warrant).

OSK Holdings had in October last year signed agreements to acquire a 31.7% in PJD for RM229.37mil or RM1.60 per share and a 73.6% stake in OSK Property for RM55.29mil or RM2 per share. It also proposed to acquire the remaining PJD shares and warrants at RM1.60 and 60 sen respectively)

Pursuant to the declaration of a 4 sen interim dividend per PJD share, the offer price for PJD shares was revised to RM1.56 in April this year.

The mandatory general offer (MGO) for PJD shares on Tuesday follows OSK Holdings’ notice of unconditional mandatory takeover offer for OSK Property last month.

PJD shares closed 1 sen lower at RM1.54 on Tuesday while OSK Holdings shares gained 1 sen to RM1.80.

Besides property and construction, PJD is also involved in manufacturing (canles, wires and building materials) and hotel management focusing on the Swiss-Garden brand.

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Condominium hotel makes its debut in Malacca

An artist’s impression of the facade of The Pines Melaka.

MALACCA: PTS Properties Sdn Bhd (“PTS Properties” or the “Company”) recently unveiled its modern and stylish 4-star luxury condominium hotel called The Pines Melaka.

The 28-storey condominium hotel is located at Jalan Tun Sri Lanang, adjacent to the Air Keroh toll, the gateway to Malacca’s town centre. It is accessible via public transport and the popular Malacca River Cruise.

Strategically located within the vicinity of numerous corporate offices;, luxury hotels, tourist attractions and heritage spots, The Pines Melaka will appeal to both leisure and business travellers.

“The company is thrilled to showcase The Pines Melaka. The hotel will complement the city’s hospitality industry with its dynamic blend of decor and design,” said PTS Properties chief executive officer Boo Kuang Loon.

The Pines Melaka features 390 spacious and luxurious guestrooms, including standard suites, poolside suites, honeymoon suites with balcony, lover/honeymoon suites and presidential suites with modern amenities. The room sizes are among the largest in town, which range from 334 sq ft to 990 sq ft and feature large, floor-to-ceiling windows and unrivalled views across the city.

Each guest room also features the finest beds and bedding, desk with chair, flat screen television, refrigerator, safe deposit box with electrical outlet, iron and ironing board, bathrobes, hairdryer, cosmetic mirror, slippers, custom The Pines Melaka’s toiletries and artworks are by local artists.

“Every little detail was infused with a modern and refreshing concept with free flowing energy, which we know Malaysians and foreigners are ready for. We went the extra mile to inject some local accent to the palette with artworks from local artists,” Boo added.

The freehold project, with a gross development value of RM120.9 mil, was fully sold to a mixture of local and foreign buyers.

An artist’s impression of The Pines Restaurant.

The Pines Melaka is developed by PTS Properties Sdn Bhd, which isinvolved in property development, construction, sales and leasing for residential and commercial properties, hotel management and property management. The company has developments in Malacca as well as Klang Valley.

The construction arm of the company has completed construction work for several commercial buildings, such as Plaza 33, LBG Tower, Glad Tidings Vision Centre, Carrefour Puchong and Tesco Seremban.

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The perks of living and investing in Subang Jaya

Who would have thought that the once-sleepy area of Subang Jaya would now be a booming and bustling town?

What comes to mind when “Subang Jaya” is mentioned? People will get the initial impression of a renowned educational hub, and that’s no surprise considering how some of the nation’s top schools, colleges and universities can be found there. But is that all there is to this rapidly developing area?

The benefits of investing in a neighbourhood as strategically located Subang Jaya are many, when one takes into consideration the important factor of connectivity. It makes for a highly sought-after address, with property prices rising steadily. As an example, non-landed residential properties commanded an average transacted price psf of RM581 psf in Q3 2014, which is an increase of 15% from RM506 psf in Q3 2013.

Host of amenities
Subang Jaya certainly has plenty of hidden gems. Apart from creature comforts such as well-equipped medical centres, cafes and eateries, as well as entertainment outlets, there are also plenty of shopping malls for some retail therapy. Alongside the older and established ones (Subang Parade and The Summit, to name a few), there are also Empire Shopping Gallery and One City.

Heightened connectivity
Subang Jaya is an area that enjoys ease of access to other prominent areas, with no shortage of major highways and main arteries. Going to and fro is a breeze via the Damansara-Puchong Expressway (LDP), Federal Highway, Shah Alam Expressway (KESAS), New Klang Valley Expressway (NKVE) and New Pantai Expressway (NPE). As for public transportation, there is the existing KTM Komuter train, as well as the upcoming Kelana Jaya LRT line extension, which will be at the existing Subang Jaya station. There are also two upcoming stations at SS15 and SS18.

Bird’s eye view of the Subang Jaya town.

Multi-modal transport hubThe area is not without its flaws. The Subang Jaya municipality has a current approximate population count of 740,000 (source). Due to the high numbers, the roads can become heavily congested during peak hours, and there have been many complaints of parking woes. Relief comes in the form of the first transit-orientated development as part of an urban regeneration scheme of the Subang Jaya City Centre (SJCC).

The transit-orientated development is sited on more than 12 hectares, and its master plan is to create a multi-modal transport hub that seamlessly integrates a mix of retail, hotel, service apartments, SOHO and office suites. Expect to find world-class facilities and infrastructure on site, courtesy of Sime Darby Property who engaged the services of Benoy, an award-winning internationally-recognised designing company. The design concept aims to maintain a green vision, and is inspired by the natural history of the site and the intricate patterns of the oil palm tree. It will serve to become the nexus between the community and businesses.

Tropicana Metropark is also another project to look out for. It offers a harmonious blend of educational, medical, commercial and public infrastructure which can all be found within one development. Set to become a self-sustained township, this development is brought together by a landscaped 9.2-acre linear park which acts as the social heart and green lung for residents and visitors alike. The Central Park  has been completed and they have recently introduced a commercial component, Midori Flexi Suite.

Additionally, a recent partnership with global educational group GEMS Education sees Tropicana Metropark benefitting from a RM50 million international school campus. Upon its completion in 2017, it will be able to take up to 2,400 students, supported by 450 teachers and staff.

With these upcoming developments complementing the existing ones, Subang Jaya is looking all set to blaze the trail as a modernised and revitalised town fit for living and investing alike.

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UEM Sunrise wraps up Melbourne 21-storey office tower purchase

The decision to acquire the 412 St Kilda Road site is part of our strategy to ensure a steady flow of overseas projects. The property is in a different location from the other two core CBD sites we currently own. Being on the city fringe, it promises a different lifestyle, and thus, will appeal to different market segments,” said managing director and chief executive officer Anwar Syahrin Abdul Ajib(inset filepic).

KUALA LUMPUR: Property developer UEM Sunrise Bhd has completed the acquisition of a 21-storey office tower in Melbourne, Australia, for A$58mil (RM161mil).

In a statement issued yesterday, UEM said the 172,223-sq ft building located on the strategic site of St Kilda Road was one of the main routes into Melbourne’s central business district (CBD).

This marked UEM’s third property in Melbourne after its purchase of two CBD sites on LaTrobe Street and Mackenzie Street in October 2013.

UEM said it intended to develop an “ultra luxurious” residential development, potentially with a mix of ground floor retail and serviced apartment components.

The building, which has views of the Royal Botanic Gardens, the Shrine of Remembrance, Albert Park and Port Phillip Bay, is currently occupied by the Victorian Police. They will be vacating after mid-2016.

“The decision to acquire the 412 St Kilda Road site is part of our strategy to ensure a steady flow of overseas projects. The property is in a different location from the other two core CBD sites we currently own. Being on the city fringe, it promises a different lifestyle, and thus, will appeal to different market segments,” said managing director and chief executive officer Anwar Syahrin Abdul Ajib.

He said the acquisition was timely and would strengthen UEM’s momentum of its pipeline of projects in Melbourne.

He said Australia’s strong economic fundamentals and the steady population growth in Melbourne of 1,800 people per week based on the Australian Bureau of Statistics figures in March, translated into a housing demand of almost 900 units per week, and were among the reasons for the company to strengthen its overseas portfolio.

Apart from Melbourne, UEM is also pursuing development opportunities in key cities such as Sydney and London in the United Kingdom. The company has a presence in Vancouver, Canada and continues to retain landbank in Durban, South Africa.

UEM has also been appointed as the project manager (marketing) for M+S Pte Ltd, a company owned by Khazanah Nasional Bhd and Temasek Holdings Pte Ltd for its Marina One and DUO mixed-used developments in Singapore.

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PDC inks deal with S’pore-based firms to build RM1.3bil complex

Joining forces: Temasek Consumer & Real Estate head and Southeast Asia head David Heng (fourth right) exchanging the agreement documents with PDC general manager Datuk Rosli Jaafar. The event is witnessed by Lim (centre).

PENANG Development Corporation (PDC) has inked a joint venture agreement with two Singapore-based companies to develop a RM1.3bil Business Process Outsourcing Prime (BPO-Prime) Complex in Bayan Baru.

The complex will be built on a 2.8ha of land where the PDC office is located currently.

Chief Minister Lim Guan Eng, who witnessed the agreement signing ceremony, said the collaboration with Temasek Holdings and Economic Development Innovations Singapore is a testimony of confidence and trust the international business community has in the future of Penang.

“BPO-Prime will represent the prime business hub in Malaysia’s Multimedia Super Corridor at Penang Cyber City 1 in Bayan Lepas with a gross developmental value of RM1.3bil and gross floor area of minimum RM1.6mil sq ft,” Lim said.

He added that the project would start in 2016 and was expected to finish by 2019.

Lim said BPO-Prime would be the catalyst for the Penang’s industrial transformation, such as creating a new cluster of economic development in BPO, Knowledge Process Outsourcing and Information Technology Outsourcing.

“It will also become the home to multinational companies and it is estimated to create 4,000 high-income and quality job opportunities.

“Its high value added ser-vices hub includes customer operations, data processing, back office administration, accounting, technical support, transcription, software development, IT consultancy and disaster recovery services,” he said.

Lim said BPO-Prime would ensure progress in economic vibrancy, social development, liveability and sustainability.

“The Shared Services Outsourcing (SSO) sector has achieved rapid growth over the years and the state’s SSO is providing more than 8,000 high-income jobs to locals as well as serving both regional and global markets,” he said.

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Yong Tai signs 5 MoUs involving 5 property projects with GDV of RM7bil

Deal sealed: Ng (left) exchanging documents with PTS Impression executive director Datuk Seri Lee ee Hoe after the signing of an MOU. With them are (from left) Malacca Chief Minister Datuk Seri Idris Harun and Minister in the Prime Minister’s Office Datuk Dr Wee Ka Siong.

PETALING JAYA: Garment-maker-turned-property developer Yong Tai Bhd has entered into five separate memorandums of understanding (MoUs) to acquire land and businesses that can provide the company with five potential property development projects in the Klang Valley, Malacca and Johor.

Yong Tai told Bursa the five projects were expected to carry a combined gross development value (GDV) of RM7bil over the next eight years.

Executive director Ng Jet Heong said the move was in line with Yong Tai Group’s expansion and that it would “continuously seek” to acquire more land.

He said the MoUs will enable them to come to more definitive agreements for the proposed acquisitions and proposed JVs.

Trading in the shares of Yong Tai, which was suspended on Monday pending the above announcement, would resume today.

The counter was last traded at 78 sen prior to the suspension yesterday, when Yong Tai signed MoUs with PTS Impression Sdn Bhd, Yuten Development Sdn Bhd, Terrawest Resources Sdn Bhd, Land & Build Sdn Bhd and Admiral City Sdn Bhd.

The deal with PTS Impression and its vendors involves Yong Tai acquiring its entire equity stake. PTS Impression holds the rights to produce and stage a tourism performance known as “Impression Melaka”.

The deal with Yuten and vendors involve Yong Tai acquiring 100% of Yuten which has a joint venture arrangement with Fahad Holdings Sdn Bhd to jointly develop two adjoining parcels along Jalan U-Thant, Kuala Lumpur.

The MoU with Terrawest and vendors will see Yong Tai acquiring the company for its two parcels of freehold and contiguous land in Puchong, Selangor.

As for its MOU with Land & Build, Yong Tai is eyeing its development rights to develop two freehold parcels in Johor Baru.

Meanwhile, Yong Tai’s deal with Admiral City involves the proposed acquisition of 17 acres of seafront land in Kawasan Bandar VI in Malacca and to jointly develop 100 acres of leasehold land adjacent to the Impression land in Malacca.

Yong Tai said the MoUs would remain in force for three months, while the Admiral City agreement expires in two months.

Of the five potential projects, the company said Malacca development projects could potentially contribute GDV worth RM6.3bil, while those in the Klang Valley and Johor Baru may contribute RM341mil and RM363mil, respectively.

These potential projects would include the tourism and mixed developments at Kota Laksamana, Malacca, comprising the “Impression Melaka” and “Impression City” projects, upmarket and luxury service apartments project at Jalan U-Thant, Kuala Lumpur, a mixed development project comprising one tower block of small-office-versatile-office units and one hotel tower in Puchong, Selangor, and a mixed development project comprising retail and SoVo units, hotel and office suites in Johor Baru.

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Get to know more about architecture

Ready to roll: Lim (left) and Mohd Zulhemlee at the press conference on what to expect from Archidex 2015.

THE International Architecture, Interior Design and Building Exhibition (Archidex) will return for the 16th year with an additional hall this time around.

C.I.S Network president Datuk Vincent Lim said the exhibition, which will be held from Aug 12 to 15, was set to occupy nine halls in the Kuala Lumpur Convention Centre whilst also taking up extra space in Mandarin Oriental Kuala Lumpur located next door.

“There will be more than 550 Malaysian and international exhibitors taking up over 1,300 booths, marking a 4% increase in exhibition space compared to last year,” said Lim.

He also revealed that there would be five country pavilions, featuring Austria, China, Germany, Singapore and the US as participating countries.

The exhibition, jointly organised by Malaysian Institute of Architects (PAM) and C.I.S Network, will cover nine product categories for architecture, interior design and building industry, including eco building products.

Eco-B, the exhibition that focuses on environmentally responsible technology advancements and buildings will also run alongside Archidex, as in previous years.

On top of new product and innovation showcase as well as networking sessions, the exhibition will host the International Architectural Design Conference (Datum:KL), Kuala Lumpur Design Forum, Green Building Forum, Professional Practice Forums as well as trade talks.

Shedding light on the anticipated Datum:KL conference, PAM president Mohd Zulhemlee An said this year’s invited speakers were experienced architects.

They include Marlon Blackwell and Meryati Johari from the US, Shingo Masuda from Japan and Malaysia’s own Ken Wong and John Ding.

He said the exhibition and programme line-up should extend beyond people of relevance to the field.

“My objective for this year’s exhibition is to get the public to know more about architecture and to be involved with what we do,” he said, adding that this year’s speakers would enable the public to understand the subject better.

The year marks the rebranding of the New Eco Product Awards to Green Dot Award, as well as the eco collaboration between Archidex and Malaysian Association of Convention and Exhibition Organisers and Suppliers (MACEOS) together with Biji-Biji Initiative.

The collaboration involves gathering used banners, which will be upcycled into fashionable bags by the Biji-Biji Initiative social enterprise.

With the importance placed on green efforts in the architectural realm, Mohd Zulhemlee said even the exhibition has taken on environmental-friendly measures, with registration processes and catalogues going digital via the downloadable Archidex app.

“This will provide visitors a new experience,” he added.

Lim said they were anticipating about 34,000 trade visitors this year and targeted about RM1bil in business transactions from the exhibition.

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