邓章耀：民联“可负担房屋”仅挂名 40万屋价超过居民能力范围

（槟城30日讯）槟州国阵主席邓章耀说，由民联州政府兴建的1000平方尺，售价40万令吉的“可负担房屋”只是名字“可负担”而已，房屋价格却已超过可负担的范围。

他指出，他向房产界的顾问询问兴建多层房屋的价格时，得知每平方尺的兴建价格为150令吉，而此价格不包括土地价格。若1000平方尺的房屋，单是兴建费就是15万令吉。“每平方尺150令吉已是最高的兴建费，有的兴建费才不过130令吉。”

他说，不管是属州政府或中央政府的地段，只要没有出售给发展商，土地价格都是零，因此，若由州政府兴建的房屋，土地费不需要计算在内，那么，1000平方尺的房屋要价40万令吉，对比只需要15万令吉的兴建费，就出现相当大的价格差距。

他周三颁发奖励金予在初中评估考试中考获佳绩的学生后说，政府扮演的角色是提供尽量低价的房屋给人民，但，民联州政府的可负担房屋，房价却没有反映真正价格。- 

Penang Real Estate | Penang Property | Penang Properties: Surin Condominium For Rent (C33)

To those who is looking for a condo to rent in Surin, Tanjung Bungah, kindly contact us now to grab a bargain. RM2200 per month for 1500sf and fully furnished. In addtion, it is at high floor.

Penang Real Estate | Penang Property | Penang Properties: Surin Condominium For Rent (C33)

To contact Penang I Property, please click here.

Penang Real Estate | Penang Property | Penang Properties: D'Residences (Bayan Mutiara) Wanted

Calling owners of Bayan Mutiara, D'Residences Bungalow who wish to sell his unit to contact us asap. We have ready buyer awaiting you.

Penang Real Estate | Penang Property | Penang Properties: D'Residences (Bayan Mutiara) Wanted

To contact Penang I Property, please click here.

RM220mil road upgrading project in the works

THE concessionary operator of the second Penang bridge — Jambatan Kedua Sdn Bhd (JKSB) — will embark on a RM220mil road upgrading project, which mostly involves expanding a 4.9km stretch along the Tun Dr Lim Chong Eu Expressway (Bayan Lepas Coastal Highway).

State Public Works, Utilities and Transport Committee chairman Lim Hock Seng said the project’s preliminary work was scheduled to start tomorrow.

“The starting point is from the junction of Jalan Batu Maung (near Southbay, Batu Maung) to the Queensbay Mall. The upgrading project will see an expansion from the current four to six lanes,” he told a press conference in Komtar yesterday.

He added that the Works Ministry had approved the allocation and the project would be known as the FT3113.

“It is proposed that there will be flyovers at three traffic light junctions — Hilir Sungai Keluang, Lebuhraya Kampung Jawa and Jalan Kampung Jawa.

“The flyovers will connect straight to the Free Trade Zone. One lane will be available for road users who wish to make a U-turn,” said Lim.

“The project will take 24 months to complete and the project cost might go up to RM350mil due to the possibility of additional repairs,” he said.

It will also include a promenade, a bicycle lane, a sidewalk, a disabled-friendly facility, a pedestrian bridge, a bus stop and a roundabout at the Jalan Batu Maung junction.

The project will be based on the greenery concept with emphasis on ensuring much greenery is retained.

It will also involve minimal land reclamation, he said.

State Local Government and Traffic Management Committee chairman Chow Kon Yeow said the project was part of the traffic dispersal scheme for the second Penang bridge.

“The challenging part will be relocating the electrical cables and ensuring that there is no disruption to the factories operating there,” he said.

Batu Maung assemblyman Datuk Abdul Malik Abul Kassim, who was also present, said JKSB had briefed the state on the project and he was told that the earthworks would commence in September after the second bridge is almost completed.

“We will ensure minimum in- convenience to the road users,” he said.

JKSB had appointed UEM Builders as the project contractor while the consultants are Jurutek Consultants and SZY Consultant Sdn Bhd.

Minconsult Sdn Bhd was appointed as an independent consultant. The Star

槟城人下月7日起 可申请齐来也路峇都加湾可负担房屋

（槟城29日讯）槟城人可于2月7日起，到光大、槟州发展机构或威省市政局大厦，申请齐来也路或峇都加湾的可负担房屋。

槟州首长林冠英于周二召开记者会宣布，这项公开于全槟子民申请的可负担房屋计划，将于2月7日（周四）开启，并于农历新年期间开放，时间是上午9时至下午5时。针对记者询及外州人士是否可提出申请，他说这项计划是让槟民优先。

他指出，槟民在这段期间至光大、槟州发展机构或柏达镇威省市政局大厦处理申请手续。他也说，关于更多详情，州政府将会随后公布。无论如何，他说，申请者需准备个人文件，包括所得税。

槟 州发展机构总经理拿督罗斯里则说，齐来也路与峇都加湾的可负担房屋数量分别是1320间及2080间。齐来也路的中价屋有550间，其中包括275间面积 1000平方尺的售价为每间40万令吉、165间面积900平方尺的售价为每间30万令吉，而110间面积800平方尺的售价为每间20万令吉。- 光华

Middle-income trap makes owning homes near impossible

GEORGE TOWN, Jan 29 — The poor have government-controlled low-cost housing, the rich can have their pick of whichever property they fancy but the middle-income wage earners are left to rent or make do with a remote location when it comes to getting a home of their own.

The latest Property Market Report 2012 has revealed property prices in major cities such as Kuala Lumpur, Penang, Johor Baru and Kota Kinabalu to be well above the affordability of any middle-income wage earner with a take-home pay of less than RM4,000, prompting the federal government to come up with several affordable housing schemes.

In Kuala Lumpur, a single-storey terrace house in Taman Tun Dr Ismail or Lucky Garden is priced above RM730,000 while a similar type of house in the nearby Petaling district is priced above RM378,000.

The solution, according to real estate agent and International Real Estate Federation (Fiabci) committee member Michael Geh, is for potential home buyers to look further away to the outskirts.

“What we have now is a middle-income trap for the average wage earner where they can’t qualify for low-cost housing and yet they can’t afford a comfortable home within city limits,” he said.

Property prices have been strong in recent years with many urban areas experiencing property price increases while newly launched homes are priced above the RM500,000 mark, according to the Property Market Report statistics.

If a house buyer wants to get a home that’s within his means, he will have to either look at locations further from the city centre or get a “partner” as only a combined income will allow for easier approvals of housing loans, said Geh.

“So, either you grab a spouse to apply for a loan based on a joint income or you look further out of the city for cheaper housing and commute to work everyday,” he said.

Geh said there was also a new trend where friends partnered up to jointly purchase properties.

“Many singles prefer to partner up with a friend to jointly buy a house where they stay together as housemates instead of renting,” he said.

But many singles also prefer to rent and live like nomads where they frequently move from one place to another especially when they change jobs, he added.

“This is especially true for fresh graduates who may not have enough income to sustain a housing loan,” he said.

Property auctioneer M. Shanmughananthan echoed Geh’s opinions that it was now very difficult for the middle-income earner to purchase properties, especially newly launched projects in the city.

“There is now a growing phenomenon of investors clubs and they are snapping up these new projects even before they are launched so genuine home buyers will not have a chance to get these properties at the launch price,” he said.

In recent years, the bullish property sector in the country has turned this industry into a commodity worth investing in, spurring the growth of investors clubs.

Property researcher and property book author Ho Chin Soon had said there are now many investors clubs, each with a few hundred members, that advise members on project launches and property investments.

Property prices, while on the increase in urban areas, still remain at an affordable range in the outskirts such as on the mainland side in Penang where property prices in the state are known to be phenomenally high.

A single-storey terrace house on the island may cost upwards of RM500,000 but over on the mainland, in Seberang Perai, it could cost as low as RM90,000.

“House buyers will need to move away from high demand urban areas and look towards the more rural areas such as Juru or other parts of the mainland where property prices are not as high yet,” said Shanmughananthan.

Geh agreed and pointed out that there are still double-storey terrace houses in Johor Baru that are priced below RM250,000. However, this is not so practical for house buyers who prefer to live near where they work.

For lecturer Sandra Chia, all she wanted was to get a place near where she works for easier commuting and convenience, such as apartments in

Tanjung Bungah, Penang, but prices there are above RM400,000 a unit.

Chia earns around RM4,000 but does not have much savings, leaving her unable to buy properties in that area. “I am still staying with my family now but it would be nice to get a place of my own,” she said.

The high prices of properties in Penang have left Chia worried if she will ever be able to afford one and finally move out of the family home.

“It doesn’t look like I’ll be leaving home soon due to the current inflated property prices,” she said.

File photo of condominiums in Bangsar, Kuala Lumpur, most of which are beyond the means of middle-income wage earners.

Another potential house buyer, insurance agent Fakhrul Hizan, could not even get a bank loan for a RM150,000 medium-cost flat in Section 7, Shah Alam, Selangor.

The 27-year-old earns RM5,000 monthly but his loan application was rejected as the bank had calculated his nett income by taking 60 per cent of his salary and subtracting it with his monthly financial commitments of RM1,500.

He said the monthly loan instalments of RM650 would have been manageable, so he was “quite disappointed” that his loan application was rejected.

The loan rejection was probably due to strict guidelines on housing loan applications put in place by Bank Negara since 2012.

While there was no shortage in housing loan packages by banks, bank officer Jordan Chong said the problem was for applicants to qualify for the loans.

Under the Bank Negara ruling, housing loan applicants need to borrow based on their nett income, not on their gross income.

For example, Chong explained, a house buyer may have a salary of RM4,000 but the amount of housing loan he is able to apply for will not be based on that figure.

“We will look at the take home pay, after EPF and tax deductions, and from there, look at his other financial commitments such as car loans, study loans, credit cards and other debts,” he said.

So, in short, a person with RM4,000 gross income could end up with only RM3,000 nett income after deducting his other financial commitments.

“Based on this, he is only allowed to borrow a sum where the debt ratio is up to 70 per cent of the nett income,” Chong said, pointing out that a house buyer with a nett income of RM3,000 can only borrow up to RM270,000 to buy a RM300,000 house and he will need to service the loan at RM1,300 per month for 30 years.

But Chong  said house buyers may now apply for longer loan tenure that stretches up to 35 years, not only limited to 20 or 30 years.

“So, a 35-year-old house buyer is able to take up a loan that he will need to service until he is 70 years old,” he said.

As for whether it was true that it was now tougher for house buyers to get loans, he said this was because of the nett income ruling.

“Some may have a lot of financial commitments so after deducting the other loans they are servicing each month, they may not have much nett income left to borrow against,” he said.

All new house buyers with no existing housing loans under their names are eligible to apply for 90 per cent loans for a new house while those with existing housing loans can only apply for 70 per cent loans.

Due to this, newlyweds, fresh graduates and middle-income wage earners may not only have a hard time looking for properties within their affordability range but they will also have a hard time getting loans to buy their homes.

As Geh puts it, middle-income wage earners are stuck in a trap and perhaps the only way to get a place to stay now was to rent one or try their luck with the recently introduced 1 Malaysia Housing Programme (PR1MA).

Both Geh and Shanmughananthan lauded the federal government’s move in introducing the PR1MA affordable housing for the middle-income group and the My First Home Scheme for young adults to get 100 per cent loan financing.

All individuals or couples with an income of between RM2,500 and RM7,500 can apply for a PR1MA house, which is priced below RM400,000 each unit.

Prime Minister Datuk Seri Najib Razak had announced late last year that 123,000 PR1MA houses will be built throughout the nation including in Seremban, Shah Alam, Kuantan, Johor and Penang.

As for the My First Home Scheme, as at October 2012 only 436 applicants were successful in obtaining financing under the scheme which was introduced in 2011. - The Star

Malaysia can be real estate investment hub by 2020 - analyst

KUALA LUMPUR (Jan 23): Malaysia has the potential to transform itself into a real estate investment hub by 2020 with the completion of the mass rapid transit and the high speed railway linking Singapore.

Director of Ho Chin Soon Research Sdn Bhd, Ho Chin Soon, said while there are concerns over an oversupply situation, the free market will take care of itself.

“For example, there are some buildings that are still new and the rentals are too high. To attract rental, the landlords may need to introduce a rent-free period,” he said during the 6th Malaysian Property Summit 2013 on Jan 22.

“Infrastructure projects like the MRT system will determine market share. Infrastructure projects like highways will help townships in the outskirts,” he added.

Mega projects attracting attention include the Tun Razak Exchange, PJ Sentral, Warisan Merdeka and Bukit Bintang City Centre, he said.

“Government linked companies will take centre stage in future in terms of real estate development,” he said. – Bernama

Banks need to be transparent

STANDARDISING and simplifying housing loan documents is a step forward. Kudos to Pemudah (Special Taskforce to facilitate business),Bank Negara and the Association of Banks in Malaysia (ABM). It will be an excellent move to reign in the rogue banks, financial institutions (FIs) and development financial institutions (DFIs).

The National House Buyers Association (HBA) views the recent standardisation of loan agreements for housing loans below RM500,000 positively. For many years, HBA has been calling for greater protection for house buyers when they buy from developers and for borrowers when taking a housing loan.

As a typical housing loan ranges between 20 and 30 years, borrowers are stuck with the terms and conditions (T&Cs) of the housing loan for a long time. Unfortunately, most borrowers do not really understand the T&Cs of housing loan, as:

(i) The loan agreements are lengthy, running between 20 and 30 pages;

(ii) They are filled with legal terms and jargon that even borrowers with a law degree will still need their legal dictionary for reference.

Even for borrowers who are law-savvy, the loan agreement is a one-way traffic; the borrower must accept all the T&Cs or find another bank, as the banks will not vary any T&Cs. However, the scenario is the same for all banks and borrowers are at their mercy. (banks in this context includeFIs and DFIs).

Another grave injustice is that the cost of legal fees for the said housing loan is borne by the borrower although the lawyer is in fact, representing the banks and on its panel, and is in no position to advise the borrower. The borrower will be required to appoint his own lawyer should he require any legal advice. But this will be futile as banks will not agree to vary any T&Cs of the loan agreements.

Standardised Loan Agreement

HBA has been urging banks in Malaysia to be fair and transparent in their dealing with borrowers. Hence, credit must be given to “participating banks” for finally agreeing to adopt a standardised template for housing loans with simplified language which is easy for the layman to understand.

Based on our quick analysis of the Standardised Loan Agreement which can be downloaded from the website of the Association of Banks in Malaysia (www.abm.org.my), the agreement does appear to contain less legal jargon and is written in a manner which is easier for the borrower to understand.

The agreement also does away with unnecessary and ridiculous restrictions that certain bank previously impose on borrowers taking housing loans, such as:

● Borrowers cannot rent out the property without the consent of the banks;

● Borrowers cannot undertake any renovations without the consent of the banks; and

● Hidden clauses which impose various hidden charges and penalties such as late payment charges on borrowers

Based on our preliminary assessment, HBA views the agreement positively and we urge the banks and Bank Negara to further improve on the following areas:

Remove the RM500,000 cap

HBA calls for the RM500,000 limit for the Standardised Loan Agreement to be removed. This agreement should be applicable for all housing loans regardless of the amount, as the nature of the housing loan is the same. Already, most landed properties in areas such as Puchong and Kota Damansara are in excess of RM500,000. Even strata-properties in locations such as Bandar Utama, Ara Damansara are already in excess of RM500,000. Why not extend the coverage to all housing loans per se?

All industry players must adopt the standardised loan agreement

It would appear that the standardised loan agreement is being used by certain participating banks on a voluntarily basis and not all commercial banks which give out housing loans are adopting this agreement. Why is this the case? Bank Negara should compel all commercial banks to adopt this standardised agreement. In addition, non-banking Institutions that give out housing loans, such as DFIs, insurance companies must also be compelled to adopt the agreement. Why shouldn't the house buyers offered similar protection here?

Non-members of ABM such as DFIs include Bank Islam, Bank Muamalat, Bank Rakyat, Agro Bank, Bank Industri, Bank Simpanan Nasional and EXIM Bank which are formulated under their respective legislations.

Remove unnecessary fees and charges imposed on borrowers

Certain banks currently impose unnecessary fees and charges on borrowers when they request for bank statements which are needed when sthey want to settle/refinance their housing loans, or when making EPF withdrawals to reduce their housing loans. While the fees of up to RM50 may not seem much to some people, it still is an exorbitant amount as it cost banks next to nothing to produce such statements. Moreover, it is the borrowers' right to settle/refinance the loan and/or to make EPF withdrawals to reduce their loans. A bank statement showing the principal sum outstanding is required to facilitate such transactions.

By imposing fees of up to RM50 to prepare such simple statements, banks are blatantly taking advantage of their customers as they have no choice but to pay the charges just to ensure that the transaction goes through.

HBA is calling for banks to be prohibited from charging fees for these statement to facilitate repayment, refinancing or to make EPF withdrawals to reduce their loans. Some Banks are already charging RM10 for “reprint” of a bank statement on current accounts. Can you imagine a situation where the customer has not received his monthly bank statement for whatever reason and has to pay RM10 for a “reprint” of his own bank statement?

Banks can unilaterally vary theinterest rate

However, upon closer inspection of the standardised template, HBA noticed that a clause currently found in most housing loans has been carried forward. .

Even if the borrower had faithfully paid all his dues and installments' on time, the bank is entitled to vary the interest rate unilaterally at any time during the loan tenure. There is no such thing as sanctity of a binding contract between the borrower and the banks.

As we know, the current interest rates for housing loans are competitive, with some banks willing to go as low as BLR less 2.50%. So, what this can mean is that a few years down the road, when the banks realise that such low interest rates are no longer feasible, they can vary the interest rate from say BLR less 2.50% to BLR PLUS 2.50% and the borrower is obliged to pay the new interest rate. Furthermore, if the previous installment was only RM1,500 a month and the new installment due to the revised interest rate is RM2,500, the borrower must pay the new rate or risk the bank repossessing his house.

HBA urgently calls for Bank Negara to repeal this clause to prevent banks from having the upper hand to victimise unsuspecting borrowers. Banks must not be able to unilaterally vary the interest rate if the borrower had not defaulted on his obligations' under the loan agreement. Banks may say that they will not normally invoke/exercise the said clause. But, covenanted terms and conditions are binding upon both parties.

Lawyers have to purchase standard forms from banks

Nowadays, law firms undertaking banks' work have to purchase standardised pre-printed forms from banks. The price ranges from RM150-RM350. Would printing cost be so expensive or are banks making a profit or “mark-up” from such sales to law firms?

Such “expenses” are nevertheless passed down to customers/ borrowers as disbursements. Couldn't a “soft copy” be made available to law firms to adopt and print at their own cost and expense? Printing charges are only limited to RM50 as approved by the Bar Council.

Apportionment of payment to interest and principal shrouded in secrecy

Another grave injustice to borrowers is the allocation of monthly installments towards the settlement of principal and interest as this is not disclosed anywhere in the Loan Agreements' or even in the Standardised Template.

To illustrate a real life example, we had a complainant who took a 20-year housing loan about six years ago. After diligently paying his loan for five years, the complainant assumed that the principal amount outstanding should only be about 75% of the original amount. Unfortunately, the complainant had personally experienced, the amount was closer to 83%.

There need to be greater transparency on how the allocation of monthly repayments for interest and principal is done and this must be disclosed in the loan agreement. Moreover, the allocation must be done on a “straight line basis” so, after paying five out of a 20-year housing loan, the principal outstanding must be 75% of the original amount.

Conclusion

HBA calls for banks to continue to take cognisant of their borrowers' hardship and protect the interest of their borrowers instead of just focusing on profitability. Without the borrowers and customers, banks will not have any profits to show.

HBA also calls on Bank Negara to continue the close monitoring of banks to ensure that they do not take advantage of borrowers. The battle of borrowers against banks is akin to David vs Goliath. Timely intervention from Bank Negara is needed to balance the scale of power. - The Star

Chang Kim Loong is the honorary secretary-general of the National House Buyers Association, a non-profit, non-governmental organisation purely manned by volunteers. You can log in to www.hba.org.my

New projects for Penang

An artist’s impression of the RM320mil City Mall & City Residence project in Tanjung Tokong.

Riding on a stronger gross domestic product (GDP) forecast of 4.5% to 5.5% for 2013, Kuala Lumpur and Penang-based developers plan RM9.733bil gross development value (GDV) of residential and commercial properties on Penang island this year.

The GDP forecast from the Finance Ministry is slightly stronger than the projected 4.5% to 5% for 2012.

IJM Land Bhd (GDV of RM5.4bil), Mah Sing Group Bhd (RM248mil),Sunway Bhd (RM120mil), Ideal Property Development Sdn Bhd (RM2bil), SP Setia Bhd (RM945mil), Eastern & Oriental Bhd (RM500mil)and Ivory Properties Group Bhd (RM520mil)) are among the developers with plans for new residential and commercial schemes on the island.

Some RM5bil are commercial properties, while the remaining RM4.6bil residential properties.

The North-East district, which covers prime residential cum commercial neighbourhoods such as Tanjung Tokong, Batu Ferringhi, Pulau Tikus, and Bayan Mutiara, will see some RM6.7bil worth of projects taking off this year.

The South-West district, covering residential cum commercial neighbourhoods such as Relau, Batu Maung, Bukit Jambul, Bayan Lepas, Sungai Nibong and Teluk Kumbar, will see the development of the remaining RM3bil projects.

The South-West district still draws developers to launch high rise properties for RM400,000 to RM670,000 per unit, considered as “affordable” nowadays, although land prices in the area has risen by about 30% compared to two years ago.

Presently, the construction cost to build a condominium in the South-West district is about RM250 per sq ft to RM300 per sq ft, which is inclusive of land cost which is hovering around RM100 to RM150 per sq ft, about 30% more than two years ago.

“Thus it is still possible for developers to build homes within the RM400,000 and RM670,000 range in the South-West district and still make a decent profit despite the higher land costs and development charges,” said Ideal Property managing director Datuk Alex Ooi.

The commercial projects are IJM Land's RM5bil The Light Waterfront Penang, IPGB's RM100mil shopping mall in Tanjung Tokong, and SP Setia's RM55mil Setia Tri-Suites in Bayan Lepas.

IJM Land will start its commercial precinct project on 102 acres in mid-2013 located next to the Penang Bridge on Tun Dr Lim Chong Eu Expressway.

The precinct is designed to accommodate four hotels, a shopping centre, the Penang Waterfront Convention Centre, and an international business district, which will take seven to eight years to complete, said IJM Land general manager (North) Toh Chin Leong.

“The RM346mil Penang Waterfront Convention Centre (PWCC), scheduled for completion in 2017, will serve as an alternative to renowned convention venues in places such as Kuala Lumpur, Bangkok, Singapore, and Hong Kong,” he added.

In mid-2013, IJM Land is also launching the RM400mil Light Collection IV scheme in The Light Waterfront Penang, comprising 79 condominium units and 19 sea-fronting bungalows.

The condominiums have built-up areas of 1,990 sq ft and 3,249 sq ft, while the built-up areas of bungalows starts from 8,000 sq ft

“The selling price of the properties starts from RM1,000 per sq ft,” Toh said.

IPGB's shopping mall is part of the RM320mil City Mall & City Residence project in Tanjung Tokong, comprising an RM100mil shopping mall and two blocks of 202 condominiums with a RM220mil GDV, which will be launched during the Chinese New Year.

“The condominiums with 1,230 sq ft and 1,830 sq ft of built-up areas will be sold at RM800 per sq ft. So far we have received registrations for over 50% of the condominiums,” said IPGB executive director Murly Manokharan.

In Bayan Mutiara, the IPGB will launch 400 condominium units with built-up areas ranging from 460 sq ft to 1,300 sq ft in the second quarter.

“These properties, with RM200mil GDV, are priced at RM550 per sq ft, and are in phase one of the RM10bil Penang World City project, which will be completed in eight years,” he said.

SP Setia will be launching the RM55mil Setia Tri-Suites, comprising 72 business suites with built-up areas of 700 sq ft and 1,200 sq ft in Bayan Lepas, during the Chinese New Year.

This year, S P Setia is also undertaking the development of the recently launched RM290mil Setia Pinnacle, comprising 434 condominiums, and the RM600mil Sky Vista, comprising 800 condominiums, scheduled for launching in the second quarter.

The built-up areas of Sky Vista range from between 900 sq ft and 1,500sq ft, while the built-up areas of Setia Pinnacle range between 1,100 sq ft and 1,500 sq ft.

“All the residential and commercial properties are priced around RM450 per sq ft,” said SP Setia (Property North) general manager Khoo Teck Chong.

Mah Sing will undertake the development of the RM248mil Emaryl Condo Villas in Ferringhi Residence, a low-rise condominium scheme comprising 200 condominum units in Batu Ferringhi.

“The units, with built-up areas ranging between 1,510 sq ft and 1,752 sq ft, are priced from RM1mil, which is very competitive compared to the properties of similar range found in Hong Kong and Singapore,” said itschief operating officer Teh Hong Chong.

The Emaryl Condo Villas were launched on Jan 19 and Jan 20.

Eastern & Oriental Bhd deputy managing director Eric Chan Kok Leongsaid the group would launch the third tower of Andaman Condominiums at Tanjung Seri Pinang in Tanjung Tokong, comprising 210 condominiums with RM500mil GDV soon.

“In April 2011, we obtained the approval-in-principle from the Penang state government to reclaim the balance of the 760 acres at Seri Tanjung Pinang.

“We are in the midst of obtaining approvals from relevant authorities and which include the undertaking of environmental impact assessment and traffic impact studies with the overall concept master-plan,” Chan said.

The second largest project on the island is the RM2bil Ideal Vision Park by Ideal Property in Bayan Lepas in the South-West district.

The project, to be launched in May, comprises 1,945 condominiums that are priced from RM400,000 to RM670,000, in Bayan Lepas.

Ideal Property said that the project located on 25 acres in Bayan Lepas would comprise six phases to be launched in stages over a five-year period.

“We will start off with the launch of the first two phases this year,” he said.

Some 80% of the project comprises residential high-rises, while the remaining are commercial properties.

The condominiums, with built-up area of 900 sq ft and 1,500 sq ft, are priced at RM450 per sq ft.

“This means that a unit, depending on the size, is priced between RM400,000 and RM670,000,” he said.

Ideal Vision Park will also have the space to accommodate an international school, according to Ooi.

Sunway Bhd is launching the RM120mil Sunway Cassia in Batu Maung, which comprises 96 super-linked homes with built-up areas of 3,000 sq ft priced from RM1mil.

“The selling price is very competitive, as it is difficult to find a landed property nowadays with a RM1mil price tag.

“We also provide a two-acre park for Sunway Cassia, which is a guarded project,” Tan said.

According to Raine & Horne Malaysia director Michael Geh residential property prices in Penang are likely to rise by at least about 7% to 8% by the first half of 2013, due to the steady demand from the domestic and overseas market.

“New properties launched with a bundled-up financial package would be most popular.

“This is why this segment will perform better than those properties in the sub-sales market, where the buyer and seller have to do more paper work,” he said.

According to the latest National Property Information Centre property market report, total transactions for residential properties in Penang hit 18,316 for the first nine months of 2012, with a transacted value of RM5.2bil.

The whole of 2011 saw the state registering some 30,674 residential property transactions valued at RM7.7bil.

Geh says the total volume of property transacted for 2012 was unlikely to catch up with last year.

Meanwhile, Chan says the group maintained a cautiously positive outlook on the residential property market in Penang.

“For the first half, we anticipate that investors and buyers may adopt a wait-and-see attitude in light of the impending general election, global economic uncertainties as well as the market expectation for further measures to curb speculation.

“Notwithstanding these uncertainties, we expect the overall outlook for residential properties in a leading property destination like Penang to remain favourable, as its properties are still competitively priced in the region,” he says.

Penang Master Builders and Building Materials Dealers Associationpresident Lim Kai Seng says construction cost will likely be maintained in the first quarter of 2013.

Although sand prices have gone up, the smaller volume of construction jobs available is off-setting the impact of the rising prices.

“Due to the competition for jobs, construction cost will be maintained,” he says - The Star

Battersea project off toa powerful start

IT'S a freezing Thursday morning at the Battersea Power Station in London. A couple of hundred yards away at its show gallery, potential buyers are lining up in droves to lock in purchases of the first phase of apartments being launched that day.

By noon, over 60 units had already been booked. Prices start from £338,000 (RM1.014mil) for a studio, from £423,000 (RM1.269mil) for a one-bedroom, from £613,000 (RM1.839mil) for a two-bedroom and £894,000 for a three-bedroom apartment as well as from £6mil for the penthouse units.

“I think our buyers are smart and appreciate the project's unique strengths. Its proximity to Chelsea, Battersea Park, our new tube station and, of course, the carefully blended mix of uses we have,” saysBattersea Power Station Development Co Ltd (BPSDC) chief executive officer Robert Tincknell, adding that there was a lot of pent-up demand for these apartments, especially from Londoners.

BPSDC is the company that is managing the Battersea Power Station project. S P Setia, Sime Darby and the EPF purchased the 39.5-acre Battersea Power Station site for RM1.99bil in September last year.

Both S P Setia and Sime Darby have an equal stake of 40% each in the project, with the EPF holding the remaining 20%.

Attempts to revive the Battersea Power Station in the past unfortunately faced several problems. Tincknell is ecstatic that the Malaysian consortium has not only taken over the development but has already kick-started the project.

“I think it's fantastic. The consortium members not only have the financial strength to take on Battersea Power Station but also have the experience of working on large, multi-use projects such as this,” he says.

The first phase, which is named Circus West at Battersea Power Station, has a gross development value (GDV) of £900mil (RM4.5bil). A total of 800 units are up for sale, with 200 units being allocated to London purchasers. Being a Malaysian project, half (400 units) are allocated exclusively for Malaysian buyers.

The remaining 200 units are equally split between the Singapore and Hong Kong market. Buyers pay 20% and the remaining 80% on completion. S P Setia president and CEO Tan Sri Liew Kee Sin says he expects all units to be snapped up before the middle of the year.

“The strategy of Battersea is simple. We want to make it into an international centre for community and that's why we're selling it in London first, then Malaysia, Singapore then Hong Kong.

“We're the first property company to launch in London first. No other projects do this. They launch in Asia first but we were very confident that we could sell to the locals (Londoners first). As you can see, (with the good take-up) our faith and confidence is well paid off.”

According to the project's fact sheet, preparatory work on the first phase, located to the west of the power station, has already begun with work commencing in the second half of 2013. The first residents are expected to move in by 2016. Properties are to be sold on a 999-year lease.

Located on London's famous cultural South Bank, Battersea Power Station is just over a mile and a half from the Houses of Parliament. It sits south of the River Thames, across from Chelsea and forms the cornerstone of central London's last significant regeneration area, Nine Elms.

The British government-backed guarantee to extend the Northern Line underground through Nine Elms and Battersea Power Station is expected to boost accessibility.

“The biggest challenges are already dealt with the new tube station and planning permission. Now, our shareholders have the financial firepower to deliver,” says Tincknell.

He adds that Central London continues to go from strength to strength, fuelled by ever-increasing local and international demand.

“I can't see that changing any time soon. It's such a great city with the right blend of business, culture, heritage and entertainment. Nine Elms has been London's best kept secret. Its only one mile from Westminster and the mayor has produced a clear development framework for the entire area, which promotes socially and environmentally sustainable development.”

The Battersea Power Station development will create 16.8 acres of public open space with over 400m of river frontage, of which nearly six acres will be a new riverside park alongside a proposed river-bus facility.

The project will include 550,000 sq ft of retail facilities in both the Power Station and the High Street, which in turn will link to the new Battersea Power Station tube station resulting from the Northern Line extension.

With the development fully and financially supporting the proposed Northern Line extension, this transport upgrade obtained the backing from the Chancellor of the Exchequer in the Autumn Statements of November 2011 and December 2012, the latter of which confirmed a £1bil loan and a guarantee to extend the Northern Line to Nine Elms and the Battersea Power Station.

It is expected that upon completion, in excess of 15,000 people will work at Battersea Power Station across retail, hospitality, commercial, service community and creative sectors.

Separately, Tincknell says construction of the second phase will start soon.

“We're going to a new architectural team. Those appointments will be made in the next couple of months. Hopefully before Christmas, we'll be able to launch. Those units will be very much different (from the first phase). They will be much larger, with gardens on the roof.

“We're also bringing on very quickly the third phase, which is the building behind the power station. It's a new building similar to the first phase, so that will also launch pretty much the same time (by year-end).”

Tincknell says the entire Battersea Power Station project is expected to be developed over eight phases and should be completed within the next 14 to 15 years. - The Star

S P Setia expands overseas to achieve target

THERE are a few blue-chip property developers in the country and S P Setia Bhd certainly is perched high up on that short list. The developer of townships, and high-end condominiums and niche developments has one big edge when compared with the others though.

It has spread its reach well beyond the shores of the country and is now looking to generate at least half of its turnover from developments outside of Malaysia.

The need to venture out of Malaysia seems a natural progression for the property-based company given the size it has already grown to.

Considered the country's largest property developer by sales, it hit a new high in its financial year ended Oct 31, 2012, chalking up sales amounting to RM4.2bil.

For its current financial year, the company announced an ambitious target to grow its sales to RM5.5bil, and by 2017, to achieve a pre-tax profit of RM1bil.

“Achieving a pre-tax profit of RM1bil would be the first for any property developer in Malaysia,” S P Setia president and chief executive officer Tan Sri Liew Kee Sin tells StarBizWeek.

One can't help but ask is it achievable?

Liew recalls S P Setia having an analyst briefing where the company was targeting to achieve sales of over RM4bil for 2012. Many analysts doubted if the company would be able to achieve it.

It went on to hit record-breaking sales of RM4.23bil in 2012.

“But when we did our last analyst briefing where we announced our sales target of RM5.5bil (for 2013), for the first time, no one doubted that we would be able to achieve it,” Liew enthuses.

On its RM1bil pre-tax profit target, despite being confident that it is achievable, Liew admits the company will have to work very hard to make it happen.

Earnings will be through existing and new projects, he says. Currently, S P Setia has ongoing projects, both local and foreign, worth over RM72bil in gross development value (GDV).

“Not all RM5.5bil (of our current financial sales target) will come from new launches. At least 60% of that will come from existing projects, with the remaining 40% from new launches.”

While the bulk of the company's sales are generated through its developments in Malaysia, Liew says S P Setia will not be able to achieve the continuous growth it wants if it were to just focus its efforts in Malaysia.

“The property market in Malaysia is good, but it's challenging in terms of the growth that we want to achieve. We're already in the billions in terms of sales and the challenge is to grow at the same pace.

“For us to maintain a steady growth and sales target, we must operate in a few countries. That's why some time back we decided we needed to go overseas,” he says.

International property player

Over the past six years, S P Setia has been aggressively expanding its presence in several countries. Today, other than Malaysia, it is also in Vietnam, Singapore, Australia, China, Indonesia and more recently UK.

The company's foray overseas began in 2007, when Vietnam's top state-owned conglomerate, Becamex IDC Corp, chose S P Setia as its joint-venture partner to launch its 558-acre, US$880mil (RM2.7bil) GDV township project.

Known as EcoLakes at My Phuoc, the development is located some 30km outside Ho Chi Minh City. S P Setia has also launched a mixed development project called Eco Xuan at Lai Thieu in Tuan An District, Binh Doung Province.

Artist impression of EcoLakes at My Phuoc, 30km outside of Ho Chi Minh City in Vietnam.

In 2009, the company established an office in Singapore and two years later, it acquired a 29,440 sq ft site to develop a high-rise condominium called 18 Woodsville.

The successful launch of this project spurred S P Setia to acquire another parcel of 201,285 sq ft for its Eco Sanctuary condominium in Chestnut Avenue.

In June 2011, S P Setia previewed its first project in Melbourne, a high-rise condominium development called Fulton Lane.

The Autralian project's launch in November 2011 spurred S P Setia to look at more opportunities in Melbourne and it then acquired another piece of land, this time at the upmarket St Kilda Road for its second high-rise project Parque Melbourne.

In April 2012, S P Setia was invited by the Government to jointly develop the China-Malaysia Qinzhou Industrial Park. That same month, S P Setia opened its representative office in Jakarta.

Finally, in September last year, SP Setia acquired the Battersea Power Station in UK via a consortium together with Sime Darby and the Employees Provident Fund.

“With Singapore and Melbourne doing well, and with Battersea under way, we feel confident that S P Setia has become a Malaysian player in a world property market. We're very proud of this. This was not something that was done overnight,” says Liew.

“It's something we've been working on over the past five years. We've mapped out a growth pattern and have consistently been working on it.”

But despite building a strong presence overseas, Liew insists that Malaysia “will always be the base” for the company's operations.

“Up to a certain point, we felt that we could achieve our targets in Malaysia. But if we want to grow, to do RM4bil-RM5bil a year in sales, just for Malaysia alone, would be very difficult.

“That's why we are expanding overseas and we're now confident of achieving our sales target. It's a simple idea, really. S P Setia must have the depth and the breadth not only in Malaysia, but around the world, to year-in, year-out lock in the sales.”

Liew says that by 2017, with its RM1bil pre-tax profit target, he expects about 50% of sales to be generated from overseas projects.

“If you think about it, it's difficult to generate a pre-tax profit of RM1bil just from the Malaysian market. There's just no way. A long time ago we realised this already.

“For this year, we're targeting RM5.5bil sales. But to go beyond that, we must have a plan to go overseas. With the proper landbank in these foreign countries, we can ensure that we consistently deliver the sales and profits every year. Only then can we be sustainable.”

But having a presence overseas itself won't be enough, says Liew, adding that the company will need to strive to ensure that it can deliver the same kind of results and assurance that it does for its buyers locally.

“Now that we have gone international, we need to give the same S P Setia comfort to foreign buyers. Otherwise, why would they want to buy from us?

“We need to provide the same customer service to buyers whether it's in Singapore, China, Australia or any other country that we're in. The Malaysian market has also matured. A lot of them today are in the upper income and like to invest overseas. So, I tell them to come with us and we will take care of your loan, sales and purchase agreement and any other queries they may have.”

Consistency the ideal business model

Liew says that with a presence in seven countries already, S P Setia has no immediate plans to enter new markets.

“Now that we are already present in seven countries, we must consolidate and strengthen our base in these countries. Only then will we look into other countries.

“For this year, our focus is to make sure that the investments in the countries that we have gone into can be reaped. We'll be launching a new project in Singapore and Melbourne this year and also we're launching in the UK (Battersea).”

Liew says SP Setia is constantly looking out for more land to ensure that it has ongoing projects it can launch on top of the existing projects that it is working on.

“In Malaysia for example, if the condominium market is good, we launch more high-rise projects. If it's not good, then we switch to township developments. We are a township player, a niche market player, an integrated commercial development player and a commercial retailer. So we have the breadth and the width.

“Now if the Malaysian market is not doing too well, we have other markets to cover us, and vice versa. The issue with a lot of developers today is that one year they do well, then the following year, not so well. But how to be consistent?”

Liew uses English football club Manchester United as a prime example of being “successfully consistently.”

“It's like Manchester United. Year in, year out, if they're not number one, they're at least number two. That's consistency.

“How do you create consistency in a company? The same thing we must consistently deliver results, whether you like it or not.”

Last year saw S P Setia secure a few big property deals in Malaysia. In December, its subsidiary Setia Hicon Sdn Bhd purchased a parcel of land on which the British High Commission was located in Jalan Ampang for RM294.96mil.

The land purchase came on the heels of the conclusion of the company's land swap deal with the Government, where S P Setia's 50%-owned subsidiary Sentosa Jitra Sdn Bhd had signed a privatisation agreement with the Government and Syarikat Tanah and Harta Sdn Bhdto undertake the development on a piece of land in Shah Alam.

In return, the 52.36 acres in Jalan Bangsar would be injected into Sentosa Jitra.

In October, it proposed to acquire 673.3 acres in Rinching worth RM381.2mil, to replicate its successful township development in Setia Alam and Setia Eco Park.

The land in Rinching is situated mid-way between Semenyih and Bangi old town and is forecast to have a GDV of RM4bil.

S P Setia had bought 1,010 acres in Beranang for RM330mil in August.

“Last year, we had a few major deals in Malaysia, namely the Rinching and Beranang estates that we bought. We're opening a new township in the Semenyih area.

“We also secured from the Health Ministry 52 acres in Jalan Bangsar, opposite KL Sentral. That's a major development. Also, before the end of the year, we acquired the British High Commission land in Jalan Ampang. Going forward, we'll still maintain the aggressive landbanking strategies that we've always adopted.”

In capable hands

It's a fact that as far as leadership goes, nothing lasts forever. It's also a fact that via Liew's agreement with institutional shareholder Permodalan Nasional Bhd (PNB), the S P Setia boss will be paring down his stake in the company until his contract expires in March 2015.

PNB, which made a takeover offer for S P Setia last year, holds 51.63% in the company, while Liew holds under 6%.

“It's a fact that my contract will expire in March 2015. Over the next two years, I will be selling down my shares to zero, in accordance with the management agreement so that PNB can take over.

“I'm already 54 years old. I'm not young anymore. One day, I will have to go!”

Despite being considered the “face of S P Setia” by many, Liew assures that the company is in very capable hands.

He says the company has already charted an “internal succession plan” to “move to the next level,” which also includes what needs to be done once Liew leaves.

“The team is prepared to move forward. Whether I stay or not, S P Setia will still be a big property player in this country and internationally.

“The success of a CEO cannot just be measured by what he does during his tenure in a company. It's also what he leaves behind. Look atApple. Steve Jobs is no longer around but the company is still doing well!”

It's what CEOs are about, says Liew.

“That's the hallmark of a great CEO. He will make sure that there is a strong system to back him up and that the same service and quality is maintained even after he leaves.

“Over the last five years, we've been planning and planning. So, even if Alex Ferguson (manager of Manchester United) is no longer with the team, the club must continue to be successful. Our succession planning was all done long before the PNB takeover,” he says.

Liew says the company's succession planning does not just include paving the way forward once he leaves S P Setia.

“Succession planning would mean strategising who will take over and this won't just include my position in the company. It will include everyone down the line. If you don't train people to become general managers, project managers, planners, sales staff or quality controllers, the company will never grow.

“We have an internal training system whereby we train people to take over positions. For my position alone, there are four guys that can assume my post, who are maybe better than me? There are enough people in our group carry this company forward.”

Liew says that with PNB as a major shareholder, S P Setia is already in good hands.

“Over time, S P Setia will be transformed into an institutionally-owned company. That will give us the firepower and strong base to grow because we have institutional shareholders.

“But with that said, people like me, who have a passion for work, will not just walk away from this company. As long as I am CEO, S P Setia will be at its best. It's our job to deliver and move forward.”

When PNB made the takeover offer for S P Setia last year, many felt that the move was a hostile one.

To this, Liew says: “As far as PNB is concerned, whether the takeover was friendly or unfriendly it's up to interpretation. We were not notified of the takeover until the night before.

“But since the takeover, which was completed in March 2012, PNB has never interfered in management. But more importantly, they have been supportive of everything that we've been doing, whether it involves us buying a project overseas or with regards to our landbanking strategies.”

Liew says that even after the takeover, it was “business as usual” for S P Setia.

“My shareholders have not given me any trouble, why should I give them trouble? So what happens after March 2015? That will be decided then. You can't expect PNB to come and talk to me about it now.

“So the market needs to be fair to PNB and me and not interpret too much. We're still growing by leaps and bounds.” - The Star