Tambun Indah developing five Penang projects valued at RM571m

GEORGE TOWN: Tambun Indah Land Bhd is undertaking five development projects in Penang with a combined gross development value (GDV) of around RM571.5mil this year.

The projects are the RM131.3mil Pearl Indah and RM180mil Pearl Residence 1 in Simpang Ampat; RM39.3mil BM Residence in Bukit Mertajam; RM41mil Carissa Villas in Bagan Lallang; and RM180mil Straits Garden in Jelutong on the island.

Group managing director Teh Kiak Seng told StarBizWeek after an EGM that with the exception of the Straits Garden project in Jelutong that would be launched in the third quarter of 2012, the construction for the other four projects had started.

“Both Pearl Indah and Pearl Residence 1 are in the RM2bil Pearl City project, where we plan to build some 5,600 landed residential properties and 1,400 commercial properties.

“The first two phases of the Pearl City project – the Pearl Garden and Pearl Villas – are 90% and 80% sold respectively. Some 41% and 28% of the purchasers for Pearl Villas and Pearl Garden respectively are from the island,” he said.

The funding of the projects would be through the issuance of 88.4 million rights issues of new shares that would raise RM44.2mil for the group.

The two-for-five rights issues, which were approved at the EGM and expected to be completed in June, would effectively increase Tambun Indah’s share capital to RM154.7mil, comprising 309.4 million shares.

“We have a landbank of 625 acres, which has a GDV of RM2.8bil. We are constantly on the lookout for more land in Penang. We are also exploring land outside of Penang,” he said.

Teh said the Penang property market was expected to chart commendable growth in the coming years, as it had been identified as one of the world’s top 10 most dynamic industrial clusters and contributed 28% or RM17.7bil of Malaysia’s total foreign direct investment in 2010-2011.

“In addition, the Malaysia My Second Home initiatives over the past years have resulted in a spill-over benefit for Penang’s property market,” he said.

“As for properties in Seberang Prai, we believe the prices will be well sustained, due to the completion of the second link in 2013, which will have a positive effect on properties in Batu Kawan and Simpang Ampat.”

The rising prices on the island were prompting many young families to explore properties in Seberang Prai for quality lifestyle at affordable prices, Teh added. - The Star

Property transactions reach 5-yr high in 2011

KUALA LUMPUR (Apr 3): Real estate transactions in the country reached a record five-year high last year, with a rise of 14.3% to 430,403 transactions and a total transaction value increase of 28.3% to RM137.8 billion. The residential sector has spearheaded the growth of the property market, said Deputy Finance Minister Datuk Donald Lim Siang Chai at the launch of the Property Market Report 2011 on Tuesday. The report is published by the National Property Information Centre (NAPIC) under the Valuation and Property Services Department (JPPH). Lim said property prices in Malaysia also remain reasonable, and there is still room for more growth. In 2011, the residential sector took up 62.7% share of total transactions and 44.9% of the total transaction value with 269,789 transactions worth RM61.83 billion. Both residential sales volume and value recorded a double-digit growth of 18.9% and 22.1% respectively. Abdullah (left) and Lim at the launch on Tuesday. According to the report, the take-up space for purpose-built office space dropped significantly in 2011 compared with 2010. Photo: Mohd Izwan Mohd Nazam of The Edge Malaysia The Malaysian House Price Index rose 6.6% to 156.9 points in 4Q2011, as the All House Price in Malaysia reached RM217,297 in the same quarter. Kuala Lumpur continued to record the highest average house price at RM487,219, followed by Selangor at RM327,237. However, the average terraced home price in Kuala Lumpur was RM527,113, while Selangor’s average terraced house price was RM325,951. In the retail market, shops recorded 24,997 transactions worth RM13.76 billion, a rise in volume of 0.8% compared with 24,731 transactions in 2010. Total values had risen 11.7%, and was a major contributor to the commercial subsector sales, representing 57.2% or 24,997 units of the total transactions. Average occupancy rates of shopping malls, however, reduced marginally to 79.5%. Occupancy rates of purpose-built offices eased to 82.9%. The take-up space for purpose-built office space dropped significantly at 256,792 sq m in 2011, compared with 925,064 sq m in 2010. The industrial sector contributed only 2.4% and 8.4% of the total market share in terms of volume and value respectively. Last year recorded 10,479 transactions worth RM11.54 billion. The volume increased by 6.5% from 2010, while value increased by 17.4%. Agriculture property was the second most active market, making up 19.7% of total volume transactions, with 84,726 transactions worth RM18.82 billion. The growth translated to an increase of 4.7% in volume and 65.4% in value that was attributed to the significant number of real estate land sales. According to the report, 2012 is expected to be more challenging due to the economic slowdown in Europe, Japan and BRICS (Brazil, Russia, India, China and South Africa) and inflation from rising commodity prices. The European sovereign debt crisis and the slower trade would also have direct impact on the open Malaysian economy. The launch of the report was simultaneous with the launch of NAPIC's Property Information System Malaysia (PRISM-JPPH). PRISM is an online real estate portal which allows access to real estate data online. According to JPPH director-general Datuk Abdullah Thalith Md Thani, the online reserve for real estate data is a much faster way for people to obtain real estate information. "We currently have 5,000 active real estate data providers. With the information at your fingertips, it allows people accessing the portal to make quick real estate decisions," he said. Real estate data providers include the Ministry of Finance (MoF), Bank Negara Malaysia (BNM), developers and real estate agents. Payment to access the data varies according to the status of those requesting for the data including students, real estate agents and others. The data provided include transaction data, values among others. - The Edge Property

 

Slower growth in property sector

KUALA LUMPUR: The number of property units sold last year went up by 14.3%, an increase against 2010’s 11.3%.
However, the growth is expected to decelerate this year as Bank Negara Malaysia’s (BNM) measures on prudent lending take effect, curbing speculation in the domestic property market, according to investment analysts and property consultants.
According to figures released by the National Property Information Centre (Napic) yesterday, the volume of property sold grew to 430,403 units from 375,683 in 2010, while value rose 28.3% to RM137.83 billion from RM107.44 billion.
Sales were brisk in the residential subsector last year, chalking up the highest performance in five years. There were 269,789 transactions worth RM61.83 billion in the segment. Volume and transaction value registered a y-o-y growth of 18.9% and 22.1% respectively.
“This is not alarming. The healthy market activity shows that there are still sales and new units being picked up. Access to easy funding was a factor [last year], though with the new guidelines the market should see growth decelerating,” said a property consultant.
Some analysts said the delivery of new units launched since 2009 may add downward pressure on property prices. “But the quantum of the impact has yet to be seen considering this is the first property boom that the country has seen in many years,” said an analyst.

The overhang properties declined 15.2% to 19,607 units last year from 23,133. About 26.1% of them were condominium or apartment units.

There is also concern about the possible oversupply of office and retail space.
However, Napic expects this vacant space to be absorbed by foreign investors as a result of various developments under the Economic Transformation Programme.
Napic said commercial projects such as the RM25.07 billion KL International Financial District (KLIFD) will stimulate construction and benefit the property sector in the long run.
The residential subsector, which accounted for 62.7% of total market activity and 44.9% of the transaction value in the property market last year, is expected to maintain its leading role in 2012, according to Napic.
More than half of total transactions involved houses priced below RM150,000 for the residential segment. Units priced between RM250,000 and RM500,000 accounted for 16.4%.
“This could be attributed to the increase in the level of affordability and supported by the ease in borrowing, and attractive loan packages offered by the financial institutions,” said Napic.
The number of new launches rose to 49,290 units last year from 47,698 previously. Most of them were in Selangor, Johor and Perak, which collectively accounted for 51.2% of the new launches last year. The sector’s sales performance improved to 46.3% from 45.7% in 2010.
Overhang properties declined 15.2% to 19,607 units last year from 23,133 in 2010. About 26.1% of them were condominium or apartment units. Interestingly, properties priced below RM150,000 accounted for 55.7% of the unsold units.
Overhang properties are defined as unsold units after nine months of the launch.
Deputy Finance Minister Datuk Donald Lim Siang Chai said at Napic’s launch of the 2011 property market report yesterday that growth in the property market should stabilise after three to five years.
Lim said an annual growth rate of 10% to 15% is normal.
He said the government is concerned about the high residential property prices but they are still lower than in Asean countries such as Thailand and Singapore.
“At the moment, the issue is still under control and we will intervene if the figure shoots up too high,” said Lim.
He said BNM’s recent guidelines were implemented to prevent a bubble in the local property market.
“We wanted to ensure that only those who are qualified to borrow from the bank are allowed to do so. The level of consumer debt has been quite stable for the last couple of years and we hope this figure will not increase,” Lim said.
From January, the loan amount for mortgages is based on net personal income, instead of gross income as in the past.
In 2010, BNM put a cap on the maximum loan-to-value ratio for a third home loan at 70%, requiring a higher down payment. The government raised the rate of real property gains tax (RPGT) on properties sold within two years to 10% from 5% last year, a move to curb speculation in the property market.
According to BNM’s annual report, outstanding household debts rose at a slower rate of 12.5% last year compared with 13.7% in 2010. The level of household debt to GDP stood at 76.6% as at end-2011.
About 64% of household borrowings went towards the financing of residential properties and motor vehicles.
The full-year growth in borrowings for the purchase of residential properties remains at 12.7%. However, the number of borrowers with more than two outstanding housing loans grew at a lower rate of 2.9% last year from 14.9% in 2010.

Things looking up for young buyers

DISCUSSIONS are being held with participating financial institutions to enable more young working adults to own a house under the My First Home Scheme.

Deputy Finance Minister Datuk Donald Lim said 1,623 people had sought funding amounting to RM238.9mil as at Jan 31.

Of the total, 280 applications involving RM41.1mil were approved, he added.

“The ministry needs to discuss this further as a number of people in Kelantan, Terengganu, Sabah and Sarawak are not benefiting from the scheme.

“We must get people in the lower-income group to be able to own a house under the scheme,” he told Saifuddin Nasution (PKR-Machang).

Lim said among the banks which provided loans for the scheme were Alliance Bank, Public Bank and Maybank.

He added that other initiatives to help the people own houses included the 1Malaysia People’s Housing Scheme.

“We have also raised the limit of house prices under the My First Home Scheme from RM220,000 to RM400,000 as stated in Budget 2012,” he said.

Lim said Selangor recorded the highest number of applications for the My First Home Scheme, followed by Kuala Lumpur and Johor.

He added that no applications were received from those in Perlis, Kelantan, Labuan and Putrajaya as at Jan 31. - The Star

SME village to take off in 2014

THE Penang SME Village project on a 60ha site in Batu Kawan on the mainland will take off in 2014.

This is following the completion of the Penang second link, which is scheduled for completion in the third quarter of next year.

The building plans for the SME Village will be submitted to the Seberang Prai Municipal Council this month.

SMEs that are tenants of the RM40mil Penang SME Centre in Bayan Lepas will get priority to move into the SME Village when it is completed.

The purpose of the SME Village, which is the same as the Penang SME Centre, is to strengthen the competitive edge of SMEs in the state so that they can better serve the needs of multinational corporations (MNCs).

Chief Minister Lim Guan Eng said the state government was waiting for the second link to be completed first before executing the plans for the SME Village.

“While foreign direct investments (FDIs) are important to Penang and have been instrumental in promoting industrial development in the state, SMEs are equally important as they provide the much sought after ancillary and support services to the FDIs or MNCs.

”Today, the availability of supply chain or ancillary and support services is an important determining factor for FDIs in selecting the location for their investments,” he said recently after visiting the Penang SME Centre in the Bayan Lepas Industrial Park fourth phase.

The centre is over 80% completed and is expected to receive the certificate of completion and compliance (CCC) by end of next month.

Also present were Penang SME management council member Datuk Dr Mohd Sofi Osman, Penang Development Corporation (PDC) general manager Datuk Rosli Jaafar, and investPenang executive committee chairman Datuk Lee Kah Choon.

So far, 10 local SMEs had applied for the about half of the net lettable area of 130,000sq ft in the four-storey Penang SME Centre building, Lim said.

The rental rates for the Penang SME Centre ranges from RM1.50 to RM1.80 per sq ft for the first year which are below market rates.

The tenancy period is five years and subjected to renewal.

The tenants of the SME Centre will enjoy 24-hour security service, cleaning and landscaping.

“In addition, they will also get to tap into investPenang’s industry network of venture capitalist, research institutions, potential markets opportunities and intelligence, apply for MSC status and receive incentives from Multimedia Development Corporation, enjoy business mentoring provided by the Penang Science Council Committee and given priority lane for purchasing industrial land from PDC.

“InvestPenang will also showcase the centre’s tenants to potential investors, MNCs, and other large companies,” Lim added. - The Star

Property sector continues to be on solid ground

KUALA LUMPUR: The property market would continue to be active this year, supported by various government initiatives under the 10th Malaysia Plan and Budget 2012, said Deputy Finance Minister Datuk Donald Lim.

“Last year, in terms of construction activities, the higher number of new unit starts and building plan approvals signified the confidence of developers and investors,” said Lim at the launch of Malaysia’s Property Market Report 2011.

According to the report, the performance of the residential sub-sector would be sustained, while vacant space in the office and retail sub-sectors is expected to be absorbed as more space is taken up during the progress of the country’s Economic Transformation Programme.

However, Lim also pointed out that the Government was worried about the emergence of a real estate bubble.

Looking good: Lim reading the property market report. With him is Valuation and Property Services Department director-general Datuk Abdullah Thalith Md Thani.

“We do not want a United States subprime mortgage crisis in Malaysia. We noted that a lot of foreigners from the Middle East and China are keen on buying properties here,” he said.

Lim said the Government would intervene when property prices were seen to have “shot up too high.”

“As such, measures such as the implementation of the maximum loan-to-value ratio of 70% for the third home and Bank Negara’s responsible lending guidelines were taken.”

According to data on Bank Negara’s website, the amount of loans applied for purchases of residential property increased by 17% year-on-year in the first two months of 2012 to RM26.7bil.

The amount of residential property loans approved during the period was RM12.25bil, which was 2.7% higher compared to a year earlier.

Last year, the property market performed strongly with the value of transactions rising 28.3% to RM137.8bil. Volume rose 14.3% to 430,403 transactions.

The report stated that market activity was led by the residential sub-sector, which had a double-digit expansion of 18.9%.

This was followed by the development land (14.7%), commercial (9.7%), industrial (6.5%) and agricultural (4.6%) sub-sectors.

In terms of value, all sub-sectors registered double-digit growth with two sub-sectors surpassing 50%, namely agricultural (65.4%) and development land (54.8%).

Despite more units launched, the performance of the residential market improved last year. In 2011, there were 49,290 units of new launches which achieved sales of 46.3%, compared with 47,698 units with 45.7% sales in 2010.

Selangor, Johor and Perak offered the most number (51.2% or 25,216 units combined) of new launches in the country.

In terms of market share, the residential sub-sector dominated with 62.7%, followed by the agricultural (19.7%), commercial (10.1%), development land (5.0%) and industrial (2.4%) sub-sectors.

The residential sub-sector also took up a 44.9% share of the transaction value in the market. Last year, there were 269,789 residential property transactions worth RM61.83bil, which was the highest recorded in the last five years.

Selangor retained the lion’s share by capturing 27.9% (75,344 transactions) of the country’s total transactions.

The demand for high-end units priced above RM500,000 had increased, with 21,905 transactions last year (compared with 16,782 transactions in 2010).

“This could be attributed to the increase in affordability level and supported by the ease in borrowing as well as attractive loan packages offered by financial institutions.”

By property type, terraced houses captured 36.6% (98,597 units) of residential transactions, of which about one-third were transacted in Selangor.

As at the end of 2011, there were 4.51 million existing residential units with 584,546 units in the incoming supply.

According to the report, the Malaysian All House Price Index had surged to 156.9 points in the fourth quarter of last year, compared with 147.2 points a year earlier. - The Star

Residents want EGM

RESIDENTS of Gambier Heights Apartment in Penang are urging the Commissioner of Building (COB) to call for an Extraordinary General Meeting (EGM) after the parcel owners claimed that they were not given the audited financial report by the Joint Management Body (JMB).

The apartment is located in Persiaran Bukit Gambier near Bukit Gelugor.

They claimed that matters arising at the second Annual General Meeting (AGM) were also not forwarded to them during their third AGM held on May 3 last year.

Teacher S.C. Tan, 45, said the EGM was needed to vote and endorse a licensed property manager to manage the overall operations and administration of the apartments.

“We were also not given the audited financial statements for 2007, 2008, 2009 and 2010.

“According to the Building and Common Property Act 2007 (Act 663), the EGM could be called if a quarter of parcel owners signed for it.

“We submitted the petition together with 202 signatures by parcel owners to COB requesting an EGM but was later informed that the request had been rejected.

“In their letter dated November 1, it was stated that the rejection was because 25 owners had withdrawn from the petition, three had duplicated their signatures and six were not parcel owners.

“This left us with 168 signatures. Hence, the petition was rejected,” she said after a meeting with the MPPP president Patahiyah Ismail at Komtar recently.

Engineering site supervisor Stephen Lee, 49, said there were 737 units in Gambier Heights Apartment and at least 185 signatures were required.

“The law is silent on whether it allows ‘withdrawal’ from petition or if it rejects the ‘add-on’ of signatures,” Lee said.

“If the COB had allowed the ‘withdrawal’ of those who are for the EGM, why can’t they allow the ‘add-on’ of signatures?” he asked.

Lee claimed that a decision would be made known after the COB’s meeting on April 13.

Patahiyah declined to comment when met after the meeting. - The Star

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Making the right choice when buying a house

KUALA LUMPUR (Mar 21): Buying a house to live in is often a very positive experience, especially for first-time homeowners. However, for some, the transaction process can appear daunting, and for most people, the purchase is probably the biggest financial commitment they've made in their lives. With the dream house identified and booking fees paid, the next step is to withdraw one's savings from the Employee Provident Fund (EPF) and apply for a loan to pay the 10% deposit and the balance for the house. Most buyers use both the EPF funds and the loan to pay for the house. The first thing that is likely to be on the mind of first-time buyers is whether they are eligible for a loan and how to apply for a loan. Today, borrowers are spoiled for choice since non-banking institutions also provide loans, and their interest rates are highly competitive compared with banks that offer a discount of 1.8%-2.4% on the base lending rate (BLR) for a fixed period. Apart from financial institutions, insurance giants such as AIA and ING also offer fixed-term loans at a profit rate of 4.8%. The writer's own experience with buying her first house in the 1990s could serve as a guide to other buyers. When a new phase of the housing project was launched, several banks had opened their counters in the housing developer's lobby located at Wisma Tractors in Subang Jaya. Since Islamic loans were unheard of at the time, the writer and her husband took a joint conventional loan from Bank Simpanan Nasional (BSN). All the calculations and documentation for the RM120,000 loan with a 15-year duration were left to the bank. By the end of the term, the writer had repaid the bank RM150,000 through a fixed monthly payment of RM850. And today, the Muslims prefer the Islamic loan based on Syara'. Starting with the Bai Bithamin Ajil (BBA) at the end of the 1990s, there are now more Syariah-based loans such as the Bai Al Inah, which is becoming increasingly popular. Islamic loans are based on a fixed profit rate and not on the fluctuating BLR. The basic concept is that the financial institution sells the house to the borrower at a future value, that is, the value at the end of the loan term. For example, if a property costs RM350,000, the repayment over a 20-year period could reach RM900,000, inclusive of the fixed profit rate. Although this entails repaying about three times the original loan, the borrower need not worry about fluctuating interest rates or the conventional interest forbidden by Islam. However, an Islamic loan can be settled early if the borrower agrees to return the excess payment through "hibbah". Nonetheless, Islamic loans allow fixed repayments — a factor most welcomed by wage earners walking a financial tight rope in keeping up with their repayment obligations. Hazel Lim, a private sector worker, recently chose to buy property in Bangi. "Like other borrowers, I too place my complete trust in banks, lawyers and developers to complete the whole transaction. "I will ask the bank to calculate an affordable repayment by adjusting the repayment period. "It is important that I'm able to keep up with my payment obligations as stated in the agreement. If I feel that I cannot afford to repay the loan, then it's best that I don't take it in the first place. Then I have to look for a cheaper home," explained Hazel. Her choice is a corner double-storey terrace unit on 470 meters of land costing almost RM900,000, and it is Hazel and her husband's second property. "If I take a 15-year conventional loan from a local bank, after paying a down-payment of RM 150,000, the monthly repayments amount to RM5,500. "When I asked for the payment to be extended to 20 years, the repayment [amount] reduced to RM5,000 per month. I'm still considering this option. The repayments are high considering people like me and my husband are just wage earners," said Hazel. However, buyers should also take note of the much lower interest rate available now with a discount of 1.8%-2.4% on the BLR. Before making any decisions, buyers should also consider the developer's reputation. Buyers should be wary of the developer's status to ensure their housing projects are not abandoned halfway through, leaving them burdened with repayments and no house to show for it. Developers such as Sime UEP Development Sdn Bhd, Guthrie Property Development Holding Bhd, MK Land Holdings Bhd, IJM Land, SP Setia Bhd Group and I&P Group have etched a sterling reputation in the industry. Some newcomers such as Trinity Group Sdn Bhd have received good reviews from buyers for their ability to complete projects on schedule and to meet the buyers' expectations. — Bernama