Stopping foreign property purchases

RECENT reports of the Government considering doubling the minimum price of houses that foreigners can buy to RM1mil is positive for it is a step in the right direction. But you probably need something more drastic than that.

It's a strange thing, property. As much as it can keep the economy going and get prosperity levels up and up, it can send them all crashing down at other times. As much as property developers and banks contribute to societal well-being, they can just as well destroy it.

It's a basic human necessity when you call it shelter and every society aspires for a minimum standard of comfort. But it is more than shelter it's a lifestyle, it's luxury, and it caters to the rich, the poor, the middle class and the working class.

It's a workplace, it's a production facility, it's a place to go for entertainment, to shop, to stay for short periods of time and it's big business. So, when do you allow foreigners to own a property or not own one?

Hard facts: The notion that allowing foreigners to buy high-end properties will not affect other properties is false. When Malaysians are squeezed out from that sector by rising prices, they will move down the line and house prices will be affected all the way down.

That's not an easy question to answer for you have to think about prices, crowding out, demand and supply, dreaded bubbles and the like.

The trick may be to allow foreign purchases in some areas and not in others.

If property is purely for commercial purposes when it is used for offices, factories, shopping complexes, hotels and so on, by all means let those be open to foreign purchases, not to encourage speculation, but to facilitate business.

But if it is for residential purposes, it is best to keep the foreigners out for two reasons one, our currency is probably still undervalued which will enable them to buy residential property cheaply from their point of view, driving up the prices of residential property to all Malaysians.

Two, this along with schemes such as 5/95, which allows payment of 5% of the property price and nothing more for two years, simply encourages speculation in property, encouraging a boom-bust scenario in property which we can ill afford.

One will do well to remember the United States' sub-prime crisis when, incredibly, purchasers could get loans of more than the value of the house. And then incredibly too, many such mortgages were pooled together and given investment grade rating.

That basically enabled loan originators to simply pass on their loans to others in the United States and throughout the world who were blissfully unaware of the risks they were really taking because they believed the rating agencies who did not know their work.

When the crash came, as it inevitably does under such circumstances, the US economy shuddered to a halt and threatened to go under and take the whole world economy along with it. It took a lot of printing of money to stop that, something only the US could do because other countries lent it money in US dollars!

But, coming back to Malaysia, the notion that allowing foreigners to buy high-end properties will not affect other properties is false. When Malaysians are squeezed out from that sector by rising prices, they will move down the line and therefore house prices will be affected all the way down.

Ask Singaporeans they know that well. Because there is such a lot of foreign demand for houses from foreigners, most Singaporeans are stuck to their Housing Development Board flats with no chance of moving higher up in more ways than one.

In fact, there is a school of thought that this allowed the opposition to make inroads in the last Singapore elections following which Mentor Minister Lee Kuan Yew left the Cabinet and his son, the Prime Minister, made an apology to the Singaporean public.

There is only so much land and therefore so many houses that can be built. Houses should be reserved for those who stay in this country residents. Period. That way, developers can meet genuine demand from those who want to stay here, not those who want to buy property to make a quick buck.

Developers are the wrong people to ask whether foreign buying of houses should be permitted. They will say yes, because they want greater demand for their products. But ask them how they are doing now when they marketed their high-end products in areas in and around Mont Kiara and the twin towers of KL, first to foreigners and only then to locals.

Some of them are finding out that it is better to cater to genuine demand people who want to stay there rather than those who speculate on house prices. If speculators outnumber those who want to stay there, then you are going to have a problem and a property bubble that will burst.

Even if you don't allow the foreigners in, this can happen. So why let them in the first place when you deprive residents from decent places to stay.

Yes, property prices appreciate in the longer term but let them appreciate in terms of local conditions, according to local income levels. Then, the vast majority of Malaysians who don't have a house can still afford to purchase them at a reasonable price.

The lack of lights in many high-end condominiums as dusk settles on Kuala Lumpur should be a stark, dark reminder to the Government that speculative foreign purchases of residential property do nothing for Malaysia, raise property prices for Malaysia and create eerie places. - The Star

Independent consultant and writer P Gunasegaram continues to hope that the authorities will see the light of day sooner rather than later.

Should we park and ride?

RECENTLY, one of my long-serving staff decided to give up her job. In most cases, people leave a job for greener pastures. Her case was different.

She lives at one end of Kuala Lumpur (KL) and works at the other end of KL. It would be reasonable to believe that travelling within KL should be a breeze. Yet, on average she spends up to three hours each day on the road to travel to and from work. While she loves working with the company, the tiring years of spending many hours on the road has worn her down and her family time has been greatly shortened.

To many, the announcement of the Klang Valley My Rapid Transit (KVMRT) project is like a timely rain to ease the drought. The development of public transportation dictates the ease of mobility and connectivity in a city, which is a key factor for KL to become a world-class city, and for Klang Valley to elevate to the next level.

Attractive line

Being an architect and a developer, creating quality lifestyle has always been my keen interest, and I do look forward to the development of KVMRT. The first Sungai Buloh-Kajang line that has 51km in total length is expected to generate great benefits along the route once it is completed.

It will attract more people to move into Klang Valley, achieving the mission of growing the Greater KL's population, and eventually spurring the development of the country.

As the MRT project shoulders the important role of changing lifestyles of a huge population, it is important to be prudent in every single detail right from the planning stage to ensure the desirable outcomes are achieved, to the benefit of all, including the owner and operator of the MRT, as well as its end users.

Serving its purpose

Based on the plan, the Sungai Buloh-Kajang line is targeted to serve a catchment of 1.2 million people with 31 stations in total. Thirteen of these stations are expected to have the park-and-ride facilities. How viable are these facilities? Will they do more harm than good in solving the issue of traffic congestion, scarcity of land for housing and preservation of environment?

Before we delve further, let's ask ourselves this question: “How far are we prepared to walk under Malaysia's tropical weather?”

Answers may vary but the average acceptable distance will be 300m to 500m. If this is the comfortable distance for people to walk to the MRT stations, how many cars can we accommodate within the neighbourhood of this radius? How big a space should be allocated as parking bays next to the stations?

If one acre is allocated, it can only accommodate 150 cars, which is too few to satisfy the demand.

If the car park area is increased to three acres for 450 cars, it will be a huge waste of valuable space as the land next to the MRT station is a prime property. The construction and maintenance costs of these car parks will result in high parking fees for the users. Unlike shopping complexes which can charge reasonable parking fees to attract more shoppers and in turn, subsidise its car parks' maintenance cost.

In some developed countries, the same piece of land would be used to develop high rise dwellings or commercial buildings.

For example, instead of constructing a car park, the same three acres can be utilised to build 450 units of apartments of 1,200 sq ft each.

The idea of constructing 1,200 sq ft apartments will also attract more middle income group who can afford to own cars to use MRT instead. This will generate more volume to the MRT stations, increasing the economy of scale and thus lowering the price of ticket.

These stations will eventually become centres of attraction for commercial activities, creating more business and employment opportunities for the areas.

In addition to constructing high-rise buildings nearby the stations, feeder buses can be used to increase the accessibility to the MRT station. The MRT operator must ensure the feeder buses are frequent and timely in delivering reliable services to MRT commuters. Another option is to build covered walkways to encourage more people to use the MRT facility.

Riding quality

In order to attract people to stay near the MRT stations, noise and pollution from the MRT system should be reduced. One of the most effective ways of doing so is to go underground.

We should have more underground stations to ensure the quality of living for those who stay around the stations. Such areas can later on be expanded to become commercial hubs, complementing the existing business activities on the ground, such as what have been practised in Singapore, Hong Kong and Taipei.

Going underground may be expensive. Nonetheless, one has to consider the economic and social impacts of MRT stations in the long run. If it is not viable to go underground, are there any other options that are worth considering? What about building an elevated tunnel enclosed with fiberglass (similar to our KLIA's Skytrain) to cut down noise pollution?

There are many possibilities that can be explored with the development of MRT system. With proper planning, MRT system can ease the traffic flow and enrich quality of life for the people living in Klang Valley. However, with park-and ride stations, the concern is, does it serve the purpose of easing traffic congestion within if MRT commuters still need to drive to MRT stations?

Datuk Alan Tong is the group chairman of Bukit Kiara Properties. He was the FIABCI world president in 2005-2006 and was named Property Man of The Year 2010 by FIABCI Malaysia.

Investing in foreign property seems harder now with changing rules and economic climate

WITH the permission from my friend, and with her thoughts on investing in London, this piece is about her considerations when buying into a unfamiliar foreign market.

For quite a while, she and her husband have been considering the option of buying a residential property in London. She attended seminars on properties and lettings, spoke to other potential investors and those who have already invested.

After a long deliberation with her spouse, they both decided to keep their money closer home.

It was not the 2012 Budget announced on March 22 by the Chancellor of Exchequer, equivalent to finance minister, and the slew of changes that govern foreigners buying British properties that made them change their minds. They had made up their mind to drop the idea before that.

They had other considerations. The first was the distance and they questioned the practicality of having to deal with long distance administration issues, be it ownership or tenancy. The second was the uncertainties that govern the world today. Uncertainties and instability exist all the time, but the last several years, the vagaries of the changing world seem to be coming fast and furious. Added to that were the changing rules and regulations by governments.

Foreign ownership, at one time welcomed, may cease because of national considerations. They also reasoned that at this point in their lives, if they did not sell the property, it would be left to their children.

This couple was not hoping to make lots of money with their overseas investment. Neither were they speculating. They just wanted to diversify while at the same time, preserve the value of what they have.

There are many who have invested abroad. And their reasons for doing so may be well justified. But there is something about changes in rules and regulations, at national level, that add to the current load of global economic, financial and political uncertainties that govern the world today.

“Just as there are changes in Malaysian government rules and regulations about what residential properties foreigners can buy, so are there changes in the United Kingdom,” she says.

She was referring to a report early this week that the Malaysian government was mulling over raising the minimum floor price of houses that foreigners were allowed to buy from the current RM500,000 to RM1mil. The move is to control the rise in property prices.

In the same way, other governments around the world too would make changes to suit their national agenda.

Last December, the Singapore government imposed a 10% additional buyer's stamp duty applicable to all foreign purchasers, bringing it to 13%. Foreigners were snapping up about 9,300 private homes last year making it a record one-third of total sales.

Early this month, Singapore government announced that it would end a programme that allowed wealthy individuals to gain permanent residence quicker by putting money in the island, after an influx of foreigners in recent years spurred property prices and fueled voter anger, Bloomberg reported.

Back in 2010, Australia tightened rules on foreign investment in real estate, and introduced penalties to enforce the changes, to ensure pressure was not placed on housing availability for local residents. Temporary residents required approval from the Foreign Investment Review Board to buy property, and had to sell them when leaving Australia.

About three weeks ago, the British government introduced a new Stamp Duty Land Tax (SDLT) rate of 7% for residential properties over £2mil, applicable from March 22 this year.

London-based property consultant Knight Frank in an initial note on the changes says there would be a new 15% SDLT application from March 21 this year for residential properties over £2mil purchased by “non-natural persons”, such as companies.

The British government is also consulting on the introduction of an annual charge on residential properties valued at £2mil owned by “non-natural persons” (that is, properties bought in the name of companies). The intention is to legislate this in the 2013 Finance Bill and if this goes through, this annual charge will commence April 2013.

A fourth issue is an extension of the capital gains tax to gains on the disposal of UK residential properties by non-residents, non-natural persons, such as companies, commencing from April 2013.

In other words, says Knight Frank, the British government was saying that if you bought expensive residential properties as individuals, rather than a company, you would pay 7% and not 15% SDLT, and avoid a future annual charge.

The rationale is to target rich individuals who buy in the name of a company. However, property consultants and lawyers say individuals may come using a company vehicle because they wanted to protect their privacy and not to avoid paying a hefty 40% inheritance tax.

Whatever it is, to avoid all that hassle, my friend has decided to just keep her money closer home. - The Star

Assistant news editor Thean Lee Cheng thinks the vagaries of today's global outlook, coupled with changing national rules and regulations, make any investment a colossal consideration.

Protecting local house buyers

INCREASING the floor price of residential property for foreign buyers from RM500,000 to RM1mil will be a positive development for the housing market, according to analysts and consultants.

Many quarters are in favour of the move to raise the floor price as it would protect the housing market for the masses.

They say the move is timely due to the continued uptrend in home prices which are forcing financiers to start providing “second-generation” type of home loans which extend the servicing of the debt to the purchasers' children.

Property consultancy Knight Frank's executive director Sarkunan Subramaniam says the increase in floor price for foreigners would be positive as it would benefit the local buyers as the foreigners have been pushing up house prices.

Out of reach: House prices have appreciated considerably over the past few years and it is becoming increasingly difficult to find residential properties priced below RM500,000 in Kuala Lumpur or Penang.

“I think overall, this is a proactive policy measure by the Government to reduce competition for houses valued at below RM1mil. However, there could be some slight impact on foreign purchasers in Johor who choose to stay in Johor Baru but work in Singapore,” Sarkunan tellsStarBizWeek.

Hong Leong Research's property analyst Sean Lim says that the move is “positive for the domestic buyers who have been frustrated by the rise property prices over the last two to three years”.

Lim says in a report that the impact on the overall property market will be minimal as “less than 5% of all transactions is by foreign buyers”.

Lim also states that the RM1mil floor price could be irrelevant as most foreign buyers are buying in the KL City Centre area and the Golden Triangle in Kuala Lumpur with valuations in excess of RM1,200 per sq ft.

Soo says that the measure will have limited impact on the property sector as most foreign buyers are already buying properties that are priced above RM1mil.

“In the greater Klang Valley area, channel checks indicate that majority of foreigners are renting instead of buying houses,” Lim says.

Lim maintains his overweight rating on the property sector.

DTZ Debenham Tie Lung executive director Brian Koh says that the latest measure that is being considered by the Government will help protect the mass segment of residential properties from foreign speculation.

“A limit on foreigners which allow them to buy only houses that are priced above RM1mil would protect the mass market segment of residential properties and see less competition,” Koh says.

“There may be some impact on the foreign buyers of houses that are priced RM800,000 and above.

“But most foreigners normally buy properties above RM1mil so there will be limited impact on the property sector. These foreigners are from Hong Kong and Singapore,” Koh says.

CB Richard Ellis Malaysia's managing director Allan Soo says that the measure will have limited impact on the property sector as most foreign buyers are already buying properties that are priced above RM1mil.

CIMB Research says in a research note that it is “not entirely surprised by the proposed ruling as house prices have appreciated considerably over the past few years and it is becoming increasingly difficult to find residential properties priced below RM500,000 in Kuala Lumpur or Penang”.

“We believe the impact on developers with significant foreign buyers such as Eastern & Oriental Bhd would be minimal. Only 2.4% of residential properties transacted in 2011 were priced above RM1mil and foreigners typically chose higher-end properties,” it adds.

Koh: ‘A limit on foreigners which allow them to buy only houses that are priced above RM1mil will protect the mass market segment of residential properties and see less competition.’

Should this higher floor price be approved, it would also mean protection for the mass market segment of property purchasers.

The Government intervention into the property market with the objective of eventually cooling down house prices to more realistic levels is also in line with the current trend by governments in Singapore, Indonesia and China.

Analysts say that the move shows how much property prices have spiralled locally and that the move is proactive amid growing fears of a property bubble.

An economist with RHB Research Institute says that sustained high property prices and news about financiers starting to offer second generation loans show the seriousness of the non-affordability issue.

“These financiers need to stretch the loans to the second generation which only indicate that houses are becoming unaffordable for a normal salaried person,” RHB Research said.

Sarkunan: ‘I think overall, this is a proactive policy measure by the Government to reduce competition for houses valued at below RM1mil.’

“From an economic point of view, if affordability issue continues to deteriorate it would not be a good feeling for the people. Moreover, these second generation loans may have legal implications as the financiers don't know the credit rating of the children of the current buyers,” the RHB spokesperson added.

A senior analyst with a foreign research house observes that property prices have sky-rocketed and reckons that the current prices are unrealistic.

“I think the Government should implement the measure immediately.

“There is no doubt that looking back, prices were more realistic in the past without people having to extend the loans to their children.

“The trend is for developers to offer small-sized units nowadays as the prices keep going up. The houses are becoming smaller and smaller because of the rising cost factor,” he adds.

According to statistics of the Valuation and Property Services Department, the number transactions for properties priced up to RM150,000 decreased year-on-year by an cumulative average of 30.6%. - The Star

Going up the property value chain

High-profile projects like the KL Metropolis and Platinum Park are taking Naza TTDI to the next level of the property sector.

AUTOMOBILES often pop up in people's mind when Naza Group is mentioned. It's understandable given its history and position as the country's largest private car company.

There is, however, another part of the group's business that's fast catching up. The sprawling group years ago added property development to its portfolio of companies and it's looking to create the same type of awareness for that side of the business when it comes to name association.

Its ambition to get involved in bricks and mortar instead of just nuts and bolts came by way of an acquisition in 2004.

That year, Naza Group's unit, Ekspedisi Nikmat Sdn Bhd bought overTTDI Development Sdn Bhd from Danaharta. That was the first step and ever since then, that property business has slowly been manicured and groomed into Naza TTDI Sdn Bhd.

TTDI Development, formerly known as UDA SEA Park Development Sdn Bhd, was a joint venture between SEA Park Development Sdn Bhd and the Urban Development Authority (UDA) that turned 286ha of rubber estate land into the highly-acclaimed Taman Tun Dr Ismail (TTDI) township during the 1970s.

Today Naza TTDI is making waves with a number of high impact projects, notably KL Metropolis and Platinum Park, that will take it to the next level of the property value chain.

Naza TTDI deputy executive chairman cum group managing director SM Faliq SM Nasimuddin says these projects will showcase the company's branding to a broader market and build a higher profile for the company.

He is confident that Naza TTDI will be able to record RM1bil in sales this year. Last year, it recorded sales of RM655mil.

Faliq says that although the group's automobile business is the main growth driver and is doing well, its property division is also growing into an important contributor to the group's bottomline.

“Naza TTDI is probably one of the largest privately-owned property developers in the country today and our vision is to become one of the top ranking property players within the next five years,” he tellsStarBizWeek.

However, he says the company, being a private entity, does not want to expand too fast but prefers to grow steadily and systematically.

“What is important is that we have the right projects to meet an annual growth target of 10% to 15%, and a strong balance sheet.

“We want to make sure that any project we bring to the table will be of quality and will be ahead of schedule. That's why, first and foremost, we place great importance on building up an exemplary team with the right resources and expertise,” Faliq says.

Expressing his satisfaction with the company's performance thus far, he does not discount a listing of the property outfit in the future, but notes that the timing must be right to reap the right value from any listing exercise. The probable timeframe for listing is in the next three to five years.

“Our internal track record has been quite strong, and we already have in place the necessary corporate governance and performance standards required of a listed company,” he says.

Signature projects

One of the most touted projects by Naza TTDI is KL Metropolis a 75.5-acre mixed development comprising residential, commercial, retail, office towers, exhibition and convention, and arts and culture facilities.

Positioned as Kuala Lumpur's international trade and exhibition district, the development has been master planned by renowned international architect firm Skidmore, Owings and Merrill, famed for developments such as London's Canary Wharf, Burj Al-Khalifa in Dubai, and Singapore's Marina Bay.

The master plan of KL Metropolis, launched last October, shows that KL Metropolis will be based on sustainable development principles that promote the preservation of the environment as well as meeting the needs of the working and living population of the area.

According to Faliq, KL Metropolis is designed to the Green Building Index requirements and will be among the most environmentally sound mixed-use communities in the country. The development is also aiming for MSC Cybercentre status.

“It will be the first registered LEED for Neighborhood Development (LEED-ND) project in Malaysia. LEED-ND certification is an internationally-recognised green rating system that incorporates the principles of smart growth, urbanism and green building, that meets accepted high levels of environmentally responsible and sustainable development,” he explains.

Expounding on details of the master plan, he says it is designed in a manner where it can be implemented and developed in a series of manageable phases.

“This will encompass a new generation of buildings, with sustainable architecture and energy efficient engineering that is sensitive to the environment and directly improves the quality of life and productivity of their occupants.

“The RM15bil development will stretch until 2025 and will need a lot of our attention. We are talking to a few developers as well as retail and hotel investors to become partners for the various components in KL Metropolis,” he adds.

Naza TTDI's unit which is developing the project, TTDI KL Metropolis, signed a privatisation agreement with the Government and Syarikat Tanah dan Harta Sdn Bhd to develop the Matrade Centre for the Government at a cost of RM628mil.

Designed to promote year-round events, Matrade Centre on 13 acres will have a gross floor area of 1 million sq ft and net lettable area of 600,000 sq ft. The completed building is to be handed to the Government by end-2014.

Faliq says another major component of KL Metropolis will be the shopping mall which will be designed to allow future “horizontal” expansion after the gestation period is over.

“The retail component will be one of the key plays in KL Metropolis and will herald a new shopping experience with some key unique features,” he explains. Another of its high visibility project is Platinum Park, which is located on nine acres in the Kuala Lumpur City Centre vicinity.

Designed by Foster + Partners, the nine-acre project comprises three Grade A office towers, two luxury service apartment towers and one hotel cum luxury service apartment tower. There will also be 150,000 sq ft of retail space and a 1.5-acre park.

The first office tower, Felda Tower will be handed over in mid-2012 while the second tower, for a government-linked company, is due for completion in late 2013. The third tower for the Naza Group, Naza Tower, is to be completed in the second quarter of 2014.

The project with gross development value of some RM4bil is due for completion in 2016.

Spreading its wings

Naza TTDI has 1,300 acres of landbank 500 acres in the Klang Valley and 800 acres in Penang that the group feels have a potential gross development value of over RM20bil combined.

Faliq says Naza TTDI is looking to expand its market presence outside of the Klang Valley to other fast-growing markets such as Penang and Sabah.

The company owns 800 acres in Bertam on the mainland of Penang which it plans to start developing around end-2013.

As for Sabah, Naza TTDI is keen to explore opportunities in Kota Kinabalu.

He says the new airport in Kota Kinabalu and the many attractions there have contributed to a surge in tourist arrivals from various countries including Hong Kong and South Korea. Foreigners from those countries are keen to invest in properties there.

On whether Naza TTDI harbours any overseas ambition, Faliq says: “TTDI is a brand we can take overseas, but this will not be happening so soon. We are studying a number of opportunities.”

The markets being looked into include Singapore and the other Asean countries.

Faliq says being creative and having unique selling propositions to offer property buyers are very important criteria to succeed in the highly competitive property development sector.

“Creativity, functionality and quality are part of the value propositions of our projects whether it is a township, business park or retail development. Moving into the highly sought after Kuala Lumpur City Centre vicinity and other major integrated developments will offer the opportunity for us to do even better in those areas,” he explains.

Having completed more than 15,000 residences and commercial units spanning over 1,650 acres, the company has established a good development track record and sound fundamentals.

“The Naza TTDI brand is synonymous with quality, early delivery and proven capital appreciation in the secondary market,” he says.

Faliq says the company has to be vigilant on the challenges in the property business that include growing competition, getting hold of the right landbank for its projects, having to face an oversupply situation of high-rise residential projects and office space and rising cost.

According to him, the surplus in the high-rise residential market comprises mainly over-sized units of more than 2,000 sq ft while supply of more average sized residences is still limited.

To gauge the market's preferred size of residential property, a survey was conducted in Singapore last year, and the results show that the majority still prefer smaller units mainly for the reasons of affordability and easier maintenance.

“Demand is stronger for residences of average sizes of 600 sq ft to 1,500 sq ft which are still in short supply. This is the market we are targeting at,” Faliq says.

The company will also have larger units in the range of 2,000 sq ft or bigger but this will only account for about 30% of its projects.

Naza TTDI's portfolio of completed projects include Section 13, Shah Alam and Laman Seri semi-detached and bungalows.

Another TTDI project is Laman Seri upmarket semi-detached and bungalows enclave and Laman Seri Business Park commercial development in Shah Alam.

It successfully built the Giant Hypermarket within a record six months as well as constructed the Shah Alam Malawati Indoor Stadium in 1998 for the boxing event of the Commonwealth Games.

The company has two ongoing township developments TTDI Alam Impian, a 208-acre township development in Section 35, Shah Alam; and TTDI Grove Kajang, a 118-acre township in Kajang. These projects are the company's “bread and butter” which can cushion the company against a market downturn.

Another upcoming project set to kick off in mid-2013 is TTDI Puchong, a RM1.2bil mixed development on 53 acres in Puchong.

It also has some pocket developments at its two TTDI townships in Kuala Lumpur and Shah Alam the RM137mil TTDI Ascencia and RM207mil TTDI Adina. - The Star

Tradewinds to swap land status in Langkawi

PETALING JAYA: Tradewinds Corp Bhd has followed the precedence set by DRB-Hicom Bhd in swapping its Malay reserve land status in Langkawi Island with comparable non-Malay reserve land on the mainland at a conversion rate of RM5 psf. The proposed exercise, which is to enhance the value of the land in Langkawi, will see the status of 43.6 acres (17.4ha) under Tradewinds in Langkawi to be converted to non-Malay reserve status. Apart from that, Tradewinds also has an option to convert the status of another 119 acres in Langkawi with land in Kubang Pasu measuring 126 acres. The entire exercise will see the state receiving RM37.4 million in conversion fees based on RM5 psf. Tradewinds announced to Bursa Malaysia yesterday that through its subsidiaries THR Hotel (Langkawi) Sdn Bhd and Benua Mahsuri Sdn Bhd, it entered into agreements to exchange its land status with Northern Gateway Free Zone Sdn Bhd (NGFZ) at a ratio of 1:1.05 acres. NGFZ is a wholly-owned subsidiary of Northern Gateway Sdn Bhd, which in turn is a wholly-owned subsidiary of Benua Bayu Sdn Bhd, a company linked to Tan Sri Syed Mokhtar Albukhary. NGFZ is the owner of the land in Kubang Pasu that Tradewinds is swapping the status with. It is proposed that the Malay reserve status of THR Hotel land in Pantai Chenang, Langkawi measuring 6.9 acres be swapped with about 7.21 acres on the basis of 1:1.05 acres in Kubang Pasu. The land status swapping will cost THR Langkawi RM1.57 million. Benua Mahsuri, on the other hand, will swap the status of Malay reserve land of 36.7 acres in Padang Mat Sirat that it has leased from Lembaga Pembangunan Langkawi (Lada) with about 38.5 acres belonging to NGFZ in Kubang Pasu. The swap will cost Benua Mahsuri RM8.39 million. This is the second time a company linked to Syed Mokhtar has swapped its Malay reserve land in Langkawi with comparable land elsewhere in the state. Last December, DRB-Hicom exchanged its Malay reserve land in Pulau Rebak Besar, Langkawi with NGFZ’s tract also in Sungai Laka, Kubang Pasu, for RM76 million cash at a conversion rate of RM5.23 psf. Effectively, the swapping is a way for DRB-Hicom and Tradewinds to enhance the value of their land in Langkawi as it allows non-Malays to acquire properties developed on these parcels. Usually land with Malay reserve status carries less development potential as the sale of property is restricted. In DRB-Hicom’s land status swap agreement late last year, it said that to attract high net worth investors for the development of Rebak Marina, it has to convert the Malay reserve status into an open status land. Similarly, Tradewinds and Benua Mahsuri plan to develop the land after getting the status changed. In this respect, Benua Mahsuri said it intends to develop the Lada land to enhance the value and will submit an application to the state to de-classify the Malay reservation status of the Lada land. - The Edge Property

 

Do not sell, rep tells Balik Pulau landowners

LAND owners here have been urged not to hastily sell off their plots for quick profits as this move could disrupt the physical environment of the area.

Pulau Betong assemblyman Muhammad Farid Saad said some land owners had received letters from a real estate agency asking them whether they have any intention to sell or rent out their lands.

“Just imagine if 100 acres of land were sold off.

“The landscape

of

Balik

Pulau would surely then change.

“The owners here are entrusted to the land. Please don’t sell it.

“The quick profits will not last forever. But with the land, we can keep it for the generations to come.

“Even if they build new houses here, it is going to be costly. Only outsiders can afford it, not the locals here.

“If possible, please maintain Balik Pulau as it is, “he said after presenting aids in the form of monetory aid, laptops, a personal computer and a printer totalling RM40,000 to 13 schools, the Fisherman Association and religious organisations in Balik Pulau.

Muhammad Farid, who also received the same letter, also questioned how the real estate agency got hold of their addresses.

“So far, I’ve collected 12 letters from the residents,” he added.

The letters dated March were sent by a real estate agency based in Butterworth.

When contacted, a spokesman for the real estate agency who declined to be named said that their company was assigned by a developer to obtain feedback from the residents.

“We are not forcing anyone to sell or rent their land.

“In fact, we have already received feedback from them. Some are not willing to sell but some are willing to provided the price is good. We will present the feedback we received to our client,” she said. - The Star

It’s a no-no to strong arm tactics

Police out to get contractors who flex their muscles to secure renovation jobs

POLICE have set up a task-force to zeroin on in-house contractors who are muscling for renovation jobs at newly completed apartments and condominiums using their links to triads in Penang.

An initial police probe found that many of them, who charged exorbitant prices for materials and workmanship, were protected by secret societies.

In the latest incident, police nabbed an “in-house” contractor, 34, after he had barred another contractor from starting renovation work at an apartment unit in Batu Lanchang here.

The suspect, said to have close links to the ‘08’ underworld gang, insisted that the house owner engaged him for the renovation or buy construction materials from him.

The victim, 59, lodged a police report on the matter.

George Town OCPD Asst Comm Gan Kong Meng said a suspect was picked up in Jelutong at 10am yesterday.

“He is now being investigated under Section 506 of the Penal Code for criminal intimidation.

“We have received four police reports of such similar cases at the same newly completed apartment block,” ACP Gan said.

“We will not tolerate this. House owners who are threatened by such contractors can come to us. House owners can engage any contractor they like,” he told a press conference at George Town police district headquarters.

He advised those who faced similar problems in Jelutong to contact ASP Azhar Abu Bakar at 012-9065999, Insp Megat Shafril Emran at 019-4100400 or lodge a police report at the nearest police station.

The in-house contractors who monopolise renovations at newly completed high-rise residential buildings are mostly linked to secret societies active in the district.

It is learnt that house owners who refuse to engage them would be posed with all sort of problems, ranging from stolen or broken window panes, or having their unit doors, or walls damaged.

House owners were also forced to pay exorbitant prices for a wheelbarrow of sand or a bag of cement. - The Star

‘Improve public transportation in Penang’

GEORGE TOWN: If public transportation system is improved, there would be no need for a third link between Penang island and the mainland, says Halcrow Consultants director Dave Turner.

Turner, a transportation planning expert involved in the Penang Transport Master Plan Study, said the third link depended on whether Penangites were ready to change and start using public transport.

“If we don't start using public transportation, we will eventually need a third link.

“If we don't make any improvement in public transportation, then cars will be the only option for most people's travel. If so, then by 2030, we will need a third link,” he said at a forum on the Penang Master Plan Study.

Halcrow Consultants and Singapore Cruise Centre are part of AJC Planning Consultants which was hired by the state government for the master plan study last May.

Turner, who revealed the findings after almost a year's research, said the study identified the issues on the lack of public transportation on the island and mainland, the pedestrian regime, and taxi and ferry services that needed attention.

He said the population growth would result in travel demand increasing by around 25% or more by 2020 and 50% or more by 2030.

“The methods we have taken to handle this problem are highway-based, public transport-based and policy intervention-based,” he added.

“As such, we have come up with two approaches the Highway Improvement-Based Approach and the Balanced Approach Vision.”

He said both included the Core Package, which was an improvement on the highways, public transport and implementation of policy intervention.

“The Highway Improvement-Based Approach consists of the Core Package along with the Third Crossing, Cross City Link from Jelutong to Air Itam bypass, North Coast Pair Road, Air Itam to Relau Pair Road and the North-South Expressway Link,” he said, adding that the costs were estimated at RM12.5bil.

“The Balanced Approach Vision consists of the Core Package along with the Penang Outer Ring Bypass, the North-South Expressway Link, trams, ferries, commuter rail and George Town/Butterworth Access chargers,” he said. - The Star