新关仔角红树林 或筑走道成海上公园

（槟城27日讯）新关仔角的红树林已开始长成，或在未来被开发成为筑有海上走道的观景公园，来槟游客在用餐后可穿梭走道在海中欣赏海景！
郑雨周：望大选后有眉目
也是丹绒武雅区州议员郑雨周透露，他已向州政府建议将丹绒道光Marina Bay公寓后方及新关仔角合您购物广场及G酒店前红树林地相串连，以在未来开辟成为红树林海上走道及观景，成为海上公园。他表示，在2009年已向州政府提呈计划，有关计划也后期加添不少新元素，然而他承认有关计划迄今还只是处于纸上谈兵，尚未获得政府积极看待，计划上路也无期，只寄望可在大选后会出现眉目。
郑雨周表示，在提议下将在红树林进行规划出海上的走道，在海上架起木桥穿梭进入红树林伸入海中，游人可在海上架起的观景平台上望海欣赏日出等活动，有关计划或须百万令吉打造。他表示，有关计划已交彭文宝行政议员以便交给州政府认真考虑及执行，在计划下他建议迎合红树林成长地型拟定出海上走道，这可参照其他国家的做法，只要划出范围执行起来并不难，它将可发展成为一座海上式的公园。
在问及上述红树景观可能会遮挡新关仔角海景时，郑雨周认为，红树林走道将成为新关仔角的海景带来附加价值，旅人可在用餐后步上走道欣赏红树及海景，一举多得，此外新关仔角的海景不再只是海上景观，绿油油的长成红树林将成为视觉上的一种享受。针对新关仔角的红树林开始长成，郑雨周表示，红树的生存率是五十对五十，在此前人为种植的红树林面对海潮冲走的命运。而他不排除红树长成后面对人为破坏的可能，在先前于东方海鲜舫的红树即有7至8颗的红树遭人砍伐，对此他表示州政府将不会姑息有关行为。-光华

Seeing is believing

EARLY this week, an article from wire service Reuters highlighted the perils of buying properties in an unfamiliar country. The article, datelined London, was about British developers and house builders promoting their projects in Asia as a result of strict lending guidelines drying up demand among Britons.

StarBizWeek has also featured quite a number of articles about the British property market since 2009. Like stocks, bonds and other asset classes, property is another form of investment. While some may prefer to invest locally, others may invest abroad.

But whether it is Britain, Australia, Singapore or Malaysia, developers anywhere work on the same principle and that is the need to sell in order to generate revenue, in both good and bad times.

The world, with the exception of Asia (for now), is going through difficult times and this is expected to last quite a while. There is no end in sight for the eurozone crisis for many months to come, at least. That is why developers and house builders are promoting and marketing their projects in Hong Kong, Singapore and Malaysia more aggressively than before.

Kuala Lumpur is a relatively new market for them as their normal destinations prior to 2009 have been Hong Kong and Singapore. When it comes to overseas property investments, the people in Hong Kong and Singapore have been there before us.

But despite that, buyers from the former British colony have discovered that they have bought into projects based on misrepresentation.

According to the Reuters article, an investor bought into a project which he believed was “a 40-minute walk from central London.” It turned out to be “a 40-minute journey by high-speed train!”

Another bought into a project that was located on Kensington High Street. The brochure alluded to the proximity of the High Street Kensington underground station.

Some of these projects could well have been promoted here. In both these cases, there would be non-issues had the investors flown to London to see the actual site for themselves, check out the accessibility and the stations that may or may not be there.

In the case of 375 Kensington High Street, on the map that came with the beautifully printed and obviously expensive brochure, the nearest tube station seems to be Olympia. But while Olympia is along the tube line, the train only stops there during public holidays, weekends and when there is an event at the exhibition hall which is located nearby. The train does not stop at Olympia during a weekday. One will not know that based on the information provided by the map alone.

Secondly, to allude to the project being near High Street Kensington may be a bit of a stretch because the two nearest tube stations are West Kensington and Hammerstein, according to a source who used to live there. When 375 Kensington High Street was marketed in Kuala Lumpur, a thick glossy publication was given to potential investors.

Kensington Street is a long road and on which end the property is sited is important. The local equivalent would be Jalan Ampang, which begins from Lebuh Ampang, passes the KLCC to Ampang Point to the deeper corners of Ampang.

Some of Malaysia's most prestigious properties are located there and less prestigious ones as well with the KLCC as the central point of reference just as High Street Kensington tube station being the point of reference.

If one has the inclination to buy into a project that runs into hundreds of thousands of ringgit or RM1mil or more, it seems only logical to check out the area before signing on the dotted line. That holiday, which costs a fraction of the investment, will give clarity to the investment, and peace of mind.

While there, one may also request to see other properties by the same developer. Besides misrepresentation, it has been brought to our attention that some projects may not yet have got the necessary financing. British banks will only lend to developers after a certain portion of sales have been formalised.

Some projects have been marketed in Asia with the hope and aim to achieve that sales target. Lack of financing may lead to delays.

Some projects are promoted as having yield of between 5% and 6%. According to an agent, well located properties have yield of between 3% and 4%. The further away, the higher the yield. Properties in Kajang, for example, would be cheaper than those in Petaling Jaya and the yield from that Kajang house would be higher (annual rental/price).

This does not mean London is not a good property investment destination. On the contrary, the EPF have bought into some landmark buildings there. It would not be fair, therefore, to tar with the same brush all properties promoted here. Indeed, some exceptional properties have arrived on Asian shores. But like companies that do due diligence before investing, individuals too must do likewise. Whether it is Melbourne, Singapore or London, or even a project here, wouldn't checking out the site be the first thing to do? - The Star

Deputy news editor Thean Lee Cheng suggests it is time for some Malaysian investors to take a working holiday in Britain, if they have not done so already.

Look at the fine print in guaranteed rental returns

CALL them what you like leasebacks, buy-to-let, cash back, own-for-free developers have come up with creative plans to woo investors with guaranteed rental returns (GRRs) on yet-to-be-built properties.

Developers would agree to pay buyers rentals ranging from 8% to 12% per annum or a proportion of the purchase price for a certain length of time.

This kind of purchase, which has become increasingly common judging from the press advertisements, sounds enticing to investors who do not want the trouble of managing their own investments. You buy the property, and you get the rental returns thrown in.

While GRRs could be very attractive, investors need to know that the scheme is not as simple as it seems, much like ads that appeal to our desire to lose weight quickly, get rich fast or strike the lottery.

Realistic rentals

If a developer is offering GRRs, the buyer has no way of knowing whether that property is going to achieve the promise in the open market. The developer may not be able to get the guaranteed rent or the property may not be let out at all during the guaranteed period.

Pitfalls

Generally, GRRs are best for the laidback investor. Some people will value the “simplicity” of the deal. However there are issues that buyers have to be aware of and comfortable with before entering into such agreements.

A typical mortgage lasts 20 years. If you have a guaranteed rental for just three years, what will happen for the next 17 years? You are left to sink or swim on your own.

A typical table of returns will show potential buyers a surplus income. A potential investor has to take into account the cost of maintaining the property, the taxes that come with being a property owner, the cost of maintaining the mortgage and all other fees related to acquiring the property.

Under most GRR schemes, you will need to buy a furniture package with the apartment and commit yourself to the management charges and sinking fund of the building, on top of the regulatory quit rent and assessment tax.

These will often take a substantial bite out of any rental money left each month.

GRRs are specifically aimed at selling units to investors, so you may see a situation of 500 apartments all going to the rental market rather than owner-occupiers at the end of the scheme. You will need to consider how many people will be chasing tenants at the end of the guarantee period and most particularly how many prospective tenants there are.

In areas of high competition, landlords will have to reduce the rent to attract available tenants. Consequently, the market value of the properties will go down rather than up.

If you decide to sell, you will also be limited to buyers who will also be mainly investors. Sellers will also find themselves competing with developers who are offering higher rental returns with new developments.

Overpricing When supply is more than demand, developers always look for ways to avoid having to reduce prices. While GRRs may offer attractive secure returns, it will be a false economy in the long run if the buyer ends up overpaying for the property.

A guarantee is only as good as the company who underwrites it. Even if the GRRs seem reasonable and are offered with honourable intentions, investors need to be sure that the developer would be able to sustain the returns if the rental or sales market were to take a turn for the worse. If developers were to default on the payments due to buyers, these buyers will likely default on their respective loan repayments, thereby setting off a chain of events with dire consequences.

Terms and conditions in GRR agreements are not regulated by law. As such, the inexperienced investors may not understand that the fine prints are often written in the guarantors' favour. Example of such clauses:

“Provided always and it is hereby agreed between the contracting parties hereto that the Developer reserves its right to terminate the GRR agreement for any reason whatsoever by giving TWO (2) MONTHS written notice to the Purchaser wherein such a case the Developer's obligation to pay the guaranteed return to the Purchaser shall cease from the date of such termination. Such notice is deemed to have been received within three (3) days from the date of the letter”

Purchaser's nightmare

Quite sometime ago, we received an email from an observer who was at a developer's office. He narrated this incident where he witnessed an elderly Ah Pek who had just taken “vacant possession” of his investments, comprising four units of apartments with a GRR scheme. He was demanding that the developer “take back” the units and give him a full refund on the purchases.

The Ah Pek had discovered that the four units he purchased under the developer's GRR scheme had depreciated in value by 25%. To rub salt to the wound, the developer had terminated the GRR scheme as allowed in their agreement, leaving the Ah Pek frustrated with his “failed” investment. The elderly Ah Pek wept in full view of all present at the developer's office! Did the “generous” developer give the Ah Pek any refund? Your guess is as good as mine.

In another case reported in the local papers two years ago, a group of investors filed a legal suit to claim from the developer whom they alleged had breached their agreements. They were practically throwing good money after bad. Win or lose, lawyers collected their fees upfront.

Buyers beware

The rental market is volatile, depending on current competition and market conditions. People investing in these schemes are not just buying properties that they hope will increase in value in time, but also using “other people's” money (from rentals) to pay for the purchase. It is, however, a cyclical market, and one is subject to the laws of supply and demand as in any other sector of the economy.

GRRs offered to investors should be checked carefully against the local market and competition. A simple survey within the location will give an investor a fair idea of the state of the local market. If market prices are lower than the proposed rent, incentives and discounts being offered to woo the buyers, then this are issues to be considered. If guarantees of rentals are higher than the existing market rate, then a rent decline after the end of the guarantee is likely. It is a classic case of caveat emptor rental guarantees can sometimes guarantee investors nothing but heartache.

Anyone who has any real estate experience knows there is no such thing as a guaranteed rental. Real estate, as with any other type of investment, has its ups and downs. There are times when one cannot rent out. Any developer or any person (mind you) who says that he is able to predict the future is “bluffing.”

Our economic cycle goes through cyclical changes that response to economic and other happenings in, as well as, outside our country. Projected monetary returns that cannot be guaranteed (or self-guaranteed) are doubtful in nature.

Had it been so profitable, don't you think that the developer, their shareholders and related companies would have snapped them up before being available in the market? Why don't they keep it for themselves? Guaranteed returns should be accompanied by documentary proof of a trust account nothing more nothing less.

Chang Kim Loong is the honorary secretary-general of The National House Buyers Association, a non-profit, non-governmental, non-political organisation manned by volunteers. For more information, checkwww.hba.org.my or e-mail info@hba.org.my

Continuous improvement needed for developers to remain competitive

FIABCI MALAYSIA is urging local property developers to “raise the bar” in order to remain competitive at the annual FIABCI Prix d’Excellence Awards, which comprises the best of the best from around the world.

“The Malaysian real estate projects are some of the world’s best in the true sense. (However), the competition will get tougher each year as more and more countries enter the competition with their own national winners,” FIABCI Malaysia president Yeow Thit Sang said recently at an appreciation dinner for Malaysian developers that were honoured at this year’s FIABCI Prix d’Excellence Awards.

Yeow however commended the Malaysian companies that were recognised at this year’s Prix d’Excellence Awards.

“There is total transparency and independence in the judging process. None of the 47 judges knew who was marking which project. There was no comparison of opinion between any of them. All the marks were given independently,” he says.

FIABCI Malaysia is the organiser of the annual Malaysia Property Awards (MPA), which is considered the “Oscars” of the property industry.

Over the years, there has been an increasing emphasis on the environment and participants at the MPA have to take this into consideration.

“The impact a particular project has on the environment currently accounts for between 20% and 25% of the judging criteria,” says Yeow.

He also says the standard of judging for the MPA has increased over the years.

“It comprises a four-tier process,” says Yeow, adding that the judges comprise past presidents of FIABCI Malaysia.

“We also have a public auditor who collates all the marks,” he says.

Winners of the MPA in their relevant categories will go on to represent Malaysia the following year at the FIABCI International Prix d’Excellence, an annual competition that honours the world’s best property projects.

This year’s FIABCI Prix d’Excellence Awards, which was held in May at St. Petersburg, Russia, crowned four Malaysian developments in total, namely UEM Land Holding Bhd (for the Master Plan category), Mulpha International Bhd (Residential Low Rise) category, SP Setia Bhd(Specialised Project/Purpose-Built category and Sunway City (Ipoh) Sdn Bhd (Resort category).

Established in 1992, this year’s MPA will be held in November.

Separately, Yeow says he is optimistic about the outlook of the local property market for this year, adding however that things can turn for the worse should the global economic situation deteriorates.

“The economies of the world have a great influence on the local market. If Europe and the United States are affected – because they are buying from us, it will affect us. Eventually, our products cannot sell and there will be unemployment.

“Once unemployment comes in, the real estate market will be affected. If you’ve bought a house and you’re servicing the loan and lose your job, what are you going to do?” — The Star

One step closer to new look

THE proposed upgrading of the Chowrasta Market in George Town has taken a step towards reality.

The Penang Municipal Council (MPPP) has approved a budget of RM12.07mil for the project, said its financial management sub-committee alternate chairman Tan Hun Wooi.

He said the project’s architect would have to submit the paperwork for the project in a month or two.

Tan was, however, unable to say when the project would start as the paperwork had to be reviewed after submission.

“The project is expected to be completed in three years after work starts,” he said at an MPPP full council meeting at the City Hall yesterday.

It was reported earlier that the market would sport a refreshing new look under the project which, among others, would include a five-storey car park with 153 parking bays.

Other proposals include travelators, a small bank with automated teller machines, a post office and an urban farm on the rooftop where hydroponic plants could be grown.

The original Chowrasta Market was built in 1890 by the George Town Municipal Council and was last upgraded in 1961.

On another matter, MPPP councillor Muhammad Sabri Md Osman said the road heading from Jalan Sekolah La Salle towards Jalan Lumba Kuda via Jalan Kuda would be turned into a one-way street from Monday to Friday (6.30am to 8am and 12.30pm to 2pm) to alleviate traffic congestion.

“Part of Jalan Ibbetson (from the junction of Jalan Grove) to the entrance of SM Teknik Tunku Abdul Rahman Putra will also be turned into a one-way street during the same periods,” he said.

He said a three-month trial of the one-way street system on the two roads would be implemented from next month. - The Star

Affordable housing move

DEVELOPERS who opt to build 87 housing units per acre (0.4ha) on Penang island will now have to allocate 15% of their projects for units priced between RM200,000 and RM300,000.

This is an increase of 5% as the previous requirement for such units for that plot ratio was 10%, said Penang Municipal Council (MPPP) councillor Felix Ooi Keat Hin.

He said developers who take up the plot ratio were able to build more units and, as such, they needed to also build more affordable ones too.

“It is an initiative by the state to build more affordable housing,” Ooi said at a full council meeting at the City Hall in the Esplanade, Penang, yesterday.

He said developers who opted for that plot ratio also had to allocate 5% of their project for units priced RM200,000 and below, and 5% for units priced between RM300,000 and RM500,000.

ull agenda: Councillors discussing matters at the full council meeting at the City Hall.

MPPP Public Health Standing Committee alternate chairman Ong Ah Teong said Alunan Matrik Sdn Bhd had been awarded the tender to manage the use of electronic bunting on street lamps.

He said the award was made through an open tender conducted in June last year.

He said the company would be allowed to put up 100 panels on selected street lamps for which they had to pay the council RM720 per panel a year in addition to a RM10,000 deposit for all 100 panels.

“The company have to comply with regulations set by the council such as a ban on alcohol advertisements,” Ong said, adding that the e-buntings would be up in July.

When contacted, Alunan Matrik marketing vice-president Patricia Pee said the e-bunting was an initiative by the company to go green as there would be no ink and paper wastage. - The Star

Mah Sing may gain up to 25% margins from Southville

KUALA LUMPUR: Property developer Mah Sing Group Bhd is expected to benefit from its latest land purchase in Bangi, Selangor, due to the large pre-tax profit margins the company can gain from the development.

Analysts said the development of Southville City on the Bangi land could achieve pre-tax profit margins of up to 25%.

The project would be developed on a 408-acre freehold land and four-acre leasehold land.

Maybank Investment Bank Bhd analyst Wong Wei Sum said in a report that the development, slated for a launch in the first-half of 2013, could translate into a net profit of RM50mil per annum or six sen per share. This is on the assumption of a 25% pre-tax profit margin and an eight-year development period.

She has retained a “hold” rating on the stock on the premise that higher interest costs had lowered the company's 2012-2013 net profit forecasts by 0.2% to 1.2% and had also raised net profit forecast for 2014 by 4.7%.

“Post-acquisition, Mah Sing's net gearing would jump to 0.6 times from 0.3 times as at end-Dec 2011. There's no change to our RM2.95 revised net asset value estimate,” Wong added.

Hong Leong IB said it was “positive” on the land acquisition.

“We are positive on this acquisition as land cost makes up 16% of overall gross development value, meaning margins should be healthy.

“This is a very quick turnaround project, with Phase 1 to be launched in the second half of this year. We expect earnings contribution to commence in the first half of 2013. Phase 1 will comprise double-storey link homes indicatively priced from RM530,000.”

Hong Leong IB has retained its “buy” call on Mah Sing with a target price of RM2.44, which is a 30% discount to revised net asset value.

Meanwhile, analysts at Kenanga Research have maintained their “market perform” rating on the stock and lowered their target price to RM2 from RM2.18 previously.

They said that it was a sector-driven call due to the unexciting sector dynamics, coupled with Mah Sing's higher-than-average net gearing level among developers under their coverage. - The Star

Inspired by famous Oz market

BY December, people of Paya Terubong in Penang will have a wet market with a modern and dynamic architectural design and facilities complete with a food court.

The Sri Aman Food Court and Wet Market costing RM5mil is a project by developer Chong Company Sdn Bhd under its Corporate Social Responsibility programme.

The project is built on a 0.76ha land in Persiaran Paya Terubong 3.

At the site: A view of the Sri Aman Food Court and Wet Market contruction in progress in Persiaran Paya Terubong 3, Penang

Chong Company executive director Chan Fock Seng said the project was currently under the third phase of construction.

“The building can accommodate 50,000 people and it will be the first wet market and food court complex in Paya Terubong.

“The design is inspired by the Queen Victoria Market in Melbourne, Australia, with high ceilings for good ventilation, car parking bays, loading area, motorcycle parks, toilets and washing area,” he said.

An artist's impression of the new market's interior

“It will house 143 stalls in the wet market section and 37 stalls in the food court section,” he told reporters after visiting the project site with state Local Government and Traffic Management Committee chairman Chow Kon Yeow recently.

Chow commended the company’s Green Initiatives Plan to incorporate a Recycling Centre, Natural Ventilation, Sun Shading, Skylight (Natural Lighting) & Low Energy Fittings into the project.

He said: “It is the state’s hope to upgrade the facilities and outlook of wet markets and to do away with the perception of them being smelly and unclean places.

“The state government through both the Penang Municipal Council and the Seberang Prai Muni- cipal Council have spent over RM10mil to upgrade the wet markets on the island and on the mainland.” - The Star

初步概念翻新巴刹店面 乔治市商业改进区现形

（槟城24日讯）乔治市商业改进区计划（BIDS）逐渐“现形”，初步概念中，旧社尾巴刹一带将改头换面，除了翻新巴刹及店面，也提议建立图书馆、文化中心、房屋等。Think City项目经理许仁强在槟州首长林冠英的陪同下，于周四在光大首长办公室向媒体呈献初步概念。商业改进区计划委员会由槟州发展机构担任主席，而Think City与国库控股则为先锋队。
许仁强表示，经过1年半时间与多个单位讨论后才拟出大蓝图，概念建立在5个设计理念上，即衔接、绿意、民众安全、包含性及多元化，可分为5个阶段进行，涉及范围从柑仔园时代广场到加马购物中心、头条路、槟榔路以及林萃龙路。“无论如何，这只是大概念，还未细节化，也不是最后定案，因为与州政府、市政局、私人领域等多方面合作，配合交通大蓝图，还有寻求民众意见等。”
他接着说，该概念中，第1阶段涉及柑仔园路的连接，第2阶段是林萃龙路及头条路、第3阶段将提升光大及新光大，而最后一个阶段是翻新旧社尾巴刹一带区域。他透露，其中新光大顶楼的建议是要设立空中花园、室内足球场、滑板公园等。
他提及，HENG LEE & CO有限公司、玮力产业集团、第一大道广场、新光大、槟州发展机构、加马百货（GAMA）、龙城酒店（Cititel Express）、PLENITUDE公司、乐台居等已纷纷提供建议。林冠英表示，州政府注重绿意及公共空间的提升。民众若有任何意见都可寄至Bidi@thinkcity.com.my。出席者包括槟州发展机构总经理拿督罗斯里、光大区州议员黄伟益等。- 光华

SP Setia has big plans in Penang

GEORGE TOWN: After recently acquiring 21.3 acres in Tanjung Bungah for RM185.6mil, SP Setia Bhd is now looking at an adjacent 14-acre site.

SP Setia Property (North) divisional general manager Datuk S. Rajoosaid the group was now in an advanced stage of negotiation to buy the property.

“We expect to ink the deal soon. The two properties are an integral part of the group's business plan to launch about RM2.5bil worth of properties on the island this year and in 2013,” Rajoo said.

“Land on the island is becoming scarce. Since SP Setia wants to continue playing a dominant role in the property market on the island, it is seizing every opportunity to expand its landbank, capitalising on attractive deals,” he said.

SP Setia's business plans for Penang include the launch of residential and commercial properties worth over RM638mil in the second half of 2012.

In 2013, besides the RM1.1bil project in Tanjung Bungah, SP Setia will also launch a RM175mil condominium project in Sungai Nibong, and the Wave and Breeze condominium projects for Setia Pearl Island, with a gross development value (GDV) of RM350mil and RM300mil respectively.

“In the second half 2012, the key projects include the RM250mil Setia Triangle, the RM335mil Setia Greens 2, and a RM53mil condominium project in Teluk Kumbar,” he said.

The Setia Triangle project on 6.8 acres in Setia Pearl Island comprises two-, three-, and four-storey shop offices with built-up areas of 3,000 sq ft, 4,500 sq ft, and 6,000 sq ft respectively. Each unit will be priced between RM1.95mil and RM3.6mil.

“There will also be a residential component comprising a 225-unit condominium, priced between RM575,000 and RM1.2mil,” Rajoo said.

The Wave consists of 535 condominium units priced from RM300,000 to RM750,000, while the Breeze comprises 450 units with a price tag of RM500,000 onwards.

“The scheme in the Teluk Kumbar development comprises 98 condominium units with built-up areas of 1,000 sq ft and 1,4000 sq ft, priced between RM500,000 and RM700,000.

“To date, we have launched over RM1.1bil worth of residential properties in Setia Pearl Island. Once the Setia Triangle, Wave, and Breeze are launched, the GDV for Setia Pearl Island will rise to RM2bil,” he said.

Rajoo said SP Setia had also recently acquired two pieces of land in Balik Pulau for RM38mil, where the group planned to develop both landed and high-rise properties.

He added that the group's projects in Penang should generate about 15% of the its revenue for the fiscal year ending Oct 31. - The Star