Home prices in suburban Klang Valley expected to hold steady

KUALA LUMPUR: Property prices in suburban areas in the Klang Valley may be stable in the next two years, as there would be a lot of supply to cater to the demand.

Low Yat Group executive director Low Su-Ming said she believed that “prices will be holding the way they are because there is more supply coming up in the northern and southern corridors” and that developers were already branching out to areas beyond the first tier locations.

“I don't think there will be an acceleration unless the development is prime but having said that, construction cost and land prices will not come down,” she told StarBiz.

Low said that while the domestic demand for properties was varied, there was unwavering demand for landed property among Malaysians.

Low: ‘Property prices will be holding the way they are.’

“There will continue to be demand for these homes and more Malaysians are also looking for landed properties at affordable prices. People are going out (of the urban areas) and developers will go where there is a catchment market.”

Whether prices would appreciate and at what rate, Low maintained this will depend on the developers' distinctive concepts and product pricing. The Low Yat Group has a mid-market 2,670-acre township development in Bandar Tasik Puteri, Rawang that is 50% completed with a 50,000 population.

Low said the township has become more appealing now as more infrastructures have been introduced to the area, notably highways that shortened the time it took to travel into the city centre.

“There is a choice (for Malaysians). That's the beauty of Klang Valley. You can own an inner-city dwelling yet live 20 minutes away and have a huge mansion of your dreams,” she said, noting that it was something intense, highly developed cities like Hong Kong and Singapore could not offer.

“We have a young and growing population. In the Klang Valley, we have a great deal of opportunities to make our city into a well-developed and sustainable city by having the various townships linked up through infrastructures like highways,” she said.

Of a recent report about rising prices in Penang, Low said that an effective masterplan for sustainable development was needed to overcome concerns from Penang's population.

“Penang is undergoing a transition. In the next three to five years, it should join the ranks of world class beach and tourist destinations like Bali, Phuket, Singapore and Hong Kong.

Low Yat Group’s 2,670-acre Bandar Tasik Puteri township in Rawang.

“It will also become a choice destination for high net worth individuals who come here here the Malaysia My Second Home programme,” she said, adding that this scenario should be perceived positively.

“As long as guidelines are in place and administered efficiently, the island will gain from better quality projects that are designed by internationally acclaimed architects and master planners,” she said.

Low Yat has been in the Penang property scene since the late 1970s building resorts, hotels and condominiums.

Currently, it has an upcoming five-star hotel project with 382 rooms along Northern Road on the island.

The project is scheduled to commence construction in the first quarter of next year. - The Star

Taskforce: Pig farmer polluting mangrove swamp

CHECKS by relevant agencies found that a pig farm owner who failed to treat sludge in the sewage pond in Kampung Pantai Acheh in Balik Pulau, Penang, for the past 10 years has been causing the muck to ‘overflow’ into a nearby mangrove swamp.

Taman Negara Penang Monitoring Taskforce committee member Teh Yee Cheu said the improper management of the pond in accordance with the set environmental guidelines had resulted in the mangrove swamp, which is part of the Taman Negara in Teluk Bahang, to be polluted.

He said the farm owner was already committing an offence by running the farm which encroached on a piece of state government land.

“He then went a step further by not treating the sludge in the sewage pond causing the pond to be filled with murky water which is emitting a foul stench,” he said.

Teh, who visited the site recently, said the contaminated water also flowed out to the sea which made matters worse.

He said the checks were carried out by the Environmental Depart-ment and the southwest district Drainage and Irrigation Department (DID).

Teh also said he was shocked to find out through an emailed reply from the DID that the part of the sewage pond, which was on state land, was given a temporary occupational licence last October.

“This means that all this time, the pond was actually illegal.

“Action should be taken against the farm owner for jeopar- dising public health as well as polluting the environment,” he added.

Teh, who is also Tanjung Bungah assemblyman, suggested that the farm could be relocated to a more suitable location like Kampung Selamat in the southern part of Seberang Prai. - The Star

RM7mil to tackle floods

THE Penang Government has allocated more than RM7mil in its effort to tackle floods in five places on the island.

Penang Agriculture and Agro-based Industries and Flood Mitigation Committee chairman Law Choo Kiang said several flood mitigation projects were expected to start before the next rainy season (in September) to help minimise the risk of flood.

“The state allocated more than RM200,000 for the upgrading of the sewerage system in Kampung Bukit, Bayan Lepas, in April and the project will be managed by the Public Works Department (PWD),” he said.

“The upgrading work, such as replacing the box culvert, is expected to start before September as PWD will have to prepare the tender documents and look into traffic management before starting the project.

“The whole procedure before the project starts will take at least three months,” he told reporters after inspecting the sewerage systems in Jalan Besar, Bayan Lepas, yesterday.

Bayan Lepas PAS coordinator Asnah Hashim said Kampung Bukit often experienced flood during downpour and the problem had been there since it was under the Barisan Nasional administration.

“The land in Kampung Bukit is lower and water flowing from the hill to the village causes flood,” she said.

Kampung Bukit Community Security and Development Committee chairman Akbar Ibra-him said flood would occur after about two hours of heavy rain.

He hoped that with the flood mitigation project in Kampung Bukit, the flood water would be diverted into the nearby Sungai Bayan Lepas.

Law said three other flood mitigation projects were also waiting to start since the allocation was approved.

“One of the projects includes replacing the box culvert with an arch bridge in Jalan Sungai Dua (opposite Universiti Sains Malaysia).

“The box culvert is too small for the huge volume of water to pass through during heavy rain,” he said.

“By replacing it with an arch bridge, more water will be able to go through and this will help prevent flooding,” he said.

Law said upgrading works on drainage system would also be done in Jalan 3 and Jalan 6 in Minden Heights.

“The level of the road is lower, thus this causes flooding in the area during heavy rain.

“Both projects will be managed by Drainage and Irrigation Department,” he added.

Law said the sewerage system in Jalan Berek, Pulau Tikus, would also undergo upgrading works and was expected to start next week.

“The project in Jalan Berek will be managed by the Penang Municipal Council (MPPP).

“An additional budget of RM30,000 was also given to MPPP to de-silt the monsoon drain in Jalan Gurdwara to prevent flooding,” he said. - The Star

Lim: Planning committee to look into hill development exceeding 76m

GEORGE TOWN: Development on hills above 76m, whether approved or unapproved, will be referred to the state planning committee, chaired by Lim Guan Eng.

The Chief Minister said these projects, including those approved as “special projects” by the previous administration, should be referred to the committee, which comprises several state executive councillors.

“At least let us be aware of all projects – even those above 76m. I don’t want to only know about it from the newspapers,” he said to reporters in Komtar yesterday.

“I, as the head of the state government, and state Local Government and Traffic Management Committee chairman Chow Kon Yeow do not want to be the last to know. At the same time, we can explore other remedies to prevent projects above 76m from starting.”

Lim also met Sungai Ara residents who have protested over two hillside development projects. He said these were approved on Sept 13, 1996, by the previous state government as a “special project”.

“Following this discovery, we’ve decided that such projects should be referred to the planning committee.

“When this project was reported in the press, it shocked me that this was happening. I thought there must have been a system failure that failed to detect the projects above 76m.

“I contacted Penang Municipal Council president Patahiyah Ismail and she told me that they followed the procedures and passed the requirements as it was taken out of the category as a ‘special project’, and approved by the previous state government,” he said.

Lim said the current state government was unhappy that the 76m limit had been breached because of previous approvals, adding that the details of 31 such projects by the previous state government would be released. - The Star

Apartment built like a hotel

IF a serviced apartment is like a marriage between a hotel and an apartment, Low Yat Group's latest luxury project may elevate the romance between the two to another level.

Named after a neighbourhood in Lower Manhattan of New York City, Tribeca is designed with elements of a neighbourhood within a building that is also equipped for hotel-style living.

Executive director Low Su-Ming says Tribeca will target mainly investors as well as those seeking the true essence of city-living.

“We find property investors these days seek a lot more added value for their investments,” she tells StarBizWeek.

Hospitality suite: Low with a model of the Tribeca tower project.

Among the key features of the hospitality suites are the two rooftop infinity swimming pools and five distinctively different Sky Pods which work as common areas scatter throughout the building.

This is a concept first in Malaysian residential developments and will be visible from the exterior of the building.

The pods, or breakout spaces, will each occupy three storeys along the corridor with internal staircases for easy accessibility. Among the pods would be a jungle-themed children play pod, a three-storey exclusive club lounge, business function rooms and more.

“Each pod acts as extended features to the units where residents or business travellers staying temporarily can entertain friends in one of the lounges or host a 20-pax dinner function in the club,” she says, adding that while residents are free to utilise the common facilities, “some are only accessible with a small fee”.

Tribeca is also designed to light up with colours all around its tower.

“We say for this project, we say we have to do a bit different to define urban. It does not have to be the gray, CBD, Class-A steely look,” Low says.

The group wanted to bring a bit more fun and life into the cityscape by featuring different coloured windows at each unit, making the whole tower rather colourful from the outside.

“As a private developer, we are doing our fair share in contributing in terms of not just adding another building to the city skyline but also thinking of ways to activate the city,” she says.

Being sited on a very strategic location, Low says the group wants to complement the activities already there while further adding vibrancy to the city centre by designing and operating a building that meant for urban lifestyle.

The development will have 297 units built on a 0.756-acre freehold land.

It is a 15-minute walk to Kuala Lumpur City Centre through the covered walkways and a five-minute walk away from Pavilion shopping mall.

Situated in on Jalan Imbi, it is close to the Bukit Bintang and Imbi monorail stations. It will also be accessible via the proposed My Rapid Transit stations in the Bukit Bintang and Pasar Rakyat.

For the studio and suites in Tribeca ranging from 510 sq ft to 1,020 sq ft build-ups, Low Yat expects to price them between RM950,000 and RM1.5mil.

The development has limited loft units with a build-up of 1,300 sq ft, priced in the range of RM2.4mil to RM3mil.

The 36-storey development is targeted to launch in the last quarter of this year and construction would be completed three years from then.

“Summing it up, it's a solid and sustainable investment project. Small units are selling better than larger units, that is a fact,” Low says, adding that while 10% of the units were lofts, the focus is on small serviced suites.

Although land bank in the bustling city centre may be a challenge, Low continues to see potential in Greater KL.

“The Low Yat Group has been a part of the metamorphosis of Greater KL over the last 60 years beginning with its first development Federal Hotel in Bukit Bintang,” she says.

She reveals that there are expansion plans underway for some of Low Yat's first developments in the Golden Triangle, such as Low Yat Plaza and BB Park.

Under Low Yat's property development division are two distinctive portfolios, namely the premium luxury portfolio and the ongoing affordable and mid-market housing developments.

“Tribeca would be the latest addition to our premium luxury projects that occupy prime city centre sites while we are also undertaking larger land tracks for residential landed development happening in the northern Klang corridor,” she says.

With the rampant developments around the Klang Valley, Low says that there is a whole basket full of options for Malaysians in different parts of Kuala Lumpur.

“Different town centres are sprouting out all over Klang Valley but there is only one city centre and it continues to be appealing to both locals and foreigners,” she says.

For its luxury developments, Low Yat has completed and on-going projects like Bintang Fairlane Residences, MyHabitat serviced apartments and the Shiki ski resort in Niseko, Japan.

Low Yat Group has also expanded to China with a commercial development project in Changsu. - The Star

Sales pitch from Canada

LAST week, a group of fairly young people organised a lunch at a club to promote and market some townhouses in Alberta, Canada. There are a few things about the investment propostion that comes across as rather interesting. Whether it will be profitable or not is another matter. The objective of this article is, therefore, to highlight the different types of property-investment offerings that are entering the market as a result of Asia being rather buoyant, despite the woes in US and Europe.

First, it was the first time that properties as far away as Canada are being promoted this way. Usually, agents will just opt for an advertisement. Vision International Properties did that, besides other things.

One may ask, why Canada? Seems so far away when there are properties in Britain, Australia and Singapore to choose from. Malaysians generally invest in British and Australian property because they have children studying in these countries, or because they themselves studied there. There is, therefore, the emotional and sentimental ties. As for Singapore, it is just an hour away by plane and they frequent the city state and so they decide to buy something in Singapore.

The other thing interesting about this Canadian proposition is that, the director of Vision International is a Malaysian who studied in Canada, worked in an international consultancy firm there for about a year before deciding to go full time into property investment with a partner. Virata Gamany, the Malaysian director has now decided to return to Malaysia to start a branch here, besides other branches in Singapore and China.

An artist impression of Chestermere Manor, a project comprising 96 units of townhouses being marketed by Vision International Properties.

Thirdly, Virata, 28, is offering an investment proposition which, thus far, is fairly new to Malaysian residential buyers, to a degree.

Unlike local Malaysian agents representing foreign developers and house builders to promote an overseas property development here, which they sell to Malaysians and other investors in other parts of Asia, Virata and his partners are neither agents nor developers.

They instead bulk purchase into a project in Canada, which they then sell to Malaysians and other investors. It is very much like the Middle-Eastern investors who bought en bloc units in the KLCC area and then sold the units to other buyers at a lower rate than the developer. They are able to do this because they buy multiple units.

In the case of Vision International, it is uncertain whether the properties come at na discounted rate from the developer's price. But they will manage the property on behalf of investors.

In other words, one buy into their project, in this case, Chestermere Manor, which comprises 96 units of townhouses in Calgary, Alberta, not to stay, but to be rented out at a gross yield of between 7% and 8% a year.

He said they will help investors enter into the market easier by assisting with bank loans and legal paperwork and manage the properties and look for tenants. Investors will have to consider the cost of this list of services as it will be factored into the price of the house, or in some other ways.

A two-bedroom unit is priced at C$218,000 with a downpayment of C$76,300. Virata has put the rent at C$1,300 and a string of other fees like property tax, management fee, mortgage expense and condominium fee.

A client can exit anytime because it is a direct ownership, he says.

Virata says Canada is rather low-profiled compared with other destinations but this does not mean a shortage of opportunities. The project he is offering sits on 10 acres, of which about half will be occupied by townhouses. These will be the more affordable alternative to the more pricey three-storey landed units. Vision, he says, is buying nine blocks, of which eight blocks, comprising 96 units, will be sold to investors. They will keep the ninth for investment.

Chestermere Manor is their 19th property investment.

“Our investments are focussed on apartment and condominium units with rentals that are within the range of the average Canadian family. Such properties tend to yield better returns and are less risky,” he says.

There will be regular project updates. Currently, each of the blocks is being built at different stages with the last block expected to be completed in 2014.

Virata says this is investment proposition is neither a Reit (real estate investment trust) nor a land-banking, which had some Malaysian investors losing their life savings earlier this year.

He also suggests investors see the properties for themselves and Vision International will pay for the flight ticket.

“We find it odd that less than 5% of investors ask to see the properties and if not for us providing the return flight tickets, they do not do so.”

While Virata and his team offer a host of conveniences, a property consultant agrees that dealing with one party in this case a property investment company may seem more appealing than buying from an agent who represents a developer, and having to engage letting agents to rent out the unit.

“There is the issue of not knowing who to turn to in the event the desired situation does not materialise for whatever reason, for example, a project not taking off. In the case of having to deal with an agent who represents a developer, and a letting agents, there is a clear separation of duties and responsibilities,” he says.

While Virata's investment proposition may appeal to some, as with other property-related investments abroad, it is worthwhile to note that the low interest rates around the world today has been a major driving force for such investments.

Last week, wire service Bloomberg highlighted the dangers of Canadian housing debt levels.

Canada Mortgage & Housing Corp (CMHC), which called on home buyers to guard against taking on too much debt, cautioned buyers to exercise prudence.

“Interest rates are at historic lows and they are certain to rise in the future. In this context, it is important that they not get overextended,” a CMHC's representative says.

Bank of Canada Governor Mark Carney has said that record consumer debt loads are the biggest domestic economic risk, and housing starts reached the highest since 2007 last month.

Finance Minister Jim Flaherty's March 29 budget put CMHC's securitisation and insurance operations under oversight by the country's banking regulator, with Flaherty citing the economic risks posed by the housing boom.

“Strong labour market conditions will continue to drive the construction of new homes, but some diminution of the current robust pace of housing starts is expected later this year and next year,” CMHC's report says.

Housing is also being supported by a five-year mortgage rate that has been at or close to record lows this year. The Bank of Canada said last month it may need to raise its 1% benchmark overnight rate because of faster-than-expected growth and inflation.

The agency said it had mortgage insurance in force worth C$570bil (US$554bil) at the end of March, up 10% from a year earlier. Canadian law requires borrowers with less than a 20% down payment to have their mortgages insured and CMHC has a C$600bil limit on its insurance portfolio.

CMHC said in January it had begun rationing bulk insurance for lenders to keep from exceeding the limit.

All these represent red flags that potential Malaysian investors need to be aware of. It is difficult to monitor an investment that is so far away, and laws and legal system may be different and the way things are done may vary considerably. - The Star

Time is of the essence in the property development sector too

HAVE you been to the Immigration Department recently to renew your passport? I was surprised to hear from a family member that 45 minutes was all that she needed to renew her passport. The process of renewing a passport has indeed positively changed with the time.

I recalled in the past that it took months before one could get a passport renewed. The processing time then reduced to weeks, followed by days and eventually to 45 minutes.

The evolution of improvement in the passport renewal process is beyond doubt, impressive. It is clear proof that things of bigger scale can become more efficient with continuous improvement and commitment to improve.

The improved passport renewal process brings forth many benefits such as less waiting time, and reduction in parking and transportation costs as a second trip to the immigration department to pick up the passport is no longer required. The government, businesses, common people and ultimately, the country are beneficiaries of these successes.

This form of efficiency is greatly required in other industries including the property development industry. Sadly today, the process of getting the necessary approvals for a property development project is extremely lengthy.

In my previous article, I highlighted the negative consequences of introducing “cooling off” measures to curb or control house prices and to stifle temporarily the buying appetite of home buyers.

All these measures not only slow down the rate of production of new houses by developers but create a massive housing backlog in the near future due to the anticipated demand and supply imbalance.

It is therefore essential to increase the supply of new housing units with greater pace to meet the increasing demand and maintain property prices.

Property developers today unfortunately have to wait a year or two to obtain the necessary approvals from several authorities before a project can be launched. Then there is a further two to three years required for the construction and completion of the building. Thus, a condominium project may require a total of at least four to five years before it is ready for occupation.

According to the latest World Bank Doing Business Report, Malaysia was ranked 18th when it comes to the ease of doing business. Last year we were ranked 23rd. However, in terms of Dealing with Construction Permits, our ranking dropped to 113th from 111th last year.

The report also highlighted that Malaysian developers need to go through 22 procedures and spend 260 days in total to obtain the necessary licenses, permits and complete the required notifications and inspections.

Comparatively, Singaporean developers need to undergo 11 procedures and the whole process takes 26 days, imagine if this can be achieved in Malaysia. As for Thailand, developers are required to comply with eight procedures and approximately 157 days to go through the whole process. In the case of Indonesia, the whole process involves 13 procedures and an expected processing time of 158 days.

Our closest neighbours definitely have the edge in terms of speed to start property construction i.e. 6 to 11 months advantage.

For Malaysia to remain competitive against its neighbours and in the same breath, meet the growing demand of its population for new housing units at an affordable price, immediate steps need to be taken to improve the approval process for new housing developments in the same fashion as the immigration department.

It is good to note that the Government is looking into the matter when the Chief Secretary to the Government, Tan Sri Mohd Sidek Hassanrecently held a Public Consultation with relevant parties, both public and private, to improve efficiency in the construction industry.

As for Kuala Lumpur, the City Hall is also putting in noteworthy effort to shorten the processing time by taking the lead to allow developers to submit their plans online.

When the approval time is shortened and the speed of construction enhanced, the supply of new housing units will increase in momentum and able to respond to the growing demand.

The fear of continuous inflation will be curtailed and at the same time, there will be room for reasonable price appreciation in the future.

For these aspirations to be realised, time efficiency is the essence. It is vital that the relevant agencies, authorities and the private sector set their sights in the same destination and row in the same direction. After all, if you can get a passport renewed in 45 minutes, what else can you expect to speed up? - The Star

FIABCI Asia Pacific Chairman, Datuk Alan Tong, has over 50 years of experience in property development. He was FIABCI World President in 2005/06 and was named Property Man of The Year 2010. He is also the group chairman of Bukit Kiara Properties.

High take-up rate at Dorsett Place Waterfront soft launch

THE Mayland Group says that its latest project, the Dorsett Place Waterfront, saw a high take-up rate of 60% during its soft launch.

The project, comprising 1,989 suites, is strategically tucked between two major landmarks in the mature township of Subang Jaya, the Sime Darby Medical Centre and the five-star Grand Dorsett Hotel Subang.

The location is within a few minutes travelling time to public amenities such as shopping malls, colleges and a KTM station and forthcoming MRT.

“About 1,200 suites were sold during the soft launch. Most of the buyers are residents in Subang Jaya, which clearly shows that the local community is supportive and receptive to the project. In fact, we have been receiving praise and very positive feedback that the project is very acceptable and has come at the right time in the right place,” says Mayland executive director Pel Loh.

The project, maintained by Dorsett International and complete with a range of recreational facilities, is set to create a new benchmark for quality accommodation in Subang Jaya. “The suites are not only affordable but also fully designer-furnished which underscores our catchphrase “Bring only your luggage.”

The introduction of Dorsett Place Waterfront suites is not the first such offering in the market as there have been numerous other similar products offered by hotel chains not only in Malaysia, but also in Australia and the United Kingdom.

“This project is a positive development in support of progress in Subang Jaya. In fact, as a value-added feature for the convenience of the eventual residents, we will be providing complimentary daily shuttles not only to the LRT/MRT and the shopping malls but also to the nearby colleges as we recognise that Subang is an educational hub with a huge student population. The shuttles are also an effective way to reduce the carbon footprint in the area. In any case the town’s facilities are mostly within walking distance.”

Besides serving residents of the Dorsett Place Waterfront, the additional access road will also be a boon to people travelling to the Sime Darby Medical Centre, Grand Dorsett Hotel and Holiday Villa by dispersing traffic as an alternative to Jalan Kewajipan.

“We believe we have more than enough parks bays to serve the needs of all residents,” said Loh, adding that not all residents will be requiring carparks in view of the complimentary shuttles and the convenience of the nearby LRT and MRT. Additionally, the ratio of one suite to carpark number is very low as the suites will house only singles or couples.

“We are committed to seeing to the completion of Dorsett Place and delivering to our buyers our promise of a unique quality lifestyle product.”

The Mayland group, backed by a strong proven track record in the past two decades, has delivered close to 10,000 units to its customers. For more information, contact Mayland’s marketing department at 03- 2692 9663. - The Star

NGO: Freeze hillslope development until all guidelines are revised

GEORGE TOWN: Another non-governmental organisation has urged the state government to immediately freeze all approved hillslope projects until the present guidelines for such development are revised.

Malaysian Nature Society (MNS) Penang branch adviser D. Kanda Kumar said the projects would include those that had been approved but had yet to start work and those that had started work but yet to be completed.

“The state government should look into reducing the height of buildings currently allowed for hillslope development. The density of the projects allowed for hilly areas should be looked into as well,” he said.

Kanda Kumar was commenting on the mushrooming of development projects on hilly areas that had recently sparked off criticisms of the state government's development policy by environmentalists and politicians.

On Monday, the Consumers Association of Penang and Sahabat Alam Malaysia had urged the Federal Government, state government and local authorities to halt all hillslope projects and gazette forests and mangrove areas as permanent forest reserves.

S. M. Idris, who is president of both NGOs, said Penang was becoming “unliveable” due to “mindless development”.

Idris said “whichever government” which gave approval for 31 development projects on hill land above 76m should explain the basis for the approvals.

This followed the statement by Chief Minister Lim Guan Eng on Thursday that the new administration did not approve a single project above 76m since taking office in March 2008.

In a related matter, Bukit Bendera MP Liew Ching Tong of DAP urged the Federal Government to raise the real property gains tax in an effort to curb housing speculation and rising house prices. - The Star

Federal govt gives out RM100mil for R&D projects for 10 years

GEORGE TOWN: The Federal Government is providing RM100mil for 10 years for research and development activities undertaken by the newly launched Collaborative Research in Engineering, Science and Technology Centre (CREST) and the industries to accelerate the growth of the electrical and electronics (E&E) industry.

CREST, a component of the Economic Transformation Programme, was set up by the Government to serve as a platform for industry players, academics and the Government to collaborate and promote research, design and development activities in the E&E sector in Malaysia.

Minister in the Prime Minister's Department Tan Sri Nor Mohamed Yakcop said that the E&E industry has been a key driver and leading contributor to Malaysia's industrial development in the last three decades.

“It contributes significantly to the gross domestic product (GDP) growth, export earnings, investment and employment.

“E&E is the single largest contributor of the manufacturing sector, and more than 40% of total exports as well as employs more than 5% of the total workforce,” he said in his speech during the launching of CREST at sains@USM in Bukit Jambul Saturday.

The concept of the centre, which was mooted in 2008, was established by Khazanah Nasional Bhd as the Centre of Engineering Excellence.

It was subsequently established as a company limited by guarantee on June 30, 2011 through the efforts of the Northern Corridor Implementation Authority (NCIA).

The 11 companies and organisations that are CREST founder members are Agilent Technologies, Altera Corporation (M) Sdn Bhd, Advanced Micro Devices (AMD), Avago Technologies, Intel, Motorola, National Instruments, Osram Opto Semiconductors (M) Sdn Bhd, Silterra Malaysia Sdn Bhd, NCIA and Universiti Sains Malaysia (USM).

The nine companies account for RM25bil in total revenue and RM1.4bil in research and development expenditure, employing 500,000 workers.

CREST has approved RM3.2mil worth of grant for 10 research and development projects.

Malaysian Investment Development Authority chief executive officer Datuk Noharuddin Nordin said that the E&E industry is a regular contributor to new investment and reinvestment in the country.

“I'm happy to note that of the 10 research and development projects that have been approved to receive grants from CREST, half of them come from local companies,” he said.

At the event, the FasTrack programme graduation ceremony was also held where 98 apprentices received their scrolls.

FasTrack is a 12-month apprenticeship programme targeting high-achieving Malaysian engineering graduates. - The Star