1MDB embarks on Penang affordable housing project

WHILE Penang’s soaring property prices have become a conversational topic, the federal and state governments have pledged to make affordable housing available on the island.

On Tuesday, 1Malaysia Development Bhd (1MDB), a government-owned development company, bought 9.5ha from Farlim Group (M) Bhd for RM112.5mil through one of its subsidiaries. The deal marks 1MDB’s first public land deal in Penang, and when contacted by StarBizWeek, the company says it is part of 1MDB’s plan to develop affordable housing in Penang as announced earlier.

During a visit to Penang in May, Prime Minister Datuk Seri Najib Tun Razakannounced that the federal government will build 2,222 low-medium cost houses and 1,111 affordable houses in Air Putih, Air Itam and Paya Terubong. It was a pre-election political pledge to the people of Penang by the federal government.

A property developer reckoned that the affordable housing scheme could cost about RM300,000 per unit, depending on the development.

“If assuming the plot ratio is four, then it will work out to RM50 per sq ft of gross floor area. Construction cost circa 200 per sq ft, and that would work out to a total development cost of RM250 per sq ft.

Therefore cost of a three bedroom 1,200 sq ft unit would be around RM300,000. This is just the cost price,” he says.

He, however, said development cost could come down to RM150 per sqft if its based on a lower cost structure.

If we scrutinise the deal more, the said land is strategically situated within an established township known as Bandar Air Itam (formerly known as Ayer Itam) and is sited at the north-eastern part of the island.

“This township is located along Jalan Air Itam and Jalan Paya Terubong, the main thoroughfares leading to the Kek Lok Si temple as well as the Penang Hill funicular railway station,” says Farlim in a filing on Tuesday.

But the main caveat for 1MDB is that the land is presently occupied by squatters and structures comprising residential units (semi-concrete, concrete, wooden and zinc houses), foundries, temples, a recycle centre, factories, workshops and shops.

Simply, that would mean more time and capital exhausted to relocate these squatters to other suitable areas.

The company might have to allocate a number of units as settlement, narrowing down the supply of units for eligible owners.

From past experience, dealing with squatters is a sensitive issue as people have a natural resistance to change and eviction notices aren’t welcome.

“This might just be the beginning of high density flats ala the Singapore Housing Development Board (HDB) flats style,” says a market observer.

Speculation is also that 1MDB could be snapping up remaining portion of the land from the other owners, as Farlim have just a fraction of ownership rights to the said three parcels of land.

Farlim did not respond to queries by StarBizWeek over the identity of the other owners of the said land.

The Penang state government has earmarked seven projects in August for affordable housing where 4,145 low-medium-cost, 3,148 medium-cost homes and six shoplots would be built.

Meanwhile, the federal government has also proposed to redevelop the Rifle Range flats, Penang’s first affordable housing project. However, this is still pending approval by local authorities.

When the Rifle Range flats were completed in the early 1970s, they were the tallest buildings in Penang.

The units in the nine blocks of 16-storey dwellings were only about 400 sq ft and provide housing for some 25,000 people.

Besides its property venture, 1MDB has also gone extensively into the energy sector, buying up power plants to beef up its cash flow.

It currently holds 100% of Powertek Energy Sdn Bhd and 75% in Jimah Energy Ventures Holdings Sdn Bhd and Kuala Langat Power Plant Sdn Bhd (KLPP), respectively, involving an investment totalling RM12bil.

1MDB had acquired Powertek and KLPP in a portfolio of power plants with a total generating capacity of 4,600 MW in Malaysia, Bangladesh, Pakistan, Egypt, Sri Lanka and Abu Dhabi.

1MDB is also known to be actively bidding for a 2,000MW coal-fired power plant, dubbed Project 3B, as well as other greenfield and brownfield developments in the region.

It is taking the lead in the development of government land in prime areas of Kuala Lumpur. Some 70 acres in Jalan Tun Razak, the project of which is likely to be delayed, will be shaped into a financial district called the Tun Razak Exchange, while the old airport in Sungai Besi, renamed Bandar Malaysia, is being converted into a mixed development. - The Star

谢诗坚：客家村将设各族文物馆 浮罗山背拟建土楼酒店

（槟城23日讯）马来西亚客联会署理总会长拿督谢诗坚博士宣布，浮罗山背客家村联委会将在浮罗山背设立一座具有现代化和符合酒店业需求的具有土楼特 色的酒店供游客住宿，以享受浮罗山背与众不同的自然美景和清新空气。这座圆形的土楼酒店，内部有浮罗山背各民族文物馆，用三语呈现，也有艺术走廊，供画家 展销精心杰作。

谢诗坚也是浮罗山背客家村联委会总策划，他说一个新的旅游景点，一个命名为“浮罗山背客家村”的宏伟计划，即将在浮罗山背离开双溪槟榔不远的大路旁的一块20依格的土地上建立起来。

首个海外客家村

“感谢热心客家文化的企业家，在知悉我们有一个客家梦后，便在年初与我们接头，希望我们能一起合作，把浮罗山背打造出第一个马来西亚客家村，也是世界上第一个海外客家村，以共同推动旅游业。”

“参考土楼结构只是因为土楼一望即知客家，无需再作解释，并不具其他用心。其中我们也将与台湾大学的客家学院合作，设立客家文化基地，为学者及学界提供文库资料。同时我们也会设立一间客家餐馆；也会设立槟城美食的小贩中心、土产销售中心、旅游产品及精品店等。”

“更为出色的是，我们保留了榴梿园、也会建立豆蔻、丁香和橡胶品种供参观者了解浮罗的特产。我们要让来自世界各地的人真正享受浮罗山背的自然生态和具有价值的文化生态。”

谢诗坚是在槟州客家公会周日举行74周年（客家情，浮罗梦），青年团33周年，妇女组15周年及浮罗山背客家村联委会5周年联欢宴上致词时这么表示。- 

产业投机有过热迹象 业界建议加强管制

（吉隆坡21日讯）最近，有关谈论房地产收益税（RPGT）可能会恢复在下月出炉的2014年财政预算案中讨论。房地产和住房开发商协会（REHDA）已书面向有关部门陈述它们的观点。国家银行也研究禁止发展商在建筑期间负担买家利息的可行性方案。

发展商的利息负担计划（DIBS）就是鼓励投机行动，因为购房者只需要支付5％或10％的首期，然后无须负担任何费用，直到该物业落成为止。

重新推出RPGT以及可能取消DIBS，显示房地产领域准备面对未来挑战的迹象，就好像东南亚股票市场出现动荡一样。

然而马来西亚在较大的经济框架中，必须解决一系列问题，例如有3个问题一直困扰着房地产领域，分别是泡沫、投机因素和负担能力。

发展商希望能够有一个温和的RPGT制度，而DIBS则维持不变，而有某部分希望返回旧的税制，即是在首年内出售产业就要缴交30%的产业盈利税。

购房者协会（HBA）兼Khong & Jaafar地产代理公司产业顾问埃尔文费尔南德斯说，RPGT是一项既反投机又能增加税收的措施。在过去两个预算案中，HBA所预期的税制改革令它大失所望。

曾经有一段时间，并不是所有发展商提供免收利息计划。今天，大多数都是受到这样压力下而做。REHDA主席拿督斯里任志刚称：“这个计划可以帮助购房者买入房屋。”

埃尔文指出：“不过，这也产生投机的趋势。”

顺便一提，新加坡政府是第一个国家实施取消免收利息计划，早在2009年因为当地的房地产投机活动过热，因此政府推行上述计划来冷却市场。

埃尔文表示，除了DIBS之外，最大的问题是透明度。当发展商提供DIBS加上其他奖励：例如租赁担保、现金付款回扣、附送家具，免收费印花税及法律费用，而银行和贷款机构提供抵押贷款是基于大型发展商的信誉以及这些折扣而订。

提供一个没有折扣的实际价格，正好反映房产市场真实的一面。

DIBS和折扣也会导致初级市场蓬勃发展。在2009年，全国房产资讯中心共录得21万1600宗楼宇成交个案，当中12.24％是从发展商购买，而87.76％则从二手市场购买。

此外，3年后的2012年，成交个案增至27万2669宗，当中从发展商购买的比率高达22.09％。

埃尔文透露：“这种情况从来没有出现过。这是一个不寻常的跳升，主要是发展商给予DIBS和折扣的关系。”

他说，市场的转变是明确的，而这也代表了风险。

住房问题非常复杂，因此无法达到许多人的要求，而国内大约有三分之一的房屋，其价格是15万令吉以下。其中一些房屋坐落在令人羡慕的地区，例如吉隆坡的孟沙。

但是这些房屋都没有得到适当的维修，而且年轻专业人士不希望在那里生活。它可以归结为一个整体的产业管理问题。

大马PR1MA机构首席执行员拿督阿都慕达立阿利亚斯说，超过2万家房屋将在大巴生谷、柔佛、槟城、沙巴和砂拉越的第1阶段15个可负担住房项目下建成。- 

Rehda sees rise in real property gains tax

KUALA LUMPUR: Real Estate and Housing Developers’ Association Malaysia (Rehda) expects the Government to increase real property gains tax (RPGT) by 15%-20% in the 2014 Budget to be tabled on Oct 25.

Its chairman of finance and investment committee, Datuk Ng Seing Liong, said buyers should not worry about the increase in RGPT as it would only affect buyers who disposed of their properties within five years after their purchase.

“At least when buyers buy property, they must hold it for five years before they let it go,” he told a media briefing.

According to news reports, the Government was considering an increase in RPGT to curb excessive speculation which has led to the increase in the prices of houses. — Bernama

RM1.5bil affordable housing project

PETALING JAYA: Construction company Pesona Metro Holdings Bhd is a frontrunner for a massive RM1.5bil housing project under the Government’s1Malaysia People’s Housing Scheme or better known as PR1MA.

Sources said the company, which was listed via a reverse takeover last October, is likely to be chosen due to its “expertise” and “track record”.

There were four other bids that were submitted for the job, which should take some 30 months to complete once it is awarded, a source noted.

An announcement on this will be made earliest in two weeks’ time.

Since its debut on Bursa Malaysia, Pesona has been relatively quiet until recently, that is.

In June, it announced that it had obtained an RM87mil job for the proposed construction and completion of the remaining and rectification works of a government office building.

Pesona had declared last October that it was bidding for construction projects under the PR1MA programme.

If this RM1.5bil job does go to Pesona, then it would more than triple its current orderbook of about RM570mil, making it a major construction concern.

Shares in Pesona ended 6% higher to 50.5 sen on a volume of 20.7 million shares at yesterday’s close.

It was announced last month that more than 20,000 homes would be built under 15 affordable housing projects in Greater Klang Valley, Johor, Penang, Sabah and Sarawak.

These 15 projects come under Phase 1 of the PR1MA programme, an affordable housing scheme announced under Budget 2013.

PR1MA Corp Malaysia chief executive officer Datuk Abdul Mutalib Alias had said last month that specifications of the houses, including pricing and floor plans, would be announced in the next few months.

However, it has been reported that the homes would be priced under RM350,000 per unit.

Recall, Pesona took over the listing status of financially-beleaguered Mithril Bhdlast year amid a restructuring exercise.

It had raised more than RM10mil for working capital via the issuance of 40 million new shares of 25 sen each then.

While Pesona may not immediately be a recognisable name, it has completed more than 30 projects valued at more than RM1.5bil.

Among its completed projects are a flood mitigation project in Sungai Kerayong, Kuala Lumpur, the construction of the Timah Tasoh Dam in Perlis and the Zehn Luxury Condominium at Jalan Bukit Pantai, Kuala Lumpur.

The company is also responsible for the construction of the Customs, Immigration and Quarantine Complex in Melaka, which it completed and handed over in the last financial year ended Dec 31, 2012 (FY12).

Citing internal projections, sources said the PR1MA project is expected to yield Pesona some RM202.5mil in net profit based on a projected 13% profit margin.

This is huge in comparison to its current earnings. For its six months ended June 30, Pesona’s net profit stood at RM8.39mil on a revenue of RM154.32mil.

For FY12, its net profit was at RM11.78mil on a revenue of RM220.78mil.

The group’s current net assets per share stands at 14.50 sen per share. It has cash and bank balances of RM25.5mil with minimal borrowings. - The Star

UK House Prices Rise Further, Sales Jump

British house prices recorded their fastest rise in almost seven years last month and a measure of sales volumes also jumped to a multi-year high, a survey showed on Tuesday.

The Royal Institution of Chartered Surveyors' seasonally adjusted house price balance climbed to +40 from a slightly upwardly revised +37 in July, staying at its highest since November 2006.

The balance reflects the percentage of property professionals saying that prices rose minus those reporting falls.

Britain's housing market has shown signs of a revival this year, spurred by a healing economy and help from the government and the Bank of England to ease access to finance. But the scale of the recovery has raised concerns about a new property bubble.

The RICS survey found that a net balance of +45 of surveyors expect further price growth over the next three months. Over the coming year, house prices are forecast to rise by 2.2 percent.

"Momentum is increasingly broad-based across the country; this isn't just a London story," RICS said.

The average number of sold properties per surveyor rose to 17.9 over the last three months, the highest since January 2010.

The number of properties going on sale also increased markedly in August, with the relevant balance jumping to +26 from 16 in July.

"With positivity starting to return to areas right across the UK, it seems those who may have been waiting for the right time to sell are choosing now to do so," RICS said.- Reuters

House buyers to shoulder burden of impact of fuel price hike, crackdown on illegals, say developers

Prospective house buyers face forking out at least 10% more for their dream home, with developers bound to push additional costs caused by an increase in fuel prices and worker absenteeism.

The Star reported that the construction industry had been hit by a double blow, higher costs of building materials due to the RM0.20 increase in the price of RON 95 petrol and a nationwide crackdown on illegal immigrants by authorities.

The Star quoted Real Estate and Housing Developers Association of Malaysia president Datuk Seri Michael Yam Kong Choy as saying the failure of foreign workers to turn up for work was causing delays, which added to costs.

He said developers had experienced this in the past when continuous raids by authorities resulted in legal migrant workers not turning up for work or delaying their return to Malaysia.

Yam said migrant workers, even those with proper documents, were intimidated by these raids.

"The shrinking supply of labour will force developers to pay workers more to meet contractual deadlines. Failure to meet these deadlines will result in financial penalties as developers are bound by the sales and purchase agreements signed," Yam added.

The Star reported that sales and purchase agreements stipulated that compensation will have to be paid by the developer to buyers if delivery of the said property is late. Contracts in the private sector also have no provisions for price adjustments.

Despite the call by Prime Minister Datuk Seri Najib Razak last week for businesses and traders not to increase their prices following the increase in petrol prices, Yam said it had affected the entire supply chain of the industry, involving more than 100 types of businesses.

Master Builders Association of Malaysia president Matthew Tee warned of a scenario similar to 2002, when the construction industry grounded to a standstill due to a shortage of workers.

He said their members were already complaining that their legal workers whose documents were being processed hadn't turned up for work.

"Our understanding is that all foreign workers will be detained unless they can prove that they have proper documentation. This can be difficult as their documents may still be with their employer or immigration pending the affixing visa of stickers by the authorities," Tee said.

In Penang, the Penang Master Builders and Building Materials Dealers Association says it expected construction costs to rise by 3 to 5%. The cost of transportation was likely to rise 10 to 20% and the prices of sand and cement by between 5 and 10%. - The Malaysian Insider

... But it is beyond our means, say youngsters

KUALA LUMPUR: Malaysian youths, who have been encouraged by the Real Estate and Housing Developers Association to buy a house before a car, say houses are too expensive and beyond their means.

Marketing executive Omar Islam Akhiruddin, 26, bought a second-hand car last year and lives with his parents in Puchong.

“I need a car because I need to move around and houses are expensive,” said Omar, adding that since he lived with his parents, a house was not a necessity yet.

Omar said he would prioritise buying a house if there was an LRT station nearby, adding that he would not depend on buses as a form of public transportation.

SEGi University lecturer Alex Chan, 28, says that even with the 1Malaysia Housing Programme (PR1MA), houses were too expensive for fresh graduates.

“As the Government has raised the ceiling price for PR1MA houses, they are too costly for fresh graduates who have loans to pay and other living expenses to meet,” he said.

Earlier this year, the Government raised the ceiling price of PR1MA homes to RM450,000 while the maximum household income eligibility was increased to RM7,500.

Chan, who bought a car earlier this year, said a vehicle ranked higher in necessity than a house in Malaysia.

“I can always rent a place but my house can’t take me places. People need transport,” said the Ipoh native, who has been renting rooms since he started working in 2010.

According to Chan, the public transportation system here was unreliable.

“KTM is not that good. The LRT is okay but it doesn’t go everywhere.

“When we have an efficient transportation system, which is also affordable and easily accessible, people can perhaps prioritise where their financial responsibilities lie,” he said.

Broadcasting student Joshua Nicholas Aeria, 24, said he was looking forward to moving out from his relatives’ house and buying a car once he finds a job.

“I want to rent a place and slowly save up for a car but finding a job is the top priority at the moment and having a car helps,” said Joshua. - The Star

Buy house first, youths told

PETALING JAYA: These days, it has become a trend among the young who enter working life to place priority on owning a car instead of a home.

Perhaps buying a vehicle which gels with their current lifestyle is cheaper for them, compared to purchasing a house.

Nevertheless, Real Estate and Housing Developers’ Association’s (Rehda) immediate past president Datuk Ng Seing Liong said the trend should be reversed.

“Buying a property, such as an affordable house, should be the main priority for youngsters and they should not wear out their salary on owning a car,” he told Bernama when met at Wisma Rehda here yesterday.

Thus, he suggested that youngsters begin buying property early in their careers, especially for those located in hotspot areas.

“I understand that a car is a necessity for the younger generation, but bear in mind that property prices will always go up. Take this as an investment and in the meantime commute via public transportation,” advised Ng.

He said there were affordable houses away from the city centre which were in high demand.

“Higher prices are only in the hot-spot areas, but it seems to reflect the whole market.

“If they look at the bigger areas, such as in Malacca, Pahang and Kelantan, the prices are still affordable.”

He also explained that the property value rise could be attributed to “people are not just buying a house, but they are purchasing the lifestyle that comes with the property”.

According to Rehda’s Property Industry Survey for the first half of this year, the top five hotspots in the Klang Valley are Puchong, Cheras, Kota Damansara, Kuala Lumpur City Centre and Shah Alam, with landed property ranking at the top followed by condominiums and serviced apartments. - The Star

Rehda wants monitoring of buyers of affordable homes

KUALA LUMPUR: The Real Estate and Housing Developers’ Association (Rehda) has called on the government to monitor buyers of affordable housing, saying there is no mechanism for this at present.

Rehda president Datuk Sri Michael Yam said while developers have done their best to provide houses in an affordable price range, it is also the government’s duty to monitor house buyers to make sure that affordable houses are going to the right people.

“I think as a responsible organisation, our developers have provided a million low- to medium-cost houses. But there has been no monitoring of the sub-sales of subsidised housing, and something has to be done in order to prevent profiteering.

“Under the context of the social housing system, developers are being responsible. But who monitors who gets the houses later? Going forward, if the government wants to reach the target audience for affordable housing, there has to be a body to control  subsequent transfers,” he told a media briefing yesterday.

Rehda immediate past president, Datuk Ng Seing Liong, said there has been a misconception among buyers in general with regard to rising house prices.

“There have only been a few hotspots where property prices have gone up. However, it must be understood that people are not buying homes, but rather a lifestyle. There are many second-hand houses that have not seen much of a take-up rate due to financing issues,” said Ng.

According to recent Rehda research findings, residential selling prices averaged between RM500,000 and RM1 million during the first half of the year, mostly in Selangor, Kuala Lumpur, Johor and Penang.

The survey, which sampled 150 Rehda association members across 12 states, found that the number of respondents that will be offering houses priced within the RM250,000 to RM500,000 range is expected to increase to 25% of total units in the second half of 2013 after falling to 23% in the first half.

Yam: ... something has to be done to prevent profiteering.

The survey also showed that some 95% of buyers were local, whose main purpose was for their own occupation. The remaining 5% were foreign buyers who purchased the units  for investment purposes.

The survey respondents were optimistic of the outlook for the second half of 2013, with the sentiment expected to continue into the first half of 2014.

Future launches are expected to increase to 63% or 18,181 units year-on-year for the second half of 2013, with strata properties expected to dominate launches in KL, Selangor and Johor.

The survey also found that the local property market is facing its fair share of challenges, which could change sentiment.

Yam said rising labour costs and shortages, inconsistent supply and the increasing cost of building materials were the main challenges plaguing the construction side of the industry.

Almost half the respondents have reported a 5% to 10% increase in the cost of doing business.

“There was also a significant increase in the buyers (about 62%) reporting to our members that they were having issues with end-financing, as a result of the stricter borrowing requirements imposed by the banks,” Yam said.


This article first appeared in The Edge Financial Daily, on September 03, 2013.