Expert: Penang property market speculative in nature

It is not fair to compare property prices in Penang with those in Singapore and Hong Kong, says CA Lim & Co’s principal Lim Chien Aun.

“No doubt among the cheapest in the region, Penang, however, is not a financial centre like Singapore and Hong Kong, where there is substantial expatriate population to support high-end properties.

“Furthermore the foreign participation in the local property market is less than 8%,” Lim said, on the frequent comparison of property prices in Penang with Hong Kong and Singapore.

On the speculative nature of the Penang property market, Lim said as the return-on-investment (ROI) was not attractive in Penang, most investors buy properties for capital appreciation reasons and not for rental yields.

“In other words, the Penang property market is very speculative in nature,” he added.

In view of the high pricing of residential properties in Penang, the sub-sales market has now become important, said Raine & Horne Malaysia director Michael Geh.

He said more people were going after secondary property because of the pricing which ranged between RM72,000 and RM350,000.

Geh said strategically located affordable apartments with built-up areas of 700sq ft to over 800sq ft such as the Serina Bay in Sungai Pinang were now selling for RM350,000, compared to RM130,000 in 2005.

“Some apartment projects like the Symphony Park in Jelutong and Ocean View in Sungai Pinang have appreciated respectively to RM400,000 and RM380,000, compared to RM130,000 and RM150,000 when they were first sold in 2000 and 2001, due to their strategic locations,” he said.

“On the island, the sub-sales properties are found largely in the south-west district and in Seberang Prai,” said Geh.The Ocean View units have built-up areas of 870sq ft, while the Symphony Park units are 730sq ft.

“The problem, however, is with the limited sub-sales supply, as there will be many who are also unwilling to sell at the sub-sales price.

“There are also no reasons for them to sell. If they were to give up their homes below the market price, how are they going to take up another home?”

Ideal Property Sdn Bhd chief executive officer Datuk Alex Ooi said the group planned to develop 2,000 units of affordable properties priced around RM200,000, RM300,000 and RM400,000 in Bayan Lepas next year.

“These will take three years to increase. We will plan more of such affordable homes in the near future on the island,” he said.

Penang Town and Country Planning and Housing committee chairman Jagdeep Singh Deo said the state government planned to deliver eight affordable projects comprising 20,000 housing units, three on the island and five in Seberang Prai.

“These properties will be priced between RM72,000 and RM400,000.

“On the island, the location for the projects are in Jalan S.P. Chelliah, Teluk Kumbar and Jelutong.

“In Seberang Prai, the sites for the projects are Kampung Jawa Butter-worth, Ampang Jajar, off Jalan Be-rapit, Bukit Juru and Batu Kawan,” Jagdeep said.

In 2012, according to the National Property Information Centre (Napic), total transactions of residential properties in Penang fell by 23% to 23,266 from 30,674 in 2011, while the total value of transactions was down 7.5% to RM7bil from RM7.7bil in 2011. - The Star

New Strata Management Act 2013 to affect all stakeholders

KUALA LUMPUR: The implementation of the new Strata Management Act 2013 in 2014 will impose more stringent responsibilities on home owners, joint management bodies and developers of strata properties such as condominiums, said property experts.

“This Act is going to affect everybody’s lives and lifestyle. We are always selling things in terms of concept and lifestyle and this is one of the things which will be coming along, and part of the package when you actually buy into strata properties,” said Adzman Shah Mohd Ariffin, vice-president of the Royal Institution of Surveyors Malaysia (RISM).

Adzman was speaking at a press conference for the 23rd National Real Estate Convention yesterday. 

He highlighted the duty of developers to hand over the strata titles to the purchasers as soon as they hand over the keys. While in the past the strata titles might have taken as long as six months to a number of years to be transferred to the owner, the new Act requires the transfer to be done up front. This will prevent cases in which developers change the designated common property for home owners into retail space.

The Strata Management Act 2013 requires the registration of finalised plans and division of parcels within the property to be given to the commissioner in advance of completion. Developers will face higher costs in commissioning surveyors to do so, in contrast with the past, when plans were drawn up as long as up to six months after construction was completed.

The Act will impose heavier penalties on various parties. There is an increase from 10 offences in the repealed Building and Common Property (Maintenance and Management) Act 2007 to 35 offences in the current Act. 

Tougher fines will be imposed on home owners who default on service charges, with punitive fines of a maximum RM5,000, compared with RM500 in the past, and imprisonment of up to three years. 

The Act also sees elected joint management bodies of the strata properties facing tougher consequences for neglecting their maintenance duties.

More information on strata management will be disseminated at the 23rd National Real Estate Convention on Real Estate Realities on Oct 24. Other topics that will be covered are Asian real estate investment trusts, the property market outlook for 2014, affordable housing and changing market trends.

According to RISM president P Tangga Peragasam, with small office/home office and integrated developments, and lifestyle concepts being the current market trend, the consequences of the Strata Management Act will become more apparent in the future.

The Strata Management Act 2013 received royal assent on Feb 5 this year and Adzman said it is likely to be implemented in the first quarter next year.


This article first appeared in The Edge Financial Daily, on October 18, 2013.

City & Country: Prices to remain stable until year-end

LOAN applications that were not approved frustrated buyers and sellers of homes in Penang during the last quarter, according to Raine & Horne International Zaki + Partners director Michael Geh.

"The government and Bank Negara Malaysia's initiatives [to curb speculation in the property market] have met their objectives as far as Penang is concerned," he says. "Speculators don't go out to play anymore and have stopped snapping up houses. Real first-time homebuyers, however, are still suffering," Geh says in presenting The Edge/Raine & Horne International Zaki + Partners Penang Housing Property Monitor for 2Q2013.

He says the banking sector should be more "gentle" to genuine first-time buyers while Bank Negara should consider granting them some concessions.

Geh admits that identifying first-time homebuyers is not a straightforward task, but says if nothing is done, they will not be able to buy their own homes.

While some have pointed to the PR1MA programme as one solution, Geh says there are no such schemes in Penang island or on the mainland yet.

Meanwhile, there is a proposal for an inner city electric tram system in George Town, supported by a bus dispersal system. Whether or not this will take off is not known as the project is still in the discussion stages. "I see a trend where you will find more pedestrian and cyclist-friendly streets," Geh says.

There is also no update on the federal government's proposed monorail for the island.

As for the Second Penang Bridge, it will be opened in October instead of September as originally scheduled due to the collapse of one of the ramps on the island in June.

Geh believes the opening of the bridge will have a positive effect on the state's housing market.

"When the second bridge is fully operational, it will lift up tremendously property prices in Butterworth, Batu Kawan and the suburbs surrounding Batu Kawan, Juru and Nibong Tebal on the mainland by as much as 30% to 40%.

A view of Penang … the opening of the second bridge may have a positive effect on the state’s housing market

"On the island, the second bridge is near to the first bridge so there won't be a big change in property prices. However, it will significantly impact new areas in Batu Maung, Teluk Kumbar, Teluk Tempoyak and areas southeast of the island as it will bring more development there," Geh explains.

Currently, that part of the island is relatively under-developed while on the Butterworth side, properties are underpriced, he notes.

On the flipside, the rental market has been thriving over the past six months. "As it is tough to buy houses, many are extending the tenancy of rented properties," Geh says. "There is also new stock in the market that can't be sold so these will be rented out. So, rents will not rise because there are many properties to choose from."

Overall, he says, property prices will remain stable for the rest of the year.

1-storey terraced houses
Prices for this property type generally rose q-o-q and y-o-y except in a few areas. Houses in Tanjung Bungah achieved a 25% increase to RM750,000 from RM600,000 in the previous quarter. Other areas that did well included Sungai Dua and Sungai Ara homes (both by 10%). The same house type in Tanjung Bungah increased 87.5% from RM400,000 in the previous year, followed by Bandar Bayan Baru at 40.63%.

"The significant rise in the price is due to the lack of supply for this type of property," says Geh. "We noted that there is no longer new incoming supply of 1-storey terraced houses on Penang Island. Most developers are building 2 and 3-storey terraced houses to maximise GDV as 1-storey terraced houses fetch a lower selling price.

"Tanjung Bungah is located between Tanjung Tokong, Seri Tanjung Pinang and Batu Ferringi, and is one of the property hot spots on the island.

"Bayan Baru is near the Bayan Lepas Industrial Zone, and is a favourite with factory workers," he says.

"Although most of the existing 1-storey terraced houses are old leasehold properties, they are more affordable than new properties. For example, in Bayan Baru, a condominium unit is priced at around RM400,000 to RM600,000, but you can own a landed property for RM450,000. Less supply and high demand is what makes the prices go up."

2-storey terraced houses
Two-storey terraced houses in Pulau Tikus achieved 15.79% price growth from the previous quarter to RM1.1 million from RM950,000. The area also led in price y-o-y, rising 29.41% from RM850,000.

"Pulau Tikus is a high-end residential area nearest to the George Town city centre," Geh says. "Most of the properties comprise of 2-storey terraced houses, 2-storey semi-detached houses and bungalows. The 2-storey terraced houses are more affordable than other property types in the area, which resulted in positive price growth."

2-storey semi-detached houses
This property type showed modest price growth from the last quarter. Compared with a year ago, however, there was a significant increase. Houses in Sungai Dua rose 18.18% from the last quarter to RM1.3 million from RM1.1 million. Y-o-y, prices grew 85.71%, from RM700,000.

The prices of homes in Island Park, Green Lane, rose 52.73% to RM1.68 million, from RM1.1 million a year ago.

"Many of the 2-storey semi-detached houses are located on the main road and have potential for commercial use, which contributed to the rise in prices," Geh says. "For example, some 2-storey semi-detached houses on Island Park, along Jalan Masjid Negeri and Jalan Delima, and along Jalan Sungai Dua in Sungai Dua, have been converted into car showrooms, furniture showrooms and offices," Geh says.

2-storey detached houses
All houses in this property type showed positive price growth. Houses in Tanjung Tokong rose the highest at 59.09% to RM3.5 million, from RM2.2 million in the last quarter. Y-o-y, prices rose 118.75% from RM1.6 million. Homes in Tanjung Bungah increased 105.88% to RM3.5 million from RM1.7 million a year ago.

"Tanjung Tokong and Tanjung Bungah are high-end residential areas located near Seri Tanjung Pinang and Gurney Drive, which offers mainly new luxury condominiums priced at a few million," Geh says. "As a result, homebuyers may opt to buy a landed villa with a similar price."

Standard 3-bedroom flats
All flats showed modest gains with those in Bandar Baru Air Itam and Paya Terubong rising 15.38% each from the last quarter to RM150,000 from RM130,000.

"These areas are congested with many low-cost and low-medium-cost flats, which do not allow much room for appreciation," Geh points out.

Y-o-y, the biggest gainers were flats in Green Lane that rose 40% to RM350,000 from RM200,000. Geh says Green Lane is doing better than other areas as most of the flats are medium cost and demand is high for this type of property.

Standard 3-bedroom condominiums
Pulau Tikus condo units achieved a price growth of 16.22% from the previous quarter while other areas registered steady growth.

"As Pulau Tikus is a high-end residential area that is nearest to the George Town city centre, the supply of affordable apartments or condo units are limited, so this area will perform well consistently," Geh says.

Previously, the property monitor had taken Cantonment Road to represent condominium prices within Pulau Tikus. However, as condo prices in Cantonment Road can start from RM800,000, they do not reflect the average price in the area.

Thus, the monitor will now look at Pulau Tikus as the area of focus rather than Cantonment Road specifically.

Prices of condos in perennial favourite Batu Ferringhi rose 40% to RM350,000 from RM250,000.

"Batu Ferringhi is a tourism hot spot where the most number of foreigners stay," says Geh. "It is also a more affordable place for high-rise sea view properties on the northern side of the island compared with Seri Tanjung Pinang and Gurney Drive."

This article first appeared in The Edge Malaysia Weekly, on October 7, 2013.

Leave RPGT alone, Govt urged

GEORGE TOWN: The Federal Government should leave real property gains tax (RPGT) alone in the 2014 Budget.

New Bob Group director Dr Lee Ville said that if the RPGT is increased, then it will dampen the property market, which has already started to cool.

Lee is also president of ERA Malaysia, which is the world’s leading real estate brand.

It is expected that the Federal Government will raise the RPGT rate to 30% from 15% for properties sold within two years, and 15% from 10% for properties sold within three to four years.

For properties sold in the fifth and sixth year, the RPGT is expected to remain unchanged at the current 10% and zero RPGT respectively.

“The anticipated RPGT will not deter foreigners from buying, as they are allowed to dispose their properties only after the third year,” he said.

“If implemented, developers will respond by reducing their delivery of residential housing projects.Lee said the anticipated RPGT would work in the initial stages, curbing speculation in the short term.

“This will eventually lead to a shortage, triggering demand and causing property prices to rise up again in the long term,” he said.

Lee said the Federal Government should look into controlling price, other than cement, of essential building materials, as the rising price of raw materials was a reason for soaring property prices.

Meanwhile, Raine & Horne Malaysia director Michael Geh said the RPGT would hurt current speculators who had already bought properties, and not the future ones who had yet to buy properties.

“If the existing speculators are hurt, the banks will also be dragged down.

“The Federal Government should look at curbing speculation through other means such as providing middle-income homes with an effective delivery mechanism that ensures only the eligible income category benefits,” Geh said. - The Star

Learning the art of Zidanomics

THE legendary French footballer Zinedine Zidane is considered to be one of the greatest players to have graced the football pitch.

As an attacking midfielder, he combined the best qualities of a striker with his superb ball skills to coordinate the team’s assault on the opponents’ goalmouth. In addition, Zidane was invaluable in pulling together the defence.

In short, Zidane is a prime example of how an outstanding midfielder holds the team together. Interestingly, these are the qualities we need to adopt, when we set out to optimise our money.

Money optimisation requires maintaining a fine balance in a select number of areas that have financial implications for us. As we discussed in last month’s column, investing is only one of eight core areas of personal financial management that require our considered and informed attention.

While investment planning and management is like the striker gunning for goals, it is equally crucial to address other risk factors that can greatly impact our financial success.

In football terms, this means making sure that we not only have superb offensive skills and strategies, but that our midfield is hardworking and efficient, and we always have a solid defence.

Merely growing our wealth without paying attention to these other factors is like playing football with only the strikers on the pitch.

Using the football analogy, it is common to see three levels of money optimisation among investors.

Level 1

Level one is home to the speculator. Through speculation this person endeavours to grow their wealth (even though he may think that he is investing). Here the focus is often only on the return on investment.

A person who adopts this strategy tends to make decisions based only on the promised return, without considering other factors.

On level one, the higher the promised return, the better. The investor tends not to think about the risks. In this person’s mind, there are no risks. Normally, inexperienced investors will fall into this category.

But don’t think this level is reserved for the young and naïve. This is a fool’s paradise where ambition and the opportunity to ‘make it big’ blind sides and often relegate common sense to the bench.

Here the focus is on the offence, with no thought given to the defence. Of course it is more exciting to go on the attack. The players get to showcase their skills, evade the opposing team and take a crack at scoring a goal. Nothing sets the pulse racing like a scramble at the goalmouth.

When applying this strategy, sometimes investors will make a gain and sometimes they will lose. The money growth pattern is very unpredictable and they never learn why.

Level 2

Next the focus shifts to investing. Here, the strategy is to manage investment returns and risks concurrently. In addition to investment returns, we should consider whether the investment will lose money, whether our capital is secure, and whether the investment can deliver the promised return. In football terms, this is like a team that has a strong offence and some strength in defence.

Usually, people who are a bit older and with more investment experience will operate at this level. They may have experienced losses or even have had their capital wiped out before. A person who adopts this strategy will see his or her money grow to a certain extent. However, this does not mean that the money growth is optimised. Playing at this level, the investor may be too worried about potential risks and become too conservative.

It is a common occurrence for investors to address each individual investment with a silo mentality.

With this approach, investors fail to consider how it may impact the rest of their investment portfolio. As a result, they will overlook the risks that lie beyond the investment. So, when they make an investment decision at this level, there is somehow some anxiety and a feeling of insecurity in them.

Level 3

At the highest level, the focus is on money optimisation. The strategy involves managing the investment return, and the risks arising from the eight areas of money optimisation such as investing, estate planning, debt & loan management, tax planning, risk management & insurance, planning, education planning, retirement and asset protection. At this level, we take into consideration all our assets and financial resources when investing. In addition, we also consider our life and financial goals.

In this way, we will be clear about our optimal target investment return, asset allocation, optimal saving rate, cashflow and other factors. As a result, we are able to minimise all unnecessary risks and grow our money optimally at all times. When we make an investment decision, we feel comfortable and trust that it is a good decision.

Taking an integrated approach to all eight areas of money optimisation, we will arrive at balanced and optimal investing decisions each time. We know that we will not over leverage to cause cash flow challenges nor under invest our money and fall prey to the risk of inflation. We also know not to put all our eggs into one basket by investing too much money into any one asset class, be it properties or shares.

Using the football analogy, the offence and defence work as a team coordinated by a strong midfielder like Zidane. As another football star, Zlatan Ibrahimovic, puts it: “When Zidane steps onto a pitch, the other 10 players suddenly get better”.

In some ways, a strong midfielder is like a holistic financial plan that coordinates our total financial needs and resources. It will help us grow our money with minimum wastage and result in steady growth.

When a talent like Zidane plays his part, he earns titles like the Best European Footballer in the last 50 years. If we grow our money like Zidane plays football, financial success is guaranteed.

> Yap Ming Hui (yap@yapminghui.com) is a bestselling author, TV personality, columnist and coach on money optimisation. He heads Whitman Independent Advisors, a licensed independent financial advisory firm which has helped people to optimise their wealth and achieve financial freedom since 2000. - The Star

Investors on hold pending budget

PROPERTY agents polled in the Klang Valley say Budget 2014 is expected to weigh considerably against investors. The more experienced investors are reading the signs around them and are taking a wait-and-see attitude while the braver ones are going ahead with their investment plans.

“Many may only make a decision post-budget,” says Peter, a senior negotiator who declined to be named.

Investors are concerned about the re-imposition of the real property gains tax (RPGT) in its full force. Of late, different media have delved into that possibility.

“Because property prices are so high today, there is the likelihood that this group of buyers will be targeted, as opposed to those buying for their own stay,” says an agent.

The situation in the property market today is different from before, Peter says, as investors have several issues to content with.

“Property investments are not as simple as before. The RPGT will be a deterrent, while the possible imposition of the goods and services tax (GST) may raise prices, which may induce those who do not yet own a property to just buy a unit,” says Peter.

The re-imposition of the RPGT and the entry of GST are not the only concern among the more experienced investors.

They are also concerned about the flat or falling rental market.

Peter says there was a time when investors bought into a project with a larger downpayment than currently on a progressive payment method and used the rental income to cover the full or partial monthly mortgage commitment. Today, that may not be possible because of the low downpayment, says Peter. The present developers interest bearing scheme has changed that.

“A one-room apartment in some locations may be more than RM600,000 today. At that price, he will only get a gross yield of 4% if he were to rent it out at RM2,000 a month and he has to pay for the various monthly charges.

“The days of using your rental income to cover your mortgage loan is over,” Peter says.

His comments are similar to another agent specialising in the Sri Hartamas/Mont’Kiara location in Kuala Lumpur.

She says rental has been trending down for several years.

“Most landlords are more accommodating and acceptable about reducing rental,” says Jenny.

She says the monthly rental for a 640 sq ft one bedroom unit used to be RM2,200-RM2,300 in 2011. This has gradually been reduced to RM2,000 today, a drop of 10% to 15%.

“There are more than 400 units in Plaza Damas 3 today. Some of the units were under a guaranteed scheme. Buyers who opted for this scheme had their units with a built-up of 500 sq ft rented out for RM3,000 a month. This amount includes car park, utilities and house keeping. If you remove these items, the rental is about RM2,500 to RM2,600 a month. With the end of these scheme, more units will be entering the market, putting new pressure on rental going forward,” she says.

The drop in rental is prevalent in most locations in the Klang Valley with the rental of larger units in Mont’Kiara facing a greater reduction.

“It is likely that rental may drop further,” she says, adding that returns have been trending downwards from 7% to 8% to 4%-5% today. It is likely to go down to 3% for condominium units.

“You cannot expect your rental to cover your monthly instalments,” she says, adding that much of this situation has to do with urbanisation. “We see this situation in Beijing, Shanghai and Singapore – part and parcel of the urbanisation process.”

The downtrend facing rental of condominium units is due to the supply entering the market.

Says Vincent Ng of Kim Realty: “Tenants stay in a place a year or two and move from the older ones to the newer block. This is prevalent in any location where there are multiple blocks coming up in a single location. The owner may refurbish his unit but the public areas are beyond his control.”

Ng says that while the one and two-bedroom units – with rentals between RM1,000 and RM2,000 – continue to be in demand even in the older blocks, it is the larger and older units that may face a problem in rental.

“There are so many new condominiums coming up and many of them have excellent facilities compared to the older ones,” says Ng.

However, Ng cautions that each location and project is different and has its own selling points. University Tower, located at the busy crossroads facing the University Malaya Medical Centre for example, enjoys good demand, despite not having the facilities or the ambience of the more modern contemporary units found in Mont’Kiara and Hartamas.

“Rental for University Tower is going up instead of going down,” says Ng. It is the only apartment block in that site. Oversupply will push down rental but that is not the case with University Tower because there is no other residential block within walking distance of the hospital.

An agent who declined to be named says North Point in Mid Valley used to be rented out at RM7,500-RM8,000 three years ago. “The last year, the landlord, a China national, instructed me to rent it out at RM6,000. There were no takers. He has just given new instructions to rent it out at RM4,000 a month. Ironically, people are willing to pay RM1.5mil for it, which is double the launching price,” says the agent.

Like the most fundamental of economic theory, when it comes to condominium rental, the theory of demand and supply applies, as with any goods and services. - The Star

发展增速快●屋价推高 大吉隆坡产业将整合

吉隆坡12日讯）据产业咨询观察员称 ，随着在过去三年来价格高涨与交易量有惊人的增长后，大吉隆坡住宅产业市场已为市场即将出现的一些整合作好准备。

世邦魏理仕最大吉隆坡最新市场指数称，一个稳定期，是为了看到自2009年以来所取代的时代，从而逐渐增加资本价值的显著增长期。

“由于吉隆坡及其郊区增长快速 ，导致缺乏发展地开发，而使到雪兰莪许多地区的资本价被推高。 ”

该报告称：“在大吉隆坡的住宅有约75.7%是坐落在雪兰莪，剩下的24%和0.3%,分别在吉隆坡市与布城。 后者是大马的行政首都，占刚刚超过4740间的房屋单位，主要是公务员。”

新的住宅发展越走越远，以及远离市中心，在大吉隆坡南部的部分看到一个发展水平的不断提高，形成了增长走廊连接城市布城与赛城和到吉隆坡国际机场。

世邦魏理仕的报告指出，以前被忽视的领域，包括士毛月，在不久的将来会可见到被大事开发的活动有显著增加。

在今年次季中有19万6092间的房屋单位被归类为收入供应， 即定义是房屋单位已获批准的施工许可证（不论是否已开始建设），18万6581个单位被视为是正在建设中，这意味着，95.1%的单位取得施工许可证的建设工作已经开始。

在截至2013年次季业绩中，现有住宅产业单位的总供应量达约177万间，拥有土地的单位约占总存量的43.5%数额，未有土地产业约占34.9%数目，廉价屋有21.6%。

它指出，供应量的增长后2012年便不超过1%，自2006年以来房屋供应局部的增加，使到自2009年起大吉隆坡的许多地区资本价值上扬 。

2011年以来新开工数量虽然有所反弹，但仍低于在2003年至2007年的水平。

DTZ Nawawi公司执行董事许布赖恩在展望未来时称，所推行的产业速度会较慢，但会带来更多的持续增长，以及住客占有率是可预期的。

他称，在2013的最后一个季度中，房地产市场所要探讨的事情，包括在银行利率可能上涨作为国家银行有望出台以控制家庭债务的进一步措施。较高的借贷利率也可能影响按揭贷款利率，可能意味着更高的借贷成本给购房者。

他称：“外国买家的购兴，尤其是来自新加坡、香港、中国和日本可减轻国内较软的未来需求。”

与此同时，Knight Frank’s针对今年首半年的房地产高调称，在过去12个月由于政府的降温措施已使到屋价受到抑制，更多的活动被预期大选后作为额外的散热措施，实现在亚洲市场的竞争，如新加坡、香港和中国，可能会导致吉隆坡、槟城和依斯干达房地市场大受垂青。

世邦魏理仕估计在2013年下半年豪华的公寓有6484个单位建竣。

在吉隆坡高层发展达4万2979个单位（公寓和服务式住宅）的产业价值每平方尺或超过500令吉（PSF），它说，约35％被认为是“奢侈品”的产业（估价为每平方尺800令吉及以上）。

世邦魏理仕称，明年大吉隆坡会有面积达627万平方尺的新写字楼落成，尽管有相当数量位于是分层地契的房屋或二级建筑，但市场仍然有望在不久的将来有利于租户。 - 

IJM Land to allay impact of cooling measures

RM1.7b NEW PROPERTIES: Company targets owner occupiers and upgraders

IJM Land Bhd will focus on developing townships and building affordable houses to mitigate the effects of property cooling measures.

Chief executive officer and managing director Datuk Soam Heng Choon said the company will also launch housing projects targeted at owner occupiers.

"When people buy houses for their own use, the impact from cooling measures will not be there. We hope the government does not continue to flip-flop on policies as it will affect the property sector and other industries," he said.

Soam said IJM Land has seven to eight launches worth RM1.7 billion coming up between now and March next year and it is targeting owner occupiers and upgraders.

The new launches include Seri Riana Phase 2, Bandar Rimbayu Phase 3, Seremban 2 and Pantai Sentral Park Phase 1.

He said IJM Land is bent on surpassing the RM2 billion new sales it achieved last year. It has so far raked in RM1.2 billion in the first half of fiscal year 2014.

Soam was speaking at a media briefing on the company's Seri Riana project in Wangsa Maju yesterday.

IJM Land is launching Phase 2 of Seri Riana, with a gross development value of RM250 million, this month.

It consists of 284 condominium units worth between RM696,000 and RM1.2 million each, or about RM600 per sq ft. Some 2,000 people have registered, Soam said.

"We are selling to a community who are going to live in these condominiums, which is why we have larger units of 1,259 sq ft to 1,830 sq ft. We aim to sell 60 per cent of the units over the next three to four months," Soam said.

Phase 1, launched a year ago, has 395 units and are 95 per cent sold. 

For its STG200 million (RM1.03 billion) Royal Mint Gardens project in London, IJM Land has achieved property sales of 85 per cent worth more than RM800 million for Phase 1, which comprises 254 apartment units, Soam said - Business Times

Property sector still facing challenges

Real estate sector
Maintain neutral: On July 5, we downgraded the real estate sector to “neutral” from “overweight”. Since then right up to August, the Kuala Lumpur property index had fallen 9% versus the FBM KLCI’s 3% drop over the same period.

Despite the correction, the sector will likely see an overhang in the immediate term until Budget 2014 is presented on Oct 25.

While the reversal of liquidity flows and rising bond yields have eased somewhat, the property sector still faces other challenges, including: (i) rising cost pressure as a result of the fuel price hike and the nationwide crackdown on illegal immigrants; (ii) weaker consumer sentiment due to the imminent rising inflationary pressure from the fuel price hike; and (iii) potential tightening of policies that could discourage local and foreign buyers from investing in the property market.

We also expect mortgage rates to gradually increase, in line with overseas markets, on the back of higher bond yields and the resulting interest rate risk. These factors have, together, given rise to the current consolidation in the property market.

Fears of regulatory tightening typically heighten one to two months before the announcement of the annual budget. While there has been media speculation on the introduction of drastic measures, including a big increase in the real property gain tax (RPGT) and stamp duty, we expect the government to adopt milder measures, such as a gradual increase in RPGT to ensure healthy growth of the industry.

In addition, given the tepid GDP growth at below 4.5% in the first half of 2013 (1H13), drastic measures that constrict the sector would be unreasonable, in our opinion.

Property stocks are vulnerable to a selldown as we expect sporadic rumours of policy tightening in the coming weeks. Hence, we maintain our “neutral” rating for now. We like developers with solid fundamentals with minimal exposure to foreign purchasers. Our top picks are IJM Land Bhd and Tambun Indah Land Bhd. — RHB Research, Oct 7

This article first appeared in The Edge Financial Daily, on October 8, 2013.

University of Hull to open a franchised campus in Batu Kawan

GEORGE TOWN: The University of Hull will open a franchised main branch campus in Batu Kawan, with completion targeted in three years.

An alumni of the university, Datuk Michael Tio, will invest RM130mil through his company PKT Logistics Group Sdn Bhd to realise the project.

Tio, the company’s chief executive, said the branch would be called The Ship Campus as it was designed like a ship and able to accommodate about 5,000 students.

“When we came up with the idea for a concept campus, we decided on a ship design as we are also heavily involved in shipping business,” he said at the signing of an MoU between the university and ALC College, a subsidiary of PKT Logistics, which would manage the branch campus.

The university and ALC College were represented by Prof Ian Pashby and chief executive officer Edmund Edward respectively.

Chief Minister Lim Guan Eng and ALC College chairman Datuk Wira Jalilah Baba witnessed the signing held at a hotel here.

Tio said the Federal-supported project would be located on a 2ha plot allocated by the state government. - The Star