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Gabungan AQRS to sell land for RM50m

PETALING JAYA: Gabungan AQRS Bhd has proposed to dispose of two contiguous parcels of freehold land in Seberang Prai Tengah, Penang for RM50mil via its subsidiary Grand Meridian Development Sdn Bhd.

In a filing with Bursa, the builder said it expected to gain RM15.44mil following the disposal based on the market value of RM35.8mil as at March 12.

It is selling the 63,709 sq m vacant land to developer Ocean Mix Sdn Bhd. - The Star

Secondary property market transaction value to go up

PETALING JAYA: The Malaysian Institute of Estate Agents (MIEA) is targeting the transaction value of the secondary property market to increase by between 5% and 8% this year.

MIEA president Nixon Paul says: “Historically, the transaction value would increase at about that range every year.”

Speaking at a press conference on the Malaysian Secondary Property Exhibition (Maspex) 2013, Paul said for this year, the market would see a dramatic increase in residential properties priced from RM300,000 to RM700,000.

MIEA will be organising the inaugural Maspex 2013, featuring 32 real estate agencies from April 12 to April 14 at the Tropicana City Mall here.- 

“We are targeting at least 3,000 visitors per day. Property exhibitions are always a big draw,” said Paul.

“On average, the secondary market offers more than a 30% discount when compared with new properties,” he added, noting that the secondary property market guaranteed a mature location, with all conveniences thrown in such as public transportation.

Paul also said the exhibition provided a platform to better serve the public and further assist MIEA members to enhance their business activities.

Also present was MIEA deputy president Siva Shanker, who said that in terms of the volume of residential property transactions in Malaysia, the secondary market accounted for almost 87% of the total transaction in the first half of 2012.

“The primary market seems to be over-represented, in terms of advertisements, exposure as well as exhibitions,” he observed.

He expected residential terrace houses and semi-Ds to continue to be best-sellers in 2013. Meanwhile, the condominium market is expected to play catch-up, courtesy of government initiatives. - The Star

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Rehda wants level playing field for private developers

PRIVATE housing developers are appealing to the government to provide the same exemptions as those in the 1Malaysia People's Housing Programme (PR1MA) scheme to encourage them to build affordable houses.

The Real Estate and Housing Developers' Association Malaysia (Rehda) president Datuk Seri Michael Yam said the developers are supportive of PR1MA and the government's agenda in providing affordable housing, especially to those living in urban areas earning between RM3,000 and RM7,000 in household income.

"It is almost impossible for private enterprises to deliver affordable houses in urban areas for between RM150,000 and RM400,000 due to the rising land prices, compliance costs, building material and labour costs and interest costs paid on financing idle land when awaiting development approval," he said recently.

It wants a "level playing field" for private developers and for them to benefit from the same exemptions, waivers and/or facilitation grant to developers which will, in all probability, provide a product that would be as competitive.

The developers have said they can step in to meet the demand for one million more houses in Greater KL within the next seven years.

At the inaugural Business Times Insight Series last Friday, which focused on affordable homes, PR1MA chief executive officer Datuk Abdul Mutalib Alias said a public-private partnership will be involved in meeting the 80,000-unit target.

PR1MA will build 50,000 homes by sourcing land from the Federal or state governments, government agencies and government-linked companies, while 30,000 more units would be built by private developers.

"When PR1MA Corporation is able to get government land at nominal to 'zero' cost and exempted from a whole raft of conditions normally imposed on private developers, such as the requirement to build low-cost housing, allocation for Bumiputera units at a particular discount, provision of infrastructure and amenities and possible waiver or reduction in capital contribution to utility companies, it has major cost savings that enable PR1MA to supply units at lower than market price," said Yam. 

"This would render market pricing and products of private developers uncompetitive."

He said private developers' delivery system has been time tested and proven in their ability to build more than a million low- and medium-cost housing in the last 40 years.

"If this advantage and benefit cannot be extended to developers wishing to embark on affordable homes, then it would be more practical and sustainable if government takes responsibility for social housing for the urban poor and disadvantaged and also affordable housing and relieve developers from providing subsidised housing," he suggested.

By this move, private commercially driven enterprise can concentrate on the higher-end properties.

"This way the inefficiencies in cross subsidies and prescribed burden can be removed, enabling developers to maximise profit that would result in higher tax collection by the government," Yam said. - Business Times

Glomac eyes Penang, more overseas ventures

KUALA LUMPUR: Glomac Bhd, which already has a presence in property hot spots in the Klang Valley and Johor, is now eyeing Penang as its next destination. The property developer is also not discounting the possibility of venturing into more countries across the globe.

Group managing director and CEO Datuk Fateh Iskandar Mohamed Mansor said Glomac is venturing out of its comfort zone in the Klang Valley, and aims to include more projects in Johor and Penang under its long-term plan.

“Our developments are mainly focused in greater Kuala Lumpur. We are actively looking for landbanks in Malaysia but mainly in greater KL. However, we are always open if any good opportunity comes up outside of KL,  especially in Iskandar Malaysia, Johor, and Penang, and even overseas,” Fateh Iskandar wrote in an email reply to The Edge Financial Daily.

He was responding to a question about Glomac’s  geographical diversification and whether the company is keen on expanding its presence in Sabah and Sarawak.

Fateh Iskandar, however, declined to elaborate on Glomac’s plans for Sabah and Sarawak.

Abroad, Glomac has ventured into Australia and Thailand. It undertook its overseas foray in 2006 when it boughtan office building in Melbourne, Australia for A$30.5 million (RM99 million).

In 2007, Glomac took a 49% stake in Thailand-based warehousing and logistics entity, WHA Glomac Alliance Co Ltd. However, it sold the stake in September 2011 for RM30.92 million.

It was also reported in 2007 that Glomac had intended to undertake an estimated RM800 million township development in Pune, India under a joint-venture with India-based developer Vescon  but there have no recent updates on this venture.

Glomac’s geographical diversification plans come at a time when the company is raking in higher new property sales.  Fateh Iskandar said the company expects to register at least RM750 million worth of sales in the current financial year ending April 30, 2013 (FY13),  13% higher than FY12’s RM663 million.

In the first nine-months of FY13, sales amounted to RM519 million while unbilled sales as at January 31, 2013 stood at RM827 million.
“For full-year (FY13) target, we are on track to exceed RM750 million,”  Fateh Iskandar said.

TA Securities, in its note on Glomac, expects the company to secure new sales of RM760 million for FY13, RM890 million for FY14 and RM953 million for FY15.

The research house said the increase in sales projections reflects stronger than expected sales from Glomac’s existing township projects. TA Securities expects a higher potential GDV of RM2.5 billion for the group’s new township development in Puchong and RM1.2 billion from its project in Dengkil.

Fateh Iskandar noted that the company continued to chalk up consistent sales for townships in Sungei Buloh and Rawang, while new launches in Lakeside Residences in Puchong have also been well received.

“Other developments such as Reflection Residences (in Mutiara Damansara) and Glomac Centro (Bandar Utama) also contributed (to overall sales),” he added.

Glomac’s cumulative net profit for the first nine-months of FY13 climbed 11% to RM70.29 million from RM63.53 million a year earlier. Revenue was higher by 9% to RM445.32 million against RM407.95 million previously. Glomac shares closed at 98.5 sen last Friday.

Maybank Investment Bank has raised its target price for Glomac to RM1.16 from RM1 previously. This comes with a “buy” call.  TA Securities has also increased its target price for Glomac to RM1.17 from 98 sen. - The Edge Property

Will MRT help boost prices?

DO infrastructure projects like the Mass Rapid Transit (MRT) really boost property prices? Sometimes it does, and sometimes it does not. It depends on a number of factors, according to property consultants.

When the MRT project was first announced, there was a general euphoria (with pockets of dissenting views) about the project. There was also an overall anticipation that property prices will get a big boost.

To a large extent, that has been true, although not chiefly because of the MRT factor. There are other factors like the cost of buildings materials and construction, among others, that have contributed to the rise in property prices the last couple of years.

But that premise aside that the MRT project boost prices there are also properties which have been adversely affected by the rail transportation construction and these can be seen in some areas today.

Before going further, one fact need to be established. There is a need for public transportation to improve if Greater Kuala Lumpur is to progress further. This public infrastructure will contribute to the liveability of Greater Kuala Lumpur.

But while there is a need for a well integrated public transportation system, it would be simplistic to, with one stroke, pronounce that the MRT will help boost property prices.

Because what is happening today is, during this current period of the MRT construction, there are certain properties that have become less desirable because they are directly affected by the MRT project. And these property owners have found themselves up against a wall, literally.

What is happening to them may be repeated in other locations along the 52km Sg Buloh-Kajang MRT line that is currently being constructed. And very likely, it will be repeated in the next two subsequent lines that will be constructed, if all the plans are to go ahead as scheduled.

An informal poll among property agents and a transport consultant was carried out which threw up differing schools of thoughts. It is impossible to write about this without going into specifics how many affected houses, exactly which house is facing what, and what's best thing to do in this predicament.

The specifics

As one drives from Bandar Utama heading towards Taman Tun Dr Ismail (TTDI), Kuala Lumpur on the Lebuhraya Damansara-Puchong (LDP), one will see that the MRT construction has started at Jalan Pinggir Zaaba, TTDI. Mudajaya Corp Bhd is the contractor for that stretch.

From here, the line connects to the Sprint and heads towards Damansara Heights. Before coming to the junction that leads to Bangsar, there is a row of shops housing Victoria Station and OCBC Bank on the left. Pillars have been erected close to the houses backing the Sprint. There are about 150 houses on Jalan Kasah from end to end including 36 of them located on two cul-de-sacs. Sunway Construction is the contractor for that stretch.

Already, houses in both locations have been put up for sale. One may say, houses are being put on sale all the time. But what the agents and owners are experiencing today is a drop in demand and prices.

A few agents who declined to be named say the value of properties directly affected have dropped between 20% and 30%. Previously, the price of the double-storey linked houses were priced between RM1.2mil and RM1.3mil.

Today, an owner is trying to sell his double-storey terrace unit at RM1mil negotiable, and another at RM950,000. There are no takers.

The MRT viaduct that the train runs on is expected to cover half of the two-lane road in one section of the road fronting about 20 houses. The MRT viaduct will be between 15m and 20m high from the ground, which is higher than the houses there. At the closest point, the viaduct will be 14.5m away from one of the properties, according to drawings submitted by a group of owners to City Hall.

Says an agent who declined to be named and who specialises in that location: “It is best that certain parts of Jalan Pinggir Zaaba stretch be converted into commercial zone. If this is done, the value of the properties there will increase and it is up to the owners if they want to continue to stay, or to sell out,” says an agent.

A transport consultant who requested anonymity feels the same. “The owners now know how close the pillars will be. Potential buyers can see that for themselves. Why would they buy those properties unless they are buying it cheap in order to rent it out?”

He says there was a situation in Taman Mega Mas, Petaling Jaya which involves a pass-through tunnel linking Ara Damansara with Taman Mayang. It was no longer environmentally conducive to be a residential area because of the high traffic volume. But “in order for an area to successfully be converted into a commercial area, everyone in that affected area must agree to it. Those who are not too adversely affected may protest. Once an area is commercially zoned, there will be commercial traffic, which makes it inconducive for those who may want to stay,” he says.

“Jalan Pinggir Zaaba lends itself to be a commercial area, but not an overly busy one. There will be a certain amount of parking space below the viaducts and accessibility can be improved. This is a viable option for the affected properties but the owners along that stretch will need to be united about this and it is up to the authorities concerned.

“However, Jalan Kasah, Medan Damansara does not have the same advantage as TTDI's Jalan Pinggir Zaaba as the properties there do not have good strategic frontage or access, or space,” the consultant says.

He gave an example of an area in Jalan Pudu, Kuala Lumpur near the Gerakan headquarters where the semi-detached houses were converted to showrooms and other commercial use as the area was no longer viable nor conducive as a residential area.

The opposing view

However, there is another school of thought about the switch from residential to commercial use. Fernstate Sdn Bhd (real estate) senior manager Shawn Fernandez feels differently. His office his located in Jalan Setiapuspa, Medan Damansara in the same block as Victoria Station, which fronts the Sprint Highway.

Fernandez says landed properties will not be terribly affected in the longer term although there will be fall in demand and prices in the short immediate term. Converting residential to commercial use when it involves the MRT project will set a precedent and this will be a mistake. Also, there will not be sufficient parking space for the Jalan Kasah area.

“My suggestion would be for owners to sit out the construction period,” he says. Fernandez says the line will take three to four years to complete. Cost of construction and labour will only go up and so will the affected landed units in time to come.

“When the train is up and running, over the longer term, the convenience will have some form of value. We are seeing that in Brickfields today. When KL Sentral was being constructed, there was much concern about property owners.”

But the specifics are important, says Fernandez. If a house is next to a station, the value of the property will be affected, while the next one a few rows away will command a better value, Fernandez says.

He says there are owners who want to sell out and there are those who are taking a wait-and-see attitude in Jalan Kasah today.

There are two things facing property owners there the retaining wall and the alignment. All the 150 houses, from end to end of Jalan Kasah will be affected, he says.

It is which house, to what degree, because once the line is operational, the row backing the Sprint will be affected.

The train, he says, will run in the middle of the Sprint. That means all the houses backing the Sprint will be affected so it is wrong for the people staying there now to say they are not affected.

Says Fernandez: “It is difficult to assume what will happen to these houses until we know details about the wall that is being constructed today how high will it be, the type of retaining wall that will be built and other details.”

Acknowledging that he is a lay person when it comes to engineering, he says a wall with two layers of bricks and a space in between will reduce noise level better than a wall with one layer of bricks. A wall higher than the roof top will serve as a noise buffer better than a low wall.

Explaining further, Fernandez says a wall with protrusions facing the highway will be able deflect sound waves better than “a straight wall” with no protrusions. If the wall can be made aesthetically pleasing, that will help. He doubts residents know these details.

“It is important to engage the people who have been affected. If the retaining wall can be made aesthetically pleasing and serves its purpose to reduce noise and vibration levels, if the Government (or the companies involved) can make contributions to double-glaze windows to further enhance the liveability of their properties, owners may be happier.

“It is when there is inadequate engagement and scarce information with little details, that gives rise to situation we have today in the affected areas,” says Fernandez.

A retaining wall, not MRT viaduct

In response to a letter from a reader, Mass Rapid Transportation Corp Sdn Bhd CEO Datuk Azhar Abdul Hamid earlier this week wrote that “what is being built now is a retaining wall and not the MRT viaduct.” (Retaining wall, not MRT Viaduct, being built, April 3, 2013)

“With the retaining wall, a new slow lane for the Kuala Lumpur-bound side of the Sprint Highway can be created. This new lane will compensate for the fast lane of the highway which is being taken for the MRT viaduct. The MRT, therefore, will run in the middle of the Sprint Highway and not metres behind the houses along Jalan Kasah.” - The Star