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Monday, September 1, 2008

Developers look abroad

GOING international and attracting foreign property investors will be gaining momentum among developers as they look to tap the vast offshore market for their properties.

Industry players are realising that they have to widen their target market to beyond Malaysia’s shores to make up for the slowdown in local demand following rising inflationary pressures and prevailing cautious sentiment among potential property buyers.

Property developers who participated at The Star Property and Home Fair Penang 2008 roundtable discussion in Penang recently concurred that the foreign factor was the much needed link to promote greater buying interest in a more sustainable market for Malaysia’s real estate.

The three-day exhibition from Sept 5 will be held at the Penang International Sports Arena.

They also voiced their apprehensions over the state’s restrictive development guidelines, including the low plot ratio and restrictions on development at more than 250 feet above sea level.

To overcome a shortage of development land in land-scarce Penang, SP Setia Bhd executive director and chief operating officer Datuk Voon Tin Yow suggested more mixed use integrated developments with residential, commercial and leisure components be allowed.

This is because such projects would free up more land for better use, including landscaping and greening purposes.

He also said development plans on land above 250 feet should be given due consideration if the slope of the land is gentle.

The panellists also voiced the need for clearer guidelines for development in inner city George Town, especially around the buffer zones, to ensure a more optimum balance between restoration and development efforts.

They opined that a more efficient public delivery system with progressive and transparent guidelines and processes would contribute greatly as speed and timing are important attributes for projects to succeed.

According to Ivory Properties Group executive director Datuk Sri Nazir Ariff, it would be easier to formulate financial plans and projections if industry players could be assured of transparent governance.

Penang Town and Country Planning and Housing Committee chairman Wong Hon Wai, who also took part in the roundtable discussion, assured the developers that the new Penang state government would adopt the kaizen or continuous improvement approach in its civil service in line with its competence, accountability and transparency (CAT) governance.

“Where property development is concerned, we want to ensure Penang does not turn into a concrete jungle but will grow as an organic city with a soul,” Wong said.

In welcoming Wong’s assurance, Nazir said: “A competent, accountable and transparent government will make Penang cleaner, less congested and more liveable. That will help re-define the property market into a quality market.”

Real Estate and Housing Developers Association (Rehda) Penang chairman Datuk Jerry Chan said more needed to be done to promote Penang’s many attributes to the world, including building up a strong branding as an international real estate destination.

“There is also a need to rejuvenate the inner city of George Town to its old glory as a lively and liveable city,” he said.

Nazir said the declaration of George Town as a United Nations Heritage Site in July was a great branding opportunity for Penang and more cohesive efforts were needed between developers and the state government to leverage on the state’s unique charms.

He urged the state government’s Heritage Steering Committee to work hand-in-hand with the local government and developers when enforcing and implementing the heritage guidelines.

IJM Corp Bhd deputy managing director Teh Kean Ming said while Penang’s property market offered much potential for developers and investors, the onus was on industry players to work with the authorities to elevate the state’s profile in the international real estate arena.

“There is a need for more world-class products and infrastructure, such as waterfront developments, that appeal to savvy high-net worth foreign buyers,” Teh said.

Concurring with Teh, Henry Butcher Penang director Dr Teoh Poh Huat said current thinking seemed to focus on leveraging on foreign demand as a panacea for the more challenging domestic market.

“Making Malaysia a destination of choice for property investment and a second home is now the sine qua non.

“As this sector of the market is relatively less understood, it is imperative to conduct research to understand both the demographic and psychographic elements of the foreign market on the country’s real estate,” Teoh said.

By The Star (by Angie Ng)

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