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Friday, March 14, 2008

East Ledang homes see good sales

East Ledang's twin villa show unit

IN less than a month, UEM Land Sdn Bhd’s (UEM) latest property development, East Ledang at Nusajaya, Johor has sold almost half (48%) of its first phase that was launched late February.

“Fifty percent of our buyers are locals, mostly from Johor and are high income professionals while the other 50% are foreigners, mostly from Singapore,” said Wan Abdullah Wan Ibrahim, managing director of UEM Land.

The RM1.2 billion development takes up 275 freehold acres in Nusajaya and will be developed in seven phases comprising a total of 861 homes. The first phase offers a total of 139 units comprising 52 twin villas and 87 link duplexes.

The twin villas have built-up areas ranging between 3,700 sq ft and 4,400 sq ft while the link duplexes have builtups of between 2,600 sq ft and 3,000 sq ft. The homes are priced at RM870,000 and above and RM458,000 and above respectively.

“Work has already begun at Phase 1, which we are confident of delivering within 18 months. The entire East Ledang would take us between five to seven years to complete,” said Wan Abdullah, adding that Phase 2, comprising semidees and bungalows, is targeted for launch in August.

According to him, the project has an “East meets West” concept, blending tropical gardens and colourful flora from the East with security and ICT technology. The gated development comes with 24-hour CCTV surveillance, guarded and access card entrances, patrolled perimeters, as well as home security systems that come with panic buttons linked to the Central Monitoring System.

Another feature of the project is its 31 themed gardens including a 20-acre forest, wetland gardens, lake gardens and a large lake. “The Central Garden in Phase 1, with its 100-year-old multi-hued Frangipani trees whose whorled trunks resemble sculptures, is one not to be missed,” said Wan Abdullah.

Residents of East Ledang will receive membership for the clubhouse, “The Ledang”. Located at the estate’s entrance, the clubhouse features dining, recreational and spa facilities with a business centre, convenience shopping and a range of concierge-style services. Members may also enjoy panoramic views of East Ledang from “The Tower” at the clubhouse.

Located in south Johor, East Ledang is part of Nusajaya, a 24,000-acre regional city touted to be the largest fullyintegrated urban development in South-East Asia. Nusajaya is located within the Iskandar Development Region, which is connected to Singapore via modern expressways, 20 minutes away from Johor Baru and about three hours car drive to Kuala Lumpur.

Nusa Idaman, UEM Land's other project also within Nusajaya, will be completely launched this year. To date, it has launched six out of eight phases and handed over the first three phases. The remaining two phases will be launched within 2008, said Wan Abdullah. The RM417- million project is expected to house over 2,000 units upon completion.

UEM Land is the master developer of Nusajaya, which is expected to house 500,000 residents by 2025.

By theSun (by Yeong Ee-Wah)

Affordable terraced homes in Sungai Buloh

A show unit of the Camellia designed terraced home

LOOKING for an affordable terraced property in the Sungai Buloh- Kepong area? More 2-storey
terraced homes will be offered at the upcoming launch of the leasehold 200-acre Taman Desa Bukit Indah in Sungai Buloh, Selangor by Magilds Park Sdn Bhd, a subsidiary of Petaling Tin Bhd.

Following the successful take-up of its Camellia designed 2-storey terraces that was launched last month, the developer plans to introduce more of such terraced homes in June, Petaling Tin CEO Leong Choong Wah (pix) told PropertyPlus.

“In less than a month, we sold about 90% of the 83 units of Camellia terraces. Most of our buyers are from the surrounding Kepong and Sungai Buloh areas," said Leong.

"Apart from the affordable pricing, they were also attracted to the location which is about 15 minutes from nearby commercial amenities in Kepong like Jusco and Carrefour. Even 1 Utama is
about 15 minutes away.” The 3+1-bedroom, 3- bathroom Camellia homes have a land area of 22ft by 80ft and built-up of 1,600 sq ft. Prices for the homes start from RM216,000. The gross development value (GDV) is about RM20.9 million for the Camellia phase.

Construction works on the project have started. For its upcoming launch, the developer would be
offering 113 units of 20ft by 65ft terraces with a built-up area of 1,400 sq ft. According to the developer, prices are slightly below RM210,000 for the standard 3+1- bedroom, 3-bathroom units.

“This phase will have a GDV of about RM21 million. Since the launch of the RM214 million Taman Desa Bukit Indah in 2001, we have sold and delivered 47 industrial lots amounting to about RM36 million and 235 units of 20ft by 70ft link houses. These link homes are valued at about RM39 million,” said Leong.

Taman Desa Bukit Indah will take another five years to complete. There are midend condominiums and shoplots in the master plan, he added.

Taman Desa Bukit Indah is located near the Sungai Buloh hospital and the KTM Komuter station. It also enjoys easy access to the Damansara Puchong, MRR2 and New Klang Valley Expressway highways.

Meanwhile, at its ongoing leasehold 26.5- acre project at Taman Kelab Ukay in Ampang’s Ukay Heights, Leong said it is busy planning for the last few remaining phases of the RM125 million development.

“We will be offering superlinks, terraces, bungalows and zero lot bungalows for these final phases that will be launched by year-end or early next year. The entire development will be completed by 2011,” he added.

First to be launched in the final phase will probably be the superlinks which is in the final stages of approval.

“We are hoping to obtain the approvals for the 24ft by 90ft 3-storey superlink homes at Taman Kelab Ukay soon and we plan to launch them later in the year,” said Leong.

“There will only be 15 units within a gated scheme. Tentative pricing has been set at about RM680,000,” he said, adding that the maintenance fee has not been set. The built-up area for the superlinks is 3,200 sq ft and would have a GDV of RM10 million.

The developer has also lined up 21 units of 22ft by 80ft 3-storey link homes with a GDV of RM11 million as well as 17 bungalows and 15 zero lot bungalows with a total GDV of RM55 million in the same development.

By theSun (by Loo Pik Kwan)

Hospitality BOOST

Real estate consultants believe that the local hospitality sector would continue to expand in tandem with tourism and foreign investments growth.

AS the government continues to promote foreign direct investments into the country, a growing number of commercial properties’ transactions led by foreign buyers can be seen particularly in the Klang Valley.

While these foreign investors, such as those from the Middle East and Hong Kong, have interests in office buildings and shopping centres, much growth has been seen in the number of hotel acquisitions too. It was reported that the country recorded hotel transactions worth about US$376 million (about RM1.2 billion) last year, or 3.5 % of the total US$10.8 billion (RM34.5 billion) made across Asia.

Global hotel investment services firm Jones Lang LaSalle Hotels said the Asian hotel market witnessed 83 major transactions, valued above US$5 million (about RM15.98 million) last year and that it was more than double the previous high of US$5 billion (RM15.98 billion) transacted in 2006. It attributed strong local economies and expanding leisure markets as the factors of Asia’s well-performing hotel sector.

Sales of (from left) Crown Princess KL, The Westin KL, and Sheraton Subang Hotel & Towers were concluded over the last two years.

At the recent first Malaysian Property Summit 2008 organised by the Association of Valuers & Property Consultants in Private Practice Malaysia in Kuala Lumpur, real estate consultants expressed belief that the local hospitality sector would continue to enjoy more upside fuelled by tourism market growth and growing foreign investments.

According to data from Zerin Properties, foreign investments in hotels grew by 64% to RM878 million in 2006 while the total investments by locals only amounted to RM153 million. Last year, 62% of the total value of hotel transactions which amounted to RM756 million were by foreigners.

Among the hotel transactions which have been over the last two years include the 571-room Crown Princess Kuala Lumpur which was transacted at RM240 million or RM420,315 per room, 100-room Grand Centrepoint for RM12.5 million or RM125,000 per room, and the 452- room The Westin Kuala Lumpur that was sold for RM455 million or a whopping RM1 million per room.

In suburban Subang Jaya, the 502-room Sheraton Subang Hotel and Towers was sold for RM140 million or RM278,884 a room.

According to Zerin Properties CEO Previndran Singhe (pix), hotel funds as well as foreign investment funds are the main drivers for hotel properties here. “Some hotspots for hospitality investments include city centre areas like KLCC, Penang and Johor Baru which has offerings that include hotels and serviced apartments ranging from high to mid-end,” said Previndran, adding that the foreign investors’ interest is growing outside the Klang Valley.

Resort properties in Penang such as the 350-room Ferringhi Beach Hotel was sold for RM43 million (or RM122,857 per room) and 96-room Midtown Hotel was transacted at RM12 million (or RM125,000 a room). Other examples include the 258- room Holiday Villa sold for RM55 million (or RM213,178 per room) in Langkawi; the 160-room Holiday Villa in Kedah was sold for RM31 million, and Kuantan’s 100-room Holiday Villa was purchased for RM21.87 million.

Malaysian Association of Hotels (MAH) executive director Sarjit Singh (pix) believes that investors here are driven by the country’s good climatic conditions. “They see the potential in opening hotels here as it is expected to perform better this year.

With the government’s growing emphasis on the Meetings Incentives Conferences Exhibitions market, participants of such conferences usually tend to bring their families and end up staying longer to do shopping and other tourist activities,” Sarjit told PropertyPlus.

With the government’s extension of Visit Malaysia Year (VMY) 2007 to Aug 31 this year, both Previndran and Sarjit are confident of tourism growth this year.

“As Malaysia is still very much perceived as a value-for-money destination, the growth in our tourism market is also driven by lowcost carriers like AirAsia. The 9/11 incident actually also benefitted us as there are more travellers to this side of the world as well. In fact, another boost for the industry is when the government allows for the open-sky policy,” said Previndran.

Apart from tourist arrivals, Sarjit said that the length of time tourists spend in the hotels is also important. “The number of room nights and the amount of money spent in the hotel are also important to the industry.

The Tourism Ministry is beginning to lure tourists from niche markets, those with money and will stay at least a week, such as from Monte Carlo, Greece, Latin America and even Africa,” said Sarjit, adding that Malaysia is well-known as a paradise of sales.

“The government’s efforts to promote the country through the carnival sales have borne fruit and the extension of VMY 2007 to Aug 31. The government has spent a lot of money on VMY 2007 publicity and based from our members feedback, they are quite happy. Between the months of July and September last year, more people came, especially those from the Middle East, and occupancy levels were more than 90%,” said Sarjit.

Some 20.7 million tourist arrivals were recorded last year while the shopping receipts amounted to RM45.7 billion, which is the second largest foreign exchange earner for the country. These numbers surpassed Tourism Malaysia’s targets of 20.1 million visitors and foreign exchange earnings worth RM44.5 billion. The bulk of tourist arrivals were from Asian countries including Singapore, Thailand, Indonesia, Brunei, China, India and Japan.

Although tourists to Malaysia seem to be proximity-based, Previndran said that tourists from the Middle East and Emirates were the largest shopping spenders.

“They spend about US$776 per day while tourists from India registered as the highest spenders in hotels,” he added. For 2008, the Ministry of Tourism have set higher targets for both tourist arrivals and shopping receipts, amounting to 22.5 million tourists and RM50 billion, an increase of five and two per cent respectively from the original expectations.

Incoming supply
Over the next three years, Klang Valley will see an addition of about 5,600 hotel rooms housed in less than 20 hotels with 4- and 5- star rating. Those that will be completed this year include Hotel Grand Mercure Putrajaya Lakeside (owned by the French-based Accor Group), Maytower Hotel Serviced Apartments (owned by Mayland Group), Royal Chulan Tower Hotel & Residence (owned by Boustead Group) and Gardens Hotel and Residences (owned by IGB Group).

According to MAH’s latest data on upcoming hotels and rooms supply for the period between 2008 and 2010, those completed in 2009 would include Bluestone Group Malaysia’s Rendezvous Hotel Kuala Lumpur and Sepang Goldcoast’s Golden Palm Tree Resort & Spa in Sepang.

The data also revealed that a 400-room 5-star hotel would be completed in the Kuala Lumpur city centre area in 2010.

More than 1,300 rooms would make up those from the other states throughout the period and there would be three Accorowned hotels in East Malaysia.

From the latest leisure stock report for 3Q2007 obtained from the Valuation and Property Services Department’s National Property Information Centre (Napic), there are 2,184 hotels in the country offering a total room supply of 151,014 rooms. The total comprised 1- to 5-star rated hotels at 26% (568 units with 99,532 rooms); orchidrated hotels at 14.4% (315 units with 9,207 rooms) and unrated hotels at 59.5% (1,300 units with 42,227 rooms).

It also reported that the average occupancy rate of five-, four- and three-star hotels was well maintained at 65.4%, 60.8% and 62.6% respectively.

Future trends
Previndran feels that the country would soon be experiencing new hospitality trends that have been taking place on the international front. “For example, limited service and branded budget hotels [like the Tune brand] are very popular overseas and these are managed by well-known hotel brands including Holiday Inn and Marriott.

Serviced apartments are also another type of limited service offering,” he said, adding that the sector’s growth would be in tandem with the growth of low-cost carriers.

Other trends that would benefit the local hospitality sector include spa resorts and Syariah-compliant hotels. “Foreigners will enjoy the spa-themed resorts which are considerably more affordable here. There is also a big market for ethnic-based hotels with Islamic architecture here, and in the Middle East there are about 26 Syariahcompliant hotels. Extreme sports-themed resorts and hotels which leverage on the abundance of nature in the country will also be popular here,” said Previndran.

By theSun (by Loo Pik Kwan)

Homes shunned at auction

LONDON: The residential property market took a turn for the worse last week but the evidence is likely to be missed by most homeowners.

According to the Royal Institution of Chartered Surveyors (Rics), just 57% of the 7,669 homes that went up for auction in 4Q2007 were sold for the reserve price.

This figure was 12% down on the same quarter in 2006 and marked the lowest success rate at auction for three years. Most homeowners may feel safely detached from auction figures, but they have implications for the wider market. For a start, despite the dip in sales, the number of homes that went to residential auction was up 15% on the year before, says Rics. That was due to repossessions which, the Council of Mortgage Lenders (CML) reports, reached 27,100 in 2007 – up 20.9% on the previous year. Rics forecasts that repossessions could rise a further 50 % this year as a result of last year's rate hikes and the credit crunch.

But still more pessimistic commentators claim the new auction figures are proof that the wider market is destined for a crash. "The value of a property is not the latest monthly average but the price of the last one that was sold," says Jonathan Davis at website "If
they are not selling at the current reserve prices, sellers have no choice but to reduce these prices and put them back up for auction. This process brings the value of all property downwards – especially as many auction bidders are now not from the trade but novice investors holding out for a bargain. Auctions are the retail market."

And that's not where the impact of the Rics figures end. According to Allsop, the UK's biggest property auctioneer, around half of the typical 400 homes sold at any one auction have already been repossessed by lenders. With house values down and mortgage profits escaping through the back door, banks must recoup losses from somewhere and fears are mounting that this will be in the form of higher rates and stricter lending criteria. Ultimately, it may be the average homeowner – who has probably never been to an auction – who will be hit in the pocket when they try either to switch their mortgage deal or take out a new home loan when moving.

Oliver Gilmartin, economist at Rics, says: "While tighter credit conditions will be most acute for those with a poorer credit history, less generous loan amounts and the introduction of upper limits on some advances could equally hit the mid-tier of the market, which would increase the number of properties languishing on auction books." A spokeswoman for the CML denies the new auction figures will have an impact on lending conditions as only a "minority" of repossessed properties end up being sold at auction anyway. "Lenders have to get the best price for a property, which often means they are marketed and sold through estate agents."

But Gary Murphy, a partner at Allsop, says the overall market is "considerably weaker" than the auction one. "Repossessed homes are often offered by private treaty first but go to auction when the price cannot be achieved," he says.

Auctioneers also like to distinguish themselves from their rivals. "Sale success is a question of whether the auctioneer is giving the right advice to their clients about reserve prices," says Murphy, adding that Allsop sold 88% of its 415-lot catalogue in February and 84% in December.

Broker Savills has also reported healthy figures. In a residential auction last month, it sold 75% of stock, raising over £25 m (about RM163 million). Charles Smailes of the National Association of Valuers and Auctioneers adds that quarterly numbers are a snapshot of "times gone by" rather than an indication of the current market.

"The market was post-credit crunch and still reeling from the American sub-prime and Northern Rock debacles. Auctions are a very public and honest evaluation of what is going on at the time – and that's why I am sure that the 1Q2008 figures will be more optimistic." However, with both the Halifax and the Nationwide reporting that house prices fell yet again in February, people can't be too careful. "Homeowners will need to be vigilant about meeting payments for all sorts of utilities, cards and loans," warns Melanie Bien, director of Savills.

"They would also do well to pay down their mortgage and reduce the loan to value if they have any spare money. This will make it easier for them to remortgage when the time comes," adds Bien.

By The Independent

Worst housing market in a decade

LONDON: Britain's housing market is facing its worst conditions in more than a decade, according to the Royal Institution of Chartered Surveyors (Rics). Surveyors are reporting falling prices, with February the seventh month in a row when sentiment has been negative.

The net balance of surveyors reporting falling rather than rising values climbed to 64.1% in February, up from 54.8% in January. This figure is only marginally higher than the historical nadir reached in June 1990. Such powerful anecdotal evidence reinforces data from the Halifax and Nationwide indices which have shown a pattern of gently declining prices.

Only Scotland is bucking the gloomy trend. Philip Shaw of Investec Securities said: "Housing demand has fallen off a cliff over the past year, with no signs of an imminent stabilisation in activity, let alone a recovery."

The decline in prices is driven by a lack of demand linked to the credit crunch, rather than a jump in supply of new housing.

Buyers are finding it tougher to raise mortgages. Banks and building societies have tightened up their lending criteria for fear of a rise in bad debts. They have also been "hoarding liquidity" to shore up balance sheets, and some have been badly affected by the collapse in demand for securitised mortgage-backed securities.

The Government has been hinting it may offer some kind of quality assurance ("Kitemarked securities") to unfreeze the market. Additionally, the UK's "sub-prime" lenders have disappeared. These factors have been reflected in a marked drop in mortgage approvals recently. Falling house prices will tend to exacerbate the credit crunch and could create a vicious circle.

The shortage of buyers has left a glut of unsold houses and flats. The stock of property on surveyors' books jumped by more than 8.5% in February, the fifth successive monthly increase of that magnitude. The ratio of sales compared to the stock of unsold property fell to 26.5%, the lowest since September 1996.

By The Independent

Auction caution

Buyer beware: Before buying a house at an auction, the buyer needs to be aware of the issues and complexities involved.

Looking at the advertisements in the daily newspapers, it would appear that a large number of properties are being auctioned off every weekend. The indicated prices appear to be way below the market price, making it appear like an attractive purchase.

Is it safe to buy a property at an auction, and is the buyer adequately protected by the law? Can properties be auctioned off without a court order?

Well, court approval is only required if there is a precondition in the loan agreement requiring approval of the court before it can be sold. Otherwise the court is only involved if the land has a charge registered under the National Land Code.

Right to sell
Almost all the auctions in the advertisements include a reference to a bank, a financial institution or a borrower. This would suggest a loan default scenario. The words “assignee” and “assignor” in the advertisements suggest that the property in question does not have separate individual titles to enable a charge to be registered.

Where there is no individual title and the loan is granted on the basis of a loan agreement and a Deed of Assignment, the lender is entitled to dispose of the property on the strength of a Power of Attorney, unless there is a restriction.

In fact, most such documents allow the lender to dispose of the property without any prior court approval. The agreement may not mention an auction but the auction mechanism is utilised to make the intended disposal known to a wider audience to get the best price and show transparency.

Before buying a house at an auction, the buyer needs to be aware of the issues and complexities involved. The offer price may appear to be cheap but there could be other aspects that could increase the cost of the transaction.

Contractual relationship
To start with, the property may not necessarily be available at the indicated price. This is merely the reserve price at which the bidding will start. Depending on the property and the buyers it has attracted, the price could end up much more than the reserve price.

An auction creates a setting to put in place a contractual relationship between the parties involved. The process starts with the publication of an advertisement.

Following the advertisement, the auctioneer invites bids for a particular item for sale and starts the ball rolling. This is referred to as an invitation to a treat. If a bid is made pursuant to such invitation, that in law constitutes an offer, the auctioneer is free to accept or reject. However, the sale by an auctioneer is concluded when he announces its completion by the fall of the hammer or in any other customary manner.

The next question that arises is: what are the terms and conditions on which the property is purchased? When property is purchased from a developer, there is the standard Sale and Purchase Agreement, if it is a housing accommodation. When a property is acquired through a sub-sale, the terms are set out in the Sale and Purchase Agreement, which is the result of negotiations between the parties.

Conditions of sale
However, the scenario in an auction sale is different. This is because the property is sold based on the Conditions of Sale, which become the terms on which the property is transacted.

These Conditions of Sale are always available before the auction takes place. An individual bidder at the auction ought to obtain and familiarise himself with these terms and conditions before the bid. This is because if the bid is successful, he will be deemed to have entered into a contract on those terms.

An example of a clause in a Condition of Sale which illustrates the risks a bidder must assume when he purchases a property, reads as follows:

“The property is sold on an ‘as is where is’ basis without vacant possession subject to (a) all express and/or implied conditions, restriction-in-interest affecting the Master Land and that which may be imposed/endorsed on the document of individual strata title to the property upon the issuance thereof, (b) all easements, covenants, charges, caveats, liabilities, (including but not limited to liabilities to the local authorities incurred but not ascertained and any rates made but not demanded) and any adverse claims in respect of the Property; and (c) all tenancies, lease, occupiers and rights (if any) of any tenant or occupier, subsisting thereon or therefore without any obligations arising to define the same respectively.”

It is a common and acceptable practice to purchase a property subject to express and implied restrictions endorsed on the document of title. But if there are tenants on the land, the bidder has to take the responsibility of evicting them and bear the costs incurred with the added risk that compensation may not be recoverable. The same would apply in the case of a need to have a caveat removed.

This is different from purchasing a property from a developer or an ordinary individual where the vendor has an undertaking that the property is free from encumbrances which could include caveats, and that the seller will hand over the property to the buyer with vacant possession as part of his obligation.

To reinforce the rights of the seller or rather the seller’s lack of obligations, such Conditions of Sale often provide a condition binding the purchaser to admit that he has inspected the property and is buying it in the condition that it is in. An example of a Condition of Sale which exonerates the seller from handing over the property with vacant possession has a clause which reads as follows:

“The successful purchaser shall at his own costs and expense take possession of the property after the payment of the balance purchase price. The assignee/lender or its agents have no obligation to deliver vacant possession of the property and the successful purchaser is prohibited from entering the property before the payment of the balance of purchase price and/or late payment interest.”

Need for caution
It would be in the interest of the bidder to visit the property and inspect it to familiarise himself with the condition of the property. The photographs in the newspaper or leaflet may not convey the real state of the property which the bidder expects to acquire.

These are just some of the conditions of sale. A detailed examination of the Conditions of Sale in auctions could disclose a host of responsibilities which the seller may exclude himself from.

In conclusion it must be said that a valuable property may well be acquired at an auction. However, there is a need to make adequate inquiries and investigations, and consider all the factors in order to end up with a good bargain.

By The Star (