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Monday, December 29, 2008

Malaysian property mart resilient enough

The Malaysian property market, which is expected to enter the down cycle next year, will still be resilient enough to survive the onslaught of a softening global economy.

The government's RM7 billion stimulus package, including the reduction of Employees Provident Fund contributions from 11 to eight per cent, coupled with lower interest rate and inflation, will provide the bright spark to the market.

The market still has ample liquidity as banks continue to give out financing despite worries about an increasing credit crunch in the US.

Association of Valuers and Property Consultants in Private Practice Malaysia president, James Wong Kwong Onn, said although the property market was expected to see a slowdown in the take-up rate, there would not be a major correction as there was still room to grow.
He said Malaysia was in a better position compared to Singapore, Hong Kong and Thailand which were more exposed to the US sub-prime crisis.

Wong, however, said the association did not expect the market to burst as there would be a moderate reduction in property prices.

He said the property market, especially for residential and commercial, has been 'red hot' for three years up to the third quarter of this year but the softening economy has put a pressure on it.

According to Real Estate and Housing Developers' Association president, Datuk Ng Seing Liong, the property market would see a slowdown of between five and 15 per cent in 2009.

He attributed the economic slowdown as a dampener to the enthusiasm of buyers.

Ng said sales generally would be ongoing but in small volumes as most purchasers adopted a wait-and-see attitude while most developers downsized their new property launches for next year.

An analyst from Aseambankers Malaysia Bhd said buyers were holding back their investments until the economic environment was stable. He anticipates home buyers to return to the market in the second half of 2009.

By Bernama

Nomad seeks stronger foothold in Philipines

KUALA LUMPUR: The Nomad Group Bhd, the largest serviced office provider in Kuala Lumpur, plans to open its latest office in the Philippines by the first quarter of next year.

Chief executive officer Hew Thin Chay said the group had already shortlisted two buildings in the central business district of Manila to set up its office.

“There is good demand for serviced offices in Manila but we are still waiting for the (rental) rates to improve,” he told StarBiz.

The company would be investing about RM4mil in the office, he said, adding that he expected a return on investment in the second year of operations.

The offices, he said, were targeted at travelling entrepreneurs and enterprises.

“The typical serviced office business generally takes about a year to mature. After that period, and once people know where you are located, that is when you start seeing stable returns.

“We always tell our shareholders that this is a long-term business, that the first year of operating a serviced office is not the time when we see business growth,” he said.

The office in Manila is part of the group’s strategy to establish a firm presence in the Asean region. It currently operates offices in Singapore, Indonesia, Vietnam and, most recently, Thailand.

Hew said the group would also be opening a second office in Indonesia, and it had also considered Cambodia and Laos but nothing had been finalised yet.

“We are comfortable with our presence in Asean currently and want to venture further into Asia.”

He also said the group was planning to make in-roads into Hong Kong and Taiwan next year. “We are certain about (opening an office in) Hong Kong next year. In Taiwan, we are still waiting for the political situation to stabilise,” he said.

By having an office in either Hong Kong or Taiwan, Hew said the group would be able to fast track its business into China.

On the local front, the group operates six serviced offices. Hew said the offices offered fully furnished and unfurnished office suites, virtual office, meeting rooms, business lounge and video conferencing facilities, in addition to office-support services.

He said Nomad was looking at setting up an office in Penang but had yet to find “good office space.”

By The Star (by Eugene Mahalingam)