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Saturday, February 27, 2010

Seberang Prai becomes popular

Artist impression of the Pearl Garden project, launched last September, sold about 70% in a matter of weeks.

The Seberang Prai residential property market is facing robust demand in both the landed and high-rise segments.

Two key developers in Seberang Prai have lined up for launching, in the first quarter of this year, some 486 units of landed residential properties with an estimated gross sales value of RM156mil to meet the rising needs of those with the disposable income to upgrade their lifestyle.

Over the past two years, the investments brought in by multinational corporations such as Ibiden, Honeywell International, National Instruments, St Jude Medical, and First Solar have created an executive class of home seekers.

The projects are the second and third phases of Pearl Garden, with a gross sales value of RM71mil, developed by Tambun Indah Development Sdn Bhd and Phase 2 of RM85mil Bukit Mertajam Utama by DNP Land Sdn Bhd.

The Pearl Garden, a joint venture project with Mutiara Goodyear Development Bhd, comprises 446 units of double-storey terraced, semi-detached, and bungalow houses on a 67.9-acre land in Simpang Ampat, about 20km from the Penang Bridge.

The first phase, launched last September, was about 70% sold (175 units) in a matter of weeks.

“Most of our buyers are those who want to own landed property but could not do so on the island. The second and third phases, comprising 271 double-storey terraced and semi-detached houses, was launched mid-February,” says Tambun Indah general manager Teh Theng Theng.

The Pearl Garden is a gated and guarded project, with 24-hour security, and comes with a double-storey clubhouse and recreational facilities such as a swimming pool, a gymnasium, jogging track, and a community hall. The selling price for the properties ranged between RM238,000 and RM512,000.

“We are also arranging for a special financing package that provides 90% financing and allows purchasers to pay the 10% instalments over a 12-month period. Depending on the size and type of unit, the monthly instalment starts from RM400 per month,” Teh adds.

The RM85mil Bukit Mertajam Utama, comprising 215 units of double-storey terraced and semi-detached houses, is located on a 56-acre site in Bukit Mertajam, about 3km from the Penang Bridge.

The terraced and semi-detached houses have respective built-up areas of 1,900sq ft and 2,700sq ft priced at RM328,000 and RM468,000.

DNP Land (North) general manager K.C. Tan says about 60% of Bukit Mertajam Utama, scheduled for official launch in March, were sold during the soft launch last month.

“Landed properties in Seberang Prai, which are priced about 40% lower than landed homes on the island, will always find a strong market in the young executives with a combined household income of over RM6,000,” he says.

As for the high-rise condominium market, that too seems to be getting increasingly popular in Seberang Prai, a territory known for its affordable landed residential homes.

Fook Tone Huat ... Most mainland buyers look for properties priced 40% below the landed properties on the island.

More than 10 years ago, high-rise residential properties were not that sought after, Henry Butcher Malaysia (Seberang Prai) senior manager Fook Tone Huat tells StarBizWeek.

“Most of the buyers on the mainland looked for landed homes which were priced about 40% below the landed properties on the island.

“About three years ago, high-rise properties in Jalan Raja Uda and Jalan Telaga Air, in Butterworth, started to do well. The original selling price, which started off from about RM160,000 for a unit with over 1,000sq ft in built-up area, has risen over 30% over the past three years to around RM210,000 and RM230,000 today,” he says.

The Cassia Resort Condominiums by Island LandCap Properties and the Vista Bay Condominiums by Cendana Realty Sdn Bhd are two such projects launched three years ago in the heart of Butterworth town that has seen such appreciation.

For this reason, there are already three high-rise residential projects that will be launched by the middle of this year; Island LandCap’s Pinang Laguna Water Park Condo and Airmas Development’s apartment Telaga Emas by the first quarter of this year and Dahlia Park in mid-2010.

The largest of these scheme is the RM160mil Pinang Laguna Water Park Condo, located in Seberang Jaya, comprising about 1,000 units, with over 1,000sq ft in built-up areas, priced from RM180,000 onwards.

The Dahlia Park, located near Jalan Bagan Luar, at the heart of Butterworth town, comprises 140 condominium units with built-up areas ranging between 1,307sq ft and 1,726 sq ft. These will be priced from RM190,000 onwards. Dahlia Park is equipped with comprehensive clubhouse facilities.

The Apartment Telaga Emas, located at Jalan Telaga Air, Butterworth, comprises 144 units with built-up areas of 1,327 sq ft priced from RM197,000 onwards. The scheme is equipped with amenities such as a swimming pool, sauna and round-the-clock security.

“High-rise properties have become popular because of their affordable pricing, and because of the facilities that come with them. In comparison, landed properties, which have been appreciating at about 10% per annum, are now priced over RM300,000 for a double-storey terraced unit with built-up area of 1,600sq ft and a 1,400sq ft land area.

“This means that only households, with a combined income of over RM5,000, and who are willing to borrow to the maximum, can take up loans for such housing projects. Landed property prices are expected to go up by another 10% this year,” he says.

Oon Weng Boon ... High-rise properties could sell well if they are strategically located.

Island LandCap Properties executive chairman Oon Weng Boon says the high-rise properties in Butterworth could sell well if they are strategically located and offer a full range of recreational facilities.

“Our Cassia Resort Condominium sold well because it was centrally located in Butterworth town, on Jalan Raja Uda, and had various clubhouse facilities. Furthermore, the pricing of Cassia Resort Condominium which was around RM160,000 then, was affordable for many households with a combined income between RM3,500 and RM4,000,” he says.

Oon says the Pinang Laguna Water Park Condo project was the group’s first attempt to infuse theme-park concept with condominium lifestyle living in Seberang Prai.

“This adds value to the project, making it more attractive to house buyers, especially those with families. During the soft launch preview last month, we have already received bookings for about 50% of the first phase, comprising 350 condominiums. The second phase is scheduled for launching in the second half of this year,” he says.

By The Star (by David Tan)

The Chinese love for properties

China, Hong Kong and Singapore's buoyant property markets.

AS US gaming giant Las Vegas Sands goes hither and thither in preparation for what it describes as the “most expensive stand-alone integrated resort-property ever built” scheduled in late April this year, all eyes are on the effect on the city state property sector.

The opening of the US$5.5bil (RM18.7bil) Marina Bay Sands casino resort complex will come two months after the start of gaming operations at Resorts World Sentosa, a development owned by Malaysia’s Genting Group.

Las Vegas Sands says the 963-room hotel, part of the shopping mall and convention centre will also open together with the casino.

The second phase of the opening slated for June 23 will include a massive sky garden on top of the development’s three hotels as well as more retailers, it said.

Its chairman and chief executive Sheldon Adelson says their dedication to complete the project never wavered despite the challenging economic climate.

Construction of the complex – the US gaming firm’s first development in Southeast Asia – had been delayed by materials shortages and financial difficulties faced by subcontractors due to the recent global economic slump.

As Asia climbs out of the economic quagmire which has engulfed the world, the property radar in this part of the world have been far more rosy than that of the West.

Singapore’s property sector, as with Hong Kong’s and China’s, have piqued quite a bit of interest among Asians themselves and watched with envy in the West.

Known as the exotic Far East by the West, property prices in this part of the world have remained excitingly buoyant by contrast, so much so that the Singapore government has recently imposed a levy on people selling residential properties within a year from the date of purchase.

The city-state also lowered the loan-to-value limit to 80% from 90% for all housing loans provided by financial institutions.

The measures are “aimed at pre-empting the formation of a property bubble,” Adrian Chua, an analyst at DBS Group Holdings Ltd writes in a note.

“The earlier-than-expected introduction of measures signals that more could come should prices and volumes not revert back to sustainable levels.”

Singapore’s steps come after the island’s private home sales last year were just shy of the 2007 record, helped by the nation’s economic recovery. A total of 14,688 homes were sold last year, compared with the record 14,811 transacted in 2007, according to government data.

Private residential prices rose 7.3% in the fourth quarter from the previous three months, extending the biggest rally in 28 years, based on data from the Urban Redevelopment Authority. The government’s property price index surged 15.8% in the third quarter.

China’s property market is no less exciting. Having grown by leaps and bounds, it will probably go through a “more meaningful correction” this year because the price gains in 2009 aren’t sustainable, Christopher Lee, corporate ratings director at Standard & Poor’s, says.

The outlook for the Chinese market is “neutral” for this year, Bei Fu, an associate director of corporate ratings at S&P, says on a conference call with Lee this week.

“The middle of 2010 could be a potential turning point for many developers,” Fu says. “A combination of slower demand, higher supply and various government initiatives will dampen market sentiment.”

China’s property prices has surged 9.5% in January, the most in 21 months, as total new loans have surged to 1.39 trillion yuan (US$204bil), more than in the previous three months combined.

The China Banking Regulatory Commission told banks last month to “strictly” follow property lending policies.

Investors tend to “sit on the sideline” in anticipation of more tightening measures to curb property price gains this year, Lee says.

Gradual and cautious

Beijing will scrap some home-purchase incentives after the jump in prices, reducing the scope of a housing sales-tax exemption and enforcing a 40% down-payment requirement for second homes, the capital’s Municipal Commission of Housing and Urban-Rural Development says in a statement this week.

The People’s Bank of China raised the reserve requirement by 50 basis points for the second time this year just before Chinese New Year to slow bank lending. The change came into effect this week.

The central bank says it wants to gradually normalise monetary conditions from a “crisis mode” after gross domestic product grew 10.7% in the fourth quarter, the fastest pace in two years.

“Policy introduction this year will be in a gradual and cautious manner,” Fu says. “Stability will be the focus.”

The Chinese government will increase supply of subsidised public housing this year to provide affordable accommodation for people with lower incomes, and there will be a “surprise” in the number of available luxury homes by the middle of this year, when projects started one year ago are completed, leading to stronger competition among developers, she says.

Industry consolidation

“Bigger and stronger property players will do even better as they have the scale and financial resources to grow, and smaller companies will find the market condition more challenging,” Hong Kong-based Fu says. “We expect to see more merger and acquisition activities in the sector.”

Over in Hong Kong, developers are optimistic the city’s government will maintain its “benign” stance toward the industry, and that borrowing costs will remain low, sustaining real estate demand.

“The government has kept a rather benign stance towards the Hong Kong property sector,” Macquarie Group Ltd analysts led by Chris Cheng says in a research report.

“Nothing significantly new was introduced in relation to property” in financial secretary John Tsang’s budget speech earlier in the week.

The city has announced that it will raise the stamp duty on homes selling for more than HK$20mil (US$2.57mil) to 4.25 % from 3.75%.

This is in response to US Federal Reserve chairman Ben S. Bernanke’s remark that a slack labour market and low inflation will allow the Federal Open Market Committee to keep the benchmark lending rate low “for an extended period.”

The Hong Kong Monetary Authority typically tracks the Fed’s interest rate movements because the city’s currency is pegged to the dollar. The lowest mortgage rates in at least two decades and an influx of overseas capital equivalent to more than a third of Hong Kong’s annual gross domestic product helped fuel a 29% gain in property prices last year.

The raised transaction tax on luxury homes, the first increase since 1999, will only affect about 2% of the property market. Of 110,000 Hong Kong residential sales in 2009, about 2,000 sold for more than HK$20mil, according to realty company Midland Holdings Ltd.

By the way, all three countries are predominantly Chinese. – Agencies

By The Star

Lessons from recent tragedies

Governing authorities should work towards a construction benchmark

The need for a high quality culture to be adopted for all construction projects, whether they are public or private structures or facilities, cannot be over emphasised as the people’s safety should be of paramount importance.

The fact that there have been a spate of “problem” projects with structural problems or certified unfit for occupancy shows that a conscious quality culture is still grossly missing among some industry players.

From faulty infrastructure projects to poorly constructed public buildings and amenities, the list includes the collapse of the Kuala Terengganu stadium roof and the roof of the Kuala Berang express bus and taxi terminal, the RM18mil Batu Burok Aquatic Complex and the RM123mil Sultan Mahmud Airport terminal.

Shoddy workmanship and the use of sub-standard building materials have been found to be the major contributor of most of these failed projects.

There is also the issue of proper maintenance and whether these public structures are periodically maintained to ensure that they are in tip top condition.

Besides the loss of lives like the three schoolchildren attending the 1Malaysia camp in Kuala Dipang who drowned after the suspension bridge they were on collapsed last October, such mishaps will also tarnish the image of the country and the whole industry.

It is important to ensure that personals of the governing authorities, including the Public Works Department, are well equipped and properly trained to ensure they keep abreast of latest industry standards and needs to conduct their supervisory role responsibly.

Industry practitioners should take it upon themselves to promote a conscious quality culture in all their projects.

There are many benefits that can be reaped from having quality construction standards that include significantly reducing the incidents of structural and architectural defects.

The adoption of high international standards in our building and construction projects is a good platform for local players to take their developments international.

For a start, industry players and the governing authorities should work towards a minimum set of quality standards that need to be adhered to by the building fraternity, including contractors.

Although there is a local quality system, the Quality Assessment System in Construction introduced by the Construction Industry Development Board since 2006 to evaluate the quality and workmanship of construction projects in the country, it is not compulsory for the building fraternity to adopt them.

The adoption of such standards should not be just to win government contracts but to ensure a strong quality culture prevail among industry practitioners.

In Singapore, it is compulsory for all public amenities and government buildings to adhere to the strict guidelines of the Construction Quality Assessment System (Conquas).

Its Building and Construction Authority conducts intensive training camps for developers, contractors, and building engineers, to adopt these stringent quality standards in their projects.

The fact that there are 47 Malaysian developers and contractors who are adopting Conquas shows that there are local players that have embraced the quality culture seriously.

It is important to build on this foundation and cast the net wider to include all the industry players, whether big or small.

A poor maintenance culture is also one of the major flaws in our society today that has contributed to the poor state of affairs in many of our buildings and public facilities.

To ensure greater durability and sustainability of these facilities, there is a need to promote a world-class maintenance culture among the people and the relevant authorities.

There is no point having great buildings or projects if they are not properly maintained.

For those who own strata-titled buildings, it is mandatory for them to make monthly contribution to a common maintenance fund to ensure the proper upkeep and maintenance of the common facilities.

The maintenance is the responsibility of the joint management body (JMB), of which owners are members.

It is the responsibility of owners to pay the maintenance fees.

Likewise, the respective local councils and authorities should also ensure that all public facilities are properly maintained to ensure they are safe to the users at all times.

·Deputy news editor Angie Ng believes selflessness is the way to go to promote a caring society.

By The Star

See Hoy Chan nursing medical ambition

See Hoy Chan is now talking to three foreign hospital operators to jointly develop a medical centre in Bandar Utama township

See Hoy Chan Holdings Group (SHC), controlled by the Teo family, is said to be in talks with several foreign hospital operators to jointly develop a medical centre in its highly successful Bandar Utama township in Petaling Jaya, Selangor.

"Several international operators have expressed interest in forming a joint venture with SHC to open a medical centre in Bandar Utama. SHC is now talking to three of them," a source told Business Times.

The source added that SHC and the foreign companies were looking at possible models for the partnership.

It is undecided if the foreign player will take on sole management of the medical centre to be built by SHC or both will jointly manage it, with the foreign partner having a stake in the business.
"The medical centre in Bandar Utama could be up and operational within three years of obtaining all the approvals," the source said, adding that regulatory approvals had yet to be sought.

Foreign hospital operators with a presence in the country include Singapore's Parkway Holdings and Health Management International (HMI), the US-based Columbia Asia and Austria's Vamed.

It is understood that at least one of the players SHC is talking to has no representation here as yet.

Industry players said that this operator is world renowned for its medical facilities and expertise, and is particularly successful in the region for medical tourism.

When contacted by Business Times, SHC director Datuk Teo Chiang Kok said that talks were "still preliminary". He did not elaborate.

In an interview in 2006, Teo had said that the Bandar Utama master plan would include setting up a medical centre and a retirement village.

Some 4.86ha near 1Utama's Phase 2 shopping complex has been allocated for this purpose.

At that time, Teo had said that the medical centre would offer maternity and paediatric care, while the retirement home would cater for residents in the area.

The group's plans for a medical centre were said to have been inspired by Teo's father, Tan Sri Teo Soo Cheng, given his involvement in the Tung Shin Hospital in Jalan Pudu, Kuala Lumpur.

In April last year, Prime Minister Datuk Seri Najib Razak announced that the government was lifting the 30 per cent Bumiputera equity rule for 27 service sub-sectors, including health services. However, it is unclear if that includes hospitals and medical centres.

By Business Times