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Saturday, March 6, 2010

SP Setia plans high-end condos in Gurney Drive

Property developer SP Setia Bhd is set to make its mark on Penang's popular seafront promenade Gurney Drive, if a plan to buy land in the upmarket neighbourhood goes through.

General Manager S. Rajoo said SP Setia has identified a parcel of land measuring 0.92 hectares in the area, and plans to build 70 units of high-end condominiums.

"We intend to incorporate lots of greenery into the proposed development for the super-condominiums which are set to boast a floor area of 3,000 sq feet," he told Business Times.

Rajoo was speaking during a Chinese New Year celebration hosted by SP Setia in Penang which was attended by the company's president and chief executive officer Tan Sri Liew Kee Sin and chief operating officer Datuk Voon Tin Yow.

The proposed project in Gurney Drive is part of SP Setia's move to expand its landbank by 12ha this year.
Gurney Drive, located in the affluent Pulau Tikus area in George Town, is currently lined with high-end condominiums and is near a sea-fronting shopping mall and a host of eateries.

"We have also identified another 5.6ha land to acquire in the southwest district of Penang island. We intend to develop a gated community comprising detached and semi-detached homes," Rajoo said.

SP Setia is also looking to buy more land in the southwest district for a resort homes development.

"This would be a sizeable piece of land where more bungalows and semi-detached units will be built," he added.

It now has an undeveloped landbank of around 24.4ha on Penang island.

SP Setia still thinks that demand for landed properties is strong despite similar projects being launched by other developers.

"The supply for landed properties is still lacking and we intend to market our homes to foreign investors and locals," he said.

SP Setia's entry into Penang was via its maiden development "Setia Pearl Island" in Sungai Ara near the Penang International Airport.

The project, which is sited on a 45.2ha of land, serves as the company's flagship project in Penang.

From November 2009 until now, the company has sold properties worth RM115 million at Setia Pearl Island.

"Our target is to chalk sales of RM200 million by the end of October," he added.

By Business Times (by Marina Emmanuel)

Pickup in industrial parks

The industrial property sector is expected to rebound this year as the supply has been stagnant in the last four to five years.

“Since 2004, the prices of industrial land have appreciated as property developers venture into developing industrial parks as a new income avenue to overcome the softer property market,” says MIDF Research in a recent report.

It adds that, currently, industrial players are on the lookout for more than the conventional designs.

“Features such as gated and guarded concepts, super-sized terraces, underground cabling and covered drainage are value-added features in demand. We expect the trend of industrial parks being located in the vicinity of commercial areas, and close to highways, to continue in the future,” the report says.

Nevertheless, it says niche concepts such as “halal parks” and Technology Centres may remain in the offering to serve niche players.

KGV-Lambert Smith Hampton (M) Sdn Bhd executive director Anthony Chua says the number of industrial properties transacted have shown a gradual increase of 13.6% from 2005 to 2008 and the value of these transactions rose significantly by 58% in that period.

“The industrial land prices in some popular schemes demonstrated up trend of over the past 6 years. Popular schemes include area in Kota Kemuning, Glenmarie, Bukit Jelutong and Balakong in Selangor and with few factors boosting the price going up,” he tells StarBizWeek in an email reply.

He says one of the factors involved is limited new supply of industrial properties like for example, in Wilayah Persekutuan where there is no new factories between 2005 to 2008.

“The growing small and medium enterprise sector forms a source of demand for industrial premises and the role of the government in expanding this sector with various initiatives and financing augurs well for the industrial property sector,” he says.

Industrial premises such as terrace and semi-detached factories are suitable for services operation such as those in auto servicing, distributive trade, transportation, light manufacturing or processing.

“Some astute developers who spotted this trend has ventured into industrial schemes to capitalise on this “neglected” sector compared to the residential and industrial sectors,” says Chua.

On the current and new trends in the industrial sector, he says the current trend of developing semi-detached factories is continuing although there are significant changes to the building features.

“Semi-detached factories are transforming from light industrial workshop design to a more corporate look. This has attracted some companies to use these newer factories as their corporate offices,” he says.

Chua elaborates that the recent trend include “super-link” factories, somewhat similar to super-link houses. These are terrace factories with large built-up areas, some are almost similar in size to semi-detached factories (6,000 sq ft and above).

He adds that a fairly recent introduction in the industrial property scene is the set-up of Halal Parks in establishing Malaysia as a global Halal Hub.

“This is a government initiative and to-date 17 Halal Parks have been planned with five in operations. The innovation in creating Halal Parks is in bringing the concepts and practices for the entire chain of activities encompassing industrial and food development, food manufacturing, Halal traceability, logistics and certification under one location,” says Chua.

Mah Sing Group Bhd’s group managing director cum group chief executive Tan Sri Datuk Seri Leong Hoy Kum says the company focuses on appropriate product offering, optimum pricing and promotion strategy.

“Mah Sing’s experience in industrial developments includes the successful 300-acre Mah Sing Integrated Industrial Park in Sungai Buluh. This project with a gross development value of RM400mil was launched in 1995 and is fully sold. Furthermore, we have a unique user’s viewpoint for industrial developments, as we have a profitable plastics business with factories in both Malaysia and Jakarta.

“We recently launched iParc@Bukit Jelutong in January whereby we saw overwhelming response, with 40 units out of a total of 42 units being sold,” he says.

Due to the strong response, he says, Mah Sing has decided to develop a similar concept for iParc 2@Shah Alam to cater to the spill over demand.

“We are careful to select lands that fits the requirements of industrial property buyers like for example; excellent road, rail, air and sea connectivity, readily available infrastructure facilities like water, electricity and telecommunications and also close proximity to mature residential developments which provides a catchment of skilled and unskilled labour force,” he says.

He adds that Mah Sing also creates fresh demand by offering flexible designs to suit the needs of the end user, hence the layout design can be configured to specific needs.

Effectively, he says, these can be customised factories at a fraction of the cost of commissioning a purpose built factory.

Another developer involved in the industrial sector, LBS Bina Group Bhd says that the property sector has seen a strong comeback since the third quarter 2009 with renewed buying interest for property.

“Given the improving economy sentiment, we expect strong recovery in demand for properties, both residential and commercial for year 2010. We remain optimistic over the demand for our industrial units in Puchong in view of the strong demand in this vicinity,” says Lee Eileen from sales and marketing department through an e-mail reply to StarBizWeek.

Generally, LBS is positive about the business outlook for 2010 as the Malaysian economy is set to recover, albeit slowly.

“This was proven after our successful launching of our 58 units of semi-detached factory at Taman Perindustrian Tasik Perdana@Puchong on January last year.

“The sales were picking up from May 2009 and we managed to achieve 71% of the sales of the said project on September 2009. The balance units are available for sale and reserved for bumiputra only,” she says.

The project in Taman Perindustrian Tasik Perdana covers 39 acres of development which consists of 58 units of 1 1/2 storey semi-detached factory and 11 industrial lots.

“The semi-detached factory was sold at the range of RM1.4mil to RM2.5mil with a built up area of 4,043 sq ft. We are selling the industrial lot at RM80 per sq ft and the land size of the lot is ranging from 0.5 acres to 1.88 acres. Currently, there are four industrial lots available for sale and is reserved for Bumiputra only,” she says.

The group will launch five units of 3-storey bunglow factory with built up area of 8524 sq ft at the land size of 0.316 acres onwards in April. The proposed selling price of each units is RM3.5mil onwards.

By The Star

Promoting safer neighbourhoods

ABRIDGED versions of gated and guarded enclaves in older housing estates are sprouting up in many parts of the Klang Valley.

Increasing urban crime rates have compelled many residents to put up with the inconveniences of having their housing estates barricaded and turned into “fortresses”.

As one colleague whose USJ11 house was broken into last year says: “Even the police admit that break-ins and robberies have become almost daily occurrences and there has been a sharp spike in such crimes in the Klang Valley.”

The residents’ associations need the support from at least 85% of the residents to get approval from the authorities to implement the security schemes.

Those who have supported the scheme swear that it has drastically reduced crime in their neighbourhoods.

The opponents, however, say that the fences, guard posts and barriers are an inconvenience to the residents and the public, especially visitors, because some public roads have been sealed off and are not accessible.

While peace of mind and security used to be a given fact just a few years ago, today it comes with a price. Each household that has signed up for the security scheme has to fork out monthly fees of around RM50 to RM55 for guards to be stationed at the main entrance of their housing area and for a 24-hour patrol.

There is also the inconvenience of having to forego the easy access offered by open roads around the neighbourhood. Because of the barricades and fences, residents have to take longer route as well as be screened by the guards before entering the cordoned housing area.

Business operators in these housing estates, especially food operators, lamented that their businesses have suffered tremendously since the barricades went up.

The promoters of the security scheme should realise that any closure of roads must not create a hassle to residents or hamper the movement of emergency services.

The scheme should only be an interim measure and not be turned into a permanent feature in our housing estates. This is because under the Street, Drainage and Building Act 1974, it is illegal to put up barriers that obstruct access to public roads.

Provisions of the Town and Country Planning Act 1976 may also be violated where guard houses are built on public land or road shoulders. To address some legal issues which have cropped up, the Housing and Local Government Ministry intends to come out with guidelines for such guarded schemes.

Minister Datuk Seri Kong Cho Ha is concerned over the absence of proper guidelines for these guarded community housing estates that have resulted in state governments and local councils introducing their own guidelines and by-laws which differ from one locality to another.

Ultimately, it is important to address the root causes of crime and to seek more sustainable measures to curb it. Local communities and law enforcers can play more effective roles in fighting crime in housing estates.

Hopefully, the RM1bil allocation pledged by the Government to beef up the police force will be deployed wisely and efficiently to rein in this rising social menace. More regular patrols by plainclothes policemen should be effective.

Volunteer patrol schemes and neighbourhood watchgroups should also be deployed to combat crime in residential areas. If properly implemented, such patrols will promote stronger understanding and ties among residents. Reinstating good neighbourliness will certainly go a long way to promote safe neighbourhoods.

Those who are averse to barricading the roads should resort to mobile security patrolling instead. Developers can also play a big role by designing their new housing estates in a more safe and secure way. These housing areas should not “share” entry and exit points with other neighbouring projects.

Preferably, each neighbourhood should have more cul-de-sacs and less through roads to minimise access, noise, air pollution and promote pedestrian safety for the residents.

Deputy news editor Angie Ng believes all Malaysians deserve to enjoy the bliss of secure homes and public places.

By The Star

Keeping The Lid On House Prices

Great demand: A file picture of house buyers checking out the properties on offer at a property fair in Shanghai.

The question of when is the right time to buy a house is always on the minds of the Chinese people. But the timing varies like a roller coaster.

The world’s third-biggest economy has seen itself moving back and forth in its fiscal approach to control soaring house prices over the past few years. And this can only complicate the decision to buy a property, not to mention that prices remain ridiculously high.

Senior executive Chen Zilin, who bought his first home in Beijing six years ago and a second in 2007, went through tough times on each occasion. Now he is more like an observer of the ever dynamic real estate market.

“Before I got married, my then fiance told me to buy an apartment before we could wed. We got the apartment for 380,000 yuan (RM187,000) which was quite a good price at that time,” said the 32- year-old from Zhuhai in Guangdong province.

Chen and his wife lived in the first apartment, a two-bedroom unit measuring 90 sq m, and rented out the second, a service apartment about 13km from the city centre.

The first apartment was bought under the city’s affordable housing scheme that his Beijing native wife is entitled to. It can now fetch 1.4 million yuan (RM690,000). The second is now valued at over a million yuan, up from 700,000 yuan (RM343,000).

“Who would have expected the price of my first apartment to increase four-fold? It’s good that I bought the apartments early as I can now save money for other things,” he said.

“But if I were to buy a bigger house, I will have to pay more. So, there are two sides to the coin.” Last month, the Chinese government moved to cool a possible bubble, when house prices in 70 major cities rose 9.5% year-on-year, by limiting interest rate discounts for loans and requiring buyers to pay as much as 40% in down payment.

Several banks, following government guidelines, have also stopped lending to property developers without adequate capital or licence, and recalled loans to those hoarding land and homes.

Just 10 months ago, when housing sales slumped to record lows, banks were allowed to give a maximum 30% discount on the interest, and down payment of as low as 20%.

House buyers in cities like Shanghai even had stamp duties waived and deed tax cut to 1%.

And the grapevine has it that developers in Beijing will be required to announce the exact sales numbers of their housing projects as soon as they market the projects.

“The government has been rather passive and not taking enough initiatives to dictate the pace. At the end of the day, most people still look at the price, which is still too high, when house hunting,” Chen said.

Xu Fang, who works as a teacher in Shanghai, believes that despite the high prices in many major cities, there are still potential growth areas where prices are relatively affordable. She and her husband bought three apartments in three years, all in the suburbs.

“We bought our first home in Anting for only 400,000 yuan (RM196,000) using our parents’ savings. Then we walked out of a sales centre with another apartment costing about the same price, followed by the third a few months later,” the 27-year-old said.

“I’m not worried whether the price of my properties will increase significantly. So far, the price of the first and second houses, each measuring 70 sq m, have gone up to about 550,000 yuan (RM269,000), which is not too bad.

“When buying houses, we mostly consider the location, whether there’s a core industry which can bring about sustainable development in the area.”

She said Anting had great promise – the town had been earmarked as a car city together under the city’s 11th Five-Year Plan (2006-2010). The third apartment, a three-bedroom unit costing about a million yuan, is now Xu’s most prized acquisition. The couple plans to move into the apartment with their baby one day.

In Guangzhou, where average house prices are about 8,000 yuan (RM3,920) a sq m, buyers have seen prices increase more than 25%, the highest nationwide last year.

“It’s better not to buy a house now, as the prices do not reflect the actual cost of the property,” said a Guangzhou-native designer, who only wanted to be known as Yang.

Yang bought a 90 sq m secondhand apartment near downtown for 550,000 yuan (RM269,500) at the age of 33. Currently it can fetch 715,000 yuan (RM350,000), a 30% gain on paper.

“The price was still all right when we bought it one-and-a-half years ago. Last year, house prices in the city rose significantly,” he said. Yang is paying back his parents 5,000 yuan (RM2,450) a month for the money he borrowed from them to buy the house. He and his wife have a yearly disposable income of 210,000 yuan (RM102,900).

However, for those with lower income, owning and changing to a bigger home remains a dream. Chinese Premier Wen Jiabao told netizens in an online chat last Saturday that he was bent on keeping house prices at reasonable levels.

“I really understand the complaints as my family had lived in a 9 sq m house before I left home. Of course, that was a different era, and now we should provide housing for the public based on the current situation,” he said.

“We will need a little longer to strike a balance between supply and demand, and giving the public more housing choices and fiscal management in managing the market.”

Wen said the government would build five million affordable homes this year, adding to the two million completed last year. Another two million shanty houses will be upgraded this year.

He also vowed effective fiscal policies and legal means to curb land hoarding by developers as well as property speculation.

Mu Qiru, a representative of the Chinese People’s Political ConsultativeConference,thenation’s top advisory body, said it was not right to blame the entire real estate industry for the soaring prices.

“We must have confidence in the developers as well. Developers are a driving force in our economy and pay up to 65% taxes to the government,” said Mu, who is also the chairman of Beijing Zhaotai Land Holdings Co Ltd.

She said the recent record-breaking land sale prices was unavoidable as developers faced fierce competition in land auctions, but the government could continue to fine-tune auction procedures to keep prices at reasonable levels.

By The Star