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Saturday, April 10, 2010

Developing properties for different generations

The hype surrounding the huge “generation gap” among Malaysians seems to be among the many efforts marketeers are creating to widen the appeal of their products.

Differentiation is certainly a clever way to expand in an otherwise listless and static market. From new generation gadgets such as the iPod to branded fashionwear and credit cards, marketeers are quick to leverage on these differences to make us buy into their message that “we should never leave home without them.”

The country’s demographics is changing fast with more young Malaysians making up a bigger share of the population. The Gen-Yers (aged 15-30) are making a big impact in the market place. The Gen-Xers (born between 1965 and 1979) and Baby Boomers (1945-1964) are also important market segments as they wield the most purchasing power.

The different needs, habits and lifestyles of the various age groups creates huge opportunities for property developers to tap into.

So, planning and designing the right products to meet the requirements of the various age groups should be among the priorities of niche property players.

Instead of turning their projects into a one-size-fits-all, the better option is to identify special products and fit them with the right facilities for the different age groups. This will add higher value to the projects and make them more marketable.

In fact, greenfield projects offer the best opportunity for developers to draw up a good master plan where the needs of different buyers can be catered to.

Irrespective of age, developers should note that property buyers place high priority on security, good neighbourhood, quality workmanship and convenience. So, projects should always be planned with those needs in mind.

Although there are more niche developments, especially high-end gated and guarded enclaves, most property projects are conventional developments aimed at the mass middle-income market.

The projects are mostly apartments, terraced and detached houses with the usual basic necessities, either in guarded or non guarded enclaves.

I believe there aren’t any developers that have set out solely to cater to the needs of senior citizens. The reason may be because most senior Malaysians are cared for by their children and are living with them, while some may be in homes for the aged or infirmed.

But there is certainly a growing number of senior citizens that have the financial means to own homes in well planned, built and managed housing estates.

For many senior citizens, retirement will be the best time to pursue their “postponed gratifications.” Those with grown up children are likely to experience the “empty nest” syndrome and will look forward to live in homes that are easier to manage.

Many Baby Boomers (aged 45-64) will soon be joining the ranks of retirees and are likely to consider such facilities. If properly planned and managed, developments for our senior citizens could be the next trend for developers just like in Australia, Japan and South Korea.

Projects should preferably be low-density and low-rise with amenities for the aged such as lifts, ramps, medical facilities and attendants, health rejuvenation centres, laundrettes and convenience stores.

As most retirees will look forward to a more relaxed environment, developments should be in quiet suburbs, but close enough to the basic needs and conveniences.

Meanwhile, properties that cater to younger buyers such as Gen-Yers should have smaller built-up for easier maintenance.

Deputy news editor Angie Ng believes simplicity can enrich one’s life regardless of whether one is a Baby Boomer, Gen-Xer or Gen-Yer.

By The Star (by Angie Ng)

Sunway to develop 6.8ha in Puncak Jalil

Sunway Holdings Bhd has sealed a deal to develop three plots of land totalling 6.84ha in Puncak Jalil, Kuala Lumpur, into an upmarket residential area with a gross development value (GDV) of RM120 million.

The deal signed with Monty Properties Sdn Bhd yesterday will increase Sunway's total GDV to RM2 billion from various developments planned on 161.87ha over three years.

Sunway said it will build double storey terrace and semi-detached homes offering lifestyle concepts on the three parcels.

They measure between 1.6ha and 3.23ha each, and are well-served by a network of highways and main roads, including the Bukit Jalil and Sungai Besi highways.

The developments are expected to be launched in the second half of the year, Sunway said in a statement yesterday.
"This venture brings the group's landbank to some 161.87ha with a potential GDV of about RM2 billion, which we will develop over the next three years," Sunway managing director Yau Kok Seng said.

The latest deal follows its recent acquisition of 39.65ha with a total GDV of RM500 million in Templers, Gombak, Selangor.

Last year, Sunway also announced that it was undertaking a private housing project in Singapore's District 14 via a joint venture.

That was its third Singapore property project following the two successful public housing projects under the design-build-sell scheme in Boon Keng and Toa Payoh.

The two Singapore projects and another in Melawati, Kuala Lumpur, have provided Sunway with more than RM650 million in unbilled sales to date.

Yau said the company plans to launch about RM800 million worth of property projects in Malaysia, Singapore and China for the rest of the year.

By Business Times

Sunway Mas in property JV

KUALA LUMPUR: Sunway Mas Sdn Bhd, a unit of Sunway Holdings Bhd, has formed a joint venture with Monty Properties Sdn Bhd to undertake a property development project called “Puncak Jalil”.

Sunway Holdings said the project, to be carried out by the joint-venture firm Geneba Dua Sdn Bhd, is expected to have a gross development value of RM120mil on 6.75ha land.

In a statement to Bursa Malaysia yesterday, Sunway Mas said it would hold 65% stake in the joint venture with the remaining 35% under Monty Properties.

It also said that the proposed joint venture would enable the group to increase the size of its land bank for further property development.

“The land is suitable for high-end residential development and is proposed for a property development project comprising terrace and semi-detached houses which will be launched this year,” said Sunway Holdings.

“That fits into the group’s strategy of focusing on niche residential projects with fast turnaround time,” it said.

The land for the proposed development is strategically located in Puncak Jalil, a well-established township, and is easily accessible to the Bukit Jalil highway and Puchong via the Damansara-Puchong Expressway.

By Bernama

Appetite for British properties

Malaysians’ interest in British properties is increasing in terms of range, scope and pricing.

What started as a passing attraction in British properties prior to the financial crisis has been replaced by an upbeat mood on the part of Malaysians buyers, fanned by aggressive property consultants.

Incidentally, this interest is not limited to Britain but includes Australia and Singapore as well. However, the current weak pound sterling is a strong pull factor; the Australian and Singapore dollar are high comparatively.

Britain’s interest rate environment is also another plus factor. The Bank of England has maintained the base rate at 0.5% for 11 consecutive months.

Over the past 1½ years, Malaysian investors have not only shown interest in residential developments but also commercial buildings and land deals.

Last year, several property consultancies exhibited British properties in Malaysia with prices starting from about £120,000 for an apartment.

While located away from central London, most of the properties are within walking distance to London’s main public transport system – the underground.

There is now a growing interest for developments in the higher price bracket and in more centralised locations.

“We have had conversations with people from Malaysia, Singapore and Hong Kong. The general feel is that they want properties that have a higher value and are more centrally located,” says Tim Wright, a King Sturge realtor. Wright says investors from Hong Kong (including China), Singapore and Malaysia have acquired properties worth about £500mil since March 2009.

Last month, Henry Butcher Malaysia exhibited British properties priced from about £1,000 per sq ft in Covent Garden.

Tang Chee Meng says Malaysians bought British properties worth over £60mil in the past 12 months.

Chief operating officer Tang Chee Meng says Malaysians bought British properties worth over £60mil in the past 12 months.

Due to strong interest, the company has also increased its frequency of British property exhibitions in Malaysia, sometimes featuring several projects over a weekend.

Henry Butcher has so far exhibited 13 British developments in Malaysia over the past year.

Among the developers the company works with includes Berkeley Homes, St James, St George, United House, Eurpoean Land, Bellway and Ballymore.

Savills Rahim & Co is another local consultancy firm promoting British properties in Malaysia.

Some of the recent projects showcased by the company were Neo Bankside, located south of River Thames, and Chelsea Apartments in Chelsea.

Neo Bankside was priced between £1,000 and £1,500 per sq ft when the first phase was launch last year.

Prices are expected to rise about 10% when phase two is launched in a couple of months.

Christopher Hahn says Savills Rahim & Co has sold six units of Neo Bankside totalling about £6mil.

The company has so far sold six units of Neo Bankside totalling about £6mil, says Christopher Hahn, corporate real estate and overseas business development manager at Savills Rahim.

Hahn says the company is selective of the British developments it markets in Malaysia as it has to balance the type of properties with the pricing that Malaysians are comfortable with.

Says Robert Ang, Savills Rahim’s MD: “Buying properties overseas is a tricky thing when you are not a local person. We try to not only offer good products, but sound and prudent advice.

“We do our due diligence and prefer to work with developers, not contractors, whom we know and trust. We also prefer take on one project at a time. Maybe we are too conservative but we do not want our buyers to lose money.”

Much of the interest in British properties, says Hahn, is in the south east side of England. It is here that the bulk of the city’s regeneration programme is being carried out.

Regeneration is a process where vast areas are torn down with the purpose to re-energise or re-zone the land use.

That was how Canary Wharf came about. Formerly known as Docklands, it was at one time an area comprising mass warehouses by the River Thames. Today, it has been transformed into a financial centre.

By The Star (by Thean Lee Cheng)

Britain’s weak economy entices local investors

BRITAIN’S low interest rate environment and the weak pound sterling has drawn Malaysian investors over the past year to enter into joint ventures or take up equity interest in property development .

Robert Ang ... ‘The European and British economy are pretty depressed but this can be seen as a good opportunity (to invest in these markets).’

This trend is expected to continue as investors eye opportunities there. Savills Rahim & Co’s recent £100mil land deal involved a Malaysian firm taking a 10% stake in the deal, says managing director Robert Ang.

“It is a private company with property development experience in Malaysia,” he says.

The main parties involved in the deal is Native Land, one of London’s leading residential developers, and Grosvenor, a privately owned property group.

According to a press release from Native Land, the 2-acre development site currently forms part of Holland Park School.

Planning consent has already been granted for 72 private luxury residential apartments, 78 car parks and a residents’ only leisure facility on the 2-acre site.

Holland Park’s location is equivalent to Bukit Tunku in KL, says Chris Hahn, manager for corporate real estate and overseas business development at Savills Rahim.

“It’s not smack in the city centre but just beyond it. It is home to many of Britain’s corporate figures, including Sir Richard Branson,” he says.

Prime central London locations include Chelsea, Mayfair, Knightsbridge and Kensington.

The Native Land press release said the land purchase was one of the most significant land deals in prime London residential development in the last 12 months.

To date, Native Land and Grosvenor have worked together on three other luxury residential projects in London.

The most recent is Neo Bankside, a residential development promoted by Savills Rahim last year.

Last year, another Malaysian investor invested £6mil in a 50:50 joint venture project to build a five-storey office and residential building located in Chelsea, a prime London location.

The proposed plan is to have 10 units of apartments priced between £1,200 and £1,300 per sq ft.

The apartments are expected to be put on sale in a few months time, says Ang.

Last September, AMDB Bhd invested £50.5mil in two freehold office buildings in Paddington, London. Banking icon Tan Sri Azman Hashim owns 53% of AMDB. His main asset is AMMB Holdings Bhd.

The properties consist of two buildings constructed in 1960.

The first is 40 Eastbourne Terrace, a 83,000 sq ft grade A building refurbished in 2006.

It is fully tenanted with a total rent of just over £2.9mil a year until 2016.

The other building comprising 60,000 sq ft over three blocks of multi-let office and retail accommodation with an annual rental of £1.7mil.

Ang is helping to broker a fourth land deal involving Malaysian interest, keen to enter into a joint venture.

“The European and British economy are pretty depressed but this can be seen as a good opportunity (to invest in these markets),” he says.

By The Star

Flat outlook for British housing market

The British housing market is expected to be broadly flat this year, according to Jones Lang LaSalle (JLL).

The short-term outlook is relatively uncertain, despite a stronger than expected rebound in the last nine months of 2009, says James Thomas, head of residential development and investment at JLL.

Savills expects British property prices to soften, albeit marginally, over the course of the current year. — Reuters

House prices have been trending upwards since March 2009 but fell marginally in February, he says. London and south west London have seen far stronger price growth during the recovery. Thomas expects Britain’s average property prices to decline by up to 3% this year.

“Next year is also likely to be relatively stagnant, although it should be the year that firmer foundations are estbalished in preparation for stronger economic and housing market conditions from 2012 onwards,” he says.

According to a report by London-based Savills (Prime Residential Markets in London and Great Britain – January 2010), the prices of ultra prime properties in London remained 1.3% lower at the beginning of the year compared with the same period last year.

“Generally, high net (worth) individuals have been slower to return to a market more or less dominated by discretionary second home acquisitions,” it says.

“The prime markets in London, particularly the south west inner suburbs, were surprisingly strong last year given the extent and speed of the previous price falls of 2008.

Since the bottom of the market in March 2009, prices in prime central London and prime south west London have increased by 13.4% and 21% respectively.

However, on average, this still leaves prices in these markets between 10.2% and 12.85 below their peak,” the report says.

It says this year, the prime London markets will have to contend with the continuation of relatively weak economic conditions, the uncertainty that surrounds a general election and the prospect that improvements in earnings and purchasing power will be tempered by increased taxation.

Savills expects British property prices to soften, albeit marginally, over the course of the current year.

By The Star