Malaysia Property News is a free resource website sharing Daily Property News & information about Property in Malaysia, which related to, Property Market, Property Investment, Commercial Property , Hot Properties Malaysia, Real Estate, Retail Shop, Business Park, Condominium Malaysia, Terraces & Apartment Malaysia, Houses, Residence, Resort and many more.

Thursday, October 14, 2010

Plans for national REIT body and withholding tax removal likely

PETALING JAYA: The Malaysian real estate investment trust (REIT) sector is likely to get a boost soon, with firmer plans for a national REIT company and a reduction or removal of the withholding tax for REIT investors, sources said.

The national REIT will likely include a number of assets belonging to the Government and government-linked companies (GLCs).

“There is a huge potential for “REITing” these government properties in a similar way Singapore did,” said a source.

In the 10th Malaysia Plan (10MP), there was a proposal for Pelaburan Hartanah Bhd to set up REITs to facilitate bumiputra investment in commercial and industrial properties and benefit from property appreciation.

It is likely that Pelaburan Hartanah would be used to set up the national REIT, drawing from the experience of Singapore.

There the government had made available a vast array of properties to be put into REITs such as those run by CapitaLand.

“The Singapore government wanted to turn Singapore into a REITs hub and has achieved much success with attracting capital to its market,” explained a REIT expert.

The expert added that in Malaysia, there were a vast array of properties still being held primarily by GLCs which could be put into a REIT.

There are 14 listed REITs on Bursa Malaysia with a total market capitalisation of slightly over RM10bil. In comparison, Singapore’s REITs’ market capitalisation is more than RM60bil while Japan’s stands at around RM100bil.

In another effort to boost the REIT sector and to move it on par with markets like Singapore, the Government is likely to reduce or remove entirely the withholding tax for REIT investors. This is something that REIT players had been lobbying the Goverment for the last few years to no avail.

“The aim is to bring it in line with markets like Singapore and Hong Kong where individuals and institutional investors do not pay withholding tax on REIT investments,” said a party familiar with the situation. Both local and foreign retail and institutional investors in Malaysia now have to pay a 10% withholding tax, which had already been reduced from the 25% tax rate previously. The withholding tax rate in Malaysia has not been adjusted since 2008.

ECM Libra head of research Bernard Ching said a reduction of withholding tax for REIT investors would be a major boost for the sector “as the effective dividend yield to shareholders would rise, which would translate into higher capital values for the REITs.”

Analysts have said that REITs in Malaysia had traded at a discount to those in Singapore and Japan in terms of yields and their price to net asset values.

The analysts have said that while factors such as asset and liquidity played an important role in determining valuations, the tax regime and REIT guidelines imposed by governments and authorities in individual countries also affected the attractiveness of all REITs.

Another analyst, however, said the Government may be hard-pressed to reduce the withholding tax, considering that it just postponed the implementation of the planned goods and services tax.

But it is understood that the REIT withholding tax waiver would not seriously dent the Government’s coffers in terms of the total amount of lost tax revenues from this sector. Furthermore, the last tax waiver proposal is believed to be only for a three-year period.

It is understood that these proposals may appear in the soon-to-be- announced Budget 2011.

By The Star

Call to curb loans for third home buyers

GEORGE TOWN: The Penang Master Builders’ and Building Materials Dealers’ Association (PMBBMDA) urges the Government to impose a cap on the margin of advance for housing loans for third home buyers.

The move was necessary to curb speculation, reduce gearing of purchasers, and maintain the sustainability of housing prices and the property market, PMBBMDA president Vincent Ong told StarBiz.

“The first and second home buyers should continue to get borrowing up to 90% of the property value to ensure that the demand for properties is sustained, creating spill-over effects for the contractors and building materials suppliers,” he said.

He also added that the federal and state governments should also implement more government projects in Penang, as there were so far only 28 projects, with a total value of RM172mil, awarded by the government sector for Penang for the period January to June 2010.

“Even though the number of government projects has increased from 10 in the first quarter to 18 in the second quarter, the value of government contracts is still very low and only makes up about 13% of the total value of projects awarded to the Penang state of RM1.35bil,” Ong said.

Meanwhile, PMBBMDA immediate past president Finn Choong said the Government should quickly draw up a national policy on green building.

Choong said so far the guidelines for green or environmentally friendly buildings and policy were being implemented on a piecemeal basis at the state level.

“A standard national policy on sustainable buildings would not only further spur the adoption of green lighting components such as light-emitting diodes (LEDs), and environmentally friendly materials but also commit the country towards a sustainable culture as we make the transition towards a developed nation,” Choong added.

On another matter, the PMBBMDA urged the federal government to consider deferring or revoking altogether the imposition of ad-valorem stamp duty for all service agreements in 2011.

By The Star

LBI Capital buys land in Genting

PROPERTY developer LBI Capital Bhd is buying a leasehold land measuring 2.166ha located near Gohtong Jaya, Genting Highlands, for RM5 million, to build resorts and hotel suites.

The acquisition is to enhance its property development activities given the completion of most of its projects, LBI said in a filing to Bursa Malaysia yesterday.

By Business Times

Amcorp Prop buys UK property

PETALING JAYA: Amcorp Properties Bhd is enhancing its presence in London by buying a freehold commercial property along Baker Street from British Land Offices (Non-City) Ltd for £16.25mil in cash.

It told Bursa Malaysia yesterday that British Land would convert part of the building into residential units, with work on the residential scheme scheduled to start in early 2011 and completed in 12 to 18 months.

By The Star