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Saturday, December 11, 2010

The regeneration of Sentul

When the YTL group took over Taiping Consolidated Bhd in 2001, one of the priced assets that came with it was a piece of land in Sentul.

Much of the early concept for that master plan development stemmed from the Sentul KTM Komuter station and its tracks which split the 294-acre land.

Datuk Yeoh Seok Kian ... ‘We will monitor demand for future residential and commercial projects.’

It was on this basis that the group decided to make Sentul a transport hub, leveraging on the commuter station that was already there and the golf course, which it had turned today into a private park for residents.

Sentul is located 5km north-west from the heart of Kuala Lumpur and 45 minutes from KLIA. Taiping Consolidated eventually became YTL Land & Development Bhd (YTL Land), a 64% subsidiary of YTL Corp Bhd.

Executive director Datuk Yeoh Seok Kian recently unveiled Sentul's first commercial development d7, a seven-story block comprising 20 retail stores on the ground floor, 78 office suites and 34 duplex offices in Sentul West. The project is completed and 100% sold.

Another project d6, on Sentul East, is being planned. A sky bridge connects the two. d7 was launched at RM380 per sq ft a few years ago.

It is expected to be priced about RM650 per sq ft in the secondary market. Rental rates are between RM3.50 and 4.00 per sq ft.

The seven storey project will have offices, retail and food and beverage outlets. It will be a low-rise office building with courtyard and communal spaces.

It will have two unique office layouts duplex units with skylights, pantry and spacious interior and office suites, which come as empty shells with flexible configurations.

Yeoh says the company will build residential and commercial projects with a total sales value of about RM8bil over the next seven years. That location will be among YTL Land's largest property development.

The plan was to characterise the two halves differently. Over time as Sentul West becomes more established, the community is likely to be more senior and relatively more sedate, compared with the community in Sentul East which will cater more to the up-and-going younger group of people living there, he says.

Covering 186 acres, Sentul West will be the crown jewel of the location comprising a 35-acre private park and residences, offices and retail shops.

Sentul East, which spans 108 acres, with all its vibrancy, will set the tone for modern downtown living.

Yeoh says between 15% and 20% of its targeted projects for that location has been completed since work started on that site in 2002, beginning with The Tamarind in Sentul East and subsequently The Maple in Sentul West.

We will monitor demand for future residential and commercial projects to ensure good buying interest for each project, Yeoh says, alluding to the uncertainties that plague the global economy today and the effects on Malaysia's property market.

But for now, he says there is much they can be proud of. Public infrastruture has improved significantly over the years and Sentul now had a iconic development the new KTM train station, a connecting hub that anchors Sentul West and Sentul East.

Pedestrian sidewalks and skywalk, improved traffic systems, LRT and commuter trains are also part of Sentul's transportation plan, Yeoh says.

Sentul Link also provides access to Jalan Sentul and Jalan Ipoh by connecting Jalan Mahameru at the intersection of Jalan Kuching.

This access helps alleviate existing traffic congestion at the Jalan Mahameru-Jalan Ipoh, Putra World Trade Centre intersection, he says.

When completed, Sentul will have a mixed development of 7,000 units of residential properties, commercial offices and retail outlets.

We are also trying to improve Sentul's past image of being a place that's often plagued by criminal activities, Yeoh says.

He says too often, city development projects tend to focus on decentralisation and the relocation of communities, which ultimately results in cities losing their identity.

The regeneration of Sentul is not just about renewal of the physical environment and wealth. It is also about the renewal of its community, their access to local services and their relationship with the area and the people that live and work there, he says.

YTL Land, which has a market capitalisation of about RM1.05bil, currently has a land bank (with no holding costs) of over 2,000 acres with a sales value of about RM12bil.

By The Star

BCB targets Klang Valley

KLUANG: Johor-based property developer BCB Bhd will focus on building its presence in the Klang Valley property market over the next three to four years.

Group managing director Datuk Robert Tan Seng Leong said the company was confident it would be able to compete with established players in the Klang Valley.

He said BCB was in the midst of setting up a permanent office in Mont' Kiara, Kuala Lumpur to mark its commitment to become one of the major property players in the Klang Valley.

It is only natural for us to move beyond Johor and our presence in the Klang Valley will open up opportunities for us to venture into other states including Penang, Tan told StarBizWeek after the company AGM on Wednesday.

He said BCB would be launching two maiden property projects in the Klang Valley in the third and the fourth quarters of 2011.

The first project comprises three bungalows, priced from RM3mil, at Lorong Awan Jawa, Taman Yarl.

The second project is Secret Garden @ Kiara on a 2.02ha site beside Solaris Mont' Kiara, which consists of 352 condominium units in five 30-storey blocks with a gross development value of RM500mil.

Tan said the units, with built-up areas ranging from 1,400 to 4,000 sq ft would be priced at RM650 per sq ft and BCB expected the project, when completed in three years, to generate a pre-tax profit of RM100mil.

Being the new boy on the block, our selling price per sq ft is slightly lower than what the established players offer and we believe this will be our strong point to attract buyers, he said.

He said BCB had engaged building consultants and landscape architecture companies from Shanghai for Secret Garden @ Kiara and would award the construction of the project to a leading Japanese or South Korean contractor.

Tan said BCB would bank on its close relationship with property companies in China, especially from Beijing and Shanghai, in marketing the project to buyers in China as many rich Chinese were looking to buy properties in South-East Asia.

He also said BCB was actively looking for land in the Klang Valley for future development and was willing to undertake projects on joint-venture basis with land owners.

For the financial year ended June 30, BCB recorded net profit of RM2.12mil on revenue of RM91.07mil against RM3.6mil and RM93.07mil respectively the previous year.

By The Star

The perils of the American dream

There was this tagline The American Dream is truly attainable! in a local newspaper advertisement marketing US properties.

The advertisement highlighted earning an annual rental income with a three-bedroom detached house of up to 20%, which in Malaysia, would be considered a bungalow.

The nice house and attractive proposition aside, is that American dream really attainable? And if it is, is it sustainable?

If it were, the US government would not need to pump nearly US$1 trillion into the economy and neither would US President Barrack Obama speak to CEOs to seek their help to ease unemployment which is running at more than 9%.

Malaysia's unemployment rate is 3.2%, which is technically considered as full employment. But this piece is not about the American economy, or the Malaysian economy.

It's about the pursuit of the American dream which Hollywood and savvy marketing have enticed us with over the years. That American dream constitues a nice house in a middle class neighbourhood, sons who drive to college, daughters who are trendily dressed in class.

They take annual holidays and are up to date with the latest trends and lifestyle. They go after the latest gadgets that technology has spawned. Sounds familiar? But that lifestyle has also incurred high household debts which in some cases has resulted in foreclosures in the United States.

The situation in United States today is due to choices made years ago. It did not begin with Lehman Brothers fall in 2008, it started way before because of materialism and consumerism.

The Americans have been so good at marketing and advertising, they have made consumerism and marketing into an art and the Americans bought into it.

They are selling that same dream to Asia and other parts of the world just as they have very successfully sold us the various gadgets that technology has spawn.

Out of a population of 28 million, Malaysia has a working class of 12.5 million, of which two million are foreign workers. Of the remaining 10.5 million, 1.5 million are in the public sector.

Only 5.5 million are formally employed in the private sector. The remaining 3.5 million are making a living as traders.

Of late, the authorities and the press have been talking about being in the middle income trap. The middle income group has a monthly salary of between RM2,000 and RM10,000.

Most of us belong to this group whose profile is a house, or several houses, in the Klang Valley and the major towns of Malaysia, with school going children in private or overseas schools and universities. It also includes young graduates who earn slightly less than RM2,000 but who within a short time, move from lower income bracket to the lower middle income group.

This middle income group comprises about half of the 12.5 million working population, who are in a way pursuing that American or Malaysian dream.

The resulting trend is that house buyers no longer seek to buy a house, but to buy a lifestyle.

And developers prefer to build lifestyle homes, because the margin is greater. Lifestyle housing also gives them the added edge of branding themselves.

If it is an apartment, the bigger the better. Buying a house is no longer enough, one has to buy a lifestyle house with designer fittings and sanitary ware.

Education for the children is a premium. Technologically advanced gadgets and branded attire completes the picture.

In short, technically we are geographically in a different location but the people and that American dream remains the same.

Some 30 to 40 years ago, the manufacturing sector was the mainstay of the American economy. It now accounts for 12% of US jobs. Today, services, creation and innovation accounts for a large chunk of it.

In Malaysia, manufacturing used to account for about 35% of gross domestic product (GDP). Manufacturers used to be the largest employers.

Today, contribution from that sector has dropped to 29% of GDP, giving employment to a third of the 5.5 million private sector salaried workers.

The service sector is expected to be the largest employer this year, constituting more than half of the total employment, followed by manufacturing.

For years, the problem in the United States was hidden by cheap debt. We have that today in Malaysia. Banks are pushing attractive mortgage terms. Another way to finance that lifestyle is to leach from the Employees' Provident Fund to finance home mortgages, children's overseas education and private investments in unit trust.

And so the baby boomers (those born in the the 1950s and 1960s) have to postpone their retirement because banks are now approving loans up to the age of 65 or 70.

Easy debt has become a millstone in latter years. Come 2011, house buyers who purchased properties with the 5/95 scheme and variations of it, will be getting the keys to their properties. They paid a downpayment of only 5% of their property price in the first quarter of 2009.

They will now have to cough out the other 95%. Americans are slowly relinquishing that American dream. We are aspiring towards it. Is the American or Malaysian dream sustainable? Food for thought.

Like other middle class wage earner, assistant news editor Thean Lee Cheng is herself a victim of the American dream.

By The Star

Taiwan plans special property tax

Taiwanese authorities said Friday they plan to levy a special property tax in a bid to curb rising real estate prices and narrow the widening income gap.

The finance ministry is proposing a minimum 10 percent special tax on non-residential properties that change owners frequently, aimed at countering speculative activities, said an official, without elaborating.

The proposal, which requires parliament's approval, is expected to take effect as early as March 2011, according to local media.

Taiwan's property prices have been on the rise on the back of the island's recovery from the global recession last year.Meanwhile, the gap between the island's richest and poorest has continued to widen according to various government figures.

The ministry is also planning a "rich man's tax" on high-end products, services and trade to help reduce the gap between the island's haves and have-nots.

The most prosperous 20 percent in Taiwan reported average disposable incomes of 1.79 million Taiwan dollars (56,000 US) last year, or 6.34 times more than the income of the poorest 20 percent, according to government figures.

This was the highest since 2001, said the Directorate General of Budget, Accounting and Statistics, which attributed it to a global trend of growing inequality.

By The Star