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Saturday, February 12, 2011

APM sees brisk sale of The Arc@Cyberjaya

Datuk Vincent Tiew with a model of The Arc@Cyberjaya project.

ANDAMAN Property Management Sdn Bhd (APM), which is currently undertaking its largest property project by far The Arc@Cyberjaya in Cyberjaya with a gross development value of RM700mil expects to sell all of its 1,000 units by year-end.

APM was incorporated in 2009 as a property management and property-related services company by a few individuals of the previous management of the Andaman Group, an established property developer.

APM executive director and head of sales and marketing Datuk Vincent Tiew says since the company's formation, it now has ten property projects in hand with a total gross development value of RM2bil.

“We have been operating for only three years and I believe we have come far to anchor ourselves as a respectable property management company; our clients are mainly property developers and landowners,” he tells StarBizWeek in a recent interview.

Tiew says The Arc@Cyberjaya, the company's single largest freehold property project is expected to be launched in March.

“We have several phases to the project. The first phase will comprise 250 units priced at an average of RM350,000 per unit.

The Arc@Cyberjaya should be fully occupied by 2015,” he says, adding that the property project would be an iconic landmark in Cyberjaya once the apartments and 15 badminton courts with five office/campus tower blocks are completed.

Tiew is confident of full occupancy for the project as the company has provided “strong incentives” for home-buyers.

Homebuyers of The Arc@Cyberjaya can expect an 8% gross rental guarantee per annum for up to 25 years based on the company's four-year + four-year lease-back-option for six times plus an additional year.

“We can afford to guarantee the gross rental rate because we have a contract with the Multimedia University to provide hostel like accommodation for first and final year students,” Tiew points out.

The owner of The Arc@Cyberjaya is developer Maju Puncakbumi Sdn Bhd.

It is APM's strategy to price their property units at “affordable” levels for the mass market. “We generally build homes for the mass market and price them to allow for favourable upside in capital gain in the medium term with secured rental-yield return,” he elaborates.

He points out that some of the company's other property projects also have a gross rental guarantee of 8% per annum, but the tenure was shorter. They include the Cova Villa at Kota Damansara comprising 346 units at an average of RM300,000 per unit with three years and another three years lease-back-option.

Cova Villa at Kota Damansara, which was completed in 2009, says Tiew mainly caters to the students of Segi College.

Yet another property project of APM Casa Residenza at Kota Damansara, which has a GDV of RM126mil comprising 357 units at average price of about RM380,000 per unit was launched last year and was sold off within two days.

The property project also has a three-year + three-year lease-back-option at 8% gross rental guarantee per annum.

Its recently-launched 44 units of commercial shops at Kota Damansara was also sold out within two days for the total sales value of RM135mil. Construction is in full steam now and completion with Certificate of Fitness is anticipated within 18 months from sales and purchase date.

Other upcoming projects include the Selangor Science Park 2 in Cyberjaya (GDV RM180mil), The Academia@South City Plaza in Seri Kembangan (GDV RM65mil) and four and five-storey shop offices that include a mall at Bangi with a GDV of RM500mil.

APM markets its property projects via its five sales galleries located in Bangi, USJ, Kota Damansara, Ipoh and Johor Baru and it has a strong 2,000 odd loyal existing customers/buyers for the various projects in the pipeline.

According to Tiew, the company plans to brand itself as a premier property management company that provides developers and landowners the option to leave the job to APM to fully build and manage their properties.

“APM has the expertise to customise a building for a developer/owner and to run the day-to-day property-service related activities including rental and tenancy management, security, billing/credit control, carpark management, and food and beverage,” he says.

“We have scalability and can source for building materials at very competitive prices because we constantly have ongoing property projects,” he adds.

By The Star

Is it more viable to buy or rent a house?

In today's environment of rising home prices, is it more advantageous to buy a house or rent a house?

While most people unanimously agree that owning a home is better, the financial situation of the individual is important in assessing whether he or she can afford the home.

James Wong ... ‘It’s better to buy than rent as the loan you pay to the bank is equivalent to the rental you are forking out.’

VPC Alliance (KL) Sdn Bhd managing director James Wong says it is always better to own a home. But one's financial ability will play a big part in the choice of a house, he adds.

“Of course, it's better to buy than rent as the loan you pay to the bank is equivalent to the rental you are forking out,” says the boss of the property consultant firm.

Young people are advised to look into their finances and ensure their existing debt ratios are not too high before buying a house. They also need to consider the stability of their jobs to ensure they will be able to make the monthly loan instalments, Wong says.

“If a person's debt ratio in relation to his salary is already close to 50%, chances are banks will not qualify the loan. If a person's salary is too low, meaning that the mortgage amount to be paid is more than 50% of a person's salary, the bank may also hesitate and require more documentation to approve the loan.

“These days, with the easy payment packages by banks and the ability to withdraw from one's Employees Provident Fund (EPF) savings, owning a house has become more affordable,” says Wong.

Certainly, potential house buyers can now tap on their EPF account 2 to purchase a property. First-time house buyers can still qualify for loans of up to 90%

During Budget 2011, the Government said it will introduce Skim Rumah Pertamaku through Cagamas Bhd, which will provide a guarantee on the downpayment of 10% for houses below RM220,000.

This scheme is for first-time house buyers with household income of less than RM3,000 per month. In other words, the buyers will obtain a 100% loan without having to pay the 10% downpayment.

First-time house buyers will also be given a stamp duty exemption of 50% on instruments of transfer on house prices not exceeding RM350,000. The Government also proposed that a stamp duty exemption of 50% be given on loan agreement instruments to finance such first-time purchase of houses.

“If you rent a home, especially in today's environment of rising prices, you will never benefit from the increase of the property value. Furthermore, even if the value of the home does not increase over time, the mortgage balance decreases and equity builds,” says another property consultant.

“With the problem of inflation creeping up, the more you delay buying a house, the more expensive it becomes over time. Buying property is one way to fight inflation,” he adds.

In terms of disadvantages in owning a house, there are many variable costs involved, for example the house assessment, service or maintenance fees and fire insurance among others.

“Selling the house may also not be as quick as, say, selling your investments in shares. The whole process of selling, along with documentation by lawyers can take up to a year, depending on the location of the home. If there is already a potential house buyer, the process can be sped up to 3 months,” says the property consultant.

Khong & Jaafar managing director Elvin Fernandez gives a quantitative example between buying and renting a property.

If a typical middle class 2-storey terrace house in Kuala Lumpur is RM400,000 and the rent is RM1,500 a month, the nett yield is RM3.8%.

“This is a reasonable return from such a landed property,” he says.

Assuming that the household income is about RM7,000 a month, this means that the ratio of the household income per annum to the house price is 4.76 times.

“To buy this house based on 90% financing at a fixed interest loan for 30 years, you would have to pay a 5% interest, which means a monthly expense of about RM1,900 a month. At this point of the exercise, it is clearly better to rent than buy,” he elaborates.

Still, he adds: “This analysis is based on what I consider the typical housing unit. Different considerations may apply for different types of housing units in different areas.”

Another powerful motivation in favour of buying rather than renting is the social imperative to own a home.

“Owning a house also allows you to raise credit as and when it is needed, for family expenses and for business purposes, and this is a powerful motivation for ownership,” says Fernandez.

By The Star