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Wednesday, March 30, 2011

Malaysia to allocate land for affordable homes

The government will allocate a portion of its landbank for the construction of affordable housing, especially for Malaysians eligible for the My First Home Scheme.

Housing and Local Government Minister Datuk Chor Chee Heung said the affordable housing project, which will likely be stratified properties or apartments, will either be built by the government or through joint ventures with the private sector.

"The government is looking at its landbank for the purpose of building houses for those earning RM3,000 a month and below.

"We also hope that the state governments will do their part by imposing quotas for developers to build affordable homes, besides low-cost houses," he told a news conference after launching Green Building Index Township Rating Tool and Residential New Construction Tool (Version 2) in Kuala Lumpur yesterday.

Chor also said that the government will start paying some RM1.4 billion annually to Alam Flora Sdn Bhd, SWM Environment Sdn Bhd and Idaman Bersih Sdn Bhd once the concession agreement is signed between the government and the three waste management companies.

He said local councils in Peninsular Malaysia will collect some RM900 million from households for waste management services provided by these concessionaires, while the federal government will top up about RM500 million.

Once the concession is signed, he said, the three operators must perform their duties according to the agreement and key performance indicators.

Chor said the operators will also be able to deliver better services as they can use the concession agreement as collateral to obtain financing for capital expenditure.

He said for the past 13 years, the three operators have been utilising their own resources in providing the services, besides not receiving full payment from the state governments.

"We are currently studying the intricacies of the contract, which will take between three and four weeks. Then, we will submit it to the Cabinet, before it is submitted to the National Council for Local Government," he said.

The minister, however, did not give the targeted date for the signing of the concession agreement.

Currently, Alam Flora is responsible for Selangor, Kuala Lumpur, Pahang, Terengganu and Kelantan; SWN for Negri Sembilan, Malacca and Johor; and Idaman for Perak, Kedah, Penang and Perlis.

Commenting on the statement made by Penang Chief Minister Lim Guan Eng to allow the state government to opt out of the Solid Waste and Urban Cleansing Management Act and choose its own contractor for the services, Chor said: "Let time convince those state governments that do not agree."

It is understood that there are three states that have yet to accept the taking over of solid waste services by the government-appointed concessionaires.

By Business Times

Push for more industrial parks

PETALING JAYA: A shortage of industrial properties and absence of new industrial park projects in the Klang Valley have resulted in higher prices and opened up opportunities for developers with large landbank, especially those near highways, to venture into industrial park projects.

James Wong

Property consultancy, VPC Alliance (KL) Sdn Bhd managing director James Wong said over the past six years, vacant industrial land in premier industrial parks such as Bukit Jelutong, Glenmarie and Section 23 Shah Alam had seen substantial price increases of between 60% and 100% in 2010, or an annualised increase of 10% to 17% a year.

Average prices of industrial units rose by 8% to 18% in the first half of 2010 over the same period in 2009.

Currently, industrial property is still a small sector of the overall property market, accounting for 2.5% of the total property transactions and about 10% of the total value of property transactions. The average yearly transaction of industrial properties is only about 8,000 units.

“The industrial property market is considered quiet for the past few years as developers are concentrating on residential and commercial developments and there is hardly a developer that concentrates on industrial development,” Wong told StarBiz.

“With the Government's big push to transform the country's economy under the Economic Transformation Programme and with the industrial sector as one of the main drivers of the economy, it is timely and ripe for developers to come forward to develop more industrial parks and estates to cater to the increasing demand.”

Wong said last year, the manufacturing sector attracted RM47.2bil of approved investments, compared with RM32.6bil in 2009, a jump of 44.8%. This will translate to more demand for industrial properties.

In the past decade, the majority of new industrial parks in the Klang Valley were developed by the Selangor State Development Corp and there were no new industrial parks by private developers.

Many of the private industrial parks are fully developed and sold, and they are only available in the secondary market.

“There are opportunities to develop modern three-storey semi-detached factories in pockets of prime industrial parks and with easy access to highways,” he added.

The development of SME parks to cater to the SMEs was still a neglected sector, Wong said, adding that although the SMEs' contribution to the national gross development product was more than 30%, many of them were still located in illegal buildings and squatter areas.

“Developers should develop parks for the SME industries of similar trades to group them together, such as shoe-making SMEs industrial parks with amenities such as common canteen, food courts, and also staff housing for the workers,” he added.

According to figures provided by the National Property Information Centre, the value of industrial property transactions grew by 44% from RM3.06bil in the first half of 2009 to RM4.4bil in the same period of 2010, while the volume of transaction increased by 29.3% from 3,596 to 4,648.

The rise was mainly due to demand from SMEs seeking small-sized industrial buildings with good concepts in strategic locations with excellent accessibility.

Wong said Mah Sing was the pioneer in the new generation of semi-detached factories for multi-purpose use.

According to Mah Sing Group Bhd group chief executive and managing director Tan Sri Leong Hoy Kum, there is pent-up demand for three-storey semi-detached corporate factories.

He said the shortcomings faced by the sector were that generally the older units were either detached (with too large built-up) or linked (small built-up), and did not have the capacity for multi-purpose use.

“Our research shows that semi-detached factories currently make up about 10% of the total supply of industrial units in the Klang Valley. We foresee there will be strong demand from the SMEs, halal food industries, light manufacturing, distributive trade and those who need to upgrade to industrial properties which can serve multi-purpose functions such as integrating their logistics, warehousing, showrooms and offices under one roof,” Leong added.

Mah Sing is undertaking three i-Parc industrial projects comprisingthree-storey semi-detached corporate factories which have 4-in-1 centralised function as a factory, corporate office, showroom and warehouse.

“Our buyers are mainly local companies looking to integrate their corporate headquarters with operations and warehousing facilities as well as multinational corporations from various industries which see the commercial potential of locating in these schemes,” he added.

By The Star

LTV imposition not likely to have big impact on home loans growth

PETALING JAYA: Bank Negara's move last November to introduce a loan-to-value (LTV) ratio for third and subsequent house financing facilities will not hamper residential mortgage loans growth this year or even reduce residential property prices significantly.

A local bank-backed analyst said residential home loans growth might see a slight slowdown as the measure by the regulator would curb speculative investment activities.

She said the slowdown would not be drastic, as 70% to 90% of banks' mortgage loans were held by homeowners, who were not speculative investors but had purchased residential properties to live in.

“Our population has a high number of people below 30 years, who are purchasing properties to live in,” she said.

Bank Negara said in its “Financial Stability and Payment Systems Report 2010” that house prices in selected locations within and surrounding urban areas had shot up to four times higher than the national house price index.

It also added that there had been incidents of applications for financing of multiple residential units within a single development project from a single borrower.

To address this, the LTV ratio was placed into effect, aimed at promoting a stable and sustainable property market by deterring speculative activity through higher equity requirements for transactions of these nature.

Maybank Investment Bank Research said in a report earlier this month that housing loan applications had declined for the last three months on a month-on-month basis, partly due to recent measures to curb property lending, namely the LTV imposition.

Loans applications for residential purchases fell 3.8% month-on-month from December 2010 to January 2011, 7.1% from November 2010 to December 2010 and 9.6% from October 2010 to November 2010.

However, another local bank-backed analyst said the decline in housing loans applications could be seasonal and could pick up as the year progressed.

“I still think it is early days to attribute the decline to the LTV imposition only. Generally, I do not see this new measure having much of an impact on residential housing loans growth this year,” he added.

Zerin Properties group chief executive officer Previndran Singhe said the regulator's cooling-off measure would have minimal impact on the property market, as individuals looking at third properties were usually cashed up and took a long-term view on real estate.

“Moreover, speculative activities in Malaysia are limited so the impact (on property prices) will be very minimal as prices are driven by domestic demand,” he added.

MIDF Research chief economist Anthony Dass said a curb on speculative investment of properties and slower loans growth could see a correction in property prices and the downside risk, more so for high-rise properties, would be contained.

By The Star