Foreign investors may wait and see

PETALING JAYA: Foreign investors may take a wait and see approach following the dismal performance of the ruling coalition Barisan Nasional in the 12th general election, until the state and federal governments are well established, said local property consultants. In the polls, Selangor, Penang, Kedah and Perak fell to the opposition.

However, they said investments in the property sector and in other sectors would improve in the long run if there are signs of better corporate governance and transparency in doing business here.

Zerin Properties CEO Previndran Singhe expects an overall positive impact as real estate is a long-term investment.

"The outcome of the elections proved that the country is democratic and its citizens, politically matured. I do not foresee any negative affect on foreign investments, as investors will notice that
Malaysia is democratic and practises good corporate governance," he said.

“The public should be made to understand that with a simple majority, the federal government can continue to implement its policies and amend legislations, except the constitution.” However, Previndran added that certain projects could be affected in terms of timing, as they may require state approvals.

City Valuers & Consultants Sdn Bhd general manager CY Lim also expects the election results to have a general positive impact on the property sector. He said foreign investments would continue to remain positive, as investors would expect a more transparent administration.

“We also hope that the new state governments will clean up red tape and delays at the land office in Selangor,” said Lim.

Real Estate and Housing Developers Association (Rehda) president Ng Seing Liong said the dip in the Kuala Lumpur Composite Index (KLCI) on Monday was inevitable as people were shocked at the unexpected outcome of the election. The KLCI took a dive to close 9.55% or 123.11 points lower, to 1,173.22 on Monday.

“We do not expect much changes in policies as the federal government is intact but we foresee that whatever changes there may be, would be for the better,” said Ng.

He hopes that Selangor, now under a coalition led by Parti Keadilan Rakyat (PKR), will be more proactive in creating a conducive business environment including implementing development-friendly policies.

"There will be heightened expectations on both incumbents and newcomers to improve the nation's competitiveness by enhancing the delivery system and efficiency, and the efforts will benefit the economy and image of Malaysia as an investment destination for foreign investors," said Ng.

He added that the local governments should not forget their social responsibility and that building affordable houses for the hardcore poor irrespective of race is essential.

Commenting on whether the economic development corridors such as the Northern Corridor Economic Region (NCER) would be affected, Ng said that while the development corridors may be temporarily affected, he foresees medium and long-term positive effect.

By theSun (by Rosalynn Poh)

Guocoland: KFH option on Singapore apartments lapses

PETALING JAYA: Kuwait Finance House (M) Bhd (KFH) is believed to have decided not to exercise the option on 97 apartments at the 210-unit Goodwood Residence development in downtown Singapore, given the softening in the city-state's private residential property market.

The apartments were supposed to be sold to a fund managed by KFH for US$818.4mil, or at S$3,000 per sq ft.

Goodwood Residence, developed by Guocoland Ltd, is a premier residential development on a 24,845-sq-m freehold plot fronting Goodwood Hill.

A Guocoland statement issued on Monday said the options were not exercised and had lapsed.

“Both parties are presently in discussions, with a view to granting fresh options for units in the development,” it said, adding that the private residential property market in Singapore was currently cautious.

KFH did not respond to StarBiz's queries.

Meanwhile, industry observers said Singapore's property market had shown signs of softening and take-up rates had slowed since January as a result of the US subprime market woes.

According to Abbey Woods Sdn Bhd chairman and managing director Datuk Wong Choon Kee, the market had seen substantial price appreciation in the past one year, with a new price benchmark of more than S$4,000 per sq ft set by some of the recently launched luxury residential projects.

SC Global Developments' Ardmore Apartments, launched in the last quarter of 2007, were sold at an average price of S$4,400 per sq ft while the company's The Marq on Paterson Hill fetched S$5,100 per sq ft.

Wong said Singapore's luxury apartment market was well supported by good fundamentals and the limited supply would continue to drive up prices in prime districts.

“Singapore is seen as the new Switzerland, with stricter secrecy laws making it an ideal investment destination for high net worth individuals.

“Niche projects in Sentosa Cove are favoured by buyers and developers. Going forward, prices of commercial and residential properties in prime locations will remain high although sales volume will, at best, be at slightly lower levels,” Wong said.

KFH is also an active participant in the Kuala Lumpur property market, especially around KL City Centre.

The Islamic bank is focusing on the super high-end residential and other investment grade commercial properties with potential for capital appreciation.

In January, KFH offered to buy 50% of the Menara YNH tower block for a whopping RM920mil, which translates into RM1,258 per sq ft – one of the highest prices among recent property transactions in Kuala Lumpur.

Last August, KFH, together with Khazanah Nasional Bhd and Jumeirah Capital, were awarded a 99-year leasehold concession to develop the 624-acre Cultural Cluster in Iskandar Development Region.

By The Star (by Angie Ng)

Lee to quit as Country Heights MD

TAN SRI Lee Kim Yew said he will quit his post as group managing director of Country Heights Holdings Bhd, but denied that he was selling his shares in the property company.

"That is not true. I'm not leaving. I'm not selling off my shares. In fact, I have been accumulating shares of Country Heights," he told Business Times in a telephone interview yesterday.

Lee, who founded Country Heights, was responding to a recent news report that said he may relinquish his executive role in the group following an internal restructuring exercise that is under way.

The report had said that Lee planned to concentrate on running his privately-held and profitable companies involved in property development and oil palm plantations.

"My shareholding is around 46 per cent and I'm still a board member. There would be a change of management, a change for the better," he said.

Lee said that in the interest of corporate governance, it was better to leave the daily operations of Country Heights to professionals.

"I will leave it to the new team to do what is best for Country Heights. As the biggest shareholder, I'm optimistic of their capability," he said.

Lee added that Country Heights' businesses will be re-categorised into hospitality, development and property, and the three divisions will have their respective chief executive officers reporting to the group managing director.

Country Heights has hired recruitment firm Korn Ferry to help it find a group managing director.

Analysts were not surprised that Lee is relinquishing the daily operations to professionals to concentrate on his privately-held companies.

"Country Heights has slipped off the radar screens of many investors for a long time. If you exclude the one-off gain from the sale of its shopping centre last year, you can see that the group is not making money," an analyst with a foreign research house said.

Country Heights has seen profits decline from RM12.44 million in 2003 to RM10.87 million in 2004 and RM6.66 million in 2005.

It fell into the red in 2006 with a net loss of RM32.69 million.

Last year, it posted an unaudited net profit of RM107.94 million, thanks to an estimated gain of RM102 million from the sale of the Mines Shopping Fair to Singapore's CapitaLand Ltd for RM432 million cash.

By New Straits Times (Business Times)

Quill Capita gets 'outperform' rating

ALLIANCE Research Sdn Bhd initiated coverage of Quill Capita Trust (QCT) with an "outperform" rating, saying it has a defensive blue-chip tenancy profile and a strong parent in CapitaLand Ltd.

"With its tenants locked in for a long term on master lease agreements with step up agreements, the real estate investment trust (REIT) provides stable earnings with mild growth even without acquisitions," the local research firm said in a report yesterday.

"QCT management has proactively sought ways to improve asset quality and improve rental yield with some of its tenants, providing investors with further upsides for the future," it added.

Alliance Research said the strong multinational corporation presence in QCT tenancy profiles, with the likes of DHL, IBM, HSBC, BMW and Technip as its anchors, proves its earnings quality.

In terms of value, these key tenants occupy 84 per cent of the total property investment value.

Alliance Research said the upside to QCT will come from aggressive acquisitions backed by its low gearing position and low financing costs.



"With a strong pipeline of office-related commercial properties, we believe there is room for yields to improve further amid its future acquisitions," it said, setting a target price of RM1.50 on the REIT.

By New Straits Times

Morubina’s Kinta Riverfront project ready by Sept 2009

Ting: Attracted buyers from Indonesia, Singapore and even China

PETALING JAYA: Ipoh’s first 5-star Kinta Riverfront Hotel & Suites on a fiveacre leasehold site along the Kinta River has registered sales of close to 80% of its serviced apartments. Developed by Morubina Sdn Bhd, a member of the Morubina Group of Companies, the project comprises a 19-storey hotel with 313 rooms and a 20-storey serviced apartment offering 239 suites for sale. The entire project has a gross development value of RM120 million and would be completed in Sept next year. Piling works for the project have commenced.

According to the developer, sales have been encouraging since its launch in June last year. Morubina’s managing director Ting Sing Yiew told theSun that its buyers were drawn to the project’s 15-year guaranteed rental scheme. “They found the scheme, which guarantees an annual rental yield of 7%, attractive. We also conducted road shows overseas and have attracted about 40 buyers from Indonesia, Singapore and even China,” said Ting, adding that it has set up sales offices in Medan and Guangzhou due to the overwhelming response. Its local buyers, however, are mostly from Perak and Ting said that most purchased it for investment reasons.

For the serviced apartments, which are unfurnished, the developer is offering two types for sale. The Type A design, totaling 126 units, has views of the riverfront and comes with a built-up area of 1,223 sq ft. Prices of the three-bedroom unit ranges between RM338,999 and RM438,999. Those with the heritage view is the two-bedroom 808 sq ft Type B design which totals 108 units and range from RM199,999 to RM299,999.

There are also five penthouses which come in two designs. With built-up areas of between 1,602 sq ft and 7,393 sq ft and prices from RM730,000 and RM2.8 million, buyers have a choice of between the fully furnished (with three bedrooms) or the partially furnished (with two bedrooms) units.

The developer is also offering an additional fixtures and fittings scheme priced at RM38,000 for Type A units and RM25,000 for Type B units. The maintenance and utility fee is free for those who opt for the guaranteed rental scheme. Those who purchase for own use need to pay 20 sen psf monthly.

The developer says that buyers need only pay an upfront instalment amounting to 20% of the selling price for the project, which employs the build-and-sell concept. The balance payment would be upon the issuance of the Certificate of Fitness for Occupation.

Meanwhile, the hotel component, to be managed by Morubina, would have presidential, royal, family and deluxe suites. “We are also offering standard facilities like any other 5-star hotel. We have a grand ballroom which accommodates 1,600 people, which is the biggest in Ipoh. There are five restaurants, a business centre, two basement car parks, pools and sporting facilities too,” said Ting. Other amenities include Wi-Fi broadband access, spas as well as safety elements such as closedcircuit televisions.

According to Ting, the Kinta Riverfront Hotel & Suites is a tourism-related project and it has since been given a Temporary Occupancy License by the state government to further develop both sides of the Kinta River, covering a 1.5km- stretch from Jalan Raja Musa Mahadi up to Jalan Sultan Iskandar.

“We will be building six mini-bridges, a replica of famous world bridges, along this stretch, costing some RM2 million. There will also be more than 300 shops, bazaars, food and beverage outlets, as well as an open-air auditorium,” said Ting, adding that the cost of developing the riverbank area amount to some RM30 million.

By theSun (by Loo Pik Kwan)

Repossessions to rise by 50% in 2008

LONDON: The number of home repossession is expected to rise by 50% this year, according to the Royal Institution of Chartered Surveyors (Rics).

Figures released by Rics show that the number of properties offered at auction, usually an indication of distress, was close to historically high levels last year with 7,732 properties placed under the hammer.

However, a smaller proportion were reaching their reserves: in 4Q2007, only 57% of properties were disposed of successfully, compared to 69% in the same period a year ago.

The overall number of residential properties offered at auctions rose by 15% in 2007, while the number of repossessed properties rose by around 20%, indicating that many have struggled to service their mortgages following last year’s interest rate hikes and tougher refinancing conditions.

There also seems to be an emerging “London effect”. Success rates at auctions for London property fell to 63% in the last few months of 2007, down from 80% in the same period a year before.

Rics economist Oliver Gilmartin said: “Fears over further house price falls have taken some stimulus out of achieved sales at the auction house, as specialist lending has all but evaporated... we expect a tougher year for many at the margins in 2008 .”

Recently, the Nationwide Building Society reported a 0.5% fall in house prices for February, which is a greater drop than the 0.3% recorded in January. Year on year, Nationwide said that prices were now up just 2.7%.

By The Independent

Firms with overseas jobs more resilient

IJM Corp’s Al Reem Island Development project in Abu Dhabi, the United Arab Emirates

PETALING JAYA: Construction firms that rely mostly on government jobs would be the most vulnerable to political changes but some companies will be better positioned to weather the uncertainties.

OSK Research analyst Jeremy Goh said earnings of companies such as Hock Seng Lee Bhd, whose projects are mainly in Sarawak, should remain resilient.

“We also remain positive on companies like IJM Corp Bhd and Zelan Bhd, whose operations are focused mainly in the oil-rich Middle East.” he said.

When contacted by StarBiz, Zelan chief executive officer Albert Chang said: “Almost all of our projects are foreign-based. In fact, we have not had any direct government projects for the past 20 years.

“The current uncertainty in the local scene does not have any bearing on us as we’re mainly focused on the Middle East.” he said.

IJM Corp is another construction player that has the bulk of its order book from overseas.

Chief executive officer and managing director Datuk Krishnan Tan told Reuters yesterday that the company had an order book of RM6bil, of which 40% was from overseas.

Tan said notwithstanding some erosion in margin, he saw a steady flow of work from India and the Middle East.

TSR Capital Bhd, whose core business is in construction, remains quite unfazed by the looming uncertainties as most of its projects are in the Federal Territory.

Managing director Tengku Datuk Mustapha Tengku Mohamed said: “We are still confident of prospects as most of our projects are Federal projects.”

The construction sector is poised to be a key driver of the country’s economic growth as projects worth billions of ringgit are being planned for implementation under the Ninth Malaysia Plan.

However, the impending change in administration in Penang, Perak, Kedah and Selangor, which have come under opposition control, has given rise to uncertainties in the award of public contracts.

There are also concerns whether the implementation of projects that have already been awarded would be delayed as the newly-elected state governments have said projects would be reviewed.

By The Star (by Yvonne Tan)

Investment grade homes at Desa ParkCity

An aerial view of Desa ParkCity, which is today a well-designed master planned community development.

PERDANA ParkCity Sdn Bhd is targeting the investment property market and has lined up a number of investment grade residences in its Desa ParkCity township in Kuala Lumpur for launch in the next few years.

The first in the company's investment product series is The NorthShore Gardens, a 40-storey condominium block that was launched last month.

The 269 residences of between 900 and 2,500 sq ft are priced at an average of RM520 per sq ft. There are also four penthouses of 5,800 sq ft that are equipped with a private pool each.

In the pipeline are 4,000 condominium units, of which 80% will be high-end, and 500 landed residences, including bungalows, semi-detached and terrace houses.

According to group chief executive officer Lee Liam Chye, the number of property buyers who are keen to invest to reap capital appreciation and rental yields is on the rise.

“Our customers have a lot of confidence in our property products.

“This is because they have enjoyed consistent capital appreciation averaging 8% per annum for the last three years, and net annual yields as high as 12% from leasing to the growing population of expatriates,” he told StarBiz.

Besides its good location in the last piece of sizeable freehold land in Menjalara, Kuala Lumpur, Desa ParkCity's master planned community and village concept had made it a well-sought-after address among buyers, he said.

“We are also actively looking at the viability of building housing units for senior citizens who want to continue enjoying an active lifestyle in a well-managed and secure environment,” Lee said.

This special “village” of about 20 to 30 acres will have at least 200 low-rise and medium-rise apartments of between 800 and 900 sq ft, with specially designed bathrooms. It will be equipped with community halls and recreational facilities.

To kick off the initiative, he said, the company had last August signed a memorandum of understanding with Subang Jaya Medical Centre to design, build and lease a 250-bedroom hospital in Desa ParkCity. The lease will be for 15 years with the option to renew for another 10 years.

Lee said the hospital was expected to be ready for operation by 2011 and work on the new village precinct would take off two years after that.

“Providing housing and supporting facilities for senior citizens is one of the biggest growth areas in many parts of the world, but we have yet to see such a project in Malaysia.

“Our target market is the aging baby boomers who were born after World War II and would like to 'upgrade' into a better neighbourhood after their children have left the nest to live on their own.”

Lee said there would also be other more exciting products lined up for Desa ParkCity to cater to the strong demand for quality medium and higher-end residences in the area.

Since the first project, Nadia Parkhomes and Condominiums, was launched in 2002, close to 2,000 houses have been completed.

The Nadia Parkhomes in Desa ParkCity

Desa ParkCity, which will take another eight to 10 years, will have a total of 7,000 residences, of which 4,500 units will be high-rise condominium units and the rest landed houses.

“We have sold more than RM1bil worth of properties to date, and the future launches are expected to generate another RM3bil,” Lee said.

Its maiden commercial enclave, comprising neighbourhood shops on 5.5 acres facing the central park lake, was recently completed and leased to various businesses.

There are 150,000 sq ft of net lettable space, of which 80% have been leased at rental rates of RM3 to RM10 per sq ft.

Meanwhile, Desa ParkCity's town centre will be launched in the next two years. The 40-acre development will comprise mainly shops, offices, serviced apartments as well as a hotel and hospital.

Perdana ParkCity chief operating officer Fan Len Kuan said a memorandum of understanding had been signed with Nord Anglia Education PLC, a worldwide education specialist listed on the London Stock Exchange, to operate an international school in Desa ParkCity.

Lee said the development of the township was on track and much value had been added to the once rocky terrain.

Perdana ParkCity, a unit of Sarawak timber company Samling Group, bought the 437-acre land in 1999 for RM200mil.

“While many regarded the site as too hostile for development, we also saw the immense value behind the rocky land. It took us three years to blast the whole area to get it ready for development, which incurred a total bill of RM100mil.

“A total 12 million tonnes of rocks were blasted and shipped out from the area. After the area had been cleared, the net developable land came to 200 acres,” Lee said.

Today, the bustling neighbourhood is being joined by other quality developments such as Sunway SPK Damansara and Villa Manja, which are undertaken by Sunway City Bhd and its joint-venture partner, Syarikat Permodalan Kebangsaan Bhd.

By The Star - StarBiz - (by Angie Ng)

Perdana ParkCity wants to replicate success in Vietnam

PERDANA ParkCity Sdn Bhd is keen to replicate its success of the Desa ParkCity integrated township in other parts of the Klang Valley and in emerging markets in the region, notably Vietnam.

“We are looking for the right piece of land of at least 800 acres to build another signature development for the middle to upper-middle-class population,” said group chief executive officer Lee Liam Chye.

The company is also eyeing Vietnam's robust property market and believes its range of products will be a big hit with the Vietnamese.

According to Lee, the property market in Hanoi and Ho Chi Minh City are bustling with activities as demand has outstripped supply by at least three to four times.

“As a developer of quality medium to high-end residential properties, we see Vietnam as a good platform to expand our brand outside Malaysia,” Lee said.

Lee Liam Chye

Perdana ParkCity recently signed a tripartite joint-venture agreement with Singaporean and Vietnamese partners to undertake its maiden overseas project in Hanoi.

The development, to be located in Hadong, a suburb about 13km from the city centre of Hanoi, is scheduled for launch in August and will take between eight and 10 years.

“We will be developing a 200-acre site near the city's main thoroughfare into an integrated township for the medium-end market,” he said.

The project will comprise 7,000 housing units and 1.5 million sq ft of commercial space, including shop offices.

“We are looking at 5,000 condominium units and 2,000 more units of terrace house, semi detached home and bungalow for the middle class and affluent group of buyers in Hanoi.

“Like Desa ParkCity, there will be gated enclaves, parks, lakes and walkable neighbourhoods.”

Lee said Vietnam was a “very under-served” market and property prices were generally twice those in Malaysia.

While projects in Malaysia have average margins of 20%, developments in Vietnam can have higher margins.

The favourable demographics in Vietnam included the fact that 80% of its population of 85 million comprise people aged 40 years and below.

Its fast-growing economy, at an average growth of 7.5% per annum, has also raised the people's disposable income and demand for more quality housing.

“We are encouraged by the Vietnam government's policies to allow foreign developers to partake in the country's development. There is no restriction on foreign ownership and foreigners can own up to 100% in property development companies,” he added.

Being a township developer with a good track record of building well-designed master planned property products, Perdana ParkCity would provide its management expertise for the design, planning and building of the Hanoi project, Lee said.

“We have the tested solutions that are relevant to the needs of the Vietnamese market that is growing in sophistication.

“The master planned community of Desa ParkCity has the same characteristics as a village environment like those in Vietnam,” he noted.

Lee said the company had also been approached by other Vietnamese land owners to undertake joint developments with them.

“There is potential for other joint ventures that may include equity participation in Vietnam. The market will remain robust for quite a number of years,” he added.

By The Star

Rehda: Buy properties now

PETALING JAYA: Prospective homebuyers should make their purchases now as property prices may increase in the near future, said the Real Estate and Housing Developers’ Association’s (Rehda) Negri Sembilan chapter.

Branch chairman Datuk Soam Heng Choon (pix) told theSun that in light of escalating fuel prices and cost of raw materials, the cost of construction would eventually be passed on to consumers.



Soam said property prices in the state have already seen increases since last December by as much as 10%.

“We represent about 52 developers in the state and all are facing similar problems as those faced at the national level. The strain on the construction industry is getting worse with the rising prices of steel bars and cement. Moreover, Malaysian skilled workers in the industry are also being pinched overseas to places like India, China and the Middle East,” Soam said, adding that the developers’ main concern is to keep the cost of doing business down.

Demand for properties in the state has been “quite good” in the last six months which Soam attributed to the relatively affordable prices.

“We have also seen buyers from the Klang Valley … maybe because our selling prices are still pretty affordable. For example, the average price of a 2-storey house here is just over RM200,000 while for a 1-storey home, it’s over RM100,000,” said Soam.

Rehda Negri Sembilan members are hoping for vibrant sales at the upcoming three-day Malaysia Property Expo (Mapex) 2008 (state level), in May.

“It’s the norm for us to achieve about RM20 million sales during Mapex but this year we hope for higher sales as we are encouraging prospective buyers to buy their properties now before the eventual price hike in properties,” added Soam.

More than RM200 million worth of properties will be offered at the upcoming Mapex, which is organised by Rehda. According to Soam, about 20 developers in the state would be taking part in the first of the twice-yearly exhibition in the state. The next exhibition is expected to be held towards the end of the year.

By theSun (by Loo Pik Kwan)

Free SMS service for seekers of property

PETALING JAYA: Zerin Properties has launched a for your home free SMS service, on March 3, to assist those interested in purchasing or renting properties in the Klang Valley.

Zerin’s assistant head of agency Terence Yap said, initially, only properties in the Kuala Lumpur city centre area would be listed but other areas in Kuala Lumpur, such as Mont’Kiara, Bangsar and Damansara, will be featured in the coming months.

“Its very easy and convenient to use, and its absolutely free,” said Yap. “All one needs to do is type the keywords KLCCS to view properties for sale, KLCCR to look for properties for rent, and KLCC to get a listing on both categories,” he said.

Send the keywords to 36600 and the reply together with the listings will be received almost immediately. Yap said unlike other companies, which charge a fee for any type of SMS notification, Zerin will bear the cost for each SMS sent and received so users will not be charged.

“This is part of our value-added service in an effort to keep up with modern technology to allow anyone with a mobile phone to access our service from anywhere,” said Yap.

“Users will also receive an SMS stating our contact number and web page address so they can get in touch with us if they are interested in buying or renting a particular property,” he added.

This is the second free property service from Zerin Properties. Just two months ago, the real estate consultancy launched a property portal – www. klcc-living.com – to provide a complete guide on all residential and commercial properties, shopping areas, restaurants, clubs, embassies and other developments in the KLCC area. The website, according to Yap, averages 100,000 hits per month.

“We hope to get a similar encouraging response with our free SMS service,” he added.

By theSun (by Tim Leonard)

You think you’ve got a bargain but you could have overpaid for your home

LONDON: Should buyers beware of property developers bearing gifts? Against the backdrop of a stagnant housing market, tempting deals are proliferating. But first-timers, in particular, are being urged not to take these offers at face value.

Developers have become accustomed to the rich pickings of a buoyant market, but with prices now on the turn and the number of potential buyers on estate agents’ books half the level it was four years ago, they are clutching at any means of selling their homes – including seemingly generous financial incentives for first-time buyers.

For example, it is becoming common for companies to offer a “free” deposit of up to five per cent and to pay buyers’ stamp duty and legal fees.

However, Ray Boulger, senior technical manager at broker John Charcol, says homehunters should be wary of these deals as they can simply be an attempt to mask an overinflated initial price.

“To keep the ‘list’ price high, a developer will market the property for, say, £200,000 (about RM1.2 million) but waive the deposit and often other fees. This could mean that just £185,000 has changed hands yet the final sale price is recorded with the Land Registry at £200,000 – in other words, more than it is actually worth,” says Boulger.

Graham Ellis at the Royal Institution of Chartered Surveyors adds: “It can be difficult to get the bigger picture when valuing newlybuilt homes, especially in an uncertain market, as there are often no comparable properties on which to base a price. This means that if the developer does not disclose the gifted deposit, it may be overlooked.”

In some instances, the developer can even use its own valuer, whose estimate then finds its way on to the books of the Land Registry and is often accepted by the mortgage lender too. Thorough checks or a site visit will not be carried out, although the borrower may still be charged a fee for the so-called “valuation”.

The problem of gauging the true going rate can be exacerbated by the clout of buy-to-let landlords or members of property investment clubs, who often buy in bulk and can negotiate discounts of up to 20%, against the five to seven per cent available to individual first-timers. So a buyer needing, say, a 95% mortgage, and under the impression they have got a bargain, could actually be making repayments on a loan that is higher than the market value of the property. In other words, without knowing it, they may have started home ownership in negative equity.

Another worry for buyers is that there is a glut of newbuild apartments – especially in cities such as Nottingham, Leeds and Manchester – and this is driving down prices.

In the past few months, banks and building societies have clamped down on their lending on new-builds as the credit crunch has taken hold.

Some, such as Scarborough building society, have capped advances at 70%, while HBOS will lend only if the property has been valued by one of its own surveyors.

All in all, people considering a newly-built home should be cautious, says Mr Boulger. “This is a buyer’s market and even if first-timers are offered a discount, they should negotiate hard. They should also do their homework, comparing the list price with similar second-hand and newly-built properties in the area,” he says.

Melanie Bien, director at broker Savills Private Finance, adds: “There is nothing wrong with gifted deposits as long as everyone is aware of their existence. The valuer must know, when assessing a property, and the lender must be aware when deciding whether to advance the mortgage funds or not.”

By The Independent

TTDI aims high with Laman Seri Business Park

TTDI Development Sdn Bhd hopes to make its Laman Seri Business Park (LSBP) the best commercial development in Shah Alam.

Group managing director Datuk Johan Ariffin said the business park, which was soft-launched recently, would have plenty of outstanding features that would give investors a better chance of reaping higher capital gains as well as commanding higher rentals.

The 8.245-acre leasehold development with six blocks of four and five-storey shop offices will feature modern contemporary facade, dual frontage, double-volume office space (front portion only) for 39ft wide corner units, handicapped-friendly design layout, wide pedestrian thoroughfare and two intermediate shop offices which will share a lift with common lift lobby. Premium corner lots will have their own lift.

Datuk Johan Ariffin with a model of the Laman Seri Business Park

The intermediate units will have 26ft wide frontage and there will be 900 parking bays at basement and surface level.

“There will be a 37,000-sq-ft central events piazza for alfresco dining and water features such as ponds, a creek and synchronised water fountains with fibre optic lighting,” Johan told StarBiz.

He said that as of Feb 25, more than 30% (14 out of 46 units) had been sold. The projected rental rate would be around 8.3% per annum or about RM18,000 rental per month for a four-storey shop office (RM2.76 per sq ft).

The bumiputra price (units facing the main road) is RM2.63mil for the intermediate and RM3.88mil for the corner four-storey shop office while the bumiputra price for the intermediate and corner five-storey shop office is RM3.1mil and RM4.34mil respectively. The project has a gross development value of RM143mil.

Johan said LSBP was in a strategic location with many established housing estates nearby. These include Kelab Golf Sultan Abdul Aziz Shah, D'Kayangan, Bukit Jelutong, Glenmarie Resort and TTDI Jaya. There are also six golf courses and several colleges as well as hypermarkets in the vicinity.

The North Klang Valley Expressway to the north and Persiaran Sukan to the south flank LSBP. There is Kolej Universiti Teknologi & Pengurusan Malaysia adjacent to the project.

The event piazza, in the centre, will be beautifully landscaped with ornamental trees and shrubs complemented with synchronised fountain and ponds, creating a green and calm oasis.

Johan said an extra-wide thoroughfare would surround the piazza to act as an open-air street shop front complete with verandas where food and beverage outlets could “spill-out” into the landscaped area, creating alfresco dining experience.

There will also be drop-off points between building blocks where wide-open pedestrian walkways can be turned into activity centres.

He said the development was designed to be disabled-friendly with designated car parks, dedicated ramps and pathways for easy accessibility. There will also be a stand-alone surau with washrooms to cater to the public, especially those coming from the piazza.

There will be three waste disposal stations using modern technology called spiral waste disposal system to manage solid waste.

The top floor of the premium corner units will have double-volume office space at the front, which is further enhanced by the use of continuous full-height glazed windows and high fixed glass panels.

The facade design attempts to break away from the conventional image of the traditional shop house design. The exterior of the building is dressed in full-height glazed windows, with aluminium sun shading louvers projecting from the window. Horizontal aluminium screen panels conceal air-conditioning compressors from the outside while providing sufficient and efficient ventilation.

Meanwhile, TTDI Development has completed its Laman Seri, a high-end residential enclave across the road from LSBP.

Phases 1 and 2 comprising 89 units of semi-detached houses (70 units) and bungalows (19 units) are 90% sold. The company has also sold 18 of the 33 bungalows priced from RM2.3mil to RM2.4mil in Phase 3. The project will be handed over in December this year, almost a year ahead of schedule.

Johan said the philosophy of developing Laman Seri was to create the best gated and guarded community in Shah Alam and purchasers could see the amount of efforts that had been put into it.

“In addition to the more than RM1.5mil spent on landscaping and extra water features like fountains and fibre optic lighting, we are going to introduce cobblestones at the intersection inside the development,” he added.

By The Star -StarBiz - (by S.C. Cheah)

Profitable Plots ready to shop again in Iskandar

PROFITABLE Plots, the land investment division of the UK's Profitable Group, may buy more properties in the Iskandar Development Region (Iskandar) in Johor to ride on rising prices.

Profitable group operations director for Asia, John A. Nordmann, said the company is optimistic of strong demand for properties in the area.

In fact, he said, the company recently sold RM20 million worth of properties by UEM Group, the Ledang Heights development in Nusa Dua, to a pool of investors from Singapore.

"This shows that there is indeed strong demand for properties in strategic areas such as those in Iskandar. We will be looking for more of such properties there," he told Business Times in a recent interview in Kuala Lumpur.

Profitable Plots is a strategic land investment company that acquires, subdivides and sell land parcels, primarily in the UK.

As part of its expansion plan, the firm is buying more land and other types of properties in Asia, encouraged by the robust economic development in the region.

Nordmann said Asian countries certainly have a lot to offer and Malaysia, as well as the Philippines, are the areas the company is looking at.

"Our strategy in Asia would be a little different from the one in the UK where we will not be concentrating solely on land investment. For instance in Malaysia, we will focus on strategic properties while in the Philippines we will focus on land.

"We are looking at opportunities in other countries in Asia as well. However, from the way we see things, Malaysia would probably get the larger share of our investment portfolio. Putrajaya is also another area in Malaysia that we are looking at," he said.

However, he declined to say how much money Profitable Plots would set aside for these investments.

Meanwhile, Nordmann called on Asian investors to look at investment opportunities in UK land, which could potentially provide investors with returns of up to 500 per cent.

With a total landbank of more than 60ha (170 acres) in the UK, he said the company currently handles some RM500 million worth of investments in Asia.

"Although the return takes longer compared to other investment options, the risk is lower and the return is huge.

"In the present stock market condition, investors should look at the potential of land investment in UK," he added.

By New Straits Times (by Anna Maria Samsuddin)

Encorp wants to venture into Asia, Mideast

PETALING JAYA: Having made its mark in the prefabricated building technology locally, Encorp Bhd is ready for its maiden foray overseas and has set its sights on projects in Asia and the Middle East.

It was negotiating to undertake homes, government quarters and commercial building projects in several countries in the two regions, said group chief executive officer Yeoh Soo Ann.

He said Encorp's reputation in designing, financing and constructing 10,000 teachers' quarters in Malaysia using the industrialised building system positioned the company well to seek overseas ventures that used such technology for mass housing projects.

Yeoh Soo Ann

“We will go where the returns are operationally and financially viable after taking into consideration the political and currency risks of that particular country and/or region,” he told StarBiz.

On when it expected to conclude talks, Yeoh said it hinged on due diligence and feasibility studies.

He said Encorp was also aggressively pursuing opportunities presented by the Ninth Malaysia Plan (9MP).

“We are looking at several projects in the 9MP, with a total value estimated at RM2bil. They are currently at tender and/or negotiation stage,'' he said.

Encorp returned to the black in the financial year just ended Dec 31 (FY07) with net profit of RM69.88mil against losses of RM124.84mil in FY06. Revenue more than doubled to RM327.74mil from RM143.13mil a year earlier.

Yeoh believes that the company was poised for growth and better financial results.

With Encorp's stable financial standing, coupled with successful sales of existing projects, it is scouting around for land that could yield higher returns.

“We do not fancy having a huge land-bank as that will also mean having to carry the cost over a longer term,” Yeoh said

Encorp was also looking into potential partnerships and joint ventures with property developers and landowners, Yeoh said, adding that talks were ongoing with several potential partners, locally and abroad.

An artist's impression of The Strand Damansara

He said the group was optimistic its property division would continue to enhance profits in the future. Meanwhile, plans have been finalised for the launch of serviced apartments and small office, home office phases of The Strand, Damansara later this year, followed by the Shopping Mall at The Strand.

“We are expecting sizeable recurring income from the rental of the mall when it is completed in 2010,” Yeoh said.

Encorp will also launch the Section U10, Shah Alam development this year. With a gross development value of RM300mil, the integrated eco-concept gated community project is expected to be completed by the second quarter 2010.

By The Star - StarBiz - (by Chan Ching Thut)

Millionaire’s property can be a ‘small estate’

A “small estate” is the property of a deceased person having a total value of RM2 million or below, but it must at least consist of some land or a building (that is, immovable property).

The property of a deceased person is known as an “estate” in law. In addition to the land or building, a small estate may consist of movable property, such as cash, money in bank savings or current account, unit trusts, and company shares.

After the recent amendment known as the Small Estates (Distribution) (Amendment) Act 2008 (the amending Act), the value of a small estate is increased to RM2 million. In other words, after the amendment, the property of a deceased millionaire can be a “small estate”.

The debts of the deceased are not to be deducted when ascertaining the value of a small estate. A trust property is not to be included either in the small estate. A small estate must include some landed property (known as immovable property in law) for example, a piece of land, a house or a shop. Without landed property, it cannot be a small estate.

Even if the property of the deceased person consists of only a few thousand ringgit in cash, it does not become a small estate. Movable property (such as cash or company shares) does not constitute a small estate.

Value increased
The amending Act received the Royal Assent on Jan 24, 2008, and was published in the Gazette on Feb 7, 2008. It will come into force on a date to be appointed by the relevant minister by notification in the Gazette.

The most important amendment introduced by the amending Act is the increase in the value of a small estate. The value of a small estate is increased from RM600,000 to RM2 million.

Such an increase is phenomenal. The total value of a small estate is now up to RM2 million. It is 333% of the original value of RM600,000 before the amendment. The drastic increase in the value of a small estate in a way reflects the fast spiralling inflationary trend in this country.

It is instructive to note the upward adjustments in the value of a small estate over a period of 50 years since the inception of the principal Act in 1957.

A “small estate” was worth only RM10,000 or below, when it was first introduced in 1957. The principal Act came into effect on Oct 1, 1957, soon after this country achieved independence.

The recent increase in the value of a small estate from RM600,000 (since 1990) to RM2 million is considerable. The adjustment of 333% in the value of a small estate has been the highest since the introduction of the principal Act (apart from the sixfold increase in 1979).

If one compares RM2 million with the initial RM10,000 (the value of a small estate first introduced in 1957), the former is 200 times the latter! This would mean that over a period of 50 years, the increased value of a small estate amounts to 20,000% (or 200 times) its initial value!

Could it be that the government is anticipating that an impending fuel price hike would lead to a steep increase in property prices?

Where to file the petition?
After the amendment, the petition is to be lodged in the district where the immovable property (a piece of land or a house) is situated: s.8(1). The petition need not be lodged in the district where the greater part of the property is situated.

For example, if a house is situated in district A, the petitioner of a small estate must file his petition in district A, though the greater part of the property is found in another district, say district B. Even though the house may constitute a minor part of the small estate, the petition must be filed in the district where the house is situated.

The Director of Lands and Mines (PTG) of the state concerned, or the Director General of Land and Mines (PBGT) of the Federation, has discretionary power to order that the petition be heard by the land administrator of a particular district.

But someone must make the application. The order made must appear to be convenient to the parties or witnesses, or it is in the interest of justice to make such an order. The order made is final and not subject to any appeal: proviso to s.4(2).

Sale of movable property by land administrator
The land administrator has been given additional power to sell property. Under a new provision, if two (or more) beneficiaries are each entitled to a share in any movable property (such as company shares), the land administrator may sell the property. But, when exercising his discretion, he must have regard to the interests of the beneficiaries concerned: new s.15(5A).

Transitional provision
Under the transitional provision, all small estate petitions filed before the amendment, are to proceed under the old procedure. Only petitions lodged after the amendment are to be heard according to the new procedure.

All petitions for small estates distribution lodged before the coming into force of the amending Act, must follow the previous procedure: s.12(1) of the amending Act.

All small estate matters commenced before the amending Act takes effect (or pending before a land administrator), must continue to be heard under the previous procedure: s.12(2) of the amending Act.

Conclusion
The Small Estates (Distribution)(Amendment) Act 2008, increases the value of a small estate to RM2 million. As a result, a millionaire’s property may be treated as a small estate. It reflects the rapid inflationary trend taking place in this country.

Every land office must therefore have sufficient resources to deal with the influx of small estates matters. Otherwise, the accumulation of small-estate cases and undue delay in their disposal are inevitable. It is hoped that the authorities concerned have taken necessary steps to cater for such eventualities.

The writer is a member of the Conveyancing Practice Committee, Bar Council, Malaysia www.malaysianbar.org.my

Note: This column is brought to you by the Malaysian Bar Council for your information only. It does not constitute legal advice. You should therefore seek professional legal advice for your specific needs. Neither the Malaysian Bar nor the Sun Media Corporation Sdn Bhd shall be liable to any reader who suffers losses as a result of relying on this column.

Articles by theSun (by Yang Pei Keng)

Local REITs gain global attention

Cross-border REIT partnerships will benefit all

BARELY three years after Malaysia's first real estate investment trust (REIT) was on the stock exchange, the industry crossed a new milestone with Wednesday's signing of a partnership agreement between Hektar Klasik Sdn Bhd and Singapore-based Frasers Centrepoint Asset Management (M) Pty Ltd (FCAM).

Today, not only have local REITs grown in market capitalisation to over RM1bil, investors can look forward to enjoying the benefits of this first cross-border REIT partnership. This surely augurs well for the industry as a whole and for the REITs in terms of global recognition by institutional investors.

Commenting on the cross-border REIT partnership, Hektar Asset Management Sdn Bhd chief executive officer Datuk Jaafar Abdul Hamid said the joint venture would benefit both parties.

“It would help harness the combined strengths of the sponsors: FCAM's strategic reach and financial resources within South-East Asia and Hektar group's experience and expertise in Malaysia.

“We have extensive understanding of the Malaysian market and we are gaining momentum in growing the REIT's asset size, especially with our recent retail acquisition in Johor,” he said.

The joint venture agreement is part of the sale and purchase agreement entered into between Hektar Klasik and Fraser Centrepoint Ltd (FCL) on May 16, 2007 for FCL's acquisition of a a 40% stake in Hektar Asset Management Sdn Bhd, the managers of Hektar REIT.

FCL fully owns FCAM and also has a stake in Frasers Centrepoint Trust (FCT), which purchased a 27% stake in Hektar REIT for RM104.5mil in June 2007. FCL is a unit of Fraser & Neave Ltd.

A foreign REIT analyst said the partnership would bring about tremendous synergy and was a win-win situation for both Hektar REIT and FCT.

“It shows commitment by FCAM to grow FCT via a stake in Hektar REIT and also benefits the latter through the combined expertise of the REIT managers from both trusts,” he said.

The Securities Commission had earlier approved the appointment of two directors from FCAM and a third independent director to the board of Hektar Asset Management.

Asked if there could be more cross-border REIT partnerships in time, the analyst said it would be difficult to predict but certainly other REIT managers would be looking at ways to increase their trust asset size, exposure to foreign investors and market capitalisation via various means including cross-border REIT partnerships and mergers and acquisitions.

He said REIT managers could also work with property developers and third parties with good prime assets in strategic locations to inject matured properties into the trusts.

“Every trust is trying to grow by attracting more investors and the competition for funds is getting tougher,” he said.

By The Star (by Danny Yap)

Acerinox picks Malaysia for first Asian plant

The RM5bil facility is Johor's largest foreign investment

JOHOR BARU: Spanish steel company Acerinox S.A. is investing RM5bil in its new production plant in Tanjung Langsat near Pasir Gudang.

The Johor plant will be the company's first plant in Asia. Its existing plants - all developed with partner Nisshin Steel of Japan - are in Spain, South Africa and the US.

Acerinox's investment is the single largest foreign direct investment (FDI) to be secured by Johor to date.

The integrated plant, on a 140ha site, will be developed in phases. When fully ready in 12 years, it will have the capacity to produce one million tonnes of stainless steel, including 600,000 tonnes of cold-rolled steel sheets, annually.

“This is a major success for Johor to continue to position itself as the premier destination for capital-intensive high-technology industries in Malaysia,” Mentri Besar Datuk Abdul Ghani Othman said in a statement yesterday.

Since 2005, maintained its position as the most popular destination for FDIs in Malaysia, he said. The state attracted RM9.24bil in FDIs last year.

Under phase one, the partners will spend RM1bil to build a 240,000-tonne-per-year production line of which 182,000 tonnes will be cold-rolled steel.

The line, which will come on stream in 2011, will include a cold-rolling mill, a combined annealing and picking facility, a skinpass and a finishing shop.

Ghani said Aceronix and Nisshin Steel picked Johor because of its strategic location and excellent connectivity to potential markets within Asean as well as Australia and India.

Once completed, the Malaysian plant - together with the existing three facilities - will boost the group’s installed capacity to 4.5 million tonnes per year.

By The Star (by Zazali Musa)

MRCB Utama offers resort features in Laman Suria

An artist's impression of the Laman Suria apartments

MRCB Utama Sdn Bhd, a subsidiary of Malaysia Resources Corp Bhd, is trying to lure those working in the city of Kuala Lumpur to move to Kajang, Selangor, with its Balinese-themed Laman Suria apartments in Taman Kajang Utama.

Describing them as “e-resort” apartments, MRCB Utama’s sales and marketing manager Chiang Hon Kit said the 4-acre freehold development has resort features with each unit equipped with an alarm system, an electric clothes dryer and entry via personal access cards.

Comprising a total of 255 units, priced from RM88,000 to RM168,00, buyers have a choice of five designs with built-up sizes of 687 sq ft, 840 sq ft, 850 sq ft, 870 sq ft and 879 sq ft.

Chiang told Property Plus that the response has been very encouraging. “We are banking on Laman Suria’s affordable pricing, easy accessibility and full-condo facilities to attract potential buyers,” he said.

Block A of the 5-storey apartments were launched in the iddle of 2006, comprising 99 units that have been fully taken up, while 50% of Block B’s 87 units were sold within a couple of weeks, said Chiang. The units are currently under construction.

“Block C, with 69 units, is scheduled for launch soon,” he added.

The bulk of purchasers for the earlier units are those working in KL. “They prefer to live on the outskirts of the city, away from the crowds and traffic. Laman Suria is easily accessible by major roads as well as the SILK and North-South Expressways,” said Chiang.

As many as three major universities, shopping complexes and other amenities are in the vicinity of Laman Suria. Besides the quality finishing, Chiang adds that, “a great deal of effort was also put in the landscaping aspects of Laman Suria to give residents a ‘resort’ ambience.” He said among the facilities at the apartments is a swimming pool, a wading pool, a BBQ pit, changing rooms, a multipurpose hall, a convenience store, a launderette, 24-hour security service and a surau.

“Those interested in purchasing a unit in Laman Suria have to pay a down payment of only RM100,” said Chiang.

MRCB Utama’s completed projects include the Residensi Ayu small office home office (SOHO) apartments, also in Kajang.

The SOHO apartments are priced from RM90,000 onwards. The company has also ongoing projects in Negri Sembilan and Penang.

By theSun - Property Plus -(by Tim Leonard)

I&P plans four launches in Bangi

An artist's impression of I&P's Phase 1P3 2-storey cluster home

ISLAND & Peninsular Bhd (I&P) has planned four launches comprising terraced and semi-detached homes this year for its Alam Sari project located in the township of Bangi, Selangor. Having sold out Phase 1P1 of Ilmia during its sales launch in November last year, the developer will be launching Phases 1P2 and 1P3 before the end of this month.

I&P group managing director Datuk Jamaludin Osman told PropertyPlus that most of the buyers of Phase 1P1 were from and within the Bangi locality. “Buyers in Bangi look for landed property with freehold titles. There are purchasers who upgrade from living in apartments to landed homes; there are also some who upgrade from terraced homes to semidees,” he shared.

Phase 1P1 homes were priced between RM248,088 and RM512,760 and offered 90 units of 2-storey terraced homes sized at 22ft by 75ft with built-ups ranging from 2,099 sq ft to 2,271 sq ft. With Phase 1P2 and 1P3, I&P expects to put out 60 units of 2-storey terraced homes and 32 units of 2- storey cluster homes respectively.

Homes in Phase 1P2 are sized at 22ft by 75ft with built-ups from 2,044 sq ft to 2,500 sq ft while Phase 1P3 homes are sized at 33ft by 85ft with builtups between 2,400 sq ft and 2,600 sq ft. The homes are tentatively priced at RM255,000 for Phase 1P2 and RM448,000 for Phase 1P3. According to Jamaludin, these homes are targeted at government servants, businessmen and a multiracial community.

“Phase 1P3 offers cluster-style homes, which are planned in clusters and short rows. The homes are built according to the natural terrain and are functional, with a practical layout suitable for modern-day needs. These homes are also designed to be protected from the sun and rain,” explained Jamaludin.

Located within the heart of Bangi, about 3.5km south of Bandar Baru Bangi, Alam Sari has a gross development value (GDV) of RM1 billion and takes up 432.5 freehold acres. Set within the vicinity of higher learning institutions such as Universiti Kebangsaan Malaysia (UKM), the EPF Training Centre (ESSET) and the Petronas Management Training Centre, the “Neighbourhood of Academia” township will feature academically themed parks and precincts.

Upon completion, the township is expected to have 3,435 units of residential properties including semidees, bungalows, orchard lots and apartments as well as shops, convenience centres and a supermarket or mall complemented by facilities and amenities such as schools, kindergarten, a community hall, police station, parks and gardens.

With an expected population of 17,000 upon full occupation, the township would take between eight and 10 years to complete. “Construction for Phase 1P1 which commenced in November last year, is currently in progress and targeted for completion in the middle of 2009,” said Jamaludin.

I&P’s other developments include Bandar Kinrara, Alam Damai in Cheras, Alam Impian in Shah Alam, and Kota Bayuemas in Klang. In early January, the developer launched Phase 4D5 of shop offices at the RM3.9 billion freehold township, Bandar Kinrara. Out of 30 units, only 20 were opened for sale while the remaining 10 units were retained as assets, said Jamaludin.

Currently about 30% sold, the shop offices come in six designs with standard lots measuring 22ft by 80ft and builtups between 4,960 sq ft and 10,896 sq ft. Pegged between RM1.68 million and RM3.99 million, these units are targeted at business owners, banks, restaurant owners and investors. “The land is currently being cleared, and the project is targeted for completion within three years,” said Jamaludin.

Meanwhile at the residential parcel of Bandar Kinrara, the developer launched Phase 9A9A also known as “Butik Bungalow”. According to Jamaludin, the 14 units of 2-storey bungalows have been 30% sold since it was opened for sale in November last year. Available in five types and five designs, the homes are priced between RM1,137,888 and RM1,459,888.

There are also two bungalow lots for sale within this phase. “These are affordable and modulardesign bungalows with big land areas, which allows room for future expansion.

The homes are targeted at the middle to higher-income group, and for those looking to upgrade,” said Jamaludin. The bungalows come in lot sizes of between 7,200 sq ft and 11,000 sq ft and built-ups of between 2,714 sq ft and 3,030 sq ft. “It is now at the foundation stage and will be completed in approximately two years,” he added.

By theSun (by Yeong Ee-Wah)