Number of applicants for BTO flats on the rise

SINGAPORE: The optimum flat-to-applicant ratio for public housing launches appears to be 1:2, with almost every applicant that is given a chance to pick a flat doing so.

In his latest blog entry titled Who Are The Successful Ones?, posted on Monday, National Development Minister Khaw Boon Wan gave an analysis of how earlier build-to-order (BTO) projects had done.

For the Housing Development Board's (HDB) January BTO launch, where there were two applicants for each of the 1,728 Bukit Batok and Yishun flats on offer, 92% of all the applicants were offered a flat.

Khaw, who took over the housing hot seat following the May general elections, wrote: “For (the) January BTO, practically all first-timers got to select a flat. Even second-timers got an 84% chance to select.”

This was taking into account how “not all who are asked to select (a flat) do so. Many will pass up the chance”, he said.

But the number of unhappy applicants for BTO flats, which form the lion's share of public housing available, increased dramatically over the following two months.

For February, where there were five applicants for every flat, only 34% actually got a chance to pick a flat, after taking into account those who turned down HDB's offer to pick one of the 1,593 Sengkang and Bukit Panjang flats on sale.

March, with a whopping eight applicants for each of the 1,527 Jurong and Sengkang flats put up for sale, had just 19% of the applicants getting a chance to pick a flat.

Those who had turned down a previous offer fared particularly badly in those months, with 13% and 4% in February and March respectively getting offered a flat, Khaw noted.

This, he said, is “why we are ramping up BTO launches to reduce application rate, and hence raise the chances for our applicants”.

Data from the later months, including May's unprecedented launch of 4,000 new flats, as well as last week's launch of 3,600 flats at a significant discount from earlier new flat prices, are not yet available.

By Asian News Network/The Straits Times

Icon City phase two launch by September

KUALA LUMPUR: Mah Sing Group Bhd, the country's fifth largest developer by revenue, will launch by September the second phase of Icon City in Petaling Jaya, Selangor, featuring 570 units of serviced residences worth RM439 million.

Group managing director-cum- group chief executive Tan Sri Leong Hoy Kum is upbeat that the units, worth RM450,000 to RM1.2 million each or RM700 to RM800 per sq ft, will be snapped up during the launch.

The residences come with space sizes of 550 sq ft to 1,779 sq ft.

"The right product in the right location will always sell well. We are bullish on the outlook led by the Economic Transformation Programme," Leong told Business Times.

Leong's confidence is further boosted by the launch of the first phase of of Icon City last weekend, where sales of RM426.5 million were raked in.

Icon City is a RM3.2 billion integrated commercial development located on 7.93ha in SS8, Sungei Way, at the crossroads of the Lebuhraya Damansara-Puchong and the Federal Highway.

The project comprises 30 Jewels (seven- to eight-storey lifestyle shop-offices), Gourmet Street (one- to two-storey retail outlets), i-SoVo (Small office Versatile offices), serviced apartments, and mall, boutique hotel and office towers.

The phase one featured i-SoVo tower 3, where 80 per cent of the units, priced from RM599,000 were sold, as well as 30 Jewels and Gourmet Street.

Some 96 per cent of 30 Jewels, which is worth more than RM10 million each, and 37 per cent of Gourmet Street, comprising 20 retail outlets worth from RM4.5 million, were taken.

Due to overwhelming sales and demand for i-SoVo tower 3, Mah Sing is selling the second block under Phase Two, known as i-SoVo tower 3A, comprising 212 units.

CIMB Research, meanwhile, is maintaining its forecasts and target price of RM3.30 on Mah Sing, based on an unchanged target market price to earnings of 14.5 times, largely because of the impressive take-up for Icon City's phase one.

The RM426.5 million sales achieved by Mah Sing for the phase one make up around 18 per cent to 23 per cent of its full-year sales target of RM2 billion to RM2.5 billion, the research house said.

By Business Times

Icon City racks up RM426.5m sales at launch

KUALA LUMPUR: Mah Sing Group Bhd racked up sales of RM426.5mil during the launch of its Icon City show gallery, at the project site in SS8 Petaling Jaya last weekend.

The sales were from the commercial i-SoVo (small office versatile office) units, 30 Jewels (seven and eight-storey shop offices), and Gourmet Street (one and two-storey retail shops).

Buyers were able to enjoy DIBS (pay 10% and nothing else until completion) 90% financing even for third and fourth properties onwards on the commercial i-SoVo project in Icon City.

Icon City is Mah Sing's flagship integrated commercial project, which enjoys exceptionally high visibility and has a total gross development value (GDV) of about RM3.2bil, to be developed in three to four phases.

The i-SoVo is part of phase one comprising 410 units. The well-designed duplexes come with built-ups of 69.2 sq m and 101.6 sq m, and priced from RM599,000.

By Bernama

UK plans Ampang land sale

Kuala Lumpur: The British government plans to sell the land where its High Commission in Malaysia sits, sources said.

The land located on Jalan Ampang measures some 1.22ha and could fetch as high as RM1,500 per sq ft or RM196 million, real estate agents estimated.

It is understood that the High Commission is looking at relocating to a prestigious office building and has been making enquires within the Golden Triangle in Kuala Lumpur for its new base.

A source said that the decision to move comes as it has more space than it requires. With the advancement in information technology, it now has fewer back office or administration staff.

It is keen to take advantage of modern offices that function effectively.

An official at the High Commission when contacted by Business Times to confirm this said: "The High Commission had in principle decided to relocate the High Commission but no firm decision has been taken on the location".

It is understood that the High Commission will not go ahead with the sale until it finds an alternative location.

The current building includes office, residences, a swimming pool and tennis courts.

The British High Commission Kuala Lumpur's website states that the piece of land was given to the British government in return for giving up Carcosa in 1987.

The British government had until then used Carcosa as its diplomatic residence.

The website noted: "So in 1987, in return for giving up Carcosa, the British government was given a plot of land near the corner of Jalan Tun Razak and Jalan Ampang, then a fair distance from the city centre (but now very convenient to the Twin Towers!), on which it decided to build a new High Commission building".

It would be interesting to see if the neighbours of the British High Commission will buy the land.

They include Boustead Properties, IOI Group, HSC Healthcare and Sri Mersing Hotels Sdn Bhd.

Sri Mersing owns the vacant land at the corner of Jalan Ampang and Jalan Tun Razak.

The land measures 1.22ha and it is understood that Sri Mersing is linked to Malaysia's richest man, Robert Kuok.

HSC, meanwhile, runs the recently-opened HSC Medical Centre, while Boustead Properties has a project named 183 Ampang located behind the High Commission.

The IOI Group too has land in the embassy enclave in Kuala Lumpur.

By Business Times

China housing inflation up 4.2% in June

BEIJING: China's annual housing inflation ticked higher in June for the first time this year, official data showed yesterday, keeping up pressure on the government to rein in the red-hot property sector.

Many economists have warned that a bursting of a property bubble is the biggest risk facing the world's second-largest economy in the medium to long term.

China's average new home prices rose 4.2% in June from a year earlier, an uptick from an annual rise of 4.1% in May, according to Reuters calculations from official data published yesterday.

Month-on-month, however, home prices grew at a slower pace in June, for a sixth month in a row.

Earlier this year, the agency stopped publishing its average national home price index.

The government has unveiled a spate of heavy-handed measures to cool down the property sector, including home-purchase restrictions alongside higher down payments and mortgage rates.

Such tightening efforts have started to bite, but property buying interest remains strong as the real interest rates remain deeply negative, analysts say.

China's cabinet rolled out new steps last Thursday, taking its heavy-handed purchase restrictions to smaller cities while urging local officials nationwide to increase efforts to curb property speculation.

That would make the operating environment even harder for Chinese developers and force them to sacrifice prices to boost sales performance sooner rather than later, analysts said.

“Home prices will fall slightly in the second half,” Sun Jianping and Li Pinke of Guotai Junan Securities, said in a note last week after talking to six major developers including China Vanke and Poly Real Estate.

Cooling home prices is an important part of China's priority to check inflation, which hit a three-year high in June.

The central bank has increased interest rates three times so far this year, with the latest move on July 6. Meanwhile, Chinese banks have also demanded higher down payment and mortgage rates, beyond regulatory requirements, making it harder and dearer for people to buy homes.

New home prices in Beijing rose 2.2% in June from a year earlier, up from a 2.1% annual rise in May, the National Bureau of Statistics reported yesterday.

In Shanghai, prices climbed 2.2% last month, compared with a rise of 1.4% in May. Reuters

Chinese property shares ended down 0.3% at GMT 0312, underperforming a rise of 0.04% in the benchmark Shanghai stock index yesterday morning.

Apart from Beijing and Shanghai, annual housing inflation also accelerated in other big cities, including Shenzhen and Guangzhou.

A cabinet meeting chaired by Premier Wen Jiabao concluded on Thursday that “some cities are still facing pretty high upward pressure on home prices and others are relaxing their tightening efforts.”

Prices have been rising faster so far this year in smaller cities where the purchase restriction is non-existent or lax.

For example, new home prices rose the fastest in Urumqi, capital of the far western region of Xinjiang, by 9.2% in June from a year earlier.

In May, the northeastern city of Dandong witnessed the quickest annual home price rise of 9.7%.

Prices of new homes, including affordable housing, fell in three cities of Hangzhou, Sanya and Nanchong, in June from a year earlier, as compared with three in both May and April.

In month-on-month terms, cities saw housing price declines in June, as compared with nine in both May and April.

By Reuters

More MRT lines likely beyond 2020

KUALA LUMPUR: Apart from the blue and circle lines of the My Rapid Transit system, there is a possibility for other lines, depending on density and economic activity, to be built beyond 2020, said Transport Minister Datuk Seri Kong Cho Ha.

However, Kong stressed that the focus would be to implement the blue line, which covers the 51km Sungai Buloh-Kajang MRT route. This line will have 31 stations.

Speaking after the launching of the Third World Chinese Economic Forum, he said details of the circle line had yet to be finalised and may be announced by the year-end or early 2012.

Kong said the waiting time for KTM Kommuter train services would be reduced from 30 minutes to 10 minutes once the 38 sets of Electric Multiple Units (EMUs) ordered by KTM Bhd were operational by June 2012.

“The first EMU will be delivered in September while the remaining five will be delivered by the year-end. We will receive all by June next year,” he said.

The 38 sets of EMUs cost RM1.89bil, excluding maintenance, repair and overhaul (MRO) expenses. KTM signed an agreement with CSR ZELC in May last year to purchase the EMUs for commuter service in the Klang Valley.

Kong also said the park and ride facilities in various commuter and light rail transit stations in the Klang Valley were now being upgraded, which will see the addition of about 7,000 parking lots.

By The Star

Be discerning, socially responsible when shopping for property

The promotion of eco-principles to developers is something the state authorities need to seriously consider and implement with no more delays.

In the face of spiralling property prices in Penang, where the average wage earner continues to struggle to find units, it may be timely for all property investors in the state to become more discerning "shoppers".

How does a buyer contend with pouring his or her life savings, bank borrowings and more into buying a property, only to find themselves "living dangerously", exposing them and loved ones to danger, while risk having their properties devalued should an environmental disaster occur in the area?

These are some of the scary thoughts which are keeping residents of Taman Desaria at Sungai Ara on Penang island awake each night.

The once green and lush development, which gave its residents - ranging from top industrialists to retired civil servants - fantastic views and fresh air, is slowly turning into a neighbourhood which is often plagued by mudslides, following the clearing of land for a luxurious hill slope development close to them.

The proposed development is said to comprise 51 three-storey semi-detached units and bungalows on the hill slope between two roads in the neighbourhood.

The same development received objections from the residents when it was first proposed in early 2006 and the Penang Island Municipal Council is said to have rejected the proposal not once, but 11 times.

This is because the gradient of the hill slope exceeds 35 degrees in some areas, and because a plot measuring 1.6ha was meant for education and not residential purposes.

The once-rejected project is now said to have been given the green light in December 2009 and the affected residents say they were only notified of the change 11 months later.

The Taman Desaria case is not the first to plague Penang property buyers since many other instances, with sometimes different "twists to the plot", have been highlighted by this paper and other print and online publications and blogs.

As the exercise of finger-pointing has commenced with the blame being placed on various parties ranging from the state authorities, elected representatives and the said developer, it is probably a good time to remind property investors to wisen up and "vote" with their money in future.

Socially responsible investing, also known as sustainable, socially conscious, or ethical investing or shopping, is something we read of taking place in the West when it comes to retail or consumer purchases.

In the same manner that socially responsible investors often favour corporate practices which promote environmental stewardship, consumer protection, human rights and diversity, the same can and should be the yardstick that we use when shopping for big ticket items like homes in this country.

By asserting one's rights as a buyer, property developers and industry professionals will be forced to develop and work sustainably as consumer demand increases.

Apart from merely putting forward arguments that buying sustainable homes will yield cost-savings in electricity and other bills, providing a higher quality of life and health, perhaps the lessened impact on the environment should also be highlighted by property developers to potential investors, when canvassing for sales.

As Penang positions itself to emerge an international city where it wants to serve as a preferred spot for investors and tourists, the promotion of eco-principles to developers is something the state authorities need to seriously consider and implement with no more delays.

Such a move will display political will and sincerity, instead of coming up with schemes to penalise errant developers for offences like demolishing heritage properties, or threatening to haul them to court for other wrongful acts when precious lives are lost or hurt.

Sustainable property investments require extensive research on a property developer and include among others, their track record of meeting promised deadlines, resale value on a property, delivering work which is far from shoddy and being kind to the environment.

The basic lesson which must be learnt by all parties ranging from legislators, corporations and consumers however, is that sustainability is not only about providing for the needs of people today.

These provisions should also be made without compromising the needs of future generations.

By Business Times

TTDI’s future landmarks

New landmark: Kuok standing in front of a model of The Greens condominiums. He says The Greens is on ‘one of the last remaining landbanks you can get in TTDI.’

The Greens luxury condominiums and Menara LGB will add to the TTDI skyline

Within the next three years, the prestigious Taman Tun Dr Ismail (TTDI) neighbourhood in Kuala Lumpur will have new high rise landmarks in the form of The Greens luxury condominiums and Menara LGB.

Both are maiden flagship and freehold projects by Bellworth Developments Sdn Bhd, the property development arm of the LGB Group.

The Greens is a 165-unit residential development housed in two 27-storey blocks while Menara LGB is a 31-storey Grade “A” office tower.

Each development is on separate 1.8-acre sites along Jalan Wan Kadir 3. The gross development value (GDV) of The Greens and Menara LGB is RM310mil and RM390mil respectively.

The Greens

Bellworth Developments Sdn Bhd chief executive officer Kevin Kuok says “The Greens was named for the fact that it offers spectacular views of over 900 acres of lush greenery encompassing Bukit Kiara hills and forest reserves, Bukit Kiara Park, Bukit Kiara Equestrian Club, Kuala Lumpur Golf & Country Club, Kelab Golf Perkhidmatan Awam Malaysia and Royal Selangor Club” all set against the backdrop of the iconic Petronas Twin Towers and KL city skyline.

Designed by BEP Akitek Sdn Bhd, The Greens offers five layout types with 2+1, 3+1 and 4+1 bedroom units, and sizes ranging from 1,442 to 3,823 sq ft.

Block A of The Greens has three units per floor while Block B has five units per floor.

However, Kuok says only 60% of the units will have views of the greenery.

“The remainder, which are units sized 1,680 sq ft and below, will have views of One World Hotel and Bandar Utama. Some units will look at Section 16, Petaling Jaya and Damansara Kim.”

“This is one of the last remaining landbanks you can get in TTDI. That is why we decided on a sustainable luxury residential development targeted at professionals, corporate executives, those seeking mid to larger sized units for multi-generational living as well as current TTDI residents who are looking to upgrade into a secure vertical community,” says Kuok.

He points out that all bedrooms (except the utility room) come with split unit air-conditioning while selected units will have ducted air-conditioning system to the living, dining and dry kitchen.

The dry kitchens will be equipped with full cabinetry and electrical appliances such as cooker hood, hob, microwave and convection ovens. Hot water will be provided in the kitchens and all bathrooms.

Also, all units will be fitted and finished with imported marble in the living and dining areas, and the master bathroom and dry kitchen, while solid timber floorings are installed in all bedrooms and the family area.

The Greens will also be equipped with a security system, connecting audio intercoms between each unit and the guardhouse, with multi-stage flash card access at guard house, car park, main lobby, and lifts as well as CCTV coverage of the perimeter fencing, main entrance, lift lobbies and carparks.

According to Kuok, an auxiliary retail space of about 20,000 sq ft will be set aside for food and beverage outlets at The Greens.

Five levels of car park areas will be built, with more than 500 bays with separate entrances for the residents and the public for enhanced security.

Kuok says units sized from 1,442 to 2,426 sq ft will come with two car park bays while larger units will come with three bays.

Pricing for The Greens will be an average of RM700 per sq ft onwards. It is likely to be launched at the end of the third quarter of this year, and be completed in the fourth quarter of 2014. The Greens will also be compliant with Malaysia's Green Building Index (GBI), according to Kuok.

Menara LGB

The LGB group will occupy about 30% of Menara LGB, which has a gross floor area of 561,570 sq ft and net floor area of 414,119 sq ft.

“The balance will be leased out. We are targeting local and multinational companies who are looking to operate in a Grade A office environment,” says Kuok.

Estimated lease rates are in the region of RM5.50 to RM6 per sq ft.

The tower is designed to comply with the Multimedia Super Corridor (MSC) Cybercentre status, Singapore's Building & Construction Authority (BCA) Green Mark (Gold Accreditation) and Malaysia's GBI.

It is aimed at being an ecological workplace by reducing energy use and water consumption.

Kuok says a Grade A building is defined by its technology and design.

According to him, Menara LGB will be one of the few buildings in the Klang Valley equipped with a chilled water storage tank, housed at the basement level, to cool the building.

Designed by Hijjas Kasturi Associates Sdn Bhd, Menara LGB will feature a distinctive modern contemporary facade wrapped in aluminium and “Low E” laminated glazing.

The building will have infrastructure that supports dual power feed and a multiple telecommunication service environment equipped with high speed bandwidth and CAT6E cables for data communication.

In addition, Menara LGB will also feature an intelligent building management system to control, monitor and optimise services such as lighting, fire protection, air-conditioning, security, closed-circuit television (CCTV) surveillance and alarm system, ventilation, filtration and climate-control ventilation.

Also, over 80% of its site area will be allocated to hard and soft landscaping with open public spaces.

Amenities and facilities will include a gym, bank, bistros and cafes, a food court and about 710 car park bays.

Work on the tower commenced in January 2009, and it is due to be completed by the first quarter of 2013.

Upcoming projects

There are plans by Bellworth to redevelop its 1.05-acre Lancer Square property in London into a sustainable luxury mixed use development comprising retail, office and residential components.

Kuok points out that Lancer Square is located at one of the United Kingdom's most affluent and prestigious residential addresess. Lancer Square, which benefits from being just north of Kensington High Street, is bordered to the north by Notting Hill, to the east by Knightsbridge, to the south by Chelsea and also the open spaces of Hyde Park and Kensington Palace Gardens, otherwise known as “Millionaires' Row”.

Currently, notable tenants in Lancer Square include Warner Music UK, Jimmy Choo, Eden McCullum, Starbucks and Costa Coffee.

“Lancer Square is currently undergoing planning approvals to double its existing net usable area from 80,000 sq ft to 160,000 sq ft,” says Kuok.

The property is expected to generate a GDV of 300mil or RM1.5bil over the next three years. Kuok says the group expects to launch the re-development sometime after the 2012 Olympic Games in London.

Meanwhile, Bellworth Developments also has plans for a 400-acre mixed township in the Hang Tuah Jaya district in Malacca. “We will be building about 1,800 units of landed residential and commercial properties. There are no plans for high-rise projects here at the moment.”

The planned township is located close to three golf courses, namely the Tiara, Air Keroh and Orna Golf & Country Clubs. Residential units will consist of super-link, semi-detached and bungalow houses in more than 10 gated and guarded precincts. Planned amenities include a central park, a residents' clubhouse, commercial centre, medical centre, education institution and a hotel.

According to Kuok, the first phase of the township is due to be launched in the third quarter of 2012. The township, which has a GDV of RM1bil, has a 10-year development programme.

Bellworth Developments, formed in 2007, is the property development arm of the LGB group, which specialises in the water, environment and infrastructure sector, and has businesses across South-East Asia.

The LGB Group has also operations in highway management, construction and engineering, as well as steel and industrial products. Taliworks Corp Bhd and Grand Saga Sdn Bhd, the toll concessionaire for the Cheras-Kajang Highway, are part of the LGB Group.

“We are expanding and actively looking to increase our landbank throughout the Klang Valley,” says Kuok.

Meanwhile, CB Richard Ellis (Malaysia) Sdn Bhd executive director Paul Khong says the residential market in TTDI has been performing very well especially in the high end segment for the last 18 to 24 months.

“The capital values have been on an upward trend and we have seen increases of 15 to 20% per annum and in some cases more. With the Mass Rapid Transit (MRT) stopping by TTDI in the future, we expect to see further premiums especially when actual physical works for the MRT starts on site.”

Khong points out that The Greens is a new generation of condominiums embracing the green concept.

He says that at an estimated average price of RM700 per sq ft onwards, it comes closely in line with market rates for such offerings.

“We expect The Greens to do well, looking at the limited number of units to be offered.”

Khong notes that in order to comply with the GBI Gold status, this would cost a developer at least 15% to 20% more in terms of construction cost (compared with a “normal” building) and therefore, translates to higher pricing.

“With a prominent main road frontage and the new MRT nearby, Menara LGB should fall in place really well. We expect the rental price to exceed RM5 per sq ft upon its completion.”

By The Star

More green buildings needed

Green city: To become a world class city, Kuala Lumpur must also be sustainable. One way of doing that is by building and designing buildings with minimal environmental degradation, in other words, building green buildings.

Building by-laws should compel developers to provide green features in their projects

While green solutions have long been adapted by property industry practitioners in the United States, Europe and Australia, it is still at an early stage in Malaysia.

According to the Eastern Regional Organisation for Planning and Human Settlement (EAROPH) Malaysia honorary secretary, S Thirilogachandran, although there are lots of initiatives and programmes to promote greater green awareness and practices locally, there is still a need for more practical solutions to be adapted among the property development fraternity.

Building by-laws or other building legislation need to be made mandatory for developers to provide green features in their developments.

He says the Government should also come out with more incentives and policies to encourage more developers to adopt green solutions.

“The Government through the Energy, Green Technology and Water Ministry is also looking into promoting green practices by providing guidelines, framework and the policies.

“Initiatives such as offering tax benefit for green solutions in buildings are also in place. Soon, certain green requirements to be incorporated in buildings will be made mandatory by law. But there is still a lot to be done,” Thirilogachandran explains.

He says the number of green buildings and green neighbourhoods in the country is still very small, and hopefully in the next five years more green buildings and townships (that are under planning) will be completed by then.

Thirilogachandran says following the launch of the Green Building Index (GBI) in 2009 to rate green buildings, there is now greater awareness on green solutions among developers in the country and more developers are taking initiatives to adapt green practices and solutions in their developments.

To date GBI tools for buildings, townships and industrial projects have been launched, and the next to be launched will be for residential projects.

Some local authorities have made certain mandatory green requirements for approval of building plans and some have taken the initiative to green the cities under their purview. CB Richard Ellis (Malaysia) vice-president of research, Nabeel Hussain says industry practitioners have a responsibility to adopt sustainable building practices and related technologies in order to play a proactive role in climate change mitigation.

“Malaysia's introduction of its own green rating system, the Green Building Index (GBI) in 2009, and the Government's support for the drive towards green buildings and technology should be a good start,” he says.

Thirilogachandran says in Asia, Japan has taken big initiatives in going green and to reduce its carbon foot print.

The Japanese have also taken initiatives in greening their existing buildings in a big way.

More countries are adapting green solutions in property development, including Singapore's Green Mark Rating and Australia's Green Star rating that has been in existence for more than a decade now.

Meanwhile, the larger economies like China and India, and other emerging economies like Vietnam and the Middle East are also catching up and have taken initiatives to incorporate green solutions in developments.

To raise greater awareness and promote green solutions in the local real estate and housing development industry, a conference on “Green Solutions for Property Development 2011 Greener Cities” will be held on July 28.

It is jointly organised by Rehda Institute and EAROPH Malaysia Chapter.

Thirilogachandran, who is the chairman of the organizing committee, says the conference will showcase latest developments on green solutions in different areas related to property development.

The aim of the conference is to demonstrate that green is a feasible alternative in today's highly competitive market environment through tested, practical and profitable methods.

He says the theme “Greener Cities” was chosen this year to address the green solutions for cities, townships and in the context of neighbourhoods rather than just addressing the solutions for a building or units within a building or a particular site.

It will cover aspects of planning and design, lifestyle, government policies and initiative, telecommunication, green townships tools, low carbon city framework, facilities and assets management and other green solutions for greener cities.

By The Star

Meeting buyers’ increasing needs and wants

The bachelor or a newly-married couple just starting out in life are more likely to opt for an apartment with additional facilities.

BUYING a home is a big investment for the vast majority of us. So most of us agonise over it for a long time before making the investment.

We want the best for the money we pay, especially when we have to part with a lot of it. We expect to receive value for money. In fact, some of us expect to receive more than what we pay for, but that's only human.

And our expectations have risen steadily over the years, mainly influenced by prevailing conditions, changing trends and, in no small way, what we see and experience elsewhere around the world.

There was a time when providing a roof over our heads was the primary and perhaps only consideration when we purchased a home. What came inside was secondary.

Drop in at one of those houses built in the 1970s or 1980s and you will probably find only one bathroom, to be shared by the entire family and their guests. Metal grills for the doors, windows and a fence around the house were all the security you could expect to get.

Life had other considerations then, and security was not such a big issue. Today, a developer sets himself apart by the extras he can offer home purchasers as much as the location, price and quality of his project.

So what do buyers expect of developers today? For the most part, security has gained the highest consideration. Everybody wants to feel safe. In response to this need, gated communities with provision for tight security have sprung up.

The guard post has also become part and parcel of any high-rise development today. In high-rise projects, there is the addition of a secured lift access card a facility that has become basic.

Once the project has been completed and the keys handed over to the purchasers, the developer is expected to organise the security detail and maintenance services until the Joint Management Board (JMB) is formed, which takes place within a year. The responsibility is then handed over to the JMB.

Beyond that, there are other considerations. Lifestyle facilities such as a clubhouse, swimming pool or gymnasium are now a must. The more affluent the purchasers, the higher their demands.

Apart from the swimming pool and gymnasium, purchasers now also expect a function room, a yoga or pilates room, and a children's playroom.

Wireless Internet access, a barbecue pit, jogging tracks, laundry service and a convenience store are important. Jacuzzi, tennis court and sauna are plus points.

A purchaser's choice of property to buy is also influenced by his status in life. The bachelor or a newly-married couple just starting out in life are more likely to opt for an apartment with additional facilities such as a rooftop lounge.

A couple with young children is more likely to opt for landed property that comes with some garden space for play. High-rise projects with large open recreational spaces built in also appeal to such buyers.

Buyers who have aged parents living with them will opt for more “user-friendly” homes where there are not too many levels to climb up or down, and where at least one room is at the same level as the kitchen and living area for the old folks' easy access.

The size of a property one buys is, of course, influenced as much by the price as the size of his family.

Logically, a large family, especially with three generations living together, will need more room, while a young couple will opt for a smaller unit that is more affordable. Room must also be made available for the domestic maid who is now a must for every Malaysian family.

Having said that, one can safely assume that an apartment with about 2,000 sq ft and three-plus-one bedrooms is about right for the average Malaysian family. The “plus-one” bedroom is presumably for the domestic help.

The buyer of a landed property would most likely expect four or five bedrooms. Whether apartment or landed property, buyers now expect a bathroom attached to each and every bedroom.

Now that we have the basic structure of four walls and a roof, with the requisite number of rooms and the facilities taken care of, what else do buyers want?

In most families today, both the husband and wife work. So there is little time left to worry about getting the little things for a new home.

In light of that, developers are beginning to throw in at least the basic appliances and built-ins to help ease the buyer and his family into their new home.

Many developers now provide as basic items such as built-in wardrobe and kitchen cabinets. Also being given as part of a package now are air-conditioners and water heaters.

Going green is also becoming quite trendy, with a number of buyers inquiring about environment-friendly designs. Some developers have taken the initiative to design homes that, for instance, let in more natural light so that there is less of a need to switch on the lights.

High ceiling and large windows that make the interior more airy also help to reduce the use of the fan or air-conditioning, all of which also help to cut energy costs, which is a bonus for purchasers.

As expectations increase, developers have to become more creative and innovative. At the same time, such extras do come at a price and in the end, some of it has to be passed on to the buyer.

Having said all that, there are some who do not even bother to look at the floor plan or want to know what facilities are available before placing an order for several units at the same time. These are the hardcore property investors and theirs is another story.

Teh Lip Kim is the MD of SDB Properties Sdn Bhd, a lifestyle property company. Bouquets and brickbats are welcome at md@sdb.com.my.

By The Star (by TEH LIP KIM)

CLSA downgrades property sector rating

PETALING JAYA: CLSA Asia-Pacific Markets has downgraded the property sector rating to neutral from overweight in view of the mixed signals from transaction volumes and the growth rate of residential loan approval.

Basically the CLSA has turned cautious on the outlook of the property market based on some negative and positive signals that have fogged the market direction going forward.

Based on Kuala Lumpur Property Index (KLPRP) against year-on-year (y-o-y) growth of residential loan approval for each quarter, CLSA saw a positive correlation for the period 2003 till second quarter of 2009.

“But, such relationship seemed to have broken down since then, as the continued surge of residential loan approval till the fourth quarter of 2009 was not reflected in the performance of the KLPRP index.

“KLPRP index remained subdued till second quarter of last year, before rising at 40% to the current level,” said CLSA in a property sector report yesterday.

CLSA believed this could be a delayed reaction to the surge of loan approval as market might be sceptical with the economy recovery from the unprecedented global economic crisis.

“If this was the case, it could possibly mean that the market could potentially react to the declining growth rate of the loan approval, which is signalling to us of potential downward trajectory of KLPRP index,” it said.

On the bright side, CLSA highlighted that the Malaysian property index had outperformed the KLCI index in 2010 and first half of this year by 11.3% and 3.8% respectively.

“This is supported by consistent y-o-y house price growth of 6% to 8% in each quarter since since fourth quarter of 2009, for a consecutive of six quarters.

“It is important to note that we have not witnessed such persistent strong growth in price in the last 10 years, and such price trend did explain the outperformance of the KLPRP index,” it said.

Although still in proposal stage, CLSA also touched on the potential change in government policy which was studying the possibility of computing household loans based on net income rather than gross income.

“But, the impact of the proposed change is more significant for the higher income group due to higher marginal tax rate.

“For example, a person who can previously afford to buy a residential property that is worth RM1mil, would only be able to afford a property that is 20% lower value at RM800,000 with the proposed change,” it said.

Nevertheless, CLSA said it was important to note that only 2% of the total transaction volumes carried out in 2010 was related to property value higher than RM1mil.

“The bulk of the transactions still related to property valued at less than RM200,000, which accounted for 70% of total transactions in 2010,” it said.

By The Star

Naza TTDI plans 18 new launches by end of year

KUALA LUMPUR: Naza TTDI Sdn Bhd, the property development arm of the Naza Group, plans to launch 18 new developments including new phases worth over RM1 billion by end of the year.

Group managing director SM Faliq SM Nasimuddin said new property launches will include three high-end residential projects.

"We are looking to launch 18 new projects this year, which include our three trophy high-rise luxury residential towers in Kuala Lumpur," he said at the signing of a service agreement with Telekom Malaysia Bhd (TM) here yesterday.

Naza TTDI will launch one block with more than 50 floors at the company's RM4 billion Platinum Park development in Kuala Lumpur by third quarter.

The second residential project is on a 0.8ha site located near the embassies, such as Singapore High Commission, on Jalan Tun Razak.

The third residential project comprising 30 floors will be developed on a 0.4ha site in Taman Tun Dr Ismail.

Among the new phases to be launched is TTDI Alam Impian in Shah Alam.

Faliq said the company has 323ha of undeveloped landbank for its future developments - about 202ha are in the northern region and 121ha in the Klang Valley.

It was reported earlier that Naza TTDI wanted to achieve a turnover of RM1 billion this year, from RM635 million in 2010.

Meanwhile, TM vice-president of Selangor Datuk Zaini Maatan said UniFi's subscriber base stands at about 110,000 and the service is available in 68 exchange areas.

The agreement will see TM providing its high-speed broadband services to TTDI Alam Impian by 2016, dubbed the first UniFi township project in the central region.

By Business Times

Danajamin takes on more complex deals

Kuala Lumpur: Danajamin Nasional Bhd expects to guarantee another RM1.6 billion worth of facilities this year after backing some RM1.4 billion in the first half of the year.

"We'll be seeing a more diverse set of industries being guaranteed from now on as well as more complex deals being approved," Danajamin chief executive officer Ahmad Zulqarnain Onn told reporters from the New Straits Times Press (NSTP) group yesterday.

Danajamin guarantees enhance the credit ratings of non-"AAA" rated issuers, enabling them to access longer term capital via the bond market at more attractive rates.

Ahmad Zulqarnain led an eight-member delegation of Danajamin top management on an official visit to Balai Berita, NSTP's headquarters, in Bangsar, Kuala Lumpur, yesterday.

He explained that last year saw guarantees approved for mostly property companies because those deals were easier to process compared to, for example, independent power producers, which are more complex.

Danajamin aims to guarantee some RM3 billion worth of facilities in a year.

The institution has a underwriting capacity of up to RM15 billion across all sectors. To date, it has guaranteed facilities worth RM2.305 billion.

Ahmad Zulqarnain said while the institution is focused on its mandate to help more corporations raise funds from the bond market, it is also exploring the possibility of securitising loans from small and medium enterprises.

"We started looking at it after receiving enquiries from some banks, but it is still at the exploratory stage. It's more of a long term plan," he said.

Ahmad Zulqarnain added that securitisation should be on an existing portfolio with a track record. This way, the exercise would add to lending capacity.

"We need to understand the issues before we can proceed," he said.

Securitisation of loans has been a controversial issue following the subprime crisis which crippled the US economy in 2007.

By Business Times

AM-EL's high-end St John Woods launched

KUALA LUMPUR: Property group AM-EL Group has launched a boutique luxury condominium located along Persiaran Raja Chulan, with a gross development value (GDV) of RM180 million.

The St John Woods Residence condominium features 48 luxury homes housed in 33-storey towers that offers one unit per floor. Each unit will have three parking bays.

The company is banking on its large unit design to attract buyers since surrounding condominiums that are available and undergoing construction offer smaller unit apartment or mix development projects.

"Our strategy is to provide large luxury units that offer exclusivity and privacy. The lower density and limited number of units give the development its unique competitive edge," said project director Simon Low at the launch yesterday.

"Not many developers are going into this market," he added.

He projected about 70 per cent buyers will be coming from local customers. The homes range from 3,660 sq ft to 8,848 sq ft and are priced at about RM900 per sq ft or between RM3.3 million and RM4.4 million per unit.

St John Woods Residence which sits on a 0.6 acre leasehold land is expected to be completed by June 2014. The group is confident of selling all its units when it holds a preview for the development this weekend.

The total GDV for AM-EL Group's current projects is about RM400 million. It has two other ongoing residential projects in Penang and Taiping, Perak.

Asked if the group would consider mergers and acquisitions or to float its shares in the local bourse to further expand, Simon said AM-EL Group would like remain a boutique developer.

"We would like to keep the company niche and family based," he added.

His sister Catherine Low is the property sales and marketing director.

Established in 1982, the company was founded by their father, Michael K.C. Low. To date, AM-EL Group has developed and sold 10 residential and three commercial projects like the Dataran Merdeka, Dataran Pahlawan, Crystal Prestige and Merc Residence.

By Business Times

EPF owns Quill 7?

Kuala Lumpur: The Employees Provident Fund (EPF) may be the new owners of Quill 7 located in KL Sentral, sources say.

Quill 7 is a 29-storey office building with a six-storey podium. The building has a total net lettable area of 356,759 sq ft.

Industry estimates for the building are in the tune of RM1,200 per sq ft or some RM428 million based on recent transaction value in the same area.

The building, which is virtually full, with the exception of the penthouse, collects an average rental rate of RM7 per sq ft including service charge. Its tenants include Axiata and Nokia Siemens.

It is understood that EPF had extended a loan to a special purpose vehicle to construct the building and under the terms, EPF has an option to buy it.

Quill 7, previously called Tower D, is located on Lot J at KL Sentral, and developed by Quill Realty Sdn Bhd.

It was reported during the topping-up ceremony that Quill Realty is 60 per cent owned by Quill Group and 40 per cent by Malaysia Commercial Development Fund (MCDF), which is a closed-end private fund sponsored by CapitaLand Group.

A source told Business Times that tenants at the building had already signed a novated tenancy agreement which revealed the name of a new company understood to be linked to the EPF.

Messages left at Quill group of companies to confirm this were not returned.

Zerin Properties Group chief executive officer Previndran Singhe, when contacted to comment on the building, said: "KL Sentral offices have proven due to connectivity and with its MSC status, its ability to attract tenants worldwide.

"This, plus limited initial supply, has pushed rental and capital values upwards. Moving forward, with the impending new supply coming into KL Sentral, we will see slightly lower occupancy rates with rentals remaining at present levels."

By Business Times

Aberdeen aims up to US$400mil for new fund

A view of the waterfront facing Singapore’s financial district. Aberdeen’s latest property fund will be offered to investors seeking to gain exposure to real estate in the Asia-Pacific. — AP

SINGAPORE: Aberdeen Asset Management Asia has launched a property fund of funds aimed at institutional investors seeking to gain exposure to real estate in the Asia-Pacific region that could raise up to US$400mil.

Aberdeen, best known in Asia for its equity funds, has been building up its offerings in other asset classes. It launched two bond funds that will invest in Asian and emerging market debt in April, and set up a US$400mil joint venture with GE Capital Real Estate in May that will invest in residential property in Tokyo.

“Having built a substantial specialist equity and now a growing fixed-income business over the past 20 years, property stands as the next asset class that is ripe for expansion,” Aberdeen Asia managing director Hugh Young said in a statement.

For its latest property fund of funds, Aberdeen is targeting 13%-17% annual returns with gearing of 50%-60%. Aberdeen's existing Asian property funds last year returned 13.3% to 25.7%, it said. Aberdeen expects to raise US$300-US$400mil.

Aberdeen's head of property for Asia Pacific Puay Ju Kang said the UK fund manager expected to allocate most of the money to private equity fund managers that concentrated on single countries or a specific sector. “We tend to prefer managers who are very focused with a very specific skill set,” said Puay.

She said Aberdeen, which manages or advises on about US$1bil in Asian real estate investments, had to date allocated funds to managers that invest in Japan, Singapore, China, India and Australia.

Besides offices, malls and residences, Aberdeen has also put money in a fund that has invested in Japanese nursing homes.

By Reuters

Prime land boost for Nadayu Properties

PETALING JAYA: Nadayu Properties Bhd (formerly Mutiara Goodyear Development Bhd) has formalised its acquisition of a 3.56 acre plot of land along Jalan Sultan Ismail from UDA Holdings Bhd for RM215.5mil.

The company told Bursa Malaysia yesterday that based on UDA's financial year ended Dec 31, 2010, the audited net book value of the land was RM31.71mil, adding that there are plans to build a 30-storey service apartment building, an eight storey podium car park and a three-storey retail shopping complex.

Nadayu said the acquisition was part of the company's expansion strategy to grow its land banks for development purposes in prime locations across the Klang Valley.

“The proposed acquisition provides an opportunity for the group to acquire a freehold vacant land ready for development that is located at a prime commercial area of Jalan Sultan Ismail, which is within the centre of Kuala Lumpur city.”

Nadayu said the purchase price for the land was a discount of RM10.50mil or about 95% to the market value of RM226mil based on the valuation by CH Williams Talhar & Wong Sdn Bhd on June 15.

The acquisition will be satisfied entirely in cash, and financed via internally generated funds and bank borrowings, it said.

By The Star

Asian REITs in the lead

KUALA LUMPUR: Asian Real Estate Investment Trusts (REITs) have outperformed global REITS by three times in the past five years. As for Malaysian REITS, they provided an average return of 7%-8%, higher than the average 6.3% returns from Asia-Pacific property trusts, said AmInvestment Bank's director of retail funds (fund management) Ng Chze How.

“Malaysia indices give out 3.5% in dividends,'' Ng said, adding that each business cycle averaged between seven and eight years, and that Malaysia was in the third year of recovery.

Axis REIT Managers Bhd chief executive officer Stewart LaBrooy said that property values in Malaysia were relatively low compared with its regional peers.

“We're seeing a lot of foreign interest in our REITs recently. This is mainly due to a fear of inflation and the huge amounts of liquidity out there. In Malaysia, our problem is size and liquidity. Size is a huge consideration for foreign funds. It would be good to see more REITs in our market. We are seeing people moving into physical assets to protect their wealth,” said Labrooy.

He added that it was an Asian thing for people to use property as a measure of wealth. Most Malaysians love to buy properties for their children.

“More importantly, its a great way to fight inflation,” said Labrooy.

He said that to date, there were some RM280bil in fixed deposits (FD) in Malaysia while there were some RM80bil in savings account. This huge amount of money sitting idle was being eaten up by inflation.

“Let's say you have RM1mil in fixed deposits. This will yield you RM27,000 per year. With inflation going at 3.5%, your RM1mil will be worth RM965,000. So theoretically, by leaving your money in the FD, you have a net loss of RM8,000,” said Labrooy.

“Whereas, putting that RM1mil in a REIT stock will yield about RM80,000 a year (RM72,000 after tax). With inflation at 3.5%, your portfolio could be worth RM1.035mil upon revaluation. Thus, the total gain is effectively RM72,000 plus RM35,000, which is RM107,000,” he said.

Axis presently has 27 properties which include commercial and industrial properties, with a value of some RM1.35bil. These properties are located in Penang, Kuala Lumpur and Johor. Every year, Axis targets to buy five to six properties in the industrial segment.

Labrooy said industrial properties had better yields, averaging between 8% to 10%.

By The Star

MoF extends Kamarul’s service

PETALING JAYA: The Finance Ministry (MoF) has extended the service contract of Datuk Kamarul Rashdan Salleh as managing director of Syarikat Perumahan Negara Bhd (SPNB) for another two years effective July 1. SPNB is a wholly owned unit of Minister of Finance Inc.


Datuk Kamarul Rashdan Salleh

Kamarul was appointed to the company's board of directors as managing director on July 1, 2009.

According to Kamarul, his target is for SPNB to achieve a total development value of RM2.8bil by 2016 by ensuring all the affordable housing units that the company plans to build are completed on schedule.

By 2013, SPNB would have built 36,095 affordable houses, of which 16,423 have been sold.

Kamarul obtained his PhD in construction econometrics from University of Salford UK, Mphil Facilities Management from University of Strathclyde UK, BSc (Hons) in Quantity Surveying from Glasgow Caledonian University UK and Diploma in Quantity Surveying from Institut Teknologi MARA.

By The Star

Ivory lands Bayan Mutiara

It is learnt that Ivory Properties had submitted the higher bid to develop an initial 24.8ha at Bayan Mutiara on Penang Island.

George Town: Ivory Properties Group Bhd is believed to have won the right to develop over 40ha of land at Bayan Mutiara on Penang Island.

Business Times has learnt that the decision to award the tender to Ivory was made during Penang Development Corporation's board meeting which ended late yesterday evening.

Ivory and SP Setia Bhd were in the race to develop the landbank, which was put out by the Penang state government via a request for proposal (RFP), for which the reserve price was reportedly set at RM200 per sq ft.

It is learnt that Ivory had submitted the higher bid to develop an initial 24.8ha, which is located south of the Penang Bridge. The cost of developing the land surpasses the RM1 billion mark.

The RFP comes with the potential to develop an additional 14ha, by way of a future reclamation after the development of the initial 24.8ha land.

The Bayan Mutiara tender is part of the state government's efforts to unlock the value of the land it owns in selected areas.

Ivory's success leaves SP Setia in the lurch, as currently, it is the only developer without any development projects along Penang's southern corridor where its rivals are present.

The rivals include Mah Sing Group Bhd, which is planning a mixed-development property project in Batu Maung. Ivory Properties is present via "The View Twin Towers" development in Batu Uban, while IJM Land Bhd had already embarked on its landmark waterfront development of "The Light", close to the Penang Bridge.

In January this year, the Penang state government announced that SP Setia - via subsidiary Eco Meridean Sdn Bhd - had won a RM300 million project to build and operate the Penang International Convention and Exhibition Centre in Relau on the island.

The project was reportedly meant to create a "Penang People's Park" that includes the country's first subterranean Penang International Convention and Exhibition Centre , a 2.8ha public park on the rooftop, a refurbished and upgraded Penang International Sports Arena, a refurbished and upgraded aquatic centre as well as a four-star hotel with retail outlets and a spacious parking lot.

By Business Times