The lure of Melbourne city

An aerial view of Melbourne City at sunset, taken from the Observation Deck at the Rialto Towers on Collins St. Houses and townhouses in Melbourne have shown an average property price appreciation of about of 10% per annum in the last 10 years, with some prime areas performing at close to 15%.

RESIDENTIAL properties in Melbourne, Australia can be an attractive option for Malaysian property investors, despite the high exchange rate of the Australian dollar vis-a-vis the ringgit (A$1 equals RM3.20) and restrictions on foreign buyers, property consultants concur.

The regulatory controls Down Under mean that foreigners are restricted to buying only new properties and not those in the secondary market.

Khong: ‘Some cities may experience higher growth but are highly volatile as they depend hea vily on mining.’

Property consultancy CB Richard Ellis (Malaysia) executive director Paul Khong points out that last August, Melbourne was rated as the best city in the world to live in, edging Vancouver, in a survey by global research and analysis resource Economist Intelligence Unit.

The survey of 140 cities is based on factors such as government stablility, crime rate, quality of infrastructure, access to quality health care, cultural events, education as well as employment rates.

“It is also the second largest city in Australia and its economy is boosted by education. Some cities may experience higher growth rates but they are highly volatile as they depend heavily on mining activities,” points out Khong.

Chen: ‘Many new developments in locations previously deemed expensive, would be available.’

Meanwhile, Jalin Realty International Pte Ltd chief executive officer Ian Chen says statistical data shows that Melbourne has seen substantial growth in median property prices in the past five to six years, compared with other regions.

According to Chen, the best advantage about buying in Melbourne, Victoria would be stamp duty savings, which is generally not available in other cities.

“The investor who buys off the plan (pre-construction) would only be required to pay for stamp duty based on the current land value, whereas in another Australian city, the same investor would be subjected to paying stamp duty based on the full purchase price (land and building cost combined), regardless of how early he purchases the property,” Chen shares with StarBizWeek in an email interview.

Another unique advantage of buying Melbourne properties would be the ability to purchase with the addition of a “and/or nominee” in the contract of sale, which is not available in other cities.

This allows the investor to nominate a relative or friend to carry out the purchase.

“However, people should not use this as a strategy to buy and flip' properties, but rather as an exit strategy,” cautions Chen.

Chen also points out that Australia practises the build-then-sell concept where only 10% of the purchase price is required upon purchase, with the balance payable only upon completion of the property.

“Australian developers are unable to utilise the initial 10% as it is paid to their solicitors trust account backed by the government.”

Chen says that in terms of finance, foreigners can be eligible for up to 80% of the purchase price.

However, Khong advises investors to weigh their investment strategies, objective for property purchase, and also plan their timing and exit.

“They can also consider London, England. The British pound is about RM4.75 against the ringgit, and there are many good deals to consider, given the present state of the property market over there,” says Khong.

According to Khong, in terms of property price appreciation, houses and townhouses in Melbourne have shown an average growth of about of 10% per annum in the last 10 years, with some prime areas performing at close to 15%.

Chen points out that landed properties in Melbourne had seen capital appreciation of 8% to 9% consistently for a four to five-year period before 2011.

“Melbourne property prices posted a drop in 2011 (attributed to cautious consumer sentiment due to global economic uncertainty). This year, many new quality developments in good locations that were previously deemed expensive, would be more easily available to investors.”

Concerning rental returns for a landed unit in Melbourne city, Khong says Melbourne provides an average yield of 4% to 5% per annum, with the actual vacancy rate at less than 3% currently.

Chen concurs, and says with high occupancy rates of up to 98% in inner cities, investors need not worry about renting out their properties.

“Rent reviews are generally after six months or one year (depending on length of tenancy).”

Meanwhile, Henry Butcher Marketing's international projects director Jazmine Goh says foreign investors should look at Australian properties as a mid-to-long term prospect.

“Just like other countries, buying a good property in Australian cities such as Melbourne is about location public amenities and infrastructure, good surrounding tenant catchment and if they are receiving any positive transition from regeneration,” she says.

Location is key

According to AUS Property Corp co-founder Steve Galanos, investors may want to focus on property developments in the western and northern corridors of Melbourne, where he says growth is a lot faster and prices are cheaper comparatively.

“Traditionally, the east and south east corridors of Melbourne have been more popular areas as they are more developed.”

Khong concurs, and points out that prices for new-release apartments in the north and western suburbs are now priced between AUD$7,000 (RM22,362) and AUD$8,500 (RM27,150) per sq metre while similar units in the south and east as well as Melbourne's central business district (CBD) are between AUD$8,500 (RM27,150) and AUD$11,500 (RM36,733) per sq metre.

“It is so much more expensive in the south and east because these developed suburbs offer more in terms of amenities, and public transportation to the CBD. There is also more affluent demographics for buyers and investors to consider.”

Khong explains that in Melbourne, the areas to the east (along the bay's shore and upstream of the Yarra River) were the first to be developed. “There was a major land boom and bust in the 1880's that resulted in Melbourne's south east development. Meanwhile, west of the CBD is swampy and hindered early development.”

Public transport is more developed in the east.

Chen also says there are still huge land parcels in the western suburbs and “this has kept prices attractive to young families. It is still undergoing infrastructural changes with government backing and there is an opportunity to enjoy capital growth over these few years without paying a premium price.”

However, Chen advises investors to look into the long term trend of a specific area before making a decision.

“There are matured suburbs in the east that show 8% to 11% capital growth yearly which trump capital growth in other corridors,” he points out.

Chen says two-and-three bedroom homes in the east or south east would typically be priced from AUD$550,000 (RM1.76mil) onwards.

Current developments

Last November, AUS Property Corp launched a landed residential project in The Lakes at Greenvale, Melbourne.

The development, which will consist of 21 units of 2-storey semi-detached houses, was a value proposition, according to Galanos.

A typical 1,650 sq ft unit is priced in the region of AUD$360,000 (RM1.15mil).

Each unit comes with three-bedrooms, two bathrooms, a powder room and a garage.

The Greenvale suburb is located 23km north of Melbourne's central business district (CBD). The Lakes at Greenvale come with a seven-year builder's warranty.

“We provide heating, cooling, carpets, tiles, window screens, security doors, remote-controlled garage, landscaping and even the clothsline to dry clothing.”

Galanos says in the last 22 months, AUS Property Corp's developments have attracted an increasing number of foreign buyers.

A house at The Lakes at Greenvale, Melbourne is priced in the region of RM1.15mil.

Malaysians, Singaporeans and investors from Hong Kong bought 10 out of 27 houses in the company's Clearwater Rise development in Truganina, 22km west of Melbourne's CBD.

Units were priced in the region of AUD$335,000 (RM1.07mil).

In the first quarter of 2012, AUS Property Corp is also due to launch single and 2-storey houses in the suburb of Point Cook, which is about 20 minutes drive from Melbourne's CBD.

“They will be 4 to 5-bedroom houses, and should not be much more expensive than our current developments.”

Another release of new houses is scheduled for mid-2012 at Toolern Waters, Melbourne.

Meanwhile, Jalin Realty is marketing the second release of a townhouse development in Northcote (6km to Melbourne's CBD).

Chen says the first release was a huge success with investors and owner-occupiers in Australia and Malaysia.

“The second release is selling fast, especially with prices ranging from AUD437,000 (RM1.4mil) to AUD739,000 (RM2.36mil).”

In mid-February, CB Richard Ellis introduced the The William @ William Street condominium project in Melbourne, which consists of 470 units with sizes ranging from 550 sq ft for a one-bedroom unit to 900 sq ft for a three-bedroom unit.

The William @ William Street is the maiden Australian residential project of Hengyi Australia Pty Ltd, a subsidiary of Shandong HYI (Group) Co Ltd.

Henry Butcher Marketing is also promoting two developments in Melbourne, namely Lakeside Central and Coburg Hill. Lakeside Central is a townhouse development located within the award-winning Sanctuary Lakes golf resort.

Goh says the Sanctuary Lakes development has amenities such as schools and a shopping mall, and is a five-minute drive to the Point Cook town centre and about 20 minutes via train or a 30-minute drive to Melbourne city. Land sizes are from 2,336 sq ft to 3,294 sq ft, with a choice of 3 or 4-bedroom townhouses.

Land prices start from AUD$255,000 (RM814,431) excluding the townhouse which costs about AUD$280,000 (RM894,137).

Meanwhile, Coburg Hill is a landed development located 9km north of Melbourne's CBD.

Goh points out that Coburg Hill neighbours the Brunswick suburb, which has seen significant growth over the last few years through urban regeneration schemes.

“Coburg Hill is designated as the principle activity centre in Melbourne. It has a lot of potential and is ranked as one of the top investment hotspots in Melbourne. Properties in that suburb are considered more affordable, and it is getting to be a popular suburb among Australians due to its proximity to the city, its established infrastructure and amenities, as well as the benefits of the gentrification underway,” says Goh.

By The Star

Investment choices in Melbourne

AUS Property Corp co-founder Steve Galanos says that foreigners investing from abroad should focus more on buying landed residential units.

He says foreign property buyers should note that many Australians do not buy apartments.

“They want space for their families, kids to play and to entertain friends.”

AUS Property Corp is a medium-sized boutique property developer that specialises in landed property in Melbourne.

Galanos says the company has delivered 500 houses in nine developments with a combined gross development value of more than AUD$200mil (RM639mil) over the last three years.

He says the majority of apartment units in Melbourne are sold to foreigners.

“When it comes to landed residential properties, most of the buyers are owner-occupiers.”

In his opinion, buying landed residential units in Australia is a secure investment due to the annual supply and demand situation concerning new properties.

“We don't have a huge population or labour force. Our actual construction rate in terms of dwellings built annually has not increased since the 1980's.”

Australia has a population of about 22 million.

However, Henry Butcher Marketing's international projects director Jazmine Goh offers a different opinion. She says that high-rise residential units in and around the city are still in demand.

“We have parents buying for their children who are studying in the city, empty nesters who prefer smaller units as the kids have left home, and migrants who work in the city and prefer a more vibrant lifestyle.”

According to Goh, the rental returns are typically between 4% to 5% per annum as the market is established and enjoys very low vacancy rates.

“Compared with landed property within a 10km radius of the city, a high-rise residential unit has a lower entry cost.”

Goh points out that landed properties benefit from more long-term capital growth. She says landed property within a 10km radius of the city are more expensive, with the average price for a three-bedroom/two-bathroom house being more than AUD$550,000 (RM1.76mil), depending on how prime the location is and its built-up area.

Jalin Realty International Pte Ltd chief executive officer Ian Chen says investors should look at demographics and location to determine the type of property (apartment or landed) to invest in.

“We need to understand buyers' needs and requirements. If they prefer single tenants and do not mind paying a higher premium, then an apartment in the city may be the investment for them.

However, for the same dollar value of a city apartment, one can also opt for a three-or-four-bedroom home in the suburbs of Melbourne (depending on the location) with a family as a tenant.”

Meanwhile, CB Richard Ellis (Malaysia) executive director Paul Khong says that demand for apartment units is likely to rise as Melbourne consolidates, and becomes more dense. According to him prime land in the city is being re-developed with high-rise projects.

“Affordability pressures would mount on conventional housing forms. However, investors who sell within the short-term, without accumulating sufficient losses, will incur large capital gains tax which is currently 29% in Australia. By investing long-term, an investor is able to accumulate tax losses to minimise the capital gains tax,” says Khong.

He opines that landed properties are usually for owner-occupiers and are located away from the city.

By The Star

Putting Johor on the tourist map

The development of Mersing Laguna will be carried out with strict guidelines to ensure the district's idyllic coastline and natural marine attractions is protected and preserved despite the massive dredging and reclamation work involving 809ha for the proposed project.

Sinohydro Group Ltd's chairman Fan Jixiang, who gave this assurance said his company appreciates the natural ambiance and attraction of Mersing and will adhere to the strict local and international laws in regards to environmental conservation.

"We respect Malaysia's laws and will do everything necessary for the care of the environment as Mersing Laguna is all about eco-paradise tourist destination," Fan said in an interview after witnessing the signing agreement of the RM4.2 billion contract between Synohydro Corp (M) Sdn Bhd and Radiant Starfish Marine Development Bhd in Johor Baru recently.

Also present during the ceremony were Johor Menteri Besar Datuk Abdul Ghani Othman and Radiant Starfish Development Bhd's president and chief executive officer Ungku Safian Abdullah.

Fan said Sinohydro will ensure the reclamation work will be timely delivered and enable the full-scale development on the man-made islands to be carried out as planned, enabling Radiant Starfish to realise its dream in making Mersing Laguna an eco-paradise destination.

He said Sinohydro, a state-owned conglomerate and is ranked among the world's top 15 international contractors by the engineering news record, decided to take part in this mammoth project due to the strong ties between the Malaysian and Chinese governments.

Sinohydro is actively involved in major contracts and business interests in 70 countries involving architectural projects, electric power investment, property and real estate as well as design and manufacture of construction equipment.

The company's current book order is estimated at RM86.72 billion (US$D27.1 billion), is also engaged in the manufacture and installation of mechanical and electrical plants, power generation, expressways, railways, harbours, airports, municipal public utilities and building industries.

"We will consciously work towards environmental sustainability through our advanced technologies and execute the work strictly in accordance with strict regulations," Fan said adding that local talents and resources would be maximised throughout the duration of the project.

He added the company's 10-year experience in Malaysia, in projects such as the building of the Bakun dam in Sarawak has encouraged it to participate in other large-scale projects such as Mersing Laguna.

He thanked Radiant Starfish for its confidence in awarding the design and built contract to his company.

Mersing Laguna, a RM22 billion high-end development is set to transform the once sleepy-town into an international class eco-tourism destination involving three man-made islands and a 36km stretch of beachfront between the Endau-Rompin and marine parks off the coast of Mersing.

The project was among the nine announced by Prime Minister Datuk Seri Najib Razak to be implemented in the East Coast Economic Region that straddles Pahang, Terengganu, Kelantan and Mersing in Johor on February 28 in Putrajaya.

This ambitious development will involve the construction of 25 international-class hotels, 4,000 villas, a marina withyachting facilities and several commercial developments

It is also understood that several world-renowned architects have been penned to be involved which will see Malaysia, particularly Johor, establishing itself as an eco-tourism hub similar to that of the Gold Coast in Australia.

By Business Times

Japanese investors to develop RM500mil "Little Japan" in Johor Baru

JOHOR BARU: Japanese investors plan to develop Malaysia's first "Little Japan" township in Taman Molek here for high net worth ethnic Japanese keen to relocate and make Malaysia their second home.

Global Asia Assets (M) Sdn Bhd (GAAM), an asset-building consulting company for Japanese investors, which is behind the project, hopes to woo 2,000 wealthy Japanese to live, work or do business here within the next few years.

GAAM chief executive officer Fujimura Masanori said since March last year, some 70 Japanese individuals had already relocated here under the Malaysia My Second Home (MM2H) programme.

Additionally, 365 Japanese investors have also acquired high-end residential and commercial properties worth more than RM400mil here since January last year and are expected to also move here permanently soon.

"In view of the overwhelming response, we are eager to kick start the "Little Japan" project in Taman Molek where Japanese individuals are expected to invest over RM500mil in landed houses and luxury apartments over the next few years," said Fujimura.

Fukimura was talking to reporters at the Starhill Golf & Country Club in conjunction with a charity golf tournament in aid of the victims of the Japanese earthquake and tsunami last year.

About 50 golfers, including 20-GAAM customers from Japan had flown here to take part in the event.

All proceeds from the event will be donated to the Japanese Red Cross Society for distribution to needy victims of the Japanese earthquake and tsunami on March 11 last year.

According to Fujimura, "Little Japan", the first of its kind in Malaysia, would be a self-contained township complete with restaurants, spas, medical facilities and retirement homes for Japanese who want to live and work here.

He noted that the Japanese, who have traditionally avoided investing outside of Japan, have enormous amounts of liquid assets lying dormant in Japanese banks.

Fujimura said the response was very positive with Japanese clients buying up 50 per cent of the 248 high-end condominium units in Molek Pine Tower 3 - a project by the Kuok Group subsidiary, Tanjung Bintang Sdn Bhd, which is marketed under the Berinda brand name.

"The developer, in view of the overwhelming response from Japanese buyers, will refit the units with special Japanese features such as Onsen-Spa facilities, Ofuro (Japanese bathtub) and Zen concept landscaping.

"Our clients have already committed over RM400 million in the purchase of units in various residential schemes in Taman Molek and Taman Ponderosa, which is yet another project by Berinda," he said, adding that GAAM will also manage the property on behalf of its clients.

"Johor Baru's proximity to Singapore, coupled with good infrastructure, fine weather, the Government's commitment to boost safety and security and the virtual absence of natural disasters like earthquakes, makes it an ideal place for Japanese to make it their second home," he said.

These residents, he added, would eventually also open Japanese convenience shops, fine restaurants, dental and medical clinics in partnership with locals, traditional medicine shops and even retirement homes catering not only to Japanese clients, but also Singaporeans and locals.

"They will help create jobs, provide skills training, help promote business and contribute to the local economy and the growth of Johor and Malaysia as a whole," he stressed.

Fujimura is confident the "Little Japan" project will take off in a big way because of rapid development in Johor under Iskandar Malaysia, with international schools and universities and top-notch health and medical facilities all opening here soon.

By Bernama

The many extras on offer can be irresistible for the home buyer

If you are looking to buy a new house or apartment, there has never been a better time than now to seriously consider it.

With home builders becoming more competitive in their quest to win new buyers and investors, and with higher demands from purchasers, there is now a wide range of extras to entice the potential buyer.

This is especially so in the higher end of the market, where purchasers are generally more discerning and more demanding. They are prepared to pay top dollar for a new home, and they expect to get the best product.

As a result, built-ins such as kitchen cabinets and wardrobes are becoming standard fare in newly built homes. In many areas, so are some basic appliances such as refrigerators, ceiling fans and air-conditioners.

In the higher end of the market, the design and concept are also important. Homes are sold on emotion as much as style and utility. The home must not just be a place one wants to come home to it must also be able to impress the guests.

While these extras go a long way in helping a potential buyer make his choice, equally important is how he is going to pay for it. Developers, working together with financial institutions, now offer various benefits in the financing packages that not only make it easier for the buyer to make his initial payments, but also save him some money in the longer term.

How do these new schemes work?

When a developer has a new project to launch, the many domestic banks as well as foreign banks that have operations in Malaysia are invited to offer financing packages to potential buyers.

Given that banks have to work within very strict guidelines set by our monetary authorities, the packages they offer are mainly confined to attractive interest rates for loans.

In today's market, most banks offer home loans at interest rates of BLR (base lending rate) minus 2.45% to 2.5%. With the BLR at 6.6% today, buyers pay a 4.1% to 4.15% interest on their loans.

This offer comes with a caveat a lock-in period of three to five years, during which a penalty will be charged if the borrower decides to refinance his purchase with another bank. The penalty is usually about 3% of the loan amount.

Apart from absorbing the legal fees and stamp duty on the loan agreement, there is not very much more that banks are allowed to offer. Banks used to absorb the penalty imposed on borrowers who move their loans from other banks, as well as the fees for discharge and new loan agreement but even these are also not permitted now.

Where the banker's hands are tied, the developer has now come in with offers that help to ease the financial burden on buyers further.

The absorption of legal fees on the sale and purchase agreement as well as the stamp duty and other miscellaneous charges are now standard fare offered by developers.

Some developers have taken it a step further by offering an interest-absorption scheme to those who buy into a newly launched property. This works in the sell-then-build concept, which is the practice in Malaysia.

When someone buys a new property, he usually is able to get a loan of up to 90% of the purchase price. For instance, if the property costs RM1mil, he will have to pay a 10% down-payment, or RM100,000, upon signing the sale and purchase agreement.

The remaining RM900,000 is disbursed by the bank to the developer at various stages of the construction from the completion of the foundation, the structure, walls and so on in lump sums of 10% or more.

Interest is only charged by the bank on the amount that has been disbursed, and while the project is still under construction, the developer pays the interest to the bank. For landed property, the construction period usually takes 24 months while high-rise projects take up to 36 months.

The buyer only starts paying when the project is completed and vacant possession of the property is handed over to him by the developer. The total sum in interest borne by the developer can thus be quite substantial.

But for those who are unable to make that first 10% down-payment, there is yet another solution. Developers now accept credit cards for the down-payment, so long as the credit limit is sufficient to cover the amount.

The buyer then repays the amount in instalments over one or two years under an “interest-free instalment plan”, much like what is on offer now for purchases at various consumer goods outlets.

The interest incurred on the sum borrowed on credit card is absorbed by the developer.

Offers such as the interest absorption scheme and the credit card plan are geared towards helping the potential buyer take the big step towards owning a property.

As competition toughens, developers are bound to come up with even more offers and extras to attract buyers. However, these offers eat into profits. Rising costs of land and materials also put pressure on margins.

Like any enterprise, there is a limit to how much extras or discounts the developer can offer. It cannot reach a point where it is no longer economically viable to proceed with a project.

Meanwhile, it is still a shopping haven for property buyers. So why wait?

Teh Lip Kim is the MD of SDB Properties Sdn Bhd, a lifestyle property company. Bouquets and brickbats are welcomed. Send by email to md@sdb.com.my

By The Star

Property carnival in Kajang

MKH Berhad, formerly known as Metro Kajang Holdings Berhad, has launched a property carnival at MetroPoint Complex Mall in Kajang which is open until Sept 30.

The MKH Berhad Property Carnival 2012 showcases projects from the developer for buyers to select their dream houses or for investment.

There are eight projects — apartments, condominiums, terrace houses, semi-detached houses, bungalows and shoplots — available.

The built-up areas range between 850sq ft and 5,000sq ft with price starting from RM220,000.

Customers who bought property during the carnival period only need to pay 5% for downpayment and a rebate up to 5% will be given.

Buyers need not pay the legal fee for sale and purchase agreement and memorandum-of-transfer stamp duty.

They will also get an MKH buyer programme worth up to RM3,000 and can sign up for loyalty programmes for more benefits.

Visitors to the fair can also take part in many interesting games and there are attractive prizes worth RM50, 000 up for grabs.

MKH Berhad group managing director Datuk Eddy Chen Lok Loi said the company thanked the public and business partners for all the support it received over the past 35 years.

“We will always improve ourselves and hope we can meet the demands by our customers.

“We are expanding and have developed housing areas outside Kajang such as Puncak Alam, Melawati and Bangsar,” he said.

Chen said the abolishment of toll charge for two toll plazas at the Cheras-Kajang Highway and the MyRapid Transit Sungai Buloh-Kajang line should be seen as a plus point by homebuyers.

“With property prices ever increasing, they should buy now especially in the affordable range,” he said.

For details, call 03-8737 2323 or visit www.mkhberhad.com

By The Star

Looking at relevance in development

Not just a market: The TTDI market in Jalan Wan Kadir. While deliberating on the redevelopment plan for the market, let’s not forget that a traditional wet market still has a role to play in our communities.

The art of placemaking will determine whether a place or project resonates with its target audience, and contributes to higher value and quality of the overall living environment.

According to Wikipedia, placemaking capitalises on a local community's assets, inspiration, and potential, ultimately creating good public spaces that promote people's health, happiness, and well being. “Placemaking is both a process and a philosophy,” it points out.

In this profit-driven and consumerist age, placemaking may have been commercialised to bolster the cash register and companies' bottomline, but in its original simplistic form, it actually encapsulates both the tangible and intangible elements that give meaning to a place.

Things like the sights and sounds of a place, general ambience, colours, smell, building forms and architecture, and even the energy and aura of a place all come to mind. In a nutshell, they constitute things that are held dear by the community and make life meaningful to the people.

I'm sure most of us have come across places that we took a liking to the very first time we set eyes or foot on them; and there are those that did just the opposite to our senses.

Besides the building structures and facilities, I believe it must have something to do with a place's aura and energy that determine whether it continues to be relevant to the community.

With that in mind it is important to ensure that, in the pursuit of development, the “heart and soul” and elements that give meaning to our housing estates, townships and cities are cherished and safeguarded.

Some of these places include historical buildings, cultural and arts centres, and not to forget, our alma mater the schools and universities.

Places like open fields, parks and markets are also where communities come together and they need to be perpetuated for our local communities to thrive.

These are places where we can see Malaysians of all races converge and engage with one another in true blue Malaysian spirit and appreciate each other.

Without these public spaces, the decadence in the communal spirit, which is already setting in, is bound to worsen.

Although fields, parks and markets do not generate income to the local councils, they are important community-building assets and public spaces, and should not be roped in for development purposes.

News reports that some quarters are eyeing the site of the 25-year-old Taman Tun Dr Ismail (TTDI) wet market complex for redevelopment into a mixed-used development have understandably upset many people, especially the local community who get their daily fresh produce from there, and the traders who depend on the market for a living.

The interested parties are said to have submitted their plan to the Kuala Lumpur City Hall (DBKL), which owns the market complex, and the plan is said to be under consideration.

While deliberating on whether to allow the redevelopment plan to go ahead, and what kind of concept it should be, let's not forget that a traditional wet market still has a role to play in our communities.

Besides being the place for folks from TTDI and the surrounding housing estates to buy fresh produce of fish, poultry, meat, vegetables and fruits, it is also a much appreciated community meeting place.

Although the hypermarkets and supermarkets with their frozen food section is an alternative source, home makers and those who opt to do their marketing daily at the wet market should have that option availed to them.

As for the traders that number more than 200, many of them were moved from the former Kuala Lumpur Central Market in Jalan Hang Kasturi some 25 years ago when the old market was closed for a major renovation.

A good number of them are second generation traders, having taken over the business from their elderly parents or siblings. Today the refurbished Central Market is a cultural, arts and craft centre.

Having dutifully moved from their old trading place in Kuala Lumpur to TTDI, the traders' wishes are to ensure any redevelopment plan of the market complex will preserve the concept of a traditional wet market, instead of taking after a modern hypermarket concept that will inadvertently take away the rice bowl of these traders.

If the decision is to proceed with the redevelopment plan, the authorities should look into a spanking new market with better equipped facilities, such as multi-storey car parks and a more hygienic and clean environment.

Longer operating hours will be a definite improvement to cater to office workers who can only do their marketing in the evenings.

Whatever the plan may be, there should be more transparency and engagement with the local community, traders and other stakeholders, to ensure a holistic and equitable solution for all.

Deputy news editor Angie Ng reminisces about the good old days when the community spirit was strong and unchaperoned children walked around freely unharmed.

By The Star (by Angie Ng)

OSK Property plans rights issue with warrants

Petaling Jaya: OSK Property Holdings Bhd has proposed a renounceable one-for-10 rights issue of up to 23.74 million new shares in OSK Property together with up to 71.21 million free detachable warrants on the basis of three warrants for each rights share subscribed to, on an entitlement date to be determined later.

It also proposes a bonus issue of up to 47.48 million OSK Property shares on the basis of two new OSK Property shares for every one rights share subscribed by the existing shareholders pursuant to the proposed rights issue with warrants.

There is a proposed restricted issue of up to 50 million new warrants to the holders of unexercised 2007/ 2012 Warrant B on the basis of one new warrant for every one existing Warrant B held on an entitlement date to be determined later.

Based on the indicative price of RM1 per rights share, the proposed rights issue with warrants is expected to raise gross proceeds of at least RM18.74mil and up to RM23.74mil.

By The Star

Bangi’s new business hub

Artist impression: The 86 shop office units will be connected to the shopping centre via a covered pedestrian sky-bridge.

The Andaman Group and the Selangor State Development Corporation (PKNS) officially launched the Sentral@Bangi CBD project at the Andaman Bangi sales gallery in Bandar Baru Bangi recently.

Located along Persiaran Kemajuan, Sentral@Bangi CBD is on 5.44ha of leasehold land and comprises two phases. The first phase is a commercial centre development while the second phase will be a mall.

The eight-block commercial centre offers 86 shoplots.

The mall is expected to be the recreation, leisure and entertainment hub of Bangi.

The price range for Sentral@Bangi CBD commercial and business centre development is from RM2.15mil to RM5.5mil per unit.

All units come with individual lift (first of its kind in Bangi).

Andaman Group sales and marketing director Datuk Vincent Tiew said they had received good response for the project.

“Around 70% of the shoplots and offices have already been sold,” he said.

“Sentral@Bangi CBD is a comprehensive commercial and business hub, in that it not only offers shops and offices for sale. There is also a modern shopping centre with a proposed cineplex and a bowling centre. This is truly, genuinely the last most prime commercial land in Bangi,” said Tiew.

The 86 shop office units will be connected to the shopping centre via a covered pedestrian sky-bridge. The space between the shops and shopping centre will feature a street mall promenade with lush green landscaping, creating a sustainable eco-friendly ambience for visitors and shoppers.

From Kuala Lumpur, the Sentral@Bangi CBD is accessible via the North-South Expressway, exiting from the Kajang interchange. It is also closer to the neighbouring Kajang and Semenyih towns with direct connection to Putrajaya and Cyberjaya.

Travelling time from the Sungei Besi toll to the Bangi town centre is a mere 10 minutes’ drive.

By The Star

New growth phase for WCT

PETALING JAYA: WCT Bhd is set to enter a new growth phase with its newly-acquired prime land in Kuala Lumpur, with analysts staying bullish on the prospects of the construction group.

Maybank Investment Research said the acquisition would enhance WCT's bank-bank by 6%.

“However, as the land is located in a highly-mature part of the Klang Valley, the development value is huge, projected at RM4bil. This would lift the total outstanding GDV (gross development value) for its Malaysian projects by 70% to RM9.7bil,” it said.

The research house expects the development to achieve good demand, with earnings projected to start contributing to the group from 2014.

On Wednesday, WCT entered into an agreement to acquire three parcels of land measuring 23ha in Overseas Union Garden, Kuala Lumpur, via the entire equity interest in Timor Barat Properties Sdn Bhd.

The shareholders of Timor Barat are Eng Lian Entereprise, Shen & Sons and AMC. The land along Taman Yarl is planned for a mixed development.

The acquisition price translates into RM180 per sq ft based on the purchase price of RM450mil. The conversion premium of RM15 per sq ft, which is pending, will be borne by the vendors.

“We think this is fair for a prime piece of land in a mature neighbourhood. Timor Barat has also applied for a contiguous piece of land in the area and, if approved, will be acquired by WCT for RM150 per sq ft (freehold) and RM135 per sq ft (leasehold),” HwangDBS Vickers Research said.

It said WCT would launch RM1bil worth of projects this year, after strong sales of RM457mil in 2011.

“We remain confident WCT will achieve this, given its exposure to the resilient mid-end segment in mature locations such as Bandar Parklands, Klang and 1 Medini. 1 Medini is off to a good start, with 80% take-up of the RM150mil launch of Phase 1,” it said.

Hong Leong Investment Bank Research said the acquisition would increase WCT's net debt and gearing to RM1.03bil and 0.7 times respectively, from RM579.8mil and 0.39 times at Dec 31, 2011.

According to Hong Leong, the gearing level is considered high, but it is not overly concerned considering the strong cashflow from the company's new Taman Yarl project.

“We are positive on the latest development as WCT is acquiring the land at a reasonable price, while the relatively established location of the land means the development can take off in a major way over a relatively short period of time,” it said.

By The Star

SDB buys land for RM34.5mil in Selangor

KUALA LUMPUR: Selangor Dredging Bhd's wholly-owned SDB Properties Sdn Bhd yesterday bought three parcels of leasehold land in Selangor for RM34.5mil.

The developer said the land had development potential and was part of its ongoing identification of suitable properties to add to its land bank. The gross development value is expected to be RM150mil.

By Bernama

Loan applicants fail to meet eligibility criteria

BANK Negara Malaysia said slightly less than half of the applicants for My First Home Scheme were unsuccessful in obtaining loans under the scheme as they failed to meet the eligibility criteria.

These applicants amounted to 505, or 47.5 per cent, of the total applications of 1,062 as at the end of January, said the central bank in a statement yesterday.

The participating banks received a total of 1,624 applications as of January, but 562 were subsequently withdrawn due to multiple applications to various banking institutions.

Bank Negara said from a total of 1,062 actual applications, 389 (36.6 per cent) have been approved by banking institutions, of which 280 have obtained guarantee from Cagamas Bhd, the national mortgage corporation, while 168 (15.8 per cent) are currently being processed by banking institutions, said Bank Negara.

My Frist Home Scheme, launched in March 2011, aims to allow young working adults to obtain 100 per cent financing from banking institutions to purchase their first home valued at a maximum of RM220,000 (for single applicants) or a maximum of RM400,000 (for joint applicants of husband and wife with household income below RM6,000 per month cumulatively).

Applications are made to participating banking institutions and upon approval Cagamas will provide a guarantee for the first 10 per cent of the loan.

The statement was issued following news reports yesterday claiming that the success of the scheme had been hampered by the unwillingness of banks to risk giving loans with monthly repayments that come up to more than half of the applicants' salary.

In fact, a Chinese daily even reported on March 5 that not a single loan under the scheme has been approved.

Bank Negara said that to qualify, applicants should have the capacity to meet their debt obligations, provide the evidence of a sustainable income stream, good credit history and able to meet the basic eligibility criteria of the scheme.

"The intention is to ensure that young borrowers are not over burdened by debt obligations that may lead to bankruptcies or foreclosures," said the central bank.

By Business Times

Sunway REIT will spend about RM200mil to rejuvenate Putra Place

An artist’s impression of Sunway Putra Place

PETALING JAYA: Sunway REIT Management Sdn Bhd, the manager of Sunway Real Estate Investment Trust (REIT), will refurbish Sunway Putra Place to rejuvenate and reposition the property as an exciting tourism and shopping destination.

This follows the Federal Court's decision on Feb 20 to dismiss the application by the property's previous owner, Metroplex Holdings Sdn Bhd, for leave to appeal the High Court's and Court of Appeal's decision to declare OSK Trustees Bhd as the legal owner of Putra Place.

Putra Place was acquired by OSK Trustees, on behalf of Sunway REIT, in a public auction in March 2011 for RM513.94mil.

The property, comprising Legend Hotel, an office tower and a mall known as The Mall, has been renamed Sunway Putra Place.

Sunway REIT Management chief executive officer Datuk Jeffrey Ng said the preliminary capital expenditure for the refurbishment of the mall was estimated at RM200mil, while that for the hotel and office tower would be on a need basis.

“The refurbishment of the mall is to expand the total gross floor area from 860,000 sq ft to 952,000 sq ft.

“Meanwhile, the net lettable area will be increased from 505,448 sq ft to about 620,000 sq ft,” he told StarBiz.

The work will take 15 to 18 months and will provide a projected return on investment of 12.5% to 15.0%.

Ng said the creation of new net lettable area and better retail layout planning “will translate into substantial increase in rental income in the future”.

“Sunway REIT is optimistic about the future prospects of the 3-in-1 mixed-used property of Sunway Putra Place and expects substantial capital appreciation post-refurbishment.

“Our new tenancy mix will draw new and larger crowds to Sunway Putra Mall, and the businesses of Sunway Putra Hotel and Sunway Putra Tower will benefit synergistically from the transformation of the new shopping mall,” Ng added.

He said tenants at Sunway Putra Mall would appreciate the modern ambiance with improved retail layout and circulation in the shopping mall.

A distinctive retail zoning will be one of the main features of the mall, with new interesting concepts such as food and beverage, alfresco and entertainment concepts to create vibrancy.

He said the Asian Avenue would be a unique retail theme with food and entertainment components as well as an addition of eight cinema screens.

The refurbishment plan will also include improvement in traffic circulation within the proximity of Sunway Putra Place.

Studies are also underway to improve vehicular traffic on both ingress and egress points of the mall, direct linkage to the LRT station, and covered pedestrian walkways to the KTM Komuter station and Putra bus terminal.

By The Star

TA Global to jointly develop project in Canada with GDV of RM1.53bil

PETALING JAYA: TA Global Bhd and Birkbeck Trust planned to jointly develop a high-rise mixed-use project consisting of hotel and residences in Vancouver, British Columbia, Canada.

The project is to be carried out under a partnership arrangement with an initial contribution of C$110mil (RM339mil) by each party.

The proposed joint development has a gross development value of C$496.4mil (RM1.53bil) which consists of a eight-level underground parkade and a 64-storey building comprising a four-level podium and a 60-storey point block which would house 61 guest rooms with supporting amenities. and 249 units of residences.

Construction will start in the third quarter of 2012 and will likely be completed by mid 2016.

The total development cost of the project is C$359.8mil (RM1.11bil), with land cost alone taking up C$110mil.

The land is acquired from the Birkbeck Trust by assuming C$85mil (RM262.1mil) of its existing debt liabilities. Therefore, the liabilities to be assumed by TA Global in this partnership will be 50% of the debt liabilities, amounting to C$42.5mil.

The parties are expected to make profits of C$136.6mil (RM421.5mil), not taking into account the debt liabilities of C$85mil.

The project has a total gross development area of 730,504 sq ft and a total net saleable area of 492,702 sq ft.

By The Star

Hospitality sector urged to go green

KOTA KINABALU: Hotels and resorts here were told to step up the ‘greening’ of their premise to complement the government’s effort in developing a sustainable tourism sector.

Chief Minister Datuk Musa Aman said the hospitality sector should be mindful of the need to reduce its carbon footprint as Sabah was known for its biodiversity, clean environment and nature-based destinations.

“It is crucial for players in the tourism sector who depend on Sabah’s natural products to lure tourists to implement greener policies.

“Look for innovative ways of reducing energy and water use, recycle what you can, and try to start sourcing for organic detergents,” Musa said at the Ming Garden Hotel and Residence here.

He said businesses that showed real commitment in going green would draw in environmental conscious clientele apart from helping to create a safer and better environment.

Musa also called on hotel and resort operators in Sabah to create their own niche and offer something different to guests and make use of the feedback from their customers to update and improve their services.

He added that Malaysia has a variety of products that cater to the needs of tourists, from nature destinations to rich cultural heritage and premier shopping malls.

“There is something for everyone who visits Malaysia.

“It is projected that in 2020, the country’s tourism sector will grow by three folds with 36 million tourist arrivals and RM168 billion in receipts,” he said.

The state’s annual tourist arrivals had risen by 13.6% in 2011 and exceeded its initial target of 2.63 million visitors annually.

He added that the Sabah government had projected a repeat positive performance with tourist arrivals expected to exceed 2.75 million this year.

“The continuing upward trend means more hotel rooms are needed to accommodate the increasing number of visitors and the opening of Ming Garden is indeed timely.”

The Ming Garden Hotel and Residence is the newest hotel in Kota Kinabalu with 600 rooms, comprising 244 guest rooms and 356 service residences.

The property is a joint venture between the state-owned Sabah Urban Development Corporation (SUDC) and the Long Yuan Construction Group of China.

By The Star

Meda to buy Majuperak land for RM13m

KUALA LUMPUR: Meda Inc Bhd will buy a 103.69 hectares of land in Sg Siput, Perak, from Majuperak Holdings Bhd for RM13 million.

The acquisition is for mixed development comprising commercial and residential properties.

By Business Times

S’pore developers bids for sites signal likely dip in home prices

SINGAPORE: Developers on the island-state are becoming more cautious about how much money they are willing to pay for private home sites.

They seem to be getting more worried that private home prices could fall, perhaps by up to 8% this year, according to a research report.

So they have to factor the potentially lower prices of the homes into their sums when deciding how much to offer for a plot on sale.

The BNP Paribas research report analysed about 100 government land sale bids since 2007 up until last month.

When developers look at how much to bid for a site, they consider the likely “break-even” figure. That is, how much they would have to pay for the project, taking into account the cost of building the condo and various other finance, marketing and administration costs.

Then, of course, they add a bit on top to make it worth their while, in terms of profits which means they would offer less for the land than break-even.

The report said developers were lowering the figure they were willing to pay for land, as they could no longer feel sure that prevailing home prices would hold up by the time they were likely to sell the project.

Starting in mid-2011, the difference between the expected break-even price and current selling prices started to widen to 19.8%, well above the mean of 12.1%, the report said.

The mean of 12.1% would tend to represent the profit margin developers have been achieving, on average.

This difference of about 8 percentage points is likely to represent developers' efforts to guard against the possibility of future average selling prices heading south.

A similar pattern was also observed in the second quarter of 2008, right before home prices tanked, when margin buffers widened in similar fashion, BNP Paribas property analyst Chong Kang Ho noted.

The wider spread of bids for each site, which indicates differing views among developers, and the shorter turnaround of launches also reflected concerns of an uncertain outlook in the market, he added.

Developers' nervousness is reflected not just in their bid prices but also in their haste in pushing out new launches.

The average turnaround time between securing a site and launching a project has been cut to just eight months for sites awarded in the past two years down from more than 10 months, generally, for sites awarded in 2009.

Another likely trend was even more enthusiasm for sites right near MRT stations and retail malls, the report said.

Developers feel that buyers will go for homes built on these plum sites even if times get a little rough.

By The Straits Times

Developer will not compensate USJ One Avenue residents

NO COMPENSATION will be paid to residents of USJ One Avenue in USJ 1, Subang Jaya, whose cars have been damaged in a flood at the condominium’s lower ground car park last week.

The decision was made by the developer in a meeting with residents’ representatives.

Last week, more than 200 cars were damaged when the basement car park of the condominium was flooded during a downpour.

Recalling a nightmare: USJ One Avenue residents at the meeting looking at the images captured during the flood.

Developer MCT Berhad instead offered a relief fund of RM250,000 to the Joint Management Body (JMP).

MCT representatives also gave technical and legal explanations why compensation will not be given.

The residents said such an incident should not have occurred in a premier development.

The meeting saw the residents’ committee chairman leaving the meeting.

Another residents’ representative, who refused to be named, said the developer had to shoulder a great deal of responsibility now.

“There were no precautions taken even after the first flood last year.

“The second is worse and we demand measures to prevent floods,” she said.

Resident Fakrul Azuan Hashim said he was disappointed with the result of the meeting.

“This is not the first time such an incident had occurred but the management has not taken any preventive action.

“The developer’s ability to provide good service and management to the condo buyers has been questioned,” he said.

Another resident Gerald Lee said the developer was avoiding their responsibility.

“I am disappointed with the outcome as we believe that the developer should pay compensation for negligence,” he said.

A Facebook account addressed www.facebook.com/usj1avenuecondo was set up for the residents to raise their opinions and concerns on the management of the condominium.

By The Star

Proud moment for developer

Matter of significance: (from left) CK Designworks Managing Director Domenic Crisante, Rahadian and Siti officially launching the event together with Magna Prima Berhad Executive Director Datuk Mohd. Rizal Abdullah (right).

PROPERTY developer, Magna Prima Berhad officilaly announced its first step into the regional market with the launch of its maiden overseas project, The Istana recently.

The Istana is a 25-storey single tower residential apartment situated on A’Beckett Street in Melbourne, Australia — a prime address in the heart of Melbourne’s Central Business District.

Datuk Siti Nurhaliza officially launched the event in JW Marriott Hotel KL.

Siti also purchased the “royal address” at The Istana, Melbourne.

Magna Prima Berhad’s executive director Datuk Rahadian Mahmud said: “The launch of The Istana is highly significant as it marks our foray into the regional market. In fact, this maiden regional project actually expedites our 10-year vision for a regional presence.”

Formerly known as Dynasty Living, The Istana spreads over more than 27,000sq ft and has 320 units comprising studio units, apartments and double-storey penthouses.

The name change was a strategic move to better reflect the character of the property and to add a touch of Malaysia.

To date, The Istana has attracted a 62% take up among Australian and other international buyers. The remaining 38% (120 units) will be marketed to Malaysians and expatriates living here. The units are priced from A$340,000 (approximately RM1.1mil) and are targeted for completion in 2014.

By The Star

EPF to allot projects in Sungai Buloh by June

The Employees Provident Fund (EPF), which is charged to lead the development of the proposed prime township sited at Rubber Research Institute of Malaysia (RRIM) land in Sungai Buloh, Selangor, is expected to start distributing portions of the long-awaited project by June.

EPF chief executive officer Tan Sri Azlan Zainol said it will start calling for tenders, which are open to all strong property developers in the country to participate in.

“The project is going through some legal issues and then it will go through the bidding process.

“The development will be spread out over several phases and each phase will be around 12.15ha-20.25ha portions for the development of projects from commercial, residential, industrial, affordable housing and shophouses,” he told Business Times in an interview at EPF’s headquarters here recently.

Previously managed by RRIM, the 1,215ha land was slated for development over the next 10-15 years, as announced in the 2010 Budget , but until now the project has not taken off.

On May 12, 2010, the government had approved the proposal for the development of the Sungai Buloh land by Kwasa Land Sdn Bhd, a wholly-owned subsidiary of the EPF.

The EPF will have a master plan where it will allocate a few parcels and allow property developers to bid for those parcels, of which some parcels will be operated on a joint-venture basis while others may be sold outright via bids.

The development is likely to feature a big linear park, green lungs, open spaces, walkways and water bodies.

It will incorporate information technology and data infrastructure (Multimedia Super Corridor city status) and urban transportation integration.
This development will also house the depot for the upcoming mass rapid transit system.

Dubbed the new hub of the Klang Valley, the development is expected to attract RM5 billion in investments.

By Business Times