Property Market Outlook for 2010 | Malaysia
The Malaysia Property Market Outlook for year 2010 is look Very Promising as there is NO Fire Sales so far.
The "Wait and See Attitude" by potential property investors and homebuyers may end very soon, as sentiment is given a boost by the attractive purchasing environment, low interest rate, undervalued property prices compared with the region and Malaysia has shows a solid potential as a promising emerging property market for foreign investors.
For those who are still looking forward to the beginning of a first major bubble in the housing market in Malaysia, Just Forget IT!
There would be NONE!
Let listen to the Property expert on the their views on what to expect in 2010 from the residential and office property markets in Malaysia.
Property consultants VPC Alliance Sdn Bhd managing director James Wong, chief operating officer of Henry Butcher Marketing Sdn Bhd Tang Chee Meng and CBRE Malaysia executive chairman Christopher Boyd are features in the video.
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Property Market Outlook 2010
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Goverment Support on easing of foreign ownership
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Launches in Bandar Kinrara- Home Buyers Queuing Over 10 Nights for I&P Properties in Bandar Kinrara Puchong
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Low Interest Rate Make Property Investment An ideal Option
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WOW!!! We need Police to control the Potential Home Buyer!
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For the sake of Dream Home: 10 Night Camping to Buy a Property
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For the sake of Dream Home: Long Queue is not a Problem to Buy a Property
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Are YOU still NOT Convince? 
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Property prices may rise 5% to 10%
Property prices in Malaysia are forecast to increase by 5% to 10% this year against last year in line with the recovering economy.
Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia president James Wong said the market did not expect a big jump in property prices this year as the economy was not fully recovered yet.
The economic recovery will largely influence the property market performance and Malaysia’s gross domestic product (GDP) growth rate this year is forecast at 2% to 3% from the estimated contraction of 3% last year.
“Condominiums and apartments are currently selling well and landed property prices, which had held through the economic crisis last year, are expected to grow this year,” Wong said after the opening of the Malaysian Property Summit 2010 yesterday.
Citing examples, Wong said the St Mary’s serviced apartments were 80% taken up within five days of their launch, Sky Residences recorded a 70% take-up rate and the 50-unit Verticas Residensi in Bukit Ceylon achieved a 60% take-up rate during soft launch.
“This shows that condos and apartments are not short of buyers. And developers that postponed property launches last year are not expected to do so this year,” he said, adding that property prices last year were estimated to have dropped by 5%.
However, Wong raised some concerns about tenancy of condominiums and apartments.
“A lot of new developments are facing a hard time in getting tenants,” he said.
Another area of concern would be the office market that saw the supply of four billion sq ft of space last year, according to Wong.
“Thus, there is a slight concern on the take-up rate, especially for tenants that will occupy huge space of 20,000 sq ft and above as well as the effect of the new supply on rental rates,” he said.
Valuation and Property Services Department director-general Datuk Abdullah Thalith Md Thani said this would be a good year for the property sector as key economic indicators that related to the growth of the industry were expected to perform better than last year.
The expected recovery in the GDP of Malaysia’s main trading partners – the United States, Japan and Singapore – and improved prices for crude oil, crude palm oil and rubber would augur well for the country, he said.
In fact, the property market, which had slumped in the first half of last year, had improved since the second half-year, he added.
fr:biz.thestar.com.my/news/story.asp?file=/2010/1/27/business/5549928&sec=business
Sime Property and Sunrise team-up for RM1b development
Sime Darby Property Bhd and Sunrise Bhd have formed a 50:50 joint-venture (JV) company, Sime Darby Sunrise Development Sdn Bhd, to undertake a RM1 billion property development in Bukit Jelutong.
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Bukit Kiara Properties makes foray into Ampang
KUALA LUMPUR: Bukit Kiara Properties Sdn Bhd (BKP) is moving beyond its home turf of Mont’Kiara to develop The Ambangan in the vicinity of Embassy Row in the U-Thant area of Ampang.
The exclusive freehold five-storey condominium project will have only 19 units and will be sited on slightly less than an acre in Persiaran Madge, according to BKP group managing director N. K. Tong.
Each unit will have a built-up area of about 3,000 sq ft. The area is home to several small boutique developments which have sprung up in the last 10 years.
Malaysian, South Korean and Singaporean developers had in the early part of the millennium converged on the U-Thant/Madge area because it was seen as offering an alternative to the Kuala Lumpur City Centre (KLCC) site.
Divided by Jalan Tun Razak, the U-Thant area’s land prices were trailing that of the KLCC area, and because the authorities had a height restriction for the U-Thant area, the financial outlay was also reduced without compromising on exclusivity.
Rental yields in the KLCC area have of late come under pressure, while those in the highly populated Mont’Kiara have dropped since the fall of Lehman Brothers in September 2008.
N. K. Tong is the son of “Condo King” Datuk Alan Tong of the Sunrise-Mont’Kiara fame.
It was Alan Tong who saw the potential of what was then known as Segambut and renamed it Mont’Kiara. That location turned out to be a hit. When Alan Tong subsequently left Sunrise, his son set up BKP in 2000 but remained on what was then his father’s home turf. BKP has three projects, all at Mont’Kiara.
It is currently selling Verve Suites, a four-tower development, of which two towers have been fully sold, while 85% of the third tower has been sold. The fourth tower will be launched in the second half of the year.
N.K. Tong’s foray into Ampang is significant in more ways than one. Sunrise Bhd, one of the first developers in Mont’Kiara, is also beginning to go beyond the area into the city centre and Bukit Jelutong, with a new strategy to offer multiple products in multiple locations.
fr:biz.thestar.com.my/news/story.asp?file=/2010/2/1/business/5584686&sec=business
Challenging times for condominium segment
THERE is an oft-quoted line: what goes up, must come down. With the anticipated recovery in the property sector, the focus now turns to the condominium market. Over the last decade or so, this segment has increasingly become a very big sub-segment of the property market.
The overall perception today is that there is a general oversupply of condominiums and serviced apartments. Because of this overhang of more than 90%, the market is expected to be rather challenging this year.
According to the National Property Information Centre (Napic), in the last 24 months the oversupply exceeded 90% for both the luxury and non-luxury category. This is significant when compared with other sub-segments of the property market, namely detached units (zero overhang), semi-detached (1%) and terraced housing (3%).
Henry Butcher Marketing Sdn Bhd chief operating officer Tang Chee Meng says if one were to look at the stock of residential properties coming onstream, the bulk in Penang, Selangor and Kuala Lumpur are condominiums. Because land is scarce, developers are trying to maximise land use.
In a recent talk on the luxury condominium market, he says his main concern is the oversupply in KLCC and Mont’Kiara. Tang is focusing on the luxury segment of RM700 per sq ft and above.
He says there are difficulties in renting out the larger units because there is a scarcity of expatriates.
The number of skilled, trained and professional foreigners entering the country has been dwindling since early last year. Although the situation may reverse, for the next year or so this seems unlikely.
There are other issues haunting this segment. The recent return of the real property gains tax (RPGT) and a possible future increases have also resulted in wary resignation.
Incidentally, sales of luxury condominiums were boosted by the suspension of RPGT in 2006. Besides the RPGT, the possible rise in interest rate is another cause for potential buyers to be more circumspect.
Investment options
At the global level, the weak and uncertain economic situation has also lowered the level of interest among foreign investors.
“There are more attractive investment options offered by overseas properties where prices have dropped more significantly and currency exchange rates have become more favourable,” says Tang.
He says although some have reported that up to 40% of their units have been sold to foreigners, the percentage of Malaysia’s properties bought by professional foreigners is actually less than 3%, taking into consideration the middle and high-end category.
“Some of them have been living here for many years. They are not speculators or investors. We are not seeing foreign investors coming back in a big way. Most of the buying is done by locals at the moment and they go for smaller units so the large units are difficult to sell. They also prefer to buy units that come with tenants,” he says.
He says the completion of several new projects in the KLCC area has also put further pressure on occupancy and rental rates.
There are luxury condominiums in other locations like Bangsar, U-Thant and Damansara Heights but they do not boast such massive numbers. Tang, therefore, expects the market in Bangsar and Damansara Heights to recover fast.
Giving an overall picture of the situation around the KLCC and Mont’Kiara area, Elvin Fernandez, managing director of Khong & Jaafar group of companies, says the KLCC and Mont’Kiara condo market is high-end that appeals to modern singles or households that prefer city centre living that one may buy to stay or to invest in. City centre living is a growing long-term trend as opposed to the suburban living. Notwithstanding that broad trend, the micro factors insofar as Kuala Lumpur’s high-end condo is concerned, the financial crisis has rocked this market quite a bit.
“Although many believe the global crisis is behind us, equally as many believe the issues and problems that caused and came with the crisis will continue to impact us as we go forward.
“City centre condos are presently pressured by low rental yields of below 5% net. That is not sufficiently attractive as it ought to be more than 5% to commensurate with long term and sustainable risks in the hierarchy of risks within and outside the property market,” he says.
Suburban condominiums, on the other hand, are higher density substitutes for landed properties.
Landed properties are preferred and the low initial net yields reflect this, but with the scarcity of land in suburban areas, particularly just outside the city centre areas, higher density housing is an increasingly acceptable substitute.
The pricing and returns of suburban condos will follow the substitute landed except that a slightly higher risk will prevail and this will translate to a higher expected net yield.Higher yield also means a lower unit value.
While net yields for landed houses in prime locations may be 2% to 3% net at present (they ought to be moving to higher numbers going forward) the long-term sustainable net yield for suburban condos should rightly be about 6% net and above.
Change in conditions
Taking the cue from the current market conditions, over at Mont’Kiara, Sunrise Bhd being the biggest player there, says it will not be giving emphasis to large units of 2,000 sq ft and above.
Incidentally, these two locations – KLCC and Mont’Kiara – have come under scrutiny because of their sheer numbers which go into several thousands.
Says Sunrise executive chairman Tong Kooi Ong: “The profile of the Mont’Kiara resident has changed. The old strategy of selling to Malaysians and renting to a professional foreigner worked many years ago. It will be a sunset industry if we follow this strategy today and this is obvious if you look carefully at the tenancy market.”
“There is a shift in the expatriate population and this will affect the property market. The average occupancy is 75% in Mont’Kiara. Now it takes about two years to fill a condo; last time, we could have filled it up faster. Our buyers have become residents themselves. If you cannot get RM15K a month, why buy a RM3mil unit? The guy who buys a RM3mil unit is not renting it. He is buying to stay,” he adds.
At its peak, owners have reported exuberant yields of double-digit with 9% being on the conservative side. Today, the yield has dropped to about 5%.
Known as a one-product, one-location developer, Tong says the company will be going into different locations offering different projects from now on. It recently signed a joint venture with the Sime Darby group to go into commercial development in Bukit Jelutong, Shah Alam. The company has secured more than 50% bookings, valued at about RM500mil, when it launched condominium project MK 28 in December last year. The average selling price of RM785 psf was also higher than expected. Tong says the company will continue to develop MK 20 and 22, both condominiums, in that area later on.
S. K. Brothers Realty (M) Sdn Bhd general manager Chan Ai Cheng says Mont’Kiara is very developed. The appeal here is the international schools. In light of the number of completed projects of late, she is aware of unit owners in certain projects there who are facing challenges in securing tenants and had to reduce rentals after the units remained untenanted for close to a year.
“Generally, it would seem like supply outweighing demand. However, not all units are facing the same challenge,” she says.
The U-Thant area will have its niche appeal and following while KLCC properties will tend to be more speculative as they attract not only locals but foreigners as well, although, for the time being, the foreign market has dried up.
On the other hand, the Petaling Jaya condominium market appeals more to locals and this will continue to be mainly a family-based, owner-occupier market.
“PJ properties are seen to be resilient because of strong local demand. Some projects are thriving and are in hot demand while places like Pavillion Residences keep raising prices. Selected established condominiums like Hampshire Residence remain well occupied,” she says.
The Selangor Dredging group, which recently launched the second phase of Five Stones, has an overall take-up rate of 66% for the 192 units in Block D and E. Over at Damansara Perdana, if there is no issue with leasehold, Chan says it is possible to get units at attractive prices and there are many options to choose from. As more projects enter the market, developers will have to keep improving. We are already seeing this in Ara Hills, by Sime UEP group, which have provided a high-voltage perimeter fencing as an added safety feature, she says.
fr:biz.thestar.com.my/news/story.asp?file=/2010/2/13/business/5662557&sec=business
Sime finds JV best way to go
Sime Darby Property’s announcement to develop a parcel of land in its Bukit Jelutong development in Shah Alam together with condominium developer Sunrise Bhd raised some questions recently.
The company’s managing director Datuk Tunku Putra Badlishah explains the rationale for the joint venture in an interview with P. Gunasegaram and Eugene Mahalingam and elaborates on the conglomerate’s property strategy
Q: Why is it necessary to bring in a joint-venture (JV) partner?
We have gone into joint-venture partnerships in the past and intend to continue this strategy into the future. The reasons are several.
The first reason is to accelerate the development of our land-bank. As you may be aware, Sime Darby Property has the largest land-bank in the country totalling 36,000 acres. Having such a large land-bank is both a blessing and a curse, and as you can imagine such an asset sits heavily on the balance sheet.
To ensure superior returns to our shareholders, all Sime Darby operating divisions are required to monitor their respective return on invested capital (ROIC) as a key performance indicator (KPI) and if the asset is not generating a return, the ROIC will be negatively impacted.
Sime Darby Property currently develops between 400 and 500 acres a year and at this development rate, it will take us more than 70 years to develop our entire land-bank! Collaborations with other developers will increase our asset turnover without the need to significantly increase our manning and overheads.
Second, such arrangements allow us to realise the enhanced land values within our developments and “monetise” our land-bank. The cash generated can then be used to finance the subsequent development and reduce the need for external funding.
Another reason is to create better value by leveraging on each other’s strengths and expertise. As the cliche goes, we hope that in our partnerships 1+1=3. There is also the opportunity for cross organisational learning, technology transfer and sharing of best practices.
In undertaking any development, there is also an element of risk and the joint-venture model means that the risks are shared.
What about contracting it out to the best bidder?
If a property is considered non-strategic, we will generally undertake a tender process and sell to the highest bidder. This applies to industrial, petrol station, kindergarten lots, among others. However, if the development of a particular piece of land will impact the overall neighbourhood or township, a joint venture is preferred as we want to ensure that the development undertaken will have a positive impact by improving the overall value of the surrounding properties and enhancing the lifestyle and well-being of existing and future residents.
Furthermore, we always undertake a decision-tree analysis to compare the benefits of selling land outright versus undertaking the development ourselves or through partnerships. Apart from the factors mentioned above, the net present value (NPV) calculation will help us decide the best option from a financial standpoint.
Guna, you also questioned whether it would have been better for us to buy the capacity and expertise to undertake the development in question rather than share the development profits with another party. I have elaborated on the benefits of the joint-venture arrangement earlier and it goes without saying that hiring development consultants will negate the said benefits.
In our joint-venture arrangements thus far, a joint management committee comprising staff from all partners is formed to run the project. Therefore, it is a truly collaborative and synergistic effort as all parties have a stake in the ultimate success of the project due to the profit-sharing component.
In a typical client-consultant relationship, the consultant’s compensation is fee-based and not related to the profitability of the project. The nature of the relationship is also fundamentally different from a joint venture and limits the opportunity for cross organisational learning.
Although we use many consultants such as planners, architects and engineers, we have found that “buying” expertise in this way is very much a temporary arrangement and limited to a particular project. Therefore, there is little sustained benefit to the organisation.
Is there any particular reason why Sunrise was chosen?
This joint-venture agreement was not conceived overnight and was almost two years in the making. In any partnership, the “chemistry” between the partners is most important.
During our “courtship” period, we found out that Sunrise shared many of the same values that we hold dear. A commitment to quality and customer service, dedication to development innovation and maximising return to shareholders are some of the shared values that come to mind.
Also their past experience with Plaza Mont’Kiara and their successful Solaris developments are very relevant to what we intend to create in Bukit Jelutong. Sunrise has also built a strong and loyal customer database, evidenced by the high incidence of repeat buyers for their projects.
This is something we hope to take advantage of. Historically they have also delivered development margins in excess of 25%, among the highest in the industry.
What about the valuation (for the land in Bukit Jelutong)?
In any sales transaction, the ultimate price is determined on a willing buyer, willing seller basis. In this specific case, two valuations were undertaken by different firms and the values quoted ranged from RM80–RM100 per sq ft. Therefore, the RM125 per sq ft sales price we achieved is in fact 25% above valuation.
Residential land there (in Bukit Jelutong) is going for about RM150 per sq ft.
It is true that residential land in Bukit Jelutong is being transacted at higher prices and this is a reflection of the success we have had in marketing Bukit Jelutong as a premier residential community.
There is a general perception that commercial land must be more expensive than residential land. I don’t agree with that as the price of property is dependent on several factors including supply and demand, the plot ratio and potential uses allowable for the development.
The valuers would have taken all these factors into account in deriving the market value for the land.
The gross development value (of the Bukit Jelutong project) is RM1bil but the total land price is about RM114mil. Considering the gross development value, isn’t the land price a bit low?
The gross development value of any project is dependent on the developer’s ability to enhance the sales value of the development components.
As I have said earlier, we hope this synergistic partnership can result in a 1+1=3 scenario. The enhanced gross development value projected is a good example where the joint management committee has been able to drive value to maximise the development revenue for the benefit of the shareholders.
You also questioned the significance of this project to Sime Darby. At the transacted price of RM114mil, Sime Darby Property makes a profit of RM74mil on the land alone. Assuming the JV company is able to deliver a 25% development margin, the development profit on the projected RM1bil revenue is RM250mil. Adding our 50% share of the development profit to the land profit, the total profit attributable to Sime Darby Property is just about RM200mil. Given the 21-acre development land, this translates to profit per acre of close to RM10mil!
From my experience, I don’t believe many projects would be able to generate such returns. So there is no question that we are happy with the projected returns from this project and that from the standpoint of Sime Darby Property, this is indeed a significant project for us.
So does this mean you will have future joint ventures of this nature?
Yes, it’s a strategy we will continue to pursue and we are in constant negotiations with other parties to explore potential partnerships.
You may have heard about the Sime Darby Vision Valley, where we have masterplanned 37,000 acres just around KLIA alone. For this large-scale development, we intend to take the partnering strategy a step further by inviting not just local developers but also foreign partners and investors to participate in this project.
From the explanations given, I hope you will agree that such joint ventures make sense for Sime Darby Property.
fr:biz.thestar.com.my/news/story.asp?file=/2010/2/16/business/5681799&sec=business
Developers optimistic on 2010 outlook
They expect growth to continue despite cooling off of broader regional market
GEORGE TOWN: Property developers are optimistic that there will be growth in the local sector despite the cooling off of the broader regional market.
This is based on the Government’s projection of a 3.2% gross domestic product (GDP) growth this year, the brisk sales of high-end properties in Kuala Lumpur and Penang in 2009 and the fact that prices of Malaysian properties are still affordable to investors.
Real Estate and Housing Developers Association (Penang) chairman Datuk Jerry Chan said the prices of Malaysian homes, having appreciated 5% to 10% annually, was still affordable.
“The prices, with room to appreciate further, are still attractive to foreign buyers wanting affordable holiday homes and those with the disposable income to upgrade their properties,” he said.
Chan said given the high cost of land in Penang and the increase in building material prices, property values in the state were likely to rise by 5% to 10% this year.
“To build a 1,000-sq-ft apartment on the island will cost RM350,000 to RM380,000, taking into consideration the land and construction costs.
“This means a 1,000-sq-ft apartment will have to be priced close to RM500,000 to generate profit,” he said.
Meanwhile, IJM Land Bhd managing director Datuk Soam Heng Choon expects the recovery of the local property sector in the second half of 2009 to resume into 2010.
“There is a lot of optimism among local investors as the stock market is on the rebound and good liquidity in the market augurs well for the property sector.
“The take-up rate should remain steady with more first-time homebuyers coming into the market while the demand for high-end properties should be good with a ready pool of upgraders and investors.
“Prices should remain stable with reasonable appreciation, given that speculative buying is well under control,” he said.
Mah Sing Holdings Bhd deputy chief operating officer Teh Heng Chong said landed property prices in prime locations in Penang, Klang Valley and Johor Baru would still hold up this year.
Teh said the demand for properties in such locations would come from those with the buying power who preferred homes in a secured environment.
“That is why our recent previews of high-end projects, such as the RM209mil Perdana Residence 2 in Selayang and RM690mil Garden Residence in Cyberjaya, attracted large crowds,” he said.
Perdana Residence 2 and Garden Residence Resort Homes are both super-linked houses priced from RM828,000 and RM738,800 respectively.
“For Perdana Residence, we have potential buyers indicating they will take up 162 units while for Garden Residence Resort Homes, there are people expressing interest to buy 200 units,” he added.
Teh said the group’s main property launches in the Klang Valley this year would be iParc in Bukit Jelutong, Garden Villas in Hijauan Residence, Garden Residence in Cyberjaya, and Perdana Residence 2 in Selayang.
Mah Sing also plans to launch more phases this year in its existing projects like Hijauan Residence in Cheras, Aman Perdana in Meru-Shah Alam, StarParc Point in Setapak, as well as Sri Pulai Perdana and Sierra Perdana in Johor Baru.
SP Setia Bhd property division (north) general manager S. Rajoo said there was still room for property prices in the country to appreciate, unlike in some other neighbouring countries where prices had stagnated.
“The drivers of property demand in the country comes from first-time buyers, those who can afford to upgrade their lifestyle, and investors from Indonesia and Singapore.
“And with land scarcity being a concern on Penang island, buyers would generally jump at the chance of owning a property in the location of their choice,” Rajoo said.
Eastern & Oriental Bhd executive director Eric Chan Kok Leong said the local property sector looked promising this year, with demand expected to pick up.
He said the recovering economy was projected to improve the overall market sentiment, boosted by the attractive mortgage rates which were expected to remain accommodative, given the ample liquidity in the banking system.
“From a broader perspective, investors, anticipating inflation to follow the economic recovery, may decide to hedge their positions by investing in property.
“For us, we have seen a steady take up for our properties as 2009 drew to a close and we are confident of a better performance this year,” he said.
fr:biz.thestar.com.my/news/story.asp?file=/2010/2/17/business/5559315&sec=business
Developers to launch RM1b projects in Penang
This is in view of recovering economy, demand for high-end homes
GEORGE TOWN: Four major Kuala Lumpur-based developers plan to launch some RM1.16bil worth of luxurious residential properties in Penang this year, in view of a recovering domestic economy and continuing demand for high-end homes.
The properties are IJM Land Bhd’s RM422mil The Light Collection I & II, SP Setia Bhd’s RM60mil Brooks Residences, RM230mil Reflections condominium and semi-detached schemes for its Setia Pearl Island project, E&O Property Development Bhd’s RM380mil first phase of the Quayside project, and Mah Sing Holdings Bhd’s RM71mil first phase of the Legenda@Southbay.
The RM165mil Light Collection I, scheduled for launch in the second quarter on a 7-acre site next to the Penang Bridge, comprises 152 condominiums and 24 water villas, priced at RM650 per sq ft and RM800 per sq ft respectively.
The built-up areas for the condominiums range from 1,375 to 1,580 sq ft while the water villas have a built-up area of 3,169 sq ft.
The RM257mil Light Collection II, scheduled for launching on a 8.58-acre site in the second half of 2010, comprises 297 condominiums with built-up areas ranging from 516 to 3,528 sq ft, priced at about RM700 per sq ft onwards.
IJM Land managing director Datuk Soam Heng Choon said residential properties in the mid to high-end categories had proven to be good hedging instruments and would serve as the main growth driver for the property sector this year.
He said IJM Land also planned to launch in May its RM123mil Maritime Square, which comprises 244 serviced suites and 67 shop and office units.
SP Setia Property (North) general manager S. Rajoo said the RM150mil Reflections condominium scheme and the 54 semi-detached homes for the Setia Pearl Island project in Sungai Ara would be launched in the first and second quarter respectively.
“The Reflections comprises 317 condominiums with built-up areas of 1,077 to 1,512 sq ft and priced from RM378,800 onwards.
“The Brooks Residences project, located in the prime residential vicinity of Jesselton Road, is expected to be launched in the final quarter of 2010,” he said.
Rajoo said the group planned to introduce an innovative financing package for its new projects in Penang soon.
“The special financing package is for the new launch of semi-detached homes in the Setia Pearl Island scheme and a new project, Setia Ara, on a 28-acre site in Sungai Ara,” he said.
Mah Sing deputy chief operating officer Teh Heng Chong said the first phase of the RM284mil Legenda@Southbay project would offer 19 bungalows with an estimated gross sales value of RM71mil.
Comprising a total 76 bungalows, the Legenda@Southbay is a gated and guarded project that comes with a clubhouse and is equipped with features such as personal pool, smart-home features, solar hot water system and rain water-harvesting system.
“We also plan to launch the first phase of the RM911mil Southbay City commercial project in Batu Maung this year.
“The Southbay City is an integrated commercial hub comprising serviced residences, commercial lots, lifestyle mall, and four and five-star hotels,” Teh said.
Eastern & Oriental Bhd executive director Eric Chan Kok Leong said the company’s property arm E&O Property would launch the first phase of the RM1.8bil Quayside luxurious condominium scheme for its sea-fronting Seri Tanjung Pinang project in Tanjung Tokong early next month.
“The first phase is a 26-storey block, comprising 298 units,” he said.
Quayside, resembling sea-fronting home projects in Sentosa, and Sovereign Island in Gold Coast, comprises seven high and low-rise blocks surrounded by 4.5 acres of water park.
The Quayside is located within the first phase of the 908-acre Seri Tanjung Pinang housing project.
fr:biz.thestar.com.my/news/story.asp?file=/2010/2/22/business/5559403&sec=business
Developers, analysts unperturbed by interest rate hike
Interest rates still low and remain attractive to house buyers
PETALING JAYA: Developers and property analysts are not overly concerned about Bank Negara’s overnight policy rate (OPR) hike to 2.25% from a record low of 2%.
Although Thursday’s rise in the benchmark interest rate was the first in almost four years, industry players do not expect property sales to be affected.
According to ECM Libra property analyst Bernard Ching, despite the interest rate hike, bank financing will continue to be cheap with effective interest rates at 3.8% to 4% from the previous highs of 6.5% to 6.75% about two-and-a half to three years ago.
“Going forward, we expect the OPR to rise gradually and the best thing to do is to lock in the current negative spread before the rates rise further,” Ching told StarBiz.
He said the housing packages being offered by developers were providing a low entry cost for housebuyers and fuelling demand for houses.
He expects these packages to continue for the next couple of months at least, as it would be premature to end them at this juncture.
Ching said upper-middle range buyers, who have the capability to service their loans, were mostly buying for investment purposes.
SP Setia Bhd president and chief executive officer Tan Sri Liew Kee Sin said the rise in the OPR was very minimal and that “we see it as a normalisation of rates, given the improved economic outlook this year.”
“Generally, interest rates are still low and remain attractive to house buyers. We do not see this affecting our property sales and are confident with our ongoing launches. We will continue with what we have planned for this year,” he added.
Mah Sing Group Bhd group managing director-cum-chief executive Tan Sri Leong Hoy Kum said with the rates still far below historical highs, the affordability level of property buyers was still high.
“We doubt that the rate hike will have any impact on property sales. This increase should be seen as a positive move as it indicates a normalisation which can curb inflationary pressures,” he said.
Leong said the expected economic expansion, improvement in employment market, high savings and healthy affordability levels would contribute to higher demand for properties in the coming months.
Mah Sing will be capitalising on its branding, product quality, location, concept and track record to capture its market share and achieve its 2010 sales target of RM1bil.
The company plans to have property launches in 10 new projects and four existing developments.
fr:biz.thestar.com.my/news/story.asp?file=/2010/3/8/business/5808036&sec=business
Banks raise rates
Bankers say rate hikes based on recent adjustment
KUALA LUMPUR: Banks have begun raising their base lending rates (BLRs) following Bank Negara’s move to lift the overnight policy rate (OPR) by 25 basis points last week.
Five of the largest banks in the country raised their BLR to 5.8%.
Malayan Banking Bhd (Maybank) and CIMB Bank Bhd were the first two banks to announce their interest rate hike from 5.55%.
The two banks raised their BLR and base financing rates to 5.8% effective today following Bank Negara’s OPR revision last Thursday.
In a statement, Maybank president and CEO Datuk Seri Abdul Wahid Omar said the interest rate revision was based on the recent adjustment in the OPR.
“We expect to see better growth from our core business segments, leveraging on the improving economic environment and as more customers take advantage of the diversity of our product and service offerings,” he added.
Public Bank will also raise its BLR to 5.8% today, according to Bank Negara’s banking info website.
“We are supportive of Bank Negara’s move to normalise interest rates as the economy regains stability and are immediately transmitting it to both savers and borrowers,’’ said CIMB group chief executive Datuk Seri Nazir Razak in a statement.
Nazir said it was the right time to raise interest rates as the economic environment had normalised and growth momentum was strong.
“We saw the fourth quarter gross domestic product (GDP) numbers and we are looking at a GDP growth north of 4% this year potentially,’’ he told reporters at the launch of CIMB Twin Yield Income Investment structured product yesterday.
“Those conditions suggest that it is time to normalise interest rates. As best as I can tell, it is a good decision.’’
CIMB also raised its savings and fixed deposit rates by up to 25 basis points.
The RHB banking group also raised its BLR for RHB Bank Bhd to 5.8% today.
In a statement, group managing director Datuk Tajuddin Atan said RHB would be balancing the increased borrowing rates by offering more competitive rates for depositors.
Hong Leong Bank Bhd will increase its BLR to 5.8% effective March 10.
Bank Negara raised the OPR as the economy has improved significantly and returned to its path to recovery.
“Given this improved economic outlook, the Monetary Policy Committee (MPC) decided to adjust the OPR towards normalising monetary conditions and preventing the risk of financial imbalances that could undermine the economic recovery process,’’ said Bank Negara in its monetary policy statement last week.
“At the new level of the OPR, the stance of monetary policy continues to remain accommodative and supportive of economic growth.”
A rise in interest rates is usually greeted with trepidation as economists typically worry about its impact on growth and demand.
This time around, that apprehension is not yet visible.
“At the moment the impact will not be great as it is coming off historic lows,’’ said AmResearch economist Manokaran Mottain.
The Association of Banks Malaysia said the increase in OPR would not impede access to financing nor affect the industry’s lending activities.
The banking industry recorded a loans growth of 8.6% in January and 7.8% in December.
Analysts said the impact the BLR increase would have on bank’s profits would depend on whether deposit rates would be raised by the same quantum.
They said bank margins were squeezed when interest rates were cut but they expected net interest margins to widen as interest rates rose.
fr:biz.thestar.com.my/news/story.asp?file=/2010/3/9/business/5821302&sec=business
Jaya Upaya sees brisk sales of new bungalows
KUALA LUMPUR: Property developer Jaya Upaya Corp Sdn Bhd expects to sell all its boutique bungalows at Milano@Kemuning by the end of this month after receiving overwhelming response during the project’s launch on March 6.
Managing director Lee Cheng Bing told StarBiz the company had already sold 50% of the 38 three-storey boutique bungalows.
“We are optimistic based on the feedback we received during the property’s launch where we managed to attract about 300 walk-in potential buyers and investors.
“With the economy heading for improvement and attractive interest rates from the banks, we should be able to sell all the remaining units by end of this month,” he said.
Lee said the bungalows were priced at RM1.5mil to RM2.3mil for lot sizes ranging from 4,000 to 7,500 sq ft. The project is located near the Kesas Highway.
“A new highway is under development now to connect Kota Kemuning to Shah Alam.
“Milano@Kemuning will be much more accessible once the highway is opened,” he said.
He said the outlook for the property market was improving with most big developers upgrading their developments to come up with more premium products.
“We can see in the areas surrounding Milano@Kemuning that people are still coming to buy properties from the developers though the prices have increased now.
“Our launch that day saw the participation of some buyers in their mid-30s and this is a good sign that more young professional buyers are coming into the market,” he said.
Milano@Kemuning is a gated residential scheme on 3.2ha of freehold land next to Alam Impian township and near Kota Kemuning in Shah Alam.
The project has a gross development value of RM80mil and targets completion by the end of 2011.
fr:biz.thestar.com.my/news/story.asp?file=/2010/3/15/business/5827022&sec=business
CMP to build high-end condos in Johor Baru
KUALA LUMPUR: Central Malaysian Properties Sdn Bhd (CMP) will be developing high-end condominiums in Johor Baru that may cost about RM1.5mil a unit.
Called the “Lido Residences”, it was part of the company’s integrated Lido Boulevard waterfront project and each unit was expected to be about 1,900 sq ft in size, CMP managing director Datuk Chan Tien Ghee said.
“It (Lido Residences) will comprise 900-odd apartments over a 24-acre estate. The units will be fully furnished and will be facing Johor City as well as Singapore,” he said after a contract signing ceremony between CMP and Jan De Nul (Malaysia) Sdn Bhd yesterday.
Apartment units within the area currently were priced RM700 to RM800 per sq ft, Chan said, adding however that CMP had yet to finalise the price of its condominium units.
“Right now we’re still looking at our pricing.”
CMP has appointed Belgium-based dredging company Jan De Nul to carry out reclamation works at the site.
The deal is worth RM238.6mil. Chan said the works would take 15 months to complete. Once completed, about 94.18 acres would be reclaimed land while 28.17 acres would be on a piled concrete deck.
Preliminary works commenced this month.
On the reclamation, Jan De Nul group managing director J.P.J. De Nul said: “If you have a booming coastal area, what is cheaper than to make your city bigger by gaining a stretch (of land) from the sea?”
According to CMP’s website, Lido Boulevard spans 2.4km along the Tebrau Straits coastal line.
Encompassing an area of 122.35 acres, the project will be divided into six parcels and expected to be completed in 2016.
Chan said the project would have a gross development value of over RM4bil.
CMP is a special-purpose vehicle set up to undertake the development of the Lido Boulevard project.
The company’s main shareholders comprise businessman Tan Sri Vincent Tan Chee Yioun and Chan himself.
The project is a joint venture with Johor State Secretary Inc, an investment holding company of the Johor state government, which is also the land owner.
fr:biz.thestar.com.my/news/story.asp?file=/2010/3/16/business/5867176&sec=business