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9 Responses to “Malaysian Property Market Outlook and REIT | FREE Seminar”

1. alan on January 19th, 2010 at 9:11 am

   Local interest in foreign property at a high
   ————

   Interest in foreign properties has surged among Malaysians thanks to favourable investment conditions at the destination countries, coupled with uncertainties on the domestic front.

   Developers from the UK and Australia, in particular, have been actively wooing Malaysian investors with many high-end condominium projects being launched in Kuala Lumpur.

   These include projects such as the Lumiere Residences in Sydney, which is priced between A$1.16 million (RM3.59 million) to A$2.88 million (RM8.91 million) and the Waterline House and Woodberry Park apartments in London that start at £340,000 (RM1.856 million) and £199,950 (RM1.1 million) respectively. From a news report, Malaysians made up 20 per cent of all buyers in November last year.

   According to sources, one Kuala Lumpur office of a London-based real estate agency managed to garner sales of UK properties worth £70 million (RM382 million) last year and expects to do £140 million (RM764 million) this year.

   Meanwhile, the Australian Trade Commission says Malaysians invested about A$4.9 billion (RM15.3 billion) in Australian property in 2008.

   The amount invested in overseas property also suggests a continuing trend of brain and money drain from the country, as those who can afford to purchase property in Australia and UK tend to be educated and skilled and many do so with an eye on migration, either for themselves or for their children. It also contributes to the outflow of capital from Malaysia, which has exceeded inflows for the past decade.

   However, interest in these real estate markets is not only limited to Malaysians but has become a trend among Asians, led by China.

   Jellis Craig, a leading real estate agency in Melbourne said that in 2009, overseas Asian investors had become much more predominant in the Melbourne real estate market, with homes worth about A$1.5 million (RM4.64 million) being the most popular.

   “We find that most overseas Asian buyers are considering moving with their families to Australia themselves, or investing for their children to live in Australia,” said a Jellis Craig spokesperson in response to questions sent over e-mail.

   “In some cases, the mother and children have moved to Australia, while the father commutes between Asia and Australia. Melbourne is considered an attractive city to live [in] because it is renowned for top-quality schooling and lifestyle and is a city of multicultural communities.”

   As many Asians tend to move to Australia with an eye on education, Jellis Craig said that they are attracted to areas around Melbourne’s more recognised and prominent private schools; for example in Kew, Hawthorn, Camberwell, Balwyn and Armadale.

   In the case of London, the economic slowdown affected property prices in UK, making it relatively cheaper to acquire while at the same time reducing the number of potential local buyers, forcing developers to look abroad for customers.

   Jellis Craig added that the Melbourne real estate market is poised to grow thanks to record low interest rates, the Australian government’s stimulus package, higher immigration, the relaxation of Foreign Investment Review Board regulations and news of increased consumer spending, contributing to a ground-swell of support for the property sector.

   fr:themalaysianinsider.com/index.php/business/50040-local-interest-in-foreign-property-at-a-high

2. alan on January 21st, 2010 at 8:04 am

   Is property really a good investment?
   ———–

   Is property a good investment?”

   I get this question all the time. To be kind, I would smile and nod approvingly. “Of course!”

   But deep in my heart, I know that while the answer is correct, it is not complete. Of course properties make good investments. But then, the same thing can be said about stocks, unit trusts, gold and a couple of others as well. While they are all good investments does not mean anyone can make money from them. Buying the first house you see or the stock that takes your fancy is a sure recipe for disaster and a guaranteed formula for losing your hard earned money.

   Further, the house is the most expensive purchase most of us will make in our lifetime. And it also forms our highest debt and lasts for the longest time – often lasting 20 years or longer.

   That being the case, doesn’t it make sense for us to do a little bit (or better, a lot) of homework before parting with our money? Doesn’t it make sense to tread very carefully before buying a property? Obviously, the answer is ‘yes’.

   As an example of careful trading, a colleague of mine viewed the plot that he wanted to buy three times: once in the morning, once in the afternoon and once at night – all on different days. Mind you, it was only a plot of land at that time as the house was not up yet. Now some people may think that may be overkill, but his answer was spot on: “Before paying RM810,000 for anything, I want to be sure that everything is right and in order first.” I totally agree.

   And oh yes, he sold the house when it was completed two years later for RM1.1 million. Even taking into account that he had to pay RPGT (that was still applicable then), real estate agent’s commission, legal fees and all, he still pocketed a tidy sum of money. I’d say the three trips was certainly worth the RM200,000 plus – don’t you agree?

   But I have seen people buying houses on the spur of the moment. I have seen people rushing to buy properties as if they were buying groceries. For their sake, I sure hope that they have done the homework beforehand though my heart tells me something else.

   Buying a property is easy. All you need is a little bit of money and sign some papers. The question is, “Can you sell the property for a profit later on (hopefully not too later on)?” Or in other words, can you make money from the property in the near future? As you can see, the answer is not so easy.

   So this will mean that you will need to do your homework when investing in properties.

   This will include reading books, magazines, articles, observing and yes, learning from the experts. Of course, this will require time, effort and yes, even money. But all that effort is peanuts compared to the reward that awaits you. And yes, the price is miniscule compared to the problems that can happen if you bought wrongly. (Just ask the unfortunate people who bought houses in flood prone areas. Worse, they have to bear the brunt of listening to jokes about water proof furniture and getting free boats from the developer.)

   fr:starproperty.my/PropertyGuide/Finance/1729/0/0

3. alan on January 28th, 2010 at 5:52 pm

   A good time to buy

   I ATTENDED the wake of a distant family member who passed away earlier this year. As we sat in his car porch, drinking our mineral water and muttering platitudes, a family member stood up and declared, “good riddance to bad rubbish” and then sat down again, looking satisfied. Much as I admire and enjoy eccentric behaviour and will always support freedom of speech, I thought this remark was a little ill-timed, denying the target his right to initiate the customary hundred million ringgit suit for defamation.

   I shall treat the passing year with appropriate reverence and respect. Suffice to say, it marked the 50th anniversary of the kidney transplant. Now, can we move on please?

   But before we do, let me spotlight a couple of non-events that didn’t seem to make the news. Firstly, have you noticed you are no longer being beseeched to buy land in England? And that owning a plot in Canada is no longer your passport to the good life? There are reasons for this. In March, Walton International Property Group, a company which enjoyed prominence here for a while, was raided by Bank Negara following suspected breaches of the Exchange Control Act.

   Bank Negara warned the public to be cautious of this type of land banking scheme. Then in October the Companies Commission carried out three simultaneous raids on UK Land International (M) Sdn Bhd, Profitable Plots Sdn Bhd and Edgeworth Properties (M) Sdn Bhd for alleged breaches of the Companies Act as well as the commission’s policy guidelines.

   It transpires that one of the companies is already facing winding up proceedings in the United Kingdom. According to the British Financial Services Authority, which initiated these winding up proceedings, UKLI Ltd had over 4,500 investors but none of the land sold had ever received planning permission.

   The other curious non-event was that the Kuala Lumpur 2020 City Plan was not gazetted. If you recall, this was the plan drafted in 2008 which reviewed permitted land use and densities. We are told that gazettal will take place in 2010 but there is still time for appeal. This may be your last chance, although only history will record whether this has been a quixotic attempt at reform or whether the task of master planning a city as dynamic as KL is really feasible.

   And so here we are, arguably entering a new decade or possibly nearing the end of the old one, depending on whether you start counting from zero or one. (A book that has made a lasting impression on me is, How to Lie with Statistics. Did you know that the average human being has one breast and one testicle?)

   Now that 2009 is over, we can probably lower the storm flags over the property market, although I wouldn’t fold them up and stow them away just yet.

   Retail and office space looks well moderated but there is still a hefty supply of top-end condos in the pipeline. And we may not have seen the worst of the non-performing loans.

   Developers’ friend

   Looking ahead, the Government may face difficulty controlling inflation, which is dubbed ‘the developers’ friend’ and which generally pushes values upwards. My long-range forecast is for our next boom to come around in 2013, and there has probably never been a better time to buy, than now.

   This is the last in my series, but before I wish you a Happy New Year and Goodbye, I want to share with you one abiding experience that has made this festive season a truly cheerful one for me.

   Coming out of Subway last week after a quick lunch, I nearly tripped over a young man sitting on the kerb, apparently gesticulating wildly into thin air. On closer inspection I saw he had his handphone propped between his knees. He had the camera on. Deaf and dumb, he was ‘talking’ to his friend. God bless him, and hooray for technology. There is hope for humanity yet.

   Chris Boyd is executive chairman of Regroup Associates Sdn Bhd, property consultants.

   fr;biz.thestar.com.my/news/story.asp?file=/2009/12/31/business/5381424&sec=business

4. alan on January 29th, 2010 at 9:42 am

   Loan indicators show strong growth rates

   PETALING JAYA: Overall loan indicators in the country registered strong annual growth rates across business and household sectors, Bank Negara said in its latest monetary and financial development report.

   On a net basis, banking loans and oustanding private debt securities (PDS) expanded at a combined annual rate of 8.6% as at end of last year.

   Gross financing in the banking system and the capital market remained high at RM69.2bil in December, although there was a drop compared with RM84.8bil recorded in November.

   In the business sector, demand for financing was lower while loan approvals and disbursement remained relatively strong.

   Loans were mainly channelled to the manufacturing, retail, restaurant and hotel, as well as primary agricultural sectors for working capital purposes.

   As at end-December, business loans oustanding expanded at an annual rate of 2.6%.

   In the household sector, demand for financing of passenger cars and personal loans climbed.

   Loans disbursement rose in tandem, and led to the annual growth rate of 10% recorded as at end of December.

   Net fund raising activity in the capital market stood at RM4.3bil last month, but was lower compared with November due to several large issuances of PDS and Maxis Bhd’s share sale during the month.

   Meanwhile, the average fixed deposit interest rate was unchanged in December.

   The average base lending rate stood at 5.51% as at Jan 15, while the average lending rate trended lower to 4.83% as at end of December compared with 4.91% in November.

   Broad money supply, or M3, grew at an annual pace of 9.1% and up RM16.6bil on a monthly basis. The increase in M3 in December was due to higher credit by banks to the private sector, higher government spending and net inflows from abroad.

   The banking system’s capitalisation remained strong with the risk-weighted capital ratio and core capital ratio at 14.7% and 13.1% respectively.

   The net non-performing loan ratio improved to 1.8%, while aggregate loan loss coverage ratio was above 90%.

   fr:biz.thestar.com.my/news/story.asp?file=/2010/1/29/business/5571795&sec=business

5. alan on January 30th, 2010 at 10:21 am

   Al-Hadharah REIT profit up 8.8%

   KUALA LUMPUR: The Al-Hadharah Boustead REIT (real estate investment trust) achieved an 8.8% increase in realised operating profit of RM69mil for its financial year ended Dec 31, 2009 (FY09) from RM63.5mil in the previous year.

   This was mainly due to a stronger contribution from fixed rental income due to the inclusion of two new estates, Bebar and Malakoff, the fund said in a statement.

   It posted revenue of RM71mil for FY09 against RM67.5mil previously.

   fr:biz.thestar.com.my/news/story.asp?file=/2010/1/30/business/5579138&sec=business

6. alan on February 4th, 2010 at 11:42 am

   Hektar REIT posts lower net income

   KUALA LUMPUR: Hektar Real Estate Investment Trust (REIT) registered a net income of RM9.58mil for the fourth quarter ended Dec 31, 2009, down 70.7% from RM32.6mil in the previous corresponding period.

   Its revenue decreased 3.3% to RM21.5mil from RM22.3mil a year ago.

   In a filing with Bursa Malaysia, Hektar REIT said its net income for the year ended Dec 31 (FY09) fell 38.5% to RM37.1mil, on account of a smaller fair value gain during the year, against RM60.4mil in FY08.

   Its revenue for FY09 rose 4.3% to RM87.7mil, primarily due to the full year performance of its Wetex Parade in Muar.

   It declared dividend per share of 3.1 sen for the fourth quarter.

   REIT manager Hektar Asset Management Sdn Bhd chief executive officer Datuk Jaafar Abdul Hamid said after an unpromising start and over the course of a volatile year, Hektar REIT had managed to maintain the level of the financial performance of its shopping complexes.

   “Our solid and stable assets have continued to perform, proving that Hektar REIT has a resilient property portfolio, a focused business model and quality execution by management,” he said.

   Hektar REIT has shopping centres in Selangor, Malacca and Johor with assets valued in excess of RM700mil and an average occupancy of 95.8%.

   fr:biz.thestar.com.my/news/story.asp?file=/2010/2/3/business/5600334&sec=business

7. alan on February 13th, 2010 at 3:21 pm

   Super-niche projects still drawing buyers

   THE local high-end residential property segment seems to be making quite a comeback, with developers eagerly launching their projects and some already raking in quick sales.

   Last month, Urban Hallmark Properties Sdn Bhd (UHP) previewed its Zephyr Point on Basong in Damansara Heights, a niche high-end residential development comprising just seven units – three penthouses and four villas.

   The three-level villas have built-ups ranging from 8,000 sq ft to 10,000 sq ft while the three penthouses sized from 10,000 sq ft to 12,000 sq ft are spread on a single level.

   The project is expected to be launched between April and May, with the final purchase price of the homes to be determined then. However, with an indicative pricing of RM1,200 psf, each unit is expected to fetch a cool RM10mil onwards.

   UHP managing director Datuk Jeffrey Ng says as the company was targeting high net worth individuals and corporations, price would not be an issue.

   “The main issue here is whether they perceive the purchase is a value buy at this point in time and whether they are convinced that the property will enjoy capital appreciation in the future.

   “Undoubtedly there will be demand for the super high end properties due to scarcity in prime residential locations,” he tells StarBizWeek in an e-mail.

   Ng says the high net individuals it was targeting comprised local upper class Malaysian buyers from surrounding locations or even expatriates.

   “When comparing the pricing of properties within the same region such as Singapore, Hong Kong, Bangkok and Jakarta, property prices in Malaysia are still considered very cheap and provides a good investment opportunity.”

   Ng says UHP was also in the process of appointing foreign real estate consultants to target our local expats who plan to return to Malaysia soon.

   On how quickly he expects the homes to be taken up, Ng says: “We would expect the properties to be sold at a conservative pace given the price point and the profile of buyers targeted.”

   The Zephyr Point homes come with low emission laminated/ tempered glazing glass (for areas facing west only); the use of heavy duty commercial grade aluminium windows and full height sliding doors; salt water infinity pool; salt water spas (in the Villas) and a fully equipped gymnasium.

   The homes are also wi-fi ready, have fully ducted air-conditioning and come with a private lock-up garage as well as a drivers waiting lounge. Each unit comes with a private home office sized between 300 sq ft and 500 sq ft, located on a special dedicated floor known as Breezeway. The Breezeway also hosts the residents’ function lounge and entertainment foyer, overlooking a fully equipped gym and infinity pool.

   Given the super high price of the homes, one still has to beg the question as to whether people will still buy – given that the world is still recovering from a global economic turmoil.

   Ho Chin Soon Research Sdn Bhd director Ho Chin Soon says there would always be purchasers for super-niche projects.

   “There are always people that can still buy and given that there are so few units (at Zephyr Point), the developer will already have the people (buyers) in mind.”

   Ho says it was more than likely that the purchasers would buy the properties for themselves rather than rent them out.

   “At RM10mil, you can imagine the cost of rent. Who’s going to pay so much a month?”

   Knight Frank Malaysia executive director Sarkunan Subramaniam concurs that there would always be purchasers for niche, high-end products.

   “The super rich are not affected by economic times. They usually have their investments well protected and in a downturn, they become a lot more prudent in their spending. When the time is right, they will know when to buy. Of course, location (of properties) is critical and the Damansara area is a good location.”

   Sarkunan also said chances of the homes being quickly snapped up were also dependent on whether the project was by a reputable developer.

   Another high-end development that has seen promising take-ups is Planet Uno Sdn Bhd’s Seputeh Gardens, which will comprise 42 units of bungalows are scheduled for completion before the end 2011.

   Priced from RM4.1mil to RM6.8mil, Seputeh Gardens managing director Liew Tze Yong says more than half of the homes were pre-sold even before their launch on Jan 16.

   “Out of the total 42 units, 33 units were sold on the second day of the launch,” he says.

   The homes are targeted at professionals, chief executive officers, and business owners, says Liew.

   Each of the units has seven to nine rooms, including a study and a maid’s room. All bedrooms also come with attached bathrooms. Each home also comes with two kitchens and a laundry area.

   The low-density homes come with spacious gross built-up areas ranging from 6,038 sq ft to 8,878 sq ft and land areas ranging from 4,500 sq ft to 8,200 sq ft.

   Seputeh Gardens is situated at the intersection of major highways namely the Federal Highway, the New Pantai Highway, KL-Seremban Highway and also the East-West Link.

   Liew says the success of the local high-end segment was dependent on location and “good architecture detailing and materials.”

   The company, which is best known for its Gita Bayu development, is also studying the possibility of other high-end, niche residential projects and potential joint ventures.

   fr:biz.thestar.com.my/news/story.asp?file=/2010/2/13/business/5660225&sec=business

8. alan on March 13th, 2010 at 8:49 am

   Hektar REIT sells land to Govt

   KUALA LUMPUR: Hektar Asset Management Sdn Bhd, the manager for Hektar REIT (real estate investment trust), yesterday announced the Government has acquired 0.1331 ha from Hektar REIT.

   The deal, done under the Land Acquisition Act 1960, was for the proposed extension of the Kelana Jaya Light Rail Transit Phase Two project in Subang Jaya.

   The land formed part of the 4.362 ha on which the Subang Parade Shopping Centre is located and which belong to Hektar REIT, the company said in a filing with Bursa Malaysia

   fr:biz.thestar.com.my/news/story.asp?file=/2010/3/13/business/5856405&sec=business

9. alan on April 28th, 2010 at 8:02 am

   Sunrise may offer REIT listing

   KUALA LUMPUR: Developer Sunrise Bhd may consider injecting some of its property assets into a real estate investment trust (REIT) as they begin to deliver stable income, its executive chairman said.

   “We have invested considerably in a pool of investment assets over the last few years, which are now starting to bear fruit,” said Datuk Tong Kooi Ong.

   Sunrise, ranked ninth by market value among listed Malaysian developers, might consider a REIT “at a later stage,” Tong said in an e-mail interview.

   This month, larger rival Sunway City Bhd (SunCity) said it would inject eight retail properties into a REIT in a deal bankers said might raise up to RM1bil for the company.

   REIT mainly invests in commercial property and pay most of the rent to shareholders as dividends, which are usually higher than yields of government bonds and offer capital gains if property prices rise.

   Tong, a former banker and stockbroker, said Sunrise had not yet planned to enter the fast-growing markets of Vietnam and China.

   “For the medium term, our overseas focus will be on Canada. We do not have plans for the moment to venture into Vietnam or China,” he said.

   Later this year, Sunrise planned to launch two projects – an office tower project in Kuala Lumpur as well as a residential project in Vancouver, Canada, Tong said.

   Malaysian property developers, such as SP Setia Bhd and Gamuda Bhd, have embarked on multi-billion ringgit developments in Vietnam to tap rapid growth. SunCity has formed property joint ventures in fast-growing China and India.

   Local developers expect higher sales from home this year as the economy rebounds from last year’s downturn.

   The stock market rally in 2009, which saw the benchmark share index jump nearly 40%, is expected to further boost house buyers.

   Malaysia is one of the first in Asia to withdraw crisis measures when the central bank raised its key policy rate by 25 basis points to 2.25% in March. Most economists expect more hikes later this year.

   Sunrise shares have risen 6.8% so far this year, outpacing the 5.6% gain in the property sector index.

   fr:biz.thestar.com.my/news/story.asp?file=/2010/4/28/business/6142747&sec=business