Property Malaysia

Seri Petaling is known for a lot of things. Endah Parade, fabulous dim sum, proximity to Old Klang Road and Kesas highway, a congested commercial area and old linkhouses. Then there is the proposed KL-Putrajaya highway. (For our write up on the KL-Putrajaya and Sri Petaling, check out this article).

Endah Puri is also known for PJ Development, and they have recently launched Endah Puri, another condominium just next to the KL-Seremban highway and Kesas highway. Access to the place is via the main road just off the Kesas. Location is more or less favourable, given proximity to the highways and KL city. There is also a vibrant business and commercial centre (some may say over-congested and haphazard), and recreational facilities.

This is billed as the last Endah series of condo in the area. It probably is, we wouldn’t know (no, sales person there, remember?). When we were at the sales office, there wasn’t a single sales person there, except a security guard. And some of the rooms in the temporary show flat were stripped bare because they were moving it to the actual condo. So, excuse us if we miss out one or two little details.

The condo is laid out in a two large blocks, both enclosing the pool and common facilities. They have full condo facilities, and some pretty impressive security features (developers seem to be touting this three tier security thing recently…). On top of that, they have internet-ready points in the units, high-speed broadband connectivity, wireless hotspots at common areas and intelligent home systems. Guess they are wooing the yuppie income group.

There are 4 types of units available, starting with 1,062sq.ft to 1,541sq.ft.

The smallest one, Type A (1,062sq.ft), is a standard 3 bedroom design, with a balcony. The kitchen is open, so smoke gets into your living and dining. They have what they call a ‘compartmentalized bathroom’ for all the units. It has 3 equally sized partitions, an open sink area, a door into the WC, and a shower area.

Type B (1,211sq.ft) is a slightly enhanced version of the smallest unit. It has an additional utility / maid behind the yard, making it detached from the unit.

Type C (1,237sq.ft) is almost the same size, but may not be so desirable for families, it is oddly polygon in shape. Because of this, the master and one other bedroom is affected, resulting in unusable space. Not good.

Type D (1,541sq.ft) is the largest, and probably quite attractive to large families. There are 4+1 rooms, but one of the main rooms is also quite small, probably meant to be a study. The kitchen is still open, though, and the yard is inconceivably large, partly due to it odd size again.

The developer is offering upgrade packages to add fittings and points, this is a good move.

One the whole, it probably is a good buy if you like the area, since there aren’t much choice in that area. But we don’t fancy living so close to busy highways and THAT commercial area, so it’s a matter of personal preference.

So, should you buy a condo or landed unit?

Ah, the perpetual question that haunts the housebuyer / investor.

It all really boils down to the personal preference, really, albeit there are about a hundred other factors to consider. Last week the Sun’s online paper ran a good article on this issue, interviewing some Malaysians on their choices.

It’s worth a read, you can check it out here.

We here at Property Malaysia, are preparing a few big postings next week, so watch this space for more goodies.

There was an expansive report on RB Land in yesterday’s StarBiz section. RB Land is more known as the property division of Road Builder Holdings (RBH). Through its many subsidiaries and divisions, RBH has interests in construction (RBM), toll concessionaire (NPE, Besraya) port operations (KPC) and others.

Previously, RB Land was previously known as Econstates Sdn. Bhd., and was acquired by RBH (which originated as a infrastructure developer) to increase their foothold in the property development market, as a means diversification and safeguard against the unstable Malaysian construction market. Actually, in the last ten years, more and more construction based firms are going this direction, like IJM (IJM Properties), Gamuda (Gamuda Land), Ireka (i-Zen, Binaderas), WCT (WCT Land), etc.

According to the report,

For the financial year ended June 30, RB Land’s share of earnings contribution to the Road Builder group has increased substantially to more than 30% from a single-digit contribution during the days of Econstates.
Share from the property division is expected to remain at 30% for the 2006 financial year.
RB Land recorded annual property sales of around RM300mil, and sales for the next six months are expected to remain strong.
It has unbilled sales of RM300mil that will be recognised over the next 1½ year.

Further on, it also notes that:

A corporate restructuring exercise that involved the injection of Road Builder’s 70% owned company, RB Land Sdn Bhd (RBL), into the property group has further raised RB Land’s profile.
Previously, Econstates’ only assets were the 383-room Holiday Villa hotel and a nine-acre plot of land in Subang Jaya.

The series of articles, which interviewed RB Land’s executive director Datuk Soam Heng Choon, also notes the following salient points:

This post is part of the series of postings on the latest launches in Bandar Puteri Puchong developed by IOI Properties. We strongly recommend you read that post (you can find it here) to get a better understanding of this review.

Other than the high-end Aseana Puteri (reviewed here earlier), Bayu Puteri is the other apartment phase available, although this one is much more affordable, from about RM130k to about RM170k (Aseana Puteri starts from RM230k to about RM280k, with full condo facilities).

As a lower end alternative to apartment living, the location is pretty good, set a top of the hill looking down on the sprawling Bandar Puteri, and it’s next to the Bukit Hitam Forest Reserve. So for the moment, there won’t be any further development that side (Note we said ‘for the moment’…)

The overall design of the apartment follows the template set out by IOI Properties in this development and Bandar Puchong Jaya (like Sutramas). There are two towers set a distance apart, with the common facilities in between. Facilities are quite standard, security, swimming pool, function halls and shops. Actually, for this price range, you can’t expect too much nifty facilities. Already Bandar Puteri is an almost fully-developed township with all the commercial amenities and infrastructure, buyers would not have much to complain here.

Potential buyers are advised to check on availability of carparking for every unit.

For the sales people, this must be one of the easiest products to market – there is only ONE unit type to describe. For all the 250 units. Actually they’ll tell you there’s two types – A and B, but both are exactly the same, except that one is the mirror image of the other. Oh wait, there’s either a corner type or intermediate type, but again same except for extra windows.

There are 8 units per floor for one block, four intermediate and four corner units. The typical unit comes in 900sq.ft, quite a standard size for this price range. There is much to fault the internal layout, since they’re mass marketing the one type to suit everyone’s taste. There is a fair-sized living and dining, one master bedroom and two other rooms. Both rooms share a powder room. In fact, this layout is almost similar to another we’ve seen somewhere else in Puchong.

The kitchen is rather small, but it’s not a big complaint. The yard is adequate, we can foresee it comfortably fitting a washing machine, overhead clothes-line, and any knick-knacks and junk Malaysian love to accumulate.

At RM130psf, the price is still affordable. At the moment construction has commenced and will complete in Jan 2008.

For our views on the location, accessibility and quality of the Bandar Puteri homes, please check out the earlier mentioned post on the overall review of the Bandar Puteri development here.

If you have problems understanding some of the terms used by housing developers and this site, here are some of the textbook definitions for the more common ones. For an in depth glossary of legal and industry terms, this place is an excellent site for your reference (here). The examples below are taken from that site.

Encumbrance
Anything, such as a mortgage, tax, or judgment lien, an easement, a restriction on the use of the land or an outstanding dower right that may diminish the value or use and enjoyment of a property.

Conveyance
A term used to refer to any document that transfers title to real property.
The term is also used in describing the act of transferring.

Alienation
The act of transferring property to another. Alienation may be voluntary, such as by gift or sale, or involuntary, as through eminent domain or adverse possession.

Subdivision
A tract of land divided by the owner, known as the subdivider, into blocks, building lots and streets according to a recorded subdivision plat, which must comply with local ordinances and regulations.

Adjustable-Rate Mortgage (ARM)
A loan characterized by a fluctuating interest rate, usually one tied to a bank or savings and loan association cost-of-funds index.

Easement
A right to use the land of another for a specific purpose, such as for a right-of-way or utilities; an incorporeal interest in land.

Lien
A right given by law to certain creditors to have their debts paid out of the property of a defaulting debtor, usually by means of a court sale.

For the entire glossary, don’t forget to check out the source site here.

This was another development we saw at the recent Homebuyer Expo, although this particular reason stayed in our minds for all the wrong reasons (more on that later). But let’s talk about the housing project first.

Most Klang Valley residents are pretty aware of the suburb limits for the city are slowing expanding due to scarcity of land, with Sri Damansara in the north, Cheras to the east and Shah Alam / Klang in the west. And of course in the south, there’s Puchong / Seri Kembangan which is will one day, eventually merge with Putrajaya / Cyberjaya. But for the time being, Kipark Puchong seems to be breaking new undeveloped ground between the two growth zones.

It is situated just beyond Puchong, after the border with Sepang. If you’re traveling towards the southern end of the LDP, it is on your right just after the last toll.

(Location map will be uploaded soon, thanks for being patient!)

There are 130 units of semidetached homes, built on residential leasehold land. There are two types of units, but only one was mad available to us for review (Type A). This unit is 32’ x 75’, which is slightly smaller than the usual 40’ x 80’. This would mean its almost a linkhouse dimension, just with an addition of a side garden that’s less than 10’ wide.

Being 2 ½ storeys, the build up is only 2,706sq.ft, which isn’t big due to the small footprint. The driveway is quite ample, wide enough to park 2 cars. Ground floor, there is a foyer before the living and dining. The wet and dry kitchen is combined, but adequate for family cooking. First floor, there is a large master bedroom, with a strange balcony. Should have done away with it. Two other bedrooms share a common bath. Second floor, there is a huge family area (with another balcony) and 2 more identical rooms sharing a common bath. So in all there are 5 + 1 rooms.

The perks include gated security features and a ‘water-theme park’. It’s really just a park with a fancy swimming pool.

People might view their location as favourable, as it is very near to Putrajaya/Cyberjaya, and the universities near there like Limkokwing, UNITEN, MMU and UKM.

They are also developing other KiPark projects across the Klang Valley, including Sri Utara KL, Selayang and Cheras.

We encountered this development during the recent Homebuyer Expo, unfortunately the sarcastic salesperson attending us left a very bad impression of the development and company (we saw them again at Mapex, but we made sure we didn’t pass their booth…) We’re used to less than knowledgeable sales people or those that cannot speak English properly, but this Ms. Sarcasm takes the cake. Maybe we looked like poor supervisors that can’t afford to buy the homes (which is true, actually), but you know the old adage, “don’t judge a book by its cover…”

They say the end of the year is usually a slow period for selling homes. We don’t really know if it’s true. According to a sales guy I know, he says it’s because of the school holidays, and people are busy going on holidays, be it overseas or locally. We’re not entirely convinced, but we’re no experts.

Maybe this year it could be so, since it’s the start of the fasting month, and pretty soon, most Malaysians will be busy with Hari Raya preparations and shopping, then it will be REALLY the end of the year. Then it will be the Chinese New Year.

Regardless, we doubt the new launches and promotions will totally stop, and already we still see advertisements for new projects in the papers. And the latest sales drives and re-launches of existing projects don’t seem to be letting up. Open the newspapers everyday you’ll still dozens of those colourful development ads using the latest home marketing buzzwords like ‘heavenly’, ‘sanctuary’, ‘tranquility’ and ‘exquisite’.

In fact, the other day we just got our 6th text message from this developer reminding us to visit this newly launched condo project we viewed earlier (6th one, no joke, that’s got to be some kind of record). We were told that this place sold off 60% of their units in one weekend (regular Property Malaysia readers would know which one), that’s got to say something about our property market.

Well, anyway, there will still be many, many more new launches in these last few months of 2005. Some of those we are keen to view in the near future are:
Troika (launched a few months ago to great success, we’re told)
Paragon Heights, Bukit Jalil (we didn’t get pass the crusher run access road the last time)
Alam Sutera, Bukit Jalil (wait till you here our story on this one…)
Axis Ampang (ok, fine, we review too many of these luxury condos).

Everybody needs a bank loan when buying a home, unless you’re the few that pay everything in cash (!). In Malaysia, there are 10 local anchor banks, most of them (if not all) are actively marketing your home loan packages during these good times for property investment.

There used to be many, many local banks, not to mention the small finance companies, but some years back during the financial crisis Bank Negara Malaysia (the Malaysian central bank) sought to consolidate the industry by mergers, so we now have 10. There is talk of another round of mergers down to 6 anchor banks, but there is no announcement yet.

Other than the 10, there is another 2 Islamic banks (also listed below). These are not including a few more development finance and savings institutions like Bank Rakyat and Bank Simpanan Nasional. For home loans, any one of the 10 banks will do. Number in parentheses is the telephone number.

For more on the home loan offered by local and foreign banks, yo ucan check out this series of articles in Property Malaysia:

Home Loans by Malaysian and Foreign Banks Part 1 : Local Banks
Home Loans by Malaysian and Foreign Banks Part 2 : Best selling Islamic Banks Loans
Home Loans by Malaysian and Foreign Banks Part 3

Local Banks:
Affin Bank Bhd. (+603 2055 9000)
Alliance Bank Malaysia Bhd. (+603 2694 8800)
Arab-Malaysian Bank Bhd. (+603 2026 3939)
Bumiputra-Commerce Bank Bhd. (+603 2693 1722)
EON Bank Bhd. (+603 2694 1188)
Hong Leong Bank Bhd. (+603 2164 2828)
Malayan Banking Bhd. (+603 2070 8833)
Public Bank Bhd. (+603 2176 6000)
RHB Bank Bhd. (+603 9287 8888)
Southern Bank Bhd. (+603 2087 3000)

Islamic Banks:
Bank Islam (M) Bhd. (+603 2693 5566)
Bank Mualamat (M) Bhd. (+603 2059 1389)

In addition to that, foreign banks also have a large presence in the country, and some like Citibank and HSBC are working closely with developers to offer home loan packages.

Foreign Banks:
ABN Amro Bank Bhd. (+603 2162 7888)
Bangkok Bank Bhd.(+603 2072 4555)
Bank of America (M) Bhd. (+603 2032 1133)
Bank of China (M) Bhd. (+603 2169 8117)
Bank of Tokyo-Mitsubishi (M) Bhd. (+603 2034 8080)
Citibank Bhd. (+603 2383 8585)
Deutsche Bank (M) Bhd. (+603 2053 6788)
HSBC (M) Bhd. (+603 2070 0744)
JP Morgan Chase Bank Bhd. (+603 2270 4111)
Bank of Nova Scotia Bhd. (+603 2161 0766)
OCBC Bank (M) Bhd. (+603 2692 0344)
Standard Chartered Bank (M) Bhd. (+603 2117 7777)
United Overseas Bank (M) Bhd. (+603 2692 7722)

Negara Properties Bhd, a long time property player, hope to return to the black by focusing on more up-market, lifestyle product, as reported in the StarBiz on October 4, 2005.

According to the report:

• The company recorded RM103mil in revenue and pre-tax loss of RM20.5mil in financial year ending June 30, 2005. Last year, it was RM123.4mil revenue and pre-tax profit of RM12.9mil.

• The company reports that the losses were mainly due to the liability arising from the High Court judgments against their subsidiaries, provision for an award by an arbitrator, LAD, and write-offs for cost overruns.

• The company is banking on developing a land bank of 1,200 acres in Desa Melawati and Taman Melawati.

• They have ongoing commercial project in Melawati Urban.1 (MU.1) scheduled for completion next year and Phase 2 (MU.2) with a gross development value (GDV) of RM100mil will start this year.

• Another project is the Impian Boulevard in Kajang scheduled to commence construction this financial year.

Based on these high-end projects and some medium- and low-cost projects, Negara Properties hope to turn around the losses into profits this year. We hope they will be able to do it, they are a decent developer with vast experience in building good homes.

The government is set to give Malaysian REITs a big boost, as spelt out in the recently Budget 2006 (read our report here).

In a nutshell, the government is proposing tax deduction for legal, valuation and consultancy expenses incurred by REITs. Many of the industry professional were supportive of the this move, as reported by the Star on Oct 1. REHDA president Datuk Jeffrey Ng said that this would bring down the cost of setting up such trusts.

According to the report,

“More developers and REITs promoters will be encouraged to invest in investment-grade buildings to get into the REIT act,” he said.

We think that this is a good move. However, the tax deductions are only a small fraction of the actual sum required by corporations to acquire the investment instruments and to set up the REITs. However, it will serve more as an incentive to those corporations planning to do so already.

At the moment, there are a handful of companies planning to launch REITs soon. We have always emphasized that perhaps a larger number of counters should be encouraged for it make a significant impact on investors’ interest.

For further reading, check out the following articles in Property Malaysia:

Budget 2006: Effects on Housing & Property Sector

About Malaysian REITs

YTL to Launch Starhill REIT in October