Property Malaysia

We thought of doing this new year wish list for the Malaysian Property industry during January 1st, but only managed to do it now. With most company’s business year traditionally starting during the lunar new year, we thought this was still appropriate.

Judging from some of the predictions from the newspaper columnists, they are saying that this year will be a soft one for high end residential property. As for mid-priced houses, the views are mixed, but we are more inclined that it will be pretty much be the same as before.

This is the first part of the list for 2006, so here goes:

Cheap houses will remain cheap
Over the course of the post-financial crisis years, the bottom line price of 20′ x 70′ linkhomes has been creeping up. It’s still possible to find one for RM200k in the suburbs now, but we wish that it will not increase anymore. These basic home units are still very popular for entry level housebuyers, and will always be.

More REITs
It’s starting to take off slowly, with a trickle of corporations getting into the act. But we really need to see more of them to have a decent choice of imvestment and have a fair picture of their performance. With the government pushing for them, we’re optimistic.

More interesting and attractive packaging
Selling homes have become more and more competitive these days, especially with the number of developers getting into the act. This is especially so for higher priced homes above RM300k. By and large it is understood that any freebies or packages included in the home is generally priced in together, but sometimes ingenuity and thoughtfulness goes a long way to attract potential customers. Some packaging we can think of are security systems, in-house renovation and upgrading works, rebates for referrals, etc.

Watch out for part two coming up next.

L&G have been prominently mentioned in the business papers recently. They are currently undergoing a restructuring exercise, with a debt valued at about RM488mil as of at the end of last year. Their financial problems have been highlighted here In Property Malaysia before (you can check it out here).

The company is looking to revived two of their stalled townships, Bandar Sg. Buaya and Lembah Beringin. These two projects are held under the company’s respective subsidiaries, and were hit during the 1997-98 Asian financial crisis. However, how the company plans to do so is unclear. Currently they are looking at a few options, such as JV with other parties or offloading some land to raise cash, but nothing is decided yet.

According to a report, The group posted a net loss of RM129.5 million for the year ended March 31, 2005 mainly due to the impairment of assets and liquidated ascertained damages in the two subsidiaries.

Further to that, during the recent EGM:

• The company will sell off two plots of land in Sungai Buloh, Selangor, to TA Enterprise Bhd’s unit Indo Aman Bina Sdn Bhd for RM189.55 million as part of its debt restructuring agreement (DRA) with its creditors.

• The DRA, which is in effect from 2003 to 2010, will see it selling off specified assets to reduce about RM742 million in debts and forbids it from further borrowings. This leaves the company with a land bank of more than 5,000 acres.

During the height of the boom time when both Lembah Beringin and Bandar Sg. Buaya were launched, many city folks viewed the two projects as too far from the city and the other suburbs, making it less attractive as compared to other competing developments. If L&G plans to really make good revenue from resurrecting these two projects, they have an uphill task ahead of them. Furthermore, they have also to consider the economic climate of the property market in the coming months.

Related Articles in Property Malaysia:

L&G Selling Land In KL in Debt Restructure

We would like to wish a Happy Chinese New Year to all our readers out there, Gong Xi Fa Cai, Xin Nien Kuai Le!

For the coming Year of the Dog, we wish all our readers prosperity and happiness, may this year bring more good investment opportunities and interesting new launches.

This site will be updated over the next one week, for the benefit of those who are taking the opportunity learn more about property and real estate during the holidays. So keep your browsers here, folks…

Mah Sing is looking to develop more bungalows and semi-detached houses in the Klang Valley in the near future. We have earlier reviewed their Damansara Legenda project, which is situated in the Tropicana area of Petaling Jaya .

A report in the Star recently mentioned some interesting points about this first board property development firm. From there:

• About 90% of the group’s homes in the Klang Valley and up to 30% in Johor are semi-detached houses and bungalows.

• They are planning to launch about RM700 to RM800million homes this year alone.

• The group is basically targeting both up-graders and new buyers.

• So far, the take up rate of their high end homes is 86% during project launch and unbilled sales are at RM387mil.
  
  

• The recently launched Aman Perdana project has a take up rate of more than 80% and sales of RM263mil since its launch in March 2005. The project, which was launched in March last year, will have gross development value (GDV) totaling RM858mil.

• Mah Sing will be launching the limited edition semi-detached houses and garden bungalows in Perdana Residence, Selayang, in March. Altogether, Perdana Residence offers 75 medium-high-end homes priced at RM400,000 to RM1.1mil.

• Next, in the second half of this year will be the 261-acre Sierra Perdana in Plentong, Johor. The mixed residential and commercial development, with a GDV of RM500mil, will comprise 4,219 properties, including terrace and semi-detached houses.

• Meanwhile, more launches are expected from Austin Perdana in Tebrau, Johor. It will comprise mainly the Perdana series of houses.
  Sales have reached RM433mil and another RM133mil worth of properties will be launched over the next three years.

It looks like that Mah Sing has the drive and the landbank to fuel their ambitions of moving up in the property stakes.

Further reading in Property Malaysia:

Mah Sing Show Good Profits

I got the heads up from Preacher, someone who has been very helpful to this site. Thanks!

Local papers had reported that the authorities are going to build a second waste transfer station on a 9ha facility in Kampung Bohol, and expects that it will be operational by next year. The project, called Southern KL Transfer Station (SKLTS), has been awarded to a private company CyWaste Sdn Bhd, which is part of a larger environmental group, CyEn Group.

This issue has recently been hotly discussed at a local property forum, you can follow it here. THe concerned residents have also set up a website to make their voice heard against this project, you can check it out here. We’ve linked the photo here, I hope they don’t mind… You can see the clearer photo at their site.

A check with the contractor’s website, we found some more info:

Transfer Stations – Southern Kuala Lumpur Transfer Station (SKLTS)

CyEn has been awarded the “Build, Operate and Transfer” (BOT) privatisation of a new solid waste transfer station, known as the “Southern Kuala Lumpur Transfer Station (SKLTS)” at Kampung Bohol, Mukim Petaling, Kuala Lumpur.

Built on a site of approximately 9 ha in size, SKLTS is designed to cater for the management of solid waste for the southern part of Federal Territory of Kuala Lumpur (FTKL) and the state of Selangor for the next 30 years.

SKLTS is designed to achieve operational efficiency, with minimal impacts on the surrounding environment during the development and operation of the facility.

According to the DOE website, the department is actually still studying the Detailed EIA (DEIA) report submitted by CyWaste. Members of the public can get a copy of the report for RM1000, details can be obtained here.

As it stands, the DOE has yet to issue any latest reply on this matter, and the residents are organising a petition and have also sought out a meeting together with contractor and their elected parliamentary representatives.

Another point of concern is the recent launch of new developments in the area within a short distance from the proposed site. Many buyers of these middle and high end projects are concerned that whether the developers did or did not know of this project, and if yes, why was it not revealed earlier.

There seems to be a lot of questions to be answered, we’ll update here with any recent news.

Right, here is something that some of us may like to ponder over the long Chinese New Year break. I got this from Legalwiz.com, quite a nifty site with some interesting articles.

This one is about Top 10 Myths Preventing People from Succeeding in Property (or as they say in America, real estate). In summary, the ten myths are as follows:

Reason #1: No Cash
Reason #2: No Time
Reason #3: Everyone says this stuff doesn’t work
Reason #4: Too much competition
Reason #5: It doesn’t work in my market

Reason #6: The recession is coming
Reason #7: Realtors won’t cooperate with me
Reason #8: I have bad credit
Reason #9: I might lose money
Reason #10: I don’t know what to do

Kind of sounds like what a lot of people are saying, isn’t it? If you’re interested, you can check out the full write-up here.

The Petaling Jaya Municipal Council, MPPJ have increased the assessment rate for landed properties by 10%. This had taken effect since January 14 and was widely reported in most papers the past few days.

Residents who were paying 5-8% of the value of their land who have to pay from 5.5% to 8.8% for the 2006 assessment. Many residents associations have urged the MPPJ to reconsider and to provide due justification for this increase.

According the Star today:

In an immediate response some 35 residents associations in Petaling Jaya are meeting tonight to discuss, among other things, filing a lawsuit against the Petaling Jaya Municipal Council (MPPJ) if need be.

The Local Government Act 1976 (Section 127) states that the local authority “may, with the approval of the State Authority, from time to time as is deemed necessary, impose either separately or as a consoli- dated rate, the annual rate or rates.” However, under the principle of administrative law and good governance, MPPJ is duty bound to prove how they come up with the new rates and allow time for the people to object before any increase in rates can be approved.

While 10% may seem insignificant to some, this represents a huge amount of increase to the hundreds and thousands of working class residents that call Petaling Jaya their home. The resident associations are appealing to MPPJ on the grounds of administrative law and good governance to justify this increase to the public before it is approved.

The meeting will be held at La Salle Hall, Jalan 5/15B, off Jalan Chantek 5/13 in Petaling Jaya. It begins at 8.30pm.

These days, it is quite common for developers to take out a full page ad in the papers, especially if they have major new launch. Come to think of it, you can see a dozen of them almost every day in the regional section pullout of our national papers.

If the company is in the big leagues, and they have a top of the line development, they even come out with a double page spread. Recent ones we can remember are by Gamuda and SP Setia (like we said, big leagues).

The other day while reading the Star, we saw IJM Properties advertise 3 alternate pages in a row – for PJ8, Ampersand@Kia Peng and Riana Green east. Talk about massive advertising budget. PJ8 had been featured in this website (here and here), Ampersand and Riana Green east have just opened for registration.

Above : IJM Properties’ PJ8 project

Ampersand@Kia Peng is the latest high end project to appear in the KLCC vicinity, boasting of a low density of 35 units per acre. Riana Green east is a joint venture with Landmarks Land & Properties in the Wangsa Maju area (check out this of Desa Putra review in the same development).

Above : IJM Properties’ Ampersand@Kia Peng project

What struck us immediately was that the pages of the advertisement were hand sketched in a similar style, quite impressive to the reader. We are eagerly waiting for the launch of both Riana Green east and Ampersand.

Above : IJM Properties’ Riana Green East project

For further info, you can check out the IJM PRoperties homepage.

We’ve updated the Project Reviews page, this was supposed to be done at the start of every month, somehow this month we were quite sidetracked with a few other things.

But as of now it has been updated, you can access that listing anytime by clicking on the link above that says “Project Reviews”, just above the post title.

anyways, we didn’t really noticed, but this blog has been running for just over 6 months (since July 8, 2005), and there has been 63 reviews and about 200 posts.

So take some time to check out the reviews page.

There has been a lot of talk in the past year or two regarding gated communities in Malaysia, especially in the Klang Valley where most new luxury landed properties have this safety and security feature. For the developer, this is a great selling point: a guard house at all entry points to the development (usually there is only one) to check on all incoming cars, guards patrolling the neighbourhood at regular intervals, high walls circling the perimeter, sometimes with CCTV, etc.

For the buyers, the extra price for these features comes with an added security when they sleep at night, buoyed by concerns of crimes like robbery and break-ins. Although cases of crime in gated communities are known to happen, and there have been many complaints of ineffective guards, by and large, gated communities are increasingly popular these days.

But all this may soon come to an end.

The authorities is said to be drafting some guidelines and rules on gated communities, and from what we hear, developers may no longer be able to offer this feature. Due to growing concerns from some sectors, this could mean the end of them.

Firstly, conventional developments with landed units (semi-Ds, bungalows, etc) give individual titles to buyers. That also usually means all the roads, drains, public parks, sewerage, rubbish collection and water supply will be handed over to the relevant authorities (local council, TNB, JPS, etc) after two years. Then the homeowner will pay quit rent, assessment and utility bills to these authorities.

By that reckoning all the roads and parks and their reserves belong to the government, so anyone can use them, whether or not they live in the development or somewhere else. This is the main bone of contention against gated developments. That they stop other people from using public roads and amenities.

Some developments use strata concept for their landed units, some of these are prominent developments in the city. By using strata titles, like condominiums, the management control maintains control of some of the utilities, charges maintenance fees, etc. From the grapevine, this will also come to an end.

One way out for the gated concept is the guarded concept, where they have guards patrolling the estate 24/7 but no boom gates to stop cars from entering (and therefore exiting) the development. Many normal housing estates are already employing this, more of a interim crime prevention measure.

However, the guidelines have yet to be issued, and many developers are keen to see what the authorities will say.